Exhibit 2.1
EXECUTION VERSION
dated as of
July 25, 2011
between
and
XXXXXX OIL CORPORATION
TABLE
OF CONTENTS
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ARTICLE 1 |
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Section 1.01. Definitions
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1 |
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Section 1.02. Other Definitional and Interpretative Provisions
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14 |
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ARTICLE 2 |
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Purchase and Sale |
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Section 2.01. Purchase and Sale
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15 |
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Section 2.02. Excluded Assets
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17 |
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Section 2.03. Assumed Liabilities
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19 |
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Section 2.04. Excluded Liabilities
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20 |
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Section 2.05. Non-assignability of Purchased Assets
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21 |
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Section 2.06. Purchase Price; Allocation of Purchase Price
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23 |
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Section 2.07. Closing
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24 |
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Section 2.08. Hydrocarbon Inventory and Adjustment
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25 |
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Section 2.09. Adjustments for Pro-Rated Expenses
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27 |
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Section 2.10. Adjustments For Certain Capital Expenditures
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29 |
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Section 2.11. Dispute Resolution
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30 |
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ARTICLE 3 |
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Representations and Warranties of Seller |
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Section 3.01. Corporate Existence and Power
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31 |
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Section 3.02. Corporate Authorization
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31 |
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Section 3.03. Governmental Authorization
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31 |
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Section 3.04. Noncontravention
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31 |
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Section 3.05. Financial Statements
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31 |
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Section 3.06. Absence of Certain Changes
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32 |
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Section 3.07. Material Contracts
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32 |
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Section 3.08. Litigation
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34 |
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Section 3.09. Compliance with Laws and Court Orders
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34 |
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Section 3.10. Properties
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34 |
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Section 3.11. Intellectual Property
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37 |
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Section 3.12. Insurance Coverage
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37 |
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Section 3.13. Finders’ Fees
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38 |
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Section 3.14. Employees; Labor Issues
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38 |
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Section 3.15. Employee Benefit Plans
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39 |
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Section 3.16. Environmental Compliance
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41 |
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Section 3.17. Permits
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42 |
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Section 3.18. Tax Matters
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43 |
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Section 3.19. Suppliers
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43 |
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Section 3.20. Customers
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44 |
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ARTICLE 4 |
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Section 4.01. Corporate Existence and Power
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44 |
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Section 4.02. Corporate Authorization
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44 |
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Section 4.03. Governmental Authorization
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44 |
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Section 4.04. Noncontravention
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45 |
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Section 4.05. Financing
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45 |
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Section 4.06. Litigation
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45 |
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Section 4.07. Finders’ Fees
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45 |
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Section 4.08. Inspections; No Other Representations
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45 |
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ARTICLE 5 |
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Section 5.01. Conduct of the Business
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46 |
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Section 5.02. Access
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48 |
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Section 5.03. Notices of Certain Events
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49 |
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ARTICLE 6 |
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Covenants of Buyer |
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Section 6.01. Access
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49 |
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Section 6.02. Release and Replacement of Bonds and Guaranties
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49 |
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Section 6.03. Removal of Seller’s Name
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50 |
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Section 6.04. Notices of Certain Events
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50 |
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ARTICLE 7 |
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Covenants of Buyer and Seller |
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Section 7.01. Best Efforts; Further Assurance
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51 |
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Section 7.02. Public Announcements
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52 |
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Section 7.03. WARN Act
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52 |
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Section 7.04. Post-Closing Payments or Demands
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53 |
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Section 7.05. Certain Environmental Matters
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53 |
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Section 7.06. Title Policies
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55 |
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Section 7.07. Litigation Cooperation
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55 |
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Section 7.08. Contact with Customers and Vendors
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56 |
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Section 7.09. PMPA Actions
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56 |
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Section 7.10. Crude Supply Agreement
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57 |
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Section 7.11. Buyer Financing
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57 |
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Section 7.12. Certain Agreements
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59 |
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Section 7.13. Software License Assistance
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59 |
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ii
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ARTICLE 8 |
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Section 8.01. Tax Cooperation; Allocation of Taxes
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59 |
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ARTICLE 9 |
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62 |
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62 |
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Section 9.03. Defined Contribution Plans
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63 |
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Section 9.04. Defined Benefit Plans
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65 |
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Section 9.05. Credit for Past Service; Annual Bonus
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66 |
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Section 9.06. Welfare Plans; ESPP
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66 |
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Section 9.07. Retiree Welfare Benefits
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68 |
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Section 9.08. Workers’ Compensation
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69 |
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Section 9.09. Withholding
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69 |
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Section 9.10. Allocation of Certain Liabilities
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70 |
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Section 9.11. Employee Communications
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70 |
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Section 9.12. Acknowledgement
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70 |
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Section 9.13. No Third Party Beneficiaries
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Section 9.14. Cooperation
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71 |
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ARTICLE 10 |
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Intellectual Property Matters |
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Section 10.01. License Grants
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71 |
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Section 10.02. Transfer of Licenses
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71 |
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Section 10.03. Licensed IPR
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72 |
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Section 10.04. Restrictions on Use and Disclosure of Intellectual
Property Rights
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72
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Section 10.05. Improvements
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73 |
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Section 10.06. Reservation of Rights
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73 |
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Section 10.07. NO ADDITIONAL REPRESENTATIONS OR WARRANTIES
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73 |
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Section 10.08. LIMITATION OF LIABILITY
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73 |
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ARTICLE 11 |
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Conditions to Closing |
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74 |
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Section 11.02. Conditions to Obligation of Buyer
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74 |
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Section 11.03. Conditions to Obligation of Seller
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75 |
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ARTICLE 12 |
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Survival; Indemnification |
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Section 12.01. Survival
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75 |
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Section 12.02. Indemnification
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76 |
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Section 12.03. Third Party Claim Procedures
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78 |
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Section 12.04. Direct Claim Procedures
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79 |
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Section 12.05. Calculation of Damages
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79 |
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Section 12.06. Environmental Procedures
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80 |
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Section 12.07. Assignment of Claims
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81 |
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Section 12.08. Exclusivity
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82 |
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ARTICLE 13 |
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Section 13.01. Grounds for Termination
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82 |
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Section 13.02. Effect of Termination
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83 |
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ARTICLE 14 |
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Section 14.01. Notices
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83 |
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Section 14.02. Amendments and Waivers
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84 |
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Section 14.03. Expenses
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85 |
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Section 14.04. Successors and Assigns
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85 |
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Section 14.05. Governing Law
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85 |
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Section 14.06. Jurisdiction
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85 |
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Section 14.07. WAIVER OF JURY TRIAL
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85 |
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Section 14.08. Counterparts; Effectiveness; Third Party Beneficiaries
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86 |
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Section 14.09. Entire Agreement
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86 |
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Section 14.10. Bulk Sales Laws
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86 |
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Section 14.11. Severability
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86 |
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Section 14.12. Disclosure Schedules
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86 |
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Section 14.13. Construction and Interpretation
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87 |
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Section 14.14. Specific Performance
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87 |
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EXHIBIT A Assignment and Assumption Agreement and Xxxx of Sale
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EXHIBIT B-1 Hydrocarbon Inventory Measurement Procedures |
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EXHIBIT B-2 Hydrocarbon Inventory Valuation Procedures
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EXHIBIT C Form of Consent Decree Modification |
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EXHIBIT D Fuel Regulations
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EXHIBIT E Internal Hydrocarbon Transfers |
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EXHIBIT F Form of Transition Services Agreement
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EXHIBIT G Form of Special Warranty Deed |
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EXHIBIT H Environmental Insurance Policy Terms
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EXHIBIT I Crude Supply Agreement |
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iv
The parties hereto agree as follows:
Section 1.01
. Definitions. (a) As used herein, the following terms have the following
meanings:
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Adjusted Cash Amount” means the Cash Amount as adjusted pursuant to Section 2.09.
“Adjusted Profit Sharing Contribution Percentage” means a percentage determined by taking the
product of (a) 2.7%, multiplied by (b) the quotient of (i) the number of days between January 1 of
the calendar year in which the Closing occurs and the Closing Date, divided by (ii) the number of
days in such year.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such other Person. For purposes of this
definition, “control” when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by
Contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.
“Aggregate Capital Expenditures Amount” means the aggregate amount paid by Seller or its
Subsidiaries during the period from and including the date hereof to and including the Closing in
connection with the capital expenditure projects identified on the capital expenditures budget set
forth on Section 1.01(a) of the Seller Disclosure Schedule under the heading “Capital Expenditures
Budget”; provided such capital expenditures (i) are required to be capitalized under GAAP; (ii) are
reasonably necessary and appropriate to complete the cumene project and the gasoline rail loading
project, each as described on Section 1.01(a) of the Seller Disclosure Schedule under the heading
“Capital Expenditures Budget”; and (iii) in the case of purchases from Affiliates of Seller, are on
pricing and other terms commensurate with arm’s-length transactions between unrelated parties.
“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign
federal, state or local law (statutory, common or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar
requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding
upon or applicable to such Person, as amended unless expressly specified otherwise.
“Assumed Environmental Liabilities” means all liabilities and obligations (including the costs
of any Remedial Action and any Consent Decree Obligations) arising in connection with or in any way
relating to the Business (as currently or previously conducted), the Purchased Assets, the
Facilities or the Real Property (including the activities and operations conducted thereon and
offsite disposal therefrom), whether accrued, contingent, absolute, determined, determinable or
otherwise, that in each case arise under or relate to any Environmental Law, including all items
disclosed on Section 3.16 of the Seller Disclosure Schedule (except as otherwise noted in Section
3.16 of the Seller Disclosure Schedule), but excluding any Excluded Environmental Liabilities.
“Balance Sheet” means the balance sheet of the Business dated as of December 31, 2010.
“Balance Sheet Date” means the date of the Balance Sheet.
“Business Contractor” means any independent contractor, consultant, agent or other individual
non-employee providing services to the Business (which Person does not provide any services to
Seller or its Subsidiaries with respect to any business other than the Business).
2
“
Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks
in
New York,
New York are authorized or required by Applicable Law to close.
“Business Employee” means any employee of Seller or any of its Subsidiaries who is employed
exclusively in the Business, (i) including any employee of Seller or any of its Subsidiaries who is
employed exclusively in the Business and who is, immediately prior to the Closing, absent from work
on account of paid time-off, vacation, military, sick or personal leave, short- or long-term
disability or leave of absence (other than a leave of absence resulting from a reduction in force
or a “bridging” of age and/or service credit for purposes of an Employee Plan) and any Business
Employee for whom an obligation to recall, rehire or otherwise return to employment exists under a
contractual obligation or Applicable Law, but (ii) excluding any Excluded Employee.
“Business Licensed IPR” means all Intellectual Property Rights owned by a third party and
licensed or sublicensed to either Seller or any of its Subsidiaries for use exclusively in the
operation of the Business.
“Business Permits” means all Permits held by Seller or its Subsidiaries that exclusively
relate to the operation of the Business.
“Buyer Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this
Agreement that has been provided by Buyer to Seller immediately prior to the execution of this
Agreement.
“Cash Amount” means $214,000,000, in cash.
“Closing Date” means the date of the Closing.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collective Bargaining Agreement” means the agreement dated July 1, 2002 to July 1, 2006
between Xxxxxx Oil USA, Inc. and International Union of Operating Engineers Local 305, as amended,
which is the collective bargaining agreement to which Seller or any of its Subsidiaries is a party
that covers Union Employees.
“Confidentiality Agreement” means that certain letter agreement dated as of September 15, 2010
between Buyer and Seller.
“Consent Decree” means that certain consent decree, among Xxxxxx Oil USA, Inc., the United
States of America, the Louisiana Department of Environmental Quality and the State of Wisconsin,
entered by the United States District Court for the Western District of Wisconsin in United States,
et al. x. Xxxxxx Oil USA, Inc., Civil Action No. 3:10-cv-00563-bbc (the “Consent Decree Court”), on
February 16, 2011.
3
“Consent Decree Modification” means a modification to the Consent Decree in the form attached
hereto as Exhibit C (as it may be modified in accordance with Section 7.05(b)) pursuant to which,
at Closing, (i) all Consent Decree Obligations are separated from all other obligations under the
Consent Decree and (ii) Buyer assumes, and Seller and its Affiliates are released from, all Consent
Decree Obligations.
“Consent Decree Obligations” means (i) all of the liabilities and obligations of or relating
to the Consent Decree that are applicable to the Purchased Assets or the Business as currently or
previously conducted, other than payment of that certain $1.25 million civil penalty required by
Paragraph 161 of the Consent Decree (which is an Excluded Environmental Liability) and (ii) those
obligations applicable to the Business set forth on Section 1.01(a) of the Seller Disclosure
Schedule under the heading “Certain Consent Decree Obligations”.
“Continuing PMPA Franchise Business” means the portion of the Business, if any, conducted by
Buyer pursuant to the Seller PMPA Franchise Agreements after the Closing (it being understood that,
to the extent that Buyer operates or permits the operation of any franchise or other facility
pursuant to a franchise agreement or similar arrangement other than a Seller PMPA Franchise
Agreement, such operation shall not be included in the Continuing PMPA Franchise Business).
“Contract” means any contract, agreement, lease, commitment, or other similar obligation
(whether written or oral).
“Environmental Insurance Policy” means the environmental insurance policy required to be
purchased by Buyer pursuant to Section 7.05(a)(i).
“Environmental Law” means any Applicable Law relating to the environment or any spill,
release, discharge, disposal or recycling of, or exposure to, any pollutant or contaminant or
ignitable, corrosive, reactive or otherwise hazardous substance or waste.
“Equipment” means all machinery, mobile or otherwise, equipment and systems, including (a) all
processing units and distillation systems, (b) all heating, lighting, and power systems, fire
prevention and fire extinguishing systems, control systems, emergency warning and emergency
preparedness systems and related assets, and heating, refrigerating, air conditioning, and
ventilating systems, (c) all tanks, refining process units, meters, pumps, engines, compressors,
pipes, fittings, valves, connections, regulators, sewers and loading and unloading lines, (d) all
telecommunication assets and equipment and computer hardware and software, (e) all spare parts,
tools, computers, and warehouse stores, (f) all other fixtures, furniture and furnishings, (g) all
works-in-process, (h) all vehicles, trucks, tractors, trailers and rail cars (excluding trucks and
trailers used for delivery of refined petroleum products to retail gasoline stations) and (i) all
other tangible personal property of every kind whatsoever, in each case owned or leased
4
by Seller or its Subsidiaries and used or held for use exclusively in connection with the
ownership of the Purchased Assets or operation of the Business.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended and the rules
and regulations promulgated thereunder.
“ERISA Affiliate” of any entity means any other entity which, together with such entity, would
be treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.
“Excluded Businesses” means the (i) retail, midstream and wholesale marketing businesses of
Seller and its Subsidiaries including all retail stations owned and operated by Seller and its
Subsidiaries, but excluding each of the Spur Franchise Business and the Included Superior Wholesale
Business, (ii) operation and ownership and/or leasing by Seller or its Subsidiaries of the Excluded
Terminals, (iii) operation of a refinery and related terminals in Meraux, Louisiana, (iv) ownership
and operation of the ethanol plants described on Section 1.01(a) of the Seller Disclosure Schedule
under the heading “Excluded Ethanol Plants” and (v) businesses described on Section 1.01(a) of the
Seller Disclosure Schedule under the heading “Excluded Businesses”.
“Excluded Crude” means all crude oil (i) acquired by Seller or its Subsidiaries from
independent petroleum producers at such producers’ well heads which is in transit to injection
points on the Enbridge North Dakota pipeline system where title has passed to Xxxxxx Oil USA, Inc.
(but which crude oil has not yet been injected into the Enbridge North Dakota pipeline system) and
(ii) for which title has passed to Xxxxxx Oil USA, Inc. or Superior Crude Trading Company and which
is located on a feeder pipeline leading to the mainline of the Enbridge pipeline system, but which
has not yet been injected into the mainline of the Enbridge pipeline system.
“Excluded Employees” means the employees set forth on Section 1.01(a) of the Seller Disclosure
Schedule under the heading “Excluded Employees”.
“Excluded Environmental Liabilities” means (i) payment of that certain $1.25 million civil
penalty required by Paragraph 161 of the Consent Decree; (ii) payment of any monetary fines to the
extent solely attributable to a violation of Environmental Law prior to Closing by Seller or its
Subsidiaries relating to the Business; (iii) any and all obligations or liabilities arising out of
the Consent Decree other than the Consent Decree Obligations; and (iv) all liabilities and
obligations (including the costs of any Remedial Action) to the extent they arise in connection
with (A) any transportation by or on behalf of Seller or its Subsidiaries, prior to Closing, of
Hazardous Materials from the Real Property to any other real property (other than the Real Property
or those terminals used in connection with the Business located in Nebraska and Utah) for disposal
or recycling; or (B) to the extent pending or, to Seller’s knowledge threatened, prior to Closing,
any action, suit or proceeding by any third party to the extent alleging
5
exposure at the Real Property, prior to Closing, of any individual to any Hazardous Materials
at, on, in or under the Real Property that were spilled, released, emitted or discharged by or on
behalf of Seller or its Subsidiaries.
“Excluded Terminals” means all terminals owned by Seller or its Subsidiaries and/or terminal
capacity operated and/or leased by Seller or its Subsidiaries and/or all terminal capacity which
Seller or its Subsidiaries otherwise have the right to use, other than the Included Superior
Terminals.
“Facilities” means all buildings, tanks, rail lines, pipelines, docks and fixtures owned or
leased by Seller or its Subsidiaries, located on the Owned Real Property or the Leased Real
Property and used primarily in the Business, but excluding for the avoidance of doubt (i) power
lines, pipelines, telephone lines and other improvements and fixtures owned by public utilities
furnishing utilities to the Owned Real Property or the Leased Real Property, (ii) rail lines,
pipelines and other improvements and fixtures owned by third parties and located on existing
easements for such purpose which encumber the Owned Real Property or the Leased Real Property and
(iii) the Enbridge pipeline system and the Magellan pipeline system.
“FIPR Term” means a period of three years commencing on the Closing Date; provided that either
Buyer or Seller may earlier terminate the FIPR Term at any time by providing written notice of
termination to the other party six months prior to the effective date of such termination (provided
that such termination shall not be effective earlier than the first anniversary of the Closing
Date).
“Franchise Licensed Marks” means the trademarks set forth in Section 1.01(a) of the Seller
Disclosure Schedule under the heading “Franchise Licensed Marks”.
“Fraud” means actual fraud involving a Person’s knowing and intentional misrepresentation or
omission of a material fact, which misrepresentation is made or omission is omitted by such Person
with the intent to defraud, as determined under common law.
“Fuel Compliance Obligations” means, with respect to the Business or Purchased Assets,
including the Hydrocarbon Inventory, compliance with the Fuel Regulations.
“Fuel Credits” means all credits, allotments, renewable identification numbers (RINs),
certificates or other authorizations relating to any applicable fuel quality standards or renewable
fuel standards (including those standards provided for in the Fuel Regulations).
“Fuel Regulations” means the regulations set forth on Exhibit D.
“GAAP” means generally accepted accounting principles in the United States.
6
“Governmental Authority” means any transnational, domestic or foreign federal, state or local
governmental, regulatory or administrative authority, department, court, agency or official,
including any political subdivision thereof.
“Hazardous Material” means any pollutant or contaminant or otherwise hazardous substance or
waste that in each case is regulated under any Environmental Law.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Hydrocarbon Inventory” means (i) the hydrocarbon inventory at the Superior refinery that is
owned by Seller and its Subsidiaries as of Closing, including crude oil, blendstocks, ethanol,
biodiesel, feedstocks and other raw materials (including polymers and emulsifying compounds),
intermediate petroleum products and finished products (including asphalt), tank heels and tank
bottoms (including all such items located in process units or interconnecting lines at the
refinery), (ii) all such products produced at the Superior refinery that are owned by Seller and
its Subsidiaries as of Closing where title has not passed to a customer (including, for the
avoidance of doubt, Seller or its Subsidiaries that are customers of the refinery; provided that in
the case of such an internal transfer title will be deemed to be passed as set forth in Exhibit E)
prior to Closing and (iii) all hydrocarbons (including crude oil, blendstocks, feedstocks and other
raw materials, intermediate petroleum products and finished products, tank heels and tank bottoms)
in transit to the Superior refinery (other than Excluded Crude) for which title has passed to
Xxxxxx Oil USA, Inc. or Superior Crude Trading Company, including such hydrocarbons in transit from
Xxxxxx Exploration & Production Company — USA where title has so passed.
“Included Superior Terminals” means (i) the terminals owned and operated by Seller or its
Subsidiaries set forth on Section 1.01(a) of the Seller Disclosure Schedule under the heading
“Owned Terminals”, (ii) the terminal capacity leased by Seller or its Subsidiaries set forth on
Section 1.01(a) of the Seller Disclosure Schedule under the heading “Leased Terminal Capacity”,
(iii) the rights Seller or its Subsidiaries have to use terminal capacity at the terminals set
forth on Section 1.01(a) of the Seller Disclosure Schedule under the heading “Common Carrier
Terminals” and (iv) the leasehold interests of Seller or its Subsidiaries in the terminals leased
by Seller or its Subsidiaries set forth on Section 1.01(a) of the Seller Disclosure Schedule under
the heading “Leased Terminals”.
“Included Superior Wholesale Business” means the wholesale marketing business conducted by
Seller or its Subsidiaries at the Included Superior Terminals, excluding, for the avoidance of
doubt, the Excluded Employees associated with such wholesale business.
7
“Intellectual Property Right” means any Trademark, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the foregoing) or any other
similar type of proprietary intellectual property right.
“Interest Rate” means (i) the rate per annum for three-month deposits in U.S. dollars which
appears on the Bloomberg Screen BTMM Page under the heading “LIBORFIX BBAM” as of 11:00 a.m. on the
date of measurement plus (ii) 2%.
“Intra-Company Agreement” means any Contract between the Business, on the one hand, and any
other business, division, group or function of or within Seller and its Subsidiaries, on the other
hand, but not including any Contract expressly provided by this Agreement to be entered into in
connection with the Closing.
“knowledge of Seller,” “Seller’s knowledge” or any other similar knowledge qualification in
this Agreement means, with respect to any matter, to the actual knowledge of any of the Persons
listed on Section 1.01(a) of the Seller Disclosure Schedule under the heading “Knowledge Parties”.
“Licensable” means, with respect to any Intellectual Property Right, that a Person has the
power and authority to grant a non-exclusive license (or sublicense, as the case may be) on the
terms and conditions set forth in Article 10 without any of the following: (i) the consent of any
third party (unless such consent can be and is obtained without providing any additional
consideration to such third party); (ii) impairment of such Person’s existing rights in respect of
any Intellectual Property Right (it being understood that the grant of a non-exclusive license, in
and of itself, shall not be construed as an impairment of any of such Person’s rights); (iii)
imposition of any additional obligations on such Person under any preexisting agreement relating to
any Intellectual Property Right; or (iv) the payment of royalties or other consideration on or
after the Closing Date by such Person to any third party under any preexisting agreement. For the
avoidance of doubt, in no event shall any Intellectual Property Right be “Licensable” if any of the
foregoing conditions in clauses (i)-(iv) apply.
“Licensed IPR” means Business Licensed IPR and Shared Licensed IPR.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest or encumbrance in respect of such property or asset.
“Material Adverse Effect” means any change, development, effect, condition, fact, circumstance
or occurrence that has a material adverse effect on the financial condition, business, assets or
results of operations of the Business, taken as a whole, but excluding any effect resulting from
(A) changes in GAAP or changes in the regulatory accounting requirements applicable to any industry
in
8
which the Business operates, (B) changes in the financial or securities markets or changes in
the general economic or political conditions in the United States or abroad, (C) changes (including
changes of Applicable Law) or conditions generally affecting the industry in which the Business
operates, (D) acts of war, sabotage, terrorism or natural disasters, (E) the announcement, pendency
or consummation of the transactions contemplated by this Agreement (including any cancellations of
or delays in customer orders or other decreases in customer demand, reduction in revenues, work
stoppages or loss or threatened loss of employees or other employee disruptions), (F) any changes
in commodities markets or commodity, crude oil or feedstock prices or refining margins, (G) any
effect on the Business or Purchased Assets resulting from changes in a financial rating published
by a rating agency, (H) any failure to obtain any consent, approval, waiver or authorization from
any third party in connection with the consummation of the transactions contemplated hereby, (I)
any failure of the Business to meet any internal or published or third party budgets, projections,
forecasts or predictions of financial performance for any period (it being understood that this
clause (I) shall not prevent a party from asserting that any fact or circumstance that may have
contributed to such failure independently constitutes or contributes to a Material Adverse Effect),
(J) any action taken (or omitted to be taken) at the request of Buyer, (K) any action taken by the
Seller that is required or expressly contemplated or permitted pursuant to this Agreement, (L)
bankruptcy, insolvency or other financial distress of any customers of the Business or (M) seasonal
reduction in the revenues or earnings of the Business in the Ordinary Course of Business; provided,
that the changes or occurrences set forth in clauses (B), (C) and (F) may be taken into account in
determining whether there has been a Material Adverse Effect to the extent such changes have a
disproportionate adverse effect on the Business as compared to other participants in the industries
in which the Business operates.
“Non-Union Transferred Employee” means each Transferred Employee who is not a Union Employee.
“Ordinary Course of Business” means, with respect to the Business and the Purchased Assets,
the ordinary course of business in all material respects consistent with Seller’s and its
Subsidiaries’ past custom and practice.
“Owned Intellectual Property Rights” means all Intellectual Property Rights owned and
Licensable by Seller or any of its Subsidiaries and used in the Business; provided that the Owned
Intellectual Property Rights shall not include any Trademarks.
“Permit” means any license, franchise, permit, certificate, approval, registration or other
similar authorization issued by a Governmental Authority.
“Person” means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a Governmental Authority.
9
“PMPA” means the Petroleum Marketing Practice Act 28 U.S.C. §2801 et. seq.
