STOCK PURCHASE AGREEMENT among Ergon, Inc., Lion Oil Company and Delek US Holdings, Inc. dated March 17, 2011
Exhibit
2.1
Execution Copy
among
Ergon, Inc.,
Lion Oil Company
and
dated
March 17, 2011
TABLE OF CONTENTS
Page | ||||
ARTICLE I DEFINITIONS AND DEFINITIONAL PROVISIONS |
1 | |||
Section 1.1 Definitions |
1 | |||
Section 1.2 Construction |
16 | |||
ARTICLE II SALE OF LION SHARES AND OTHER CONSIDERATION |
16 | |||
Section 2.1 Sale of Lion Shares |
16 | |||
Section 2.2 Lion Shares Purchase Price |
17 | |||
Section 2.3 Deposit |
17 | |||
Section 2.4 Adjustment to Consideration |
17 | |||
ARTICLE III CLOSING AND TRANSACTIONS AT CLOSING |
18 | |||
Section 3.1 Time and Place of Closing |
18 | |||
Section 3.2 Transactions Occurring at Closing |
18 | |||
Section 3.3 Closing Deliveries |
24 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER |
27 | |||
Section 4.1 Organization |
28 | |||
Section 4.2 Capitalization; Ownership of the Lion Shares |
28 | |||
Section 4.3 Due Authority; Execution and Delivery; Enforceability |
29 | |||
Section 4.4 No Conflicts; Approvals |
29 | |||
Section 4.5 Financial Statements |
30 | |||
Section 4.6 Absence of Undisclosed Liabilities |
30 | |||
Section 4.7 Material Contracts |
30 | |||
Section 4.8 Title to Assets |
32 | |||
Section 4.9 Authorizations of the Companies |
33 | |||
Section 4.10 Compliance with Laws |
33 | |||
Section 4.11 Proceedings |
34 | |||
Section 4.12 Environmental |
34 | |||
Section 4.13 Taxes |
35 | |||
Section 4.14 Acquisition of Delek Shares for Investment |
36 | |||
Section 4.15 Brokers |
37 | |||
Section 4.16 Benefit Plans |
37 | |||
Section 4.17 Labor Matters |
38 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER |
38 | |||
Section 5.1 Organization and Qualification |
38 |
-i-
TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
Section 5.2 Due Authority; Execution and Delivery; Enforceability |
38 | |||
Section 5.3 No Conflicts; Approvals |
39 | |||
Section 5.4 Proceedings |
39 | |||
Section 5.5 Acquisition of Lion Shares for Investment |
39 | |||
Section 5.6 No Brokers |
40 | |||
Section 5.7 Buyer Capitalization |
40 | |||
Section 5.8 SEC Documents; Material Changes |
41 | |||
ARTICLE VI PRE-CLOSING COVENANTS AND AGREEMENTS |
42 | |||
Section 6.1 Operation of the Business |
42 | |||
Section 6.2 Appropriate Action; Consents; Filings |
44 | |||
Section 6.3 Right of Entry; Access to Information |
45 | |||
Section 6.4 Condition of Assets |
46 | |||
Section 6.5 Independent Investigation |
46 | |||
Section 6.6 Supplement to Disclosure Schedules |
47 | |||
Section 6.7 Cooperation with Respect to Financial Statements |
47 | |||
Section 6.8 Transactions Involving Delek Stock |
48 | |||
Section 6.9 Cooperation with Respect to Financing |
48 | |||
Section 6.10 Corporate Structure of Buyer |
48 | |||
Section 6.11 Data Room CD ROMs |
48 | |||
Section 6.12 Partial Assignment of Lion/Ergon Debt |
48 | |||
ARTICLE VII TAX MATTERS |
49 | |||
Section 7.1 Paline Taxes |
49 | |||
Section 7.2 Transfer Taxes |
49 | |||
Section 7.3 Tax Returns; Audits |
49 | |||
Section 7.4 Tax Agreements |
50 | |||
Section 7.5 Survival |
51 | |||
Section 7.6 Third-Party Tax Claim Procedures |
51 | |||
ARTICLE VIII CLOSING CONDITIONS |
52 | |||
Section 8.1 Conditions to Obligations of Each Party Under this Agreement |
52 | |||
Section 8.2 Additional Conditions to Seller’s and Lion’s Obligations |
52 | |||
Section 8.3 Additional Conditions to Buyer’s Obligations |
53 | |||
ARTICLE IX POST-CLOSING COVENANTS |
54 |
-ii-
TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
Section 9.1 Further Assurances |
54 | |||
Section 9.2 Access; Records |
54 | |||
Section 9.3 Confidentiality |
54 | |||
Section 9.4 Asphalt Inventory |
55 | |||
Section 9.5 Post-Closing Restrictions on Hiring of Key Employees |
55 | |||
Section 9.6 Removal of Legend |
56 | |||
Section 9.7 Operation of Business |
56 | |||
ARTICLE X TERMINATION |
56 | |||
Section 10.1 Termination |
56 | |||
Section 10.2 Effect of Termination |
57 | |||
Section 10.3 Specific Performance |
58 | |||
ARTICLE XI INDEMNIFICATION AND REMEDIES |
58 | |||
Section 11.1 Survival of Representations and Warranties |
58 | |||
Section 11.2 Indemnification Provisions for Benefit of Buyer |
59 | |||
Section 11.3 Indemnification Provisions for Benefit of Seller |
60 | |||
Section 11.4 Indemnification Procedures |
60 | |||
Section 11.5 Determination of Losses; Apportionment of Losses |
61 | |||
Section 11.6 Further Limitations on Liability; Releases |
62 | |||
Section 11.7 No Multiple Recoveries |
63 | |||
ARTICLE XII MISCELLANEOUS |
63 | |||
Section 12.1 Entire Agreement; Amendment; Waivers |
63 | |||
Section 12.2 Parties in Interest |
63 | |||
Section 12.3 Assignment |
63 | |||
Section 12.4 Public Announcements |
64 | |||
Section 12.5 Expenses |
64 | |||
Section 12.6 Headings; Disclosure Schedules; Data Room |
64 | |||
Section 12.7 Notices |
65 | |||
Section 12.8 Severability |
66 | |||
Section 12.9 Governing Law |
66 | |||
Section 12.10 Dispute Resolution |
66 | |||
Section 12.11 Provisional and Emergency Measures and Specific Performance |
66 | |||
Section 12.12 Time of the Essence |
66 |
-iii-
TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
Section 12.13 Relationship of the Parties |
67 | |||
Section 12.14 Counterparts |
67 |
-iv-
TABLE OF CONTENTS
Exhibits
Exhibit A
|
Restrictive Legend | |
Exhibit B
|
Form of New Lion Note | |
Exhibit C
|
Form of Buyer Guaranty | |
Exhibit D
|
Form of Lion Assignment Agreement | |
Exhibit E
|
Form of Asphalt Sales Agreement | |
Exhibit F
|
Form of Mutual Release | |
Exhibit G
|
Form of Registration Rights Agreement | |
Exhibit H
|
Form of Termination Agreement | |
Exhibit I
|
Form of Lion-Buyer Note | |
Exhibit J
|
Form of Muskogee Terminal Operations Agreement | |
Exhibit K
|
Form of Seller Transition Services Agreement | |
Exhibit L
|
Form of Lion Transition Services Agreement | |
Exhibit M
|
Form of Paline Option Agreement | |
Exhibit N
|
Dispute Resolution Procedures | |
Exhibit O
|
Form of Asphalt Marketing Agreement |
Schedules
Schedule 1.1(i)
|
Permitted Asset Liens | |
Schedule 3.2(d)
|
Inventory Measurement Procedures | |
Schedule 3.2(e)
|
Letters of Credit | |
Schedule 3.3(a)(iv)
|
Third-Person Consents and Authorizations | |
Schedule 3.3(a)(xv)
|
Resignations | |
Schedule 3.3(c)(vii)
|
Third-Person Consents and Authorizations | |
Schedule 6.1
|
Operation of Business | |
Schedule 6.10
|
Corporate Structure of Buyer | |
Schedule 8.2(c)
|
Third-Person Consents and Authorizations | |
Schedule 8.3(c)
|
Third-Person Consents and Authorizations | |
Schedule 9.5(a)
|
Lion Non-Hires | |
Schedule 9.5(b)
|
Seller Non-Hires |
-v-
This STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of March 17, 2011
(the “Execution Date”), by and among Ergon, Inc., a Mississippi corporation (“Seller”), Lion Oil
Company, an Arkansas corporation (“Lion”), and Delek US Holdings, Inc., a Delaware corporation
(“Buyer”). Buyer, Lion and Seller may be referred to herein individually as a “Party,” and
collectively as the “Parties.”
RECITALS
A. Lion, by itself and through the Acquired Subsidiaries, owns, leases, operates or uses: (i)
a crude oil refinery located in El Dorado, Arkansas, including a light products terminal located at
Lion’s refinery complex in El Dorado, Arkansas (the “Refinery”); (ii) a gasoline and diesel
terminal located in El Dorado, Arkansas; (iii) an asphalt distribution terminal located in El
Dorado, Arkansas; (iv) a light products terminal located in Nashville, Tennessee; (v) a light
products terminal located in Memphis, Tennessee; (vi) a crude oil pipeline between Xxxxxx,
Louisiana and Magnolia, Arkansas; (vii) a crude oil pipeline between Magnolia, Arkansas and El
Dorado, Arkansas; (viii) light products pipelines between the Refinery and a facility owned by a
unit of Enterprise Products Company located in El Dorado, Arkansas; (ix) a crude oil gathering
system located in southern Arkansas and northern Louisiana; (x) an industrial construction and
engineering business based in El Dorado, Arkansas; (xi) an asphalt distribution terminal located in
Henderson, Texas; and (xii) an asphalt distribution terminal located in Muskogee, Oklahoma.
B. Seller is the record and beneficial owner of 4,450,000 shares of common stock, par value
$0.10 per share, of Lion (the “Lion Shares”).
C. Seller desires to sell to Buyer, and Buyer desires to buy from Seller, the Lion Shares, on
the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the representations, warranties and
covenants contained herein, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND DEFINITIONAL PROVISIONS
DEFINITIONS AND DEFINITIONAL PROVISIONS
Section 1.1 Definitions. As used in this Agreement (including in the preamble and
recitals), the following terms, when capitalized, shall have the following meanings:
“Acquired Subsidiaries” means El Dorado Pipeline Company, X. Xxxxxxx Construction Co., Lion
Oil Trading & Transportation and Magnolia Pipeline Company.
“Adjusted Current Assets” means the current assets of the Companies (including spare parts but
excluding catalysts), on a consolidated basis, determined in accordance with GAAP and the
Companies’ past practices, consistently applied, as of the Measurement Time; provided, however,
that for purposes of determining Adjusted Current Assets (1) with respect to the assets that
constitute Related Party Receivables, Asphalt Inventory or Excess Inventory, such assets shall be
included in such determination notwithstanding that any of such assets may not otherwise be
reflected on the consolidated balance sheet
of the Companies prepared as of the Measurement Time, but the value thereof as of the
Measurement Time shall be reduced by the amounts deemed to constitute partial payments by Lion of
the outstanding principal balance of the Lion/Ergon Debt pursuant to the provisions of Section
3.2(c)(ii), (iii) or (iv),
Page 1 of 67
Stock Purchase Agreement
Stock Purchase Agreement
respectively, even if any such reduction results in
a negative amount and (2) Inventory shall be measured and valued in accordance with Section
3.2(d)(vi).
“Adjusted Current Liabilities” means the current liabilities of the Companies, on a
consolidated basis, determined in accordance with GAAP and the Companies’ past practices,
consistently applied, as of the Measurement Time; provided, however, that for purposes of
determining Adjusted Current Liabilities there shall be excluded (i) the Lion/Ergon Debt, (ii) the
Statoil Fees, (iii) any liabilities for Taxes caused by or resulting from any of the Contemplated
Transactions, including the Paline Pipeline Equity Transfer, (iv) any liabilities for Taxes caused
by or resulting from any event occurring after the Closing which is not in the ordinary course of
the Business or (v) any liabilities for Taxes for which Seller or its Affiliates, other than the
Companies, are liable to make the payment, including Taxes with respect to any Tax Return described
in Section 7.3(c).
“Adjusted Net Working Capital” means Adjusted Current Assets less Adjusted Current
Liabilities; provided, however, that the Adjusted Net Working Capital shall not be less than zero.
“Affiliate” means, as to any specified Person, any other Person that, directly or indirectly
through one or more intermediaries or otherwise, controls, is controlled by or is under common
control with the specified Person. For purposes of this definition, “control” of a Person means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether by contract or otherwise.
“Agreement” has the meaning given such term in the preamble to this Agreement and includes all
Exhibits and Schedules attached hereto or delivered pursuant hereto.
“Arbiter” has the meaning given such term in Section 3.2(d)(iv).
“Asphalt Inventory” has the meaning given such term in Section 3.2(c)(ii).
“Asphalt Marketing Agreement” has the meaning given such term in Section 3.3(a)(xi).
“Asphalt Sales Agreement” has the meaning given such term in Section 3.2(c)(ii).
“Asphalt Sales Period” has the meaning given such term in Section 9.4.
“Authorization” means any franchise, permit, license, authorization, order, certificate,
registration, exemption, concession, approval, variance, waiver, right or other consent or approval
granted or issued by any Governmental Authority pursuant to any Law.
“Benefit Plan” includes (i) any “employee benefit plan,” as such term is defined in Section
3(3) of ERISA, (ii) any “multiemployer plan” as defined in Section 3(37) of ERISA, (iii) any plan
that would be an employee benefit plan if it were subject to ERISA or the Code, such as plans for
directors, (iv) any stock bonus, stock ownership, stock option, stock purchase, stock appreciation
rights, phantom stock or other stock plan (whether qualified or nonqualified), (v) any bonus,
deferred compensation, excess
benefit, or incentive compensation plan, (vi) any severance agreement, plan, program, policy
or arrangement, (vii) any supplemental unemployment, sick leave, long-term disability,
post-retirement medical or life insurance, and (viii) any other plan, program, policy, employment
practice, pay practice or arrangement providing benefits to employees.
“Business” means the business of the Companies as of the date hereof.
Page 2 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Business Day” means any day other than Saturday, Sunday or a day on which banks located in
the State of Arkansas are authorized or obligated to close.
“Buyer” has the meaning given such term in the preamble to this Agreement.
“Buyer Disclosure Schedules” means all the Schedules relating to Article V delivered
by Buyer to Seller on the Execution Date, and any supplements or amendments delivered in accordance
with the provisions of Section 6.6(c). The Buyer Disclosure Schedules have been arranged
in sections corresponding to the numbered sections of Article V.
“Buyer Financial Statements” has the meaning given such term in Section 5.8.
“Buyer Fundamental Representations and Warranties” has the meaning given such term in
Section 11.1(b).
“Buyer Guaranty” has the meaning given such term in Section 3.2(b).
“Buyer Indemnification Ceiling” means $45,000,000.
“Buyer Indemnification Deductible” means $10,000,000.
“Buyer Indemnitees” means each of Buyer and its past or present officers, directors,
employees, advisors and other representatives.
“Buyer Material Adverse Effect” means a material adverse effect on the assets or business of
Buyer and its Subsidiaries that has caused, will cause or would reasonably be expected to cause any
Loss or Losses, individually or in the aggregate, with respect to the business of Buyer and its
Subsidiaries, in excess of TEN MILLION AND NO/100 DOLLARS ($10,000,000); provided, however, that in
no event shall any effect that results from any of the following be deemed to constitute a Buyer
Material Adverse Effect: (a) this Agreement or any actions taken in compliance with this Agreement,
the Contemplated Transactions, or the pendency or announcement thereof, (b) changes or conditions
affecting the petroleum refining, marketing and transportation industry (including feedstock
pricing, refining, marketing, transportation, terminaling and trading) generally or regionally, (c)
changes in general economic, capital markets, regulatory or political conditions in the United
States or elsewhere (including interest rate fluctuations), (d) changes or proposed changes in Laws
or GAAP or regulatory accounting requirements or interpretations thereof, (e) fluctuations in
currency exchange rates, (f) acts of war, insurrection, sabotage or terrorism, (g) failure, in and
of itself, of the businesses of Buyer and its Subsidiaries to meet operational or financial
expectations or projections or (h) any decline in market value of the Delek Stock as indicated on
the New York Stock Exchange (provided, however, that this clause (h) shall not operate to exclude
from the definition of “Buyer Material Adverse Effect” any set of facts or circumstances that
cause or result in any such decline in market value to the extent such facts or circumstances
would constitute a “Buyer Material Adverse Effect” independently from the decline in market value),
except to the extent such effects in the cases of clauses (b), (c), (d) and (f) above materially
and disproportionately affect Buyer and its Subsidiaries relative to other participants in the
petroleum refining, marketing and transportation industry.
“Buyer Representation and Warranty Losses” has the meaning given such term in Section
11.3(a)(i).
“Buyer SEC Documents” has the meaning given such term in Section 5.8.
Page 3 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Cash Repayment Amount” has the meaning given such term in Section 3.2(a)(i).
“CBAs” means, collectively, all collective bargaining agreements between any Company and any
collective bargaining unit of any employee union and all existing contract extension agreements,
memoranda of agreement, letters of understanding and similar agreements and instruments with any
such collective bargaining unit.
“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of
1980.
“CFIUS” means the Committee on Foreign Investment in the United States, including any member
or staff of such committee acting on behalf of such committee.
“Challenged Amount” has the meaning given such term in Section 3.2(d)(iv).
“Claim” means (i) any demand, claim, complaint, notice of grievance or of the commencement of
any other Proceeding, or any other assertion of an Obligation, whether written or oral, for any
Loss, specific performance, injunctive relief, remediation or other equitable relief or (ii) any
charge or notice of violation issued by a Governmental Authority or Stock Exchange, in each of
cases (i) and (ii), whether or not ultimately determined to be valid.
“Closing” has the meaning given such term in Section 3.1.
“Closing Balance Sheet” has the meaning given such term in Section 3.2(d)(iii).
“Closing Conditions” means each of the conditions to the Closing set forth in Article
VIII.
“Closing Date” has the meaning given such term in Section 3.1.
“Code” means the Internal Revenue Code of 1986.
“Collateral Assignee” has the meaning given such term in Section 12.3.
“Commercially Reasonable Efforts” means efforts which are commercially reasonable to enable a
Person, directly or indirectly, to satisfy a condition to or otherwise assist in the consummation
of a desired result and which do not require the performing Person to expend funds or assume
Obligations
other than expenditures and Obligations which are customary and reasonable in nature and
amount in the context of a series of related transactions similar to the Contemplated Transactions.
“Companies” means Lion and the Acquired Subsidiaries.
“Company” means Lion or any of the Acquired Subsidiaries.
“Confidential Information” has the meaning given such term in Section 9.3(a).
“Confidentiality Agreement” means that certain Mutual Non-Disclosure Agreement dated January
18, 2011, by and among the Parties.
“Consent Decree” means any consent decree or consent order currently in effect and issued by,
or entered into with, any applicable Governmental Authority prior to the Closing pursuant to any
Law relating to the ownership or use of any of the properties or assets of the Companies or the
operation of any part of the Business prior to the Closing.
Page 4 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Contemplated Transactions” means the transactions contemplated by this Agreement, including:
(i) the sale of the Lion Shares to Buyer; (ii) the transactions described in Section 3.2;
(iii) the execution and delivery of the Related Agreements; and (iv) the performance by the Parties
of their respective covenants and obligations under this Agreement.
“Contract” means any written or oral agreement, contract, lease, instrument, note, guaranty,
indemnity, representation, warranty, assignment, power of attorney, purchase order, work order,
commitment, covenant, assurance or contractual undertaking of any nature.
“Data Room” means the electronic data room established by Seller for the posting of documents
for review by Buyer in connection with the Contemplated Transactions.
“Delek Shares” has the meaning given such term in Section 3.2(a)(ii).
“Delek Stock” means shares of common stock, par value $0.01 per share, of Buyer.
“Deposit” has the meaning given such term in Section 2.3.
“Diligence Representative” has the meaning given such term in Section 6.3(b).
“Dollars” and the symbol “$” mean the lawful currency of the United States of America.
“DPA” means the Defense Production Act of 1950, as amended by the Foreign Investment and
National Security Act of 2007.
“El Dorado Pipeline Company” means El Dorado Pipeline Company, an Arkansas corporation.
“Environmental Authorization” means any Authorization granted or issued by any Governmental
Authority under any Environmental Law.
“Environmental Claim” means any Claim asserting an Environmental Liability or asserting a Lien
under any Environmental Law, or any written or oral notice of noncompliance or violation by or from
any Person alleging an Environmental Liability.
“Environmental Condition” means (i) the presence in, or Release of any Hazardous Substance at,
on, under or from (including migrating from), any of the properties or assets of the Companies,
(ii) any condition that now requires or may in the future require Remediation Activities with
respect to soil (including the underlying strata), sediments or groundwater at, from, to or under
any of the properties or assets of the Companies, (iii) any condition or circumstance that
constitutes noncompliance with, or lack of a required Environmental Authorization under, any
Environmental Law in connection with the ownership or operation of any of the properties or assets
of the Companies, (iv) any condition or circumstance that constitutes non-compliance with any
Environmental Authorization granted or issued to any of the Companies, or (v) any condition or
circumstance that otherwise could result in the imposition of liability under any Environmental Law
in connection with the ownership or operation of any of the properties or assets of the Companies.
“Environmental Law” means any Law relating to (i) the protection of the environment or the
public or employee welfare from actual or potential exposure (or the effects of exposure) to any
actual or potential Release (whether past or present) of any Hazardous Substance or (ii) pollution,
natural resource damages, conservation of resources, waste management or the manufacture,
generation, production, processing, distribution, use, treatment, labeling, storage, release,
emission, discharge, remediation,
Page 5 of 67
Stock Purchase Agreement
Stock Purchase Agreement
removal, disposal, transport or handling of any Hazardous
Substance (including asbestos, polychlorinated biphenyls, crude petroleum and its fractions or
derivatives thereof), including CERCLA, RCRA, the Clean Air Act, the Federal Water Pollution
Control Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Hazardous & Solid
Waste Amendments Act of 1984, the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, the Occupational Safety and Health Act of 1970 (but only to
the extent relating to any of the matters described in clause (i) or (ii) of this definition), the
Oil Pollution Act of 1990, the Emergency Planning and Community Right-to-Know Act of 1986, and any
state and local Laws implementing or comparable to any of the foregoing federal Laws, and any
regulations promulgated by any Governmental Authority pursuant to any of the foregoing. For the
avoidance of doubt, due to the inclusion of the word “applicable” in the definition of “Law”
incorporated into this definition, any references in this Agreement to “any Environmental Law” or
“any applicable Environmental Law” shall have the same meaning.
“Environmental Liability” means any Obligation or Loss: (a) arising under any applicable
Environmental Law (including required costs and expenditures for Remediation Activities) pursuant
to any agreement, Order, Consent Decree, notice of responsibility, directive (including directives
embodied in Environmental Laws) or similar documents (including settlements) arising out of any
Environmental Laws; or (b) arising from any Claim by a Governmental Authority or other Person for
personal injury, property damage, damage to natural resources, performance of or payment or
reimbursement of costs or expenses for Remediation Activities, in each case arising as a result of
an Environmental Condition and made pursuant to any applicable Environmental Law or applicable
common law (such as Claims alleging trespass, nuisance, ultra hazardous liability or negligence
relating to any of the foregoing).
“Ergon Asphalt & Emulsions” means Ergon Asphalt & Emulsions, Inc., a Mississippi corporation.
“Ergon Terminaling” means Ergon Terminaling, Inc., a Mississippi corporation.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any Person (whether or not incorporated) that, within the six-year
period ending on the Closing Date, is or was treated as a single employer together with Lion or any
of its Affiliates under Code Section 414.
“Estimated Adjusted Net Working Capital” has the meaning given such term in Section
3.2(d)(ii).
“Excess Inventory” means the volume of Inventory owned by the Companies as of the Measurement
Time in excess of 2.1 million barrels in the aggregate.
“Exchange Act” means the U.S. Securities Exchange Act of 1934.
“Execution Date” has the meaning given such term in the preamble to this Agreement.
“Final Adjusted Net Working Capital” has the meaning given such term in Section
3.2(d)(iii).
“Foreclosure Notice” has the meaning given such term in Section 12.3.
“GAAP” means accounting principles generally accepted in the United States of America.
Page 6 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Governing Documents” means the articles of incorporation, certificate of incorporation,
charter, bylaws, articles or certificate of formation, regulations, limited liability company
agreement, certificate of limited partnership, partnership agreement, and all other similar
documents, instruments or certificates executed, adopted, or filed in connection with the
formation, organization or governance of a Person, including any amendments thereto.
“Governmental Authority” means any federal, state, local or other governmental agency,
authority, administrative agency, regulatory body, commission, board, bureau, agency, officer,
official, instrumentality, court or arbitral tribunal having governmental or quasi-governmental
powers or any other instrumentality or political subdivision thereof; 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 Substance” means any substance that is listed, identified or otherwise designated
as hazardous, toxic or dangerous under, or is regulated (or the cleanup of which can be required)
under, any Law for the protection of health, safety or the environment, and, in addition, any
substance which requires special handling, storage or disposal procedures to avoid a Release or
whose use, handling, storage or disposal is in any way regulated, in either case under any Law for
the protection of health, safety or the environment. Without limiting the generality of the
foregoing, Hazardous Substances shall include (i) “hazardous wastes,” “solid wastes” (excluding
office, household or similar solid wastes), “hazardous substances,” “toxic substances,”
“pollutants,” or “contaminants” or other similar identified designations in any Law for the
protection of health, safety or the environment; and (ii) petroleum, crude oil, refined
petroleum products and fractions or by-products thereof, in each case whether in their virgin,
used or waste state.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976.
“Indemnified Party” has the meaning given such term in Section 11.4(a).
“Indemnifying Party” has the meaning given such term in Section 11.4(a).
“Inspector” has the meaning given such term in Section 3.2(d)(vi)(A).
“Interim Period” means the period of time from the Execution Date until the earlier of the
Closing or the termination of this Agreement pursuant to Article X.
“Inventory” means the crude oil, feedstocks, intermediates, blendstocks and refined petroleum
products owned by the Companies as of the Measurement Time (including hydrocarbons located in
processing units and interconnecting pipes and hydrocarbons serving as tank bottoms and heels);
provided, however, that “Inventory” shall not include (i) the Asphalt Inventory, (ii) the
value of (A) supplies, (B) spare parts, (C) catalysts and (D) chemicals of the type customarily
excluded from the inventory of the Companies (such as cleaning chemicals), wherever stored, and
(iii) sludge and noncustomary levels of basic sediment and water in tanks.
“Inventory Report” has the meaning given such term in Section 3.2(d)(vi)(A).
