AGREEMENT
This AGREEMENT (the "Agreement"), dated as of April 8, 1995, is made and entered
into by and among Wickland Oil Company, a California corporation ("Wickland"),
Castle Energy Corporation, a Delaware corporation ("Castle") and Indian Powerine
L.P., an Illinois limited partnership ("Indian"), (for purposes of Sections
1(j), (k), and (l), 8, 9 and 17 only) with reference to the following facts:
A. Concurrently herewith, Wickland and Powerine Oil Company, a California
corporation and a wholly-owned subsidiary of Castle ("Powerine") are entering
into that certain Powerine Petroleum Sale and Storage Agreement (the "Powerine
Agreement") respecting, among other things, the purchase and sale of certain
crude, intermediate refined products, blend stocks and finished petroleum
products. Capitalized terms used herein without definitions shall have the
meanings provided therefor in the Powerine Agreement.
B. Castle, as the indirect sole shareholder of Powerine, will derive substantial
benefits from the performance by Wickland of its obligations under the Powerine
Agreement, which performance by Wickland will, among other things, help
facilitate the anticipated sale by Castle of Powerine and will maximize
Powerine's available working capital for continued operations prior to such
sale.
C. The execution and delivery of this Agreement is a condi- tion precedent to
Wickland's continuing obligations under the Powerine Agreement.
Accordingly, to induce Wickland to enter into the Powerine
Agreement and in consideration thereof, Castle hereby agrees as follows:
1. Guaranty. Castle hereby guaranties to pay and/or perform for the
benefit of Wickland, in each case without any deduction whatsoever for
counterclaim, offset or otherwise and within 10 days after written demand
therefor from Wickland, the following:
(a) any indebtedness or obligation of Powerine to Wick- land under the
Powerine Agreement which is unpaid, or with respect to which Wickland has made a
refund, by reason of or in connection with, any insolvency, bankruptcy,
reorganization, arrangement or other similar proceeding involving Powerine
(collectively a "Bankruptcy Event");
(b) any Loss (as defined below) attributable to any defect in title to
Commodities sold by Powerine to Wickland pursuant to Section 1 of the Powerine
Agreement;
(c) any Loss attributable to any Bankruptcy Event involving Powerine;
and
(d) any Loss attributable to any termination or suspension of all or
any part of operations at Powerine's Santa Fe Springs refinery.
The foregoing obligations are hereinafter referred to as the "Guarantied
Obligations". The Guarantied Obligations shall include any loss attributable to
the removal of the Commodities from the Tanks by Wickland and the resale of
crude oil so removed. The obligation of Castle hereunder is absolute,
unconditional, irrevocable, present and continuing. Such guaranty is a guaranty
of prompt and punctual payment and performance and is not merely a guaranty of
collection.
(e) Upon the occurrence of any default of Powerine under the Powerine
Agreement, Castle shall, within 10 days after written demand therefor from
Wickland, perform the Guarantied Obligations for the benefit of Wickland and/or
pay to Wickland the amount of the Guarantied Obligations together with all
interest on all unpaid Guarantied Obligations, fees, expenses and other amounts
referred to herein.
(f) In the event the Guarantied Obligations are paid in whole or in
part by Powerine or by any other guarantor or person, Castle's liability
hereunder shall continue and remain in full force and effect in the event that
all or any part of any such payment is recovered from Wickland by any person for
any reason, including as a part of any judgment, order, settlement or compromise
with respect to any claim against Wickland for the recovery thereof as a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law. In addition, Castle acknowledges and agrees that by
virtue of this Agreement, it has specifically assumed any and all risks of a
bankruptcy or reorganization case or proceeding with respect to Powerine, and
that any modification of the Guarantied Obligations in any bankruptcy or
reorganization case concerning Powerine shall not affect the obligation of
Castle to pay and perform the Guarantied Obligations in accordance with their
respective original terms as though no such bankruptcy or reorganization case
had occurred.
