1
EXHIBIT 10.29
STOCKHOLDERS AGREEMENT dated effective as of May 1, 1997 (this "Agreement") by
and between D-S SPLITTER, INC., a Delaware corporation ("D-S"), JLM INDUSTRIES,
INC., a Delaware corporation ("JLM") and OLEFINS TERMINAL CORPORATION, a
Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, in order to maintain harmony and continuity in connection with the
management of the business and affairs of the Company, the parties hereto desire
to place certain restrictions on the transferability of certain shares of Common
Stock to provide a mechanism for the sale of certain shares of Common Stock and
to impose certain obligations on and grant certain rights to the holders of
certain shares of Common Stock;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS AND REFERENCES.
As used herein, the following terms shall have the meanings set forth
below:
(a) "Affiliate" shall mean, with respect to any Person (as defined in
this Article 1), any other Person which, directly or indirectly,
controls, is controlled by or is under common control with such Person;
provided, however, that, except as otherwise expressly provided herein,
the Company shall not be deemed an Affiliate of any other Party (as
defined in this Article 1) for the purposes hereof. A Person shall be
deemed to control another Person if such controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. Any director,
executive officer or beneficial owner of five percent (5%) or more of
the equity of a Person shall for the purposes of this Agreement be
deemed to be an Affiliate of such Person.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Company Securities" shall mean the shares of Common Stock
currently owned by JLM and D-S on the date hereof and equity securities
of the Company issued or distributed in exchange or substitution for,
upon conversion or reclassification of or otherwise in respect of such
shares;
(d) "Credit Agreement" shall mean the Credit Agreement dated as of May
7, 1997, between the Company, and Bank of America Illinois;
- 1 -
2
(e) "D-S Shares" shall mean the shares of Common Stock owned by D-S on
the date hereof and any equity securities of the Company issued or
distributed in exchange or substitution for, upon conversion or
reclassification of or otherwise in respect of such shares.
(f) "Facility" shall mean the polymer grade propylene storage and
terminal facility located at Seabrook, Texas on property owned by
Baytank (Houston), Inc. to be owned and operated by the Company.
(g) "Fiscal Year" shall mean the fiscal year of the Company.
(h) "Guaranty" shall mean the unconditional guaranty of the Company's
obligations under the Credit Agreement executed by Ultramar Diamond
Shamrock Corporation, parent of D-S, of even date.
(i) "Holder" shall mean a Stockholder (as defined in this Article 1)
individually.
(j) "Holders" shall mean the Stockholders (as defined in this Article
1) collectively.
(k) "JLM Shares" shall mean the shares of Common Stock owned by JLM on
or before the date hereof and any equity securities of the Company
issued or distributed in exchange or substitution for, upon conversion
or reclassification of or otherwise in respect of such shares.
(l) "Management Agreement" shall mean the Management Agreement dated as
of July 22, 1991 between the Company and JLM.
(m) "Parties" shall mean the Holders (as defined in this Article 1) and
the Company, collectively.
(n) "Party" shall mean a Holder (as defined in this Article 1) or the
Company, individually.
(o) "Person" shall mean an individual or an entity, including, without
limitation, a corporation, partnership, joint venture, trust, joint
stock company, association, unincorporated organization or group acting
in concert.
(p) "Special Company Securities" shall mean the Company Securities and
any equity securities of the Company issued or distributed in exchange
or substitution for, upon conversion or reclassification of or
otherwise in respect of such Company Securities.
- 2 -
3
(q) "Stockholder" shall mean D-S and JLM individually.
(r) "Stockholders" shall mean D-S and JLM collectively.
As used herein, the word "transfer" shall include sell, assign,
transfer, exchange, mortgage, pledge, encumber and any other means by
which personal property may be disposed of, whether voluntary,
involuntary, by operation of law or otherwise.
As used herein, the terms "securities" and "equity securities" shall
include shares of capital stock and options, warrants and other rights
or interests convertible into or exchangeable or exercisable for shares
of capital stock.
As used herein, the terms "JLM" and "D-S" shall include their
respective successors.
As used herein, the term "Common Stock" shall include any equity
securities of the Company issued or distributed in exchange or
substitution for, upon conversion or reclassification of or otherwise
in respect of the Common Stock.
2. CORPORATE GOVERNANCE.
2.1 Board of Directors; Initial Board and Officers.
(a) Each Party agrees to take any and all actions necessary
for the strict enforcement of the Amended and Restated Bylaws
of the Company in the form of which is appended hereto as
Appendix A. The Company agrees that it shall not approve or
authorize any annual operating budget, capital budget or other
budget, or any change to any such budget, unless such budget
or change shall have been approved by a majority of the Board.
(b) The Stockholders agree that so long as the Company is
obligated to repay any amounts due under the Credit Agreement
or the Guaranty is in full force and effect, D-S shall have
the right to appoint two (2) of the three (3) directors of the
Board. Upon satisfaction of the Credit Agreement in full and
release of the Guaranty, the Stockholders shall elect three
(3) directors, one (1) of whom shall be unaffiliated with
either Stockholder. As of this date, the Board shall consist
of the following three members:
- 3 -
4
D-S JLM
Xxx Xxxxxx Xxxx XxxXxxxxx
Xxxx Xxxxx
(c) The initial set of officers of the Corporation shall
consist of the following:
OFFICER INDIVIDUAL
Xxxx XxxXxxxxx President
Xxxx X. Xxxxx Vice President - Finances
Xxx Xxxxxxx Vice President - Operations
Xxxx Xxxxxx Secretary/Treasurer
(d) Each Stockholder shall give to the other Stockholder (on
date hereof and, thereafter, as the same may change from time
to time in accordance with this Agreement) and maintain at all
times thereafter in full force and effect a duly executed
proxy to vote its shares of Common Stock in the form attached
hereto as Exhibits A-1 and A-2, as appropriate, and agrees to
take any and all actions necessary to give effect to the
transactions contemplated by and to carry out the purpose and
intent of such proxies. Notwithstanding the beneficial
interest of others in any of the Shares, no Stockholder shall
give to any other Person any other proxy or power of attorney
with respect to its shares of Common Stock inconsistent with
any proxy given pursuant to the preceding sentence.