“Pre-Closing Tax Period” means (i) any taxable period ending on or before the Closing Date and
(ii) with respect to a taxable period that commences before but ends after the Closing Date, the
portion of such period up to and including the Closing Date.
“Purchase Agreement” means any agreement for the purchase of materials, supplies, goods,
services, equipment or other assets by Seller or any of its Subsidiaries.
“Remedial Action” means any investigation, remediation, clean-up, abatement, removal or
monitoring (or words of similar import) of Hazardous Materials.
“Seller Disclosure Schedule” means the disclosure schedule dated the date hereof regarding
this Agreement that has been provided by Seller to Buyer immediately prior to the execution of this
Agreement.
“Seller Group Insurance Plans” means the Group Insurance Plan for Employees of Xxxxxx Oil
Corporation and the Group Insurance Plan for Retired Employees of Xxxxxx Oil Corporation.
“Seller PMPA Franchise Agreements” means all franchise agreements between Seller or its
Subsidiaries and franchisees of the Spur Franchise Business.
“Shared Licensed IPR” means all Intellectual Property Rights owned by a third party and
licensed or sublicensed to either Seller or any of its Subsidiaries for use in the operation of the
Business, other than Business Licensed IPR.
“Spur Franchise Business” means the business of Seller and its Subsidiaries comprising the
PMPA franchise business conducted under the “Spur” brand.
“Subsidiary” means, with respect to any Person, any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at any time directly or indirectly owned by such
Person.
“Supply Agreements” means any sales, distribution or similar agreement providing for the sale
by Seller or any of its Subsidiaries of materials, supplies, goods, services, equipment or other
assets.
“Tax” means (i) any tax, governmental fee or other like assessment or charge of any kind
whatsoever (including withholding on amounts paid to or by any Person), together with any interest,
penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for
the imposition of
10
any such tax (domestic or foreign) (a “Taxing Authority”), or (ii) liability for the payment
of any amounts of the type described in (i) as a successor (including under Treasury Regulations
section 1.1502-6 or otherwise) or as a result of being party to any agreement or any express or
implied obligation to indemnify any other Person.
“Title IV Plan” means an Employee Plan subject to Title IV of ERISA other than any
multiemployer plan, as defined in Section 3(37) of ERISA.
“Trademarks” means any and all (i) trademarks, trade names, corporate names, company names,
business names, service marks, logos, brand names, domain names and all other source or business
identifiers, and the rights in any of the foregoing which arise under Applicable Law, (ii) goodwill
symbolized thereby or associated therewith and (iii) registrations and applications for
registration of any of the foregoing.
“Transferable” means, with respect to any Intellectual Property Right, that a Person has the
power and authority to transfer all of such Person’s right, title and interest in and to such
Intellectual Property Right on the terms and conditions set forth in Article 10 without any of the
following: (i) the consent of any third party (unless such consent can be and is obtained without
providing any additional consideration to such third party); (ii) impairment of such Person’s
existing rights in respect of any other Intellectual Property Right; (iii) imposition of any
additional obligations on such Person under any preexisting agreement relating to any other
Intellectual Property Right; or (iv) the payment of royalties or other consideration on or after
the Closing Date by such Person to any third party under any preexisting agreement. For the
avoidance of doubt, in no event shall any Intellectual Property Right be “Transferable” if any of
the foregoing conditions in clauses (i)-(iv) apply.
“Transition Services Agreement” means the Transition Services Agreement between Buyer and
Seller (or its Affiliates), substantially in the form attached hereto as Exhibit F.
“Union Employee” means each Business Employee who is a member of a collective bargaining unit
covered by the Collective Bargaining Agreement.
“Union Transferred Employee” means each Transferred Employee who is a Union Employee.
(b) Each of the following terms is defined in the Section set forth opposite such term:
|
|
|
Term |
|
Section |
Accounting Referee |
|
2.06(b) |
Agreement |
|
Preamble |
Allocation |
|
2.06(b) |
11
|
|
|
Term |
|
Section |
Allocation Statement |
|
2.06(b) |
Apportioned Obligations |
|
8.01(b) |
Assigned Contracts |
|
2.01(g) |
Assumed Liabilities |
|
2.03 |
Business |
|
Recitals |
Business Financial Statements |
|
3.05 |
Buyer |
|
Preamble |
Buyer DC Plan |
|
9.03 |
Buyer FSA Plan |
|
9.06(d) |
Buyer Indemnified Party |
|
12.02 |
Cap |
|
12.02(a)(ii) |
City of Superior Fee |
|
8.01(c) |
Closing |
|
2.07 |
Complying Party |
|
7.05(c)(ii) |
Credit Support Arrangement |
|
6.02 |
Crude Supply Agreement |
|
7.10 |
Customer Security Arrangements |
|
2.01(q) |
Customers |
|
3.20(a) |
Damages |
|
12.02 |
De Minimis Amount |
|
12.02(a)(ii) |
Deductible |
|
12.02(a)(ii) |
Delayed Transfer Asset |
|
2.05 |
Easements |
|
2.01(c) |
e-mail |
|
14.01 |
Employee Plans |
|
3.15 |
Employee Withholding Documents |
|
9.09 |
Environmental Matters |
|
12.06 |
Estimated Aggregate Capital Expenditures Amount |
|
2.07(a) |
Estimated Closing Proration Adjustment Amount |
|
2.09(b) |
Estimated Inventory Value |
|
2.08 |
Excluded Assets |
|
2.02 |
Excluded Contracts |
|
2.02(j) |
Excluded Liabilities |
|
2.04 |
Field Inspector |
|
2.08(b) |
Field Inspector Report |
|
2.08(b) |
Filing Documentation |
|
8.01(e) |
Final Aggregate Capital Expenditures Amount |
|
2.10 |
Financing |
|
7.11 |
FIPR License |
|
10.01(b) |
Fundamental Representations |
|
12.01(a)(ii) |
Improvements |
|
10.05 |
In Bound / Out Bound Inventory |
|
2.08(b) |
Indemnified Party |
|
12.03 |
Indemnifying Party |
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12.03 |
Initial Hydrocarbon Inventory Tax Amount |
|
8.01(e) |
12
|
|
|
Term |
|
Section |
Inspector |
|
2.08(c) |
Interim Financial Statements |
|
7.11 |
Inventory Balance |
|
2.08(c) |
Inventory Statement |
|
2.08(c) |
Inventory Value |
|
2.08(c) |
Leased Real Property |
|
2.01(b) |
Licenses |
|
10.01(b) |
LIPR Sublicense |
|
10.03(d) |
Material Contract |
|
3.07(c) |
Non-Union Transferred Participant |
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9.03(a)(i) |
Obligated Party |
|
7.05(c)(ii) |
OIPR License |
|
10.01(a) |
Owned Real Property |
|
2.01(a) |
PBGC |
|
3.15(f) |
Permitted Liens |
|
3.10(b)(xvii) |
Permitted Transferee |
|
10.02 |
Xxxxx Cash |
|
2.01(m) |
PMPA Termination Date |
|
7.09(a)(i) |
PMPA Termination Notice |
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7.09(a)(i) |
Post-Closing Adjustment Date |
|
2.09(b) |
Post-Closing Proration Adjustment Amount |
|
2.09(b) |
Post-Closing Tax Period |
|
8.01(b) |
Potential Contributor |
|
12.07 |
Prepayments |
|
2.01(l) |
Pre-Closing Fuel Compliance Obligations |
|
7.05(c)(i) |
Profit Sharing Contribution |
|
9.03(a)(i) |
Proposed Wisconsin Tax Schedule |
|
2.06(f) |
Purchase Price |
|
2.06 |
Purchased Assets |
|
2.01 |
Real Property |
|
3.10 |
Real Property Leases |
|
2.01(b) |
Refining Business |
|
Recitals |
Relevant Period |
|
9.02 |
Retained Union Employee Benefit Liabilities |
|
9.01(b) |
Sales and Use Taxes |
|
8.01(e) |
Seller |
|
Preamble |
Seller DB Plan |
|
9.03 |
Seller DC Plan |
|
9.03 |
Seller FSA Plan |
|
9.06(d) |
Seller Indemnified Party |
|
12.02(b) |
Seller Retiree Welfare Benefit |
|
9.07 |
Seller Welfare Plan |
|
9.06(a) |
Sharing Arrangement |
|
2.05(b) |
Standard Procedure |
|
9.09 |
Third Party Claim |
|
12.03 |
13
|
|
|
Term |
|
Section |
Third Party License Agreement |
|
10.03(d) |
Transfer Taxes |
|
8.01(e) |
Transferred Contractor |
|
9.01(a) |
Transferred Employees |
|
9.01 |
Transferred Pipeline Rights |
|
2.01(d) |
Union DB Plan |
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9.04(b) |
Union DC Plan |
|
9.03(a)(ii) |
Union Welfare Plan |
|
3.15(h) |
WARN Act |
|
3.14(c) |
Warranty Breach |
|
12.02(a)(i) |
Wisconsin Tax Schedule |
|
2.06(f) |
Wisconsin Real Estate Transfer Fees |
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2.06(f) |
Section 1.02
. Other Definitional and Interpretative Provisions. The words “hereof”, “herein”
and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The captions herein are included for
convenience of reference only and shall be ignored in the construction or interpretation hereof.
References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and
Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth
in full herein. Any capitalized terms used in any Exhibit or Schedule, but not otherwise defined
therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement
shall be deemed to include the plural, and any plural term the singular. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”, whether or not they are in fact followed by those words
or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and
other means of reproducing words (including electronic media) in a visible form. References to any
statute shall be deemed to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder. References to any Contract are to that Contract as amended,
modified or supplemented from time to time in accordance with the terms hereof and thereof;
provided that with respect to any Contract listed on any schedules hereto, all such amendments,
modifications or supplements must also be listed in the appropriate schedule. References to any
Person include the successors and permitted assigns of that Person. References from or through any
date mean, unless otherwise specified, from and including or through and including, respectively.
References to “law”, “laws” or to a particular statute or law shall be deemed also to include any
and all Applicable Law.
14
Section 2.01
. Purchase and Sale. Except as otherwise provided below (including Sections 2.02
and 2.05), upon the terms and subject to the conditions of this Agreement, Buyer agrees to purchase
from Seller and its Subsidiaries and Seller agrees to sell, convey, transfer, assign and deliver,
or cause to be sold, conveyed, transferred, assigned and delivered, to Buyer at the Closing, free
and clear of all Liens, other than Permitted Liens, all of Seller’s and its Subsidiaries’ right,
title and interest in, to and under the assets, properties and business owned, held or used
exclusively in the conduct of the Business by Seller and its Subsidiaries as the same shall exist
and be held by Seller and its Subsidiaries on the Closing Date (collectively, the “
Purchased
Assets”), including all right, title and interest of Seller and its Subsidiaries in, to and under
the following to the extent owned, held or used exclusively in the conduct of the Business as the
same shall exist and be held by Seller and its Subsidiaries on the Closing Date:
(a) the real property owned in fee listed on Section 2.01(a) of the Seller Disclosure
Schedule (the “Owned Real Property”), together with all buildings, structures, fixtures and other
improvements owned by the Seller and its Subsidiaries and located thereon (including all
construction work-in-progress, process units, storage tanks, control houses, office buildings,
laboratory facilities, warehouses, boiler houses, power plants, waste water treatment facilities
and similar improvements);
(b) the leasehold estates listed on Section 2.01(b) of the Seller Disclosure Schedule (the
“Leased Real Property”), and the related lease or sublease agreements (the “Real Property Leases”)
respecting land, buildings, fixtures and real property improvements (whether owned or leased),
together with all construction work-in-progress in respect of same;
(c) the easements appurtenant to the Seller’s or its Subsidiaries’ ownership of the Owned
Real Property, lease of the Leased Real Property and operation of the Business and Facilities,
including the easements identified on Section 2.01(c) of the Seller Disclosure Schedule (the
“Easements”);
(d) the Contracts, deeds, easements, rights of way, franchises, licenses, permits, and
other documents respecting those pipeline rights listed on Section 2.01(d) of the Seller Disclosure
Schedule (collectively, the “Transferred Pipeline Rights”);
(e) the Hydrocarbon Inventory;
(f) the Equipment and all inventories (other than hydrocarbon inventories and products),
including chemicals, catalysts, additives inventories and precious metals (in the case of precious
metals, listed by type and amount on Section 2.01(f) of the Seller Disclosure Schedule), in each
case used exclusively
15
in connection with the ownership of the Purchased Assets or operation of the Business;
(g) all rights and obligations of the Seller or its Subsidiaries under (i) the Material
Contracts (other than any Excluded Contract) and (ii) any other Contracts of Seller or its
Subsidiaries (including any agreements with Business Contractors) that are not Excluded Contracts
and that relate exclusively to the ownership of the Purchased Assets or operation of the Business
(the items in clauses (i) and (ii) collectively, the “Assigned Contracts”); for the avoidance of
doubt the Assigned Contracts shall include the Seller PMPA Franchise Agreements;
(h) all Business Permits;
(i) except as set forth in Sections 2.01(j), 2.02(d), 2.02(e), 2.02(f), 2.02(g) or
2.02(o), all books, records, files and papers, whether in hard copy or computer format, including
any information relating to any Tax imposed on the Purchased Assets, wherever located, in each case
which relate exclusively to the ownership of the Purchased Assets or operation of the Business;
(j) to the extent permitted by Applicable Law, copies of the personnel and employment
records relating to Transferred Employees; provided that if Applicable Law requires that Buyer
receive original personnel and employment records relating to any Transferred Employees, Buyer
shall receive such records pursuant to this Section 2.01(j);
(k) all unexpired warranties from third parties related exclusively to the Business,
including warranties set forth in any equipment purchase agreement, construction agreement, lease
agreement, consulting agreement or agreement for architectural or engineering services, it being
understood that nothing in this Section shall be construed as a representation by Seller that any
such warranty remains in effect or is enforceable;
(l) all deposits, advance payments, prepayments, prepaid expenses and other similar
payments made by or on behalf of Seller or its Subsidiaries, in each case to the extent exclusively
related to the Business (collectively, “Prepayments”);
(m) all xxxxx cash located at the operating facilities of the Business (“Xxxxx Cash”);
(n) all goodwill associated with the operation of the Business, together with the right to
represent to third parties that Buyer is the successor to the Business;
(o) all assets of the Employee Plans expressly assumed by or provided to be transferred to
Buyer pursuant to Article 9 (including, without limitation, all insurance Contracts maintained in
connection with such Employee Plans);
16
(p) all computer and data processing hardware of Seller or its Subsidiaries (i) located
at the Facilities or (ii) that otherwise is used by Seller or its Subsidiaries exclusively in the
operation of the Business or Facilities as currently conducted by Seller or its Subsidiaries;
(q) except as set forth in Section 2.02(l), all bonds, letters of credit and other security
arrangements established by any Person in favor of Seller that relate exclusively to the Purchased
Assets or the operation of the Business (collectively, the “Customer Security Arrangements”), to
the extent transferable;
(r) except as otherwise expressly provided in this Agreement, any other assets, properties,
and rights of Seller or any of its Subsidiaries that are used exclusively in the ownership of the
Purchased Assets or the operation of the Business as it is currently conducted by Seller or its
Subsidiaries and any other tangible asset owned by Seller or its Subsidiaries located at, or on the
grounds of, the Facilities; and
(s) except as set forth on Section 2.01(s) of the Seller Disclosure Schedule, any insurance
proceeds received from third parties after the date hereof (net of Seller’s or its Subsidiaries’
costs of collection and any applicable deductibles actually paid by Seller or its Subsidiaries)
arising out of events that occurred prior to the Closing Date, to the extent such insurance
proceeds are actually paid and relate to (i) the repair or restoration of any of the Facilities,
but excluding proceeds to the extent Seller effects such repair or restoration before the Closing,
or (ii) an Assumed Liability.
Section 2.02
. Excluded Assets. Buyer expressly understands and agrees that the following
assets and properties of Seller and its Subsidiaries (collectively, the “
Excluded Assets”) shall be
excluded from the Purchased Assets:
(a) all of Seller’s or its Subsidiaries’ cash and cash equivalents on hand and in banks,
except for Xxxxx Cash;
(b) except as otherwise specifically provided in Section 2.01(o) or Section 2.01(s), all
rights, titles, claims and interests of Seller or any of its Subsidiaries (i) under any policy or
agreement of insurance of Seller or any of its Subsidiaries or (ii) to any insurance proceeds under
any of the policies or agreements of insurance described in the preceding clause (i);
(c) all Owned Intellectual Property Rights and Trademarks (including the Franchise Licensed
Marks) (it being understood that nothing in this Section 2.02(c) shall limit the Licenses);
(d) all books, records, files and papers, whether in hard copy or computer format, prepared in
connection with this Agreement or the transactions contemplated hereby (including relating to the
sale process) and all minute books and corporate records of Seller and its Subsidiaries;
17
(e) copies of any books, records files or papers relating to Taxes described in Section
2.01(i);
(f) copies of any of the books, records, files and papers described in Section 2.01(i), to the
extent Seller reasonably concludes that they are or may be necessary or useful in connection with
Seller’s or its Subsidiaries’ defense or prosecution of any suit, action or proceeding relating to
an Excluded Liability;
(g) copies of the personnel and employment records described in Section 2.01(j) to the extent
Seller reasonably concludes that they are or may be necessary or useful in connection with Seller’s
obligations under Article 9;
(h) the property and assets described on Section 2.02(h) of the Seller Disclosure Schedule;
(i) all rights of Seller arising under this Agreement or the transactions contemplated hereby;
(j) all Contracts of the Seller or any of its Subsidiaries that do not relate exclusively to
the operation of the Business as currently conducted by the Seller or its Subsidiaries and any
Contract listed on Section 2.02(j) of the Seller Disclosure Schedule (together, the “Excluded
Contracts”).
(k) any payments or other receivables owing from any customer on account of any products
produced at the Facilities where title has passed to the customer prior to Closing;
(l) all of Seller’s or its Subsidiaries’ right, title and interest in and to all (i) accounts
receivable and all notes and other evidences of indebtedness of and rights to receive payments
arising out of sales, services, rentals and other activities of the Business occurring in
connection with and attributable to the ownership or operation of the Purchased Assets or the
Business prior to the Closing (which, for the avoidance of doubt, shall include all sales of
hydrocarbon products or inventories other than the Hydrocarbon Inventory) and the security
arrangements, if any, related thereto, (ii) all bonds, letters of credit or other security
arrangements posted or otherwise issued by the Seller or any of its Subsidiaries in favor of any
other Person, other than any Prepayments, and (iii) rights with respect to any third party
collection procedures or any other actions or proceedings in connection with any of the foregoing;
(m) all of Seller’s or its Subsidiaries’ rights arising under any outstanding receivable
arising prior to Closing between the Seller or any of its Subsidiaries in respect of the Business,
on the one hand, and Seller or any Affiliate of the Seller in respect of any other business
division, group or function, on the other hand;
(n) all assets related to any Employee Plan or any other pension, profit sharing, stock bonus,
stock option, thrift or other retirement plan, medical,
18
hospitalization, dental, life, disability, vacation or other insurance or benefit plan,
employee stock ownership plan, deferred compensation, stock ownership, stock purchase, bonus,
benefit or other incentive plan, severance plan or other employee benefit plan relating to the
Seller, its Affiliates or their respective employees (in each case other than all assets of the
Employee Plans expressly assumed by or provided to be transferred to Buyer pursuant to Article 9);
(o) the original personnel and employment records relating to Transferred Employees to the
extent Applicable Law does not permit that Buyer receive such original records; provided, if any
medical records of Transferred Employees are needed in order to respond to any post-Closing inquiry
from any Governmental Authority relating to employment or workplace safety issues, Seller agrees,
to the extent permitted by Applicable Law, reasonably to cooperate with Buyer to make such records
available to Buyer or to such Governmental Authority for purposes of the inquiry;
(p) any and all Fuel Credits that (i) relate to the ownership or operation of the Business or
Purchased Assets and are in existence, acquired, generated or otherwise attributable to the period
prior to Closing, (ii) do not otherwise relate to the operation of the Business or Purchased Assets
or (iii) relate to the ownership or operation of any business by Seller or any of its Subsidiaries
from and after Closing;
(q) all Tax refunds relating to any Pre-Closing Tax Period;
(r) any Purchased Assets sold or otherwise disposed of in the Ordinary Course of Business and
not in violation of any provision of this Agreement during the period from the date hereof until
the Closing Date;
(s) all assets primarily or exclusively related to the Excluded Businesses; and
(t) all hydrocarbon inventories and products other than the Hydrocarbon Inventory.
Section 2.03
. Assumed Liabilities. Upon the terms and subject to the conditions of this
Agreement, Buyer agrees, effective as of the Closing, to assume, pay, discharge and perform as and
when due, the following liabilities and obligations (the “
Assumed Liabilities”):
(a) all debts, obligations, Contracts and liabilities of any kind, character or description
(whether known or unknown, accrued, absolute, contingent or otherwise) relating to or arising out
of the ownership or operation of the Purchased Assets or the conduct of the Business from and after
the Closing, including any such debts, obligations, Contracts and liabilities arising as a result
of the consummation of the transactions contemplated by this Agreement;
(b) all liabilities and obligations of Seller or any of its Subsidiaries
19
arising under the Assigned Contracts, including any such liabilities or obligations arising as
a result of the consummation of the transactions contemplated by this Agreement;
(c) all Assumed Environmental Liabilities;
(d) all liabilities and obligations of the Seller or its Subsidiaries under open purchase
orders or other accounts payable that were entered into or incurred by Seller or its Subsidiaries
in the operation of the Business prior to Closing and which provide for the delivery of goods or
services on or following Closing;
(e) all liabilities and obligations relating to or arising out of the matters identified on
Section 2.03(e) of the Seller Disclosure Schedule, regardless of whether such matter existed prior
to the Closing;
(f) all delivery obligations in respect of products produced at the Facilities with respect to
which title has not passed to a customer prior to Closing;
(g) all liabilities for Taxes allocated to Buyer under Article 8;
(h) all liabilities and obligations with respect to, or relating to, any Transferred Employee
arising from such Transferred Employee’s employment by Buyer or its Affiliates at or after the
Closing; and
(i) all liabilities and obligations expressly assumed by or provided to be transferred to
Buyer pursuant to Article 9.
Section 2.04
. Excluded Liabilities. Buyer is assuming only the Assumed Liabilities and is
not assuming any other liability or obligation of Seller or its Subsidiaries of whatever nature,
whether presently in existence or arising hereafter. All such other liabilities and obligations
shall be retained by and remain liabilities and obligations of Seller and/or its Subsidiaries, as
applicable (all such liabilities and obligations not being assumed being herein referred to as the
“
Excluded Liabilities”). Excluded Liabilities include, but are not limited to, the following:
(a) any liability or obligation of Seller or any of its Subsidiaries for personal injury or
tort, or similar causes of action, to the extent arising out of, associated with, relating to, or
incurred in connection with the ownership of the Purchased Assets or the operation of the Business
prior to the Closing; provided that the foregoing shall not include any such liabilities or
obligations arising under or relating to any Environmental Matters (other than as provided in
Section 2.04(d));
(b) any liability or obligation of Seller, or any member of any consolidated, affiliated,
combined or unitary group of which Seller is or has been a member, for Taxes (including liabilities
for Taxes allocated to Seller under Article 8 and except to the extent explicitly assumed in
Section 2.03); provided
20
that Transfer Taxes incurred in connection with the transactions contemplated by this
Agreement and Apportioned Obligations shall be borne and paid in the manner set forth in Section
8.01 hereof;
(c) any liability or obligation to the extent associated with or relating to an Excluded Asset
(including any liability incurred in connection with Seller’s removal of the Excluded Assets);
(d) Excluded Environmental Liabilities;
(e) all of Seller’s or its Subsidiaries’ obligations arising under any outstanding payable
arising prior to Closing between the Seller or any of its Subsidiaries in respect of the Business,
on the one hand, and Seller or any Affiliate of the Seller in respect of any other business,
division, group or function, on the other hand;
(f) except as provided in Section 2.03(h) or Section 2.03(i), all liabilities and obligations
with respect to, or relating to, the Business Employees or any current or former employee of Seller
or its Affiliates (including, without limitation, all liabilities and obligations arising from any
Transferred Employee’s employment by Seller or its Affiliates or the termination of such employment
and including all Retained Union Employee Benefit Liabilities); provided, that the foregoing
liabilities and obligations shall not include any Assumed Environmental Liabilities; and
(g) except as provided in Section 2.03(i), all liabilities and obligations with respect to, or
relating to, any Employee Plan or any other pension, profit sharing, stock bonus, stock option,
thrift or other retirement plan, medical, hospitalization, dental, life, disability, vacation or
other insurance or benefit plan, employee stock ownership plan, deferred compensation, stock
ownership, stock purchase, bonus, benefit or other incentive plan, severance plan or other employee
benefit plan relating to Seller, its Affiliates or their respective current or former employees, or
under or with respect to which Seller or its ERISA Affiliates have or may have any obligation or
liability.
Section 2.05
. Non-assignability of Purchased Assets. (a) Notwithstanding anything in this
Agreement to the contrary, if and to the extent that the transfer or assignment from Seller or any
of its Subsidiaries to Buyer of any Purchased Asset would be a violation of Applicable Law with
respect to such Purchased Asset or otherwise materially and adversely affect the rights of Seller
or its Subsidiaries or Buyer thereunder as a result of the failure to obtain any consent, approval,
waiver or authorization required in connection with such transfer or assignment, then the transfer
or assignment to Buyer of such Purchased Asset (each, a “
Delayed Transfer Asset”) shall be
automatically deemed deferred and any such purported transfer or assignment shall be null and void
until such time as all legal impediments are removed and/or applicable consents, approvals, waivers
or authorizations have been obtained. Notwithstanding the foregoing, for purposes
21
of determining whether any liability or obligation is an Assumed Liability, any such Delayed
Transfer Asset shall be deemed a Purchased Asset only as of and from the earlier of (i) the date
that such Delayed Transfer Asset is actually transferred or assigned to Buyer and (ii) the date
that a Sharing Arrangement is entered into by Buyer and Seller with respect to such Delayed
Transfer Asset; provided that to the extent Buyer receives the use or benefit of a given Delayed
Transfer Asset, it shall bear the burden of such Delayed Transfer Asset corresponding to such use
or benefit. Seller and Buyer will use their commercially reasonable efforts (but without any
payment of money by Seller or Buyer) to obtain the consent of the applicable third party for the
assignment or transfer of the Delayed Transfer Assets.