“X. Xxxxxxx Construction Co.” means X. Xxxxxxx Construction Co., Inc., an Arkansas
corporation.
“Knowledge of Buyer” or any phrase of similar import means the actual knowledge of each of the
following individuals, without independent investigation or inquiry: Uzi Yemin; Xxx Xxxxx; Xxxx
Xxxxx; Assi Xxxxxxxx; Xxxx Xxx; Xxxx Xxxxxx; and Xxxx Xxxxxx.
Page 7 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Knowledge of Seller” or any phrase of similar import means the actual knowledge of each of
the following individuals (regardless of their affiliation with Seller or Lion), without
independent investigation or inquiry: Xxx X. Xxxxxxx; Xxxxxxx X. Xxxxx; A. Xxxxxxx Xxxxx; Xxx
Xxxxxx; Xxxxxxx X. Xxxxxxx; Xxxxxx Xxxxx; Xxxx X. Xxxxxxx; Xxxxxxx X. Xxxxx; Xxxxx X. Xxxxxxx; Xxxx
Xxxxxx; H. Xxx Xxxxx; Xxxxx Xxxxxxxx; Xxxx Xxxxxx; Xxxxx Xxxxxxx; Xxxx Xxxxx; Xxxxx Xxxxxxx; and
Xxx Xxxxxxxxx.
“Law” means any applicable law, statute, ordinance, code (including the Code), rule,
regulation, policy, protocol, proclamation or executive order promulgated by any Governmental
Authority or any applicable Order of any court or other Governmental Authority having the effect of
law in any such jurisdiction. For the avoidance of doubt, any references herein to “any Law”
shall, as indicated by this definition, be deemed to refer only to such Law as is applicable in the
circumstances.
“Leased Personal Property” means all tangible personal assets leased by the Companies,
wherever located, including any such leased assets located at the Lion Facilities as of the Closing
or which are in offsite repair, maintenance or storage facilities or in transit to or from any such
facilities as of the Closing.
“Leased Real Property” means all real property that is land leased or subleased by or to any
of the Companies.
“Lien” means any mortgage, pledge, security interest, lien, charge, Preference Right,
encumbrance or other “adverse claim” (as Section 8-102(a) of each applicable Uniform Commercial
Code defines that term), any conditional sale or other title retention agreement, or the filing of
or agreement to give any security interest, charge or financing statement under the Laws of any
jurisdiction.
“Lion” has the meaning given such term in the preamble to this Agreement.
“Lion Assignment Agreement” has the meaning given such term in Section 3.2(c)(ii).
“Lion-Buyer Note” has the meaning given such term in Section 3.2(g).
“Lion/Ergon Debt” means the obligations, including accrued and unpaid interest through and
including the Closing Date and including any amounts borrowed by Lion to repay indebtedness of Lion
under the Paline Note as contemplated by Section 6.1(o), owed by Lion to Seller pursuant to
that certain unsecured, long-term financing agreement between Lion and Seller, the principal
balance of which was approximately $374 million as of January 31, 2011 and which is due and payable
on February 23, 2012 (including $50 million of which will be transferred by Seller to Ergon
Terminaling pursuant to Section 6.12 prior to the Closing). For purposes of this Agreement
and the Related Agreements, any reference to the “principal balance” of the Lion/Ergon Debt shall
include all accrued and unpaid interest through and including the Closing Date.
“Lion/Ergon Debt Threshold” has the meaning given such term in Section 8.2(e).
“Lion Facilities” means (i) any petroleum refining, storage or transportation facilities that
are currently owned or leased by the Companies, (ii) the terminal located in Henderson, Texas that
is currently used by the Companies and (iii) the terminal located in Muskogee, Oklahoma that is
currently used by the Companies.
“Lion Financial Statements” has the meaning given such term in Section 4.5(a).
“Lion Minority Shareholders” means the shareholders of Lion other than Buyer and Seller.
Page 8 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Lion Oil Trading & Transportation” means Lion Oil Trading & Transportation, Inc., an Arkansas
corporation.
“Lion Payments and Transfers” means the payments and transfers described in Section
3.2(a), Section 3.2(b), Section 3.2(c) and Section 3.2(d) to be made as
partial payments of the outstanding principal balance of the Lion/Ergon Debt.
“Lion Shares” has the meaning given such term in the recitals to this Agreement.
“Lion Shares Purchase Price” has the meaning given such term in Section 2.2.
“Lion Transition Services Agreement” has the meaning given such term in Section
3.3(a)(ix).
“Loss” means any and all damages, penalties, fines, assessments, charges, costs, liabilities,
obligations, Taxes, losses, expenses and fees, including costs of investigation, court costs, costs
of defense and reasonable fees of attorneys, accountants and other professional advisors and expert
witnesses.
“Magnolia Pipeline Company” means Magnolia Pipeline Company, an Arkansas corporation.
“Management Agreement” has the meaning given such term in Section 4.2(a).
“Master Facilities Sublease” means that certain Master Facilities Sublease and Sublicense
Agreement dated November 11, 2010, by and among BKEP Materials, L.L.C., BKEP Asphalt, L.L.C. and
Ergon Asphalt & Emulsions.
“Material Adverse Effect” means a material adverse effect on the assets or business of the
Companies that has caused, will cause or would reasonably be expected to cause any Loss or Losses,
individually or in the aggregate, with respect to the assets or business of the Companies, in
excess of TEN MILLION AND NO/100 DOLLARS ($10,000,000); provided, however, that in no event shall
any effect that results from any of the following be deemed to constitute a Material Adverse
Effect: (a) this Agreement or any actions taken in compliance with this Agreement, the Contemplated
Transactions, or the pendency or announcement thereof, (b) changes or conditions affecting the
petroleum refining, marketing and transportation industry (including feedstock pricing, refining,
marketing, transportation, terminaling and trading) generally or regionally, (c) changes in general
economic, capital markets, regulatory or political conditions in the United States or elsewhere
(including interest rate fluctuations), (d) changes or proposed changes in Laws or GAAP or
regulatory accounting requirements or interpretations thereof, (e) fluctuations in currency
exchange rates, (f) acts of war, insurrection, sabotage or terrorism or (g) failure, in and of
itself, of the Business to meet operational or financial expectations or projections, except to the
extent such effects in the cases of clauses (b), (c), (d) and (f) above materially and
disproportionately affect the Companies relative to other participants in the petroleum refining,
marketing and transportation industry.
“Material Contract” has the meaning given such term in Section 4.7(a). “Material
Contracts” shall include the Master Facilities Sublease notwithstanding that a Subsidiary of
Seller, and not a Company, is the tenant under the Master Facilities Sublease.
“Measurement Period” has the meaning given such term in Section 3.2(a)(ii).
“Measurement Time” means 11:59 P.M. on April 30, 2011.
Page 9 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Muskogee Terminal Operations Agreement” has the meaning given such term in Section
3.3(a)(viii).
“Mutual Release” has the meaning given such term in Section 3.2(e)(i).
“New Buyer Information” has the meaning given such term in Section 6.6(c).
“New Lion Note” has the meaning given such term in Section 3.2(b).
“New Seller Information” has the meaning given such term in Section 6.6(b).
“Obligations” means, with respect to any Person, any duties, liabilities and obligations of
such Person, whether vested or unvested, absolute or contingent, conditional or unconditional,
primary or secondary, direct or indirect, known or unknown, asserted or unasserted, disputed or
undisputed, matured or unmatured, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, and whether contractual, statutory or otherwise.
“Order” means any order, writ, ruling, decision, verdict, decree, assessment, award (including
arbitration awards), judgment, stipulation, injunction, or other determination, decision or finding
by, before, or under the supervision of any Governmental Authority.
“Owned Personal Property” means all tangible personal assets currently owned by the Companies,
wherever located, including such assets owned by the Companies and located at the Lion Facilities
as of the Closing or which are in offsite repair, maintenance or storage facilities or in transit
to or from any such facilities as of the Closing.
“Owned Real Property” means all real property that is land currently owned in fee by any of
the Companies.
“Paline Conversion” has the meaning given such term in Section 3.2(c)(i).
“Paline Note” means that certain Promissory Note dated May 1, 2008 issued by Lion in favor of
Paline Pipeline Company, as amended.
“Paline Option Agreement” has the meaning given such term in Section 3.3(a)(x).
“Paline Pipeline Company” means Paline Pipeline Company, a Texas corporation, and the Texas
limited liability company resulting from the Paline Conversion.
“Paline Pipeline Equity” has the meaning given such term in Section 3.2(c)(i).
“Paline Pipeline Equity Transfer” has the meaning given such term in Section
3.2(c)(i).
“Paline Refund” has the meaning given such term in Section 2.4(c).
“Paline Tax Statement” has the meaning given such term in Section 2.4(a).
“Paline Taxes” means the total of (i) the excess, if any, of (A) the aggregate amount of
income taxes (including alternative minimum taxes but excluding Texas franchise taxes) of Paline
Pipeline Company, Lion and the Acquired Subsidiaries (and any affiliated, consolidated, combined or
unitary group of which any of Paline Pipeline Company, Lion and the Acquired Subsidiaries is a
member) for the Tax Year in which the Paline Pipeline Equity Transfer occurs, taking into account
the provisions of
Page 10 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 7.1, over (B) the aggregate amount of such income taxes
(including alternative minimum taxes but excluding Texas franchise taxes) for such Tax Year
determined without regard to any gain (including any gain that is treated as ordinary income
including depreciation recapture) recognized on the Paline Pipeline Equity Transfer or the Paline
Conversion, taking into account the provisions of Section 7.1, plus
(ii) the amount of Transfer Taxes incurred as a result of the Paline Pipeline Equity Transfer
or the Paline Conversion, minus (iii) the amount of Transfer Taxes that would have been incurred as
a result of the Paline Pipeline Equity Transfer if the Paline Conversion had not occurred. For the
avoidance of doubt, net operating losses and tax credits available to Paline Pipeline Company, Lion
and the Acquired Subsidiaries (and any affiliated, consolidated, combined or unitary group of which
any of Paline Pipeline Company, Lion and the Acquired Subsidiaries is a member) for any Tax Year
ending on or prior to the Closing Date or any portion of a Straddle Period on or prior to the
Closing Date as described in Section 7.1 shall be taken into account in the determination
of Paline Taxes. For the avoidance of doubt, gain recognized on the Paline Pipeline Equity
Transfer or the Paline Conversion shall not include any cancellation of indebtedness income for
purposes of determining Paline Taxes.
“Party” has the meaning given such term in the preamble to this Agreement.
“Past Due Receivables” has the meaning given such term in Section 3.2(d)(vii).
“Permitted Asset Lien” means:
(i) inchoate Liens and charges imposed by Law and incidental to the construction,
maintenance, development or operation of any of the properties or assets of the Companies if
payment of the obligation secured thereby is not yet delinquent, or the validity or amount
of which is being contested in good faith by a Company with any action to foreclose or
attach any of the properties or assets of the Companies on account thereof being
appropriately stayed;
(ii) Liens for Taxes, assessments, obligations under workers’ compensation,
unemployment insurance or other social welfare legislation or other requirements, charges or
levies of any Governmental Authority, in each case not yet delinquent or as to which the
validity or amount is being contested in good faith by a Company with any action to
foreclose or attach any of the properties or assets of the Companies on account thereof
being appropriately stayed;
(iii) easements, servitudes, leases, rights-of-way and other rights, exceptions,
reservations, conditions, limitations, covenants and other restrictions or encumbrances that
do not materially interfere with the operation or use of the properties or assets affected
thereby;
(iv) defects or irregularities in title to real properties which do not materially (A)
diminish the value of any of the related surface estates or (B) interfere with the ordinary
conduct of business or the use of any of such properties;
(v) customary provisions contained in any contracts or agreements affecting properties
under which a Company is required immediately before the expiration, termination or
abandonment of a particular property to reassign to its predecessor in title all or a
portion of such Person’s rights, titles and interests in and to all or a portion of such
property;
(vi) Liens to secure the performance of bids, tenders, trade or government contracts
(other than for repayment of borrowed money), leases, licenses, statutory obligations,
surety bonds, performance bonds and completion bonds or as otherwise incurred in the
ordinary course of business, in each case where there is no delinquent obligation;
Page 11 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(vii) any Liens consisting of (A) statutory landlord’s liens under any lease to which
any Company is a party or other Liens on leased property reserved in leases thereof for rent
or for compliance with the terms of such leases, (B) rights reserved to or vested in any
Governmental Authority to control or regulate any property of a Company or to limit the use
of such property in any manner which does not materially impair the use of such property for
the purposes for which it is currently held by a Company, (C) obligations or duties to any
Governmental Authority with respect to any franchise, grant, license, lease or permit and
the rights reserved or vested in any Governmental Authority to terminate any such franchise,
grant, license, lease or permit or to condemn or expropriate any property, or (D) zoning or
other land use or Environmental Laws and ordinances of any Governmental Authority, in each
case that do not materially detract from the value or marketability of the property affected
or interfere with the ordinary conduct of the business at any of such properties;
(viii) Liens of carriers, warehousemen, mechanics, laborers and materialmen and similar
charges incidental to the construction, maintenance, development or operation of any of the
properties or assets of the Companies that are either not filed of record and not delinquent
or that are filed of record but are being contested in good faith by a Company with any
action to foreclose or attach any of the properties or assets of the Companies on account
thereof being appropriately stayed;
(ix) Liens that will be paid in full or released at or prior to the Closing;
(x) Liens caused or created by Buyer;
(xi) Liens encumbering fee title to any property in which a Company holds only a
leasehold or easement interest; and
(xii) Liens set forth in Schedule 1.1(i).
“Permitted Equity Lien” means: (i) transfer restrictions under (A) federal and state
securities Laws, and (B) general corporation Laws of the applicable jurisdiction of formation of
the Person in question; (ii) except with respect to Section 5.7(c), Liens caused or created
by Buyer; and (iii) Liens for Taxes, assessments, obligations under workers’ compensation,
unemployment insurance or other social welfare legislation or other requirements, charges or levies
of any Governmental Authority, in each case not yet delinquent or as to which the validity or
amount is being contested in good faith with any action to foreclose or attach any equity interests
owned by the Person in question on account of such Liens being appropriately stayed, provided,
that, except with respect to Permitted Equity Liens referred to in Section 5.7(c), Seller
shall be responsible for and promptly pay when due all amounts finally determined to be owed that
are the subject of such contest.
“Person” means a natural person, corporation, partnership, limited liability company, joint
stock company, trust, estate, joint venture, union, association or unincorporated organization,
Governmental Authority or any other form of business or professional entity.
“Preference Right” means any right or agreement that enables any Person to purchase or acquire
any asset or any interest therein or portion thereof as a result of or in connection with the sale,
assignment
or other transfer of such asset or any interest therein or portion thereof including any
option, warrant, right of first option or right of first refusal or first offer.
“Proceeding” means any action, case, suit, investigation, hearing, audit, examination or other
proceeding (including regulatory or administrative proceedings) at law or in equity, commenced,
brought,
Page 12 of 67
Stock Purchase Agreement
Stock Purchase Agreement
conducted or heard by or before, any Governmental Authority, or any mediator, arbitrator
or board of arbitration.
“Protest Letter” has the meaning given such term in Section 3.2(d)(iii).
“RCRA” means the Resource Conservation and Recovery Act of 1976.
“Real Property” means the Owned Real Property and the Leased Real Property.
“Records” means the historical books and records of the Companies currently maintained at (i)
the Lion Facilities, (ii) the corporate offices of Lion, or (iii) the offices of Seller, and
relating primarily to the Business, including the Refinery’s customer credit files, and including
any such books and records that are stored or maintained in electronic storage format, such as
computer disks or tapes.
“Refinery” has the meaning given such term in the recitals to this Agreement.
“Registration Rights Agreement” has the meaning given such term in Section 3.3(a)(v).
“Related Agreements” means the agreements, documents and instruments listed in Section
3.3 other than those referred to in Section 3.3(a)(xix), Section 3.3(b)(xiv) or
Section 3.3(c)(xvii).
“Related Party Receivables” has the meaning given such term in Section 3.2(c)(iii).
“Release” means any spilling, leaking, pumping, pouring, emitting, discharging, dumping or
disposing of any Hazardous Substance into the environment.
“Remediation” or “Remediation Activities” means any testing, investigation, assessment, study,
design, monitoring, cleanup, treatment, removal, response, remediation, corrective action,
reporting or other similar activities undertaken pursuant to Environmental Laws to address any
Environmental Condition or any Release, including any such activities involving investigation,
study, design, assessment, testing, monitoring, containment, removal, disposal, closure, corrective
action, passive remediation, natural attenuation or bioremediation, or the installation and
operation of remediation systems.
“Review Period” has the meaning given such term in Section 3.2(d)(iii).
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the U.S. Securities Act of 1933.
“Seller” has the meaning given such term in the preamble to this Agreement.
“Seller Credit Enhancements” has the meaning given such term in Section 3.2(e)(iv).
“Seller Disclosure Schedules” means all the Schedules relating to Article IV delivered
by Seller to Buyer on the Execution Date, and any supplements or amendments delivered in accordance
with the provisions of Section 6.6(a) or Section 6.6(b). The Seller Disclosure
Schedules have been arranged in sections corresponding to the numbered sections of Article
IV.
“Seller Fundamental Representations and Warranties” has the meaning given such term in
Section 11.1(a)(ii).
“Seller Indemnification Ceiling” means $89,000,000, as increased pursuant to Section
11.2(c).
Page 13 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Seller Indemnification Deductible” means $10,000,000.
“Seller Indemnitees” means each of Seller and its past or present officers, directors,
employees, advisors and other representatives.
“Seller Provided Materials” means any written information or data provided to Buyer by Seller
prior to the Closing Date, including the Lion Financial Statements, for the express purpose of
negotiations by Buyer with or disclosure to the Lion Minority Shareholders for the purchase of
their equity interests in Lion.
“Seller Representation and Warranty Losses” has the meaning given such term in Section
11.2(a)(i).
“Seller Transition Services Agreement” has the meaning given such term in Section
3.3(a)(ix).
“Share Equivalents” means, with respect to any Person, (a) options, warrants, convertible
securities, exchangeable securities, subscription rights, conversion rights, exchange rights, or
other Contracts that require such Person to issue any of its capital stock or other equity
interests, or any other securities convertible into, exchangeable for, or representing the right to
subscribe for any capital stock or equity interest for such Person, or to sell any capital stock or
equity interests it owns in another Person; (b) pre-emptive rights granted under a Person’s
Governing Documents; (c) stock appreciation rights, phantom stock, profit participation, or other
similar rights granted by such Person with respect to any capital stock of such Person (or any
derivative thereof); and (d) any securities issued by such Person that are convertible into or
exchangeable for any of the foregoing.
“Shell L/C” means Seller’s outstanding letter of credit in the amount of $12,500,000 issued by
JPMorgan Chase Bank, N.A. to Shell Trading (US) Company on behalf of Lion Oil Trading &
Transportation and currently relating to the Proceeding styled as Shell Trading (US) Company v.
Lion Oil Trading & Transportation, Inc., Cause No. 2009-11659, pending in the 000xx
Xxxxxxxx Xxxxx xx Xxxxxx Xxxxxx, Xxxxx.
“Statoil Fees” has the meaning given such term in Section 3.2(c)(v).
“Statoil Lawsuit” means the Proceeding styled as Lion Oil Trading & Transportation, Inc. v.
Statoil Marketing and Trading (US) Inc., Statoil Marketing and Trading (US) Inc. v. Lion Oil
Trading & Transportation, Inc., Statoil Marketing and Trading (US) Inc. v. Lion Oil Company, Civil
Action No. 08-11315 (WHP), pending in the United States District Court for the Southern District of
New York.
“Stock Exchange” means any domestic or foreign stock or securities exchange on which any
equity or debt securities of Buyer are listed.
“Straddle Period” means any Tax Year that begins on or before the Closing Date but ends after
the Closing Date.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, joint venture or other legal entity (and any successor to any such legal entity)
of which such Person owns, directly or indirectly, more than 50% 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, partnership, limited liability
company, joint venture or other legal entity.
Page 14 of 67
Stock Purchase Agreement
Stock Purchase Agreement
“Subsidiary Equity Interests” has the meaning given such term in Section 4.2(c).
“Tax” or “Taxes” means (a) any and all federal, state, provincial, county, local or foreign
taxes or levies of any kind, and any and all other like assessments, customs, duties, imposts,
charges or fees, imposed by or payable to any Governmental Authority, including income, gross
receipts, ad valorem, value added, excise, real property, personal property, asset, sales, use,
franchise, license, payroll, transaction, capital, capital gains, net worth, withholding,
estimated, social security, utility, workers’ compensation, severance, disability, wage,
employment, production, unemployment compensation, occupation, premium, windfall profits, transfer,
recordation, gains, alternative or add-on minimum, stamp, documentary, recapture, business license,
business organization, environmental, profits, or lease taxes, together with any interest, fines,
penalties, assessments, or additions resulting from, attributable to, or incurred in connection
with any of the foregoing, imposed by or payable to any Governmental Authority (whether or not
disputed); and (b) any liability to any Governmental Authority for the payment of any item
described in clause (a) as a result of being a member of an affiliated, consolidated, combined or
unitary group for any period, including pursuant to Treasury regulations section 1.1502-6 or any
analogous or similar state, local or foreign Law.
“Tax Control Party” has the meaning given such term in Section 7.6.
“Tax Non-Control Party” has the meaning given such term in Section 7.6.
“Tax Return” means any and all reports, returns, declarations, statements, forms, or other
information filed or required to be filed with or submitted to any Governmental Authority in
connection with the determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with any Tax Law.
“Tax Survival Period” has the meaning given such term in Section 7.5.
“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for
which the Tax is reported as provided under applicable Tax Law.
“Termination Agreement” has the meaning given such term in Section 3.3(a)(vii).
“Termination Date” means April 29, 2011.
“Third-Party Claim” has the meaning given such term in Section 11.4(b).
“Third Person” means any Person other than any of Seller, Lion or Buyer or their respective
Affiliates.
“Third-Person Consent” means any approval, consent, amendment or waiver of a Third Person that
is required under any Governing Document of Seller, any of the Companies or Buyer or under any
Contract to which Seller, any of the Companies or Buyer is a party or by which it or its assets is
bound in order to effect the Contemplated Transactions or any part thereof, including waivers and
consents by lenders and waivers of transfer restrictions.
“Threshold Amount,” when used to qualify any representation and warranty set forth in
Article IV or Article V by excepting any items that would not exceed (or would not
have an adverse effect in excess of) the Threshold Amount, means except for each individual such
item (when aggregated with any other such items arising out of the same set of facts or the same
event, circumstance or Claim) as would not give rise to a post-Closing Loss in excess of $250,000.
For the avoidance of doubt, by way of
Page 15 of 67
Stock Purchase Agreement
Stock Purchase Agreement
example, one enforcement action by a Governmental Authority
that identifies numerous violations would constitute the “same set of facts or the same event or
circumstance” under this definition.
“Transfer Taxes” means state and local sales and use taxes, real property transfer or gains
taxes, stamp taxes, recording fees or similar charges or Taxes.
“Updated Seller Information” has the meaning given such term in Section 6.6(a).
Section 1.2 Construction. Whenever the context requires, the gender of all words used
in this Agreement includes the masculine, feminine and neuter and 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, all references to Exhibits refer to
exhibits to this Agreement and all references to Schedules refer to Schedules to this Agreement,
which Exhibits and Schedules are attached hereto or delivered pursuant hereto and made a part of
this Agreement for all purposes. Except as this Agreement otherwise specifies, all references
herein to any Law defined or referred to herein, including the Code, CERCLA, ERISA, the HSR Act,
the DPA and RCRA (or any other Environmental Law), are references to that Law (and any rules and
regulations promulgated thereunder), as the same may have been (or may hereafter be) amended from
time to time; provided, however, that any references to any Law in Article IV or
Article V (or, as used in any Section in any such Article, any references to any Law
included in any defined term used in Article IV or Article V) are references to
that Law (and any rules and regulations promulgated thereunder), as the same may have been amended
through the Closing. In the event of any conflict between the main body of this Agreement and the
Exhibits and Schedules hereto, the provisions of the main body of this Agreement shall prevail, but
only with respect to the application of the provisions hereof or the interpretation of any of the
provisions hereof. The word “includes” or “including” means “including, but not limited to,” unless
the context otherwise requires. The words “shall” and “will” are used interchangeably and have the
same meaning. The words “this Agreement,” “hereof,” “hereby,” “herein,” “hereunder” and similar
terms in this Agreement shall refer to this Agreement as a whole and not any particular Section or
Article in which such words appear. If a word or phrase is defined, its other grammatical forms
have a corresponding meaning. Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified. The language used in this
Agreement will be deemed to be the language the Parties have chosen
to express their mutual intent, and no rule of strict construction will be applied against any
Party. A defined term has its defined meaning throughout this Agreement and each Exhibit and
Schedule to this Agreement, regardless of whether it appears before or after the place where it is
defined. The term “cost” includes expense and the term “expense” includes cost. All references to
a specific time of day in this Agreement shall be based upon Central Standard Time or Central
Daylight Savings Time, as applicable, on the date in question. The word “or” will have the
inclusive meaning represented by the phrase “and/or” unless the context requires otherwise. Time
periods within or following which any payment is to be made or an act is to be done shall be
calculated by excluding the day on which the time period commences and including the day on which
the time period ends and by extending the period to the next Business Day following if the last day
of the time period is not a Business Day. For purposes of Article IV, the words “delivered
to” mean posted to the Data Room prior to the Execution Date (and not removed prior to the
Execution Date) or physically delivered to Buyer.
ARTICLE II
SALE OF LION SHARES AND OTHER CONSIDERATION
SALE OF LION SHARES AND OTHER CONSIDERATION
Section 2.1 Sale of Lion Shares. Subject to and upon the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer, convey, assign and deliver to Buyer, and
Buyer shall purchase, acquire and accept from Seller, all of Seller’s right, title, and interest in
and to the Lion Shares, free and clear of any and all Liens, other than Permitted Equity Liens.
Page 16 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 2.2 Lion Shares Purchase Price. In consideration of the Lion Shares, and
subject to the adjustments set forth in Section 3.2(f) and Section 7.4, Buyer shall
pay to Seller SIX MILLION AND NO/100 DOLLARS ($6,000,000) (the “Lion Shares Purchase Price”).
Section 2.3 Deposit.
(a) Contemporaneously with the execution and delivery of this Agreement by the Parties, Buyer
has delivered to Seller FIVE MILLION AND NO/100 DOLLARS ($5,000,000), by wire transfer of
immediately available funds to an account or accounts designated by Seller, as a deposit (the
“Deposit”) to be held by Seller in a segregated bank account of Seller during the Interim Period in
accordance with the terms and conditions of this Agreement.
(b) In the event the Closing occurs, the Deposit shall be retained by Seller and the amount of
the Deposit shall be applied toward payment by Buyer of the Lion Shares Purchase Price.
