1
EXHIBIT 2.2
================================================================================
ASSET PURCHASE AGREEMENT
By and Among
BP CORPORATION NORTH AMERICA INC.,
AMOCO OIL COMPANY
and
TESORO PETROLEUM CORPORATION
Dated as of
July 16, 2001
Relating to the
Purchase and Sale
of the Salt Lake City Refinery and Related Assets
================================================================================
2
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
1. PURCHASE AND SALE OF THE BUSINESS ...................................... 1
2. EXCLUDED ASSETS ........................................................ 4
3. DEPOSIT AND PURCHASE PRICE ............................................. 7
(a) Deposit .......................................................... 7
(b) Purchase Price ................................................... 8
(c) Closing Date Payments ............................................ 9
(d) Post-Closing Adjustment .......................................... 9
4. ASSUMPTION OF LIABILITIES .............................................. 9
(a) Assumed Liabilities .............................................. 9
(b) Excluded Liabilities ............................................. 11
5. CLOSING ................................................................ 13
6. SELLER'S REPRESENTATIONS AND WARRANTIES ................................ 15
(a) Organization and Good Standing ................................... 15
(b) Authority ........................................................ 15
(c) Consents ......................................................... 16
(d) No Breach ........................................................ 16
(e) Real Property .................................................... 16
(f) Brokers .......................................................... 17
(g) Machinery and Equipment .......................................... 17
(h) Compliance With Laws ............................................. 17
(i) Permits .......................................................... 17
(j) Intellectual Property ............................................ 18
(k) Actions and Proceedings .......................................... 18
(l) Collective Bargaining Agreements ................................. 18
(m) Assets ........................................................... 19
(n) Tangible Assets .................................................. 19
7. ENVIRONMENTAL MATTERS .................................................. 19
(a) Environmental Representations and Warranties ..................... 19
(b) Limitation ....................................................... 20
(c) Post-Closing Access of Seller .................................... 20
8. DISCLAIMERS ............................................................ 21
9. BUYER'S REPRESENTATIONS AND WARRANTIES ................................. 23
(a) Organization and Good Standing ................................... 23
</Table>
-i-
3
<Table>
(b) Authority of Buyer ............................................... 23
(c) Consents ......................................................... 23
(d) No Breach ........................................................ 23
(e) Litigation ....................................................... 24
(f) Brokers .......................................................... 24
(g) Availability of Funds ............................................ 24
(h) No Knowledge of Misrepresentations or Omissions .................. 24
10. COVENANTS ............................................................. 24
(a) Covenants of Seller .............................................. 24
(i) Access and Information .................................... 24
(ii) Conduct of Business ....................................... 25
(iii) Schedules ................................................. 25
(iv) Confidentiality ........................................... 26
(b) Covenants of Buyer ............................................... 27
(i) Confidentiality ........................................... 27
(ii) Notification .............................................. 28
(iii) Litigation ................................................ 28
(iv) Title Policies ............................................ 28
(v) Removal of Seller Marks ................................... 29
(vi) Project Sunshine Consent Decree ........................... 29
(c) Mutual Covenants ................................................. 29
(i) H-S-R ..................................................... 29
(ii) Assignments ............................................... 30
(iii) Transition Services Agreement ............................. 32
(iv) Other Governmental Approvals .............................. 32
(v) Other Actions ............................................. 32
(vi) Retail Marketing Facilities ............................... 32
(vii) Jobber Business ........................................... 33
11. EMPLOYEES ............................................................. 33
(a) Employees ........................................................ 33
(b) Employment Offers to Active Non-Union Employees and
to All Union Employees ........................................... 33
(c) Employment Offers to Non-Union Employees on Leave ................ 34
(d) Transfer Time .................................................... 34
(e) Level of Employee Benefits Provided by Buyer ..................... 34
(f) Pension Plans .................................................... 34
(g) Defined Contribution Pension Plans ............................... 35
(h) Welfare Benefits and Other Benefits and Policies ................. 35
(i) Vacation ......................................................... 35
(j) Severance ........................................................ 35
(k) Buyer's Adoption of Collective Bargaining Agreement .............. 36
(l) WARN Act ......................................................... 36
(m) Service Credit ................................................... 36
</Table>
-ii-
4
<Table>
(n) Benefits Miscellaneous ........................................... 36
12. BUYER'S OBLIGATION TO CLOSE ........................................... 36
(a) Compliance with Agreement ........................................ 36
(b) Representations and Warranties ................................... 37
(c) Litigation ....................................................... 37
(d) Governmental Consents ............................................ 37
13. SELLER'S OBLIGATION TO CLOSE .......................................... 37
(a) Compliance with Agreement ........................................ 37
(b) Representations and Warranties ................................... 37
(c) Litigation ....................................................... 37
(d) Governmental Consents ............................................ 38
14. FURTHER ASSURANCES .................................................... 38
15. INDEMNIFICATION ....................................................... 38
(a) Buyer's Indemnification of Seller ................................ 38
(b) Seller's Indemnification of Buyer ................................ 39
(c) Environmental Indemnifications ................................... 39
(d) Exclusive Remedy ................................................. 40
(e) Procedures Relating to Indemnification Among Buyer
and Seller ....................................................... 41
(f) Procedures Relating to Indemnification for
Third Party Claims ............................................... 41
(g) Losses Net of Insurance and Taxes ................................ 42
(h) Attorneys' Fees .................................................. 43
(i) Time Limitation .................................................. 43
(j) Monetary Limitation .............................................. 43
(k) Limitation of Liability .......................................... 43
(l) Environmental Remediation Monetary Limitation .................... 43
(m) Mitigation ....................................................... 44
(n) Losses ........................................................... 44
16. TAXES ................................................................. 44
17. RECORDS/LITIGATION ASSISTANCE ......................................... 44
18. TERMINATION RIGHTS .................................................... 45
19. SPECIFIC PERFORMANCE .................................................. 46
20. NOTICES ............................................................... 47
21. GOVERNING LAW; SUBMISSION TO JURISDICTION ............................. 48
</Table>
-iii-
5
<Table>
22. PUBLICITY ............................................................. 48
23. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES ................. 48
24. ENTIRE AGREEMENT ...................................................... 48
25. ASSIGNMENT ............................................................ 49
26. AMENDMENT AND WAIVER .................................................. 49
27. EXPENSES .............................................................. 49
28. HEADINGS .............................................................. 49
29. COUNTERPARTS .......................................................... 49
30. INTERPRETATION ........................................................ 50
31. NO STRICT CONSTRUCTION ................................................ 50
32. SCHEDULES ............................................................. 50
33. REPRESENTATION BY COUNSEL; INTERPRETATION ............................. 51
34. SEVERABILITY .......................................................... 51
35. BULK TRANSFER LAWS .................................................... 51
36. NO THIRD PARTY BENEFICIARIES .......................................... 51
37. DEFINITION OF AFFILIATE ............................................... 51
38. TIME OF ESSENCE ....................................................... 51
39. NO CONDITIONS ......................................................... 51
</Table>
-iv-
6
SCHEDULES
<Table>
<Caption>
SCHEDULE DESCRIPTION
-------- -----------
1(a) Major Refinery Equipment and Facilities
1(b) Refinery Real Property
1(c) Retail Marketing Assets
1(d) Retail Marketing Real Property
1(h) Terminal Assets
1(i) Terminal Real Property
1(j) Product Pipelines
1(k) Crude Pipelines
1(l) Diesel Pipeline
1(m) Contracts
1(p) Third-Party Process Technology Licenses
1(t) Jobber Business
2(c) Excluded Assets Related to Support and Other Services
2(n) Excluded Remediation Equipment
2(q) Other Excluded Assets
2(r) Excluded Contracts
2(t) Intercompany Agreements
4(b)(vii) Retained Environmental Liabilities
4(b)(viii) Other Retained Environmental Liabilities
6(c) Consents
6(d) No Breach
6(e)(i) Real Property Exceptions
6(g) Machinery and Equipment
6(h) Compliance
6(i) Permits
6(k) Actions and Proceedings
6(l) Collective Bargaining Agreements
6(m) Assets
7(a) Environmental Matters
10(a)(ii) Conduct of Business
11(a) Employees
11(k) Letter of Understanding-Successorship
</Table>
-v-
7
EXHIBITS
<Table>
<Caption>
EXHIBIT DESCRIPTION
------- -----------
A Methodology For Valuing Inventories
B Form of Technology Transfer and License Agreement
C Form of Deeds for Real Property
D Form of Transition Services Agreement
E Form of Product Offtake Agreement
</Table>
-vi-
8
INDEX TO DEFINED TERMS
<Table>
<Caption>
Term Page
---- ----
affiliate ................................................................. 51
Agreement ................................................................. 1
Amoco ..................................................................... 1
Asbestos-Related Liabilities .............................................. 10
Assumed Liabilities ....................................................... 9
Base Price ................................................................ 8
BP ........................................................................ 1
BP Group .................................................................. 4
BP RAP .................................................................... 34
BP Severance Plan ......................................................... 35
Business .................................................................. 1
Buyer ..................................................................... 1
Buyer Indemnified Parties ................................................. 39
Buyer Pension Plan ........................................................ 34
CBA ....................................................................... 36
CERCLA .................................................................... 11
Closing ................................................................... 13
Closing Date .............................................................. 13
Code ...................................................................... 14
Confidentiality Agreement ................................................. 24
Corrective Action ......................................................... 20
Crude Pipeline Agreements ................................................. 3
Crude Pipelines ........................................................... 3
Data ...................................................................... 24
Deposit ................................................................... 7
Deposit Return Event ...................................................... 7
Diesel Pipeline ........................................................... 3
Diesel Pipeline Agreements ................................................ 3
Disclosed Environmental Liabilities ....................................... 11
Employees ................................................................. 33
Environmental Permits ..................................................... 3
Excluded Assets ........................................................... 4
Excluded Liabilities ...................................................... 11
First Threshold ........................................................... 43
H-S-R Act ................................................................. 13
Health, Safety and Environmental Laws ..................................... 11
Hydrocarbon Inventories ................................................... 2
Indemnification Notice .................................................... 41
Indemnified Party ......................................................... 41
Indemnifying Party ........................................................ 41
Inventories ............................................................... 2
Jobber Business ........................................................... 4
knowledge ................................................................. 15
</Table>
-vii-
9
<Table>
Leave ..................................................................... 33
Licensee .................................................................. 20
Losses .................................................................... 44
Non-Hydrocarbon Inventories ............................................... 2
Non-Union Employees ....................................................... 33
Non-Union Transferred Employees ........................................... 33
Offering Memorandum ....................................................... 22
Offsite Environmental Liabilities ......................................... 13
ordinary course of business ............................................... 4
Owner ..................................................................... 20
Permits ................................................................... 3
Permitted Liens ........................................................... 17
Person .................................................................... 16
Personal Property ......................................................... 2
Product Pipeline Agreements ............................................... 3
Product Pipelines ......................................................... 3
Project Sunshine Consent Decree ........................................... 11
Purchase Price ............................................................ 8
Purchased Assets .......................................................... 1
Real Property ............................................................. 3
Refinery .................................................................. 1
Refinery Real Property .................................................... 1
Remediation Losses ........................................................ 39
Retail Marketing Assets ................................................... 1
Retail Marketing Facility ................................................. 2
Retail Marketing Real Property ............................................ 2
Retained Environmental Liabilities ........................................ 12
Second Threshold .......................................................... 43
Seller .................................................................... 1
Seller Indemnified Parties ................................................ 38
Seller Information ........................................................ 28
Seller Vacation Policy .................................................... 35
Seller's knowledge ........................................................ 15
Taxes ..................................................................... 5
Technology Agreement ...................................................... 3
Terminal Assets ........................................................... 2
Terminal Real Property .................................................... 3
Third Party Claim ......................................................... 41
Threshold ................................................................. 43
Transferred Employees ..................................................... 33
Transition Services Agreement ............................................. 32
Union ..................................................................... 33
Union Employees ........................................................... 33
Union Transferred Employees ............................................... 33
WARN Obligations .......................................................... 36
</Table>
viii
10
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT for the purchase and sale of
assets ("Agreement"), is made and entered into as of July 16, 2001, by and among
BP Corporation North America Inc., an Indiana corporation ("BP"), and Amoco Oil
Company, a Maryland corporation ("Amoco," and together with BP, "Seller"), on
the one hand, and Tesoro Petroleum Corporation, a Delaware corporation
("Buyer"), on the other hand.
WITNESSETH:
WHEREAS, upon and subject to the terms and conditions of this
Agreement, Seller wishes to sell its petroleum refining assets and certain
retail marketing assets located in the vicinity of Salt Lake City, Utah and
related assets as described below (the "Business") and certain liabilities, each
as further described in Sections 1 and 4, and Buyer wishes to purchase the
Business and to assume certain liabilities relating thereto, in each case upon
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises made
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby expressly acknowledged, and subject to the
conditions hereinafter set forth, the parties hereto agree as follows:
1. PURCHASE AND SALE OF THE BUSINESS. Subject to the terms and
conditions of this Agreement (including the provisions of Section 10(c)(ii)),
Seller agrees to sell, assign, convey, transfer and deliver, or cause such sale,
assignment, conveyance, transfer and delivery by Seller's affiliates, to Buyer,
as of the Closing Date, and Buyer agrees to purchase and take assignment and
delivery from Seller as of the Closing Date, of all of Seller's rights, title
and interest in the following assets relating to the Business (the "Purchased
Assets"):
(a) the refinery and related equipment and facilities of
Seller located in the vicinity of Salt Lake City, Utah, including the
process units, storage tanks, control houses, office buildings,
laboratory facilities, warehouses, boiler houses, waste water treatment
facilities and other similar facilities of such refinery, major items
of which are listed on Schedule 1(a) attached hereto (the "Refinery");
(b) the real property on which the Refinery is situated,
whether or not contiguous, owned by Seller and used in the operation of
the Business as it is currently operated by Seller, in each case as
more particularly described on Schedule 1(b) attached hereto,
including, subject to Section 2(j), the improvements to such real
property together with all appurtenances thereto and the fixtures
thereon (the "Refinery Real Property");
(c) the retail marketing assets and related equipment relating
to the thirty-three (33) retail marketing facilities of Seller located
in the vicinity of Salt Lake City, Utah, including all storage tanks,
gasoline pumps, automated and manual carwash facilities, air pumps,
motor vehicles and other similar equipment in each case as more
particularly described on Schedule 1(c) attached hereto (the "Retail
Marketing Assets");
11
(d) the real property on which the Retail Marketing Assets are
situated and used exclusively in the operation of the Business as it is
currently operated by Seller, in each case as more particularly
described on Schedule 1(d) attached hereto, including, subject to
Section 2(j), the improvements to such real property together with all
appurtenances thereto and fixtures thereon (the "Retail Marketing Real
Property and each individual location together with the related real
property, a "Retail Marketing Facility");
(e) the hydrocarbon inventories (the "Hydrocarbon
Inventories") of the Business (including any such inventories located
at the marketing terminals described in Section 1(h) or in the product
pipelines serving those marketing terminals, as described in Section
1(j)) as of the Closing Date (which shall be measured and valued in
accordance with Exhibit A attached hereto), including:
(i) all crude oil inventories at, or in transit to,
the Business where title has passed to Seller;
(ii) all crude oil inventories in the storage tanks
at the Business (it being expressly understood by the parties
hereto that all such hydrocarbon inventories shall consist of
the total contents thereof, regardless of whether above or
below the off-take pipe, including bottom sediment and water);
(iii) all refined and intermediate product
inventories at the Business; and
(iv) all additives at the Business;
but in all cases excluding all finished and unfinished products which
have left the Business and are en route to any customer (including the
BP Group) where title has passed to the customer;
(f) the non-hydrocarbon inventories of the Business as of the
Closing Date consisting of (i) the chemicals and catalyst inventories
located at the Business, (ii) the stores inventories, including
maintenance and capital spares and parts and (iii) any precious metals
and other Non-Hydrocarbon Inventories of the Business (collectively,
the "Non-Hydrocarbon Inventories," and together with Hydrocarbon
Inventories, the "Inventories");
(g) the machinery (including machinery related to the
utilities), vehicles and other personal property owned and used
exclusively in the operation of the Business as it is currently
operated by Seller (collectively, the "Personal Property");
(h) the marketing terminals, including all loading racks,
equipment, spares and additives located in Boise, Idaho and Burley,
Idaho, in each case as more particularly described on Schedule 1(h)
attached hereto (the "Terminal Assets");
(i) the real property on which the Terminal Assets are
situated and used exclusively in the operation of the Business as it is
currently operated by Seller, in each case as more particularly
described on Schedule 1(i) attached hereto, including, subject to
Section 2(j), the improvements to such real property together with all
appurtenances thereto and
2
12
fixtures thereon (the "Terminal Real Property" and collectively with
the Refinery Real Property and the Retail Marketing Real Property, the
"Real Property");
(j) subject to Section 2(j), Seller's interest in the six (6)
inch and eight (8) inch pipelines and all real property interests of
Seller used to transport petroleum products from the Refinery to the
Chevron Pipeline's Salt Lake Station, each as more particularly
described on Schedule 1(j) attached hereto (collectively, the "Product
Pipelines"), including, subject to Section 10(c)(ii), all assignable or
transferrable easements, rights-of-way, permits, licenses, leases and
other rights of access relating to the Product Pipelines (the "Product
Pipeline Agreements");
(k) subject to Section 2(j), Seller's interest in the ten (10)
inch and eight (8) inch pipelines and all real property interests of
Seller used to transport crude oil from the North Salt Lake Junction to
the Refinery, each as more particularly described on Schedule 1(k)
attached hereto (collectively, the "Crude Pipelines"), including and
subject to Section 10(c)(ii), all assignable or transferrable
easements, rights-of-way, permits, licenses, leases and other rights of
access relating to the Crude Pipelines (the "Crude Pipeline
Agreements");
(l) subject to Section 2(j), Seller's interest in the six (6)
inch pipeline and all real property interests of Seller used to
transport diesel fuel from the Refinery to the Roper Yard Terminal in
Salt Lake City, Utah, as more particularly described on Schedule 1(l)
attached hereto (the "Diesel Pipeline"), including and subject to
Section 10(c)(ii), all assignable or transferable easements,
rights-of-way, permits, licenses, leases and other rights of access
relating to the Diesel Pipeline (the "Diesel Pipeline Agreements");
(m) subject to Section 10(c)(ii), all assignable or
transferable rights and obligations of Seller under the supply,
distribution, exchange, collective bargaining and other agreements,
contracts, leases, licenses and similar instruments relating
exclusively to the Business as it is currently operated by Seller,
including those set forth on Schedule 1(m) attached hereto;
(n) subject to Section 10(c)(ii), all assignable or
transferable permits or licenses of Seller from any federal, state or
local regulatory agencies which are necessary to and used exclusively
in connection with the ownership and operation of the Business as it is
currently operated by Seller (collectively, the "Permits"), including
any approval, registration, authorization, certificate, certificate of
occupancy, consent, exemption, license, order or permit or other
similar authorization of or filing with any governmental authority
required by applicable Health, Safety and Environmental Laws in effect
on or prior to the Closing Date, as they are enforced with respect to
the Business, for the ownership or operation of the Business as it is
currently operated by Seller (collectively, the "Environmental
Permits"), provided that the Environmental Permits necessary to conduct
remediation activities associated with any Retained Environmental
Liabilities shall not be transferred to Buyer and shall not constitute
part of the Purchased Assets;
(o) subject to and in accordance with the Technology Transfer
and License Agreement attached hereto as Exhibit B (the "Technology
Agreement"), a nonexclusive, royalty-free license to use in the
operation of the Business as it is currently operated by Seller certain
technology, software, know-how and proprietary information owned by
Seller,
3
13
BP p.l.c. and/or its other direct or indirect subsidiaries and its
affiliates (together with Seller, the "BP Group"), whether patented or
unpatented, as more specifically described in the Technology Agreement;
(p) subject to Section 10(c)(ii) and subject to and in
accordance with the Technology Agreement, Seller's assignable or
transferable rights under the process technology licenses with third
parties listed on Schedule 1(p) attached hereto, all as are necessary
or used exclusively for the operation of the Business as it is
currently operated by Seller;
(q) subject to Section 2(f), all operating records and data in
possession of Seller or any other member of the BP Group and relating
exclusively to and necessary for the operation of the Business as it is
currently operated by Seller, including all books, records, cost and
pricing information, accounting records, supplier lists and records,
training materials and equipment, training records, maintenance and
inspection reports, equipment, lists, repair notes and archives;
(r) subject to Section 10(c)(ii) and in accordance with the
Technology Agreement, all assignable or transferable technical drawings
in possession of Seller located at the Business and relating
exclusively to and necessary for the operation of the Business as it is
currently operated by Seller; and
(s) all other assignable or transferable assets, active or
inactive, owned or leased by, or licensed to or used by Seller and
located at the Business and used exclusively in the operation of the
Business as it is currently operated by Seller; and
(t) all rights and obligations of Seller under the agreements,
contracts, leases, licenses and similar instruments relating to
Seller's jobber business, as more particularly described on Schedule
1(t) attached hereto (the "Jobber Business");
provided that the Purchased Assets shall not include the Excluded
Assets.