(b) If the transfer or assignment of any Purchased Asset intended to be transferred or
assigned hereunder is not consummated prior to or at the Closing as a result of Section 2.05(a),
then Seller or its Subsidiary shall thereafter, directly or indirectly, hold such Delayed Transfer
Asset for the use and benefit of Buyer (at the expense of Buyer) insofar as reasonably practicable.
In addition, to the extent not prohibited, Seller shall take or cause to be taken such other
actions as may be reasonably requested by Buyer (including entry into such cooperative arrangements
as may be reasonably acceptable to Buyer and Seller, including sublease, agency, management,
indemnity or payment arrangements (a “Sharing Arrangement”)) in order to place Buyer, insofar as
reasonably practicable, in substantially the same position as if such Delayed Transfer Asset had
been transferred as contemplated hereby and so that all the benefits and burdens relating to such
Delayed Transfer Asset, including possession, use, risk of loss, potential for gain, and dominion,
control and command over such Delayed Transfer Asset, are to inure from and after the Closing to
Buyer. To the extent permitted and to the extent otherwise permissible in light of any required
consent, approval, waiver or authorization, Buyer shall be entitled to, and shall be responsible
for, the management of any Delayed Transfer Assets not yet transferred to it as a result of this
Section 2.05 and the parties hereto agree to use commercially reasonable efforts to cooperate and
coordinate with respect thereto.
(c) If and when the consents, approvals, waivers or authorizations, the absence of which
caused the deferral of transfer of any Purchased Asset pursuant to this Section 2.05, are obtained,
the transfer of the applicable Delayed Transfer Asset to Buyer shall automatically and without
further action be effected in accordance with the terms of this Agreement. For the avoidance of
doubt, the covenants set forth in this Section 2.05 apply pre-Closing and post-Closing.
(d) Neither Seller nor any of its Subsidiaries shall be obligated, in connection with the
provisions of this Section 2.05, to expend any money unless the necessary funds are advanced by
Buyer, other than reasonable out-of-pocket recording or similar fees, all of which shall be
promptly reimbursed by Buyer except as otherwise specifically provided in this Agreement.
(e) The parties hereto further agree that, provided that Seller or its
22
Subsidiary and Buyer have entered into a Sharing Arrangement with respect to a Delayed
Transfer Asset or to the extent that Buyer otherwise receives the use or benefit of a Delayed
Transfer Asset, (i) such Delayed Transfer Asset shall be treated for all income Tax purposes as an
asset of Buyer and (ii) neither Buyer nor Seller shall take, and each of Buyer and Seller shall
prevent any of their respective Affiliates from taking, any position inconsistent with such
treatment for any income Tax purposes (unless required by a change in applicable income Tax law or
a good faith resolution of a contest).
Section 2.06
. Purchase Price; Allocation of Purchase Price. (a) The purchase price (the
“
Purchase Price”) for the Purchased Assets shall be the sum of (i) the Adjusted Cash Amount, (ii)
the Inventory Value and (iii) the Aggregate Capital Expenditures Amount. The Purchase Price shall
be paid as provided in Section 2.07 and shall be subject to adjustment as provided in Sections
2.08, 2.09 and 2.10.
(b) As promptly as practicable, but not later than 60 days after the Closing, Buyer shall
deliver to Seller a statement (the “Allocation Statement”), allocating the Purchase Price (plus
Assumed Liabilities, to the extent properly taken into account under Section 1060 of the Code)
among the Purchased Assets in accordance with Section 1060 of the Code (the “Allocation”). If
within 30 days after the delivery of the Allocation Statement Seller notifies Buyer in writing that
Seller objects to the allocation set forth in the Allocation Statement, Buyer and Seller shall use
commercially reasonable efforts to resolve such dispute within 30 days. In the event that Buyer
and Seller are unable to resolve such dispute within 30 days Buyer and Seller shall jointly retain
a nationally recognized accounting firm (the “Accounting Referee”) to resolve the disputed items.
Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall
be adjusted to reflect such resolution. The costs, fees and expenses of the Accounting Referee
shall be borne equally by Buyer and Seller.
(c) Seller and Buyer agree to (i) be bound by the Allocation Statement and (ii) act in
accordance with the Allocation in the preparation, filing and audit of any Tax return (including
filing Form 8594 with its federal income Tax return for the taxable year that includes the date of
the Closing).
(d) If an adjustment is made with respect to the Purchase Price pursuant to Section 2.08 or,
after the Closing, Section 2.08, Section 2.09, Section 2.10 or Section 12.02, the Allocation
Statement shall be adjusted in accordance with Section 1060 of the Code and as mutually agreed by
Buyer and Seller. In the event that an agreement is not reached within 30 days after the
determination of the applicable adjustment, any disputed items shall be resolved in the manner
described in Section 2.06(b). Buyer and Seller agree to file any additional information return
required to be filed pursuant to Section 1060 of the Code and to treat the Allocation Statement as
adjusted in the manner described in Section 2.06(b).
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(e) Not later than 30 days prior to the filing of their respective Forms 8594 relating to this
transaction, each party shall deliver to the other party a copy of its Form 8594.
(f) No later than 20 Business Days prior to Closing, Seller shall deliver to Buyer a proposed
schedule (the “Proposed Wisconsin Tax Schedule”) that, for purposes of computing the amount of
“real estate transfer fees” required by the state of Wisconsin to be paid on the sale of the
Purchased Assets (the “Wisconsin Real Estate Transfer Fees”), sets forth either (i) the percentage
of the Purchase Price that will be allocated to those Purchased Assets constituting “real property”
as defined under the laws of the state of Wisconsin or (ii) a methodology for determining such
percentage. Buyer and Seller shall work in good faith to reach agreement on any revisions to the
Proposed Wisconsin Tax Schedule and to finalize the revised Proposed Wisconsin Tax Schedule (such
final schedule, the “Wisconsin Tax Schedule”) no later than 10 Business Days prior to Closing. If
Buyer and Seller are unable to reach an agreement 10 Business Days prior to Closing, then Buyer and
Seller shall jointly retain an Accounting Referee to resolve the dispute in accordance with the
procedures set forth in Section 2.11. The Accounting Referee shall make a final determination as
promptly as practicable, but in no event later than 10 days before payment of the real estate
transfer fees described in the Wisconsin Tax Schedule are due pursuant to Applicable Law. Upon
resolution of the dispute, the percentage or methodology (as applicable) set forth in the Wisconsin
Tax Schedule shall be adjusted to reflect such resolution, and Buyer and Seller agree to be bound
by such adjusted Wisconsin Tax Schedule. Adjustments to the Wisconsin Real Estate Transfer Fees
shall be made in accordance with this Section 2.06(f) following any post-Closing adjustments to the
Purchase Price pursuant to Section 2.08, Section 2.09 or Section 2.10.
Section 2.07
. Closing. The closing (the “
Closing”) of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities hereunder shall take place at the offices of
Xxxxx Xxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, as soon as possible, but in no
event later than the second Business Day, after satisfaction or waiver of the conditions set forth
in Article 11 (other than conditions that by their nature are to be (and will be) satisfied at
Closing) or at such other time or place as Buyer and Seller may agree;
provided, however, that if
pursuant to the foregoing the Closing would occur on a date that is earlier than 30 days after the
date Seller delivers the Interim Financial Statements to Buyer, then the Closing shall occur on the
earlier of (i) the date that is 30 days (or if such date is not a Business Day, on the first
Business Day after the end of such 30 day period) after the date on which Seller delivers the
Interim Financial Statements to Buyer and (ii) the first Business Day after the day on which Buyer
consummates the Financing. The Closing shall be deemed to be effective as of 11:59:59 p.m. Central
time on the Closing Date. At the Closing:
(a) Buyer shall deliver to Seller (and/or one or more Subsidiaries of Seller as directed by
Seller) an amount in cash equal to the sum of (i) the Cash
24
Amount as adjusted by the Estimated Closing Proration Adjustment Amount, (ii) the Estimated
Inventory Value, (iii) Seller’s good faith estimate of the Aggregate Capital Expenditures Amount
(the “Estimated Aggregate Capital Expenditures Amount”) (which good faith estimate will be
delivered by Seller to Buyer no later than 5 Business Days prior to Closing) and (iv) if
applicable, the Initial Hydrocarbon Inventory Tax Amount, in immediately available funds by wire
transfer to such account(s) of Seller and/or its Subsidiaries as designated by Seller, by notice to
Buyer, not later than 2 Business Days prior to the Closing Date (or if not so designated, then by
certified or official bank check payable in immediately available funds to the order of Seller
and/or the applicable Subsidiaries in such amount).
(b) Seller and/or its Subsidiaries and Buyer shall enter into an Assignment and Assumption
Agreement and Xxxx of Sale substantially in the form attached hereto as Exhibit A, Seller shall
deliver or cause to be delivered to Buyer duly executed special warranty deed(s) substantially in
the form attached hereto as Exhibit G and, subject to the provisions hereof, Seller shall deliver
or cause to be delivered to Buyer such other deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and assignment as the parties
and their respective counsel shall deem reasonably necessary to vest in Buyer all of Seller’s and
its Subsidiaries’ right, title and interest in, to and under the Purchased Assets (it being
expressly understood that such deeds, bills of sale, endorsements, consents, assignments and other
instruments shall not require Seller or its Subsidiaries or any other Person to make any additional
representations, warranties or covenants, express or implied, not contained in this Agreement).
(c) Seller (and/or its applicable Subsidiaries) and Buyer shall enter into (i) the Transition
Services Agreement and (ii) the Crude Supply Agreement.
Section 2.08
. Hydrocarbon Inventory and Adjustment. (a) No later than 5 Business Days prior
to the Closing Date, Seller shall deliver to Buyer a certificate of Seller setting forth Seller’s
good faith estimate of the Inventory Value (the “
Estimated Inventory Value”). Such certificate
shall also set forth Seller’s estimates of the ownership, types, characteristics and volumes, on a
tank, trunk, pipeline or other location basis, of all Hydrocarbon Inventory.
(b) Prior to the Closing, Seller and Buyer shall engage a mutually agreeable independent
inspector (the “Field Inspector”). The Field Inspector shall measure the Hydrocarbon Inventory as
of Closing at the respective locations of the Hydrocarbon Inventory on the Closing Date; provided
that notwithstanding anything herein to the contrary, (i) the volumes of all Hydrocarbon Inventory
in process units and pipeworks and the volumes of all tank sludge Hydrocarbon Inventory shall be
conclusively determined as set forth on Exhibit B-1 and shall not be measured by the Field
Inspector or included in the Field Inspector Report, (ii) the volumes of all In Bound Hydrocarbon
Inventory and Outbound Hydrocarbon Inventory (as each such term is defined on Exhibit B-1)
(together,
25
“In Bound / Out Bound Inventory”) shall be determined as set forth on Exhibit B-1 and shall
not be measured by the Field Inspector or included in the Field Inspector Report and (iii) crude
tank volume compositions shall be determined as set forth on Exhibit B-2. With respect to the
Hydrocarbon Inventory measured by the Field Inspector, such Hydrocarbon Inventory shall be measured
in accordance with the procedures set forth in Exhibit X-x. Buyer shall not take or permit to be
taken any actions that would reduce the level of Hydrocarbon Inventory between the time of the
Closing and such time that the Field Inspector completes its measurement procedures unless Buyer
and Seller mutually agree upon adjustments and/or procedures to appropriately account for any such
reduction. The Field Inspector shall issue a written report (the “Field Inspector Report”) to
Buyer and Seller within 10 Business Days after the Closing Date setting forth the volumes and
quantities of the Hydrocarbon Inventory as of the Closing (to the extent such Hydrocarbon Inventory
is measured by the Field Inspector in accordance with Exhibit B-1) and such volumes and quantities
shall be deemed to be final and binding on Buyer and Seller (absent manifest error). The fees and
expenses of the Field Inspector shall be borne equally by Seller and Buyer.
(c) As promptly as practicable, but in any event no later than 20 days following receipt of
the Field Inspector Report, Seller shall cause to be prepared and delivered to Buyer a statement
(the “Inventory Statement”), together with (where applicable) supporting calculations and
information setting forth (i) the volumes and quantities of the In Bound / Out Bound Inventory as
of the Closing Date and determined in accordance with Exhibit B-1 and (ii) the value of the
Hydrocarbon Inventory (the “Inventory Value”) as of the Closing Date, which value shall be
determined in accordance with the procedures set forth in Exhibit B-2. No later than 20 days
following its receipt of the Inventory Statement Buyer shall give Seller notice of (i) its
acceptance of the Inventory Statement or (ii) specific and reasonably detailed objections to the
valuation and/or (to the extent expressly permitted in Exhibit B-1) the volumes set forth in the
Inventory Statement (and Buyer shall be deemed to have agreed with all matters set forth in the
Inventory Statement that are not objected to). If Buyer fails to give such notice before the end
of such 20 day period, the Inventory Statement will be deemed final and binding upon the parties.
If Buyer gives such notice to Seller of Buyer’s objection within such 20 day period, and Buyer and
Seller are unable to resolve the issues in dispute within 10 days after delivery of such notice of
objection, each of Buyer’s and Seller’s positions on the remaining items in dispute with respect to
the computation of the Inventory Value will be submitted to an independent and qualified party
mutually selected by the parties (the “Inspector”) such as an accounting firm or independent
inspector, for final resolution in accordance with the procedures set forth in Section 2.11.
(d) If the Inventory Value (as finally determined pursuant to this Section 2.08) minus the
Estimated Inventory Value (such difference, the “Inventory Balance”) is greater than zero, Buyer
shall pay to Seller, without offset or deduction, an amount equal to the Inventory Balance by wire
transfer of immediately available funds to such account or accounts of Seller or its
26
Subsidiaries as may be designated by Seller. If the amount of the Inventory Balance is less
than zero, then Seller shall pay, or cause to be paid, to Buyer, without offset or deduction, an
amount equal to the absolute value of the Inventory Balance by wire transfer of immediately
available funds to such account or accounts of Buyer as may be designated by Buyer. Any payment
pursuant to this Section 2.08(d) shall be made within 5 days after the Inventory Value has been
finally determined and shall bear interest from and including the Closing Date to but excluding the
date of payment at a rate per annum equal to the Interest Rate in effect from time to time during
the period from the Closing Date to the date of payment. Such interest shall be payable at the
same time as the payment to which it relates and shall be calculated on the basis of a year of 365
days and the actual number of days elapsed.
(e) Each party agrees that, following the Closing, it shall not take any actions with respect
to the accounting books, records, policies and procedures of itself or its Affiliates that would
obstruct or prevent the preparation of the Inventory Statement as provided in this Section 2.08.
From the Closing through the final determination of the Inventory Value in accordance with this
Section 2.08, Seller and Buyer shall provide one another with reasonable access at all reasonable
times to the personnel, properties, and books and records of the applicable refinery for purposes
of determining the Inventory Value, including permitting the parties and their respective advisors
to participate in the taking of the physical inventory.
(f) Except as expressly set forth in this Section 2.08 or Section 2.11, Buyer and Seller shall
each bear its own expenses incurred in connection with the preparation and review of the Inventory
Statement.
Section 2.09
. Adjustments for Pro-Rated Expenses. (a) Buyer and Seller agree that the items
listed in Section 2.09(a)(i) — 2.09(a)(vii) (but excluding any income Taxes and the City of
Superior Fee, and without duplication) and relating to the Business or operation of the Purchased
Assets shall be prorated as of the Closing, with the Seller liable to the extent such items relate
to any time period prior to the Closing, and the Buyer liable to the extent such items relate to
periods on (including those items arising as a result of the consummation of the transactions
contemplated by this Agreement) or after the Closing (in each case, measured in the same units used
to compute the item in question, or otherwise measured by calendar days), and, in accordance with
Section 2.09(b), the Cash Amount shall be increased by the amount of Xxxxx Cash and by the
pro-rated amount of all such payments made by Seller and its Subsidiaries prior to the Closing but
that are attributable to periods on or after the Closing and the Cash Amount shall be decreased by
the pro-rated amount of all such payments to be made by Buyer subsequent to the Closing but that
are attributable to periods prior to the Closing:
(i) personal property, real estate and occupancy Taxes, assessments and other
charges, including those of the type that could give
27
rise to a Permitted Lien or are payable in installments of which any installment is
due and payable, if any, on or with respect to the Business or operation of the Purchased
Assets; provided that the proration of Taxes referred to in this Section 2.09(a)(i) shall
be made in accordance with Article 8;
(ii) rent, Taxes and all other items (including prepaid services or goods not
included in Hydrocarbon Inventory) payable by or to the Seller or its Subsidiaries under
any Assigned Contracts;
(iii) any permit fees, license fees, registration fees or other similar fees with
respect to any Business Permits;
(iv) sewer rents and charges for water, telephone, electricity and other utilities;
(v) other fees or charges imposed by any Governmental Authority;
(vi) the Prepayments (other than those set forth on Section 2.09(a)(vi) of the Seller
Disclosure Schedule), it being understood that for purposes of this Section 2.09(a)(vi),
any deposit or similar payment securing a performance obligation will be deemed to be a
Prepayment that relates to periods after the Closing Date regardless of actual timing of
the performance obligation; and
(vii) payments under the Assigned Contracts; provided that if Seller or any of its
Subsidiaries or Buyer or any of its Affiliates makes any payment to a third party pursuant
to any Assigned Contract and (i) such payment is made in respect of work performed,
services provided or goods delivered during a period of time that includes the Closing or
(ii) the Closing occurs between the making of such payment and the performance of the work
or services or delivery of goods, the parties will allocate the burden of such payment in
a manner that reflects the relative benefit of such work performed, services provided or
goods delivered to each party.
For the avoidance of doubt, the parties agree that for purposes of determining the pro-rations
pursuant to this Section 2.09(a), the Closing Date will be included in the time period for which
Seller is responsible, except to the extent the relevant matter arises as a result of the
consummation of the transactions contemplated by this Agreement.
(b) At Closing, the Cash Amount shall be increased or decreased (as applicable) by an amount
equal to Seller’s good faith estimate of the amount of Xxxxx Cash and the prorations referred to in
Section 2.09(a) (such estimate, the “Estimated Closing Proration Adjustment Amount”), and a further
adjustment to account for the difference between the estimated amounts and the actual amounts (the “Post-Closing Proration Adjustment Amount”) shall be made
28
after the Closing by
mutual agreement of Seller and Buyer within 45 days after the Closing Date (or 120 days of the
Closing Date, in the case of prorations referred to in Section 2.09(a)(i)) and no further
adjustment payment in respect of Xxxxx Cash and such prorations shall be made thereafter. The
prorations relating to a time period shall be based on the number of days in a year or other
appropriate period (a) through and including the Closing Date and (b) after the Closing Date. The
Seller and the Buyer agree to furnish each other with such documents and other records as may be
reasonably requested in order to confirm all adjustment and proration calculations made pursuant to
Section 2.09(a) and this Section 2.09(b). If Seller and Buyer are not able to mutually agree on a
Post-Closing Proration Adjustment Amount within the period specified above, Buyer and Seller shall
jointly retain an Accounting Referee to resolve the dispute in accordance with the procedures set
forth in Section 2.11. Any post-Closing payment pursuant to this Section 2.09(b) shall be made
within 5 days after the Post-Closing Proration Adjustment Amount has been finally determined,
whether by mutual agreement or dispute resolution (the “Post-Closing Adjustment Date”), and shall
bear interest from and including the Post-Closing Adjustment Date to but excluding the date of
payment at a rate per annum equal to the Interest Rate in effect from time to time during the
period from the Closing Date to the date of payment. Such interest shall be payable at the same
time as the payment to which it relates and shall be calculated on the basis of a year of 365 days
and the actual number of days elapsed.
Section 2.10
. Adjustments For Certain Capital Expenditures. (a) Promptly following the
Closing, but in no event later than 45 days thereafter, Seller shall provide Buyer with a statement
setting forth in reasonable detail its calculation of the Aggregate Capital Expenditures Amount,
which statement shall be accompanied by copies of the applicable vendor invoices for the expenses
shown to the extent available, and such other supporting documentation as Buyer
reasonably requests; it being understood that Seller shall be responsible for all payments owing to
vendors for all capital expenditures reflected in such statement. Buyer shall be deemed to have
agreed with the amount set forth on such statement unless Buyer notifies Seller in writing of its
disagreement within 20 days of Buyer’s receipt of such statement. If Buyer so notifies Seller,
Seller and Buyer shall work in good faith to resolve any such disagreement as promptly as
practicable, but in any event within 10 days of such notification. If Seller and Buyer are not
able to mutually agree on a determination of the Aggregate Capital Expenditures Amount within the
period specified above, Buyer and Seller shall jointly retain an Accounting Referee to resolve the
dispute in accordance with the procedures set forth in Section 2.11. If the Final Aggregate
Capital Expenditures Amount exceeds the Estimated Aggregate Capital Expenditures Amount, Buyer
shall pay promptly to Seller, without offset or deduction, the amount of such excess to such
account or accounts as may be designated by Seller. If the Estimated Aggregate Capital
Expenditures Amount exceeds the Final Aggregate Capital Expenditures Amount, Seller shall promptly
pay to Buyer, without offset or deduction, the amount of such excess to such account or accounts as
may be designated by Buyer. As used herein, “
Final Aggregate Capital Expenditures
29
Amount” means the
amount set forth on the statement delivered by Seller pursuant to this Section 2.10 (if Buyer does
not notify Seller of a disagreement as set forth herein) or the Aggregate Capital Expenditures
Amount that has been finally determined, whether by mutual agreement or dispute resolution.
(b) Any payment pursuant to this Section 2.10 shall be made within 5 days after the Final
Aggregate Capital Expenditures Amount has been determined and shall bear interest from and
including the Closing Date to but excluding the date of payment at a rate per annum equal to the
Interest Rate in effect from time to time during the period from the Closing Date to the date of
payment. Such interest shall be payable at the same time as the payment to which it relates and
shall be calculated on the basis of a year of 365 days and the actual number of days elapsed.
(a) In the case of any dispute submitted to an Accounting Referee or an Inspector pursuant to
this Agreement, (i) the Inspector or Accounting Referee, as applicable, shall only consider those
items as to which Buyer and Seller disagree, (ii) each party will furnish to the Inspector or
Accounting Referee, as applicable, such work papers and other documents and information relating to
the disputed issues as the Inspector or Accounting Referee, as applicable, may request and are
available to such party, and will be afforded the opportunity to present to the Inspector or
Accounting Referee, as applicable, any material relating to such issues and to discuss the same
with the Inspector or Accounting Referee, as applicable, (iii) the Inspector’s or Accounting
Referee’s determination or computation of the applicable final amount or value shall be binding and
conclusive on the parties and will be deemed to be final (provided that with respect to each item
in dispute, the Inspector’s or Accounting Referee’s determination or computation of the applicable
final amount or value shall be within the bounds of the applicable amount or value submitted by
Buyer, on the one hand, and Seller, on the other hand, with respect to such item) and judgment
thereupon may be entered in any court having jurisdiction over the party against which the same is
sought to be enforced and (iv) the fees and expenses of the Inspector or Accounting Referee, as
applicable, for such determination will be borne by the Buyer, on the one hand, and the Seller, on
the other hand, in the same proportion that the dollar amount of disputed items lost by the Buyer,
on the one hand, or the Seller, on the other hand, bears to the total dollar amount in dispute that
is resolved by the Inspector or Accounting Referee, as applicable.
Except as set forth in the Seller Disclosure Schedule, Seller represents and warrants to Buyer
as of the date hereof that:
30
Section 3.01
. Corporate Existence and Power. Each of Seller and each Subsidiary that is
transferring any Purchased Assets hereunder is an entity duly organized, validly existing and (to
the extent applicable) in good standing under the laws of its jurisdiction of organization and has
all corporate or other powers required to carry on its business as currently conducted. Each of
Seller and each Subsidiary that is transferring any Purchased Assets hereunder is duly qualified to
do business as a foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be so qualified or to
be in good standing would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.02
. Corporate Authorization. The execution, delivery and performance by Seller of
this Agreement and the consummation of the transactions contemplated hereby are within Seller’s
corporate powers and have been duly authorized by all necessary corporate action on the part of
Seller. This Agreement constitutes a valid and binding agreement of Seller enforceable against
Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and
general principles of equity).
Section 3.03
. Governmental Authorization. The execution, delivery and performance by Seller
of this Agreement and the consummation of the transactions contemplated hereby require no action by
or in respect of, or filing with, any Governmental Authority other than (i) compliance with any
applicable requirements of the HSR Act; (ii) compliance with the matters set forth on Section 3.03
of the Seller Disclosure Schedule; (iii) compliance with any applicable requirements of the 1934
Act; and (iv) any such action or filing as to which the failure to make or obtain would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.04
. Noncontravention. The execution, delivery and performance by Seller of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (i)
violate the certificate of incorporation or bylaws or equivalent organizational documents of Seller
or any Subsidiary of Seller that is transferring any Purchased Assets hereunder, (ii) assuming
compliance with the matters referred to in Section 3.03, violate any Applicable Law, (iii)
constitute a default under or give rise to any right of termination, cancellation or acceleration
of any right or obligation or to a loss of any benefit relating to the Business to which Seller or
any Subsidiary of Seller that is transferring any Purchased Assets hereunder is entitled under any
provision of any Contract or other instrument binding upon Seller or such Subsidiary or (iv) result
in the creation or imposition of any Lien on any Purchased Asset, except for Permitted Liens, with
such exceptions, in the case of each of clauses (ii) through (iv), as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
31
Seller Disclosure Schedule are true and complete copies of the balance sheets for the Business
as of December 31, 2010 and December 31, 2009 and the related statements of operations and cash
flow for the years ended December 31, 2010, December 31, 2009 and December 31, 2008 (collectively,
the “Business Financial Statements”). Except as disclosed in the footnotes to the Business
Financial Statements, the Business Financial Statements present fairly in all material respects the
financial position and results of operations and cash flow of the Business as of the dates and for
the relevant periods of such statements in conformity with GAAP applied on a consistent basis
throughout the periods involved. There is no liability or obligation of any kind, whether accrued,
absolute, fixed, contingent, or otherwise, relating to the Purchased Assets and the Business that
is not reflected or reserved against in the Balance Sheet, other than (i) liabilities incurred in
the Ordinary Course of Business since December 31, 2010, (ii) any such liabilities or obligations
that would not be required to be presented on the face of financial statements prepared in
conformity with GAAP, in a manner consistent with past practice, in the preparation of the Business
Financial Statements, (iii) any such liabilities or obligations that would not reasonably be
expected to be material to the Business, taken as a whole or (iv) any such liabilities or
obligations under any Assigned Contract, other than as a result of Seller’s or its Subsidiaries’
breach of any Assigned Contract prior to Closing.
