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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JUNE 14, 1994
(MAY 23, 1994)
CORNERSTONE NATURAL GAS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-11994 74-1952257
(Commission (IRS Employer
File Number) Identification No.)
8080 N. CENTRAL EXPRESSWAY
SUITE 1200
DALLAS, TEXAS 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 691-5536
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ITEM 5. OTHER EVENTS
On May 23, 1994, Cornerstone Natural Gas, Inc.'s wholly-owned subsidiary,
Dubach Gas Company, completed the sale of its Claiborne refinery and certain
idle refining assets at its Dubach facility in north Louisiana to Arcadia
Refining & Marketing Company, L.P., a Texas limited partnership. The Company
also entered into a letter of intent to sell its remaining idle refining
assets located at Dubach to an affiliate of Arcadia.
Total purchase consideration for the Claiborne refinery, inventories and
certain Dubach refining assets was approximately $4.3 million consisting of
a $2.39 million cash payment, a $1 million subordinated note and a 46%
minority limited partnership interest in Arcadia held by Dubach Gas Company.
Of the 46% limited partnership interest, Dubach Gas Company holds 6%
interest in trust for the Turner Mason & Company. Total consideration for the
proposed Dubach transaction is expected to be approximately $1.0 million. If
the transaction had been completed January 1, 1994, the Company revenues and
net earnings would have decreased by approximately $8.5 million and $337,000,
respectively for the three months ended March 31, 1994. The first quarter
results, as adjusted for the sale of the refinery operations, do not include
any earnings applicable to the two cryogenic gas processing units which the
company brought on-line in April 1994. Accordingly, management does not
believe that the first quarter results are indicative of the results which the
Company expects to achieve in the last half of 1994.
The sale of the Claiborne facility and letter of intent to sell the Dubach
facility by the end of the second quarter is two of the final steps necessary
to refocus the Company on its gas gathering, processing and marketing business
and disposing of its petroleum refining business. The sale of the Dubach
Refinery is subject to numerous conditions including, but not limited to,
negotiations and execution of a definitive purchase document.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired - not applicable
(b) Pro forma financial information - not applicable
(c) Exhibits
10.1 Asset Contribution Agreement by and between Dubach Gas Company and
Arcadia Refining & Marketing Company, L.P., dated April 14, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORNERSTONE NATURAL GAS, INC.
(Registrant)
Dated: June 14, 1994 /s/ Ray C. Davis
Ray C. Davis
Chairman of the Board and
Chief Executive Officer
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Exhibit 10.1
ASSET CONTRIBUTION AGREEMENT
by and between
DUBACH GAS COMPANY,
a Texas corporation
("Grantor")
and
ARCADIA REFINING & MARKETING COMPANY, L.P.
a Texas limited partnership
("Grantee").
Concerning the contribution of certain
assets by Grantor, the assumption and assignment
of certain liabilities of Grantor and
the distribution of capital to Grantor
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ASSET CONTRIBUTION AGREEMENT
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This ASSET CONTRIBUTION AGREEMENT (this "Agreement"), dated as of this 14th
day of April, 1994, is by and between DUBACH GAS COMPANY, a Texas corporation
("Grantor"), and ARCADIA REFINING & MARKETING COMPANY, L.P., a Texas limited
partnership ("Grantee"). Grantor and Grantee may be referred to herein
individually as a "Party" and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, Grantor owns a refinery located in Claiborne Parish, Louisiana
(the "Claiborne Refinery") and another refinery located in Lincoln Parish,
Louisiana (the "Dubach Refinery") (collectively, the "Refineries"); and
WHEREAS, Grantor desires to contribute and Grantee desires to acquire all
the assets used in connection with the Claiborne Refinery, save and except the
Excluded Assets (as hereinafter defined) and acquire certain equipment located
at the Dubach Refinery (the "Dubach Transfer Equipment"), which will be moved by
Grantee to the Claiborne Refinery;
NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, and after good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
hereby contract and agree as follows:
ARTICLE I.
Transfer of Property; Limited Assumption of Liabilities
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1.01 TRANSFER OF PROPERTY. On the terms and subject to the conditions set
forth herein, on the Closing Date (as hereinafter defined), Grantor shall
assign, convey, deliver and transfer to Grantee and Grantee shall acquire from
Grantor, all of Grantor's right, title and interest in and to the tangible and
intangible property and assets (the "Transfer Assets") described on Exhibit "A"
hereof.
Notwithstanding any provision of this Agreement to the contrary, the
Transfer Assets shall not include any assets listed below (the "Excluded
Assets"):
(A) All cash, accounts receivable, bank accounts, security deposits
and any instruments, documents and chattel paper arising out of the sale of
goods prior to May 1, 1994;
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(B) All pipelines of any type, including, but not limited to, the
natural gas gathering system and certain other assets located at the
Claiborne Refinery, including all of the assets listed on Exhibit "B"
hereof (the "Gas Processing Assets");
(C) The salt water disposal well and related salt water disposal
facilities located at the Claiborne Refinery and described on Exhibit D
hereof; and
(D) All contracts related to the Excluded Assets or operations
related thereto.
1.02 CONSIDERATION.
(A) ISSUANCE OF PARTNERSHIP INTEREST AND CAPITAL DISTRIBUTION FROM
THE PARTNERSHIP. For and in consideration of the transfer of the Transfer
Assets to Grantee, Grantee shall issue to Grantor a limited partnership
interest equal to 46% ownership interest in Grantee and shall distribute
capital to Grantor at the Closing (as hereinafter defined) in the amount of
$2,080,000, plus (i) the amount of any prepaid accounts or security
deposits that are conveyed to Grantee, and (ii) the market value of crude
oil, feed stocks, intermediates and finished products (the "Hydrocarbon
Inventory") (to be paid as hereafter set forth) (all of such amounts in
this sentence are hereafter referred to as the "Consideration Amount").
The Consideration Amount to be distributed to Grantor shall consist of (i)
$1,080,000 in cash, subject to adjustment (as described below), and (ii)
promissory notes from Grantee in the aggregate principal amount of
$1,000,000 in the form and substance mutually agreed to by Grantor and
Grantee on or before the Closing (collectively, the "Notes"). The Notes
will be subject to the following terms: (1) they will be subordinated on
terms acceptable to Grantor to the Senior Debt (as hereinafter defined),
(2) they will be secured by a second lien on all of the assets of Grantee,
including the Transfer Assets, (3) they will bear interest at 10% per annum
payable quarterly, and (4) they will mature on the sixth anniversary of the
Closing Date, and prior to maturity, will be entitled to a mandatory
prepayment based on available cash after distribution to pay taxes after
the retirement of the Senior Debt.