(g) Castle consents and agrees that Wickland may, at any time and from
time to time, in Wickland's sole and absolute discretion, without notice or
demand, and without affecting the enforceability or continuing effectiveness
hereof: (i) supplement, modify, amend, extend (including extensions beyond the
original term thereof), renew, accelerate, waive, discharge or otherwise change
the time for payment or the terms of the Guarantied Obligations or any part
thereof or any additional security or guaranties now or hereafter held therefor;
(ii) enter into or give any agreement, approval or consent with respect to the
Guarantied Obligations or any part thereof or any additional security or
guaranties now or hereafter held therefor; (iii) accept new or additional
instruments, documents or agreements in exchange for or relative to the
Guarantied Obligations or any part thereof; (iv) accept partial payments on the
Guarantied Obligations; (v) receive and hold additional security or guaranties
for the Guarantied Obligations or any part thereof; (vi) settle, release (by
operation of law or otherwise), liquidate and/or fail to enforce any Guarantied
Obligation; (vii) release (by operation of law or otherwise), reconvey,
terminate, waive, abandon, fail to perfect, subordinate, transfer and/or fail to
enforce any other security or guaranties now or hereafter held for the
Guarantied Obligations or any part thereof; (viii) substitute, exchange, amend
or alter any other security or guaranty now or hereafter held for the Guarantied
Obligations or any part thereof, whether or not the security or guaranty
received upon the exercise of such power is of a character or value the same as
the character or value of the item of security or guaranty so affected; (ix)
release (by operation of law or otherwise) any person from any personal
liability with respect to the Guarantied Obligations or any part thereof; (x)
consent to the transfer of any such other security and bid and purchase the same
at any sale thereof; and/or (xi) consent to any merger, acquisition, change or
other restructuring or termination of the corporate existence of Powerine or any
other person, and correspondingly restructure the Guarantied Obligations.
(h) Upon the occurrence and during the continuance of any default of
Powerine under the Powerine Agreement, Wickland may enforce this Agreement
independently as to Castle and independently of any other remedy, source of
payment or security which Wickland may at any time have in connection with the
Guarantied Obligations. Castle expressly waives any right to require Wickland to
proceed against Powerine, any other guarantor or any collateral provided by any
other person and agrees that Wickland may proceed against Castle and/or any
source of payment or collateral in such order as it shall determine in its sole
and absolute discretion. Castle expressly waives trial by jury in any action to
enforce this Agreement and waives the benefit of any statute(s) of limitations
affecting Castle's liability hereunder or the enforcement of the Guarantied
Obligations or any other rights of Wickland created or granted herein. The
rights of Wickland created or granted herein and the enforceability of this
Agreement at all times shall remain effective to guaranty the full amount of all
the Guarantied Obligations even though the Guarantied Obligations, including any
part thereof or any other security or guaranty therefor, may be or may hereafter
become invalid or otherwise unenforceable as against Powerine or any other
guarantor and whether or not Powerine or any other guarantor shall have any
personal liability with respect thereto. Castle expressly waives any and all
defenses now or hereafter arising or asserted by reason of (i) any lack of
authority or other incapacity of Powerine, any other guarantor or any other
person with respect to the Guarantied Obligations or any part thereof; (ii) the
unenforceability or invalidity of any security, letter of credit or other
guaranties for the Guarantied Obligations or the lack of perfection or
continuing perfection or failure of priority of any security for the Guarantied
Obligations or any part thereof; (iii) the cessation for any cause whatsoever of
the liability of any of Powerine or any other guarantor (other than by reason of
the full payment and performance of all Guarantied Obligations); (iv) any
failure of Wickland to marshal assets in favor of Castle or any other guarantor
or any other person; (v) any act or omission of Wickland or others that
directly, indirectly, by operation of law or otherwise results in or aids the
discharge or release of Powerine, any other guarantor or any security or
guaranties now or hereafter held for the Guarantied Obligations or any part
thereof; (vi) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation; (vii) any failure of Wickland to file
or enforce a claim in any bankruptcy or other proceeding with respect to any
person; (viii) the election by Wickland, in any bankruptcy proceeding of any
person, to apply or not to apply Section 1111(b)(2) of the United States
Bankruptcy Code; (ix) any extension of credit or the grant of any lien under
Section 364 of the United States Bankruptcy Code; (x) any use of cash
collateral under Section 363 of the United States Bankruptcy Code; (xi) any
agreement or stipulation with respect to the provision of adequate protection in
any bankruptcy proceeding of any person; (xii) the avoidance of any lien in
favor of Wickland for any reason; (xiii) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any person, including any discharge of, or
bar or stay against collecting, all or any of the Guarantied Obligations in or
as a result of any such pro- ceeding; (xiv) any action taken by Wickland that is
authorized by this Section 1 or any other provision of this Agreement; (xv) any
election of remedies by Wickland, which destroys or otherwise impairs the
subrogation rights of Castle or the right of Castle to proceed against Powerine
for reimbursement, or both, or (xvi) any other principle or provision of law,
statutory or otherwise, which is or might be in conflict with the terms hereof.