Section 3.06
. Absence of Certain Changes. (a) Since the Balance Sheet Date, the Business has
in all material respects been conducted in the Ordinary Course of Business and there has not been
any event, occurrence, development or state of circumstances or facts that has had or would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) From the Balance Sheet Date until the date hereof, there has not been any action taken by
Seller or its Subsidiaries that, if taken during the period from the date of this Agreement through
the Closing Date without Buyer’s consent, would constitute a breach of Section 5.01(a), Section
5.01(b), or (to the extent relating to any of the foregoing Sections) Section 5.01(j).
Section 3.07
. Material Contracts. (a) Except as set forth on Section 3.07(a) of the Seller
Disclosure Schedule, as of the date hereof neither Seller nor any of its Subsidiaries is a party to
or bound by any of the following relating exclusively to the Business:
(i) any lease of personal property providing for annual rentals of $2,000,000 or more
that cannot be terminated on not more than 60 days’ notice without payment by Seller or
any of its Subsidiaries of any material penalty;
(ii) any Purchase Agreements (other than agreements for the purchase of any
materials, supplies or goods on a spot market basis) providing for either (A) annual
payments by Seller or any of its Subsidiaries of $2,000,000 or more or (B) aggregate
payments by Seller or
32
any of its Subsidiaries of $4,000,000 or more, in each case other than any Purchase
Agreement (i) that can be terminated on not more than 60 days’ notice without payment by
Seller or any of its Subsidiaries of any material penalty or (ii) with respect to which no
delivery or payment obligations remain outstanding;
(iii) any Supply Agreements (other than agreements for the sale of any materials,
supplies or goods on a spot market basis) that provides for annual payments to Seller or
any of its Subsidiaries of $2,000,000 or more or aggregate payments to Seller or any of
its Subsidiaries of $4,000,000 or more, in each case other than any Supply Agreement (i)
that can be terminated on not more than 60 days’ notice without payment by Seller or any
of its Subsidiaries of any material penalty or (ii) with respect to which no delivery or
payment obligations remain outstanding;
(iv) any material partnership, joint venture or other similar agreement or
arrangement;
(v) any agreement relating to the acquisition or disposition of any material business
(whether by merger, sale of stock, sale of assets or otherwise);
(vi) any agreement relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case, whether incurred, assumed, guaranteed or
secured by any asset), except any such agreement with an aggregate outstanding principal
amount not exceeding $2,000,000;
(vii) any agreement that materially limits the freedom of Seller or any of its
Subsidiaries to compete in any line of business or with any Person or in any area;
(viii) any material Seller PMPA Franchise Agreement; or
(ix) other than Real Property Leases, Purchase Agreements and Supply Agreements, any
other agreement, commitment or arrangement not otherwise referred to in Sections
3.07(a)(i) — 3.07(a)(viii) (whether or not in excess of the dollar thresholds set forth in
such sections), including any agreements with Business Contractors, that has a term
greater than one year and requires payments in excess of $500,000 per contract year or
aggregate payments in excess of $2,500,000 (in each case other than such agreements (i)
that can be terminated on not more than 60 days’ notice without payment by Seller or any
of its Subsidiaries of any material penalty or (ii) with respect to which no delivery or
payment obligations remain outstanding).
(b) Except as set forth on Section 3.07(b) of the Seller Disclosure Schedule and other than
agreements (i) for the purchase or sale of any materials,
33
supplies or goods on a spot market basis or (ii) with respect to which no delivery or payment
obligations remain outstanding, as of the date hereof neither Seller nor any of its Subsidiaries is
a party to or bound by any material Intra-Company Agreement.
(c) Each agreement, commitment or arrangement required to be disclosed pursuant to Section
3.07(a) (each, a “Material Contract”) is a valid and binding agreement of Seller or one of its
Subsidiaries and is in full force and effect, and none of Seller or any of its Subsidiaries or, to
the knowledge of Seller, any other party thereto is in default or breach in any respect under the
terms of any such Material Contract, except for any such failures to be valid and binding or in
full force and effect, defaults or breaches which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 3.08
. Litigation. As of the date hereof, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of Seller, threatened against, Seller or any of its
Subsidiaries with respect to the Business before any arbitrator or any Governmental Authority which
is reasonably likely to have, individually or in the aggregate, a Material Adverse Effect or which
in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement.
Section 3.09
. Compliance with Laws and Court Orders. Neither Seller nor any of its
Subsidiaries is in violation of any Applicable Law relating to the Purchased Assets or the conduct
of the Business, except for violations that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
Section 3.10
. Properties. (a) Sections 2.01(a) and 2.01(b) of the Seller Disclosure Schedule
correctly identify all real property owned in fee by Seller or its Subsidiaries and all property
leased by Seller or its Subsidiaries, respectively, used or held for use exclusively in the
operation of the Business (collectively, the “
Real Property”).
(b) Seller or one of its Subsidiaries has good and (with respect to owned interests in real
estate) marketable (subject to any Permitted Liens) title to, or in the case of any Leased Real
Property or leased personal property, has valid leasehold interests in, all Purchased Assets,
except for properties and assets sold in the Ordinary Course of Business or where the failure to
have such good and marketable title or valid leasehold interest would not reasonably be expected to
be material to the Business. No Purchased Asset is subject to any Lien, except:
(i) Liens disclosed on Section 3.10(b)(i) of the Seller Disclosure Schedule;
(ii) Liens disclosed on the Balance Sheet or notes thereto or
34
securing liabilities reflected on the Balance Sheet or notes thereto;
(iii) Liens for taxes, assessments and similar charges that are not yet due or are
being contested in good faith;
(iv) mechanic’s, materialman’s, carrier’s, repairer’s and other similar Liens arising
or incurred in the Ordinary Course of Business or that are not yet due and payable or are
being contested in good faith and for which adequate reserves have been made;
(v) undetermined or inchoate liens or charges constituting or securing the payment of
expenses which were incurred incidental to the conduct of the operations of the Business
or the operation of the Purchased Assets;
(vi) Liens created by law or which arise from leases, easements, rights-of-way or
other real property interests for compliance with the terms of such leases, easements,
rights-of-way or other real property interests (including the payment of rental fees or
other charges); provided, that the same individually and in the aggregate do not
materially interfere with the operation or use of the Purchased Assets or the Business as
currently operated;
(vii) all reservations of record of minerals (without right of surface entry) in and
under or that may be produced from any of the lands constituting part of the Real Property
or on which any of the Purchased Assets are located;
(viii) all easements, rights-of-way and restrictive covenants of record, and all
discrepancies, shortages in area, conflicts in boundary lines, encroachments or
protrusions, or overlapping of improvements, defects, irregularities and other matters
affecting the Real Property or the Facilities which (A) individually and in the aggregate
do not materially detract from the value of the Purchased Asset as currently used or
materially interfere with the operation or use of the Purchased Asset or the Business as
currently operated and (B) would not reasonably be expected to be material to the
Business;
(ix) any defect that has been cured by applicable statutes of limitations or statutes
for prescription;
(x) any defect affecting (or the termination or expiration of) any easement,
right-of-way, leasehold interest, license or other real property interest which is
replaced prior to Closing at Seller’s sole cost by an easement, right-of-way, leasehold
interest, license or other real property interest constituting part of the Purchased
Assets covering substantially the same rights to use the land or the portion thereof used
by Seller or its Subsidiaries in connection with the operation of the Business or
Facilities;
35
(xi) rights reserved to or vested in any Governmental Authority to control or
regulate any of the Purchased Assets or the operations of the Business or Facilities and
any rights under Applicable Law, including any building or zoning ordinances;
(xii) existing leases, licenses and similar agreements to the extent such constitute
Assigned Contracts;
(xiii) acts done or suffered to be done by, and judgments against, Buyer or its
Affiliates and those claiming by, through or under Buyer or its Affiliates;
(xiv) any agreement or contract entered into by the parties in accordance with the
terms of this Agreement;
(xv) all matters of record as of the date hereof, but excluding any monetary Liens,
purchase options and rights of first refusal;
(xvi) Liens incurred in the Ordinary Course of Business since the Balance Sheet Date;
or
(xvii) other Liens which (A) individually and in the aggregate do not materially
detract from the value of the Purchased Asset as currently used or materially interfere
with the operation or use of the Purchased Asset or the Business as currently operated and
(B) would not reasonably be expected to be material to the Business (clauses (i) — (xvii)
of this Section 3.10(b) are, collectively, the “Permitted Liens”).
(c) Except for services provided pursuant to the Transition Services Agreement (and the assets
related thereto), the Purchased Assets and the rights provided to Buyer pursuant to Article 10
(subject to the limitations set forth therein, including Section 10.03(c)) constitute all of the
material property and assets owned or leased by Seller or its Subsidiaries necessary to or used
exclusively in the conduct of the Business and are generally adequate to conduct the Business as
currently conducted. For the avoidance of doubt, the failure to obtain any consent, approval,
waiver or authorization required in connection with any transfer or assignment to Buyer of a
Purchased Asset shall not in and of itself constitute a breach of this Section 3.10(c) or any other
representation or warranty in this Agreement. There are no assets, licenses, Contracts or Permits
which are material to the Business, taken as a whole, that are used or held for use primarily but
not exclusively in connection with the Business, except for those set forth on Section 3.10(c) of
the Seller Disclosure Schedule under the heading “Non-Exclusive Assets”. For the avoidance of
doubt, all tangible Equipment and inventories located at the Facilities shall be deemed to be used
exclusively in the Business.
(d) Each of the Real Property Leases and Easements is a valid and binding agreement of Seller
or one of its Subsidiaries and is in full force and
36
effect, and none of Seller or any of its Subsidiaries or, to the knowledge of Seller, any
other party thereto, is in default or breach in any respect under the terms of any such Real
Property Lease or Easement, nor, to the knowledge of Seller, has any event occurred that with the
passage of time or the giving of notice or both would create a default under the terms of any such
Real Property Lease or Easement by any party thereto, except for any such failures to be valid and
binding or in full force and effect, defaults or breaches which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(e) Except as would not reasonably be expected to be material to the Business, Seller has not
received any written notice (i) for assessments for public improvements against any of the Owned
Real Property, Leased Real Property or Easements or (ii) regarding any pending condemnation,
eminent domain or similar proceeding affecting all or any portion of any of the Owned Real
Property, Leased Real Property or Easements.
Section 3.11
. Intellectual Property. (a) Section 3.11(a) of the Seller Disclosure Schedule
contains a list of all material registrations and applications for registration included in the
Owned Intellectual Property Rights and the Franchise Licensed Marks.
(b) Section 3.11(b) of the Seller Disclosure Schedule sets forth a list of all agreements as
to which Seller or any of its Subsidiaries is a party and pursuant to which any Person is
authorized to use any material Owned Intellectual Property Right or any material Franchise Licensed
Xxxx.
(c) No Owned Intellectual Property Right or Franchise Licensed Xxxx is subject to any
outstanding judgment, injunction, order, decree or agreement restricting the use thereof by Seller
or any of its Subsidiaries with respect to the Business or restricting the licensing thereof by
Seller or any of its Subsidiaries to any Person, except for any judgment, injunction, order, decree
or agreement which would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(d) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (i) the conduct of the Business, as currently conducted, does not infringe
or otherwise violate the Intellectual Property Rights of any Person and (ii) to the knowledge of
Seller, no Person has infringed or otherwise violated any Owned Intellectual Property Right or
Franchise Licensed Xxxx.
Section 3.12
. Insurance Coverage. Seller and/or its Subsidiaries maintain adequate insurance
coverage in accordance with reasonable commercial standards, including material insurance policies
and fidelity bonds, in each case in respect of the Purchased Assets and the business and operations
of the Business and its employees. Excluding insurance policies that have expired and have been
37
replaced in the Ordinary Course of Business, no material insurance policy held Seller or its
Subsidiaries and applicable to the Purchased Assets or the Business has been cancelled within the
last 2 years prior to the date hereof. Section 3.12 of the Seller Disclosure Schedule contains, as
of the date hereof, an accurate and complete list of all material outstanding claims to the extent
relating to the Purchased Assets or the Business under the insurance policies held by Seller or its
Subsidiaries and applicable to the Purchased Assets or the Business.
Section 3.13
. Finders’ Fees. Except for Xxxxxxx, Sachs & Co., whose fees will be paid by
Seller, there is no investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Seller who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.
Section 3.14
. Employees; Labor Issues. (a) Section 3.14(a) of the Seller Disclosure Schedule
sets forth a true and complete list as of the date hereof of the names, titles, annual salaries and
most recent annual bonus of all Business Employees whose annual base salary exceeds $150,000.
(b) Other than the Collective Bargaining Agreement, there is no collective bargaining
agreement or other labor agreement with any union, labor organization or employee association to
which Seller or any of its Subsidiaries are a party covering any Business Employees. To the
knowledge of Seller, as of the date hereof, there is no effort, activity or proceeding of any
union, labor organization or employee association (or a representative thereof) to organize any
Business Employees. As of the date hereof, (i) there are no pending or, to the knowledge of
Seller, threatened, labor strikes, walkouts, work stoppages, slowdowns or lockouts with respect to
Business Employees and (ii) there are no disputes with respect to the Business Employees except as
would not reasonably be expected to be material to the Business, taken as a whole.
(c) Seller is and has been for the past 5 years in compliance in all material respects with
all, and to the knowledge of Seller, is not under investigation with respect to and has not been
threatened to be charged with or given notice of any material violation of any, Applicable Laws
pertaining to labor and employment and related to the ownership and operation of the Purchased
Assets or the Business, including but not limited to employment practices, terms and conditions of
employment, payment of compensation, Contracts of employment, collective bargaining,
non-discrimination and affirmative action, plant closing and mass layoff, family and medical leave,
immigration, health and safety, wages and hours, payment of unemployment benefits and taxes and
workers’ compensation, including but not limited to Title VII of the Civil Rights Act of 1964, the
Equal Pay Act, Executive Order 11246 and its implementing regulations, the Fair Labor Standards
Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older
Worker Benefit Protection Act, the Family Medical Leave Act (“FMLA”), the Worker Adjustment and
Retraining Notification Act (the “WARN Act”) and any similar Laws addressing
38
plant closings or mass layoffs, ERISA, the Immigration Reform and Control Act of 1986, the
Occupational Safety and Health Act of 1970 and its implementing regulations, as amended, and the
National Labor Relations Act and the Code, in each case that would reasonably be expected to result
in a material liability. Since January 1, 2005 to the date hereof, there has not been any material
strike, work stoppage or slow-down.
(d) Except as set forth on Section 3.14(d) of the Seller Disclosure Schedule, none of the
Business Employees or any past employees of Seller or its Subsidiaries who were employed in the
Business and located at the Facilities has a pending or, to the knowledge of Seller, threatened
material claim against Seller or its Subsidiaries. Except as set forth on Section 3.14(d) of the
Seller Disclosure Schedule, neither Seller nor any of its Subsidiaries has pending against it
related to the Purchased Assets or the Business any material unfair labor practice charges or other
material administrative charges, claims, grievances, actions, proceedings or lawsuits before any
Governmental Authority or arbitrator arising under any Applicable Law governing employment. Except
as set forth on Section 3.14(d) of the Seller Disclosure Schedule, neither Seller nor any of its
Subsidiaries has received written or, to the knowledge of Seller, oral notice of intent of any
Governmental Authority responsible for the enforcement of any labor or employment laws, regulations
or executive orders to conduct an investigation or review with respect to Seller’s employment
policies or practices that would reasonably be expected to result in a liability which would be
material to the Business, taken as a whole.
(e) Except as set forth on Section 3.14(e) of the Seller Disclosure Schedule, Seller has no
employment agreement or other arrangement with any of the Business Employees that provide for
anything other than at-will employment; and unless set forth on Section 3.14(e) of the Seller
Disclosure Schedule, all Business Employees are terminable at will and no severance or other
amounts are payable to such employees upon termination of employment, other than with respect to
vested rights under applicable benefit plans. Any material Contract relating to the employment of
any Business Employee pursuant to which Seller or any of its Subsidiaries is or may become
obligated to make any material severance, termination, change of control, bonus or relocation
payment is included on Section 3.14(e) of the Seller Disclosure Schedule. Except with respect to
wages, severance, employee benefits and other employment related obligations accrued in the
Ordinary Course of Business, Seller is not indebted to or a creditor of any Business Employee.
Neither Seller nor any of its Subsidiaries is in material breach of any existing employment or
independent contractor Contract related to the Business and, as of the date hereof, has not
received written notice that any management-level Business Employee intends to terminate his or her
employment with Seller, whether in connection with this transaction or not.
Section 3.15
. Employee Benefit Plans. (a) Seller has made available to Buyer a list of and
copies of each material written “employee benefit plan”, as
39
defined in Section 3(3) of ERISA, each material written employment, severance or similar
contract, plan, arrangement or policy and each other material written plan or arrangement (and a
written descriptions of the terms and conditions of each material unwritten plan, Contract or
policy) providing for compensation, bonuses, profit-sharing, stock option or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits, insurance
(including any self-insured arrangements), health or medical benefits, employee assistance program,
disability or sick leave benefits, workers’ compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) which is maintained, administered or contributed to by
Seller or any of its ERISA Affiliates and covers any Business Employee or any beneficiary thereof
(and, if applicable, related trust or funding agreements or insurance policies) and all amendments
thereto and written interpretations thereof have been made available to Buyer, together with, to
the extent applicable with respect to each such plan or trust, (i) the most recent annual report
(Form 5500 including, if applicable, Schedule B thereto) and Form 990, if applicable, (ii) the most
recent actuarial valuation, (iii) the most recent summary plan description and any summaries of
material modifications thereto, and (iv) any trust agreement, funding agreement or insurance policy
(and any amendments thereto). Such plans, Contracts and policies are set forth on Section 3.15(a)
of the Seller Disclosure Schedule and referred to collectively herein as the “Employee Plans”.
(b) None of Seller, any ERISA Affiliate of Seller and any predecessor thereof, sponsors,
maintains or contributes to, or has any material liability or obligation under or relating to, or
has in the past 6 calendar years sponsored, maintained or contributed to, a Title IV Plan.
(c) None of Seller, any ERISA Affiliate and any predecessor thereof contributes to, or has in
the past 6 calendar years contributed to, or has any material liability or obligation under or
relating to, any multiemployer plan, as defined in Sections 3(37) or 4001(a)(3) of ERISA.
(d) Each Employee Plan which is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter, or has pending or has time remaining in which to file,
an application for such determination from the Internal Revenue Service, and Seller is not aware of
any reason why any such determination letter should be revoked or not be reissued or anything that
could reasonably be expected to adversely affect the qualification of any such Employee Plan under
Section 401(a) of the Code. Seller has made available to Buyer copies of the most recent Internal
Revenue Service determination letters with respect to each such Employee Plan. Each Employee Plan
has been maintained in compliance in all material respects with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code,
which are applicable to such Employee Plan.
(e) Seller has no current or projected material liability in respect of
40
post-employment or post-retirement health or medical or life insurance benefits for retired,
former or current Business Employees, except as required to avoid excise tax under Section 4980B of
the Code.
(f) With respect to the Union DB Plan (as defined in Section 9.04(b)): (i) no liability to
the Pension Benefit Guaranty Corporation (“PBGC”) has been incurred (other than for premiums not
yet due); (ii) no notice of intent to terminate the Union DB Plan has been filed with the PBGC or
distributed to participants therein and no amendment terminating any such Pension Plan has been
adopted; (iii) no proceedings to terminate the Union DB Plan instituted by the PBGC are pending or
threatened, and no event or condition has occurred which would reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, the Union DB Plan; (iv) the Union DB Plan is not in “at risk” status, within the
meaning of Section 430 of the Code or Section 303 of ERISA; (v) no “reportable event” within the
meaning of Section 4043 of ERISA (for which the 30-day notice requirement has not been waived by
the PBGC) has occurred within the within the last six years; (vi) no Lien has arisen or would
reasonably be expected to arise as a result of actions or inactions that occurred prior to the
Closing Date under ERISA or the Code on the assets of Seller; (vii) there has been no cessation of
operations at a facility subject to provisions of Section 4062(e) of ERISA within the last six
years; and (viii) the Union DB Plan is not a multiple employer pension plan subject to Section 4063
or 4064 of ERISA.
(g) Seller has no announced plan or legally binding commitment to (i) create any additional
Employee Plan which is intended to cover any Business Employees or (ii) amend or modify any
Employee Plan, in each case with respect to an Employee Plan, (x) that is expressly assumed by or
provided to be transferred to Buyer pursuant to Article 9 in such a manner as to increase the cost
of such Employee Plan, or (y) to the extent that such announced plan or legally binding commitment
would increase the cost to Buyer of complying with its obligations to maintain compensation and
benefits as provided in Section 9.02 hereof.
(h) Section 3.15(h)(i) of the Seller Disclosure Schedule sets forth each Employee Plan that is
a medical or dental benefits plan or life, death, disability, accident or sickness insurance policy
maintained by Seller for the benefit of the Union Employees (each, a “Union Welfare Plan”). Except
as set forth in Section 3.15(h)(ii) of the Seller Disclosure Schedule, (i) each Union Welfare Plan
covers only Union Employees and their beneficiaries, and (ii) all benefits under each Union Welfare
Plan are provided on a fully insured basis pursuant to an insurance contract maintained by Seller
in connection with such Union Welfare Plan. No Union Welfare Plan is a multiemployer plan, as
defined in Section 3(37) of ERISA.
Section 3.16
. Environmental Compliance. (a) Except as disclosed on Section 3.16 of the
Seller Disclosure Schedule or for matters that would not
41
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:
(i) Seller’s, or, as applicable, its Subsidiaries’ ownership of the Purchased Assets
and operation of the Business as presently owned and operated are in compliance with all
applicable Environmental Laws;
(ii) (A) no written notice, order, request for information, complaint or penalty has
been received by Seller or any of its Subsidiaries, and (B) there are no actions, suits or
proceedings pending or, to the knowledge of Seller, threatened before any arbitrator or
any Governmental Authority, in the case of each of (A) and (B), that allege a violation of
or liability under any Environmental Law and relate to the Purchased Assets, Real Property
or the Business;
(iii) Seller has obtained or caused to be obtained all Permits required under any
Environmental Law that are necessary for the operation of the Purchased Assets and Real
Property;
(iv) neither Seller nor any of its Subsidiaries is in violation of the terms of such
Permits or, with respect to the operation of the Purchased Assets, Real Property and
Business, any applicable Environmental Law; and
(v) to the knowledge of Seller, Seller has made available (or otherwise made
available summaries thereof) to Buyer all final, written investigations, reports, audits,
and similar documents within its possession or control dated during the 3 years prior to
the date hereof and relating to (A) the Purchased Assets or the Business and (B)
compliance with or liability under any Environmental Law or the release of Hazardous
Materials, except for such investigations, reports, audits and documents that (Y) are
privileged or (Z) relate to routine matters with respect to which there is no material
non-compliance.
(b) Except as set forth in this Section 3.16 and Section 3.17 (Permits), no representations or
warranties are being made with respect to matters arising under or relating to Environmental Laws,
any spill, release, emission, discharge, disposal or recycling of, or exposure to, Hazardous
Materials or other environmental matters. Seller makes no representation or warranty as to
compliance by Seller, its Subsidiaries or the Business with Fuel Regulations.
Section 3.17
. Permits. Seller or its Subsidiaries have all material Permits required to
carry on the Business as now conducted. Section 3.17 of the Seller Disclosure Schedule lists each
material Business Permit (including each such Business Permit required by Environmental Law).
Except as would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) each Business Permit is valid and in full force and effect and
42
(ii) neither Seller nor any of its Subsidiaries is in default under, and no condition exists
that with notice or lapse of time or both would constitute a default under, any such Business
Permit. No representation or warranty is being made by Seller hereunder that any Business Permit
can be assigned or transferred to Buyer at Closing or that any Business Permit can be maintained by
Buyer from and after Closing.
Section 3.18
. Tax Matters. (a) Seller or its Subsidiaries have (i) duly and timely filed or
caused to be filed all material Tax returns (or appropriate extensions) required to be filed by
them with respect to the Business and the Purchased Assets and each such return is true, correct
and complete in all material respects and (ii) timely paid all Taxes required to be paid on or
prior to the date this representation is made, the non-payment of which would result in a Lien on
any Purchased Asset.
(b) There are no currently proposed or pending adjustments, audits or examinations by any
Taxing Authority in connection with any Taxes relating to the Purchased Assets, and no waiver or
extension of any statute of limitations applies with respect to any Tax matter relating to the
Purchased Assets, in each case, that would result in a liability to Buyer.
(c) There are no rulings, closing agreements, or similar agreements with any Taxing Authority
that could reasonably be expected to materially increase the Taxes imposed with respect to the
Purchased Assets for any period ending after the Closing Date.
(d) Seller or its Subsidiaries have established, in accordance with GAAP applied on a basis
consistent with that of preceding periods, adequate reserves for the payment of, and will timely
pay, all Taxes which arise from or with respect to the Purchased Assets or the operation of the
Business and are incurred in or attributable to the Pre-Closing Tax Period.