At any time and from time to time prior to the Closing, Seller
shall have the right to update and supplement the description of the
Purchased Assets (including the Schedules and Exhibits referred to
above) to reflect changes, including additions and deletions, occurring
in the ordinary course of business prior to the Closing. For purposes
of this Agreement, the term "ordinary course of business" shall include
all reasonably necessary actions taken in connection with, in
contemplation of or in preparation for, the sale of the Business, the
Closing and any other transaction contemplated by this Agreement so
long as such actions do not have a material adverse effect on the
Business, taken as a whole, as it is currently operated by Seller or
the Purchased Assets, taken as a whole.
2. EXCLUDED ASSETS. The Purchased Assets shall not include any assets
other than those specifically described in Section 1 above, and, without
limiting the generality of the foregoing, Seller (or, as applicable, other
members of the BP Group) shall retain and not sell, convey, transfer or deliver
to Buyer, and Buyer shall not purchase or have any rights in, the following
assets, each of which is specifically excluded from the Purchased Assets being
sold hereunder (collectively, the "Excluded Assets"):
4
14
(a) cash and cash equivalents (including marketable securities
and short-term investments);
(b) accounts and notes receivable and exchange balances due
from a third party as of 12:01 a.m., Central Time, on the Closing Date,
including payments for all finished and unfinished products which have
left the Business and are en route to any customer (including members
of the BP Group) prior to the Closing Date where title has passed to
the customer; provided that all accounts receivable with respect to any
Inventories included or to be included in the Purchased Assets shall
not be Excluded Assets;
(c) assets owned by other members of the BP Group not used
exclusively by Seller in the operation of the Business or not located
at the Business, including employee and other records (including
employee, personnel and medical records) necessary to administer
salaried payrolls and benefits and welfare plans retained by Seller or
other members of the BP Group and to file tax returns, assets related
to certain support services provided by the BP Group to the Business
including those described on Schedule 2(c) attached hereto and certain
other specified assets not located at the Business as described on
Schedule 2(c) attached hereto;
(d) the crude pipeline owned by members of the BP Group,
including all lateral pipelines and gathering lines attached thereto,
running to the Refinery and including the portion of the pipeline which
terminates at the pumping station at the Refinery;
(e) tax refunds arising out of all taxes, charges, fees,
imposts, duties, levies, withholdings or other assessments imposed by
any governmental entity, including environmental taxes, excise taxes,
customs, duties, utility, property, income, sales, use, value added,
transfer and fuel taxes, and any interest, fines, penalties or
additions to tax attributable to or imposed on or with respect to any
such assessment, including all applicable income, sales, use, excise,
business, occupation or other tax, if any, relating in any way to this
Agreement or any other service, supply or operating agreement
(collectively, "Taxes") relating to the Purchased Assets accruing to or
for any period, or portion thereof, ending prior to or on the Closing
Date;
(f) all forecasts, financial information or financial
statements and proprietary manuals (except rights to use manuals
specific to and necessary for the operation of the Business as it is
currently operated by Seller (as determined by Seller in its reasonable
discretion)) prepared by or used by Seller or another member of the BP
Group to the extent not relating exclusively to the Business and all
copies of and subscriptions to third-party reports;
(g) except as otherwise expressly provided in the Technology
Agreement, all proprietary BP Group computer systems and software;
(h) remediation equipment used primarily for investigation,
cleanup or treatment of contamination in the soil or groundwater at the
Business as listed on Schedule 2(h) attached hereto;
5
15
(i) defenses and claims that Seller could assert against third
parties, other than claims which Seller could assert on account of
matters or acts as to which Buyer has agreed to assume liability or as
to matters to the extent Buyer is entitled to be indemnified by Seller
pursuant to this Agreement;
(j) any assets, property improvements, appurtenances,
fixtures, equipment or goods located at the Business which are not
owned by Seller, including spare parts on consignment, certain
chemicals on consignment, leased nitrogen units, a leased desalter
unit, leased and rented mobile equipment, leased office equipment,
copiers, telephones and other leased items;
(k) to the extent not otherwise excluded, proprietary
information, intellectual property (including patents, inventions and
trade secrets (in each case whether patentable or not) and copyrights)
and technology of Seller and other members of the BP Group not used
exclusively in the operation of the Business as it is currently
operated by Seller or not otherwise assignable by Seller;
(l) all service marks, trademarks, trade names, trade dress or
other indicia of origin of Seller and other members of the BP Group and
variants thereof, including the following: the words "Amoco" and
"Standard," any items that include the words "Amoco" or "Standard," the
BP Group torch and oval design, the letters "BP," any items that
include the word "BP," the phrase "BP Oil," the BP Group shield or the
BP Group Helios logo and/or variants thereof;
(m) all books, documents, records and files prepared in
connection with or relating in any way to the transactions contemplated
by this Agreement, including bids received from other parties and
analyses relating in any way to the Purchased Assets, the Assumed
Liabilities and the Refinery;
(n) all rights of Seller and other members of the BP Group
under or pursuant to this Agreement and the other agreements and
transactions contemplated hereby;
(o) any assets, properties and rights of Seller and/or other
members of the BP Group not used exclusively in the operation of the
Business as it is currently operated by Seller;
(p) employment records, including personnel records and
medical records, relating to employees of the Business, and subject to
Section 11, all rights of Seller and other members of the BP Group and
any assets under employee benefit plans or trusts;
(q) the assets, property and property improvements,
appurtenances, fixtures, equipment, goods and rights listed on Schedule
2(q) attached hereto;
(r) the rights and obligations of Seller and other members of
the BP Group under any agreements, contracts, leases, licenses and
similar instruments that do not relate exclusively to the Refinery or
are not assignable by Seller, including those set forth on Schedule
2(r) attached hereto;
6
16
(s) any rights under or amounts payable from present or former
insurance policies applicable to the Business; and
(t) all arrangements, contracts, agreements, understandings or
commitments, whether written or oral by and among members of the BP
Group, other than those listed on Schedule 2(t) attached hereto (it
being understood that all such arrangements, contracts, agreements,
understandings or commitments will be terminated on or prior to
Closing).
To the extent that any Excluded Assets remain located at the Business
or any other owned or leased real property constituting part of the
Purchased Assets after the Closing Date, Buyer shall grant to Seller
and other members of the BP Group and their respective representatives
reasonable access to such property from and after the Closing Date for
a reasonable period of time not to exceed 180 days in order to permit
Seller and such persons to review and remove such Excluded Assets and
make any other appropriate arrangements with respect thereto. Seller
agrees that it will consult with Buyer in advance of taking any such
actions following the Closing Date with a view towards establishing a
mutually agreeable plan for such review and removal so that these
actions will not unreasonably interfere with the normal operation of
the Business.
3. DEPOSIT AND PURCHASE PRICE.
(a) Deposit. On the date hereof, Buyer shall pay to Seller (or
Seller's designee) in immediately available funds, by wire transfer to
an account designated by Seller, a non-refundable deposit against the
Purchase Price of certain of the Purchased Assets (excluding the Real
Property) in an amount equal to Twenty Million Dollars ($20,000,000)
(the "Deposit"). The Deposit shall be non-refundable in that it shall
not be returned to Buyer under any circumstances, unless this Agreement
shall be terminated by Buyer or by Seller, the Closing shall not have
occurred and a Deposit Return Event has occurred in which event Seller
shall transfer to Buyer, in immediately available funds by wire
transfer to an account designated by Buyer, a cash amount equal to the
Deposit plus interest thereon from the date on which the Deposit was
received by Seller through and including the date on which such payment
is made at a rate of 4% per annum. As used herein, the term "Deposit
Return Event" means the occurrence of any of the following:
(i) between the date hereof and the Closing Date,
there shall have occurred any damage, destruction or other
casualty losses with respect to the Purchased Assets that (A)
cause the Purchased Assets to become unusable or inoperable
and not capable of repair for a period of at least ninety (90)
days or (B) individually or in the aggregate, have an
estimated cost (as determined by Seller in good faith) to
repair or replace of more than Fifty Million Dollars
($50,000,000.00), that has not been substantially repaired or
rectified by Seller by the later of the Closing Date or within
ninety (90) days after Seller becomes aware of the existence
of such matter (provided, for the avoidance of doubt, that if
Seller elects to repair or rectify any such damage,
destruction or other casualty losses, Seller shall bear the
cost of any such repair or replacement);
7
17
(ii) each of Buyer and Seller mutually agree that the
closing condition set forth in Sections 12(d) and 13(d) has
become incapable of fulfillment and each of Buyer and Seller
have complied with the obligations of Section 10(c)(i);
(iii) this Agreement is terminated pursuant to
Section 18(a)(i); or
(iv) this Agreement is terminated by Buyer pursuant
to Section 18(a)(ii) (other than pursuant to Section 12(d)
which is covered under Section 3(a)(ii) above); provided,
however, that at the time of such termination, Buyer is not in
material breach of its representations, warranties, covenants
or agreements contained in this Agreement;
(v) this Agreement is terminated by Seller pursuant
to Section 18(a)(iv); provided, however, that at the time of
such termination, Buyer is not in material breach of its
representations, warranties, covenants or agreements contained
in this Agreement; or
(vi) this Agreement is terminated by Buyer pursuant
to Section 18(a)(v); provided, however, that at the time of
such termination, Buyer is not in material breach of its
representations, warranties, covenants or agreements contained
in this Agreement.
(b) Purchase Price. In consideration for the Purchased Assets,
Buyer shall pay, transfer and undertake to Seller as follows
(collectively, the "Purchase Price"):
(i) Buyer shall pay to Seller (or Seller's designee)
in cash:
(A) a base price of Three Hundred Sixty
Five Million Dollars
($365,000,000.00), representing the
value of the Purchased Assets
(excluding the value of the
Hydrocarbon Inventories) as of the
Closing Date (the "Base Price");
plus
(B) an amount equal to the estimated
market value of the Hydrocarbon
Inventories, as of the Closing
Date, as determined by Seller in
accordance with Exhibit A attached
hereto (provided that Seller shall
deliver such estimated market value
to Buyer at least two (2) business
days prior to the Closing Date);
minus
(C) an amount equal to any aggregate
adjustment made in accordance with
Section 10(c)(vi); minus
(D) an amount equal to any aggregate
adjustment made in accordance with
Section 10(c)(vii); and
(ii) Buyer shall assume and agree to pay and perform
and discharge when due the Assumed Liabilities.
8
18
For purposes of determining the market value of the
Hydrocarbon Inventories, all Hydrocarbon Inventories which are located
in storage tanks shall be valued as specified on Exhibit A based on the
total contents thereof, regardless of whether above or below the
off-take pipe, excluding only the bottom sediment and water (it being
expressly understood by the parties hereto, however, that such bottom
sediment and water shall constitute part of the Purchased Assets to be
transferred to Buyer).
(c) Closing Date Payments. On the Closing Date, Buyer shall
pay to Seller (or Seller's designee), in immediately available funds by
wire transfer to an account designated by Seller, the total of (i) the
amount equal to the Base Price plus (ii) the amount specified by
Section 3(b)(i)(B) above, minus (iii) any amount required by Section
3(b)(i)(C) above, minus (iv) any amount required by Section 3(b)(i)(D),
minus (v) an amount equal to the Deposit specified in Section 3(a)
above (which amount shall already have been paid by Buyer to Seller
upon the execution of this Agreement) plus interest thereon from the
date on which the deposit was received by Seller through and including
the Closing Date at a rate of 4% per annum.
(d) Post-Closing Adjustment. The Purchase Price shall be
subject to adjustment based on the final market value of the
Hydrocarbon Inventories as described in this Section 3(d). Within
thirty (30) days following the Closing Date, the final market value of
the Hydrocarbon Inventories as of the Closing Date shall be determined
by Seller and Buyer in accordance with procedures specified in Exhibit
A. If the final market value of the Hydrocarbon Inventories is greater
than the estimated market value of the Hydrocarbon Inventories
referenced in Section 3(b) above, Buyer shall pay to Seller an amount
equal to such difference, and if the final market value of the
Hydrocarbon Inventories is less than such estimated market value of the
Inventories, Seller shall pay to Buyer an amount equal to such
difference. In either case, such payment shall include interest from
the Closing Date through and including the date the payment is made at
a rate of 4% per annum, and such payment shall be made in immediately
available funds within five (5) business days after the determination
of the final market value of the Hydrocarbon Inventories.