(c) In the event this Agreement is terminated pursuant to the terms herein, the Deposit shall
be returned to Buyer or retained by Seller as provided pursuant to Section 10.2(b).
Section 2.4 Adjustment to Consideration.
(a) After the Closing, Buyer shall deliver to Seller a statement (based on draft Tax Returns
of Lion and Paline Pipeline Company (and any affiliated, consolidated, combined or unitary group of
which either of Lion and Paline Pipeline Company is a member) prepared by PricewaterhouseCoopers
LLP, KPMG LLP or another mutually acceptable independent accounting firm) that sets forth the
amount of any Taxes that are included in the Paline Taxes, together with reasonable details
supporting the calculation of the Paline Taxes (the “Paline Tax Statement”). Seller shall have 45
days from the date of receipt of the Paline Tax Statement to pay to Buyer an amount equal to
any undisputed portion of the Paline Taxes set forth in the Paline Tax Statement by wire transfer
of immediately available funds to an account or accounts designated in writing by Buyer. In the
event that Seller does not agree with the calculation of the Paline Taxes as set forth in the
Paline Tax Statement, Seller shall so notify Buyer in writing within 10 Business Days after the
date of receipt of the Paline Tax Statement, setting forth in writing and in reasonable detail the
nature of Seller’s objections to the calculation of Paline Taxes as set forth in the Paline Tax
Statement. Seller and Buyer shall negotiate in good faith the disputed portion of the Paline Taxes
calculation. In the event the Parties are unable to reach an agreement within 10 days after Buyer
receives written notice of any disputed amount (or such later date as may be agreed by Buyer and
Seller), then the Parties will resolve such dispute in accordance with the procedures set forth in
Exhibit N. Any amount to be paid by Seller to Buyer pursuant the dispute resolution
process conducted pursuant to Exhibit N shall be paid within 10 Business Days of such
determination by wire transfer of immediately available funds to an account or accounts designated
in writing by Buyer.
(b) If, after payment of the Paline Taxes pursuant to Section 2.4(a), there is a
subsequent adjustment in the amount of the Paline Taxes as a result of any Proceeding related to
Taxes, and (i) if any portion of the Paline Taxes previously paid by Seller pursuant to Section
2.4(a) is finally determined as a result of such adjustment to not have been owing, then Buyer
shall pay to Seller such portion that is determined not to be owing or (ii) if the Paline Taxes are
finally determined as a result of such adjustment to be in excess of the Paline Taxes originally
paid, then Seller shall pay to Buyer such excess amount. Any amount to be paid by Seller or Buyer
pursuant to the immediately preceding sentence shall be paid within 10 Business Days of the
determination of the adjustment by wire transfer of immediately available funds to an account or
accounts designated in writing by the recipient of such payment.
Page 17 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) If, after payment of the Paline Taxes pursuant to Section 2.4(a), (i) the Tax
basis of the assets of Paline Pipeline Company following the Paline Pipeline Equity Transfer is
reduced as a result of a Proceeding, (ii) the amount of the Paline Taxes would have been reduced
had the Paline Taxes been determined based on an amount of consideration payable in the Paline
Pipeline Equity Transfer that is consistent with the amount of such reduced Tax basis and (iii)
Buyer, the Companies or their Affiliates are entitled to (or upon filing of an amended Tax Return
or other appropriate form would have been entitled to) receive a refund (whether by payment,
credit, offset or otherwise) related to the Paline Taxes described in clause (ii) of this sentence
(a “Paline Refund”), then Buyer shall pay to Seller the amount of the Paline Refund but only to the
extent such amount exceeds any additional Taxes that are incurred (or upon filing of an amended Tax
Return or other appropriate form would have been incurred) by Buyer, the Companies or their
Affiliates as a result of reducing the amount of consideration payable in the Paline Pipeline
Equity Transfer in a manner that is consistent with the amount of such reduced Tax basis (including
any Taxes resulting from cancellation of indebtedness income resulting from such reduction of
consideration). The Parties shall cooperate, and shall cause their Affiliates to cooperate, in
order to take any necessary steps to claim any such refund. The determination of the amount of and
the timing of any payment under the first sentence of this Section 2.4(c) shall be based on
the principles of Section 2.4(a) and without regard to Buyer’s consolidated Tax group’s
loss or credit carrybacks. Additionally, in the event a Paline Refund has actually been obtained
and is subsequently challenged and adjusted as a result of any Proceeding related to Taxes then the
principles of Section 2.4(b) and Section 7.6 shall apply to such adjusted Paline
Refund.
ARTICLE III
CLOSING AND TRANSACTIONS AT CLOSING
CLOSING AND TRANSACTIONS AT CLOSING
Section 3.1 Time and Place of Closing. The closing of the sale and purchase of the
Lion Shares contemplated hereby (the “Closing”) shall take place at the offices of Fulbright &
Xxxxxxxx L.L.P., Fulbright Tower, 0000 XxXxxxxx, Xxxxxxx, Xxxxx, at 10:00 A.M. on April 29, 2011,
provided that the Closing Conditions (other than Closing Conditions to be fulfilled at the Closing)
have been fulfilled or waived by the relevant Party or Parties whose obligations to proceed with
the Closing are conditioned on the satisfaction of the respective Closing Conditions, or at such
other date and place as Buyer and Seller may mutually agree (the “Closing Date”).
Section 3.2 Transactions Occurring at Closing. The Parties agree that the following
transactions (in addition to the transactions set forth in Article II) shall occur on the
Closing Date (unless expressly provided otherwise) contemporaneously with the occurrence of the
Closing:
(a) Buyer Payments on Behalf of Lion. Buyer shall pay or cause to be paid to Seller
the sum of EIGHTY NINE MILLION AND NO/100 DOLLARS ($89,000,000) on behalf of Lion as partial
payment by Lion of the outstanding principal balance of the Lion/Ergon Debt, which amount shall be
paid as follows:
(i) FORTY FOUR MILLION AND NO/100 DOLLARS ($44,000,000) (the “Cash Repayment
Amount”) shall be
paid by wire transfer of immediately available funds to an account or accounts designated in
writing by Seller at least three Business Days prior to the Closing; and
(ii) Buyer shall issue to Seller restricted shares of Delek Stock with a valuation equal to
FORTY FIVE MILLION AND NO/100 DOLLARS ($45,000,000) calculated as provided in this
Section 3.2(a)(ii) (the “Delek Shares”); provided, however, that Buyer shall have the right
to pay Seller cash (in lieu of issuing Delek Shares) to the extent that Buyer anticipates that the
amount of Delek Shares issuable to Seller would exceed an amount equal to 15.0% of the aggregate
amount of issued and outstanding shares of Delek Stock as of the Business Day immediately preceding
Page 18 of 67
Stock Purchase Agreement
Stock Purchase Agreement
the Closing Date; provided, further, that if Buyer so elects to pay Seller cash in lieu of issuing
Delek Shares, such cash amount shall be paid on the Closing Date by wire transfer of
immediately available funds to the account or accounts designated in writing by Seller under
Section 3.2(a)(i). The number of Delek Shares issuable to Seller shall be calculated based
upon the average of the closing prices of Delek Stock as reported on the New York Stock Exchange
for the 10 consecutive trading days immediately preceding the Closing Date (the “Measurement
Period”). On the Closing Date, Buyer shall deliver irrevocable instructions to its transfer agent,
American Stock Transfer & Trust Company, to issue a stock certificate, registered in the name of
Seller, representing the number of Delek Shares issuable to Seller pursuant to this Section
3.2(a)(ii), and bearing the restrictive legend set forth in Exhibit A, within two
Business Days after the Closing Date.
(b) New Lion Note. Lion shall pay to Seller the sum of FIFTY MILLION AND NO/100
DOLLARS ($50,000,000), as partial payment by Lion of the outstanding principal balance of the
Lion/Ergon Debt, which amount shall be paid by delivery to Seller of an unsecured promissory note
issued by Lion in the form attached hereto as Exhibit B (the “New Lion Note”), in the
aggregate principal amount of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000) and bearing interest
on the unpaid principal thereof at a per annum rate equal to 4.0%. The New Lion Note shall be
guaranteed by Buyer
pursuant to a Guaranty in the form attached hereto as Exhibit C to be entered into by
Buyer (the “Buyer Guaranty”).
(c) Transfer of Certain Assets by Lion. Lion shall, or shall cause the applicable
Acquired Subsidiaries to, transfer, convey, assign and deliver to Seller (or Ergon Terminaling as
expressly provided below), as partial payment by Lion of the outstanding principal balance of the
Lion/Ergon Debt in the amounts specified below, each of the following assets of Lion:
(i) Seller shall cause Lion to convert Paline Pipeline Company into a Texas limited liability
company prior to the Closing (the “Paline Conversion”). Lion shall transfer, convey, assign and
deliver to Ergon Terminaling, as payment by Lion of FIFTY MILLION AND NO/100 DOLLARS ($50,000,000)
of the outstanding principal balance of the Lion/Ergon Debt then held by Ergon Terminaling, all of
Lion’s right, title, and interest in and to all of the issued and outstanding limited liability
company interests of Paline Pipeline Company (the “Paline Pipeline Equity”), without any
representations or warranties as to Paline Pipeline Company, its assets, properties or business, or
the Paline Pipeline Equity (the “Paline Pipeline Equity Transfer”). Within 30 days after the
Closing Date, Seller shall provide to Buyer a purchase price allocation schedule with respect to
the assets of Paline Pipeline Company which shall be based on a purchase price for the Paline
Pipeline Equity of $50,000,000, and any tax filings by the Parties and their Affiliates shall be
consistent with such schedule, except as otherwise required by Law.
(ii) Lion shall, or shall cause the applicable Acquired Subsidiaries to, sell to Ergon Asphalt
& Emulsions all of Lion’s right, title and interest in and to the asphalt owned by the Companies
and located at the Lion Facilities as of the Measurement Time (including PG asphalt, flux and
polymer modified asphalt, but excluding polymer modified asphalt concentrate which shall be
included in Inventory) (the “Asphalt Inventory”) in exchange for a right to payment in an amount
equal to the fair market value of the Asphalt Inventory as of the Measurement Time pursuant to an
Asphalt Sales Agreement in the form attached as Exhibit E to be entered into between Lion
and Ergon Asphalt & Emulsions (the “Asphalt Sales Agreement”). Pursuant to an Assignment Agreement
in the form attached as Exhibit D to be entered into between Lion and Seller (the “Lion
Assignment Agreement”), the Companies shall assign to Seller the right to payment for the Asphalt
Inventory and such assignment of the right to payment for the Asphalt Inventory shall constitute
partial payment by Lion of the outstanding principal balance of the Lion/Ergon Debt in an amount
equal to such right to payment. For the avoidance of doubt, raw materials used in the manufacture
of polymer modified asphalt shall be taken into account
Page 19 of 67
Stock Purchase Agreement
Stock Purchase Agreement
in determining the Inventory for purposes
of Section 3.2(d), but shall not constitute part of the Asphalt Inventory. The Parties
agree that Lion shall retain possession of the Asphalt Inventory from and after the Closing,
subject to the provisions of Section 9.4. The fair market value of the Asphalt Inventory as
of the Measurement Time shall be determined, measured and valued pursuant to Schedule
3.2(d).
(iii) Lion shall, or shall cause the applicable Acquired Subsidiaries to, transfer, convey,
assign and deliver to Seller, all of Lion’s right, title and interest in and to all accounts
receivables owed by Ergon Securities, Inc., a Mississippi corporation, to Lion or the Acquired
Subsidiaries as of the Measurement Time (the “Related Party Receivables”) pursuant to the Lion
Assignment Agreement. The transfer and assignment of the Related Party Receivables shall
constitute partial payment by Lion of the outstanding principal balance of the Lion/Ergon Debt in
an amount equal to the aggregate balance of the Related Party Receivables as of the Measurement
Time.
(iv) On or before 30 days after the Closing Date, Seller shall act as agent of Lion to
identify, and arrange sales of, the Excess Inventory to one or more Third Persons. Lion shall, or
shall cause the applicable Acquired Subsidiaries to, sell to such Third Persons all of Lion’s
right, title and interest in and to the Excess Inventory, if any, as requested by Seller. Pursuant
to the Lion Assignment Agreement, the Companies shall assign to Seller the right to receive payment
for the Excess Inventory and such assignment of the right to receive payment for the Excess
Inventory shall constitute partial payment by Lion of the outstanding principal balance of the
Lion/Ergon Debt in an amount equal to the fair market value of the Excess Inventory as of the
Measurement Time as determined in accordance with this Agreement, regardless of whether any of the
Excess Inventory is sold for less than its fair market value as of the Measurement Time.
(v) Lion shall reimburse Seller, by wire transfer of immediately available funds, for the
amount of reasonably documented third-party legal fees incurred and paid by Seller or Lion in
connection with Statoil Lawsuit for the period beginning on January 1, 2011 and ending on the
Business Day immediately preceding the Closing Date (the “Statoil Fees”), and such reimbursement
obligation shall constitute partial payment by Lion of the outstanding principal balance of the
Lion/Ergon Debt in an amount equal to the amount reimbursed. On the Business Day immediately
preceding the Closing Date, Seller shall submit in writing to Buyer the amount of the Statoil Fees.
Third-party legal fees incurred by Lion in connection with the Statoil Lawsuit for the period
beginning January 1, 2011 and ending on the Business Day immediately preceding the Closing Date
shall not constitute an Adjusted Current Liability of the Companies or otherwise be reflected in
the determination of Adjusted Net Working Capital.
(d) Adjusted Net Working Capital Paid on Behalf of Lion.
(i) Buyer shall pay or cause to be paid to Seller, on behalf of Lion as partial payment of the
outstanding principal balance of the Lion/Ergon Debt, an amount equal to the Adjusted Net Working
Capital of the Companies as of the Measurement Time, as determined and paid in accordance with this
Section 3.2(d).
(ii) At least three Business Days prior to the Closing Date, Seller shall submit in writing to
Buyer its good faith estimate of the Adjusted Net Working Capital as of the Measurement Time (the
“Estimated Adjusted Net Working Capital”) along with documentation supporting its good faith
calculation of the Estimated Adjusted Net Working Capital and information relating to the account
or accounts to be used for the wire transfer, and shall reasonably respond to questions and
comments from Buyer regarding such submission prior to the Closing Date. Buyer shall pay or cause
to be paid to Seller the amount of the Estimated Adjusted Net Working Capital at Closing in
accordance with Section 3.3(c)(iv).
Page 20 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(iii) Within 60 days after the Closing Date, Buyer shall submit to Seller its written
calculation of the actual Adjusted Net Working Capital as of the Measurement Time (the “Final
Adjusted Net Working Capital”) accompanied by the consolidated balance sheet of the Companies as of
the Measurement Time, prepared in accordance with GAAP and the Companies’ past practices,
consistently applied, except for adjustments expressly provided for by this Agreement (and without
giving effect to any material adjusting journal entries recommended by KPMG LLP in connection with
its audit of the Companies’ financial statements for the year ended April 30, 2011 that are not
consistent with the Companies’ past practices or that appear to be intended to relate to, or to be
motivated by, the change
of control of Lion effected pursuant to this Agreement) (the “Closing Balance Sheet”). Buyer
shall cause the Companies to provide Seller and its designees access (during normal business hours)
to all materials, Records and personnel of the Companies reasonably necessary for Seller to verify
the amount of the Final Adjusted Net Working Capital. The calculation of the Final Adjusted Net
Working Capital and the Closing Balance Sheet submitted by Buyer to Seller shall become final and
binding upon Seller 30 days after it is delivered to Seller (the “Review Period”), unless Seller,
within the Review Period, provides written notice to Buyer disputing the amount of the Final
Adjusted Net Working Capital or the Closing Balance Sheet setting forth in detail the amounts in
dispute and the reasons therefor (the “Protest Letter”), in which case the Final Adjusted Net
Working Capital and the Closing Balance Sheet shall not be binding upon Seller and Buyer and such
dispute shall be resolved pursuant to Section 3.2(d)(iv).
(iv) After the receipt of the Protest Letter by Buyer, Seller and Buyer shall meet by
telephone, or at a mutually agreeable location, to discuss and attempt to reconcile their
differences with respect to the amount of the Final Adjusted Net Working Capital (the “Challenged
Amount”) or the Closing Balance Sheet. If the Parties are unable to mutually resolve the dispute
within 15 days after receipt of the Protest Letter by Buyer, then PricewaterhouseCoopers LLP, KPMG
LLP or another mutually acceptable independent accounting firm (the “Arbiter”) will be engaged to
determine the Challenged Amount or any corrections to the Closing Balance Sheet. The Arbiter: (A)
will be jointly selected and engaged by Buyer and Seller; (B) will be provided, within 10 Business
Days of accepting the engagement, with a definitive written statement from Seller and Buyer of
their respective positions and a copy of the Inventory Report and Closing Balance Sheet; (C) will
be advised in the engagement letter that the Parties accept the Arbiter as the appropriate Person
to interpret this Agreement for all purposes relevant to the resolution of the Challenged Amount or
the Closing Balance Sheet; (D) will be granted access to all Records and personnel of the Companies
and (E) will have 75 days to carry out a review and prepare a written statement of its decision
regarding the Challenged Amount or the Closing Balance Sheet, which shall be binding and final upon
Seller and Buyer. Each Party will be afforded the opportunity to present to the Arbiter any
material such Party deems relevant to the determination. The decision of the Arbiter shall be
final and binding upon the Parties and shall be in substitution for and precludes the bringing of
any Proceedings, including in any court, in connection with any dispute under this Section
3.2(d)(iv). The fees and expenses of the Arbiter incurred in resolving the disputed matter
shall be shared equally by Buyer, on the one hand, and Seller, on the other hand.
(v) Not later than the fifth Business Day after the final determination of the Final Adjusted
Net Working Capital is made pursuant to this Section 3.2(d):
(A) if the Final Adjusted Net Working Capital is less than the
Estimated Adjusted Net Working
Capital, then Seller shall pay to Buyer, by wire transfer of immediately available funds to the
account or accounts designated in writing by Buyer prior to such fifth Business Day, the amount of
that difference, but not to exceed, the greater of (1) the sum of: (I) the amount (if any) by which
the Lion/Ergon Debt Threshold exceeded the unpaid principal balance of the Lion/Ergon Debt as of
the Closing (after taking into account the Lion Payments and Transfers made on, as of or prior to
the Closing Date), and (II) the amount (if any) by which the sum of the Estimated Adjusted Net
Working Capital plus the other Lion Payments and Transfers made on, as of or prior to the Closing
Date exceeded
Page 21 of 67
Stock Purchase Agreement
Stock Purchase Agreement
the unpaid principal balance of the Lion/Ergon Debt as of the Closing (prior to
giving effect to the Lion Payments and Transfers), or (2) the amount (if any) by which the unpaid
principal balance of the Lion/Ergon Debt in excess of the Lion/Ergon Debt Threshold was paid or
caused to be paid by Buyer to Seller pursuant to Section 8.2(e) in order to satisfy such
Closing Condition, plus, in the case of (1) or (2),
interest on the amount to be paid at 4% per annum from the Closing Date to the date paid, and
any such payment by Seller shall constitute a reduction of the Cash Repayment Amount; or
(B) if the Final Adjusted Net Working Capital is greater than the
Estimated Adjusted Net
Working Capital, then Buyer shall pay to Seller by wire transfer of immediately available funds to
the account or accounts designated in writing by Seller prior to such fifth Business Day, the
amount of the difference, reduced (but not below zero) by the amount (if any) of the
unpaid principal balance of the Lion/Ergon Debt in excess of the Lion/Ergon Debt Threshold that was
paid or caused to be paid by Buyer to Seller pursuant to Section 8.2(e) in order to satisfy
such Closing Condition, plus interest on the amount to be paid at 4% per annum from the Closing
Date to the date paid, and any such payment shall constitute an additional payment on behalf of
Lion as partial payment of the outstanding principal balance of the Lion/Ergon Debt.
(vi) The Parties agree that, for purposes of determining Adjusted Current Assets, the
Inventory shall be measured and valued in accordance with the following provisions:
(A) An independent and experienced inspector (the
“Inspector”) shall be engaged by agreement
of Seller and Buyer prior to the Closing. The Inspector shall measure the Inventory as of the
Measurement Time at the respective locations of the Inventory at the Measurement Time, in
accordance with the procedures set forth in Schedule 3.2(d). Seller and Buyer shall be
permitted to have representatives present to observe any measurements taken by the Inspector. The
Inspector shall issue a written report to both Seller and Buyer within 10 Business Days after the
Closing Date setting forth the volumes and quantities of the Inventory as of the Measurement Time,
which report shall, subject to review and comment periods to be agreed upon by Seller and Buyer, be
final and binding on Seller and Buyer as to the volumes and quantities of Inventory as of the
Measurement Time (the “Inventory Report”). The fees and expenses of the Inspector shall be borne
equally by Seller and Buyer.
(B) The Inventory shall be valued based upon the average closing
prices for the three trading
days ending on and including the Closing Date and shall include appropriate adjustments for the
location, grade and quality of the respective inventory and reasonably anticipated direct selling
expenses payable to Third Persons, including third-party tariffs and terminaling, third-party
additives (for branded and unbranded products) or truck loading fees (provided that such
adjustments would not include operating expenses of Lion, such as electricity or labor), and
otherwise in accordance with the procedures set forth in Schedule 3.2(d). The market value
of products included in the Inventory shall be based upon published market spot prices from the
nearest hub location, with appropriate adjustments for transportation expenses to the actual
location of the Inventory. Any disagreement after the Closing Date between Buyer and Seller as to
the value of the Inventory shall be resolved by the Arbiter pursuant to the procedures established
in Section 3.2(d)(iv).
(vii) Lion shall have the option, to be exercised by written notice to Seller within three
Business Days after the Closing Date (but not thereafter), to sell to Seller, and upon the exercise
of such option by Lion, Seller shall be obligated to purchase, any accounts receivables of the
Companies that (A) are included in the determination of the Estimated Adjusted Net Working Capital
and (B) are more than 15 days past due as of the Closing Date (the “Past Due Receivables”). The
price at which any Past Due Receivable shall be sold by Lion and purchased by Seller shall be the
value assigned to such Past Due Receivable for purposes of the Estimated Adjusted Net Working
Capital. Any Past Due
Page 22 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Receivable that is sold to Seller pursuant to this Section 3.2(d)(vii) shall be
included in the determination of Final Adjusted Net Working Capital.
(e) Release of Obligations.
(i) Upon the Closing, Seller shall, on its own behalf and on behalf of its Subsidiaries (other
than the Companies), release and discharge each of the Companies from (A) all Obligations for the
Lion/Ergon Debt and the Paline Note, including the balance thereof (if any) remaining unpaid after
giving effect to the Lion Payments and Transfers, (B) all Obligations arising under the Management
Agreement and (C) all Obligations owed to Seller and its Subsidiaries outside the ordinary course
of business of the Companies (other than Obligations arising under this Agreement or any Related
Agreement), in each case pursuant to a Mutual Release Agreement in the form attached as Exhibit
F (the “Mutual Release”).
(ii) Pursuant to the Mutual Release, each of the Companies shall release Seller and its
Affiliates (other than the Companies and any joint venture Affiliates of Seller) from (A) any
Obligation to provide the Companies with funding, financial support, letters of credit or other
credit enhancements of any kind from and after the Closing (excluding financing extended pursuant
to the New Lion Note, Seller’s obligations with respect to the Shell L/C pursuant to Section
3.2(e)(iv), and any Obligations arising under this Agreement or any Related Agreement), (B) all
Obligations arising under the Management Agreement and (C) all Obligations owed to the Companies
outside the ordinary course of business of the Companies (other than Obligations arising under this
Agreement or any Related Agreement).
(iii) Seller shall obtain and deliver to Lion releases from the lenders to and debtholders of
Seller and its Subsidiaries, releasing each of the Companies from any Obligations of the Companies
under the financing arrangements of Seller and its Subsidiaries, including any and all notes
payable and credit facilities of Seller and its Subsidiaries, each such release to be in form and
substance reasonably acceptable to Buyer.
(iv) Buyer shall, or shall cause Lion to, replace the letters of credit listed on Schedule
3.2(e) and any letters of credit obtained by Seller or its Affiliates (other than the
Companies) on behalf of the Companies prior to the Closing (collectively, the “Seller Credit
Enhancements”) with new arrangements, including obtaining and posting substitute bonds, sureties,
letters of credit or guaranties, effective as of the Closing; provided that at Buyer’s written
request not later than 10 Business Days prior to the Closing Date Seller shall leave in place one
or more of the Seller Credit Enhancements (as requested by Buyer) for a period not to exceed 60
days from the Closing Date if Buyer provides and maintains an irrevocable standby letter of credit
in favor of Seller, in form acceptable to Seller and issued by a nationally recognized U.S. banking
institution acceptable to Seller, in an amount equal to the aggregate face amount of each such
Seller Credit Enhancement that remains in place after the Closing as security for such Seller
Credit Enhancement. Buyer agrees to pay Seller’s reasonably documented letter of credit and unused
capacity fees with respect to each such Seller Credit Enhancement that remains in place after the
Closing at Buyer’s request. Seller agrees that it shall not withdraw the Shell L/C for a period of
24 months after the Closing Date, unless Buyer notifies Seller that it may withdraw the Shell L/C
prior to the end of such 24-month period; provided, however, that Seller may agree to eliminate or
reduce the amount of the Shell L/C at any time to the extent authorized to do so by Shell Trading
(US) Company or any court of competent jurisdiction. Buyer shall reimburse Seller with respect to
any draw
by Shell Trading (US) Company under the Shell L/C within two Business Days of Seller’s written
request for reimbursement.
Page 23 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(f) Allocation of Excess Payments. Notwithstanding the provisions of Section
3.2(a), Section 3.2(b), Section 3.2(c) and Section 3.2(d), in the event
the aggregate amount of the Lion Payments and Transfers exceeds the unpaid principal balance of the
Lion/Ergon Debt as of the Closing (prior to giving effect to the Lion Payments and Transfers), then
such excess amount shall be treated by the Parties as an increase to the Lion Shares Purchase Price
except as otherwise required by Law.
(g) Lion-Buyer Note. In consideration of Buyer issuing to Seller the Delek Shares and
performing its other agreements pursuant to Section 3.2(a)(ii), Lion shall deliver to Buyer
an unsecured promissory note in the form attached hereto as Exhibit I (the “Lion-Buyer
Note”), in the aggregate principal amount of FORTY FIVE MILLION AND NO/100 DOLLARS ($45,000,000)
plus the amount, if any, paid by Buyer pursuant to Section 3.2(a)(i).
Section 3.3 Closing Deliveries.