To the extent that the Transfer Assets include prepaid items and the
Hydrocarbon Inventory, the Consideration Amount shall be increased by the value
of these assets (the "Adjustment"). The Adjustment shall be the sum of (i) the
value of all prepaid items included in the Transfer Assets, and (ii) the fair
market value of the Hydrocarbon Inventory included in the Transfer Assets (the
"Inventory Value"). The Inventory Value shall be calculated by (i)
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measuring, as of 12:01 AM on May 1, 1994, the amount of Hydrocarbon Inventory
using the best available method of measurement, and (ii) assigning a market-
related price for each of these items. The Adjustment shall be distributed in
cash by Grantee to Grantor on or before May 16, 1994.
(B) ALLOCATION OF VALUE. The Parties agree to allocate the value of
the Transfer Assets in a manner mutually acceptable to the Parties. The
Parties shall jointly file a Form 8594 or such other documents,
certificates or schedules as may be necessary to properly reflect such
allocations with the Internal Revenue Service and any other taxing
authority. The Parties acknowledge that the tax basis for Grantor's 46%
interest in Grantee shall be determined as provided in Subchapter K of the
Internal Revenue Code of 1986, as amended, and the Regulations promulgated
thereunder, and it is contemplated that Grantor will be entitled to a
carryover basis with respect to its partnership interest.
1.03 LIMITED ASSUMPTION OF LIABILITIES. Grantee hereby agrees that at the
Closing it will assume and undertake to pay, satisfy or discharge the remaining
unfulfilled obligations of Grantor set forth on Schedule 1.03 hereof (the
"Assumed Liabilities").
1.04 TRANSFER OF PARTNERSHIP INTEREST. Subject to the Closing occurring on
the Closing Date (as hereinafter defined) in accordance with the terms and
conditions set forth in this Agreement, Grantee will issue to Grantor on the
Closing Date the limited partnership interest (the "Partnership Interest") in
Grantee having a percentage interest of ownership equal to 46%. The Partnership
Interest will be issued to Grantor pursuant to and shall be governed by the
Agreement of Limited Partnership in the form and substance mutually agreed upon
by the Parties on or before the Closing (the "Partnership Agreement").
ARTICLE II.
2.01 CLOSING DATE AND EFFECTIVE TIME. The closing of the contribution of
the Transfer Assets and the distribution of capital contemplated hereby (the
"Closing") shall be held at the offices of Grantor at 8080 North Central
Expressway, 12th Floor, Dallas, Texas or at such other place as the Parties
mutually agree on or before May 16, 1994, or such other date mutually approved
of by the Parties (the "Closing Date"), but all prorations of income and
expenses will occur as of 12:01 A.M. on May 1, 1994.
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2.02 CLOSING TRANSACTIONS. On the Closing Date:
(A) Grantor shall execute and deliver to Grantee all deeds, bills of
sale, endorsements, assignments, documents of title and other instruments
of transfer and conveyance as Grantee shall reasonably request and in form
and substance reasonably requested by Grantee so as to vest in Grantee all
of Grantor's legal and equitable title to the Transfer Assets. THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE TRANSFER ASSETS WILL BE TRANSFERRED TO
GRANTOR "AS IS" WITH NO EXPRESSED OR IMPLIED WARRANTIES EXCEPT AS PROVIDED
IN THIS AGREEMENT AND THE EXHIBITS HERETO.
(B) Grantee shall deliver to Grantor (i) the sum of $1,080,000 by
wire transfer of immediately available funds to an account designated by
Grantor, and (ii) the Note(s), together with all of the documents
perfecting a security interest in the collateral securing the Note(s).
2.03 ISSUANCE OF PARTNERSHIP INTEREST AND CAPITALIZATION OF PARTNERSHIP.
Grantee shall deliver (1) a counterpart of the Partnership Agreement signed by
all partners of Grantee as of the Closing Date (the "Partners"), with evidence
satisfactory to Grantor that at least $1,060,000 of capital has been contributed
by the other limited partners of Grantee (excluding Grantor) and $20,000 has
been contributed by the general partner of Grantee, (3) evidence that all
investors in Grantee are accredited investors as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
("Accredited Investors"), and (4) evidence that the Senior Term Debt and the
Working Capital Revolver (as hereinafter defined) have been obtained in
accordance with the terms set forth in this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES BY GRANTOR. Grantor hereby represents
and warrants to Grantee as follows:
(A) ORGANIZATION AND GOOD STANDING. Grantor is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Texas.
(B) CORPORATE AUTHORITY; AUTHORIZATION OF AGREEMENT. The execution
and delivery of this Agreement by Grantor, the performance by Grantor of
all the terms and conditions hereof to be performed by Grantor and the
consummation of the transactions contemplated hereby have been duly
authorized and approved by all requisite action (shareholder and board
approval and otherwise) on the part of Grantor.
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(C) NO VIOLATION. Except for the approval of the Bank of Oklahoma,
National Association, certain other approvals, and any requisite applicable
regulatory approval all as disclosed on Schedule 3.01(C) hereof, neither
the execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement nor compliance with its terms
and conditions, shall result in the creation or imposition of any lien,
charge or encumbrance of any nature upon the Transfer Assets.
(D) INVESTMENT. Grantor is an Accredited Investor and is purchasing
the Partnership Interest for investment purposes.
(E) BROKER. All negotiations on behalf of Grantor relating to this
Agreement and the transactions contemplated by this Agreement have been
carried on by Grantor and its agents directly with Grantee without the
intervention of any other person in such manner as to give rise to any
claim for a brokerage commission, finder's fee or other like payment in
connection with the consummation of the transactions contemplated hereby,
except for Turner, Mason & Company (the "Broker"), and Grantor acknowledges
it will be responsible for the commission owed to the Broker.