4. ASSUMPTION OF LIABILITIES.
(a) Assumed Liabilities. As of the Closing Date, Buyer shall,
without any further action on the part of Buyer or Seller, assume and
agree to pay, perform and discharge, and indemnify, defend and hold
Seller and the other members of the BP Group harmless from, each of the
following liabilities (collectively, the "Assumed Liabilities")
(provided that the Assumed Liabilities shall not include the Excluded
Liabilities):
(i) all obligations, responsibilities, liabilities,
costs and expenses of whatever kind and nature, primary or
secondary, direct or indirect, absolute or contingent, whether
based in common law or statute or arising under written
contract or otherwise, known or unknown, liquidated or
unliquidated, real or potential, tangible or intangible,
whether or not accrued, caused by, arising out of, incurred in
connection with or relating in any way to the ownership of the
Purchased Assets or the operation of the Business now existing
or arising at any time prior to, on or after the Closing Date
as heretofore, currently or hereafter conducted. Without
limiting the generality of the foregoing in this subparagraph
(i), the Assumed Liabilities shall
9
19
include all obligations, responsibilities, liabilities, costs
and expenses of Seller and/or any other member of the BP Group
caused by, arising out of, incurred in connection with or
relating in any way to any of the following, prior to, on or
after the Closing Date:
(A) the Business (including the
Refinery, the Real Property, the
Inventories, the Terminal Assets,
the Product Pipelines and the
Personal Property);
(B) all of the agreements, contracts,
collective bargaining agreements,
leases, permits or similar
instruments, including easements,
rights-of-way and other rights of
access, constituting part of the
Purchased Assets;
(C) the Permits;
(D) except with respect to Hydrocarbon
Inventories, all accounts payable
and accrued liabilities relating to
goods and/or services provided to
the Business on or after the
Closing Date;
(E) the Transferred Employees to the
extent provided in Section 11;
(F) all actions, grievances,
arbitrations, suits, liabilities,
obligations, proceedings and
investigations of, relating to or
arising out of the business or
operations of the Business or any
of the Purchased Assets, including
those asserted under, relating to,
arising out of or incurred in
connection with Health, Safety and
Environmental Laws, other than the
Retained Environmental Liabilities;
and
(ii) other than the Retained Environmental
Liabilities and subject to any rights to indemnification Buyer
may have pursuant to Section 15, all obligations,
responsibilities, liabilities, costs and expenses caused by,
arising from, incurred in connection with or relating in any
way to the ownership of the Purchased Assets or the operation
of the Business under, relating to or otherwise required or
incurred to achieve or maintain compliance with Health, Safety
and Environmental Laws, as the same are in effect from time to
time, irrespective of whether the events or conditions giving
rise to such liabilities occurred prior to, on or after the
Closing Date, including (A) any and all obligations,
responsibilities, liabilities, costs and expenses caused by,
arising from, incurred in connection with or relating in any
way to the existence of asbestos and lead-based paint at, on
or within the Business or the Purchased Assets, including any
incidental contamination resulting therefrom (collectively,
the "Asbestos-Related Liabilities"), (B) any and all
obligations, responsibilities, liabilities, compliance costs
and expenses (whether presently realized or projected) caused
by, arising from, incurred in connection with or otherwise
relating in any way to the matters disclosed in that certain
URS report dated March 21, 2001, a copy of
10
20
which previously has been provided to Buyer, the Confidential
Information Memorandum or in any of the health, safety and
environmental records or reports of the Business previously
provided to Buyer (collectively, the "Disclosed Environmental
Liabilities") (C) any and all obligations, responsibilities,
liabilities, compliance costs and expenses relating to
governmental requirements including mandated clean-up, fines
and penalties and (D) any and all obligations,
responsibilities, liabilities, compliance costs and expenses
incurred in connection with, arising as a result of or
otherwise required to comply with those terms and conditions
of the Project Sunshine Consent Decree. As used in this
Agreement, "Project Sunshine Consent Decree" means that
certain consent decree among the United States of America
(including certain intervening state and local governments),
BP Exploration and Oil Co., Amoco Oil Company and Atlantic
Richfield Company, in Civil No. 2:96CV095 RL (N.D. IN), as the
same may be amended, supplemented or revised from time to
time.
As used in this Agreement, "Health, Safety and
Environmental Laws" means any and all past, present or future
local, state, and federal laws, principles of common law,
statutes, ordinances, regulations, rules, orders, permits,
standards or requirements (including consent decrees, judicial
decisions, judgments, injunctions and administrative orders
issued or approved thereunder), together with all related
amendments and implementing regulations and all common law,
pertaining to or regulating pollution, environmental
protection, health and safety of persons, pipeline safety,
natural resource damages, conservation of resources, wildlife,
waste management, the use, storage, generation, production,
treatment, emission, discharge, remediation, removal, disposal
or transport or any other activity related to a toxic or
hazardous substance, waste or material (including crude
petroleum and its fractions or derivatives thereof), or any
other environmental matter, including: the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et. seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901 et. seq.; the Toxic Substances Control Act, as amended,
15 U.S.C. Section 2601 et. seq.; the Clean Air Act, as
amended, 42 U.S.C. Section 7401 et. seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et.
seq.; the Safe Drinking Water Act of 1974, as amended, 42
U.S.C. Section 3009(f) et. seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001
et. seq.; the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Section 651 et. seq.; and the Hazardous
Liquid Pipeline Safety Act, as amended, 49 U.S.C. Section
60101 et. seq.
Buyer's obligations under this Section 4(a) shall not
be subject to offset or reduction by reason of any actual or alleged
breach by Seller of any representation, warranty or covenant contained
in this Agreement or any agreement or document delivered in connection
herewith or any right or alleged right to indemnification hereunder.
(b) Excluded Liabilities. The liabilities and obligations of
Seller and other members of the BP Group transferred to Buyer shall not
include the following (collectively, the "Excluded Liabilities"):
11
21
(i) any liability or obligation for Taxes (including
deficiencies, interest and penalties relating thereto)
accruing to or for any period ending on or prior to the
Closing Date, except to the extent provided otherwise in
Section 16;
(ii) any liability or obligation for any expenses
incurred in connection with the transactions contemplated by
this Agreement;
(iii) any brokerage or finder's fees payable by
Seller or any other member of the BP Group in connection with
the transactions contemplated by this Agreement;
(iv) any liability or obligation accruing prior to
the Closing Date for real property taxes and charges as
prorated in accordance with Section 16(b);
(v) any liability or obligation with respect to any
accounts payable and exchange balances owed to a third party,
in each case determined in accordance with generally accepted
accounting principles as in effect in the United States at the
Closing Date (notwithstanding anything to the contrary
contained in this Agreement, all accounts payable with respect
to any Inventories shall be Excluded Liabilities);
(vi) any liability or obligation in respect of
indebtedness for borrowed money;
(vii) the environmental liabilities or obligations
set forth on Schedule 4(b)(vii) attached hereto, all of which
are existing, have manifested themselves and are known to
Seller on or prior to the Closing Date (the "Retained
Environmental Liabilities"); and
(viii) those matters set forth on Schedule
4(b)(viii), all of which are existing, have manifested
themselves and are known to Seller on or prior to the Closing
Date.
(ix) except as otherwise provided in this Agreement,
all liabilities or obligations relating to any litigation,
threatened litigation or claims against Seller or any other
member of the BP Group to the extent attributable solely to
periods ending prior to the Closing Date, including those set
forth on Schedule 6(k) attached hereto; provided, that Buyer
shall provide Seller with reasonable access to (and permission
to take copies of) all records and reasonable access to all
relevant personnel of the Business in connection with the
defense of any such claims in accordance with the provisions
of Section 17 hereof;
(x) to the extent attributable solely to periods
ending prior to the Closing Date, all liabilities or
obligations with respect to third party personal injury or
wrongful death claims, including those arising under
Environmental, Health and Safety Laws, relating to the
pre-Closing operation of the Business; provided, that (i) this
clause shall not be deemed to include any liability or
obligation for property damage and (ii) Buyer shall provide
Seller with reasonable access to (and permission to take
copies of) all records and reasonable access to all relevant
personnel of the
12
22
Business in connection with the defense of any such claims in
accordance with the provisions of Section 17 hereof;
(xi) all liabilities or obligations relating to any
violations by Seller or other members of the BP Group of
antitrust laws prior to the Closing Date;
(xii) all liabilities or obligations arising under
Environmental, Health and Safety Laws with respect to the
disposal prior to the Closing Date by Seller or any member of
the BP Group (or by a third-party at the express direction of
Seller of any member of the BP Group) at any location other
than the Purchased Assets of hazardous materials generated as
a result of or in connection with the operation of the
Business (the "Offsite Environmental Liabilities");
(xiii) any responsibility for the payment of any
criminal sanctions against Seller or other members of the BP
Group imposed at any time arising from the operation of the
Purchased Assets prior to the Closing Date; provided that
Buyer shall provide Seller with reasonable access to (and
permission to take copies of) all records and reasonable
access to all relevant personnel of the Business in connection
with the defense of any such claims in accordance with Section
17 hereof; and
(xiv) any liability or obligation related to an
Excluded Asset.
5. CLOSING.
(a) Subject to the parties' satisfaction or waiver of the
conditions precedent set forth in Sections 12 and 13, the closing and
consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place at 10:00 a.m., Central Time, at the offices
of Kirkland & Ellis at 200 East Randolph Drive, Chicago, Illinois, on a
business day which is not later than five (5) business days after the
expiration of the waiting period, or any extension thereof (without
challenge), provided for in the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, as amended (the "H-S-R Act"), if a filing is required. The
date of the Closing is referred to herein as the "Closing Date."
(b) On the Closing Date, Seller shall deliver to Buyer the
following:
(i) duly-executed limited or special warranty deeds
for the Real Property, substantially in the form of Exhibit C
attached hereto, conveying fee simple title to such Real
Property subject to the Permitted Liens;
(ii) appropriately executed instruments of sale,
assignment, transfer and conveyance evidencing and effecting
the sale and transfer to Buyer of the Purchased Assets (it
being expressly understood by the parties hereto, however,
that such instruments shall not require Seller or any other
Person to make any additional representations, warranties or
covenants, express or implied, not contained in this
Agreement);
13
23
(iii) a certified copy of the resolution(s) adopted
by the Board of Directors of Seller authorizing the
transactions contemplated by this Agreement and authorizing
specified individuals to act on behalf of Seller in connection
therewith;
(iv) an incumbency certificate, duly executed by an
authorized officer of Seller attesting to the due appointment
and authorization of individuals signing this Agreement on
behalf of Seller, any agreement contemplated hereby or any
agreement related to the transactions contemplated hereby;
(v) a current certificate of BP's good standing in
Indiana and Amoco's good standing in Maryland, and BP's and
Amoco's qualification to do business and good standing in
Utah; and
(vi) the affidavit referred to in Section 1445(b)(2)
of the Internal Revenue Code of 1986, as amended, (the "Code")
in customary form.
(c) On the Closing Date, Buyer shall deliver to Seller the
following:
(i) the payments specified in Section 3(c) hereof;
(ii) instruments of assumption evidencing and
effecting the assumption by Buyer of the Assumed Liabilities
and such other documents as are required by this Agreement;
(iii) a certified copy of the resolution(s) adopted
by the Board of Directors of Buyer or its affiliates, as
appropriate, authorizing the transactions contemplated by this
Agreement and authorizing specified individuals to act on
behalf of Buyer herewith;
(iv) an incumbency certificate, duly executed by an
authorized officer of Buyer attesting to the due appointment
and authorization of individuals signing this Agreement on
behalf of Buyer, any agreement contemplated hereby or any
agreement related to the transactions contemplated hereby;
(v) a current certificate of Buyer's good standing in
the state of its incorporation and its qualification, or the
qualification of its wholly-owned subsidiary to which Buyer
directs that Seller convey the Purchased Assets, to do
business and good standing in Utah;
(vi) a modification to the Project Sunshine Consent
Decree, in a form satisfactory to Seller and the United States
of America, duly executed by an authorized officer of Buyer
(provided that such modification shall be for the purpose of
making Buyer a party thereto and shall not result in any
substantive changes in the obligations that Buyer is assuming
as compared to the obligations contained in the Project
Sunshine Consent Decree relating to the Purchased Assets as of
the Closing Date); and
14
24
(vii) evidence, in a form satisfactory to Seller, of
Buyer's acceptance of the CBA (as defined in Section 11(k)).
(d) On the Closing Date, Buyer and Seller shall each deliver
duly executed counterparts by the appropriate parties of the following:
(i) the Technology Agreement substantially in the
form of Exhibit B;
(ii) subject to Section 10(c)(iii), the Transition
Services Agreement substantially in the form of Exhibit D
attached hereto; and
(iii) a Product Offtake Agreement substantially in
the form of Exhibit E attached hereto.
(e) All of the transactions identified in this Section 5 shall
occur simultaneously, and none shall be deemed completed until all are
completed. Unless otherwise expressly provided for herein, all
transfers of assets and liabilities, as well as all other actions
related to the Closing, shall be deemed to have occurred at 12:01 a.m.,
Central Time, on the Closing Date.
6. SELLER'S REPRESENTATIONS AND WARRANTIES. Subject to the exceptions,
disclaimers and other matters set forth in this Section 6 and in Section 8
below, the matters set forth on the Schedules to this Agreement and any other
written disclosures made to Buyer at any time prior to the Closing Date, Seller
hereby represents and warrants to Buyer as of the date of this Agreement and as
of the Closing Date (except with respect to those representations and warranties
that speak as to a particular date or time, which need only be true and correct
as of such date or time) as set forth below. For purposes of this Agreement,
"knowledge," when used in the phrase "Seller's knowledge" in this Agreement
means, and shall be limited to, the actual knowledge (without independent
investigation) of the manager of the Refinery and the individuals acting as his
or her direct reports as of the date of this Agreement. Buyer understands that
none of such individuals is making any representations or warranties to Buyer
and that such individuals shall have no liability to Buyer in connection with
the matters covered in this Section 6.
(a) Organization and Good Standing. BP is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Indiana. Amoco is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland.
(b) Authority. Seller has the corporate power and authority to
enter into this Agreement and the transactions contemplated hereby and
to carry out its obligations hereunder. The execution, delivery and
performance of this Agreement and the transactions contemplated hereby
have been duly authorized and this Agreement has been duly executed and
delivered by Seller and constitutes a valid and binding agreement of
Seller enforceable against Seller in accordance with its terms, except
as such enforceability is limited by general principles of equity and
applicable provisions of bankruptcy, insolvency, moratorium,
reorganization or similar laws.
15
25
(c) Consents. Other than with respect to (i) the H-S-R Act,
(ii) obtaining the consents required in connection with certain
agreements, contracts, licenses, leases, easements, rights-of-way and
permits and (iii) Buyer's execution of a modification to the Project
Sunshine Consent Decree and the filing thereof with the U.S. District
Court upon Closing, in accordance with the terms and conditions of
paragraph six of the Project Sunshine Consent Decree, no consent,
approval of or by, or filing with or notice to any other individual,
corporation, partnership, association, trust, limited liability company
or any other entity or organization, including a government or
political subdivision or agency, unit or instrumentality thereof (a
"Person") is required with respect to Seller in connection with the
execution, delivery or enforceability of this Agreement or the
consummation of the transactions provided for hereby, except where the
failure to obtain such consent or approval, make such filing or give
such notice would not have a material adverse effect on the Business,
taken as a whole, as it is currently operated by Seller.
(d) No Breach. Subject to obtaining the consents required in
connection with certain agreements, contracts, licenses, leases,
easements, rights-of-way and permits and except for such matters as
would not have a material adverse effect on the Business, taken as a
whole, as it is currently operated by Seller, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby and the compliance by Seller with any of the
provisions hereof does not and will not (i) violate or conflict with,
or result in a breach of, any provisions of, or constitute a default
(or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in termination of, or accelerate
the performance required by, or result in the creation of any lien or
other encumbrance upon the Purchased Assets under any of the terms,
conditions or provisions of the Certificate of Incorporation or By-Laws
of Seller or under any material agreement, instrument or obligation to
which Seller is a party, or by which the Purchased Assets are otherwise
bound, or (ii) violate any order, injunction, judgment, decree or
award, federal, state, local or foreign law, ordinance, statute, rule
or regulation.
(e) Real Property.
(i) Title to the Real Property is owned in fee by
Seller and, when transferred to Buyer, shall be good and
marketable, free and clear of all liens and encumbrances,
except for: (A) such items as are set forth on Schedule
6(e)(i) attached hereto or the other Schedules attached
hereto; (B) mechanics', carriers', workmen's, repairmen's or
other like liens arising or incurred in the ordinary course of
business, liens arising under original purchase price
conditional sales contracts and equipments leases with third
parties entered into in the ordinary course of business, liens
for taxes and other governmental charges which are not due and
payable or which may thereafter be paid without penalty or
which are being contested in good faith and liens relating to
environmental or safety conditions, including the Retained
Environmental Liabilities; (C) other imperfections of title,
restrictions or encumbrances, if any, which imperfections of
title, restrictions or encumbrances do not, individually or in
the aggregate, materially adversely impair the continued use
and operation of the assets to which they relate in the
operation of the Business as currently conducted by Seller;
(D) easements, covenants, conditions, rights-of-way, minor
title exceptions and other similar restrictions; (E) any
conditions that would be shown on an accurate survey or upon a
personal inspection of the Real Property;
16
26
(F) existing leases, licenses and similar agreements; (G)
zoning, building, fire, health, environmental and pollution
control laws, ordinances, rules and safety regulations and
other similar restrictions; (H) the rights of the owners of
outstanding oil, gas and mineral interests and/or their
lessees, to explore for, drill, produce and develop said oil,
gas and minerals owned by them in, on and under said lands,
together with the right to use as much of the surface of said
lands as is reasonably necessary to exercise their rights to
explore for and extract said oil, gas and minerals from said
lands; (I) the exposure restrictions contained in the deeds
attached hereto as Exhibit C; (J) acts done or suffered to be
done by, and judgments against, Buyer and those claiming by,
through or under Buyer (collectively, (A) through (J) are
referred to herein as the "Permitted Liens").
(ii) Subject to the Disclosed Environmental
Liabilities, to Seller's knowledge, all water, sewer, gas,
steam, electric, telephone and drainage facilities and all
other utilities necessary for the operation of the Real
Property as it is currently operated by Seller are adequately
available to service the Real Property.
(iii) To Seller's knowledge, the Real Property has
access to a public street adjoining the Real Property, and
such access is not dependent on any land or other real
property interest which is not included in the Real Property.
