POWERINE PETROLEUM SALE AND STORAGE AGREEMENT
This Powerine Petroleum Sale and Storage Agreement together with the exhibits
referred to herein (this "Agreement") is signed on April 8, 1995, and is made
between Wickland Oil Company, a California corporation ("Wickland"), and
Powerine Oil Company, a California corporation ("Powerine"), with reference to
the following facts:
(a) Wickland has agreed to purchase Powerine's existing inventories of
crude oil, intermediate refined products, Blend Stocks and certain finished
petroleum products.
(b) Wickland has agreed to supply certain crude oil and other
commodities to Powerine.
(c) Wickland and Powerine have agreed to sell to one another certain
intermediate and finished refined products from the Powerine Refinery at Santa
Fe Springs, California (the "Powerine Refinery"), all upon the terms and
conditions more fully set forth in this Agreement.
(d) Powerine has agreed to store the foregoing commodities in the
facilities described on Schedule 1 to the attached Exhibit B (the "Powerine
Tanks") and undertake certain other obligations in favor of Wickland, all as
more fully described in this Agreement.
Accordingly, in consideration of the promises and covenants set forth herein,
Powerine and Wickland hereby agree as follows:
1. Sale of Inventory to Wickland.
(a) Purchase and Sale. On the closing date referenced in Section 6
below (the "Effective Date") and pursuant to a Bill of Sale in form and
substance satisfactory to Wickland, Powerine shall sell to Wickland, and
Wickland shall purchase from Powerine, Powerine's existing inventories of
petroleum commodities, including tank bottoms and certain pipeline fills
(collectively, the "Wickland Purchased Commodities") in the amounts, for the
purchase prices and upon the terms set forth in the attached Exhibit A. Payment
to Powerine by Wickland shall be made in immediately available federal funds on
the Effective Date. Such payment will be based on provisional measurements. As
soon as the final measurements are completed, an adjusting payment shall be made
immediately to the party entitled thereto.
(b) Title Matters. Title to the Wickland Purchased Commodities and all
commodities to be supplied or purchased by Wickland in accordance with this
Agreement (collectively "Wickland-Owned Commodities") shall be vested solely in
Wickland, and Powerine shall have no ownership interest therein or with respect
thereto unless and until title passes to Powerine as expressly provided by this
Agreement. Wickland shall be entitled to identify the Wickland-Owned Commodities
as the property of Wickland by a plaque affixed to the Powerine Tanks in which
such commodities are stored. Wickland shall have the right (but not the
obligation) to resell any and all of the Wickland Purchased Commodities to third
parties in its sole discretion. If Wickland elects not to do so, however, the
provisions of this Agreement applicable to the purchase of the Wickland
Purchased Commodities by Powerine shall apply and remain in full force and
effect.
(c) Existing Commitments. Wickland shall honor existing commitments to
sell refined products to third parties which Powerine shall be unable to fill
due to the sale of such commodities to Wickland. Powerine shall be deemed to
have purchased such products on the date of delivery to the third parties at the
prices paid by Wickland for such products, plus an interest component in the
amount provided in the attached Exhibit D.
2. Commodities Oil Storage. Subject to Section 8 of this Agreement,
Powerine shall store Wickland-Owned Commodities upon the terms and conditions
set forth in the attached Exhibit B.
3. Crude and Intermediate Products. Subject to Section 8 of this
Agreement, Wickland shall supply to Powerine crude oil, non-crude oil
commodities purchased from third parties for refinery processing (the "Feed
Stocks"), and intermediate products produced by Powerine which require further
processing (the "Intermediate Products"). The parties shall also sell
Intermediate Products to one another, upon the terms and conditions set forth in
the attached Exhibit C.
4. Wickland Product Purchase. Subject to Section 8 of this Agreement,
Wickland shall purchase Blend Stocks and finished petroleum products from
Powerine, and Powerine shall sell Blend Stocks and finished products to
Wickland, upon the terms and conditions set forth in the attached Exhibit D.
5. Golden West Extension. The parties agree and understand that
Wickland may find it necessary with the consent of Powerine to extend its
current terminalling arrangements with Golden West Refining Company ("Golden
West") in connection with performing Wickland's obligations under this
Agreement. Powerine shall reimburse Wickland for all costs and expenses incurred
by Wickland under such terminalling arrangements with Golden West, as so
extended.