Without limiting the generality of the foregoing or any other provision hereof,
Castle hereby expressly waives any and all benefits which might otherwise be
available to Castle under California Commercial Code Section 3605, California
Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433, or
any comparable provision of any other applicable law. Castle expressly waives
all setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Guarantied Obligations, and all notices of
acceptance of this Agreement or of the existence, creation or incurring of new
or additional Guarantied Obligations.
(i) Castle represents and warrants to Wickland that Castle has
established adequate means of obtaining from Powerine, on a continuing basis,
financial and other information pertaining to the business, operations and
condition (financial and otherwise) of Powerine, its affiliates and its and
their properties, and Castle now is and hereafter will be completely familiar
with the business, operations and condition (financial and otherwise) of
Powerine, its affiliates and its and their properties. Castle hereby expressly
waives and relinquishes any duty on the part of Wickland (should any such duty
exist) to disclose to Castle any matter, fact or thing related to the business,
operations or condition (financial or otherwise) of Powerine, its affiliates and
its and their properties, whether now known or hereafter known by Wickland
during the life of this Agreement. With respect to any of the Guarantied
Obligations, Wickland need not inquire into the powers of Powerine or the
officers or employees acting or purporting to act on Powerine's behalf, and all
Guarantied Obligations made or created in good faith reliance upon the professed
exercise of such powers shall be guarantied hereby.
(j) Each of Castle and Indian agrees that all existing and future
indebtedness of Powerine to it or to any other person owned in whole or in part,
directly or indirectly, by it and its right to withdraw, or to cause or permit
any such person to withdraw, any capital invested by such person in Powerine or
to receive from Powerine any distribution of cash or other property by way of
dividend, liquidating distribution or otherwise, is hereby subordinated to the
prior payment in full of the Guarantied Obligations to Wickland and, without the
prior written consent of Wickland, no such subordinated indebtedness or
distribution shall be paid or withdrawn in whole or in part nor will it cause or
permit any person owned in whole or in part, directly or indirectly, by it, as
the case may be, to accept any payment of or on account of any such indebtedness
or distribution or as a withdrawal of capital while this Agreement is in effect.
At Wickland's request, Castle and/or Indian shall cause Powerine to pay to
Wickland, instead of to Castle, Indian or any person owned in whole or in part,
directly or indirectly, by Castle or Indian, all or any part of any such
subordinated indebtedness and distributions and any capital which Castle or
Indian or any person owned in whole or in part, directly or indirectly, by
Castle or Indian is otherwise entitled to withdraw. Each payment by Powerine in
violation of this Subsection (j) shall be received by the person to whom paid in
trust for Wickland, and Castle or Indian, as the case may be, shall cause the
same to be paid over to Wickland immediately on account of the Guarantied
Obligations. The indebtedness of Powerine to Castle or to Indian or to any other
person owned in whole or in part, directly or indirectly, by Castle or Indian
which is subordinated hereunder shall include, without limitation, any
indebtedness acquired by right of subrogation. Each of Castle and Indian
acknowledges that by virtue of its affiliation with Powerine it will benefit
substantially as a result of the covenants of Wickland to Powerine contained in
the Powerine Agreement, that the value of the obligations owing to it by
Powerine will be significantly increased by Wickland's performance thereunder
and that without the foregoing subordination, Wickland would not have entered
into the Powerine Agreement.