(a) Seller Closing Deliveries. At the Closing, Seller shall deliver, or cause to be
delivered, to Buyer and Lion (unless only Buyer or Lion is specified below):
(i) to Buyer, certificates representing the Lion Shares, free and clear of any Liens, which
certificates shall be duly endorsed in blank (or accompanied by duly executed stock powers);
(ii) a copy of the Lion Assignment Agreement, duly executed by Seller;
(iii) a copy of the Asphalt Sales Agreement, duly executed by Ergon Asphalt & Emulsions,
together with a valid sale for resale certificate (for the States of Texas, Arkansas and Oklahoma)
from Ergon Asphalt & Emulsions;
(iv) a copy of each Third-Person Consent and Authorization set forth in Schedule
3.3(a)(iv);
(v) a copy of the Registration Rights Agreement, in the form attached hereto as Exhibit
G, providing for the registration of the Delek Shares issued pursuant to this Agreement and
related matters (the “Registration Rights Agreement”), duly executed by Seller;
(vi) a copy of the Mutual Release, duly executed by Seller;
(vii) a copy of the Termination of Management Agreement and Waiver of Option, in the form
attached hereto as Exhibit H (the “Termination Agreement”), duly executed by Seller;
(viii) a copy of the Muskogee Terminal Operations Agreement, in the form attached hereto as
Exhibit J (the “Muskogee Terminal Operations Agreement”), duly executed by Ergon Asphalt &
Emulsions;
(ix) (A) a copy of the Seller Transition Services Agreement, in the form attached hereto
as
Exhibit K (the “Seller Transition Services Agreement”), and (B) a copy of the Lion
Transition Services Agreement, in the form attached hereto as Exhibit L (the “Lion
Transition Services Agreement”), in each case duly executed by Seller (or Paline Pipeline Company
in the case of the Lion Transition Services Agreement);
Page 24 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(x) a copy of the Paline Option Agreement, in the form attached hereto as Exhibit M
(the “Paline Option Agreement”), duly executed by Ergon Terminaling;
(xi) a copy of the Asphalt Marketing Agreement, in the form attached hereto as Exhibit
O (the “Asphalt Marketing Agreement”), duly executed by Ergon Asphalt & Emulsions;
(xii) to Buyer, the certificates referred to in Section 8.3(a),
Section 8.3(b)
and Section 8.3(d);
(xiii) copies of the resolutions of the board of directors of Seller, certified as being
correct and complete and then in full force and effect, authorizing the execution by Seller of this
Agreement and the Related Agreements to which Seller is a party and the consummation by Seller of
the Contemplated Transactions;
(xiv) an incumbency certificate, duly executed by an authorized officer of Seller, attesting
to the due appointment and authorization of individuals signing this Agreement on behalf of Seller,
any agreement contemplated hereby or any agreement related to the Contemplated Transactions;
(xv) the resignation, effective as of the Closing, of each of the individuals listed on
Schedule 3.3(a)(xv) from the positions held with any of the Companies as specified on such
Schedule 3.3(a)(xv);
(xvi) to Buyer, a properly executed certificate, in the form prescribed by Treasury
Regulations under Section 1445 of the Code, stating that Seller is not a “foreign person” within
the meaning of Section 1445 of the Code;
(xvii) to Lion, the New Lion Note, duly executed by Seller;
(xviii) to Buyer, a copy of the Buyer Guaranty, duly executed by Seller; and
(xix) any other documents, instruments or agreements contemplated hereby or reasonably
necessary to consummate the Contemplated Transactions.
(b) Lion Closing Deliveries. At the Closing, Lion shall deliver, or cause to be
delivered:
(i) to Seller, the New Lion Note, duly executed by Lion;
(ii) to Seller, a copy of the Lion Assignment Agreement, duly executed by each Company;
(iii) to Buyer and Seller, a copy of the Asphalt Sales Agreement, duly executed by Lion;
(iv) to Seller, certificates representing the Paline Pipeline Equity, which certificates shall
be duly endorsed in blank (or accompanied by duly executed limited liability company interest
powers);
(v) to Seller, a copy of the Mutual Release, duly executed by each Company;
(vi) to Seller, a copy of the Termination Agreement, duly executed by Lion;
Page 25 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(vii) to Buyer and Seller, copies of the Muskogee Terminal Operations Agreement, duly executed
by Lion;
(viii) to Buyer and Seller, copies of the Seller Transition Services Agreement and to Buyer
and Paline Pipeline Company, copies of the Lion Transition Services Agreement, duly executed by
Lion;
(ix) to Ergon Asphalt & Emulsions, a copy of the Asphalt Marketing Agreement, duly
executed by
Lion;
(x) to Buyer and Seller, copies of the resolutions of the board of directors of Lion,
certified as being correct and complete and then in full force and effect, authorizing the
execution by Lion of this Agreement and the Related Agreements to which Lion is a party and the
consummation by Lion of the Contemplated Transactions;
(xi) to Buyer and Seller, an incumbency certificate, duly executed by an authorized officer of
Lion attesting to the due appointment and authorization of individuals signing this Agreement on
behalf of Lion, any agreement contemplated hereby or any agreement related to the Contemplated
Transactions;
(xii) to Buyer, the Lion-Buyer Note, duly executed by Lion;
(xiii) to Seller, an amount equal to the Statoil Fees, by wire transfer of immediately
available funds; and
(xiv) to Buyer or Seller, as applicable, any other documents, instruments or agreements
contemplated hereby or reasonably necessary to consummate the Contemplated Transactions.
(c) Buyer Closing Deliveries. At the Closing, Buyer shall deliver, or cause to be
delivered, to Seller (unless otherwise specified):
(i) the Lion Shares Purchase Price, less the amount applied toward payment pursuant to
Section 2.3(b), by wire transfer of immediately available funds to an account or accounts
designated in writing by Seller at least three Business Days prior to the Closing;
(ii) the Cash Repayment Amount, by wire transfer of immediately available funds to an account
or accounts designated in writing by Seller at least three Business Days prior to the Closing;
(iii) an amount of cash, if any, to be paid in lieu of issuing Delek Shares as described in
Section 3.2(a)(ii), by wire transfer of immediately available funds to an account or
accounts designated in writing by Seller at least three Business Days prior to the Closing;
(iv) an amount equal to the Estimated Adjusted Net Working Capital, by wire transfer of
immediately available funds to an account or accounts designated in writing by Seller at least
three Business Days prior to the Closing;
(v) subject to Section 3.2(e)(iv), evidence of the new arrangements, including
substitute bonds, sureties, letters of credit or guaranties, that are replacing the Seller Credit
Enhancements;
Page 26 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(vi) irrevocable standby letters of credit in favor or Seller in an aggregate amount equal to
the aggregate face amount of each Seller Credit Enhancement that remains in place after the Closing
as security for such Seller Credit Enhancement as described in Section 3.2(e)(iv);
(vii) a copy of each Third-Person Consent and Authorization set forth in Schedule
3.3(c)(vii);
(viii) a true and correct copy of the irrevocable instructions to American Stock Transfer
&
Trust Company to issue a stock certificate, registered in the name of Seller, representing the
Delek Shares issuable to Seller pursuant to Section 3.2(a)(ii);
(ix) a copy of the Registration Rights Agreement, duly executed by Buyer;
(x) a copy of the Buyer Guaranty, duly executed by Buyer;
(xi) a copy of the Paline Option Agreement, duly executed by Buyer;
(xii) the certificates referred to in Section 8.2(a), Section 8.2(b)
and
Section 8.2(f);
(xiii) copies of the resolutions of the board of directors of Buyer, certified as being
correct and complete and then in full force and effect, authorizing the execution by Buyer of this
Agreement and the Related Agreements to which Buyer is a party and the consummation by Buyer of the
Contemplated Transactions;
(xiv) copies of the resolutions of the governing body of Delek Hungary Ltd., certified as
being correct and complete and then in full force and effect, authorizing the consummation by Buyer
of the Contemplated Transactions;
(xv) an incumbency certificate, duly executed by an authorized officer of Buyer attesting to
the due appointment and authorization of individuals signing this Agreement on behalf
of Buyer, any agreement contemplated hereby or any agreement related to the Contemplated
Transactions;
(xvi) to Lion, the Lion-Buyer Note, duly executed by Buyer; and
(xvii) any other documents, instruments or agreements contemplated hereby or reasonably
necessary to consummate the Contemplated Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that the statements contained in this
Article IV are true and correct as of the Execution Date, and will be true and correct as
of the Closing Date (unless any such representation or warranty speaks to an earlier date;
provided, however, any such representation or warranty that speaks to a “current” or “currently”
dated time period shall be deemed to refer to such representation or warranty as of the Execution
Date and as of the Closing Date).
Page 27 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 4.1 Organization.
(a) Seller is a corporation duly incorporated and validly existing and in good standing under
the Laws of the State of Mississippi. Seller has heretofore delivered to Buyer accurate and
complete copies of Seller’s Governing Documents, as in effect on the Execution Date.
(b) Each of the Companies (i) is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, as set forth in Section
4.1 of the Seller Disclosure Schedules, and (ii) has all requisite corporate power and
authority under those laws and its Governing Documents to own or lease and to operate its
properties and other assets and to carry on its business as currently conducted. Seller has
heretofore delivered to Buyer accurate and complete copies of the Governing Documents of the
Companies, as in effect on the Execution Date.
(c) To the Knowledge of Seller and except for matters that would not result in an adverse
effect in excess of the Threshold Amount, no breach or violation of any provision of such Governing
Documents has occurred and is continuing. Each of the Companies is duly qualified and in good
standing as a foreign corporation in all jurisdictions in which it owns or leases property or in
which the carrying on of its business as now conducted so requires, except where the failure to be
so qualified would not result in an adverse effect in excess of the Threshold Amount.
Section 4.2 Capitalization; Ownership of the Lion Shares.
(a) The total authorized, issued and outstanding capital stock of Lion is set forth in
Section 4.2 of the Seller Disclosure Schedules and includes a listing of the record owners
as of the date hereof and their respective shares of the outstanding capital stock of Lion held of
record as of the date hereof. Seller does not hold, is not party to, and is not the beneficiary
of, and to the Knowledge of Seller, no third party holds, is a party to or is the beneficiary of,
any outstanding subscriptions, commitments, preemptive rights, agreements, arrangements or
commitments of any kind for or relating to the issuance, sale, registration or voting of any shares
of capital stock of any class, other equity interests or Share Equivalents of Lion, except for the
sale of the Lion Shares contemplated by this Agreement and except for Seller’s option to acquire
common stock of Lion as provided in the Management Agreement dated as
of March 22, 1985 by and between Seller and Lion, as amended (the “Management Agreement”).
Except for Seller’s option to acquire common stock of Lion as provided in the Management Agreement,
Lion does not have any outstanding Share Equivalents.
(b) Except as set forth in Section 4.2 of the Seller Disclosure Schedules: (i) Seller
owns the Lion Shares free and clear of any Liens, other than (A) Permitted Equity Liens, (B) Liens
arising under this Agreement or the Related Agreements, (C) Liens arising under the Governing
Documents of Lion as in effect on the Closing Date and (D) restrictive covenants contained in
credit agreements to which the Companies are parties; and (ii) upon the occurrence of the Closing,
the delivery of the Lion Shares to Buyer in accordance with the terms of this Agreement will
transfer good and marketable title to the Lion Shares free and clear of any Liens, other than the
Liens described in clauses (A), (B) and (C) in this sentence or any Liens established by Buyer.
The Lion Shares (i) have been duly authorized and validly issued in accordance with Law, (ii) are
fully paid and nonassessable, (iii) were issued free of preemptive rights and (iv) were issued in
accordance with the registration or qualification provisions of the Securities Act and any relevant
state securities Laws or pursuant to valid exemptions therefrom. Seller has heretofore delivered
to Buyer accurate and complete copies of all certificates representing the Lion Shares.
(c) Section 4.2 of the Seller Disclosure Schedules lists each of the Acquired
Subsidiaries and sets forth, with respect to each Acquired Subsidiary, the issued and outstanding
equity
Page 28 of 67
Stock Purchase Agreement
Stock Purchase Agreement
interests (collectively, the “Subsidiary Equity Interests”). The Subsidiary Equity
Interests are duly authorized, validly issued, fully paid and nonassessable and were issued free of
preemptive rights. Lion owns all issued and outstanding Subsidiary Equity Interests free and clear
of all Liens (other than (i) Permitted Equity Liens, (ii) Liens arising under this Agreement or the
Related Agreements, (iii) Liens arising under the Governing Documents of any of the Acquired
Subsidiaries as in effect on the Closing Date and (iv) restrictive covenants contained in credit
agreements to which the Companies are parties). Except for Seller’s option to acquire common stock
of Lion as provided in the Management Agreement, there are no outstanding securities, convertible
or exchangeable into equity interests of any of the Acquired Subsidiaries or Share Equivalents
outstanding or other rights, agreements or commitments obligating any of the Acquired Subsidiaries
to issue, transfer or sell to any Person other than Lion any Subsidiary Equity Interests.
Section 4.3 Due Authority; Execution and Delivery; Enforceability. Each of Seller and
Lion has full corporate power and authority to execute and perform this Agreement, to perform the
Related Agreements to which it will be a Party and to carry out the Contemplated Transactions. The
execution, delivery and performance by Seller and Lion of this Agreement, the execution, delivery
and performance by Seller or Lion of the Related Agreements to which it will be a party and the
consummation of the Contemplated Transactions have been duly authorized by all requisite action on
the part of Seller and Lion. This Agreement has been duly and validly executed by each of Seller
and Lion and, at the Closing, all Related Agreements required hereunder to be executed and
delivered by Seller or Lion shall have been duly executed and delivered by Seller or Lion, as
applicable. This Agreement does, and the Related Agreements to which Seller or Lion will be a
party shall, assuming the due authorization, execution, and delivery of this Agreement by Buyer,
constitute the legal, valid and binding obligation of Seller or Lion, as applicable, enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium or other Laws affecting the
enforcement of creditors’ rights generally and except that the availability of equitable remedies
is subject to the discretion of the court before which any proceeding therefor may be brought.
Notwithstanding the foregoing or any other representation or warranty hereunder, no
representation or warranty is made as to whether approval of any of the shareholders of Lion is
required, or would be appropriate, in connection with the transactions contemplated under this
Agreement and the Related Agreements.
Section 4.4 No Conflicts; Approvals.
(a) Subject to obtaining the consents and waivers referred to in Section 4.4 of the
Seller Disclosure Schedules, and except for any matters described in this Section 4.4 that
would not exceed the Threshold Amount, neither the execution and delivery by Seller or Lion of this
Agreement or any Related Agreement nor the performance by Seller or Lion of its obligations
hereunder or thereunder will, (i) violate or breach the terms of or cause a default under (A) any
Law applicable to Seller or any of the Companies, (B) the Governing Documents of Seller or any of
the Companies or (C) to the Knowledge of Seller, any Material Contract or (ii) to the Knowledge of
Seller, 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 (i) of this Section 4.4(a).
(b) Except as set forth in Section 4.4 of the Seller Disclosure Schedules, and except
for any approvals or filings the failure of which to have obtained or made would not exceed the
Threshold Amount, neither the execution and delivery by Seller or Lion of this Agreement or any
Related Agreement nor the performance by Seller or Lion of its obligations hereunder or thereunder
will, to the Knowledge of Seller, require Seller, Lion or any of the Lion Subsidiaries to obtain
any approval, consent or waiver of, or to make any filing with, any Governmental Authority that has
not been obtained or made.
Page 29 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 4.5 Financial Statements.
(a) Section 4.5 of the Seller Disclosure Schedules sets forth the following financial
statements (collectively, the “Lion Financial Statements”):
(i) the audited consolidated balance sheet of Lion (including the Companies and Paline
Pipeline Company) as of April 30, 2009 and 2010, together with corresponding audited consolidated
statements of operations and of cash flows of Lion (including the Companies and Paline Pipeline
Company) for the fiscal years ended April 30, 2010, 2009 and 2008; and
(ii) the unaudited consolidated interim balance sheets of Lion (including the Companies and
Paline Pipeline Company) as of January 31, 2011, together with corresponding unaudited consolidated
interim statements of operations for the nine-month periods ended January 31, 2011 and 2010 and
unaudited interim combined statements of cash flows for the nine-month periods ended January 31,
2011 and 2010.
(b) The Lion Financial Statements described in Section 4.5(a)(i) have been prepared
from the Records of Lion (including the Companies and Paline Pipeline Company) and present fairly,
in all material respects, the consolidated financial position of Lion (including the Companies and
Paline Pipeline Company) as of the respective dates of the balance sheets included therein and the
consolidated results of operations and cash flows of Lion (including the Companies and Paline
Pipeline Company) for the respective periods set forth therein, all in accordance with GAAP applied
on a consistent basis during the periods covered thereby (except as noted in the accompanying
footnotes thereto).
(c) The Lion Financial Statements described in Section 4.5(a)(ii) have been prepared
from the Records of Lion (including the Companies and Paline Pipeline Company) and reflect all
adjustments necessary for a fair statement, in all material respects, of the consolidated financial
position of Lion (including the Companies and Paline Pipeline Company) as of the respective dates
of the balance sheets included therein and the consolidated results of operations and cash flows of
Lion (including the Companies and Paline Pipeline Company) for the respective periods set forth
therein, all in accordance with GAAP applied on a consistent basis during the periods covered
thereby (except as noted in the accompanying footnotes thereto) (subject to the absence of footnote
disclosures and to normal and recurring year-end adjustments).
(d) Since January 31, 2011, the Companies have conducted the Business in the ordinary course
of business.
Section 4.6 Absence of Undisclosed Liabilities. To the Knowledge of Seller, except
(i) for Obligations reflected in the balance sheet as of January 31, 2011 included in Section
4.5 of the Seller Disclosure Schedules, (ii) Obligations incurred in the ordinary course of
business since January 31, 2011, (iii) Obligations otherwise disclosed in or incurred pursuant to
this Agreement, or (iv) as set forth in Section 4.6 of the Seller Disclosure Schedules,
none of the Companies has incurred any Obligations which would result in an adverse effect in
excess of the Threshold Amount.
Section 4.7 Material Contracts. To the Knowledge of Seller:
(a) Section 4.7 of the Seller Disclosure Schedules sets forth a list of all of the
following to which any of the Companies is a party as of the date hereof (in each case, to the
extent remaining executory in whole or in part as of the date hereof), excluding this Agreement and
any agreement or other instrument between or among two or more of the Companies to which no third
Person is a party (each, a “Material Contract”):
Page 30 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(i) any Contract relating to any indebtedness of any of the Companies for borrowed money in an
amount in excess of $300,000, or the granting of any Lien by any of the Companies securing any such
borrowing;
(ii) any Contract whereby any of the Companies has guaranteed an Obligation in excess of
$300,000 of any other Person (other than one or more of the Companies);
(iii) any Contract with an employee or consultant of any of the Companies providing for annual
payment by such Person in excess of $300,000 or a change-in-control severance benefit in excess of
$300,000;
(iv) any Contract with any officer or director of any of the Companies;
(v) any collective bargaining contract or other contract with a labor union;
(vi) any Contract for the purchase or sale of feedstocks, intermediate stocks or refined
products that (A) provides for forward physical delivery on a date more than 60 days after April
29, 2011 or (B) provides for the payment after April 29, 2011 by or to such Person of more than
$500,000;
(vii) any Contract for the supply of goods or services by or to any of the Companies not
covered in any other paragraph of this Section 4.7(a) that provides for payments after
April 29, 2011 by or to such Person of more than $500,000;
(viii) any Contract for the sale of any asset by or to any of the Companies not covered in any
other paragraph of this Section 4.7(a) that provides for the payment after April 29, 2011
by or to such Person of more than $500,000;
(ix) any lease under which any of the Companies is the lessor or lessee of real or personal
property that provides for an annual base rental to or from such Person of more than $500,000;
(x) any Contract prohibiting any of the Companies from competing with another Person in any
business or area;
(xi) any Contract providing for the direct or indirect merger, consolidation, or other
reorganization of any of the Companies;
(xii) any other Contract (other than a contract or agreement of a type described in clause
(vi) above) of any of the Companies not covered in any other paragraph of this Section
4.7(a) that provides for the payment after April 29, 2011 by or to such Person of more than
$500,000;
(xiii) any Contract entered into with any Affiliate of Seller (excluding the Companies) that
provides for the payment after April 29, 2011 by or to such Person of more than $500,000; and
(xiv) any Contract to enter into any agreement with respect to any of the matters described in
any of the foregoing clauses of this Section 4.7(a).
Page 31 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(b) Material Contracts.
(i) (A) Lion has delivered to Buyer accurate and complete copies of all Material
Contracts,
together with all amendments thereto, and (B) except as set forth in Section 4.7(b) of the
Seller Disclosure Schedules and except for any matters that would not result in an adverse effect
in excess of the Threshold Amount, there are no oral Material Contracts and no oral terms or
conditions to any Material Contracts.
(ii) Except as set forth in Section 4.7(b) of the Seller Disclosure Schedules,
except
for the Master Facilities Sublease, and except for matters that would not result in an adverse
effect in excess of the Threshold Amount, (A) each Material Contract is in full force and effect
and is a legal, valid and binding obligation of Lion or an Acquired Subsidiary, as applicable,
enforceable against Lion or an Acquired Subsidiary, as applicable, in accordance with its terms
(and against each counterparty thereto), except as enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium or other Laws affecting
the enforcement of creditors’ rights generally
and except that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought, (B) Lion or the Acquired Subsidiary
party thereto, as applicable, has not breached the terms of any Material Contract nor has any other
party thereto, (C) Lion or the Acquired Subsidiary party thereto, as applicable, has not received
from any other party to any Material Contract written notification that such Material Contract is
not in full force and effect, that Lion or the Acquired Subsidiary party thereto, as applicable,
has failed to perform its obligations thereunder to date, or that any other party thereto has not
performed its obligations thereunder to date, and (D) no event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time or both) would result in a breach
or violation of, or a default under, the terms of any Material Contract.
(iii) Except as set forth in Section 4.7(b) of the Seller Disclosure Schedules, and
except for matters that would not result in an adverse effect in excess of the Threshold Amount,
(A)the Master Facilities Sublease is in full force and effect and is a legal, valid and binding
obligation of Ergon Asphalt & Emulsions, enforceable against Ergon Asphalt & Emulsions in
accordance with its terms (and against each counterparty thereto), except as enforcement may be
limited by bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium or
other Laws affecting the enforcement of creditors’ rights generally and except that the
availability of equitable remedies is subject to the discretion of the court before which any
proceeding therefor may be brought, (B) Ergon Asphalt & Emulsions has not breached the terms of the
Master Facilities Sublease nor has any other party thereto, (C) Ergon Asphalt & Emulsions has not
received from any other party to the Master Facilities Sublease written notification that the
Master Facilities Sublease is not in full force and effect, that Ergon Asphalt & Emulsions has
failed to perform its obligations thereunder to date, or that any other party thereto has not
performed its obligations thereunder to date, and (D) no event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time or both) would result in a breach
or violation of, or a default under, the terms of the Master Facilities Sublease.
Section 4.8 Title to Assets. To the Knowledge of Seller:
(a) Section 4.8(a) of the Seller Disclosure Schedules sets forth a list as of the date
hereof and, to the extent available, a legal description (which Seller may separately make
available to Buyer rather than set forth in Section 4.8(a) of the Seller Disclosure
Schedules) of (i) all Owned Real Property and (ii) all Leased Real Property.
(b) Except as set forth in Section 4.8(b) of the Seller Disclosure Schedules, the
Companies own or lease, pursuant to valid and enforceable leases, all material fixed assets used in
or reasonably necessary for the conduct of the Business as currently conducted.
Page 32 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) Except as set forth in Section 4.8(c) of the Seller Disclosure Schedules, each of
the Companies (i) has good and indefeasible title to the Owned Real Property that is owned by it
and (ii) has possession, pursuant to valid and enforceable leases, of the Leased Real Property that
is leased by it, in each case, subject only to (A) Permitted Asset Liens or (B) any Liens for
individual amounts that would not exceed the Threshold Amount.
(d) Except as set forth in Section 4.8(d) of the Seller Disclosure Schedules, each of
the Companies, as of the Closing Date, will have (i) good and marketable title to each material
item of Owned Personal Property owned by such Company and used by it primarily in the operation of
the Business and (ii) possession, pursuant to a valid and enforceable lease or sublease, of each
material item
of Leased Personal Property that is leased by it, in each case, subject only to (A) Permitted
Asset Liens or (B) any Liens for individual amounts that would not exceed the Threshold Amount.
Section 4.9 Authorizations of the Companies. To the Knowledge of Seller:
(a) Section 4.9(a) of the Seller Disclosure Schedules contains a list of all material
Authorizations of the Companies, including pending applications or filings therefor and renewals
thereof, used in connection with the Business.
(b) Except as would not result in an adverse effect in excess of the Threshold Amount: (i) the
Authorizations, including pending applications or filings therefor and renewals thereof, set forth
in Section 4.9(a) of the Seller Disclosure Schedules are all Authorizations that are
necessary to carry on the Business as currently conducted; (ii) no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time or both) would
constitute or result in a violation by any of the Companies of, or a failure on the part of any of
the Companies to comply with the terms of, any such Authorization, including pending applications
or filings therefor and renewals thereof; (iii) except as set forth in Section 4.9(b) of
the Seller Disclosure Schedules, none of the Companies has received from any Governmental Authority
written notification that any such Authorization (A) is not in full force and effect, (B) has been
violated in any respect, or (C) is subject to any suspension, revocation, modification or
cancellation; and (iv) there is no Proceeding pending or threatened regarding suspension,
revocation, modification or cancellation of any such Authorization.
(c) Notwithstanding the foregoing, no representation or warranty is made in this Section
4.9 with respect to (i) Authorizations under Environmental Laws, which are addressed
exclusively in Section 4.12, (ii) Authorizations under Tax Laws, which are addressed
exclusively in Section 4.13, or (iii) Authorizations under ERISA, which are addressed
exclusively in Section 4.16(c).
Section 4.10 Compliance with Laws. To the Knowledge of Seller, except with respect to
matters (i) as would not result in an adverse effect in excess of the Threshold Amount or (ii) as
are set forth in Section 4.10 of the Seller Disclosure Schedules: (A) each of the Companies
is in compliance with all Laws, as currently in effect and interpreted; (B) none of the Companies
has received any written notification from any applicable Governmental Authority within the last
three years that it is not in compliance with any Laws; and (C) no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time or both) would
constitute or result in a failure of any of the Companies to comply with the terms of any Law, as
currently in effect and interpreted. Except for matters that would not result in an adverse effect
in excess of the Threshold Amount, there are no consent or similar decrees or, to the Knowledge of
Seller, other Orders affecting any of the Companies or the Business. Notwithstanding the
foregoing, no representation or warranty is made in this Section 4.10 with respect to
compliance with Environmental Laws, which is addressed exclusively in Section 4.12,
compliance with Tax Laws, which is addressed exclusively in Section 4.13, or compliance
with ERISA, which is addressed exclusively in Section 4.16(c).
Page 33 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 4.11 Proceedings.
(a) There is no Proceeding pending or, to the Knowledge of Seller, threatened against Seller
that would affect its ability to perform the Contemplated Transactions.
(b) Except for matters as would not exceed the Threshold Amount and except as set forth in
Section 4.11(b) of the Seller Disclosure Schedules: (i) there is no Proceeding pending for
which the Companies have received service of process or otherwise written notice or, to the
Knowledge of Seller otherwise pending, or, to the Knowledge of Seller, threatened against any of
the Companies, including any involving a claim for indemnification pursuant to any statute,
Governing Document or contract relating to any other Proceeding, which directly or indirectly
relates to the Business or seeks to prevent or make illegal the consummation by Seller of the
Contemplated Transactions; and (ii) to the Knowledge of Seller, there are no Orders or other
decisions of any Governmental Authority outstanding against any of the Companies pertaining to any
of the Companies or the Business; provided, however, that no representation or warranty is made in
this Section 4.11 with respect to Proceedings under or involving Environmental Laws, which
are addressed exclusively in Section 4.12, Tax matters, which are addressed exclusively in
Section 4.13, or ERISA matters, which are addressed exclusively in Section 4.16(c).
Section 4.12 Environmental. To the Knowledge of Seller, and except for matters that
would not result in an adverse effect in excess of the Threshold Amount:
(a) except as set forth in Section 4.12(a) of the Seller Disclosure Schedules, the
Business is and the assets of the Companies are, and for the past three years have been, operated
in compliance with all applicable Environmental Laws (in each case, as in effect and interpreted at
the respective times within such three-year period);
(b) all Environmental Authorizations, including pending applications or filings therefor and
renewals thereof, required to be obtained or filed by or complied with by any of the Companies
under any applicable Environmental Law currently in effect in connection with the Business as
currently conducted, including those relating to Hazardous Substances, have been duly obtained or
filed for and are listed in Section 4.12(b) of the Seller Disclosure Schedules, and each of
the Companies is, and for the past three years has been, in compliance with the terms and
conditions of all such Environmental Authorizations applicable to it;
(c) except as set forth in Section 4.12(c) of the Seller Disclosure Schedules, (i)
none of the Companies has received from any Governmental Authority written notification that any
Environmental Authorization listed in Section 4.12(b) of the Seller Disclosure Schedules
(A) is not in full force and effect, (B) has been violated, or (C) is subject to any suspension,
revocation, modification or cancellation, (ii) there is currently no Proceeding pending or
threatened regarding suspension, revocation, modification or cancellation of any Environmental
Authorization listed in Section 4.12(b) of the Seller Disclosure Schedules and (iii) there
are no Orders or other decisions of any Governmental Authority outstanding against any of the
Companies pertaining to any of the Companies or the Business arising under Environmental Laws
(excluding Consent Decrees set forth in Section 4.12(f) of the Seller Disclosure
Schedules);
(d) Section 4.12(d) of the Seller Disclosure Schedules sets forth a list of all
Environmental Conditions at the location of the Refinery that require or may require Remediation
Activity pursuant to applicable Environmental Laws, in each case as currently in effect and
interpreted, and a description of (i) any Remediation Activity being conducted with respect to any
such Environmental Conditions as of the Execution Date and (ii) any pending or threatened
Environmental Claims made in writing with respect to any such Environmental Conditions;
Page 34 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(e) except as set forth in Section 4.12(e) of the Seller Disclosure Schedules,
the current operation of the Business does not provide a basis for revocation or suspension of any
Environmental Authorization issued to any of the Companies;
(f) Section 4.12(f) of the Seller Disclosure Schedules sets forth a list of all
Consent Decrees and all notices of violation that set forth any requirements relating to
Remediation Activities, in each case applicable to the Business, and Seller or Lion has delivered
to Buyer copies of all significant submittals prepared pursuant to such Consent Decrees and notices
of violation since January 1, 2008, and each of the Companies is in compliance with such Consent
Decrees and notice of violation requirements, to the extent applicable to it;
(g) there is no currently pending or threatened Environmental Claim relating to the Business,
other than those set forth in Section 4.12(g) of the Seller Disclosure Schedules;
(h) except as set forth in Section 4.12(h) of the Seller Disclosure Schedules, during
the past three years, there have been no Releases on, at, under or from (including migrating from)
the property of any of the Companies that would result in an Environmental Claim being asserted
against any of the Companies under Environmental Laws, in each case as currently in effect and
interpreted;
(i) Seller or Lion has delivered to Buyer copies of all reports in Seller’s or Lion’s
possession or control reflecting Environmental Conditions on, at, or underlying the property of any
of the Companies, and any reports, documents or correspondence reflecting non-compliances with
Environmental Laws currently in effect;
(j) The assets and properties of the Companies are not encumbered by any Lien arising or
imposed under Environmental Laws; and
(k) except as set forth in Section 4.12(k) of the Seller Disclosure Schedules, none of
the Companies has, during the past three years, disposed of or arranged for the disposal of, any
Hazardous Substances (excluding garbage and household or office trash) in the conduct of the
Business to or at any third person disposal facility.
Section 4.13 Taxes.
(a) To the Knowledge of Seller, except for any matter that would not result in an adverse
effect in excess of the Threshold Amount and except as set forth in Section 4.13(a) of the
Seller Disclosure Schedules: (i) each of the Companies has filed or caused to be filed on a timely
basis all Tax Returns that are or were required to be filed by or with respect to it, either
separately or as a member of an affiliated, consolidated, combined or unitary group, pursuant to
Law; (ii) all such Tax Returns are accurate and complete in all material respects; (iii) all Taxes
(whether or not shown on any Tax Return) that are due and payable by the Companies have been or
will be paid in full on or before the Closing Date; (iv) except with respect to Taxes not yet due
and payable, (A) there are no Liens for unpaid Taxes on any asset or property of any Company, other
than Permitted Asset Liens and Permitted Equity Liens, and (B) no claim for unpaid Taxes has been
made by any Governmental Authority that could give rise to any such Lien; (v) all Taxes that any of
the Companies are or were required by Law to withhold or collect have been duly withheld or
collected and, to the extent due and payable, have been remitted to the proper Governmental
Authority, and the applicable Company has properly received and maintained any and all
certificates, forms, and other documents required by Law for any applicable exemption from such
withholding; (vi) no foreign, federal, state or local Proceedings by or with a Governmental
Authority regarding Taxes of the Companies are pending or being conducted, and no Company has
agreed to any extension or waiver of the statute of limitations applicable to any Tax, or agreed to
any extension of time
Page 35 of 67
Stock Purchase Agreement
Stock Purchase Agreement
with respect to a Tax assessment or deficiency, which extension or waiver remains in effect;
(vii) none of the liabilities of the Companies includes an obligation under any record retention,
transfer pricing, closing or other agreement regarding Taxes with any Governmental Authority that
will survive the Closing or impose any liability on Buyer or any of the Companies after the
Closing; (viii) none of the Companies has participated in, or is currently participating in, a
“listed transaction” or a “reportable transaction” within the meaning of Section 6707A(c) of the
Code or Treasury Regulation Section 1.6011-4(b); (ix) none of the Companies has distributed stock
of another Person, and none of the Companies has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed by Section 355 of the Code within the
two-year period ending on the Closing Date; (x) none of the Companies has been a member of an
affiliated, consolidated, combined or unitary group for Tax purposes other than any such group of
which Lion is the parent; and (xi) any Tax-sharing agreement between any of the Companies, on the
one hand, and Seller or any of its Affiliates, on the other hand, has previously been or will be
terminated at or before the Closing, and none of the Companies will have any obligation to make a
payment to Seller or any of its Affiliates with respect to any such Tax-sharing agreement at or
after Closing.
(b) Section 4.13(b) of the Seller Disclosure Schedules sets forth the amounts of the
net operating loss and Tax credit carryforwards of the consolidated group of companies of which
Lion is the common parent for federal income Tax purposes and of each Company for state income Tax
purposes as of April 30, 2010.
(c) None of the net operating loss or Tax credit carryforwards set forth on Section
4.13(b) of the Seller Disclosure Schedules is subject to any limitation provided in Section 382
or 383 of the Code, other than by reason of this Agreement and the Contemplated Transactions.
(d) Seller has delivered to Buyer accurate and complete copies of all federal and state income
Tax Returns filed by or for the Companies for the taxable years ended April 30, 2008, April 30,
2009 and April 30, 2010.
Section 4.14 Acquisition of Delek Shares for Investment.
(a) The Delek Shares, when acquired by Seller at the Closing, will be acquired from Buyer for
Seller’s own account, for investment purposes and Seller is not acquiring the Delek Shares from
Buyer with a view to, or to make offers of sales for Buyer in connection with, any distribution or
public offering thereof, or to participate or have a direct or indirect participation in any such
undertaking, or to participate or have a participation in the direct or indirect underwriting of
any such undertaking, in each case within the meaning of the Securities Act or applicable state
securities Laws.
(b) Seller understands that (i) the Delek Shares have not been registered under the Securities
Act by reason of their issuance in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act and have not been qualified under any state securities
Laws on the grounds that the offering and sale of securities contemplated by this Agreement are
exempt from registration thereunder and, accordingly, the stock certificate representing the Delek
Shares will bear the restrictive legend set forth in Exhibit A, and (ii) Buyer’s reliance
on such exemptions is predicated on Seller’s representations set forth herein. Seller understands
that the resale of the Delek Shares may be restricted indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act and registered under any state securities Law or is
exempt from such registration.
(c) Seller is aware of the provisions of Rule 144 promulgated under the Securities Act, which
permits limited resale of restricted securities subject to the satisfaction of certain conditions
and understands that, among other restrictions on resale, Seller’s resales of the Delek Shares may
be
Page 36 of 67
Stock Purchase Agreement
Stock Purchase Agreement
restricted or limited to the extent that Seller is deemed to be an “affiliate” of Buyer for
purposes of Rule 144. In addition, Seller acknowledges that, depending upon the number of shares
of Delek Stock, including Delek Shares, of which it is the beneficial owner within the meaning of
the Exchange Act, Seller may be subject to the provisions of Section 16 under the Exchange Act.
(d) Seller is an “accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act. Seller is able to bear the economic risk of the acquisition
of the Delek Shares pursuant to the terms of this Agreement, including a complete loss of Seller’s
investment in the Delek Shares.
(e) Seller can bear the economic risk of its investment in the Delek Shares (including
possible complete loss of such investment) for an indefinite period of time and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and
risks of its acquisition of the Delek Shares.
(f) Seller and its representatives and legal counsel have been afforded access, to the extent
not prohibited by Law, to such information concerning Buyer and have been afforded an opportunity
to ask such questions of Buyer as Seller has deemed necessary or desirable to evaluate the merits
and risks of the prospective investments in the Delek Shares contemplated herein.
(g) For purposes of state “blue sky” Laws, Seller represents and warrants that Seller is
located in the State of Mississippi and that the decision by Seller to acquire the Delek Shares
shall be deemed to occur solely in the State of Mississippi.
Section 4.15 Brokers. Except as set forth in Section 4.15 of the Seller
Disclosure Schedules, no broker, finder or investment banker is entitled to any brokerage, finder’s
or other fee or commission in connection with the Contemplated Transactions based on arrangements
made by or on behalf of Seller.
Section 4.16 Benefit Plans. To the Knowledge of Seller:
(a) Section 4.16(a) of the Seller Disclosure Schedules sets forth a list, as of the
Execution Date, of all Benefit Plans applicable to the Companies and any related material
Authorizations. Seller has provided to Buyer accurate and complete copies of any plan documents
with respect to such Benefit Plans.
(b) Neither the Companies nor any current or former ERISA Affiliate currently maintains,
sponsors, participates in, has liability under, or contributes to, or has ever maintained,
established, sponsored, participated in, had liability under, or contributed to, any pension plan
(within the meaning of Section 3(2) of ERISA) which is subject to Part 3 of Subtitle B of Title I
of ERISA, Title IV of ERISA or Section 412 of the Code, including any “multiemployer plan” as such
term is defined in Section 3(37) of ERISA or any “multiple employer plan” as such term is defined
in Section 413(c) of the Code.
(c) Except for matters that would not result in an adverse effect in excess of the Threshold
Amount, with respect to any Benefit Plan that is sponsored, maintained or contributed to by any of
the Companies or to which an “obligation to contribute” (as defined in Section 4212 of ERISA) by
any of the Companies exists, or has been sponsored, maintained, contributed to by any of the
Companies or to which an “obligation to contribute” by any of the Companies exists within six years
prior to the Execution Date by any ERISA Affiliate: (i) no Proceedings are pending or threatened
(including Proceedings by or before the U.S. Department of Labor, the Pension Benefit Guaranty
Corporation, the Internal Revenue Service or other Governmental Authorities); (ii) the Companies
are in substantial
Page 37 of 67
Stock Purchase Agreement
Stock Purchase Agreement
compliance with ERISA and Law; (iii) no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time or both) would constitute or result in a
failure of any of the Companies or any Benefit Plan to comply with ERISA and Law; (iv) there are no
Orders outstanding against any of the Companies pertaining to any such Benefit Plan; and (v) the
consummation of the Contemplated Transactions will not result in any liability to Buyer or any of
the Companies for Taxes, penalties, interest or any other Claims resulting from any such Benefit
Plan.
Section 4.17 Labor Matters. To the Knowledge of Seller:
(a) Section 4.17(a) of the Seller Disclosure Schedules sets forth a list of all CBAs
to which any Company is a party or is bound. Seller has provided to Buyer accurate and complete
copies of such CBAs.
(b) Except as set forth in Section 4.17(b) of the Seller Disclosure Schedules and
except for matters as would not result in an adverse effect in excess of the Threshold Amount: (i)
there are no grievances pending pursuant to the CBAs nor are there any unfair labor practice Claims
pending before any agency having jurisdiction over any of the employees of the Companies and there
are no known union representation Claims involving any of the active represented employees of the
Companies; and (ii) there are no pending strikes, work stoppages, work slowdowns, picketing,
lockouts or similar labor activity, except for routine grievance matters by or with respect to any
of the active represented employees of the Companies.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that the statements contained in this
Article V are true and correct as of the Execution Date, and will be true and correct as of
the Closing Date (unless any such representation or warranty speaks to an earlier date; provided,
however, any such representation or warranty that speaks to a “current” or “currently” dated time
period shall be deemed to refer to such representation or warranty as of the Execution Date and as
of the Closing Date).
Section 5.1 Organization and Qualification. Buyer is a corporation duly incorporated
and validly existing and in good standing under the Laws of the State of Delaware. Buyer is duly
qualified to conduct its business as a foreign entity and is in good standing under the Laws of
each jurisdiction where such qualification is required. Buyer has the requisite corporate power and
authority under the laws of the jurisdiction of its incorporation and its Governing Documents to
own or lease and to operate its properties and other assets and to carry on its business as
currently conducted. Buyer has heretofore delivered to Seller correct and complete copies of
Buyer’s Governing Documents, as in effect on the Execution Date.
Section 5.2 Due Authority; Execution and Delivery; Enforceability. Buyer has full
corporate power and authority to execute and perform this Agreement, to perform the Related
Agreements to which it will be a party and to carry out the Contemplated Transactions. The
execution, delivery and performance by Buyer of this Agreement, the execution, delivery and
performance of the Related Agreements to which it will be a party and the consummation of the
Contemplated Transactions, including the issuance of the Delek Shares, have been duly authorized by
all requisite action on the part of Buyer. This Agreement has been duly and validly executed by
Buyer and, at the Closing, all Related Agreements required hereunder to be executed and delivered
by Buyer shall have been duly executed and delivered by Buyer. This Agreement does, and the
Related Agreements to which Buyer will be a party shall, assuming the due authorization, execution,
and delivery of this Agreement by Seller, constitute the legal, valid and binding obligation of
Buyer, enforceable in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance or transfer,
Page 38 of 67
Stock Purchase Agreement
Stock Purchase Agreement
reorganization, moratorium or other Laws affecting the enforcement of creditors’ rights
generally and except that the availability of equitable remedies is subject to the discretion of
the court before which any proceeding therefor may be brought.
Section 5.3 No Conflicts; Approvals.
(a) Subject to obtaining the consents and waivers referred to in Section 5.3 of the
Buyer Disclosure Schedules, and except for any matters described in this Section 5.3 that
would not exceed the Threshold Amount, neither the execution and delivery by Buyer of this
Agreement or any Related Agreement nor the performance by Buyer of its obligations hereunder or
thereunder will, (i) violate or breach the terms of or cause a default under (A) any Law applicable
to Buyer, (B) the Governing Documents of Buyer or (C) any Contract to which Buyer or any of its
Subsidiaries is a party that has been filed pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K as an exhibit to the Buyer SEC Documents, (ii) provide any party other than Seller
with the right to exercise any right of first refusal to purchase or other right to purchase the
Delek Shares, or (iii) 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 clauses (i) or (ii) of this Section
5.3(a).
(b) Except as set forth in Section 5.3 of the Buyer Disclosure Schedules, and except
for any approvals or filings the failure of which to have obtained or made would not exceed the
Threshold Amount, neither the execution and delivery by Buyer of this Agreement or any Related
Agreement nor the performance by Buyer of its obligations hereunder or thereunder will, to the
Knowledge of Buyer, require Buyer to obtain any approval, consent or waiver of, or to make any
filing with, any Governmental Authority that has not been obtained or made.
Section 5.4 Proceedings. There is no Proceeding pending or, to the Knowledge of
Buyer, threatened against Buyer that would affect its ability to perform the Contemplated
Transactions.
Section 5.5 Acquisition of Lion Shares for Investment.
(a) The Lion Shares, when acquired by Buyer at the Closing, will be acquired from Seller for
Buyer’s own account, for investment purposes and Buyer is not acquiring the Lion Shares from Seller
with a view to, or to make offers of sales for Seller in connection with, any distribution thereof,
or to participate or have a direct or indirect participation in any such undertaking, or to
participate or have a participation in the direct or indirect underwriting of any such undertaking,
in each case within the meaning of the Securities Act, or applicable state securities Laws.
(b) Buyer understands that (i) the Lion Shares have not been registered under the Securities
Act by reason of their issuance in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act and have not been qualified under any state securities
Laws on the grounds that the offering and sale of securities contemplated by this Agreement are
exempt from registration thereunder, and (ii) Seller’s reliance on such exemptions is predicated on
Buyer’s representations set forth herein. Buyer understands that the resale of the Lion Shares may
be restricted indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act and registered under any state securities Law or is exempt from such registration.
(c) Buyer is an “accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act. Buyer is able to bear the economic risk of the acquisition
of the Lion Shares pursuant to the terms of this Agreement, including a complete loss of Buyer’s
investment in the Lion Shares.
Page 39 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(d) Buyer can bear the economic risk of its investment in the Lion Shares (including possible
complete loss of such investment) for an indefinite period of time and has such knowledge and
experience in financial or business matters that it is capable of evaluating the merits and risks
of its acquisition of the Lion Shares.
(e) Buyer and its representatives and legal counsel have been afforded access, to the extent
not prohibited by Law, to such information concerning Lion and have been afforded an opportunity to
ask such questions of Seller as Buyer has deemed necessary or desirable to evaluate the merits and
risks of the prospective investments in the Lion Shares contemplated herein.
(f) For purposes of state “blue sky” Laws, Buyer represents and warrants that Buyer is located
in the State of Tennessee and that the decision by Buyer to acquire the Lion Shares shall be deemed
to occur solely in the State of Tennessee.
Section 5.6 No Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the Contemplated Transactions
based on arrangements made by or on behalf of Buyer.
Section 5.7 Buyer Capitalization.
(a) The authorized capital stock of Buyer consists solely of 110,000,000 shares of Delek
Stock, of which 54,436,592 shares were issued and outstanding as of the Business Day immediately
preceding the Execution Date, and 10,000,000 shares of preferred stock, par value $0.01 per share,
of which no shares are issued and outstanding as of the Execution Date. All outstanding shares of
Delek Stock have been duly authorized and validly issued in accordance with Law, are fully paid and
nonassessable and were issued in accordance with the registration or qualification provisions of
the Securities Act and any relevant state securities Laws, or pursuant to valid exemptions
therefrom. Except as disclosed in the Buyer SEC Documents, as of the Execution Date and as of the
Closing Date: (i) there are no Share Equivalents applicable to any capital stock or other equity
interests of Buyer or any of its Subsidiaries, including any Share Equivalents obligating Buyer or
its Subsidiaries (A) to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of Buyer or the capital stock or other equity interests of any
of its Subsidiaries or any securities or obligations convertible into or exchangeable for any such
shares, or (B) to grant, extend or enter into any such Share Equivalents; (ii) there are no
Contracts with respect to (or which affect) the voting, giving of written consents with respect to
the voting, transfer, conversion, issuance, or registration, of the Delek Stock or the capital
stock or other equity interests of any of its Subsidiaries; and (iii) there are no outstanding
obligations of Buyer or any of its Subsidiaries to redeem, repurchase, or otherwise acquire any of
the Delek Stock or the capital stock or other equity interests of any of its Subsidiaries. No
stock plan, stock purchase, stock option or other agreement or understanding between Buyer or its
Subsidiaries and any holder of the capital stock of Buyer or the capital stock or other equity
interests of any of its Subsidiaries, or rights exercisable or convertible therefor, provides for
acceleration or other changes in the vesting provisions or other terms of such agreement or
understanding, including adjustments to or resets of the exercise price of any outstanding security
of Buyer or any of its Subsidiaries, as a result of the consummation of the Contemplated
Transactions.
(b) Except as set forth in Section 5.7 of the Buyer Disclosure Schedules or as
disclosed in the Buyer SEC Documents, Buyer does not have any outstanding (i) securities
convertible into, exchangeable or exercisable for, or carrying the right to acquire any capital
stock or other equity securities of Buyer nor (ii) options, warrants, subscriptions, rights, calls,
agreements, demands or other arrangements or commitments of any character obligating Buyer to issue
any capital stock or equity securities or any interest therein.
Page 40 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) The issuance of the Delek Shares pursuant to Section 3.2(a) has been duly
authorized by Buyer and, when issued and delivered to Seller in accordance with the terms of this
Agreement, the Delek Shares will be validly issued, fully paid and nonassessable, free of any and
all Liens and restrictions on transfer, other than (i) Permitted Equity Liens and (ii) Liens
arising under this Agreement or the Related Agreements, and, assuming the accuracy of Seller’s
representations and warranties set forth in Section 4.14, issued in compliance with all
applicable federal and state securities Laws. Except for those rights set forth in the
Registration Rights Agreement, none of the Delek Shares issued pursuant to this Agreement will,
upon issuance, be subject to any preemptive rights, rights of first refusal, or other rights to
purchase the Delek Shares (whether in favor of Buyer or any other Person) pursuant to any Contract
of Buyer.
Section 5.8 SEC Documents; Material Changes.
(a) Buyer has filed timely with the SEC all reports, schedules, statements and exhibits
required to be filed by it under the Exchange Act from and after January 1, 2008 (all such
documents filed between January 1, 2008 and the Execution Date, collectively, the “Buyer SEC
Documents”). The Buyer SEC Documents, including any audited or unaudited financial statements and
any notes thereto or schedules included therein (the “Buyer Financial Statements”), at the time
filed (except to the extent corrected by a subsequently filed Buyer SEC Document filed prior to the
Execution Date) (i) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein
not misleading, (ii) complied as to form in all material respects with the applicable requirements
of the Exchange Act, (iii) in the case of the Buyer Financial Statements, complied as to form in
all material respects with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, (iv) in the case of the Buyer Financial Statements,
were prepared in accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and (v) in the case of the Buyer Financial Statements, fairly
present (subject in the case of unaudited statements to normal, recurring and year-end audit
adjustments) in all material respects the consolidated financial position of Buyer as of the dates
thereof and the consolidated results of its operations and cash flows for the periods then ended
and are consistent with the books and records of Buyer and its Subsidiaries. If the Delek Shares
were issued and outstanding on the Execution Date, Buyer would meet the registrant requirements and
paragraph 3 of the transaction requirements of Form S-3 under the Securities Act to register the
resale of the Delek Shares in a secondary offering. As of the date hereof, Buyer is in compliance
in all material respects with the applicable listing requirements of the New York Stock Exchange
and Buyer has not received written notice from the New York Stock Exchange regarding any failure to
so comply.
(b) Except as described in the Buyer SEC Documents or as set forth in Section 5.8(b)
of the Buyer Disclosure Schedules, since December 31, 2010, there has not been:
(i) any change in the consolidated assets, liabilities, financial condition or operating
results of Buyer and its Subsidiaries, taken as a whole, from that reflected in the Buyer Financial
Statements, except for changes in the ordinary course of business or changes which would not have a
Buyer Material Adverse Effect;
(ii) any declaration or payment of any dividend, or any authorization or payment of any
distribution, on any shares of capital stock of Buyer, or any redemption or repurchase of any
securities of Buyer;
Page 41 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(iii) any pending, or to the Knowledge of Buyer, threatened Claim or Proceeding, including
Claims or Proceedings relating to any Tax or Tax Return, Environmental Law, or any noncompliance
with any Law or permit, which would have a Buyer Material Adverse Effect;
(iv) any material transaction entered into by Buyer or any of its Subsidiaries other than in
the ordinary course of business (other than as contemplated by this Agreement);
(v) any amendment to the Governing Documents of Buyer;
(vi) any change to any material Contract by which Buyer or its Subsidiaries is bound or to
which any of their respective assets or properties is subject which would have a Buyer Material
Adverse Effect; or
(vii) any other event outside the ordinary course of business that has had or would have a
Buyer Material Adverse Effect.
ARTICLE VI
PRE-CLOSING COVENANTS AND AGREEMENTS
PRE-CLOSING COVENANTS AND AGREEMENTS
Section 6.1 Operation of the Business. Except (i) as set forth in Schedule
6.1, (ii) as otherwise contemplated by this Agreement or the Related Agreements or (iii) as
otherwise consented to by Buyer in advance in writing, such consent not to be unreasonably
withheld, conditioned or delayed, during the Interim Period, Seller (with respect to the Companies
and the Business) or Lion shall, and shall cause the Companies to:
(a) afford to Buyer and its agents, advisors, accountants, lenders, and representatives
reasonable access to the Companies’ properties, personnel, documents and Records (except to the
extent such access is prohibited by Law or by Contract) and to furnish such information about the
Companies, their properties and assets, the Lion Shares and the Business as Buyer may reasonably
request, all upon reasonable notice to Seller or Lion and in a manner that does not interfere in
any material respect with the normal operations of the Business;
(b) operate and maintain the properties and assets of the Companies and the Business in the
ordinary course of business (including ordinary course of business: repairs; routine maintenance;
and regulatory capital expenditures) and not enter into any material transaction outside the
ordinary course of business;
(c) operate the Business and maintain the properties and assets of the Companies in accordance
with all Laws currently in effect, or as may be amended or come into effect prior to the Closing,
in all material respects;
(d) use Commercially Reasonable Efforts to preserve their existing beneficial relationships
with agents, lessors, suppliers and customers, subject to the effects of the announcement of the
Contemplated Transactions and Buyer’s stated plans for the Business;
(e) not incur any obligations for borrowed money or purchase money indebtedness, whether or
not evidenced by a note, bond, debenture or similar instrument (nor enter into any guarantees with
respect to any such indebtedness), which indebtedness is secured by some or all of the properties
or assets of the Companies except indebtedness that will be paid in full at or prior to the
Closing;
Page 42 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(f) except in the ordinary course of business, not destroy or remove any material Records;
(g) promptly notify Buyer of any material emergency or other material change in or affecting
the Business or the properties or assets of the Companies, including any material Claim asserted or
material Proceeding initiated against Seller with respect to the Business or the Lion Shares or
against any of the Companies;
(h) not (i) grant or approve any increase in compensation, commission, bonus or other direct
or indirect remuneration payable to any employee of the Business within the 35 day period
immediately preceding the Closing Date (provided, however, that this clause (h)(i) shall not apply
to any such increases required pursuant to any CBA), or (ii) hire any new employee, other than to
fill a vacancy in an existing position; provided that Seller may make special bonus payments to
employees of the Business as it may deem necessary to preserve key employees, and such bonus
payments shall not increase the Lion/Ergon Debt;
(i) not enter into any Contract that would have been a Material Contract if it would have been
in effect on the Execution Date, except any contract, agreement or other arrangement entered into
in the ordinary course of business;
(j) not amend, modify or terminate any Material Contract or otherwise waive, release or assign
any material rights, Claims or benefits of Seller or any Company under any Material Contract or
enter into any derivative, option, hedge or futures contracts, except any derivative, option, hedge
or futures contracts entered into in the ordinary course of business;
(k) not enter into any new CBAs, or amend or modify in any material respect any existing CBA;
(l) not adopt any new or modified method of accounting (except in accordance with GAAP, Law or
regulatory guidelines, provided that Seller promptly informs Buyer in writing and in reasonable
detail of any such new or modified method of accounting) with respect to the properties or assets
of the Companies or the Business outside the ordinary course of business;
(m) provide Buyer with copies of the financial and operating reports prepared or maintained by
or for the Companies in the ordinary course of business that are reasonably requested by Buyer and
consistent in scope and format with the financial and operating reports previously provided to
Buyer;
(n) timely obtain, maintain in full force and effect, and comply, in all material respects,
with all provisions of all material Authorizations required in connection with the operation of the
properties or assets of the Companies or the Business;
(o) except in the ordinary course of business and except for cash used to repay any and all
indebtedness under the Paline Note, not sell, transfer, convey, assign, dispose of, exchange or
lease any of their properties or assets;
(p) not take any action to amend the Governing Documents of the Companies;
(q) not issue any capital stock, Share Equivalents or other equity interests of any of the
Companies;
Page 43 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(r) not convert, merge or consolidate any of the Companies with or into any other corporation
or entity;
(s) not adopt a plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization related to any of the Companies;
(t) not (i) amend any material Tax Return or settle or compromise any material Tax liability
or enter into any agreement or preliminary settlement with any Governmental Authority concerning
material Taxes; (ii) make or change any material Tax election; (iii) file with, or provide to, any
Governmental Authority any waiver extending the statutory period for assessment or reassessment of
material Taxes or any other waiver of restrictions on assessment or collection of any material
Taxes; (iv) change an annual accounting period for Tax purposes; or (v) affirmatively surrender any
right to claim a refund of material Taxes; and
(u) not agree, resolve or commit to do any of the actions prohibited in Section
6.1(e), (f), (h), (i), (j), (k), (l),
(o), (p), (q), (r), (s) or (t).
Section 6.2 Appropriate Action; Consents; Filings. During the Interim Period:
(a) Seller, Lion and Buyer shall each use Commercially Reasonable Efforts to (i) take, or
cause to be taken, all actions, and do, or cause to be done, all things that, in either case, are
necessary, proper or advisable under Law or otherwise to consummate and make effective the
Contemplated Transactions, (ii) obtain from the relevant Governmental Authorities all
Authorizations required to be obtained at or prior to the Closing by Seller, Lion or Buyer in
connection with the authorization, execution, delivery and performance of this Agreement and the
consummation of the Contemplated Transactions, and (iii) make all necessary filings, including
filings under the HSR Act and the DPA, and thereafter make any other required submissions, with
respect to this Agreement and the Contemplated Transactions required under any Law at or prior to
the Closing. Buyer, on the one hand, and Seller, on its own behalf and on behalf of Lion, on the
other hand, shall each bear the costs and expenses of their respective filings; provided that Buyer
shall bear all of the filing fees in connection with any such filings other than filings under the
HSR Act (which shall be borne equally by Buyer, on the one hand, and Seller, on the other).
Seller, Lion and Buyer shall each cooperate in connection with the making of all such filings,
including by providing copies of all such documents to the non-filing party and its advisors prior
to filing and, if requested, accepting all reasonable additions, deletions or changes suggested in
connection therewith. Additionally, Seller and Buyer shall consult with the other prior to any
meetings, by telephone or in person, with the staff of the applicable Governmental Authorities, and
(when customary in such circumstances and to the extent permitted by the applicable Governmental
Authority) each Party shall have the right to have a representative present at any such meeting.
Seller and Buyer shall each use Commercially Reasonable Efforts to furnish or cause to be furnished
all information required for any application or other filing to be made pursuant to any Law in
connection with the Contemplated Transactions.
(b) Seller, Lion 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) set
forth in Schedules 3.3(a)(iv) and 3.3(c)(vii), as applicable, or (ii) required
under any Material Contract in connection with the consummation of the Contemplated Transactions.
(c) Seller and Buyer shall each give prompt notice to the other of the receipt of any written
notice or other written communication from (i) any Person alleging that the consent of such Person
is or may be required in connection with the Contemplated Transactions or Buyer’s ownership of the
Lion Shares, (ii) any Governmental Authority or Stock Exchange in connection with the
Page 44 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Contemplated Transactions, (iii) any Governmental Authority, Stock Exchange or other Person
regarding the initiation or threat of initiation of any Claims against, relating to, or involving
or otherwise affecting the Companies, Buyer or Seller that relate to the consummation of the
Contemplated Transactions or Buyer’s ownership of the Lion Shares, or (iv) any Person regarding the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be
reasonably likely to (A) cause any condition to the obligations of the other party hereto to
consummate the Contemplated Transactions not to be satisfied, (B) cause a breach of the
representations, warranties or covenants of such party under this Agreement, or (C) delay or impede
the ability of either Lion, Buyer or Seller, respectively, to consummate the Contemplated
Transactions or to fulfill their respective obligations set forth herein.
(d) Buyer and Seller each agree to cooperate and to use Commercially Reasonable Efforts to
vigorously 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 or any Stock Exchange that
is in effect and that restricts, prevents or prohibits the consummation of the Contemplated
Transactions, including the vigorous pursuit of all available avenues of administrative and
judicial appeal and all available legislative action. Buyer shall take, or cause to be taken,
Commercially Reasonable Efforts required by any Governmental Authority as a condition to the
granting of any Authorization necessary for the consummation of the Contemplated Transactions or as
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; provided that
compliance with this Section 6.2(d) by Buyer shall not require Buyer to dispose of any of
its material assets or assume any material Obligations.
Section 6.3 Right of Entry; Access to Information.
(a) During the Interim Period, Buyer and the Diligence Representatives shall be afforded
reasonable access (under the supervision of Seller’s delegee, if required by Seller) upon
reasonable request (i) to the Records (but only to the extent such access is not prohibited by Law
or by Contract), personnel and operations of the Business, the Companies and their properties and
assets and the Lion Shares, and (ii) for purposes of conducting Phase I environmental site
assessments on the Real Property in accordance with the specifications for such an assessment by
the American Society for Testing and Materials (but not including any core sampling or any other
invasive sampling or testing procedures). In the event Buyer obtains any such Phase I
environmental site assessments, Buyer shall promptly provide accurate and complete copies thereof
to Seller.
(b) Buyer hereby acknowledges that any access to the properties and assets of the Companies by
Buyer or any representative, current or potential lender, appraiser, consultant or other Person
acting by or on behalf or at the request of Buyer (each, a “Diligence Representative”) shall be at
the sole risk, cost and expense of Buyer. Buyer shall and shall ensure that each Diligence
Representative complies with all safety, security and similar requirements imposed by any of the
Companies on its employees or contractors; provided that Seller or the Companies have provided to
Buyer a written description of such safety, security and other requirements. Before and after the
Closing, Buyer shall assume and indemnify, defend and hold harmless the Seller Indemnitees from and
against any and all Claims and Losses for personal injury, death or property damage to the extent
arising out of any of Buyer’s or any Diligence Representative’s entry upon or access to the
Records, personnel or operations of the Business or the Companies or their properties or assets, IN
EACH CASE REGARDLESS OF THE NEGLIGENCE OR OTHER FAULT (OTHER THAN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE SELLER INDEMNITEES OR ANY EMPLOYEE OF ANY SUCH SELLER INDEMNITEE) OF THE SELLER
INDEMNITEES OR ANY EMPLOYEE OF ANY SUCH SELLER INDEMNITEE. Buyer’s indemnification obligations
under this Section 6.3(b) shall not be subject to the Buyer Indemnification Deductible or
the Buyer Indemnification Ceiling.
Page 45 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) During the Interim Period, Buyer may seek, at Buyer’s expense, owner’s or lessee’s (as
applicable) policies of title insurance insuring the Companies’ title to or leasehold interests in
(as applicable) the Real Property and related insurable improvements, and one or more surveys of
the Real Property, and Seller shall, and shall cause the Companies to, provide such reasonable
cooperation to Buyer as Buyer may request in connection therewith.
(d) Buyer will hold any information obtained under Section 6.3(a) in accordance with
the provisions of the Confidentiality Agreement.
Section 6.4 Condition of Assets. In consummating the purchase and the sale of the
Lion Shares contemplated hereunder, Buyer acknowledges THAT NEITHER SELLER NOR LION MAKES ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, AS TO TITLE, CONDITION (INCLUDING ANY
ENVIRONMENTAL CONDITION), MERCHANTABILITY, PERFORMANCE, FITNESS (BOTH GENERALLY AND FOR ANY
PARTICULAR PURPOSE) OR OTHERWISE (WHICH WARRANTIES SELLER AND LION HEREBY EXPRESSLY DISCLAIM), OF
THE PROPERTIES OR ASSETS OF THE COMPANIES, OTHER THAN AS EXPRESSLY SET FORTH HEREIN OR IN THE
RELATED AGREEMENTS. Without limiting the generality of the preceding sentence, the provisions of
this Section 6.4 shall not alter, limit, modify or impair the representations and
warranties and covenants of Seller and Lion contained in this Agreement or the Related Agreements.
Section 6.5 Independent Investigation. As of the Closing, Buyer will have completed
its independent investigation, verification, analysis, review and evaluation of this Agreement, the
Related Agreements, the properties and assets of the Companies and the Lion Shares, as Buyer has
deemed necessary or appropriate. EXCEPT FOR THE REPRESENTATIONS EXPRESSLY MADE IN OR PURSUANT TO
THIS AGREEMENT OR THE RELATED AGREEMENTS, BUYER ACKNOWLEDGES AND AGREES THAT: (i) THERE ARE NO
REPRESENTATIONS, WARRANTIES, STATEMENTS, ASSURANCES OR GUARANTEES MADE BY OR ON BEHALF OF SELLER OR
LION, EXPRESS OR IMPLIED, AS TO (A) THE PROPERTIES OR ASSETS OF THE COMPANIES OR THE LION SHARES OR
(B) THE OBLIGATIONS, BUSINESS, RESULTS OF OPERATIONS, CONDITION (FINANCIAL, ENVIRONMENTAL OR
OTHERWISE) OR PROSPECTS RELATING TO THE BUSINESS, AND THAT IN MAKING ITS DECISION TO ENTER INTO
THIS AGREEMENT AND TO CONSUMMATE THE PURCHASE OF THE LION SHARES, BUYER HAS RELIED AND WILL RELY
SOLELY UPON ITS OWN INDEPENDENT INVESTIGATION, VERIFICATION, ANALYSIS AND EVALUATION; (ii) SELLER
AND LION DISCLAIM ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR
INFORMATION ORALLY OR IN WRITING MADE OR COMMUNICATED TO BUYER INCLUDING ANY OPINION, INFORMATION
OR ADVICE WHICH MAY HAVE BEEN PROVIDED TO BUYER BY SELLER OR LION OR ANY OF THEIR RESPECTIVE
AFFILIATES OR REPRESENTATIVES (INCLUDING ANY BACKCAST DATA OR MODELS PROVIDED BY SELLER OR LION,
WHICH HAVE BEEN PROVIDED FOR ILLUSTRATION PURPOSES ONLY, ANY CORRESPONDENCE FROM SELLER OR LION OR
ANY OF THEIR RESPECTIVE AFFILIATES, ANY PRESENTATION BY THE MANAGEMENT OF SELLER OR LION OR ANY OF
THEIR RESPECTIVE AFFILIATES AND ANY INFORMATION, DOCUMENT OR MATERIAL PROVIDED OR MADE AVAILABLE TO
BUYER, OR STATEMENTS MADE TO BUYER DURING SITE OR OFFICE VISITS, IN ANY DATAROOMS OR MANAGEMENT
PRESENTATIONS); (iii) NEITHER SELLER NOR LION NOR ANY OF THEIR RESPECTIVE AFFILIATES HAS MADE, AND
SELLER AND LION EACH HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, FITNESS (BOTH GENERALLY AND FOR A PARTICULAR PURPOSE), OR CONFORMITY TO MODELS OR
SAMPLES AND ANY OTHER REPRESENTATION OR
Page 46 of 67
Stock Purchase Agreement
Stock Purchase Agreement
WARRANTY, EXPRESS, STATUTORY OR IMPLIED, RELATING TO ANY OF THE PROPERTIES OR ASSETS OF THE
COMPANIES OR THE BUSINESS; AND (iv) NEITHER SELLER NOR LION MAKES ANY REPRESENTATIONS OR WARRANTIES
WITH RESPECT TO THE USE OR CONDITION (INCLUDING ENVIRONMENTAL USE OR CONDITION), THE PRESENCE OR
ABSENCE OF HAZARDOUS SUBSTANCES AT, ON, UNDER OR ADJACENT TO ANY PORTION OF THE PROPERTIES OR
ASSETS OF THE COMPANIES, COMPLIANCE WITH LAWS AND AUTHORIZATIONS; provided, however, the provisions
of this Section 6.5 shall not limit, alter or waive any claims for fraud in the negotiation
or execution of this Agreement.
Section 6.6 Supplement to Disclosure Schedules.
(a) Seller shall, on or before March 31, 2011, by written notice to Buyer, supplement or amend
the Seller Disclosure Schedules, to include information which has been posted in the Data Room on
or before the Execution Date to the extent necessary to make the Seller Disclosure Schedules true
and complete as of the Execution Date (“Updated Seller Information”). The written notice to Buyer
shall identify the actual Updated Seller Information. Upon request, Seller shall identify which
directory files in the Data Room such information was posted on or before the Execution Date. The
Seller Disclosure Schedules shall be deemed to have been amended to include the Updated Seller
Information and the Updated Seller Information shall be deemed to be waived by Buyer and Buyer
shall not be entitled to make a Claim thereon under this Agreement.
(b) Additionally, Seller may, from time to time after March 31, 2011 but prior to 9:00 A.M. on
the fourth day preceding the Closing Date, by written notice to Buyer, further supplement or amend
the Seller Disclosure Schedules to include new or additional information (“New Seller Information”)
which shall, in each instance, identify the actual New Seller Information. If Buyer has a right to
terminate this Agreement pursuant to Section 10.1(c)(ii) as a result of the condition to
the obligations of Buyer to effect the Contemplated Transactions set forth in Section
8.3(a) not being satisfied, without taking into consideration any New Seller Information for
purposes of qualifying any of the representations and warranties of Seller set forth in this
Agreement, but Buyer elects to proceed with the Closing, then the Seller Disclosure Schedules shall
be deemed to have been amended to include the New Seller Information, the New Seller Information
shall be deemed to be waived by Buyer and Buyer shall not be entitled to make a Claim thereon under
this Agreement.
(c) Buyer may, from time to time but prior to 9:00 A.M. on the fourth day preceding the
Closing Date, by written notice to Seller, supplement or amend the Buyer Disclosure Schedules to
include new or additional information (“New Buyer Information”) which shall, in each instance,
identify the actual New Buyer Information. If Seller has a right to terminate this Agreement
pursuant to Section 10.1(b) as a result of the condition to the obligations of Seller to
effect the Contemplated Transactions set forth in Section 8.2(a) not being satisfied,
without taking into consideration any New Buyer Information for purposes of qualifying any of the
representations and warranties of Buyer set forth in this Agreement, but Seller elects to proceed
with the Closing, then the Buyer Disclosure Schedules shall be deemed to have been amended to
include the New Buyer Information, the New Buyer Information shall be deemed to be waived by Seller
and Seller shall not be entitled to make a Claim thereon under this Agreement.
Section 6.7 Cooperation with Respect to Financial Statements. During the Interim
Period and after the Closing, Seller shall (and shall cause the Companies during the Interim Period
to) provide such reasonable cooperation as may be requested by Buyer with respect to modifications
to the Lion Financial Statements and preparation of such other financial information in such form
and for such periods as may be required pursuant to the requirements of Regulation S-X of the SEC
or other applicable U.S. federal securities Laws relating to Buyer’s acquisition of the Lion
Shares. Any such modifications
Page 47 of 67
Stock Purchase Agreement
Stock Purchase Agreement
shall be made, and any such cooperation shall be provided, at Buyer’s expense, for Third
Person expenses.
Section 6.8 Transactions Involving Delek Stock. During the Measurement Period: (a)
Buyer shall not, and it shall cause its Subsidiaries and Delek Group Ltd. (and Buyer shall use
Commercially Reasonable Efforts to cause its officers, directors and other Affiliates) not
to, trade in any shares of Delek Stock or any derivative securities with respect thereto (or enter
into any Contract or arrangement relating to any such trading); and (b) Seller and Lion shall not,
and they shall cause their respective Subsidiaries (and Seller and Lion shall use their
respective Commercially Reasonable Efforts to cause their respective officers, directors and other
Affiliates) not to, trade in any shares of Delek Stock or any derivative securities with respect
thereto (or enter into any Contract or arrangement relating to any such trading).
Section 6.9 Cooperation with Respect to Financing. During the Interim Period, Buyer
shall keep Seller reasonably informed regarding the status of Buyer’s activities (including status
of negotiations and documentation, perceived difficulties and the temporary postponement of or
termination of any activities) to obtain financing for the Contemplated Transactions; provided,
however, that Buyer shall not be required to seek or obtain financing or equity commitment letters
or similar undertakings from any Persons in order to satisfy its obligations hereunder, but shall
provide Seller with copies of such financing or equity commitment letters or similar undertakings
to the extent the same are obtained by Buyer.
Section 6.10 Corporate Structure of Buyer. Except (i) as set forth in Schedule
6.10, (ii) as otherwise contemplated by this Agreement or the Related Agreements or (iii) as
otherwise consented to by Seller in advance in writing, such consent not to be unreasonably
withheld, conditioned or delayed, during the Interim Period, Buyer shall not, and shall not permit
its Subsidiaries to:
(a) adopt or propose to adopt any material amendments to its or their Governing Documents as
in effect on the Execution Date;
(b) issue (except in accordance with the terms of securities of Buyer outstanding on the
Execution Date or in connection with incentive plans of Buyer in existence on the Execution Date),
split, combine or reclassify any shares of its or their capital stock, declare, set aside or pay
any dividend or other distribution (whether in cash, stock or property or any combination thereof)
in respect of its or their capital stock (except for regular quarterly dividends in the ordinary
course of business not in excess of the amount paid for the most recent quarter) or otherwise make
any payments to stockholders in their capacity as such or authorize any of the foregoing; or
(c) adopt a plan of complete or partial liquidation, dissolution, merger or consolidation of
such entity.
Section 6.11 Data Room CD ROMs. As promptly as practicable after the Execution Date
(and in any event within five Business Days after the Execution Date), Seller shall cause all
documents posted to the Data Room on or prior to the Execution Date (and not removed on or prior to
the Execution Date) to be copied to CD ROMs and ten copies of such CD ROMs to be delivered to
Buyer.
Section 6.12 Partial Assignment of Lion/Ergon Debt. Prior to the Closing Date, Seller
shall transfer and assign to Ergon Terminaling an amount equal to $50 million of the unpaid
principal balance of the Lion/Ergon Debt and provide Buyer at the Closing with copies of the
instruments assigning such portion of the Lion/Ergon Debt to Ergon Terminaling. The Paline Pipeline
Equity Transfer to Ergon Terminaling at the Closing shall be in full satisfaction of such $50
million of the Lion/Ergon Debt.
Page 48 of 67
Stock Purchase Agreement
Stock Purchase Agreement
ARTICLE VII
TAX MATTERS
TAX MATTERS
Section 7.1 Paline Taxes. In the case of any Taxes described in the definition of
“Paline Taxes” for a Straddle Period, the amount of such Taxes shall be determined based on an
interim closing of the books as of the close of business on the Closing Date; provided that
exemptions, allowances or deductions that are calculated on an annual basis (including depreciation
and amortization deductions) shall be allocated between the period ending on and including the
Closing Date and the period beginning after the Closing Date in proportion to the number of days in
each period.
Section 7.2 Transfer Taxes. Seller and Buyer agree that all Transfer Taxes relating
to the sale, conveyance, and transfer of the Lion Shares pursuant to this Agreement shall be borne
by Seller. Seller and Buyer agree that all Transfer Taxes relating to any other Contemplated
Transactions, except Transfer Taxes that are included in the Paline Taxes, shall be borne by Buyer.
Buyer and Seller shall cooperate to minimize any such Transfer Taxes.
Section 7.3 Tax Returns; Audits.
(a) For each Tax Return required by Law to be filed by any of the Companies for which the due
date (taking into account extensions) is on or after the date hereof and on or prior to the Closing
Date, Seller shall be responsible for causing such Tax Return to be timely filed, and the payment
by the Companies of all Taxes reflected thereon, and for each Tax Return required by Law to be
filed by any of the Companies for which the due date (taking into account extensions) is after the
Closing Date, including any such consolidated federal income Tax Return of the affiliated group of
which Lion is the common parent for any Tax Year ending on or prior to the Closing Date, Buyer
shall be responsible for causing such Tax Return to be timely filed and the payment of all Taxes
reflected thereon. Notwithstanding any other provision of this Agreement to the contrary, any
Losses relating to a failure of Buyer or Seller to satisfy their respective obligations under this
Section 7.3(a), except in the case of such a failure by Buyer to the extent related to any
Taxes that are included in the Paline Taxes, shall be limited to any interest and penalties imposed
by the applicable Governmental Authority after the Closing Date with respect to such failure.
(b) Not later than 20 days before the due date (taking into account extensions) of any Tax
Return of Lion and Paline Pipeline Company (and any affiliated, consolidated, combined or unitary
group of which either of Lion or Paline Pipeline Company is a member) that sets forth any Taxes
that are included in the Paline Taxes, other than (i) any Tax Return described in Section
7.3(c) and (ii) any Tax Return relating to any Transfer Taxes which Seller is required to
prepare and file, including a Transfer Tax Return of Paline Pipeline Company (a “Paline Tax
Return”), Buyer shall deliver to Seller a draft of the portion of such Paline Tax Return that
relates to Taxes included in the Paline Taxes for Seller’s review and comment. Seller shall have
10 days following the receipt of any such Paline Tax Return to provide its written comments to
Buyer regarding any Tax items that would affect the computation of the Paline Taxes. Buyer shall
make a good faith effort to consider any such written comments received from Seller. If Seller has
not delivered any such written comments to Buyer during such 10-day period, Seller shall be
considered to have accepted such Paline Tax Return. Notwithstanding the foregoing, Seller will
take the position, unless otherwise required by Law, for purposes of any Tax Return for Transfer
Taxes prepared and filed by Seller or its Affiliates, including the Companies, that the assets
transferred in the Paline Pipeline Equity Transfer were the equity interests in Paline Pipeline
Company and not the assets of Paline Pipeline Company.
(c) Not later than 20 days before the due date (taking into account extensions) of any
combined Texas franchise Tax Return of Seller and its Affiliates, including the Companies and
Paline
Page 49 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Pipeline Company, that sets forth any Taxes that are included in the Paline Taxes, Seller
shall deliver to Buyer a draft of the portion of such Tax Return that relates to the Companies and
Paline Pipeline Company for Buyer’s review and comment. Buyer shall have 10 days following the
receipt of any such Tax Return to provide its written comments to Seller regarding any Tax item
that would affect the computation of the Paline Taxes. Seller shall make a good faith effort to
consider any such written comments received from Buyer. If Buyer has not delivered any such
written comments to Seller during such 10-day period, Buyer shall be considered to have accepted
such Tax Return. Seller shall include the Companies and Paline Pipeline Company in Seller’s
combined group through the Closing Date for purposes of Seller’s Texas franchise Tax Returns and
none of the Companies will be designated as the reporting company for such Tax Returns.
(d) Buyer shall be responsible for causing any Paline Tax Return to be timely filed, and the
payment of all Taxes reflected thereon. Buyer shall provide to Seller a copy of any such Paline
Tax Return not later than 30 days after filing. Seller shall be responsible for causing any Tax
Return described in Section 7.3(c) to be timely filed, and the payment of all Taxes
reflected thereon. Seller shall provide to Buyer a copy of the portion of such Tax Return that
relates to the Companies and Paline Pipeline Company not later than 30 days after filing. Any Tax
Return described in this Section 7.3(d) that is actually filed (i) shall be consistent with
the determination of Paline Taxes in accordance with Section 2.4(a) and (ii) shall be
prepared in a manner consistent with practices followed in prior Tax Years except as otherwise
required by Law.
(e) Buyer and Seller shall (and shall cause their Affiliates to) cooperate fully, as and to
the extent reasonably requested by the other Party, at such other Party’s sole cost and expense, in
connection with the filing of Tax Returns with respect to the Companies and Paline Pipeline Company
and any Proceeding with respect to Taxes and the preparation of any allocation described in
Section 3.2(c)(i). Such cooperation shall include the retention and (upon a Party’s
request) the provision of records and information that are reasonably relevant to such Proceeding
and making employees available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Buyer and Seller agree (i) to retain all Records
with respect to Tax matters pertinent to the Companies and the Business relating to any taxable
period beginning before the Closing Date until the expiration of the applicable statute of
limitations (and, to the extent notified by Buyer or Seller, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements entered into with any
Governmental Authority, and (ii) to give the other Party reasonable written notice prior to
transferring, destroying, or discarding any such Records and, if the other Party so requests, Buyer
or Seller, as the case may be, shall allow the other Party to take possession of such Records at
the other Party’s sole expense.