2.2 Distributions in Respect of Company Securities.
(a) Except as otherwise provided in Section 2.2(b) hereof, the
Company shall not declare, pay or set aside cash, properties,
assets, securities, rights or other interests for payment of
any dividends of any kind, or make any distributions of any
kind, to holders of its equity securities.
(b) After the repayment, in full, of all obligations under the
Credit Agreement, the Company may, from time to time, at the
discretion of the Board, declare and pay a cash dividend to
the Stockholders of the Company.
- 4 -
5
2.3 Transactions With Affiliates.
The Company shall not enter into any contract, lease,
transaction or other arrangement during the term of this
Agreement to which a Holder or any Affiliate of a Holder is
also a party, other than those negotiated on an "arms-length"
basis on commercially reasonable terms, without the prior
written consent of each of D-S and JLM.
2.4 Extraordinary Matters.
(a) Except as otherwise permitted by Section 2.4(b) hereof,
the Company shall not take or permit to be taken any of the
following actions without the prior written consent of each of
D-S and JLM:
(i) the amendment or restatement of the certificate of
incorporation of the Company;
(ii) the amendment, repeal or restatement of the by-laws
of the Company or the adoption of any new by-law of the
Company;
(iii) any change in the quorum for meetings of the
directors or stockholders of the Company or in the vote
required to take any action at such meetings;
(iv) except for the repurchase of shares of Common Stock
from each Holder ratably based on the proportion that the
number of shares of Common Stock held by each Holder bears
to the total number of shares of Common Stock held by the
Holders, the repurchase, redemption or retirement by the
Company of any of the then outstanding securities of the
Company;
(v) the issuance, award, grant, sale or other transfer
by the Company of any equity securities of the Company;
(vi) any material change, elimination or diversification
in the businesses, scope of operations, products or
services of the Company;
(vii) the entry into any contract or any series of related
contracts outside the normal and ordinary course of
business of the Company resulting in obligations of or
payments by the Company in excess of $50,000;
- 5 -
6
(viii) except for amounts constituting obligations under
the Credit Agreement, the borrowing or lending of any
funds or the incurrence of any obligations as a guarantor
or surety, excluding any transaction or any series of
related transactions which does not involve more than
$50,000;
(ix) the sale, lease, exchange, mortgage, pledge or
other disposition of, or creation of a security interest
in, assets of the Company having an aggregate fair market
value of $250,000 or more in any single transaction or any
series of related transactions;
(x) the merger, consolidation or other business
combination of the Company;
(xi) the dissolution, winding-up, reorganization or
liquidation of the Company;
(xii) any transaction to which the Company and a member
of the Board are parties;
(xiii) the formation, acquisition, sale, transfer,
liquidation or dissolution of any subsidiary of the
Company.
(b) No consent shall be required to be obtained pursuant to
Section 2.4(a) hereof in order for the Company to take any
action which is contemplated by this Agreement or any
agreement or instrument contemplated hereby or thereby.
(c) Notwithstanding anything contained in this Section 2.4, in
this Agreement to the contrary, in the event that the Board
shall have terminated the Management Agreement on account of
an event of default (as such term is defined therein)
thereunder, the Board shall be permitted to make alternative
arrangements for the management of the Company, including, but
not limited to, the approval of a substitute management
agreement with a third party, a Holder or an Affiliate of a
Holder or the taking of any other related action, that the
Board may in its discretion deem advisable without the
necessity of obtaining the consent of JLM. The Management
Agreement shall not be amended or assigned without the consent
of a majority of the Board.
- 6 -
7
2.5 Accounting and Banking Matters; Audit Right.
(a) The Company shall, at its cost and expense:
(i) keep books and accounts in correct and proper form in
accordance with generally accepted accounting principles;
(ii) deliver to D-S, JLM and to each member of the Board:
(A) Quarterly Statements -- within sixty (60) days
after the end of each fiscal quarter in each Fiscal
Year, one copy of:
(1) an unaudited consolidated balance sheet of
the Company as at the end of such fiscal quarter;
and
(2) unaudited consolidated statements of income,
stockholders' equity and cash flows of the
Company for the period commencing on the first
day of such fiscal quarter and ending on the
last day of such fiscal quarter accompanied by a
certificate signed by the principal financial
officer of the Company stating that such
financial statements present fairly the
financial condition of the Company and have been
prepared in accordance with generally accepted
accounting principles consistently applied,
subject to normal year-end adjustments and
accruals;
(B) Annual Statements -- within one hundred twenty
(120) days after the end of each Fiscal Year, one
copy of:
(1) an audited consolidated balance sheet of the
Company as at the end of that Fiscal Year;
(2) audited consolidated statements of income,
stockholders' equity and cash flows of the
Company for that Fiscal Year; and
(3) a comparison of the actual financial figures
for that Fiscal Year with comparable figures for
the prior Fiscal Year and with comparable
figures included in the budget for that Fiscal
Year, together with an
- 7 -
8
explanation of any material differences between
them, and, in the case of balance sheets and
statements, accompanied by an opinion of a firm
of independent public accountants of recognized
national standing stating that such financial
statements present fairly the financial
condition of the Company and have been prepared
in accordance with generally accepted accounting
principles consistently applied;
(C) Budgets and Projections -- within thirty (30)
days following the beginning of each Contract Year
(as such term is used in the Operation and
Maintenance Agreement dated July 31, 1991 between the
Company and Baytank (Houston), Inc.), a budget on a
monthly basis for such Contract Year for the
Company's operations, together with an analysis of
such budget, prepared in reasonable detail by the
principal financial officer of the Company, and,
within fifteen (15) days following the making of any
changes in such budget, a letter disclosing all such
changes;
(D) Other Auditor's Reports -- promptly, copies of
all reports submitted by the Company's independent
public accountants in connection with any annual or
interim audit of the books of the Company or any
subsidiary, including, without limitation, any letter
or reports relating to internal controls, adequacy of
records or the like;
(E) Reports, Etc. -- promptly, after the same are
sent, copies of all financial statements and reports
which the Company sends to the Agent, and, promptly,
copies of any periodic or special reports (including
health, safety and environmental reports) filed by
the Company with any federal, state or local
governmental agency or authority, if such reports
indicate any material change in, or material adverse
events or conditions affecting, the business,
operations, affairs or condition of the Company and
copies of any material notices and other material
communications from any federal, state or local
governmental agency, court or authority which
specifically relate to the Company;
- 8 -
9
(F) Requested Information -- with reasonable
promptness, any other data and information which may
be reasonably requested from time to time.