(F) TITLE TO PROPERTY. Other than the leased equipment and vehicles
shown on Schedule 1.03, Grantor has good, valid and indefeasible title to
all the Transfer Assets. Upon consummation of the transactions
contemplated hereby, Grantee shall receive good, valid and indefeasible
title to the Transfer Assets that are owned free and clear of all security
interests, liens, claims and encumbrances and good and valid leasehold
interest in the leased equipment and vehicles shown on Schedule 1.03.
(G) TAXES. All income, excise, corporate, franchise, property,
sales, use, payroll, withholding and other taxes related to taxable periods
or portions thereof ending prior to or on the date hereof, including,
without limitation, governmental charges, assessments and required
contributions of Grantor with respect to its business that may result in
the filing of a lien on the Transfer Assets or that may result in the
imposition of transferee or other liability on Grantee for the payment of
such taxes, have been accurately recorded and duly paid, collected or
withheld and remitted to the appropriate governmental agency, except for
current taxes not due and payable prior to or on the date hereof (such
taxes to be paid when due by Grantor). Grantor shall timely file all
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sales tax returns with respect to sales occurring in connection with Grantor's
business prior to or on the date hereof.
(H) LITIGATION. There are no legal actions or administrative
proceedings or investigations instituted, or to the best knowledge of
Grantor or Shareholder, threatened, against or affecting, or that could
affect any of the Transfer Assets.
(I) COMPLIANCE WITH LAWS. To the best of Grantor's actual knowledge,
there are no existing violations by Grantor of any federal, state or local
law or ordinance other than the Occupational Health and Safety Act and
Environmental Laws (as hereinafter defined) as to which Grantor makes no
representation or warranty that could have a material adverse effect on
the Transfer Assets. To the best of Grantor's actual knowledge, it
possesses all necessary licenses, permits and governmental authorizations
to conduct the business associated with the Transfer Assets as now
conducted.
(J) CONDITIONS OF THE TRANSFER ASSETS. The structures and equipment
included in the Transfer Assets are currently being operated, and, as of
March 31, 1994, were processing approximately seven thousand (7,000)
barrels of crude oil per day.
(K) UNIONS. No employees of Grantor are represented by any union,
labor organization or collective bargaining unit. To the best knowledge of
Grantor, the employees of Grantor have no current intention to and have not
threatened to organize or join a union, labor organization or collective
bargaining unit.
(L) ACCURACY OF INFORMATION FURNISHED. Exhibit C is information that
has been provided to Grantee by Grantor. Such information and all
representations contained in this Agreement and the exhibits hereto are
true, correct and complete in all material respects. Such information
states all facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements are made, true, correct and complete in all material respects.
3.02 REPRESENTATIONS AND WARRANTIES BY GRANTEE. Grantee hereby represents
and warrants to Grantor that:
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(A) ORGANIZATION AND EXISTENCE. Grantee is a limited partnership
duly formed, validly existing and in good standing under the laws of the
State of Texas and will be qualified to do business in Louisiana on or
before the Closing Date.
(B) AUTHORITY AND APPROVAL. Grantee has all requisite partnership
power and authority to execute and deliver this Agreement, to consummate
the transactions contemplated hereby and to perform all the terms and
conditions hereof to be performed by it. The execution and delivery of
this Agreement by Grantee, the performance of it of all the terms and
conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized and approved by
all requisite partnership action on the part of Grantee. Grantee has
delivered to Grantor a true and correct copy of the Partnership Agreement.
(C) NO BROKER. All negotiations on behalf of Grantee relating to
this Agreement and the transactions contemplated by this Agreement have
been carried on by Grantee, the Broker, Grantor and its agents without the
intervention of any other person in such manner as to give rise to any
claim against Grantor or its affiliates for a broker's commission, finder's
fee or like payment in connection with the consummation of the transactions
contemplated herein other than Grantor's obligations to the Broker.
(D) LIMITED REPRESENTATIONS BY GRANTOR. Grantee represents and
warrants to Grantor that it has inspected, examined and investigated the
Transfer Assets prior to its execution and delivery of this Agreement and
that Grantee has retained and relied upon experts that have knowledge and
experience in the refinery business and used its experts for its
independent financial analysis and review. Grantee represents, warrants
and agrees that, except as set forth in this Agreement and the exhibits
hereto, (i) it is relying SOLELY on its and its experts' own inspections,
examinations and investigations in making the decision to purchase the
Transfer Assets, (ii) that (subject to the accuracy of Grantor's
representations that it is an Accredited Investor) Grantee qualifies as an
Accredited Investor, and (iii) Grantee with its experts has the business
background and technical expertise to properly evaluate the investment and
make a proper business decision.
(E) NO RELIANCE ON MARKETING MATERIALS. Grantee has not relied, and
is not relying, upon any information, document, sales brochures, or other
literature, financial projections, financial statements, representations,
guarantees or warranties (whether express or implied, oral or written,
material or immaterial) that may have been given or made by
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Grantor, except for any representations and warranties contained in this
Agreement and the exhibits hereto.
(F) NO RELIANCE ON GRANTOR AS TO QUALITY OR PHYSICAL CONDITION OF
TRANSFER ASSETS; "AS IS" SALE. EXCEPT AS PROVIDED IN THIS AGREEMENT AND
THE EXHIBITS HERETO, GRANTEE IS NOT RELYING AND HAS NOT RELIED ON GRANTOR
OR ITS OFFICERS, DIRECTORS, AGENTS AND REPRESENTATIVES AS TO (I) THE
QUALITY, NATURE, ADEQUACY OR PHYSICAL CONDITION OF THE TRANSFER ASSETS;
(II) THE QUALITY, NATURE, ADEQUACY OF PHYSICAL CONDITION OF SOILS OR THE
EXISTENCE OR CONDITION OF GROUND WATER AT THE LOCATION OF THE TRANSFER
ASSETS; (III) THE EXISTENCE, QUALITY, NATURE, ADEQUACY OF PHYSICAL
CONDITION OF ANY UTILITY SERVING THE TRANSFER ASSETS; (IV) THE DEVELOPMENT
POTENTIAL OF THE TRANSFER ASSETS, ITS HABITABILITY, MERCHANTABILITY OR
FITNESS, SUITABILITY OR ADEQUACY FOR ANY PARTICULAR PURPOSE; (V) THE ZONING
OR OTHER LEGAL STATUS OF THE TRANSFER ASSETS; (VI) THE COMPLIANCE WITH ANY
APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS,
CONDITIONS OR RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY
OR OF ANY OTHER PERSON OR ENTITY OF THE TRANSFER ASSETS; OR (VII) THE
COMPLIANCE OF THE TRANSFER ASSETS WITH ANY ENVIRONMENTAL LAWS OR THE
EXISTENCE OF ANY CONDITION OR SUBSTANCE THAT COULD CAUSE LIABILITY UNDER
ANY ENVIRONMENTAL LAWS. GRANTEE IS PURCHASING THE PROPERTY IN "AS IS"
CONDITION "WITH ALL FAULTS" AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY
WARRANTIES, REPRESENTATIONS OR GUARANTIES OF ANY KIND, ORAL OR WRITTEN,
EXPRESS OR IMPLIED, CONCERNING THE PROPERTY OR THIS AGREEMENT FROM OR ON
BEHALF OF GRANTOR.