(iv) There are no Permitted Liens that would have a
material adverse effect on the Business, taken as a whole, as
it is currently operated by Seller.
(f) Brokers. Seller has not retained any broker or finder or
incurred any liability or obligation for any brokerage fees,
commissions, finder's fees or similar compensation with respect to this
Agreement or the transactions contemplated hereby, except pursuant to
an agreement with Rothschild Inc., for which Seller or another member
of the BP Group will be solely responsible.
(g) Machinery and Equipment. Other than with respect to items
leased from third parties, Seller has, and as of the Closing Buyer will
have, valid title to all major items of machinery and equipment
included in the Purchased Assets free and clear of all liens and
encumbrances, except for Permitted Liens.
(h) Compliance With Laws. To Seller's knowledge, other than
with respect to Health, Safety and Environmental Laws (which are
addressed in Section 7), the Purchased Assets are in compliance in all
material respects with all laws, governmental regulations, orders and
decrees, as they are currently enforced with respect to the operation
of the Business by Seller, except for violations, non-compliance or
other matters, if any, which would not have a material adverse effect
on the operation of the Business, taken as a whole, as it is currently
operated by Seller.
(i) Permits. Seller possesses all Permits, licenses and
governmental approvals necessary for the operation of the Business,
taken as a whole, as it is currently operated by Seller, except (i) for
Environmental Permits (which are addressed in Section 7) and (ii) for
such Permits, licenses and other governmental approvals the failure to
possess would not,
17
27
individually or in the aggregate, have a material adverse effect on the
Business, taken as a whole, as it is currently operated by Seller.
(j) Intellectual Property.
(i) BP Group-Owned Process Technology. Seller or
another member of the BP Group has the right to use, and to
license to Buyer pursuant to the Technology Agreement, the
material BP Group-owned process technology that is used in and
necessary for the operation of the Business as it is currently
operated by Seller, except for any technology which would not
have a material adverse effect on the operation of the
Business, taken as a whole, as it is currently operated by
Seller.
(ii) Non-BP Group-Owned Process Technology. Schedule
1(p) attached hereto contains a true, correct and complete
list of all material process technology (which does not
include software and related intellectual property matters)
not owned by the BP Group that is used in and necessary for
the operation of the Business as it is currently operated by
Seller. To Seller's knowledge, Seller has not received any
notices of, and is not aware of any facts that indicate a
likelihood of, any infringement by Seller of any of such
non-BP Group-owned process technology rights due to the
operation of the Business as it is currently operated by
Seller.
(k) Actions and Proceedings. Except for such matters as would
not have a material adverse effect on the operation of the Business,
taken as a whole, as it is currently operated by Seller, and except as
set forth on the Schedules attached hereto:
(i) there is no action, suit, arbitration proceeding
or claim pending, or to Seller's knowledge, threatened against
Seller and/or any other member of the BP Group involving or
affecting the Purchased Assets, and, other than Permitted
Liens, except as set forth in Section 7, there are no decrees,
injunctions, liens, orders or judgments of or with any court
or governmental department or agency outstanding against
Seller and/or any other member of the BP Group relating to or
affecting the Purchased Assets;
(ii) no action, suit, arbitration or regulatory
proceeding is pending, or to Seller's knowledge, threatened
seeking to restrain or prohibit this Agreement or any
agreement, instrument or transaction contemplated hereby, or
to obtain damages, a discovery order or other relief in
connection with this Agreement or the transactions
contemplated hereby; and
(iii) there is no pending or to Seller's knowledge,
threatened condemnation or other governmental taking of any of
the Real Property included in the Purchased Assets.
(l) Collective Bargaining Agreements. Schedule 6(l) attached
hereto sets forth each collective bargaining agreement, contract
extension agreement, memorandum of agreement and letter of
understanding by or to which any of the Union Employees (as defined in
Section 11(a)) is covered or subject.
18
28
(m) Assets. Except for (i) assets disposed of in the ordinary
course of business subsequent to the date hereof, (ii) Excluded Assets,
(iii) pipeline rights of way, permits, licenses and other property
rights, and (iv) assets set forth on Schedule 6(m), the Purchased
Assets and the assets, properties and rights provided to Buyer pursuant
to this Agreement and the other agreements contemplated hereby, include
all material assets, other than the intellectual property assets and
leases and licenses and other contracts that are not transferable, and
which are reasonably required to operate the Business immediately
following the Closing Date substantially in the manner in which the
Business is currently conducted by Seller, except for such assets the
failure of which to include would not individually or in the aggregate,
have a material adverse effect on the Business, taken as a whole, as it
is currently operated by Seller.
(n) Tangible Assets. The Purchased Assets, excluding all
rights-of-way, permits, licenses, leases and other rights of access
relating to the Product Pipelines and the Crude Pipelines, are free
from material defects, have been maintained substantially in accordance
with normal industry practice, and are in substantially good operating
condition and repair for their age (taking account of their nature,
normal wear and tear and continued repair and replacement in accordance
with Seller's past practice).
7. ENVIRONMENTAL MATTERS.
(a) Environmental Representations and Warranties. Subject to
the exceptions, disclaimers and other matters set forth in Section 6
above and Section 8 below, the matters set forth on the Schedules
attached hereto, the Disclosed Environmental Liabilities and any other
written disclosures made to Buyer at any time prior to the Closing
Date, to Seller's knowledge, as of the date hereof and as of the
Closing Date:
(i) all Environmental Permits necessary for the
operation of the Business as it is currently operated by
Seller have been obtained and are in effect and, where
applicable, applications for renewal thereof have been timely
filed, except where the failure to obtain such Environmental
Permits or have them in effect or file for such renewals would
not, individually or in the aggregate, have a material adverse
effect on the Business, taken as a whole, as it is currently
operated by Seller;
(ii) all environmental control equipment necessary
for the operation of the Business as it is currently operated
by Seller is in substantial compliance with Health, Safety and
Environmental Laws, as they are currently enforced with
respect to the operation of the Business by Seller, is
installed at the Business, and such equipment is operating in
a manner sufficient to achieve and maintain such compliance
under normal operating conditions, except where the failure to
be in such compliance would not have a material adverse effect
on the Business, taken as a whole, as it is currently operated
by Seller; and
(iii) there are no existing or known violations of
Health, Safety and Environmental Laws, as they are currently
enforced with respect to the operation of the Business by
Seller, which, individually or in the aggregate, would have a
material
19
29
adverse effect on the Business, taken as a whole, as it is
currently operated by Seller.
(b) Limitation. The representations and warranties set forth
in this Section 7A represent the sole and exclusive representations and
warranties of Seller with respect to health, safety or environmental
matters, including any matters arising under or relating to Health,
Safety and Environmental Laws.
(c) Post-Closing Access of Seller.
(i) From and after the Closing, Buyer and, if
applicable, its designated representatives (collectively,
"Owner") shall permit complete access to and entry upon the
Business and other Purchased Assets by Seller and other
members of the BP Group and their respective representatives
(collectively, "Licensee"), without charge, as necessary (as
determined by Licensee in its sole and absolute discretion) to
conduct and complete any corrective or remedial actions
relating to any Retained Environmental Liabilities and any
other matters for which Seller shall be responsible under this
Agreement (each a "Corrective Action"). In the event of and as
a condition to a subsequent sale, lease or other transfer of
the Business and/or other Purchased Assets, Buyer shall
require that Buyer's transferee agree (in a form satisfactory
to Seller) to the access provisions of this Section 7(c). Such
access shall, where necessary, include access to utility
connections, easements for installation of treatment
facilities and associated pipelines and utilities and
connections and use of wastewater treatment facilities. Seller
shall pay Buyer a reasonable fee covering Buyer's reasonable
direct and indirect costs actually incurred for such utility
and treatment facility use and such access shall be done in a
manner so as not to unreasonably interfere with Buyer's
operation of the Business. Buyer shall cooperate in good faith
with Seller in all respects to ensure adequate and cost
effective performance of any Corrective Action.
(ii) Except in the event of an emergency (in which
case no notice shall be required), Licensee shall provide
Owner with at least five (5) days notice prior to beginning
any drilling, construction and equipment installation, as well
as other activity that may disrupt normal business operations
at the Business or other Purchased Assets.
(iii) Owner shall use its commercially reasonable
efforts not to unreasonably interfere with the Licensee while
Licensee exercises its rights of access, including ingress and
egress, to perform the Corrective Action.
(iv) Owner, at its cost, shall maintain and provide
Licensee with access to any ground water monitoring wells used
to satisfy obligations pursuant to Permits relating to
hazardous waste.
(v) Upon completion of a Corrective Action, and
except as the Corrective Action may require a change in the
appearance or condition of a portion of the Real Property or
other Purchased Assets, Licensee shall use all commercially
reasonable efforts to restore the Real Property or Purchased
Assets to substantially the same
20
30
condition which existed immediately prior to the commencement
of the Corrective Action.
(vi) Licensee shall provide to Owner copies of
non-privileged final reports, drawings, maps, appropriate
project, operating and maintenance files, correspondence with
any governmental authority, and sampling data related to, or
which result from, any Corrective Actions at the Business or
other Purchased Assets. Owner shall provide to Licensee copies
of any correspondence with or between Owner and any applicable
governmental authority which involves or relates to any
matters described in this Agreement or which could impact
Licensee's Corrective Actions at the Business or other
Purchased Assets. Upon Licensee's request, Owner shall provide
Licensee with such non-privileged final reports, drawings,
maps and appropriate project, operating and maintenance
records as may be useful for Licensee to examine to determine
whether operation of the Business or other Purchased Assets
has changed after the Closing Date, and whether contamination
is or may be the result of operations at the Business or other
Purchased Assets on or after the Closing Date. Owner shall
permit Licensee to examine and copy such financial records as
may be useful in determining the reasonableness of
expenditures for which Indemnity or reimbursement is claimed.
(vii) Prior to and during a Corrective Action,
Licensee shall take all steps which are reasonably necessary
to prevent injury to persons or damage to property resulting
from or in any way connected with the Corrective Action.
(viii) Licensee shall indemnify the Owner against any
and all Losses incurred by Owner, in connection with actions
that Licensee performs on the Business or any other Purchased
Assets.
(ix) Owner shall pay any and all costs, claims, rents
or charges which Licensee may incur if reasonable access to
the Business or any other Purchased Asset is not granted in
accordance with this Agreement.
(x) Owner agrees to be responsible and reimburse
Licensee for any damage or loss that Owner, its employees,
agents, lessees, occupants of the Business or any other
Purchased Assets, contractors, successors or assigns cause,
whether sole, joint or concurrent, to any test or monitoring
well, remediation equipment and/or associated piping, or any
other property or equipment installed or otherwise used by
Licensee in connection with a Corrective Action.
(xi) All equipment installed or used in the course of
Corrective Action shall remain the property of Licensee, and
may be removed upon completion of the Corrective Action.
8. DISCLAIMERS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE INSTRUMENTS, DOCUMENTS AND AGREEMENTS REFERRED TO HEREIN OR
EXECUTED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY:
21
31
(a) NEITHER SELLER NOR ANY OTHER MEMBER OF THE BP GROUP MAKES
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, WITH RESPECT TO ITSELF, THE BUSINESS, THE
REFINERY, THE PURCHASED ASSETS, THE ASSUMED LIABILITIES OR ANY PORTION
THEREOF, AND SELLER AND THE OTHER MEMBERS OF THE BP GROUP EXPRESSLY
DISCLAIM ANY IMPLIED WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ORDINARY PURPOSE
OR ANY REPRESENTATION OR WARRANTY AS TO VALUE;
(b) THE PURCHASED ASSETS, INCLUDING THE BUSINESS AND ANY OTHER
ASSETS TRANSFERRED TO BUYER PURSUANT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT ARE BEING TRANSFERRED "AS IS, WHERE IS"AND "WITH ALL
FAULTS" AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF;
(c) NEITHER SELLER NOR ANY OTHER MEMBER OF THE BP GROUP MAKES
ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE CONDITION OF THE
BUSINESS, INCLUDING ANY OF THE PURCHASED ASSETS, THE MERCHANTABILITY OF
THE BUSINESS, INCLUDING THE PURCHASED ASSETS, THE FITNESS OF ANY ASSETS
FOR ANY PURPOSE OR THE ASSIGNABILITY, COMPLETENESS OR CONTIGUITY OF
PIPELINE RIGHTS OF WAY, PERMITS, LICENSES AND OTHER PROPERTY RIGHTS,
AND SELLER AND THE OTHER MEMBERS OF THE BP GROUP EXPRESSLY DISCLAIM ANY
AND ALL SUCH REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE;
(d) BUYER EXPRESSLY ACKNOWLEDGES THAT NONE OF SELLER, ANY
OTHER MEMBER OF THE BP GROUP OR ANY OTHER PERSON HAS MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, AS
TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE
BUSINESS, THE PURCHASED ASSETS OR THE ASSUMED LIABILITIES, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE SCHEDULES HERETO, AND
BUYER FURTHER AGREES THAT NONE OF SELLER, ANY OTHER MEMBER OF THE BP
GROUP OR ANY OTHER PERSON SHALL HAVE OR BE SUBJECT TO ANY LIABILITY TO
BUYER OR ANY OTHER PERSON RESULTING FROM THE DISTRIBUTION TO BUYER, OR
BUYER'S USE OF, ANY SUCH INFORMATION, INCLUDING THE CONFIDENTIAL
INFORMATION MEMORANDUM, DATED AS OF FEBRUARY 2001 (THE "OFFERING
MEMORANDUM"), AND ANY INFORMATION, DOCUMENT OR MATERIAL MADE AVAILABLE
TO BUYER IN CERTAIN "DATA ROOMS," MANAGEMENT PRESENTATIONS OR ANY
OTHER FORM IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT; AND
(e) BUYER EXPRESSLY ACKNOWLEDGES THE DISCLAIMERS OF SELLER AND
THE OTHER MEMBERS OF THE BP GROUP, INCLUDING (I)
22
32
THOSE SET FORTH IN SECTIONS 8(a), 8(b), 8(c) AND 8(d) ABOVE AND (II)
THAT THERE ARE UNCERTAINTIES INHERENT IN ANY ESTIMATES, PROJECTIONS AND
OTHER FORECASTS AND PLANS PROVIDED BY SELLER AND OTHER MEMBERS OF THE
BP GROUP TO BUYER, INCLUDING ANY SUCH INFORMATION CONTAINED IN THE
OFFERING MEMORANDUM, THAT BUYER IS AWARE OF AND FAMILIAR WITH SUCH
UNCERTAINTIES AND THAT BUYER TAKES FULL RESPONSIBILITY FOR MAKING ITS
OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ANY SUCH ESTIMATES,
PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS
OF THE ASSUMPTIONS UNDERLYING SUCH ESTIMATES, PROJECTIONS AND
FORECASTS) IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. ACCORDINGLY, NEITHER SELLER NOR ANY OTHER MEMBER OF THE BP
GROUP MAKES ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO SUCH
ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE
REASONABLENESS OF THE ASSUMPTIONS UNDERLYING SUCH ESTIMATES,
PROJECTIONS AND FORECASTS). BUYER ACKNOWLEDGES THAT IT HAS HAD
SUFFICIENT OPPORTUNITY TO MAKE WHATEVER INVESTIGATION IT HAS DEEMED
NECESSARY AND ADVISABLE FOR PURPOSES OF DETERMINING WHETHER OR NOT TO
ENTER INTO THIS AGREEMENT.
9. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby represents and
warrants to Seller as of the date of this Agreement and as of the Closing Date
(except with respect to those representations and warranties that speak as to a
particular date or time, which need only be true and correct as of such date or
time) as set forth below:
(a) Organization and Good Standing. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Delaware.
(b) Authority of Buyer. Buyer has the corporate power and
authority to enter into this Agreement and the transactions
contemplated hereby and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly authorized and this
Agreement has been duly executed and delivered by Buyer and constitutes
a valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms, except as such enforceability is limited by
general principles of equity and applicable provisions of bankruptcy,
insolvency, moratorium, reorganization or similar laws.
(c) Consents. Other than with respect to the H-S-R Act, no
consent, approval of or by, or filing with or notice to any other
Persons is required with respect to Buyer in connection with the
execution, delivery or enforceability of this Agreement or the
consummation of the transactions provided for hereby.
(d) No Breach. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and the
compliance by Buyer with any of the provisions hereof does not and will
not: (i) violate or conflict with, or result in a breach of, any
provisions of, or constitute a default (or an event which, with notice
or lapse
23
33
of time or both, would constitute a default) under, or result in
termination of, or accelerate the performance required by any of the
terms, conditions or provisions of the Certificate of Incorporation or
By-Laws or other organizational documents of Buyer or under any
material agreement, instrument or obligation to which Buyer is a party
or (ii) violate any order, injunction, judgment, decree or award,
federal, state, local or foreign law, ordinance, statute, rule or
regulation.
(e) Litigation. No action, suit, arbitration or regulatory
proceeding is pending or, to Buyer's knowledge, threatened seeking to
restrain or prohibit this Agreement, or any agreement, instrument or
transaction contemplated hereby, or to obtain damages, a discovery
order or other relief in connection with this Agreement or the
transactions contemplated hereby.
(f) Brokers. Buyer has not retained any broker or finder or
incurred any liability or obligation for any brokerage fees,
commissions, finders' fees or similar compensation with respect to this
Agreement or the transactions contemplated hereby, except pursuant to
an arrangement with Lehman Brothers Inc., for which Buyer is solely
responsible.
(g) Availability of Funds. Buyer has cash available to enable
it to consummate the transactions contemplated by this Agreement, to
operate the Business for the reasonably foreseeable future and to meet
the Business's financial obligations as such are presently known or
reasonably anticipated.
(h) No Knowledge of Misrepresentations or Omissions. Buyer has
no knowledge that any representation or warranty of Seller in this
Agreement or any agreement contemplated hereby is not true and correct
in all material respects, and Buyer has no knowledge of any material
errors in, or material omissions from, the Schedules to this Agreement
or the schedules, exhibits or attachments to any agreement contemplated
hereby.
10. COVENANTS.
(a) Covenants of Seller. Seller covenants and agrees as
follows:
(i) Access and Information. Subject to the provisions
of the letter agreement between Buyer and Seller with respect
to confidentiality dated on or about December 12, 2000 (the
"Confidentiality Agreement") and upon reasonable notice,
Seller shall grant, or cause to be granted to, Buyer access
during normal business hours throughout the period between the
date of this Agreement and the Closing Date to the Business
and the books and records and other information relating to
the operations of the Business. During this period, Seller
shall use all commercially reasonable efforts to furnish, or
cause to be furnished to, Buyer and its representatives all
data and information concerning the Business (the "Data") and
concerning operations of the Business which may reasonably be
requested by Buyer and shall use all commercially reasonable
efforts to make available, or cause to be made available, such
personnel of Seller as may reasonably be requested for the
furnishing of such Data. During this period, Buyer shall not
contact or communicate with any employees, customers,
suppliers or distributors of the Business without Seller's
prior written consent. Buyer shall indemnify and hold Seller
and its affiliates
24
34
harmless against any and all Losses suffered in connection
with the exercise of Buyer's rights under this Section
10(a)(i). Notwithstanding any provision in this Agreement to
the contrary, Buyer's obligations under this Section 10(a)(i)
shall survive the termination of this Agreement and the
consummation of the transactions contemplated hereby.
(ii) Conduct of Business. Except as provided on the
Schedules attached hereto, Seller shall: operate the Business
in the ordinary course of business consistent with past
practice or as described in the Offering Memorandum; use
commercially reasonable efforts to maintain satisfactory
relationships with employees, suppliers, distributors,
customers, collective bargaining units and others having
business relationships with the Business; use commercially
reasonable efforts to maintain the Purchased Assets in
reasonably good operating condition, normal wear and tear
excepted; maintain its inventory of supplies, parts and other
materials and inventories and keep its books of account
records and files, in each case in the ordinary course of
business consistent with past practice; refrain from (A)
amending, modifying, waiving any rights under or terminating
(or allowing to terminate) any material contract, except in
the ordinary course of business, (B) disposing of,
encumbering, selling or otherwise transferring any of the
material assets constituting Purchased Assets or other rights
of the Business, except sales of inventory in the ordinary
course of business, (C) commencing any new capital projects or
making any additional commitments for capital expenditures
relating to the Business in excess of Five Hundred Thousand
Dollars ($500,000) in the aggregate, except in connection with
certain scheduled turnarounds, and except as reasonably
required to comply with the Project Sunshine Consent Decree or
(D) granting or agreeing to grant any bonus to any employees
of the Business, except for any bonus approved prior to the
date hereof or made in the ordinary course of business, or
enter into any contract of employment involving aggregate
annual salary in excess of Two Hundred Thousand Dollars
($200,000), collective bargaining agreement or other labor
contract with respect to any such employees outside the
ordinary course of business; provided that Seller may take any
action to which Buyer consents (which consent shall not be
unreasonably withheld taking account of Buyer's and Seller's
commercial objectives with respect to the Purchased Assets).
(iii) Schedules.
(A) Prior to the Closing Date, Seller
shall notify Buyer of additions or
changes to the Schedules to this
Agreement required to reflect
events since the date of this
Agreement or facts discovered by
Seller after the date hereof, so as
to cause Seller's representations
and warranties contained herein
(other than any which speak as to a
particular date) to be true and
correct in all material respects as
of the Closing Date. Notices given
by Seller pursuant to this Section
10(a)(iii) will be deemed to have
amended the Schedules, to have
qualified the representations and
warranties contained in Sections 6
and 7, and to have corrected any
misrepresentation or breach of
warranty that otherwise might have
existed hereunder by
25
35
reason of the fact, circumstance,
event or development (with the
result that no misrepresentation or
breach shall be deemed to have
occurred), in each case to the
extent of the disclosure contained
in such notice, including for
purposes of Section 12(b).
(B) If such additions or changes would
have a material adverse effect on
the Business, taken as a whole, as
it is currently operated by Seller,
the parties shall negotiate in good
faith to determine a reasonable
adjustment to the Purchase Price to
fully reflect any Losses incurred
by Buyer resulting from such
matters. For purposes of this
Section 10(a)(iii)(B) only, such
additions or changes shall be
deemed to have a material adverse
effect on the Business only if such
adverse effect exceeds Ten Million
Dollars ($10,000,000).
(C) In the event that the parties
hereto are unable to agree upon an
adjustment to the Purchase Price
prior to the Closing Date, each
party agrees that the Closing will
take place without delay as set
forth in this Agreement and the
Buyer shall pay the full purchase
price. The Parties further agree,
upon the demand of any party, to
submit the need for, and size of,
any adjustment to the Purchase
Price to binding arbitration. A
party desiring to submit to
arbitration any such matter shall
furnish its demand for arbitration
in writing to the other party
within a ten (10) day period
commencing on the Closing Date. The
arbitration shall be conducted
before three (3) arbitrators who
are experienced in matters
pertaining to the oil refining
industry. The arbitrators shall not
be a past or present officer,
director or employee of any party
or any of its affiliates. The
arbitration shall be governed by
the Commercial Arbitration Rules of
the American Arbitration
Association. Should the arbitrators
render a decision in favor of the
Buyer for an adjustment in the
Purchase Price, Seller shall pay to
Buyer such amount and plus interest
from the Closing Date through and
including the date payment is made
at a rate of 4% per annum.
(iv) Confidentiality. After the Closing, Seller shall
maintain the confidentiality of all information, documents and
materials relating exclusively to the Business, including all
such materials which remain in the possession of Seller,
except to the extent that disclosure of any such information
is requested or required by law (by oral questions,
interrogatories, requests for information or other documents
in legal proceedings, subpoena, civil investigative demand or
any other similar legal process) or legal or administrative
process or authorized by Buyer or reasonably occurs in
connection with disputes over the terms of this Agreement. The
provisions of this Section 10(a)(iv) shall not apply to any
information, documents or materials which are in the public
domain or shall come into public domain, other than
26
36
by reason of a breach by the Seller of its obligations
hereunder. Furthermore, notwithstanding the foregoing, Seller
shall be permitted to disclose any confidential information
(i) to any other member of the BP Group or (ii) as required to
operate Seller's ongoing business, provided such member shall
comply with the terms of this Section 10(a)(iv).
(b) Covenants of Buyer. Buyer covenants and agrees as follows:
(i) Confidentiality.
(A) Buyer acknowledges that all
information provided to any of it
and its affiliates, directors,
officers, employees, counsel,
auditors, accountants, agents,
advisors and other representatives
by Seller and other members of the
BP Group and their respective
directors, officers, employees,
counsel, auditors, accountants,
agents, advisors and other
representatives is subject to the
terms of the Confidentiality
Agreement, the terms of which are
hereby incorporated herein by
reference. Effective upon, and only
upon, the Closing, the
Confidentiality Agreement shall
terminate only with respect to
information provided to any of
Buyer and its affiliates,
directors, officers, employees,
counsel, auditors, accountants,
agents, advisors and other
representatives that relates solely
to the Business, the Purchased
Assets and the Assumed Liabilities;
provided that Buyer acknowledges
that any and all information
provided or made available to any
of it and its affiliates,
directors, officers, employees,
counsel, auditors, accountants,
agents, advisors and other
representatives by or on behalf of
Seller (other than information
relating solely to the Purchased
Assets and the Assumed Liabilities)
shall remain subject to the terms
and conditions of the
Confidentiality Agreement on and
after the Closing Date.
(B) Buyer agrees that, from and after
the Closing Date, Buyer shall, and
shall cause its affiliates,
directors, officers, employees,
counsel, auditors, accountants,
agents, advisors and other
representatives to, keep the Seller
Information confidential following
the Closing Date, except to the
extent that disclosure of any such
Seller Information is requested or
required by law (by oral questions,
interrogatories, requests for
information or other documents in
legal proceedings, subpoena, civil
investigative demand or any other
similar legal process) or legal or
administrative process or
authorized by Seller or reasonably
occurs in connection with disputes
over the terms of this Agreement.
The provisions of this Section
10(b)(i)(B) shall not apply to any
information, documents or materials
which are in the public domain or
shall come into the public domain,
other than by reason of a
27
37
breach by Buyer of its obligations hereunder
or under the Confidentiality Agreement.
Furthermore, notwithstanding the foregoing,
Buyer shall be permitted to disclose the
Seller Information to any of its affiliates,
provided such affiliate shall comply with
the terms of this Section 10(b)(i)(B). In
connection with the Transferred Employees,
Buyer shall use commercially reasonable
efforts, at Seller's request and at Buyer's
expense, to enforce existing confidentiality
agreements and rights requiring employees to
keep trade secrets confidential. For
purposes of this Agreement, "Seller
Information" shall mean all information
concerning Seller and/or any other member of
the BP Group, other than information that
relates exclusively to the Business, the
Purchased Assets and the Assumed Liabilities
and other than any such information that is
available to the public on the Closing Date,
or thereafter becomes available to the
public, other than as a result of a breach
of this Section 10(b)(i).
(ii) Notification. From the date hereof through and
including the Closing Date, Buyer shall promptly notify Seller
if Buyer obtains knowledge that any representation or warranty
of Seller in this Agreement or any agreement contemplated
hereby or information set forth in the Schedules hereto is not
true and correct in all material respects, or if Buyer obtains
knowledge of any material errors in, or omissions from, the
Schedules to this Agreement.
(iii) Litigation. With respect to all litigation and
other matters set forth on the Schedules attached hereto and
any other matters that constitute Excluded Liabilities and for
so long as Seller is contesting or defending such matter,
Buyer shall cooperate in all respects with Seller and other
members of the BP Group and their respective counsel in their
efforts to conduct or resolve such litigation, including by
making available to them such documents and witnesses as may
be deemed necessary or useful therefor in Seller's sole but
reasonable discretion. With respect to any dispute or
litigation involving any terminated Employee seeking
reinstatement, Buyer shall take such actions as are necessary
for Seller to comply with the terms of any judgment, decision
or order of any proper authority issued in connection with
such dispute or litigation (including by offering to employ
such former Employee) and shall treat any former Employee who
is ordered to be reinstated as a Transferred Employee for all
purposes hereunder.
(iv) Title Policies. Buyer may procure, and shall pay
the cost of the premium for commitments or policies from title
insurance companies to provide owner's title insurance
policies with respect to the portions of the Purchased Assets
constituting real property, provided, however, that Buyer's
ability or inability to obtain title insurance (and without
regard to (i) any exceptions contained therein and (ii) any
title insurance premium Buyer is required to pay in order to
obtain such title insurance) on such real property for any
reason shall not cause there to be an adjustment to the
Purchase Price and shall not cause the Closing of the
transactions contemplated by this Agreement to be delayed.
28
38
(v) Removal of Seller Marks. Buyer agrees that,
within three (3) months after the Closing Date, Buyer shall
(i) remove, obliterate, cover or replace, as appropriate, all
signs, billboards, containers, drums, advertisements or other
media containing any service marks, trade names, trade dress
or other indicia of origin of Seller or any member of the BP
Group, including the words "Amoco" and "Standard," any items
that include the words "Amoco" or "Standard," the BP Group
torch and oval design, the letters "BP," any items that
include the word "BP," the phrase "BP Oil," the BP Group
shield or the BP Group Helios logo or variants thereof located
on or appurtenant to any of the Purchased Assets, including
signs, billboards and advertisements or other media located at
the Business and (ii) return to Seller, or at Seller's option,
destroy (and certify such destruction to Seller) all items and
materials, including stationery, letterhead and purchase
orders, located at any of the Purchased Assets containing the
above described marks.
(vi) Project Sunshine Consent Decree. Buyer
represents and warrants that it has received a copy of the
Project Sunshine Consent Decree and that it has the financial
and technical capability to assume the obligations set forth
in the Project Sunshine Consent Decree with respect to the
Purchased Assets. Buyer covenants and agrees that prior to or
at the Closing it will execute and deliver a modification to
the Project Sunshine Consent Decree, in a form satisfactory to
Seller and the United States of America, pursuant to which
Buyer shall agree to be bound by the terms and conditions of
the Project Sunshine Consent Decree applicable to the
Purchased Assets, and Buyer further covenants and agrees that
from and after the Closing Date it shall comply in all
respects with those provisions of the Project Sunshine Consent
Decree (including any amendments, supplements or revisions
thereto) relating to the operation, maintenance, insurance,
and use of the Refinery and the Business and assume all costs
and expenses associated therewith, and Buyer shall be
responsible and liable for all costs and expenses arising from
or relating in any way to compliance with the Project Sunshine
Consent Decree as it relates to the Business. Buyer further
agrees that the provisions of this paragraph shall be binding
upon (A) any successors or assigns of Buyer, (B) any
transferees of all or any portion of the Business and (C) any
grantee of rights of use and/or operation thereof. Prior to
transferring any interest in the Business, Buyer shall deliver
to Seller written evidence satisfactory to Seller that such
transferee has agreed to assume and has the financial and
technical capability to assume the obligations set forth in
the Project Sunshine Consent Decree with respect to the
Purchased Assets.
(c) Mutual Covenants. Buyer and Seller covenant and agree as
follows:
(i) H-S-R. Buyer and Seller shall each file or cause
to be filed with the Federal Trade Commission and the United
States Department of Justice any notifications required to be
filed under the H-S-R Act with respect to the transactions
contemplated hereby, and Buyer and Seller shall bear the costs
and expenses of their respective filings; provided that Buyer
and Seller shall each pay 50% of the filing fee in connection
therewith. Buyer and Seller shall use their respective
reasonable best efforts to make such filings promptly (and in
any event within ten (10) business days) following the date
hereof, to respond promptly to any requests for additional
29
39
information and documentary materials made by either of such
agencies, to make any further filings that may be necessary,
proper or advisable in connection therewith and to cause the
waiting periods under the H-S-R Act to terminate or expire at
the earliest possible date and to resist in good faith, at
each of their respective cost and expense (including the
institution or defense of legal proceedings), any assertion
that the transactions contemplated hereby constitute a
violation of the antitrust laws, all to the end of expediting
consummation of the transactions contemplated hereby. Each of
Buyer, on the one hand, and Seller, on the other, shall
consult with the other prior to any meetings, by telephone or
in person, with the staff of the applicable governmental
authorities, and each of Buyer and Seller shall have the right
to have a representative present at any such meeting.
(ii) Assignments.
(A) With respect to any agreement,
contract, license, lease, easement,
right-of-way or Permit which (1) is
not an Excluded Asset, (2) is
material to the operation of the
Business as it is currently
operated by Seller and (3) requires
consent for the assignment thereof
to Buyer, Seller shall take such
actions as are commercially
reasonable and necessary, and Buyer
shall cooperate fully with Seller
in all commercially reasonable
respects, to effect assignment
thereof to Buyer as of the Closing
Date. It is understood that such
actions by Seller shall not include
any requirement of Seller to expend
money, commence any litigation or
offer or grant any accommodation
(financial or otherwise) to any
third party. In the event that
Seller is unable to obtain the
requisite approval for assignment
of any such agreement, contract,
license, lease, easement,
right-of-way or Permit, or in the
event such agreement, contract,
license, lease, easement,
right-of-way or Permit is required
to be amended or supplemented and
is not so amended or supplemented
as of the Closing Date, and such
assignment is reasonably necessary
to conduct the Business in the
ordinary course of business without
giving rise to a material adverse
effect on the Business, at the
written request of Buyer on or
before the Closing Date (except
where such action would be unlawful
or prohibited by such agreement,
contract, license, lease, easement,
right-of-way or Permit), Seller
shall (x) retain any such
agreement, contract, license,
lease, easement, right-of-way or
Permit and shall enter into an
arrangement with Buyer to provide
Buyer with the benefits of such
agreement, contract, license,
lease, easement, right-of-way or
Permit, provided that Buyer shall
perform Seller's obligations
thereunder arising on or after the
Closing Date (and indemnify Seller
against Losses suffered in
connection therewith) until such
agreement, contract, license,
lease, easement, right-of-way or
Permit is assigned to Buyer or
expires at the earliest
30
40
opportunity in accordance with its
terms, or is properly amended or
supplemented, and (y) take all
commercially reasonable and
necessary actions required to
assign to Buyer, or amend or
supplement, any such agreement,
contract, license, lease, easement,
right-of-way or Permit as soon as
practicable after the Closing Date.
(B) Notwithstanding Seller's
obligations pursuant to Section
10(c)(ii)(A), the assignment of any
agreement, contract, license,
lease, easement, right-of-way or
Permit to be transferred to Buyer
which requires consent for
assignment, or amendment or
supplement, may be effected after
the Closing Date. Except as
otherwise provided in this
Agreement, the Purchase Price shall
not be subject to adjustment, and
the Closing of the transactions
contemplated by this Agreement
shall not be delayed, by reason of
any inability to obtain consent for
assignment of any agreement,
contract, license, lease, easement,
right-of-way or Permit or any such
amendment or supplement. Buyer
acknowledges that certain consents
to the transactions contemplated by
this Agreement may be required from
parties to agreements, contracts,
licenses, leases, easements,
rights-of-way or Permits (written
or otherwise) to which any of
Seller or other member of the BP
Group is a party, and such consents
may not be obtained (provided that
Seller has complied with its
obligations under this Section
10(c)(ii)). Buyer agrees that
Seller shall not have any liability
whatsoever to Buyer arising out of
or relating to the failure to
obtain any consents that may have
been or may be required in
connection with the transactions
contemplated by this Agreement or
because of the default,
acceleration or termination of any
such agreement, contract, license,
lease, easement, right-of-way or
Permit as a result thereof
(provided that Seller has complied
with its obligations under this
Section 10(c)(ii)). Buyer further
agrees that no representation,
warranty or covenant of Seller
contained herein shall be breached
or deemed breached and no condition
of Buyer shall be deemed not to be
satisfied as a result of the
failure to obtain any consent or as
a result of any such default,
acceleration or termination or any
lawsuit, action, claim, proceeding
or investigation commenced or
threatened by or on behalf of any
persons arising out of or relating
to the failure to obtain any
consent or any such default,
acceleration or termination
(provided that Seller has complied
with its obligations under this
Section 10(c)(ii)(B)).
(C) With respect to any agreement,
contract, license, lease, easement,
right-of-way or Permit that may not
be properly assigned to Buyer
because of the failure to obtain a
required
31
41
consent or that may not be operated
or used by Seller for Buyer's
benefit, Buyer shall indemnify,
defend and hold harmless Seller and
the other members of the BP Group
from and against any liability that
Seller or any other members of the
BP Group may have in connection
with such nontransferred
agreements, contracts, licenses,
leases, easements, rights-of-way or
Permits as a result of the
transactions contemplated by this
Agreement; provided that, for the
avoidance of doubt, it is expressly
understood and agreed that in the
event Seller is unable to provide
Buyer the benefits of any such
agreement, contract, license,
lease, easement, right-of-way or
Permit, Buyer shall not be required
to indemnify Seller against Losses
suffered in connection therewith
until and to the extent Seller,
with full cooperation from Buyer in
all respects, is able to provide
Buyer the benefit of any such
agreement, contract, license,
lease, easement, right-of-way or
Permit.
(iii) Transition Services Agreement. In the event
Buyer and Seller agree that transition services will be
necessary after the Closing, Buyer and Seller shall negotiate
in good faith to execute and deliver at the Closing a
Transition Services Agreement substantially in the form
attached hereto as Exhibit D (the "Transition Services
Agreement"). Promptly following the execution of this
Agreement, representatives of Buyer and Seller shall meet to
develop a transition plan which shall identify services,
service periods (not to exceed six (6) months) and service
charges to be provided pursuant to the terms and conditions of
the Transition Services Agreement and which will, to the
extent practicable, be completed prior to the Closing. Such
services may include any technical and/or managerial support
required to operate the Business that are necessitated by a
cessation of employment at the Refinery of one or more of the
manager of the Refinery or the individuals acting as his or
her direct reports as of the date of this Agreement.
(iv) Other Governmental Approvals. Buyer and Seller
shall cooperate with each other and take all reasonable steps
necessary to obtain authorization for the sale of the Business
from all other applicable governmental authorities.
(v) Other Actions. Buyer and Seller shall otherwise
use their respective commercially reasonable efforts to cause
the satisfaction of all conditions precedent in this Section
10 and Sections 12 and 13 and the Closing to occur as soon as
reasonably practicable after the date of this Agreement.
(vi) Retail Marketing Facilities. If there shall be
any fact or circumstance not disclosed in this Agreement or
the Schedules attached hereto relating to a Retail Marketing
Facility that is reasonably likely to impose upon Buyer a
material Loss with respect to, or diminution in value in, such
Retail Marketing Facility, then Seller, at its election, may
(A) remove such facility from the definition of Purchased
Assets, (B) cure such fact or circumstance or (C) indemnify
Buyer from such Loss or diminution in value. For each Retail
Marketing Facility so removed, the Purchase
32
42
Price shall be reduced by Five Hundred Thousand Dollars
($500,000) and the parties shall deem such fact or
circumstance cured with no further rights to any adjustment to
the Purchase Price as a result thereof. For purposes of this
Section 10(c)(vi) only, any such fact or circumstance shall be
deemed to impose a material Loss or diminution in value only
if such Loss or diminution in value is reasonably likely to
exceed Seven Hundred Fifty Thousand Dollars ($750,000) with
respect to such Retail Marketing Facility, or One Hundred
Seventy-Five Thousand Dollars ($175,000) if such Loss or
diminution in value results from a defect in title to the
Retail Marketing Real Property relating to such Retail
Marketing Facility.
(vii) Jobber Business. Buyer and Seller acknowledge
that Seller may be unable to assign certain of the agreements
relating to the Jobber Business that are listed on Schedule
1(t) attached hereto. For each such agreement that Seller is
unable to assign to Buyer, Seller shall remove such agreement
from the definition of the Purchased Assets. For each
agreement so removed, the Purchase Price shall be adjusted as
set forth in Section 3(b) in an amount equal to the product of
(A) $.085 and (B) the aggregate gallons of product supplied by
Seller in fiscal year 2000 pursuant to such unassigned
agreement.
11. EMPLOYEES.
(a) Employees. Schedule 11(a) attached hereto contains a list
of all employees of Seller or other members of the BP Group directly
employed in the operation of the Business (collectively, the
"Employees"), including employees who are receiving short-term
disability benefits or are on family and medical, medical/long-term
disability, administrative or military leave or any other type of leave
that entitles the employee to reinstatement upon completion of the
leave under the applicable leave policies of Seller or other members of
the BP Group (collectively, "Leave"). Schedule 11(a) sets forth both
Employees represented by Local 8-286 of the Paper, Allied-Industrial,
Chemical and Energy Workers International Union (the "Union," and the
Employee membership of the Union, "Union Employees") and Employees not
represented by the Union ("Non-Union Employees"). Seller shall be
entitled to update Schedule 11(a) as necessary at any time prior to
Closing to reflect any and all employment changes.
(b) Employment Offers to Active Non-Union Employees and to All
Union Employees. No later than ten (10) days after the date of this
Agreement (and not later than three (3) days after any update of
Schedule 11(a)), Buyer shall offer employment with Buyer, effective as
of the Closing Date, to all active Non-Union Employees and to all Union
Employees at the same or better salaries or wages, with similar duties
and responsibilities, at the same location and on the same status
(e.g., full-time or part-time) as provided by Seller or other members
of the BP Group immediately prior to the Closing Date. All Employees
who accept employment with Buyer pursuant to the offers described
either in this Section 11(b) or in Section 11(c) are referred to herein
as "Transferred Employees." Transferred Employees who are Union
Employees are also referred to herein as "Union Transferred Employees,"
and Transferred Employees who are Non-Union Employees are also referred
to herein as "Non-Union Transferred Employees." Buyer shall not reduce
any Transferred Employee's initial salary or wages as an employee of
Buyer during the 12-month period after
33
43
the Closing Date. Buyer will give each active Non-Union Employee and
each Union Employee no less than seven (7) days in which to accept or
reject Buyer's employment offer.
(c) Employment Offers to Non-Union Employees on Leave. In
addition, no later than ten (10) days after the date of this Agreement,
Buyer shall offer employment with Buyer to each Non-Union Employee who
is on Leave as of the Closing Date, commencing at such time as such
Non-Union Employee is ready to return to work, at the same or better
salaries or wages, with similar duties and responsibilities, at the
same location and on the same status (e.g., full-time or part-time) as
provided by Seller or other members of the BP Group immediately prior
to the commencement of such Non-Union Employee's Leave; provided,
however, that such Non-Union Employee is ready to return to work within
one hundred twenty (120) days after the Closing Date. Buyer will give
each Non-Union Employee on Leave no less than seven (7) days in which
to accept or reject Buyer's employment offer.
(d) Transfer Time. All Transferred Employees shall become
employees of Buyer as of 12:01 a.m., Central Time, on the Closing Date
and except as otherwise provided herein, at such time, Buyer shall
assume and be responsible for payment of all salaries and benefits and
all other costs and liabilities relating to the Transferred Employees,
except that with regard to a Non-Union Employee on Leave, such
obligations shall not attach until the Non-Union Employee on Leave
commences employment with Buyer.
(e) Level of Employee Benefits Provided by Buyer. Buyer shall
provide to all Non-Union Transferred Employees employee benefits in
accordance with employee benefit plans (such as defined benefit plans,
defined contribution plans and welfare benefit plans), programs,
policies and pay practices (such as vacations, bonuses and short-term
disability leaves) which shall be the same as or better than the
benefits provided to substantially similar employees of Buyer. No later
than the Closing Date, Seller will provide to Buyer the Transferred
Employees' recognized credited service, and participation, vesting and,
as applicable, benefit accrual periods of service amounts, with Seller
or other members of the BP Group as of immediately prior to the Closing
Date.
(f) Pension Plans. Buyer agrees that, effective as of the
Closing Date, Buyer will sponsor a defined benefit pension plan ("Buyer
Pension Plan"), as defined under Section 3(35) of the Employee
Retirement Income Security Act of 1974, as amended, with respect to
Transferred Employees who participate in the BP Retirement Accumulation
Plan ("BP RAP") prior to the Closing Date. The Buyer Pension Plan will
provide that (i) such Transferred Employees will be eligible to
participate in the Buyer Pension Plan as of the Closing Date, and (ii)
such Transferred Employees will be given service credit equal to the
number of years of participation and vesting periods of service such
Transferred Employees have under the BP RAP. The Buyer Pension Plan
also will grant service for benefit accrual service equal to the number
of years of benefit accrual service for those Transferred Employees who
have an accrued benefit in the BP RAP and may provide that the age 65
single life annuity payable to Transferred Employees under the Buyer
Pension Plan may be offset by the amount of the age 65 single life
annuity payable to such Transferred Employees under the BP RAP. In no
event shall the age 65 single life benefit accrued under the Buyer
Pension Plan for Transferred Employees be less than the benefit such
Transferred Employees would receive if only service with Buyer were
recognized under the Buyer Pension Plan. The Buyer Pension Plan may
include such other terms and provisions as shall be determined
34
44
by Buyer in its sole discretion to the extent not inconsistent with
this Section 11(f). Seller agrees to furnish on a timely basis such
information with regard to benefits payable to Transferred Employees
under the BP RAP and such other information as Buyer may from time to
time, within one (1) year after the Closing Date, reasonably request
for purposes of complying with this Section 11(f).
(g) Defined Contribution Pension Plans. Buyer agrees that,
effective as of the Closing Date, Buyer's defined contribution pension
plans that Transferred Employees participate in shall be amended to
recognize such Transferred Employees' participation and vesting periods
of service with Seller and other members of the BP Group for purposes
of determining participation, vesting and the level of company
contributions.
(h) Welfare Benefits and Other Benefits and Policies. For each
Transferred Employee who participates in any welfare benefit plan, or
is subject to any policy or pay practice, of Buyer, both Buyer and the
applicable welfare benefit, policy and pay practice (i) shall recognize
the Transferred Employee's recognized credited service amounts with
Seller and other members of the BP Group for all purposes including
eligibility, vesting and benefit determination and accrual; (ii) shall
not require a physical examination or other proof of insurability, and
shall waive all coverage exclusions and limitations relating to waiting
periods or pre-existing conditions, with respect to any of the
Transferred Employees or any dependent covered by Seller's and other
members of the BP Group's comparable welfare benefit plan, policy or
pay practice in effect as of the Closing Date; and (iii) shall credit
the expenses of the Transferred Employees which were credited toward
2001 deductibles or co-payments under the applicable welfare benefit
plan of Seller or other members of the BP Group against satisfaction of
any 2001 deductibles or co-payments under Buyer's medical welfare
benefit plan for the Transferred Employees.
(i) Vacation. Seller shall be responsible for paying the
Transferred Employees for any vacation due as of the Closing Date under
the applicable vacation policy of Seller or other members of the BP
Group (the "Seller Vacation Policy"). Buyer will provide Transferred
Employees who, based upon the recognized credited service amounts of
such Transferred Employees with Seller or other members of the BP
Group, were eligible for a greater amount of annual vacation under the
Seller Vacation Policy than they are under Buyer's vacation policy even
after Buyer recognizes such Transferred Employees' credited service
amounts, with their Seller annual vacation amount. Between the Closing
Date and the end of the year in which the Closing occurs, Buyer shall
permit all Transferred Employees to take the same number of days of
vacation on an unpaid basis as they would have been eligible to take
immediately prior to the Closing Date under the Seller Vacation Policy
based upon the recognized credited service amounts of such Transferred
Employees with Seller or other members of the BP Group.
(j) Severance. Buyer shall establish a severance policy
substantially similar to the 2001 BP Severance Benefits Plan (the "BP
Severance Plan") with respect to any Non-Union Transferred Employee who
has actions taken against such Non-Union Transferred Employee within
eighteen (18) months after the Closing Date that would make the
Non-Union Transferred Employee eligible for severance benefits under
the involuntary terminations section of the BP Severance Plan. Buyer's
severance policy established under
35
45
this Section 11(j) shall recognize the Non-Union Transferred Employees'
recognized credited service amounts with Seller or other members of the
BP Group.
(k) Buyer's Adoption of Collective Bargaining Agreement. Buyer
will recognize the Union as the exclusive representative of the Union
Transferred Employees and will adopt all collective bargaining
agreements between Seller and the Union and all existing contract
extension agreements, memoranda of agreement, letters of understanding
and similar agreements and instruments (collectively, the "CBA"),
except that Buyer is not required to continue the existing employee
benefit plans provided for under any applicable provisions of the CBA.
If Buyer does not continue said existing employee benefit plans, Buyer
will comply with the terms of the Letter of Understanding-Successorship
attached hereto as Schedule 11(k) relating to establishing and
implementing an alternate package of benefit plans and shall indemnify
the Seller Indemnified Parties against any Losses caused by, arising
from, incurred in connection with or relating in any way thereto.
(l) WARN Act. Buyer represents and warrants to, and covenants
with, Seller that there will be no major employment losses as a
consequence of the transactions contemplated by this Agreement that
might trigger obligations under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. Section 2101 et. seq., or under any similar
provision of any federal, state, regional, foreign or local law, rule
or regulation (collectively, "WARN Obligations"). To the extent that
any WARN Obligations might arise as a consequence of the transactions
contemplated by this Agreement, Buyer shall be responsible for, and
shall indemnify the Seller Indemnified Parties against any Losses
caused by, arising from, incurred in connection with or relating in any
way to, any WARN Obligations arising as a result of any employment
losses occurring on or after the Closing Date. For ninety (90) days
following the Closing Date, Buyer shall not engage in any mass layoff,
plant closing or other action that might trigger WARN Obligations of
Seller or any other member of the BP Group.
(m) Service Credit. From and after the Closing Date, the
Transferred Employees shall be given credit for their service
recognized by Seller or other members of the BP Group prior to the
Closing Date for all purposes, including eligibility, vesting and
benefit determination and accrual under all applicable plans and
programs of Buyer as well as for purposes of determining any vacation,
severance or other related benefits to be provided pursuant to the
manner described above.
(n) Benefits Miscellaneous. Notwithstanding the foregoing,
Buyer shall not be liable for any obligations arising out of
participation by Transferred Employees in the Employee Benefit Plans of
Seller.
12. BUYER'S OBLIGATION TO CLOSE. Buyer's obligation to close under this
Agreement is subject to the fulfillment on or prior to the Closing Date of each
of the following conditions (except to the extent that Buyer shall have
hereafter agreed in writing to waive one or more of such conditions).
(a) Compliance with Agreement. Seller shall have performed and
complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with
by Seller prior to the Closing Date.
36
46
(b) Representations and Warranties. The representations and
warranties of Seller made in this Agreement (as amended by Seller in
accordance with Section 10(a)(iii)) shall be true and correct in all
material respects as of the date hereof and on and as of the Closing
Date, as though made on and as of the Closing Date, except for
representations and warranties that speak as of a specific date or time
(which need only be true and correct as of such date or time). Seller
shall have performed or complied in all material respects with the
obligations and covenants required by this Agreement to be performed or
complied with by Buyer by the time of the Closing.
(c) Litigation. There shall not be any judicial restraining
order or injunction, preliminary or otherwise, in effect prohibiting
the Closing of the transactions contemplated by this Agreement. There
shall not be pending or threatened any litigation or proceeding
instituted by any federal, state or foreign governmental agency to
restrain, prohibit or otherwise interfere with or obtain substantial
monetary damages in connection with the consummation of the
transactions contemplated by this Agreement, or operation of the
Business by Buyer after the Closing Date.
(d) Governmental Consents. The applicable waiting period under
the H-S-R Act and any extension thereof shall have terminated or
expired, without a challenge to the transactions contemplated by this
Agreement, and the transactions contemplated by this Agreement shall
have been authorized by applicable governmental authorities.
13. SELLER'S OBLIGATION TO CLOSE. Seller's obligation to close under
this Agreement is subject to the fulfillment on or prior to the Closing Date of
each of the following conditions (except to the extent that Seller shall have
hereafter agreed in writing to waive one or more of such conditions).
(a) Compliance with Agreement. Buyer shall have performed and
complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with
by Buyer prior to the Closing Date.
(b) Representations and Warranties. The representations and
warranties of Buyer made in this Agreement shall be true and correct in
all material respects as of the date hereof and on and as of the
Closing Date, as though made on and as of the Closing Date, except for
representations and warranties that speak as of a specific date or time
(which need only be true and correct as of such date or time). Buyer
shall have performed or complied in all material respects with the
obligations and covenants required by this Agreement to be performed or
complied with by Buyer by the time of the Closing.
(c) Litigation. There shall not be any judicial restraining
order or injunction, preliminary or otherwise, in effect prohibiting
the Closing of the transactions contemplated by this Agreement. There
shall not be pending or threatened any litigation or proceeding
instituted by any federal, state or foreign governmental agency to
restrain, prohibit or otherwise interfere with or obtain substantial
monetary damages in connection with the consummation of the
transactions contemplated by this Agreement, or the operation of the
Business by Buyer after the Closing Date.
37
47
(d) Governmental Consents. The applicable waiting period under
the H-S-R Act and any extension thereof shall have terminated or
expired, without a challenge to the transactions contemplated by this
Agreement, and the transactions contemplated by this Agreement shall
have been authorized by applicable governmental authorities.
14. FURTHER ASSURANCES. From time to time, as and when reasonably
requested by any party hereto, the other party shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions (subject to the
limitations set forth in Section 10(c)(ii)), which documents, instruments or
actions are consistent with, and customary and necessary for, the consummation
of the transactions contemplated by this Agreement.
15. INDEMNIFICATION.
(a) Buyer's Indemnification of Seller. Except as otherwise
provided herein and subject to the provisions of this Section 15, from
and after the Closing Date, Buyer shall indemnify, defend, save and
hold harmless, Seller, the other members of the BP Group, and their
respective directors, officers, employees, shareholders, partners,
counsel, auditors, accountants, agents, advisors and other
representatives and each of the heirs, executors, successors and
assigns of any of the foregoing (collectively, the "Seller Indemnified
Parties"), from and against any and all Losses of any kind which are
caused by, arise from, are incurred in connection with or relate in any
way to:
(i) the ownership of the Purchased Assets, including
the Refinery and all of the other Purchased Assets, and the
operation of the Refinery on and after the Closing Date,
including those Losses arising under, any foreign, federal,
state or local laws or regulations, or any contract, warranty,
tort or other theory of law;
(ii) Buyer's modification of any technology,
software, know-how or proprietary information transferred or
licensed to Buyer pursuant to the Technology Agreement;
(iii) (A) Buyer's breach of or failure to perform any
covenant or agreement in this Agreement requiring performance
by Buyer on or after the Closing Date (including any
discontinuance, suspension or modification of any compensation
or employee benefit plan or program maintained by Buyer as
contemplated by Section 11); or (B) Buyer's breach of any
representation or warranty in this Agreement which survives
the Closing; or
(iv) the Assumed Liabilities (other than any Retained
Environmental Liabilities covered by Section 15(c)(i) below);
provided, however, that Buyer shall not have any liability
under clause (iii) above for any breach of a representation or
warranty contained in this Agreement or the other agreements
contemplated hereby if Seller had knowledge of such breach at
the time of Closing and failed to notify Buyer of such breach,
and no Losses caused by, arising from, incurred in connection
with or related in any way thereto shall be aggregated for
purposes of Section 15(j).
38
48
(b) Seller's Indemnification of Buyer. Except as otherwise
provided herein and subject to the provisions of this Section 15, from
and after the Closing Date, Seller shall indemnify, defend, save and
hold harmless, Buyer, its affiliates and their respective directors,
officers, employees, shareholders, partners, counsel, auditors,
accountants, agents, advisors and other representatives and each of the
heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Buyer Indemnified Parties") from and against any
and all Losses of any kind which are caused by, arise from, are
incurred in connection with or relate in any way to:
(i) the Excluded Assets or the Excluded Liabilities
(other than any Retained Environmental Liabilities covered by
Section 15(c)(ii) below) (provided, however, that with respect
to Excluded Liabilities, the provisions of Sections 15(i)
through 15(l) will not apply to indemnity claims by Buyer
relating to Sections 4(b)(i) through (viii) and 4(b)(xi)
through (xiv) of this Agreement;
(ii) (A) Seller's breach of or failure to perform any
covenant or agreement in this Agreement requiring performance
by Seller on or after the Closing Date; or (B) Seller's breach
of any representation or warranty in this Agreement which
survives the Closing; provided that, for purposes of this
Section 15, any occurrence relating to Seller's representation
contained in (x) Section 6(e)(iv) shall not be deemed to be
material or have a material adverse effect on the Business
unless such effect or adverse effect exceeds Two Million Five
Hundred Thousand Dollars ($2,500,000) and (y) Section 6(m)
shall not be deemed to be material or to have a material
adverse effect on the Business unless such effect or adverse
effect exceeds Five Million Dollars ($5,000,000);
(iii) any failure by Seller to comply with the
provisions, if any, of state or local bulk sales laws; and
(iv) subject to the limitations set forth in Section
15(l), property damage caused by, or any environmental
remediation required due to a violation of, Health, Safety and
Environmental Laws during the pre-Closing operation of the
Business ("Remediation Losses");
provided, however, that Seller shall not have any liability
under clause (ii) above for any breach of a representation or
warranty contained in this Agreement or the other agreements
contemplated hereby if Buyer had knowledge of such breach at
the time of Closing and failed to notify Seller of such breach
in accordance with Section 10(b)(ii), and no Losses caused by,
arising from, incurred in connection with or related in any
way thereto shall be aggregated for purposes of Section 15(j).
(c) Environmental Indemnifications. Buyer and Seller shall
provide the environmental indemnifications specified below:
(i) Seller shall indemnify, defend, save and hold
harmless the Buyer Indemnified Parties from and against any
and all Losses of any kind which are caused by, arise from,
are incurred in connection with or relate in any way to the
39
49
(A) Retained Environmental Liabilities, (B) a breach of
Seller's representations and warranties in Section 7, and (C)
the Excluded Assets described in Section 2(h) or the Excluded
Liabilities described in Section 4(b)(xii) (provided, however,
that the provisions of Sections 15(i) through 15(l) will not
apply to indemnity claims by Buyer relating to Section
4(b)(vii), (xii) or (xiv) of this Agreement); and
(ii) other than with respect to the Retained
Environmental Liabilities, Buyer shall assume responsibility
for, and shall indemnify, defend, save and hold harmless, the
Seller Indemnified Parties from and against (A) any and all
Losses of any kind which are caused by, arise from, are
incurred in connection with or relate in any way to, the
ownership of the Purchased Assets or the operation of the
Business, under, relating to or otherwise required or incurred
to achieve or maintain compliance with Health, Safety and
Environmental Laws, as the same are in effect from time to
time, irrespective of whether the events giving rise to such
liabilities occurred prior to, on or after the Closing Date,
including any and all Losses of any kind which are caused by,
arise from, are incurred in connection with or relate in any
way to Asbestos-Related Liabilities, the Disclosed
Environmental Liabilities or the Project Sunshine Consent
Decree and (B) any and all Losses that are caused by or result
or arise from changes in, modifications to or amendments of
Health, Safety and Environmental Laws that were in effect
prior to the Closing Date or promulgated, made or enacted on
or after the Closing Date;
provided, however, that Seller shall not have any liability
under clause (i) above for any breach of a representation or
warranty contained in this Agreement or the other agreements
contemplated hereby if Buyer had knowledge of such breach at
the time of Closing and failed to notify Seller of such breach
in accordance with Section 10(b)(ii), and no Losses caused by,
arising from, incurred in connection with or related in any
way thereto shall be aggregated for purposes of Section 15(j).
(d) Exclusive Remedy. Any claim or cause of action based on,
arising out of or relating in any way to any of the transactions
contemplated under this Agreement (including all Exhibits and Schedules
attached hereto or referenced herein) must be brought by either party
in accordance with the provisions and limitations of this Agreement,
whether such claim arises out of any contract, tort or otherwise.
Except as otherwise provided in this Agreement, the parties hereby
waive to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action they may have against each other
relating to the subject matter of this Agreement and the other
agreements contemplated hereby arising under or based on any federal,
state, provincial, local or foreign statute, law, ordinance, rule or
regulation or otherwise, including such rights, claims and causes of
action Buyer may have against Seller under CERCLA, breaches of
statutory or implied warranties or otherwise, nuisance or other tort
actions, and common law rights of contribution. Without limiting the
generality of the foregoing, Buyer understands and agrees that the
rights accorded under this Section 15 are the sole and exclusive remedy
of Buyer against Seller or any other member of the BP Group with
respect to any matters relating to Health, Safety and Environmental
Laws. Buyer hereby waives any right to seek contribution or other
recovery from Seller or any other member of the BP Group under such
Health, Safety and Environmental Laws, and Buyer hereby releases Seller
and the other members of the BP Group from any claims, demands or
causes of action that Buyer has or may have in the future against
Seller and/or
40
50
the other members of the BP Group under Health, Safety and
Environmental Laws. Buyer further acknowledges and agrees that, (A)
other than the representations and warranties of Seller specifically
contained in this Agreement, there are no representations or warranties
of Seller, any other member of the BP Group or their respective
directors, officers, employees, shareholders, partners, counsel,
auditors, accountants, agents, advisors or other representatives or any
other Person either express or implied, with respect to any of them,
the Business, the Purchased Assets or the Assumed Liabilities and (B)
it shall have no claim or right to indemnification with respect to any
information, documents or materials furnished by Seller, any other
member of the BP Group or their respective directors, officers,
employees, shareholders, partners, counsel, auditors, accountants,
agents, advisors or other representatives or any other Person or any of
their officers, directors, employees, shareholders, partners, counsel,
auditors, accountants, agents, advisors or other representatives,
including the Offering Memorandum and any information, documents or
material made available to Buyer in certain "data rooms," management
presentations or any other form in expectation of the transactions
contemplated by this Agreement.
(e) Procedures Relating to Indemnification Among Buyer and
Seller. Following the discovery of any facts or conditions which could
reasonably be expected to give rise to a Loss or Losses for which
indemnification is provided under this Agreement, the party seeking
indemnification (the "Indemnified Party") shall, as promptly as
reasonably possible thereafter, provide written notice to the party
from whom indemnification is sought (the "Indemnifying Party"), setting
forth the specific facts and circumstances, in reasonable detail,
relating to such Loss or Losses and the amount of Loss or Losses (or a
reasonable, good-faith estimate thereof if the actual amount is not
known or not capable of reasonable calculation) ("Indemnification
Notice"); provided, however, that failure to give such Indemnification
Notice on a timely basis shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been
actually and materially prejudiced as a result of such failure.
Notwithstanding the foregoing:
(i) a Buyer Indemnified Party shall not be entitled
to make a claim against Seller under Section 15(b)(ii) unless
and until (A) Buyer shall have provided Seller written notice
of such default; and (B) Seller shall have failed to cure such
default within sixty (60) days after Seller's receipt of
Buyer's notice; and
(ii) a Seller Indemnified Party shall not be entitled
to make a claim against Buyer under Section 15(a)(iii) unless
and until (A) Seller shall have provided Buyer written notice
of default; and (B) Buyer shall have failed to cure such
default within sixty (60) days after Buyer's receipt of
Seller's notice.
(f) Procedures Relating to Indemnification for Third Party
Claims.
(i) In order for an Indemnified Party to be entitled
to any indemnification provided for under this 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"), such Indemnified Party must provide an
Indemnification Notice to the Indemnifying Party of the Third
Party Claim as promptly as reasonably possible after receipt
by such Indemnified Party of notice of the Third Party Claim.
Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, within five (5) business
41
51
days 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;
provided, however, that failure to provide an Indemnification
Notice, or deliver copies of all notices and documents, on a
timely manner shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall
have been actually prejudiced as a result of such failure.
(ii) If a Third Party Claim is made against an
Indemnified Party, the Indemnifying Party shall be entitled to
participate in the defense thereof and, if it so chooses and
acknowledges its obligation to indemnify the Indemnified Party
therefor, to assume the defense thereof with counsel selected
by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party. Notwithstanding any acknowledgment made
pursuant to the immediately preceding sentence, the
Indemnifying Party shall continue to be entitled to assert any
limitation on its indemnification responsibility contained in
Sections 15(j) and 15(k). Should the Indemnifying Party so
elect to assume the defense of a Third Party Claim, the
Indemnifying Party shall not be liable to the Indemnified
Party for legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If
the Indemnifying Party assumes such defense, the Indemnified
Party shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate
from the counsel employed by the Indemnifying Party, it being
understood, however, that the Indemnifying Party shall control
such defense. The Indemnifying Party shall be liable for the
fees and expenses of counsel employed by the Indemnified Party
for any period during which the Indemnifying Party has not
assumed the defense thereof. If the Indemnifying Party chooses
to defend any Third Party Claim, all the parties hereto shall
cooperate in the defense or prosecution of such Third Party
Claim. Such cooperation shall include the retention and (upon
the Indemnifying Party's request) the provision to the
Indemnifying Party of records and information which are
reasonably relevant to such Third Party Claim and making
employees available on a mutually convenient basis to provide
additional information and explanation of any material
provided hereunder. Whether or not the Indemnifying Party
shall have assumed the defense of a Third Party Claim, the
Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge, or consent to the
entry of any judgment with respect to such Third Party Claim
without the Indemnifying Party's prior written consent (which
consent shall not be unreasonably withheld).
(g) Losses Net of Insurance and Taxes. The amount of any and
all Losses under this Section 15 and elsewhere under this Agreement
shall be determined net of any amounts recovered or recoverable by the
Indemnified Party under insurance policies, indemnities or other
reimbursement arrangements with respect to such Losses. Each party
hereby waives, or will procure the waiver of, any subrogation rights
that its insurer may have with respect to any indemnifiable Losses. The
amount of any and all Losses shall be reduced by the amount of any net
reduction in cash Tax payable by the Indemnified Party with respect to
such Losses through and including the Tax year in which the
indemnification payment is made. Any indemnity payment under this
Agreement shall be treated as an adjustment to the Purchase Price for
tax purposes.
42
52
(h) Attorneys' Fees. In connection with any litigation arising
out of this Agreement or to enforce any indemnification claim pursuant
to this Agreement, the prevailing party shall be entitled to recover
from the nonprevailing party its reasonable attorneys' fees and costs,
on appeal or otherwise.
(i) Time Limitation. Except as otherwise provided herein, any
claim by any Buyer Indemnified Party for indemnity arising under this
Agreement, including pursuant to Sections 15(b) and 15(c), shall be
brought within two (2) years after the Closing Date. A claim shall be
deemed to have been brought only upon delivery of a proper
Indemnification Notice to the other party at the notice address set
forth in Section 20. Any claim required to be made within such two (2)
year period not so timely made shall be forever barred.
(j) Monetary Limitation. Buyer shall have no claim under this
Agreement against Seller or any other member of the BP Group for any
Losses unless and until the aggregate of all such Losses incurred or
sustained by the Buyer Indemnified Parties exceeds Five Million Dollars
($5,000,000) and then only for the excess over Five Million Dollars
($5,000,000) (the "Threshold"); provided that Losses amounting to less
than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate
arising out of the same occurrence or matter shall not be aggregated
with other Losses for purposes of determining whether and when the
Threshold has been reached. After the Threshold has been reached,
Seller shall have no obligation to indemnify the Buyer Indemnified
Parties under this Agreement with respect to such matters for any
Losses amounting to less than Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate arising out of the same occurrence or
matter. For purposes of this Section 15(j), Losses shall exclude
Remediation Losses, which are addressed in Section 15(l) below.
(k) Limitation of Liability. Seller's aggregate liability for
Indemnification pursuant to this Agreement, including Section 15(b) and
(c), shall in no event exceed an amount equal to Fifty-Two Million Five
Hundred Thousand Dollars ($52,500,000).
(l) Environmental Remediation Monetary Limitation.
Notwithstanding any other provision of this Agreement, Buyer shall have
no claim under this Agreement against Seller or any other member of the
BP Group for any Remediation Losses by Seller or other members of the
BP Group unless and until the aggregate of all such Remediation Losses
incurred or sustained by the Buyer Indemnified Parties exceeds Five
Million Dollars ($5,000,000), and then only for the excess over Five
Million Dollars ($5,000,000) (the "First Threshold"). After the First
Threshold has been reached, Buyer shall only have a claim under this
Agreement against Seller for fifty percent (50%) of the excess of any
Remediation Losses incurred or sustained by the Buyer Indemnified
Parties over the First Threshold unless and until the aggregate of all
such Remediation Losses incurred or sustained by the Buyer Indemnified
Parties exceeds Ten Million Dollars ($10,000,000) (the "Second
Threshold"). Thereafter, subject to Sections 15(j) and 15(k), Buyer
shall have a claim under this Agreement against Seller for 100% of the
excess of Remediation Losses over the Second Threshold. Notwithstanding
the foregoing, (i) Remediation Losses amounting to less than Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate arising out
of the same occurrence or matter shall not be aggregated with any other
Remediation Losses for purposes of determining whether and when the
First Threshold or the Second Threshold has been reached. After the
First Threshold or Second Threshold has been reached, Seller shall have
43
53
no obligation to indemnify the Buyer Indemnified Parties under this
Agreement with respect to such matters for any Remediation Losses
amounting to less than Two Hundred Fifty Thousand Dollars ($250,000) in
the aggregate arising out of the same occurrence or matter.
(m) Mitigation. Each party hereto shall take all reasonable
steps and use all commercially reasonable efforts to mitigate any and
all Losses.
(n) Losses. As used in this Agreement, "Losses" means any and
all costs, claims, losses, liabilities, obligations (including
corrective and remedial obligations), damages and expenses (including
reasonable legal fees and expenses but excluding any liability relating
to consequential damages, lost profits or punitive damages).
16. TAXES
(a) Except as provided in this Section 16, Buyer shall be
liable for and pay all Taxes, utility charges or apportionments which
arise as a result of this Agreement or the consummation of the
transactions contemplated hereby or as a result of any purchase, sale,
rental, lease, storage, use, consumption or operation of the Purchased
Assets by Buyer. Seller agrees to cooperate with and assist Buyer in
claiming any applicable occasional sale or other sales tax exemption;
provided that Seller shall not incur any unreimbursed third-party
costs, expenses, fees or liabilities as a result of or in any way
relating to, the provision of such assistance.
(b) General and special real estate and other ad valorem taxes
and assessments and other state or local taxes, fees, charges and
assessments in respect of real property on the basis of the fiscal year
in which the Closing occurs shall be prorated between Buyer and Seller
as of 12:01 a.m., Central Time, on the Closing Date. If the Closing
Date shall occur before the tax rate or assessment is fixed for such
fiscal year, the apportionment of such taxes and payments at the
Closing shall be based upon the most recently ascertainable tax bills;
provided that Buyer and Seller shall recalculate and re-prorate said
taxes and payments and make the necessary cash adjustments promptly
upon the issuance, and on the basis, of the actual tax bills received
for the fiscal year in which the Closing occurs and the amount of any
payments in lieu of tax made with respect to any such fiscal year.
(c) Personal property taxes, if any, on the basis of the
fiscal year in which the Closing occurs shall be prorated between Buyer
and Seller as of 12:01 a.m., Central Time, on the Closing Date. If the
Closing Date shall occur before the tax rate or assessment is fixed for
such fiscal year, the apportionment of such taxes at the Closing shall
be based upon a reasonable estimate mutually agreed upon by Buyer and
Seller; provided that Buyer and Seller shall recalculate and re-prorate
said taxes and make the necessary cash adjustments promptly upon the
issuance of, and on the basis of, the actual tax bills received for
such fiscal year.
17. RECORDS/LITIGATION ASSISTANCE.
(a) For a period of seven (7) years following the Closing
Date, Buyer shall provide to Seller and other members of the BP Group
(and their counsel, auditors, accountants, agents, advisors or other
representatives) reasonable access to and permission
44
54
to take from the Business copies of any books, records or accounts
relating to the Business through and including the Closing Date; and
Buyer shall not destroy or dispose of any such books, records and
accounts for a period of at least seven (7) years after the Closing
Date without first offering to surrender to Seller such books, records
and accounts which Buyer may intend to destroy or dispose of. Seller
agrees that it will consult with Buyer in advance of taking any such
actions following the Closing Date with a view towards establishing a
mutually agreeable plan for such visits so that these actions will not
unreasonably interfere with the normal operation of the Business.
(b) After the Closing Date, each party shall provide such
assistance as the other party may from time to time reasonably request
in connection with the preparation of tax returns required to be filed,
any audit or other examination by any taxing authority, any judicial or
administrative proceeding relating to liability for taxes, or any claim
for refund in respect of such Taxes or in connection with any
litigation and proceedings or liabilities related to the Business,
including making available employees for interviews, litigation
preparation and testimony. The requesting party shall reimburse the
assisting party for the out-of-pocket costs incurred by the assisting
party.
(c) If Buyer, as a result of the transactions contemplated by
this Agreement, at any time within twelve (12) months after the Closing
Date, is required to file with the Securities and Exchange Commission
financial statements relating to the Business, Seller shall provide
such assistance as Buyer may reasonably request in connection with the
preparation of such financial statements, including providing to Buyer
Seller's books, records or accounts relating to the Business and
relevant personnel relating to the Business and access to Seller's
independent auditors from the date hereof through and including the
Closing Date and for a period of twelve (12) months thereafter;
provided that Seller shall not incur any unreimbursed third-party
costs, expenses, fees or liabilities as a result of or in any way
relating to, the provision of such assistance.
18. TERMINATION RIGHTS.
(a) This Agreement may be terminated at any time prior to the
Closing Date as follows and in no other manner:
(i) By mutual written consent of Buyer and Seller;
(ii) By Buyer, if any of the conditions set forth in
Section 12 shall have become incapable of fulfillment, and
shall not have been waived by Buyer (provided, however, that
Buyer is not in material breach of its representations,
warranties, covenants or agreements contained in this
Agreement);
(iii) By Seller, if any of the conditions set forth
in Section 13 shall have become incapable of fulfillment, and
shall not have been waived by Seller (provided, however, that
Seller is not in material breach of its representations,
warranties, covenants or agreements contained in this
Agreement);
(iv) By Seller, if the Closing does not occur on or
prior to December 14, 2001;
45
55
(v) by Buyer, if the Closing does not occur on or
prior to December 31, 2001; provided, however, that, in the
event that all conditions of Section 12 other than termination
or expiration of the waiting period under the HSR Act are
satisfied, then Buyer may not terminate under this clause (v)
until March 15, 2002;
(vi) By Buyer, if a Deposit Return Event occurs.
(b) In the event of termination by Buyer or Seller pursuant to
this Section 18, written notice thereof shall forthwith be given to the
other party and the transactions contemplated by this Agreement shall
be terminated, without further action by any party. If the transactions
contemplated by this Agreement are terminated as provided herein:
(i) Buyer shall return to Seller all documents and
copies and other materials received from, or on behalf of,
Seller relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof; and
(ii) all confidential information received by Buyer
with respect to the Purchased Assets, the Assumed Liabilities
and the Business shall be treated in accordance with the terms
and conditions of the Confidentiality Agreement, which shall
remain in full force and effect notwithstanding the
termination of this Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 18, this
Agreement shall become void and of no further force and effect, except
for the provisions of:
(i) Section 10(b)(i) relating to the obligation of
Buyer to keep confidential certain information and data
obtained by it;
(ii) Section 22 relating to publicity;
(iii) Section 10(a)(i) relating to indemnification in
connection with the matters contemplated thereby;
(iv) Section 27 relating to certain expenses;
(v) Sections 6(f) and 9(f) relating to finder's fees
and broker's fees; and
(vi) this Section 18.
Nothing in this Section 18 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this Agreement or to impair the right of any party to compel specific
performance by another party of its obligations under this Agreement.
19. SPECIFIC PERFORMANCE. Each party hereto acknowledges and agrees
that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each
46
56
party hereto agrees that the other party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the parties hereto and the matter (subject to the provisions
set forth in Section 21 below), in addition to any other remedy to which they
may be entitled, at law or in equity.
20. NOTICES.
(a) All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex or telecopy, or sent, postage prepaid, by
registered, certified or express mail, or reputable overnight courier
service and shall be deemed given when so delivered by hand, telexed or
telecopied, or if mailed, five (5) days after mailing (one (1) business
day in the case of express mail or overnight courier service), as
follows:
If to Buyer:
Tesoro Petroleum Corporation
300 Concord Drive
San Antonio, TX
Attn: James C. Reed, Jr., General Counsel
Telecopy: (210) 283-2400
with a copy to:
Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
Houston, TX 77010-0395
Attn: Michael W. Conlon
Telecopy: (713) 651-5246
If to Seller:
BP Corporation North America Inc.
200 East Randolph Drive
Chicago, IL 60601
Attn: Assistant General Counsel - Corporate
Telecopy: (312) 856-4091
Amoco Oil Company
200 East Randolph Drive
Chicago, IL 60601
Attn: Richard J. Battaglia
Telecopy: (312) 856-4091
(b) Any party may change the address to which such
communications are to be directed to it by giving written notice to the
other in the manner in paragraph (a) above.
47
57
21. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and the
obligations of the parties hereunder shall be governed by and construed and
enforced in accordance with the substantive and procedural laws of the State of
Illinois, without regard to rules on choice of law. Any action to enforce the
terms hereof may be properly venued in, and shall be brought in, the federal or
state courts located in Cook County in the State of Illinois on a non-exclusive
basis. Each party hereto agrees that it shall submit to the jurisdiction of such
courts for purposes of actions to enforce the terms of this Agreement.
22. PUBLICITY. Buyer and Seller agree that, from the date hereof
through and including the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued or made by any
party hereto (including any member of the BP Group) without the prior consent of
the other party (which consent shall not be unreasonably withheld), except (a)
as such release or announcement may be required by law or the rules or
regulations of any securities exchange, whether in the United States, United
Kingdom or elsewhere, (or in the opinion of counsel such release or announcement
is appropriate or desirable under or in light of such laws and regulations), in
which case the party making the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in advance of
such issuance, and (b) that any member of the BP Group, including Seller, may
make such an announcement to its employees. Notwithstanding the foregoing, Buyer
and Seller shall cooperate to prepare a joint press release to be issued on the
Closing Date and, upon the request of either Buyer or Seller, at the time of the
signing of this Agreement. Buyer and Seller agree to keep the terms of this
Agreement confidential, except to the extent required by applicable law or for
financial reporting purposes and except that the parties may disclose such terms
to their respective (and in the case of Seller, the BP Group's) counsel,
auditors, accountants, agents, advisors and other representatives as necessary
in connection with the ordinary conduct of their respective businesses (so long
as such Persons agree to keep the terms of this Agreement confidential).
23. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The
covenants and representations and warranties in this Agreement and in any other
document delivered in connection herewith shall survive the Closing solely for
purposes of Sections 15(a) and 15(b). The representations and warranties in this
Agreement shall terminate at the close of business on the second anniversary of
the Closing Date; provided, however, that the representations and warranties
provided in Section 6(e)(i) through (iii) with respect to the Real Property
shall not survive and shall terminate at the Closing.
24. ENTIRE AGREEMENT. This Agreement, the attached Schedules and
Exhibits and the agreements referred to herein or executed simultaneously
herewith, set forth the entire agreement and understanding of the parties in
respect to the transactions contemplated hereby and thereby and supersede all
prior agreements, arrangements and undertakings, whether written or oral,
relating to the subject matter hereof (other than the Confidentiality Agreement
which shall continue in effect). No representation, promise, inducement or
statement of intention, whether written or oral, has been made by any party
which is not embodied in or superseded by this Agreement or the Confidentiality
Agreement or in the documents referred to herein, and no party shall be bound by
or liable for any alleged representation, promise, inducement or statement of
intention not so set forth whether in the Offering Memorandum, in certain "data
rooms," management presentations or any other form in expectation of the
transactions contemplated by this Agreement. Except as otherwise specifically
provided in this Agreement, no conditions, usage of trade, course of dealing or
performance,
48
58
understanding or agreement purporting to modify, vary, explain or supplement the
terms or conditions of this Agreement will be binding unless hereafter made in
writing and signed by the party to be bound, and no modification will be
effected by the acknowledgment or acceptance of documents containing terms or
conditions at variance with or in addition to those set forth in this Agreement,
except as otherwise specifically agreed to by the parties in writing.
25. ASSIGNMENT. This Agreement and any rights and obligations hereunder
shall not be assignable or transferable by Buyer or Seller (including by
operation of law in connection with a merger or sale of stock, or sale of
substantially all the assets, of Buyer or Seller) without the prior written
consent of the other party and any purported assignment without such consent
shall be void and without effect; provided, however, that each of Buyer and
Seller may (a) assign any and all of its rights and interests hereunder to one
or more of its affiliates and (b) designate one or more of its affiliates to
perform its obligations hereunder; provided further that each of Buyer and
Seller shall remain responsible for the performance of all of its respective
obligations hereunder. Notwithstanding the foregoing, Seller may assign or
transfer any or all of its rights hereunder to any qualified intermediary in
order to complete an exchange of like-kind property under Section 1031 of the
Code and, at the request of Seller, Buyer shall execute such agreements and
other documents as may be necessary, in the reasonable opinion of Seller's
counsel, to complete and otherwise effectuate Seller's exchange of properties in
accordance with said Section 1031 of the Code and the regulations thereunder;
provided that Buyer shall not incur any unreimbursed third party costs,
expenses, fees or liabilities as a result of or connected with the exchange.
26. AMENDMENT AND WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the parties hereto, or, in the case of a waiver, by or on behalf of
the party waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver by any party of any condition, or
of any breach of any term, covenant, representation or warranty contained in
this Agreement, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such condition or breach or a waiver of
any other condition or of any breach of any other term, covenant representation
or warranty. No course of dealing between or among any Persons having any
interest in this Agreement shall be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any Person
under or by reason of this Agreement.
27. EXPENSES. Whether or not the transactions contemplated hereby are
consummated, and except as otherwise specifically provided in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including legal, due diligence, accounting and
investment banking fees and expenses, shall be paid by the party incurring such
costs or expenses.
28. HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
29. COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts (including by means of telecopied signature pages), all of
which shall be
49
59
considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
the other party.
30. INTERPRETATION. Unless the context requires otherwise:
(a) this Agreement includes this Asset Purchase Agreement and
any other agreement entered into by Buyer and Seller on the Closing
Date or in connection with the transactions contemplated hereby;
(b) the singular shall include the plural and the plural shall
include the singular and any gender shall include all other genders,
all as the meaning and the context of the Agreement shall require;
(c) references to Sections and paragraphs refer to sections
and paragraphs, respectively, of this Agreement;
(d) references to Exhibits and Schedules are to exhibits and
schedules attached to this Agreement, each of which is hereby
incorporated and made a part of this Agreement for all purposes as if
set forth in full herein;
(e) the words "including," "include," "includes" and all
variants thereof mean "including, without limitation;" and
(f) all references to "Dollars" and "dollars" in this
Agreement are to United States dollars.
31. NO STRICT CONSTRUCTION. Notwithstanding the fact that this
Agreement has been drafted or prepared by one of the parties, Buyer and Seller
confirm that both they and their respective counsel have reviewed, negotiated
and adopted this Agreement as the joint agreement and understanding of the
parties, and the language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any Person.
32. SCHEDULES. The disclosures in the Schedules hereto (including any
disclosures made in amendments made pursuant to Section 10(a)(iii)) are to be
taken as relating to the representations and warranties of Seller as a whole.
Matters listed once on the Schedules shall be deemed disclosed with reference to
all sections of the Schedules and all of Sections 6 and 7 of this Agreement. The
inclusion of information in the Schedules hereto shall not be construed as an
admission that such information is material to the Business, the Purchased
Assets, the Assumed Liabilities or Seller. In addition, matters reflected in the
Schedules are not necessarily limited to matters required by this Agreement to
be reflected in such Schedules. Such additional matters are set forth for
informational purposes only and do not necessarily include other matters of a
similar nature. Prior to the Closing, Seller shall have the right at all times
to supplement, modify or update the Schedules hereto; provided, however, that
any such supplements, modifications or updates shall be subject to the
provisions of Section 10(a)(iii). The Schedules are incorporated herein by
reference and made a part hereof.
50
60
33. REPRESENTATION BY COUNSEL; INTERPRETATION. Buyer and Seller
acknowledge that each of them has been represented by counsel in connection with
this Agreement and the transactions contemplated hereby. Accordingly, any rule
of law or any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived.
34. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be valid and effective under
applicable law, but if any provision of this Agreement or the application of any
such provision to any Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
35. BULK TRANSFER LAWS. Buyer hereby waives compliance by Seller with
the provisions of any so-called bulk transfer laws of any jurisdiction in
connection with the purchase and sale of the Purchased Assets. Seller shall
indemnify and hold Buyer harmless from any Losses which Buyer may incur due to
failure to so comply in accordance with Section 15.
36. NO THIRD PARTY BENEFICIARIES. Except as provided with respect to
indemnification as set forth in Section 15 and elsewhere in this Agreement,
nothing in this Agreement shall confer any rights upon any Person other than the
parties hereto and their respective heirs, successors and permitted assigns.
37. DEFINITION OF AFFILIATE. As used herein, the term "affiliate" shall
have the meaning set forth in Rule 405 promulgated under the Securities Act of
1933, as amended.
38. TIME OF ESSENCE. With regard to all rights and obligations of the
parties and all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
39. NO CONDITIONS. For the avoidance of doubt, the only conditions to
closing are those set forth in Sections 12 and 13 herein, and no other covenants
or conditions set forth in this Agreement are intended to have any effect on the
Closing or the payment of the Purchase Price.
* * * *
51
61
IN WITNESS WHEREOF, the parties have duly executed this instrument as
of the day and year first above written.
BP CORPORATION NORTH AMERICA INC.
By: /s/ RICHARD J. BATTAGLIA
-------------------------------
Richard J. Battaglia
Title: Attorney-in-Fact
AMOCO OIL COMPANY
By: /s/ N. R. MORRIS
-------------------------------
Neil R. Morris
Title: Attorney-in-Fact
TESORO PETROLEUM CORPORATION
By: /s/ WILLIAM T. VAN KLEEF
-------------------------------
William T. Van Kleef
Title: Executive Vice President, Chief
Operating Officer
Signature Page to Asset Purchase Agreement