Section 3.19
. Suppliers. Section 3.19 of the Seller Disclosure Schedule sets forth a
complete and accurate list of the 10 largest suppliers of materials, products or services to Seller
and its Subsidiaries in connection with the Business (measured by the aggregate dollar amount
purchased from all such suppliers) during 2010. As of the date hereof, to the knowledge of Seller,
the relationships of Seller and its Subsidiaries with the suppliers listed on Section 3.19 of the
Seller Disclosure Schedule are good in connection with the Business. Since January 1, 2011 through
the date hereof, none of such suppliers has cancelled or terminated or otherwise materially altered
(excluding (i) increases in the prices charged for supplies, materials, products or services and
(ii) terminations of Contracts pursuant to the terms thereof other than due to a breach by Seller
or its Subsidiaries) such arrangements, notified Seller or any of its Subsidiaries in writing of
any intention to do any of the foregoing, or otherwise threatened in writing to cancel, terminate
or seek to materially alter its relationship with Seller and its Subsidiaries, in each case, in
connection with the Business.
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Section 3.20
. Customers. Section 3.20 of the Seller Disclosure Schedule sets forth (a) a
complete and accurate list of the names of the 10 largest customers of the Business excluding
Seller and its Subsidiaries, measured by the aggregate dollar amount of products, goods and
services purchased from Seller during 2010 (collectively, the “
Customers”) and (b) a complete and
accurate list, in all material respects, of the amount for which each Customer was invoiced during
such period. Except as set forth on Section 3.20 of the Seller Disclosure Schedule, since January
1, 2011 through the date hereof, Seller has not received any written notice that any such Customer
has ceased, or will cease, to purchase those types of products included in current and active
programs for such Customer.
Except as set forth in the Buyer Disclosure Schedule, Buyer represents and warrants to Seller
as of the date hereof that:
Section 4.01
. Corporate Existence and Power. Buyer is a limited partnership duly formed,
validly existing and in good standing under the laws of its jurisdiction of organization and has
all corporate or similar powers and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted. Buyer is duly qualified
to do business as a foreign entity and is in good standing in each jurisdiction where such
qualification is necessary, except where the failure to be so qualified or to be in good standing
would not reasonably be expected to materially impede or delay the Closing or the performance by
Buyer of its obligations hereunder.
Section 4.02
. Corporate Authorization. The execution, delivery and performance by Buyer of
this Agreement and the consummation of the transactions contemplated hereby are within the
corporate or similar powers of Buyer and have been duly authorized by all necessary corporate or
similar action on the part of Buyer. This Agreement constitutes a valid and binding agreement of
Buyer enforceable against Buyer in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’
rights generally and general principles of equity).
Section 4.03
. Governmental Authorization. The execution, delivery and performance by Buyer
of this Agreement and the consummation of the transactions contemplated hereby require no material
action by or in respect of, or material filing with, any Governmental Authority other than (i)
compliance with any applicable requirements of the HSR Act; (ii) compliance with any applicable
requirements of the 1934 Act; and (iii) other actions or filings that, individually or in the
aggregate, would not reasonably be expected to materially impede or delay the Closing or the
performance by Buyer of its obligations hereunder.
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Section 4.04
. Noncontravention. The execution, delivery and performance by Buyer of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (i)
violate any of the governing documents of Buyer, (ii) assuming compliance with the matters referred
to in Section 4.03, violate any Applicable Law, (iii) require any consent or other action by any
Person under, constitute a default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation or to a loss of any benefit to which Buyer is entitled
under any provision of any agreement or other instrument binding upon Buyer or (iv) result in the
creation or imposition of any Lien on any asset of Buyer, with such exceptions, in the case of each
of clauses (ii) through (iv), as would not reasonably be expected to materially impede or delay the
Closing or the performance by Buyer of its obligations hereunder.
Section 4.05
. Financing. Buyer has, and will have at Closing, sufficient cash, available
lines of credit or other sources of immediately available funds to enable it to make payment of the
Purchase Price and any other amounts to be paid by it hereunder. The consummation of the
transactions contemplated by this Agreement by Buyer (including the payment of the Purchase Price
and any other amounts to be paid hereunder) is not conditioned on the receipt by Buyer of any
financing.
Section 4.06
. Litigation. As of the date hereof, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of Buyer threatened against, Buyer before any
arbitrator or any Governmental Authority which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this Agreement.
Section 4.07
. Finders’ Fees. There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of Buyer who might be
entitled to any fee or commission in connection with the transactions contemplated by this
Agreement.
Section 4.08
. Inspections; No Other Representations. Buyer is an informed and sophisticated
purchaser, and has engaged expert advisors, experienced in the evaluation and purchase of property
and assets such as the Purchased Assets as contemplated hereunder. Buyer has undertaken such
investigation and has been provided with and has evaluated such documents and information as it has
deemed necessary to enable it to make an informed and intelligent decision with respect to the
execution, delivery and performance of this Agreement. Buyer acknowledges that Seller has given
Buyer complete and open access to the key employees, documents and facilities of the Business.
Buyer will undertake prior to Closing such further investigation and request such additional
documents and information as it deems necessary. Notwithstanding anything contained to the
contrary in any other provision of this Agreement or any document delivered by Seller in connection
herewith, Buyer acknowledges and agrees that Seller is not making any representation or warranty
whatsoever,
45
express, implied, statutory or otherwise, except as expressly set forth in this Agreement.
Buyer acknowledges and agrees that the Purchased Assets are sold “as is”, “where is” and “with all
faults” and Buyer agrees to accept the Purchased Assets and the Business in the condition they are
in on the Closing Date based on its own inspection, examination and determination with respect to
all matters, including environmental matters, and without reliance upon any express or implied
representations or warranties of any nature made by or on behalf of or imputed to Seller, except as
expressly set forth in this Agreement. Without limiting the generality of the foregoing, Buyer
acknowledges that Seller makes no representation or warranty with respect to (i) any projections,
estimates or budgets delivered to or made available to Buyer of future revenues, future results of
operations (or any component thereof), future cash flows or future financial condition (or any
component thereof) of the Business or the future business and operations of the Business or (ii)
any other information or documents made available to Buyer or its counsel, accountants or advisors
with respect to the Business, except as expressly set forth in this Agreement.
Seller agrees that:
Section 5.01
. Conduct of the Business. From the date hereof until the Closing Date, Seller
and its Subsidiaries shall in all material respects conduct the Business in the Ordinary Course of
Business (including routine maintenance and routine preventative maintenance, and in material
compliance with Applicable Law) and shall use their respective commercially reasonable efforts to
preserve intact the Purchased Assets, the Business and its relationships with employees, agents,
lessors, suppliers, customers and other third parties having business dealings with the Business,
and to keep available the services of the present employees of the Business. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date, except as disclosed on
Section 5.01 of the Seller Disclosure Schedule or as expressly contemplated hereby, neither Seller
nor any of its Subsidiaries will, in each case with respect to the Business, without the prior
written consent of Buyer (such consent not to be unreasonably withheld, conditioned or delayed):
(a) acquire a material amount of assets from any other Person (other than acquisitions of any
materials, supplies or goods on a spot market basis in the Ordinary Course of Business);
(b) sell, lease, license or otherwise dispose of, or grant any right or Lien, except Permitted
Liens, with respect to any Purchased Assets except (i) pursuant to existing Contracts or (ii)
otherwise in the Ordinary Course of Business;
46
(c) (i) enter into any agreement or arrangement that limits or otherwise restricts in any
material respect the conduct of the Business or that could, after the Closing Date, limit or
restrict in any material respect the Business, Buyer or any of their respective Affiliates, from
engaging or competing in any line of business, in any location or with any Person or (ii) enter
into, amend or modify in any material respect or terminate any Material Contract other than in the
Ordinary Course of Business;
(d) (i) grant or increase any severance or termination pay to (or amend any existing
arrangement with) any Business Employee, (ii) increase benefits payable under any existing
severance or termination pay policies or employment agreements with any Business Employee, (iii)
enter into any employment, deferred compensation or other similar agreement (or amend any such
existing agreement) with any Business Employee, (iv) establish, adopt or amend any Employee Plan or
any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other benefit plan or arrangement
covering any Business Employee, or (v) increase the compensation, bonus or other benefits payable
to any Business Employee, in each case referred to in clauses (i) — (v), other than (A) as
expressly required by the provisions of any Employee Plan, (B) in the Ordinary Course of Business,
(C) as required by Applicable Law, (D) as required by the terms of any Material Contract set forth
on the Seller Disclosure Schedule or any Collective Bargaining Agreement or (E) as set forth on
Section 5.01(d) of the Seller Disclosure Schedule;
(e) enter into any settlement of any pending or threatened litigation or claim, or enter into
any amendment of any existing settlement agreement, to the extent such settlement or amendment will
materially interfere with or impose material additional cost in connection with the Buyer’s
ownership or operation of the Purchased Assets or any portion of the Business from and after the
Closing;
(f) other than the Consent Decree Modification, consent to the entry of (or amendment to) any
decree, judgment or order by any Governmental Authority, or enter into (or amend) any other
agreements with any Governmental Authority, in each case to the extent such decree, judgment, order
or agreement (or amendment) will materially interfere with or impose material additional costs in
connection with Buyer’s ownership or operation of the Purchased Assets or any portion of the
Business from and after the Closing;
(g) fail to maintain the Facilities in the Ordinary Course of Business;
(h) fail to maintain insurance on the Purchased Assets at levels equal to or superior to
existing insurance including with respect to coverage, deductibles or any other material terms,
subject to commercially reasonable variations in coverage in connection with renewals for expiring
insurance policies;
(i) fail to maintain levels of catalysts, supplies and spare parts at the
47
levels maintained in the Ordinary Course of Business; or
(j) agree or commit to do any of the foregoing.
Section 5.02
. Access. (a) From the date hereof until the Closing Date, Seller will (i) give
Buyer, its counsel, financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of Seller and its Subsidiaries relating to the
Business, (ii) furnish to Buyer, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating to the Business as
such Persons may reasonably request, (iii) instruct the employees, counsel and financial advisors
of Seller to cooperate with Buyer in its investigation of the Business and (iv) permit Buyer
reasonable access (on reasonable prior notice and during normal business hours) to the refinery
property for, at Buyer’s sole cost and expense, the purpose of installing telecom and data lines
necessary to Buyer’s operation of the Purchased Assets from and after the Closing, provided that
(A) such telecom and data lines shall not be physically connected to Seller’s systems until at or
after the Closing and (B) if the Closing does not occur, Buyer shall (at its sole cost and expense,
including any cost or expense of restoring the property to its prior state) promptly remove (and
Seller shall permit Buyer to remove) such telecom and data lines from the Purchased Assets. Any
investigation or other action by Buyer or its employees, advisors or representatives pursuant to
this Section shall be conducted in such manner as not to interfere unreasonably with the conduct of
the business of Seller and its Subsidiaries. Notwithstanding the foregoing, Buyer may not under
any circumstances conduct or cause to be conducted any sampling or other invasive investigation of
the air, soil, soil gas, surface water, groundwater, building materials or other environmental
media at any property related to the Seller or its Subsidiaries or the Business, including the
Purchased Assets, the Facilities and the Real Property. Buyer bears the risk of injury to any of
its employees, advisors or representatives who are provided access to the offices or properties of
Seller or its Subsidiaries hereunder, and shall indemnify, defend and hold Seller and its
Affiliates harmless for all Damages resulting from Buyer’s or its employees’, advisors’ or
representatives’ access to the offices or properties of Seller or its Subsidiaries provided
hereunder.
(b) On and after the Closing Date, Seller and its Subsidiaries will afford promptly to Buyer
and its agents reasonable access to their respective books of account, financial and other records,
information, employees and auditors to the extent necessary or useful for Buyer in connection with
any audit, investigation, dispute or litigation or any other reasonable business purpose relating
to the Business; provided that any such access by Buyer shall not unreasonably interfere with the
conduct of the business of Seller or any of its Subsidiaries.
(c) Notwithstanding anything in this Section 5.02 to the contrary, but subject to Section
2.02(o), Buyer shall not have access to (i) personnel records of Seller relating to individual
performance or evaluation records or medical
48
histories, (ii) materials entitled to legal privilege (or which could jeopardize the
attorney-client privilege of Seller or its Subsidiaries), (iii) materials with respect to which
Seller or its Subsidiaries owe an obligation of confidentiality to a third party or (iv) other
information which in Seller’s good faith opinion is sensitive or could reasonably be expected to
subject Seller or any of its Subsidiaries to the risk of liability. The parties shall endeavor in
good faith to make appropriate substitute disclosure arrangements, if practicable, in a manner that
does not give rise to any of the circumstances referred to in the preceding sentence.
Section 5.03
. Notices of Certain Events. Seller shall promptly notify Buyer of any written
or oral notice or other written or oral communication (or site visit) from:
(a) any Person alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any Governmental Authority in connection with the transactions contemplated by this
Agreement;
(c) any Person regarding the initiation or threat of initiation of any actions, suits,
investigations or proceedings relating to or otherwise affecting the Seller, the Purchased Assets
or the Business that, if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.08; and
(d) any Person regarding the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be reasonably likely to cause any condition to the obligations of
Buyer to consummate the transactions contemplated hereby not to be satisfied.
Buyer agrees that:
Section 6.01
. Access. On and after the Closing Date, Buyer will afford promptly to Seller
and its agents reasonable access to its properties, books, records, employees and auditors to the
extent necessary to permit Seller to determine any matter relating to its rights and obligations
hereunder or regarding the Business for any period ending on or before the Closing Date;
provided
that any such access by Seller shall not unreasonably interfere with the conduct of the business of
Buyer.
49
financial assurances and other surety obligations for those set forth on Section 6.02 of the
Seller Disclosure Schedule (each, a “Credit Support Arrangement”), and Buyer, shall use its
commercially reasonable efforts to cause the release as of the Closing Date of Seller and its
Subsidiaries, in form and substance reasonably acceptable to the Seller, from all obligations
relating to any such Credit Support Arrangements and any liabilities or obligations related
thereto. Buyer shall indemnify, defend and hold harmless Seller and its Subsidiaries from any and
all Damages relating to, resulting from, or arising out of, any Credit Support Arrangement to the
extent any such Damages relate to, result from, or arise out of the use of the Purchased Assets or
the operation of Business on or after the Closing Date.
Section 6.03
. Removal of Seller’s Name. Except as expressly set forth in Section 10.01(b),
following the Closing, neither Buyer nor any of its Affiliates shall be entitled to adopt, employ
or make any use of (i) any Trademark owned by Seller or any of its Subsidiaries, (ii) any Trademark
containing or associated with the term “Xxxxxx” or (iii) any variation or derivative of the
foregoing, including anything that is confusingly similar thereto. Buyer shall, as soon as is
reasonably practicable and in any event within 90 days following the Closing Date, remove, destroy
or paint over, as appropriate, any trademark, service xxxx, trade name, logo or signage (including
signs displaying the Seller’s or its Subsidiaries’ emergency contact information) indicating that
the Purchased Assets were owned or operated by or otherwise affiliated with Seller or any of its
Subsidiaries and not licensed to Buyer pursuant to the FIPR License (it being understood that, with
respect to any such trademark, service xxxx, trade name, logo or signage licensed pursuant to the
FIPR License, Buyer shall take the measures set forth in this sentence within 90 days following the
date on which the FIPR License ceases to be applicable thereto).
Section 6.04
. Notices of Certain Events. Buyer shall promptly notify Seller of any written
or oral notice or other written or oral communication (or site visit) from:
(a) any Person alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any Governmental Authority in connection with the transactions contemplated by this
Agreement;
(c) any Person regarding the initiation or threat of initiation of any actions, suits,
investigations or proceedings relating to or otherwise affecting Buyer that, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to Section 4.06; and
(d) any Person regarding the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be reasonably likely to cause any condition to the obligations of
Seller to consummate the transactions contemplated hereby not to be satisfied.
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Buyer and Seller agree that:
Section 7.01
. Best Efforts; Further Assurance. (a) Subject to the terms and conditions of
this Agreement, Buyer and Seller will use their respective commercially reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable
under Applicable Law to consummate the transactions contemplated by this Agreement, including (i)
determining whether any action by or in respect of, or filing with, any Governmental Authority is
required, or any actions, consents, approvals or waivers are required to be obtained from parties
to any material Contracts, in connection with the consummation of the transactions contemplated by
this Agreement and (ii) taking such actions, making such filings and furnishing information
required in connection therewith, and seeking to obtain on a timely basis any such actions,
consents, approvals or waivers from such parties. No party shall be obligated to make any payment
to any Person to obtain any consent, approval or waiver of such Person under any contract.
(b) Each of Buyer and Seller shall (i) make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as
practicable and in any event within 10 Business Days of the date hereof, (ii) supply as promptly as
practicable any additional information and documentary material that may be requested pursuant to
the HSR Act and (iii) take all other actions necessary to cause the expiration or termination of
the applicable waiting periods under the HSR Act as soon as practicable. Buyer shall promptly take
(and shall cause its Affiliates to promptly take) any and all action necessary, including
participating in and actively defending against or otherwise pursuing any litigation that may be
commenced by a Governmental Authority or private party relating to this Agreement or the
transactions contemplated hereby, to avoid the entry of, or to effect the dissolution of or vacate
or lift, any order that would have the effect of preventing or delaying the Closing and to resolve
the objections, if any, that any Governmental Authority or private party may assert under any
Applicable Law with respect to the transactions contemplated by this Agreement, and, consistent
with the foregoing, to avoid or eliminate each and every impediment under any Applicable Law
asserted by any Governmental Authority or private party with respect to the purchase by Buyer of
the Business so as to enable the Closing to occur as soon as reasonably possible.
(c) Each of Buyer and Seller shall promptly inform the other party upon receipt of any
communication from any Governmental Authority or private party regarding any of the transactions
contemplated by this Agreement. If Buyer or
51
Seller (or any of their respective Affiliates) receives a request for additional information
from any Governmental Authority that is related to the transactions contemplated by this Agreement,
then such party shall endeavor in good faith to make, or cause to be made, to the extent
practicable and after consultation with the other party, an appropriate response to such request.
No party shall participate in any meeting, or engage in any material substantive conversation, with
any Governmental Authority without giving the other party prior notice of the meeting or
conversation and, unless prohibited by such Governmental Authority, the opportunity to attend or
participate. Buyer shall advise Seller promptly of any understandings, undertakings or agreements
(oral or written) which Buyer proposes to make or enter into with any Governmental Authority in
connection with the transactions contemplated by this Agreement. For the avoidance of doubt and
irrespective of whether the sale of the Business occurs, Buyer shall not require Seller or any of
its Subsidiaries to, and neither Seller nor any of its Subsidiaries shall be required to, take any
action with respect to any Order or any applicable Law which would bind Seller or any of its
Subsidiaries.
(d) Seller and Buyer agree to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions contemplated by this Agreement and
to vest in Buyer good and (to the extent applicable) marketable title to the Purchased Assets;
provided that such documents, certificates, agreements, other writings or actions shall not require
Seller or its Subsidiaries or any other Person to make any additional representations, warranties
or covenants, express or implied, not contained in this Agreement.
Section 7.02
. Public Announcements. The parties agree to consult with each other before
issuing any press release or making any public statement with respect to this Agreement or the
transactions contemplated hereby and, except for any press releases and public statements the
making of which may be required by Applicable Law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such public statement prior
to such consultation.
Section 7.03
. WARN Act. Buyer shall assume all obligations and liabilities for the provision
of notice or payment in lieu of notice or any applicable penalties under the WARN Act or any
similar state or local law arising as a result of the transactions contemplated by this Agreement.
Buyer hereby indemnifies Seller and its Affiliates against and agrees to hold each of them harmless
from any and all Damages incurred or suffered by Seller or any of its Affiliates with respect to
the WARN Act or any similar state or local law arising as a result of the transactions contemplated
by this Agreement including, for the avoidance of doubt, all Damages triggered directly or
indirectly by any terminations of employment initiated by Buyer or its Affiliates at any time from
the Closing Date to the end of the 90 day period commencing on the first Business Day following the
Closing Date.
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Section 7.04
. Post-Closing Payments or Demands. Should Seller or any of its Subsidiaries,
after Closing, receive payments to which the Buyer or any of its Affiliates is entitled pursuant to
this Agreement, then the Seller or its applicable Subsidiaries shall, within 30 days of receipt of
the same, forward such payments to Buyer, and should Buyer or any of its Affiliates, after Closing,
receive payments to which Seller or any of its Subsidiaries is entitled pursuant to this Agreement,
then Buyer or its applicable Affiliates, within 30 days of receipt of the same, shall forward such
payments to, or as directed by, Seller. If any demand is made on Buyer or its Affiliates after
Closing to pay any invoice or other obligation contracted or incurred by Seller or any of its
Subsidiaries prior to Closing in the operation of the Business, Buyer or its Affiliates shall pay
the same to the extent such invoice or obligation constitutes an Assumed Liability; if and to the
extent any such invoice or obligation constitutes an Excluded Liability, Seller shall, or shall
cause one of its Subsidiaries to, pay the same. Any payment required to be made by Buyer or
Seller, as applicable, pursuant to this Section 7.04 shall be made without any set off or deduction
against amounts owed by Seller or Buyer (or their respective affiliates), as applicable.
(i) At or prior to Closing, Buyer shall provide to Seller a binder for, and evidence
that Buyer has paid in full the premium costs of, an environmental insurance policy which
policy conforms to the terms set forth on Exhibit H, subject to such modifications as are
reasonably acceptable to Seller. At least 15 Business Days prior to Closing, Buyer shall
provide to Seller a full proposal from the relevant insurance carrier for the
Environmental Insurance Policy, including all endorsements and policy forms.
(ii) From and after Closing, Buyer shall comply, and shall cause its Affiliates to
comply, with the terms and conditions of the Environmental Insurance Policy, including
those relating to reporting, cooperation and defense of claims, and use commercially
reasonable efforts to maintain such policy in force and to not allow such policy to be
cancelled or otherwise modified in any manner that would prejudice Seller.
(iii) In connection with obtaining the Environmental Insurance Policy, Buyer shall
provide to the relevant insurance carrier all documentation and other information
reasonably requested to be disclosed in the application for such policy. Seller shall use
reasonable efforts to assist Buyer in providing such documentation and other information.
(b)
Consent Decree. Consistent with Paragraph 6 of the Consent Decree, (i) Buyer
acknowledges that it has received written notice of the Consent
53
Decree and been provided with a copy thereof; and (ii) within a reasonable time after the date
hereof (but in any event within 5 days of the date hereof), Seller or its Subsidiaries shall
provide notice of this Agreement to the other parties to the Consent Decree. Seller or its
Subsidiaries and Buyer shall negotiate in good faith to make any changes to the Consent Decree
Modification mutually acceptable to Seller and Buyer that are (A) appropriate non-substantive form
changes or (B) if applicable, necessary to reflect only the sale that is the subject of this
Agreement and not the sale of that certain refinery in Meraux, Louisiana. Seller or its
Subsidiaries and Buyer shall consult with the parties to the Consent Decree to confirm that those
parties have no objections to the Consent Decree Modification and, if applicable, shall negotiate
in good faith with such parties to resolve any such objections. Upon obtaining such confirmation
or making any changes mutually acceptable to Seller and Buyer to address any objections by the
parties to the Consent Decree, Seller shall take, or cause to be taken, all appropriate actions
(including those set forth in Paragraph 7 of the Consent Decree) to have the Consent Decree
Modification entered by the Consent Decree Court, and Buyer shall take all reasonable steps
(including those set forth in paragraph 7 of the Consent Decree) to support Seller’s or its
Subsidiaries’ actions to have the Consent Decree Modification entered by the Consent Decree Court,
including supporting Seller’s and its Subsidiaries’ efforts to be released from the Consent Decree
Obligations and to demonstrate to the Consent Decree Court and the other parties to the Consent
Decree that Buyer has the financial and technical ability to assume the Consent Decree Obligations.
On and after the Closing, Buyer shall satisfy, perform and assume all Consent Decree Obligations.
(i) From and after Closing, (i) for fuels shipped on and after Closing, Buyer shall
be responsible for all Fuel Compliance Obligations and (ii) for fuels shipped prior to
Closing, Seller shall be responsible for all Fuel Compliance Obligations (such obligations
of Seller, “Pre-Closing Fuel Compliance Obligations”). Seller or its Subsidiaries shall
submit by the relevant deadline all filings required by the Fuel Regulations associated
solely with the Pre-Closing Fuel Compliance Obligations, and shall provide a copy, or
other such proof, of each such filing to Buyer.
(ii) In the event either party (the “Complying Party”) may be required by applicable
Fuel Regulations to use Fuel Credits to comply with any Fuel Compliance Obligations that,
as set forth in Section 7.05(c)(i), are the responsibility of the other party (the
“Obligated Party”), prior to using such credits, the Complying Party shall use reasonable
efforts to allow the Obligated Party to provide it with Fuel Credits that satisfy, in
whole or in part, such Fuel Compliance Obligations. To the extent the Obligated Party’s
Fuel Compliance Obligations are not satisfied in whole by Fuel Credits provided by the
Obligated Party, the Obligated Party shall reimburse the Complying Party for the cost of
any Fuel Credits the Complying Party used to satisfy such Fuel Compliance
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Obligations (at the Obligated Party’s election, either in the form of Fuel Credits or
the monetary equivalent in U.S. dollars (which cost, in the case of Fuel Credits used by
the Complying Party which it already owns, shall be at the fair market value of such Fuel
Credits)), provided the Complying Party submits to the Obligated Party a written request
for reimbursement with sufficient supporting evidence of having used such Fuel Credits and
the value thereof.
