EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
AMONG
ORION REFINING CORPORATION,
VALERO ENERGY CORPORATION
AND
VALERO REFINING--NEW ORLEANS, L.L.C.
DATED
MAY 13, 2003
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ...................................................................... 1
Section 1.1 Definitions ................................................................... 1
Section 1.2 Other Defined Terms ........................................................... 11
Section 1.3 Construction .................................................................. 11
ARTICLE II PURCHASE AND SALE OF ASSETS ..................................................... 11
Section 2.1 Purchase and Sale of Assets ................................................... 11
Section 2.2 Excluded Liabilities .......................................................... 13
ARTICLE III CLOSING; INVENTORY ADJUSTMENT .................................................. 13
Section 3.1 Closing ....................................................................... 13
Section 3.2 Closing Deliveries ............................................................ 13
Section 3.3 Seller Inventory Adjustment ................................................... 14
Section 3.4 Earn Out ...................................................................... 15
Section 3.5 Taxes, Utilities, Etc ......................................................... 16
Section 3.6 Escrow Agreement .............................................................. 18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER ........................................ 18
Section 4.1 Organization and Qualification ................................................ 18
Section 4.2 Authority Relative to Agreements .............................................. 18
Section 4.3 Conflicts and Approvals ....................................................... 19
Section 4.4 Title to Assets ............................................................... 19
Section 4.5 Assumed Contracts ............................................................. 19
Section 4.6 Authorizations ................................................................ 20
Section 4.7 Compliance with Law ........................................................... 20
Section 4.8 Environmental Matters ......................................................... 20
Section 4.9 Insurance ..................................................................... 21
Section 4.10 Labor Matters ................................................................. 21
Section 4.11 Taxes ......................................................................... 21
Section 4.12 No Brokers .................................................................... 21
Section 4.13 Licenses ...................................................................... 21
Section 4.14 Foreign Person ................................................................ 21
Section 4.15 Foreign Trade Zone ............................................................ 21
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND VALERO................................ 22
Section 5.1 Organization and Qualification ................................................ 22
Section 5.2 Authority Relative to Agreements .............................................. 22
Section 5.3 Conflicts and Approvals ....................................................... 22
Section 5.4 Litigation .................................................................... 23
Section 5.5 No Brokers .................................................................... 23
Section 5.6 Preferred Stock ............................................................... 23
Section 5.7 Capital Stock ................................................................. 23
Section 5.8 Financial Statements .......................................................... 23
Section 5.9 Absence of Certain Changes .................................................... 24
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Section 5.10 SEC Filings ................................................................... 24
Section 5.11 Regulation as a Utility ....................................................... 24
Section 5.12 Takeover Statutes ............................................................. 24
ARTICLE VI COVENANTS ....................................................................... 25
Section 6.1 Operation of the Business ..................................................... 25
Section 6.2 Appropriate Action; Consents; Filings ......................................... 26
Section 6.3 Employee Benefit Matters ...................................................... 28
Section 6.4 UOP Claim ..................................................................... 30
Section 6.5 Public Announcements .......................................................... 30
Section 6.6 Expenses ...................................................................... 30
Section 6.7 Foreign Trade Zone ............................................................ 30
Section 6.8 Further Assurances ............................................................ 30
Section 6.9 Cure Amount Determination ..................................................... 30
Section 6.10 Valero Guaranty ............................................................... 31
Section 6.11 Post-Closing Access; Transition Personnel Arrangements ........................ 31
Section 6.12 Sales and Use Tax Matters ..................................................... 32
ARTICLE VII CLOSING CONDITIONS ............................................................. 33
Section 7.1 Conditions to Obligations of Each Party Under This Agreement .................. 33
Section 7.2 Additional Conditions to Seller's Obligations ................................. 33
Section 7.3 Additional Conditions to Buyer's Obligations .................................. 33
ARTICLE VIII TERMINATION ................................................................... 37
Section 8.1 Termination ................................................................... 37
Section 8.2 Effect of Termination Under Section 8.1 ....................................... 37
ARTICLE IX MISCELLANEOUS ................................................................... 38
Section 9.1 Independent Investigation; Scope of Representations and Warranties of Seller... 38
Section 9.2 Indemnification ............................................................... 39
Section 9.3 Amendment ..................................................................... 44
Section 9.4 Waiver ........................................................................ 44
Section 9.5 Notices ....................................................................... 44
Section 9.6 Headings ...................................................................... 45
Section 9.7 Severability .................................................................. 45
Section 9.8 Entire Agreement .............................................................. 45
Section 9.9 Assignment .................................................................... 45
Section 9.10 Parties in Interest ........................................................... 46
Section 9.11 Failure or Indulgence Not Waiver .............................................. 46
Section 9.12 Disclosure Schedule ........................................................... 46
Section 9.13 Governing Law ................................................................. 46
Section 9.14 Counterparts .................................................................. 46
Section 9.15 Buyer's Like Kind Exchange .................................................... 46
ARTICLE X SPECIAL PROVISIONS ............................................................... 47
Section 10.1 Motion to Approve Agreement and Transaction ................................... 47
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Section 10.2 Break-Up Fee and Expense Reimbursement ........................................ 47
Section 10.3 Disclosure .................................................................... 47
Exhibits:
1.1-A Certificate of Designations
1.1-B Escrow Agreement
1.1-C Inventory Sale Agreement
2.1(a) Land
2.1(c) Personalty
3.2(a) Act of Sale
3.2(b) Xxxx of Sale, Assignment and Assumption Agreement
3.2(i) Registration Rights Agreement
3.3(b) Seller Inventory Calculation
3.4 Earn Out
10.1 Sales Procedures and Sale Motion
10.2 Sales Procedures Order
10.3 Sale Order
Schedules to Seller Disclosure Schedule:
1.1-A Certain Assumed Contracts
1.1-B Possible Assumed Contracts
1.1-C Assumed Licenses
1.1-D Certain Excluded Assets
3.5(a) Tax Prorations
4.3(B) Third Person Consents
4.3(C) Governmental Authorizations
4.8 Environmental Matters
4.9 Insurance
4.11 Tax Liens
6.1 Certain Exceptions to Covenants
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PURCHASE AND SALE AGREEMENT
This
PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as
of May 13, 2003 (the "Effective Date"), by and among ORION REFINING CORPORATION,
a Delaware corporation ("Seller"), VALERO ENERGY CORPORATION, a Delaware
corporation ("Valero") and VALERO REFINING--NEW ORLEANS, L.L.C., a Delaware
limited liability company ("Buyer").
RECITALS
Immediately prior to Seller's execution of this Agreement on the date
hereof, Seller filed for bankruptcy protection (the "Seller Bankruptcy") under
chapter 11 of Title 11, U.S. Code, as amended (the "Bankruptcy Code") in the
United States Bankruptcy Court for the State of Delaware (the "Bankruptcy
Court").
Seller desires to sell, and Buyer desires to purchase, the Assets.
The sale of the Assets to Buyer, subject to the terms and conditions of
this Agreement, has been duly approved by the Board of Directors of Seller,
Buyer and Valero.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants contained herein, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement (including in the
Recitals), the following terms shall have the following meanings:
"Aggregate Purchase Price" has the meaning given such term in
Section 3.2.
"Agreed Rate" means the rate of interest published by The Wall Street
Journal as one month LIBOR on the Closing Date plus 112.5 basis points (1.125%),
such rate to change each month on the monthly anniversary date of the Closing
Date based on the quotation of one-month LIBOR in The Wall Street Journal.
"Agreement" has the meaning given such term in the first paragraph
hereof.
"Assets" has the meaning given such term in Section 2.1.
"Assumed Contracts" means (i) those contracts listed on Schedule 1.1-A
of the Seller Disclosure Schedule to which Seller is a party related to the
Assets or the Business, (ii) those contracts listed on Schedule 1.1-B of the
Seller Disclosure Schedule, except for such deletions to such list which Buyer
designates to Seller prior to Closing, and (iii) all rights of Seller as
licensee under those licenses of intellectual property of another Person listed
on Schedule 1.1-C, together with all applications and registrations with respect
thereto, to the extent used by Seller in
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connection with the ownership and operation of the Refinery, in each case only
to the extent they are executory contracts on the Closing Date.
"Assumed Environmental Liabilities" means all environmental remediation
obligations of Seller associated with the Land or land immediately adjacent to
the Land, whether known or unknown and whether accruing before or after the
Closing, except claims asserted in connection with the offsite transportation
and disposal prior to Closing of wastes containing Hazardous Materials generated
at the Refinery or otherwise in connection with the Business.
"Assumed Liabilities" means:
(a) Assumed Environmental Liabilities;
(b) the Settlement Agreement between Seller and the Louisiana
Department of Environmental Quality entered into on September
5, 2002, becoming final and binding on December 30, 2002; and
(c) all obligations and liabilities under the Assumed Contracts
for the period after 2:59 a.m. Central Time on the Closing
Date.
"Authorization" means any franchise, permit, license, authorization,
order, certificate, registration, or other consent or approval granted by any
Governmental Authority.
"Bankruptcy Code" has the meaning given such term in the first recital
of this Agreement.
"Bankruptcy Court" has the meaning given such term in the first recital
of this Agreement.
"Benefit Plan" means (i) any "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, (ii) any stock bonus, stock ownership, stock
option, stock purchase, stock appreciation rights, phantom stock, or other stock
plan (whether qualified or nonqualified), (iii) any bonus, deferred
compensation, or incentive compensation plan, and (iv) any other severance
agreement, plan, program, policy, or arrangement; provided, however, that such
term shall not include (a) routine employment policies and procedures developed
and applied in the ordinary course of business and consistent with past
practice, including wage, vacation, holiday, and sick or other leave policies,
(b) workers compensation insurance, and (c) directors' and officers' liability
insurance.
"Business" means the business related to the Assets conducted by
Seller.
"Business Day" means a 24-hour period ending at 5:00 p.m. EST on a
weekday on which banks are open for general commercial business in New York.
"Buyer" has the meaning given such term in the first paragraph of this
Agreement.
"Buyer Covered Loss" has the meaning given such term in Section 9.2(c).
"Buyer Plan" has the meaning given such term in Section 6.3(a).
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"Buyer's Savings Plan" has the meaning given such term in Section
6.3(d).
"Cash Purchase Price" has the meaning given such term in Section
3.2(d).
"Certificate of Designation" means the certificate designating the
shares of Preferred Stock substantially in the form of Exhibit 1.1-A.
"Claim Notice" has the meaning given such term in Section 9.2(e).
"Closing" has the meaning given such term in Section 3.1.
"Closing Condition" means each of the conditions to the Closing set
forth in Article VII.
"Closing Date" means the date on which the Closing occurs.
"Closing Permitted Encumbrances" means:
(i) easements, leases, reservations, or other rights of others
in, or minor defects and irregularities in title that do not materially
impair the use of, the encumbered property or assets for the purposes
for which they are held; and
(ii) any Lien or privilege vested in any lessor, licensor or
permittor for rent or other obligations solely related to the period
after the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means the Amended and Restated
Confidentiality Agreement dated as of March 5, 2002, by and between Seller and
Valero.
"Counterparty" shall have the meaning set forth in Section 6.9.
"CPA Firm" has the meaning given such term in Section 3.3(d).
"Cure Amount" means the amount of cash required for the cure or
compensation necessary to assume and assign, a contract or agreement, pursuant
to the requirements of Section 365(b) of the Bankruptcy Code.
"Department of Revenue Claim" means all claims of Seller against the
Department of Revenue, State of Louisiana, relating to enterprise zone tax
credits accruing prior to the Closing Date, including those as described in
filings made by Seller in Suit No. 501828, Div. "27" pending in the 19th
Judicial District Court for the Parish of East Baton Rouge, State of Louisiana.
"Earn Out Amount" shall have the meaning set forth in Section 3.4(a).
"Earn Out Payment" shall mean for any Earn Out Year, the excess of the
2-1-1 Crack Spread over the Base Crack Spread determined in the manner specified
in (and as such terms are defined in) Exhibit 3.4.
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"Earn Out Period" shall mean the seven year period commencing on either
September 1, 2003 or January 1, 2004, at Seller's option designated in writing
to Buyer on or before the Closing Date; provided that if no such designation is
made, the Earn Out Period shall commence on January 1, 2004.
"Earn Out Year" shall mean any one-year period commencing on the first
day of the Earn Out Period or on any anniversary thereof during the Earn Out
Period.
"Effective Date" has the meaning given such term in the first paragraph
of this Agreement.
"Election Period" has the meaning given such term in Section 9.2(e).
"Environmental Law" means any Law pertaining to health (with respect to
exposure to Hazardous Materials) or the environment currently in effect in any
or all jurisdictions in which Seller owns or has owned property or conducts or
has conducted business, including the Clean Air Act, as amended, the
Comprehensive Environmental, Response, Compensation, and Liability Act of 1980,
as amended, the Federal Water Pollution Control Act, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Safe Drinking Water Act,
as amended, the Toxic Substances Control Act, as amended, the Hazardous & Solid
Waste Amendments Act of 1984, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation
Act, as amended, the Oil Pollution Act of 1990, and any state and local Laws
implementing or comparable to the foregoing federal Laws.
"Environmental Permit" means any Authorization with respect to the
Business or the Assets under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Account" means the escrow account established in accordance
with the Escrow Agreement.
"Escrow Agent" means Wilmington Trust Company, in its capacity as
Escrow Agent under the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement substantially in the form
of Exhibit 1.1-B dated as of the date of this Agreement among the Escrow Agent,
Buyer, and Seller.
"Estimated MSCG Inventory Amount" has the meaning given such term in
the Inventory Sale Agreement.
"Estimated Seller Inventory Amount" means 90% of Seller's good faith
estimate of the value of the Seller Inventory on the Closing Date, prepared on
the basis of an inventory conducted on the Closing Date, and valued on the same
basis as specified for the Seller Inventory Amount in Exhibit 3.3(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Excluded Assets" means (i) all cash and cash equivalents, (ii) the UOP
Claim, (iii) accounts receivable, (iv) prepaid expenses, (v) exchange
imbalances, (vi) other current assets other than Inventory, (vii) all rights
related to the ownership of the Assets or the operation of the Business prior to
2:59 a.m. Central Time on the Closing Date, including litigation claims and
claims under insurance policies (including director and officer liability
policies), (viii) all rights and powers of a trustee and debtor-in-possession
against any Person whatsoever, including all avoidance powers granted to Seller
or its bankruptcy estate under the Bankruptcy Code and all causes of action and
remedies granted pursuant to Section 502, 510, 541, 544, 545, 547 through 551
and 553 of the Bankruptcy Code, (ix) all deposits and escrow accounts provided
to contract parties for credit enhancement or to secure obligations except the
GATX Environmental Escrow Account, (x) rights and obligations under contracts to
which Seller is a party or related to the Assets that are not Assumed Contracts,
(xi) deposits, (xii) tax refunds and benefits, (xiii) the Department of Revenue
Claim, (xiv) all real and personal property located in Houston,
Texas except
books and records related to the Refinery other than Restricted Information and
(xv) those assets identified on Schedule 1.1-D of the Seller Disclosure
Schedule.
"Excluded Liabilities" means all liabilities, obligations, claims,
costs, penalties and expenses related to the Business for the period prior to
2:59 a.m. Central Time on the Closing Date whether known or unknown, contingent
or otherwise, excluding Assumed Liabilities, but including the following:
(a) All indebtedness for borrowed money of Seller;
(b) All guarantees of third party obligations by Seller and
reimbursement obligations to guarantors of Seller's
obligations or under letters of credit;
(c) All Taxes imposed (i) on the Business or Assets that are
properly attributable to any period, or portion thereof,
ending on or before the Closing Date and (ii) on the Seller
regardless of whether attributable to periods ending before,
on or after the Closing Date;
(d) Except to the extent constituting Assumed Liabilities, all
actions, suits, proceedings, arbitrations or investigations
pending against Seller on or before the Closing Date or
relating to the Business or Assets prior to the Closing Date
even if instituted after the Closing Date;
(e) All liabilities of Seller to any owner or former owner of
capital stock or warrants, holder of indebtedness for borrowed
money, or current or former officer or director of Seller;
(f) Except as provided in Section 6.3, any liabilities or
obligation: (i) for salary, wages, benefits, vacation,
supplies or overhead for or on behalf of any current or former
employees of Seller pertaining to their employment by Seller
at the Assets, (ii) to the extent arising out of acts or
omissions prior to Closing with respect to any Seller Benefit
Plan, employee practices or programs, including employee
claims of wrongful discharge or discrimination, (iii)
severance liabilities of Seller and any other obligations of
Seller under employment contracts for any employees of Seller,
and (iv) any change of control amounts due from Seller and
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payable to any Retained Employees or Transferred Employees as
a result of the transactions contemplated by this Agreement;
(g) drafts or checks outstanding at the Closing;
(h) any claims related to Excluded Assets, including contracts
that are not Assumed Contracts;
(i) obligations under any futures contracts, options on futures,
swap agreements or forward sale agreements; and
(j) Retained Environmental Liabilities.
"Filed SEC Documents" means the SEC Documents filed with the SEC and
publicly available as of the date of this Agreement.
"GATX Environmental Escrow Account" means that escrow account
established pursuant to the Environmental Escrow Agreement dated September 19,
1997, and any amendments or restatements thereto, among Seller, GATX Terminals
Corporation, and First National Bank of Commerce, as escrow agent.