6. Closing. The closing shall take place at the offices of Loeb and
Loeb, 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California 90017, at
10:00 PDT on the date on which all of the conditions precedent to Wickland's
obligations hereunder have been satisfied or waived in writing by Wickland;
provided, however, that without the prior written consent of Wickland, the
closing shall not occur after April 11, 1995.
7. Term and Termination.
(a) Term. The term of this Agreement shall commence, and all terms and
conditions comprising this Agreement shall become effective at 05:00 (5:00 a.m.)
on the Effective Date and terminate at 05:00, Los Angeles local time, on July 1,
1995; provided, however, that either party may for any reason give notice of
termination of this Agreement to the other party on or after the 30th calendar
day following the Effective Date, in which event the Agreement shall terminate
15 calendar days following the delivery of such notice; provided further, that
in either such event, the provisions of this Agreement shall continue to apply
until the final delivery to the Powerine Tanks of all commodities to be supplied
by Wickland in relation to this Agreement which have, prior to 05:00 July 1,
1995 or the giving of such notice (as applicable), been purchased or have been
arranged to be purchased by Wickland in Ecuador or elsewhere pursuant to
instructions received by Wickland from Powerine, specifically including, without
limitation, all crude oil then scheduled to be loaded aboard vessels in Ecuador
or elsewhere for final delivery to Powerine (collectively, the "Committed
Crude"), excluding those commodities which Powerine has elected not to purchase
pursuant to Section 7(b) below. Such date of termination of this Agreement is
referred to as the "Termination Date".
(b) Purchased Commodities At Termination. Subject to Section 9 hereof,
on the Termination Date Powerine shall have the option to purchase all then
existing Wickland-Owned Commodities in the Powerine Tanks and all Committed
Crude, at the purchase prices set forth in attached Exhibits C and D hereto.
Concurrently with any notice of termination delivered by Powerine pursuant to
Section 7(a) of this Agreement (or within two business days following receipt of
such termination notice from Wickland) and at least 20 days prior to any other
Termination Date contemplated by this Agreement (the "Option Date"), Powerine
shall advise Wickland in writing of whether or not it elects to exercise its
option to purchase the Wickland-Owned Commodities and Committed Crude. In the
event such option is not exercised, Powerine shall continue to take deliveries
of Wickland-Owned Commodities (except for Blend Stocks and refined products)
until Wickland's inventories of such Wickland-Owned Commodities delivered to the
Initial Crude Delivery Points on or before the Option Date and Intermediate
Products in the Powerine Tanks are exhausted. For purposes of this Section 7(b),
all cargoes from vessels for which a notice of readiness has been given on or
before the Option Date shall be deemed to be delivered on or before that Option
Date. After inventories of Wickland-Owned Commodities are exhausted as
aforesaid, Wickland shall have up to 30 days to remove its Wickland-Owned
Commodities from the Powerine Tanks.
8. Financing. Powerine may obtain financing from Congress Financial
Corporation or other person or entity in an amount of at least $15,000,000. The
date Powerine receives such financing is referred to in this Agreement as the
"Powerine Financing Date". On the later to occur of the Powerine Financing Date
or the 40th calendar day following the Effective Date, the following shall
occur:
(a) Purchase of Commodities. Powerine shall purchase for cash the then
existing Wickland-Owned Commodities other than crude oil in the Powerine Tanks
(as measured by an inventory taken in the same manner as a month-end inventory
taken pursuant to Exhibit C) for the purchase prices set forth in attached
Exhibit C. Powerine shall thereafter retain title to and sell all Products (as
defined in Exhibit D) and Intermediate Products previously purchased by
Wickland. Powerine shall also have the right to acquire the remaining
Wickland-Owned Commodities (i.e., crude oil) remaining in the Powerine Tanks for
the purchase prices set forth in attached Exhibits C and D.
(b) Continued Supply. Powerine shall continue to purchase crude oil
from Wickland on an exclusive basis and shall have the option to continue to
acquire Feed Stocks from Wickland. The remaining supply provisions of this
Agreement shall terminate.
(c) Conforming Changes. Appropriate and consistent amendments to be
agreed upon by both parties shall be made to this Agreement in order to reflect
the provisions of this Section 8, including, without limitation, that
Wickland-Owned Commodities shall continue to be segregated from commodities
owned by Powerine.
If the Powerine Financing Date has not occurred on or before May 15, 1995, then
the increased purchase price of the commodities as set forth in Exhibit C shall
apply.
