STOCK AND ASSET PURCHASE AGREEMENT
dated
November 21, 1995
TABLE OF CONTENTS
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Page
I. DEFINITIONS .................................................. 1
1.1 Definitions .................................................. 1
II. SALE OF STOCK AND ASSETS ..................................... 9
2.1 Sale of Stock ................................................ 9
2.2 Sale of Assets ............................................... 9
2.3 Assumption of Liabilities .................................... 10
2.4 "As Is" and "Where Is" ....................................... 11
III. PURCHASE PRICE ............................................... 11
3.1 Purchase Price ............................................... 11
3.2 Allocation ................................................... 12
IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS ................ 12
4.1 Organization and Good Standing ............................... 12
4.2 Authorization, Enforceability ................................ 12
4.3 Consents and Approvals ....................................... 13
4.4 No Violation ................................................. 13
4.5 Acquired Corporation ......................................... 13
4.6 Purchased Assets ............................................. 14
4.7 Compliance With Laws ......................................... 14
4.8 Employee Relations and Employee Benefit Plans; ERISA ......... 14
4.9 Financial Condition .......................................... 17
4.10 Taxes ........................................................ 18
4.11 Insurance .................................................... 20
4.12 No Broker .................................................... 20
4.13 Accuracy of Information ...................................... 20
V. REPRESENTATIONS AND WARRANTIES OF BUYER ...................... 20
5.1 Organization and Good Standing ............................... 20
5.2 Authorization; Enforceability ................................ 20
5.3 Consents and Approvals ....................................... 21
5.4 No Violation ................................................. 21
5.5 No Broker .................................................... 21
5.6 Subsequent Sale .............................................. 21
VI. TAX MATTERS .................................................. 21
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Page
6.1 Access to Information .......................................... 21
6.2 Tax Indemnification ............................................ 22
6.3 Transfer Taxes ................................................. 22
6.4 Post-Closing Audits and Other Proceedings ...................... 23
6.5 Certain Consolidated Return Matters ............................ 23
VII. COVENANTS OF SELLERS ........................................... 23
7.1 Access to Information .......................................... 23
7.2 Actions Prior to Closing Date .................................. 24
7.3 Consents and Approvals ......................................... 25
7.4 Confidentiality ................................................ 25
7.5 Insurance ...................................................... 26
7.6 Names .......................................................... 26
7.7 Transfer of Retirement Plans ................................... 26
7.8 DB Plan Funding ................................................ 27
7.9 Intercompany Indebtedness ...................................... 27
7.10 Commercially Reasonable Efforts; Cooperation ................... 28
7.11 Use of Asset Purchase Price; Payment of Creditors .............. 28
7.12 Escrow Agreement ............................................... 28
7.13 Use of Radnor Space ............................................ 28
7.14 Reimbursement for Inventory Liquidation ........................ 29
VIII. COVENANTS OF BUYER ............................................. 29
8.1 Consents and Approvals ......................................... 29
8.2 Confidentiality ................................................ 29
8.3 Transfer of Retirement Plans ................................... 30
8.4 Reimbursement for Real Estate Taxes ............................ 31
8.5 Assistance with Inventory Liquidation .......................... 31
8.6 Insurance Reimbursements and Payments .......................... 31
8.7 Employee Matters ............................................... 31
8.8 Commercially Reasonable Efforts; Cooperation ................... 32
IX. CONDITIONS TO OBLIGATIONS OF BUYER ............................. 32
9.1 Truth of Representations and Warranties ........................ 32
9.2 Compliance with Covenants ...................................... 32
9.3 Absence of Suit ................................................ 32
9.4 Receipt of Consents and Approvals .............................. 33
9.5 Proceedings and Instruments Satisfactory, Certificates ......... 33
9.6 Intercompany Indebtedness ...................................... 33
9.7 Deliveries at Closing .......................................... 33
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Page
9.8 No Material Adverse Change .................................... 33
9.9 Bank Consents ................................................. 33
9.10 Mobil Consent ................................................. 33
9.11 Platinum Sale Documents ....................................... 34
X. CONDITIONS TO OBLIGATIONS OF THE SELLERS ...................... 34
10.1 Truth of Representations and Warranties ....................... 34
10.2 Compliance with Covenants ..................................... 34
10.3 Absence of Suit ............................................... 34
10.4 Receipt of Consents and Approvals ............................. 34
10.5 Proceedings and Instruments Satisfactory; Certificates ........ 34
10.6 Intercompany Indebtedness ..................................... 34
10.7 Equity Contributions and Undertaking .......................... 35
10.8 Deliveries at Closing ......................................... 35
10.9 Platinum Sale Documents ....................................... 35
10.10 Bank Consents ................................................. 35
10.11 Mobil Consent ................................................. 35
XI. INDEMNIFICATION ............................................... 35
11.1 Requirement of Indemnification ................................ 35
11.2 Procedures Relating to Indemnification ........................ 36
11.3 Defense of Third-Party Claim .................................. 38
11.4 Payment ....................................................... 38
11.5 Limitation on Indemnification ................................. 38
XII. CLOSING ....................................................... 39
12.1 Time and Place ................................................ 39
12.2 Items to be Delivered by the Sellers .......................... 39
12.3 Items to be Delivered by Buyer ................................ 41
XIII. TERMINATION ................................................... 43
13.1 Termination ................................................... 43
13.2 No Other Transaction .......................................... 43
XIV. AMENDMENT AND WAIVER .......................................... 44
14.1 Amendment ..................................................... 44
14.2 Extension; Waiver ............................................. 44
XV. MISCELLANEOUS ................................................. 44
15.1 Notices ....................................................... 44
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Page
15.2 Governing Law ................................... 45
15.3 Successors and Assigns .......................... 45
15.4 Partial Invalidity .............................. 46
15.5 Execution in Counterparts ....................... 46
15.6 Titles and Headings ............................. 46
15.7 Entire Agreement ................................ 46
15.8 Announcements ................................... 46
15.9 Construction .................................... 47
15.10 Jurisdiction .................................... 47
15.11 Further Actions ................................. 47
15.12 Shell Litigation ................................ 47
15.13 Expenses ........................................ 47
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EXHIBITS
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A Escrow Agreement
B Note
C Mortgage
D Platinum Sale Documents
SCHEDULES
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1.1A Sellers' Knowledge Persons
1.1B Outstanding Liens
1.1C Trade Payables
1.1D Other Liabilities
2.1 Shares
2.2A Real Property
2.2B Insurance Policies
2.2C Tank Bottoms
2.2D Excluded Receivables - Excluded Contracts -
Other Excluded Assets
4.3 Sellers' Required Filings and Approvals
4.4 Sellers' Consents
4.8 ERISA Matters
4.9 IRC Bank Accounts
4.10 Tax Matters
5.3 Buyer's Required Filings and Approvals
8.4 Real Estate Taxes
8.7 Employees
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STOCK AND ASSET PURCHASE AGREEMENT
----------------------------------
STOCK AND ASSET PURCHASE AGREEMENT (as the same may be amended, the
"Purchase Agreement"), dated as of November 21, 1995, among CASTLE ENERGY
CORPORATION, a Delaware corporation ("Castle"), INDIAN REFINING I LIMITED
PARTNERSHIP, an Illinois limited partnership ("IRLP"), INDIAN REFINING &
MARKETING I, INC., an Illinois corporation and the sole general partner of IRLP
("IRMI") (IRMI and IRLP are collectively referred to as the "Asset Sellers"),
and AM WEST GP, INC., a Delaware corporation ("Buyer").
WITNESSETH:
-----------
WHEREAS, Castle owns directly or indirectly all of the issued and
outstanding partnership interests or capital stock of each of the Asset Sellers;
and
WHEREAS, Castle also owns, beneficially and of record, all of the
outstanding capital stock of Indian Refining Company, a Delaware corporation
(the "Acquired Corporation" or "IRC"); and
WHEREAS, Castle and the Asset Sellers wish to sell to Buyer and Buyer
wishes to purchase from the Asset Sellers certain of the assets of the Asset
Sellers upon the terms and conditions hereinafter set forth; and
WHEREAS, Castle wishes to sell to Buyer and Buyer wishes to purchase
from Castle all of the capital stock of the Acquired Corporation upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth herein, and intending to be legally
bound, Castle, the Asset Sellers and Buyer hereby agree as follows:
I. DEFINITIONS
Section 1.1 Definitions. When used in this Purchase Agreement, the
following words or phrases have the following meanings:
"Acquired Corporation" shall have the meaning set forth in the
preamble hereto.
"Acquisition Proposal" shall mean any proposal, other than as
contemplated by this Purchase Agreement, for the acquisition of the Refinery or
Terminal, whether through a merger, consolidation, reorganization, other
business combination, recapitalization, acquisition of any shares of capital
stock or Assets, or otherwise.
1
"Affiliate" shall mean a Person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with another Person or beneficially owns or has the power to vote or
direct the vote of 20% or more of any class of voting stock or of any form of
voting equity interest of such other Person in the case of a Person that is not
a corporation. For purposes of this definition, "control," including the terms
"controlling" and "controlled," means the power to direct or cause the direction
of the management and policies of a Person, directly or indirectly, whether
through the ownership of securities or partnership or other ownership interests,
by contract or otherwise.
"Asset Purchase Price" shall have the meaning set forth in Section 3.1
hereof.
"Asset Sellers" shall have the meaning set forth in the preamble
hereto.
"Assets" shall mean all rights, titles, franchises, and interests in
and to every species of property, real, personal, and mixed, tangible and
intangible, including, without limitation, cash, cash equivalents, receivables,
real property, together with buildings, structures, and the improvements
thereon, fixtures contained therein and appurtenances thereto, and easements and
other rights relating thereto, machinery, equipment, supplies, parts, spare
parts, furniture, fixtures, leasehold improvements, inventory (including without
limitation, "tank bottoms"), vehicles, leases, licenses, insurance and similar
policies, warranties, indemnities, guaranties, permits, approvals,
authorizations, joint venture agreements, Contracts, processes, trade secrets,
know-how, computer hardware and software, computer programs and source codes,
protected formulae, all other Intellectual Property, goodwill, prepaid expenses,
records, files, claims (including, without limitation, insurance and litigation
claims and causes) and privileges, and any other assets whatsoever.
"Assignee" means a Delaware limited partnership of which Buyer shall
be the general partner, to which Buyer assigns at or prior to the Closing this
Agreement and the Escrow Agreement and all of its rights and obligations
thereunder and under the documents contemplated hereby.
"Assumed Contracts" shall mean all Contracts of IRLP including,
subject to the provisions of Section 9.10, the Mobil Contract, but excluding the
Excluded Contracts.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3
hereof.
"Balance Sheet" shall have the meaning set forth in Section 4.9
hereof.
"Balance Sheet Date" shall have the meaning set forth in Section 4.9
hereof.
2
"Benefit Plans" shall have the meaning set forth in Section 4.8
hereof.
"Buyer" shall have the meaning set forth in the preamble hereto.
"Buyer Documents" shall have the meaning set forth in Section 5.2
hereof.
"Buyer Indemnitees" shall mean Buyer, its Affiliates, and their
respective officers, directors, employees, counsel, agents, investment bankers,
accountants, and Affiliates.
"Castle" shall have the meaning set forth in the preamble hereto.
"Castle Employees" shall have the meaning set forth in Section 7.7
hereof.
"Castle Entities" shall mean, collectively, Castle, the Asset Sellers,
and the Acquired Corporation.
"Castle Plan" shall have the meaning set forth in Section 7.7 hereof.
"Castle Subsidiaries" shall mean, collectively, IRLP, IRMI and IRC.
"Closing" and "Closing Date" shall have the respective meanings set
forth in Section 12.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compliance Cost Agreement" shall mean the Compliance Cost Agreement,
dated April 10, 1990, between IRC and IRLP.
"Consolidated Group" shall have the meaning set forth in Section 4.10
hereof.
"Contract" shall mean a contract, indenture, bond, note, mortgage,
deed of trust, lease, agreement or written commitment.
"Cooling Tower Claim" shall have meaning set forth in Section 7.5
hereof.
"Damages" shall mean losses, costs, liabilities, reasonable expenses,
and/or other damages (including, without limitation, reasonable attorneys' fees
and expenses and any and all reasonable expenses whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation).
"DB Plan" shall have the meaning set forth in Section 4.8 hereof.
3
"DB Plan and Trust" shall have the meaning set forth in Section 4.8
hereof.
"Determination Letter" shall have the meaning set forth in Section 4.8
hereof.
"Environmental Claim" shall mean any claim by a Person alleging actual
or potential Liability of the Castle Subsidiaries or any other Seller Indemnitee
but in any case only if relating to the Refinery and/or the Terminal for any
investigatory cost, cleanup cost, governmental response cost, natural resources
damage, property damage, personal injury, or penalty, and arising out of, based
on, or resulting from (a) the presence, transport, disposal, discharge, or
release of any Materials of Environmental Concern at any location (including,
without limitation, accrued liabilities for hazardous waste removal), whether or
not owned by Castle or any of the Castle Subsidiaries, as the case may be, or
(b) circumstances forming the basis of any violation or alleged violation of any
Environmental Law. Notwithstanding the foregoing, under no circumstances shall
Environmental Claims include any Liabilities of any Castle Subsidiaries or any
other Seller Indemnitees which related to the Powerine Refinery's (located in
Santa Fe Springs, California) business, operation or Assets (as now or at any
time prior hereto instituted), the natural gas business, the exploration and
production business or any other business, properties, Assets or affairs of
Castle or any of its Affiliates (or any of their predecessors in interest) other
than the Refinery or the Terminal.
"Environmental Law" shall mean all Laws relating to pollution or
protection of human health, the environment, including, without limitation,
ambient air, surface water, ground water, land surface, or subsurface strata,
and including, without limitation, Laws relating to emissions, discharges,
releases or threatened releases, or the presence of Materials of Environmental
Concern, or otherwise relating to the manufacture, processing, distribution,
use, existence, treatment, storage, disposal, transport, recycling, reporting,
or handling of Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Castle, any trade or
business that together with Castle or any of the Castle Subsidiaries would be
deemed a "controlled group" within the meaning of Section 4001(a)(14) of ERISA.
"Escrow Agreement" shall mean an escrow agreement to be dated the
Closing Date among IRLP, Castle, Buyer, and an independent entity reasonably
acceptable to the parties acting as escrow agent, in the form of Exhibit A
attached hereto and by this reference made a part hereof (with such changes
thereto as are required by such escrow agent and are reasonably acceptable to
the parties).
"Excluded Contracts" shall mean the Contracts listed on Schedule 2.2D
attached hereto.
4
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"Governmental Entity" shall mean a court, legislature, governmental
agency, commission, or administrative or regulatory authority or
instrumentality, domestic foreign.
"GWC" shall have the meaning set forth in Section 10.7 hereof.
"Indian Benefit Plans" shall have the meaning set forth in Section 4.8
hereof.
"Indian 401(k) Plan" shall have the meaning set forth in Section 4.8
hereof.
"Indian 401(k) Plan and Trust" shall have the meaning set forth in
Section 4.8 hereof.
"Intellectual Property" shall mean marks, names, trademarks, service
marks, patents, patent rights, assumed names, logos, copyrights, trade names,
inventions, protected formulae, processes, proprietary information, trade
secrets, computer software, as well as related documentation and manuals, all
applications for registration of such items with any Governmental Entity, and
all licenses and research and development relating thereto.
"Intervening Lien" shall mean any Lien which is not an Outstanding
Lien and encumbers any of the Purchased Assets as of the Closing Date.
"IOC" shall mean Indian Oil Company, an Illinois corporation which is
a wholly-owned Subsidiary of Castle.
"IRLP" shall mean Indian Refining I Limited Partnership, an Illinois
limited partnership.
"IRC" shall have the meaning set forth in the preamble hereto.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" of or with respect to (a) any individual shall mean the
actual knowledge of such individual and any knowledge such individual reasonably
should have had under the circumstances; and (b) Sellers, shall mean the
Knowledge of the individuals listed on Schedule 1.1A attached hereto.
"Law" shall mean a law, ordinance, rule, or regulation enacted or
promulgated, or an Order issued or rendered, by any Governmental Entity, now or
hereafter.
"Liability" shall mean a liability, obligation, claim, or cause of
action of any kind or nature whatsoever, whether absolute, accrued, contingent,
or other and whether known or unknown.
5
"License" shall mean a license, certificate of authority, permit, or
other authorization to transact an activity or business or to use an asset or
process issued or granted by a Governmental Entity.
"Lien" shall mean a lien, mortgage, deed to secure debt, pledge,
security interest, lease, sublease, charge, levy, or other encumbrance of any
kind.
"Litigation Expenses" shall mean all out-of-pocket expenses,
including, without limitation, reasonable legal fees, incurred in investigating,
preparing, prosecuting, defending or negotiating the settlement of the Shell
Litigation.
"Materials of Environmental Concern" shall mean chemicals, pollutants,
contaminants, wastes, toxic or hazardous substances, petroleum, petroleum
additives, petroleum intermediates, and petroleum products subject to
environmental regulation.
"MG Swap Agreement" shall mean the Natural Gas Swap Agreement dated as
of October 14, 1994 between MG Natural Gas Corp. and IRLP.
"Mobil" shall have the meaning set forth in Section 9.10 hereof.
"Mobil Contract" shall have the meaning set forth in Section 9.10
hereof.
"Mortgage" shall have the meaning set forth in Section 3.1 hereof.
"Multiemployer Plan" means a "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA.
"Order" shall mean an order, writ, ruling, judgment, injunction or
decree of, or any stipulation to or agreement with, any arbitrator, mediator or
Governmental Entity.
"Outstanding Liens" shall mean the Liens identified in Schedule 1.1C
attached hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Liens" shall mean (i) easements, rights-of-way,
restrictions, zoning restrictions, and other similar encumbrances on or minor
imperfections in title to real property which do not materially detract from the
value or use thereof, and (ii) Liens created by the Buyer.
"Person" shall mean an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Entity,
business trust, unincorporated organization or other legal entity.
6
"Platinum Sale Documents" shall mean the Bill of Sale, the Security
Agreement and the Note, each dated as of the Closing Date, between IOC and Buyer
pursuant to which Buyer will purchase platinum catalyst from IOC, in the forms
attached hereto as Exhibits D-1, D-2 and D-3.
"Purchase Agreement" shall have the meaning set forth in the preamble
hereto.
"Purchased Assets" shall have the meaning set forth in Section 2.2
hereof.
"Qualified Plan" shall have the meaning set forth in Section 4.8
hereof.
"Refinery" shall mean the crude oil refinery owned by IRLP and located
in Lawrenceville, Illinois, including the underlying land and all related
properties owned by IRLP.
"Required Filings and Approvals" of a party shall mean any filing of
this Agreement with and the approval of such by all Governmental Entities and
such other applications, registrations, declarations, filings, authorizations,
Orders, consents, and approvals as may be required to be made or obtained by
such party from any Person prior to or to permit consummation of the
Transactions.
"Relevant Group" shall have the meaning set forth in Section 4.10
hereof.
"Schedule 1.1B" shall mean a schedule dated the date hereof and
attached hereto identifying all Persons known to have a Lien on any of the
Purchased Assets as of the date of this Agreement, and, in each case, the amount
secured by such Lien.
"Schedule 1.1C" shall mean a schedule dated the date hereof and
attached hereto identifying all known Liabilities of IRLP as of the date hereof
for trade payables (other than Liabilities secured by a Lien on any of the
Purchased Assets), and, in each case, the amount of such Liability.
"Schedule 1.1D" shall mean a schedule dated the date hereof and
attached hereto identifying all known Liabilities (other than Assumed
Liabilities) of IRLP at the date hereof not included in Schedule 1.1B or
Schedule 1.1C; provided that failure to identify a Liability of IRLP on Schedule
1.1D shall not mean that the Liability so omitted is an Assumed Liability.
"Second Stage Financing" shall mean the completion by Buyer of the
requisite equity, long-term debt and working capital financings for the
operation of the Refinery.
"Seller Indemnitees" shall mean the Sellers, any present or future
parent or Subsidiary of the Sellers, and their respective officers, directors,
employees, counsel, agents, investment bankers, accountants, and Affiliates.
Seller Documents" shall have the meaning set forth in Section 4.2
hereof.
7
"Seller Note" shall have the meaning set forth in Section 3.1 hereof.
"Sellers" shall mean Castle and the Asset Sellers.
"Shares" shall mean the issued and outstanding shares of capital stock
of the Acquired Corporation.
"Shell" shall mean Shell Canada Limited, a Canadian corporation,
together with its wholly owned Subsidiary, Salmon Resources Ltd., a Wyoming
corporation.
"Shell Contract" shall mean the Long Term Supply Agreement, dated as
of November 1, 1992, as amended, among Shell, IRLP, IRMI and MG Refining and
Marketing, Inc.
"Shell Litigation" shall mean (i) the litigation commenced by Shell in
the United States District Court for the Northern District of Illinois,
captioned Salmon Resources Ltd. and Shell Canada Limited v. MG Refining and
Marketing, Inc., Indian Refining Limited Partnership, and Indian Refining &
Marketing, Inc., (ii) any other litigation which may be brought by Shell raising
similar claims or requesting similar relief against IRLP, IRMI or Castle and
(iii) any counterclaims, cross-claims, or other claims or causes of action
relating to any litigation referred to in clause (i) or (ii).
"Subsidiary" of any Person shall mean any other corporation,
partnership, or other entity of which such Person, directly or through
Subsidiaries, owns shares of capital stock or partnership or other equity
interests which either (i) represent at least 50% of the common equity of such
entity or (ii) entitle such Person to cast at least a majority of the votes
entitled to be cast generally upon election of directors or other similar
governing body.
"Tax" shall mean any Federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, motor fuel, environmental, capital stock, franchise,
profits, gains, withholding, social security, unemployment, disability, real
property, personal property, sales, use, rental, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto or amendment thereof.
"Terminal" shall mean the terminal facility owned by IRLP and located
in Mt. Vernon, Indiana, including the underlying property and all related
properties owned by IRLP.
"Termination Date" shall mean that date which is 10 business days
after the last to occur of (i) the date this Purchase Agreement is executed by
the parties thereto and (ii) the date on which Castle shall have filed a
8
complying notification report form pursuant to the requirements of the Hart
Scott Rodino Antitrust Improvements Act of 1976, as amended, with respect to the
Transactions.
"Title IV Plan" shall have the meaning set forth in Section 4.8
hereof.
"Third Party Claim" shall have the meaning as set forth in Section
11.2 hereof.
"Transactions" shall mean the transactions contemplated by the
Purchase Agreement.
"Treasury Regulations" shall mean the regulations promulgated by the
Secretary of the Treasury pursuant to the Code and any predecessor and successor
thereto.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. ss.ss. 2101-2109.
II. SALE OF STOCK AND ASSETS
Section 2.1 Sale of Stock. Subject to the terms and conditions of this
Purchase Agreement, on the Closing Date Castle shall, by appropriate instruments
of transfer, sell, transfer and convey to Buyer, and Buyer shall purchase from
Castle, all of the Shares, as listed on Schedule 2.1 attached hereto, free and
clear of all Liens.
Section 2.2 Sale of Assets. (a) Subject to the terms and conditions of
this Purchase Agreement, on the Closing Date the Asset Sellers shall sell,
transfer, and convey to Buyer, and Buyer shall purchase from the Asset Sellers,
by appropriate instruments of transfer, each and all of the Assets of the Asset
Sellers (the "Purchased Assets"), including, but not limited to, (i) all real
property owned by IRLP, including the real property identified on Schedule 2.2A
hereto, together with all improvements thereon, including the Refinery and the
Terminal, (ii) all personal property, equipment, spare parts and supplies at or
used in the business of the Refinery or the Terminal, (iii) the rights (but not
the obligations) of IRLP under the Assumed Contracts (including the insurance
policies listed on Schedule 2.2B hereto as insurance policies to be transferred
to Buyer), including all warranty, indemnity and similar rights and provisions
set forth in the Assumed Contracts in favor of the Sellers, but excluding the
receivables thereunder which are identified on Schedule 2.2D hereto, (iv) the
Cooling Tower Claim and (v) the tank bottoms listed on Schedule 2.2C hereto
(which may not be owned by IRLP prior to the Closing Date); provided, however,
that the Purchased Assets shall not include (A) the partnership interests in
IRLP, (B) any accounts receivable of the Asset Sellers from Castle or any of its
Affiliates, (C) cash and cash equivalents of the Asset Sellers (except any cash
or cash equivalents collateralizing any obligations of the Acquired
Corporation), (D) any trade accounts receivable of the Asset Sellers and the
excluded receivables identified on Schedule 2.2D, (E) the Excluded Contracts,
(F) the insurance policies of IRLP identified on Schedule 2.2B hereto as
insurance policies not to be transferred to Buyer, and (G) any other excluded
asset specifically identified in Schedule 2.2D hereto. On the Closing Date, the
Asset Sellers shall sell, transfer, and convey the Purchased Assets to Buyer
free and clear of all Liens other than (y) Permitted Liens and (z), subject to
the provisions of Sections 7.11 and 7.12 hereof and of the Escrow Agreement, the
Outstanding Liens.
9
(b) To the extent that the assignment by the Asset Sellers to Buyer of
any Contract to be assigned to Buyer hereunder shall require the consent of a
party other than a Castle Entity which has not been obtained by the Closing,
this Purchase Agreement shall not constitute an agreement to assign such
Contract unless and until such consent is obtained. Until such time as the
Sellers are able to obtain a consent required with respect to any Contract, such
Contract shall not be included in the Purchased Assets or the Assumed
Liabilities and the Sellers shall use their commercially reasonable efforts to
obtain a consent or enter into an arrangement to provide to Buyer the benefits
under such Contract.
Section 2.3 Assumption of Liabilities. Subject to the terms and
conditions of this Purchase Agreement, on the Closing Date Buyer shall, by
appropriate instruments, assume the following Liabilities of the Asset Sellers
identified in clauses (a) through (e) below (the "Assumed Liabilities"): (a)
Liabilities of the Asset Sellers relating to Environmental Claims; (b)
Liabilities to the Indian 401(k) Plan and Trust or the DB Plan and Trust; (c)
Liabilities of IRLP to IRC under the Compliance Cost Agreement; (d) all
obligations of IRLP to be performed under the Assumed Contracts after the
Closing Date, exclusive of (i) payments of money to be made by the Sellers after
the Closing Date, the obligation for which accrued on or prior to the Closing
Date, (ii) obligations of the Sellers to indemnify other parties to the Assumed
Contracts for breaches of, or acts or omissions under, the Assumed Contracts by
the Sellers or their Affiliates prior to the Closing Date, and (iii) Liabilities
subject to indemnification by the Sellers under Section 11.1(a); and (e) any
Liabilities of the Asset Sellers (and to the extent set forth in the definition
of "Shell Litigation," of Castle) in the Shell Litigation.
Buyer does not assume any Liabilities of the Asset Sellers other than
the Assumed Liabilities. Liabilities that are not assumed and for which Buyer
and its Affiliates shall have no responsibility include but are not limited to
the following: (i) Liabilities of the Asset Sellers arising under the
partnership agreement of IRLP to IRLP's partners, (ii) any Liabilities of the
Asset Sellers to Castle or any of its Affiliates other than Liabilities arising
under the Compliance Cost Agreement, (iii) Liabilities for Taxes of Castle, the
Asset Sellers, any of their respective Affiliates or the Consolidated Group or
any Relevant Group of which one or more of the Castle Entities is or was a
member, including without limitation any liability for Taxes of any such Castle
Entity as a withholding agent or transferee, or a Liability for Taxes arising by
Contract or otherwise, (iv) Liabilities for guaranteeing, endorsing or otherwise
becoming liable or responsible for any indebtedness, lease or other obligation
of Castle or any of its Affiliates, (v) Liabilities relating to employment
and/or severance agreements, the WARN Act or any similar laws, rules and/or
regulations, options, stock appreciation rights and similar arrangements and/or
rights between any of the Castle Entities or any of their Affiliates and their
respective directors, executives, employees and/or personnel, except as provided
in Section 8.7, (vi) any trade and/or other accounts payable of the Asset
Sellers, including without limitation, those payables and other Liabilities
identified in Schedule 1.1B and Schedule 1.1C, and the Liabilities set forth in
Schedule 1.1D, (vii) Liabilities relating to the MG Swap Agreement, and (viii)
Liabilities under any Contracts other than as expressly set forth in clauses (b)
through (d) above.
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Section 2.4 "As Is" and "Where Is". Except as otherwise expressly
provided in this Agreement, Buyer shall acquire the Purchased Assets, the
Shares, and, indirectly, the Assets of the Acquired Corporation "AS IS" AND
"WHERE IS." EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT OR
ANY EXHIBITS OR ATTACHMENTS HERETO, ANY AND ALL OTHER REPRESENTATIONS AND
WARRANTIES WITH RESPECT TO THE PURCHASED ASSETS, THE SHARES, AND SUCH OTHER
ASSETS, WHETHER EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED, INCLUDING ANY
REPRESENTATIONS OR WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE.
III. PURCHASE PRICE
Section 3.1 Purchase Price. The purchase price to be paid by Buyer to
Castle for the Shares shall be $1.00. In addition to the assumption of the
Assumed Liabilities, the purchase price to be paid by Buyer to IRLP for the
Purchased Assets (the "Asset Purchase Price") shall be equal to: (a) $3.0
million in cash to be paid at the Closing, (b) $225,000 in cash to be paid upon
consummation and funding of the Second Stage Financing, it being understood that
said $225,000 payment is contingent upon the funding of the Second Stage
Financing, and (c) $5.0 million in the form of a limited recourse promissory
note (the "Seller Note") issued to IRLP at the Closing in the form of Exhibit B
hereto, which Seller Note shall be secured by a first mortgage Lien on the
Refinery (but not the Terminal) in the form of Exhibit C attached hereto (the
"Mortgage"), it being understood and agreed that the payment obligations under
the Seller Note shall not be enforceable against any Assets of Buyer except the
Refinery. The principal amount of the Seller Note may be reduced in the
circumstances provided for in Section 7.11(b). The Asset Purchase Price shall be
held and disbursed solely in the manner specified in Sections 7.11 and 7.12 and
the Escrow Agreement.
Section 3.2 Allocation. The Asset Purchase Price shall be allocated
among the Purchased Assets in accordance with their relative fair market values,
as determined by Buyer. Buyer and Sellers agree to prepare and file their
federal income tax returns on a basis consistent with such allocation and agree
not to take a position inconsistent with such allocation in any other Tax return
or otherwise.
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IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers jointly and severally represent and warrant to Buyer as
follows (it being understood that representations relating specifically to
Castle do not relate to any other Castle Entity):
Section 4.1 Organization and Good Standing. Each Castle Entity is a
corporation or limited partnership duly organized, validly existing, and, to the
extent applicable in the case of partnerships, in good standing under the Laws
of the state of its incorporation or organization, with all requisite corporate
or partnership power and authority to own, operate, and lease its properties and
to carry on its business as now being conducted. Each of the Castle Subsidiaries
is qualified or otherwise authorized to transact business, and is in good
standing, as a foreign corporation or limited partnership, in the respective
jurisdictions set forth in Schedule 4.1. To the Knowledge of Sellers, there is
no other jurisdiction in which the ownership of their Assets or the conduct of
their business by the Castle Subsidiaries makes such qualification necessary.
Except for the ownership by IRMI of its partnership interests in IRLP, the
Castle Subsidiaries do not directly or indirectly own any interest in any
Subsidiary or any other Person. Castle shall make available to Buyer, prior to
the Closing, true, correct, and complete copies of the Articles or Certificate
of Incorporation, bylaws, and minute books of the Acquired Corporation.
Section 4.2 Authorization, Enforceability. Each Seller has the
requisite corporate or partnership power and authority to enter into and
consummate the Transactions and to perform its obligations under the Purchase
Agreement and the other documents to be executed and delivered in connection
herewith to which such Seller is a party, including the Escrow Agreement (the
"Seller Documents"). The execution, delivery and performance of the Seller
Documents and the consummation of the Transactions have been duly approved and
authorized by the Board of Directors and stockholders of each Seller which is a
corporation and by IRMI as the general partner of IRLP. No other corporate or
partnership proceedings on the part of any Seller will be necessary to authorize
the Seller Documents and the Transactions. This Purchase Agreement and the other
Seller Documents have been, duly authorized by each Seller. This Purchase
Agreement has been, and at the Closing the other Seller Documents will have been
duly executed and delivered by each Seller and, assuming this Purchase Agreement
and the other Seller Documents are legal, valid, and binding obligation of
Buyer, constitutes or will constitute at Closing a legal, valid, and binding
obligation of each Seller, enforceable against each Seller in accordance with
its terms.
Section 4.3 Consents and Approvals. Listed on Schedule 4.3 hereof are
all of the Required Filings and Approvals of Castle and the Castle Subsidiaries
in connection with the execution and delivery of this Purchase Agreement and the
other Seller Documents and the consummation of the Transactions. At the Closing,
all such Required Filings and Approvals of Castle and the Castle Subsidiaries
will have been obtained, except any listed on a schedule to be delivered by
Sellers pursuant to Section 12.2(f).
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Section 4.4 No Violation. The execution, delivery, and performance of
this Purchase Agreement by the Sellers and the consummation by them of the
Transactions contemplated hereby will not (a) violate any provision of the
charter or by-laws or similar organizational documents of any of the Castle
Entities or (b) subject to obtaining the consents set forth on Schedule 4.4,
violate, conflict with, result in a breach of any provision of, constitute a
default or an event which, with notice or lapse of time or both, would
constitute a default under, result in the termination of or accelerate the
performance required by, result in a right of termination or acceleration under,
or result in the creation of any Lien upon any of the Shares or the Purchased
Assets under any of the terms of any Contract to which Castle or any of its
Subsidiaries is a party.
Section 4.5 Acquired Corporation. The authorized capital stock of the
Acquired Corporation consists of 100 Shares of common stock, of which 100 Shares
are issued and outstanding. All of the Shares have been duly authorized and
validly issued, are fully paid and nonassessable and are owned beneficially and
of record by Castle. There are no other shares of the capital stock of the
Acquired Corporation authorized, issued, or outstanding or reserved for
issuance, no outstanding preemptive rights or subscription rights with respect
to any such shares, and no outstanding options, warrants, rights, voting trusts,
convertible securities, or other agreements or commitments with respect to any
such shares. At the Closing, good and valid title to the Shares will pass to
Buyer free and clear of all Liens. The Acquired Corporation has or at the
Closing will have good and valid title to the Assets held by it, free and clear
of all Liens except the Permitted Liens.
Section 4.6 Purchased Assets. The Asset Sellers have or at the Closing
will have good and valid title to the Purchased Assets and at the Closing the
Asset Sellers will have full power and authority to transfer the Purchased
Assets to Buyer. At the Closing, good and valid title to the Purchased Assets
will pass to Buyer, free and clear of all Liens except the Permitted Liens.
Neither Castle nor any of its Subsidiaries other than the Castle Subsidiaries
owns, leases, or licenses any material Assets used in the conduct of the
business of, or otherwise relating to, the Refinery and/or the Terminal, except
for the inventory, the catalyst and receivables from third parties owned by IOC.
Section 4.7 Compliance With Laws. (a) Castle and its Subsidiaries have
obtained all Licenses required to be obtained by Castle or any of its
Subsidiaries for the conduct of the business of the Castle Subsidiaries as
presently conducted, except where the failure to have obtained any such Licenses
would not have a material adverse effect on the financial condition, operating
results, assets, properties, or business of any of the Castle Subsidiaries. All
such Licenses are in full force and effect, except to the extent failure to be
in effect would not be reasonably likely to have a material adverse effect on
the financial condition, operating results, Assets, properties, or business of
any of the Castle Subsidiaries, or the operation of the Refinery.
(b) Castle and its Subsidiaries have complied with and are in
compliance with all, and have not received any written notice of any claimed
violation of any, Laws applicable to the business of the Castle Subsidiaries,
excluding Environmental Laws, except where the failure to comply with, or the
violation of, any such Laws, excluding Environmental Laws, would not be
reasonably likely to have a material adverse effect on the financial condition,
operating results, Assets, properties, or business of any of the Castle
Subsidiaries, or the operation of the Refinery.
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Section 4.8 Employee Relations and Employee Benefit Plans; ERISA.
(a) None of the Castle Subsidiaries has entered into any
collective bargaining agreement. To the Knowledge of Sellers, (i) there is no
labor strike, dispute, slowdown, or work stoppage or lockout pending or
threatened against or affecting any of the Castle Subsidiaries, and (ii) no
union organizational campaign is in progress with respect to the employees of
any of the Castle Subsidiaries. There is no unfair labor practice, charge, or
complaint pending or, to the Knowledge of Sellers, threatened before the
National Labor Relations Board against any of the Castle Subsidiaries and no
charges with respect to or relating to any of the Castle Subsidiaries are
pending before the Equal Employment Opportunity Commission.
(b) (i) Schedule 4.8 attached hereto contains a true and
complete list of each "employee benefit plan," as defined in Section 3(3) of
ERISA, and each other employee benefit plan, welfare plan, program, agreement,
policy, or arrangement, including, without limitation, severance pay, salary
continuation for disability and consulting or other compensation agreements
("Benefit Plans"), sponsored, maintained, or contributed to or required to be
contributed to by the Asset Sellers within six years prior to the Closing Date
(the "Indian Benefit Plans").
(ii) With respect to each Indian Benefit Plan, Castle has
delivered to Buyer a true, correct, and complete copy of: (A) each writing
constituting a part of such Indian Benefit Plan, including, without limitation,
all plan documents, benefit schedules, trust agreements, and insurance contracts
and other funding vehicles; (B) the three most recent Annual Reports (Form 5500
Series) and accompanying schedule, if any; (C) the current summary plan
description, if any; (D) the three most recent annual financial reports, if any;
and (E) the most recent Determination Letter from the IRS, if any. The Annual
Reports (Form 5500 Series) with respect to each Indian Benefit Plan have been
properly filed, including the payment in full of any late fees, interest, and
penalties, if and to the extent applicable. Except as specifically provided in
the foregoing documents delivered to Buyer, there are no amendments to any
Indian Benefit Plan that have been adopted or approved nor have the Asset
Sellers or Castle undertaken or committed to make any such amendments; provided
that amendments to each Indian Benefit Plan that is intended to be a "qualified
plan" within the meaning of Section 401(a) of the Code ("Qualified Plans") that
are required by the Internal Revenue Service as a condition to the granting of a
favorable Determination Letter will be timely drafted under the supervision, and
at the expense, of Seller and adopted by Seller (if prior to Closing) or Buyer
(upon Buyer's reasonable approval and timely submission by Seller to Buyer)
prior to the end of the applicable remedial amendment period under Section
401(b) of the Code.
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(iii) Schedule 4.8 identifies each Qualified Plan. The Indian
Refining Limited Partnership 401(k) Plan (the "Indian 401(k) Plan" and, together
with the Assets thereof and its related trust agreement, the "Indian 401(k) Plan
and Trust") has been issued a favorable determination letter as to its current
qualified status (the "Determination Letter"). The Indian Refining Limited
Partnership Defined Benefit Pension Plan (the "DB Plan" and, together with the
Assets thereof and its related trust agreement, the "DB Plan and Trust") has not
been issued a favorable Determination Letter with respect to the amendments
required by the Tax Reform Act of 1986 and subsequent tax law changes. However,
a request to the Internal Revenue Service has been made on a timely basis. The
DB Plan remains within the applicable remedial amendment period under Section
401(b) of the Code for the adoption of such amendments and for obtaining a
favorable Determination Letter with respect to such amendments, as extended in
accordance with IRS Announcement 94-136.
(iv) All contributions required to be made to any Indian
Benefit Plan by applicable law or regulation or by any plan document or other
contractual under-taking, and all premiums due or payable with respect to
insurance policies funding any Indian Benefit Plan, for any period through the
date hereof have been timely made or paid in full or, to the extent not required
to be made or paid on or before the date hereof, have been fully reflected on
the financial statements of the Asset Sellers. The funding method used in
connection with the DB Plan is acceptable and the actuarial assumptions used in
connection with funding the DB Plan are reasonable. As of the last day of the
last plan year of the DB Plan and as of the Closing Date, the present value of
DB Plan assets exceeded the actuarial present value of accumulated benefit
obligations under the DB Plan, and the excess of present value of projected
benefit obligations over the fair value of plan assets did not and will not
exceed $1,500,000.
(v) Castle, the Asset Sellers and each Indian Benefit Plan
have complied, and are now in compliance, in all material respects with all
provisions of ERISA, the Code, and all Laws applicable to the Indian Benefit
Plans, except to the extent of amendments to the Qualified Plans which can be
adopted during the remedial amendment period. There is not now, nor do any
circumstances exist that could give rise to, any requirement for the posting of
security with respect to any Indian Benefit Plan or the imposition of any Lien
on the assets of any of the Castle Subsidiaries or any of their ERISA Affiliates
under ERISA or the Code.
(vi) Schedule 4.8 sets forth each Indian Benefit Plan (other
than a multiemployer plan) that is subject to Title IV of ERISA (a "Title IV
Plan"). Except as set forth on Schedule 4.8, no accumulated funding deficiency
or unpaid required installments within the meaning of Section 412 of the Code
exists, nor has there been issued a waiver or variance of the minimum funding
standards imposed by the Code with respect to any Title IV Plan, nor has any
Lien been created under Section 302(f) of ERISA or security been required under
Section 307 of ERISA, nor are any excise taxes due or hereafter to become due
under Section 4971 or 4972 of the Code with respect to the funding of any such
plan for any plan year or other fiscal period ending on or before the Closing
Date. With respect to each Title IV Plan, (A) there has not occurred any
reportable event within the meaning of Section 4043(b) of ERISA or the
15
regulations thereunder, and (B) there exists no ground upon which the PBGC would
reasonably be expected to demand termination of any Title IV Plan or appointment
of itself or its nominee as trustee thereunder. The PBGC has not instituted or
threatened in writing a proceeding to terminate any Title IV Plan. All PBGC
premiums due on or before the Closing Date with respect to any Title IV Plan
have been paid in full, including late fees, interest, and penalties, if and to
the extent applicable. Copies of the actuarial report for the 1994 plan year and
an update thereto as of January 1, 1995 for each Title IV Plan and of a report
which accurately projects the funded status and contribution requirements for
each Title IV Plan as of the Closing Date have been delivered to Buyer. There
has been no material adverse change in the Assets, Liabilities or financial
position of any Title IV Plan since the date of the most recent actuarial
report. None of the Sellers' purposes of engaging in the transactions
contemplated hereby is for the evasion or avoidance of Liability under Title IV
of ERISA.
(vii) None of the Castle Subsidiaries nor any ERISA Affiliate
has ever contributed to or has ever been obligated to contribute to any
Multiemployer Plan.
(viii) There does not now exist, nor do any circumstances
exist that could result in, any Liability under (A) the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code, (B)
Title IV of ERISA, Section 302 of ERISA, or Sections 412 and 4971 of the Code,
or (C) corresponding or similar provisions of foreign Laws that would be a
Liability of the Buyer following the Closing Date. Without limiting the
generality of the foregoing, neither Castle nor the Asset Sellers nor any of
their Affiliates have engaged in any transaction described in Section 4069,
4204, or 4212 of ERISA.
(ix) The Asset Sellers have no Liability for life, health,
medical, or other welfare benefits to former employees or beneficiaries or
dependents thereof, except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA and such health
continuation coverage is at no expense to any Castle Subsidiary or ERISA
Affiliate.
(x) There are no pending actions, claims, litigations, or
arbitrations which have been asserted in writing or instituted (other than in
respect of benefits due in the ordinary course) against the Assets of any of the
Indian Benefit Plans or against the Asset Sellers or any fiduciary of the Indian
Benefit Plans.
(xi) The Liabilities for all benefits provided pursuant to
all Indian Benefit Plans have been fully and adequately provided for on the
books of account of the Asset Sellers in accordance with GAAP.
(xii) Following the Closing, Buyer will have no Liability of
any kind, actual, contingent, present, future or otherwise with respect to any
Benefit Plans (other than the Indian 401(k) Plan and the DB Plan) for which
Castle, any Asset Seller or any ERISA Affiliate or any of them could have any
Liability.
16
Section 4.9 Financial Condition. Castle has delivered to Buyer (a) the
audited consolidated balance sheet as of September 30, 1994 (the "Balance Sheet
Date") of Castle and its Subsidiaries (the "Balance Sheet") and the audited
consolidated statement of income, consolidated statement of retained earnings,
and consolidated statement of cash flows of Castle and its Subsidiaries for the
year then ended, (b) the audited balance sheet as of the Balance Sheet Date of
IRLP and the audited statement of income, statement of retained earnings, and
statement of cash flows of IRLP for the year then ended, and (c) the unaudited
balance sheet as of August 31, 1995 of IRLP and the unaudited statement of
income, statement of retained earnings, and statement of cash flows of IRLP for
the period then ended. Each such balance sheet presents fairly the financial
condition, assets, liabilities, and stockholders' equity or partnership capital
of the respective entities as of its date; each such statement of income and
statement of retained earnings presents fairly the results of operations of the
respective entities for the period indicated; and each such statement of cash
flows presents fairly the information purported to be shown therein. To the
Knowledge of Sellers, the financial statements referred to in this Section 4.9
have been prepared in accordance with GAAP (except, in the case of the unaudited
statements, for the omission of footnote disclosures and other information and
for normal year-end adjustments) and the books and records of Castle and its
Subsidiaries. To the Knowledge of Sellers, the Castle Subsidiaries have no
material capital lease obligations (other than leases for copiers, vehicles. and
similar equipment which may have been capitalized) and no material long-term
liabilities for the deferred purchase price of any assets (other than a license
fee for the Penex process). As of the date hereof (with respect to clause (a)
only) and as of the Closing Date: (a) the Acquired Corporation has at least $3.5
million of cash plus interest accrued thereon in bank accounts specified in
Schedule 4.9 attached hereto, which cash and interest shall be part of the
Assets owned by IRC at Closing, and has no Liabilities, known or unknown,
accrued or unaccrued, aggregating more than $25,000, other than Environmental
Claims; and (b) IRLP has title to the "tank bottoms" specified on Schedule 2.2C
attached hereto.
Section 4.10 Taxes. (a) The Acquired Corporation is a member of an
affiliated group of corporations within the meaning of Section 1504 of the Code
(the "Consolidated Group"), and Castle is the common parent of the Consolidated
Group.
(b) The Acquired Corporation has joined in the filing of
consolidated Federal income Tax Returns by the Consolidated Group, and the
Acquired Corporation will continue to be included as a member of the
Consolidated Group for Federal income tax purposes up to and including the
Closing Date, including for purposes of filing the consolidated Federal income
Tax Return of the Consolidated Group for the tax year which includes the Closing
Date.
(c) The Consolidated Group has filed all Tax Returns that it
was required to file, and each of the Castle Subsidiaries and any combined,
consolidated, or unitary group of which any of the Castle Subsidiaries is or has
at any time been a member (any such group being a "Relevant Group") has filed
all Tax Returns that it was required to file prior to the Closing Date. All such
Tax Returns were correct and complete in all material respects. All Taxes shown
to be due on such Tax Returns have been paid. Neither the Consolidated Group,
17
any Relevant Group, nor any of the Castle Subsidiaries is a party to any
agreement extending the time within which to file any Tax Return. No closing
agreement pursuant to Section 7121 of the Code or compromise pursuant to Section
7122 of the Code (or any predecessor provisions) or any similar provision of any
state or local law has been entered into by or with respect to the Acquired
Corporation. No claim has ever been made by any authority in a jurisdiction in
which any of the Castle Subsidiaries does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction.
(d) Each of the Castle Subsidiaries has withheld and paid all
material Taxes required to be withheld and paid prior to the Closing Date.
(e) There is no dispute or claim concerning any material
liability for Taxes of any of the Castle Subsidiaries or any Relevant Group
currently pending.
(f) No Tax Returns of any of the Castle Subsidiaries or of
any Relevant Group or Consolidated Group for any taxable year beginning on or
after January 1, 1991 have been audited except as set forth on Schedule 4.10(f).
(g) None of the Castle Subsidiaries, any Relevant Group or
the Consolidated Group has waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to any Tax assessment or
deficiency.
(h) All Taxes attributable to periods or portions thereof
ending on or before the Closing Date for which any Castle Subsidiary is or may
be liable, whether by Contract, by reason of its status as a transferee or
member of the Consolidated Group or any Relevant Group or otherwise, have been
paid or an adequate reserve will have been established therefor as of December
31, 1995 in accordance with GAAP on the books of such Castle Subsidiary, and
each Castle Subsidiary has no Liability for Taxes in excess of the amounts so
paid or the reserves to be so established by it.
(i) The Acquired Corporation is not a "consenting
corporation" within the meaning of Section 341(f)(1) of the Code and none of the
assets of any Castle Entity is subject to any election under Section 341(f) of
the Code.
(j) The Acquired Corporation is not party to any tax sharing
agreement or arrangement that will survive or give rise to any liabilities or
obligations on the part of the Acquired Corporation or Buyer after the Closing
Date.
(k) None of the Castle Subsidiaries has made any material
payments, is obligated to make any material payments, or is a party to any
agreement that under certain circumstances could obligate it to make any
material payments that will not be deductible under Section 280G of the Code.
18
(l) Following the Closing, none of the Purchased Assets and
none of the assets of the Acquired Corporation will be an asset or property that
the Buyer or the Acquired Corporation will be required to treat as being owned
by any other Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately before the
enactment of the Tax Reform Act of 1986. None of the Purchased Assets or the
assets of the Acquired Corporation is (i) "tax-exempt use property" within the
meaning of Section 168(h)(1) of the Code, (ii) used predominantly outside the
United States within the meaning of Proposed Treasury Regulation Section
1.168-2(g)(5), or (iii) "tax-exempt bond financed property" within the meaning
of Section 168(g)(5) of the Code.
(m) The Acquired Subsidiary is not required to make any
adjustment under Section 481(a) of the Code or any comparable provision of
state, local or other Tax law by reason of any change in accounting method or
otherwise.
Section 4.11 Insurance. Listed on Schedule 2.2B are all insurance
policies relating to the Assets of the Acquired Corporation or the Asset
Sellers. Each such insurance policy is, as of the date of this Purchase
Agreement, in full force and effect and will be in effect on the Closing Date.
Section 4.12 No Broker. The Castle Entities have not engaged or
authorized any broker, investment banking firm, finder, agent, or other Person
to act on their behalf, directly or indirectly, as a broker or finder in
connection with the Transactions.
Section 4.13 Accuracy of Information. The Castle Entities have not
omitted to disclose to Buyer any material fact necessary in order for the
representations and warranties of Castle and the Castle Subsidiaries in this
Purchase Agreement and the other Seller Documents not to be misleading.
V. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers as follows:
Section 5.1 Organization and Good Standing. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of its
state of organization. At the Closing Assignee, if any, will be a limited
partnership duly organized, validly existing and, to the extent applicable, in
good standing under the laws of its state of organization and will be duly
qualified in the State of Illinois (if other than its state of organization).
Section 5.2 Authorization; Enforceability. Buyer has the requisite
power and authority to enter into this Purchase Agreement, the Seller Note, the
Mortgage and the Escrow Agreement and the other documents to be executed and
delivered by Buyer in connection herewith (collectively, the "Buyer Documents"),
19
and to consummate the Transactions. The execution and delivery of the Buyer
Documents and the consummation of the Transactions have been duly approved and
authorized by Buyer. The Buyer Documents and the Transactions have been duly
authorized by Buyer. This Purchase Agreement has been duly executed and
delivered by Buyer and at the Closing the other Buyer Documents will have been
duly executed and delivered by Buyer. Assuming this Purchase Agreement is and
the other Buyer Documents to which any Seller will be a party are the legal,
valid, and binding obligations of the Sellers, this Purchase Agreement
constitutes and such other Buyer Documents will constitute the legal, valid, and
binding obligations of Buyer, enforceable against Buyer in accordance with its
terms.
Section 5.3 Consents and Approvals. Listed on Schedule 5.3 are all of
the Required Filings and Approvals of Buyer in connection with the execution and
delivery of the Buyer Documents and the consummation of the Transactions. At the
Closing, all such Required Filings and Approvals of Buyer will be obtained,
except any listed on a schedule to be delivered by Buyer pursuant to Section
12.3(e).
Section 5.4 No Violation. The execution, delivery, and performance of
the Buyer Documents by Buyer and the consummation by it of the Transactions will
not (a) violate any provision of the certificate of incorporation of Buyer or
(b) violate, conflict with, result in a breach of any provision of, constitute a
default or an event which, with notice or lapse of time or both, would
constitute a default under, result in the termination of or accelerate the
performance required by, result in a right of termination or acceleration under,
or result in the creation of any Lien upon any of the assets of Buyer under any
of the terms of any Contract to which Buyer is a party before giving effect to
the Transactions to be consummated on the Closing Date.
Section 5.5 No Broker. Buyer has not engaged or authorized any broker,
investment banking firm, finder, agent, or other Person to act on its behalf,
directly or indirectly, as a broker or finder in connection with the
Transactions, other than Oppenheimer & Co. Sellers shall have no liability for
the fees payable to Oppenheimer & Co. by Buyer in connection with the
Transactions, which fees shall be paid by Buyer.
Section 5.6 Subsequent Sale. Buyer has no present intention to sell or
cause to be sold the Shares, the Assets of the Acquired Corporation or all or
substantially all of the Purchased Assets, and has received no offers or
proposals regarding any such sale. The Sellers recognize that after the Closing
circumstances may change and Buyer will deal with such Assets in its economic
self-interest as it sees fit under the circumstances, which could include a sale
of some or all such Assets.
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VI. TAX MATTERS
Section 6.1 Access to Information. (a) Castle will make available to
Buyer any information relating to the Acquired Corporation which has been
included in the consolidated Federal income Tax Returns filed by the
Consolidated Group for the taxable years up to and including the Closing Date
that is relevant for purposes of determining the tax liabilities and attributes
of the Acquired Corporation. Sellers will make available to Buyer such other
information concerning Taxes as may reasonably be requested by Buyer.
(b) Following the Closing, Buyer agrees to make available to
Castle any information relating to the Acquired Corporation (including, but not
limited to, its books and records and work papers for all periods in which the
Acquired Corporation has been included as a member in the Consolidated Group for
purposes of filing consolidated Federal income Tax Returns) that is relevant for
purposes of determining the tax liability of the Consolidated Group for all
periods up to and including the Closing Date, as is reasonably necessary for the
preparation of any Tax Return, and for purposes of dealing with any examination
by or controversy with the IRS or any other taxing authority.
Section 6.2 Tax Indemnification. Sellers shall jointly and severally
indemnify and hold the Buyer Indemnitees, including without limitation, the
Acquired Corporation, harmless from (a) any and all Liabilities for Taxes of any
Castle Subsidiary, the Consolidated Group, or any Relevant Group, and (b) any
and all Liabilities for Taxes for which any Castle Subsidiary, the Consolidated
Group, or any Relevant Group is liable as withholding agent or transferee, by
Contract, or otherwise, including in each case any related Damages; provided,
however, that, except in the case of Liability for Federal or state income taxes
of the Consolidated Group or any Relevant Group for the taxable year of the
Consolidated Group or such Relevant Group which includes the Closing Date, such
indemnity shall include only Taxes with respect to periods ending on or prior to
the Closing Date and the portion through and including the Closing Date of any
taxable period that includes, but does not end on, the Closing Date (determined
by means of a closing of the books and records of the Acquired Corporation as of
the close of business on the Closing Date).
Section 6.3 Transfer Taxes, Sellers, jointly and severally, and Buyer
shall each be responsible to pay 50% of any and all sales, use, value added,
excise and other transfer or similar Taxes imposed on the transfer of the
Purchased Assets and the Shares hereunder, including without limitation the
following Taxes relating to the transfer of the real property included in the
Purchased Assets: (a) the Illinois state transfer tax of $.50 per $500 paid for
real property located in Illinois, (b) the Lawrence County transfer tax of $.25
per $500 paid for real property located in Lawrence County, and (c) the Indiana
State Corporate Gross Income Tax of 1.2% of the consideration paid for real
property located in Indiana. Buyer shall execute and deliver to Sellers at the
Closing any certificates or other documents as Sellers may reasonably request to
comply with any reporting, notification, or filing requirements relating to, or
to perfect any exemption from, any transfer, documentary, sales, excise or use
tax, or other similar taxes.
21
Section 6.4 Post-Closing Audits and Other Proceedings. (a) Castle and
Buyer agree to give prompt notice to each other of any proposed adjustment to
Taxes for periods ending on or prior to the Closing Date or any period within
which the Closing Date occurs. Castle and Buyer shall cooperate with each other
in the conduct of any audit or other proceeding involving the Acquired
Corporation for such periods and each may participate at its own expense;
provided that Castle shall have the right to control the conduct of any such
audit or proceeding for which Castle (i) agrees that any resulting Tax is
covered by the indemnity provided in Section 6.2 above and (ii) reasonably
demonstrates to Buyer its ability to make such indemnity payment.
Notwithstanding the foregoing, neither party may settle or otherwise resolve any
such claim, suit, or proceeding without the consent of the other party, such
consent not to be unreasonably withheld; provided, however, that Buyer shall not
be required to contest any proposed adjustment to, or claim for, any Tax if
Buyer waives its right to any indemnity in respect to such Tax hereunder. Buyer
shall promptly pay over to Castle any Tax refund received by any of the Acquired
Corporation (or by Buyer or any of its Affiliates with respect to any of the
Acquired Corporation) relating to any period ending on or prior to the Closing.
(b) Castle shall be responsible for the preparation and
filing of all state income and other Tax Returns for the Acquired Corporation
for short taxable periods ending on the Closing Date in states the tax laws of
which require Tax Returns for such short taxable periods.
Section 6.5 Certain Consolidated Return Matters. (a) Any tax sharing
agreement or arrangement between Castle and its Affiliates and the Acquired
Corporation shall be terminated as of the Closing Date, and shall have no
further effect for any taxable year.
(b) Castle shall include the income or loss of the Acquired
Corporation for periods through the Closing Date in the consolidated Federal
income Tax Return filed by the Consolidated Group for the period including the
Closing Date. Castle shall prepare books and working papers (including a closing
of the books) which will clearly demonstrate the income and activities of the
Acquired Corporation for the period ending on the Closing Date.
VII. COVENANTS OF SELLERS
The Sellers hereby jointly and severally covenant and agree with Buyer
as follows (all such covenants and agreements to survive the Closing unless
otherwise expressly stated):
Section 7.1 Access to Information. From and after the date of this
Purchase Agreement and until the Closing Date or the Termination Date, Buyer and
its authorized representatives shall upon reasonable notice have access during
normal business hours to (a) all properties, books, records, Contracts, and
documents of Sellers relating to any of the Castle Subsidiaries, including
without limitation all such consolidating financial statements and financial
statements of the Castle Subsidiaries as are prepared in the normal course of
the preparation of the audited financial statements described in Section 4.9,
and Sellers shall furnish or cause to be furnished to Buyer and its authorized
representatives information with respect to the affairs and business of the
Castle Subsidiaries as Buyer may reasonably request, and (b) counsel,
representatives, accountants and auditors of Castle and the Castle Subsidiaries.
22
Section 7.2 Actions Prior to Closing Date. From and after the date of
this Purchase Agreement and until the Closing Date or Termination Date,
whichever first occurs:
(a) Sellers shall not undertake or institute any action of
the Castle Subsidiaries which could reasonably be expected to have a material
adverse effect on the assets, properties, financial condition, or operating
results of any of the Castle Subsidiaries.
(b) Sellers shall not (i) sell, pledge, convey, transfer,
lease or encumber any of the Shares or any partnership interests in the Asset
Sellers or the Purchased Assets, or (ii) sell or permit any Castle Subsidiary to
issue or sell any shares of capital stock or other equity interests of any
Castle Subsidiary or any securities convertible or exchangeable for, or options.
warrants, commitments, or rights of any kind to acquire, any such shares of
capital stock or other equity interests.
(c) Castle shall promptly notify Buyer of any material
lawsuits, claims, proceedings, or investigations of which Sellers have Knowledge
that may be threatened, brought, asserted, or commenced against or involving any
of the Castle Subsidiaries, the Purchased Assets, or the Transactions.
(d) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to: (i) make any loans or advances to any other
person or enter into any Contract relating to the borrowing of money or
extension of credit (including obligations with respect to capital leases); or
(ii) assume, guarantee, endorse, or otherwise become liable or responsible for
the obligations of any other person (whether directly, contingently, or
otherwise).
(e) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to: (i) increase or agree to increase the
compensation payable to any of the directors, officers, or employees of the
Castle Subsidiaries, except pursuant to the terms of agreements or plans as
currently in effect; or (ii) enter into or adopt any pension, profit-sharing,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation rights, or severance pay plan or any employment or consulting
agreement, with or for the benefit of any director, officer, or employee of the
Castle Subsidiaries, whether past or present, or amend or terminate any of such
plans or any of such agreements in existence on the date hereof.
(f) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to, enter into any Contracts which, individually
or in the aggregate, are material to the Castle Subsidiaries or modify, amend,
terminate, or cancel any existing material Contract.
(g) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to, declare, set aside, or pay to any such
stockholder any dividend or other distribution in respect of its capital stock.
23
(h) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to, enter into or agree to enter into any
transaction with or for the benefit of any Affiliate.
(i) The Asset Sellers shall not, and the Sellers shall not
permit the Acquired Corporation to, make any change in any of its methods of
accounting or in any of its accounting principles or practices.
Section 7.3 Consents and Approvals. (a) The Sellers shall use their
commercially reasonable efforts to obtain the Required Filings and Approvals of
the Castle Entities.
(b) The Castle Entities shall, without directly incurring any
costs or expenses (other than fees and expenses of their counsel), cooperate in
good faith with Buyer in the obtaining by Buyer of the Required Filings and
Approvals of the Buyer.
Section 7.4 Confidentiality. The Sellers shall use their commercially
reasonable efforts to insure that all confidential information which the
Sellers, the Acquired Corporation, or any of their respective officers,
directors, employees, counsel, agents, investment bankers, or accountants may
now possess or may hereafter create or obtain relating to the financial
condition, results of operations, business, properties, Assets, Liabilities, or
future prospects of any Castle Subsidiary or Buyer or any customer or supplier
of any of them shall not be published, disclosed, or made accessible by any of
them to any other Person at any time or used by any of them except pending the
Closing in the business and for the benefit of the Castle Entities, in each case
without the prior written consent of Buyer; provided, however, that the
restrictions of this sentence shall not apply (a) after this Purchase Agreement
is terminated, but only to the extent such confidential information relates to
the financial condition, results of operations, business, properties, Assets,
Liabilities or future prospects of any Castle Subsidiary, of any Affiliate of
any of them, or any customer or supplier of any of them, (b) to disclosure to
existing or prospective lenders (including lenders to IOC) or other investors
and their legal advisors or to others whose consent may be required or desirable
in connection with obtaining the consents which are required or desirable to
consummate the Transactions, (c) as may otherwise be required by law, (d) as may
be necessary or appropriate in connection with the enforcement of this Purchase
Agreement, (e) to the extent such information shall have otherwise become
publicly available not in violation of the provisions of this Purchase
Agreement, or (f) as may otherwise be permitted by Section 13.2(b).
Section 7.5 Insurance. The Sellers shall maintain in effect insurance
covering the Castle Subsidiaries and the Purchased Assets, of the types and in
the amounts in effect at the date of this Purchase Agreement. As of the Closing,
Sellers shall take all steps necessary to cause the transfer to Buyer of (a) the
insurance policies identified on Schedule 2.2B hereto as being transferred to
Buyer, and (b) all claims which have been or may hereafter be made with respect
to any insurance policies now or previously in effect at any time where such
claims relate (in whole or in part) to the Refinery, the Terminal, the Purchased
24
Assets and/or the Assumed Liabilities, including, without limitation, the claims
for insurance recovery Assets and/or the Assumed for the cooling tower at the
Refinery damaged in September, 1995 (the "Cooling Tower Claim"); provided that
Sellers shall make appropriate arrangements (including through the issuance of
separate insurance policies) with their insurers, satisfactory to IOC, to insure
that insurance costs and proceeds under said insurance policies which pertain to
IOC's inventory located at the Refinery are allocated and made payable to IOC or
its lenders or their agent, as the case may be.
Section 7.6 Names. After the Closing, upon Buyer's request, the
Sellers shall promptly change the name of each Asset Seller and its Affiliates
to a name which does not include the word "Indian" or derivatives thereof,
provided that Buyer reimburses Sellers for the reasonable legal costs and
disbursements incurred by Seller to effect any such name changes and any related
filings, if necessary, under the Uniform Commercial Code, and provided further
that such costs have been pre-approved in writing by Buyer. Effective upon the
earlier of (a) the sale of IOC's inventory located at the Refinery and the
Terminal or (b) the name changes above referred to, the Sellers will cease the
use of the name "Indian" or derivatives thereof in connection with the business
of the Sellers and their Affiliates.
Section 7.7 Transfer of Retirement Plans. (a) As of the Closing Date,
the Asset Sellers shall take all steps necessary to cause the transfer to the
Buyer of (i) all of each Asset Seller's right, title, and interest in and to the
Indian 401(k) Plan and Trust, including all Liabilities and account balances
thereunder and (ii) all of each Asset Seller's right, title, and interest in and
to the DB Plan and Trust and to substitute Buyer as the successor plan sponsor
under both the Indian 401(k) Plan and Trust and the DB Plan and Trust. Moreover,
if Buyer so elects following the Closing Date, Persons designated by Buyer shall
be appointed to serve as successor trustees of the Indian 401(k) Plan and Trust
and the DB Plan and Trust. Absent the appointment by Buyer of successor
trustees, the Asset Sellers shall have secured the consent of the present
trustees of the Indian 401(k) Plan and Trust and of the DB Plan and Trust to
continue to serve in that capacity for up to one year after the date hereof. The
Asset Sellers and Buyer agree to execute after the Closing Date any additional
documents necessary, in the reasonable judgment of the other, to effectuate the
transfer of the Indian 401(k) Plan, the DB Plan, and their related Trusts to
Buyer.
(b) As soon as practicable after the Closing Date, the Asset
Sellers shall deliver to Buyer such copies of the Asset Sellers' applicable
records concerning the participants in the Indian 401(k) Plan and the DB Plan
and such copies of other applicable records of Asset Sellers regarding the
Indian 401(k) Plan and DB Plan as Buyer may reasonably require and request.
(c) The Asset Sellers represent that an application for a
favorable Determination Letter on the qualification of the Indian 401(k) Plan
and the DB Plan under Section 401(a) of the Code has been submitted to the IRS
prior to the expiration of the extension of the remedial amendment period
provided in IRS Advance Announcement 94-136.
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(d) Effective prior to or as of the Closing Date, Castle
shall adopt a new Section 401(k) plan (the "Castle Plan") for the benefit of
Castle's employees designated by Castle (the "Castle Employees"). The Castle
Plan shall contain a provision authorizing the receipt of assets transferred
from another qualified plan. As soon as practicable following the Closing Date,
Castle shall submit an application to the IRS for a determination that the
Castle Plan is a qualified pension or profit sharing plan within the meaning of
Sections 401(a) and 401(k) of the Code and shall make any and all changes which
may be necessary to obtain a favorable determination from the IRS as to the
qualified status of the Castle Plan. Upon the receipt of a favorable
Determination Letter as to the qualified status of the Castle Plan, Castle shall
furnish Buyer with a copy of such favorable Determination Letter.
Section 7.8 DB Plan Funding. On or before the Closing Date, the Asset
Sellers shall cause to be paid to the DB Plan the amount, if any, which the
current enrolled actuary for the DB Plan has determined is required in order to
satisfy the minimum funding requirement of Code Section 412 for the plan year of
the DB Plan ending on December 31, 1994 and for the period commencing January 1,
1995 and ending on the Closing Date, as if Code Section 412 required all minimum
funding contributions with respect to such period to be made on or prior to the
Closing Date.
Section 7.9 Intercompany Indebtedness. On or prior to the Closing
Date, Castle shall contribute to capital or execute and deliver to the Acquired
Corporation a release and discharge of all Liabilities of the Acquired
Corporation to Castle or any Affiliate of Castle existing prior to the Closing,
other than under the Compliance Cost Agreement, and the Acquired Corporation
shall execute and deliver to the Sellers a release and discharge or shall
declare and pay a dividend of all Liabilities of the Sellers and their
Affiliates to the Acquired Corporation existing prior to the Closing, except any
Liabilities arising under this Purchase Agreement and the Transactions.
Section 7.10 Commercially Reasonable Efforts; Cooperation. The Sellers
agree to use all commercially reasonable efforts to cause the conditions set
forth in Articles IX and X to be satisfied, and to take, or cause to be taken,
all action and to do, or cause to be done, and to assist and cooperate fully
with the other parties in doing, all things necessary, proper, or advisable to
consummate the Transactions, provided that nothing in this Section 7.10 shall
obligate Castle to contribute any capital to the Asset Sellers as a condition to
the Closing, other than as contemplated by Section 7.9.
Section 7.11 Use of Asset Purchase Price; Payment of Creditors.
(a) At the Closing, (i) $500,000 of the cash portion of the Asset
Purchase Price shall be paid by IRLP to IOC or its designees as part of the
consideration for (A) its consent to the release, and its release at the
Closing, of all of the Liens held by it on IRLP's Assets (including the release
of all such Liens that were previously assigned to third parties by IOC) and (B)
the transfer of the tank bottoms identified in Schedule 2.2C hereto and (ii) the
balance of the Asset Purchase Price (other than the $225,000 contingent payment
referred to in Section 3.1(b)) shall be delivered to the escrow agent under
the Escrow Agreement to be held and disbursed as contemplated thereby.
26
(b) If at any time after the date of execution of this Agreement and
prior to the Closing, (i) an Intervening Lien shall be placed on any of the
Purchased Assets or (ii) IRLP shall become aware of any Liabilities (other than
Assumed Liabilities) in respect of trade payables which are not identified in
Schedule 1.1C, and such Lien shall not have been released or such Liability
shall not have been discharged, then (A) the principal amount of the Seller Note
shall be reduced by the aggregate amount of the claims underlying all such
Intervening Liens and of all such other unidentified Liabilities in respect of
trade payables and (B) the amount by which the Seller Note is so reduced shall
be provided by Buyer and shall be used to pay such claims and Liabilities at
Closing.
Section 7.12 Escrow Agreement. The representations, warranties and
covenants of the parties set forth in the Escrow Agreement are incorporated
herein by this reference as if fully set forth herein.
Section 7.13 Use of Radnor Space. For a period beginning on the
Closing Date and ending on April 30, 1996, (a) Castle shall continuously allow
Buyer to use office and conference space and related equipment (including,
without limitation, telephones, facsimile machines, copiers, etc.),
receptionist, secretarial support and the like at Castle's Radnor, Pennsylvania
office, to the same extent that IRLP made use of the same over the two-year
period ending as of the date hereof and (b) Buyer shall continuously allow IRLP
to use a similar amount of space and similar services at the Refinery. All such
use shall be at no cost or charge to Buyer or IRLP, as applicable, except that
Buyer shall reimburse Castle, and Castle shall reimburse Buyer, for Castle's or
Buyer's out-of-pocket expense costs (but not any equipment or personnel costs)
for Buyer's or IRLP's, as applicable, use of the telephones, facsimile machines
and copiers.
Section 7.14 Reimbursement for Inventory Liquidation. From and after
the Closing, Sellers shall jointly and severally pay and reimburse Buyer, on
demand upon presentation of standard and appropriate substantiating
documentation, for any and all out-of-pocket costs and expenses (not including
internal personnel costs but including costs of personnel hired solely to
perform such services) incurred by Buyer with respect to any delivery, refining,
processing, movement, storage, administration, selling, liquidating, financing
or other action or transaction relating to any inventories of any Sellers or any
of their Affiliates. Such costs and expenses shall not include any fees or
profits to Buyer but shall include, without limitation, operating costs of
processing, refining, storage and/or delivery units and/or other equipment
(other than depreciation), taxes and personnel. Sellers jointly and severally
covenant and agree that all such inventories shall be removed from the Refinery
and the Terminal on or prior to January 31, 1996.
27
VIII. COVENANTS OF BUYER
Buyer covenants and agrees with Sellers as follows (all such covenants
and agreements to survive the Closing unless otherwise expressly stated or, to
take effect after the Closing Date in the case of Section 8.1(c)(ii) below):
Section 8.1 Consents and Approvals. (a) Buyer shall use its
commercially reasonable efforts to obtain the Required Filings and Approvals of
Buyer.
(b) Buyer shall, without incurring any costs or expenses
(other than fees and expenses of Buyer's counsel), cooperate in good faith with
the Castle Entities in the obtaining by the Castle Entities of the Required
Filings and Approvals of the Castle Entities.
(c) Buyer shall use commercially reasonable efforts to
obtain, as promptly as practicable after the Closing, the Second Stage Financing
on terms and conditions acceptable to Buyer.
Section 8.2 Confidentiality. Buyer shall use its commercially
reasonable efforts to insure that all confidential information which Buyer, its
Affiliates, or any of their respective officers, directors, employees, counsel,
agents, investment bankers, or accountants may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
business, properties, Assets, Liabilities or future prospects of any Castle
Subsidiary or any customer or supplier of any of them shall not be published,
disclosed, or made accessible by any of them to any other Person at any time or
used by any of them except pending the Closing in the business and for the
benefit of the Castle Entities, in each case without the prior written consent
of Castle; provided, however, that the restrictions of this sentence shall not
apply (a) after the Closing, (b) to disclosure to existing or prospective
lenders or other investors (and their advisors) or to others whose consent may
be required or desirable in connection with obtaining the financing or consents
which are required or desirable to consummate the Transactions, (c) as may
otherwise be required by law, (d) as may be necessary or appropriate in
connection with the enforcement of this Purchase Agreement, or (e) to the extent
such information shall have otherwise become publicly available not in violation
of the provisions of this Purchase Agreement.
Section 8.3 Transfer of Retirement Plans. (a) Buyer agrees to adopt
the Indian 401(k) Plan and Trust, including all amendments thereto, on the
Closing Date as the Indian 401(k) Plan and Trust exist immediately prior to such
date and agrees to assume all rights, duties and obligations thereunder.
Notwithstanding anything herein contained to the contrary, Buyer shall retain
the right to amend or to terminate the Indian 401(k) Plan and Trust (as adopted
and assumed by Buyer) at any time after the Closing Date, in accordance with
applicable law.
(b) Buyer agrees to adopt the DB Plan and Trust, including
all amendments thereto, on the Closing Date, as the DB Plan and Trust exist
immediately prior to such date and agrees to assume all rights, duties, and
obligations thereunder, including, without limitation, the Liability for all
"unfunded current liability" (as defined under Section 412 of the Code) as well
as all minimum funding requirements for periods commencing on the Closing Date.
Notwithstanding anything herein contained to the contrary, Buyer shall retain
the right to amend and to terminate the DB Plan and Trust (as adopted and
assumed by Buyer) at any time after the Closing Date, in accordance with
applicable law.
28
(c) Buyer shall be responsible for satisfying any and all
governmental reporting and disclosure requirements applicable to the Indian
401(k) Plan and the DB Plan with respect to plan years ending on and after
December 31, 1995. Castle and the Asset Sellers shall furnish promptly to Buyer
any information or data related to periods prior to the Closing Date which may
be necessary to Buyer in order to satisfy such governmental reporting and
disclosure requirements in a timely manner.
(d) When Castle has received a favorable IRS Determination
Letter with respect to the Castle Plan, Buyer shall cause the entire account
balance of each of the Castle Employees in the Indian 401(k) Plan to be
transferred to the trustee of the Castle Plan and to be credited to that Castle
Employee's account under the Castle Plan. In connection with such transfer,
Buyer shall provide to Castle a statement from the plan administrator that the
Buyer's 401(k) Plan either has or will apply for a favorable IRS determination
letter, and Castle and Buyer shall execute all documents and make all filings
necessary or appropriate in order to satisfy the requirements of applicable Law.
Section 8.4 Reimbursement for Real Estate Taxes. Buyer agrees to pay
to the appropriate tax authorities when due the dollar amount specified in
Schedule 8.4 for the periods specified in said Schedule, representing 50% of the
real estate taxes respecting the Refinery and the Terminal identified in
Schedule 8.4 for the periods specified in said Schedule, provided that the
making of such payment shall be subject to the condition precedent that 50% of
all such taxes shall have been paid in full (together with any interest and
penalties) by the Castle Entities and any and all Liens (or possible future
Liens) relating thereto shall have been released, and subject to presentation by
Sellers to Buyer of appropriate substantiating documentation.
Section 8.5 Assistance with Inventory Liquidation. Subject to
fulfillment of the ongoing reimbursement obligations set forth in Section 7.14
above, for the period commencing on the Closing Date and ending on January 31,
1996, Buyer shall, to the extent reasonably practicable and specifically
requested in writing by Sellers or IOC from time to time, and without any
requirement to incur any material incremental Liability (or lose any material
opportunity) of any kind or nature whatsoever, utilize the Refinery and the
Terminal to assist IOC in the liquidation of any inventory which IOC may own
immediately following the Closing (including the storage, consolidation and
transmission of feedstocks previously delivered to IOC at the Refinery and
products previously refined by IRLP for IOC at the Refinery). Sellers and IOC
hereby jointly and severally waive, release and discharge Buyer and all Buyer
Indemnitees from any and all Liabilities, claims and causes of action relating
to any actions (or omissions) of Buyer or any Buyer Indemnitees with respect to
such inventory liquidation (except for Liabilities directly caused by the gross
negligence or wilful misconduct of Buyer). Subject to IOC's agreement to be
bound by the provisions of the preceding sentence, and of the last sentence of
Section 7.14, IOC shall be a third party beneficiary of the provisions of this
Section 8.5.
29
Section 8.6 Insurance Reimbursements and Payments. Buyer shall
promptly reimburse and pay IRLP for (a) the allocable premium cost (relating to
periods beginning on the Closing Date) for any insurance policies identified on
Schedule 4.11 attached hereto and transferred to Buyer pursuant to Section 7.5
above, and (b) 50% of the gross insurance proceeds paid to (or at the direction
of) Buyer by the applicable insurance company for the Cooling Tower Claim (up to
a maximum of $350,000).
Section 8.7 Employee Matters. Buyer shall reimburse IRLP on or prior
to December 15, 1995, for the aggregate gross salary payments and applicable
payroll taxes and benefits made by IRLP with respect to the period from the
Closing Date through November 30, 1995 to those of its employees identified in
Schedule 8.7, Part 1 attached hereto who become employees of Buyer as of the
Closing Date as set forth in said Schedule 8.7, Part 1, subject to such changes
to said Schedule 8.7, Part 1 as may be made pursuant to a written notice from
Buyer to IRLP at the Closing. Further, except for the senior management
personnel identified on Schedule 8.7, Part 2, for a period of 18 months
following the Closing Date, Buyer agrees not to hire or retain (as an employee,
consultant or otherwise) any employee of IRLP as of the date hereof who is
identified on Schedule 8.7, Part 3, who does not waive any right to severance or
other similar payments from Castle or any of its Affiliates for any period after
November 30, 1995.
Section 8.8 Commercially Reasonable Efforts; Cooperation. Buyer agrees
to use all commercially reasonable efforts to cause the conditions set forth in
Articles IX and X to be satisfied, and to take, or cause to be taken, all action
and to do, or cause to be done, and to assist and cooperate fully with the other
parties in doing, all things necessary, proper or advisable to consummate the
Transactions.
IX. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to purchase the Shares and Purchased Assets
at the Closing are subject to the fulfillment at or prior to the Closing of each
of the following conditions, unless waived in writing by Buyer.
Section 9.1 Truth of Representations and Warranties. The
representations and warranties made by the Sellers in this Purchase Agreement
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
or given on and as of such date.
30
Section 9.2 Compliance with Covenants. The Sellers shall have
performed and complied in all material respects with all of their covenants and
obligations under this Purchase Agreement which are to be performed or complied
with by them prior to or at the Closing.
Section 9.3 Absence of Suit. No action, suit, proceeding, or
investigation shall have been commenced or threatened by any Person against
Buyer, the Sellers, the Purchased Assets or any of their officers, directors or
Affiliates seeking to modify in any material respect, or to restrain or prevent,
and no Law shall have been enacted, issued, or promulgated which has the effect
of modifying in any material respect or restraining or preventing, the
Transactions or questioning the validity or legality of the Transactions.
Section 9.4 Receipt of Consents and Approvals. All Required Filings
and Approvals indicated on Schedules 4.3, 4.4, or 5.3 as material Required
Filings and approvals shall have been obtained.
Section 9.5 Proceedings and Instruments Satisfactory, Certificates.
All proceedings, corporate or otherwise, to be taken by the Sellers in
connection with the Transactions shall have occurred and all certificates and
other documents reasonably incident thereto as Buyer may reasonably request
shall have been delivered to Buyer.
Section 9.6 Intercompany Indebtedness. Castle shall have contributed
to capital or executed and delivered to the Acquired Corporation a release and
discharge of all Liabilities of the Acquired Corporation to Castle or any
Affiliate of Castle existing prior to the Closing, except any Liabilities
arising under this Purchase Agreement or under the Compliance Cost Agreement.
Section 9.7 Deliveries at Closing. All documents and instruments
required to be delivered by the Sellers and their Affiliates at the Closing
shall have been delivered to Buyer as provided in Section 12.2.
Section 9.8 No Material Adverse Change. From date hereof through the
Closing Date, there shall not have occurred (a) any material adverse change in
the financial condition, operating results, Assets, properties, or business of
any of the Castle Subsidiaries from that shown in the financial statements
delivered pursuant to Section 4.9, other than any such material adverse change
resulting from the shut-down of the Refinery on September 30, 1995 or from any
acts of Buyer or its Affiliates, or (b) any material adverse change in the Shell
Contract or any amendment, modification or termination of the Shell Contract,
whether or not agreed to by any of the Sellers.
Section 9.9 Bank Consents. All lenders to Castle and its Affiliates
who have any direct or indirect Liens on or other interest or Contract right in
or relating to the Purchased Assets (including, without limitation, BT
Commercial Corporation and Mees Pierson N.V.) shall have (i) consented to the
Transactions, and the transactions contemplated by the Platinum Sale Documents,
to the full extent necessary to permit consummation of the Transactions, and the
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transactions contemplated by the Platinum Sale Documents, without violation of
any such lender's rights, including, but not limited to, the terms of this
Purchase Agreement and the Escrow Agreement and (ii) released all such Liens,
interests and rights, all as acceptable to Buyer in its sole discretion
(collectively, the "Bank Consents").
Section 9.10 Mobil Consent. Mobil Oil Corporation ("Mobil") shall have
agreed and consented in writing to (a) an assignment to Buyer of all of IRLP's
rights under that certain Exchange Agreement dated as of July 29, 1994 between
Mobil and IRLP (as amended, the "Mobil Contract"), and (b) a modification of the
Mobil Contract, acceptable to Buyer in its sole discretion, limiting Buyer's
Liabilities under the Mobil Contract to an amount acceptable to Buyer and
extending the timing of payment of any such Liabilities in a manner acceptable
to Buyer.
Section 9.11 Platinum Sale Documents. The Platinum Sale Documents
shall be duly executed and delivered by IOC to Buyer and the transactions
contemplated thereby shall be consummated concurrently with the Transactions.
X. CONDITIONS TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers to be performed hereunder shall be
subject to the satisfaction prior to or at the Closing of the following
conditions unless waived in writing by Castle.
Section 10.1 Truth of Representations and Warranties. The
representations and warranties of Buyer in this Purchase Agreement shall be true
and correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given on
and as of such date.
Section 10.2 Compliance with Covenants. Buyer shall have performed and
complied in all material respects with all of its covenants and obligations
under this Purchase Agreement which are to be performed or complied with by it
prior to or at the Closing.
Section 10.3 Absence of Suit. No action, suit, proceeding, or
investigation shall have been commenced or threatened by any Person against
Buyer, the Sellers, or any of their officers, directors or Affiliates seeking to
modify in any material respect, or to restrain or prevent, and no Law shall have
been enacted, issued, or promulgated which has the effect of modifying in any
material respect or of restraining or preventing, the Transactions or
questioning the validity or legality of the Transactions.
Section 10.4 Receipt of Consents and Approvals. All Required Filings
and Approvals indicated on Schedules 4.3, 4.4, or 5.3 as material Required
Filings and Approvals shall have been obtained.
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Section 10.5 Proceedings and Instruments Satisfactory; Certificates.
All proceedings, corporate or otherwise, to be taken by Buyer in connection with
the Transactions shall have occurred and all certificates and other documents
reasonably incident thereto as the Sellers may reasonably request shall have
been delivered to the Sellers.
Section 10.6 Intercompany Indebtedness. The Acquired Corporation shall
have executed and delivered to the Sellers a release and discharge of all
Liabilities of the Sellers and their Affiliates to the Acquired Corporation
existing prior to the Closing, except any Liabilities arising under this
Purchase Agreement.
Section 10.7 Equity Contributions and Undertaking. Buyer shall have
received $5 million cash in equity contributions and Seller shall have received
from Gadgil Western Corporation ("GWC") an undertaking duly executed by GWC, in
the form previously agreed upon by Castle and GWC.
Section 10.8 Deliveries at Closing. All documents and instruments
required to be delivered by Buyer and its Affiliates at the Closing shall have
been delivered to the Sellers as provided in Section 12.3.
Section 10.9 Platinum Sale Documents. The Platinum Sale Documents
shall be duly executed and delivered by Buyer to IOC and the transactions
contemplated thereby shall be consummated concurrently with the Transactions.
Section 10.10 Bank Consents. The Bank Consents shall have been
obtained, in form and substance acceptable to Sellers in their sole discretion.
Section 10.11 Mobil Consent. Mobil shall have agreed and consented to
in writing to the Mobil assignment contemplated by Section 9.10(a) on terms
acceptable to IRLP in its sole discretion.
XI. INDEMNIFICATION
Section 11.1 Requirement of Indemnification. (a) Sellers shall jointly
and severally indemnify and hold the Buyer Indemnitees harmless from and against
any Damages suffered by them resulting from, arising out of, or incurred with
respect to, or (in the case of claims asserted against any Buyer Indemnitee by a
third party) alleged to result from, arise out of, or have been incurred with
respect to (i) the falsity, breach, or inaccuracy of any representation,
warranty, covenant, or agreement of the Sellers contained in this Purchase
Agreement or in any schedule, exhibit, document, or instrument delivered in
connection herewith, (ii) any current or future Liability whatsoever relating to
tax obligations of the Castle Entities, except as provided in Section 8.4 and
except for Liabilities for Taxes of the Acquired Corporation for periods
commencing on the Closing Date, (iii) any Liability whatsoever of the Sellers
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other than the Assumed Liabilities, whether arising prior to, on, or after the
Closing Date, whether or not known at the date hereof or on the Closing Date,
and whether or not identified in a Schedule to this Purchase Agreement, provided
that Castle shall not be liable for any such Liability to trade creditors of
IRLP for which it was not liable prior to the Closing, (iv) any Liability of the
Asset Sellers or any ERISA Affiliate related to any Indian Benefit Plan that
existed prior to or at Closing, maintained by, contributed to, or obligated to
be contributed to, at any time, by the Asset Sellers or any ERISA Affiliate
(other than the Indian 401(k) Plan and the DB Plan), and any Liability of the
Asset Sellers or any ERISA Affiliate related to any Title IV Plan or other
Benefit Plan other than the DB Plan and Trust, (v) any Liability of the Castle
Entities under any federal or state securities or similar laws, rules or
regulations with respect to any transactions, facts or circumstances (real or
alleged) occurring or existing prior to the Closing Date, (vi) any Liability
with respect to intracompany claims among the Castle Entities, except under the
Compliance Cost Agreement, (vii) any Liability relating to employment and/or
severance agreements, the WARN Act or any similar laws, rules or regulations,
options, stock appreciation rights and similar arrangements and/or rights
between any of the Castle Entities or any of their Affiliates and their
respective personnel, except as provided in Section 8.7, (viii) any Liability or
Damage of any party resulting from the failure of the Asset Sellers to use the
Asset Purchase Price in the manner set forth in the Escrow Agreement, (ix) any
Liability to BT Securities Corporation, its Affiliates, counsel,
representatives, consultants, employees or agents relating to previous "high
yield" or other financing and/or equity transactions with respect to the
Refinery, and (x) any Liability of Buyer or any Buyer Indemnitee resulting from
the use of the Refinery or the Terminal pursuant to Section 8.5 above except a
Liability referred to in this clause (x) directly caused by the gross negligence
or wilful misconduct of Buyer).
(b) Buyer shall indemnify and hold the Seller Indemnitees
harmless from and against any Damages suffered by them resulting from, arising
out of, or incurred with respect to, or (in the case of claims asserted against
any Seller Indemnitee by a third party) alleged to result from, arise out of, or
have been incurred with respect to (i) the falsity, breach, or inaccuracy of any
representation, warranty, covenant, or agreement of Buyer contained in this
Purchase Agreement or in any schedule, exhibit, document, or instrument
delivered in connection herewith, (ii) the Assumed Liabilities, (iii) any
Environmental Claims and (iv) any Liability of Buyer relating to tax obligations
of the Acquired Corporation for periods on and after the Closing Date.
Section 11.2 Procedures Relating to Indemnification. (a) A party (the
"indemnified party") seeking indemnification under this Purchase Agreement in
respect of, arising out of, or involving a claim or demand made by any Person
against the indemnified party (a "Third Party Claim") shall notify the
indemnifying party in writing of the Third Party Claim within 20 days after
receipt by the indemnified party of written notice of the Third Party Claim;
provided, however, that failure to give such notification shall not affect the
indemnification provided under this Purchase Agreement, except to the extent the
indemnifying party shall actually have been prejudiced by the failure.
Thereafter, the indemnified party shall deliver to the indemnifying party,
promptly after the indemnified party's receipt thereof, copies of all notices
and documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
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(b) The indemnifying party shall have the right, within 30
days after being so notified, to assume the defense of such Third Party Claim
with counsel reasonably satisfactory to the indemnified party. In any such
proceeding the defense of which the indemnifying party shall have so assumed,
the indemnified party shall have the right to participate therein and retain its
own counsel at its own expense unless (i) the indemnified party and the
indemnifying party shall have mutually agreed to the retention of such counsel,
(ii) the indemnified party shall have received a written opinion of counsel to
the effect that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying party,
or (iii) the named parties to any such proceeding (including the impleaded
parties) include both the indemnifying party and the indemnified party, and
representation of both parties by the same counsel would be inappropriate in the
opinion of the indemnified party's counsel due to actual or potential differing
interests between them; in any such case, such separate counsel may be retained
by the indemnified party at the indemnifying party's expense (provided that the
indemnifying party shall not be required to bear the fees and expenses of more
than one counsel (plus any local counsel as may be reasonably required) for each
group of similarly situated persons). To the extent that the settlement of such
a Third Party Claim, the defense of which has been assumed by the indemnifying
party, involves the payment of money only, the indemnifying party shall have the
right, in consultation with the indemnified party, to settle those aspects
dealing only with the payment of money, provided that the indemnifying party
pays such money and such settlement includes a general release from the other
parties to such Third Party Claim in favor of the indemnified party. In
connection with any such defense or settlement, the indemnifying party shall not
enter into a consent decree involving injunctive or non-monetary relief or
consent to an injunction without the indemnified party's prior written consent.
(c) With respect to all Third Party Claims, the indemnified
party shall cooperate in all reasonable respects with the indemnifying party in
connection with such claims and the defense or compromise of the claims. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information
reasonably relevant to the Third Party Claim, making employees available on a
mutually convenient basis to provide additional information, and explanation of
any material provided under this Purchase Agreement. If the indemnifying party
shall have assumed the defense of a Third Party Claim, the indemnified party
shall not, without first waiving the indemnity as to such claim, admit any
liability with respect to, or settle, compromise, or discharge, the Third Party
Claim, without the indemnifying party's prior written consent.
(d) The foregoing provisions of this Section 11.2 shall not
apply to matters covered by the provisions of Article VI to the extent that the
provisions of this Section 11.2 are inconsistent with the provisions of Article
VI.
Section 11.3 Defense of Third-Party Claim. The failure by the
indemnifying party to notify the indemnified party of its election to defend any
Third Party Claim within 30 days after written notice thereof shall have been
given to the indemnifying party shall be deemed a waiver by the indemnifying
party of its right to defend such Third Party Claim. If the indemnifying party
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shall not assume the defense of any such Third Party Claim, the indemnified
party may defend against and, subject to obtaining the consent of the
indemnifying party, which shall not be unreasonably delayed or denied, settle
such Third Party Claim in such manner as it may deem appropriate.
Section 11.4 Payment. The indemnifying party shall pay directly all
Damages or shall, if the indemnified party elects to pay any Damages directly,
promptly reimburse the indemnified party for any Damages paid by the indemnified
party that is the subject of an indemnification given under this Article XI. The
indemnifying party shall reimburse the indemnified party promptly upon demand
for the amount of any judgment rendered or settlement entered into with respect
to any Third Party Claim, the defense of which was not assumed by the
indemnifying party, and, promptly upon demand, for all Damages paid by the
indemnified party in connection with the defense against such Third Party Claim.
Section 11.5 Limitation on Indemnification. (a) An indemnified party
shall not be entitled to assert later than September 30, 1997 any right of
indemnification for any Damages suffered by it as a result of the falsity,
inaccuracy, or breach of any representation or warranty (but not the breach of
any covenant or agreement) by the indemnifying party set forth herein; provided
however, that (i) any claim with respect to the falsity, inaccuracy, or breach
of a representation or warranty with respect to (A) title to Assets may be
brought at any time or (B) Taxes may be brought at any time prior to 30 days
after the expiration of the applicable statute of limitations and (ii) if there
shall then be pending any claim for such indemnification hereunder which has
been asserted prior to the applicable date by the indemnified party with
reasonable specificity, the indemnified party shall continue to have the right
to be indemnified with respect thereto.
(b) A Buyer Indemnitee shall not be entitled to
indemnification hereunder for any Damages suffered by it as a result of the
falsity, inaccuracy, or breach of any representation or warranty by the Sellers
unless the aggregate amount of Damages suffered by all Buyer Indemnitees for all
such falsities, inaccuracies, and breaches exceeds $25,000, and then the Sellers
shall be responsible only for the amount of such Damages that exceeds $25,000.
(c) A Seller Indemnitee shall not be entitled to
indemnification hereunder for any Damages suffered by it as a result of the
falsity, inaccuracy, or breach of any representation or warranty by Buyer unless
the aggregate amount of Damages suffered by all Seller Indemnitees for all such
falsities, inaccuracies, and breaches exceeds $25,000, and then Buyer shall be
responsible only for the amount of such Damages that exceeds $25,000.
(d) The aggregate amount to which an indemnified party shall
be entitled to receive as indemnification under this Article XI shall be reduced
by the amount of all tax benefits or savings actually available to and utilized
by such party as a result of any loss, liability, cost, expense, or damage
giving rise to such indemnification.
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(e) Except as provided in Articles III, VI, and XIII, each of
the parties acknowledges and agrees that, from and after the date of this
Purchase Agreement, its sole and exclusive remedy with respect to any and all
claims relating to the subject matter of this Purchase Agreement shall be
pursuant to the indemnification provisions in this Article XI.
XII. CLOSING
Section 12.1 Time and Place. The closing of the Transactions (the
"Closing") shall take place at the offices of Latham & Watkins, 885 Third
Avenue, Suite 1000, New York, New York, as promptly as practicable after the
satisfaction or waiver of the conditions set forth herein, or at such other date
and place as may be agreed upon by the parties (the "Closing Date").
Section 12.2 Items to be Delivered by the Sellers. At the Closing, the
Sellers shall deliver in accordance with this Purchase Agreement, among other
things, the following:
(a) Certificates representing the Shares, duly endorsed in
blank or accompanied by appropriate stock powers for transfer of all right,
title, and interest in the Shares to Buyer.
(b) Such bills of sale and other instruments of transfer as
are necessary or reasonably requested for the transfer and conveyance to Buyer
of the Purchased Assets.
(c) A certificate, signed by an officer of each of Castle and
of each other Seller which is a corporation (on behalf of such corporation and
of any partnership of which such corporation is a general partner), stating that
the representations and warranties made by the Sellers in this Purchase
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on or given on and as of the Closing Date, that the Sellers have in all
material respects performed and complied with all of their obligations under
this Purchase Agreement which are to be performed or complied with by them prior
to or on the Closing Date, and that to the Knowledge of Sellers all conditions
to the obligations of Buyer to be performed hereunder have been satisfied or
waived. The delivery of such certificate shall be and constitute a
representation and warranty of each Seller as of the Closing Date to each of the
facts stated therein.
(d) A written opinion of counsel for the Sellers and IOC,
respectively, dated as of the Closing Date, addressed and reasonably
satisfactory to Buyer, covering the following matters:
(i) the corporate existence and good standing of Castle
and the corporate or partnership existence, and good standing of the Castle
Subsidiaries and IOC;
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(ii) the due authorization, execution, and delivery by
the Sellers of this Purchase Agreement, the Escrow Agreement and the other
agreements and instruments to be delivered by Sellers at Closing, and by IOC of
the Platinum Documents to which it is a party, and the legal, valid, and binding
effect of the Sellers' obligations hereunder and thereunder, and of IOC's
obligations under the Platinum Documents, enforceable against Seller in
accordance with the terms hereof and thereof, except as may be limited by Laws
affecting bankruptcy, insolvency, fraudulent conveyance, and creditors' rights
generally and subject to equitable principles and the discretion of a court to
grant equitable remedies;
(iii) the requisite corporate or partnership power and
authority of the Castle Subsidiaries and IOC to own and operate their respective
businesses;
(iv) the capitalization of the Acquired Corporation and
the other matters referred to in Section 4.5;
(v) that, subject to the receipt of the Required
Filings and Approvals, the execution and delivery of the Seller Documents and
the Platinum Documents do not, and the consummation of the Transactions
contemplated hereby and thereby will not, violate any provision of the
organizational documents of Castle, the Castle Subsidiaries or IOC, or any Law
to which the Castle Entities or IOC are subject or bound or, to the knowledge of
such counsel, result in the default or acceleration of any obligation or default
under any provisions of any Contract or Order known to such counsel to which
Castle or any of the Castle Subsidiaries or IOC is a party, or by which the
business of the Castle Subsidiaries or IOC is bound or encumbered; and
(vi) to the knowledge of such counsel, without
independent investigation, the existence of all Required Filings and Approvals
of the Castle Entities and IOC indicated as material Required Filings and
Approvals on the Schedules hereto.
(e) A certified copy of the duly adopted resolutions of the
Board of Directors of each Seller and IOC which is a corporation authorizing and
recommending the Transactions (on behalf of such corporation and of any
partnership of which such corporation is a general partner).
(f) A copy of each approval, consent, assignment, contract,
novation, release, or waiver, including the Required Filings and Approvals of
Castle, obtained by the Sellers in connection with the Transactions, and a
schedule of any Required Filings and Approvals of Castle that have not been
obtained.
(g) A duly executed and valid certificate of non-foreign
status in accordance with Section 1445 of the Code and the Treasury Regulations
thereunder.
(h) The Escrow Agreement duly executed by Castle and IRLP.
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(i) The Platinum Sale Documents duly executed by IOC.
(j) Such other documents, instruments, or certificates as
Buyer may reasonably request, including UCC-3 termination statements duly
executed by IOC and its assignees with respect to all Purchased Assets on which
they may have a Lien.
Section 12.3 Items to be Delivered by Buyer. At the Closing, Buyer
shall deliver, among other things:
(a) A certificate, signed by an officer of Buyer, stating
that the representations and warranties made by Buyer in this Purchase Agreement
are true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
or given on and as of the Closing Date, that Buyer has in all material respects
performed and complied with all of its obligations under this Purchase Agreement
which are to be performed or complied with by it prior to or on the Closing
Date, and that to the Knowledge of Buyer all conditions to the obligations of
Sellers to be performed hereunder have been satisfied or waived. The delivery of
such certificate shall be and constitute a representation and warranty of Buyer
as of the Closing Date to each of the facts stated therein.
(b) A written opinion of counsel for Buyer or Assignee, as
applicable, dated as of the Closing Date, addressed and reasonably satisfactory
to the Sellers, covering the following matters:
(i) the corporate existence and good standing of Buyer
and the partnership existence of Assignee, if applicable;
(ii) the due authorization, execution, and delivery by
Buyer of this Purchase Agreement, the Escrow Agreement and the other Buyer
Documents, and of the Platinum Documents, and the legal, valid, and binding
effect of Buyer's obligations hereunder and thereunder, enforceable against
Buyer in accordance with the terms hereof and thereof, except as may be limited
by Laws affecting bankruptcy, insolvency, fraudulent conveyance, and creditors'
rights generally and subject to the discretion of a court to grant equitable
remedies;
(iii) that, subject to the receipt of the Required
Filings and Approvals, the execution and delivery of this Purchase Agreement and
the other Buyer Documents, and of the Platinum Documents do not, and the
consummation of the Transactions will not, violate any provision of the
certificate of incorporation of Buyer or partnership agreement of Assignee, as
applicable, or any Law to which Buyer is known to such counsel to be subject or
bound (before giving effect to the Transactions to be consummated at Closing)
or, to the knowledge of such counsel, result in the default or acceleration of
any obligation or default under any provision of any Contract known to such
counsel to which Buyer is a party (before giving effect to the Transactions to
be consummated at Closing); and
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(iv) to the knowledge of such counsel, without
independent investigation,
the existence of all Required Filings and Approvals of Buyer indicated as
material Required Filings and Approvals on Schedule 5.3 hereto.
(c) The duly executed Seller Note, Mortgage and Escrow
Agreement.
(d) A certified copy of the duly adopted resolutions of the
Board of Directors of Buyer (or of the general partner of Assignee, if
applicable) authorizing the Transactions.
(e) A copy of each approval, consent, assignment, contract,
novation, release, or waiver, including the Required Filings and Approvals of
Buyer obtained by Buyer in connection with the Transactions and a schedule of
any Required Filings and Approvals of Buyer that have not been obtained.
(f) An agreement pursuant to which Buyer assumes the Assumed
Liabilities.
(g) The duly executed Platinum Sale Documents.
(h) Such other documents, instruments, and certificates as
Castle may reasonably request.
XIII. TERMINATION
Section 13.1 Termination. This Purchase Agreement may be terminated
and the purchase and sale of the Shares and Purchased Assets abandoned at any
time prior to the Closing Date:
(a) by mutual consent of Castle and Buyer;
(b) by Buyer, if by the Termination Date any of the
conditions provided in Article IX of this Purchase Agreement have not been met
and have not been waived in writing by Buyer, except as a result of the wilful
acts or omissions of Buyer; or
(c) by Castle, if by the Termination Date any of the
conditions provided in Article X of this Purchase Agreement have not been met
and have not been waived in writing by Castle, except as a result of the wilful
acts or omissions of Castle.
(d) The obligations contained in Sections 7.4, 8.2, 15.8 and
15.13 hereof shall survive any termination of this Purchase Agreement.
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Section 13.2 No Other Transaction. (a) Each of Castle and the Asset
Sellers hereby covenants with Buyer that it will not enter into, or commit to,
any transaction to sell or otherwise dispose of any of the Shares or the
Purchased Assets with any Person other than Buyer prior to the close of business
on the Termination Date. Upon execution of this Agreement the provisions of
clause (b) of the third paragraph of that certain letter of intent between
Castle and Gadgil Western America, Inc. dated November 9, 1995 shall be
superseded by the provisions of this Section 13.2.
(b) Subject to the controlling provisions of Section 13.2(a),
Buyer agrees that the Castle Entities and their Affiliates shall have the
complete right and authority to, and to authorize and permit their officers,
directors, employees, counsel, agents, investment bankers, accountants, or other
representatives to, directly or indirectly, (a) cooperate with, or, subject to
entering into a confidentiality agreement reasonable acceptable to Buyer with
such Person, furnish or cause to be furnished any non-public information
concerning the business, properties, or assets of the Castle Subsidiaries to,
any Person in connection with any Acquisition Proposal excluding, however, this
Purchase Agreement and its contents (unless otherwise required to be made
public); and (b) negotiate with any Person with respect to any Acquisition
Proposal; provided, however, that the Castle Entities and their Affiliates shall
not take, authorize, or permit any of their officers, directors, employees,
counsel, agents, investment bankers, accountants, or other representatives to,
directly or indirectly, at any time after the date hereof, initiate contact with
any Person in an effort to solicit any Acquisition Proposal; provided, that the
Castle Entities may take or permit any such action at any time when Castle is
permitted to terminate this Purchase Agreement pursuant to Section 13.1.
XIV. AMENDMENT AND WAIVER
Section 14.1 Amendment. This Purchase Agreement may be amended or
modified in whole or in part at any time by an agreement in writing executed in
the same manner as this Purchase Agreement.
Section 14.2 Extension; Waiver. At any time prior to the Closing Date,
either party hereto may:
(a) extend the time for the performance of any of the
obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, or
(c) waive compliance with any of the agreements or conditions
contained herein.
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Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing duly executed and delivered
on behalf of such party. The failure of any party hereto to enforce at any time
any provision of this Purchase Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this Purchase
Agreement or any part hereof or the right of such party hereafter to enforce
each and every such provision. No waiver of any breach of this Purchase
Agreement shall be held to constitute a waiver of any other or subsequent
breach.
XV. MISCELLANEOUS
Section 15.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, sent by Federal Express, Express Mail, or similar
overnight delivery or courier service, or delivered (in person or by telecopy,
telex, or similar communications equipment) against receipt to the party to whom
it is given, addressed as follows:
if to the Sellers, to:
Castle Energy Corporation
One Radnor Corporate Center
Suite 250
100 Matsonford Road
Radnor, Pennsylvania 19087
Attention: Joseph L. Castle, II, CEO
Telecopy No: (610) 995-0409
with a copy to:
Duane, Morris & Heckscher
One Liberty Street
Philadelphia, PA 19103
Attention: Sheldon M. Bonovitz, Esq.
Telecopy No: (215) 979-1020
if to Buyer, to:
Am West GP, Inc.
c/o Latham & Watkins
885 Third Avenue, Suite 1000
New York, NY 10022
Attention: Arun Chandrachud
Telecopy No: (212) 751-4864 and (011)(973) 697845
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with a copy to:
Latham & Watkins
885 Third Avenue
New York, NY 10022
Attention: Roger H. Kimmel, Esq.
Telecopy No: (212) 751-4864
or to such other address as the Person to whom notice is given may have
previously furnished to the other party in writing in accordance herewith.
Section 15.2 Governing Law. This Purchase Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
regard to its rules on conflicts of law.
Section 15.3 Successors and Assigns. This Purchase Agreement and the
Escrow Agreement shall not be assigned by any party without the written consent
of all other parties and any attempted assignment without such written consent
shall be null and void and without legal effect; provided that (a) Buyer may
assign this Agreement (and the Escrow Agreement) to Assignee and Buyer or
Assignee may assign its rights to purchase all or a portion of the Purchased
Assets and/or Shares to a wholly-owned subsidiary of Buyer or Assignee, as the
case may be, and (b) Buyer, Assignee or any such subsidiary may collaterally
assign its rights hereunder to any lenders providing financing. Upon assignment
of this Purchase Agreement to Assignee by Buyer, the term "Buyer", whenever used
in this Agreement, shall mean Assignee, unless the context otherwise requires.
This Purchase Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the Persons entitled to indemnity under Article XI.
Section 15.4 Partial Invalidity. In case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Purchase
Agreement, but this Purchase Agreement shall be construed as if such invalid,
illegal, or unenforceable provision or provisions had never been contained
herein unless the deletion of such provision or provisions would result in such
a material change as to cause completion of the Transactions to be unreasonable
or would materially and adversely frustrate the objectives of the parties as
expressed in this Purchase Agreement.
Section 15.5 Execution in Counterparts. This Purchase Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each of the parties and delivered to each of
the other parties.
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Section 15.6 Titles and Headings. Titles and headings to Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Purchase Agreement.
Section 15.7 Entire Agreement. This Purchase Agreement, together with
all schedules and exhibits hereto and any documents delivered pursuant to this
Purchase Agreement, contains the entire understanding of the parties hereto with
regard to the subject matter contained herein.
Section 15.8 Announcements. Announcements to the public, employees,
customers, or suppliers concerning the Transactions by the Sellers or Buyer
shall be subject to the approval of the other parties in all essential respects,
except that the approval by the other parties shall not be required as to any
statements and other information which a party may submit to any Governmental
Entity or is required to announce pursuant to any Law.
Section 15.9 Construction. The parties acknowledge that both parties
and their counsel have participated fully in the negotiation and preparation of
this Purchase Agreement and agree that, in any construction or interpretation of
this Purchase Agreement, no provision shall be construed against the interest of
either party on the basis that such party drafted such provision.
Section 15.10 Jurisdiction. Any action, suit, or proceeding arising
out of, based on, or in connection with this Purchase Agreement, or the
Transactions may be brought only in any United States District Court or
appropriate state court in the State of Delaware and each party covenants and
agrees not to assert, by way of motion, as a defense, or otherwise, in any such
action, suit, or proceeding, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that the action, suit, or proceeding is brought in an
inconvenient forum, that the venue of the action, suit, or proceeding is
improper, or that this Purchase Agreement or the subject matter hereof may not
be enforced in or by such court.
Section 15.11 Further Actions. At any time and from time to time, each
party hereto agrees, without further consideration, to take such actions and to
execute and deliver such documents as may be reasonably necessary to effectuate
the purposes of this Purchase Agreement and to more effectively carry out the
transfer of stock and assets, realization of assets, and assumption of
liabilities contemplated by this Purchase Agreement.
Section 15.12 Shell Litigation. (a) Until the Closing, Castle and IRLP
shall control the prosecution, defense and negotiation of any settlement of the
Shell Litigation, in each case with counsel of its choice, and Castle and IRLP
shall bear all Litigation Expenses with respect thereto incurred prior to the
Closing. Any settlement effected or judgment rendered in the Shell Litigation
prior to the Closing shall be solely for the account of Castle.
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(b) Upon and following the Closing, Buyer shall assume and
control the prosecution, defense and negotiation of any settlement of the Shell
Litigation, and shall bear all Litigation Expenses incurred after the Closing
with respect thereto. Any settlement effected or judgment rendered in the Shell
Litigation after the Closing shall be solely for the account of Buyer. Upon
request, all parties to the Shell Litigation that are controlled by Castle shall
execute, deliver and file any and all papers and documents as may be required to
effectuate the intent of this paragraph (b).
Section 15.13 Expenses. Each party hereto shall pay its own costs and
expenses incident to this Purchase Agreement and to action taken in preparation
for carrying this Agreement into effect.
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IN WITNESS WHEREOF, the parties hereto have caused this
Purchase Agreement to be duly executed as of the date and year first above
written.
AM WEST G.P., INC.
By: /S/ B. N. BANERJEE
---------------------------------
Title: B. N. BANERJEE, PRESIDENT
---------------------------------
CASTLE ENERGY CORPORATION
By: /S/ JOSEPH L. CASTLE
---------------------------------
Title:
---------------------------------
INDIAN REFINING I LIMITED PARTNERSHIP
By: INDIAN REFINING & MARKETING I INC.,
General Partner
By: /S/ WILLIAM S. SUDHAUS
---------------------------------
Title: WILLIAM S. SUDHAUS, CEO
---------------------------------
INDIAN REFINING & MARKETING I INC.
By: /S/ WILLIAM S. SUDHAUS
---------------------------------
Title: WILLIAM S. SUDHAUS, CEO
---------------------------------