"Governmental Authority" means any national, federal, regional, state,
local or other governmental agency, authority, administrative agency, regulatory
body, commission, instrumentality, court, or arbitral tribunal, including any
multinational authority having governmental or quasi-governmental powers;
provided, however, that such term shall not include any entity or organization
that is engaged in industrial or commercial operations and is wholly or partly
owned by any government.
"Hazardous Materials" means those pollutants, contaminants, chemicals
or toxic, hazardous, or petroleum hydrocarbon substances or wastes that are
regulated under applicable Environmental Laws.
"Holdback Amount" means $20,000,000 in stated value of Preferred Stock
(800,000 shares).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"HSR Fee" means $280,000.
"Indemnified Party" has the meaning given such term in Section 9.2(e).
"Indemnity Notice" has the meaning given such term in Section 9.2(e).
"Intellectual Property" has the meaning given such term in Section
2.1(e).
"Inventory" means the MSCG Inventory and the Seller Inventory.
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"Inventory Sale Agreement" means the Inventory Sale Agreement
substantially in the form of Exhibit 1.1-C dated as of the date hereof among
Seller, Buyer, Valero, and MSCG.
"knowledge" means, when used with respect to Seller, the actual
knowledge of S. Xxxxx Xxxxxxx, Xxxx X. Xxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, or
Xxxxxxx Xxxxx or, but only to their actual knowledge with respect to their areas
of responsibility at Seller, the actual knowledge of Xxxxxx Xxxxxxxx, Xxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxx XxXxxxxxx, Xxxx
Xxxxxxxx, or Xxxxxxx Xxxxxxxx, and, when used with respect to Buyer, the actual
knowledge of Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxx Xxxxxx, or the
chief financial officer of Valero.
"Land" has the meaning given such term in Section 2.1(a).
"Law" means any applicable law, statute, or ordinance of any nation or
state, including the United States of America, and any political subdivision
thereof, including any state of the United States of America, any regulation,
policy, protocol, proclamation, or executive order promulgated by any
Governmental Authority, any rule or regulation of any self-regulatory
organization such as a securities exchange, or any applicable judgment, order,
decree, or decision of any court or other Governmental Authority having the
effect of law in any such jurisdiction.
"Lien" means any mortgage, pledge, security interest, lien, encumbrance
or charge of any kind (including any agreement to give any of the foregoing),
any conditional sale or other title retention agreement, or the filing of or
agreement to give any financing statement under the Laws of any jurisdiction.
"Material Adverse Effect" means any condition, circumstance, event,
change, or effect that (i) when used with respect to the Assets, would
reasonably be expected to cause loss or liability in excess of $3,000,000 with
respect to the Assets after the Closing or (ii) when used with respect to the
ability of a Person to perform its obligations under this Agreement, would
reasonably be expected to materially and adversely affect such ability;
provided, however, that in no event shall any condition, circumstance, event,
change, or effect arising from any of the following be deemed to constitute a
Material Adverse Effect: (A) entering into this Agreement or the announcement of
the transactions contemplated by this Agreement, including the filing and
continuation of the Seller Bankruptcy and any insolvency or lack of liquidity of
Seller, and any reasonably anticipated effects of any thereof, (B) United States
or global regulatory or political conditions, (C) changes in the United States
or global economy as a whole, and (D) any effect resulting from changes that are
the result of factors generally affecting the specific industry or markets in
which Seller competes.
"MSCG" means Xxxxxx Xxxxxxx Capital Group Inc., a Delaware corporation.
"MSCG Inventory" means the "Inventory," as defined in the Inventory
Sale Agreement.
"Objection" has the meaning given such term in Section 3.3(c).
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"Permitted Encumbrance" means:
(i) Liens for Taxes, assessments, and other governmental
charges not delinquent or that are currently being contested in good
faith by appropriate proceedings;
(ii) mechanics' and materialmen's Liens not filed of record
and similar charges not delinquent or that are filed of record but are
being contested in good faith by appropriate proceedings;
(iii) Liens in respect of judgments or awards with respect to
which an appeal or other proceeding for review is being prosecuted and
with respect to which a stay of execution pending such appeal or such
proceeding for review has been obtained;
(iv) easements, leases, reservations, or other rights of
others in, or minor defects and irregularities in title that do not
materially impair the use of, the encumbered property or assets for the
purposes for which they are held;
(v) any Lien or privilege vested in any lessor, licensor, or
permittor for rent or other obligations; and
(vi) Liens that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect with respect
to the Assets.
"Person" means an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture, association, or
unincorporated organization, or any other form of business or professional
entity.
"Pre-Closing Determined Cure Amount" shall have the meaning given such
term in Section 6.9.
"Preliminary Tax Proration" shall have the meaning given such term in
Section 3.5(a)
"Preferred Stock" has the meaning given such term in Section 3.2(d).
"Refinery" has the meaning given such term in Section 2.1(b).
"Restricted Information" means (i) any information related to offers
for the purchase of Seller or all or any material portion of its assets received
or created by Seller, whether prior to or after the Effective Date, (ii) any
other information restricted from Buyer by the Bankruptcy Court, and (iii) any
strategic plans of Seller except plans for the operation of or capital additions
to the Refinery.
"Retained Employees" has the meaning given such term in Section 6.3(a).
"Retained Environmental Liabilities" means all environmental
liabilities and obligations related to the Seller, the Assets or the Business
with respect to actions, inactions or matters occurring or arising prior to the
Closing whether a claim with respect thereto is raised before or after Closing,
excluding Assumed Environmental Liabilities, but including without limitation:
8
(a) penalties assessed for any notice of violation received
from any Governmental Authority related to the operation of the Assets or the
Business prior to Closing that is pending and unresolved as of the Closing Date;
(b) claims asserted in connection with the offsite
transportation and disposal prior to Closing of wastes containing Hazardous
Materials generated at the Refinery or otherwise in connection with the
Business; and
(c) claims for bodily injury or property damage arising out of
exposure to or contamination by Hazardous Materials to the extent arising from
the ownership of, or operations at or in connection with, the Refinery prior to
the Closing Date.
"Review Period" has the meaning given such term in Section 3.3(c).
"Sale Order" has the meaning given such term in Section 10.1.
"Sale Procedures Order" has the meaning given such term in Section
10.1.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning given such term in Section 5.10.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning given such term in the first paragraph of this
Agreement.
"Seller Bankruptcy" has the meaning given such term in the first
Recital of this Agreement.
"Seller Benefit Plans" has the meaning given such term in Section
6.3(a).
"Seller Covered Loss" has the meaning given such term in Section
9.2(a).
"Seller Disclosure Schedule" means the disclosure schedule delivered by
Seller to Buyer on the date of this Agreement.
"Seller Inventory" means the inventory at Closing other than the MSCG
Inventory, including sulfur, petroleum coke, and other product inventory (other
than the MSCG Inventory) and the stores inventory, spare parts, catalyst
(including reclaimable precious metals), chemicals and consumables in warehouse
storage owned by Seller at Closing, in each case whether at the Refinery or
terminals, in transit by pipeline or by vessel, or located elsewhere, whether in
the possession of Seller or any other Person (but attributable to the Business),
but excluding wholesale exchange balances.
"Seller Inventory Adjustment" has the meaning given such term in
Section 3.3(a).
"Seller Inventory Amount" means the value of the Seller Inventory as of
the Closing Date, determined in accordance with Exhibit 3.3(b).
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"Seller Inventory Statement" has the meaning given such term in Section
3.3(b).
"Seller Savings Plan" has the meaning given such term in Section
6.3(d).
"Seller's Pro Rata Taxes" has the meaning given such term in Section
3.5(a).
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, joint venture, or other legal entity
(and any successor to such legal entity) of which such Person owns, directly or
indirectly, more than 50 percent of the stock or other equity or partnership
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
"Tax" means any income, profits, franchise, withholding, ad valorem,
employment, social security, disability, occupation, property, severance, or
excise tax, together with any interest and penalties with respect thereto,
imposed by or on behalf of any Taxing Authority.
"Taxing Authority" means, with respect to any Tax, the Governmental
Authority that imposes such Tax and the Governmental Authority charged with the
collection of such Tax, including any Governmental Authority that imposes, or is
charged with collecting, social security or similar charges or premiums.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto.
"Termination Date" has the meaning given such term in Section 8.1(e).
"Third Person Claim" has the meaning given such term in Section 9.2(e).
"Third Person Consent" means any approval, consent, amendment, or
waiver of a Person that is required under any organizational document of Seller
or Buyer or under any contract to which Seller or Buyer is a party or by which
it or its assets is bound in order to effect the transactions contemplated
hereby or any part thereof, including waivers and consents by lenders and
waivers of transfer restrictions; provided, however, that the use of the term
"Third Person Consent" in this Agreement shall not be deemed to require any such
approval, consent, amendment or waiver of such Person when such approval,
consent, amendment or waiver has been obtained, or could be obtained, by entry
of an Order of the Bankruptcy Court or another court of competent jurisdiction.
"Transferred Employee" has the meaning given such term in Section
6.3(a).
"UOP Claim" means all claims of Seller against UOP, a general
partnership, EM Sectors Holdings, Inc., and Catalysts, Adsorbents and Process
Systems, Inc., and others relating to technology and services provided to Seller
prior to Closing for its catalytic cracking unit, including those as described
in pleadings filed by Seller in the District Court in Xxxxxx County,
Texas, for
misrepresentation, negligence, breach of contract, and violation of the Illinois
Deceptive Trade Practice Act.
"Valero" has the meaning given such term in the first paragraph of this
Agreement.
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"Valero Balance Sheet" means the audited balance sheet of Valero as of
December 31, 2002 included in the Valero Financial Statements.
"Valero Common Stock" means the common stock, par value $0.01 per
share, of Valero.
"Valero Financial Statements" means the audited financial statements of
Valero as of and for the years ended December 31, 2001 and 2002.
"Valero Form 10-K" means the Annual Report on Form 10-K for the year
ended December 31,2002.
"Valero Parties" means Valero and its Subsidiaries (including Buyer)
and their respective officers, directors and employees.
"Welfare Benefits" has the meaning given such term in Section 6.3(e).
Section 1.2 Other Defined Terms. Other terms defined in this Agreement
have the meanings so given them.
Section 1.3 Construction. Whenever the context requires, the gender of
all words used in this Agreement includes the masculine, feminine, and neuter.
Terms defined in the singular have the corresponding meanings in the plural, and
vice versa. All references to Articles and Sections refer to articles and
sections of this Agreement, and all references to Exhibits refer to exhibits to
this Agreement, which are attached hereto and made a part hereof for all
purposes. The word "including" means "including, but not limited to."
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.1 Purchase and Sale of Assets. Subject to and in accordance
with the terms and conditions of this Agreement, at the Closing, Seller shall
sell to Buyer, and Buyer shall purchase from Seller, the following assets (the
"Assets") free and clear of any Liens except Closing Permitted Encumbrances:
(a) the land more particularly described in Exhibit 2.1(a) (the
"Land"), together with all of Seller's right, title, and interest in and to all
land lying in the bed of any street, road, or avenue, opened or proposed, in
front of or adjoining the Land, any land owned, claimed, or fenced by Seller
which adjoins or is located near the Land (including property owned by Seller in
New Sarpy, Louisiana), and all easements, servitudes, rights-of-way, privileges,
licenses (written or oral), and appurtenances relating to the Land;
(b) all buildings, fixtures and other improvements located on the Land,
including the petroleum refinery located thereon (the "Refinery");
(c) all of Seller's right, title, and interest in and to all refinery
equipment and systems, including (i) all processing units, cokers, crackers, and
distillation, cracking, desulphurization and deasphalting systems and catalysts,
chemicals, precious metals and consumables not
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included in Inventory, (ii) all heating, lighting, and power systems, fire
prevention and fire extinguishing systems, control systems, and heating,
refrigerating, air conditioning, and ventilating systems, (iii) all tanks,
meters, pumps, engines, vehicles, compressors, pipes, fittings, valves,
connections, regulators, and loading and unloading lines, (iv) all
telecommunication facilities and equipment and computer hardware, (v) all tools,
computers, unit fill and line fill, and (vi) all other tangible personal
property, in each case (1) presently located on the Land or (2) used or held for
use by Seller in connection with the ownership and operation of the Refinery,
including the tangible personal property more particularly described in Exhibit
2.1(c);
(d) all of Seller's right, title, and interest in and to all Assumed
Contracts accruing after Closing;
(e) all of Seller's right, title, and interest in and to all patents,
copyrights, trademarks, trade secrets, information technology, and other
intellectual property rights ("Intellectual Property"), together with all
applications and registrations with respect thereto, all to the extent used by
Seller in connection with the ownership and operation of the Refinery;
(f) to the extent assignment is permitted by Law, all of Seller's
right, title, and interest in and to all Authorizations granted by any
Governmental Authority to Seller and used or held for use in connection with the
ownership and operation of the Refinery accruing after Closing;
(g) the Inventory;
(h) all of Seller's right, title, and interest in and to all originals
and copies of plans, specifications, designs, reports, maps, surveys, manuals,
and operating and maintenance records (whether paper, photographic, electronic,
magnetic, optical or otherwise) used or held for use by Seller in connection
with the ownership and operation of the Refinery;
(i) all of Seller's books and records relating to the Business and the
Assets, including Transferred Employees, except Restricted Information;
(j) (i) all rights of Seller to property damage insurance proceeds
related to the Assets to the extent Seller has not incurred costs or losses
prior to Closing giving rise to such proceeds and (ii) all rights of Seller to
business interruption insurance proceeds to the extent the period covered by
such business interruption insurance extends past the Closing Date (it being
understood that Seller shall have the right to terminate coverage under its
insurance policies effective as of the Closing);
(k) all of Seller's right, title, and interest in and to GATX
Environmental Escrow Account;
(l) all warranties related to the Assets to the extent a claim under
such warranties arises after the Closing; and
(m) all other real and personal property owned by Seller, located at
the Refinery; but excluding the Excluded Assets.
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Section 2.2 Excluded Liabilities. Buyer and Seller agree that Buyer is
not assuming the Excluded Liabilities.
ARTICLE III
CLOSING; INVENTORY ADJUSTMENT
Section 3.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place (a) at the offices of Xxxxxx &
Xxxxxx L.L.P. in Houston,
Texas, at 11:00 A.M. local time on the third business
day after the day on which the last to be fulfilled of the Closing Conditions
(other than Closing Conditions to be fulfilled on the Closing Date) is fulfilled
or waived by the relevant party or (b) at such other time and place as Seller
and Buyer shall agree.
Section 3.2 Closing Deliveries. At the Closing, Seller and Buyer shall
take the following actions and execute and deliver the following documents:
(a) Each of Seller and Buyer shall execute and deliver to the other an
Act of Sale substantially in the form of Exhibit 3.2(a), pursuant to which
Seller conveys the Land and the improvements and fixtures thereon to Buyer, free
and clear of all Liens except Closing Permitted Encumbrances;
(b) Each of Seller and Buyer shall execute and deliver to the other a
Xxxx of Sale, Assignment, and Assumption Agreement substantially in the form of
Exhibit 3.2(b), pursuant to which Seller conveys the Assets to Buyer, free and
clear of all Liens other than Closing Permitted Encumbrances, and Buyer assumes
the Assumed Liabilities, in each case effective as of 2:59 a.m. on the Closing
Date;
(c) Seller shall deliver to Buyer possession of the Assets, free and
clear of all Liens except Closing Permitted Encumbrances;
(d) Buyer shall pay to Seller an amount equal to the sum of the
Estimated Seller Inventory Amount reported in writing to Buyer by Seller before
9:00 a.m. Central Time on the Closing Date plus $400,000,000 and shall make the
payment to MSCG described in Section 3.2(e) on behalf of Seller (collectively,
the "Aggregate Purchase Price"), less (A) the Pre-Closing Determined Cure
Amounts, (B) the Seller's Pro Rata Taxes, and (C) one-half the HSR Fee (items
(A), (B) and (C) being referred to herein as the "Closing Purchase Price
Adjustments"), payable as follows: (x) an amount in immediately available funds
equal to the Estimated Seller Inventory Amount plus $150,000,000 less the
Closing Purchase Price Adjustments (the "Cash Purchase Price"), and (y) Valero
shall deliver to Seller 10,000,000 shares of 2% Mandatory Convertible Preferred
Stock of Valero, with a stated value of $25 per share, equal to $250,000,000
having the terms set forth in the Certificate of Designation (the "Preferred
Stock") less the Holdback Amount (800,000 shares);
(e) Buyer shall pay to MSCG on behalf of Seller the Estimated MSCG
Inventory Amount in accordance with the Inventory Sale Agreement;
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(f) Buyer shall pay to each Counterparty the Pre-Closing Determined
Cure Amounts with respect to such Counterparty;
(g) Buyer shall deliver to the Escrow Agent the Holdback Amount;
(h) Valero shall deliver to Seller (i) a copy of Valero's Certificate
of Incorporation, as amended as of the Closing Date and including the
Certificate of Designation, certified by the Secretary of State of the State of
Delaware as of a date within five business days immediately preceding the
Closing Date and (ii) a copy duly certified by a secretary or assistant
secretary of Valero to be true and correct of the resolutions of Valero referred
to in Section 5.12; and
(i) Each of Seller and Valero shall execute and deliver to the other a
Registration Rights Agreement substantially in the form of Exhibit 3.2(i).
Section 3.3 Seller Inventory Adjustment.
(a) If the Seller Inventory Amount is greater than the Estimated Seller
Inventory Amount, Buyer shall make an additional payment to Seller in an amount
equal to the excess of the Seller Inventory Amount as calculated in accordance
with this Section 3.3 over the Estimated Seller Inventory Amount, together with
interest thereon at the Agreed Rate from the Closing Date to the date of
payment, which payment shall be made on or before the fifth Business Day after
the final determination of the Seller Inventory Adjustment in accordance with
this Section 3.3. If the Seller Inventory Amount is less than the Estimated
Seller Inventory Amount, Seller shall pay to Buyer an amount equal to the excess
of the Estimated Seller Inventory Amount over the Seller Inventory Amount as
calculated in accordance with this Section 3.3, together with interest thereon
at the Agreed Rate from the Closing Date to the date of payment, which payment
shall be made on or before the fifth Business Day after the final determination
of the Seller Inventory Adjustment in accordance with this Section 3.3. Buyer
shall provide Seller with payment instructions prior to the date of payment. The
payment to be made by Buyer or Seller, as applicable, is herein called the
"Seller Inventory Adjustment."
(b) The Seller Inventory Statement shall be prepared based on a
physical inventory performed by Buyer and Seller and valuation calculations
initially made by Seller. Such physical inventory and valuation calculations
shall be carried out using the methods set forth in Exhibit 3.3(b). Such
physical inventory shall be commenced on the Closing Date and shall be completed
as soon as reasonably practicable thereafter. With respect to all items of
warehouse inventory, such physical inventory shall be completed by Buyer and
Seller prior to Closing based on a reasonable sampling of such inventory
commenced no earlier than the date of this Agreement in accordance with the
procedures specified in Exhibit 3.3(b). The Seller Inventory specified in
Exhibit 3.3(b) shall be included in the Seller Inventory Amount at fair market
value, determined based on the market price indices set forth in such Exhibit.
The warehouse inventory and other inventory for which a market price index is
not set forth on Exhibit 3.3(b) shall be included in Seller Inventory at its
book value at Closing. After receipt of the Adjusted Inventory Report (as
defined in Exhibit 3.3(b)) Seller shall initially calculate the Seller Inventory
Amount and shall deliver to Buyer a statement (the "Seller Inventory Statement")
setting forth the Seller Inventory Amount, together with supporting calculations
and information, as soon as reasonably practicable after the receipt of the
Adjusted Inventory Report but no later than within 10
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Business Days thereof. From the Closing Date through the final determination of
the Seller Inventory Amount in accordance with this Section 3.3, (i) Seller
shall give Buyer access at all reasonable times to the personnel and working
papers utilized in determining the Seller Inventory Amount for purposes of
confirming Seller's calculation of same and (ii) Seller and Buyer shall give one
another access at all reasonable times to the personnel, properties, and books
and records of the Refinery for purposes of determining the Seller Inventory
Amount, including permitting the parties and their respective advisors to
participate in the taking of the physical inventory.
(c) Unless Buyer delivers notice (an "Objection") to Seller on or
before the fifth Business Day after Buyer's receipt of the Seller Inventory
Statement that Buyer disputes the Seller Inventory Amount specified in the
Seller Inventory Statement and providing its proposed calculation of the Seller
Inventory Amount, the Seller Inventory Amount shall be as specified in the
Seller Inventory Statement. If Buyer delivers an Objection to Seller on or
before such fifth Business Day that it disputes the Seller Inventory Amount
specified in the Seller Inventory Statement, Seller shall respond to Buyer with
respect to the Objection within five Business Days from the date of receipt (the
"Review Period"). In any event the party hereto being obligated to pay the
Seller Inventory Adjustment shall pay to the party hereto entitled to receive
the Seller Inventory Adjustment the undisputed amount thereof in accordance with
this Section 3.3. Buyer and Seller shall consult in good faith and use all
reasonable efforts to reach agreement on any dispute regarding Seller Inventory
Amount.
(d) If on or before the fifth Business Day after the end of the Review
Period Seller and Buyer have not agreed on the Seller Inventory Amount, Seller
or Buyer shall have the right to submit such matters as remain in dispute to
Deloitte & Touche, or such other accounting firm as Seller and Buyer shall agree
(the "CPA Firm"), for final resolution. The CPA Firm promptly shall review this
Agreement and the disputed items, subject to any scope that the parties hereto
jointly agree upon. The parties hereto shall make readily available to the CPA
Firm all books and records relating to the Seller Inventory volumes and
valuation calculation and any other items the CPA Firm may reasonably request.
In resolving the dispute, the CPA Firm shall consider only those items or
amounts on which the parties hereto have disagreed.
(e) The CPA Firm shall deliver to the parties as promptly as
practicable a report determining the disputed Seller Inventory Adjustment. Such
report shall be final and binding upon Seller and Buyer (and judgment thereupon
may be entered in any court having jurisdiction over the party against which the
same is sought to be enforced), and the Seller Inventory Amount and Seller
Inventory Adjustment shall be determined accordingly. Buyer and Seller shall
each pay one-half the fees and expenses of such accounting firm for its services
in resolving such dispute. Seller and Buyer may agree in writing prior to
Closing on the value of one or more items of inventory at or prior to Closing
and agree that such value is not subject to further adjustment in accordance
with this Section 3.3.
Section 3.4 Earn Out. (a) Buyer shall, subject to the conditions and at
the times set forth in this Section 3.4, pay to Seller an additional and
contingent amount not to exceed $50,000,000 annually and $175,000,000 in the
aggregate (the "Earn Out Amount").
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(b) The Earn Out Amount shall be payable as follows:
(i) Within 30 days following the end of each Earn Out Year,
Buyer shall pay to Seller the Earn Out Payment for such Earn Out Year,
if any.
(ii) No interest shall accrue on the Earn Out Amount.
(iii) The manner in which Earn Out Payments shall be
calculated and hypothetical examples of when and how Earn Out Payments
would be made are set forth in Exhibit 3.4.
(c) All payments by Buyer to Seller pursuant to this Section
3.4 shall be made by wire transfer of immediately available funds to the account
specified by Seller from time to time.
(d) If, at any time prior to or during the Earn Out Period,
Platts Oilgram Price Report or Petroleum Argus Global Markets shall cease to be
published or shall fail to publish any of the prices used in calculating the
Earn Out Payments, the parties (acting in good faith) shall mutually agree on an
alternate publication for the purpose of establishing any such prices. If the
Maya Crude pricing formula ceases to represent the true market price for Maya
Crude, or if Maya Crude is no longer the industry reference for heavy, sour Gulf
Coast crudes, then the parties (acting in good faith) shall mutually agree on an
alternative pricing formula consistent with the intent of the parties as of the
date of this Agreement.
(e) Buyer shall initially calculate the Earn Out Payment and
shall deliver to Seller a statement setting forth the calculation of the Earn
Out Payment, together with supporting information, at such time as the Earn Out
Payment is made. The acceptance by Seller of any Earn Out Payment shall not
preclude Seller from taking exception to the correctness of the amount of any
Earn Out Payment due hereunder; provided, however, that any such exception must
be specified by Seller in a written notice to Buyer within 30 days after the
date such payment is made, which notice shall describe the basis for Seller's
dispute in reasonable detail. If Seller gives such notice, Buyer shall pay to
Seller any undisputed additional amount of the Earn Out Payment in accordance
with this Section 3.4, and Seller and Buyer shall consult in good faith and use
all reasonable efforts to agree upon the calculation of the Earn Out Payment. If
on or before the 30th day after Seller's notice Seller and Buyer have not agreed
on the Earn Out Payment, either Seller or Buyer shall have the right to submit
such matters as remain in dispute to Deloitte & Touche, or such other accounting
firm as Seller and Buyer shall agree, for final resolution, which resolution
shall be binding upon Seller and Buyer, and judgment upon which may be entered
in any court having jurisdiction over the party against which such determination
is sought to be enforced. Buyer and Seller shall each pay one-half the fees and
expenses of such accounting firm for its services in resolving such dispute.
Section 3.5 Taxes, Utilities, Etc.
(a) Real estate and personal property Taxes for the calendar
year December 31, 2003, shall be prorated on a per diem basis to the
Closing Date, with Seller being responsible for such Taxes allocable to
the period from January 1, 2003, to the Closing Date, and Buyer being
responsible for such Taxes allocable for the period from the
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Closing Date through December 31, 2003. The initial proration (the
"Preliminary Tax Proration") shall be based upon the amounts of real
estate and personal property Taxes allocated to the Assets from the
most recent property tax assessments if known, or upon the amounts paid
during the preceding year to the extent not known, all as shown on
Schedule 3.5(a) of the Seller Disclosure Schedule. Such prorations
shall be made at Closing, and Seller's pro rata share of such Taxes
("Seller's Pro Rata Taxes") shall be deducted from the Aggregate
Purchase Price and the Cash Purchase Price as provided in Section
3.2(d). Buyer will assume responsibility for the actual payment to the
applicable Governmental Authority of (1) any unpaid property Taxes not
yet due to the extent they relate to periods after the Closing Date,
and (2) any property Taxes to the extent that there has been a
reduction in the Aggregate Purchase Price and the Cash Purchase Price
pursuant to this Section 3.5(a). Seller shall remain liable for any
unpaid property Taxes to the extent they relate to periods ending on or
before the Closing Date and for which there has not been a reduction in
the Aggregate Purchase Price and the Cash Purchase Price pursuant to
this Section 3.5(a). Buyer shall have the right to contact any
Governmental Authority with respect to obtaining assurances that Buyer
shall not be liable for the payment of any property Taxes which are to
be paid by Seller pursuant to the preceding sentence. Promptly upon
Buyer's receipt of the final invoices for the Taxes prorated in
accordance with this Section 3.5(a), Buyer shall deliver a copy of such
invoices to Seller. If the amount of such Taxes as reflected in such
invoices is different from the amount of such Taxes as reflected in
Schedule 3.5(a) of the Seller Disclosure Schedule, Buyer or Seller, as
applicable, shall make an adjustment payment to the other such that the
Seller's Pro Rata Taxes deducted from the Aggregate Purchase Price and
the Cash Purchase Price, together with such adjustment payment, shall
equal Seller's pro rata portion of such Taxes as specified in the first
sentence of this Section 3.5(a). The resulting amount payable by Buyer
or Seller shall be paid promptly upon demand by the party hereto to
whom such payment is owed and any failure by Seller to pay such claim
shall be a Seller Covered Loss, and any failure by Buyer to pay such
claim shall be a Buyer Covered Loss. To the extent permitted by Law,
Buyer shall claim the credit against Louisiana franchise and income
taxes with respect to the full amount of the personal property taxes
imposed on inventory for the period from January 1, 2003, through
December 31, 2003, and, upon the receipt of such credit (whether
through reduction of an amount due or through refund) shall pay to
Seller Seller's pro-rata portion, based on the portion of such taxes
included in Seller's Pro Rata Taxes.
(b) Any charges for utilities or similar costs or assessments,
common area maintenance reimbursements to lessors, local business or
other license fees and other similar periodic charges shall be prorated
on a per diem basis through the Closing Date, with Seller being
responsible for all of such prorated charges attributable to the period
up to and ending on the Closing Date and Buyer being responsible for
all of such prorated charges attributable to the period after the
Closing Date. Promptly upon receipt, Buyer or Seller, as appropriate,
shall provide the other with copies of all bills for such items for
which the other party is responsible pursuant to this Section 3.5(b).
The resulting amount payable by Buyer or Seller shall be paid promptly
upon demand by the party hereto to whom such payment is owed and any
failure by Seller to pay such claim shall be a Seller Covered Loss, and
any failure by Buyer to pay such claim shall be a Buyer Covered Loss.
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Section 3.6 Escrow Agreement. Pursuant to the Escrow Agreement, (a) the
Escrow Agent shall deliver to Buyer from the Escrow Account shares of Preferred
Stock with a stated value equal to (i) if applicable and not otherwise paid
pursuant to the provisions of this Agreement, the Seller Inventory Adjustment
and (ii) the amount of any claim for Seller Covered Losses (subject to the
limitations set forth in Section 9.2(a)) mutually agreed by Seller and Buyer or
finally determined pursuant to judicial proceedings to be due to Buyer and (b)
the Escrow Agent shall pay to Seller from the Escrow Account (i) at the request
of Seller at any time, any dividends received on the Preferred Stock in the
Escrow Account, (ii) at the end of the survival periods specified in Section
9.2(a)(ii), an amount equal to the remaining Preferred Stock and dividends, if
any, in the Escrow Account (less the amount of any Preferred Stock still
required to be maintained in the Escrow Account pursuant to Section
9.2(a)(viii)) plus any pending claims of Buyer for Seller Covered Losses duly
made in accordance with Section 9.2(a)(ii)), and (iii) after the end of the
survival periods specified in Section 9.2(a)(ii), upon final determination of
any claim of Buyer for Seller Covered Losses, an amount equal to the excess of
the amount of Preferred Stock retained in the Escrow Account in respect of such
claim in accordance with Section 9.2(a)(ii) over the amount finally determined
to be due to Buyer in connection with such claim.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer and Valero as follows:
Section 4.1 Organization and Qualification. Seller is a corporation
duly organized and validly existing and, except for the effects of the Seller
Bankruptcy, in good standing under the Laws of the State of Delaware. Subject to
the Bankruptcy Court's entry of the Sale Order, Seller has the requisite
corporate power and authority to carry on its business as it is now being
conducted. Seller has delivered to Buyer correct and complete copies of its
certificate of incorporation and by-laws. Seller is duly qualified as a foreign
corporation and, except for the effects of the Seller Bankruptcy, in good
standing in the State of Louisiana and in each other jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect with respect to the Assets. Seller has no
subsidiaries.
Section 4.2 Authority Relative to Agreements. Subject to the Bankruptcy
Court's entry of the Sale Order, Seller has the requisite corporate power and
authority to enter into this Agreement and the other agreements to which Seller
is a party contemplated hereby and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
agreements to which Seller is a party contemplated hereby by Seller and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of Seller and its stockholders
and, prior to the Closing Date, will be duly authorized by the Bankruptcy Court.
Following the approval of this Agreement and the other agreements to which
Seller is a party contemplated hereby by the Bankruptcy Court pursuant to the
Sale Order, each of this Agreement and the other agreements to which Seller is a
party contemplated hereby will have been duly and validly executed by Seller
and, assuming the
18
due authorization, execution, and delivery of this Agreement and such other
agreements by the other parties thereto, will constitute the legal, valid, and
binding obligation of Seller enforceable in accordance with its terms, except
(i) as enforcement may be, after Seller's emergence from its pending bankruptcy,
limited by bankruptcy, insolvency, or other similar Laws affecting the
enforcement of creditors' rights generally, and (ii) that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.
Section 4.3 Conflicts and Approvals. To Seller's knowledge, except (A)
as required in connection with the HSR Act, (B) for the receipt of the Third
Person Consents set forth in Schedule 4.3(B) of the Seller Disclosure Schedule,
(C) for the effectuation of the filings and registrations with and the receipt
of the Authorizations from Governmental Authorities set forth in Schedule 4.3(C)
of the Seller Disclosure Schedule, and (D) as permitted under the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure or the orders of the Bankruptcy
Court, neither the execution and delivery by Seller of this Agreement and the
other agreements to which Seller is a party contemplated hereby nor the
performance by Seller of its obligations hereunder and thereunder will (a)
violate or breach the terms of or cause a default or require any filing,
consent, authorization, notice or approval under (i) any Law applicable to
Seller, (ii) the Certificate of Incorporation or By-Laws or other organizational
documents of Seller, or (iii) any Authorization or Environmental Permit or any
Assumed Contract or (b) with the passage of time, the giving of notice, or the
taking of any action by a third Person, have any of the effects set forth in
clause (a) of this Section 4.3, except for any matters described in this Section
4.3 (excluding consents set forth in Schedule 4.3(B)) that would not reasonably
be expected to have a Material Adverse Effect with respect to the Assets or the
ability of Seller to perform its obligations under this Agreement.
Section 4.4 Title to Assets. To Seller's knowledge, Seller has title to
the Assets (other than the MSCG Inventory), free and clear of Liens, other than
(a) Liens securing debt that will not encumber the Assets after Closing and (b)
Permitted Encumbrances. To Seller's knowledge, at Closing, Seller will convey to
Buyer the Assets (including the MSCG Inventory), free and clear of any Liens
except the Closing Permitted Encumbrances. To Seller's knowledge, to the extent
that any of the Assets are held by Seller under lease agreements or easements,
Seller enjoys peaceful and undisturbed possession of such properties, other than
any properties that, individually or in the aggregate, are not material.
Section 4.5 Assumed Contracts.
(a) To Seller's knowledge, Seller has provided Buyer (through Seller's
data website or otherwise) complete and correct copies of the Assumed Contracts
listed on Schedules 1.1-A, 1.1-B and 1.1-C.
(b) To Seller's knowledge, except for any matter arising from the
Seller Bankruptcy, any failure of Seller to make timely payments or any matter
that would not reasonably be expected to have a Material Adverse Effect with
respect to the Assets, as of the date of this Agreement (i) Seller has not
breached the terms of any Assumed Contract described in Section 4.5(a), (ii)
Seller has not received from any other party to any Assumed Contract described
in Section 4.5(a) specific written notification that such Assumed Contract is
not in full force and
19
effect, that Seller has not performed its obligations thereunder to date, or
that any other party thereto has not performed its obligations thereunder to
date, and (iii) no event has occurred, and no circumstance or condition exists,
that (with or without notice or lapse of time) would reasonably be expected to
result in a breach or violation of, or a default under, the terms of any Assumed
Contract described in Section 4.5(a).
Section 4.6 Authorizations. To Seller's knowledge, except with respect
to matters (A) arising from the Seller Bankruptcy, (B) subject to Section 4.8 or
(C) as would not reasonably be expected to have a Material Adverse Effect with
respect to the Assets, as of the date of this Agreement (a) Seller has obtained
all Authorizations that are necessary to construct, own, operate, use and carry
on the Business as currently conducted, (b) no event has occurred, and no
circumstance or condition exists, that (with or without notice) would reasonably
be expected to constitute or result in a violation by Seller of, or a failure on
the part of Seller to comply with the terms of, any Authorization, (c) Seller
has not received from any Governmental Authority written notification that any
Authorization (i) is not in full force and effect, (ii) has been violated in any
respect, or (iii) is subject to any suspension, revocation, modification or
cancellation, and (d) there is no action, suit, proceeding, arbitration, or
investigation pending or, threatened regarding suspension, revocation,
modification, or cancellation of any Authorization.
Section 4.7 Compliance with Law. To Seller's knowledge, except for
matters subject to Section 4.3, 4.6, 4.8, or 4.11 or that would not reasonably
be expected to result in a Lien on the Assets after Closing or require material
corrective action by Buyer with respect to the Assets after Closing, as of the
date of this Agreement (a) the Assets are in compliance with all applicable
Laws, (b) Seller has received no specific written notification from any
applicable Governmental Authority that the Assets are not in compliance with all
applicable Laws, and (c) no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) would reasonably be
expected to constitute or result in a failure of the Assets to comply with the
terms of, any applicable Law.
Section 4.8 Environmental Matters. To Seller's knowledge as of the date
of this Agreement, except for matters arising from the Seller Bankruptcy or
disclosed in Schedule 4.8 of the Seller Disclosure Schedule and except for
Assumed Liabilities and matters that would not reasonably be expected to result
in a Lien on the Assets after Closing or require material corrective action by
Buyer with respect to the Assets after Closing:
(a) the Assets and the operations of Seller with respect thereto are in
compliance with all applicable Environmental Laws, including Environmental
Permits;
(b) all Authorizations, if any, required to be obtained or filed by or
complied with by Seller under any applicable Environmental Law in connection
with the Assets and the operations of Seller with respect thereto, as they are
currently being conducted, including those relating to Hazardous Materials, have
been duly obtained or filed for and are in full force and effect, and the Assets
and Seller are in compliance with the terms and conditions of all such
Authorizations,
(c) there are no pending or threatened actions, suits, investigations,
inquiries, or proceedings by or before any Governmental Authority under any
applicable Environmental Law relating to the Assets or Seller's operations with
respect thereto;
20
(d) there have been no releases of Hazardous Materials on or under the
Assets by Seller as a result of Seller's operations with respect to the Assets
that would require remediation by Buyer after Closing under applicable
Environmental Laws; and
(e) other than materials with respect to which Seller has asserted the
attorney-client or the attorney-work product privileges, Seller has made
available to Buyer all environmental site assessment reports and all material
environmental studies and correspondence on environmental matters (in each case
relevant to the Assets) in Seller's possession and relating to the Assets or
Seller's operations with respect thereto.
Section 4.9 Insurance. To Seller's knowledge, Schedule 4.9 of the
Seller Disclosure Schedule sets forth a list, including the name of the
underwriter, risks insured, coverage and related limits and deductibles,
expiration dates, and significant riders, of the property damage and business
interruption insurance policies currently maintained by Seller. To Seller's
knowledge, as of the date of this Agreement, all such policies are in full force
and effect and all premiums due thereon have been paid.
Section 4.10 Labor Matters. To Seller's knowledge, as of the date of
this Agreement, there is no labor dispute, strike, or work stoppage against
Seller which would reasonably be expected to have a Material Adverse Effect with
respect to the Assets after the Closing.
Section 4.11 Taxes. To Seller's knowledge, except as set forth in
Schedule 4.11 of the Seller Disclosure Schedule or as would not reasonably be
expected to have a Material Adverse Effect with respect to the Assets after the
Closing, there are no Liens on any of the Assets that arose in connection with
any failure (or alleged failure) to pay any Tax that will continue to be Liens
against the Assets (as distinguished from the proceeds thereof) after Closing.
Section 4.12 No Brokers. To Seller's knowledge, no broker, finder, or
investment banker is entitled to any brokerage, finder's, or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller or any stockholder of
Seller, except any thereof the fees and commissions for which will be discharged
by Seller or one or more stockholders of Seller.
Section 4.13 Licenses. To Seller's knowledge, Seller has taken
reasonable precautions to protect its rights in and to the Intellectual
Property, including maintaining the confidentiality of trade secrets, pending
patent applications, know-how, and other confidential Intellectual Property.
Section 4.14 Foreign Person. Seller is not a "foreign person" as
defined in Section 1445 of the Code. Seller's U.S. tax identification number is
00-0000000.
Section 4.15 Foreign Trade Zone. To Seller's knowledge, as of the date
of this Agreement, the Refinery is operating as a subzone, Subzone 124A (the
"Subzone"), under a valid grant of authority from the Foreign Trade Zones Board
and has been activated with the U.S. Customs Service.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND VALERO
Buyer and Valero hereby jointly and severally represent and warrant to
Seller as follows:
Section 5.1 Organization and Qualification. Each of Buyer and Valero is
a corporation duly organized and validly existing and in good standing under the
Laws of Delaware. Each of Buyer and Valero has the requisite corporate power and
authority to carry on its business as it is now being conducted. Buyer is duly
qualified as a foreign corporation and in good standing in the State of
Louisiana and in each other jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect with respect to Valero and its Subsidiaries taken as a whole.
Each Valero subsidiary (other than Buyer) which is a significant subsidiary as
defined in Rule 1-.02(w) of Regulation S-X of the Exchange Act (a "Significant
Subsidiary") is a corporation or other entity duly organized and validly
existing and in good standing under the Laws of the jurisdiction in which it is
incorporated or organized except where the failure to be in good standing would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect with respect to Valero and its Subsidiaries taken as a whole.
Valero and each Valero Significant Subsidiary is duly qualified as a foreign
corporation or other entity and in good standing in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect with respect to Valero and its Subsidiaries taken
as a whole.
Section 5.2 Authority Relative to Agreements. Each of Buyer and Valero
has the requisite corporate or partnership power and authority to enter into
this Agreement and the other agreements to which Buyer and/or Valero is a party
contemplated hereby and to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the other agreements to which
Buyer and/or Valero is a party contemplated hereby by each of Buyer and Valero
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of Buyer and Valero.
Each of this Agreement and the other agreements to which Buyer and/or Valero is
a party contemplated hereby have been duly and validly executed by Buyer and
Valero and, assuming the due authorization, execution, and delivery of this
Agreement and such other agreements by the other parties thereto, constitutes
the legal, valid, and binding obligation of Buyer and Valero enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, or other similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
Section 5.3 Conflicts and Approvals. Except as required in connection
with the HSR Act and the obtaining of any required permits or licenses from any
Governmental Authority, neither the execution and delivery by Buyer or Valero of
this Agreement and the other agreements to which Buyer and/or Valero is a party
nor the performance by Buyer or Valero of
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its obligations hereunder and thereunder will (a) violate or breach the terms of
or cause a default or require any filing, consent, authorization, notice or
approval under (i) any Law applicable to Valero or any of its Significant
Subsidiaries, (ii) the certificate of incorporation or by-laws or other
organizational documents of Buyer, Valero or any of its Significant
Subsidiaries, or (iii) any Authorization or contract or agreement to which
Buyer, Valero or any of its Significant Subsidiaries is a party or by which it
or any of its properties or assets is bound or (b), with the passage of time,
the giving of notice, or the taking of any action by a third Person, have any of
the effects set forth in clause (a) of this Section 5.3, except in each case for
any matters described in this Section 5.3 that would not reasonably be expected
to have a material adverse effect with respect to Valero and its Subsidiaries
taken as a whole or the ability of Buyer or Valero to perform their obligations
under this Agreement.
Section 5.4 Litigation. As of the date of this Agreement, except as set
forth in the Filed SEC Documents, there are no actions, suits, proceedings,
arbitrations, or investigations pending or, to the knowledge of Valero or Buyer,
threatened against Buyer, Valero or any of its Significant Subsidiaries, that,
individually or, with respect to multiple actions, suits, proceedings, or
arbitrations that allege similar theories of recovery based on similar facts, in
the aggregate, would not reasonably be expected to have a material adverse
effect with respect to Valero and its Subsidiaries taken as a whole or the
ability of Valero or Buyer to perform its obligations under this Agreement in
all material respects.
Section 5.5 No Brokers. No broker, finder, or investment banker is
entitled to any brokerage, finder's, or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Buyer, except any thereof the fees and commissions for
which will be discharged by Buyer.
Section 5.6 Preferred Stock. Valero has the requisite corporate power
and authority to issue and deliver the Preferred Stock and the Valero Common
Stock issuable upon conversion of the Preferred Stock (the "Underlying Shares")
in accordance with and upon the terms and conditions set forth in this Agreement
and in the Certificate of Designation. All corporate action required to be taken
by Valero for the authorization, issuance, and delivery of the Preferred Stock
and the Underlying Shares has been validly and sufficiently taken. The Preferred
Stock has been duly and validly authorized, and, upon delivery of the Preferred
Stock as provided herein, will be validly issued, fully paid and nonassessable,
with no personal liability attaching to the ownership thereof. The Underlying
Shares have been duly and validly authorized and reserved for issuance upon such
conversion and, when issued upon conversion, will be validly issued, fully paid
and nonassessable. The Preferred Stock and the Underlying Shares will not be
issued in violation of, and will not be subject to, any purchase option, call,
right of first refusal, preemptive, subscription or similar rights under any
provision of applicable Law, the certificate of incorporation or by-laws of
Valero or any of its Subsidiaries, any contract, agreement or instrument to
which Valero or any of its Subsidiaries is subject, bound or a party or
otherwise.
Section 5.7 Capital Stock. The authorized capital stock of Valero is as
set forth in the Valero Form 10-K.
Section 5.8 Financial Statements. The Valero Financial Statements have
been prepared in accordance with GAAP and fairly present, in all material
respects, the consolidated
23
financial position of Valero and its Subsidiaries as of the dates thereof and
the results of operations for the periods then ended.
Section 5.9 Absence of Certain Changes. To Buyer's knowledge, since the
date of the Valero Balance Sheet, except as set forth in the Filed SEC
Documents, (i) there has not been any material adverse effect with respect to
Valero and its Subsidiaries taken as a whole and (ii) Valero has caused the
business of Valero and its Subsidiaries to be operated in the usual and ordinary
course, consistent with past practice except for any matter or occurrence which
would not have a material adverse effect on Valero and its Subsidiaries taken as
a whole.
Section 5.10 SEC Filings. Valero has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC under the Securities Act and the Exchange Act since January 1, 2000 (the
"SEC Documents"). As of its filing date, each SEC Document filed (A) complied in
all material respects with the applicable requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations thereunder and
(B) did not, at the time it was filed (and at the effective date thereof in the
case of a registration statement), contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of Valero
or any of its Subsidiaries included in the SEC Documents comply as to form in
all material respects with the applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto and have been
prepared in accordance with GAAP (except, in the case of unaudited statements or
pro forma statements, as permitted by Form 10-Q or Form 8-K of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto).
Section 5.11 Regulation as a Utility. Neither Valero nor any of its
Subsidiaries is a "holding company," a "subsidiary holding company," an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company" or a "public utility," as each such term is defined in the Public
Utility Holding Company Act of 1935 and the rules and regulations promulgated
thereunder.
Section 5.12 Takeover Statutes. The Board of Directors of Valero has
approved the issuance of the Preferred Stock and the Underlying Shares to Seller
for purposes of Section 203(a)(1) of the Delaware General Corporation Law. To
the knowledge of Buyer and Valero, no other "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover statute, law, regulation or
rule of any Governmental Authority is applicable to the transactions
contemplated hereby.
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ARTICLE VI
COVENANTS
Section 6.1 Operation of the Business. Except (A) as set forth in
Schedule 6.1 of the Seller Disclosure Schedule, (B) as otherwise contemplated by
this Agreement, or (C) as otherwise consented to in writing by Buyer, from the
date of this Agreement until the Closing, Seller shall:
(a) afford to Buyer and its agents, advisors, and representatives
reasonable access to the Assets and to Seller's documents and records relating
thereto except Restricted Information and to Seller's personnel and shall
furnish such information about the Assets as Buyer shall reasonably request, all
upon reasonable notice to Seller and in a manner that does not interfere in any
material respect with the normal operations of Seller and the Business;
(b) subject to the effects of the Seller Bankruptcy, operate the
Business in the usual and ordinary course consistent with past practice and not
voluntarily shut down any material unit of the Refinery to the extent such
material unit is capable of being safely operated;
(c) operate the Business in material compliance with all Environmental
Laws;
(d) keep those insurance policies identified in Schedule 4.9 (or
substantially comparable replacement policies) in effect until Closing;
(e) subject to the effects of the Seller Bankruptcy, use all
commercially reasonable efforts to preserve substantially intact its business
organization, to maintain its rights, privileges and immunities, to retain the
services of its key employees (subject to work force requirements), to maintain
its insurance coverages, and to maintain its relationships with its customers
and suppliers who are approved by the Bankruptcy Court as critical vendors;
(f) not sell, lease, exchange, or otherwise dispose of, or grant any
Lien with respect to, any material Assets, except for (i) dispositions of
inventories in the ordinary course of business consistent with past practice,
(ii) Permitted Encumbrances, and (iii) Liens securing debt that will not
encumber the Assets after Closing;
(g) not increase the compensation (excluding any compensation in
respect of retention, change of control or severance obligations not assumed by
Buyer) payable to or to become payable to any director or executive officer of
Seller or, in the case of other employees, increase the compensation payable or
to become payable to other employees other than normal salary increases
consistent with past practice except pursuant to any contract, agreement, or
other legal obligation of Seller existing as of the date of this Agreement that
has been disclosed to Buyer and except with respect to such increases in
compensation as may be made in Seller's ordinary course of business;
(h) not acquire or construct any assets or properties other than any
assets or properties that are not material to the Business and other than
repairs to existing units or assets (including repair of casualty loss and the
application of insurance proceeds thereto) or the acquisition of
25
assets from suppliers or vendors in the ordinary course of business and
consistent with past practice;
(i) not consent to the entry of any decree or order by any Governmental
Authority agreeing to pay any fine or penalty payable by Buyer after the Closing
or causing a significant expansion in the scope of the Assumed Environmental
Liabilities; and
(j) not agree in writing or otherwise to do any of the foregoing;
except, in each case, for any matters that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect with respect
to the Assets being sold at Closing.
Section 6.2 Appropriate Action; Consents; Filings. From the date of
this Agreement until the Closing:
(a) Seller and Buyer shall each use all commercially reasonable efforts
(i) to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things that, in either case, are necessary, proper, or advisable under
applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) to obtain from the relevant Governmental
Authorities all Authorizations required to be obtained by Seller or Buyer in
connection with the authorization, execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby, and
(iii) to make all necessary filings, and thereafter to make any other required
submissions, with respect to this Agreement and the transactions contemplated
hereby required under any applicable Law. Seller and Buyer shall cooperate in
connection with the making of all such filings, through, among other means,
providing copies of all such documents to the nonfiling party and its advisors
prior to filing and, if requested, accepting all reasonable additions,
deletions, or changes suggested in connection therewith. Seller and Buyer shall
furnish or cause to be furnished all information required for any application or
other filing to be made pursuant to any applicable Law in connection with the
transactions contemplated by this Agreement.
(b) Without limiting the generality of Section 6.2(a), each of Seller
and Buyer shall use its reasonable best efforts to respond as promptly as
practicable to any inquiries received from the Federal Trade Commission or the
Antitrust Division of the Department of Justice for additional information or
documentation with respect to the HSR Act filings and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Authority in connection with antitrust matters
relating to the transactions contemplated by this Agreement. Each party hereto
shall provide a copy of its filing materials under the HSR Act to the other
party hereto (excluding any Restricted Information) prior to making such filing
and the parties hereto shall confer on the matters set forth therein.
(c) Seller and Buyer shall each timely give or cause to be given all
notices to third Persons and use all commercially reasonable efforts to obtain
all Third Person Consents (i) required under any Assumed Contract in connection
with the consummation of the transactions contemplated hereby or (ii) otherwise
required to prevent a Material Adverse Effect with respect to the Assets from
occurring prior to or after the Closing. If any Authorization or Third Party
Consent required for the assignment of any Assumed Contract to Buyer is not
obtained on or
26
prior to the Closing Date (without any consent fee or other consideration to be
paid by Seller to the Counterparty thereunder for such assignment except for
Pre-Closing Determined Cure Amounts), then, notwithstanding anything to the
contrary in this Agreement, such Assumed Contract shall not be assigned to Buyer
at Closing, and thereafter (1) the parties hereto shall continue to use all
commercially reasonable efforts to obtain the required Authorization or Third
Person Consent for a reasonable period of time after the Closing Date and, if
such Authorization or Third Person Consent is obtained after the Closing Date,
such Assumed Contract shall be assigned to Buyer as soon as reasonably
practicable after such Authorization or Third Person Consent is obtained, (2) if
such Authorization or Third Person Consent is not obtained within a reasonable
time after the Closing Date, Seller shall have the right to terminate such
Assumed Contract, and (3) with respect to the period of time from the Closing
Date until such Assumed Contract is assigned to Buyer or such Assumed Contract
is terminated by Seller, Seller and Buyer shall enter into such arrangements as
shall be reasonably practicable such that the economic and other costs and
benefits of such Assumed Contract shall be passed through from Seller to Buyer
and such that Buyer shall indemnify, defend, and hold harmless Seller from and
against all liabilities arising under such Assumed Contract from and after the
Closing Date. Any out-of-pocket costs associated with obtaining such consents
except the consents of holders of indebtedness shall be borne one-half by Buyer
and one-half by Seller.
(d) Seller and Buyer shall each give prompt notice to the other of the
receipt of any written notice or other written communication (i) from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated hereby, (ii) from any Governmental Authority
in connection with the transactions contemplated hereby, (iii) from any
Governmental Authority or other Person regarding the initiation or threat of
initiation of any claims, actions, suits, proceedings, arbitrations, or
investigations against, relating to, or involving or otherwise affecting Seller
or Buyer that relate to the consummation of the transactions contemplated
hereby, and (iv) from any Person regarding the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would be reasonably likely
(A) to cause any condition to the obligations of the other party hereto to
consummate the transactions contemplated hereby not to be satisfied, (B) to
cause a breach of the representations, warranties, or covenants of such party
under this Agreement, or (C) to delay or impede the ability of either Seller or
Buyer, respectively, to consummate the transactions contemplated by this
Agreement or to fulfill their respective obligations set forth herein. No
delivery of any notice pursuant to clause (iv) of this Section 6.2(d) shall cure
any breach of any representation or warranty of the party hereto giving such
notice contained in this Agreement or otherwise limit or affect the remedies
available hereunder to the party hereto receiving such notice.
(e) Seller and Buyer each agree to cooperate and to use all
commercially reasonable efforts vigorously to contest and to resist any action,
including legislative, administrative, or judicial action, and to have vacated,
lifted, reversed, or overturned any order (whether temporary, preliminary, or
permanent) of any court or other Governmental Authority that is in effect and
that restricts, prevents, or prohibits the consummation of the transactions
contemplated by this Agreement, including the vigorous pursuit of all available
avenues of administrative and judicial appeal and all available legislative
action. Notwithstanding the foregoing, the Valero Parties shall not be required
to dispose of any assets or withdraw from doing business in particular
jurisdictions if required by any Governmental Authority as a condition to the
granting of any Authorization necessary for the consummation of the transactions
contemplated hereby or as
27
may be required to avoid, lift, vacate, or reverse any legislative,
administrative, or judicial action that would otherwise cause any Closing
Condition not to be satisfied.
(f) Prior to the Closing, Valero shall file the Certificate of
Designation with the Office of the Secretary of State of the State of Delaware
in accordance with the requirements of the General Corporation Law of the State
of Delaware.
Section 6.3 Employee Benefit Matters.
(a) Buyer agrees to offer employment for a period of at least six
months beginning on the Closing Date (unless terminated for cause) to
substantially all Seller's employees actively employed at the Refinery. Neither
Buyer nor Valero will be responsible for any severance obligations for Seller
employees who are not offered employment or for any Seller employee who does not
accept employment with Buyer (each a "Retained Employee"). Buyer shall offer to
any employee of Seller who commences employment with Buyer on or after the
Closing Date (each a "Transferred Employee") participation after the Closing
Date in Benefit Plans maintained by Valero and provided generally to Valero's
own similarly situated employees (each a "Buyer Plan"). On or prior to the
Effective Date, Buyer will have provided Seller with summaries of the terms of
the Buyer Plans as in effect on the Effective Date, which plans may thereafter
be amended, modified or terminated by Buyer in accordance with the terms of such
plans. For the purposes of determining benefit entitlement and eligibility under
any Buyer Plan for any Transferred Employee, Buyer shall grant to such
Transferred Employee credit for his or her service with Seller for all purposes
of such Buyer Plan (other than the accrual of benefits under a defined benefit
pension plan and any entitlement to benefits under a Buyer retiree medical or
life insurance plan) for which such service was recognized by Seller for
employee benefit plan purposes. With respect to any Buyer Plan that provides
group health, life or disability benefits that Buyer offers to any Transferred
Employee, Buyer shall cause such Buyer Plan to waive any exclusions or
limitations with respect to pre-existing conditions or waiting periods as are
necessary to provide immediate coverage if such Transferred Employee was covered
by a comparable Benefit Plan of Seller (a "Seller Benefit Plan(s)") and to the
extent similar restrictions were not applicable under the comparable Seller
Benefit Plan.
(b) Buyer shall provide any notice required under the United States
Worker Adjustment and Retraining Notification Act or any other Law with respect
to the transactions contemplated by this Agreement; provided, however, that
Buyer shall have no responsibility or liability for any termination of employees
by Seller prior to Closing or any such notice that would not otherwise be
required but for terminations of employees by Seller prior to Closing. Buyer
shall pay all severance payments, damages for wrongful dismissal and related
costs with respect to the termination of any Transferred Employee after the
Closing, including any severance payments under Buyer Plans regarding severance.
Buyer shall not be responsible for (i) the payment of any severance payments,
damages for wrongful dismissal and related costs with respect to the termination
of any Retained Employee prior to, on or after the Closing, including any
severance payments under Seller Benefit Plans regarding severance or (ii) for
any change of control payments or similar payments due to any Transferred
Employees or Retained Employees as a result of the transactions contemplated
hereby.
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(c) Vacation entitlement accrued but not utilized by a Transferred
Employee and available to be utilized in the year in which the Closing Date
occurs or thereafter (but not any carryover accruals that were available for use
in years prior to the year in which the Closing Date occurs) under the vacation
policy applicable to such Transferred Employee immediately prior to the Closing
Date shall be recognized by Buyer following the Closing Date; provided, however,
that the terms of Buyer's vacation policy shall govern the utilization of
vacation time after the Closing Date.
(d) Seller shall permit each Transferred Employee to elect on the
Closing Date (or as soon thereafter as reasonably practicable) a direct rollover
of his or her eligible rollover distributions under the Orion Refining
Corporation Long Term Savings Plan ("Seller's Savings Plan") to the Valero
Energy Corporation Thrift Plan (the "Buyer Savings Plan"). Any such rollovers
shall be made to the Buyer Savings Plan in cash and, if applicable, in-kind to
the extent of any outstanding plan loans of the Transferred Employee that are
not accelerated. Seller shall cause the Seller's Savings Plan to deliver to the
Buyer Savings Plan as soon as reasonably practicable after the Closing Date the
promissory notes and other loan documentation, if any, of the Transferred
Employees who have elected such a direct rollover in accordance with the
procedures prescribed by the Seller. Seller shall also take such actions, if
any, as are necessary to permit the continuation of loan repayments by
Transferred Employees to the Seller Savings Plan during the period beginning on
the Closing Date and ending 90 calendar days after the Closing Date; provided,
however, that if a Transferred Employee makes a direct rollover election as
described in this paragraph within such 90-day period, then the Seller Savings
Plan shall continue to accept loan repayments from such Transferred Employee
until the date of such direct rollover. The Seller represents, covenants and
agrees with respect to the Seller Savings Plan, and the Buyer represents,
covenants and agrees with respect to the Buyer Savings Plan, that, as of each
date of a rollover described in this paragraph, such plan (i) is intended to
satisfy the requirements of Sections 401(a) and (k) of the Code, (ii) will have
received, or an application will have been timely filed for, a favorable
determination letter from the IRS regarding such qualified status and covering
amendments required to have been adopted by Law (except the Economic Growth and
Tax Relief Reconciliation Act of 2001 ("EGTRRA")) prior to the Closing Date, and
(iii) will have been timely amended to comply with EGTRRA prior to the Closing
Date. Buyer will have no obligation with respect to amounts attributable to
Seller's Savings Plan other than acceptance of the rollovers requested by
Transferred Employees and the facilitation of loan repayments described above.
(e) Claims of Transferred Employees and their eligible beneficiaries
and dependents for medical, dental, prescription drug, life insurance, and/or
other welfare benefits ("Welfare Benefits") that are incurred before the Closing
Date shall be the sole responsibility of Seller and the Seller Benefit Plans.
Claims of Transferred Employees and their eligible beneficiaries and dependents
for Welfare Benefits that are incurred on or after the Closing Date shall be the
sole responsibility of the Buyer. For purposes of the preceding provisions of
this paragraph, a medical/dental claim shall be considered incurred on the date
when the medical/dental services are rendered or medical/dental supplies are
provided, and not when the condition arose or when the course of treatment
began; provided, however, that claims relating to a hospital confinement that
begins prior to the Closing Date but continues on the Closing Date or thereafter
shall be treated as incurred before the Closing Date.
29
Section 6.4 UOP Claim. If and for so long as Seller or its respective
successors and assigns shall be prosecuting the UOP Claim, Buyer shall cooperate
in all reasonable respects with the prosecuting party and its counsel with
respect to the UOP Claim, including providing test runs of the catalytic
cracking unit at the request and expense of Seller (including lost profit
margin) and making reasonably available Transferred Employees and records, in
each case at the expense of the prosecuting party; provided, however, that Buyer
shall not be responsible to Seller for any failure by Seller to resolve
successfully its UOP Claim or otherwise be responsible for any actions taken or
information provided by any Transferred Employees in connection with the UOP
Claim.
Section 6.5 Public Announcements. Seller and Buyer shall consult with
each other before any press release or other public statement is issued or made
with respect to the transactions contemplated hereby, and no party hereto shall
issue any such press release or make any such public statement prior to such
consultation or, subject to applicable securities or bankruptcy laws or stock
exchange requirements, issue any statement to which the other party shall have
objected.
Section 6.6 Expenses. Except as otherwise expressly provided herein,
all costs and expenses incurred by Seller in connection with this Agreement and
the transactions contemplated hereby shall be paid by Seller, and all costs and
expenses incurred by Buyer in connection with this Agreement and the
transactions contemplated hereby shall be paid by Buyer.
Section 6.7 Foreign Trade Zone. Prior to Closing, Seller and Buyer will
use reasonable efforts to transfer Seller's grant of authority for the Subzone
to Buyer to be effective as of the Closing Date.
Section 6.8 Further Assurances . Buyer and Seller shall take such
additional action, and shall cooperate with one another, as may be reasonably
necessary to effectuate the terms of this Agreement and any agreement or
instrument delivered pursuant hereto.
Section 6.9 Cure Amount Determination. With respect to any Assumed
Contract which was entered into prior to the Seller Bankruptcy and for which a
Cure Amount is required for Seller to assume and assign such contract to Buyer
and which Buyer has agreed to assume, Buyer and Seller shall use commercially
reasonable efforts to agree upon the Cure Amount with the counterparty to such
contract (the "Counterparty"). In the event that each of Seller, Buyer and the
Counterparty agree on the Cure Amount prior to the Closing (the "Pre-Closing
Determined Cure Amount"), Buyer shall pay such Counterparty the Cure Amount at
the Closing in accordance with Section 3.2(f). In the event that Seller, Buyer
and the Counterparty are unable to agree on such Cure Amount prior to the
Closing, upon determination by the Bankruptcy Court of such Cure Amount, Seller
shall pay such Cure Amount to the Counterparty. Notwithstanding the foregoing,
Buyer shall not be obligated to assume any such contract which is not listed on
Schedule 1.1-A.
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Section 6.10 Valero Guaranty.
(a) Valero hereby irrevocably and unconditionally guarantees, as
primary obligor and not merely as surety, to Seller, the due and punctual
payment and performance by Buyer of all of its obligations to Seller under this
Agreement (the "Guaranteed Obligations"), as and when the same shall become due
in accordance with the terms of this Agreement.
(b) The obligations of Valero hereunder are absolute, irrevocable and
unconditional and shall not be affected by: (i) any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations; (ii) any bankruptcy, insolvency, reorganization or winding up of
Buyer and the occurrence of any other proceeding as a result of such bankruptcy;
(iii) any claim, setoff, defense, or other right that Valero may have against
Seller; (iv) any claim as to the unenforceability of this Agreement against
Buyer or the lack of authority of Buyer to execute this Agreement; (v) any delay
or failure by Seller in the exercise of its rights and remedies under this
Section 6.10; (vi) any delay or failure of Seller to enforce this Agreement
against Buyer or to obtain any judgment against Buyer or to pursue any action to
enforce any judgment against Buyer; or (vii) any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Valero hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of its obligations under
this Section 6.10 and any requirement that Seller exhaust any right or take any
action against Buyer or any other person or pursue any other remedy in the power
of Buyer or Seller. So long as any sum remains owing by Buyer to Seller, Valero
shall not exercise any right of subrogation or any other rights of a surety or
enforce any security or other right or claim against Buyer (whether in respect
of its liability under this Section 6.10 or otherwise) or claim the insolvency
or liquidation of Buyer or any such other person in competition with Seller.
Section 6.11 Post-Closing Access; Transition Personnel Arrangements.
(a) Buyer shall afford duly authorized representatives of Seller
reasonable access to the Refinery and the books and records transferred to Buyer
at Closing after the Closing Date with respect to any legal, technical or
operational matter relating to (i) Seller's rights and obligations under this
Agreement, (ii) the operation of the Refinery before the Closing, (iii) the
Excluded Assets, (iv) the Excluded Liabilities, and (v) the Seller Bankruptcy;
provided in each case that Seller gives Buyer reasonable prior notice, such
access does not unreasonably interfere with normal operations and any access is
at Seller's sole risk except for Buyer's gross negligence.
(b) With respect to Retained Employees and Transferred Employees, for a
period of two years following the Closing:
(i) Seller shall permit Buyer and its representatives, at
Buyer's expense, to have reasonable access to all Retained Employees
who are then employed or retained by Seller or any of Seller's
Affiliates and who have relevant information regarding any claim or
dispute related to the Refinery or to assist Buyer in the reasonable
transition of the Assets and the Business to Buyer.
(ii) Buyer shall permit Seller and its representatives, at
Seller's expense, to have reasonable access to Transferred Employees
who are then employed by Buyer or
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any of Buyer's Affiliates with regard to any matters relating to this
Agreement or the Excluded Assets or the Seller Bankruptcy.
(iii) Buyer and Seller agree, for purposes of this Section
6.11(b) that:
(A) the requesting party must provide advance notice
to the providing party of its request to obtain access to
specified employees with sufficient time to allow the
providing party to rearrange work schedules to accommodate the
diversion or absence of the specified employee(s) from their
work;
(B) access to the specified employees must be during
reasonable work hours (or as otherwise agreed to by the
parties and the specified employees) and be conducted in a
manner so as not to interfere unduly with the business
operations of the providing party;
(C) the requesting party will have access to the
specified employees only at the providing party's offices,
unless otherwise agreed to by the providing party (such
agreement not to be unreasonably withheld);
(D) when pursuant to this Section 6.11 of the
Agreement, a requesting party requires access to any employee
in excess of three days in any calendar year, the expenses to
be borne by the requesting party will include reimbursement
for such employee's wages upon receipt of an invoice from the
providing party; and
(E) the providing party will not be held responsible
for the specified employee's actions taken or testimony given
on behalf of the requesting party.
Section 6.12 Sales and Use Tax Matters.
(a) On or prior to the Closing, Buyer shall have registered with the
Louisiana Department of Revenue and St. Xxxxxxx Xxxxxx for purposes of sales and
use taxes.
(b) On or prior to the Closing, Buyer (or any affiliate of Buyer that
has been assigned purchase rights pursuant to Section 9.9 of this Agreement)
shall provide to Seller a certificate in the form required by applicable Law
certifying that the portion of the Inventory consisting of raw materials and
finished products is being purchased by Buyer or such affiliate for purposes of
further processing and/or resale.
(c) On or prior to the Closing, Seller shall certify in writing to
Buyer that Seller is not in the business, and does not hold itself out to be in
the business, of selling tangible personal property of a nature similar to the
tangible personal property being sold pursuant to this Agreement with the
exception of Inventory consisting of raw materials and finished products.
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ARTICLE VII
CLOSING CONDITIONS
Section 7.1 Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of Seller and Buyer to consummate the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any or all of which may be
waived by the parties hereto, in whole or in part, to the extent permitted by
applicable Law:
(a) No Governmental Authority (other than the Bankruptcy Court) shall
have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary, or permanent) that is in effect and prohibits or renders
illegal the transactions contemplated hereby.
(b) The waiting period applicable to the consummation of the
transactions contemplated hereby under the HSR Act shall have expired or been
terminated.
(c) The Sale Order shall have been entered by the Bankruptcy Court; the
operational effect of the Sale Order shall not have been stayed and the Sale
Order shall not be subject to any pending appeal, request for leave to appeal,
or request for reconsideration; and the time for any such appeal, request for
leave to appeal or request for reconsideration shall have expired.
Section 7.2 Additional Conditions to Seller's Obligations. The
obligations of Seller to effect the transactions contemplated hereby shall be
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by Seller, in whole or in part, to
the extent permitted by applicable Law:
(a) Each of the representations and warranties of Buyer and Valero
contained in this Agreement that is qualified as to materiality shall be true
and correct, and each of such representations and warranties that is not so
qualified shall be true and correct except for any failure of the same to be
true and correct that would not reasonably be expected to have a material
adverse effect with respect to Buyer or Valero or the ability of Buyer or Valero
to perform its obligations under this Agreement, as of the date of this
Agreement and as of the Closing Date as though made again on and as of the
Closing Date, and Seller shall have received a certificate of an executive
officer of Buyer and Valero, dated the Closing Date, to such effect.
(b) Buyer and Valero shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Closing Date, and Seller
shall have received a certificate of an executive officer of Buyer and Valero,
dated the Closing Date, to such effect.
(c) Buyer shall make the deliveries required of Buyer under Section
3.2.
Section 7.3 Additional Conditions to Buyer's Obligations. The
obligations of Buyer to effect the transactions contemplated hereby shall be
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by Buyer, in whole or in part, to
the extent permitted by applicable Law:
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(a) Each of the representations and warranties of Seller contained in
this Agreement shall be true and correct as of the date of this Agreement and as
of the Closing Date as though made again on and as of the Closing Date without
regard to any qualification thereof as to materiality, except for any failure of
the same to be true and correct that would not reasonably be expected to have a
Material Adverse Effect with respect to the Assets, provided that solely for
purposes of this Section 7.3(a) the $3,000,000 threshold referred to in the
definition of "Material Adverse Effect" shall instead be $25,000,000, and Buyer
shall have received a certificate of an executive officer of Seller, dated the
Closing Date, to such effect.
(b) Seller shall have performed or complied in all respects with all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to Closing Date except for any failure of Seller to
perform or comply with the same that would not reasonably be expected to have a
Material Adverse Effect, provided that solely for purposes of this Section
7.3(b) the $3,000,000 threshold referred to in the definition of "Material
Adverse Effect" shall instead be $25,000,000, and Buyer shall have received a
certificate of an executive officer of Seller, dated the Closing Date, to such
effect.
(c) There shall have been no casualty loss to the Assets, except any
such casualty loss (i) that has been substantially repaired or replaced, or (ii)
for which Seller has received or is entitled to receive, and will assign to
Buyer at Closing such receipts or Seller's right to receive, property damage and
business interruption insurance proceeds sufficient to pay the reasonably
expected (as of Closing) full cost of such repair and loss due to business
interruption; provided that if the insurance proceeds that are assigned to Buyer
are insufficient to pay such reasonably expected cost of such repair, the number
of shares of Preferred Stock to be delivered at Closing shall be reduced by a
number of shares equal to (i) the sum of the amount of such reasonably expected
repair costs and business interruption losses not compensated by such insurance
proceeds so assigned divided by (ii) the stated value of $25 per share, with
such number of shares of Preferred Stock to be delivered to the Escrow Agent for
disposition as provided in the last sentence of this Section 7.3(c). At Closing,
Buyer shall deliver such shares of Preferred Stock to the Escrow Agent and
specify that such shares of Preferred Stock are to be deposited in the Casualty
Subaccount under the Escrow Agreement, and Seller shall deliver to the Escrow
Agent an instruction confirming the number of shares of Preferred Stock to be
deposited into the Casualty Subaccount. Buyer shall use its commercially
reasonable best efforts to complete the repair of such casualty as promptly as
practicable after the Closing and to collect amounts of insurance proceeds the
right to receive which has been assigned to Buyer in accordance with this
Section 7.3(c). Following the completion of the repair of such casualty, the
Escrow Agent, pursuant to the Escrow Agreement, shall release to Buyer a number
of shares of the Preferred Stock held by the Escrow Agent in the Casualty
Subaccount equal to the amount of the repair cost and business interruption
losses not covered by such insurance proceeds, as mutually agreed to by Seller
and Buyer or as finally determined pursuant to a judicial proceeding, divided by
$25, and shall release the remainder of such shares of Preferred Stock to
Seller. For the avoidance of doubt, the parties hereto agree that the fire in
the Refinery's xxxxx unit on January 29, 2003 shall not result in the failure of
this Section 7.3(c) to be satisfied.
(d) Seller shall make the deliveries required of Seller under Section
3.2.
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(e) The Xxxxx Unit at the Refinery shall be Operational (as defined
below); provided that, if, at such time as all other conditions to the Closing
set forth in this Article VII have been satisfied or waived by the applicable
party, the Xxxxx Unit is not Operational, Buyer and Seller agree that this
condition shall be satisfied as set forth below:
(i) Seller shall (1) direct Buyer to deliver to the Escrow
Agent at Closing shares of Preferred Stock, otherwise deliverable at
Closing to Seller by Buyer pursuant to Section 3.2(d)(y), with an
aggregate stated value equal to the Xxxxx Escrow Value (as defined
below); and (2) assign to Buyer at Closing all rights of Seller to
property damage and business interruption insurance proceeds with
respect to damages to the Xxxxx Unit resulting from the January 2003
casualty, in the case of property damage proceeds, to the extent Seller
has not incurred costs or losses prior to Closing giving rise to such
proceeds and, in the case of business interruption insurance proceeds,
to the extent the period covered by such business interruption
insurance extends past the Closing Date, including Seller's right to
receive any such proceeds funded into the GE Capital insurance escrow
account (provided that Seller shall be entitled to withdraw from such
escrow account the amount of such proceeds not assigned to Buyer under
this clause (i)(2));
(ii) At Closing, Buyer shall deliver to the Escrow Agent
shares of Preferred Stock having a stated value equal to the Xxxxx
Escrow Value and specify that such shares of Preferred Stock are to be
deposited in the Xxxxx Subaccount under the Escrow Agreement, and
Seller shall deliver to the Escrow Agent an instruction confirming the
number of shares of Preferred Stock to be deposited into the Xxxxx
Subaccount. Buyer shall have the right to have released to Buyer from
the Xxxxx Subaccount shares of Preferred Stock with a stated value
equal to the amount of any Buyer Xxxxx Claim, provided that such Buyer
Xxxxx Claim is duly made in accordance with the Escrow Agreement on or
before the 15th day after Buyer has delivered the Buyer Certification
to Seller. Seller shall have the right to make a Claim under the Escrow
Agreement and to have released to Seller from the Xxxxx Subaccount all
Preferred Stock (and any Common Stock into which such Preferred Stock
has been converted prior to such release and any dividends or other
funds, if any, in the Xxxxx Subaccount) in excess of the number of
shares of Preferred Stock subject to Buyer Xxxxx Claims after the 15th
day after Buyer has delivered the Buyer Certification to Seller. Unless
Buyer shall have delivered the Buyer Certification to Seller on or
before the date that is six months after the Closing Date, Seller shall
have the right at any time thereafter to have an independent industry
expert retained by Seller determine if the Xxxxx Unit is Operational,
and if such independent industry expert determines that the Xxxxx Unit
is Operational to have such independent industry expert certify to the
Escrow Agent and Buyer that the Xxxxx Unit is Operational. Unless, on
or before the fifth Business Day after receipt of such expert
certification, Buyer shall have notified the Seller and the Escrow
Agent in writing that Buyer disputes such certification, Seller shall
have after such fifth Business Day the right to have released to Seller
from the Xxxxx Subaccount all Preferred Stock (and any Common Stock
into which such Preferred Stock has been converted prior to such
release and any dividends or other funds, if any, in the Xxxxx
Subaccount) in excess of the number of shares of Preferred Stock
subject to Buyer Xxxxx Claims. Buyer agrees to give access to and
cooperate with any independent industry expert reasonably designated by
Seller in order for such expert to make the determination of whether
the Xxxxx Unit is
35
Operational. If Buyer disputes the expert certification, the Escrow
Agent shall not be permitted to make any release from the Xxxxx
Subaccount to Seller unless directed to do so in a writing signed by
Seller and Buyer or in a final nonappealable order of a court.
(iii) Buyer shall use its commercially reasonable best efforts
to continue to repair the Xxxxx Unit such that it is Operational as
promptly as practicable after the Closing and to collect amounts of
insurance proceeds the right to receive which has been assigned to
Buyer with respect to costs and losses that would otherwise constitute
Buyer Xxxxx Claims. Promptly following the date (but in any event
within five Business Days after such date) on which the Xxxxx Unit is
Operational, Buyer shall provide written notice to Seller and the
Escrow Agent that the Xxxxx Unit is Operational (the "Buyer
Certification").
(iv) As used in this subsection (e), the following capitalized
terms are used as defined below:
"Business Interruption Losses" shall mean an amount,
calculated through the date of any Buyer Xxxxx Claim, equal to
the sum of (i) $300,000 per day for each day covered by the
Buyer Xxxxx Claim on which the Xxxxx Unit produced less than
30,000 barrels per day ("BPD") of commercial petroleum coke;
(ii) $250,000 per day for each day covered by the Buyer Xxxxx
Claim on which the Xxxxx Unit produced at least 30,000 BPD of
commercial petroleum coke but less than 40,000 BPD; (iii)
$200,000 per day for each day covered by the Buyer Xxxxx Claim
on which the Xxxxx Unit produced at least 40,000 BPD of
commercial petroleum coke but less than 45,000 BPD; and (iv)
for each day covered by the Buyer Xxxxx Claim on which the
Xxxxx Unit produced at least 45,000 BPD but less than 48,000
BPD, an amount equal to $300,000 multiplied by a fraction, the
numerator of which is the excess of 48,000 over the number of
barrels of commercial petroleum coke produced by the Xxxxx
Unit on such day and the denominator of which is 48,000.
"Buyer Xxxxx Claim" shall mean the sum of (i) any
claim made in writing by Buyer for costs incurred by Buyer as
of the date of such claim in completing the repairs to the
Xxxxx Unit necessitated by the January 2003 fire in order to
make the Xxxxx Unit Operational, plus (ii) the Business
Interruption Losses for the period of time covered by such
Buyer Xxxxx Claim (until such date as the Xxxxx Unit shall
become Operational), less (iii) any insurance proceeds
described above received by Buyer through the date of such
Buyer Xxxxx Claim.
"Xxxxx Escrow Value" shall mean the sum of (A)
$20,000,000 plus the difference (if positive) between
$35,000,000 and the Seller Repair Costs, and (B) (i) $0, if
the Seller Repair Costs exceed $30,000,000, or (ii)
$10,000,000, if the Seller Repair Costs exceed $25,000,000 but
are less than $30,000,000, or (iii) $20,000,000, if the Seller
Repair Costs are equal to or less than $25,000,000.
"Operational" shall mean that all four of the xxxxx
drums located at the Xxxxx Unit at the Refinery shall have
been simultaneously and continuously
36
operated for five consecutive days at any time after the date
hereof and the Xxxxx Unit shall have produced at least 48,000
BPD of commercial petroleum coke during such 5-consecutive day
period.
"Seller Repair Costs" shall mean the total amount
incurred by Seller as of the fifth Business Day prior to the
Closing Date for repair and replacement costs at the Refinery
directly or indirectly arising out of or relating to the
January 2003 fire in the Xxxxx Unit; provided that Buyer shall
have the right to audit and verify the amount of all such
payments made by or on behalf of Seller at least three
Business Days prior to the Closing.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written consent of Seller and Buyer;
(b) by Seller upon notice to Buyer, if any of the conditions in Section
7.1 or 7.2 cannot be satisfied on or prior to the Termination Date;
(c) by Buyer upon notice to Seller, if any of the conditions in Section
7.1 or 7.3 cannot be satisfied on or prior to the Termination Date;
(d) by Buyer pursuant to Section 10.1; or
(e) by either Seller or Buyer upon notice to the other, if the Closing
contemplated hereby shall not have occurred on or before six months after the
date hereof (the "Termination Date").
provided, however, that a party shall not be allowed to exercise any right of
termination pursuant to this Section 8.1 if the event giving rise to such
termination shall be due to the grossly negligent or willful failure of the
party seeking to terminate this Agreement to perform or observe in any material
respect any of the covenants or agreements set forth herein to be performed or
observed by such party.
Section 8.2 Effect of Termination Under Section 8.1. The following
provisions shall apply in the event of a termination of this Agreement under
Section 8.1:
(a) If this Agreement is terminated by the Seller or the Buyer as
permitted under Section 8.1 hereof and not as the result of the gross negligence
or willful failure of any party to perform its obligations hereunder, such
termination shall be without liability (except as provided in Section 10.2) to
any party to this Agreement or any stockholder, director, officer, employee,
agent or representative of such party.
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(b) If this Agreement is terminated as a result of the gross negligence
or willful failure of the Buyer to perform its obligations hereunder, the Buyer
shall be fully liable for any and all damages sustained or incurred by Seller.
(c) If this Agreement is terminated as a result of the gross negligence
or willful failure of the Seller to perform its obligations hereunder, the
Seller shall be fully liable for any and all damages sustained or incurred by
Buyer.
(d) The Seller and the Buyer hereby agree that the provisions of
Sections 6.6, 8.2, 10.2 and Article IX hereof shall survive any termination of
this Agreement; provided, however, that neither party shall have the right to
bring any claim for breach thereof after two years following the termination of
the Agreement.
(e) Except as provided in Section 10.2, the Seller and the Buyer agree
that, if this Agreement is terminated, none of the parties hereto shall be
liable to any of the other parties hereto for consequential, special or punitive
damages.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Independent Investigation; Scope of Representations and
Warranties of Seller.
(a) Buyer acknowledges and affirms that (i) it has had access to the
data website through October 3, 2002 and to the two data rooms located at the
Refinery through the date hereof provided by Seller the information contained
in, or made available or provided with respect to materials contained in, such
data website and data rooms, and to other information made available by Seller
and its representatives during the course of Buyer's due diligence investigation
of the Assets, (ii) it has had access to the personnel, officers, professional
advisors, operations, and records (except to the extent redacted by Seller prior
to disclosure) of Seller, and (iii) in making the decision to enter into this
Agreement and to consummate the transactions contemplated hereby, it has relied
on the express representations, warranties, covenants, and agreements of Seller
set forth in this Agreement, and, other than such reliance, it has relied solely
on the basis of its own independent investigation, analysis, and evaluation of
the Business and the Assets.
(b) Except to the extent expressly set forth in this Agreement, Seller
does not make any representation or warranty whatsoever 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, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, SELLER DOES HEREBY EXPRESSLY DISCLAIM AND NEGATE ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE, AND OF
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS. BUYER EXPRESSLY WAIVES THE
WARRANTY OF FITNESS AND THE WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS,
WHETHER APPARENT OR LATENT, IMPOSED BY LOUISIANA CIVIL CODE ARTICLES 2520
THROUGH 2548, INCLUSIVE, AND THE
38
JURISPRUDENCE THEREUNDER. BUYER ALSO WAIVES ANY RIGHTS BUYER MAY HAVE IN
REDHIBITION OR IN A REDUCTION OF THE PURCHASE PRICE PURSUANT TO LOUISIANA CIVIL
CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE, IN CONNECTION WITH THE ASSETS HEREBY
CONVEYED TO BUYER BY SELLER. BY BUYER'S SIGNATURE, BUYER EXPRESSLY ACKNOWLEDGES
ALL SUCH WAIVERS AND BUYER'S EXERCISE OF BUYER'S RIGHT TO WAIVE WARRANTY
PURSUANT TO LOUISIANA CIVIL CODE ARTICLES 2520 THROUGH 2548, INCLUSIVE.
Section 9.2 Indemnification.
(a) Seller shall defend, indemnify, and hold harmless Buyer from and
against any and all losses, costs, penalties, and expenses, including reasonable
attorneys' fees and costs, arising out of any breach of the representations and
warranties of Seller contained in this Agreement or any breach of any covenant
of Seller contained in this Agreement (a "Seller Covered Loss"). Notwithstanding
anything to the contrary in this Agreement or in any other agreement entered
into by any of the parties hereto in connection with the transactions
contemplated by this Agreement (but subject to Section 9.2(d)):
(i) a claim by Buyer (A) for the payment of the Seller
Inventory Adjustment in accordance with Section 3.3(a), (B) under
Section 3.5, (C) under Section 8.2 or (D) under Section 10.2, shall not
be subject to the limitations set forth in (ii), (iii), (iv) or (v)
below but the Escrow Account shall be available to satisfy such claims
if Seller is unable to do so;
(ii) Buyer's right to make any claim for all Seller Covered
Losses shall terminate at the close of business on the day that is six
months after Closing with respect to any Seller Covered Losses arising
out of a breach of the representations and warranties of Seller
contained in this Agreement, two years after Closing with respect to
Seller Covered Losses arising out of a breach by Seller of Section
6.11, and nine months after the Closing with respect to any other
Seller Covered Loss, except with respect to each claim for a Seller
Covered Loss with respect to which a notice is delivered to the Escrow
Agent and Seller prior to the close of business on such day specifying
in reasonable detail the specific nature of and specific basis of the
Seller Covered Loss and the estimated amount of such Seller Covered
Loss;
(iii) Buyer shall have the right to recover for Seller Covered
Losses only after such time as the aggregate amount of Seller Covered
Losses exceeds $3,000,000, and then only to the extent that such Seller
Covered Losses exceed such amount;
(iv) Buyer shall not have the right to recover any amount in
excess of the Holdback Amount for all Seller Covered Losses and such
Seller Covered Losses shall only be paid out of the Escrow Account;
(v) No Buyer Covered Loss shall constitute a Seller Covered
Loss.