(b) The Company shall deposit all of its funds in its name in
an account or accounts maintained in one or more banks
designated by the Board. The Company shall not draw checks,
drafts or other items thereupon except for the account of or
use by the Company and only if signed by duly authorized
representatives of the Company designated by the Board. The
funds of the Company shall not be commingled with the funds of
any Holder.
(c) Each of D-S and JLM shall have the right, at its cost and
expense, at any reasonable time, to audit, examine and make
copies of or extracts from (i) the books, accounts and other
financial records of the Company and (ii) any contract entered
into by the Company or customer invoices relating to
transactions for the use of the throughput capacity of the
Facility. Such audit, examination, copying and extracting may
be conducted by employees of such Party or a firm of
independent public accountants designated by such Party. All
information obtained by a Party from the Company shall be
subject to the confidentiality obligations set out in Article
6 of this Agreement.
3. RIGHTS TO FACILITY CAPACITY.
The following rights to use the Facility shall attach to the ownership
of Special Company Securities, shall not be detachable or separately
transferable therefrom and shall automatically be transferred to a new
holder of Special Company securities in connection with such transfer.
Any transfer of the following rights, in whole or in part, other than
in strict compliance with the preceding sentence shall be void. Subject
to the two preceding sentences, holders of Special Company Securities
shall be entitled, but not obligated, to use the Facility as follows:
3.1 Volume. Subject to Sections 3.7 and 3.9 hereof, each holder of
Special Company Securities shall have the right to use up to that
portion of the actual total throughput capacity of the Facility which
bears the same proportion to such total capacity as the number of
shares of Common Stock held by such Holder bears to the total number of
shares of Common Stock included among the Special Company Securities;
provided, however, that if such Holder has a contract with the Company
on the date hereof to use a portion of the throughput capacity of the
Facility and such contract provides for a "take-or-pay" arrangement
with respect to all or part of such portion (the
- 9 -
10
"Other Take-Or-Pay Portion"), such Holder's right to use the throughput
capacity of the Facility hereunder shall be reduced by the Other
Take-Or-Pay Portion. For purposes of initially determining the quantity
which each such holder's allocable portion of the total throughput
capacity of the Facility entitles each such holder to use, it will be
assumed that the Facility will have a total throughput capacity of
450,000 metric tons per year. Upon the determination of the actual
total throughput capacity of the Facility, the quantity which each such
holder's allocable portion of the total throughput capacity of the
Facility entitles each such holder to use will be appropriately
adjusted.
3.2 Most Favored Nations. Each Holder of Special Company Securities
shall have the right to use any or all of that portion of the total
throughput capacity of the Facility to which such holder is entitled
under Section 3.1 hereof on a "most favored nations" basis.
3.3 Price. Section 3.2 hereof shall mean, as to price charged by the
Company to each holder of Special Company Securities, for the period
covered by the notice which such holder shall have given pursuant to
the first sentence of Section 3.5 hereof, the weighted average price
charged by the Company to other throughput users under "take-or-pay"
contracts (or the "take-or-pay" portions of contracts, as the case may
be) with the Company on (i) the date on which such notice is given or
(ii) the date of commencement of such period (a "Commencement Date"),
whichever date results in a lower weighted average price. For the
purposes hereof, (i) the "weighted average price" charged to such other
users shall be determined by (A) adding together the aggregate prices
to be paid by such users to throughput the quantities of product which
they are obligated to throughput (the "Total Price") and (B) adding
together the quantities of products which they are obligated to
throughput (the "Total Quantity") and then dividing the Total Price by
the Total Quantity and (ii) such users shall include holders of Special
Company Securities who have such contracts with the Company or who have
previously exercised their rights under this Article 3.
3.4 Quantity. After a holder of Special Company Securities has given a
notice pursuant to the first sentence of Section 3.6 hereof, such
holder shall be obligated (subject to Section 3.5 hereof) to put
product through the Facility monthly in a quantity equal to the
quantity which such holder had indicated in such notice that it
intended to throughput monthly (or, if less, the maximum quantity which
is required to be made available to such holder under Section 3.8
hereof) at the price determined pursuant to Section 3.3 hereof and to
pay the Company therefor. If such holder breaches such obligation, such
holder shall (subject to Section 3.5 hereof) pay to the Company an
amount equal to the aggregate amount which such holder would have paid
if it had not
- 10 -
11
breached such obligation, less the aggregate amount actually paid to
the Company in connection with the performance of such obligation,
[less the aggregate amount which the Company receives from a substitute
contract or contracts found by the holder or other users who use the
capacity of the Facility which would otherwise have been used by such
holder.] Such payment shall be such holder's sole liability, and the
Company's sole remedy, for such breach. Such payment shall be due
within ten (10) days after the end of each month for breaches which
occurred during that month. For purposes of determining whether other
users are using capacity of the Facility which would have to be so used
by a holder of Special Company Securities, (i) such other users shall
be deemed to be using all other capacity of the Facility before they
are treated as using such capacity and (ii) if two or more of such
holders have breached such obligation and other users are treated as
using some (but not all) of the capacity which would have been used by
such holders, such use by other users shall be allocated between or
among such holders ratably based upon the proportion which the capacity
that is not used by each such holder bears to the total capacity that
is not used by all such holders. Unless special arrangements are made
with JLM by a holder of Special Company Securities, JLM, in its
capacity as manager of the Facility, shall have no obligation to seek
or obtain a substitute user of throughput capacity in lieu of such
holder's obligation to pay for throughput capacity under this Section
3.4.
3.5 Other Terms. Section 3.2 hereof shall mean, as to terms other than
quantity, term and price, that each such other term (such as those
relating to specifications, payments, force majeure and the like)
regarding the use of the throughput capacity of the Facility by holders
of Special Company Securities under this Article 3 shall be the same as
the most favorable term afforded to any other user of the Facility
under any other "take-or-pay" contract then being performed (or, if no
such contract is then being performed, under the Company's then
standard "take-or-pay" contract) and, if such other term would excuse
any breach described in Section 3.4 hereof or reduce such holder's
liability therefor if it had been incorporated herein, then such term
shall govern notwithstanding anything contained herein to the contrary.
3.6 Notice and Contract. In order to exercise its rights under this
Article 3, a holder of Special Company Securities must give written
notice to the Company as to the capacity which such holder intends to
use, on a monthly basis, during the period of not less than twelve (12)
months specified in such notice at least ten (10) months prior to the
commencement of such use. The Company shall, within ten (10) days after
receipt, give written notice to all holders of Special Company
Securities of (i) each notice received pursuant to this Section 3.6 and
(ii) each notice (or other probative evidence) of the termination,
cancellation or non-renewal of any then existing contract to use
- 11 -
12
the throughput capacity of the Facility. Each holder of Special Company
Securities which exercises its rights under this Article 3 and the
Company shall, at least thirty (30) days prior to the applicable
Commencement Date, enter into a written contract relating to their
respective rights and obligations under this Article 3 with respect to
the use of the throughput capacity of the Facility during the period to
which such Commencement Date relates. Except as otherwise provided in
this Article 3, the form and terms of such contract shall be the same
as those of the Company's then current "take-or-pay" contract.
3.7 Reservation of Capacity. Notwithstanding anything contained herein
to the contrary, if at the time notice is given by a holder of Special
Company Securities pursuant to the first sentence of Section 3.6
hereof, sufficient throughput capacity at the Facility is not available
(because of contractual obligations, including those arising under this
Article 3, or casualties, equipment failures, force majeure or events
beyond the reasonable control of the Company) to accommodate in full
the use requested thereby for all or any part of the period covered by
such notice, the Company shall make available to such holder any
available throughput capacity of the Facility during the period covered
by such notice. Notwithstanding anything contained herein to the
contrary, if at the time notices are given by two or more holders of
Special Company Securities pursuant to the first sentence of Section
3.6 hereof, sufficient throughput capacity at the Facility is not
available (due to such causes) to accommodate in full the uses
requested thereby for all or any part of the periods covered by such
notices and if such notices are given or deemed to have been given at
the same time, the Company shall allocate any available throughput
capacity among such holders on a monthly basis so as to be able to
satisfy the same percentage of monthly use set forth in each such
notice during the periods covered by such notices. In any event where
available through-put capacity of the Facility during the period
covered by the notice given by a holder under the first sentence of
Section 3.6 will not satisfy the quantity set forth in such notice, the
Company shall have no obligation to reserve or make available to such
holder any throughput capacity beyond the period covered by such notice
unless such holder shall have given a new notice under the first
sentence of Section 3.6. For the purposes hereof, such notices shall be
deemed to have been given at the same time if they are given within
forty (40) days of each other. In all other cases, the throughput
capacity of the Facility shall be made available under this Article 3
on a "first come, first served" basis.
3.8 Existing Contracts. Nothing contained herein shall affect or modify
any of the terms or conditions of any contracts existing on the date
hereof to use the throughput capacity of the Facility.
- 12 -
13
3.9 No Defaults. A holder of Special Company Securities shall not have
any rights under this Article 3 so long as it is in material default
under or breach of any then current contract with the Company to use
the throughput capacity at the Facility; provided, however, that this
Section 3.9 shall not apply to defaults or breaches attributable to
prior material defaults under or breaches of such contract by the
Company.
4. TRANSFER OF COMPANY SECURITIES.
4.1 Right of First Refusal on Transfer of Company Interest by
Other Holders.
(a) The capitalized terms defined in this Section 4.2 shall
have the meanings set forth in this Section 4.2 only.
(b) Whenever any Holder(within the meaning of Article 1
hereof) shall receive an offer from a third party (the "Third
Party Offer") to purchase for cash any or all of its Company
Securities and related rights to Facility capacity(the
"Offered Interest"), such Holder (the "Offeror") shall give to
all of the other Holders (the "Offerees"), written notice to
that effect (the "Offer Notice"). Such notice shall describe
all of the material terms and conditions of such offer,
including the name of the third party, the offered Interest
and the proposed cash purchase price (the "Offer Price"), and
shall describe in reasonable detail the background, character,
experience and financial condition of the third party. Each
Offeree shall have the option, for a period of one hundred
twenty (120) days from the date on which the Offer Notice
shall have been given, within which to give written notice to
the Offeror and all of the other Offerees of such Offerees
desire to purchase the Offered Interest at the Offer Price and
on the terms and conditions set forth in Section 4.3 hereof
(an "Offer Acceptance Notice").
(c) If one or more Offerees gives an Offer Acceptance Notice,
such Offerees shall purchase from the Offeror, and the Offeror
shall sell to such Offerees, the entire Offered Interest at
the Offer Price and on the terms and conditions set forth in
Section 4.3 hereof. If more than one Offeree gives an Offer
Acceptance Notice, each such Offeree shall purchase from the
Offeror, and the Offeror shall sell to each such Offeree, that
portion of each class of securities included in the Offered
Interest for that portion of the Offer Price equivalent to
each such Offeree's proportionate holdings of the total number
of shares of Common Stock held by such Offerees.
- 13 -
14
(d) If no Offeree shall have become obligated to purchase the
Offered Interest pursuant to Section 4.1(c) hereof or if one
or more Offerees shall have become so obligated but shall have
materially breached such obligation, the Offeror shall
(subject to the provisions of Section 4.2(f) hereof and
compliance with the next sentence of this Section 4.1(d)) have
the right to sell all (but not less than all) of the Offered
Interest to such third party at or equal to or the Offer Price
and on the terms and conditions described in the Offer Notice.