Section 7.4 Tax Agreements. For Tax purposes, except as otherwise required by Law,
Buyer and Seller agree to treat any indemnity payment made by Seller to Buyer pursuant to this
Agreement, including any payment by Seller to Buyer of Paline Taxes pursuant to Section
2.4, as (i) a reduction to the Lion Shares Purchase Price to the extent thereof, (ii) then a
reduction to the Cash Repayment Amount to the extent thereof, and (iii) then a payment for the
Delek Shares, if issued pursuant to Section 3.2(a)(ii), and any indemnity payment made by
Buyer to Seller shall be treated as an increase to the Lion Shares Purchase Price. Each of Buyer
and Seller agree that, except as otherwise required by Law, neither it nor any of its Affiliates
will characterize the Contemplated Transactions for any Tax purposes in a manner inconsistent with
the description of such Contemplated Transaction as set forth in this Agreement. Notwithstanding
the immediately preceding sentence, and except as otherwise required by Law, each of Buyer and
Seller and their Affiliates will treat the transactions described in Section 3.2(c)(ii) and
Section 3.2(c)(iv)for Tax purposes as a sale of the Asphalt Inventory or the Excess
Inventory, as the case may be, followed by distributions of any sales proceeds received by an
Acquired Subsidiary to Lion followed by the use of such sales proceeds by Lion to repay a portion
of the
Page 50 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Lion/Ergon Debt. Buyer agrees that it will structure the purchase of the Lion Shares
hereunder so that, beginning the day after the Closing Date, the Companies will be members of the
federal income Tax consolidated group of which Buyer is the common parent. Each of Buyer and
Seller agrees that neither it nor any of its Affiliates will make an election to treat Paline
Pipeline Company following the Paline Conversion as a corporation for applicable federal or state
income Tax purposes.
Section 7.5 Survival. Notwithstanding anything in this Agreement to the contrary,
each Party’s representations, warranties, covenants, agreements, rights and obligations with
respect to any Tax or Tax matter covered by this Agreement shall survive the Closing and shall not
terminate until 30 days after the expiration of the statutes of limitations (including any and all
extensions thereof) applicable to such Tax or the assessment thereof (the “Tax Survival Period”);
provided that any representation, warranty, covenant, agreement, right or obligation that is the
subject of a Claim for indemnification hereunder which Claim was made prior to the expiration of
the Tax Survival Period shall survive with respect to such claim until such Claim is finally paid
or adjudicated.
Section 7.6 Third-Party Tax Claim Procedures. Except as otherwise provided in this
Section 7.6, (i) Buyer shall have the right to control the conduct of the response to or
defense of any Proceeding that could result in or give rise to an adjustment in the amount of the
Paline Taxes and (ii) Seller shall have the right to control the conduct of the response to or
defense of any Proceeding that could result in or give rise to an adjustment in the amount of Taxes
with respect to a Tax Return described in Section 7.3(c) or any Third Party Claim relating
to Taxes not involving a Proceeding that could result in or give rise to an adjustment in the
amount of the Paline Taxes. In the case of any Claim or Proceeding described in the preceding
sentence, the Party which has the right to control the conduct of the response to or defense of any
such Claim or Proceeding is hereafter referred to as the “Tax Control Party” and the other Party is
hereafter referred to as the “Tax Non-Control Party.” The following procedures shall apply in the
case of any Claim or Proceeding described in the first sentence of this Section 7.6
(except, in the case of a Proceeding involving a Tax Return described in Section 7.3(c),
only in respect of any matter relating to Taxes with respect to the Companies):
(a) The Tax Non-Control Party and any counsel or Tax advisor of its choice shall be entitled
to attend and participate in any such Claim or Proceeding at the Tax Non-Control Party’s sole cost
and expense.
(b) The Tax Control Party shall not agree to any settlement of such a Claim or Proceeding
without the prior written consent of the Tax Non-Control Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(c) If the Tax Control Party or any Affiliate thereof receives any written or oral
communication from a Governmental Authority with respect to such Claim or Proceeding, then the Tax
Control Party shall promptly notify the Tax Non-Control Party in writing of the existence of such
Claim or Proceeding and provide the Tax Non-Control Party with a copy of any written correspondence
relating to such Claim or Proceeding.
(d) If the Tax Control Party does not elect to control the conduct of the response to or
defense of any such Claim or Proceeding, the Tax Non-Control Party shall have the right to do so.
Any breach by the Tax Control Party of an obligation described in this Section 7.6
shall not relieve the Tax Non-Control Party of its obligations under Section 2.4(b), this
Article VII or Article XI except to the extent the Tax Non-Control Party is
actually prejudiced by such failure. The Parties agree that the procedures described in this
Section 7.6, and not the procedures described in Section 11.4(c), shall govern with
respect to Claims or Proceedings described in this Section 7.6 to the extent of
Page 51 of 67
Stock Purchase Agreement
Stock Purchase Agreement
any inconsistency in such procedures. The Parties shall (and shall cause their Affiliates to)
cooperate with each other in the conduct of any Claim or Proceeding described in this Section
7.6.
ARTICLE VIII
CLOSING CONDITIONS
CLOSING CONDITIONS
Section 8.1 Conditions to Obligations of Each Party Under this Agreement. The
respective obligations of Buyer, Seller and Lion to consummate the Contemplated Transactions shall
be subject to the satisfaction at or prior to the Closing of each of the following conditions, any
or all of which may be waived, in whole or in part, by Buyer, Seller and Lion, acting jointly, to
the extent permitted by Law:
(a) The applicable waiting period under the HSR Act and any extensions thereof shall have
terminated or expired and no temporary restraining order, preliminary or permanent injunction or
other judgment or Order issued by any court of competent jurisdiction or other statute, rule or
legal restraint of a Governmental Authority or Stock Exchange shall be in effect preventing the
consummation of the Contemplated Transactions.
(b) With regards to the DPA, either (i) CFIUS shall have advised the Parties in writing that
the Contemplated Transactions, and Buyer’s ownership of the Companies or the Lion Shares, is not a
covered transaction under the DPA; (ii) CFIUS shall have advised the Parties in writing that CFIUS
has determined to conclude its action with respect to the Contemplated Transactions and Buyer’s
ownership of the Companies or the Lion Shares, pursuant to the DPA; or (iii) the President of the
United States shall have announced, pursuant to 50 U.S.C. App. Section 721(d), his decision not to
exercise his authority under the DPA with respect to the Contemplated Transactions or Buyer’s
ownership of the Companies or the Lion Shares.
(c) There shall not be pending or threatened any Proceeding instituted by any Governmental
Authority or Stock Exchange to materially restrain, prohibit or otherwise materially interfere with
or obtain substantial monetary damages in connection with the consummation of the Contemplated
Transactions, Buyer’s ownership of the Companies or the Companies’ operation of the Business after
the Closing.
Section 8.2 Additional Conditions to Seller’s and Lion’s Obligations. The obligations
of Seller and Lion to effect the Contemplated Transactions shall be subject to the satisfaction at
or prior to the Closing of each of the following conditions, any or all of which may be waived by
Seller and Lion, in whole or in part, to the extent permitted by Law:
(a) Each of the representations and warranties of Buyer set forth in this Agreement shall be
true and correct in all respects (it being understood that, for purposes of determining
satisfaction of this Section 8.2(a), all materiality qualifications (other than “Threshold
Amount” qualifications) contained in such representations and warranties shall be disregarded) as
of the Execution Date and as of the Closing Date as though made on and as of the Closing Date
(except that, in each case, representations and warranties that speak as of a specified date (other
than the term “current” or “currently”) shall have been true and correct only on such date), except
for failures that have not had or would not be reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect, and Seller shall have received a certificate of an
executive officer of Buyer, dated the Closing Date, to such effect.
(b) Buyer shall have performed or complied in all material respects with each agreement and
covenant required by this Agreement to be performed or complied with by it on or prior to
Page 52 of 67
Stock Purchase Agreement
Stock Purchase Agreement
the Closing Date, and Seller shall have received a certificate of an executive officer of
Buyer, dated the Closing Date, to that effect.
(c) All Third-Person Consents and Authorizations listed in Schedule 8.2(c) shall have
been obtained.
(d) The Delek Shares to be issued pursuant to Section 3.2(a)(ii) shall have been
approved for listing by the New York Stock Exchange.
(e) The estimated amount of Lion Payments and Transfers to be made on, as of or prior to the
Closing Date, as reasonably estimated and valued by Seller, shall, in the aggregate, equal or
exceed the principal balance of the Lion/Ergon Debt as of the Closing less an amount equal to $16
million (such $16 million amount being the “Lion/Ergon Debt Threshold”); provided, however, that
Buyer shall have the right, but not the obligation, to agree to cause Seller to be paid at the
Closing an amount in cash (by wire transfer of immediately available funds) equal to the unpaid
principal balance of the Lion/Ergon Debt (after taking into account the Lion Payments and Transfers
to be made on, as of or prior to the Closing Date, as reasonably estimated and valued by Seller)
that is in excess of the Lion/Ergon Debt Threshold and in such event this Closing Condition shall
be deemed satisfied.
(f) Since the Execution Date, there must not have been any event or series of events which has
had or would reasonably be expected to have a Buyer Material Adverse Effect, and Seller shall have
received a certificate of either the chief executive officer or the chief financial officer of
Buyer, dated the Closing Date, to the effect that, to the knowledge of such officer, there has been
no such event or series of events.
Section 8.3 Additional Conditions to Buyer’s Obligations. The obligations of Buyer to
effect the Contemplated Transactions shall be subject to the satisfaction at or prior to the
Closing of each of the following conditions, any or all of which may be waived by Buyer, in whole
or in part, to the extent permitted by Law:
(a) Each of the representations and warranties of Seller set forth in this Agreement shall be
true and correct in all respects (it being understood that, for purposes of determining
satisfaction of this Section 8.3(a), all materiality qualifications (other than “Threshold
Amount” qualifications and the materiality or dollar amount qualifications set forth in Section
4.7(a) and Section 4.8) contained in such representations and warranties shall be
disregarded) as of the Execution Date and as of the Closing Date as though made on and as of the
Closing Date (except that, in each case, representations and warranties that speak as of a
specified date (other than the term “current” or “currently”) shall have been true and correct only
on such date), except for failures that have not had or would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect, 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 material respects with each agreement and
covenant required by this Agreement to be performed or complied with by it on or prior to the
Closing Date, and Buyer shall have received a certificate of an executive officer of Seller, dated
the Closing Date, to that effect.
(c) All Third-Person Consents and Authorizations listed in Schedule 8.3(c) shall have
been obtained.
(d) Since the Execution Date, there must not have been any event or series of events which has
had or would reasonably be expected to have a Material Adverse Effect, and Buyer shall have
Page 53 of 67
Stock Purchase Agreement
Stock Purchase Agreement
received a certificate of either the chief executive officer or the chief financial officer of
Seller, dated the Closing Date, to the effect that, to the knowledge of such officer, there has
been no such event or series of events.
ARTICLE IX
POST-CLOSING COVENANTS
POST-CLOSING COVENANTS
Section 9.1 Further Assurances. Seller and Buyer agree that, from time to time after
the Closing Date, they will execute and deliver, and will cause their respective Affiliates to
execute and deliver, such further instruments, and take, and cause their respective Affiliates to
take, such other actions as may be reasonably necessary to carry out the purposes and intents of
this Agreement and the Related Agreements.
Section 9.2 Access; Records. From and after the Closing Date, Buyer will (or will
cause the Companies to) and Seller will, afford to the applicable other Party and its authorized
representatives reasonable access during normal business hours to, and permission to take copies
of, any financial Records or accounts related to the pre-Closing ownership and operation of the
Business in the possession of such Party, and, if requested, will furnish to such other Party such
additional information and reasonably cooperate with such other Party in such other respects,
including the making of employees available to such other Party at such other Party’s expense
(except to the extent such other Party is entitled to indemnification therefor pursuant to
Article XI) as witnesses or deponents, as such other Party may reasonably request for (a)
financial reporting or (b) purposes of investigating Claims or conducting Proceedings. Buyer and
Seller shall not destroy or dispose of any such Records and accounts related to the pre-Closing
ownership and operation of the Business for a period of seven years, or such longer period as may
be required by Law, after the Closing Date without first offering to surrender to the applicable
other Party such Records and accounts. To the extent not prohibited by Law, from and after the
Closing Date, Seller shall promptly notify Buyer of any material Claims asserted or Proceedings
initiated against Seller or any of its Affiliates with respect to, as a result of, arising out of,
or in any way related to, Seller’s ownership, operation or conduct (as applicable) of the Lion
Shares or the Business prior to the Closing. The Parties agree and acknowledge that the Companies
shall be intended third party beneficiaries of this Section 9.2.
Section 9.3 Confidentiality.
(a) For a period of three years immediately following the Closing Date, except as may be
required by any Law or as otherwise expressly contemplated herein or as necessary to enforce any of
its rights hereunder or defend any Claim hereunder, Seller shall treat and hold (and shall cause
its Affiliates to treat and hold) and not disclose (or permit to disclose) to any Person any
information relating to the Companies or the Business which is non-public information, including
information relating to the Business, financial condition, operations, assets and liabilities of
the Companies, business plans, business methods, plant and equipment specifications, financial
reports, statements and projections, client lists, marketing materials, project plans and
production models (collectively, the “Confidential Information”) and refrain (and shall cause its
Affiliates to refrain) from using any of the Confidential Information except in connection with
this Agreement or the enforcement of their rights hereunder; provided, however, that Seller may
continue to use client lists in its possession as of the Closing Date to the same extent used in
Seller’s business during the 24-month period preceding the Closing Date, and Seller may disclose or
use such Confidential Information as follows: (i) in connection with the Contemplated Transactions,
to its Affiliates and their employees, lenders, counsel, or accountants, which shall agree to
maintain the confidentiality thereof; (ii) to comply with any Law or Order (or any order of a Stock
Exchange), provided, that prior to making any such disclosure the disclosing Person shall (A)
provide written notification to Buyer of any Proceeding of which it is aware, or any action taken
by a Stock Exchange,
Page 54 of 67
Stock Purchase Agreement
Stock Purchase Agreement
which may result in disclosure, the nature of such information to be disclosed, and a
description of the legal or Stock Exchange provisions requiring such disclosure, and (B) use all
Commercially Reasonable Efforts to limit or prevent such disclosure; (iii) to the extent that the
Confidential Information is or becomes generally available to the public through no fault of the
disclosing Person or its Affiliates; and (iv) to the extent that the same information becomes
available to the disclosing Person on a non-confidential basis from a source other than Seller or
its Affiliates, which source is not prohibited from disclosing such information by any legal,
contractual, or fiduciary obligation. The Parties agree and acknowledge that the Companies shall
be intended third party beneficiaries of this Section 9.3.
(b) From and after the Closing Date, the Confidentiality Agreement shall terminate and be of
no further force or effect. To the extent (and only to the extent) the Confidentiality Agreement
conflicts with the terms of this Agreement, the Confidentiality Agreement is hereby modified so
that it is consistent with this Agreement.
(c) The Parties agree and acknowledge that Buyer and the Companies would not have an adequate
remedy at law for the breach or threatened breach by Seller of the covenants and agreements set
forth in this Section 9.3 and, accordingly, Seller further agrees that, notwithstanding the
provisions of Section 12.10, Buyer or Lion shall, in addition to the other remedies which
may be available to it hereunder, be entitled to specific performance and injunctive relief to
enjoin Seller from such breach or threatened breach, without showing any actual damage or that
monetary damages would not provide an adequate remedy and without any bond or other security being
required from Buyer or Lion.
Section 9.4 Asphalt Inventory.
(a) From and after the Closing, Buyer shall cause the Companies to store the Asphalt Inventory
on behalf of Ergon Asphalt & Emulsions at no cost to Ergon Asphalt & Emulsions in substantially the
same manner and to follow substantially the same standard of care as the Companies did in storing
asphalt prior to the Closing. Ergon Asphalt & Emulsions shall continue to bear the physical risk
of loss over the Asphalt Inventory from and after the Closing (including during the Asphalt Sales
Period).
(b) During the period commencing on the later of the Closing Date and May 1, 2011, and ending
on October 31, 2011 (the “Asphalt Sales Period”), Buyer shall cause the Companies to sell the
Asphalt Inventory to Third Persons on behalf of Ergon Asphalt & Emulsions in accordance with the
Asphalt Sales Agreement.
(c) The Parties agree and acknowledge that Ergon Asphalt & Emulsions shall be an intended
third party beneficiary of this Section 9.4.
Section 9.5 Post-Closing Restrictions on Hiring of Key Employees.
(a) Until the second annual anniversary of the Closing Date, without the prior written consent
of Buyer, Seller shall not, and shall cause its Affiliates not to, hire any individual named in
Schedule 9.5(a). The Parties agree and acknowledge that the Companies shall be intended
third party beneficiaries of this Section 9.5(a).
(b) Until the second annual anniversary of the termination of the Seller Transition Services
Agreement, without the prior written consent of Seller, Buyer shall not, and shall cause its
Affiliates (including the Companies) not to, hire any individual named in Schedule 9.5(b).
The Parties agree and acknowledge that the Seller’s Subsidiaries shall be intended third party
beneficiaries of this Section 9.5(b).
Page 55 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) The Parties agree and acknowledge that Buyer, the Companies, Seller, and its Subsidiaries
would not have an adequate remedy at law for the breach or threatened breach by Seller or Buyer of
the covenants and agreements set forth in Section 9.5(a) or Section 9.5(b), and,
accordingly, the Parties further agree that, notwithstanding the provisions of Section
12.10, the Parties may, in addition to the other remedies which may be available to them
hereunder, file suit in equity to enjoin Seller, Buyer or Lion, as applicable, from such breach or
threatened breach, without showing any actual damage or that monetary damages would not provide an
adequate remedy and without any bond or other security being required from Buyer, Lion or Seller,
as applicable.
Section 9.6 Removal of Legend. As of the date the Delek Shares may be freely sold by
a Holder (as defined in the Registration Rights Agreement) without any restriction on the volume or
manner of sale or any other limitations under Rule 144 under the Securities Act, if the stock
certificate for such Delek Shares still bears the restrictive legend set forth in Exhibit
A, Buyer agrees, upon request of such Holder, to take all steps necessary to promptly effect
the removal of such restrictive legend from the stock certificate, and Buyer shall bear all third
party costs associated therewith, regardless of whether the request is made in connection with a
sale or otherwise, so long as such Holder provides to Buyer any information Buyer or its transfer
agent reasonably deems necessary to determine that the legend is no longer required under the
Securities Act or applicable state laws, including certifications that the Holder is not an
Affiliate of Buyer and regarding the length of time the Delek Shares have been held.
Section 9.7 Operation of Business. During the period commencing at the Closing and
ending at the Measurement Time, Buyer (with respect to the Companies and the Business) or Lion
shall, and shall cause the Companies to operate and maintain the properties and assets of the
Companies and the Business in the ordinary course of business (including maintenance of appropriate
insurance coverages with respect to the assets to be measured hereunder as of the Measurement Time)
and not enter into or effect any transaction outside the ordinary course of business; provided that
the Companies shall be permitted to enter into financing arrangements during such period and the
Parties agree that the impact of such financing arrangements shall not be taken into account in the
determination of Adjusted Net Working Capital.
ARTICLE X
TERMINATION
TERMINATION
Section 10.1 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, (i) in the event the Closing shall not have occurred as of
11:59 P.M. on the Termination Date or (ii) in the event any of the conditions set forth in
Section 8.1 or Section 8.2 shall have become incapable of fulfillment on or prior
to the Termination Date, provided that in the case of either clause (i) or (ii) the failure to
Close is not due to any breach by Seller or Lion of any of their respective representations,
warranties or covenants contained in this Agreement;
(c) by Buyer upon notice to Seller, (i) in the event the Closing shall not have occurred as of
11:59 P.M. on the Termination Date or (ii) in the event any of the conditions set forth in
Section 8.1 or Section 8.3 shall have become incapable of fulfillment on or prior
to the Termination Date, provided that in the case of either clause (i) or (ii) the failure to
Close is not due to any breach by Buyer of any of its representations, warranties or covenants
contained in this Agreement; or
Page 56 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(d) by Buyer upon notice to Seller at any time prior to the Closing (without any obligation to
state the reason therefor), which notice shall contain an irrevocable election to terminate this
Agreement and a release by Buyer of all Claims related to the Deposit.
Section 10.2 Effect of Termination.
(a) General. Except for this Section 10.2, Section 11.6(d),
Section 11.6(e) and Article XII (and the definitions related to any of the
foregoing), this Agreement shall, upon termination hereof pursuant to Section 10.1,
forthwith become of no further force or effect and (i) there shall be no liability in connection
with this Agreement on the part of any of Seller, Buyer or Lion or any of their respective officers
or directors to any other Party hereto and (ii) all rights and obligations of any Party under this
Agreement shall cease; provided, however, that any such termination shall not relieve any Party
from liability for any material breach of this Agreement occurring prior to such termination,
except as provided below in this Section 10.2.
(b) Deposit.
(i) Notwithstanding Section 10.2(a) to the contrary, in the event this Agreement is
terminated by Buyer pursuant to Section 10.1(d), except for this Section 10.2,
Section 11.6(d), Section 11.6(e) and Article XII (and the definitions
related to any of the foregoing), this Agreement shall become of no further force or effect and (A)
Seller shall be entitled to retain the Deposit and any interest earned thereon as a termination
fee, (B) there shall be no liability in connection with this Agreement on the part of any of
Seller, Buyer or Lion or any of their respective officers or directors to any other Party hereto,
(C) all rights and obligations of any Party under this Agreement shall cease and (D) each Party
hereby waives any and all rights to make any Claims against any other Party with respect to such
other Party’s obligations under this Agreement. For the avoidance of doubt, in no event shall
Seller or Lion have the right to (and they hereby waive, release and discharge any right to) (1)
seek or otherwise obtain specific performance of the Obligations of Buyer under this Agreement, or
(2) collect any amounts in excess of the Deposit upon any termination of this Agreement pursuant to
Section 10.1(d).
(ii) In the event (A) all of the conditions to the obligations of Buyer to consummate the
Contemplated Transactions set forth in Section 8.1 and Section 8.3 shall have been
fully satisfied on or before the Termination Date (other than the execution and delivery of the
Related Agreements), (B) notwithstanding full satisfaction of all such Closing Conditions Buyer
refuses to consummate the Contemplated Transactions while Seller and Lion stand ready and able to
complete the Closing (including the transactions contemplated to be completed by Seller and Lion
pursuant to Section 3.2, other than the execution and delivery of the Related Agreements),
(C) Buyer has not terminated this Agreement pursuant to Section 10.1, and (D) this
Agreement is terminated by Seller pursuant to Section 10.1(b), then, except for this
Section 10.2, Section 11.6(d), Section 11.6(e) and Article XII (and
the definitions related to any of the foregoing), this Agreement shall become of no further force
or effect, and (1) Seller shall be entitled to retain the Deposit and any interest earned thereon,
without any further action, as Seller’s sole remedy and source of recovery for any Claims or Losses
related to or arising from Buyer’s breach of this Agreement or the failure of the Closing to occur,
and the Parties shall mutually release each other from any residuary Claims they may have against
each other for Losses related to or arising from any breach of this Agreement, the failure of the
Closing to occur or the negotiations and execution of this Agreement, (2) there shall be no
liability in connection with this Agreement on the part of any of Seller, Buyer or Lion or any of
their respective officers or directors to any other Party hereto, (3) all rights and obligations of
any Party under this Agreement shall cease and (4) each Party hereby waives any and all rights to
make any Claims against any other Party with respect to such other Party’s obligations under this
Agreement. In no event shall Seller, Lion or any of their respective Affiliates seek
Page 57 of 67
Stock Purchase Agreement
Stock Purchase Agreement
equitable relief or seek to recover from Buyer or any of its Affiliates any money damages in
excess of the Deposit upon any termination of this Agreement under the circumstances described in
this Section 10.2(b)(ii), and Seller and Lion hereby waive, release and discharge any and
all rights with respect to the foregoing. For the avoidance of doubt, in no event shall Seller or
Lion have the right to seek or otherwise obtain specific performance of the Obligations of Buyer
under this Agreement.
(iii) If this Agreement is terminated pursuant to Section 10.1 for any reason other
than the reasons described in Section 10.2(b)(i) and Section 10.2(b)(ii), then
Seller shall return to Buyer the Deposit, plus interest actually earned thereon in the segregated
account referred to in Section 2.3(a) from the Execution Date to the date of such return,
on the first Business Day after the date of such termination of this Agreement, by wire transfer of
immediately available funds to an account or accounts designated in writing by Buyer.
(iv) Each of the Parties acknowledges that the retention of the Deposit and any interest
thereon by Seller is not a penalty, but is liquidated damages in a reasonable amount that will
compensate Seller in the circumstances in which such Deposit may be retained for the efforts and
resources expended and the opportunities foregone while negotiating this Agreement and in reliance
on this Agreement and on the expectation of the consummation of the Contemplated Transactions,
which amount would otherwise be impracticable to calculate with precision.
Section 10.3 Specific Performance. In addition to any other right or remedy to which
Buyer may be entitled under this Agreement (including this Article X), at law or in equity,
in the event all of the conditions to the obligations of Seller and Lion to consummate the
Contemplated Transactions set forth in Section 8.1 and Section 8.2 shall have been
fully satisfied on or before the Termination Date (other than the execution and delivery of the
Related Agreements), and, notwithstanding full satisfaction of all such Closing Conditions Seller
or Lion refuses to consummate the Contemplated Transactions while Buyer stands ready and able to
complete the Closing (including the transactions contemplated to be completed by Buyer pursuant to
Section 3.2), Buyer shall be entitled to enforce the obligations of Seller and Lion to
consummate the Contemplated Transactions pursuant to this Agreement by a decree of specific
performance and to temporary, preliminary and permanent injunctive relief, without posting any bond
or other undertaking.
ARTICLE XI
INDEMNIFICATION AND REMEDIES
INDEMNIFICATION AND REMEDIES
Section 11.1 Survival of Representations and Warranties.
(a) Subject to the limitations and other provisions of this Agreement, the representations and
warranties of Seller contained in this Agreement shall survive the Closing and shall remain in full
force and effect for a period of two years after the Closing Date; provided, however:
(i) the representations and warranties in Section 4.13 shall survive the Closing
until
the expiration of the statute of limitations (including all extensions thereof) applicable to the
underlying matter giving rise to that Claim; and
(ii) the representations and warranties in Section 4.1(a),
Section 4.1(b),
Section 4.2 and Section 4.3 (the “Seller Fundamental Representations and
Warranties”) shall survive the Closing forever.
(b) Subject to the limitations and other provisions of this Agreement, the representations and
warranties of Buyer contained in this Agreement shall survive the Closing and shall
Page 58 of 67
Stock Purchase Agreement
Stock Purchase Agreement
remain in full force and effect for a period of two years after the Closing Date; provided,
however, that the representations and warranties in Section 5.1 and Section 5.2
(the “Buyer Fundamental Representations and Warranties”) shall survive the Closing forever.
Section 11.2 Indemnification Provisions for Benefit of Buyer.
(a) If the Closing occurs, Seller hereby agrees to indemnify, defend and hold harmless the
Buyer Indemnitees from and against any and all Claims and Losses actually suffered or incurred by
them to the extent arising out of, resulting from or relating to:
(i) the breach of any representation or warranty of Seller contained in this Agreement
(“Seller Representation and Warranty Losses”);
(ii) the breach of any covenant or agreement of Seller (or Lion prior to the Closing)
contained in this Agreement; and
(iii) any material misstatement in or material omission from any Seller Provided Materials and
arising out of, resulting from or relating to Buyer’s negotiations with the Lion Minority
Shareholders for the purchase of their equity interests in Lion, to the extent such Seller Provided
Materials are included in the information or materials that Buyer provides to the Lion Minority
Shareholders in connection with the purchase of their equity interests in Lion.
(b) No Claim may be asserted or commenced against Seller pursuant to Section
11.2(a)(i) unless written notice of such Claim is received by Seller describing in reasonable
detail the facts and circumstances with respect to the subject matter of such Claim on or prior to
the date on which the representation or warranty on which such Claim is based ceases to survive as
set forth in Section 11.1(a); provided, however, that no such Claim may be asserted or
commenced by any Buyer Indemnitee against Seller to the extent arising out of, resulting from or
relating to any breach of any representation or warranty of which Buyer had Knowledge on or prior
to the Closing Date and for which Buyer failed to deliver written notice thereof to Seller prior to
the Closing.
(c) No Claim may be made against Seller for indemnification pursuant to Section
11.2(a)(i) unless the aggregate amount of all Seller Representation and Warranty Losses shall
exceed the Seller Indemnification Deductible, after which point Seller will be obligated only to
indemnify, defend and hold harmless the Buyer Indemnitees from and against such Losses to the
extent they exceed the Seller Indemnification Deductible but are less than or equal to the Seller
Indemnification Ceiling. Notwithstanding the foregoing provisions of this Section 11.2(c):
(i) the limitations on Seller’s indemnification obligations set forth in the preceding sentence of
this Section 11.2(c) shall not apply to Losses resulting from fraud by Seller or Lion in
the negotiation or execution of this Agreement; and (ii) the Seller Indemnification Deductible
shall not apply and the Seller Indemnification Ceiling shall be increased by the aggregate amount
of principal payments irrevocably paid by Lion under the New Lion Note, but only with respect to
any Losses resulting from any breach by Seller of the Seller Fundamental Representations and
Warranties.
(d) For purposes of this Section 11.2, in the event Buyer suffers a Loss due to a
breach by Seller of any representation and warranty that is qualified as to materiality by the
words “except for any matters that would not result in an adverse effect in excess of the Threshold
Amount,” or words of similar effect, then the entire amount of the Loss resulting from such breach
(and not just the amount in excess of the Threshold Amount) shall be included in the calculation of
the Seller Representation and Warranty Losses; provided that the provisions of this Section
11.2(d) shall not be construed to provide for the aggregation of Losses that are less than the
Threshold Amount for separate
Page 59 of 67
Stock Purchase Agreement
Stock Purchase Agreement
breaches of the same representation and warranty that do not arise out of the same set of
facts or circumstances.
(e) For the avoidance of doubt, unless consented to in writing by Buyer, Seller shall not have
the right to reduce the amount of the unpaid principal or the accrued and unpaid interest under the
New Lion Note in lieu of indemnifying, defending and holding harmless the Buyer Indemnitees from
and against any Claims or Losses for which Seller is liable under this Agreement.
Section 11.3 Indemnification Provisions for Benefit of Seller.
(a) If the Closing occurs, Buyer hereby agrees to indemnify, defend and hold harmless the
Seller Indemnitees from and against any and all Claims and Losses actually suffered or incurred by
any of them to the extent arising out of, resulting from or relating to:
(i) the breach of any representation or warranty of Buyer contained in this Agreement
(“Buyer
Representation and Warranty Losses”);
(ii) the breach of any covenant or agreement of Buyer contained in this Agreement; and
(iii) Buyer’s negotiations with or disclosures to the Lion Minority Shareholders for the
purchase of their equity interests in Lion (excluding any Claim or Loss of the type and to the
extent described in Section 11.2(a)(iii)).
(b) No Claim may be asserted or commenced against Buyer pursuant to Section 11.3(a)(i)
unless written notice of such Claim is received by Buyer describing in reasonable detail the facts
and circumstances with respect to the subject matter of such Claim on or prior to the date on which
the representation or warranty on which such Claim is based ceases to survive as set forth in
Section 11.1(b); provided, however, that no such Claim may be asserted nor commenced by any
Seller Indemnitee against Buyer to the extent arising out of, resulting from or relating to any
breach of any representation or warranty of which Seller had Knowledge on or prior to the Closing
Date and for which Seller failed to deliver written notice thereof to Buyer prior to the Closing.
(c) No Claim may be made against Buyer for indemnification pursuant to Section
11.3(a)(i) unless the aggregate amount of all Buyer Representation and Warranty Losses shall
exceed the Buyer Indemnification Deductible, after which point Buyer will be obligated only to
indemnify, defend and hold harmless the Seller Indemnitees from and against such Losses to the
extent they exceed the Buyer Indemnification Deductible but are less than or equal to the Buyer
Indemnification Ceiling. Notwithstanding the foregoing provisions of this Section 11.3(c),
the limitations on Buyer’s indemnification obligations set forth in the preceding sentence of this
Section 11.3(c) shall not apply to Losses resulting from (i) any breach by Buyer of the
Buyer Fundamental Representations and Warranties or (ii) fraud by Buyer in the negotiation or
execution of this Agreement.
Section 11.4 Indemnification Procedures.
(a) A Seller Indemnitee or Buyer Indemnitee, as the case may be (for purposes of this
Section 11.4, the “Indemnified Party”), shall give the indemnifying party under Section
11.2 or Section 11.3, as applicable (for purposes of this Section 11.4, the
“Indemnifying Party”), prompt written notice of any matter which it has determined has given or
could reasonably be expected to give rise to a right of indemnification under this Agreement,
stating the amount of the Loss, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in respect of which
Page 60 of 67
Stock Purchase Agreement
Stock Purchase Agreement
such right of indemnification is claimed or arises; provided, however, that the failure to
provide such notice shall not release the Indemnifying Party from its obligations under this
Article XI except to the extent the Indemnifying Party is actually prejudiced by such
failure.
(b) If any Third Person shall notify an Indemnified Party with respect to any matter (a
“Third-Party Claim”) that may give rise to a Claim for indemnification against the Indemnifying
Party under this Article XI, then the Indemnified Party shall promptly (and in any event
within five Business Days after receiving notice of the Third-Party Claim) notify the Indemnifying
Party thereof in writing; provided, however, that the failure to provide such notice shall not
release the Indemnifying Party from its obligations under this Section 11.4 except to the
extent the Indemnifying Party is actually prejudiced by such failure.
(c) Except as provided in Section 7.6, the Indemnifying Party will have the right to
assume and thereafter conduct the defense of the Third-Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party; provided that the Indemnifying Party will not,
without the prior written consent of the Indemnified Party (which consent may not be unreasonably
withheld, conditioned or delayed), consent to the entry of any judgment or enter into any
settlement with respect to the Third-Party Claim if, in either case, it would (i) include the
admission of any liability or responsibility on behalf of the Indemnified Party, (ii) include any
financial obligation to be paid by the Indemnified Party or (iii) include or be reasonably be
expected to have any material sanction, material restriction or material adverse effect on or
change to the business, properties, financial condition or results of operations of the Indemnified
Party (unless and to the extent such sanction, restriction, adverse effect or change would
reasonably be expected to have been imposed absent such Claim).
(d) Unless and until the Indemnifying Party assumes the defense of the Third-Party Claim as
provided in Section 11.4(c), the Indemnified Party may defend against the Third-Party Claim
in any manner it may reasonably deem appropriate. The Indemnifying Party shall be liable for the
fees and expenses of counsel employed by the Indemnified Party for any period during which the
Indemnifying Party has not assumed the defense thereof or assumes the defense but asserts any
limitation on its obligation to indemnify or defend which reduces its indemnification actions (in
each case provided that the Indemnifying Party is ultimately required to indemnify the Indemnified
Party with respect to such Third Party Claim).
(e) In no event will the Indemnified Party consent to the entry of any judgment or enter into
any settlement with respect to the Third-Party Claim without the prior written consent of the
Indemnifying Party (which consent may not be unreasonably withheld, conditioned or delayed).
Section 11.5 Determination of Losses; Apportionment of Losses.
(a) The Losses giving rise to any indemnification obligation hereunder shall be limited to the
actual loss suffered by the Indemnified Party (i.e., reduced by any insurance proceeds or other
payment or monetary recoupment (but excluding Tax benefits) actually received, realized or retained
by the Indemnified Party as a result of the events giving rise to the claim for indemnification net
of any expenses related to the receipt of such proceeds, payment or recoupment, excluding any
retrospective premium adjustments, if any) occasioned by such loss or damage. The Indemnified
Party shall notify the Indemnifying Party promptly of any proceeds, payment or monetary recoupment
actually received by the Indemnified Party and if the Indemnifying Party has previously made any
payment to the Indemnified Party, the Indemnified Party shall promptly pay any amount obtained
thereby to the Indemnifying Party to the extent of such amount being previously paid by the
Indemnifying Party to the Indemnified Party. Upon the request of the Indemnifying Party, the
Indemnified Party shall provide the Indemnifying Party with information sufficient to allow the
Indemnifying Party to calculate the amount of
Page 61 of 67
Stock Purchase Agreement
Stock Purchase Agreement
the indemnity payment in accordance with this Section 11.5. An Indemnified Party
shall take all reasonable steps to mitigate damages in respect of any Claim for which it is seeking
indemnification and shall use Commercially Reasonable Efforts to minimize any costs or expenses
associated with such Claim.
(b) Without altering or affecting in any manner the foregoing provisions of this Article
XI, to the extent that an Indemnifying Party and any one or more Indemnified Parties are each
liable hereunder for Losses arising out of the same set of facts, circumstances or conditions, the
Obligations associated with such Losses will be apportioned between the Indemnifying Party and the
Indemnified Parties in proportion to the extent to which the activities of each such Party
contributed to the cause of the Losses, taking into consideration all pertinent factors.
Section 11.6 Further Limitations on Liability; Releases.
(a) Each Party acknowledges and agrees that such Party’s sole and exclusive remedies with
respect to any and all Claims relating to this Agreement and the Related Agreements and the
Contemplated Transactions (other than Claims of, or causes of action arising from fraud in the
negotiation or execution of this Agreement and the Related Agreements) shall be pursuant to the
remedies expressly set forth in this Agreement and the Related Agreements.
(b) If the Closing occurs, each Party, on its own behalf and on behalf of each of its
successors and assigns, hereby expressly releases, waives and discharges, and covenants not to xxx
or otherwise assert any rights, remedies, Claims or other recourse against another Party or any of
such other Party’s predecessors, successors or assigns with respect to, any cause of action or
Claim not expressly provided for or retained in this Agreement or the Related Agreements, to the
maximum extent permitted by Law.
(c) To the extent necessary to give full effect to the provisions of this Section
11.6: (i) Buyer agrees that the rights, remedies and Claims of each of the other Buyer
Indemnitees and each of its and their respective successors and assigns with respect to any of the
matters referenced in the foregoing provisions of this Section 11.6 shall be limited to the
same extent as provided above with respect to Buyer; and (ii) Seller agrees that the rights,
remedies and Claims of each of the other Seller Indemnitees and each of its and their respective
successors and assigns with respect to any of the matters referenced in the foregoing provisions of
this Section 11.6 shall be limited to the same extent as provided above with respect to
Seller. Each of the Parties acknowledges and agrees that with respect to any and all Claims
relating to fraud in the negotiation or execution of this Agreement and the Related Agreements, the
Parties each shall have all remedies available under Law, subject to the provisions of Section
12.9 and Section 12.11.
(d) Notwithstanding anything in this Agreement to the contrary, no Party hereto shall be
entitled to recover from any other Party hereto any amount in respect of exemplary, punitive,
special, indirect, consequential, remote or speculative damages, including lost profits (except, to
the extent that any of the foregoing are actually paid to a Third Person with respect to a
Third-Party Claim, in which event such damages shall be considered part of Losses and shall be
covered by the indemnification provisions set forth in this Article XI, as applicable).
(e) All indemnifications, releases, disclaimers, and limitations on liability in this
Agreement, including those in this Article XI, shall apply even in the event of the sole,
joint or concurrent, active or passive, negligence, strict liability or fault of the Person whose
liability is indemnified, released, disclaimed or limited (excluding gross negligence or willful
misconduct).
Page 62 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Section 11.7 No Multiple Recoveries. Any liability for indemnification hereunder
shall be determined without duplication of recovery by reason of the state of facts giving rise to
such liability constituting a breach of more than one representation, warranty, or covenant.
ARTICLE XII
MISCELLANEOUS
MISCELLANEOUS
Section 12.1 Entire Agreement; Amendment; Waivers. This Agreement, the
Confidentiality Agreement and the Related Agreements constitute the entire agreement and
understanding of the Parties, and supersede all prior agreements and undertakings, both written and
oral, among the Parties, with respect to the subject matter hereof and thereof. This Agreement may
not be amended except by an instrument in writing authorized by Seller, Lion and Buyer and signed
by Seller, Lion and Buyer. At any time prior to the Closing, either Seller or Buyer may (i) extend
the time for the performance of any of the obligations or other acts of the other, (ii) waive any
inaccuracies in the representations and warranties of the other contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance by the other with any of the agreements,
covenants or conditions contained herein. Except as contemplated by Section 6.6, any such
extension or waiver shall be valid only if set forth in an instrument in writing signed by the
Party to be bound thereby. No failure or delay on the part of any Party 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 12.2 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party and its successors and permitted assigns, and to the benefit of
(a) the Buyer Indemnitees, (b) the Seller Indemnitees and (c) the Persons expressly referred to as
intended third party beneficiaries of Section 9.2, Section 9.3, Section 9.4
and Section 9.5 (in the case of each of clause (a), (b) and (c), only with respect to the
specific provisions that refer to such Persons), 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 12.3 Assignment. This Agreement shall not be assigned by any Party except
with the prior written consent of the other Parties; provided, however, that Buyer may assign its
rights, title and interest hereunder and under the Related Agreements to lenders and other
creditors, or agents or trustees acting on behalf of any of the foregoing (collectively, a
“Collateral Assignee”), as security for the performance of obligations of Buyer to such financing
sources, on the condition and with the understanding that, (a) to the extent of any such
assignment, the Collateral Assignee shall be entitled, only upon written notice to Seller (and any
of Seller’s Affiliates who are parties to the Related Agreements) of Collateral Assignee’s exercise
of any such security (a “Foreclosure Notice”), to exercise any and all rights of Buyer hereunder
and under the Related Agreements, (b) Seller and its Affiliates shall be entitled to rely
unconditionally upon a Foreclosure Notice in making any payments or performance hereunder and under
the Related Agreements to or for the benefit of the Collateral Assignee (or its designee(s)
identified in the Foreclosure Notice), without thereby incurring any liability to Buyer or any of
Buyer’s Affiliates, (c) neither Seller nor any of its Affiliates shall be obligated to grant any
extensions of time for performance, waive any of their rights or remedies hereunder or under the
Related Agreements, or assume any additional obligations or liabilities under this Agreement or the
Related Agreements as a result of any collateral assignment of this Agreement to a Collateral
Assignee or a Collateral Assignee’s exercise of its security so granted to it by Buyer and (d)
neither a collateral assignment of this Agreement or the Related Agreements by Buyer to a
Collateral Assignee nor any exercise by a Collateral Assignee of any security so granted to it by
Buyer shall release Buyer from any of its obligations hereunder or under any Related Agreement to
which it is a party.
Page
63 of 67
Stock Purchase Agreement
Stock Purchase Agreement
Without limiting the application of the foregoing provisions of this Section 12.3,
Buyer’s rights under this Agreement may not be assigned (or reassigned) unless the assignee
expressly assumes the obligations of Buyer under this Agreement and shall not be effective with
respect to Seller unless and until a copy of the instrument of assignment and assumption, executed
by the assignor and assignee, has been delivered to Seller. No assignment by any Party of any or
all of its rights and interests hereunder shall relieve such Party of any of its obligations
hereunder.
Section 12.4 Public Announcements. None of Seller, Lion or Buyer will issue or make
any press releases or similar public announcements concerning this Agreement or the Contemplated
Transactions without the other Parties’ prior written consent, which shall not be unreasonably
withheld, conditioned or delayed, except as may be required by any Law or any applicable Stock
Exchange requirement. In the event that a Party believes it is required to issue or make any press
release or announcement, such Party shall (a) give prompt notice thereof to the other Parties, (b)
allow such other Parties reasonable opportunity to review and provide comments with respect to the
content of such press release or announcement and (c) use Commercially Reasonable Efforts to
incorporate any reasonable comment from any other Party prior to any release or announcement.
Section 12.5 Expenses. Except as otherwise expressly provided herein, all costs and
expenses (including fees and disbursements of counsel, accountants and other experts) incurred by
Seller or Lion in connection with Seller’s or Lion’s negotiation, execution and delivery of this
Agreement and the Related Agreements and performance by Seller or Lion of the Contemplated
Transactions shall be paid by Seller; provided, however, that such costs and expenses that relate
to Lion’s engagement of counsel, accountants and other experts to advise Lion’s board of directors
regarding the Contemplated Transactions and the treatment of Lion Minority Shareholders, shall be
paid by Lion. Except as otherwise expressly provided herein, all costs and expenses (including
fees and disbursements of counsel, accountants and other experts) incurred by Buyer in connection
with Buyer’s negotiation, execution and delivery of this Agreement and the Related Agreements and
the performance by Buyer of the Contemplated Transactions shall be paid by Buyer.
Section 12.6 Headings; Disclosure Schedules; Data Room.
(a) 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.
(b) The Seller Disclosure Schedules shall be arranged in sections corresponding to the
numbered Sections contained in Article IV. In addition, the Seller Disclosure Schedules
may be amended or supplemented in accordance with the provisions of Section 6.6. Any
disclosure of an item in a specific section of the Seller Disclosure Schedules shall be deemed to
have been disclosed in any other section of the Seller Disclosure Schedules to which such
disclosure is clearly relevant from the text of such disclosure. The listing (or inclusion of a
copy) of a document or other item in the Seller Disclosure Schedules shall be adequate to disclose
an exception to a representation or warranty made herein if the nature and relevance of such
exception is reasonably apparent from the listing (or inclusion of a copy) of such document. In
addition, the posting of any document or other item in the Data Room on or before the Execution
Date shall be deemed to be a disclosure of such document or other item in any section of the Seller
Disclosure Schedules to which such document or other item is clearly relevant; provided, however,
this sentence shall only be applicable until March 31, 2011 and thereafter no document or other
item posted in the Data Room, regardless of whether posted before or after the Execution Date,
shall be deemed to be a disclosure of such document or other item in any section of the Seller
Disclosure Schedules as a result of being posted in the Data Room.
Page 64 of 67
Stock Purchase Agreement
Stock Purchase Agreement
(c) The Buyer Disclosure Schedules shall be arranged in sections corresponding to the numbered
Sections contained in Article V. In addition, the Buyer Disclosure Schedules may be
amended or supplemented in accordance with the provisions of Section 6.6. Any disclosure
of an item in a specific section of the Buyer Disclosure Schedules shall be deemed to have been
disclosed in any other section of the Buyer Disclosure Schedules to which such disclosure is
clearly relevant from the text of such disclosure. The listing (or inclusion of a copy) of a
document or other item in the Buyer Disclosure Schedules shall be adequate to disclose an exception
to a representation or warranty made herein if the nature and relevance of such exception is
reasonably apparent from the listing (or inclusion of a copy) of such document.
Section 12.7 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) or by a national overnight courier service to the relevant Party
at the following addresses or sent by facsimile (with transmission confirmation) to the following
numbers:
If to Seller or (prior to Closing) Lion, to:
Ergon, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxxx, Chairman of the Board
Facsimile: 000-000-0000
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxxx, Chairman of the Board
Facsimile: 000-000-0000
with copies (which shall not constitute notice) to:
Xxxxxx & Xxxxx, P.A.
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: J. Xxxxx Xxxxxx
Facsimile: 601-932-4400
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: J. Xxxxx Xxxxxx
Facsimile: 601-932-4400
If to Buyer or (after Closing) Lion, to:
Delek US Holdings, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
Delek US Holdings, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
with copies (which shall not constitute notice) to:
Delek US Holdings, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
0000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
or to such other address or facsimile number as Seller or Buyer may, from time to time, designate
in a written notice given in accordance with this Section 12.7. Any such notice or
communication shall be
Page 65 of 67
Stock Purchase Agreement
Stock Purchase Agreement
effective (i) if delivered in person or by courier, upon actual receipt by or on behalf of the
intended recipient, (ii) 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 (iii) if mailed in
accordance with the foregoing provisions, upon the earlier of the third Business Day after deposit
in the mail and the date of delivery as shown by the return receipt therefor.
Section 12.8 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 Contemplated Transactions is not affected in any
manner materially adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties as closely as possible in
an acceptable manner to the end that Contemplated Transactions are fulfilled to the extent
possible.
Section 12.9 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 New York, without regard to any conflicts of law provisions thereof that would result in
the application of the laws of any other jurisdiction.
Section 12.10 Dispute Resolution. Except as otherwise provided in Section
9.3, Section 9.5 and Section 10.3 of this Agreement or as otherwise expressly
provided herein or in any of the Related Agreements (but only with respect thereto), all
controversies, claims or disputes that arise out of or relate to this Agreement or the
construction, interpretation, performance, breach, termination, enforceability or validity of this
Agreement, or the commercial, economic or other relationship of the Parties, whether such
controversy, claim or dispute is based on rights, privileges or interests recognized by or based
upon statute, contract, tort, common law or otherwise, shall be resolved in accordance with the
Dispute Resolution Procedures set forth in Exhibit N.
Section 12.11 Provisional and Emergency Measures and Specific Performance. Nothing in
this Agreement shall prevent any Party from seeking provisional or emergency measures or specific
performance from any federal or state courts located in Little Rock, Arkansas. In connection with
any request for provisional or emergency measures or specific performance, each of the Parties (a)
irrevocably submits to the exclusive jurisdiction of the federal and state courts located in Little
Rock, Arkansas, (b) waives any objection to laying venue in any such action or proceeding in such
courts, (c) waives any objection that such courts are an inconvenient forum or do not have
jurisdiction over it and (d) agrees that service of process upon it may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address as specified in Section 12.7. The foregoing consents to
jurisdiction and service of process shall not constitute general consents to service of process in
the State of Arkansas for any purpose except as provided herein and shall not be deemed to confer
rights on any Person other than the Parties. Each Party hereby knowingly and intentionally,
irrevocably and unconditionally waives trial by jury in any legal action or proceeding relating to
this Agreement and for any counterclaim therein. Any request for provisional or emergency measures
or specific performance shall not be deemed incompatible with Section 12.10 or Exhibit
N or a waiver of the right to arbitrate set forth in those provisions.
Section 12.12 Time of the Essence. Time is of the essence in the performance of this
Agreement in all respects. If the date specified in this Agreement for giving any notice or taking
any action is not a Business Day (or if the period during which any notice is required to be given
or any action taken expires on a date which is not a Business Day), then the date for giving such
notice or taking such
Page 66 of 67
Stock Purchase Agreement
Stock Purchase Agreement
action (and the expiration date of such period during which notice is required to be given or
action taken) shall be the next day which is a Business Day.
Section 12.13 Relationship of the Parties. Nothing in this Agreement or the Related
Agreements shall be construed to create any joint venture, partnership, agency or other similar
fiduciary relationship between the parties hereto or thereto. The Parties acknowledge that, for
purposes of this Agreement and the Related Agreements, (a) none of the Parties or their respective
Affiliates shall be considered to be the agent or representative of the others for any purpose, (b)
except as expressly provided in this Agreement, none of the Parties or their respective Affiliates
shall have any obligation to manage or operate any of their respective businesses with any duty or
standard of care to any other Party or its Affiliates, and (c) none of the Parties or their
respective Affiliates have any authority, right or power to enter into a contract or commitment,
assume any obligation or make any representation or warranty on behalf of the others (except as
expressly specified in this Agreement or the Related Agreements). The Parties agree and
acknowledge that except as expressly provided herein or in the Related Agreements, none of the
Parties or their respective Affiliates shall owe duties, fiduciary or otherwise to the other. The
Parties and their respective Affiliates are, and will be after Closing, competitors with the right
to pursue any business opportunity for their respective individual benefit and make no
representation or warranty regarding the manner in which they will conduct their respective
businesses and operations. None of the Parties or their respective Affiliates shall have any
obligation to refrain from (i) engaging in the same or similar activities or lines of business as
the Parties or their respective Affiliates, (ii) developing or marketing any products or services
that compete, directly or indirectly with those Parties or their respective Affiliates, (iii)
investing or owning any interest publicly or privately in, or developing a business relationship
with, any Person engaged in the same or similar activities or lines of business as, or otherwise in
direct or indirect competition with, the Parties or their respective Affiliates, or (iv) doing
business with any customer of any of the Parties or any of their respective Affiliates. None of
the Parties or their respective Affiliates shall have any obligation to offer any business
opportunity to any other Party or its Affiliates, and they may modify or otherwise change any of
their respective businesses or operations at any time.
Section 12.14 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.
[Balance of page intentionally left blank]
Page 67 of 67
Stock Purchase Agreement
Stock Purchase Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of
the date first written above by its officer thereunto duly authorized.
Ergon, Inc. |
||||
By: | /s/ A. Xxxxxxx Xxxxx | |||
Name: | A. Xxxxxxx Xxxxx | |||
Title: | Executive Vice President and Chief Financial Officer | |||
Lion Oil Company |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Name: | Xxxxxxx X. Xxxxx | |||
Title: | Senior Vice President — Refining | |||
Delek US Holdings, Inc. |
||||
By: | /s/ Assi Ginzburg | |||
Name: | Assi Ginzburg | |||
Title: | EVP | |||
By: | /s/ Xxxxxxxx Xxxxx | |||
Name: | Xxxxxxxx Xxxxx | |||
Title: | EVP | |||
Signature Page to
Stock Purchase Agreement
Stock Purchase Agreement