(iii) In the event Buyer, at any time prior to the earlier of (A) the completion and
entry into operation of the cumene project described on Section 1.01(a) of the Seller
Disclosure Schedule or (B) December 31, 2011, notifies Seller that it is required by
applicable Fuel Regulations to use Fuel Credits to comply with any Fuel Compliance
Obligations that, as set forth in Section 7.05(c)(i), are Buyer’s responsibility, Seller
agrees to sell to Buyer such Fuel Credits as Buyer may reasonably require in order to
satisfy, in whole or in part, such Fuel Compliance Obligations which arise from operations
in the Ordinary Course of Business at a cost for such Fuel Credits equal to the fair
market monetary equivalent at the time of such sale in U.S. dollars; provided that Seller
shall not have any obligation to sell Fuel Credits other than those in its possession and
not otherwise necessary for its or its Subsidiaries’ operations or obligations (including
any obligation to third parties). Buyer acknowledges that Seller may cause to be sold its
Subsidiary’s refinery and related assets in Meraux, Louisiana, which may reduce the
quantity of Fuel Credits available to Seller.
Section 7.06
. Title Policies. Buyer may procure owner’s title insurance policies with
respect to the Owned Real Property;
provided, that Buyer’s ability or inability to obtain title
insurance on such Owned Real Property shall not result in an adjustment to the Purchase Price;
provided further, that the foregoing shall not be deemed to mitigate Seller’s representations and
warranties set forth in Section 3.10. Seller and its Subsidiaries shall execute and deliver to the
title insurance company such affidavits, certificates and other documentation as are reasonably
requested to cause the title insurance company to issue title insurance policies for the Owned Real
Property;
provided that nothing in such affidavits, certificates or documentation shall require
Seller or its Subsidiaries to incur any liabilities or obligations to any Person that are not
otherwise expressly set forth in this Agreement. Seller agrees to cooperate with and assist Buyer
with any reasonable request in Buyer’s efforts to obtain such title policies.
Section 7.07
. Litigation Cooperation. (a) In connection with the defense or prosecution of
any suit, action or proceeding relating to an Assumed Liability or an Excluded Liability (but
subject to the provisions of Article 12 in the event indemnification is being sought thereunder
pursuant to any applicable provision of this Agreement) each party shall (i) cooperate, and cause
its respective Affiliates to cooperate, in the defense or prosecution of such suit, action or
proceeding, (ii) furnish or cause to be furnished such documents, records,
55
information and testimony, grant or cause to be granted access to all reasonably requested
witnesses, and attend such conferences, discovery proceedings, hearings, trials or appeals, in each
case as may be reasonably requested in connection therewith, and (iii) take all reasonable steps to
make available to the other party, upon written request, its former and current employees, other
personnel and agents (whether as witnesses or otherwise) to the extent that such persons may
reasonably be required in connection therewith.
(b) Neither Seller nor Buyer will (and each of Seller and Buyer shall cause its respective
Affiliates not to) destroy or dispose of any documents, records or information that a party may
have the right to obtain pursuant to Section 7.07 without first using its reasonable best efforts
to notify the other party of the proposed destruction or disposition and giving the other party the
opportunity to take possession of or copy such documents, records or information prior to such
destruction or disposition.
Section 7.08
. Contact with Customers and Vendors. Without prior written consent of Seller
(which consent shall not be unreasonably withheld, delayed or conditioned), Buyer and its
Affiliates shall not, prior to the Closing Date, contact any customer, vendor, supplier or employee
of, or any other Person having business dealings with, Seller or its Subsidiaries with respect to
the Business or with respect to any aspect of the transactions contemplated under this Agreement;
provided that Seller and Buyer shall cooperate in contacting, prior to the Closing Date, customers
and suppliers of the Business as reasonably necessary for the purposes of transferring or
establishing credit and related security arrangements.
(a) Seller and Buyer will:
(i) provide as promptly as practicable following the date hereof (but in any event
within 5 Business Days of the date hereof) a mutually agreed written notice to each
franchisee under a Seller PMPA Franchise Agreement that, among other things, (A) includes
a description of the transactions contemplated by this Agreement to the extent they relate
to such PMPA franchisee, (B) notifies such PMPA franchisee that Buyer and Seller intend to
deliver a notice of termination or non-renewal (such notice, a “PMPA Termination Notice” )
as soon as reasonably practicable following the Closing that provides that the applicable
Seller PMPA Franchise Agreement will be terminated or non-renewed effective as of the
earlier of (1) 12 months following the Closing Date and (2) the expiration of the
applicable Seller PMPA Franchise Agreement (each such date, a “PMPA Termination Date”) and
(C) informs such PMPA franchisee that as soon as reasonably practicable following the
Closing, it will receive an offer from Buyer to such PMPA franchisee of a new PMPA
franchise agreement on substantially the same terms and conditions
56
as those set forth in such franchisee’s Seller PMPA Franchise Agreement;
(ii) use their best efforts to take, or cause to be taken, all actions to do, or
cause to be done, all things necessary or desirable under the PMPA to give effect to the
assignment of the Seller PMPA Franchise Agreements to Buyer as set forth in Article 2;
(iii) at or as promptly as practicable following the Closing (but in any event within
5 Business Days of the Closing Date) provide a PMPA Termination Notice to each franchisee
under a Seller PMPA Franchise Agreement in such form as is mutually agreed by Buyer and
Seller, and take, or cause to be taken, all actions to terminate or non-renew each Seller
PMPA Franchise Agreement as of the applicable PMPA Termination Date in accordance with
such PMPA Termination Notices; and
(iv) use their best efforts to take, or cause to be taken, all actions to do, or
cause to be done, all things necessary or desirable under the PMPA to give effect to take
all other actions required under the PMPA to effect the provisions of this Section 7.09.
(b) During the period commencing on the Closing Date and continuing for 12 months, Buyer shall
offer each franchisee under a Seller PMPA Franchise Agreement a new PMPA franchise agreement with
Buyer (the form of which shall be included with the PMPA Termination Notice) on substantially the
same terms and conditions as those set forth in such franchisee’s Seller PMPA Franchise Agreement.
Section 7.10
. Crude Supply Agreement. At Closing, Seller (or its Affiliate) and Buyer will
enter into a crude supply agreement in substantially the form attached hereto as Exhibit I (the
“
Crude Supply Agreement”).
Section 7.11
. Buyer Financing. Seller acknowledges that Buyer may undertake an equity and/or
debt financing (the “
Financing”), the proceeds of which may be used to fund all or a portion of the
Purchase Price. Seller agrees that it shall use its commercially reasonable efforts to cooperate
with Buyer’s efforts to secure the Financing (provided that such requested cooperation does not
unreasonably interfere with the ongoing operations of the Business or Seller or its Subsidiaries),
including (a) using commercially reasonable efforts to deliver (i) an unaudited balance sheet for
the Business as of June 30, 2011 and the related statement of operations and cash flow for the six
months ended June 30, 2011 and (ii) the statement of operations and cash flow for the six months
ended June 30, 2010 (collectively, the “
Interim Financial Statements”), (b) using commercially
reasonable efforts to cause its independent auditors to deliver customary “comfort letters” in
connection with the Financing, which comfort letters shall comply with the requirements of PCAOB AU
Section 634 and cover such periods as are addressed by the Business Financial Statements and the
Interim Financial
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Statements and are required under Regulation S-X to be included in a registration statement
for a Financing registered with the Securities and Exchange Commission, together with negative
assurance for any subsequent partial period for which the applicable financial information for the
Business is available to the extent such partial period is within 135 days of the date of the
latest audited or reviewed financial statements for the Business, and (c), if requested by Buyer,
providing such information to the underwriters, initial purchasers, lenders or other financing
parties in any such proposed Financing as may be reasonably requested in connection with such
parties’ due diligence investigation of the Business, including permitting Buyer’s lenders or their
agents to conduct an on-site evaluation of the Hydrocarbon Inventory of the Business (provided that
any such evaluation of the Hydrocarbon Inventory shall not have any effect on, and shall not be
used in connection with, the determination of the Inventory Value or any other matter that is the
subject of Section 2.08). Buyer shall promptly, upon request by Seller from time to time,
reimburse Seller for the reasonable, documented out-of-pocket costs incurred by Seller or any of
its Subsidiaries in connection with such cooperation (including reasonable attorneys’ and
accountants’ fees). Notwithstanding anything in this Section 7.11 to the contrary, neither Seller
nor any of its Subsidiaries shall (A) be required to incur any cost or expense in connection with
the foregoing unless Seller is reasonably satisfied that such amount will be promptly reimbursed by
Buyer, (B) have any liability or any obligation under any agreement or document related to the
Financing or (C) be required to incur any other liability with respect to the Financing. Buyer
shall indemnify and hold harmless Seller and its Subsidiaries, and its and their respective
directors, officers, employees, representatives and advisors from and against any and all Damages
suffered or incurred by any of them in connection with the Financing and any information utilized
in connection therewith, except to the extent that such Damages result from or arise out of the
gross negligence or willful misconduct of Seller or its Subsidiaries. Buyer agrees that (i) all
non-public or other confidential information provided by Seller or its Subsidiaries or any of their
respective representatives to Buyer or its representatives pursuant to this Section 7.11 shall be
kept confidential in accordance with and subject to the terms of the Confidentiality Agreement
(except to the extent required to be disclosed under applicable securities laws in connection with
an offering of securities by Buyer; and in connection therewith Buyer will take such actions as
Seller may reasonably request to limit any such disclosure and/or to protect the confidentiality
thereof), (ii) Seller shall be permitted a reasonable period (which period will take into account
the form and timing of the Financing, and Buyer will keep Seller reasonably informed on a
contemporary basis as to such form and timing) to comment on those portions of any prospectus or
confidential information memorandum related to the Financing that contain or are based upon any
such non-public or other confidential information (and Buyer shall use its reasonable efforts to
respond to such comments in a manner reasonably satisfactory to Seller), (iii) Seller shall not be
obligated to disclose any information if such disclosure would violate any agreement between Seller
or its Subsidiaries and a third party, (iv) Buyer will not unreasonably interfere with the
58
operation of Seller or its Subsidiaries’ business in connection herewith. For the avoidance
of doubt, in connection with the Financing, neither Buyer nor any of its potential financing
sources may, under any circumstances, conduct or cause to be conducted any sampling or other
invasive investigation of the air, soil, soil gas, surface water, groundwater, building materials
or other environmental media at any property related to the Seller or its Subsidiaries or the
Business, including the Purchased Assets, the Facilities and the Real Property. Notwithstanding
anything to the contrary herein, Buyer acknowledges and agrees that (i) the Closing is not
conditioned upon consummating any Financing or the receipt by Buyer of any funds necessary to pay
the Purchase Price and (ii) the failure of Buyer to consummate any Financing shall not alter or
modify Buyer’s obligations to consummate the transactions contemplated hereby (including the
Closing).
Section 7.12
. Certain Agreements. On or as promptly as practicable after the date hereof,
each of Buyer and Seller shall execute and deliver the agreement described in Item 1(a) of Section
5.01(c) of the Seller Disclosure Schedule (subject to such modifications as may be mutually agreed
by the parties thereto).
Section 7.13
. Software License Assistance. From the date hereof until the Closing Date,
Seller shall use its commercially reasonable efforts to assist (
e.g., by participating in phone
calls with vendors) Buyer in Buyer’s obtaining licenses for the software listed in Item D of
Section 3.04(iii) of the Seller Disclosure Schedule;
provided that (i) neither Seller nor any of
its Subsidiaries shall be obligated to pay any costs or expenses (including transfer or license
fees, which shall be solely for the account of Buyer) in connection with the foregoing and (ii) any
out-of-pocket expenses incurred by Seller or any of its Subsidiaries in connection with the
foregoing shall be promptly reimbursed by Buyer.
Section 8.01
. Tax Cooperation; Allocation of Taxes. (a) Buyer and Seller agree to furnish or
cause to be furnished to each other, upon request, as promptly as practicable, such information and
assistance relating to the Business and the Purchased Assets (including access to books and
records) as is reasonably necessary for the filing of all Tax returns, the making of any election
relating to Taxes, the preparation for any audit by any Taxing Authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax. Buyer and Seller shall retain all
books and records with respect to Taxes pertaining to the Purchased Assets until 60 days after the
expiration of the applicable statute of limitations, taking into account any extensions that have
been granted. On or after the end of such period, each party shall provide the other with at least
30 days prior written notice before destroying any such books and records, during which period the
party receiving such notice can elect to take possession, at its own expense, of such books and
records. Seller and Buyer shall cooperate with each other in the conduct of any audit or other
proceeding relating to Taxes
59
involving the Purchased Assets or the Business.
(b) All real property taxes, personal property taxes and similar ad valorem obligations levied
with respect to the Purchased Assets for a taxable period which includes (but does not end on) the
Closing Date (collectively, the “Apportioned Obligations”) shall be apportioned between Seller and
Buyer based on the number of days of such taxable period included in the Pre-Closing Tax Period and
the number of days of such taxable period after the Closing Date (any such portion of such taxable
period, the “Post-Closing Tax Period”). Seller shall be liable for the proportionate amount of
such Taxes that is attributable to a Pre-Closing Tax Period, and Buyer shall be liable for the
proportionate amount of such Taxes that is attributable to a Post-Closing Tax Period.
(c) For the avoidance of doubt, Seller shall be liable for the City of Superior Occupational
Tax on Petroleum Products Refined in Wisconsin (the “City of Superior Fee”) that is properly
allocable to Seller’s operations in Pre-Closing Tax Periods and Buyer shall be liable for the City
of Superior Fee properly allocable to Buyer’s operations in Post-Closing Tax Periods.
(d) Through the Closing Date, Seller shall be responsible for filing with the taxing
authorities the applicable Tax returns for ad valorem, property, severance, production and similar
Taxes which are required to be filed on or before the Closing Date. Buyer shall be responsible for
the filing with the appropriate taxing authorities the applicable Tax returns for all ad valorem,
property, severance, production and similar Taxes beginning after the Closing Date.
(e) All excise, value added, registration stamp, recording, documentary, conveyancing and
Wisconsin Real Estate Transfer Fees (collectively, “Transfer Taxes”) incurred in connection with
the transactions contemplated by this Agreement shall be borne equally by Buyer and Seller other
than Transfer Taxes imposed on the sale of the Hydrocarbon Inventory. All state and local sales
and use taxes (“Sales and Use Taxes”) imposed in connection with the transactions contemplated by
this Agreement and Transfer Taxes imposed on the sale of the Hydrocarbon Inventory shall be borne
solely and exclusively by Buyer. Buyer and Seller shall cooperate in securing and providing each
other with any appropriate resale exemption certifications, licenses and other similar
documentation. Without limiting the generality of the foregoing, no later than 5 Business Days
prior to Closing, Buyer shall provide to Seller either (i) each of the items set forth in Section
8.01(e) of the Seller Disclosure Schedule or (ii) in the case of any such item that has not yet
been obtained, documentation that establishes to Seller’s satisfaction that Buyer has completed the
necessary filings in order to secure an effective date for such item that is no later than the
Closing Date (the “Filing Documentation”). In any case in which, as of the Closing Date, Buyer has
not delivered to Seller either any item set forth in Section 8.01(e) of the Seller Disclosure
Schedule or the corresponding Filing Documentation, Buyer shall pay to Seller at Closing an amount
equal to the Transfer Taxes and
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Sales and Use Taxes that Seller expects to be imposed on the sale of the Hydrocarbon Inventory
(the “Initial Hydrocarbon Inventory Tax Amount”), with the amount of such payment to be determined
as follows: (i) the portion of the Initial Hydrocarbon Inventory Tax Amount comprising Transfer
Taxes shall be the amount of Transfer Taxes Seller expects will be imposed on the estimated volume
of the Hydrocarbon Inventory and (ii) the portion comprising Sales and Use Taxes shall be the
amount of Sales and Use Taxes Seller expects will be imposed on the Estimated Inventory Value, each
as determined pursuant to Section 2.08. If, pursuant to the procedures set forth in Section
2.08(c), it is determined that the estimated volume of the Hydrocarbon Inventory is more or less
than the volume of the Hydrocarbon Inventory as of the Closing Date and/or the Estimated Inventory
Value is more or less than the Inventory Value, (i) Buyer shall pay to Seller the amount of any
resulting net increase in the aggregate Transfer Taxes and Sales and Use Taxes imposed on the sale
of the Hydrocarbon Inventory at Closing or, as applicable, (ii) Seller shall pay to Buyer the
amount of any resulting net overpayment of the aggregate Transfer Taxes and Sales and Use Taxes
imposed on the sale of the Hydrocarbon Inventory at Closing, in each case at the same time and
subject to the same interest provisions as the amounts described in Section 2.08(d). In addition,
within 10 days of receipt by Seller of any refund in respect of (i) the Initial Hydrocarbon
Inventory Tax Amount and (ii) any additional amounts actually paid by Buyer pursuant to clause (i)
of the preceding sentence, Seller shall pay to Buyer the amount of such refund. Buyer and Seller
agree that the amount of Wisconsin Real Estate Transfer Fees shall be determined in accordance with
Section 2.06(f) and apportioned as provided in this Section 8.01(e). Any subsequent adjustments to
any Transfer Tax or Sales and Use Tax made pursuant to a legally prescribed audit, and any costs
incurred with respect to such audit, shall be apportioned as provided in this Section 8.01(e).
(f) Apportioned Obligations and Taxes described in Section 8.01(e) shall be timely paid, and
all applicable filings, reports and returns shall be filed, as provided by Applicable Law. Upon
payment of any such Apportioned Obligation or Tax described in Section 8.01(e), the paying party
shall present a statement to the non-paying party setting forth the amount of reimbursement to
which the paying party is entitled under Section 8.01(b) or Section 8.01(e), as the case may be
together with such supporting evidence as is reasonably necessary to calculate the amount to be
reimbursed. The non-paying party shall make such reimbursement promptly but in no event later than
10 days after the presentation of such statement. Any payment not made within such time shall bear
interest at a rate equal to the Interest Rate for each day until paid.
(g) For the avoidance of doubt, this Article 8 shall not apply to any Taxes or fees that are
taken into account in the calculation of the Inventory Value pursuant to Section 2.08, all of which
shall be paid by Buyer pursuant to the calculation of the Inventory Value.
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Section 9.01
. Offers of Employment; Assumption of Collective Bargaining Agreement. (a) Buyer
shall (or shall cause one of its Subsidiaries to), on or prior to the Closing Date, make an offer
of employment to each then current Business Employee on the terms set forth in Section 9.02. Such
offer shall offer to a Business Employee employment with Buyer (or one of its Subsidiaries)
commencing (i) effective as of the Closing, or (ii) in the case of any Business Employee not
actively at work with Seller immediately prior to the Closing, immediately following the end of (A)
such Business Employee’s paid time-off, vacation, military, sick or personal leave, short- or
long-term disability or other leave of absence, or (B) such Business Employee’s exercise of his or
her right to recall, rehire or other return to employment under an applicable Contract or
Applicable Law. Unless a written acceptance of an offer of employment is required by Applicable
Law, a Business Employee who continues employment with Buyer (or one of its Subsidiaries) shall be
deemed to have accepted such offer of employment, unless such Business Employee specifically
declines such offer of employment. Business Employees who accept (or are deemed to have accepted)
such offer of employment shall collectively be referred to as the “
Transferred Employees”.
(b) Buyer agrees (i) effective as of the Closing, to be the “successor” for all purposes
under, and agrees to be bound by, the Collective Bargaining Agreement, and to provide any and all
compensation and benefits required under the terms thereof, (ii) effective as of the Closing,
(i)otherwise to be bound by, and comply with all of the terms and conditions of, the Collective
Bargaining Agreement and (iii) to execute and deliver, on or prior to the Closing, all
documentation and agreements required to effectuate the foregoing; provided, however, that except
with respect to paid time off, personal and sick time credited by Buyer pursuant to Section 9.05,
Seller shall retain and be solely liable for all liabilities, obligations and expenses for
compensation and benefits of Union Employees relating to periods prior to the Closing Date (the
“Retained Union Employee Benefit Liabilities”).
Section 9.02
. Maintenance of Compensation and Benefits. Buyer agrees that for a period of 12
months after the Closing Date (the “
Relevant Period”), it shall provide (or cause its Affiliates to
provide) each Non-Union Transferred Employee with (i) an annual base salary and (ii) incentive
compensation opportunities that are at least equal to his or her annual base salary and incentive
compensation opportunities provided by Seller in effect immediately prior to the Closing. In
addition, Buyer agrees that during the Relevant Period, it shall provide (or cause its Affiliates
to provide) Non-Union Transferred Employees with benefits that are at least comparable in the
aggregate to the benefits provided by Seller to Non-Union Transferred Employees immediately prior
to the Closing (including, for such purpose, severance benefits and excluding, for such purpose,
(A) retirement and other benefits under any defined benefit pension plan (including, without
limitation, the Seller DB Plan (as defined below)), (B) any
62
benefits under any retiree medical or welfare benefits plan, (C) any benefits under any equity
based plan (including, without limitation, the Employee Stock Purchase Plan for Xxxxxx Oil
Corporation, the Xxxxxx Oil Corporation Long-Term Incentive Plan and the Xxxxxx Oil Corporation
1992 Stock Incentive Plan), and (D) any stay or similar bonuses). Buyer agrees that after the
expiration of the Relevant Period, it shall provide (or cause its Affiliates to provide) Non-Union
Transferred Employees with compensation and benefits that are at least comparable in the aggregate
to the compensation and benefits (including, for such purpose, severance benefits) provided to
similarly situated employees of Buyer or its Affiliates.
(i) Effective as of the Closing, Buyer shall cover (or cause to be covered) each
Non-Union Transferred Employee under a defined contribution plan intended to qualify under
Section 401(a) of the Code and its related trust (the “Buyer DC Plan”) on a basis at least
comparable to the basis on which similarly situated employees of Buyer or its Affiliates
participate in the Buyer DC Plan and on terms and conditions that reflect the service
credit provisions of Section 9.05. Buyer agrees to cause the Buyer DC Plan to provide for
a supplemental employer profit sharing contribution (the “Profit Sharing Contribution”) to
be allocated to each Non-Union Transferred Employee who is a participant in the Buyer DC
Plan (a “Non-Union Transferred Participant”). The Profit Sharing Contribution shall be
made only for the plan year of the Buyer DC Plan in which the Closing Date occurs and the
next following plan year of the Buyer DC Plan and shall be allocated as of the last day of
the applicable plan year of the Buyer DC Plan. For the plan year of the Buyer DC Plan in
which the Closing Date occurs, the Profit Sharing Contribution shall equal 2.7% of each
eligible Non-Union Transferred Participant’s compensation (as defined under the Buyer DC
Plan) for such plan year and, for the next following plan year of the Buyer DC Plan, the
Profit Sharing Contribution shall equal the Adjusted Profit Sharing Contribution
Percentage of each eligible Non-Union Transferred Participant’s compensation for such plan
year. For each such plan year of the Buyer DC Plan: (A) all of the Non-Union Transferred
Participants who are not highly compensated employees (as defined in Section 414(q) of the
Code) for such plan year shall be eligible for the Profit Sharing Contribution for such
plan year, and (B) one or more of the Non-Union Transferred Participants who are highly
compensated employees for such plan year shall be eligible for the Profit Sharing
Contribution for such plan year only to the extent the Profit Sharing Contribution, if
made, shall satisfy the tax qualification requirements applicable to the Buyer DC Plan
(including, without limitation, the requirements of Sections 401(a)(4) and 410(b) of the
Code), as reasonably determined by Buyer. Nothing contained in this Agreement shall
obligate Buyer to cause the Buyer DC Plan to provide for the Profit Sharing Contribution
or any other supplemental employer
63
contribution in respect of any Non-Union Transferred Participant’s compensation for
any other plan year of the Buyer DC Plan.
(ii) Effective as of the Closing, each Non-Union Transferred Employee shall cease to
be an active participant in the Thrift Plan for Employees of Xxxxxx Oil Corporation (As
Restated Generally Effective January 1, 2002 Including Amendments Made Between 2002 and
2008), an Employee Plan that is a defined contribution plan intended to qualify under
Section 401(a) of the Code and its related trust (the “Seller DC Plan”); provided that as
of the Closing, Seller shall take all actions necessary to cause all Non-Union Transferred
Employees to be fully vested in their accrued benefits under the Seller DC Plan. Seller
and the Seller DC Plan shall retain all assets and liabilities under the Seller DC Plan,
including responsibility for all benefits with respect to each such Non-Union Transferred
Employee in respect of the period prior to the Closing under the Seller DC Plan (except to
the extent of any “direct rollover” to the Buyer DC Plan, as provided below), and Seller
shall retain all liability for any and all contributions required to be made to the Seller
DC Plan under the terms of the Seller DC Plan or Applicable Law.
(iii) Effective as of the Closing or at any time thereafter reasonably requested by
Buyer (but not later than the 60th day following the Closing Date), a Non-Union
Transferred Employee shall be eligible to effect a “direct rollover” (as described in
Section 401(a)(31) of the Code) of an “eligible rollover distribution” (as described in
Section 402(f)(2)(A) of the Code) of his or her account balances (including participant
loans) under the Seller DC Plan to the Buyer DC Plan in the form of cash and participant
loan notes.
(iv) Buyer shall have no obligation or liability under the Seller DC Plan and Seller
shall defend, indemnify and hold harmless Buyer and its Affiliates against any and all
claims, loss, liability or expense under or relating to the Seller DC Plan or arising out
of any Transferred Employee’s participation in the Seller DC Plan, including claims for
benefits under the Seller DC Plan.
(b) As of the Closing, Buyer shall assume the sponsorship of the Thrift Plan for Employees of
Xxxxxx Oil USA, Inc. Represented by International Union of Operating Engineers AFL-CIO, Local No.
305, Superior, Wisconsin (As Restated Generally Effective January 1, 2002 Including Amendments Made
Between 2002 and 2008), a defined contribution plan intended to qualify under Section 401(a) of the
Code and its related trust (the “Union DC Plan”); provided that Seller shall take such actions as
are necessary to cause the Xxxxxx Oil Common Stock fund to be frozen as to new investment
contributions to or intra-fund transfers into such fund as of the Closing Date. Not later than the
Closing, or as reasonably practicable thereafter (but in no event later than as required by
Applicable Law), Seller shall make all contributions and participant loan
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repayments to the Union DC Plan required to be made in respect of the period prior to the
Closing under the terms of the Union DC Plan (including, without limitation, all pre-tax and
after-tax contributions and loan repayments of participants in the Union DC Plan deducted from the
compensation of participants in respect of the period prior to the Closing). Subject to Buyer’s
indemnification rights under Article 12, from and after the Closing, Buyer and the Union DC Plan
shall assume all assets and liabilities under the Union DC Plan and Seller shall have no obligation
or liability for benefits under the Union DC Plan, and Buyer shall defend, indemnify and hold
harmless Seller against any and all claims, loss, liability or expense under or with respect to the
Union DC Plan or arising out of any current or former Union Employee’s participation in the Union
DC Plan, including claims for benefits under the Union DC Plan.
Section 9.04
. Defined Benefit Plans. (a) With respect to the Retirement Plan of Xxxxxx Oil
Corporation (as restated January 1, 2002), an Employee Plan that is a defined benefit plan intended
to qualify under Section 401(a) of the Code, and its related trust (the “
Seller DB Plan”):
(i) Each Non-Union Transferred Employee who is a participant in the Seller DB Plan
shall cease to be an active participant in the Seller DB Plan as of the Closing; provided
that as of the Closing, Seller shall take all actions necessary to cause all Non-Union
Transferred Employees to be fully vested in their accrued benefits under the Seller DB
Plan. Seller and the Seller DB Plan shall retain all assets and liabilities thereunder,
including responsibility for all benefits with respect to each such Non-Union Transferred
Employee under the terms of the Seller DB Plan, and Seller shall retain any and all
liability in respect of the Seller DB Plan, including, without limitation, all liability
for any and all contributions required to be made to the Seller DB Plan under the terms of
the Seller DB Plan or Applicable Law;
(ii) Buyer shall have no obligation or liability under the Seller DB Plan and Seller
shall defend, indemnify and hold harmless Buyer and its Affiliates against any and all
claims, loss, liability or expense under or relating to the Seller DB Plan or arising out
of any Transferred Employee’s participation in the Seller DB Plan, including claims for
benefits under the Seller DB Plan.
(b) Effective as of the Closing, Buyer shall assume the sponsorship of the Retirement Plan for
Employees of Xxxxxx Oil USA, Inc. Represented by International Union of Operating Engineers AFL-CIO
Local No. 305, Superior, Wisconsin (As Restated Generally Effective January 1, 2002, Including
Amendments Made Between 2002 and 2008), a defined benefit pension plan intended to qualify under
Section 401(a) of the Code, and its related trust (the “Union DB Plan”). Not later than the
Closing, Seller shall make all contributions to the Union DB Plan required to be made prior to the
Closing under the Union DB Plan or Applicable Law. Subject to Buyer’s indemnification rights under
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Article 12, from and after the Closing, Buyer and the Union DB Plan shall assume all assets
and liabilities under the Union DB Plan and Seller shall have no obligation or liability for
benefits under the Union DB Plan, and Buyer shall defend, indemnify and hold harmless Seller
against any and all claims, loss, liability or expense under or with respect to the Union DB Plan
or arising out of any current or former Union Employee’s participation in the Union DB Plan,
including claims for benefits under the Union DB Plan.
Section 9.05
. Credit for Past Service; Annual Bonus. (a) Buyer shall grant (or cause its
Affiliates to grant) each Transferred Employee credit for years of prior service with Seller or any
of its Subsidiaries or their respective predecessors for all purposes under each “employee benefit
plan” (within the meaning of Section 3(3) of ERISA) sponsored or maintained by Buyer or any of its
Affiliates, including benefit accrual;
provided, however, that such credit shall not result in a
duplication of benefits. Buyer and Seller agree to cooperate and exchange such information as is
necessary to determine such service credit and avoid any such duplication of benefits. For the
avoidance of doubt, Buyer shall credit each Transferred Employee with all paid time off and
personal or sick leave credited and unused by such Transferred Employee through the Closing Date.
(b) Seller shall pay to each Transferred Employee in the first quarter of the 2012 calendar
year, a pro rata amount of the annual bonus, if any, that otherwise would be payable under the
Xxxxxx Oil Corporation 2007 Annual Incentive Plan to each Transferred Employee for the 2011
calendar year had such employee been employed by Seller or an Affiliate thereof on the last day of
the calendar year. Such amount shall be equal to the amount otherwise payable to each such
Transferred Employee (had such Transferred Employee continued in employment with Seller) multiplied
by a fraction, the numerator of which is the number of days each such Transferred Employee was
employed by Seller or an Affiliate thereof in the year in which the Closing occurs, and the
denominator of which is 365.
Section 9.06
. Welfare Plans; ESPP. (a) As of the Closing, each Non-Union Transferred
Employee shall cease participation in the health and welfare benefit plans of Seller and its
Affiliates (each, a “
Seller Welfare Plan”) and commence participation in the health and welfare
benefit plans maintained, administered or contributed to by Buyer or its Affiliates, subject to the
terms and conditions of such plans except to the extent provided herein. Seller and its Affiliates
shall be responsible for claims incurred under a Seller Welfare Plan for Non-Union Transferred
Employees and their beneficiaries and dependents prior to the Closing. All claims incurred under a
Seller Welfare Plan for Non-Union Transferred Employees and their beneficiaries and dependents at
or after the Closing shall be the responsibility of Buyer or its Affiliates. For purposes of this
Section 9.06, the Seller Welfare Plans shall include life, accidental death and dismemberment,
business travel accident, health or medical, dental, vision care and/or prescription drug and
short-and long-term disability benefit plans and the following claims shall be deemed to be
incurred as follows: (i) in the case of life,
66
accidental death and dismemberment and business travel accident insurance benefits, upon the
death or accident giving rise to such benefits; (ii) in the case of health or medical, dental,
vision care and/or prescription drug benefits, upon provision of such services, materials or
supplies; and (iii) in the case of short- and long-term disability benefits, upon the occurrence of
the disability giving rise to such benefits.
(b) Buyer shall (or shall cause its Subsidiaries to):
(i) provide each Transferred Employee with credit towards the satisfaction of all
limitations as to any applicable pre-existing conditions, exclusions, waiting periods and
actively-at-work requirements with respect to participation and coverage requirements
applicable to the Non-Union Transferred Employees under any health and welfare plans in
which such Non-Union Transferred Employees are eligible to participate after the Closing
to the extent that such credit was provided to such Non-Union Transferred Employee under
the applicable Seller Welfare Plan; and
(ii) for the plan year in which the Closing Date occurs, provide each Non-Union
Transferred Employee with credit for any co-payments and deductibles paid prior to the
Closing in satisfying any applicable deductible or out-of-pocket requirements under any
health and welfare plans that such Non-Union Transferred Employees are eligible to
participate in after the Closing.
Buyer and Seller agree to cooperate and exchange such information as is necessary in order for
Buyer to comply with this Section 9.06(b).
(c) Effective as of the Closing, Buyer shall assume the sponsorship of each Union Welfare Plan
(other than the Union Welfare Plans set forth on Section 3.15(h)(ii) of the Seller Disclosure
Schedule), which sponsorship shall include, to the extent applicable, responsibility for
“continuation coverage” required to be provided under each such Union Welfare Plan for “qualified
beneficiaries” under Section 4980B of the Code and Sections 601-608 of ERISA; provided, that Buyer
shall not assume the sponsorship of any such Union Welfare Plan that covers employees of Seller who
are not Transferred Employees; provided, further, that to the extent any Union Welfare Plan covers
employees who are not Union Employees, Buyer shall not assume the sponsorship of such Union Welfare
Plan and Buyer shall provide coverage to Union Transferred Employees in accordance with the
applicable provisions of the Collective Bargaining Agreement. Seller agrees to cooperate and
provide such information as is necessary for Buyer to provide such coverage to the Union
Transferred Employees. For the avoidance of doubt, the Union Welfare Plans assumed by Buyer shall
not include the provision of retiree medical or other retiree benefits. In accordance with Section
9.01(b), as of the Closing, Buyer shall provide the medical benefits required by the terms of
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the Collective Bargaining Agreement to Union Transferred Employees and their beneficiaries.
(d) Effective as of the Closing, Seller shall transfer from medical and dependent care
flexible spending account plans of Seller and its Affiliates (each, a “Seller FSA Plan”) to one or
more medical and dependent care flexible spending account plans established or designated by Buyer
(collectively, the “Buyer FSA Plan”), and Buyer shall assume, the responsibility for account
balances of Transferred Employees and for the obligations of the Seller FSA Plans to provide
benefits to Transferred Employees with respect to such transferred account balances at or after the
Closing. As soon as reasonably practicable after the Closing Date, Seller shall provide Buyer with
the account balance information relating to such transferred account balances. Each Transferred
Employee shall continue to have payroll deductions made under the Buyer FSA Plan as most recently
elected by him or her under the applicable Seller FSA Plan. Promptly after the Closing Date, Buyer
shall promptly reimburse Seller for benefits paid by the Seller FSA Plans with respect to the
Seller FSA Plan year in which the Closing Date occurs to any Transferred Employee prior to the
Closing to the extent in excess of the payroll deductions made in respect of such Transferred
Employee prior to Closing with respect to the Seller FSA Plan year in which the Closing Date
occurs. Promptly after the Closing, Seller shall transfer to Buyer in cash any excess amount
credited to the Seller FSA Plan that results from the Transferred Employees’ payroll deductions
credited to the Seller FSA Plan exceeding the total amount of benefits that have been paid under
the Seller FSA Plan prior to the Closing with respect to the Seller FSA Plan’s plan year in which
the Closing Date occurs.
(e) Except as provided in Section 9.06(b), (i) Seller shall have sole responsibility for
“continuation coverage” benefits for any Business Employee, any Transferred Employee and all
“qualified beneficiaries” of any Business Employee for whom a “qualifying event” occurs prior to or
at the Closing (including all qualifying events that occur in connection with the consummation of
the transactions contemplated by this Agreement) and (ii) Buyer shall have sole responsibility for
“continuation coverage” benefits for any Transferred Employee and all “qualified beneficiaries” of
any Transferred Employee for whom a “qualifying event” occurs after Closing. The terms
“continuation coverage,” “qualified beneficiaries” and “qualifying event” shall have the meanings
ascribed to them under Section 4980B of the Code and Sections 601-608 of ERISA.
(f) The treatment of the accounts of each Transferred Employee participating in the Employee
Stock Purchase Plan for Xxxxxx Oil Corporation immediately prior to the Closing shall be determined
by the terms of such plan; provided, that Seller shall take such actions as are necessary to cause
the Union Employees to cease to be participants in the Employee Stock Purchase Plan for Xxxxxx Oil
Corporation as of the Closing.
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in Section 9.07(b), Seller shall retain all liabilities and obligations under the Seller Group
Insurance Plans and Seller and its Affiliates shall be responsible for all post-retirement medical,
dental and life insurance (“Seller Retiree Welfare Benefit”) coverage for any Business Employees,
retired employees or eligible former employees, and their eligible dependents and beneficiaries of
Seller and its Affiliates. Seller and its Affiliates also shall make available or cause to be made
available Seller Retiree Welfare Benefit coverage to any Business Employee who is not a Union
Employee and who satisfies the eligibility requirements for a Seller Retiree Welfare Benefit under
the Seller Group Insurance Plans or other applicable plan as of the Closing Date and elects to
retire from active service with Seller on or prior to the Closing Date, and any such Business
Employee who is not a Union Employee who retires on or immediately prior to the Closing Date shall
otherwise be considered a Business Employee for purposes of Article 9. Buyer shall have no
obligation or liability under the Seller Group Insurance Plans and Seller shall defend, indemnify
and hold harmless Buyer and its Affiliates against any and all claims, loss, liability or expense
under or relating to the Seller Group Insurance Plans and any participation in any Seller Group
Insurance Plan by any Business Employee, retired employee or eligible former employee of Seller or
its Affiliates or any such employee’s eligible dependents and beneficiaries.
(b) Effective as of the Closing and subject to the terms and conditions of the Collective
Bargaining Agreement as in effect from time to time (or any subsequent applicable collective
bargaining agreement), Buyer shall assume the liabilities and provide for coverage for
post-retirement medical and dental benefits for each Union Transferred Employee who elects to
retire from active service with Buyer or its Affiliates following the Closing Date (the “Buyer
Retiree Medical Benefits”), to the extent that such Union Transferred Employee satisfies the
eligibility requirements for post-retirement medical and dental benefit coverage under or provided
by the Collective Bargaining Agreement. Buyer shall defend, indemnify and hold harmless Seller and
its Affiliates against any and all claims, loss, liability or expense relating to the Buyer Retiree
Medical Benefits or arising out of any retired Union Transferred Employee’s claim for benefits with
respect to any Buyer Retiree Medical Benefits.
Section 9.08
. Workers’ Compensation. Buyer’s workers’ compensation program shall be
responsible for all claims for benefits that are based upon events occurring at or after Closing by
participating Transferred Employees. Seller’s workers’ compensation program shall be responsible
for all claims for benefits that are based upon events occurring prior to Closing by participating
Business Employees.
Section 9.09
. Withholding. Buyer and Seller agree to comply with the Standard Procedure
described in Section 4 of Revenue Procedure 2004-53, 2004-2 C.B. 320 (the “
Standard Procedure”).
Seller shall, in accordance with Revenue Procedure 2004-53, assume all responsibility for preparing
and filing Form W-2, Wage and Tax Statements; Form W-3, Transmittal of Income and Tax
69
Statements; Form 941, Employer’s Quarterly Federal Tax Returns; Form W-4, Employee’s
Withholding Allowance Certificates; and Form W-5, Earned Income Credit Advance Payment Certificates
(collectively, the “Employee Withholding Documents”) with regard to wages paid to Transferred
Employees through the Closing Date. Buyer shall assume all responsibility for preparing and filing
the Employee Withholding Documents with regard to wages paid to Transferred Employees after the
Closing Date. Buyer and Seller shall cooperate in good faith to the extent necessary to permit
each of them to comply with the Standard Procedure.
Section 9.10
. Allocation of Certain Liabilities. Other than as provided in Section 2.04(d),
Buyer shall be solely responsible for all liabilities, obligations, costs and expenses (including
reasonable attorneys’ fees) for all employment and other claims by any Transferred Employee arising
from the employment of such Transferred Employee by Buyer or its Affiliates at or after the Closing
relating to arbitrations, unfair labor practice charges, employment discrimination charges,
wrongful termination claims, workers’ compensation claims, any employment-related tort claim or
other similar claims or charges of or by any Transferred Employee. Other than as provided in
Section 2.03(c), Seller shall be solely responsible for all liabilities, obligations, costs and
expenses (including reasonable attorneys’ fees) for all employment or other claims relating to
arbitrations, unfair labor practice charges, employment discrimination charges, wrongful
termination claims, workers’ compensation claims, any employment-related tort claim or other
similar claims or charges by any Business Employee arising from the employment of such Business
Employee by Seller or its Affiliates prior to the Closing.
Section 9.11
. Employee Communications. Seller and Buyer shall cooperate in communications
with Business Employees with respect to employee benefit plans maintained by Seller or Buyer and
with respect to other matters arising in connection with the transactions contemplated by this
Agreement.
Section 9.12
. Acknowledgement. Buyer and Seller acknowledge and agree that, except as
provided in Section 9.02, nothing contained in this Agreement shall be construed to limit in any
way the rights of Buyer or its Affiliates to terminate the employment, or modify the compensation,
benefits or other terms and conditions of employment, of any Transferred Employee from and after
the Closing;
provided that such termination or modification is in accordance with Applicable Law
and the provisions of this Article 9. Buyer and Seller further acknowledge and agree that nothing
in this Agreement shall be construed to limit in any way the rights of Buyer or its Affiliates to
amend, modify or terminate any employee benefit plan, program, arrangement, policy or agreement of
Buyer or its Affiliates following the Closing.
Section 9.13
. No Third Party Beneficiaries. Without limiting the generality of Section
14.08, no provision of this Article 9 shall (a) create any third party beneficiary or other rights
in any employee or former employee (including
70
any beneficiary or dependent thereof) of Seller or its Affiliates, Buyer or any of its
Affiliates or any other Person other than the parties hereto and their respective successors and
permitted assigns, (b) constitute or create or be deemed to constitute or create an employment
agreement or (c) constitute or be deemed to constitute an amendment to any employee benefit plan
sponsored or maintained by Seller or its Affiliates or Buyer or its Affiliates.
Section 9.14
. Cooperation. Each of Buyer and Seller recognize it to be in the best interests
of the parties hereto and their respective employees that the transactions in this Article 9 be
effected in an orderly manner and agree to devote their respective best efforts and to cooperate
fully in complying with the provisions of this Article 9. Without limiting the generality of the
foregoing, each of the parties agrees to execute, deliver and file all documents and to take all
such actions as are deemed necessary or desirable in order to carry out and perform the purposes of
this Article 9 and to facilitate the transactions referred to in this Article 9.
Section 10.01
. License Grants. Subject to the terms and conditions set forth in this Article
10, effective as of Closing, Seller grants to Buyer:
(a) a non-exclusive, perpetual, irrevocable, non-sublicensable, nontransferable (except as
otherwise set forth in Section 10.02), royalty-free, fully paid up license to use the Owned
Intellectual Property Rights but solely to the extent currently used in the conduct of the Business
(the “OIPR License”); and
(b) a non-exclusive, non-sublicensable, non-transferable (except as otherwise set forth in
Section 10.02), royalty-free, fully paid up license to use the Franchise Licensed Marks during the
FIPR Term in the conduct of the Continuing PMPA Franchise Business but solely to the extent
currently used in the conduct of the Spur Franchise Business (the “FIPR License”, and together with
the OIPR License, the “Licenses”) (it being understood that, for purposes of this clause (b), any
and all use of the Franchise Licensed Marks by Buyer hereunder shall inure to the benefit of
Seller, and Buyer shall use such Franchise Licensed Marks only in the form and manner currently
used in the Spur Franchise Business)).
Section 10.02
. Transfer of Licenses. In the event that Buyer sells, assigns, transfers or
otherwise disposes of the Business to another Person, or in the event of a merger of Buyer with, or
acquisition of Buyer or all or substantially all of the assets of Buyer by, another Person, the
Licenses may be transferred or assigned to such Person (a “
Permitted Transferee”) subject to such
Person’s assumption in writing of the obligations of Buyer set forth in this Agreement and such
Licenses;
provided that no such assumption shall relieve Buyer of any of its obligations hereunder
or thereunder.
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Section 10.03
. Licensed IPR. (a) Subject to Section 10.03(c), at Closing, Seller shall
transfer, or cause to be transferred, to Buyer all of Seller’s and its Subsidiaries’ right, title
and interest in and to all Business Licensed IPR to the extent such Business Licensed IPR are
Transferable by Seller or its Subsidiaries.
(b) Subject to Section 10.03(c), at Closing, Seller shall grant, or cause to be granted, to
Buyer a non-exclusive, perpetual, irrevocable, non-sublicensable, nontransferable sublicense to use
(solely to the extent currently used in the conduct of the Business) any and all (i) Business
Licensed IPR to the extent such Business Licensed IPR are Licensable but not Transferable by Seller
or its Subsidiaries and (ii) Shared Licensed IPR to the extent such Shared Licensed IPR are
Licensable by Seller or its Subsidiaries.
(c) Buyer acknowledges and agrees that certain Business Licensed IPR may not be Transferable
or Licensable and that certain Shared Licensed IPR may not be Licensable. In the event that
Buyer’s inability to use or exploit any such Licensed IPR would reasonably be expected to have a
materially adverse affect on the Business, Seller shall use commercially reasonable efforts to
effect a transfer (solely in the case of Business Licensed IPR) or sublicense (subject to the terms
and conditions set forth in Section 10.03(b)) to Buyer of such Licensed IPR; provided that (i) any
cost or expense incurred in connection with such transfer or sublicense shall be borne solely and
exclusively by Buyer and (ii) in no event shall any such transfer or sublicense impose upon Seller
any incremental obligation (other than any costs or expenses in respect of which Seller will be
reimbursed in full by Buyer), impair Seller’s Intellectual Property Rights or other rights (it
being understood that such transfer or sublicense, in and of itself, shall not constitute an
impairment of Seller’s rights) or otherwise result in any detriment to the business of Seller.
(d) In the event that Buyer materially breaches any of the terms and conditions set forth in
Section 10.03(b) or Section 10.03(c) with respect to a sublicense of Licensed IPR (an “LIPR
Sublicense”) or any of the terms and conditions set forth in a third party agreement granting
Seller or an Affiliate thereof, as the case may be, a license to such Licensed IPR (a “Third Party
License Agreement”), and such breach is not completely and fully cured within the lesser of (i) the
cure period, if any, applicable to such breach set forth in the Third Party License Agreement and
(ii) 30 days after notice to Buyer identifying such breach, Seller shall have the right to
terminate such LIPR Sublicense immediately upon notice to Buyer. For the avoidance of doubt, in
the event that Buyer materially breaches any term or condition of a Third Party License Agreement
and such agreement does not provide for a cure period for such breach prior to termination of any
license to Licensed IPR, Buyer shall not be entitled to any cure period in respect of such breach
prior to termination of the LIPR Sublicense for such Licensed IPR.
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(a) disclose any Owned Intellectual Property Right, Franchise Licensed Xxxx or Licensed IPR to
any Person except to the extent (i) necessary to exercise the Licenses or any LIPR Sublicense, (ii)
not prohibited by any Third Party License Agreement or (iii) required under any Applicable Law;
(b) challenge the validity or ownership of any Owned Intellectual Property Right or Franchise
Licensed Xxxx or claim adversely or assist in any claim adverse to Seller concerning any right,
title or interest in any such Intellectual Property Rights; or
(c) do or permit any act that may directly or indirectly impair or prejudice any Owned
Intellectual Property Right or Franchise Licensed Xxxx or be detrimental to the reputation and
goodwill of Seller and its Affiliates.
Section 10.05
. Improvements. For the avoidance of doubt, Buyer shall not be entitled to
receive, and Seller and its Subsidiaries shall have no obligation to provide, any improvements,
modifications, enhancements or upgrades (“
Improvements”) made following the Closing Date by Seller
or its Subsidiaries to any Intellectual Property Rights.
Section 10.06
. Reservation of Rights. Buyer acknowledges and agrees that (i) the Licenses
and any LIPR Sublicense are the only licenses and sublicenses granted herein to Buyer with respect
to any Intellectual Property Rights and (ii) no other licenses or sublicenses whatsoever have been
granted to Buyer, expressly or by implication or estoppel, by the provisions of this Agreement with
respect to any Intellectual Property Rights. Any and all rights in and to any Intellectual
Property Rights not expressly granted to Buyer herein are reserved and retained by Seller.
Section 10.07
. NO ADDITIONAL REPRESENTATIONS OR WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 3.11, THE LICENSES, ANY LIPR SUBLICENSE AND ANY INTELLECTUAL PROPERTY RIGHTS PROVIDED
PURSUANT TO THIS ARTICLE 10 ARE PROVIDED “AS-IS” WITH NO REPRESENTATIONS OR WARRANTIES, AND SELLER
AND ITS AFFILIATES HEREBY EXCLUDE AND DISCLAIM ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE LICENSES, ANY LIPR SUBLICENSE AND ANY INTELLECTUAL PROPERTY RIGHTS, WHETHER
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY REPRESENTATION OR WARRANTY WITH RESPECT TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.
Section 10.08
. LIMITATION OF LIABILITY. IN NO EVENT SHALL SELLER OR ANY OF ITS AFFILIATES BE
LIABLE FOR ANY DAMAGES RELATED TO OR ARISING FROM THE EXERCISE OF THE LICENSES, ANY LIPR
SUBLICENSE, ANY OTHER TRANSACTION CONTEMPLATED BY THIS ARTICLE 10 OR BUYER’S, ANY OF ITS
AFFILIATES’ OR ANY
73
PERMITTED TRANSFEREE’S USE OF ANY INTELLECTUAL PROPERTY RIGHTS.
(a) All necessary filings and notifications under the HSR Act relating to the transactions
contemplated hereby shall have been made and any applicable waiting period under the HSR Act shall
have expired or been terminated.
(b) No order, ruling, judgment, injunction or decree, preliminary or otherwise, issued by any
Governmental Authority of competent jurisdiction shall (i) prohibit the consummation of the Closing
or (ii) reasonably be expected to have a Material Adverse Effect on the effective operation of the
Business (as it is currently operated by Seller and its Subsidiaries) by Buyer after the Closing.
Section 11.02
. Conditions to Obligation of Buyer. The obligation of Buyer to consummate the
Closing is subject to the satisfaction, or waiver by Buyer, of the following further conditions:
(a) (i) Seller shall have performed in all material respects all of its obligations hereunder
required to be performed by it on or prior to the Closing Date; (ii) the representations and
warranties of Seller contained in this Agreement and in any certificate or other writing delivered
by Seller pursuant hereto (disregarding any materiality or Material Adverse Effect or similar
qualifications contained therein) shall be true (prior to any amendment or supplements of the
Seller Disclosure Schedule pursuant to Section 14.12) at and as of the Closing Date, as if made at
and as of such date (except for representations and warranties that are made as of a specific date,
which representations and warranties shall be true as of such specific date, disregarding, for
purposes of this parenthetical, the reference to “as of the date hereof” in the lead in clause to
Article 3), with only such exceptions as would not in the aggregate reasonably be expected to have
a Material Adverse Effect; and (iii) Buyer shall have received a certificate signed by an executive
officer of Seller on behalf of Seller to the foregoing effect.
(b) Seller shall have delivered to Buyer a certificate, in accordance with Treasury
Regulations section 1.1445-2(b), duly executed and acknowledged, certifying that Seller is not a
foreign person and, thus, is exempt from withholding pursuant to the Foreign Investment in Real
Property Tax Act.
(c) All consents and authorizations specified in Section 11.02(c) of the Seller Disclosure
Schedule required for the consummation of the transactions
74
contemplated by this Agreement shall have been obtained and remain in effect.
(d) The agreements specified in Section 11.02(d) of the Seller Disclosure Schedule shall have
been executed and delivered by the parties thereto (other than Seller or its Affiliates).
(e) From the date of this Agreement to the Closing, there shall not have been any event,
occurrence, development or state of circumstances or facts that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 11.03
. Conditions to Obligation of Seller. The obligation of Seller to consummate
the Closing is subject to the satisfaction, or waiver by Seller, of the following further
conditions:
(a) (i) Buyer shall have performed in all material respects all of its obligations hereunder
required to be performed by it at or prior to the Closing Date, (ii) the representations and
warranties of Buyer contained in this Agreement and in any certificate or other writing delivered
by Buyer pursuant hereto shall be true in all material respects (prior to any amendment or
supplement of the Buyer Disclosure Schedule pursuant to Section 14.12) at and as of the Closing
Date, as if made at and as of such date (except for representations and warranties that are made as
of a specific date, which representations and warranties shall be true as of such specific date,
disregarding, for purposes of this parenthetical, the reference to “as of the date hereof” in the
lead in clause to Article 4) and (iii) Seller shall have received a certificate signed by an
executive officer of Buyer on behalf of Buyer to the foregoing effect.
(b) Notice of this Agreement shall have been provided to the parties to the Consent Decree in
accordance with Paragraph 6 of the Consent Decree at least 30 days prior to Closing, and a motion
with the Consent Decree Court shall have been filed to enter the Consent Decree Modification.
Section 12.01
. Survival. (a) The representations and warranties of the parties hereto
contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in
connection herewith shall survive the Closing until the 18 month anniversary of the Closing Date;
except that
(i) the representations and warranties contained in Sections 3.14 (Employee; Labor
Issues), 3.15 (Employee Benefit Plans) and 3.18 (Tax Matters) shall survive until 30 days
following the expiration of the applicable statute of limitations,
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(ii) the representations, and warranties contained in Sections 3.01 (Corporate
Existence and Power), 3.02 (Corporate Authorization), 3.13 (Finders’ Fees), 4.01
(Corporate Existence and Power), 4.02 (Corporate Authorization), 4.07 (Finders’ Fees) and
4.08 (Inspections; No Other Representations), (collectively, the “Fundamental
Representations”) shall survive indefinitely or until the latest date permitted by law,
and
(iii) the representations and warranties contained in Section 3.16 (Environmental
Compliance) shall survive for a period of 2 years after the Closing Date.
(b) The covenants and agreements of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith shall survive the
Closing indefinitely or for the shorter period explicitly specified therein, except that for such
covenants and agreements that survive for such shorter period, breaches thereof shall survive
indefinitely or until the latest date permitted by law; provided that breaches of the covenants
contained in Section 5.01 shall survive only until the 18 month anniversary of the Closing Date.
Notwithstanding the preceding sentence, any breach of covenant, agreement, representation or
warranty in respect of which indemnity may be sought under this Agreement shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence, if notice (which notice must
include reasonable detail regarding the specifics of the breach or inaccuracy) of the breach or
inaccuracy thereof giving rise to such right of indemnity shall have been given to the party
against whom such indemnity may be sought prior to such time.
Section 12.02
. Indemnification. (a) Effective at and after the Closing and subject to the
other provisions of this Article 12, Seller hereby indemnifies Buyer and its Affiliates, and its
and their respective successors and assigns, and each of their respective directors and officers
(or Persons in a similar capacity) and employees (each, a “
Buyer Indemnified Party”) against, and
agrees to defend and hold each of them harmless from, any and all damages, penalties, fines, costs,
losses and expenses (including reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding, including amounts paid in settlement) (“
Damages”) imposed upon or
actually incurred or suffered by any Buyer Indemnified Party to the extent such Damages are in
connection with, resulting from or arising out of:
(i) any misrepresentation or breach of warranty (each such misrepresentation and
breach of warranty a “Warranty Breach”) or breach of covenant or agreement made or to be
performed by Seller pursuant to this Agreement or the certificate delivered pursuant to
Section 11.02(a)(iii);
(ii) any Excluded Liability; or
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(iii) the matter set forth on Section 12.02(a)(iii) of the Seller Disclosure
Schedule;
provided that with respect to indemnification by Seller for Warranty Breaches pursuant to Section
12.02(a)(i), (A) Seller shall not be liable for any Warranty Breach where the amount of Damages
with respect to such Warranty Breach does not exceed $100,000 (the “De Minimis Amount”) (and the
amount of such Damages shall not be aggregated for purposes of clause (B)), (B) Seller shall not be
liable unless the aggregate amount of Damages with respect to such Warranty Breaches exceeds
$6,600,000 (the “Deductible”) and then only to the extent of such excess and (C) Seller’s maximum
liability for all such Warranty Breaches shall not exceed $22,000,000 (the “Cap”); provided,
further, that (1) the foregoing limitations shall not apply to any claim for indemnification for a
Warranty Breach with respect to a Fundamental Representation or Section 3.18 and (2) when
calculating the amount Damages for purposes of this Section 12.02(a), representations and
warranties shall be interpreted without giving effect to any materiality qualifier (e.g.,
“material”, “materiality”, or “Material Adverse Effect”) contained therein.
(b) Effective at and after the Closing and subject to the other provisions of this Article 12,
Buyer hereby indemnifies Seller and its Subsidiaries, and its and their respective successors and
assigns, and each of their respective directors and officers (or Persons in a similar capacity) and
employees (each, a “Seller Indemnified Party”) against, and agrees to defend and hold each of them
harmless from, any and all Damages imposed upon or actually incurred or suffered by any Seller
Indemnified Party to the extent such Damages are in connection with, resulting from or arising out
of:
(i) any Warranty Breach or breach of covenant or agreement made or to be performed by
Buyer pursuant to this Agreement or the certificate delivered pursuant to Section
11.03(a)(iii);
(ii) any Assumed Liability; or
(iii) any liability which arises or could arise under the Spur Franchise Business as
a result of the consummation of the transactions contemplated by this Agreement;
provided that with respect to indemnification by Buyer for Warranty Breaches pursuant to Section
12.02(b)(i), (A) Buyer shall not be liable for any Warranty Breach where the amount of Damages with
respect to such Warranty Breach does not exceed the De Minimis Amount (and the amount of such
Damages shall not be aggregated for purposes of clause (B)), (B) Buyer shall not be liable unless
the aggregate amount of Damages with respect to such Warranty Breaches exceeds the Deductible and
then only to the extent of such excess and (C) Buyer’s maximum liability for all such Warranty
Breaches shall not exceed the Cap; provided, further, that (1) the foregoing limitations shall not
apply to any claim
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for indemnification for any breach of a Fundamental Representation and (2) when calculating the
amount Damages for purposes of this Section 12.02(b), representations and warranties shall be
interpreted without giving effect to any materiality qualifier (e.g., “material”, “materiality”, or
“Material Adverse Effect”) contained therein.
(c) Buyer and Seller agree that any payments made pursuant to this Section 12.02 shall be
treated for all Tax purposes as an adjustment to the Purchase Price unless otherwise required by
Applicable Law.
Section 12.03
. Third Party Claim Procedures. (a) The party seeking indemnification under
this Article 12 (or any other provision of this Agreement that expressly provides for
indemnification) (the “
Indemnified Party”) agrees to give prompt notice in writing to the party
against whom indemnity is to be sought (the “
Indemnifying Party”) of the assertion of any claim or
the commencement of any suit, action or proceeding by any third party (“
Third Party Claim”) in
respect of which indemnity may be sought under this Article or such other provision of this
Agreement. Such notice shall set forth in reasonable detail such Third Party Claim, including the
amount thereof (estimated, if necessary, and if then estimable), and the basis for indemnification
(taking into account the information then available to the Indemnified Party). The failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder, except to the extent such failure shall have actually prejudiced the Indemnifying Party.
(b) The Indemnifying Party shall be entitled to participate in the defense of any Third Party
Claim and, subject to the limitations set forth in this Section 12.03, shall be entitled to control
and appoint lead counsel for such defense, in each case at its own expense.
(c) If the Indemnifying Party shall assume the control of the defense of any Third Party Claim
in accordance with the provisions of this Section 12.03, (i) the Indemnifying Party shall obtain
the prior written consent of the Indemnified Party (which shall not be unreasonably withheld)
before entering into any settlement of such Third Party Claim, if the settlement does not expressly
unconditionally release the Indemnified Party and its affiliates from all liabilities and
obligations with respect to such Third Party Claim or the settlement imposes injunctive or other
equitable relief against the Indemnified Party or any of its affiliates, (ii) the Indemnified Party
shall be entitled to participate in the defense of any Third Party Claim and to employ separate
counsel of its choice for such purpose and (iii) the Indemnified Party shall not enter into any
settlement of such Third Party Claim without the prior written consent of the Indemnifying Party.
The fees and expenses of such separate counsel shall be paid by the Indemnified Party.
(d) In connection with the defense or prosecution of any Third Party Claim, each party shall
(i) cooperate, and cause its respective Affiliates to
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cooperate, in the defense or prosecution of such claim, (ii) furnish or cause to be furnished
such documents, records, information and testimony, grant or cause to be granted access to all
reasonably requested witnesses, and attend such conferences, discovery proceedings, hearings,
trials or appeals, in each case as may be reasonably requested in connection therewith, and (iii)
take all reasonable steps to make available to the other party, upon written request, its former
and current employees, other personnel and agents (whether as witnesses or otherwise) to the extent
that such persons may reasonably be required in connection therewith. Neither Seller nor Buyer
will (and each of Seller and Buyer shall cause its respective Affiliates not to) destroy or dispose
of any documents, records or information related to the defense or prosecution of any Third Party
Claim without first using its reasonable best efforts to notify the other party of the proposed
destruction or disposition and giving the other party the opportunity to take possession of or copy
such documents, records or information prior to such destruction or disposition.
Section 12.04
. Direct Claim Procedures. In the event an Indemnified Party has a claim for
indemnity under this Article 12 (or any other provision of this Agreement that expressly provides
for indemnification) against an Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party agrees to give prompt notice in writing of such claim to the Indemnifying Party.
Such notice shall set forth in reasonable detail such claim, including the amount thereof
(estimated, if necessary, and if then estimable), and the basis for indemnification (taking into
account the information then available to the Indemnified Party). The failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to
the extent such failure shall have actually prejudiced the Indemnifying Party.
Section 12.05
. Calculation of Damages. (a) The amount of any Damages payable under this
Article 12 (or any other provision of this Agreement that expressly provides for indemnification)
by the Indemnifying Party shall be net of any amounts recovered or recoverable by the Indemnified
Party under applicable insurance policies (including the Environmental Insurance Policy), or from
any other Person alleged to be responsible therefor and the present value of any Tax benefit
realized by the Indemnified Party arising from the incurrence or payment of any such Damages. The
present value of any such Tax benefit shall be computed (x) using a discount rate equal to the
mid-term applicable federal rate in effect at the time the relevant payment is made, (y) assuming
that the Tax benefit will be used at the earliest date or dates allowable by Applicable Law and (z)
using the maximum federal or state, as the case may be, corporate Tax rate in effect at the time
the relevant payment is made. If the Indemnified Party receives any amounts under applicable
insurance policies (including the Environmental Insurance Policy), or from any other Person alleged
to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying
Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment
made or expense incurred by such Indemnifying Party in connection with providing such
indemnification payment up to the amount received by the Indemnified Party.
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(b) Notwithstanding anything to the contrary herein, the Indemnifying Party shall not be
liable under this Agreement for any (i) Damages relating to any matter to the extent that the
Indemnified Party had been compensated for such matter pursuant to the adjustments under Sections
2.08 or 2.09, (ii) consequential, indirect, incidental, special, exemplary or punitive Damages or
(iii) Damages for lost profits or opportunities.
(c) Each Indemnified Party must use its respective commercially reasonable efforts to mitigate
any loss for which such Indemnified Party seeks indemnification under this Agreement. If such
Indemnified Party mitigates its loss after the Indemnifying Party has paid the Indemnified Party
under any indemnification provision of this Agreement in respect of that loss, the Indemnified
Party must notify the Indemnifying Party and pay to the Indemnifying Party the extent of the value
of the benefit to the Indemnified Party of that mitigation within 5 Business Days after the benefit
is received.
(d) Each Indemnified Party shall use its respective commercially reasonable efforts to collect
any amounts available under insurance coverage (including under the Environmental Insurance
Policy), or from any other Person potentially responsible, for any Damages payable under this
Article 12 (or any other provision of this Agreement that expressly provides for indemnification).
Section 12.06
. Environmental Procedures. Notwithstanding anything to the contrary in this
Article 12, with respect to any claim for indemnification hereunder for any Assumed Environmental
Liability, Excluded Environmental Liability or Warranty Breach of Section 3.16 (Environmental
Compliance) or, to the extent relating to Permits required by Environmental Law, Section 3.17
(Permits), or any other claim for indemnification hereunder relating in any way to any
Environmental Law or any spill, release, emission, discharge, disposal or recycling of, or exposure
to, any Hazardous Material (collectively, “
Environmental Matters”), Buyer and Seller agree, in
addition to any other relevant provisions set forth in this Article 12 (and in the case of any
conflict between the provisions of this Section 12.06 and any other provision in Article 12, the
provisions of this Section 12.06 shall apply), as follows:
(a) The costs of any Remedial Action, which costs are otherwise subject to indemnification
hereunder, shall be indemnified only to the extent such costs must be incurred to, in a reasonably
cost-effective manner, meet the requirements of any applicable Environmental Law or meet the
legally enforceable demands of any applicable Governmental Authority, using, where possible, risk
based standards, engineering or institutional controls or deed or other restrictions so long as
such standards, controls or restrictions do not materially limit those industrial activities being
performed on the applicable property as of Closing.
(b) The Indemnifying Party shall have no liability under this Agreement
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for any Damages to the extent (i) arising out of any sampling or other invasive investigation
of the air, soil, soil gas, surface water, groundwater, building materials or other environmental
media or any disclosure, report or communication to, or initiation or encouragement of any action
by, any Governmental Authority or other third party relating to any Environmental Matters except to
the extent such investigation, sampling, disclosure, report, communication, initiation or
encouragement is required to be undertaken by an Environmental Law or pursuant to the order or
directive of any Governmental Authority; or (ii) arising in connection with any construction,
renovation, modification, expansion, reconstruction, shutdown, demolition, financing or closure of
any asset, facility or real property at or after Closing.
(c) As between Buyer and Seller, the Indemnifying Party shall have the right at its option to
control such Environmental Matter, including the disclosure, investigation, negotiation,
performance, remediation, monitoring, settlement and resolution of such matter. With respect to
any Environmental Matter, (i) the controlling party shall keep the other party reasonably informed;
and (ii) both parties agree to, and shall cause their Affiliates to, cooperate with the other party
in providing reasonable access to properties and facilities and reasonably promptly provide each
other with copies of all communications relating to such matter received from or delivered to any
Person.
(d) Buyer and Seller acknowledge that the Environmental Insurance Policy will contain its own
procedures, including with respect to notice, cooperation and defense of claims, and that to the
extent any of the provisions of this Article 12 conflict with the provisions of such Environmental
Insurance Policy with respect to any claim that is submitted pursuant to such policy, the terms and
conditions of such Environmental Insurance Policy shall prevail, provided, however, the terms of
such Environmental Insurance Policy shall in no way limit any right to indemnification provided
under this Agreement.
(e) No Indemnifying Party shall have liability under this Agreement for any Damages to the
extent such Damages are exacerbated by acts or omissions of or on behalf of the Indemnified Party
or its Affiliates.
(f) Notwithstanding anything else herein to the contrary, Seller shall have no liability under
this Agreement for any Damages relating to any Environmental Matters to the extent arising from or
relating to the coming into force of, or the change in, any requirement or obligation set forth in
any Environmental Law or Permit required by Environmental Law (or the interpretation or enforcement
of such Environmental Law or Permit), including any new or modified standard or requirement for
Remedial Action, on or after Closing.
Section 12.07
. Assignment of Claims. If the Indemnified Party receives any payment from an
Indemnifying Party in respect of any Damages pursuant to Section 12.02 and the Indemnified Party
potentially could have recovered all or a
81
part of such Damages from a third party (a “Potential Contributor”), the Indemnified Party
shall assign such of its rights to proceed against the Potential Contributor as are necessary to
permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment.
Section 12.08
. Exclusivity. Except as specifically set forth in this Agreement, effective as
of the Closing, Buyer (on behalf of itself and its Affiliates) waives any rights and claims Buyer
and its Affiliates may have against Seller or any of its Affiliates or its or their respective
officers, directors or employees, whether in law or in equity, relating to the Business, the
Purchased Assets or the transactions contemplated hereby. The rights and claims waived by Buyer
include claims for contribution or other rights of recovery arising out of or relating to any
Environmental Law (whether now or hereinafter in effect), claims for breach of contract, breach of
representation or warranty, negligent misrepresentation and all other claims for breach of duty.
After the Closing, this Article 12 will provide the exclusive remedy for any misrepresentation or
breach of warranty or any breach of any covenant contained in Section 5.01. Notwithstanding
anything in the foregoing to the contrary, nothing in this Agreement or any documents or
certificate
s delivered in connection with this Agreement shall limit any liability for Fraud and
the limitations on liability set forth in Section 12.02(a) and Section 12.02(b) shall not apply to
liabilities for Fraud.
(a) by mutual written agreement of Seller and Buyer;
(b) by either Seller or Buyer if the Closing shall not have been consummated on or before the
six month anniversary of the date of this Agreement; provided that the right to terminate this
Agreement pursuant to this Section 13.01(b) shall not be available to any party whose breach of any
provision of this Agreement results in the failure of the Closing to be consummated by such date;
(c) by either Seller or Buyer if consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of any Governmental Authority having
competent jurisdiction; or
(d) by either party if (i) there has been a violation or breach by the other party of any
covenant, representation or warranty contained in this Agreement (which has not been waived in
writing by the non-breaching party), (ii) such violation or breach is not capable of being cured by
the date set forth in Section
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13.01(b) or, after receipt by the breaching party of a written notice of such violation or
breach by the non-breaching party, the breaching party does not use commercially reasonable efforts
to cure such violation or breach as promptly as reasonably practicable and (iii) such violation or
breach would result in a failure of the conditions set forth in Article 11 being satisfied (other
than conditions that by their nature are to be (and will be) satisfied or waived at Closing).
The party desiring to terminate this Agreement pursuant to Section 13.01(b) or Section
13.01(c) shall give notice of such termination to the other party.
Section 13.02
. Effect of Termination. If this Agreement is terminated as permitted by
Section 13.01, such termination shall be without liability of either party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party) to the other party
to this Agreement;
provided that if such termination shall result from the willful and knowing (i)
failure of either party to fulfill a condition to the performance of the obligations of the other
party, (ii) failure to perform a covenant of this Agreement or (iii) breach by either party hereto
of any representation or warranty or agreement contained herein, such party shall be fully liable
for any and all Damages incurred or suffered by the other party as a result of such failure or
breach. The provisions of Sections 14.02, 14.03, 14.04, 14.05, 14.06, 14.07 and 14.09 shall
survive any termination hereof pursuant to Section 13.01.
Section 14.01
. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission and electronic mail (“
e-mail”)
transmission, so long as a receipt of such e-mail is requested and received) and shall be given,
if to Buyer, to:
Calumet Specialty Products Partners, L.P.
0000 Xxxxxxxxxx Xxxx X. Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx
Facsimile No.: 000-000-0000
E-mail: Xxxxxxxx.xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx
83
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Facsimile No.: 000-000-0000
E-mail: xxxxxxx.xxxxxxxx@xx.xxx
xxxxx.xxxxxxxx@xx.xxx
if to Seller, to:
Xxxxxx Oil Corporation
000 Xxxxx Xxxxxx, X.X. Xxx 0000
Xx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
E-mail: Xxxxxx_Xxxxxxx@xxxxxxxxxxxxx.xxx
with a copy (which shall not constitute notice) to:
Xxxxx Xxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
E-mail: xxxxxxx.xxxxxx@xxxxxxxxx.xxx
or such other address or facsimile number as such party may hereafter specify for the purpose by
notice to the other parties hereto. All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in
the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such
notice, request or communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
Section 14.02
. Amendments and Waivers. (a) Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) Except as expressly set forth herein, no failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
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Except as set forth in Section 12.08, the rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 14.03
. Expenses. Except as otherwise provided herein, all costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring such cost or
expense.
Section 14.04
. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns. No
party may assign, delegate or otherwise transfer this Agreement or any of its rights or obligations
hereunder without the consent of each other party hereto;
provided, however, that each party may
assign either this Agreement or any of its rights, interests or obligations hereunder, without the
prior written approval of the other party, (i) to its (direct or indirect) wholly owned Subsidiary
or (ii) collaterally to a lender of such party as security for borrowed funds;
provided further,
that no such assignment shall (A) relieve any party from any of its obligations or liabilities
under this Agreement or (B) delay, impair or impede the consummation of the transactions
contemplated by this Agreement or the performance of such party’s obligations hereunder.
Section 14.05
. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of
New York, without regard to the conflicts of law rules of
such state.
Section 14.06
. Jurisdiction. The parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought in the United States
District Court for the Southern District of
New York or any
New York State court sitting in
New
York City, so long as one of such courts shall have subject matter jurisdiction over such suit,
action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to
have arisen from a transaction of business in the State of
New York, and each of the parties hereby
irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. Process in any
such suit, action or proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 14.01 shall be deemed effective service of
process on such party.
Section 14.07
. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
85
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 14.08
. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed by the other party
hereto. Until and unless each party has received a counterpart hereof signed by the other party
hereto, this Agreement shall have no effect and no party shall have any right or obligation
hereunder (whether by virtue of any other oral or written agreement or other communication).
Except as provided with respect to indemnification of Indemnified Parties as set forth in Article
12, no provision of this Agreement is intended to confer any rights, benefits, remedies,
obligations, or liabilities hereunder upon any Person other than the parties hereto and their
respective successors and permitted assigns;
provided that any claim for indemnification by an
Indemnified Party may only be asserted against an Indemnifying Party if such Indemnified Party has
received the express written consent of Buyer or Seller, as applicable, and a copy of such consent
is delivered to the Indemnifying Party prior to the assertion of any such claims.
Section 14.09
. Entire Agreement. This Agreement (including the schedules and exhibits
referred to in this Agreement) and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
Section 14.10
. Bulk Sales Laws. Buyer and Seller each hereby waive compliance by Seller with
the provisions of the “bulk sales,” “bulk transfer” or similar laws of any state.
Section 14.11
. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other Governmental Authority to be
invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be affected, impaired
or invalidated so long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a determination, 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 in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 14.12
. Disclosure Schedules. (a) Seller and Buyer have set forth information on the
Seller Disclosure Schedule and Buyer Disclosure Schedule, as applicable, in a section thereof that
corresponds to the section of this Agreement
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to which it relates. A matter set forth in one section of the applicable Disclosure Schedule
need not be set forth in any other section of the applicable Disclosure Schedule so long as its
relevance to such other section of the applicable Disclosure Schedule or to a section of this
Agreement is reasonably apparent on the face of the information disclosed therein. The parties
acknowledge and agree that (i) the Seller Disclosure Schedule or Buyer Disclosure Schedule may
include certain items and information solely for informational purposes for the convenience of
Buyer or Seller, as applicable, and (ii) the disclosure by a party of any matter in the applicable
Disclosure Schedule shall not be deemed to constitute an acknowledgment by such party that the
matter is required to be disclosed by the terms of this Agreement or that the matter is material.
(b) From time to time prior to the Closing, each party may revise the Disclosure Schedule
applicable to such party to reflect matters arising after the date hereof or with respect to which
such party did not have knowledge as of the date hereof by delivering a supplement or update to the
applicable Disclosure Schedule (along with a marked copy of such applicable Disclosure Schedule
reflecting such supplement or update, if practicable) to the other party no later than the third
Business Day prior to the Closing Date; provided that no such supplement or update, (i) to the
extent relating to any matter existing or occurring on or prior to the date hereof that should have
been set forth or described on such Disclosure Schedule so as to render such Disclosure Schedule
true and correct in all respects, shall cure any misrepresentation or breach of warranty for
purposes of this Agreement, including for purposes of determining whether the conditions set forth
in Article 11 have been satisfied at Closing or for purposes of the other party’s right to
indemnification as provided in Article 12 and (ii) to the extent relating to any matter of which
such party has become aware after the date hereof, shall cure any misrepresentation or breach of
warranty for purposes of this Agreement, including for purposes of determining whether the
conditions set forth in Article 11 have been satisfied at Closing; provided further, that, if the
Closing occurs, each party shall be deemed to have waived any right to indemnification pursuant to
Article 12 with respect to any matter disclosed pursuant to clause (ii) above.
Section 14.13
. Construction and Interpretation. The parties hereto agree that any rule of
construction to the effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
Section 14.14
. Specific Performance. The parties hereto agree that irreparable damage would
occur if any provision of this Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement or to enforce specifically the performance of the terms and provisions hereof in any
court set forth in Section 14.06, in addition to any other remedy to which they are entitled at law
or in equity.
87
EXHIBIT D
Fuel Regulations
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40 C.F.R. Title 40, Part 79, Registration of Fuels and Fuel Additives |
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40 C.F.R. Title 40, Part 80, Subpart B (Controls and Prohibitions (RVP Regs)) |
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40 C.F.R. Title 40, Part 80, Subpart E (Anti-dumping) |
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40 C.F.R. Title 40, Part 80, Subpart G (Detergent Additives) |
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40 C.F.R. Title 40, Part 80, Subpart H (Gasoline Sulfur) |
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40 C.F.R. Title 40, Part 80, Subpart I (Motor Vehicle Diesel Fuel: Nonroad, Locomotive,
and Marine Diesel Fuel; and ECA Marine Diesel Fuel) |
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40 C.F.R. Title 40, Part 80, Subpart K (Renewable Fuel Standard) |
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40 C.F.R. Title 40, Part 80, Subpart L (Gasoline Benzene) |
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40 C.F.R. Title 40, Part 80, Subpart M (Renewable Fuel Standard) |