If the Offered Interest is sold to a third party pursuant to
this Section 4.1(d), the Offeror shall, as soon as is
reasonably practicable, give written notice to that effect to
the Offerees. If the Offered Interest is not sold to such
third party pursuant to this Section 4.1(d) within two hundred
seventy (270) days after the Offer Notice shall have been
given, the Offered Interest shall again become subject to this
Section 4.1 in its entirety.
4.2 Terms and Conditions of Purchase and Sale Between Parties.
(a) If a Party becomes obligated to sell an Interest (as
defined in Section 4.2(b) hereof) to another Party pursuant to
Section 4.1 hereof, such Interest shall be sold and purchased
on the terms and conditions set forth in this Section 4.2.
(b) For the purposes of this Section 4.2, the term "Notice
Date" shall mean the effective date (within the meaning of
Article 9 hereof) of the last Offer Acceptance Notice (within
the meaning of Section 4.1 hereof) as to which an obligation
to purchase and sell the Offered Interest (within the meaning
of Section 4.1 hereof) arises under Section 4.1(e) hereof and
the term "Interest" shall mean the Offered Interest (within
the meaning of Section 4.1 to be purchased and sold under this
Section 4.2.
(c) The closing of the sale shall be held at the headquarters
of the Company (or such other place as to which the purchaser
and seller may mutually agree) on a date which is sixty (60)
days after the Notice Date (or such other date as to which the
purchaser and seller may mutually agree). At such closing, the
seller shall convey and assign to the purchaser, free and
clear of all liens, claims and encumbrances, the Interest and
shall execute and deliver to the purchaser all documents which
may be required to give effect to the purchase and sale of the
Interest, and the purchaser shall pay to the seller the price
therefor in immediately available funds.
- 14 -
15
(d) The obligation of a seller to sell, and the obligation of
a purchaser to purchase, the Interest at such closing shall be
subject to the conditions precedent that (i) no preliminary or
permanent injunction, order, decree or ruling issued by a
court of competent jurisdiction or by a governmental or
quasi-governmental board, bureau, instrumentality, agency or
commission shall be in effect which prohibits, restricts or
enjoins such conveyance and assignment, (ii) any applicable
waiting period under any applicable law shall have expired,
(iii) all approvals, consents, authorizations, exemptions,
notices and filings shall have been obtained, given or made as
required under applicable law, (iv) the purchaser shall have
received a representation and warranty to the effect that the
seller has good and marketable title to the Interest, free and
clear of all liens, claims and encumbrances and that the
seller has full right, power and authority to effect such
conveyance and assignment (which representation and warranty
the seller shall make) and (v) there shall have been no
material adverse change (or changes which in the aggregate are
materially adverse) in the Company's business which occurred
after the Notice Date; provided, however, that the purchaser
may waive the conditions precedent set forth in clauses (iv)
and (v) of this sentence on behalf of the seller as well as
the purchaser. The Parties shall promptly use all reasonable
efforts to (i) avoid the issuance of and, if issued, to cause
the lifting of any injunction, order, decree or ruling
referred to in the preceding sentence and (ii) obtain, give or
make all approvals, consents, authorizations, exemptions,
notices and filings referred to in the preceding sentence.
(e) A purchaser shall have the right to designate some other
Person who will act as the buyer of the Interest; provided,
however, that no such designation shall release the purchaser
from any of its obligations hereunder.
(f) If there is more than one purchaser or seller in
connection with any sale of the Interest, the obligations of
such purchasers or sellers shall be several (and not joint),
but shall be conditional upon performance by each other
purchaser and seller; provided, however, that if there are two
(2) or more purchasers and one of such purchasers materially
breaches its obligations at the closing, the other of such
purchasers shall have the right, by giving written notice at
the closing to the seller or sellers, to (A) to postpone the
closing for two (2) business days and (B) at such postponed
closing, to purchase ratably that portion of interest not
purchased by the breaching purchaser. Notwithstanding anything
contained herein to the contrary, under no
- 15 -
16
circumstances shall the seller in such an event be obligated
pursuant to the provisions hereof to sell less than 100% of
the Offered Interest.
(g) Upon consummation of such closing, the proposed purchaser
shall be entitled to all of the rights hereunder of the seller
in respect of the Interest and references contained herein to
the seller shall be deemed to be references to the purchaser;
provided, however, that, under no circumstances shall the
purchaser individually, or the purchaser and the seller
together, have greater rights hereunder in respect of the
Interest than the seller would have had if the closing had not
been consummated. If upon the consummation of the closing no
Company Securities are owned by the seller or any of its
Affiliates, then the seller and its Affiliates (i) shall cease
being a "Stockholder" or having any rights hereunder and (ii)
shall be released from all obligations, liabilities and duties
hereunder except (A) for rights, obligations, liabilities or
duties accruing, or arising out of or related to events
occurring or conditions existing, prior to the date of such
transfer or (B) as otherwise provided in Section 6.3(b)
hereof. If, as a result of any such sale, all of the Company
Securities are held by the same Party, this Agreement (other
than Article 6 hereof) shall terminate upon the closing of
such sale.
4.3 Special Restrictions on Transfer.
Notwithstanding anything contained herein to the contrary, no Holder
shall, or shall permit its Affiliates to, transfer any Company
Securities to any competitor of the Company engaged in the propylene
terminaling business in the United States.
4.4 Restriction on Transfer; Transfer With Consent.
(a) No Holder shall, or shall permit its Affiliates to,
transfer any Company Securities (i) without the prior written
consent of all of the other Holders or (ii) except as
permitted by this Article 4. The giving or withholding of
consent to any transfer of any Company Securities shall be
entirely within the discretion of the Holder requested to give
such consent.
(b) Any attempted transfer of any Company Securities other
than as permitted by this Article 4 shall be void and shall
have no effect. Each certificate evidencing any Company
Securities shall display a prominent legend regarding the
restrictions set forth in this Article 4.
- 16 -
17
4.5 Transfer to a Subsidiary.
(a) Each Holder shall have the right, at any time, to (i)
transfer any or all of its Company Securities to one or more
of its wholly owned and controlled Affiliates (individually, a
"Subsidiary" and, collectively, its "Subsidiaries") or (ii)
permit any of its Subsidiaries to transfer any or all of the
Company Securities held by such Subsidiary to such Holder or
another Subsidiary of such Holder; provided, however, that (i)
if a Subsidiary of such Holder which owns Company Securities
is to cease being a Subsidiary of such Holder for any reason,
such Holder shall cause all of such Company Securities to be
transferred back to such Holder or to another Subsidiary of
such Holder prior to such cessation, (ii) such Holder causes
each Subsidiary of such Holder which holds any Company
Securities to observe all of the terms of this Agreement and
assume and perform all of the obligations, liabilities and
duties of such Holder hereunder and (iii) such Holder or its
Subsidiaries (at its or their sole cost and expense) obtain,
prior to such transfer, all consents, approvals, exemptions
and authorizations from, give all notices to and make all
filings with any third party (including, without limitation,
any financial institution or governmental or
quasi-governmental agency, authority, commission, board,
bureau or instrumentality) which may be necessary in
connection with such transfer.
(b) Upon consummation of a transfer pursuant to Section 4.5(a)
hereof, the Subsidiary of a Holder to whom Company Securities
shall have been transferred shall be entitled to all of the
rights of such Holder hereunder as appropriate and references
contained herein to such Holder shall be deemed to include
references to such Subsidiary as appropriate; provided,
however, that, under no circumstances shall such Subsidiary,
such Holder and all of the other Subsidiaries of such Holder
which hold any Company Securities together have greater rights
hereunder than such Holder would have had if it alone held all
of the Company Securities held by it and its Subsidiaries.
(c) No transfer of Company Securities to a Subsidiary pursuant
to this Section 4.5 shall relieve the Holder who transferred
or whose Subsidiary transferred such Company Securities of its
obligations, liabilities and duties hereunder or result in
such Holder ceasing to be a "Stockholder".
4.6 Transfer of Company Securities or Subsidiary With Other
Businesses. Notwithstanding anything contained in this Article 4
(other than Section 4.3 hereof) to the contrary, (i) D-S shall have
the right, at any time, without the consent of or subject to any rights
of any other Party, to transfer its Company
- 17 -
18
Securities or any of its Subsidiaries which hold Company Securities to
any successor to or transferee of its polymer grade propylene business
and (ii) JLM shall have the right, at any time, without the consent of
or subject to any rights of any other Party, to transfer its Company
Securities or any of its Subsidiaries which hold Company Securities to
any successor to or transferee of substantially all of the assets of
JLM.
4.7 Certain Conditions to Transfer of Company Securities or
Subsidiaries to Third Parties. It shall be a condition precedent to any
proposed transfer of Company Securities or of any Subsidiary which
holds Company Securities to a third party (other than pursuant to
Section 4.5 hereof) that (i) the Holder who proposes (or whose
Subsidiary proposes) to transfer such Company Securities or Subsidiary
and the proposed transferee (at its and their sole cost and expense)
obtain all consents, approvals, exemptions and authorizations from,
give all notices to and make all filings with any third party
(including, without limitation, any financial institution or
governmental or quasi-governmental agency, commission, board, bureau or
instrumentality) which may be necessary in connection with the proposed
transfer and (ii) before or contemporaneously with the consummation of
the proposed transfer, the proposed transferee executes and delivers a
written instrument pursuant to which it agrees to (1) become a party to
this Agreement, (2) observe all of the terms hereof and conditions
hereof, (3) assume and perform all of the obligations, liabilities and
duties hereunder of the Holder who is transferring or whose Subsidiary
is transferring such Company Securities or Subsidiary and (4) execute
proxies in the form executed by such transferring Holder pursuant to
Section 2.1(C) hereof. Such written instrument must contain such
representations and warranties as the other Holders may reasonably
request to the effect that the proposed transferee will have good and
marketable title to such Company Securities or Subsidiary, that such
written instrument has been duly authorized, executed and delivered and
constitutes a legal, valid and binding obligation of the proposed
transferee and as to satisfaction of the condition precedent set forth
in clause (i) of the preceding sentence. Upon consummation of such
transfer following satisfaction of such conditions precedent, the
proposed transferee shall be entitled to all of the rights hereunder of
the Holder who transferred (or whose Subsidiary transferred) such
Company Securities or Subsidiary and references contained herein to
such Holder shall be deemed to be references to the proposed
transferee; provided, however, that, under no circumstances shall the
proposed transferee individually, or the proposed transferee and such
Holder and its Affiliates together, have greater rights hereunder than
such Holder and its Affiliates would have had if such transfer had not
been consummated. If upon the completion of such transfer no Company
Securities are owned by a Holder or any of its Affiliates, then such
Holder and its Affiliates (i) shall cease being a
- 18 -
19
"Stockholder" or having any rights hereunder and (ii) shall be released
from all obligations, liabilities and duties hereunder except (A) for
rights, obligations, liabilities or duties accruing, or arising out of
or related to events occurring or conditions existing, prior to the
date of such transfer or (B) as otherwise provided in Section 6.3(b)
hereof.
5. DISPUTE RESOLUTION. If there is a dispute between the Parties relating
to an alleged breach of this Agreement or to the business and affairs of the
Company, none of the Parties shall commence any proceeding with respect to, or
terminate this Agreement because of, such dispute until thirty (30) days after
it shall have given a notice with respect to such dispute to the other Parties;
Provided, however, that nothing contained herein shall limit or restrict in
any way the right or power of a Party at any time to commence and prosecute a
proceeding for an injunction or other order (i) to restrain any other Party
from breaching this Agreement or (ii) for specific enforcement of this Article
5 or Article 4 hereof. The Parties agree that any legal remedy available to a
Party with respect to a breach of this Article 5 or Article 4 hereof will not
be adequate and that, in addition to all legal remedies, each Party is entitled
to an order specifically enforcing this Article 5 and Article 4 hereof.
6. CONFIDENTIALITY.
6.1 Confidentiality.
(a) All data, reports, records and other information of any
kind received by a Party or the Affiliates, subsidiaries,
stockholders, directors, partners, officers, employees,
agents, representatives, consultants or lenders of a Party
(such Party being hereinafter referred to as the "Receiving
Party") from one of the other Parties or the Affiliates,
subsidiaries, stockholders, directors, officers, partners,
employees, agents, representatives, consultants or lenders of
one of the other Parties (such other Party being hereinafter
referred to as the "Delivering Party") under this Agreement or
in connection with the transactions contemplated hereby and
marked as "confidential,, shall be treated as confidential
(collectively, "Confidential Information"). Except as
otherwise provided herein, the Receiving Party shall not use
(and shall not permit its Affiliates, subsidiaries,
stockholders, directors, officers, partners, employees,
agents, representatives, consultants or lenders to use)
Confidential Information for its own (or their own) benefit
and shall use all reasonable efforts (and shall cause its
Affiliates, subsidiaries, stockholders, directors, officers,
partners, employees, agents, representatives, consultants or
lenders to use all reasonable efforts) to maintain the
confidentiality of Confidential Information. If the Receiving
Party or any of its Affiliates, subsidiaries, stockholders,
directors,
- 19 -
20
officers, partners, employees, agents, representatives,
consultants or lenders is required to disclose Confidential
Information by or to any court of competent jurisdiction or
any governmental or quasi-governmental agency, authority or
instrumentality of competent jurisdiction, the Receiving Party
shall, prior to such disclosure, immediately notify the
Delivering Party of such requirement and all particulars
related to such requirement. The Delivering Party shall have
the right, at its expense, to object to such disclosure and to
seek confidential treatment of any Confidential Information to
be so disclosed on such terms as it shall determine.
(b) The restrictions set forth in Section 6.1(a) hereof shall
not apply to the use or disclosure of Confidential Information
to the extent, but only to the extent, (i) permitted or
required pursuant to any other agreement between or among the
Parties (or their respective Affiliates), (ii) necessary by a
Party (or its Affiliates) in connection with exercising its
(or their) rights or performing its (or their) duties or
obligations under this Agreement, the agreements, instruments
and other documents contemplated hereby or the other
agreements described in clause (i) of this sentence, (iii)
necessary by a Party (or its Affiliates) in connection with
the sale or transfer of its (or their) Company Securities or
business or assets, generally; provided, however, that in any
such event such Party (or Affiliate) shall cause such proposed
transferee to execute a confidentiality agreement which shall
provide projections substantially similar to those contained
in this Section 6, (iv) contemplated by the last two (2)
sentences of Section 6.1(a) hereof or (v) that the Receiving
Party can demonstrate Confidential Information (A) is or
becomes generally available to the public through no fault or
neglect of the Receiving Party, (B) is received in good faith
on a non-confidential basis from a third party who, to the
best knowledge of the Receiving Party, discloses such
Confidential Information without violating any obligations of
secrecy or confidentiality, (C) is independently developed
after the time of receipt as shown by dated written records or
(D) was already possessed at the time of receipt as shown by
prior dated written records. The restrictions set forth in
Section 6.1(a) hereof shall not apply to the use or disclosure
by the Company or any of its Affiliates of Confidential
Information which consists of data, reports, records and
information relating to its or their business or the
ownership, leasing or use of the properties owned, leased or
used by the Company or any of its Affiliates and which is used
or disclosed in connection with the conduct of its or their
business.
- 20 -
21
(c) For the purposes of this Section 6.1, (i) information
which is specific shall not be deemed to be within an
exception set forth in Section 6.1(b) hereof merely because it
is embraced by general information which is within such an
exception and (ii) a combination of information shall not be
deemed to be within an exception set forth in Section 6.1(b)
hereof merely because individual aspects of such combination
are within such an exception unless the combination of
information itself, its principle of operation and its value
or advantages are within such an exception.
6.2 Survival.
(a) Notwithstanding anything contained herein to the contrary,
this Article 6 shall survive the termination of this Agreement
for any reason until the expiration of five (5) years after
the date of such termination.
(b) This Article 6 shall continue to bind a Party which has
ceased to be a "Stockholder" until the expiration of five (5)
years after the date of such cessation.
7. FORUM; CONSENT TO PERSONAL JURISDICTION.
Each Party agrees that any proceeding arising out of or relating to this
Agreement or the breach or threatened breach of this Agreement shall be
commenced and prosecuted in a court in the State of Texas. Each Party consents
and submits to the non-exclusive personal jurisdiction of any court in the State
of Texas in respect of any such proceeding. Each Party consents to service of
process upon it with respect to any such proceeding by registered mail, return
receipt requested, and by any other means permitted by applicable laws and
rules. Each Party waives any objection that it may now or hereafter have to the
laying of venue of any such proceeding in any court in the State of Texas and
any claim that it may now or hereafter have that any such proceeding in any
court in the State of Texas has been brought in an inconvenient forum.
8. NOTICES.
All notices, demands and requests required or permitted to be given pursuant to
this Agreement shall be given in writing, shall be transmitted by personal
delivery, by registered or certified mail, return receipt requested, postage
prepaid, or by telecopier or other electronic means and shall be addressed as
follows:
- 21 -
22
When D-S is the intended recipient:
D-S Splitter, Inc.
X.X. Xxx 000000
Xxx Xxxxxxx, Xxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: General Manager, Petrochemicals
When JLM is the intended recipient:
JLM Industries, Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
When the Company is the intended recipient:
Olefins Terminal Corporation
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Telecopy No.: (000-000-0000
Attention: Xxxx X. Xxxxx, Esq.
A Party may designate a new address to which notices required or permitted to be
given pursuant to this Agreement shall thereafter be transmitted by giving
written notice to that effect to the other Parties. Each notice transmitted in
the manner described in this Article 8 shall be deemed to have been given,
received and become effective for all purposes at the time it shall have been
(i) delivered to the addressee as indicated by the return receipt (if
transmitted by mail), the affidavit of the messenger (if transmitted by personal
delivery) or the answer back or call back (if transmitted by telecopier or other
electronic means) or (ii) presented for delivery to the addressee as so
indicated during normal business hours, if such delivery shall have been refused
for any reason.
9. TERM AND TERMINATION OF AGREEMENT.
9.1 Term of Agreement. This Agreement shall become effective as of the
date hereof and shall continue until terminated in accordance with the
terms hereof.
9.2 Termination. This Agreement may be terminated at any time by mutual
written consent of the Parties.
- 22 -
23
10. ADDITIONAL REPRESENTATION.
JLM represents and warrants that all of the beneficial owners of Common Stock
which JLM owns of record have executed consents agreeing to be bound by the
terms and conditions affecting JLM hereunder, and JLM agrees that any breach of
the terms or conditions of this Agreement by any such beneficial owner shall be
deemed a breach by JLM hereunder for which JLM shall be liable as if JLM had
committed such breach.
11. MISCELLANEOUS.
11.1 Governing Law. The validity, interpretation, performance and
enforcement of this Agreement shall be governed by the law of the State
of Texas (without giving effect to the laws, rules or principles of the
State of Texas regarding conflicts of laws).
11.2 Entire Agreement. This Agreement constitutes the entire contract
among the Parties with respect to the subject matter hereof and cancels
and supersedes all of the previous or contemporaneous contracts,
representations, warranties and understandings (whether oral or
written) by, between or among the Parties with respect to the subject
matter hereof.
11.3 Binding Effect; Assignment. This Agreement shall be binding upon
the Parties and their respective successors and assigns and shall inure
to the benefit of the Parties and their respective successors and
permitted assigns. No Party shall assign any of its rights or delegate
any of its duties under this Agreement without the prior written
consent of the other Parties. No Person (including, without limitation,
any employee or creditor of the Company) shall be, or be deemed to be,
a third party beneficiary of this Agreement.
11.4 Severability. If any provision of this Agreement shall hereafter
be held to be invalid, unenforceable or illegal, in whole or in part,
in any jurisdiction under any circumstances for any reason, (i) such
provision shall be reformed to the minimum extent necessary to cause
such provision to be valid, enforceable and legal while preserving the
intent of the Parties as expressed in, and the benefits to the Parties
provided by, this Agreement or (ii) if such provision cannot be so
reformed, such provision shall be severed from this Agreement and an
equitable adjustment shall be made to this Agreement (including,
without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent so expressed and the
benefits so provided. Such holding shall not affect or impair the
validity, enforceability or legality of such provision in any other
jurisdiction or under any other circumstances. Neither such holding nor
such reformation or severance shall
- 23 -
24
affect or impair the legality, validity or enforceability of any other
provision of this Agreement.
11.5 Headings. The headings set forth in this Agreement have been
inserted for convenience of reference only, shall not be considered a
part of this Agreement and shall not limit, modify or affect in any way
the meaning or interpretation of this Agreement.
11.6 Survival of Representations. All representations and warranties
set forth herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
11.7 Amendments; Modifications. No addition to, and no cancellation,
renewal, extension, modification or amendment of, this Agreement shall
be binding upon a Party unless such addition, cancellation, renewal,
extension, modification or amendment is set forth in a written
instrument which states that it adds to, amends, cancels, renews,
extends or modifies this Agreement and which is executed and delivered
on behalf of each Party by an officer of, or attorney-in-fact for, such
Party. No such addition, cancellation, renewal, extension, modification
or amendment by the Company or to which the Company is a party shall be
effective unless the other Parties shall have given their prior written
approval thereto.
11.8 Waiver. No waiver of any provision of this Agreement shall be
binding upon a Party unless such waiver is expressly set forth in a
written instrument which is executed and delivered on behalf of such
Party by an officer of, or attorney-in-fact for, such Party. Such
waiver shall be effective only to the extent specifically set forth in
such written instrument. Neither the exercise (from time to time and at
any time) by a Party of, nor the delay or failure (at any time or for
any period of time) to exercise, any right, power or remedy shall
constitute a waiver of the right to exercise, or impair, limit or
restrict the exercise of, such right, power or remedy or any other
right, power or remedy at any time and from time to time thereafter. No
waiver of any right, power or remedy of a Party shall be deemed to be a
waiver of any other right, power or remedy of such Party or shall,
except to the extent so waived, impair, limit or restrict the exercise
of such right, power or remedy. No waiver by the Company shall be
effective unless the other Parties shall have given their prior written
approval thereto.
11.9 Remedies Cumulative. Except as otherwise provided in this
Agreement, all rights, powers and remedies afforded to a Party
hereunder, by law, in equity or otherwise shall be cumulative (and not
alternative) and shall not preclude assertion or seeking by a Party of
any other rights or remedies.
- 24 -
25
11.10 Counterparts. This Agreement may be signed in any number of
counterparts, each of which (when executed and delivered) shall
constitute an original instrument, but all of which together shall
constitute one and the same instrument. This Agreement shall become
effective and be deemed to have been executed and delivered by all of
the Parties at such time as counterparts shall have been executed and
delivered by each of the Parties, regardless of whether each of the
Parties has executed the same counterpart. It shall not be necessary
when making proof of this Agreement to account for any counterparts
other than a sufficient number of counterparts which, when taken
together, contain signatures of all of the Parties.
11.11 Certain Expenses. Except as otherwise provided in this Agreement,
each Party agrees to pay all expenses, fees and costs (including,
without limitation, legal, accounting and consulting expenses) incurred
by it in connection with the transactions contemplated hereby.
11.12 No Partnership. Nothing contained herein shall be construed as
forming a partnership between the Parties.
IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement
as of the date first above written.
OLEFINS TERMINAL CORPORATION JLM INDUSTRIES, INC.
By: By:
------------------------------------- --------------------------------
Its: Its:
------------------------------------ -------------------------------
D-S SPLITTER, INC.
By:
-------------------------------------
Its:
------------------------------------
- 25 -