(k) Each of Castle and Indian agrees that so long as any Guarantied
Obligations shall be owing to Wickland, it shall not, without the prior consent
of Wickland, commence or join with any other person in commencing any
bankruptcy, reorganization or insolvency proceedings of or against Powerine.
Except as limited by applicable law, Wickland shall have the sole right to
accept or reject any plan proposed in such proceeding and to take any other
action which a party filing a claim is entitled to take. Castle acknowledges and
agrees that any interest on the Guarantied Obligations which accrues after the
commencement of any such proceeding (or, if interest on any portion of the
Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on any such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of the parties that the Guarantied Obligations which are guarantied by
Castle pursuant to this Agreement should be determined without regard to any
rule of law or other which may relieve Powerine of any portion of such
indebtedness. Castle will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Wickland, or allow the claim of Wickland in respect of, any such interest
accruing after the date on which such proceeding is commenced.
(l) Subject to the provisions of Subsection (k) above, each of Castle
and Indian agrees that it shall file in any bankruptcy or in any other
proceeding in which the filing of claims is required by law all claims which it
may have against Powerine relating to any indebtedness of Powerine to it and
will assign to Wickland all of its rights thereunder. If Castle or Indian do not
file any such claim, Wickland, as attorney-in-fact for Castle and Indian, is
hereby authorized to do so in the name of Castle or Indian or, in Wickland's
discretion, to assign the claim to a nominee and to cause proof of claim to be
filed in the name of Wickland's nominee. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to pay
such claim shall pay to Wickland the full amount thereof and, to the full extent
necessary for that purpose, each of Castle and Indian hereby assigns to Wickland
all of its rights to any such payments or distributions to which it would
otherwise be entitled.
(m) With or without notice to Castle, Wickland, in Wickland's sole
discretion, at any time and from time to time and in such manner and upon such
terms as Wickland deems fit, may (i) apply any or all payments or recoveries
which may be received from Powerine or from any other guarantor or endorser
under any other instrument or which may be realized from any security, to any
indebtedness of Powerine to Wickland, in such manner and order of priority as
Wickland may determine, whether or not such indebtedness is guarantied hereby or
is otherwise secured or is due at the time of such application; and (ii) refund
to Powerine any payment received by Wickland upon the Guarantied Obligations,
whereupon payment of the amount refunded shall remain fully guarantied hereby.
Any recovery realized from any other guarantor under any other instrument may
first be credited upon that portion (if any) of the indebtedness of Powerine to
Wickland that is not guarantied hereby.
(n) The amount of Castle's liability and all rights, powers and
remedies of Wickland under this Agreement and under any other agreement now or
hereafter in force between Wickland and Castle, including any other guaranty
executed by Castle relating to any indebtedness of Powerine to Wickland, shall
be cumulative and not alternative, and such rights, powers and remedies shall be
in addition to all rights, powers and remedies given to Wickland by law. This
Agreement is in addition to and exclusive of the guaranty of any other guarantor
of any indebtedness of Powerine to Wickland.
(o) The obligations of Castle hereunder are independent of the
obligations of Powerine and, in the event of any default hereunder, a separate
action or actions may be brought and prosecuted against Castle whether or not
Powerine is joined therein or a separate action or actions are brought against
Powerine. Wickland may maintain successive actions for other defaults.
Wickland's rights hereunder shall not be exhausted by its exercise of any of its
rights or remedies or by any such action or by any number of successive actions
until and unless all sums owing to Wickland in connection with the Guarantied
Obligations have been paid in full and all other obligations hereby guarantied
have been fully performed.
(p) To the extent that any underlying Guarantied Obligation is not
bearing interest, payments not made when due hereunder by Castle to Wickland on
account of such Guarantied Obligation shall bear interest from the due date
hereunder until paid to Wickland at a rate equal to the lesser of (i) 10% per
annum or (ii) the maximum rate otherwise permitted under applicable law.
