EXHIBIT 2.1
DISTRIBUTION AGREEMENT
BY AND BETWEEN
PENN OCTANE CORPORATION
AND
RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
_____________, 2003
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement") is dated ______ __,
2003, by and among PENN OCTANE CORPORATION., a Delaware corporation ("POC"), RIO
VISTA ENERGY PARTNERS L.P., a Delaware limited partnership ("RVP"), and the Tax
Subsidiaries (as defined in Article 1) of RVP.
WITNESSETH:
WHEREAS, POC is the sole limited partner of RVP and owner of common
units representing a 98% limited partner interest in RVP (the "RVP Common
Units"); and
WHEREAS, POC desires to distribute to its stockholders all of the RVP
Common Units;
NOW, THEREFORE, in consideration of the premises and the mutual terms,
covenants and conditions herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
1.1 "Affiliate" shall mean, with respect to POC or RVP, any
Person, that directly or indirectly, is in control of, is controlled by,
controls or is under common control of POC or RVP, as the case may be. For
purposes of this definition, control shall include the ownership of 50% or more
of the legal or beneficial interest in any Person or the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise. A Person
who is an Affiliate shall only be considered an Affiliate for so long as that
Person meets the definition of an Affiliate. An officer, director, general
partner, managing member or trustee of a Person or Affiliate of such Person
shall not be considered to be an Affiliate unless such Person is under the
direct or indirect control or common control of POC or RVP, as the case may be.
For purposes of clarity, POC and RVP shall not be considered to be an Affiliate
of the other, nor shall any other company in which a director or officer of POC
or RVP is also a director, officer or stockholder be considered an Affiliate of
POC or RVP unless POC or RVP, as the case may be, itself controls such company.
1.2 "Agreement" shall have the meaning specified in the preamble.
1.3 "Business Day" shall mean any day other than Saturday, Sunday
or a day on which commercial banks located in Houston, Texas are required or
authorized by law to close.
1.4 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.5 "Common Unit" shall mean the common units of RVP as defined in
the RVP First Amended and Restated Agreement of Limited Partnership.
1
1.6 "Distribution" shall mean the distribution by POC to its
stockholders of the RVP Common Units.
1.7 "Distribution Agent" shall mean Computershare Investor
Services.
1.8 "Distribution Date" shall mean the time and date as of which
the Distribution is effective.
1.9 "Liability" shall mean any and all claims, demands,
liabilities, responsibilities, disputes, causes of action, losses, damages,
assessments, costs and expenses (including interest, awards, judgments,
penalties, settlements, fines, costs of remediation, diminutions in value, costs
and expenses incurred in connection with investigating and defending any claims
or causes of action (including, without limitation, attorneys' fees and expenses
and all fees and expenses of consultants and other professionals)) and
obligations of every nature whatsoever, liquidated or unliquidated, known or
unknown, matured or unmatured, or fixed or contingent.
1.10 "Nasdaq" shall mean The Nasdaq Stock Market, Inc.
1.11 "POC" shall mean Penn Octane Corporation, a Delaware
corporation.
1.12 "POC Common Stock" shall mean POC's common stock, $.01 par
value.
1.13 "Person" shall mean an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
1.14 "RVP" for purposes of the assumption and indemnification
provisions of this Agreement, shall include Rio Vista Energy Partners L.P. and
any and all predecessors or successors thereto, whether by merger, purchase or
other acquisition of substantially all of the assets or otherwise, and any and
all predecessors or successors to such entities.
1.15 "RVP Assets" shall mean, collectively, all the property,
assets and rights, tangible and intangible, owned or operated by the RVP
Companies on, before or after the Distribution Date.
1.16 "RVP Common Units" shall have the meaning specified in the
introduction to this Agreement.
1.17 "RVP Company" shall mean any Subsidiary of RVP.
1.18 "RVP First Amended and Restated Agreement of Limited
Partnership" shall mean that certain limited partnership agreement of RVP dated
____________, 2003.
1.19 "RVP Properties" shall mean the properties currently or
previously owned or operated by any RVP Company.
1.20 "Record Date" shall have the meaning specified in Section 2.1
hereof.
1.21 "SEC" shall mean the United States Securities and Exchange
Commission.
1.22 "Subsidiary" shall mean, with respect to any Person, (i) a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned by such Person, by one or more wholly owned subsidiaries of
such Person or by such Person and one or more wholly owned subsidiaries of such
Person, (ii) a partnership in which such Person or a wholly owned subsidiary of
such Person is, at the date of determination, a general or limited partner of
such partnership, but only if such Person or its wholly owned subsidiary is
entitled to receive more than fifty percent of the assets of such partnership
upon its dissolution or (iii) any other Person (other than a corporation or
partnership) in which such Person, a wholly owned subsidiary of such Person or
such Person and one or more wholly owned subsidiaries of such Person, directly
or indirectly, at the date of determination thereof, has (x) at least a majority
ownership interest or (y) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
1.23 "Tax Subsidiary" shall mean, with respect to POC or RVP as the
context may require, (i) any corporation or association taxable as a corporation
that is connected in an unbroken chain of stock ownership satisfying the
requirements of Section 1504(a) of the Code beginning with POC or RVP as the
case may be (provided that, for this purpose, after the Distribution Date, RVP
shall be regarded as a corporation that is the common parent of the RVP Group);
(ii) any entity not a corporation that is a "disregarded" entity for federal
income tax purposes pursuant to Treasury Regulations Sections 301.7701-3 and
that is owned by POC, RVP or any Tax Subsidiary of either (determined after
application of clause (i) above) and (iii) any "disregarded" entity owned by
POC, RVP or any Tax Subsidiary of either (determined after application of
clauses (i) and (ii) above).