(vi) Buyer shall not have the right to recover for any Seller
Covered Loss (A) arising from a breach of any representation and
warranty of Seller of which breach Buyer had knowledge on or prior to
the Effective Date or (B) to the extent that such Seller
39
Covered Loss is reduced by any insurance proceeds or other amount
actually recovered by Buyer or any of its Subsidiaries from any Person
other than a Subsidiary of Buyer provided that such insurance benefit
shall be net of any additional insurance cost incurred by Buyer as a
result of such claim Loss.
(vii) In the event of a threshold determination that a breach
of a representation, warranty or covenant qualified by materiality or
Material Adverse Effect shall have occurred, for purposes of
determining a Seller Covered Loss, such materiality or Material Adverse
Effect shall be disregarded.
(viii) Any Preferred Stock with an aggregate stated amount in
excess of $10,000,000 in the Escrow Account after six months following
the Closing Date for which a claim has not been made shall be delivered
to Seller. Nine months following the Closing Date, Preferred Stock with
a stated amount equal to the amount of any claim or claims made under
this Section 9.2(a) shall be retained in the Escrow Account until the
resolution of such claim or claims and any remaining Preferred Stock
shall be delivered to Seller.
(b) BUYER AND SELLER ACKNOWLEDGE AND AGREE THAT THE REMEDIES SET FORTH
IN SECTION 3.2, SECTION 3.3(a), SECTION 7.3(c), SECTION 7.3(e), SECTION 8.2,
SECTION 10.2 AND THIS SECTION 9.2, INCLUDING THE DEDUCTIBLES, LIABILITY LIMITS,
AND SURVIVAL PERIODS SET FORTH ABOVE AND THE DISCLAIMERS SET FORTH IN SECTION
9.1, ARE INTENDED TO BE, AND SHALL BE, THE EXCLUSIVE REMEDIES OF BUYER OR SELLER
WITH RESPECT TO ANY ASPECT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
OTHER THAN CAUSES OF ACTION AND CLAIMS EXPRESSLY RESERVED IN SECTION 9.2(a)(i)
OR 9.2(c)(i). BUYER AND SELLER HEREBY RELEASE, WAIVE, AND DISCHARGE, AND
COVENANT NOT TO XXX THE OTHER PARTY WITH RESPECT TO, ANY CAUSE OF ACTION OR
CLAIM (OTHER THAN THOSE EXPRESSLY RESERVED IN SECTIONS 9.2(a)(i) OR 9.2(c)(i),
NOT EXPRESSLY PROVIDED FOR IN THIS AGREEMENT TO THE MAXIMUM EXTENT PERMITTED BY
LAW.
(c) Buyer shall defend, indemnify, and hold harmless Seller from and
against any and all losses, costs, penalties, and expenses, including reasonable
attorneys' fees and costs, arising out of (1) any breach of the representations
and warranties of Buyer contained in this Agreement or any breach of any
covenant of Buyer contained in this Agreement or (2) any of the Assumed
Liabilities (a "Buyer Covered Loss"), including any Buyer Covered Loss arising
in whole or in part from the sole or concurrent negligence of Seller (but
excluding any Seller Covered Losses). Notwithstanding anything to the contrary
in this Agreement or in any other agreement entered into by any of the parties
hereto in connection with the transactions contemplated by this Agreement (but
subject to Section 9.2(d)):
(i) a claim by Seller (A) for the payment of the Seller
Inventory Adjustment in accordance with Section 3.3(a), (B) under
Section 8.2, (C) under the Xxxx of Sale, Assignment, and Assumption
Agreement referred to in Section 3.2(b), (D) under Section 3.4, or (E)
under Section 3.5 shall not be subject to the limitations set forth in
(ii), (iii) and (iv) below;
40
(ii) Seller's right to make any claim for all Buyer Covered
Losses shall terminate at the close of business on the day that is six
months after Closing with respect to any Buyer Covered Losses arising
out of a breach of the representations and warranties of Valero and
Buyer contained in this Agreement, two years after Closing with respect
to Buyer Covered Losses arising out of a breach by Buyer of Section
6.11, and nine months after the Closing with respect to any other Buyer
Covered Loss, except with respect to each claim for a Buyer Covered
Loss with respect to which a notice is delivered to Valero and Buyer
prior to the close of business on such day specifying in reasonable
detail the specific nature of and specific basis of the Buyer Covered
Loss and the estimated amount of such Buyer Covered Loss;
(iii) no Seller Covered Loss shall constitute a Buyer Covered
Loss;
(iv) Seller shall have the right to recover for Buyer Covered
Losses for breach of Buyer's representations and warranties or
covenants only after such time as the aggregate amount of Buyer Covered
Losses exceeds $3,000,000, and then only to the extent that such
Covered Losses exceed such amount; and
(v) Seller shall not have the right to recover for any Buyer
Covered Loss (A) arising from a breach of any representation and
warranty of Buyer of which breach Seller had knowledge on or prior to
the Effective Date or (B) to the extent that such Buyer Covered Loss is
reduced by any insurance proceeds or other amount actually recovered by
Seller from any Person other than Seller.
(d) Notwithstanding anything to the contrary contained in this
Agreement, (i) Buyer and Valero agree that Seller shall have no liability or
responsibility with respect to the UOP licenses referred to in Schedule 1.1-C of
the Seller Disclosure Schedule beyond the payment to UOP, if required, of the
Cure Amount with respect thereto (if any) and up to $1,500,000, and (ii) neither
party hereto shall be entitled to recover from the other party hereto or from
the Escrow Account any amount in respect of exemplary, punitive, special,
indirect, consequential, remote, or speculative damages, including lost profits,
but including, however, any incidental, consequential, indirect, special or
punitive damages recovered by any third party pursuant to a claim that otherwise
constitutes a Seller Covered Loss or Buyer Covered Loss.
(e) All claims for indemnification under this Agreement (including
under this Section 9.2) shall be asserted and resolved as follows:
(A) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party
from whom indemnification is sought (the "Indemnifying
Party") of any third-party claim or claims asserted
against the Indemnified Party ("Third Person Claim") which
could give rise to a right of indemnification under this
Agreement and (ii) transmit to the Indemnifying Party a
written notice ("Claim Notice") describing in reasonable
detail the nature of the Third Person Claim, a copy of all
papers served with respect to such claim (if any), an
estimate of the amount of damages attributable to the
Third Person Claim and the basis of the Indemnified
Party's request for indemnification under this Agreement.
41
Within 30 days after receipt of any Claim Notice (the
"Election Period"), the Indemnifying Party shall notify
the Indemnified Party (i) whether the Indemnifying Party
disputes its potential liability to the Indemnified Party
under this Article IX with respect to such Third Person
Claim and (ii) whether the Indemnifying Party desires, at
the sole cost and expense of the Indemnifying Party, to
defend the Indemnified Party against such Third Person
Claim.
(B) If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party
does not dispute its potential liability to the
Indemnified Party under this Article IX and that the
Indemnifying Party elects to assume the defense of the
Third Person Claim, then the Indemnifying Party shall have
the right to defend, at its sole cost and expense, such
Third Person Claim by all appropriate proceedings, which
proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the
discretion of the Indemnifying Party in accordance with
this Section 9.2(e)(B). The Indemnifying Party shall have
full control of such defense and proceedings, including
any compromise or settlement thereof. The Indemnified
Party is hereby authorized, at the sole cost and expense
of the Indemnifying Party (but only if the Indemnified
Party is actually entitled to indemnification hereunder or
if the Indemnifying Party assumes the defense with respect
to the Third Person Claim), to file, during the Election
Period, any motion, answer or other pleadings which the
Indemnified Party shall deem necessary or appropriate to
protect its interests or those of the Indemnifying Party
and not prejudicial to the Indemnifying Party (it being
understood and agreed that if an Indemnified Party takes
any such action which is prejudicial and conclusively
causes a final adjudication which is adverse to the
Indemnifying Party, the Indemnifying Party shall be
relieved of its obligations hereunder with respect to such
Third Person Claim). If requested by the Indemnifying
Party, the Indemnified Party agrees, at the sole cost and
expense of the Indemnifying Party, to cooperate with the
Indemnifying Party and its counsel in contesting any Third
Person Claim which the Indemnifying Party elects to
contest, including, without limitation, the making of any
related counterclaim against the person asserting the
Third Person Claim or any cross-complaint against any
Person. The Indemnified Party may participate in, but not
control, any defense or settlement of any Third Person
Claim controlled by the Indemnifying Party pursuant to
this Section 9.2(e) and shall bear its own costs and
expenses with respect to such participation.
(C) If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying
Party elects to defend the Indemnified Party pursuant to
Section 9.2(e)(B), or if the Indemnifying Party elects to
defend the Indemnified Party pursuant to Section 9.2(e)(B)
but fails to diligently and promptly prosecute or settle
the Third Person
42
Claim, then the Indemnified Party shall have the right to
defend, at the sole cost and expense of the Indemnifying
Party, the Third Person Claim by all appropriate
proceedings, which proceedings shall be promptly and
vigorously prosecuted by the Indemnified Party to a final
conclusion or settled. The Indemnified Party shall have
full control of such defense and proceedings, provided,
however, that the Indemnified Party may not enter into,
without the Indemnifying Party's consent, which shall not
be unreasonably withheld, any compromise or settlement of
such Third Person Claim. Notwithstanding the foregoing,
if the Indemnifying Party has delivered a written notice
to the Indemnified Party to the effect that the
Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article IX and if such
dispute is resolved in favor of the Indemnifying Party by
final, nonappealable order of a court of competent
jurisdiction, the Indemnifying Party shall not be
required to bear the costs and expenses of the Indemnified
Party's defense pursuant to this Section or of the
Indemnifying Party's participation therein at the
Indemnified Party's request and the Indemnified Party
shall reimburse the Indemnifying Party in full for all
costs and expenses of such litigation. The Indemnifying
Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to
this Section, and the Indemnifying Party shall bear its
own costs and expenses with respect to such participation.
(D) In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder which does not
involve a Third Person Claim, the Indemnified Party shall
transmit to the Indemnifying Party a written notice (the
"Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of damages
attributable to such claim and the basis of the
Indemnified Party's request for indemnification under this
Agreement. If the Indemnifying Party does not notify the
Indemnified Party within 60 days from its receipt of the
Indemnity Notice that the Indemnifying Party disputes such
claim, the claim specified by the Indemnified Party in the
Indemnity Notice shall be deemed a liability of the
Indemnifying Party hereunder. If the Indemnifying Party
has timely disputed such claim, as provided above, such
dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.
(E) Payments of all amounts owing by the Indemnifying Party
pursuant to Sections 9.2(a) and 9.2(c) shall be made
within 30 days after the latest of (i) the settlement of
the Third Person Claim, (ii) the expiration of the period
for appeal of a final adjudication of such Third Person
Claim or (iii) the expiration of the period for appeal of
a final adjudication of the Indemnifying Party's liability
to the Indemnified Party under this Agreement.
43
Section 9.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by Seller, Valero and Buyer.
Section 9.4 Waiver. At any time prior to the Closing, either Seller, on
the one hand, or Buyer and Valero, on the other hand, may (a) extend the time
for the performance of any of the obligations or other acts of the other, (b)
waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance by the other with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party hereto to be bound thereby.
Section 9.5 Notices. All notices and other communications that are
required to be or may be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given if delivered in person or by courier
or mailed by registered or certified mail (postage prepaid, return receipt
requested) to the relevant party hereto at the following addresses or sent by
confirmed facsimile to the following numbers:
If to Seller, to:
Orion Refining Corporation
00000 Xxxxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Morris, Nichols, Arsht & Xxxxxxx
0000 Xxxxx Xxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxx Xxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
44
If to Buyer or Valero, to:
Valero Refining--New Orleans, L.L.C.
Valero Energy Corporation
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address or facsimile number as Seller or Buyer and Valero may,
from time to time, designate in a written notice given in accordance with this
Section 9.5. Any such notice or communication shall be effective, (a) if
delivered in person or by courier, upon actual receipt by the intended
recipient, (b) if sent by facsimile transmission, upon actual receipt if
received during the recipient's normal business hours, or at the beginning of
the recipient's next business day after receipt if not received during
recipient's normal business hours, or (c) if mailed, upon the earlier of five
days after deposit in the mail and the date of delivery as shown by the return
receipt therefor.
Section 9.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.7 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to either party hereto. Upon such determination that any term
or other provision is invalid, illegal, or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties hereto as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
Section 9.8 Entire Agreement. This Agreement (together with the
Exhibits and the Seller Disclosure Schedule) constitutes the entire agreement of
the parties hereto, and supersedes all prior agreements and undertakings, both
written and oral, among the parties hereto, with respect to the subject matter
hereof (other than the Confidentiality Agreement, which shall continue in full
force and effect).
Section 9.9 Assignment. This Agreement shall not be assigned by any
party hereto except by operation of Law; provided that Buyer may assign this
Agreement to a Subsidiary of Valero without consent if such assignment does not
affect the timing or obtaining of any consents or approvals required for the
transaction contemplated hereby and Buyer shall not by such assignment be
relieved of its obligations hereunder or under applicable bankruptcy law;
provided, further that Seller shall have the right to assign after Closing its
rights to the Earn Out Payments. Any purported assignment of this Agreement in
violation of this Section 9.9 shall be null and void.
45
Section 9.10 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any right, benefit, or remedy of any nature whatsoever
under or by reason of this Agreement.
Section 9.11 Failure or Indulgence Not Waiver. No failure or delay on
the part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty, covenant, or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right.
Section 9.12 Disclosure Schedule. The Seller Disclosure Schedule has
been arranged in schedules corresponding to the relevant Sections of this
Agreement. Any matter disclosed by Seller in the Seller Disclosure Schedule
pursuant to any Section of this Agreement shall be deemed to have been disclosed
by Seller for purposes of each other Section of this Agreement to which such
disclosure would reasonably relate.
Section 9.13 Governing Law. This Agreement shall be construed (both as
to validity and performance), interpreted, and enforced in accordance with, and
governed by, the Laws of the State of
Texas applicable to agreements made and to
be performed wholly within such jurisdiction. Any judicial proceeding brought
against any of the parties hereto with respect to this Agreement (i) during
Seller's Bankruptcy shall be brought in the Bankruptcy Court, (ii) thereafter in
any United States District Court or in any
Texas State District court, in each
case, in Houston,
Texas, and any appellate court from any thereof, irrespective
of where such party may be located at the time of such proceeding, and by
execution and delivery of this Agreement, each of the parties hereto hereby
consents to the exclusive personal jurisdiction of such court and waives any
defense or opposition to such personal jurisdiction. 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 proceedings relating to this Agreement.
Section 9.14 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 9.15 Buyer's Like Kind Exchange. Purchase of the Assets may be
part of a transaction intended to qualify as an exchange under Section 1031 of
the Code. The Seller agrees to allow an assignment of the Buyer's interest in
this Agreement to an exchange facilitator to effect the exchange, provided that
such assignment does not affect the timing or obtaining of any consents or
approvals required for the transaction contemplated hereby. Such assignment
shall not relieve Valero of any of its rights and obligations hereunder and
Valero's guarantee hereunder shall apply to such Buyer assignee's obligations
hereunder. Seller further agrees to otherwise reasonably cooperate to accomplish
such exchange. Seller makes no representations as to any particular Tax
treatment that may be afforded to Buyer by reason of such assignment, and Seller
shall not be obligated to pay any additional costs or incur any additional
obligations hereunder as a result of such exchange. Buyer hereby agrees to pay
all costs associated with such exchange and to indemnify and hold Seller
harmless from and against any and all losses and Taxes arising out of such
exchange.
46
such exchange and to indemnify and hold Seller harmless from and against any and
all losses and Taxes arising out of such exchange.
ARTICLE X
SPECIAL PROVISIONS
Section 10.1 Motion to Approve Agreement and Transaction. Seller shall
file in the Bankruptcy Court (i) on or before the Effective Date, a motion in
substantially the form set forth in Exhibit 10.1 (or otherwise reasonably
acceptable to Seller and Buyer) (a) seeking approval of this Agreement and the
transactions contemplated herein pursuant to Sections 363 and 365 of the
Bankruptcy Code, (b) seeking approval of the payment to Buyer of the Break-Up
Fee pursuant to Section 10.2 of this Agreement, and (c) seeking authority for
Seller to perform all its obligations under this Agreement. Seller shall use
commercially reasonable efforts to obtain entry of an order in substantially the
form set forth on Exhibit 10.2 (the "Sale Procedures Order") on or before
fifteen days after the Effective Date and entry of an order in substantially the
form set forth on Exhibit 10.3 on or before forty days after the Effective Date.
If the order in substantially the form set forth on Exhibit 10.3 or an order in
another form approving the sale of the Assets to Buyer in accordance with this
Agreement, including that the transfer of the Assets shall be free and clear of
Liens other than Closing Permitted Encumbrances, reasonably acceptable to Seller
and Buyer (the "Sale Order"), is not entered on or before 75 days after the
Effective Date, then Buyer shall have the right to terminate this Agreement,
whereupon neither party shall have any further liability to the other (except
with respect to items which expressly survive termination pursuant to the
provisions hereof).
Section 10.2 Break-Up Fee and Expense Reimbursement. If all or
substantially all of the Assets are sold to a third party in connection with the
Seller Bankruptcy, other than any such sale following either (a) a termination
of this Agreement by Buyer or the exercise by Buyer of a right not to consummate
the Closing because of the failure of a Closing Condition in Section 7.1(a) or
(b) or Section 7.3(c) or (e) to be satisfied or (b) a termination of this
Agreement by Seller or the exercise by Seller of a right not to consummate the
Closing because of the failure of a Closing Condition in Section 7.1(a) or (b)
or Section 7.2 to be satisfied, then Buyer will be entitled to receive from
Seller $17,000,000 plus reasonable, documented out of pocket fees and expenses
not to exceed $1,000,000 in the event the Assets are sold to a third party
payable by wire transfer in immediately available funds at the closing of such
sale.
Section 10.3 Disclosure. Except as required by the Sales Procedure
Order and the Bankruptcy Code or other applicable law, Seller agrees that, from
the date hereof and until the first to occur of the Closing Date or the
termination of this Agreement in accordance with Article VIII, Seller, nor any
of its officers, agents or other representatives shall, and Seller will direct
and use its reasonable best efforts to cause each of such Persons not to,
initiate or solicit, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer with respect to a transaction involving
all or any significant portion of the Assets. Subject to and in accordance with
the Sale Procedures Order, Seller shall provide Buyer with the material terms of
competing offers received (whether written or oral) at least two business days
prior to any auction concerning the Assets or, in the event no auction is held,
at least two business days prior to any hearing to consider entry of the Sale
Order; provided, however, if any such competing offer is received prior to the
qualifying bid deadline, Seller shall not be obligated to provide Buyer the
identity of any such offeror until the bid deadline, and if any such competing
47
offer is received after the qualifying bid deadline, Seller shall be obligated
to provide Buyer the identity of any such offeror. Notwithstanding the preceding
provisions of this Section 10.3, Seller may take any action or refrain from
taking any action necessary to comply with Section 363 of the Bankruptcy Code
and will not be deemed to be in breach of this Section 10.3 by taking such
action or refraining from taking any action, including, without limitation: (a)
the performance of all actions contemplated under the Sale Procedures Order; (b)
responding to inquiries from potential acquirers of all or any significant
portions of the Assets; (c) the provision of due diligence information and
access to and the ability to inspect the Assets and the Business to potential
acquirers of all or any significant portions of the Assets; (d) arranging for
and conducting an auction with respect to all or any significant portions of the
Assets; and (e) preparation and distribution to potential acquirers of marketing
materials concerning all or any significant portions of the Assets.
48
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ORION REFINING CORPORATION
By: /s/ S. Xxxxx Xxxxxxx
--------------------------------------------
Name: S. Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
VALERO REFINING--NEW ORLEANS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
VALERO ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT (this "Amendment")
is entered into as of June 13, 2003, by and among ORION REFINING CORPORATION, a
Delaware corporation ("Seller"), VALERO ENERGY CORPORATION, a Delaware
corporation ("Valero") and VALERO REFINING--NEW ORLEANS, L.L.C., a Delaware
limited liability company ("Buyer").
RECITALS
Seller, Valero, and Buyer have entered into the
Purchase and Sale
Agreement dated as of May 13, 2003 (the "PSA"), pursuant to which Seller has
agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, the
Assets (as defined in the PSA).
Seller, Valero, and Buyer now desire to enter into this Amendment to
amend certain provisions of the PSA and to set forth their further agreements
with respect to certain matters.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants contained herein, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used but not otherwise
defined in this Amendment have the meanings given such terms in the PSA.
Section 2. Amendments to PSA. Section 9.2(d) of the PSA is hereby
amended by replacing the comma immediately prior to clause (i) with a colon,
formatting clauses (i) and (ii) as separate subparagraphs, and replacing
subparagraph (i) in its entirety with the following:
"(i) Buyer and Valero agree that Seller shall have no
liability or responsibility to Buyer or Valero, and that Buyer and
Valero shall have no rights or remedies against Seller (or any of its
employees or representatives), with respect to the Platforming Process
License Agreement (the "Platforming License") with UOP LLC ("UOP")
listed in Schedule 1.1(C) of the Seller Disclosure Schedule (whether
under the representations, warranties, covenants, indemnities,
conditions, or other provisions of this Agreement or otherwise, it
being acknowledged by Buyer and Valero that (A) Seller has received a
notice from UOP that Seller is in default under the Platforming License
for failure to timely make required payments thereunder and a notice
from UOP purporting to terminate the Platforming License for such
default, and (B) UOP has filed a petition seeking certain injunctive
and other relief and obtained a temporary restraining order to, inter
alia, prohibit Seller's use and disclosure of UOP's proprietary
platforming process and related technical information based on its
purported termination of the Platforming License), except that, if
Seller does not assign the Platforming License to Buyer at Closing,
then, as Buyer's and Valero's exclusive remedy, the Purchase Price
shall be reduced at Closing by $2,400,000 as follows: $1,800,000 in
cash plus a number of shares of Preferred Stock having a stated value
of $600,000; provided, however, that if Buyer increases the cash
portion of the Purchase Price to be paid by Buyer by an amount equal to
or greater than $600,000 in response to a Qualifying Bid from a third
party in accordance with the Sale Procedures Order, such $600,000
reduction shall be a reduction in cash rather than in Preferred Stock.
Accordingly, the failure to assign the Platforming
License shall not constitute the failure to satisfy a condition to
Closing hereunder (directly, as a result of such failure causing (l)
any representation or warranty to be untrue or incorrect or (2) any
covenant not to be performed or complied with, or otherwise), and
Seller shall not have any obligation (through litigation or otherwise)
to make any efforts or take any actions to remedy any default under,
contest any termination of, or defend against any legal action with
respect to the Platforming License or otherwise make any efforts or
take any actions to maintain such license or to reinstate or otherwise
obtain such license or any substitute therefor. Without limiting the
foregoing, Seller shall have the right, in its sole and absolute
discretion, in its bankruptcy proceedings to reject the Platforming
License effective as of the Closing."
Section 3. Representation and Warranty of Buyer and Valero. Each of
Buyer and Valero hereby represent and warrant to Seller that neither Buyer nor
Valero has any knowledge of any breach by Seller of any of its representations
and warranties under the PSA as of the date of this Amendment.
Section 4. No Other Amendments. Except as amended by this Amendment,
the PSA remains in full force and effect as originally written.
Section 5. Governing Law. This Amendment shall be construed (both as to
validity and performance), interpreted, and enforced in accordance with, and
governed by, the Laws of the State of
Texas applicable to agreements made and to
be performed wholly within such jurisdiction.
Section 6. Counterparts. This Amendment may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ORION REFINING CORPORATION
By: /s/ S. Xxxxx Xxxxxxx
-----------------------------------------
Name: S. Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
VALERO REFINING--NEW ORLEANS, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
VALERO ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT (this "Amendment")
is entered into as of July 1, 2003, by and among ORION REFINING CORPORATION, a
Delaware corporation ("Seller"), VALERO ENERGY CORPORATION, a Delaware
corporation ("Valero") and VALERO REFINING--NEW ORLEANS, L.L.C., a Delaware
limited liability company ("Buyer").
RECITALS
Seller, Valero, and Buyer have entered into the
Purchase and Sale
Agreement dated as of May 13, 2003, as amended by the First Amendment to
Purchase and Sale Agreement entered into as of June 13, 2003, by Seller, Valero,
and Buyer (as so amended, the "PSA"), pursuant to which Seller has agreed to
sell to Buyer, and Buyer has agreed to purchase from Seller, the Assets (as
defined in the PSA).
Seller, Valero, and Buyer now desire to enter into this Amendment to
set forth their further agreements with respect to certain matters.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, and covenants contained herein, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used but not otherwise
defined in this Amendment have the meanings given such terms in the PSA.
Section 2. Xxxxx Unit Repairs.
(a) Buyer and Valero hereby agree and acknowledge that the Xxxxx Unit
at the Refinery is Operational and that the condition to Closing set forth in
Section 7.3(e) of the PSA is satisfied
(b) The PSA is hereby amended by adding the following as a new Section
6.13:
"Section 6.13 Xxxxx Unit Repairs.
(a) Buyer shall use its commercially reasonable best efforts
to complete the remaining fireproofing, painting, and removal of demo
wire and any other repairs (the "Outstanding Repairs") necessary to
fully complete the repair of the damages to the Xxxxx Unit resulting
from the January 2003 casualty as promptly as practicable after the
Closing and to collect amounts of insurance proceeds the right to
receive which has been assigned to Buyer with respect to the cost of
the Outstanding Repairs.
(b) At Closing, Buyer shall deliver to the Escrow Agent 20,000
shares of Preferred Stock that would otherwise be delivered to Seller
under Section 3.2(d)(y) of the PSA. Each time that Buyer receives a
payment of insurance proceeds with respect to Outstanding Repairs
completed by Buyer, Preferred Stock having a stated value equal to the
amount of such insurance proceeds promptly thereafter shall be released
to Seller (rounded to the nearest share of Preferred Stock). If on the
date that is two years after the
Closing Date any Preferred Stock remains in such escrow, Preferred
Stock having a stated value equal to the amount of costs actually
incurred by Buyer in carrying out Outstanding Repairs with respect to
which Buyer has not received insurance proceeds shall be released to
Buyer, and Buyer shall assign to Seller the right to receive the
insurance proceeds with respect to such costs. Any Preferred Stock
thereafter remaining in such escrow (and any Common Stock into which
such Preferred Stock has been converted prior to such release and any
dividends or other funds, if any, in such escrow representing proceeds
from such Preferred Stock) shall be released to Seller."
Section 3. Section 9.2(d)(i)--UOP Platforming License. Section
9.2(d)(i) of the PSA is hereby amended by replacing it in its entirety with the
following:
"(i) Buyer and Valero agree that Seller shall have no
liability or responsibility to Buyer or Valero, and that Buyer and
Valero shall have no rights or remedies against Seller (or any of its
employees or representatives), with respect to the Platforming Process
License Agreement (the "Platforming License") with UOP LLC ("UOP")
listed in Schedule 1.1(C) of the Seller Disclosure Schedule (whether
under the representations, warranties, covenants, indemnities,
conditions, or other provisions of this Agreement or otherwise, it
being acknowledged by Buyer and Valero that (A) Seller has received a
notice from UOP that Seller is in default under the Platforming License
for failure to timely make required payments thereunder and a notice
from UOP purporting to terminate the Platforming License for such
default, and (B) UOP has filed a petition seeking certain injunctive
and other relief and obtained a temporary restraining order to, inter
alia, prohibit Seller's use and disclosure of UOP's proprietary
platforming process and related technical information based on its
purported termination of the Platforming License), except that, if
Seller does not assign the Platforming License to Buyer at Closing,
then, as Buyer's and Valero's exclusive remedy, Buyer shall deliver to
the Escrow Agent $1,800,000 of the Cash Purchase Price and 24,000
shares of Preferred Stock that would otherwise be delivered to Seller
under Section 3.2(d)(x) and (y) of the PSA (such cash and Preferred
Stock referred to herein as the "UOP Escrow"). If pursuant to an order
of the Bankruptcy Court (or other court having jurisdiction) or the
agreement of UOP, Seller transfers the Platforming License to Buyer and
either pays or makes an adequate reserve for the payment of all Cure
Amounts with respect to the Platforming License, the UOP Escrow shall
be released to Seller. If the Bankruptcy Court (or such other court)
fully and finally makes a determination the effect of which is that
Seller cannot and will not be able to transfer the Platforming License
(e.g. that the Platforming License was terminated by UOP), the UOP
Escrow shall be released in full to Buyer. Following release of the UOP
Escrow as provided in the immediately preceding sentences, no party
shall have any remaining obligation to any of the other parties
hereunder with respect to the Platforming License or the Dispute.
Accordingly, the failure to assign the Platforming License shall not
constitute the failure to satisfy a condition to Closing hereunder
(directly, as a result of such failure causing (l) any representation
or warranty to be untrue or incorrect or (2) any covenant not to be
performed or complied with, or otherwise), and Seller shall not have
any obligation (through litigation or otherwise) to make any efforts or
take any actions to remedy any default under, contest any termination
of, or defend against any legal action with respect to the Platforming
License or otherwise make any efforts or take any actions to maintain
such license or to reinstate or otherwise obtain such license or any
substitute therefor. Without limiting the foregoing, Seller shall have
the right, in its sole and absolute discretion, in its bankruptcy
proceedings to reject the Platforming License effective as of the
Closing."
Section 4. Transition Services.
(a) The PSA is hereby amended by adding the following as a new Section
6.14:
"Section 6.14 Transition Services. The parties hereto shall
have the rights and obligations with respect to transition services
specified in Schedule 6.14."
(b) The PSA is hereby amended by adding Attachment 1 hereto to the PSA
as a new Schedule 6.14.
Section 5. Employee Transition Matters.
(a) The PSA is hereby amended by adding the following as a new Section
6.15:
"Section 6.15 Employee Transition Matters. The parties shall
have the rights and obligations with respect to employee transition
matters specified in Schedule 6.15."
(b) The PSA is hereby amended by adding Attachment 2 hereto to the PSA
as a new Schedule 6.15.
Section 6. Amendments with respect to Certain Excluded Assets.
(a) The definition of "Excluded Assets" in the PSA is hereby amended by
replacing the word "and" immediately prior to "(xv)" with a comma, and adding
the following at the end of the definition immediately prior to the period:
", (xvi) scrap material from the January 2003 casualty in the Xxxxx
Unit at the Refinery, (xvii) the surplus equipment purchased by Seller
for repairs to the Xxxxx Unit at the Refinery and not used, and (xviii)
the valves that were recently in the possession of LA Valves"
(b) Section 6.11(a) of the PSA is hereby amended by adding the
following as a new sentence at the end of such Section:
Without limiting the generality of the foregoing, Buyer shall permit
Seller to access the Refinery for purposes of removing the Excluded
Assets described in items (xvi), (xvii) and (xviii) of the definition
of Excluded Assets, and Seller shall remove such Excluded Assets from
the Refinery within 45 days after the Closing Date and shall permit
Buyer to observe, and shall provide Buyer with 48 hours prior notice
of, such removal.
Section 7. Amendments with respect to Assumed Contracts.
(a) The definition of "Assumed Contracts" in the PSA is deleted in its
entirety and replaced with the following:
"Assumed Contracts" means (i) those contracts listed on
Schedule 1.1-A of the Seller Disclosure Schedule to which Seller is a party
related to the Assets or the Business, (ii) those contracts listed on Schedule
1.1-B of the Seller Disclosure Schedule, (iii) all rights of Seller as licensee
under those licenses of intellectual property of another Person listed on
Schedule 1.1-C, together with all applications and registrations with respect
thereto, to the extent used by Seller in connection with the ownership and
operation of the Refinery, (iv) those spot feedstock purchase contracts and spot
product sales contracts being assigned to Seller by MSCG pursuant to the
Inventory Sale Agreement and vessel charters listed in Schedule 1.1-D of the
Seller Disclosure Schedule, and (v) those additional contracts listed in
Schedule 1.1-E of the Seller Disclosure Schedule with respect to which Buyer is
paying Cure Amounts.
(b) Schedules 1.1-A, 1.1-B, and 1.1-C of the Seller Disclosure
Schedules are hereby deleted in their entirety and replaced with Schedules
1.1-A, 1.1-B, 1.1-C, 1.1-D, and 1.1-E attached hereto as Attachment 3.
(c) Section 6.9 of the PSA is hereby amended by adding the following
sentence at the end of such Section:
"Notwithstanding the foregoing, Buyer shall pay, and Seller shall have
no obligation to pay, Cure Amounts as set forth in Exhibit B to the
Sale Order with respect to the Assumed Contracts specified in Schedule
1.1-E to the Seller Disclosure Schedule, and Cure Amounts with respect
thereto shall not constitute Pre-Closing Determined Cure Amounts."
Section 8. Amendments to Exhibit 3.3(b). The last sentence of the body
of Exhibit 3.3(b) to the PSA (the sentence immediately preceding Attachment A
thereto) is hereby deleted in its entirety and replaced with the following:
"Buyer agrees to cause all gasoline and motor fuels included in
Inventory to be exported from the State of Louisiana on or before July
31, 2003, to provide appropriate documentation to such effect to Seller
and MSCG promptly after each cargo/shipment is so exported and in any
event within five business days after the last such cargo/shipment is
so exported, and to indemnify Seller and MSCG for all liability, loss
and expense (including any taxes, penalties, and interest) incurred as
a result of Buyer's failure to perform its obligations in this
sentence."
Section 9. No Other Amendments. Except as amended by this Amendment,
the PSA remains in full force and effect as originally written.
Section 10. Governing Law. This Amendment shall be construed (both as
to validity and performance), interpreted, and enforced in accordance with, and
governed by, the Laws of the State of
Texas applicable to agreements made and to
be performed wholly within such jurisdiction.
Section 11. Counterparts. This Amendment may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ORION REFINING CORPORATION
By: /s/ X. X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and General
Counsel
VALERO REFINING--NEW ORLEANS, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
VALERO ENERGY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