2. Letter of Credit. On or before the date hereof, Castle shall cause
Powerine to obtain a standby letter of credit in the amount of $3,000,000 from a
bank acceptable to Wickland and in form and substance of Exhibit A hereto. Such
letter of credit may be drawn upon to pay obligations of Powerine to Wickland
existing both before and after the date of this Agreement.
3. Sale of Assets. Castle shall diligently and in good faith negotiate
with Ampton Investments, Inc. ("Ampton") to consummate the sale of the
securities or assets of Powerine to Ampton.
4. Sale Other than to Ampton. In the event Castle desires to enter into
any legal commitment (the "Commitment") to sell the securities or assets of
Powerine to a party other than Ampton (a "Third Party"), Castle shall deliver to
Wickland written notice thereof at least five business days prior to entering
into the Commitment, setting forth in full the terms of such Commitment and the
identity of the Third Party. Castle agrees to consider in good faith any counter
offer by Wickland or Ampton to purchase the same securities or assets proposed
to be sold to the Third Party; provided, however, that Castle shall have no
obligation to accept any counter offer by Wickland or Ampton for any reason
whatsoever and shall have the unencumbered right to sell Powerine or Powerine's
refinery assets to such other party. The obligations of Castle under this
Section 4 shall terminate on the termination of the Powerine Agreement.
5. Bankruptcy Proceedings. Upon, but in no event later than five
business days of, becoming aware of any proceeding instituted by or against
Powerine seeking to adjudicate Powerine a bankrupt or insolvent, Castle shall
deliver to Wickland a written statement by an officer of Castle setting forth
the details of such proceeding.
6. Representations and Warranties. Castle hereby warrants and
represents as follows:
(a) Authority to Execute and Perform. Each of Castle and Indian has all
requisite power, authority and approvals required to enter into, execute and
deliver this Agreement and to perform fully its obligations hereunder, and
Powerine has all requisite power, authority and approvals required to enter
into, execute and deliver the Powerine Agreement, that certain Security
Agreement, of even date herewith, between Powerine and Wickland (the "Security
Agreement") and all other agreements executed and delivered in connection with
the Powerine Agreement and the Security Agreement and to perform fully its
obligations thereunder.
(b) Due Authorization; Enforceability. Each of Castle and Indian has
taken all actions necessary to authorize it to enter into and perform fully its
obligations under this Agreement and to consummate the transactions contemplated
herein, and Powerine has taken all actions necessary to authorize it to enter
into and perform fully its obligations under the Powerine Agreement and all
other agreements executed and delivered in connection therewith and to
consummate the transactions contemplated therein.
(c) Sale of Powerine. As of the date hereof, no officer of Castle or
Indian has expressed an intent to sell the securities or assets of Powerine to a
Third Party or to cause Powerine to file a case in bankruptcy or to seek to file
an involuntary case in bankruptcy against Powerine, nor have any recommendations
been made by any person to the Board of Directors of Castle that the securities
or assets of Powerine be sold to a Third Party. Nothing contained herein shall
limit or restrict Powerine or Castle from seeking to sell the securities or
assets of Powerine to a third party.
(d) Litigation. To the knowledge of Castle, other than lawsuits filed
against Castle, Powerine and/or Indian by M.G. Trade Finance Corp. ("MG
Litigation") and other than as set forth on Exhibit B hereto, there is no
threatened adverse claim, dispute, governmental investigation, suit, action
(including, without limitation, nonjudicial real or personal property
foreclosure actions), arbitration, legal, administrative or other proceeding of
any nature, domestic or foreign, criminal or civil, at law or in equity, 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. Except for the
filing of the MG Litigation, since December 31, 1994, there has not occurred any
material adverse change in the condition (financial or otherwise), assets,
liabilities (whether absolute, accrued, contingent or otherwise), business,
operations or prospects of Castle, Powerine or Indian, or in the ability of
Castle or Indian to perform their respective obligations hereunder or the
ability of Powerine to perform its obligations under the Powerine Agreement.