9. Disposal Costs. In the event all Wickland-Owned Commodities and all
Committed Crude are not purchased by Powerine as contemplated by this Agreement,
Powerine shall, when invoiced in accordance with this Agreement, reimburse
Wickland for all costs and expenses associated with the removal, relocation,
transportation, resale, handling, delivery, and measurement including, without
limitation, related reasonable legal and accounting costs, arising from the
removal of Wickland-Owned Commodities from the Powerine Tanks and the disposal
of the Committed Crude and all Losses (as defined below) incurred by Wickland in
connection with the commercially reasonable sale of such commodities to a third
party. Powerine shall purchase for cash that portion of the Wickland-Owned
Commodities which remain in the Powerine Tanks (i.e., unrecoverable heels,
unrecoverable linefills and all Waste (as defined in Exhibit B)) and certain
linefills after Wickland has removed the other Wickland-Owned Commodities from
the Powerine Tanks for the purchase prices set forth in attached Exhibits C and
D.
10. Warranties and Representations.
(a) Reciprocal Warranties. Each party hereby warrants and represents
to the other as follows:
(i) Authority. Such party has all requisite power, authority and
approvals required to enter into, sign and deliver this Agreement and the
Security Agreement, and perform fully its obligations hereunder and thereunder.
(ii) Due Authorization, Enforceability. Such party has taken all
actions necessary to authorize it to enter into and perform fully its
obligations under this Agreement and the Security Agreement, and to consummate
the transactions contemplated herein and therein.
(iii) No Violation. Neither the signing or delivery by such party
of this Agreement, the Security Agreement or any other agreement, document or
instrument contemplated pursuant hereto or thereto, will violate, conflict with
or constitute a default under, permit the termination or acceleration of, or
cause the loss of any rights or options under, any contract which is material to
the business and operations of such party (a "Material Contract"); require any
authorization, consent or approval of, exemption or other action by and notice
to, any party to any Material Contract; or result in the creation or imposition
of any lien or encumbrance upon any asset of such party.
(b) Powerine Warranties. Powerine hereby warrants and represents to
Wickland as follows:
(i) Financial Condition.
(A) All financial statements of Powerine and Castle delivered
to Wickland (1) were prepared in accordance with the books and records of
Powerine; (2) were prepared in accordance with generally accepted accounting
principles; (3) fairly present Powerine's and Castle's financial condition and
the results of their respective operations as of the relevant dates thereof and
for the periods covered thereby; and (4) contain and reflect all necessary
adjustments and accruals for a fair presentation of Powerine's and Castle's
financial condition and the results of its operations for the periods covered by
said financial statements.
(B) Powerine has disclosed to Wickland in writing any change,
event, litigation, claim or condition which has had or could reasonably be
expected to have a material adverse affect upon Powerine's condition (financial
or otherwise), its assets, liabilities, business or operations, the value or
utility of its assets or Powerine's ability to remain in business without the
occurrence of a Bankruptcy Event (as defined below).
(ii) Assets. Wickland shall acquire good and marketable, lien-free
title to the Wickland Purchased Commodities, and to all Products sold to
Wickland by Powerine hereunder, free and clear of all claims and encumbrances of
any nature whatsoever.
(iii) Specifications. The Wickland Purchased Commodities shall meet
the specifications as referenced in Exhibit A, and all Products sold to Wickland
by Powerine hereunder shall comply with all applicable laws and regulations.
Such warranties and representations shall be deemed given both on the date of
this Agreement and on the Effective Date.
11. Conditions. Wickland's obligation to consummate the transactions
contemplated by this Agreement and its obligations (or continuing obligations)
under this Agreement are expressly conditioned upon the satisfaction of the
following conditions precedent and/or subsequent, as the case may be:
(a) Bringdown. On the Effective Date Powerine shall have delivered to
Wickland a certificate of the Chief Executive Officer, the Chief Financial
Officer and the Comptroller of Powerine respecting the financial condition of
Powerine, in form and substance satisfactory to Wickland.
(b) Approval of Projections. Wickland shall have approved in writing,
Powerine's cash flow and financial projections for the term of this Agreement.
(c) Approval of Wickland Purchased Commodities. Wickland shall have
approved, in writing, the Wickland Purchased Commodities, including the
location, volumes and types of commodities included therein.