(G) NO ENVIRONMENTAL REPRESENTATIONS. GRANTOR HAS NOT, DOES NOT AND
WILL NOT MAKE ANY REPRESENTATIONS OR WARRANTIES WITH REGARD TO COMPLIANCE
WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES,
REGULATIONS, ORDER OR REQUIREMENT, INCLUDING, BUT NOT LIMITED TO, THOSE
PERTAINING TO THE HANDLING, GENERATING, TREATING, STORING OR DISPOSING OF
ANY HAZARDOUS WASTE OR SUBSTANCE. GRANTOR HAS DELIVERED TO GRANTEE THE
PHASE I AND, TO THE EXTENT AVAILABLE, THE PHASE II ENVIRONMENTAL STUDY
DATED APRIL 1993 PREPARED BY ESPEY, HUSTON & ASSOCIATES, INC.
ARTICLE IV.
ADDITIONAL AGREEMENTS AND COVENANTS
4.01 COVENANTS OF GRANTOR. Grantor covenants and agrees with Grantee as
follows:
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(A) CERTAIN CHANGES. Except as expressly may be permitted hereunder,
Grantor covenants that, from the date hereof until the Closing Date,
without first obtaining the written consent of Grantee, Grantor shall not:
(i) terminate, amend, modify or change any contract which
is a Transfer Asset;
(ii) sell, lease or otherwise dispose of any of the Transfer
Assets, other than in the ordinary and usual course of business; or
(iii) commit itself to do any of the foregoing.
(B) OPERATION OF BUSINESS. Grantor covenants and agrees with Grantee
that from the date hereof until the Closing Date, except as permitted
hereunder or contemplated hereunder or as consented to in writing by
Grantee, Grantor shall carry on its business in the usual and ordinary
course and shall use its best efforts to preserve and maintain its business
organization, employees and business relationships.
(C) ACCESS. Grantor will afford to Grantee and its authorized
representatives reasonable access from the date hereof until the Closing
Date, during normal business hours, to Grantor's personnel, agents and
representatives, property, books and records related to the Claiborne
Refinery and will furnish to Grantee any and all information as it may
reasonably request but shall not be required to generate any special
reports or be required to speculate as to any matter. Grantee shall have
the right to conduct soil borings and tests to determine the geologic
subsurface and any possible existence of toxic and hazardous materials on,
about or under the Transfer Assets.
(D) BEST EFFORTS. Grantor will use its best efforts to obtain the
satisfaction of the conditions to the Closing set forth in Section 5.01
hereof.
(E) CONFIDENTIALITY. After the Closing Date, Grantor, directly or
indirectly, shall not disclose or provide to any other Person any non-
public information of a confidential nature concerning the business or
operations of the Refineries, except as is required in Securities and
Exchange Commission or other governmental filings or judicial,
administrative or arbitration proceedings.
(F) PUBLIC ANNOUNCEMENTS. Except for releases or filings required by
securities law or stock exchange requirements, at all times until the
Closing Date, Grantor shall promptly advise Grantee before issuing or
permitting any
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of Grantor's directors, officers, employees or agents to issue any press
release with respect to this Agreement or the transactions contemplated
hereby.
(G) NON-COMPETE. Grantor and its parent, Cornerstone Natural Gas,
Inc. (the "Shareholder"), each hereby agrees that, except for operations at
the Dubach Refinery (including, without limitation, condensate
stabilization), for a period of five years from the Closing Date, they will
not, directly or indirectly, either as an employee, employer, consultant,
agent, lender, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any crude oil refining operations that are in competition
with the business of Grantee, within a 100 mile radius of the Claiborne
Refinery, except as approved in writing by Grantee.
(H) PRESERVATION OF BOOKS AND RECORDS. For a period of five (5)
years after the Closing Date, Grantor shall (i) preserve and retain all
corporate, accounting, legal, auditing and other books and records related
to the Claiborne Refinery that are in Grantor's control, and (ii) make such
books and records available at the then current administrative headquarters
of Grantor to Grantee and its officers, employees and agents, upon
reasonable notice and at reasonable times. Grantee shall be entitled to
make copies of any such books and records as it shall deem necessary at
their sole cost and expense. Grantor agrees to permit representatives of
Grantee to meet with employees of Grantor on a mutually convenient basis in
order to enable Grantee to obtain additional information and explanations
of any materials provided pursuant to this Section 4.01(H).
4.02 COVENANTS OF GRANTEE. Grantee covenants and agrees with Grantor as
follows:
(A) BEST EFFORTS. Grantee will use its best efforts to obtain the
satisfaction of the conditions to the Closing set forth in Section 5.02.
(B) PRESERVATION OF BOOKS AND RECORDS. For a period of five (5)
years after the Closing Date, Grantee shall (i) preserve and retain all
books and records of Grantee that are in Grantee's control, and (ii) make
such books and records available at the then current administrative
headquarters of Grantee to Grantor and its officers, employees and agents,
upon reasonable notice and at reasonable times. Grantor shall be entitled
to make copies of any such books and records as it shall deem necessary at
their sole cost and expense. Grantee agrees to permit representatives of
Grantor to meet with employees of Grantee on a mutually convenient basis in
order
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to enable Grantor to obtain additional information and explanations of any
materials provided pursuant to this Section 4.02(B).
(C) PUBLIC ANNOUNCEMENTS. At all times until the Closing Date,
Grantee shall not issue or permit the issuance by any of Grantee's
Partners, employees or agents, or any director,officer, employee, agent or
shareholder of the general partner of Grantee to issue any press release
with respect to this Agreement or the transactions contemplated hereby.