1.24 "Transfer Agent" shall mean Computershare Investor Services.
1.25 "Voting Stock" shall mean, with respect to any Person,
securities of any class or classes of capital stock in such Person entitling the
holders thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the election of
the members of the board of directors or other governing body of such Person.
ARTICLE 2
MECHANICS OF DISTRIBUTION
2.1 Mechanics of RVP Distribution. The Distribution shall be
effected by the distribution to each holder of record of POC Common Stock, as of
the record date designated for the Distribution by or pursuant to the
authorization of the Board of Directors of POC (the "Record Date"), of one RVP
Common Unit for every eight shares of POC Common Stock held by such holder. No
fraction of a RVP Common Unit shall be issued, but in lieu thereof POC shall
cause the Distribution Agent to aggregate all fractional shares that would be
issued but for this Section 2.1 and sell such aggregated fractional shares in
the public market and the aggregate net cash proceeds of those sales shall be
distributed ratably to those POC stockholders who would otherwise have received
the fractional interests.
2.2 Timing of Distribution. The Board of Directors of POC shall
formally declare the Distribution and shall authorize POC to pay it upon the
satisfaction or waiver of the conditions set forth in Article 3, by delivery of
certificates for RVP Common Units to the Transfer Agent for delivery to the
holders entitled thereto. The Distribution shall be deemed to be effective upon
notification by POC to the Transfer Agent that the Distribution has been
declared and that the Transfer Agent is authorized to proceed with the
distribution of the RVP Common Units.
ARTICLE 3
CONDITIONS TO OBLIGATIONS OF POC
The obligations of POC to consummate the Distribution hereunder shall
be subject to the fulfillment of each of the following conditions:
(a) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall be satisfied that, after giving
effect to the Distribution and the transactions contemplated under the
Contribution, Conveyance and Assumption Agreement dated ___________, 2003 (the
"Contribution Agreement") by and among POC, RVP, the GP (as defined therein),
the Operating GP (as defined therein) and the Operating Partnership (as defined
therein), (i) POC will not be insolvent and will not have unreasonably small
capital with which to engage in its businesses and (ii) the POC surplus (as such
term is defined by Delaware General Corporation Law) will be sufficient to
permit, without violation of Delaware law, the Distribution.
(b) POC and RVP (or its Subsidiary) shall have executed
the Purchase Contract for the sale of liquified petroleum gas by POC to RVP (or
its Subsidiary).
(c) POC and RVP shall have executed the Omnibus
Agreement, which is to govern the business relationship between POC and RVP
following the Distribution.
(d) The transactions contemplated under the Contribution
Agreement shall have been effected.
(e) The Common Units shall have been approved for trading
on the National Market System of the Nasdaq Stock Market or on such other public
market acceptable to the Board of Directors of POC, and the Nasdaq Stock Market
or such other public market shall not have (i) withdrawn its certification filed
with the SEC that the Common Units have been approved for listing, (ii)
suspended trading in either the Common Units or the POC Common Stock or (iii)
filed with the SEC a Form 25 to strike either the Common Units or the POC Common
Stock from listing and registration thereof.
(f) RVP's Registration Statement on Form 10 shall have
become effective pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended, and the SEC shall not have commenced any action to prohibit or
restrict the Distribution in any way.
(g) All material governmental and third party approvals
and consents necessary to consummate the transactions contemplated under this
Agreement and the Contribution Agreement shall have been obtained.
(h) No order, injunction or decree issued by any court or
agency of competent jurisdiction or other legal restraint or prohibition
preventing the Distribution or any of the other transactions contemplated by
this Agreement and the other agreements relating to the Distribution may be in
effect.
(i) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall have received a copy of an
independent appraisal of the assets to be transferred pursuant to the
Contribution Agreement, and each of the Board of Directors of POC and the
Independent Committee of the Board of Directors of POC have determined in their
sole discretion that, based on such independent appraisal, the estimated tax
liabilities to be incurred by POC as a result of the Distribution are
acceptable.
(j) The Board of Directors of POC and the Independent
Committee of the Board of Directors of POC shall not have determined, in their
sole discretion, to abandon, defer or modify the Distribution or the terms
thereof.
ARTICLE 4
MISCELLANEOUS
4.1 RVP Covenants. To assure the performance of the obligations of
RVP under this Agreement, RVP hereby covenants and agrees that it will not, and
will cause its respective Subsidiaries not to, merge, convert into another
entity, engage in a share exchange for a majority of its units, liquidate or
transfer, assign or otherwise convey or allocate, directly or indirectly, in one
or more transactions, whether or not related, a majority of its assets
(determined in good faith by a board resolution prior to the transaction on a
fair value and consolidated basis) to any Person unless the acquiring Person (i)
expressly assumes the obligations of it hereunder, (ii) executes and delivers to
POC an agreement, in form and substance satisfactory to POC, agreeing to be
bound by each and every provision of this Agreement as if it were RVP and (iii)
has a net worth on a pro forma basis after giving effect to the acquisition or
business combination equal to or greater than that of RVP (on a consolidated
basis) and RVP's compliance with the provisions Article 3 of this Agreement. Any
such assumption of liability by the acquiring Person shall not release RVP from
its obligations under this Agreement.
4.2 Governing Law. All questions arising out of this Agreement and
the rights and obligations created herein, or its validity, existence,
interpretation, performance or breach, shall be governed by and construed in
accordance with the internals laws of the State of Texas, without regard to or
the application of the rules of conflicts of laws set forth in such laws.
4.3 Notices. All notices and other communications to be given or
made hereunder shall be in writing and shall be (a) personally delivered with
signed receipt obtained acknowledging delivery; (b) transmitted by postage
prepaid registered mail, return receipt requested (air mail if international);
or (c) transmitted by facsimile; to a party at the address set out below (or at
such other address as it may have provided notification for the purposes hereof
to the other party hereto in accordance with this Section).
If to RVP or to any of the Rio Vista GP LLC
Tax Subsidiaries of RVP: 000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax number: (713) _________
Attention: President
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Fax number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
If to POC: Penn Octane Corporation
00-000 Xxxxxxx Xxxx, Xxxxxxxx X
Xxxx Xxxxxx, XX 00000
Fax number: (000) 000-0000
Attention: President
With a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Fax number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
4.4 Expenses. Except as otherwise set forth herein or in any
agreement executed in connection herewith all costs and expenses related to the
Distribution and the transactions contemplated hereby shall be borne by POC.
4.5 Entire Agreement. This Agreement, including the Schedules,
Annexes and other writings referred to herein or delivered pursuant hereto, the
Omnibus Agreement dated of even date herewith between POC and RVP and the
Contribution Agreement constitute the entire agreement between POC, RVP and the
Tax Subsidiaries of RVP with respect to the subject matter hereof and supersede
all other agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may not be amended, altered or modified except by a
writing signed by duly authorized officers of POC, RVP and the Tax Subsidiaries
of RVP.
4.6 Waiver. No consent or waiver, express or implied, by a party
hereto to or of any breach or default by the other party hereto in the
performance by such other party of its obligations hereunder will be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such other party of the same or any other obligations of such
other party hereunder. Failure on the part of a party to complain of any act or
failure to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, will not constitute a waiver by
such party of its rights hereunder. The giving of
consent by a party in any one instance will not limit or waive the necessity to
obtain such party's consent in any future instance.
4.7 Binding Effect; Assignment; No Third Party Benefit.
(a) This Agreement will be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns. None of the parties to this Agreement may
assign its rights under this Agreement without the prior written consent of all
of the other parties; provided, however, POC may assign any of its rights and
obligations under this Agreement to any Subsidiary of POC, without the consent
of any other party to this Agreement.
(b) Nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than RVP, POC, the RVP
Indemnified Parties and the Tax Subsidiaries of RVP any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
4.8 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
4.9 References. All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement", "herein", "hereof", "hereby", "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited.
4.10 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, will include all other
genders; and the singular will include the plural and vice versa. The headings
of the Articles and Sections of this Agreement are included for convenience only
and will not be deemed to constitute part of this Agreement or to affect the
construction hereof or thereof.
4.11 Severability. Any provision of this Agreement that is
determined by arbitration as provided herein or a court of competent
jurisdiction to be invalid, illegal or unenforceable shall be ineffective to the
extent of such invalidity, illegality or unenforceability, without affecting in
any way the remaining provisions hereof in such jurisdiction or rendering that
or any other provision of this Agreement invalid, illegal or unenforceable, so
long as the material purposes of this Agreement can be determined and
effectuated. Should any provision of this Agreement be so declared invalid,
illegal or unenforceable, the parties shall agree on a valid provision to
substitute for it.
4.12 Further Assurances. Each party hereto agrees to do all acts
and things and to make, execute and deliver such written instruments, as will
from time to time be reasonably required to carry out the terms and provisions
of this Agreement.
4.13 Amendments. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived, only by a written
instrument executed by POC, RVP and the Tax Subsidiaries of RVP.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Distribution
Agreement as of the date first set forth in the introduction to this Agreement.
PENN OCTANE CORPORATION
By: __________________________________
Name: ________________________________
Title: _______________________________
RIO VISTA ENERGY PARTNERS L.P.
By: RIO VISTA GP LLC,
its General Partner
By: ______________________________
Name: ____________________________
Title: ___________________________