(d) Castle Agreement. Wickland, Castle Energy Corporation ("Castle")
and Indian Powerine L.P. ("Indian") shall have entered into an agreement (the
"Castle Agreement") in form and substance satisfactory to Wickland, and Castle
and Indian shall comply and conform in all respects with their respective
obligations and covenants set forth in the Castle Agreement. In addition, at the
Effective Time, Castle and Indian shall have delivered to Wickland a written
confirmation of their respective obligations under the Castle Agreement.
(e) Letter of Credit. No later than the first business day after the
Effective Date, Powerine shall have delivered to Wickland a standby letter of
credit in the amount of $3,000,000 from a bank acceptable to Wickland and in
form and substance of that set forth as Exhibit A to the Castle Agreement.
(f) Security Agreement. Powerine shall have entered into a security
agreement (all assets) (the "Security Agreement") in form and substance
satisfactory to Wickland in which Powerine grants to Wickland a continuing first
priority security interest in and to all of its assets to secure the payment and
performance of all of Powerine's obligations hereunder and other related
agreements.
(g) Performance of Covenants. Powerine shall perform and comply in all
respects with its obligations and covenants set forth in this Agreement and the
Security Agreement.
(h) Bankruptcy. Neither Powerine nor Castle shall, at any time prior to
or during the term of this Agreement, have committed an act of bankruptcy, made
a general assignment for the benefit of creditors or filed any petition in
bankruptcy or under federal or state insolvency laws (or had an involuntary
petition filed against it under any of such laws which was not so dismissed
within 30 calendar days after the filing thereof), or admitted its inability to
pay debts or suffered the appointment of a receiver, trustee or custodian.
(i) No Adverse Change. There shall occur no material adverse change in
the financial condition of Powerine or Castle, as determined by Wickland in its
reasonable judgment.
(j) No Adverse Claims. No third party shall impose or seek to impose at
any time any lien or other encumbrance on Wickland-Owned Commodities or
challenge the validity, perfection or priority of the security interest granted
pursuant to the Security Agreement.
(k) MG Agreement. Powerine and MG Trade Finance Corp. ("MGTF") and its
affiliates (collectively "MG"), and/or any successor in interest thereto, shall
have entered into an agreement, a copy of which shall have been delivered to
Wickland, providing that MG's liens and security interests on Powerine's assets
have been irrevocably and unconditionally removed upon payment to MGTF of the
pay-off amount described in such Agreement. Copies of all applicable UCC
Termination Statements signed by MG respecting MG's release of such liens and
security interests shall have been delivered or made available to Wickland.
In addition to the foregoing, it shall be a condition precedent to each party's
obligation to consummate the transactions contemplated by this Agreement, that
each such party shall have finally approved in writing the provisions of this
Agreement as respects the prices of crude oil, Feed Stocks, Intermediate
Products and refined petroleum products. Similarly it shall be a condition
precedent to each party's obligation to consummate the transactions contemplated
by this Agreement, that each such party shall have completed and initialled
Section 5(a) of the Security Agreement.
12. Personnel. Powerine and Wickland shall each make available to the
other on a part-time basis, without charge, the services of one or more of their
employees, who shall supervise and coordinate on behalf of the other the
contractual relations between Wickland and Powerine. At the request of Wickland,
Powerine shall second to Wickland, at Wickland's expense, one or more of
Powerine's marketing employees to assist in Wickland's product marketing
activities.
13. Payments. All payments due from Wickland to Powerine and from
Powerine to Wickland during the term of this Agreement and thereafter shall be
effected as follows:
(a) Manner of Payment. All payments shall be made in immediately
available federal funds by telephonic transfer to a party's designated bank
account. All payments by Powerine shall be made in full without deductions,
discounts or offsets, provided that payment due from a party to the other party
for commodities purchases may be combined and offset against each other so that
one net payment is made by a party to the other party.
(b) Wickland Invoicing and Payment.
(i) Crude Oil and Feed Stocks.
(A) Wickland shall invoice Powerine daily for crude oil and Feed Stocks
delivered to the Final Delivery Points (as defined in Exhibit C) between 05:01
the previous day and 05:00 the current day using the Provisional Daily
Measurements (as defined in Exhibit C) and the applicable formulated price
including the interest component.
(B) Not later than 12 calendar days after month end, Wickland shall
invoice or issue a credit to Powerine based upon the monthly reconciled
measurement quantities.
(ii) Subject to Section 13(d) below, all amounts due Wickland shall
be paid no later than three business days (one business day after the occurrence
of a Bankruptcy Event) following the date of invoice.
(c) Powerine Invoicing and Payment.
(i) Refined products and Blend Stocks.
(A) Powerine shall invoice Wickland daily for the refined
products and Blend Stocks delivered to the Final Delivery Points between 05:00
the previous day and 05:00 the current day using Provisional Daily Measurements
(as defined in Exhibit C) and the applicable formulated price.
(B) Not later than 12 calendar days after month end, Powerine
shall invoice or issue a credit to Wickland based on the monthly reconciled
measurement quantities.
(ii) Subject to Section 13(d) below, all amounts due Powerine shall
be paid no later than the first business day following the date of invoice.
(d) Payment Due Date Adjustments. If payment falls due on a Saturday or
bank holiday of Wickland's or Powerine's bank which is not a Monday, payment
shall be made on the preceding business day. If payment falls due on a Sunday or
a Monday bank holiday of Wickland's or Powerine's bank, payment shall be made on
the next business day.
(e) Interest On Late Payments. Any amount payable by a party hereunder
shall, if not paid when due, bear interest from the due date until the date
payment is received by the other party at a rate equal to the lesser of (i) the
prime rate in effect at the opening of business on the due date at The First
National Bank of Boston (Boston, Massachusetts), plus 4%, based on a 360-day
year, or (ii) the maximum rate of interest permitted under applicable law.
14. Indemnification by Powerine. Powerine shall indemnify, defend and
hold harmless (i) Wickland, (ii) each of Wickland's affiliates, assigns and
successors in interest, and (iii) each of their respective shareholders,
directors, officers, employees, agents, attorneys and representatives, from and
against any and all damages (including, without limitation, lost profits and
unrecovered revenues on cargoes or the commodities purchased by Wickland for
Powerine hereunder which must then be resold to others), awards, judgments and
other payments, all costs and expenses of investigating any claim, lawsuit or
arbitration and any appeal therefrom, all reasonable attorneys' fees incurred in
connection therewith, all amounts paid incident to any compromise or settlement
of any such claim, lawsuit or arbitration (collectively "Losses") which may be
incurred or suffered by any such party and which may arise out of or result
from:
(a) any breach of any representation, warranty, covenant or agreement
of Powerine contained in this Agreement, the Security Agreement and/or in any
other writing delivered pursuant hereto;
(b) any act or omission on the part of Powerine, its employees, agents,
or contractors;
(c) any failure by Powerine to purchase, or election by Powerine not to
purchase, all of the Wickland-Owned Commodities and all of the Committed Crude
as set forth in this Agreement;
(d) any accident, event or omission occurring, or condition earlier
existing, within the boundary limits of the Refinery or on or about the Powerine
Tanks involving or resulting in a claim against Wickland;
(e) any claim or action from a third party challenging Wickland's title
to, or seeking to obtain a lien, levy or writ of attachment or garnishment upon,
any Wickland-Owned Commodities or challenging the validity, perfection or
priority or the security interest granted pursuant to the Security Agreement;
(f) any commodities spill, discharge or other environmental liability
of any nature whatsoever, and from any cause whatsoever, relating to the
Powerine Tanks, any commodities in the Powerine Tanks (including Wickland-Owned
Commodities), the Powerine Refinery, including liabilities under any federal,
state and local laws, statutes, ordinances or regulations including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (commonly known as "CERCLA"); and
(g) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without limitation, legal
fees and expenses, incurred in enforcing this indemnity.
15. Indemnification by Wickland. Wickland shall indemnify, defend and
hold harmless (i) Powerine, (ii) each of Powerine's affiliates, assigns and
successors, and (iii) each of their respective shareholders, directors,
officers, employees, agents, attorneys, beneficiaries and representatives, from
and against any and all Losses which may be incurred or suffered by any such
party and which arise out of or result from:
(a) any breach of any representation, warranty, covenant or agreement
of Wickland contained in this Agreement and/or in any other writing delivered
pursuant hereto or the nonfulfillment of any condition in favor of Powerine
under this Agreement;
(b) any acts or omissions on the part of Wickland, its employees,
agents or contractors; and
(c) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without limitation, legal
fees and expenses, incurred in enforcing this indemnity.
16. Inventory of Product. Wickland shall sell and deliver
Wickland-owned Product produced by Powerine hereunder to its customers on a
timely basis to ensure that Powerine's finished product storage facilities do
not fill up and cause Powerine to slow down its production of Blend Stocks and
finished products. Wickland will also endeavor to sell refined products in a
responsible manner to ensure that Powerine receives the most favorable margin
from processing crude oil into finished products. In the event that Powerine can
demonstrate that Powerine's production of Products is materially reduced for any
period of time solely due to Wickland's failure to sell and deliver Blend Stocks
and refined petroleum products on a timely basis, and provided Powerine gives
advance notice to Wickland of an impending reduction in production, Powerine
shall be entitled to recover its lost margin. This margin shall be calculated by
using the build-up of Intermediate Products and/or Blend Stock inventory that
results from the production slowdown valued at the corresponding finished
product prices as set forth in Exhibit D. On the Termination Date, Wickland will
cease selling Products at Powerine's truck rack. Furthermore, Wickland will
endeavor to sell Products so as to permit the ending Blend Stock and finished
product inventory to generally approximate such inventory volume at the
Effective Date, including the volume of Wickland forward sales that have not yet
been delivered to its customers.
17. Limitation on Liability. Except as expressly provided in this
Agreement respecting reimbursement of costs and Losses to Wickland, neither
Powerine nor Wickland shall have any liability to the other for any incidental,
special, consequential or other indirect loss, damage or cost, howsoever caused.
18. No Forbearance. Wickland and Powerine intend that the purchase and
sale of commodities pursuant to this Agreement constitute bona fide sales
transactions which shift title and risk of loss to the purchasing party in
accordance with this Agreement and not a transaction involving the use,
forbearance or retention of money. In addition thereto and without limitation,
Powerine and Wickland stipulate and agree that none of the terms and provisions
contained in this Agreement, or in any other instrument or agreement signed in
connection with this Agreement, shall ever be construed to create a contract to
pay, for the use, forbearance or retention of money, for interest at a rate in
excess of the maximum interest rate permitted to be charged by applicable law
(the "Maximum Lawful Rate"). In no event shall the rate of interest payable by
Powerine or Wickland under this Agreement, taking into account all sums held to
constitute interest (the "Agreement Interest Rate"), be greater than the Maximum
Lawful Rate.
19. Confidentiality. Subject to any obligation to comply with any law,
rule or regulation or subpoena or other legal process, whether or not the
transactions contemplated by this Agreement shall be consummated, all of the
information obtained by either party about the other and all of the terms and
conditions of this Agreement shall be kept in strict confidence by each party;
provided, however, that the foregoing provision shall not apply to persons or
entities providing financing to any party hereto (including, without limitation,
MG) and the directors and senior executive officers of affiliates of the parties
hereto.
20. Notices. All notices, requests and other communications hereunder
shall be in writing and shall be delivered by courier or other means of personal
service (including by means of a nationally recognized courier service or a
professional messenger service), or sent by telex or telecopy or mailed first
class, postage prepaid, by certified mail, return receipt requested, in all
cases, addressed to:
Wickland:
Wickland Oil Company
Attention: Robert L. Sanz, Vice President
3640 American River Drive
Sacramento, California 95864
Fax: (916) 978-2410
With a copy to:
Wickland Oil Company
Attention: General Counsel
3640 American River Drive
Sacramento, California 95864
Fax: (916) 978-2428
Powerine:
Powerine Oil Company
Attention: A.L. Gualtieri
12354 Lakeland Road
Santa Fe Springs, California 90670
Fax: (310) 946-1615
With a copy to:
Castle Energy Corporation
Attention: Joseph L. Castle II
One Radnor Corporate Center
Suite 250
100 Matsonford Road
Radnor, Pennsylvania 19087
Fax: (610) 995-0409
All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgement
or other evidence of actual receipt or delivery to the address. In case of
service by telecopy, a copy of such notice shall be personally delivered or sent
by registered or certified mail, in the manner set forth above, within three
business days thereafter. Either party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
21. Further Assurances. Each of the parties shall use its reasonable
and diligent best efforts to proceed promptly with the transactions contemplated
herein, to fulfill the conditions precedent for such party's benefit or to cause
the same to be fulfilled and to sign such further documents and other papers and
perform such further acts as may be reasonably required or desirable to carry
out the provisions of this Agreement and the transactions contemplated herein.
22. Waivers and Consents. At any time and from time to time, a party
may waive compliance with any of the covenants, conditions or agreements of the
other party contained in this Agreement. However, each such waiver must be in
writing and no such waiver shall operate as a waiver of, or estoppel with
respect to, any subsequent breach or other failure to perform a covenant or
agreement under this Agreement or nonfulfillment or continuing nonfulfillment of
a condition in favor of such party.
23. Attorneys' Fees. If either party hereto shall bring an action
against the other by reason of any alleged breach of any covenant, provision or
condition hereof, the unsuccessful party shall pay to the prevailing party all
reasonable attorneys' fees and costs incurred by the prevailing party, in
addition to any other relief to which it may be entitled.
24. Entire Agreement. This Agreement (including the exhibits hereto,
and the agreements, documents and instruments to be executed and delivered
pursuant hereto or thereto) is intended to embody the final, complete and
exclusive agreement among the parties with respect to the transactions
contemplated hereby; is intended to supersede all prior agreements,
understandings and representations written or oral, with respect thereto
including, without limitation, that certain memorandum of understanding dated
March 29, 1995, and may not be contradicted by evidence of any such prior or
contemporaneous agreement, understanding or representation, whether written or
oral; provided however, this Section 24 is not intended to supersede any
indemnity or payment obligation set forth in any prior agreement between
Powerine and Wickland. For reference purposes only, the sections of this
Agreement which are not contained in the exhibits hereto are referred to as the
"Master Provisions".
25. Governing Law and Venue. This Agreement is to be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed wholly within such State, and without regard
to the conflicts of laws principles thereof. Any suit brought hereon, whether in
contract, tort, equity or otherwise, shall be brought in the state or federal
courts sitting in Sacramento, California, the parties hereto hereby waiving any
claim or defense that such forum is not convenient or proper. Each party hereby
agrees that any such court shall have in personam jurisdiction over it, consents
to service of process in any manner prescribed in Section 20 or in any other
manner authorized by California law, and agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner specified by law.
26. Binding Effect; Assignment. This Agreement and the rights,
covenants, conditions and obligations of the respective parties hereto and any
instrument or agreement signed pursuant hereto shall be binding upon the parties
and their respective successors, assigns and legal representatives. Wickland may
transfer and assign this Agreement, in whole or in part, or assign, transfer and
provide commodities in storage to third parties, without the prior written
consent of Powerine, provided such assignee assumes in writing the obligations
of Wickland under this Agreement. Powerine may not transfer, assign and convey
all or any part of its rights under this Agreement.
27. Non-severability. It is expressly agreed and understood that the
material provisions of this Agreement, including the provisions set forth in the
exhibits hereto, constitute one integrated agreement, and that each such
provision goes to the essence of the consideration bargained for by the parties
hereto and shall not be deemed severable from the remaining provisions of this
Agreement.
28. Right of Offset. Wickland shall have full rights of offset
respecting the obligations of Powerine. Such rights shall not compromise any
other right of Wickland or Powerine under this Agreement, including as set forth
in Section 13(a) of this Agreement.
29. Survivability. All indemnification, payment and reimbursement
obligations of the parties hereto shall survive the Termination Date.
30. Concluding Provisions. The section headings of this Agreement are
for convenience of reference only and shall not be deemed to alter or affect any
provision hereof. All payments required to be made pursuant to this Agreement
and amounts required to be paid in accordance with any indemnity provisions of
this Agreement, shall be made in United States dollars. Where the context or
construction requires, all words applied in the plural shall be deemed to have
been used in the singular, and vice versa; the masculine shall include the
feminine and neuter, and vice versa; and the present tense shall include the
past and future tense, and vice versa. References in this Agreement to exhibits
shall be deemed to include the schedules appended to those exhibits. Times
hereunder are based on a 24-hour clock. The parties acknowledge that each party
and its counsel has materially participated in the drafting of this Agreement
and consequently the rule of contract interpretation that ambiguities, if any,
in the writing be construed against the drafter, shall not apply.
IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as of the
day first above written.
Wickland Oil Company,
a California corporation
By: /s/ John W. Reho
-----------------------------
John W. Reho, Vice President
and Chief Financial Officer
By: /s/ Robert L. Sanz
-----------------------------
Robert L. Sanz, Vice
President
Powerine Oil Company,
a California corporation
By: /s/ A. L. Gualtieri
-----------------------------
A.L. Gualtieri
President