(D) CONFIDENTIAL INFORMATION. In the event that the Agreement is
terminated or, if not terminated, until the Closing Date, the
confidentiality of any data or information received by Grantee and the
Partners of Grantee (other than Grantor) regarding the business and assets
of Grantor shall be maintained by Grantee and its representatives, and such
information shall not be disclosed to others other than Grantee's agents,
representatives, partners and lending institutions who have agreed to be
bound by a confidentiality agreement on terms satisfactory to Grantor.
(E) NON-COMPETE. Grantee and the Partners of Grantee (excluding
Grantor) hereby agree that, for a period of five years from the Closing
Date, they will not, directly or indirectly, either as an employee,
employer, consultant, agent, lender, principal, partner, stockholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any gas processing operations that are
in competition with the business of Grantor within a 100 mile radius of the
Claiborne Refinery, except as approved in writing by Grantor.
(F) ENVIRONMENTAL REMEDIATION. Grantor has provided Grantee with an
environmental assessment of the Claiborne Refinery facilities prepared by
Espey, Huston & Associates, Inc. dated April 1993. Grantor requires that
Grantee develop and rely on its own opinions from the information provided
and the advice of its own experts and consultants regarding all
environmental matters at the Claiborne Refinery. Moreover, Grantee agrees
to operate the Transfer Assets in full compliance with all remediation
plans and programs in place at the Closing plus any modifications of such
programs and future requirements imposed on the Transfer Assets by
authorized regulatory agencies (the "Remediation Programs"). Grantee
agrees to hold harmless and indemnify Grantor for all future environmental
liabilities resulting from Grantee's operations of the Transfer Assets and
any failures to comply with the Remediation Programs. Grantee assumes all
responsibility and liability for recovery of underground hydrocarbons
related to
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the Transfer Assets and otherwise agrees to continue the remedial work that
has been conducted at the sites. Grantee agrees to indemnify and hold
Grantor harmless from all liabilities for violation(s) of any
"Environmental Laws" (as hereafter defined) as to the Transfer Assets. For
purposes of this Agreement, "Environmental Laws" shall mean laws, including
without limitation, federal, state or local laws, ordinances, rules,
regulations, interpretations and orders of courts or governmental agencies
or authorities relating to pollution or protection of the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface and subsurface strata), including without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of
1980, the Superfund Amendments and Reauthorization Act of 1987, the
Resource Conservation and Recovery Act of 1976, the Hazardous and Solid
Waste Amendment of 1984 and the Hazardous Materials Transportation Act, and
any other laws relating to pollution or protection of the environment, or
to the manufacture, processing, distribution, use, treatment, handling,
storage, disposal or transportation of Polluting Substances (as hereinafter
defined). For the purposes of this Agreement, Polluting Substance means
any solid or hazardous waste, hazardous substance, pollutant, contaminant,
oil, petroleum product, commercial product or other substance (i) which is
listed, regulated or designated as toxic or hazardous (or words of similar
meaning or regulatory effect) or with respect to which remediation or
cleanup obligations may be imposed under any Environmental Law, or (ii)
exposure to which may pose a safety or health hazard.
(G) COLLECTION OF RECEIVABLES. Grantee shall use its best efforts to
assist Grantor in the collection of all accounts receivables that are part
of the Excluded Assets (the "Retained Receivables"). Grantee shall remit
to Grantor all amounts collected on the Retained Receivables and unless
specifically notified to the contrary, shall apply all collections to the
oldest invoice.
(H) SENIOR DEBT. Grantee shall diligently pursue and seek to obtain
a bank loan of $3,000,000 for the Transfer Assets, and a working capital
facility sufficient for the operation of the Transfer Assets and may seek
to obtain such other indebtedness as shall be mutually acceptable to the
Grantor and Grantee (these loans shall be referred to collectively
hereafter as the "Senior Debt"). Grantee agrees to notify and keep Grantor
informed concerning the status of Grantee's efforts to obtain the Senior
Debt. Grantee shall notify Grantor immediately upon learning that BT
Commercial Corporation ("Banker's Trust") is not willing or able to provide
the Senior Debt on the terms previously disclosed to
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Grantor on or before the Termination Date (as hereinafter defined) and,
following such notice, diligently seek another lender to provide the Senior
Debt.
4.03 MUTUAL COVENANTS. Grantor and Grantee upon the Closing agree as
follows:
(A) CONDENSATE PURCHASE AGREEMENT. Grantor hereby agrees to sell and
Grantee hereby agrees to purchase all condensate produced by Grantor at the
Claiborne Refinery that is under the sole control of Grantor at its fair
market value at the time of its transfer from Grantor to Grantee (the
"Market Price"). The Market Price shall be that certain price that a
willing buyer would pay to a willing seller for the same or similar product
at the same location. Payments under this Condensate Purchase Agreement
shall be payable monthly and due on the 20th day of the month following the
calendar month in which the condensate was received (e.g., payments for
condensate received in May shall be paid on or before June 20). This
Condensate Purchase Agreement pursuant to this Section 4.03(A) of this
Agreement shall be perpetual and binding on all successors and assigns of
Grantor and Grantee for so long as they, their successors and assigns
operate their respective facilities but shall not be ongoing if operations
are terminated without the intent to renew operations.
(B) LIGHT HYDROCARBONS PURCHASE AGREEMENT. Grantee hereby agrees to
sell and Grantor hereby agrees to purchase all fuel gas, butanes, propane
and natural gas liquids (together, the "Light Hydrocarbons") produced by
Grantee at the Claiborne Refinery that is under the sole control of Grantee
at the Market Price determined at the time of its transfer from Grantee to
Grantor. Payments under this Light Hydrocarbons Purchase Agreement shall
be payable monthly and due on the last day of the month following the
calendar month in which the Light Hydrocarbons were received (e.g.,
payments for Light Hydrocarbons received in May shall be paid on or before
June 30). This Light Hydrocarbons Purchase Agreement pursuant to this
Section 4.03(B) of this Agreement shall be perpetual and binding on all
successors and assigns of Grantor and Grantee for so long as they, their
successors and assigns operate their respective facilities but shall not be
ongoing if operations are terminated without the intent to renew
operations.
(C) ACCESS AND EASEMENTS. Grantor hereby agrees to allow such
Grantee access ("Grantee's Right of Access") over the property where the
Dubach Refinery is located as is required by Grantee to remove the Dubach
Transfer Equipment. Grantee's Right of Access will terminate upon the
earlier of
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(i) the removal of the Dubach Transfer Equipment from the Dubach Refinery,
or (ii) one year after the Closing Date. Grantee hereby agrees to
convey to Grantor an easement ("Grantor's Easement") over the property
where the Claiborne Refinery is located in order to (i) allow Grantor to
operate, maintain, repair and expand (but expansion will only be
permissible if it does not materially hinder Grantee's operations at the
Claiborne Refinery) those certain Excluded Assets that will remain at the
Claiborne Refinery, including, but not limited to, the salt water disposal
well and the three-phase gas separator (known as the "Lisbon Separator"),
and (ii) allow Grantor to remove certain other Excluded Assets (the
"Claiborne Transfer Equipment"), including, but not limited to, certain gas
compressors. Except for the portion of the Grantor's Easement relating to
removal of the Claiborne Transfer Equipment (which shall terminate on the
earlier of (a) the removal of the Claiborne Transfer Equipment, or (b) one
year after the Closing Date) the Grantor's Easement shall be perpetual in
duration but shall revert on abandonment (which shall mean a failure to
utilize the easement for a continuous period of one year or more, unless
Grantor intends to use the easement but is prevented from such use by
economic conditions, shortage of material or other matters beyond Grantor's
control), shall be a non-exclusive right and shall also include the
temporary use of any excess land required for repair (as long as such use
does not materially interfere with the intended use of Grantee).
(D) RIGHT TO PROVIDE INFORMATION. If, on or before May 1, 1994,
Grantee notifies Grantor that Bankers' Trust is not willing or able to
provide the Senior Debt on the terms reasonably acceptable to Grantor and
Grantee, such approval not to be unreasonably withheld on or before the
Termination Date, then until such alternative financing has been obtained,
the Parties agree that Grantor may solicit bids for the Transfer Assets and
provide to other parties any and all information concerning the Transfer
Assets that Grantor deems appropriate in its sole discretion. Grantee
agrees to use its best efforts to obtain alternative financing for the
Senior Debt on terms reasonably acceptable to Grantor and Grantee, such
approval not to be unreasonably withheld.
ARTICLE V.
CONDITIONS TO CLOSING
5.01 CONDITIONS TO THE OBLIGATIONS OF GRANTEE. The obligations of Grantee
to proceed with the Closing are subject to the satisfaction on or prior to the
Closing Date of all of the following conditions; however, Grantee may close even
though one or more of the conditions have not been met, in whole or in part, by
Grantor; provided, however, that no such closing without one or more
condition(s) being met shall constitute a waiver by Grantee of any of its other
rights or remedies, at law or in equity, if
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Grantee gives written notice that it is not waiving a specified condition. The
conditions for Grantee to proceed with the Closing are as follows:
(A) COMPLIANCE. Grantor shall have performed, satisfied and complied
with its covenants and agreements contained herein, each of its
representations and warranties contained in Section 3.01 hereof shall be
true on and as though made on and as of the Closing Date, and each of the
conditions specified in this Agreement shall have been satisfied on or
before the Closing Date.
(B) OFFICER'S CERTIFICATE. Grantee shall have received a certificate
dated the Closing Date from Grantor certifying that the matters specified
in Section 5.01(A) are correct.
(C) NO ORDERS. The Closing shall not materially violate any material
order or decree of any court or governmental body having competent
jurisdiction over the transactions contemplated by this Agreement.
(D) ABSENCE OF LITIGATION. No material proceeding pertaining to the
transactions contemplated by this Agreement or to its consummation, shall
have been instituted or threatened on or before the Closing Date which
would prevent a transfer of the Transfer Assets in compliance with the
terms of this Agreement.
(E) SENIOR DEBT. Grantee shall have arranged and obtained Senior
Debt on the terms set forth in this Agreement.
(F) THIRD PARTY CONSENTS. All necessary agreements, consents and
approvals required as listed on Schedule 3.01(C) shall have been received
by Grantee and shall be in a form and substance reasonably satisfactory to
Grantee.
(G) UPDATE TO ENVIRONMENTAL REPORT. Grantor shall use its best
efforts to provide Grantee with an updated environmental assessment of the
Claiborne Refinery facilities prepared by Espey, Huston & Associates, Inc.,
dated as of a date subsequent to the date of this Agreement (Grantor's
"best efforts" obligation in this paragraph shall not require Grantor to
expend more than $10,000).
5.02 CONDITIONS TO THE OBLIGATIONS OF GRANTOR. The obligations of Grantor
to proceed with the Closing are subject to the satisfaction on or prior to the
Closing Date of all of the following conditions; however, Grantor may close even
though one or more of the conditions have not been met, in whole or in part, by
Grantee; provided, however, that no such Closing without one or more condition
being met shall constitute a waiver by Grantor of any of its other rights or
remedies at law or in equity if Grantor gives written notice that it is not
waiving a specified condition.
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The conditions for Grantor to proceed with the Closing are as follows:
(A) COMPLIANCE. Grantee shall have performed, satisfied and complied
with its covenants and agreements contained herein, each of its
representations and warranties contained in Section 3.02 hereof shall be
true on and as though made on and as of the Closing Date, and each of the
conditions specified in this Agreement shall have been satisfied on or
before the Closing Date.
(B) OFFICERS' CERTIFICATE. Grantor shall have received a
certificate, dated the Closing Date, executed by an executive officer of
the general partner of Grantee certifying as to the matters specified in
Section 5.02(A) hereof.
(C) NO ORDERS. The Closing shall not materially violate any material
order or decree of any court or governmental body having competent
jurisdiction over the transactions contemplated by this Agreement.
(D) ABSENCE OF LITIGATION. No meritorious material proceeding
pertaining to the transaction contemplated by this Agreement or to its
consummation, shall have been instituted or threatened on or before the
Closing Date, which would prevent a transfer of the Transfer Assets in
compliance with the terms of this Agreement.
(E) PARTNERSHIP CAPITALIZATION. Grantee shall have raised an
aggregate of $1,080,000 in capital in addition to the contribution to be
made by Grantor. In addition, Grantee shall have arranged and obtained a
term loan in the amount of at least $3,000,000 and a working capital
facility on terms acceptable to Grantee, such acceptance not to be
unreasonably withheld.
ARTICLE VI.
TERMINATION
6.01 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:
(A) By the mutual written agreement of Grantor and Grantee;
(B) If the Closing has not occurred prior to May 16, 1994 (the
"Termination Date"); or
(C) If Grantee shall notify Grantor that Bankers Trust is not willing
or able to provide the Senior Debt on or before the Termination Date and an
alternative lender for the Senior Debt has not been obtained, then on or
after May 1, 1994
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Grantor may terminate this Agreement by written notice to Grantee; or
(D) If the occurrence of the closing transactions would materially
violate any order, decree or judgment which prohibits the consummation of
this Agreement in a material way.
6.02 EFFECT OF TERMINATION. The following provisions shall apply in the
event of a termination of this Agreement:
(A) If this Agreement is terminated by Grantor and Grantee under any
of the grounds specified in Section 6.01(A) or 6.01(C) hereof, such
termination shall be without liability to any Party to this Agreement or
any stockholder, director, officer, employee, agent, partner or
representative of such Party.
(B) If this Agreement is terminated as a result of the failure of
Grantor to perform its material obligations hereunder without lawful
justification, Grantor shall be fully liable for any and all direct damages
sustained or incurred by Grantee, but not indirect or consequential damages
or loss of profit.
(C) If this Agreement is terminated as a result of the failure of
Grantee to perform its material obligations hereunder without lawful
justification, Grantee shall be fully liable for any and all direct damages
sustained or incurred by Grantor, but not indirect or consequential damages
or loss of profits.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS;
INDEMNIFICATION
7.01 INDEMNIFICATION OF GRANTEE. Grantor agrees to indemnify Grantee
against, and hold Grantee harmless from, any loss, damage or expense (including
reasonable attorneys' fees) sustained by Grantee arising out of or resulting
from any inaccuracy or breach of any of the representations, warranties or
covenants made by Grantor herein.
7.02 INDEMNIFICATION OF GRANTOR. Grantee agrees to indemnify Grantor
against, and hold Grantor harmless from, any loss, damage or expense (including
reasonable attorneys' fees) sustained by Grantor arising out of or resulting
from (i) any inaccuracy or breach of any of the representations, warranties or
covenants made by Grantee herein, or (ii) any claims made pursuant to an Assumed
Liability.
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7.03 SURVIVAL. The representations, warranties, covenants and agreements
set forth in this Agreement and in any certificate or instrument delivered in
connection herewith shall survive the Closing.
7.04 INDEMNIFICATION PROCEDURES. All claims for indemnification under this
Agreement shall be asserted and resolved as follows:
(A) A Party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify in writing the other Party
(the "Indemnifying Party") of the claim which has given rise to a right of
indemnification under this Agreement, (the "Third Party Claim") describing
in detail the nature of the claim (the "Claim Notice"). The Indemnifying
Party shall promptly after receipt of the Claim Notice, at the sole cost
and expense of the Indemnifying Party, defend the Indemnified Party against
such Third Party Claim or if the Indemnifying Party denies responsibility
it shall promptly so notify the party claiming indemnification.
(B) The Indemnifying Party shall have the right and obligation to
diligently defend, at its sole cost and expense, the Third Party Claim.
The Indemnifying Party shall have full control of such defense and
proceedings, including any compromise or settlement thereof. If requested
by the Indemnifying Party, the Indemnified Party agrees to cooperate in
contesting any Third Party Claim which the Indemnifying Party elects to
contest and to provide witness and other support at no costs, other than
reimbursement for travel and lodging. The Indemnified Party may
participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this Section
7.04(B).
(C) If the Indemnifying Party wrongfully fails to diligently
prosecute or settle the Third Party Claim, then the Indemnified Party shall
have the right to assume the defense of such Third Party Claim, and the
cost of such expense shall be the sole cost and expense of the Indemnifying
Party.
ARTICLE VIII
MISCELLANEOUS
8.01 EXPENSES. Except as specifically provided herein, all legal and other
costs and expenses in connection with this Agreement and the transactions
contemplated hereby shall be paid by Grantor or Grantee, as the case may be,
depending upon which Party incurred such costs and expenses.
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8.02 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or when received if
sent by registered or certified mail, return receipt requested, or on the date
of delivery as shown by a receipt from a reputable overnight delivery service,
to the Parties at the following addresses (or at such other address as Party may
specify by like notice);
(A) If to Grantee:
Arcadia Refining & Marketing Company, L.P.
2920 San Jacinto
LB 38
Dallas, TX 75201
Attention: Malcolm M. Turner
With a copy to:
Donohoe, Jameson & Carroll, P. C.
3400 Renaissance Tower
1201 Elm Street
Dallas, TX 75270-2120
Attention: James A. Donohoe
(B) If to Grantor, to:
Dubach Gas Company
8080 North Central Expressway
12th Floor
Dallas, TX 75206
Attention: Ray Davis, Chairman
With a copy to:
Schlanger, Mills, Mayer & Grossberg, L.L.P.
5847 San Felipe, Suite 1700
Houston, Texas 77056
Attention: Clarence Mayer, P.C.
8.03 EXCLUSIVE AGREEMENT. This Agreement supersedes all prior agreements
between the Parties (written or oral) and is intended as a complete and
exclusive statement of the terms of the agreement between the Parties.
8.04 CHOICE OF LAW; AMENDMENTS; HEADINGS. This Agreement shall be governed
by the internal laws of the State of Texas. This Agreement may not be amended
or modified orally. The headings and table of contents contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
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8.05 ASSIGNMENTS AND THIRD PARTIES. No Party hereby shall assign this
Agreement or any part hereof without the prior written consent of the other
Parties. Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and assigns. No assignment of this Agreement shall release the
assigning party of any of its obligations under the Agreement. Nothing in this
Agreement shall entitle any person other than Grantor or Grantee, or their
respective successors and assigns permitted hereby, to any claim, cause of
action, remedy or right of any kind.
8.06 SUBSEQUENT FILINGS. Effective at the Closing Date, Grantor shall file
with all applicable regulatory agencies or authorities any such notices or
certificates as are necessary to reflect the sale to Grantee.
8.07 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any material adverse
manner to either Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to try to
accomplish the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
8.08 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
8.09 FURTHER ASSURANCES. Grantor and Grantee agree to deliver or cause to
be delivered to each other on the Closing Date and at such other times
thereafter as shall be reasonably agreed any such additional instrument as any
of them may reasonably request for the purpose of carrying out transactions
contemplated by this Agreement. Grantor and Grantee each agree that they shall
cooperate and use their best efforts to have their officers, directors and
employees cooperate with the other Party (on or after the Closing Date), in
furnishing information, evidence, testimony and other assistance in connection
with any actions, proceedings, arrangements or disputes of any nature with
respect to any matters.
8.10 EXPENSES OF LITIGATION. If any proceeding is brought by any Party or
its successors or assigns for the enforcement of this Agreement, or as a result
of any alleged dispute, breach, default or misrepresentation by any Party of any
of the provisions of this Agreement, the successful or prevailing Party shall be
entitled to recover its reasonable attorneys' fees and other costs incurred in
pursuing such proceeding, in addition to such other relief to which
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it may be entitled, together with interest thereon at a rate of 10% per annum.
8.11 REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received by any Party at the
Closing, and (c) financial statements, certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The Parties agree that any such reproduction shall be admissible into
evidence as the original itself in any judicial or administrative proceedings
whether or not the original is in existence and whether or not such reproduction
was made by a Party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible into evidence.
8.12 KNOWLEDGE. The terms "known to Grantor", "actually known by Grantor",
"to the best of Grantor's knowledge" or any similar phrase means information or
facts in the actual knowledge of the senior executive officers of the
Shareholder.
ARTICLE IX
CLOSING DELIVERIES
9.01 DELIVERIES OF GRANTOR. At the Closing, Grantor shall deliver to
Grantee the following, all of which shall be in a form satisfactory to counsel
to Grantee:
(A) a bill of sale conveying the Transfer Assets which are personal
property to Grantee;
(B) an assignment of each lease of personal property under which
Grantor is lessee or lessor assigning the interest of Grantor therein to
Grantee;
(C) a general warranty deed, subject to zoning ordinances,
restrictions, reservations, covenants, rights-of-way, and easements of
record and any other title exceptions of record, in a form satisfactory to
counsel for Grantee, conveying each item of real property included in the
Transfer Assets to Grantee, together with the standard form owner's title
insurance policy for each item of real property insuring Grantee that good,
valid and indefeasible title to such item of real property is vested in
Grantee, subject only to standard form exclusions;
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(D) a copy of resolutions of the Board of Directors of Grantor
authorizing the execution, delivery and performance of this Agreement and
all related documents and agreements, each certified by the Secretary of
Grantor as being true and correct copies of the originals thereof subject
to no modifications or amendments;
(E) a certificate of the President of Seller dated as of the Closing
Date, as to the truth and correctness of the representations and warranties
of Grantor and Shareholder contained herein on and as of the Closing Date;
(F) a certificate of the President of Grantor dated as of the Closing
Date, (i) as to the performance of and compliance by Grantor with all
covenants contained herein on and as of the Closing Date and (ii)
certifying that all conditions precedent of Grantor to the Closing have
been satisfied;
(G) a certificate of the Secretary of Grantor certifying as to the
incumbency of the directors and officers of Grantor and as to the
signatures of such directors and officers who have executed documents
delivered at the Closing on behalf of Grantor;
(H) Partnership Agreement between Grantee and Grantor executed by
Grantor in the form attached as Exhibit D;
(I) such other instrument or instruments of transfer as shall be
necessary or appropriate, as Grantee or its counsel shall reasonably
request within sufficient time prior to Closing, to vest in Grantee good
and marketable title to the Assets that are personal property and good and
indefeasible title to the Assets that are real property.
9.02 DELIVERIES OF GRANTEE. At the Closing, Grantee shall deliver to
Grantor:
(A) the sum of $1,080,000 by wire transfer of immediately available
funds to an account designated by Grantor;
(B) the Note(s);
(C) a copy of the resolutions of the Board of Directors of the
General Partner of Grantee authorizing the execution, delivery and
performance of this Agreement, the Note and all related documents and
agreements, each certified by such General Partner's Secretary as being
true and correct copies of the originals thereof subject to no
modifications or amendments;
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(D) a certificate of the President of the General Partner of Grantee,
dated as of the Closing Date, as to the truth and correctness of the
representations and warranties of Grantee contained herein on and as of the
Closing Date;
(E) a certificate of the President of the General Partner of Grantee,
dated as of the Closing Date, (i) as to the performance and compliance by
Grantee with all covenants contained herein on and as of the Closing Date
and (ii) certifying that all conditions precedent of Grantee to the Closing
have been satisfied;
(F) a certificate of the Secretary of the General Partner of Grantee
certifying as to the incumbency of the directors and officers of Grantee
and as to the signatures of such parties who have executed documents
delivered at the Closing on behalf of Grantee; and
(G) a copy of the subscription agreements executed by the Partners of
Grantee (other than Grantor) with representations that the Partners are
Accredited Investors.
(H) such other instrument or instruments of transfer as shall be
necessary or appropriate, as Grantee or its counsel shall reasonably
request, to vest in Grantee good and marketable title to the Assets that
are personal property and good and indefeasible title to the Assets that
are real property.
IN AGREEMENT WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
Grantee
ARCADIA REFINING & MARKETING
COMPANY, L.P.
BY: ARCADIA REFINING COMPANY,
GENERAL PARTNER
By:________________________________
Title:_____________________________
Grantor
DUBACH GAS COMPANY
By:________________________________
Its:_______________________________
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For the sole purpose of acknowledging their respective covenants pursuant
to Section 4.02(D) and 4.02(E) of this Agreement, the undersigned Partners or
those persons subscribing partnership interests in the Grantee (excluding
Grantor) hereby agree to be bound by Section 4.02(D) and 4.02(E) of this
Agreement.
___________________________________
MALCOLM M. TURNER
___________________________________
JAMES A. DONOHOE
___________________________________
ROBERT J. SCHUMACHER
For the sole purpose of acknowledging its covenant pursuant to Section
4.01(G) of this Agreement, Cornerstone Natural Gas, Inc. hereby agrees to be
bound by Section 4.01(G) of this Agreement.
CORNERSTONE NATURAL GAS, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
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