(e) No Violation. Neither the signing or delivery by Castle or Indian
of this Agreement or any other agreement, document or instrument contemplated
pursuant hereto, 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
Castle or Indian (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 Castle or Indian.
(f) Financial Condition. All financial statements of Castle heretofore
delivered to Wickland, including, without limitation, its Quarterly Report on
Form 10-Q for the quarterly period ended December 31, 1994:
(i) were prepared in accordance with the books and records of
Castle;
(ii) were prepared in accordance with generally accepted accounting
principles;
(iii) fairly present Castle's financial condition and the results
of its operations as of the relevant dates thereof and for the periods covered
thereby; and
(iv) contain and reflect all necessary adjustments and accruals for
a fair presentation of Castle's financial condition and the results of its
operations for the periods covered by said financial statements.
7. Indemnification by Castle. Castle 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, 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,
hereof, all amounts paid incident to any compromise or settlement of any such
claim, lawsuit or arbitration which may be incurred or suffered by any such
party (collectively a "Loss") and which may arise out of or result from:
(a) any breach of any representation, warranty, covenant or agreement
of Castle contained in this Agreement and/or of Powerine contained in the
Powerine Agreement or the Security Agreement and/or in any other writing
delivered pursuant hereto or thereto;
(b) any insolvency, bankruptcy, reorganization, arrangement or other
similar proceeding involving or relating to Castle, Powerine or Indian that in
any way affects the exercise by Wickland of its rights and remedies hereunder;
(c) the collection or compromise by Wickland of the Guarantied
Obligations or the enforcement by Wickland of this Agreement against Castle,
whether or not suit is filed; and
(d) the return of any amounts by Wickland to Powerine or to Powerine's
trustee in bankruptcy, whether voluntarily or involuntarily and whether or not
suit is filed, in response to any claim that Wickland had theretofore received
preferential payments or transfers in fraud of creditors within the meaning of
any bankruptcy, insolvency or other similar law, now or hereafter existing.
8. 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
Castle:
Castle Energy Corporation
Attention: Joseph L. Castle II
One Radnor Corporate Center
Suite 250
100 Matsonford Road
Radnor, Pennsylvania 19087
Fax: (610) 995-0409
Indian:
Indian Powerine L.P.
c/o 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.
9. 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.
10. 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, 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.
11. 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.
12. Entire Agreement. This Agreement (together with any agreement
referred to herein) 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.
13. 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 8 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.
14. Binding Effect; Assignment. This Agreement and the rights,
covenants, conditions and obligations of the respective parties hereto and any
instrument or agreement executed 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, without
the prior written consent of Castle. Castle may not transfer, assign or convey
any of its obligations under this Agreement without the prior written consent of
Wickland.
15. Severability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable, all of the provisions
shall nevertheless be effective to the fullest extent permitted by law.
16. 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. 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.
17. TRIAL BY JURY. EACH OF CASTLE AND INDIAN HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION, ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE SUBJECT MATTER HEREOF, THE POWERINE AGREEMENT, THE SECURITY
AGREEMENT OR ANY AGREEMENT RELATED THERETO OR ANY GUARANTIED OBLIGATION, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR IN TORT
OR OTHERWISE.
IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as of the
day and year first above written.
Castle Energy Corporation,
a Delaware corporation
By: /s/ Joseph L. Castle II
------------------------------------
Wickland Oil Company,
a California corporation
By: /s/ Jack W. Reho
------------------------------------
Jack W. Reho,
Vice President and
Chief Financial Officer
By: /s/ Robert L. Sanz
------------------------------------
Robert L. Sanz
Vice President
The undersigned hereby agrees to be bound by all the provisions of
Sections 1(j), (k) and (l), 8, 9 and 17.
Indian Powerine L.P.
an Illinois limited partnership
By: IP Oil Co. Inc., an
Illinois corporation,
its general partner
By: /s/ William S. Sudhaus
------------------------------------
Its: