-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Surr40Q47HqZCogCxuNRFqsN7GwM0X47kr/oFjxPDlZY7AhUj+EQ8gPmuc+7pDEk FW3Cpan79Uroie/dBfdFPA== 0000950123-98-009586.txt : 19981109 0000950123-98-009586.hdr.sgml : 19981109 ACCESSION NUMBER: 0000950123-98-009586 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19981106 GROUP MEMBERS: LOUIS DREYFUS CORPORATION GROUP MEMBERS: LOUIS DREYFUS HOLDING COMPANY INC GROUP MEMBERS: S A LOUIS DREYFUS ET CIE ET AL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSMONTAIGNE INC CENTRAL INDEX KEY: 0000755199 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 061052062 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-36106 FILM NUMBER: 98739842 BUSINESS ADDRESS: STREET 1: 370 17TH ST STREET 2: SUITE 2750 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036268200 MAIL ADDRESS: STREET 1: P O BOX 5660 STREET 2: SUITE 2750 CITY: DENVER STATE: CO ZIP: 80217 FORMER COMPANY: FORMER CONFORMED NAME: TRANSMONTAIGNE OIL CO DATE OF NAME CHANGE: 19960724 FORMER COMPANY: FORMER CONFORMED NAME: SHEFFIELD EXPLORATION CO INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: S A LOUIS DREYFUS ET CIE ET AL CENTRAL INDEX KEY: 0000933543 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 87 AVENUE DE LA GRANDE ARMEE 75782 CITY: PARIS STATE: I0 ZIP: 00000 SC 13D 1 SCHEUDLE 13D RE: TRANSMONTAIGNE INC. 1 OMB APPROVAL OMB Number: 3235-0145 Expires: August 31, 1999 Estimated average burden hours per response........ 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 TransMontaigne Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 89393410 - -------------------------------------------------------------------------------- (CUSIP Number) Andrew J. Connelly, Esq., General Counsel, Louis Dreyfus Corporation 10 Westport Road, P.O. Box 810, Wilton, CT 06897-0810, (203) 761-8444 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 30, 1998 ------------------------------------------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . / / Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 2 SCHEDULE 13D - --------------------------- CUSIP NO. 89393410 - --------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON S.A. Louis Dreyfus et Cie. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO/AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION France - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY None OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------------------------------------------- 8 SHARED VOTING POWER 4,351,080 shares - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER None - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 4,351,080 shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,351,080 shares - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* Not Applicable / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.29% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 2 3 SCHEDULE 13D - --------------------------- CUSIP NO. 89393410 - --------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Louis Dreyfus Holding Company Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO/AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY None OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------------------------------------------- 8 SHARED VOTING POWER 4,351,080 shares - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER None - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 4,351,080 shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,351,080 shares - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* Not Applicable / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.29% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 3 4 SCHEDULE 13D - --------------------------- CUSIP NO. 89393410 - --------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Louis Dreyfus Corporation - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / Not Applicable - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY None OWNED BY EACH REPORTING PERSON WITH - -------------------------------------------------------------------------------- 8 SHARED VOTING POWER 4,351,080 shares - -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER None - -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 4,351,080 shares - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,351,080 shares - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* Not Applicable / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.29% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 4 5 ITEM 1. SECURITY AND ISSUER This statement relates to the Common Stock, par value $.01 per share (the "Common Stock"), of TransMontaigne Inc., a Delaware corporation (the "Issuer"), which has its principal executive offices at 370 Seventeenth Street, Suite 2750, Denver, Colorado 80202. ITEM 2. IDENTITY AND BACKGROUND This Statement is filed by S.A. Louis Dreyfus et Cie., a corporation organized under the laws of France ("SALD"), Louis Dreyfus Holding Company Inc., a Delaware corporation ("LDHC"), and Louis Dreyfus Corporation, a New York corporation ("LDC"). (SALD, LDHC and LDC, collectively, are sometimes referred to herein as the "Louis Dreyfus Group"). SALD is a privately-held corporation engaged in various businesses, including international merchandising and exporting of various commodities, ownership and management of ocean vessels, real estate ownership, development and management, manufacturing, and natural gas and petroleum product marketing. SALD's principal business and office address is 87 Avenue de la Grande Armee, 75782 Paris, France. LDHC is a wholly-owned subsidiary of SALD and is itself a holding company of subsidiaries which engage principally in commodities trading and merchandising and real estate activities. The principal business and office address of LDHC is 10 Westport Road, Wilton, Connecticut 06897-0810. LDC is a wholly-owned subsidiary of LDHC and is a company which holds interests in various other corporations which engage principally in commodities trading and merchandising activities. The principal business and office address of LDC is 10 Westport Road, Wilton, Connecticut 06897-0810. Information with respect to the executive officers and directors of SALD, LDHC and LDC, including (a) name, (b) business address, (c) present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted and (d) citizenship, is listed on the Schedules attached hereto as Annexes A, B and C, respectively, which are incorporated herein by reference. None of SALD, LDHC and LDC, nor, to the best of their knowledge, any executive officer or director of any of them, has during the last five years been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. 5 6 ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The Issuer and LDC entered into a Stock Purchase Agreement, dated as of September 13, 1998 (the "Stock Purchase Agreement"), pursuant to which the Issuer purchased from LDC all the issued and outstanding shares of common stock, par value $1.00 per share (the "LDEC Shares"), of Louis Dreyfus Energy Corp., a Delaware corporation and wholly-owned subsidiary of LDC ("LDEC"), and LDEC became a wholly-owned subsidiary of the Issuer (the "Sale"). In consideration for the Sale, LDC was entitled to receive 4,500,000 shares of the Common Stock, $100,565,000 in cash and an amount equal to the Closing Net Working Capital (as defined in the Stock Purchase Agreement). LDHC, as designee of LDC under the Stock Purchase Agreement, acquired all 4,500,000 such shares of the Common Stock, of which 148,920 shares were immediately transferred as described in Item 6 below (the "Transfer"). As a result of the Sale, and subsequent to the Transfer, LDC is the direct beneficial owner of 4,351,080 shares of the Common Stock; LDHC owns such 4,351,080 shares of the Common Stock indirectly through LDC and also as a registered owner thereof as nominee of LDC; and SALD owns such 4,351,080 shares of the Common Stock indirectly through LDHC and LDC. ITEM 4. PURPOSE OF TRANSACTION LDC and LDHC acquired an aggregate 4,500,000 shares of the Common Stock as partial consideration of LDC's sale of the LDEC Shares to the Issuer. Pursuant to the Stock Purchase Agreement, Simon B. Rich, the Vice Chairman and President of LDHC, has been appointed to the board of directors of the Issuer (the "Board of Directors"). For so long as LDC and its affiliates maintain an equity ownership interest in the Issuer equal to or greater than 10% of the outstanding shares of the Common Stock, the Issuer shall use its reasonable best efforts to nominate Simon B. Rich (or a substitute person designated by LDC who is reasonably acceptable to the Board of Directors) to the Board of Directors. The Louis Dreyfus Group does not maintain the ability to control the outcome of matters upon which the Board of Directors or shareholders of the Issuer vote. LDC has agreed to certain restrictions upon its ability to acquire and dispose of its shares of the Common Stock, as described in Item 6 below. Subject to such restrictions and depending upon market conditions, financial considerations and other factors, the Louis Dreyfus Group may purchase or sell additional shares of the Common Stock, if appropriate opportunities to do so are available, at such times as the Louis Dreyfus Group considers advisable. Subject to the foregoing and to the Transfer, none of SALD, LDHC or LDC has any present plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; 6 7 (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) Any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the date hereof and subject to the arrangements described in Item 6 below, LDC is the direct beneficial owner of 4,351,080 shares of the Common Stock, representing approximately 14.29% of the issued and outstanding shares of the Common Stock. LDHC is the indirect beneficial owner (as well as registered owner as nominee of LDC) of such 4,351,080 shares, representing approximately 14.29% of the issued and outstanding shares of the Common Stock. SALD is the indirect beneficial owner of the 4,351,080 shares of the Common Stock beneficially owned by LDHC, representing approximately 14.29% of the issued and outstanding shares of the Common Stock. To the best knowledge of SALD, LDHC and LDC, none of their respective executive officers or directors (i) beneficially owns any Common Stock (other than in his or her capacity as an executive officer or director of such corporations) or (ii) has the right to acquire any Common Stock. (b) SALD, LDHC and LDC share the power to vote or to direct the vote and the power to dispose or to direct the disposition of the 4,351,080 shares of the Common Stock which they beneficially own. To the best knowledge of SALD, LDHC and LDC, none of their respective executive officers or directors has the power to vote or to direct the vote or to dispose or to direct the disposition of any shares of the Common Stock beneficially owned by such corporations (other than in his or her capacity as an executive officer or director of such corporations). 7 8 (c) Other than the acquisition of the 4,500,000 shares of the Common Stock and the Transfer pursuant to the Stock Purchase Agreement, the Louis Dreyfus Group has not effected any transactions in the Common Stock in the past 60 days. To the best knowledge of SALD, LDHC and LDC, none of their respective executive officers or directors has effected any transactions in shares of the Common Stock during the past 60 days. (d) Subject to the arrangements described in Item 6 below, to the best knowledge of SALD, LDHC and LDC, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of the Common Stock beneficially owned by such corporations. (e) Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Except as described below, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among any of SALD, LDHC and LDC or, to the best of their knowledge, any executive officer or director of any of them and any other person with respect to any securities of the Issuer, including any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. The Louis Dreyfus Group acquired beneficial ownership of 4,500,000 shares of the Common Stock pursuant to the Stock Purchase Agreement. The Stock Purchase Agreement provides for Simon B. Rich's appointment as a director of the Issuer. Under the Stock Purchase Agreement, until such time as LDC and its affiliates no longer beneficially owns an aggregate of at least 10% of the outstanding shares of the Common Stock, the Issuer will recommend Mr. Rich (or a substitute person designated by LDC who is reasonably acceptable to the Board of Directors) for election as a director of the Issuer, subject to the terms of the Stock Purchase Agreement. The description of the Stock Purchase Agreement is qualified by reference to the full text thereof, which is included as an exhibit hereto and incorporated herein by reference. Pursuant to the Registration Rights Agreement dated as of October 30, 1998 between LDC and the Issuer (the "Registration Rights Agreement"), the Louis Dreyfus Group is entitled to certain registration rights with respect to the shares beneficially owned by the Louis Dreyfus Group. Also pursuant to the Registration Rights Agreement, LDC has agreed not to sell, transfer or otherwise dispose of any portion of the shares of the Common Stock acquired in the Sale (other than to other members of the Louis Dreyfus Group) (i) prior to December 31, 1999 or (ii) to the extent that, to LDC's knowledge, after giving effect to such sale, transfer or other disposal, the acquiring person would hold in excess of 5% of the voting power of all voting securities of the Issuer. Further, for a period of five years from October 30, 1998, LDC has agreed to not purchase any shares of the Common Stock if such purchase would result in its proportionate equity ownership interest in the Issuer being equal to or in excess of 15% without the Issuer's prior consent. Finally, under the Registration Rights Agreement, LDC agreed to 8 9 certain restrictions on its ability to participate in any proxy solicitation in respect of the Issuer or any similar actions designed to influence the management and control of the Issuer. The description of the Registration Rights Agreement is qualified by reference to the full text of the agreement, which is included as an exhibit hereto and incorporated herein by reference. Pursuant to the Stock Purchase Agreement, LDHC, immediately upon receipt, effected the Transfer to certain employees of LDEC as severance compensation. Pursuant to the Agreement re Share Issuance dated as of October 30, 1998 among the Issuer, LDC and LDHC, the Issuer has agreed that LDHC may transfer record ownership of the 4,351,080 share of the Common Stock held by LDHC to LDC. LDC intends to do so. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 1. Written Agreement of SALD, LDHC and LDC relating to the filing of this Amendment as required by Rule 13d-1(f). 2. Stock Purchase Agreement dated as of September 13, 1998 between the Issuer and LDC. 3. Registration Rights Agreement dated as of October 30, 1998 between the Issuer and LDC. 4. Agreement re Share Issuance dated as of October 30, 1998 among the Issuer, LDC and LDHC. 9 10 SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, correct and complete. S.A. Louis Dreyfus et Cie. November 6, 1998 By: /s/ Gerard Louis-Dreyfus ------------------------------- Gerard Louis-Dreyfus President Louis Dreyfus Holding Company Inc. November 6, 1998 By: /s/ Hal Wolkin ------------------------------- Hal Wolkin Vice President Louis Dreyfus Corporation November 6, 1998 By: /s/ Peter Griffin ------------------------------- Peter Griffin President 10 11 ANNEX A S.A. LOUIS DREYFUS ET CIE. ("SALD")
Name and Business Address (all business addresses are: S.A. Louis Dreyfus et Cie. 87 Avenue de la Grande Armee 75782 Paris, France Present Principal Occupation or unless otherwise indicated) Employment Citizenship - --------------------------- ------------------------------- ----------- DIRECTORS Bernard Baldensperger Directeur General of SALD France Claude Boquin Retired France Jean Louis-Dreyfus Vice President/ France Directeur General of SALD Gerard Louis-Dreyfus Chairman/President/ U.S.A. Louis Dreyfus Corporation Directeur General of SALD 405 Lexington Avenue New York, New York 10174 Pierre Louis-Dreyfus Vice President/ France Directeur General of SALD Jean-Hubert Pietra Retired France Jean Pinchon Retired France Philippe Poirier D'Orsay Directeur General of Groupe France Louis Dreyfus Ernest F. Steiner Chief Financial Officer of U.S.A. Louis Dreyfus Holding Groupe Louis Dreyfus Company Inc. 10 Westport Road P.O. Box 810 Wilton, Connecticut 06897 EXECUTIVE OFFICERS (who are not Directors) Georges Gateff Directeur of SALD France
11 12 ANNEX B LOUIS DREYFUS HOLDING COMPANY INC. ("LDHC")
Name and Business Address (all business addresses are: Louis Dreyfus Holding Company Inc. 10 Westport Road P.O. Box 810 Wilton, Connecticut 06897 Present Principal Occupation or unless otherwise indicated) Employment Citizenship - -------------------------- ------------------------------------------ ----------- DIRECTORS Daniel R. Finn, Jr. Executive Officer of LDHC U.S.A. Gerard Louis-Dreyfus* Simon B. Rich Vice Chairman and President of LDHC U.S.A. Ernest F. Steiner* EXECUTIVE OFFICERS (who are not Directors) - ----------------------- Robert L. Aiken Vice President of LDHC U.S.A. Andrew J. Connelly Vice President and General Counsel of LDHC U.S.A. Jerome F. Dubrowski Treasurer of LDHC U.S.A. Jeffrey R. Gilman Vice President of LDHC U.S.A. Deborah J. Neff Vice President and Associate Counsel of U.S.A. LDHC Hal Wolkin Vice President of LDHC U.S.A.
- ----------------- * Individual's business address, present principal occupation and citizenship are set forth in Annex A (SALD). 12 13 ANNEX C LOUIS DREYFUS CORPORATION ("LDC")
Name and Business Address (all business addresses are: Louis Dreyfus Corporation 10 Westport Road P.O. Box 810 Wilton, Connecticut 06897 Present Principal Occupation or unless otherwise indicated) Employment Citizenship - -------------------------- ------------------------------- ----------- DIRECTORS Robert L. Aiken** Daniel R. Finn, Jr.** Jeffrey R. Gilman** Peter B. Griffin President of LDC U.S.A. Gerard Louis-Dreyfus* Joseph Nicosia Executive Vice President of LDC U.S.A. Bruce Ritter Executive Vice President of LDC U.S.A. EXECUTIVE OFFICERS (who are not Directors) - ---------------------- Jerome F. Dubrowski** William C. Kreussling Vice President of LDC U.S.A. Ernest F. Steiner* Clifford L. Wald Vice President of LDC U.S.A. Hal Wolkin**
- ------------- * Individual's business address, present principal occupation and citizenship are set forth in Annex A (SALD). ** Individual's business address, present principal occupation and citizenship are set forth in Annex B (LDHC). 13 14 EXHIBIT INDEX
Exhibit No. Document Page --- -------- ---- 1 Written Agreement of SALD, LDHC and LDC relating to the filing of 15 this Agreement as required by Rule 13d-1(f). 2 Stock Purchase Agreement dated as of September 13, 1998 between the 16 Issuer and LDC. 3 Registration Rights Agreement dated as of October 30, 1998 between the Issuer and LDC. 100 4 Agreement re Share Issuance dated as of October 30, 1998 among the Issuer, LDC and LDHC. 125
14 EX-99.1 2 WRITTEN AGREEMENT RE: RULE 13D-1(F) FILING 1 Exhibit 1 --------- The undersigned agree that the foregoing Statement on Schedule 13D, dated November 6, 1998, is being filed with the Securities and Exchange Commission on behalf of each of S.A. Louis Dreyfus et Cie., a corporation organized under the laws of France, Louis Dreyfus Holding Company Inc., a Delaware corporation, and Louis Dreyfus Corporation, a New York corporation. S.A. Louis Dreyfus et Cie. November 6, 1998 By: /s/ GERARD LOUIS-DREYFUS ------------------------ Gerard Louis-Dreyfus President Louis Dreyfus Holding Company Inc. November 6, 1998 By: /s/ ERNEST F. STEINER ------------------------ Ernest F. Steiner Executive Vice President Louis Dreyfus Corporation November 6, 1998 By: /s/ PETER GRIFFIN ----------------- Peter Griffin President EX-99.2 3 STOCK PURCHASE AGREEMENT 1 Exhibit 2 --------- =============================================================================== STOCK PURCHASE AGREEMENT Between LOUIS DREYFUS CORPORATION and TRANSMONTAIGNE INC. Dated as of September 13, 1998 =============================================================================== 2 TABLE OF CONTENTS SECTION 1. Purchase and Sale of the Shares; Excluded Assets; Retained Liabilities........................... 1 (a) Purchase and Sale................................. 1 (b) Excluded Assets................................... 1 (c) Retained Liabilities.............................. 2 SECTION 2. Closing; Net Working Capital............................... 2 (a) Closing.......................................... 2 (b) Net Working Capital.............................. 3 (i) Estimated Net Working Capital.............. 3 (ii) Establishment of Inventories and Market Values........................... 4 (iii) Closing Net Working Capital................ 4 (iv) Review and Dispute Resolution.............. 5 (v) Net Working Capital True-Up................ 6 (vi) Accounts Receivable........................ 6 (vii) Cooperation and Access..................... 7 SECTION 3. Conditions to Closing...................................... 7 (a) Buyer's Obligation............................... 7 (b) Seller's Obligation.............................. 11 (c) Frustration of Closing Conditions................ 13 SECTION 4. Representations and Warranties of Seller................... 13 (a) Authority........................................ 13 (b) No Conflicts; Consents........................... 13 (c) The Shares....................................... 14 (d) Organization and Standing; Books and Records......................................... 15 (e) Capital Stock of the Company..................... 15 (f) Equity Interests................................. 16 (g) Financial Information; Undisclosed Liabilities................................... 16 (h) Taxes............................................ 17 (i) Assets Other than Real Property Interests..................................... 18 (j) Title to Real Property........................... 19 (k) Intellectual Property............................ 20 (l) Contracts........................................ 20 (m) Litigation....................................... 23 (n) Insurance........................................ 24 (o) Benefit Plans.................................... 24 (p) Absence of Changes or Events..................... 26 (q) Compliance with Applicable Laws.................. 27 (r) Employee and Labor Matters....................... 28 (s) Customer Accounts Receivable; Inventories................................... 29
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Page ---- (t) Licenses; Permits................................ 30 (u) Accounts; Safe Deposit Boxes; Powers of Attorney; Officers and Directors.............. 30 (v) Transactions with Affiliates..................... 30 (w) Effect of Transaction............................ 31 (x) Disclosure....................................... 31 (y) Suppliers........................................ 31 (z) Customers........................................ 32 (aa) Private Offering................................. 32 (bb) Transfer of Excluded Assets...................... 32 (cc) Securities Act................................... 32 (dd) Public Utility Holding Company Act............... 33 (ee) Brokerage Agreements............................. 33 SECTION 5. Covenants of Seller........................................ 33 (a) Access........................................... 33 (b) Ordinary Conduct................................. 33 (c) Confidentiality.................................. 36 (d) Insurance........................................ 36 (e) Resignations..................................... 37 (f) Supplemental Disclosure.......................... 37 (g) Certain Licenses and Permits..................... 37 (h) Severance Agreements............................. 37 (i) Transfer of Brokerage Accounts................... 38 (j) Audited Financial Statements..................... 38 (k) Non-Competition.................................. 38 (l) Program License Agreement........................ 39 (m) Schedules........................................ 39 SECTION 6. Representations and Warranties of Buyer.................... 40 (a) Authority........................................ 40 (b) No Conflicts; Consents........................... 40 (c) Buyer Shares..................................... 41 (d) Organization and Standing........................ 41 (e) Securities Act................................... 41 (f) Actions and Proceedings, etc..................... 41 (g) Availability of Funds............................ 42 (h) SEC Documents.................................... 42 (i) Capital Structure................................ 42 (j) Absence of Changes or Events..................... 43 (k) Private Offering................................. 43 (l) Brokerage Agreements............................. 44 (m) Disclosure....................................... 44 SECTION 7. Covenants of Buyer......................................... 44 (a) Confidentiality.................................. 44
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Page ---- (b) Board of Directors of Buyer...................... 44 (c) Supplemental Disclosure.......................... 44 (d) Business Presence................................ 45 (e) Listing of Buyer Shares.......................... 45 (f) Employees of Seller.............................. 45 (g) Change of Company Name........................... 45 (h) Access........................................... 45 SECTION 8. Mutual Covenants........................................... 45 (a) Environmental Audit.............................. 46 (b) Cooperation...................................... 48 (c) Publicity........................................ 49 (d) Commercially Reasonable Best Efforts............. 49 (e) Antitrust Notification........................... 49 (f) Records.......................................... 50 SECTION 8A. Certain Post-Closing Cooperation.......................... 51 SECTION 9. Employee and Related Matters............................... 52 (a) Employment....................................... 52 (b) Employee Benefit Plans Post-Closing.............. 53 (c) Bonus/Incentive Compensation; Accrued Vacation; Nonqualified Pension Plans........................................ 54 (d) COBRA............................................ 54 (e) Workers Compensation............................. 54 (f) Pension/Savings Plans............................ 55 (g) Post-Retirement Health Obligations............... 55 SECTION 10. Further Assurances........................................ 55 SECTION 11. Indemnification........................................... 55 (a) Tax Indemnification.............................. 55 (b) Environmental Indemnification.................... 58 (c) Other Indemnification by Seller.................. 60 (d) Other Indemnification by Buyer................... 61 (e) Losses Net of Insurance, etc..................... 61 (f) Termination of Indemnification................... 62 (g) Procedures Relating to Indemnification (Other than under Section 11(a)).............. 63 (h) Other Claims..................................... 65 (i) Procedures Relating to Indemnification of Tax Claims................................. 65 (j) Mitigation....................................... 67 SECTION 12. Tax Matters............................................... 67
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Page ---- SECTION 13. Assignment................................................ 71 SECTION 14. No Third-Party Beneficiaries.............................. 71 SECTION 15. Termination............................................... 72 SECTION 16. Survival of Representations............................... 74 SECTION 17. Expenses.................................................. 74 SECTION 18. Attorney Fees............................................. 74 SECTION 19. Amendments................................................ 74 SECTION 20. Notices................................................... 74 SECTION 21. Interpretation; Exhibits and Schedules; Certain Definitions................................... 76 SECTION 22. Counterparts.............................................. 76 SECTION 23. Entire Agreement.......................................... 76 SECTION 24. Severability.............................................. 77 SECTION 25. Consent to Jurisdiction................................... 77 SECTION 26. Governing Law............................................. 77
iv 6 STOCK PURCHASE AGREEMENT dated as of September 13, 1998, between Louis Dreyfus Corporation, a New York corporation ("Seller"), and TransMontaigne Inc., a Delaware corporation ("Buyer"). Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all the issued and outstanding shares of Common Stock, par value $1.00 per share (the "Shares"), of Louis Dreyfus Energy Corp., a Delaware corporation and wholly owned subsidiary of Seller (the "Company", which term shall, prior to the Closing (as defined in Section 2(a)(ii)), unless the context otherwise requires, include all subsidiaries of the Company). Accordingly, Seller and Buyer hereby agree as follows: SECTION 1. Purchase and Sale of the Shares; Excluded Assets; Retained Liabilities. (a) Purchase and Sale. On the terms and subject to the conditions of this Agreement, Seller shall sell, transfer and deliver or cause to be sold, transferred and delivered to Buyer, and Buyer shall purchase from Seller, the Shares for a purchase price (the "Purchase Price") of $161,000,000, consisting of (A) 4,500,000 shares (subject to decrease as set forth in Section 2(a)(ii), the "Buyer Shares") of Common Stock, par value $.01 per share (the "Buyer Common Stock"), of Buyer and (B) $100,565,000 payable in immediately available funds (subject to increase as set forth in Section 2(a)(iii), the "Cash Component"). In addition, Buyer shall pay Seller in immediately available funds an amount equal to the amount of Closing Net Working Capital (as defined in Section 2(b)(iii)) of the Company. All payments and deliveries shall be made as set forth in Section 2(a)(i). (b) Excluded Assets. At the Closing, the Company shall continue to own all assets presently owned by the Company that are used, held for use or intended to be used primarily in, or necessary for the conduct of, the current Business (as defined below) of the Company, other than assets sold in the ordinary course of business. Unless otherwise agreed by the parties as contemplated by Section 8A, from and after the Closing, the Company shall not continue to own (A) any assets relating to (I) the Company's Wilton, Connecticut-based petroleum trading operation or (II) certain real estate parcels located in Wilmington, Delaware, Norwich, Connecticut and Allentown, Pennsylvania and (B) any stock in any subsidiary of the 7 2 Company or assets owned by or relating to any such subsidiary, each to be more particularly described in Schedule 1(b) (the "Excluded Assets") and none of which is used, held for use or intended to be used primarily in, or is necessary for the conduct of, the current Business of the Company. Unless otherwise agreed by the parties as contemplated by Section 8A, the Excluded Assets shall be transferred to Seller or an affiliate of Seller (other than the Company) prior to the Closing in a manner that does not adversely affect the value of the Business. For purposes of this Agreement, the term "Business" shall mean (i) the supply, storage, terminaling, delivery, distribution, marketing, trading and transportation of gasoline, diesel fuel, heating oil, kerosene and aviation and/or jet fuels (collectively, the "Commodities"), (ii) the ownership, leasing and/or operation of Commodities terminaling, storage, pipeline delivery facilities and pipeline transportation facilities and (iii) the provision of logistical services in connection with any of the activities described in clauses (i) and (ii). (c) Retained Liabilities. Except for the liabilities and obligations described in the next sentence, Seller shall retain by assuming (both directly through the Assumption Agreement (as defined in Section 3(a) and by operation of the indemnification provisions of this Agreement), and be solely responsible for and indemnify Buyer and the Company as and to the extent set forth in the subsequent provisions of this Agreement against any and all liabilities or obligations of the Company or any subsidiary of the Company of any nature (whether accrued, absolute, contingent, known or unknown, unasserted or otherwise) (i) existing immediately prior to the Closing or (ii) arising out of the conduct of the businesses and operations of the Company at any time prior to the Closing (the "Retained Liabilities"). The Retained Liabilities shall not include (i) any liabilities or obligations (A) relating to Environmental Loss (as defined in Section 11(b)) except as provided for in Section 11(b) or (B) reflected in the calculation of Closing Net Working Capital as contemplated by Section 2(b) or (ii) any obligations to be performed after the Closing under the terms of any contract, agreement, lease, license, commitment, instrument or binding arrangement of the Business that is not an Excluded Asset. SECTION 2. Closing; Net Working Capital. (a) Closing. (i) The closing (the "Closing") of the purchase and sale of the Shares shall be held at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York, at 10:00 a.m. (local time) on 8 3 the business day following the date on which all conditions to the Closing set forth in Section 3 (other than conditions which by their terms are to be satisfied at the Closing) shall have been satisfied. The date on which the Closing shall occur is hereinafter referred to as the "Closing Date". At the Closing, (A) Buyer shall deliver to Seller, by wire transfer to a bank account designated in writing by Seller at least two business days prior to the Closing Date, immediately available funds in an amount equal to the sum of (I) the Cash Component (adjusted as set forth in Section 2(a)(iii)) and (II) the estimated Net Working Capital (as defined in Section 2(b)(i)) of the Company, determined in accordance with Section 2(b)(i) (such sum being hereinafter referred to as the "Closing Date Amount"), (B) Buyer shall deliver or cause to be delivered to Seller certificates, registered in the name of Seller or its designee, representing the Buyer Shares and (C) Seller shall deliver or cause to be delivered to Buyer certificates representing the Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed. (ii) If the Closing Date Value (as defined below) of the Buyer Common Stock is greater than $16.12, the number of shares constituting the Buyer Shares deliverable at Closing shall be decreased from 4,500,000 to such number of shares as shall have an aggregate Closing Date Value of $72,540,000. (iii) If the Closing Date Value of the Buyer Common Stock is less than $12.09, the Cash Component payable at Closing shall be increased by an amount equal to the product of (A) 4,500,000 and (B) the difference between (I) $13.43 and (II) the Closing Date Value of the Buyer Common Stock. For purposes of this Agreement, the term "Closing Date Value" shall mean the average of the last daily sale prices of the Buyer Common Stock (as reported by The Wall Street Journal) for the five (5) consecutive trading days immediately preceding the Closing Date. (b) Net Working Capital. (i) Estimated Net Working Capital. For purposes of determining the amount of immediately available funds to be paid by Buyer on the Closing Date as consideration for the Net Working Capital of the Company, Buyer and Seller shall jointly prepare an estimate of the amount of the fair value of Net Working Capital of the Company as of the close of business on the second business day preceding the Closing Date. In connection with the preparation of such estimate, Buyer and Seller shall jointly prepare such Schedules as to accounts receivable, inventory, open contracts, accounts payable and 9 4 other current assets and current liabilities as are jointly determined to be needed to support such estimate. For purposes of this Agreement, "Net Working Capital" shall mean the accounts receivable, inventories, market value of cash options, unrealized gains and losses on open contracts, trade payables, accrued liabilities and fuel taxes payable of the Business and other such current assets and current liabilities relating to the Business, all determined in the manner specified in this Section 2(b) and consistent with the determination of such items in the Trial Balances (as defined in Section 4(g)). (ii) Establishment of Inventories and Market Values. One week prior to the Closing Date, Seller shall provide Buyer with a Schedule setting forth book inventory quantities at all locations at which the Company owns inventory. On the Closing Date, Buyer shall perform such physical inventory observations as it deems necessary. On the Closing Date, Buyer and Seller shall jointly prepare a Schedule, by location, of book inventory quantities of the Business as of the close of business on the business day preceding the Closing Date. Such book inventory quantities, subject to normal adjustments resulting from reconciling book to physical inventory, shall be used in the calculation of Closing Net Working Capital. Buyer shall promptly inform Seller of any differences between book and physical inventories. On the business day preceding the Closing Date, Buyer and Seller shall prepare, and mutually agree upon the reasonableness of, a Schedule of prevailing market values, as measured by their relationship to New York Mercantile Exchange ("NYMEX") futures, prevailing as of the close of business on the second business day preceding the Closing Date, for all relevant major market locations, commodities, qualities, and delivery periods. Such market values, determined using closing NYMEX futures prices as of the close of business on the business day preceding the Closing Date, shall be used in the calculation of Closing Net Working Capital. (iii) Closing Net Working Capital. Within 60 days after the Closing Date, Buyer shall prepare and deliver to Seller a statement (the "Statement") setting forth Net Working Capital as of the close of business on the business day preceding the Closing Date ("Closing Net Working Capital") certified by an officer of Buyer to the effect that the Statement has been prepared in accordance with the requirements of this Section 2(b). Closing Net Working Capital is to be calculated at fair value in accordance with generally accepted accounting principles. Inventories of 10 5 the Business are to be valued at prevailing market prices as of the close of business on the business day preceding the Closing Date. Open purchase and sale contracts, including swaps, options and futures, are to be marked to market at prevailing market prices as of the close of business on the business day preceding the Closing Date. (iv) Review and Dispute Resolution. During the 30-day period following Seller's receipt of the Statement, Seller and its independent auditors shall be permitted to review the working papers relating to the Statement. The Statement shall become final and binding upon the parties on the thirtieth day following delivery thereof, unless Seller gives written notice of its disagreement with the Statement ("Notice of Disagreement") to Buyer prior to such date. Any Notice of Disagreement shall (A) specify in reasonable detail the nature of any disagreement so asserted and (B) only include disagreements based on mathematical errors or based on Closing Net Working Capital not being calculated in accordance with this Section 2. If a Notice of Disagreement is received by Buyer in a timely manner, then the Statement (as revised in accordance with clause (I) or (II) below) shall become final and binding upon Seller and Buyer on the earlier of (I) the date Seller and Buyer resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement or (II) the date any disputed matters are finally resolved in writing by the Accounting Firm (as defined below). The Statement, upon becoming final and binding in accordance with this Section 2(b)(iii), and as the same may be revised in accordance with clauses (I) or (II) of the preceding sentence, is hereinafter referred to as the "Final Statement". During the 30-day period following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good faith to resolve in writing any differences which they may have with respect to the matters specified in the Notice of Disagreement. At the end of such 30-day period, Seller and Buyer shall submit to an independent accounting firm (the "Accounting Firm") for review and resolution any and all matters which remain in dispute and which were properly included in the Notice of Disagreement. The Accounting Firm shall be a nationally recognized independent public accounting firm as shall be agreed upon by the parties in writing. Seller and Buyer shall use reasonable efforts to cause the Accounting Firm to render a decision resolving the matters submitted to the Accounting Firm within 30 days following submission of the disputed matters to the Accounting Firm. Seller and Buyer agree that judgment may be entered upon the determination of the Accounting Firm in 11 6 any court having jurisdiction over the party against which such determination is to be enforced. The cost of any arbitration (including the fees and expenses of the Accounting Firm and reasonable attorney fees and expenses of the parties) pursuant to this Section 2(b) shall be borne by Buyer and Seller in inverse proportion as they may prevail on matters resolved by the Accounting Firm, which proportionate allocations shall also be determined by the Accounting Firm at the time the determination of the Accounting Firm is rendered on the merits of the matters submitted. The fees and disbursements of Seller's independent auditors incurred in connection with their review of the Statement and certification of any Notice of Disagreement shall be borne by Seller, and the fees and disbursements of Buyer's independent auditors incurred in connection with their review of the Statement and any Notice of Disagreement shall be borne by Buyer. (v) Net Working Capital True-Up. If the amount of Closing Net Working Capital as determined pursuant to the Final Statement is more than the estimated Net Working Capital amount paid at Closing, Buyer shall, or if the amount of Closing Net Working Capital as determined pursuant to the Final Statement is less than the estimated Net Working Capital amount paid at Closing, Seller shall, within 10 business days after the Statement becomes final and binding on the parties, make payment by wire transfer in immediately available funds of the amount of such difference, together with interest thereon at a rate equal to the rate of interest from time to time announced publicly by BankBoston, N.A. as its prime rate, calculated on the basis of the actual number of days elapsed over 365, from and including the Closing Date to but excluding the date of payment. (vi) Accounts Receivable. Within five business days after the 120th day following the Closing Date, Seller shall pay Buyer in immediately available funds an amount equal to all accounts receivable of the Company included in Closing Net Working Capital that have not been collected by the close of business on such 120th day following the Closing Date other than any receivables the collectibility of which shall have been materially impaired by Buyer after the Closing. Simultaneously upon receipt of such payment, Buyer shall assign to Seller all rights to and interests in all such accounts receivable of the Company. Buyer shall cause the Company after Closing to use commercially reasonable efforts to collect the accounts receivable included in Closing Net Working Capital, and to reasonably cooperate (without, however, being required to incur any costs other than incidental expenses) with Seller in 12 7 collecting any receivables assigned to Seller pursuant to the preceding sentence. (vii) Cooperation and Access. Buyer agrees that following the Closing it shall not take any actions with respect to the accounting books and records of the Company on which the Statement is to be based that would obstruct or prevent the preparation of the Statement and the determination of Closing Net Working Capital as provided in this Section 2(b). During the period of time from and after the date of delivery of the Statement to Seller through the resolution of any dispute as to the amount of Closing Net Working Capital as contemplated by this Section 2(b), Buyer shall cause the Company to afford to Seller, and any accountants, counsel or financial advisers retained by Seller in connection with any such dispute, reasonable access during normal business hours to the Company's books and records for the purpose of allowing Seller to address such dispute. SECTION 3. Conditions to Closing. (a) Buyer's Obligation. The obligation of Buyer to purchase and pay for the Shares is subject to the satisfaction (or waiver by Buyer) as of the Closing of the following conditions: (i) The representations and warranties of Seller made in this Agreement qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date). Seller shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Seller by the time of the Closing. Seller shall have delivered to Buyer a certificate dated the Closing Date and signed by an authorized officer of Seller confirming the foregoing. (ii) Buyer shall have received customary opinions dated the Closing Date of Dewey Ballantine LLP, counsel to Seller, and Andrew J. Connelly, Esq., General Counsel of Seller. 13 8 (iii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (each, a "Governmental Entity") or other legal restraint or prohibition preventing the purchase and sale of the Shares shall be in effect. (iv) There shall not be pending or threatened by any Governmental Entity any suit, action or proceeding (or by any other person any suit, action or proceeding which has a reasonable likelihood of success), (A) challenging or seeking to restrain or prohibit the purchase and sale of the Shares or any of the other transactions contemplated by this Agreement or seeking to obtain from Buyer or any of its subsidiaries in connection with the purchase and sale of the Shares any damages that are material in relation to Buyer and its subsidiaries taken as a whole, (B) seeking to prohibit or limit the ownership or operation by Buyer, the Company or any of their respective subsidiaries of any material portion of the business or assets of Buyer, the Company or any of their respective subsidiaries, or to compel Buyer, the Company or any of their respective subsidiaries to dispose of or hold separate any material portion of the business or assets of Buyer, the Company or any of their respective subsidiaries, in each case as a result of the purchase and sale of the Shares or any of the other transactions contemplated by this Agreement, (C) seeking to impose limitations on the ability of Buyer to acquire or hold, or exercise full rights of ownership of, the Shares, including the right to vote the Shares on all matters properly presented to the stockholders of the Company or (D) seeking to prohibit Buyer or any of its subsidiaries from effectively controlling the Business in any material respect; provided, however, that this condition shall be deemed to be waived by Buyer as to any suit, action or proceeding that seeks solely monetary damages (except for any suit, action or proceeding by any Governmental Entity) if Seller provides to Buyer indemnification in form and substance reasonably satisfactory to Buyer and its counsel with respect to such suit, action or proceeding. (v) The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR 14 9 Act"), if applicable to the purchase and sale of the Shares, shall have expired or been terminated. (vi) Seller shall have entered into the Severance Agreements (as defined in Section 5(h)) and Buyer shall have entered into employment agreements with the two employees identified on Schedule 3(a)-I, in each case on terms and conditions reasonably satisfactory to Buyer. (vii) Seller and Buyer shall have entered into an agreement (the "Seller Registration Rights Agreement") (A) providing that (I) Seller shall not sell, transfer or otherwise dispose of any portion of the Buyer Shares (other than to an Affiliate of Seller (as defined below)) prior to September 30, 1999 and thereafter shall only sell, transfer or otherwise dispose of any portion of the Buyer Shares (other than to an Affiliate of Seller) in a manner that will not result in the acquisition by any other person to the extent that, to Seller's knowledge, after giving effect to such acquisition, such acquiring person would hold in excess of 5% of the total voting power of all voting securities of Buyer, (II) for a period of five years from the Closing Date, Seller shall not purchase any shares of Buyer Common Stock if such purchase would result in Seller's proportionate equity ownership interest in Buyer being equal to or in excess of 15% without Buyer's prior consent and (III) for a period of five years from the Closing Date, Seller shall not participate in any proxy solicitation in respect of Buyer or take any similar actions designed to influence the management and control of Buyer and (B) granting Seller (and any Affiliate of Seller to whom Seller transfers any portion of the Buyer Shares) registration rights in respect of the Buyer Shares substantially comparable to the rights set forth in the Registration Rights Agreement dated as of April 17, 1996 by and among Buyer and the Institutional Investors identified therein (provided, however, that the Seller Registration Rights Agreement shall grant Seller an initial demand right in respect of the Buyer Shares and, for so long as Seller continues to own 10% or more of the outstanding shares of Buyer Common Stock, subsequent demand rights). (viii) Seller and Buyer shall have entered into an agreement (the "Assumption Agreement") providing for the assumption by Seller of the Retained Liabilities on terms and conditions reasonably satisfactory to Buyer. 15 10 (ix) Seller shall have obtained all third party consents or waivers that are necessary or materially useful for the conduct of the Business or to consummate the transactions contemplated by this Agreement, all such consents and waivers being in form and substance satisfactory to Buyer. (x) All licenses, permits and authorizations issued or granted to the Company by Governmental Entities that are necessary or materially useful for the conduct of the Business shall be in place and not be subject to expiration, revocation or adverse change due to the Closing or shall have been obtained by Buyer. (xi) The Cost of Remediation (as defined in Section 8(a)) shall have been finally determined. (xii) Buyer shall have received an opinion of BancBoston Robertson Stephens Inc., financial advisor to Buyer, that the transactions contemplated by this Agreement are fair, from a financial point of view, to Buyer. (xiii) Buyer shall have received customary closing certificates pertaining to the Company, including a certificate of good standing from the Secretary of State of the State of Delaware and comparable certificates from the Secretaries of State of each State in which the Company is qualified to do business as a foreign corporation (except such jurisdictions where the failure to be so qualified, individually or in the aggregate, would not have a Seller Material Adverse Effect (as defined in Section 4(b)), each dated as of a date reasonably prior to the Closing Date. (xiv) Buyer shall have received satisfactory assurances in respect of (A) the maintenance of the Company's shipping rights on the Colonial Pipeline System, the Plantation Pipeline System and the other pipeline systems on which the Company holds shipping rights on the date hereof and (B) the Company's continued operation of all Facilities (as defined in Section 4(j)) operated by the Company on the date hereof. (xv) (A) Buyer shall have established to its satisfaction that the BP Relationship (as defined below) will continue on and after the Closing Date in a manner that is consistent with the past business dealings of the Company and BP Oil Company ("BP"), 16 11 (B) there shall not have occurred any material adverse change in the BP Relationship and (C) neither Seller, the Company nor Buyer shall have received any notice of an assertion by BP that the BP Relationship is or will be altered in a manner adverse to the Company or Buyer as a result of the transactions contemplated by this Agreement (including any attempted or purported exercise by BP of any alleged rights of first refusal in respect of any Facility). (xvi) The Buyer Shares shall have been approved for listing, subject to receipt of official notice of listing, by the American Stock Exchange. For purposes of this Agreement, (i) "Affiliate of Seller" shall mean any entity that is at least 80% owned, directly or indirectly, by S.A. Louis Dreyfus et Cie and (ii) "BP Relationship" shall mean the course of conduct and business dealings of the Company and BP to be described in summary form on Schedule 3(a)-II arising from the unsigned agreement captioned Agreement -- Southeastern Pipeline Terminals, between The Pure Oil Company and Gulf Oil Corporation and dated 1944, and the agreement captioned Statement of Understanding -- Inventory Consolidation Program Southeast Terminals dated on or about June 26, 1990, as amended by Amendment I dated on or about December 13, 1990 and Amendment II dated on or about February 26, 1991, each between Unocal Corporation and BP. (b) Seller's Obligation. The obligation of Seller to sell and deliver the Shares to Buyer is subject to the satisfaction (or waiver by Seller) as of the Closing of the following conditions: (i) The representations and warranties of Buyer made in this Agreement qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date). Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by Buyer by the time of the Closing. Buyer shall have delivered to Seller a certificate 17 12 dated the Closing Date and signed by an authorized officer of Buyer confirming the foregoing. (ii) Seller shall have received customary opinions dated the Closing Date of Cravath, Swaine & Moore, counsel to Buyer, and Erik B. Carlson, Esq., Senior Vice President, General Counsel and Corporate Secretary of the Buyer. (iii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of the Shares shall be in effect. (iv) There shall not be pending or threatened by any Governmental Entity any suit, action or proceeding (or by any other person any suit, action or proceeding which has a reasonable likelihood of success), challenging or seeking to restrain or prohibit the purchase and sale of the Shares or any of the other transactions contemplated by this Agreement or seeking to obtain from Seller or any of its subsidiaries in connection with the purchase and sale of the Shares any damages that are material in relation to Seller and its subsidiaries taken as a whole; provided, however, that this condition shall be deemed to be waived by Seller as to any suit, action or proceeding (except for any suit, action or proceeding by any Governmental Entity) if Buyer provides to Seller indemnification in form and substance reasonably satisfactory to Seller and its counsel with respect to any such suit, action or proceeding. (v) The waiting period under the HSR Act, if applicable to the purchase and sale of the Shares, shall have expired or been terminated. (vi) The Cost of Remediation shall have been finally determined. (vii) The Buyer Shares shall have been approved for listing, subject to receipt of official notice of listing, by the American Stock Exchange. (viii) Seller and Buyer shall have entered into the Seller Registration Rights Agreement. 18 13 (ix) Seller shall have received customary closing certificates pertaining to Buyer, including a certificate of good standing from the Secretary of State of the State of Delaware dated as of a date reasonably prior to the Closing Date. (x) Seller shall have determined that the transfer of the Excluded Assets can be accomplished in a manner that will not result in a material adverse effect on the value of the Excluded Assets. (c) Frustration of Closing Conditions. Neither Buyer nor Seller may rely on the failure of any condition set forth in Section 3(a) or 3(b), respectively, to be satisfied if such failure was caused by such party's failure to act in good faith or to use its commercially reasonable best efforts to cause the Closing to occur, as required by Section 8(d). SECTION 4. Representations and Warranties of Seller. Except as shall be set forth in the Schedules or other written disclosure materials to be delivered by Seller on or before September 25, 1998 (each of which shall make reference to the particular subsection of this Agreement to which exception is being taken), Seller hereby represents and warrants to Buyer as follows: (a) Authority. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York. Seller has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All corporate acts and other proceedings required to be taken by Seller to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been, and the Seller Registration Rights Agreement will be, duly executed and delivered by Seller and constitutes, and the Seller Registration Rights Agreement will constitute, a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. (b) No Conflicts; Consents. The execution and delivery of this Agreement by Seller do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any 19 14 obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any lien, claim, encumbrance, security interest, option, charge or restriction of any kind upon any of the properties or assets of the Company under, any provision of (i) the Certificate of Incorporation or By-laws of Seller or the Company, (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Seller or the Company is a party or by which any of their respective properties or assets are bound (including all Contracts (as defined in Section 4(l)) to be identified pursuant to Section 4(l)) or (iii) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to Seller, the Company or any of their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not have a material adverse effect on the business, assets, condition (financial or otherwise), results of operations or prospects of the Business or on the ability of Seller to consummate the transactions contemplated hereby (a "Seller Material Adverse Effect"). No material consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Seller, the Company, their respective affiliates (or, with respect to clause (B), Buyer) in connection with (A) the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby or (B) the conduct of the Business following the Closing as conducted on the date hereof, other than compliance with and filings under the HSR Act, if applicable. (c) The Shares. Seller, directly or through one or more wholly owned subsidiaries, has good and valid title to the Shares, free and clear of any liens, claims, encumbrances, security interests, options, charges and restrictions of any kind. Assuming Buyer has the requisite power and authority to be the lawful owner of the Shares, upon delivery to Buyer at the Closing of certificates representing the Shares, duly endorsed by Seller for transfer to Buyer, and upon Seller's receipt of the Closing Date Amount, good and valid title to the Shares will pass to Buyer, free and clear of any liens, claims, encumbrances, security interests, options, charges and restrictions of any kind, other than those arising from acts of Buyer or its affiliates. Other than this Agreement, the Shares are not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or 20 15 understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Shares. (d) Organization and Standing; Books and Records. (i) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted. The Company is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Seller Material Adverse Effect. Seller will deliver to Buyer true and complete copies of the Certificate of Incorporation and By-laws, each as amended to date, of the Company. The stock certificate and transfer books and the minute books of the Company (which will be made available for inspection by Buyer prior to the date hereof) are true and complete. (e) Capital Stock of the Company. The authorized capital stock of the Company consists of 1,000 shares of Common Stock, par value $1.00 per share, of which 500 shares, constituting the Shares, are duly authorized and validly issued and outstanding, fully paid and nonassessable. Seller is the record and beneficial owner of the Shares. Except for the Shares, there are no shares of capital stock or other equity securities of the Company outstanding. The Shares have not been issued in violation of, and the Shares are not subject to, any purchase option, call, right of first refusal, preemptive, subscription or similar rights under any provision of applicable law, the Certificate of Incorporation or By-laws of the Company, any contract, agreement or instrument to which the Company is subject, bound or a party or otherwise. There are no outstanding warrants, options, rights, "phantom" stock rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) (i) pursuant to which Seller or the Company is or may become obligated to issue, sell, purchase, return or redeem any shares of capital stock or other securities of the Company or (ii) that give any person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of the 21 16 Company. Except as will be set forth in Schedule 4(e), there are no equity securities of the Company reserved for issuance for any purpose. Except as will be set forth in Schedule 4(e), there are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of the Company may vote. (f) Equity Interests. Except as will be set forth in Schedule 4(f), the Company does not directly or indirectly own any capital stock of or other equity interests in any corporation, partnership or other person and the Company is not a member of or participant in any partnership, joint venture or similar person. (g) Financial Information; Undisclosed Liabilities. (i) Schedule 4(g) will set forth (A) unaudited trial balances of the Business as of May 31, 1998 and July 31, 1998 (the "Trial Balances"). The Trial Balances have been prepared based upon the accounting practices, procedures and methods regularly and consistently used by the Company for monthly reporting to Seller which are consistent with generally accepted accounting principles. (ii) The Business does not have any liabilities or obligations of any nature (whether accrued, absolute, contingent, unasserted or otherwise) that are not recorded on the Trial Balances of a nature which would be required by generally accepted accounting principles to be reflected on a balance sheet of the Business except for items that will be set forth in Schedule 4(g). (iii) The financial position of the Business at May 31, 1998 and the results of its operations and its cash flows for the year ended May 31, 1998, that will be reflected in the audited balance sheet of the Business as of May 31, 1998 (the "Balance Sheet") and the audited statements of income and cash flows for the year ended May 31, 1998 (together with the Balance Sheet and including the notes thereto, the "Audited Financial Statements") to be prepared and delivered pursuant to Section 5(j) will not be worse in any material respect than the Business' financial position and the results of its operations and cash flows at such dates and for such periods as are reflected in the Trial Balances, with the exception of (A) incentive compensation paid during the 1998 fiscal year of the Business, (B) provisions made for Federal and state income Taxes and (C) allocations of corporate expenses between the Company and Seller. (iv) The audited Financial Statements will be prepared in conformity with generally accepted accounting 22 17 principles and on that basis will fairly present the financial condition and results of operations of the Business as of the respective dates thereof and for the respective periods indicated. (v) At the close of business on May 31, 1998 and July 31, 1998, the estimated Net Working Capital of the Company was approximately $198,000,000 and $201,000,000, respectively. (h) Taxes. (i) For purposes of this Agreement, (A) "Tax" or "Taxes" shall mean all Federal, state, local and foreign taxes and assessments, including all interest, penalties and additions imposed with respect to such amounts; (B) "Pre-Closing Tax Period" shall mean all taxable periods ending on or before the Closing Date and the portion ending on the Closing Date of any taxable period that includes (but does not end on) such day; and (C) "Code" shall mean the Internal Revenue Code of 1986, as amended. (ii) Except as will be set forth in Schedule 4(h), (A) the Company and any affiliated group, within the meaning of Section 1504 of the Code, of which the Company is or has been a member, has filed or caused to be filed all material Tax returns, reports and forms required to be filed by the Code or by applicable state, local or foreign Tax laws, (B) all Taxes shown to be due on such returns, reports and forms have been paid in full or will be paid in full and (C) no material Tax liens have been filed, and no material claims are being asserted in writing, with respect to any Taxes payable by the Company or any member of any such affiliated group. The Federal consolidated income Tax returns in which the Company has joined have been examined by the Internal Revenue Service for all taxable years through the year ended May 31, 1984. All deficiencies resulting from such examinations have either been paid or adequately provided for. (iii) Except as will be set forth in Schedule 4(h), (A) neither Seller nor any of its affiliates has made with respect to the Company, or any property held by the Company, any consent under Section 341 of the Code, (B) no property of the Company is "tax exempt use property" within the meaning of Section 168(h) of the Code, and (C) the Company is not a party to any lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954. (iv) Except as will be set forth in Schedule 4(h), there are no outstanding agreements or waivers extending the 23 18 statutory period of limitation applicable to any material Tax returns required to be filed with respect to the Company and neither the Company nor any affiliated group, within the meaning of Section 1504 of the Code, of which the Company is or has been a member, has requested any extension of time within which to file any material Tax return, which return has not yet been filed. (v) Seller is not a "foreign person" within the meaning of Section 1445 of the Code. (i) Assets Other than Real Property Interests. The Company has good and valid title to all assets of the Business that will be reflected on the Balance Sheet to be included in the Audited Financial Statements or that were acquired after May 31, 1998, including all assets reflected on the Trial Balances, except those assets sold or otherwise disposed of for fair value since May 31, 1998 in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case free and clear of all mortgages, liens, security interests or encumbrances of any kind except (i) such as will be set forth in Schedule 4(i), (ii) 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 equipment leases with third parties entered into in the ordinary course of business and liens for Taxes which are not due and payable or which may thereafter be paid without penalty or are being contested in good faith in appropriate proceedings, (iii) mortgages, liens, security interests and encumbrances which secure debt that has been disclosed to Buyer in writing prior to the date hereof and (iv) other imperfections of title or encumbrances, if any, which do not, individually or in the aggregate, materially impair the continued use and operation of the assets to which they relate in the Business (the mortgages, liens, security interests, encumbrances and imperfections of title described in clauses (ii), (iii) and (iv) above are hereinafter referred to collectively as "Permitted Liens"). All the material tangible personal property of the Company has been maintained in all material respects in accordance with the past practice of the Company and generally accepted industry practice. Each item of material tangible personal property of the Company is in all material respects in good operating condition and repair, ordinary wear and tear excepted. All material leased personal property of the Company is in all material respects in the condition required of such property by the terms of the 24 19 lease applicable thereto during the term of the lease and upon the expiration thereof. This Section 4(i) does not relate to real property or interests in real property, such items being the subject of Section 4(j). (j) Title to Real Property. Schedule 4(j) will set forth a complete list of all real property and interests in real property owned in fee by the Company that are used, held for use or intended to be used primarily in, or necessary for the conduct of, the current Business (individually, an "Owned Property") and identifies any material reciprocal easement or operating agreements relating thereto. Schedule 4(j) will set forth a complete list of all real property and interests in real property leased by the Company that are used, held for use or intended to be used primarily in, or necessary for the conduct of, the current Business (individually, a "Leased Property") and identifies any material base leases and reciprocal easement or operating agreements relating thereto. The Company has (i) good and insurable fee title to all Owned Property and (ii) good and valid title to the leasehold estates in all Leased Property (an Owned Property or Leased Property being sometimes referred to herein, individually, as a "Company Property" and, collectively, as "Company Properties"), in each case free and clear of all mortgages, liens, security interests, encumbrances, leases, assignments, subleases, easements, covenants, rights-of-way and other similar restrictions of any nature whatsoever, except (A) such as will be set forth in Schedule 4(j), (B) leases, subleases and similar agreements that will be set forth in Schedule 4(l), (C) Permitted Liens, (D) easements, covenants, rights-of-way, conditions, restrictions, reservations, licenses and other similar restrictions of record, (E) (I) any conditions that may be shown by a current, accurate survey or physical inspection of any Company Property made prior to Closing and (II) all immaterial encroachments, overlaps, boundary line disputes and shortages in area and (F) (I) all land use (including environmental and wetlands) zoning, building and other similar restrictions, (II) mortgages, liens, security interests, encumbrances, easements, covenants, rights-of-way and other similar restrictions that have been placed by any owner, developer, landlord, sublandlord or other third party on property over which the Company has easement rights or on any Leased Property and subordination or similar agreements relating thereto, and (III) unrecorded easements, covenants, rights-of-way, conditions, restrictions, reservations, licenses and other similar restrictions, none of which items set forth in clauses (I), (II) and (III), individually or in 25 20 the aggregate, materially impair the continued use and operation of the property to which they relate in the business of the Company as presently conducted. The current use by the Company of the petroleum products terminaling, storage and pipeline facilities (each, a "Facility" and collectively, the "Facilities"), offices and other facilities located on Company Property does not violate any local zoning or similar land use or government regulations in any manner that materially affects, or could reasonably be expected to materially affect, the use or operation of any Facility. (k) Intellectual Property. Schedule 4(k) will set forth a true and complete list of all patents, trademarks (registered or unregistered), trade names, service marks and registered copyrights and registrations and applications therefor, domestic or foreign, owned by or registered in the name of the Company or in or with respect to which the Company has any rights that are used, held for use or intended to be used primarily in, or necessary for the conduct of, the current Business, except for (A) such rights the loss of which, individually or in the aggregate, would not have a Seller Material Adverse Effect and (B) rights in off-the-shelf computer software. The Company owns or holds licenses under all such patents, trademarks, trade names, service marks and copyrights as are necessary for the conduct of its business as currently conducted and neither Seller nor the Company is currently in receipt of any notice of infringement or notice of conflict with the asserted rights of other persons in any patents, trademarks, trade names, service marks or copyrights owned or held by other persons, except, in each case, for matters that, individually or in the aggregate, would not have a Seller Material Adverse Effect. (l) Contracts. Except as will be set forth in Schedule 4(l) or as included in the Excluded Assets, the Company is not a party to or bound by any: (i) employment agreement or employment contract that has an aggregate future liability in excess of $50,000 and is not terminable by the Company by notice of not more than 60 days for a cost of less than $50,000; (ii) employee collective bargaining agreement or other contract with any labor union; (iii) covenant of the Company not to compete (other than pursuant to any radius restriction contained in any lease, reciprocal easement or development, 26 21 construction, operating or similar agreement) or other covenant of the Company restricting the development, manufacture, marketing or distribution of the products and services of the Company; (iv) material agreement, contract or other arrangement with (A) Seller or any affiliate of Seller or (B) any current or former officer, director or employee of the Company, Seller or any affiliate of Seller (other than employment agreements covered by clause (i) above); (v) material lease, sublease or similar agreement with any person under which the Company is a lessor or sublessor of, or makes available for use to any person, (A) any Company Property or (B) any portion of any premises otherwise occupied by the Company; (vi) lease or similar agreement with any person under which (A) the Company is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any person or (B) the Company is a lessor or sublessor of, or makes available for use by any person, any tangible personal property owned or leased by the Company, in any such case which has an aggregate future liability or receivable, as the case may be, in excess of $50,000 and is not terminable by the Company by notice of not more than 60 days for a cost of less than $50,000; (vii) (A) continuing contract for the future purchase of materials, supplies or equipment, (B) management, service, consulting or other similar type of contract or (C) advertising agreement or arrangement, in any such case which has an aggregate future liability to any person in excess of $50,000 and is not terminable by the Company by notice of not more than 60 days for a cost of less than $50,000; (viii) material license, option or other agreement relating in whole or in part to the intellectual property to be set forth in Schedule 4(k) (including any license or other agreement under which the Company is licensee or licensor of any such intellectual property) or to trade secrets, confidential information or proprietary rights and processes of the Company or any other person; (ix) agreement, contract or other instrument under which the Company has borrowed any money from, or issued any note, bond, debenture or other evidence of 27 22 indebtedness to, any person or any other note, bond, debenture or other evidence of indebtedness issued to any person in any such case which, individually, is in excess of $50,000; (x) agreement, contract or other instrument (including so-called take-or-pay or keepwell agreements) under which (A) any person has directly or indirectly guaranteed indebtedness, liabilities or obligations of the Company or (B) the Company has directly or indirectly guaranteed indebtedness, liabilities or obligations of any person (in each case other than endorsements for the purpose of collection in the ordinary course of business), in any such case which, individually, is in excess of $50,000; (xi) agreement, contract or other instrument under which the Company has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to, or other investment in, any person, in any such case which, individually, is in excess of $50,000; (xii) mortgage, pledge, security agreement, deed of trust or other instrument granting a lien or other encumbrance upon any Company Property, which lien or other encumbrance will not be set forth in Schedule 4(i) or 4(j); (xiii) agreement or instrument providing for indemnification of any person with respect to liabilities relating to any current or former business of the Company or any predecessor person; (xiv) joint venture agreement or arrangement which is material to the business or operations of the Business; or (xv) other agreement, contract, lease, license, commitment or instrument to which the Company is a party or by or to which it or any of its assets or business is bound or subject which has an aggregate future liability to any person in excess of $50,000 and is not terminable by the Company by notice of not more than 60 days for a cost of less than $50,000, other than forward purchase and sale, futures, options and swaps contracts having terms and conditions generally accepted in the petroleum products trading and midstream logistics business. 28 23 Except as will be set forth in Schedule 4(l), each agreement, contract, lease, license, commitment or instrument of the Company to be listed in the Schedules hereto (collectively, the "Contracts") is valid, binding and in full force and effect and is enforceable by the Company in accordance with its terms. Except as will be set forth in Schedule 4(l), Seller and the Company have performed all material obligations required to be performed by them to date under the Contracts and they are not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and, to the knowledge of Seller, no other party to any of the Contracts is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder. Except as will be set forth in Schedule 4(l), no other party to any of the Contracts that is a supply or exchange contract has informed Seller or the Company that such party does not intend to renew the supply or exchange contract to which it is a party upon the expiration of the term thereof. (m) Litigation. Schedule 4(m) will set forth a list of all pending lawsuits or claims, with respect to which Seller or the Company has been contacted in writing by counsel for the plaintiff or claimant, against or affecting the Company or any of its properties, assets, operations or business (other than the Excluded Assets) and which (i) relate to or involve more than $50,000, (ii) seek any material injunctive relief or (iii) relate to the transactions contemplated by this Agreement. Except as will be set forth in Schedule 4(m), none of the lawsuits or claims to be listed in Schedule 4(m) as to which there is at least a reasonable possibility of adverse determination would have, if so determined, individually or in the aggregate, a Seller Material Adverse Effect. Except as will be set forth in Schedule 4(m), to the knowledge of Seller, there are no unasserted claims of the type that would be required to be disclosed in Schedule 4(m) if counsel for the claimant had contacted Seller or the Company which if asserted would have at least a reasonable possibility of an adverse determination. Except as will be set forth in Schedule 4(m), the Company is not a party or subject to or in default under any judgment, order, injunction or decree of any Governmental Entity or arbitration tribunal applicable to it or any of its properties, assets, operations or business. Except as will be set forth in Schedule 4(m), there is no lawsuit or claim by the Company pending, or which the Company intends to initiate, against any other person. Except as will be set forth in Schedule 4(m), there is no pending, or, to the knowledge of Seller, threatened, investigation of or affecting the 29 24 Company by any Governmental Entity. This Section 4(m) does not relate to matters concerning Taxes, such items being the subject of Section 4(h). (n) Insurance. Seller or the Company maintain policies of fire and casualty, liability and other forms of insurance in such amounts, with such deductibles and against such risks and losses as are reasonable for the business and assets of the Company. The insurance policies maintained with respect to the Company and its assets and properties or owned by the Company will be listed in Schedule 4(n). All such policies are in full force and effect, all premiums due and payable thereon have been paid (other than retroactive or retrospective premium adjustments that are not yet, but may be, required to be paid with respect to any period ending prior to the Closing Date under comprehensive general liability and workmen's compensation insurance policies), and no notice of cancelation or termination has been received with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancelation. To the knowledge of Seller, the activities and operations of the Company have been conducted in a manner so as to conform in all material respects to all applicable provisions of such insurance policies. (o) Benefit Plans. (i) Schedule 4(o) will contain a list of all "employee pension benefit plans" (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes referred to herein as "Pension Plans"), "employee welfare benefit plans" (as defined in Section 3(1) of ERISA), bonus, stock option, stock purchase, deferred compensation plans or arrangements and other employee fringe benefit plans maintained, or contributed to, by Seller or the Company for the benefit of any employees of the Company (all the foregoing being herein referred to as "Benefit Plans"). Seller will make available to Buyer true, complete and correct copies of (A) each Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions thereof), (B) the most recent annual report on Form 5500 filed with the Internal Revenue Service with respect to each Benefit Plan (if any such report was required), (C) the most recent summary plan description for each Benefit Plan for which such a summary plan description is required and (D) each trust agreement and group annuity contract relating to any Benefit Plan. None of the Benefit Plans is sponsored or maintained by the Company (except to the extent the Company is a participating employer in the Benefit Plans), and neither Buyer nor the Company shall have any liability or obligation under any Benefit Plan from and after the Closing except as specifically provided in Section 9 hereof. 30 25 (ii) Except as will be set forth in Schedule 4(o), (A) each Benefit Plan has been administered in all material respects in accordance with its terms, (B) the Company and all the Benefit Plans are in compliance in all material respects with the applicable provisions of ERISA and the Code, and (C) there are no lawsuits, actions, termination proceedings or other proceedings pending, or, to the knowledge of Seller, threatened against or involving any Benefit Plan and, to the knowledge of Seller, there are no investigations by any Governmental Entity or other claims (except claims for benefits payable in the normal operation of the Benefit Plans) pending or threatened against or involving any Benefit Plan or asserting any rights to benefits under any Benefit Plan which would, individually or in the aggregate, have a Seller Material Adverse Effect. (iii) Except as will be set forth in Schedule 4(o), (A) all contributions to, and payments from, the Benefit Plans that may have been required to be made in accordance with the Benefit Plans and, when applicable, Section 302 of ERISA or Section 412 of the Code, have been timely made, (B) there has been no application for or waiver of the minimum funding standards imposed by Section 412 of the Code with respect to any Pension Plan, (C) no Pension Plan has an "accumulated funding deficiency" within the meaning of Section 412(a) of the Code as of the most recent plan year and (D) there are no liens in respect of any Pension Plan to which the Company could be subject pursuant to Section 412(n) of the Code or Sections 302(f) or 4068(a) of ERISA. (iv) Except as will be set forth in Schedule 4(o), all Pension Plans that are intended to be tax-qualified have been the subject of determination letters from the Internal Revenue Service to the effect that such Pension Plans are qualified and exempt from Federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and no such determination letter has been revoked nor, to the knowledge of Seller, has revocation been threatened. No amendment to any such Pension Plan has been adopted since the date of its most recent determination letter that, to the knowledge of Seller, is likely to adversely affect its qualification. (v) No "prohibited transaction" (as defined in Section 4975 of the Code or Section 406 of ERISA) has occurred that involves the assets of any Benefit Plan and that could subject the Company or any of its employees to a material tax or penalty on prohibited transactions imposed by Section 4975 of ERISA or the sanctions imposed under Title I of ERISA. Except as will be set forth in 31 26 Schedule 4(o), none of the Pension Plans has been terminated nor have there been any "reportable events" (as defined in Section 4043 of ERISA and the regulations thereunder) with respect thereto for which the 30-day notice requirement under Section 4043(a) of ERISA has not been waived by the Pension Benefit Guaranty Corporation other than as a result of the transactions contemplated by this Agreement. Neither Seller nor, to Seller's knowledge, any trustee, administrator or other fiduciary of any Benefit Plan nor any agent of any of the foregoing has engaged in any transaction or acted or failed to act in a manner that could subject the Company to any liability for breach of fiduciary duty under ERISA or any other applicable law which, individually or in the aggregate, would have a Seller Material Adverse Effect. (vi) With respect to any Pension Plan subject to Title IV of ERISA (including for the purposes of this Section 4(o)(vi) any Pension Plan maintained or contributed to by Seller or any other person under common control with Seller), Seller has not incurred any liability to such Pension Plan or to the Pension Benefit Guaranty Corporation that has not been satisfied, other than for the payment of contributions or premiums, all of which have been paid when due. (vii) Except as will be set forth in Schedule 4(o), at no time within the five years preceding the Closing Date has Seller or the Company been required to contribute to any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) for the benefit of any employees of the Company or incurred any withdrawal liability, within the meaning of Section 4201 of ERISA, with respect to any such multiemployer plan, which liability has not been fully paid as of the date hereof, or announced an intention to withdraw, but not yet completed such withdrawal, from any such multiemployer plan. (viii) No employee or former employee of the Company will become entitled to receive from Buyer or the Company any bonus, retirement, severance, job security or similar benefit or any enhanced benefit solely as a result of the transactions contemplated hereby. (p) Absence of Changes or Events. Except as will be set forth in Schedule 4(p), since May 31, 1998, there has not been any action, event or occurrence that has had or would reasonably be expected to have a Seller Material Adverse Effect. Except as will be set forth in Schedule 4(p), since May 31, 1998, Seller has caused the business of the Company to be conducted in the ordinary course and in substantially the same manner as previously 32 27 conducted. Except as will be set forth in Schedule 4(p), since May 31, 1998 to the date of this Agreement, the Company has not taken any action that, if taken after the date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5(b). (q) Compliance with Applicable Laws. (i) The Company is in compliance with all material applicable statutes, laws, ordinances, rules, orders, permits and regulations of any Governmental Entity ("Applicable Laws"), including those relating to occupational health and safety. Except as will be set forth in Schedule 4(q), neither Seller nor the Company has received any written communication within the past three years that has not been satisfactorily resolved from a Governmental Entity that alleges that the Company is not in compliance in any material respect with any Applicable Laws. This Section 4(q)(i) does not relate to matters with respect to Taxes or to environmental matters, which are the subject of Sections 4(h) and 4(q)(ii), respectively. (ii) Except as will be set forth in Schedule 4(q), (A) the Company is in compliance in all material respects with Environmental Laws, (B) the Company holds, and is in compliance in all material respects with, all permits, licenses or governmental authorizations required under Environmental Laws for the Company to conduct its operations, (C) neither Seller nor the Company has received any written communication within the past three years that has not been satisfactorily resolved from a Governmental Entity or other person that alleges that the Company is not in compliance with or is subject to liability under any Environmental Laws or that any investigation or cleanup of Hazardous Substances is requested or demanded under any Environmental Law, (D) no real property currently or formerly owned or operated by the Company is contaminated with, or is subject to any Release of, any Hazardous Substance which contamination or Release requires investigation or remediation under Environmental Law and which investigation or remediation, individually or in the aggregate, would be reasonably likely to result in material liability to the Company, (E) the Company is not the subject of any written claim or notice regarding potential responsibility for Hazardous Substance off-site disposal pursuant to the Federal Comprehensive Environmental Response, Compensation, and Liability Act or any other Environmental Law, and (F) Seller and/or the Company will have delivered or made available to Buyer copies of all environmental reports, studies, assessments, sampling data and other material environmental information in their 33 28 possession relating to the Company and its current or former properties or operations on or before September 25, 1998. The terms "Environmental Law" and "Environmental Laws" shall mean all applicable treaties, statutes, laws, ordinances, rules, orders, permits, regulations, authorizations, common law or enforceable agency requirements issued, promulgated or entered into by any Governmental Entity, relating to the protection, investigation or restoration of the environment, public health or safety or natural resources, or to the handling, use, presence, disposal, Release or threatened Release of any Hazardous Substance, including any injury or threat of injury to persons or property relating to any Hazardous Substance. The term "Hazardous Substances" means all explosive or radioactive materials or substances, hazardous or toxic substances, wastes or chemicals, petroleum (including crude oil or any fraction thereof), asbestos or asbestos containing materials, and all other materials or chemicals regulated pursuant to any Environmental Law. The term "Release" means any spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching, emanation or migration of any Hazardous Substance in, into, onto, or through the environment (including ambient air, surface water, ground water, soils, land surface, subsurface strata, workplace, or structure). (r) Employee and Labor Matters. (i) Except as will be set forth in Schedule 4(r), (i) there is, and during the past five years there has been, no material labor strike, dispute, work stoppage or lockout pending, or, to the knowledge of Seller, threatened, against or affecting the Company; (ii) to the knowledge of Seller, no union organizational campaign is in progress with respect to the employees of the Company and no question concerning representation exists respecting such employees; (iii) to the knowledge of Seller, the Company is not engaged in any unfair labor practice; (iv) there is no unfair labor practice charge or complaint against the Company pending, or, to the knowledge of Seller, threatened, before the National Labor Relations Board; (v) there are no pending, or, to the knowledge of Seller, threatened, union grievances against the Company as to which there is a reasonable possibility of adverse determination and that, if so determined, individually or in the aggregate, would have a Seller Material Adverse Effect; (vi) there are no pending, or, to the knowledge of Seller, threatened, charges against the Company or any current or former employee of the Company with respect to employment with the Company before the Equal Employment Opportunity Commission or any state or local agency responsible for the prevention of unlawful employment 34 29 practices; and (vii) neither Seller nor the Company has received oral or written notice during the past five years of the intent of any Governmental Entity responsible for the enforcement of labor or employment laws to conduct an investigation of or affecting the Company that has not been satisfactorily resolved and, to the knowledge of Seller, no such investigation is in progress. (ii) No officer of the Company is, and, to the knowledge of Seller, no other employee of the Company is, a party to or bound by any contract, license, covenant or agreement of any nature, or subject to any judgment, decree or order of any Governmental Entity, that may interfere with the use of such person's best efforts to promote the interests of the Business, conflict with the Business or the transactions contemplated hereby or have a Seller Material Adverse Effect. Without limiting the foregoing, no officer or employee of the Company is a party to or bound by any employment agreement or employment contract to which Seller is a party. To the knowledge of Seller, no activity of any employee of the Company engaged in the conduct of the Business as or while an employee of the Company has caused a violation within the past five years or that is continuing of any employment contract, confidentiality agreement, patent disclosure agreement, or other contract or agreement. To the knowledge of Seller, neither the execution and delivery of this Agreement, nor the conduct of the Business by the employees of the Company, will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employees are now obligated. (s) Customer Accounts Receivable; Inventories. (i) All customer accounts receivable of the Company, whether reflected on the Trial Balances, the Balance Sheet or subsequently created through the Closing Date, have arisen from bona fide transactions in the ordinary course of business. To Seller's knowledge, all such customer accounts receivable are good and collectible at the aggregate recorded amounts thereof, net of any applicable reserves for doubtful accounts reflected on the Trial Balances or taken account of in the calculation of Closing Net Working Capital. The Company has good and marketable title to all of its accounts receivable, free and clear of all liens, except as will be set forth in Schedule 4(s). Since May 31, 1998, there have not been any write-offs as uncollectible of any notes or accounts receivable of the Company, except for write-offs in the ordinary course of business and consistent with past practice which have not had, either individually or in the aggregate, a Seller Material Adverse Effect. 35 30 (ii) The inventories of the Company are reflected on the Trial Balances and in the books and records of the Company and will be reflected on the Balance Sheet on the mark to market method of accounting in accordance with generally accepted accounting principles applied on a basis consistent with past practice. (t) Licenses; Permits. Schedule 4(t) will set forth a true and complete list of all material licenses, permits and authorizations issued or granted to the Company by Governmental Entities that are necessary or materially useful for the conduct of the Business. Except as will be set forth in Schedule 4(t), all such licenses, permits and authorizations are validly held by the Company, the Company has complied in all material respects with all terms and conditions thereof and the same will not be subject to suspension, modification, revocation or nonrenewal as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. All such licenses, permits and authorizations which are held in the name of any employee, officer, director, stockholder, agent or otherwise on behalf of the Company shall be deemed included under this warranty. (u) Accounts; Safe Deposit Boxes; Powers of Attorney; Officers and Directors. Schedule 4(u) will be set forth (i) a true and correct list of all bank and savings accounts, certificates of deposit and safe deposit boxes of the Company and those persons authorized to sign thereon, (ii) true and correct copies of all corporate borrowing, depository and transfer resolutions and those persons entitled to act thereunder, (iii) a true and correct list of all powers of attorney granted by the Company in force as of the date hereof and those persons authorized to act thereunder and (iv) a true and correct list of all officers of the Company. (v) Transactions with Affiliates. Except as will be set forth in Schedule 4(v) or as may be otherwise agreed by the parties as contemplated by Section 8A, none of the agreements, contracts or other arrangements between the Company, on the one hand, and Seller or any of its affiliates, on the other hand, will continue in effect subsequent to the Closing. Except as will be set forth in Schedule 4(v) or as an indirect result of the ownership of the Buyer Shares, after the Closing neither Seller nor any of its affiliates will have any interest in any property (real or personal, tangible or intangible) or contract used in or pertaining to the Business. Neither Seller nor, to the knowledge of Seller, any of its affiliates has any direct or indirect ownership interest (other than through 36 31 the Company) in any person in which the Company has any direct or indirect ownership interest or with which the Company competes or has a business relationship other than the ownership of immaterial quantities of publicly traded securities. Except as will be set forth in Schedule 4(v), Seller provides no material services to the Company. (w) Effect of Transaction. Except as will be set forth in Schedule 4(w), no creditor, employee, client, customer or other person having a material business relationship with the Company has informed Seller or the Company that such person intends to change such relationship because of the purchase and sale of the Shares or the consummation of any other transaction contemplated hereby. (x) Disclosure. (i) No representation or warranty of Seller contained in this Agreement, and no statement contained in any document, certificate or Schedule furnished or to be furnished by or on behalf of Seller to Buyer or any of its representatives pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading or necessary in order to fully and fairly provide the information required to be provided in any such document, certificate or Schedule. (ii) The financial projections for the calendar year 1998 and the period ending June 30, 1999 relating to the Business delivered to Buyer were prepared on the basis of assumptions Seller reasonably believed in good faith at the time of preparation to be reasonable and Seller has no knowledge of any fact or information that would lead it to believe that such assumptions were incorrect or misleading in any material respect as of the time of preparation. (y) Suppliers. Except as will be set forth in Schedule 4(y), between May 31, 1998 and the date of this Agreement, the Company has not entered into or made any contract or commitment for the purchase of petroleum products for the Business other than in the ordinary course of business consistent with past practice. Except for the suppliers to be named in Schedule 4(y), the Business does not have any supplier from whom it purchased more than 5% of the petroleum products which it purchased during its most recent full fiscal year. Except as will be set forth in Schedule 4(y), since May 31, 1998, there has not been (i) any material adverse change in the business relationship of the Company with any supplier of petroleum products to be named in Schedule 4(y) related to the Business or (ii) any 37 32 adverse change in any material term (including credit terms) of the supply agreements or related arrangements with any such supplier related to the Business. (z) Customers. Except for the customers to be named in Schedule 4(z), the Business does not have any customer from whom the Business derived or received more than 5% of its revenues during its most recent full fiscal year. Except as will be set forth in Schedule 4(z), since May 31, 1998, there has not been (i) any material adverse change in the business relationship of the Company with any customer to be named in Schedule 4(z) related to the Business or (ii) any adverse change in any material term (including credit terms) of the sales agreements or related agreements with any such customer related to the Business. During the past year, the Company has received no customer complaints, other than complaints in the ordinary course of business which have not, and are not likely to have, individually or in the aggregate, a Seller Material Adverse Effect. (aa) Private Offering. Neither Seller, any of its affiliates nor anyone acting on its or their behalf has issued, sold or offered any security of the Company to any person under circumstances that would cause the issuance and sale of the Shares, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). Neither Seller, any of its affiliates nor anyone acting on its or their behalf will offer the Shares or any part thereof or any similar securities for issuance or sale to, or solicit any offer to acquire any of the same from, anyone so as to make the issuance and sale of the Shares subject to the registration requirements of Section 5 of the Securities Act. Assuming the representations of Buyer contained in Section 6(c) are true and correct, the issuance, sale and delivery of the Shares hereunder are exempt from the registration and prospectus delivery requirements of the Securities Act. (bb) Transfer of Excluded Assets. After giving effect to the transfer of the Excluded Assets, the Company shall continue to own all assets presently owned by the Company that are used, held for use or intended to be used primarily in the current Business or that are necessary for the conduct of the Business consistent with past practice. (cc) Securities Act. The Buyer Shares being acquired by Seller pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof (except pursuant to the Seller 38 33 Registration Rights Agreement or otherwise in compliance with all applicable securities laws), and Seller shall not offer to sell or otherwise dispose of the Buyer Shares so acquired by it in violation of any of the registration requirements of the Securities Act. (dd) Public Utility Holding Company Act. The Company is not a "holding company", a "public-utility company" or a "subsidiary company" or an "affiliate" of a "holding company", in each case within the meaning of the Public Utility Holding Company Act of 1935, as amended, and the rules and regulations promulgated thereunder. (ee) Brokerage Agreements. Neither the Seller nor the Company has, directly or indirectly, entered into any agreement with any person that would obligate the Company or Buyer to pay any compensation, brokerage fee or "finder's fee" in connection with the transactions contemplated by this Agreement. SECTION 5. Covenants of Seller. Seller covenants and agrees as follows: (a) Access. Prior to the Closing, Seller shall, and shall cause the Company to, give Buyer and its representatives, employees, counsel and accountants reasonable access, during normal business hours and upon reasonable notice, to the personnel, properties, books and records of the Company (including for purposes of the Buyer's due diligence investigation of the Business); provided, however, that such access does not unreasonably disrupt the normal operations of Seller, the Company or any joint venture partner of the Company. (b) Ordinary Conduct. Except as will be set forth in Schedule 5(b) or otherwise expressly permitted by the terms of this Agreement, from the date hereof to the Closing, Seller shall cause the Business to be conducted in the ordinary course in substantially the same manner as presently conducted and shall make all reasonable efforts consistent with past practices to preserve their relationships with customers, suppliers, joint venture partners and others with whom the Company deals. Seller shall not, and shall not permit the Company to, take any action that would, or that could reasonably be expected to, result in any of the conditions to the purchase and sale of the Shares set forth in Section 3(a) not being satisfied. In addition, except as will be set forth in Schedule 5(b) or 39 34 otherwise expressly permitted by the terms of this Agreement, Seller shall not permit the Company to do any of the following without the prior written consent of Buyer: (i) amend its Certificate of Incorporation or By-laws; (ii) declare or pay any dividend or make any other distribution to its stockholders whether or not upon or in respect of any shares of its capital stock other than cash dividends or in connection with the transfer to Seller or an affiliate of Seller (other than the Company) of the Excluded Assets; (iii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock; (iv) adopt or amend in any material respect any Benefit Plan or collective bargaining agreement, except as required by law (including Tax qualification requirements); (v) grant to any executive officer or employee engaged in the conduct of the Business any increase in compensation or benefits, except in the ordinary course of business consistent with past practice, as required by Section 5(j) or as may be required under existing agreements and except for any increases for which Seller shall be solely obligated; (vi) except as related to the Excluded Assets and for which the Company is fully indemnified, incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business consistent with past practice; provided that in no event shall the Company incur, assume or guarantee any long-term indebtedness for borrowed money; (vii) permit, allow or suffer any of its assets (other than the Excluded Assets) to become subjected to any mortgage, lien, security interest, encumbrance, easement, covenant, right-of-way or other similar restriction of any nature whatsoever which would have been required to be set forth in Schedule 4(i) or 4(j) if existing on the date of this Agreement; 40 35 (viii) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value; (ix) except for the transfer to Seller or an affiliate of Seller (other than the Company) of the Excluded Assets and intercompany transactions in the ordinary course of business, pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, Seller or any of its affiliates; (x) make any change in any method of accounting or accounting practice or policy other than those required by generally accepted accounting principles; (xi) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) which are material, individually or in the aggregate, to the Company; (xii) except for any capital expenditure that is currently approved in writing or budgeted or required by an emergency, make or incur any capital expenditure which, individually, is in excess of $50,000 or make or incur any such expenditures which, in the aggregate, are in excess of $500,000; (xiii) sell, lease or otherwise dispose of any of its assets (other than the Excluded Assets) which are material, individually or in the aggregate, to the Company, except in the ordinary course of business consistent with past practice; provided that in no event shall the Company sell, lease, encumber or otherwise dispose of any Facility or its interest in any Facility; (xiv) acquire (whether by purchase, lease, exchange or otherwise) any additional Facilities or any interest in any additional Facilities; (xv) enter into any lease of real property, except any renewals of existing leases in the ordinary course of business with respect to which Buyer shall have the right to participate; (xvi) modify, amend, terminate or permit the lapse of any lease of, or reciprocal easement agreement, 41 36 operating agreement or other material agreement relating to, real property (except modifications or amendments associated with renewals of existing leases in the ordinary course of business with respect to which Buyer shall have the right to participate); (xvii) modify, amend or terminate the BP Relationship or any other joint venture agreement or arrangement or any other Contract which is material to the Business; (xviii) alter in any material respect any aspects of its petroleum products trading activities and practices, including in respect of the manner in which, and the volumes on which, such activities and practices are conducted; (xix) grant any powers of attorney of the Company to any person; (xx) (A) make or rescind any express or deemed election relating to Taxes if such action would create a material additional liability for the Company in respect of any period beginning after the Closing Date or (B) except as may be required by applicable law, change in any respect any of its methods of reporting income or deductions for income tax purposes from those employed in the preparation of its income tax returns for the taxable year ended May 31, 1998 if such change would create a material additional liability for the Company in respect of any period beginning after the Closing Date; or (xxi) agree, whether in writing or otherwise, to do any of the foregoing. (c) Confidentiality. Seller shall keep confidential, and cause its affiliates and instruct its and their officers, directors, employees and advisors to keep confidential, all confidential information relating to the Business (other than in respect of the Retained Liabilities), except as required by law or administrative process or to perform its obligations under this Agreement and except for information which 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 5(c). The covenant set forth in this Section 5(c) shall terminate 5 years after the Closing Date. (d) Insurance. Seller shall keep, or cause to be kept, all insurance policies to be set forth in 42 37 Schedule 4(n), or suitable replacements therefor, in full force and effect through the close of business on the Closing Date. (e) Resignations. On the Closing Date, Seller shall cause to be delivered to Buyer duly signed resignations, effective immediately after the Closing, of all officers of the Company and shall take such other action as is necessary to accomplish the foregoing. (f) Supplemental Disclosure. (i) Seller shall have the continuing obligation until the Closing promptly to supplement or amend the Schedules hereto with respect to any matter hereafter arising or discovered which, if existing or known at September 25, 1998, would have been required to be set forth or described in such Schedules; provided, however, that no supplement or amendment to such Schedules after 8 business days following Buyer's receipt of all completed Schedules or other written disclosure materials to be prepared by Seller and delivered to Buyer as contemplated by Section 5(m) shall have any effect for the purpose of determining the satisfaction of the conditions set forth in Section 3(a) or for purposes of determining whether any person is entitled to indemnification pursuant to Section 11. (ii) Seller shall promptly notify Buyer of, and furnish Buyer any information it may reasonably request with respect to, the occurrence to Seller's knowledge of any event or condition or the existence to Seller's knowledge of any fact that would cause any of the conditions to Buyer's obligation to consummate the purchase and sale of the Shares not to be fulfilled. (g) Certain Licenses and Permits. Seller covenants that all licenses, permits and authorizations which are held in the name of any employee, officer, director, stockholder, agent or otherwise on behalf of the Company with respect to the Business shall be duly and validly transferred to the Company without consideration prior to the Closing and that the warranties, representations, covenants and conditions contained in this Agreement shall apply to the same as if held by the Company as of the date hereof. (h) Severance Agreements. Seller shall use its commercially reasonable best efforts to enter into severance agreements satisfactory to Buyer (the "Severance Agreements") with the six employees identified on Schedule 5(h), with terms previously discussed by Seller and Buyer. Any amount or securities payable or deliverable 43 38 under any Severance Agreement that is forfeited by the employee in accordance with the terms thereof shall be returned by Seller to Buyer as a partial reduction of the Purchase Price. (i) Transfer of Brokerage Accounts. Seller shall use its commercially reasonable best efforts to transfer all futures contracts on the NYMEX that the Company has in accounts with a broker or brokerage unit affiliated with Seller to one or more financial institutions that are not affiliated with Seller designated by Buyer prior to or at Closing. (j) Audited Financial Statements. As soon as practicable following the date hereof, Seller shall prepare and deliver to Buyer the Audited Financial Statements. In addition, not later than 70 days after the Closing Date, Seller shall prepare and deliver to Buyer audited balance sheets of the Business as of May 31, 1997 and May 31, 1996 and audited statements of income and cash flows for the years ended May 31, 1997 and May 31, 1996. All financial statements to be prepared and provided pursuant to this Section 5(j) shall be prepared in accordance with generally accepted accounting principles (and shall include all notes required by such principles), using the same methods of accounting and accounting practices utilized in the preparation of the Trial Balances and shall be accompanied by an unqualified opinion from Ernst & Young LLP. Seller shall assist and cooperate in obtaining such reports from Ernst & Young LLP and in addition shall obtain the consent of Ernst & Young LLP to the inclusion of such reports in filings by Buyer with the Securities and Exchange Commission ("SEC"). (k) Non-Competition. Seller shall not, and shall cause each of its affiliates other than Louis Dreyfus Natural Gas Corp. not to, directly or indirectly: (i) for a period of 4 years from the Closing Date, engage in the Business within the United States of America (including for purposes of this Section 5(k) any activities relating to or that would have a detrimental impact upon the revenue streams derived from the current activities of the Business involving the Commodities, except that Seller may engage in the trading of Commodities if such activities do not have a detrimental impact upon the revenue streams derived from the current activities of the Business involving the Commodities); or 44 39 (ii) for a period of two years from the Closing Date, (A) solicit, recruit or hire any employee of Buyer, an affiliate of Buyer or the Company or (B) solicit or encourage any employee of Buyer, an affiliate of Buyer or the Company to leave the employment of Buyer, such affiliate or the Company. Notwithstanding anything to the contrary contained in this Section 5(k), Buyer hereby agrees that the foregoing covenant shall not be deemed breached as a result of the ownership by Seller or any affiliate of Seller of: (i) less than an aggregate of 5% of any class of stock of a person engaged, directly or indirectly, in the Business provided that such stock is listed on a national securities exchange or is quoted on the National Market System of NASDAQ; (ii) less than 10% in value of any instrument of indebtedness of a person engaged, directly or indirectly, in the Business or (iii) a person which engages, directly or indirectly, in the Business if such activities account for less than 10% of such person's consolidated annual revenues. (l) Program License Agreement. Seller and Company shall enter into a personal, nonexclusive, royalty-free license agreement with a term ending three years from the Closing Date whereby Seller shall license Company to use, solely in the conduct of the Business at locations to be specified, Seller's proprietary software program which supports the petroleum products and financial products trading and transportation activities of the Business, including monitoring and managing price risk, product delivery and credit risk and processing transactions (the "Program"). Such agreement shall include a representation that Seller has implemented a comprehensive, detailed program to analyze and address the risk that the Program may be unable to recognize and properly execute date-sensitive functions involving certain dates prior to and any dates after December 31, 1999 (the "Year 2000 Problem") and a covenant that Seller will use its commercially reasonable best efforts to remedy any such Year 2000 Problem on or before September 30, 1999. Such agreement shall not require Seller to provide any support services of any kind to the Company with respect to the Program other than the provision of any upgrade to the Program developed by Seller to address the Year 2000 Problem. Such agreement shall contain other commercially reasonable terms appropriate to a software license agreement acceptable to Buyer and Seller. (m) Schedules. As soon as practicable and in no event later than September 25, 1998, Seller shall prepare and deliver to Buyer each of the Schedules to this Agreement (other than those Schedules relating to representations and 45 40 warranties of Buyer) and all other written disclosure materials relating to this Agreement on the transactions contemplated hereby, if any. SECTION 6. Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller as follows: (a) Authority. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Buyer has all requisite corporate power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All corporate acts and other proceedings required to be taken by Buyer to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been, and the Seller Registration Rights Agreement will be, duly executed and delivered by Buyer and constitutes, and the Seller Registration Rights Agreement will constitute, a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms. (b) No Conflicts; Consents. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof shall not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any lien, claim, encumbrance, security interest, option, charge or restriction of any kind upon any of the properties or assets of Buyer or any subsidiary of Buyer under, any provision of (i) the Certificate of Incorporation or By-laws of Buyer or the comparable governing instruments of any subsidiary of Buyer, (ii) any material note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Buyer or any subsidiary of Buyer is a party or by which any of their respective properties or assets are bound, or (iii) any judgment, order, or decree, or material statute, law, ordinance, rule or regulation applicable to Buyer or any subsidiary of Buyer or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, would not have a material adverse effect on the business, assets, condition (financial or otherwise), results of operations or prospects of Buyer 46 41 or on the ability of Buyer to consummate the transactions contemplated hereby (a "Buyer Material Adverse Effect". No material consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Buyer or any of its subsidiaries or their respective affiliates in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, other than (A) compliance with and filings under the HSR Act, if applicable, and (B) compliance with and filings under Section 13(a) or 15(d), as the case may be, of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (c) Buyer Shares. The Buyer Shares will be, when issued, (A) duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights and (B) free and clear of any liens, claims, encumbrances, security interests, options, charges and restrictions of any kind, other than those arising from acts of Seller or its affiliates. (d) Organization and Standing. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Buyer has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted. Buyer is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Buyer Material Adverse Effect. (e) Securities Act. The Shares purchased by Buyer pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof, and Buyer shall not offer to sell or otherwise dispose of the Shares so acquired by it in violation of any of the registration requirements of the Securities Act. (f) Actions and Proceedings, etc. There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against Buyer or any of its affiliates, (ii) lawsuits, actions or 47 42 proceedings pending or, to the knowledge of Buyer, threatened against Buyer or any of its affiliates, or (iii) investigations by any Governmental Entity which are, to the knowledge of Buyer, pending or threatened against Buyer or any of its affiliates, and which, in the case of each of clauses (i), (ii) and (iii), could have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby. (g) Availability of Funds. Buyer has cash available or has existing borrowing facilities or firm commitments which together are sufficient to enable it to consummate the transactions contemplated by this Agreement. (h) SEC Documents. Since June 30, 1997, Buyer has filed all required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) with the SEC ("Buyer SEC Documents"). As of their respective dates, the Buyer SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Buyer SEC Documents, and no Buyer SEC Document when filed (as amended and restated and as supplemented by subsequently filed Buyer SEC Documents) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of Buyer included in the Buyer SEC Documents complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial position of Buyer and its consolidated subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). (i) Capital Structure. The authorized capital stock of Buyer consists of 40,000,000 shares of Buyer Common Stock and 2,000,000 shares of preferred stock, par value $.01 per share ("Buyer Preferred Stock"), of which, as of the date hereof, no shares have been designated to 48 43 constitute a particular series. At the close of business on August 31, 1998: (i) 25,965,724 shares of Buyer Common Stock were issued and outstanding, (ii) no shares of Buyer Common Stock were held by Buyer in its treasury, (iii) 1,800,000 shares of Buyer Common Stock were reserved for issuance pursuant to the TransMontaigne Oil Company Equity Incentive Plan and (iv) no shares of Buyer Preferred Stock had been designated or issued or were held by Buyer in its treasury. All outstanding shares of capital stock of Buyer are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except for the Antidilution Rights Agreement dated as of April 17, 1996 by and between Buyer and Waterwagon & Co. and awards issued under the TransMontaigne Oil Company Equity Incentive Plan or as disclosed in the Buyer SEC Documents, there are no outstanding warrants, options, rights, "phantom" stock rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) (i) pursuant to which Buyer is or may become obligated to issue, sell, purchase, return or redeem any shares of capital stock or other securities of Buyer or (ii) that give any person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of Buyer. Except as disclosed in the Buyer SEC Documents, there are no outstanding bonds, debentures, notes or other indebtedness having the right to vote on any matters on which stockholders of Buyer may vote. (j) Absence of Changes or Events. Since April 30, 1998, there has not been any action, event or occurrence that has had or would reasonably be expected to have a Buyer Material Adverse Effect. (k) Private Offering. Neither Buyer, any of its affiliates nor anyone acting on its or their behalf has issued, sold or offered any security of Buyer to any person under circumstances that would cause the issuance of the Buyer Shares, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act. Neither Buyer, any of its affiliates nor anyone acting on its or their behalf will offer the Buyer Shares or any part thereof or any similar securities for issuance or sale to, or solicit any offer to acquire any of the same from, anyone so as to make the issuance of the Buyer Shares subject to the registration requirements of Section 5 of the Securities Act. Assuming the representations of Seller contained in Section 4(cc) are true and correct, the issuance and delivery of the Buyer Shares hereunder are exempt from the registration and prospectus delivery requirements of the Securities Act. 49 44 (l) Brokerage Agreements. Buyer has not, directly or indirectly, entered into any agreement with any person that would obligate Seller to pay any compensation, brokerage fee or "finder's fee" in connection with the transactions contemplated by this Agreement. (m) Disclosure. No representation or warranty of Buyer contained in this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein not misleading. SECTION 7. Covenants of Buyer. Buyer covenants and agrees as follows: (a) Confidentiality. Buyer acknowledges that the information being provided to it in connection with the purchase and sale of the Shares and the consummation of the other transactions contemplated hereby is subject to the terms of a confidentiality agreement between Buyer and Seller (the "Confidentiality Agreement"), the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, the Confidentiality Agreement shall terminate with respect to information relating solely to the Business; provided that Buyer acknowledges that any and all other information provided to it by Seller or Seller's representatives concerning Seller shall remain subject to the terms and conditions of the Confidentiality Agreement after the Closing Date. (b) Board of Directors of Buyer. The Board of Directors of Buyer shall take such action as may be necessary (including increasing the size of the Board of Directors of Buyer) to appoint Simon Rich to the Board of Directors of Buyer after the Closing Date, effective on the Closing Date. For so long as Seller maintains an equity ownership interest in Buyer equal to or greater than 10% of the outstanding shares of Buyer Common Stock, Buyer shall use its reasonable best efforts to nominate Simon Rich (or a substitute person designated by Seller who is reasonably acceptable to the Board of Directors of Buyer) to the Board of Directors of Buyer. (c) Supplemental Disclosure. Buyer shall promptly notify Seller of, and furnish Seller any information it may reasonably request with respect to, the occurrence to Buyer's knowledge of any event or condition or the existence to Buyer's knowledge of any fact that would cause any of the conditions to Seller's obligation to 50 45 consummate the purchase and sale of the Shares not to be fulfilled. (d) Business Presence. Buyer shall maintain an office and conduct a substantial portion of the Company's business activities in Roswell, Georgia for a period of not less than one year following the Closing Date. (e) Listing of Buyer Shares. Buyer shall submit an additional listing application and use its best efforts to cause the Buyer Shares to be listed on the American Stock Exchange. (f) Employees of Seller. For a period of two years from the Closing Date, Buyer shall not (A) solicit, recruit or hire any employee of Seller or an affiliate of Seller or (B) solicit or encourage any employee of Seller or an affiliate of Seller to leave the employment of Seller or such affiliate; provided, however, that nothing herein shall limit in any manner Buyer's ability to continue the employment as of the Closing of any employee of the Company. (g) Change of Company Name. Buyer shall (i) prepare and immediately following the Closing take all necessary actions to file or cause to be filed on the Closing Date an amendment to the Certificate of Incorporation of the Company to change the name of the Company to a name designated by Buyer that bears no association with Seller or any of its affiliates and (ii) within 90 days of the Closing Date, take all necessary actions to ensure that no name or other mark or indication associated with Seller or any of its affiliates (or any mark or indication similar thereto) appears on or in relation to any Facility or for any other purpose and Buyer may use the current marks and indications solely to operate the Facilities during such period as operated through the date hereof. (h) Access. Prior to the Closing, Buyer shall give Seller and its representatives, employees, counsel and accountants such reasonable access, during normal business hours and upon reasonable notice, to the personnel and books and records of Buyer as is reasonably necessary for Seller to verify the accuracy of the representations and warranties of Buyer set forth in this Agreement; provided, however, that such access does not unreasonably disrupt the normal operations of Buyer. Nonpublic information obtained through such access shall be subject to the Confidentiality Agreement. SECTION 8. Mutual Covenants. Each of Seller and Buyer covenants and agrees as follows: 51 46 (a) Environmental Audit. (i) Buyer shall at its sole cost and expense conduct a Phase I environmental site assessment of the Company's facilities and shall prepare a written report of the results of such assessment; provided, however, that such assessment shall not include any type of sampling or intrusive testing (the "Phase I Environmental Report"). Subject to Buyer's receipt of all third party reports commissioned by Buyer in connection with the preparation of the Phase I Environmental Report, Buyer shall use commercially reasonable best efforts to complete and deliver a copy of the Phase I Environmental Report to Seller within 30 days of the date of this Agreement. The scope of work for the Phase I Environmental Report shall be as Buyer shall reasonably determine in its sole judgment, but shall at a minimum (A) identify all matters that are not in compliance with, or require investigation or remediation under, Environmental Law, (B) subject to subclause (D) below, provide a good faith estimate of the Cost of Remediation (as defined below), (C) provide such information and detail as is reasonably available and necessary for Seller to evaluate the Cost of Remediation, (D) provide good faith recommendations regarding the nature and scope of additional soil, groundwater or other testing reasonably necessary, if at all ("Phase II Recommendations"), in order to provide a good faith estimate of the Cost of Remediation, and (E) provide a good faith estimate of the time necessary to complete all necessary investigation work in connection with the matters identified in the Phase I Environmental Report and Phase II Recommendations, as applicable. The term "Cost of Remediation" shall mean all costs and expenses reasonably necessary to bring the matters identified in the Phase I Environmental Report and, if necessary, matters subsequently identified pursuant to any implementation of the Phase II Recommendations, into compliance with Environmental Law in effect as of the Closing consistent with the use and operation of the facilities in the Business, including the cost of investigation and/or remediation of any Hazardous Substances identified at such facilities, other than up to $1,000,000 in the aggregate of individual matters requiring expenditures of less than $10,000 each. (ii) Seller shall, and shall cause the Company to, cooperate fully with Buyer regarding the environmental assessment activities contemplated by subparagraph (i) above, including by providing all data and other information in the possession of Seller or the Company reasonably requested by Buyer or any of its representatives or materially relevant to such activities. All data and other information provided by Seller or the Company in connection with the conduct of such activities shall be complete and, 52 47 with respect to materials prepared by Seller or the Company, to the Seller's knowledge, accurate in all material respects. (iii) If the Phase I Environmental Report contains Phase II Recommendations, or if on one or more occasions prior to completion of the Phase I Environmental Report Buyer concludes that the Phase I Environmental Report will include Phase II Recommendations, Buyer shall confer with Seller as soon as practicable regarding the nature, scope and estimated time of implementation of such Phase II Recommendations proposed at that time. In the case of a proposed Phase II Recommendation presented to Seller before completion of the Phase I Environmental Report, Seller may defer its consideration of such Phase II Recommendation and the beginning of the formal negotiation period contemplated by the following sentence until completion of the Phase I Environmental Report but if Seller approves any Phase II Recommendation it may not later oppose it. If Seller objects to any proposed Phase II Recommendation, Seller and Buyer shall negotiate for at least two business days concerning the appropriate nature, scope and timing of implementing such Phase II Recommendation. After such negotiation, Seller may confirm in writing to Buyer its continuing opposition to any such proposed Phase II Recommendation not previously approved by Seller (a "Phase II Opposition Notice"), in which event Buyer shall not undertake the investigation contemplated by such Phase II Recommendation any earlier than after the Closing, subject to its right to terminate this Agreement in accordance with the provisions of Section 15. Subject to the preceding sentence, Buyer, at its sole expense, shall use its commercially reasonable best efforts to complete the investigations contemplated by the agreed Phase II Recommendations as promptly as practicable. (iv) Buyer shall provide Seller with the opportunity to reasonably participate in the conduct of any environmental assessment work conducted pursuant to this Section 8(a), including the opportunity to collect split samples. (v) In the event that a dispute arises between Buyer and Seller with respect to the Cost of Remediation, then the Buyer and Seller shall select a nationally recognized environmental consultant to arbitrate such dispute in accordance with the procedures set forth in subparagraph (vi) below. If the Buyer and Seller cannot agree on one such environmental consultant within five business days, each party shall select its own nationally recognized environmental consultant within five business 53 48 days thereafter, which consultants shall be instructed to jointly select within five business days a third environmental consultant to arbitrate such dispute. The agreed upon or selected environmental consultant shall be deemed the "Environmental Arbitrator." The arbitration provided for in this subparagraph (v) and in subparagraph (vi) below shall be the parties' exclusive remedy in respect of a dispute concerning the Cost of Remediation. (vi) In accordance with the then current Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association, Buyer and Seller shall submit disputes concerning the Cost of Remediation under this Section 8(a) and their respective estimates of the applicable Cost of Remediation to the Environmental Arbitrator for a final, binding resolution, and the Environmental Arbitrator shall choose one or the other of such estimates as the final amount of Cost of Remediation. The arbitration shall be conducted in a location selected by the Environmental Arbitrator, with preference given to New York, New York. No transcript or recording shall be made of any arbitration session. The decision of the Environmental Arbitrator shall be final and binding on the Buyer and Seller for all purposes and may be entered in any court of competent jurisdiction. The losing party shall pay the expenses of the Environmental Arbitrator. (b) Cooperation. Without limiting Section 12, Buyer and Seller shall cooperate with each other, and shall cause their respective affiliates, officers, employees, agents, auditors and representatives to cooperate with each other, for a period of 180 days after the Closing to ensure the orderly transition of the Business from Seller to Buyer and to minimize any disruption to the respective businesses of Seller, Buyer and the Company that might result from the transactions contemplated hereby. After the Closing, upon reasonable written notice, Buyer and Seller shall furnish or cause to be furnished to each other and their employees, counsel, auditors and representatives access, during normal business hours, to such information and assistance relating to the Company as is reasonably necessary for financial reporting and accounting matters, the preparation and filing of any tax returns, reports or forms or the defense of any tax claim or assessment. Each party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other pursuant to this Section 8(b). Neither party shall be required by this Section 8(b) to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations (or, in the case of Buyer, the Business). 54 49 (c) Publicity. Seller and Buyer agree that, from the date hereof through the Closing Date, no public release or announcement concerning the transactions contemplated hereby shall be issued by either party without the prior consent of the other party (which consent shall not be unreasonably withheld), except as such release or announcement may be required by law or the rules or regulations of any United States or foreign securities exchange, in which case the party required to make the release or announcement shall allow the other party reasonable time to comment on such release or announcement in advance of such issuance; provided, however, that each of Buyer and Seller may make internal announcements to its employees that are consistent with the parties' prior public disclosures regarding the transactions contemplated hereby after reasonable prior notice to and consultation with the other party. (d) Commercially Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, each party shall use its commercially reasonable best efforts to cause the Closing to occur. (e) Antitrust Notification. Each of Seller and Buyer shall as promptly as practicable, but in no event later than five business days following the execution and delivery of this Agreement, file with the United States Federal Trade Commission (the "FTC") and the United States Department of Justice (the "DOJ") the notification and report form, if any, required for the transactions contemplated hereby and any supplemental information requested in connection therewith pursuant to the HSR Act. Any such notification and report form and supplemental information shall be in substantial compliance with the requirements of the HSR Act. Each of Buyer and Seller shall furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission which is necessary under the HSR Act. Seller and Buyer shall keep each other apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ and shall comply promptly with any such inquiry or request. Each of Seller and Buyer shall use its commercially reasonable best efforts to obtain any clearance required under the HSR Act for the purchase and sale of the Shares. For purposes of this Section 8(e) and of Section 8(d), the "commercially reasonable best efforts" of Buyer shall not require Buyer to agree to any prohibition, limitation or other requirement of the type set forth in clauses (B), (C) and (D) of Section 3(a)(iv). 55 50 (f) Records. (i) On the Closing Date, Seller shall deliver or cause to be delivered to Buyer all original material agreements, documents, books, records and files, including records and files stored on computer disks or tapes or any other storage medium (collectively, "Records"), if any, in the possession of Seller relating to the Business to the extent not then in the possession of the Company, subject to the following exceptions: (A) Buyer recognizes that certain Records may contain incidental information relating to the Business or may relate primarily to subsidiaries or divisions of Seller or the Company other than the Business, and that Seller may retain such Records and shall provide copies of the relevant portions thereof to Buyer; and (B) Subject to clause (ii) below, Seller may retain any and all Tax returns, reports or forms and other Tax Records relating to the Company in its possession. (ii) Seller and Buyer shall provide to each other, and Buyer shall cause the Company to provide to Seller, at any reasonable time and from time to time, at the business location at which the Records are maintained, after the Closing Date, full access to such Tax Records of the Company as Seller or Buyer, as the case may be, may from time to time reasonably request and shall furnish, and request the independent accountants and legal counsel of Seller, Buyer or the Company to furnish to Seller or Buyer, as the case may be, such additional Tax and other information and documents in the possession of such persons (excluding privileged materials) as Seller or Buyer may from time to time reasonably request; provided, however, that Seller shall not be required to furnish access to Records (or portions of any Records) or furnish, or request its independent accountants or legal counsel to furnish, any information or documents (or any portions thereof) that are not related to the Business. In particular, but without limitation, (A) to the extent in its possession, Seller shall provide to Buyer, to the extent requested by Buyer, true and complete copies of all separate Tax returns (and related workpapers) of the Company and such portions of the consolidated, combined or unitary returns of affiliated groups of which the Company was a member (and related workpapers), in each case to the extent such returns or such portions relate exclusively to the Business (including redacted versions of such returns or portions thereof to the extent that relate exclusively to the Business) and (B) to the extent in the possession of Buyer or the Company, Buyer shall provide to Seller, or cause the Company to provide to 56 51 Seller, to the extent requested by Seller, true and complete copies of all Tax returns, workpapers and other Records relating to Federal, state and local sales, use and excise Taxes. SECTION 8A. Certain Post-Closing Cooperation. (a) Seller shall use its commercially reasonable best efforts to complete on or before the Closing Date (i) the transfer of the Excluded Assets (including real property and transactions under swap and option agreements) from the Company to Seller or its affiliates or a third party and (ii) the termination or release of any contracts or liabilities between the Company and, or guaranties by the Company of any liabilities (including contingent liabilities) of, Seller and its affiliates (including affiliates that are subsidiaries of the Company as of the date of this Agreement) ("Seller Liabilities"). (b) Buyer recognizes that Seller and its Affiliates, directly or through financial institutions, insurance companies or third parties, have provided guaranties or have otherwise agreed to be liable for, liabilities (including contingent liabilities) arising from the Business (the "Seller Guaranties"). Buyer recognizes that Seller prefers to terminate the Seller Guaranties as of the Closing Date. Buyer will use its commercially reasonable best efforts to substitute, where required, the obligation of Buyer and its affiliates, directly or through financial institutions, insurance companies or other third parties, for the Seller Guaranties on or before the Closing Date. (c) Seller and Buyer recognize that it may not be commercially practicable to complete the actions contemplated to be taken by Seller and Buyer under paragraphs (a) and (b) above, respectively, on or before the Closing Date because, among other things, of the inability to obtain required consents of third parties or Governmental Entities in a timely manner or on terms commercially reasonably acceptable to Buyer or Seller, as applicable. (d) In the event Seller believes it might not be able to complete the actions contemplated to be taken by Seller under paragraph (a) above on or before the Closing Date, Seller shall give written notice to Buyer of such inability prior to the Closing Date and Buyer and Seller shall negotiate in good faith to enter into agreements, as appropriate, (i) to transfer the economic benefit and/or risk of such Excluded Assets or Seller Liabilities to Seller or its affiliates including by means of back-to-back transactions, (ii) to have the Company administer such 57 52 Excluded Assets or Seller Liabilities as nominee for Seller or its affiliates upon Seller's instructions, to pay over to Seller any income associated with such Excluded Assets and to have Seller reimburse the Company for the costs of such administration and (iii) to have the Company sell, transfer or dispose of such Excluded Assets as nominee for Seller or its affiliates with the Seller entitled to or liable for the results of such sale, transfer or disposition; provided that Seller shall indemnify Buyer for all costs and liabilities that arise from Buyer's actions under this Section 8A(d) (including any liabilities for Taxes, including Taxes on the sale, disposition or transfer of such Excluded Asset or Seller Liabilities, such Tax indemnity obligation of Seller to be treated as an indemnity obligation of Seller under Section 11(a) (and related provisions) as if set forth in such Section 11(a)) in a manner reasonably acceptable to Buyer; and provided further that Seller shall continue to use its commercially reasonable best efforts to complete the actions required to be taken by Seller under paragraph (a) above. (e) In the event Buyer believes it might not be able to complete the actions contemplated to be taken by Buyer under paragraph (b) above on or before the Closing Date, Buyer shall give written notice to Seller of such inability prior to the Closing Date and Seller shall not terminate the Seller Guaranties; provided that Buyer shall indemnify Seller for all liabilities on Seller Guaranties that arise after the Closing Date (except to the extent that such liabilities are Retained Liabilities) in a manner reasonably satisfactory to Seller; and provided further that Buyer shall continue to use its commercially reasonable best efforts to complete the actions required to be taken by Buyer under paragraph (b) above. (f) This Section 8A shall not obligate any party to incur any costs (other than incidental expenses) or retain or assume any liabilities or financial risks without indemnification satisfactory to such party. SECTION 9. Employee and Related Matters. (a) Employment. Buyer shall cause the Company to continue the employment as of the Closing of each active employee of the Company ("Continuing Employees") in the same or a comparable position and at an initial rate of base salary or wages at least equal to such employee's rate of base salary or wages in effect as of the date hereof (as will be set forth in Schedule 9(a) hereto). Each employee of the Company who, on the Closing Date, is on medical, short-term disability or other authorized leave of absence from the Company shall be considered one of the "Continuing 58 53 Employees" for purposes hereof and shall be permitted to return to employment with the Company in accordance with the terms of the leave of absence policy of Buyer in effect as of the date hereof which applies to such employee. To the extent required by law, Buyer shall also cause the Company to reemploy any employee of the Company who, on the Closing Date, is on long-term disability (an "Inactive Employee") provided such Inactive Employee becomes able to return to active employment. Prior to such reemployment by the Company, all liabilities and obligations relating to Inactive Employees shall remain the responsibility of Seller. Nothing herein shall be construed as requiring Buyer to continue the employment, following the Closing, of any Continuing Employee or otherwise be construed as modifying such employee's status as "at will". (b) Employee Benefit Plans Post-Closing. Except as otherwise specifically set forth herein, Seller shall retain all liabilities and obligations under the Benefit Plans with respect to Continuing Employees and former employees of the Company ("Former Employees") and their eligible dependents and beneficiaries (including in respect of claims filed under Benefit Plans that are employee welfare benefit plans after the Closing relating to expenses incurred prior to the Closing). Following the Closing Date, Buyer shall provide the Continuing Employees with the same employee benefit plans, programs and arrangements provided to Buyer's employees as in effect from time to time. Each employee benefit plan, program, policy or arrangement provided by Buyer to Continuing Employees following the Closing shall give full credit, to the extent credited under a comparable Benefit Plan, for each participant's period of service (as recognized by the Company as of the Closing) prior to the Closing Date for purposes of determining eligibility and vesting of benefits (but not for benefit accrual purposes). Each employee welfare benefit plan provided by Buyer to the Continuing Employees from and after the Closing Date shall (i) give full credit for deductibles and out-of-pocket expenses under the Benefit Plans with respect to the current plan year toward any deductibles for the remainder of the plan year during which the Closing occurs, and (ii) shall waive any pre-existing condition limitation for any such Continuing Employee immediately prior to the Closing Date (to the extent waived under the applicable Benefit Plan); provided, however, that if a Continuing Employee's condition is a condition which is not currently covered under Buyer's group health plan, such condition shall not be waived and Buyer shall have no obligation or liability therefor. 59 54 (c) Bonus/Incentive Compensation; Accrued Vacation; Nonqualified Pension Plans. Seller shall pay prorated bonus and incentive compensation to eligible Continuing Employees (and Former Employees, if applicable) in respect of current performance periods based upon performance through the Closing Date. For calendar year 1998, all vacation entitlement for Continuing Employees shall be determined in accordance with the Seller's vacation policy as extended to the Company, and any Continuing Employee with accrued but unused vacation, personal or sick day entitlement as of the Closing Date must (subject to applicable laws) schedule and take such vacation prior to January 1, 1999 in accordance with Buyer's vacation policy. Subject to applicable laws, all accrued but untaken vacation as well as unused personal and sick days not taken prior to January 1, 1999 shall be forfeited and no Continuing Employee shall receive any compensation therefor. Seller shall reasonably permit Continuing Employees to use their accrued but untaken vacation, personal and sick days prior to the Closing Date. Commencing January 1, 1999, the Continuing Employees shall accrue and be entitled to vacation pursuant to Buyer's vacation policy, as in effect from time to time, giving credit for their years of service with the Company or any of its affiliates. (d) COBRA. Seller shall be solely responsible for compliance with the health care continuation requirements of Section 4980B of the Code and Part 6 of Title I of ERISA (hereinafter referred to as "COBRA") with respect to all Former Employees who incurred a Qualifying Event (within the meaning of Section 4980B(f)(3) of the Code and Section 603 of ERISA) prior to the Closing Date. Seller shall be solely responsible for compliance with COBRA with respect to all Former Employees who had elected COBRA continuation coverage prior to the Closing, including such Former Employees who, or whose beneficiaries, incur a subsequent Qualifying Event after the Closing Date. Buyer shall be solely responsible for compliance with COBRA with respect to all Continuing Employees who participate in Buyer's employee welfare benefit plans after the Closing, and who, or whose beneficiaries, experience a Qualifying Event from and after the Closing Date. (e) Workers Compensation. Seller shall discharge all liabilities for claims for workers compensation benefits for Continuing Employees arising out of occurrences prior to the Closing Date. Buyer shall discharge all liabilities for claims for workers compensation benefits for Continuing Employees arising out of occurrences on or after the Closing Date. 60 55 (f) Pension/Savings Plans. Seller shall, effective as of the Closing, fully vest the account balance or accrued benefits (as applicable) of, and terminate the participation of, each Continuing Employee in Seller's Pension Plans in which such individual is then participating. Each affected Continuing Employee shall be eligible to receive a distribution of his or her vested account balance and accrued benefits, if any, as soon as practicable following the Closing, subject to the terms of the applicable Pension Plan and to any applicable legal requirements as determined by Seller in its sole discretion. Buyer's tax-qualified 401(k) savings plan shall accept rollovers of the distributions received by any Continuing Employee from Seller's tax-qualified Pension Plans to the extent permitted under applicable law, provided that Seller has provided Buyer with a copy of favorable Internal Revenue Service determination letters with respect to each of Seller's tax-qualified Pension Plans from which a rollover distribution is made. (g) Post-Retirement Health Obligations. Seller shall retain all liability and obligation for (and indemnify and hold harmless Buyer from and against) all post-retirement health obligations relating to Continuing Employees and Former Employees and their eligible dependents. Eligibility for post-retirement health benefits shall be determined solely in accordance with the terms of the applicable Benefit Plan, and nothing herein shall be construed as limiting the right of Seller to amend or terminate any such Benefit Plan or as requiring Seller to provide vesting of benefits or continuing service credit under any such Benefit Plan as of or following the Closing Date. SECTION 10. Further Assurances. From time to time, as and when requested by either 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 provisions of Sections 8(c) and 8(d)), as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement. SECTION 11. Indemnification. (a) Tax Indemnification. Seller shall indemnify Buyer and its affiliates (including the Company) and each of their respective officers, directors, employees, stockholders, agents and representatives and hold them harmless from (i) all liability for Taxes of the Company for the Pre-Closing Tax Period (excluding any Taxes included in the 61 56 calculation of Closing Net Working Capital (e.g., fuel taxes payable) and any Taxes that are payable as a result of any transaction occurring on the Closing Date but after the Closing with respect to the Company or Buyer or any of Buyer's affiliates which is outside of the ordinary course of business, other than any such transaction expressly required by (x) this Agreement or (y) applicable law and the occurrence of which is outside of Buyer's control; provided, however, that neither clause (x) nor clause (y) shall be applicable to the extent that the transaction benefits Buyer (an "Extraordinary Event Tax")), (ii) all liability (as a result of Treasury Regulation Section 1.1502-6(a) or otherwise) for Taxes of Seller or any other corporation (other than the Company) which is or has been affiliated with Seller, (iii) all liability of the Company for Taxes resulting from the 338(h)(10) election (or any comparable election under state or local Tax law) contemplated by Section 12(a) of this Agreement, and (iv) all liability for reasonably necessary legal fees and expenses incurred by Buyer in enforcing its rights under clause (i), (ii) or (iii) above. Buyer shall, and shall cause the Company to, indemnify Seller and its affiliates and each of their respective officers, directors, employees, stockholders, agents and representatives and hold them harmless from (i) all liability for Taxes of the Company for any taxable period ending after the Closing Date (except to the extent such taxable period began before the Closing Date, in which case Buyer's indemnity will cover only that portion of any such Taxes that are not for the Pre-Closing Tax Period), (ii) all liability for an Extraordinary Event Tax, (iii) all liability for Taxes attributable to a breach by Buyer of its obligations under this Agreement and (iv) all liability for reasonably necessary legal fees and expenses incurred by Seller in enforcing its rights under clause (i), (ii) or (iii) above. In the case of any taxable period that includes (but does not end on) the Closing Date (a "Straddle Period"): (i) real, personal and intangible property Taxes ("property Taxes") of the Company for the Pre-Closing Tax Period shall be equal to the amount of such property Taxes for the entire Straddle Period (the "Full Year Property Taxes") multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that are in the Pre-Closing Tax Period and the denominator of which is the number of days in the Straddle Period; provided, however, that in applying this provision with respect to any Taxes 62 57 relating to inventories, the amount of such Full Year Property Taxes to be allocated in accordance with the terms of this provision shall be limited to the amount of such Taxes which would have been incurred on the basis of the inventories existing on the Closing Date as if such date were the assessment date of such Taxes; and (ii) the Taxes of the Company (other than property Taxes) for the Pre-Closing Tax Period shall be computed as if such taxable period ended as of the close of business on the Closing Date. Seller's indemnity obligation in respect of Taxes other than Income Taxes (as defined below) for a Straddle Period shall initially be effected by its payment to Buyer of the excess (the "Seller Reimbursement Amount") of (v) such Taxes for the Pre-Closing Tax Period over (w) the amount of such Taxes paid by Seller or any of its affiliates (other than the Company) at any time plus the amount of such Taxes paid by the Company on or prior to the Closing Date (in the form of estimated Tax payments or otherwise), in each case excluding amounts reflected in the calculation of Closing Net Working Capital. Seller shall initially pay the Seller Reimbursement Amount to Buyer within 30 days after the return, report or form with respect to the final liability for such Taxes is required to be filed (or, if later, is actually filed). If the amount described in clause (w) above exceeds the amount described in clause (v) above, Buyer shall pay to Seller the amount of such excess within 30 days after the return, report or form with respect to the final liability for such Taxes is required to be filed. Buyer's indemnity obligation in respect of Income Taxes for a Straddle Period shall initially be effected by its payment to Seller of the excess (the "Buyer Reimbursement Amount") of (x) such Taxes for the period after the Closing Date over (y) such Taxes previously paid by Buyer or the Company after the Closing Date (in the form of estimated tax payments or otherwise), in each case excluding amounts reflected in the calculation of Closing Net Working Capital. Buyer shall initially pay such Buyer Reimbursement Amount to Seller within 30 days after the return, report or form with respect to the final liability for such Taxes is required to be filed (or, if later, is actually filed). If the amount described in clause (y) above exceeds the amount described in clause (x) above, Seller shall pay to Buyer the amount of such excess within 30 days after the return, report or form with respect to the final liability for such Taxes is required to be filed. The payments to be made pursuant to this paragraph by Seller or Buyer with respect to a Straddle Period shall be appropriately adjusted to reflect the 63 58 outcome of any contest with respect to Straddle Period Taxes pursuant to Section 11(i). For purposes of this Agreement, "Income Tax" or "Income Taxes" shall mean all Taxes in whole or in part based on or measured by net or gross income, gains or profits, and any Taxes (including franchise Taxes) imposed in lieu thereof or similar thereto. (b) Environmental Indemnification. (i) Seller shall indemnify Buyer, its affiliates (including the Company) and each of their respective officers, directors, employees, stockholders and representatives and hold them harmless from any, loss, liability, claim, damage, charge, cost or expense (including reasonable attorney and expert fees and expenses) suffered or incurred by any such indemnified party related to any Environmental Law (in effect as of the Closing) to the extent arising out of acts or omissions occurring, or conditions existing (whether known or unknown), at or before the Closing in connection with the ownership or operation of the Company ("Environmental Loss"), whether such Environmental Loss arises before or after the Closing and whether arising on-site or off-site, including all Environmental Losses in connection with (A) bringing the Company into compliance with Environmental Laws in effect as of the Closing and (B) the investigation or remediation of Hazardous Substance contamination at Company facilities; provided, however, that Buyer or the Company shall share in Environmental Losses, and Seller's aggregate liability hereunder for Environmental Losses shall be limited to $17,400,000, as set forth in the following table: 64 59
Percentage Share Percentage Share of Environmental Class of of Environmental Losses of Buyer Environmental Losses Losses of Seller or Company - -------------------- ---------------- ------------ Individual matters 0% 100% involving Environmental Loss of $10,000 or less ("Small Matters"), so long as the aggregate amount of Small Matters is $1,000,000 or less Individual matters 80% 20% involving Environmental Loss of more than $10,000 and the excess of the aggregate amount of Small Matters over $1,000,000 ("Shared Liabilities"), up to $13,000,000 Shared Liabilities 50% 50% exceeding $13,000,000 up to $27,000,000 Environmental Losses 0% 100% after Shared Liabilities exceed $27,000,000.
(ii) Seller's liability under this Section 11(b) shall be monetary only and Buyer shall not be entitled to make a claim for specific performance with respect to any Remedial Action (as defined below). (iii) Without limiting the other provisions of this Section 11, if Buyer has a claim against Seller related to an environmental matter, Buyer shall manage any investigation, remediation, corrective action or other activities ("Remedial Action") required to address the conditions giving rise to such claim. Without limiting Buyer's right to make claims for indemnification under Section 11(b), Buyer shall cooperate with Seller and shall, 65 60 if reasonable, avoid taking any action that would have an adverse effect on Seller's ability to seek reimbursement under any applicable insurance policy for the benefit of Seller, or on Seller's ability to exercise any available contractual rights of contribution or indemnification. Buyer or the Company shall (A) provide Seller the opportunity to review in advance such Remedial Action to be taken or implemented and the form and substance of any plan, report or submission to be transmitted to any Governmental Entity regarding such Remedial Action, and (B) provide Seller periodic written reports regarding the status of such Remedial Action, including any correspondence with any Governmental Entity regarding such Remedial Action, but Buyer's or the Company's decisions after Closing on such matters shall not be subject to Seller's approval. (c) Other Indemnification by Seller. Seller shall indemnify Buyer, its affiliates (including the Company) and each of their respective officers, directors, employees, stockholders, agents and representatives against and hold them harmless from any loss, liability, claim, damage or expense (including reasonable legal fees and expenses) suffered or incurred by any such indemnified party (other than any relating to Taxes and environmental matters, for which indemnification provisions are set forth in Sections 11(a) and 11(b), respectively) to the extent arising from, relating to or otherwise in respect of (i) any breach of any representation or warranty of Seller which survives the Closing contained in this Agreement or in any certificate delivered pursuant hereto (it being agreed and acknowledged by the parties that for purposes of Buyer's right to indemnification pursuant to this Section 11(c) the representations and warranties of Seller contained herein shall not be deemed qualified by any references herein to materiality generally or to whether or not any such breach results or may result in a Seller Material Adverse Effect), (ii) any breach of any covenant of Seller contained in this Agreement and (iii) all Retained Liabilities; provided, however, that Seller shall not have any liability under clause (i) above unless the aggregate of all losses, liabilities, costs and expenses relating thereto for which Seller would, but for this proviso, be liable exceeds on a cumulative basis an amount equal to $1,600,000 (in which case Seller shall be liable for the full amount thereof); provided further, however, that Seller shall not have any liability under clause (i) above for any individual items where the loss, liability, cost or expense relating thereto is less than $10,000 and such items shall not be aggregated for purposes of the first proviso to this Section 11(c); and provided further, however, that Seller's liability under clause (i) above shall in no event exceed $16,000,000 66 61 (except that this proviso shall not apply to any wilful breach of any covenant by Seller). In no event shall Seller be obligated to indemnify Buyer or any other person with respect to any matter to the extent that (A) Seller has already provided indemnity for such matter pursuant to this Agreement or (B) such matter was reflected in the calculation of Closing Net Working Capital pursuant to Section 2(b). (d) Other Indemnification by Buyer. Buyer shall, and shall cause the Company to, indemnify Seller, its affiliates and each of their respective officers, directors, employees, stockholders, agents and representatives against and hold them harmless from any loss, liability, claim, damage or expense (including reasonable legal fees and expenses) suffered or incurred by any such indemnified party (other than any relating to Taxes, for which indemnification provisions are set forth in paragraph (a) of this Section 11) to the extent arising from (i) any breach of any representation or warranty of Buyer which survives the Closing contained in this Agreement or in any certificate delivered pursuant hereto (it being agreed and acknowledged by the parties that for purposes of Seller's right to indemnification pursuant to this Section 11(d) the representations and warranties of Buyer contained herein shall not be deemed qualified by any references herein to materiality generally), (ii) any breach of any covenant of Buyer contained in this Agreement, (iii) all obligations and liabilities of the Company, other than Retained Liabilities and other items which Seller has expressly agreed to pay or perform pursuant to this Agreement or for which indemnification is provided under Section 11(c), (iv) any act or omission of Buyer, its officers, directors, employees, agents or designated representatives in connection with Buyer's conduct of the environmental assessment work at the Seller's facilities pursuant to Section 8(a), except to the extent of Seller's negligence or misconduct related that environmental assessment work or the site, and (v) all Environmental Losses, whether such Environmental Loss arises before or after Closing and whether arising on-site or off-site, other than Environmental Losses for which Seller is obligated to indemnify Buyer under Section 11(b). (e) Losses Net of Insurance, etc. The amount of any loss, liability, claim, damage, expense or Tax for which indemnification is provided under this Section 11 shall be net of any amounts recovered or recoverable by the indemnified party under insurance policies with respect to such loss, liability, claim, damage, expense or Tax (collectively, a "Loss") and shall be (i) increased to take 67 62 account of any net Tax cost actually incurred by the indemnified party arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (ii) reduced to take account of any net Tax benefit realized by the indemnified party arising from the incurrence or payment of any such Loss or events giving rise thereto. In computing the amount of any such Tax cost or Tax benefit, the indemnified party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Loss. Any indemnification payment hereunder shall initially be made without regard to this paragraph and shall be increased or reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit only after the indemnified party has actually realized such cost or benefit. For purposes of this Agreement, an indemnified party shall be deemed to have "actually realized" a net Tax cost or a net Tax benefit to the extent that, and at such time as, the amount of Taxes payable by such indemnified party is increased above or reduced below, as the case may be, the amount of Taxes that such indemnified party would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Loss, as the case may be. The amount of any increase or reduction hereunder shall be adjusted to reflect any final determination (which shall include the execution of Form 870-AD or any successor form) with respect to the indemnified party's liability for Taxes and payments between Seller and Buyer to reflect such adjustment shall be made if necessary. Any indemnity payment under this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless a final determination (which shall include the execution of Form 870-AD or any successor form) with respect to the indemnified party or any of its affiliates causes any such payment not to be treated as an adjustment to the Purchase Price for United States Federal income Tax purposes. Notwithstanding the foregoing, an indemnifying party shall not be liable for any payment pursuant to a final determination described in the preceding sentence to which it has not consented, it being a condition to the withholding of such consent, however, that such indemnifying party agree to bear the cost of any further contest (for which a settlement or other final disposition otherwise has been proposed) it shall request. (f) Termination of Indemnification. The obligations to indemnify and hold harmless a party hereto (i) pursuant to Section 11(a), shall terminate at the time the applicable statutes of limitations with respect to the Tax liabilities in question expire (giving effect to any 68 63 extension thereof), (ii) pursuant to Section 11(b), shall terminate at the close of business on the date that is three years after the Closing Date; (iii) pursuant to Sections 11(c)(i) and 11(d)(i), shall terminate when the applicable representation or warranty terminates pursuant to Section 16 and (iv) pursuant to the other clauses Sections 11(c) and 11(d) shall not terminate; provided, however, that as to clauses (i), (ii) and (iii) above such obligations to indemnify and hold harmless shall not terminate with respect to any item as to which the person to be indemnified or the related party thereto shall have, before the expiration of the applicable period, previously made a claim by delivering a notice of such claim (stating in reasonable detail the basis of such claim) to the indemnifying party. (g) Procedures Relating to Indemnification (Other than under Section 11(a)). In order for a party (the "indemnified party") to be entitled to any indemnification provided for under this Agreement (other than in relation to Taxes, which matters are governed by Section 11(a)) 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 notify the indemnifying party in writing, and in reasonable detail, of the Third Party Claim within 10 business days after receipt by such indemnified party of written notice of the Third Party Claim; provided, however, that failure to give such notification 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 (except that the indemnifying party shall not be liable for any expenses incurred during the period in which the indemnified party failed to give such notice). Thereafter, the indemnified party shall deliver to the indemnifying party, within five business 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. 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; provided that such counsel is not reasonably objected to by the indemnified party. 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 69 64 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 (not reasonably objected to by the indemnifying party), at its own expense, separate from the counsel employed by the indemnifying party, it being understood 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 failed to assume the defense thereof (other than during the period prior to the time the indemnified party shall have given notice of the Third Party Claim as provided above). If the indemnifying party so elects to assume the defense of any Third Party Claim, all of the indemnified parties shall cooperate with the indemnifying party in the defense or prosecution thereof. 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, such Third Party Claim without the indemnifying party's prior written consent (which consent shall not be unreasonably withheld). If the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnified party shall agree to any settlement, compromise or discharge of a Third Party Claim which the indemnifying party may recommend and which by its terms obligates the indemnifying party to pay the full amount of the liability in connection with such Third Party Claim, which releases the indemnifying party completely in connection with such Third Party Claim and which would not otherwise adversely affect the indemnified party. Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the fees and expenses of counsel incurred by the indemnified party in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party which the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third Party 70 65 Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to money damages. The indemnification required by Sections 11(b), 11(c) and and 11(d) shall be made by periodic payments of the amount thereof during the course of the investigation, remediation or defense, as and when bills are received or loss, liability, claim, damage or expense is incurred. All claims under Sections 11(b), 11(c) or 11(d) other than Third Party Claims shall be governed by Section 11(h). All Tax Claims (as defined in Section 11(i)) shall be governed by Section 11(i). (h) Other Claims. In the event any indemnified party should have a claim against any indemnifying party under Sections 11(b), 11(c) or 11(d) that does not involve a Third Party Claim being asserted against or sought to be collected from such indemnified party, the indemnified party shall deliver notice of such claim with reasonable promptness to the indemnifying party. The failure by any indemnified party so to notify the indemnifying party shall not relieve the indemnifying party from any liability which it may have to such indemnified party under Section 11(b), 11(c) or 11(d), except to the extent that the indemnifying party demonstrates that it has been materially prejudiced by such failure. If the indemnifying party does not notify the indemnified party within 20 calendar days following its receipt of such notice that the indemnifying party disputes its liability to the indemnified party under Sections 11(b), ll(c) or 11(d), such claim specified by the indemnified party in such notice shall be conclusively deemed a liability of the indemnifying party under Section 11(b), 11(c) or 11(d) and the indemnifying party shall pay the amount of such liability to the indemnified party on demand or, in the case of any notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of such claim (or such portion thereof) becomes finally determined. If the indemnifying party has timely disputed its liability with respect to such claim, as provided above, the indemnifying party and the indemnified party shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of competent jurisdiction; provided, however, that if such dispute concerns indemnification for environmental matters under Section 11(b), it shall be submitted to arbitration in accordance with the procedures set forth in Section 11(b). (i) Procedures Relating to Indemnification of Tax Claims. Buyer or Seller, as the case may be, shall promptly 71 66 notify the other in writing of the commencement of any claim, audit, examination, or other proposed change or adjustment of which it or any of its affiliates has been informed in writing by any taxing authority which may affect the liability of the other party under this Section 11(a) (each, a "Tax Claim"). Such notice shall describe the asserted Tax Claim in reasonable detail and shall include copies of any notices and other documents received from any taxing authority in respect of any such asserted Tax Claim. If notice of a Tax Claim is not given by a party to the other party within a sufficient period of time to allow the other party to effectively contest such Tax Claim, or in reasonable detail to apprise the other party of the nature of the Tax Claim or if an indemnified party otherwise fails to follow the requirements of this Section 11(i), the other party shall not be liable to such party, any of its affiliates or any of their respective officers, directors, employees, stockholders, agents or representatives and the amount of any indemnity payment pursuant to Section 11(a) shall be reduced, to the extent that the other party is harmed or its position is actually prejudiced as a result thereof. With respect to any Tax Claim (other than a Tax Claim relating solely to Taxes of the Company for a Straddle Period), at Seller's election (to be made not later than 10 business days following Seller's receipt of a notification from Buyer that (i) the Company has received from a taxing authority a first offer of settlement or (ii) the Company proposes to make a first offer of settlement to a taxing authority), Seller shall have the sole right to represent the Company's interests in any Tax audit or administrative or court proceeding and to employ counsel of its choice, and, without limiting the foregoing, may in its sole discretion pursue or forego any and all administrative appeals, proceedings, hearings and conferences with any taxing authority with respect thereto, and may, in its sole discretion, either pay the Tax claimed and sue for a refund where applicable law permits such refund suits or contest the Tax Claim in any permissible manner. Seller may settle any issues and take any other actions in its discretion in connection with such audit or proceedings, and the results of the exercise by Seller of such right shall be final and binding on Buyer and its affiliates. Buyer shall cooperate fully with Seller (including, but not limited to, by granting to Seller a power of attorney reasonably necessary to represent the Company in any such audit or proceeding and by causing the Company, at Seller's reasonable request, to take such requested actions in the defense against or compromise of any claim in any Tax audit or proceeding which Seller controls pursuant hereto), timely make available to 72 67 Seller all data and other information reasonably requested by Seller in connection with such audit or proceedings and make employees available on a mutually convenient basis to provide additional information or explanation of any material provided hereunder or to testify at proceedings relating to such Tax Claim. Seller and Buyer shall jointly control all proceedings taken in connection with any Tax Claim relating solely to Taxes of the Company for a Straddle Period. In no case shall Buyer, the Company or any of their respective officers, directors, employees, stockholders, agents or representatives settle or otherwise compromise any Tax Claim without Seller's prior written consent. Neither party shall settle a Tax Claim relating solely to Taxes of the Company for a Straddle Period without the other party's prior written consent; provided, however, that if either party shall refuse to consent to any settlement that the other party proposed to accept (a "Proposed Settlement"), then (A) the liability with respect to the subject matter of the Proposed Settlement of the party who proposed to accept the Proposed Settlement shall be limited to the amount that such liability would have been if the Proposed Settlement had been accepted and (B) the other party shall be responsible for all expenses incurred thereafter in connection with the contest of such Tax audit or proceeding except to the extent that the final settlement imposes less liability on the party who proposed to accept the Proposed Settlement than the Proposed Settlement would have imposed. (j) Mitigation. Buyer and Seller shall cooperate with each other with respect to resolving any claim or liability with respect to which one party is obligated to indemnify the other party hereunder, including by making commercially reasonably efforts to mitigate or resolve any such claim or liability; provided that such party shall not be required to make such efforts (other than in respect of Tax matters) if they would be detrimental in any material respect to such party. In the event that Buyer or Seller shall fail to make such commercially reasonably efforts to mitigate or resolve any claim or liability, then (unless the proviso to the foregoing covenant shall be applicable) notwithstanding anything else to the contrary contained herein, the other party shall not be required to indemnify any person for any loss, liability, claim, damage or expense that could reasonably be expected to have been avoided if Buyer or Seller, as the case may be, had made such efforts. SECTION 12. Tax Matters. (a) Seller and Buyer shall jointly make (i) the joint election provided for in 73 68 Section 338(h)(10) of the Code and Treasury Regulation Section 1.338(h)(10)-1(d) with respect to the Company and (ii) such other similar elections under the laws of any state or local jurisdiction analogous to the election provided for in Section 338(h)(10) of the Code, which elections specifically exclude any election under the laws of any state or local jurisdiction comparable to the election under Section 338(g) of the Code in the absence of an election under the laws of such state or local jurisdictions comparable to the election under Section 338(h)(10) of the Code (the elections described in (i) and (ii), collectively, the "Section 338 Elections"). Seller and Buyer shall comply fully with all filing and other requirements necessary to effectuate the Section 338 Elections on a timely basis and agree to cooperate in good faith with each other in the preparation and timely filing of any Tax returns required to be filed in connection with the making of the Section 338 Elections, including the exchange of information and the joint preparation and filing of all required Tax forms and schedules. Buyer shall not, for Federal income Tax purposes, make any election under Section 338(g) of the Code in the absence of joining Seller in making a joint election under Section 338(h)(10) of the Code pursuant to the terms of this Section 12(a). Seller and Buyer shall endeavor in good faith to agree upon the fair market value of the assets of the Company for purposes of Section 338(h)(10) of the Code within 120 days after the Closing Date. In the event such agreement is reached, neither Seller nor Buyer (nor any of their respective affiliates), unless required pursuant to a final determination, shall take any position on any Tax return or with any taxing authority that is inconsistent with such agreement. If a party proposes a settlement or other final disposition of a contest inconsistent, in whole or in part, with such agreement, such party shall contest the matter further if requested by the other party, provided that such other party agrees to bear the expense of such further contest. (b) In the case of Taxes other than Income Taxes, for any taxable period of the Company that includes (but does not end on) the Closing Date, Buyer shall prepare and timely file with the appropriate authorities all Tax returns, reports and forms required to be filed and shall timely pay all Taxes due with respect to such returns, reports and forms; provided that Seller shall reimburse Buyer (in accordance with the procedures set forth in Section 11(a)) for any amount owed by Seller pursuant to Section 11(a) with respect to the taxable periods covered by such returns, reports or forms. In the case of Income 74 69 Taxes, for any taxable period of the Company that includes (but does not end on) the Closing Date, Seller shall prepare and timely file with the appropriate authorities (or provide to Buyer for signature and filing) all Tax returns, reports and forms required to be filed and shall timely pay (or remit to Buyer for payment) the amount of all Taxes due with respect to such returns, reports and forms; provided that Buyer shall reimburse Seller (in accordance with the procedures set forth in Section 11(a)) for any amount owed by Buyer pursuant to Section 11(a) with respect to the taxable period covered by such returns, reports or forms. For any taxable period of the Company that ends on or before the Closing Date, Seller shall prepare and timely file with the appropriate authorities all Tax returns, reports and forms required to be filed, and shall timely pay all Taxes due with respect to such returns, reports and forms. Buyer and Seller agree to cause the Company to file all Tax returns, reports and forms for the period including the Closing Date on the basis that the relevant taxable period ended as of the close of business on the Closing Date, unless the relevant taxing authority will not accept a return, report or form filed on that basis. With respect to Tax filings to be made by Seller pursuant to the terms hereof, Buyer shall cause the Company to prepare and provide to Seller packages of tax information materials, including, but not limited to, federal and state income tax information (the "Tax Packages"), which shall be completed in accordance with past practice unless other instructions shall have been provided by Seller, together with relevant work papers, for purposes of preparing all Tax returns, reports and forms for the relevant period, together with all other relevant materials and information reasonably requested by Seller for these purposes. Buyer shall cause the Tax Packages and related work papers for such taxable period of the Company to be delivered to Seller no later than 45 days prior to the due date for filing any such return, report or form. (c) Seller, the Company and Buyer shall reasonably cooperate, and shall cause their respective affiliates, officers, employees, agents, auditors and representatives reasonably to cooperate, in preparing and filing all returns, reports and forms relating to Taxes, including maintaining and making available to each other all records necessary in connection with Taxes and in resolving all disputes and audits with respect to all taxable periods relating to Taxes. Buyer and Seller recognize that Seller and its affiliates will need access, from time to time, after the Closing Date, to certain accounting and Tax records and information held by the Company to the extent such records and information pertain to events occurring on or prior to the Closing Date; therefore, Buyer agrees, and 75 70 agrees to cause the Company, (i) to properly retain and maintain all potentially relevant records until such time as Seller agrees in writing that such retention and maintenance is no longer necessary, and (ii) to allow Seller and its agents and representatives (and agents or representatives of any of its affiliates), at times and dates mutually acceptable to the parties, to inspect, review and make copies of such records as Seller may deem necessary or appropriate from time to time, such activities to be conducted during normal business hours and at Seller's expense. (d) Any refunds or credits of Taxes of the Company for any taxable period ending on or before the Closing Date, other than any amount reflected in the calculation of Closing Net Working Capital, shall be for the account of Seller, shall be treated as in the nature of an Excluded Asset and shall be remitted to Seller as set forth herein. Any refunds or credits of Taxes of the Company for any taxable period beginning after the Closing Date shall be for the account of the Buyer. Any refunds or credits of Taxes of the Company for any Straddle Period shall be equitably apportioned between Seller and Buyer. Buyer shall, if Seller so requests and at Seller's expense, cause the Company to file for and obtain any refunds or credits to which Seller is entitled under this Section 12(d). Buyer shall permit Seller to control the prosecution of any such refund claim and, where deemed appropriate by Seller, shall cause the Company to authorize by appropriate powers of attorney such persons as Seller shall designate to represent the Company with respect to such refund claim. Buyer shall cause the Company to forward to Seller any such refund within 10 days after the refund is received (or reimburse Seller for any such credit within 10 days after the credit is allowed or applied against other Tax liability). Notwithstanding the foregoing, the control of the prosecution of a claim for refund of Taxes paid pursuant to a deficiency assessed subsequent to the Closing Date as a result of an audit shall be governed by the provisions of Section 11(i). (e) Seller shall be responsible for filing any amended consolidated, combined or unitary Tax returns for taxable years ending on or prior to the Closing Date which are required as a result of examination adjustments made by the Internal Revenue Service or by the applicable state, local or foreign taxing authorities for such taxable years as finally determined. For those jurisdictions in which separate Tax returns are filed by the Company, any required amended returns resulting from such examination adjustments, as finally determined, shall be prepared by Seller and 76 71 furnished to the Company for approval (which approval shall not be unreasonably withheld), signature and filing at least 30 days prior to the due date for filing such returns. Unless Buyer shall have first secured Seller's consent in writing, Buyer shall not (i) file any amended Tax return related to the Company with respect to any Pre-Closing Tax Period or any taxable period that begins before and ends after the Closing Date, or (ii) carryback any loss or other Tax attribute to a Pre-Closing Tax Period. (f) All transfer, documentary, sales, use, registration and other such Taxes (including all applicable real estate transfer or gains Taxes) and related fees (including any penalties, interest and additions to Tax) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by Buyer (except with respect to the Excluded Assets which will be paid by Seller) and Seller and Buyer shall cooperate in timely making all filings, returns, reports and forms as may be required to comply with the provisions of such Tax laws. (g) At the Closing, Seller shall deliver to Buyer, pursuant to Section 1445(b)(2) of the Code and Treasury Regulation Section 1.1445-2(b)(2) a duty executed certification of non-foreign status. (h) Seller shall cause the provisions of any Tax sharing agreement between Seller and any of its affiliates (other than the Company), on the one hand, and the Company, on the other hand, to be terminated on or before the Closing Date. SECTION 13. Assignment. This Agreement and the 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 substantially all the assets, of Buyer or Seller) without the prior written consent of the other party hereto; provided, however, that Buyer may assign its right to purchase the Shares hereunder to a subsidiary or an affiliate of Buyer without the prior written consent of Seller and after the Closing, Buyer may assign its rights under Section 11 to any entity that acquires all or a part of the Business following written notice of such assignment to Seller; provided further, however, that no assignment shall limit or affect the assignor's obligations hereunder. Any attempted assignment in violation of this Section 13 shall be void. SECTION 14. No Third-Party Beneficiaries. Except as provided in Section 11, this Agreement is for the sole benefit of the parties hereto and their permitted assigns 77 72 and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder. SECTION 15. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date: (i) by mutual written consent of Seller and Buyer; (ii) by Seller if any of the conditions set forth in Section 3(b) shall have become incapable of fulfillment, and shall not have been waived by Seller; (iii) by Seller at any time after 10 business days following Buyer's receipt of all completed Schedules or other written disclosure materials to be prepared by Seller and delivered to Buyer as contemplated by Section 5(m) (but not in any event earlier than October 10, 1998), unless Buyer shall have previously confirmed that it will not exercise its right to terminate this Agreement pursuant to clause (ix) below; (iv) by Seller at any time after October 10, 1998, unless the condition set forth in Section 3(a)(xii) shall have been previously satisfied or waived by Buyer. (v) by Buyer if any of the conditions set forth in Section 3(a) shall have become incapable of fulfillment, and shall not have been waived by Buyer; (vi) by Buyer upon notice of commencement of any material condemnation proceeding by any Governmental Entity in respect of any Company Property; (vii) by Buyer if Seller delivers a Phase II Opposition Notice; (viii) by Buyer if the Cost of Remediation as finally determined on the basis of the environmental audit to be conducted in accordance with Section 8(a) (including any Phase II investigation conducted in accordance with Section 8(a)) exceeds $27,000,000; (ix) by Buyer if Buyer discovers during the course of its due diligence investigation (including its review of any Schedules or any supplemental disclosure 78 73 materials delivered pursuant to Section 5(f)) of the Company any facts or circumstances relating to the business, assets, condition (financial or otherwise), results of operations or prospects of the Company, which, in Buyer's sole judgment, adversely impact the value of the Shares to Buyer (whether or not such facts or circumstances would be indemnified by Seller under Section 11); or (x) by either party if the Closing does not occur on or prior to January 31, 1998; provided, however, that the party seeking termination pursuant to clause (ii), (iii), (iv), (v), (vi) or (x) is not in breach in any material respect of any of its material representations, warranties, covenants or agreements contained in this Agreement. (b) In the event of termination by Seller or Buyer pursuant to this Section 15, 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 either party. If the transactions contemplated by this Agreement are terminated as provided herein: (i) Buyer shall return all documents and other material received from Seller or the Company relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to Seller; and (ii) all confidential information received by Buyer with respect to the business of the Company shall be treated in accordance with 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 15, this Agreement shall become null and void and of no further force or effect, except for the provisions of (i) Section 7(a) relating to the obligation of Buyer to keep confidential certain information and data obtained by it, (ii) Section 17 relating to certain expenses, (iii) Section 18 relating to attorney fees and expenses, (iv) Section 8(c) relating to publicity and (v) this Section 15. Nothing in this Section 15 shall be deemed to release either party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of either party to compel 79 74 specific performance by the other party of its obligations under this Agreement. SECTION 16. Survival of Representations. The representations and warranties of Seller set forth in Sections 4(c), 4(d) and 4(e) shall not terminate. The representations and warranties of Seller set forth in Sections 4(i) and 4(j) shall terminate at the close of business five years following the Closing Date. All other representations and warranties in this Agreement and in any certificate delivered pursuant hereto (in each case other than the representations and warranties relating to Taxes and environmental matters) shall survive the Closing and shall terminate at the close of business 24 months following the Closing Date, except that because specific indemnification rights and obligations are set forth in Sections 11(a) and 11(b), respectively, representations and warranties relating to Taxes and environmental matters shall not survive the Closing. SECTION 17. 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 shall be paid by the party incurring such costs or expenses. SECTION 18. Attorney Fees. A party in breach of this Agreement shall, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other party may be entitled. SECTION 19. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto. SECTION 20. Notices. 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, cable 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, cabled or telecopied, or if mailed, three days after mailing (one 80 75 business day in the case of express mail or overnight courier service), as follows: (i) if to Buyer, TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Phone: (303) 626-8200 Fax: (303) 626-8228 Attention: Erik B. Carlson, Esq. Senior Vice President, General Counsel and Corporate Secretary with copies to: TransMontaigne Inc. 280 North College Avenue Suite 500 Fayettesville, Arkansas Phone: (501) 521-5565 Fax: (501) 442-4650 Attention: W.A. Sikora Executive Vice President Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Attention: Philip A. Gelston, Esq.; and (ii) if to Seller, Louis Dreyfus Corporation Ten Westport Road P.O. Box 810 Wilton, Connecticut 06897 Phone: (203) 761-8369 Fax: (203) 761-8085 Attention: Peter Griffin President 81 76 with copies to: Louis Dreyfus Corporation Ten Westport Road P.O. Box 810 Wilton, Connecticut 06897 Phone: (203) 761-8317 Fax: (302) 761-8321 Attention: Andrew J. Connelly, Esq. General Counsel; and Dewey Ballantine LLP 1301 Avenue of the Americas New York, New York 10019 Attention: Stanton J. Lovenworth, Esq. SECTION 21. Interpretation; Exhibits and Schedules; Certain Definitions. (a) The headings contained in this Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein, shall have the meaning as defined in this Agreement. (b) For all purposes hereof: (i) "including" means including, without limitation; and (ii) "person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity. SECTION 22. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be 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. SECTION 23. Entire Agreement. This Agreement and the Confidentiality Agreement contain the entire agreement 82 77 and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter (including the Memorandum of Understanding dated August 13, 1998 between Buyer and Louis Dreyfus Holding Company, Inc.). Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein or in the Confidentiality Agreement. SECTION 24. Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) 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 (or the remaining portion thereof) or the application of such provision to any other persons or circumstances. SECTION 25. Consent to Jurisdiction. Each of Buyer and Seller irrevocably submits to the jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of Buyer and Seller further agrees that service of any process, summons, notice or document by U.S. registered mail to such party's respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 26. Each of Buyer and Seller irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. SECTION 26. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made 83 78 and to be performed entirely within such State, without regard to the conflicts of law principles of such State. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. LOUIS DREYFUS CORPORATION, by /s/Peter Griffin -------------------------------------- Name: Peter Griffin Title: President TRANSMONTAIGNE INC., by /s/W.A. Sikora -------------------------------------- Name: W.A. Sikora Title: Executive Vice President 84 Schedule 3(a)-I David Cady Chee Ooi 85 Schedule 5(h) David Cady J. Alexander Chee Ooi Bob Young Rick Eaton Greg Pound EX-99.3 4 REGISTRATION RIGHTS AGREEMENT 1 Exhibit 3 --------- EXECUTION COPY REGISTRATION RIGHTS AGREEMENT dated as of October 30, 1998, between TransMontaigne Inc., a Delaware corporation (the "Company"), and Louis Dreyfus Corporation, a New York corporation ("LDC"). WHEREAS, the Company and LDC have entered into a Stock Purchase Agreement dated as of September 13, 1998 (the "Stock Purchase Agreement"), pursuant to which the Company has agreed to purchase from LDC, and LDC has agreed to sell to the Company, all of the issued and outstanding shares of common stock, par value $1.00 per share, of Louis Dreyfus Energy Corp. ("LDEC"), a Delaware corporation and a wholly owned subsidiary of LDC (the "Stock Purchase"); WHEREAS, a portion of the purchase price payable by the Company to LDC in connection with the Stock Purchase consists of shares (the "LDC Shares") of common stock, par value $.01 per share, of the Company (the "Common Stock"); WHEREAS, pursuant to the Stock Purchase Agreement, the Company has agreed to enter into this Agreement to, among other things, grant LDC (and any Permitted Affiliate of LDC (as defined below) to whom LDC transfers any portion of the LDC Shares) registration rights in respect of the LDC Shares substantially comparable to the rights set forth in the Registration Rights Agreement dated as of April 17, 1996 (the "Institutional Investor Registration Rights Agreement") by and among the Company and the Institutional Investors identified therein (the "Institutional Investors"). NOW, THEREFORE, in consideration of the aforesaid and the mutual promises hereinafter made, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.1. Definitions. The following terms, as used herein, shall have the following meanings: "Advice" has the meaning set forth in Section 2.3. "Affiliate" means, with respect to any specified person, any other person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" when used with respect to any 2 2 specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Board" means the Board of Directors of the Company. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York, Boston, Massachusetts or Fayetteville, Arkansas are authorized or obligated by law or executive order to close. "Commission" means the Securities and Exchange Commission or any other Federal agency from time to time administering the 1933 Act or the Exchange Act. "Common Stock" has the meaning set forth in the recitals to this Agreement. "Common Stock Equivalent" means any securities of any person convertible into or exchangeable or exercisable for Common Stock (whether at the option of such person or of the holder of such securities). "Company" has the meaning set forth in the preamble to this Agreement. "Covered Employees" means those employees of LDEC who are to receive an award of Employee Shares (as defined below). "Demand Registration" has the meaning set forth in Section 2.2.1. "Employee Shares" means that portion of the LDC Shares (consisting of 148,920 shares) to be distributed to the Covered Employees immediately following, and in connection with, the closing of the Stock Purchase. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Institutional Investor Demand Registration" has the meaning set forth in Section 2.2.1. "Institutional Investor Notice" has the meaning set forth in Section 2.2.1. 3 3 "Institutional Investor Registration Rights Agreement" has the meaning set forth in the recitals to this Agreement. "Institutional Investors" has the meaning set forth in the recitals to this Agreement. "LDC" has the meaning set forth in the preamble to this Agreement. "LDC Demand Registration" has the meaning set forth in Section 2.2.1. "LDC Holders" has the meaning set forth in Section 2.1.1. "LDC Notice" has the meaning set forth in Section 2.2.1. "LDC Shares" has the meaning set forth in the recitals to this Agreement. "LDEC" has the meaning set forth in the recitals to this Agreement. "1933 Act" means the Securities Act of 1933, as amended. "Permitted Affiliate of LDC" means any entity that is and continues to be at least 80% owned, directly or indirectly, by S.A. Louis Dreyfus et Cie. "Permitted Affiliate Section 3.1 Agreement" has the meaning set forth in Section 3.1. "person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or any other entity or organization, including a government, a political subdivision or an agency or instrumentality thereof. "Piggyback Registration" has the meaning set forth in Section 2.1.1. "Registration" has the meaning set forth in Section 2.3. "Registrable Securities" means any shares of Common Stock acquired in connection with the Stock Purchase and owned by LDC or a Permitted Affiliate of LDC and any shares of Common Stock which may be issued or distributed in 4 4 respect of such shares of Common Stock by way of concession, stock dividend or stock split or other distribution, recapitalization or reclassification, but with respect to such shares of Common Stock, only so long as such shares are "Restricted Securities". A share of Common Stock shall be deemed to be a "Restricted Security" until such time as such share (i) has been effectively registered under the 1933 Act pursuant to a registration statement with respect to the sale of such share and disposed of pursuant to such registration statement, (ii) has been distributed to the public pursuant to Rule 144 (or any similar provision then in force) under the 1933 Act, (iii) shall have been otherwise transferred, new certificates for it not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent disposition of it shall not require registration or qualification of it under the 1933 Act or any state securities or blue sky law then in force or (iv) shall have ceased to be outstanding. "Request Notice" has the meaning set forth in Section 2.2.1. "Share Transfer" has the meaning set forth in Section 3.1. "Shelf Registration" has the meaning set forth in Section 2.2.1. "Stock Purchase" has the meaning set forth in the recitals to this Agreement. "Stock Purchase Agreement" has the meaning set forth in the recitals to this Agreement. "Stop Order" has the meaning set forth in Section 2.2.3. ARTICLE II Registration and Related Rights SECTION 2.1. Company Registration. 2.1.1. Right to Piggyback on Company Registration of Common Stock. Subject to Section 2.1.3, if the Company proposes, on its own initiative, to register any Common Stock under the 1933 Act in connection with the offering of such Common Stock on any form other than Form S-4 or Form S-8 or any form substituting therefor (except for a registration in connection with an exchange offer of 5 5 securities solely to existing securityholders of the Company) and such proposal would result in the filing of a registration statement with the Commission in connection therewith at any time on or after December 31, 1999, the Company shall each such time promptly give LDC and each Permitted Affiliate of LDC then owning Registrable Securities (collectively, the "LDC Holders") prior written notice of such determination no later than 45 days prior to the proposed filing date of the registration statement to be prepared in connection with such proposed registration. Any LDC Holder wishing to register all or any portion of such LDC Holder's Registrable Securities pursuant to such proposed registration (a "Piggyback Registration") must give written notice to the Company of its intent to participate in such proposed registration no less than 15 days after the receipt of such notice. Subject to the pro rata allocations set forth in Section 2.1.3, upon receipt of such written request of any such LDC Holder, the Company will use its best efforts to effect the registration under the 1933 Act of all Registrable Securities which the Company has been so requested to register by the LDC Holders. Notwithstanding the fact that a Piggyback Registration requested pursuant to this Section 2.1 involves an underwritten public offering, any LDC Holder holding Registrable Securities that has requested to be included in such registration may elect, in writing at least three Business Days prior to the effective date of the registration statement filed in connection with such registration, not to register such Registrable Securities in connection with such registration. 2.1.2. Selection of Underwriters. If the Company in its sole discretion decides a Piggyback Registration shall be underwritten, the Company shall have sole discretion in the selection of any underwriter or underwriters to manage such Piggyback Registration. 2.1.3. Priority on Piggyback Registrations. If the managing underwriter or underwriters of a Piggyback Registration (or in the case of a Piggyback Registration not being underwritten, holders of a majority of the shares of Common Stock proposed to be registered by (x) the LDC Holders and (y) the Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement) advise the Company in writing that in its or their opinion the number of shares of Common Stock proposed to be sold in such Piggyback Registration (including any shares proposed to be sold by Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement) exceeds the number which can be sold, or would adversely affect the price at which the Common Stock could be sold in such offering, the Company will include in such registration 6 6 only that number of shares of Common Stock which, in the opinion of such underwriter or underwriters (or holders of a majority of the shares of Common Stock proposed to be registered by the LDC Holders and the Institutional Investors, as the case may be), can be sold in such offering without so affecting such price. The shares of Common Stock to be included in such Piggyback Registration shall be apportioned (i) first, to any shares of Common Stock that the Company proposes to sell, (ii) second, pro rata among any shares of Common Stock proposed to be sold by (x) any LDC Holder or (y) any Institutional Investor pursuant to the Institutional Investor Registration Rights Agreement and (iii) third, pro rata among any other shares of Common Stock proposed to be included in such Piggyback Registration, in each case according to the total number of shares of Common Stock requested for inclusion by the LDC Holders and the Institutional Investors, or in such other proportions as shall mutually be agreed to among the LDC Holders and the Institutional Investors. SECTION 2.2. Demand Registration Rights. 2.2.1. Right to Demand. Subject to the following sentence, if, at any time on or after December 31, 1999, any one or more of the LDC Holders holding Registrable Securities representing ten percent (10%) or more in the aggregate of the then outstanding Common Stock (assuming conversion or exercise of all Common Stock Equivalents held by the LDC Holders into Registrable Securities at the then conversion price or exercise price) submits a written request (a "Request Notice") to the Company for registration with the Commission under and in accordance with the provisions of the 1933 Act of all or part of the Registrable Securities then owned by such LDC Holder or LDC Holders (an "LDC Demand Registration"), the Company shall thereupon, as expeditiously as possible, use its best efforts to file a registration statement with the Commission and have the registration statement declared effective by the Commission; provided, however, that the number of Registrable Securities as to which such request is made shall represent not less than five percent (5%) of the then outstanding Common Stock and Common Stock Equivalents. Notwithstanding the foregoing, the LDC Holders shall have the right, even though they hold Registrable Securities representing less than ten percent (10%) in the aggregate of the then outstanding Common Stock, to initiate an LDC Demand Registration by submitting a Request Notice to the Company at any time on or after December 31, 1999 if all of the following conditions are met: (i) the LDC Holders have not previously submitted a Request Notice to the Company that resulted in an effective LDC Demand Registration under the terms of this 7 7 Agreement, (ii) the Registrable Securities held by the LDC Holders represent less than ten percent (10%) in the aggregate of the then outstanding Common Stock as a result of additional issuances of Common Stock by the Company after the date of this Agreement, (iii) the LDC Holders are not then eligible to sell the Registrable Securities held by them pursuant to the provisions of paragraph (k) of Rule 144 under the 1933 Act (or any successor provision) and (iv) such Request Notice relates to the proposed sale by the LDC Holders of either (x) Registrable Securities representing not less than five percent (5%) of the then outstanding Common Stock and Common Stock Equivalents or (y) all of the Registrable Securities then held by the LDC Holders. The LDC Holders acknowledge that, within 10 days after receipt of such Request Notice, the Company will serve written notice (the "Institutional Investor Notice") of such registration request to all Institutional Investors who hold shares of Common Stock which carry registration rights pursuant to the Institutional Investor Registration Rights Agreement, and, subject to the pro rata allocations set forth in Section 2.2.4, the Company will include in such LDC Demand Registration all such shares of Common Stock held by Institutional Investors with respect to which the Company has received a written request for inclusion therein within 20 days after the giving of the Institutional Investor Notice. The Institutional Investors have rights to demand registrations under the Institutional Investor Registration Rights Agreement substantially comparable to those of the LDC Holders under this Agreement. The Company agrees that, at any time on or after December 31, 1999, it shall, within 10 days after receipt of a demand registration request notice from any one or more of the Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement (an "Institutional Investor Demand Registration", with the terms "Institutional Investor Demand Registration" and "LDC Demand Registration" being collectively referred to herein as a "Demand Registration"), serve written notice (the "LDC Notice") of such registration request to all LDC Holders holding Registrable Securities and, subject to the pro rata allocations set forth in Section 2.2.4, the Company shall include in such Institutional Investor Demand Registration all Registrable Securities held by LDC Holders with respect to which the Company has received a written request for inclusion therein within 20 days after the giving of the LDC Notice. The Company represents that the Institutional Investors have agreed to the LDC Holders' right to participate in Institutional Investor Demand Registrations on the terms and conditions set forth in this Section 2.2. 8 8 All LDC Holders requesting registration of their Registrable Securities pursuant to this Section 2.2.1 shall specify the aggregate number of Registrable Securities proposed to be registered and the intended methods of disposition thereof. The LDC Holders shall collectively be entitled to request or participate in an Institutional Investor request for four Demand Registrations (the last of which shall be a shelf registration pursuant to Rule 415 under the 1933 Act to be effective for not less than 180 days (the "Shelf Registration")) pursuant to which a registration statement covering Registrable Securities shall be filed with and declared effective by the Commission, the expenses of which shall be borne by the Company in accordance with Section 2.4, and no more than one LDC Demand Registration may be requested by any LDC Holder in any 12-month period; provided, however, that if, following the effective date of any registration statement filed pursuant to a Demand Registration, any LDC Holder whose Registrable Securities are to be included in such Demand Registration pursuant to this Section 2.2.1 elects, by giving written notice to the Company not later than 90 days after such effective date, not to dispose of its Registrable Securities because of a material adverse change in the business, condition (financial or otherwise), assets or prospects of the Company and its subsidiaries, taken as a whole, or because of a material adverse event with respect to the Company and its subsidiaries, taken as a whole, not disclosed in the final prospectus prepared in connection with such Demand Registration, then such Demand Registration shall not count as one of the four Demand Registrations permitted hereunder unless shares of Common Stock representing five percent (5%) or more of the then outstanding Common Stock, including Common Stock Equivalents, are sold pursuant to the registration statement prepared in connection with such Demand Registration within 90 days of the effective date of such registration statement and prior to the occurrence of such material adverse change or event. If at the time of any Request Notice (i) the Company is engaged in a registered public offering as to which the LDC Holders had the right to include their Registrable Securities, either as a Piggyback Registration or pursuant to the LDC Holders' participation rights in respect of an Institutional Investor Demand Registration, or which was made on Form S-4 or any successor form, (ii) the Company is engaged in any other activity outside of the ordinary course of business, such as a merger, consolidation, recapitalization or acquisition which, in the good faith judgment of the Board, would be materially and adversely affected by the requested registration or 9 9 (iii) the Board makes a good faith determination that the public disclosures required to be made in the requested registration statement would have a material and adverse impact on the business, financial condition or prospects of the Company, the Company may at its option direct that such request be delayed for a period of not more than 90 days, which right to delay may be exercised by the Company only one time in respect of each LDC Demand Registration. The Company shall have the same rights to piggyback on an LDC Demand Registration as an LDC Holder would have in a Piggyback Registration permitted under Section 2.1. 2.2.2. Selection of Underwriters. If a proposed LDC Demand Registration involves either a firm or best efforts underwritten offering, the LDC Holder(s) giving the Request Notice with respect to such LDC Demand Registration shall have the right, subject to approval by the Company (which approval shall not be unreasonably withheld), to select the underwriter or underwriters to manage such LDC Demand Registration. 2.2.3. Effective Registration Statement. A registration requested pursuant to this Section 2.2 shall not be deemed to have been effected unless the registration statement prepared in connection therewith has become effective; provided, however, that if, within 75 days after such registration statement has become effective (135 days in the case of the Shelf Registration), the offering of Registrable Securities pursuant to such registration statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court (collectively, a "Stop Order"), such registration shall be deemed not to have been effected. Notwithstanding the preceding sentence, if any such Stop Order is rescinded, the effective period shall continue upon such rescission and be extended by the number of days by which such Stop Order reduced the effective period. 2.2.4. Priority on Demand Registrations. If the managing underwriter or underwriters of a Demand Registration initiated under this Agreement or the Institutional Investor Registration Rights Agreement advise the Company in writing that in its or their opinion the number of shares of Common Stock proposed to be sold in such Demand Registration exceeds the number which can be sold, or would adversely affect the price at which the Common Stock could be sold in such offering, the Company will include in such registration only that number of shares of Common Stock which, in the opinion of such underwriter or underwriters, 10 10 can be sold in such offering without so affecting such price. The shares of Common Stock to be included in such Demand Registration shall be apportioned (i) first, pro rata among (x) the Registrable Securities of the LDC Holders who have made a request to be included in such Demand Registration and (y) shares of Common Stock held by Institutional Investors who have made a request to be included in such Demand Registration and (ii) second, pro rata among any other shares of Common Stock proposed to be included in such Demand Registration, including any shares proposed to be sold by the Company pursuant to such Demand Registration. 2.2.5. Approval of Institutional Investors. As evidenced by the Amendment and Waiver dated as of October 30, 1998, entered into by and between the Company and the Institutional Investors (a copy of which is attached hereto as Annex A), the Company represents that the Institutional Investors have approved of the Company's entering into of this Agreement and the granting to the LDC Holders of registration rights in respect of Piggyback Registrations and Demand Registrations on the terms and conditions set forth herein. 2.2.6. Additional Rights. If the Company at any time grants to any other holders of Common Stock or Common Stock Equivalents any rights to request the Company to effect the registration under the 1933 Act of any such shares of Common Stock on terms more favorable to such holders than the terms set forth in this Agreement, the terms of this Agreement shall be deemed amended or supplemented to the extent necessary to provide the LDC Holders with the same more favorable terms. The Company shall not grant any other person rights to register securities of the Company on terms which could restrict in any way the ability of the Company fully to perform its obligations to the LDC Holders pursuant to this Agreement. SECTION 2.3. Registration Procedures. It shall be a condition precedent to the obligations of the Company and any underwriter or underwriters to take any action pursuant to this Article II that the LDC Holders requesting inclusion in any Piggyback Registration or Demand Registration (collectively referred to as a "Registration") furnish to the Company such information regarding them, the Registrable Securities held by them, the intended method of disposition of such Registrable Securities, and such agreements regarding indemnification, disposition of such securities and the other matters referred to in this Article II as the Company may reasonably request and as may be required in connection with any action to be taken by the 11 11 Company or any such underwriter. With respect to any Registration which includes Registrable Securities held by a LDC Holder, the Company shall, subject to Sections 2.1 and 2.2: 2.3.1. Prepare and file with the Commission a registration statement on the appropriate form prescribed by the Commission within 60 days after the end of the period within which requests for registration may be given to the Company, file with the Commission any necessary amendments to the registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective; provided, however, that at least five business days prior to filing a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of the registration statement, the Company shall furnish to the holders of the Registrable Securities covered by such registration statement and the underwriter or underwriters, if any, copies of or drafts of all such documents proposed to be filed, which documents shall be subject to the reasonable review of such holders and underwriters, if any, and the Company shall not file any registration statement or amendment thereto or any prospectus or any supplement thereto or any documents required to be incorporated by reference therein to which the LDC Holders or the underwriters, if any, shall reasonably object; 2.3.2. Prepare and file with the Commission such amendments and post-effective amendments to such registration statement and any documents required to be incorporated by reference therein as may be necessary to keep the registration statement effective for a period of time as necessary to complete the offering, which period shall be not less than 90 days (or 180 days in the case of the Shelf Registration) (or such shorter period that shall terminate when all Registrable Securities covered by such registration statement have been sold or withdrawn, but not prior to the expiration of the time period referred to in Section 4(3) of the 1933 Act and Rule 174 thereunder, if applicable); cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act (or any successor rule); and comply with the provisions of the 1933 Act applicable to it with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement or supplement to the prospectus; 12 12 2.3.3. Furnish to each such LDC Holder, without charge, at least one conformed copy of the registration statement and any post-effective amendment thereto, upon request, and such number of copies of the prospectus (including each preliminary prospectus) and any amendments or supplements thereto, and any exhibits or documents incorporated by reference therein as any such LDC Holder or underwriter or underwriters, if any, may request in order to facilitate the disposition of the securities being sold by any such LDC Holder (it being understood that the Company consents to the use of the prospectus and any amendment or supplement thereto by any such LDC Holder covered by the registration statement and the underwriter or underwriters, if any, in connection with the offering and sale of the securities covered by the prospectus or any amendments or supplements thereto); 2.3.4. Immediately notify each such LDC Holder, at any time when a prospectus relating thereto is required to be delivered under the 1933 Act, when the Company becomes aware of the happening of any event as a result of which the prospectus included in such registration statement (as then in effect) contains any untrue statement of material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter delivered to the LDC Holders (a reasonable number of such amended and supplemented prospectuses having been delivered to the LDC Holders), such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 2.3.5. Use its best efforts to cause all securities included in such registration statement to be listed, by the date of the first sale of securities pursuant to such registration statement, on each national securities exchange or market on which the Common Stock is then listed; 2.3.6. Make every reasonable effort to obtain the withdrawal of any Stop Order suspending the effectiveness of the registration statement at the earliest possible moment; 2.3.7. Subject to the time limitations specified in Section 2.3.2, if requested by the managing underwriter or underwriters or any such LDC Holder, promptly incorporate in a prospectus supplement or post-effective amendment such 13 13 information as the managing underwriter or underwriters or such LDC Holder reasonably requests to be included therein, including, without limitation, with respect to the number of shares being sold by such LDC Holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any term of the underwritten offering of the securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; 2.3.8. As promptly as practicable after the filing with the Commission of any document which is incorporated by reference into a registration statement, deliver a reasonable number of copies of such document to each such LDC Holder; 2.3.9. Prior to the date on which the registration statement is declared effective, use its best efforts to register or qualify, and cooperate with such LDC Holders, the underwriter or underwriters, if any, and their counsel in connection with the registration or qualification of, the securities covered by the registration statement for offer and sale under the securities or blue sky laws of each state and other jurisdiction of the United States as such LDC Holders or managing underwriter or underwriters, if any, requests in writing, use its best efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the period such registration statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in all such jurisdictions of the Registrable Securities covered by the applicable registration statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject; 2.3.10. Enter into such customary agreements (including an underwriting agreement in customary form) and take such other actions customarily taken by registrants, if any, as the LDC Holders or the underwriters may reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; 2.3.11. Obtain a "cold comfort" letter or letters from the Company's independent public accountants in 14 14 customary form and covering matters of the type customarily covered by "cold comfort" letters as the underwriters, if any, may reasonably request; 2.3.12. Make available for inspection by any LDC Holder holding Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such LDC Holder, underwriter, attorney, accountant or agent in connection with such registration statement; 2.3.13. Cooperate with such LDC Holders and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in such denominations and registered in such names as the LDC Holders or the managing underwriter or underwriters, if any, may request; and 2.3.14. Use its best efforts to cause the securities covered by the registration statement to be registered with or approved by such other governmental agencies or authorities within the United States, including, without limitation, the National Association of Securities Dealers, Inc., as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities. The LDC Holders, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3.4, shall forthwith discontinue disposition of the securities until the LDC Holders' receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.3.4 or until they are advised in writing (the "Advice") by the Company that the use of the prospectus may be resumed, and have received copies of any additional or supplemental filings which are incorporated by reference in the prospectus, and, if so directed by the Company, each LDC Holder shall, or shall request the managing underwriter or underwriters, if any, to, deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such LDC Holder's possession, of the prospectus covering such securities which 15 15 is current at the time of receipt of such notice. In the event that the Company gives any such notice, the time periods set forth in Section 2.3.4 shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 2.3.4 or the Advice. SECTION 2.4. Registration Expenses. In the case of any Registration, the Company shall bear all of the costs and expenses of such Registration (including, without limitation, the expenses of preparing any registration statement, Commission and state "blue sky" filings, registration and qualification fees, the cost of providing any legal opinion or "cold comfort" letters requested by the LDC Holders and printing costs) and legal fees or expenses of one counsel for the LDC Holders and the Institutional Investors mutually selected by the LDC Holders and the Institutional Investors (such counsel being subject to the reasonable approval of the Company); provided, however, that the Company shall not be responsible for registration or qualification fees or underwriter's discounts or commissions that are attributable to the Registrable Securities of an LDC Holder. SECTION 2.5. Indemnification and Contribution. 2.5.1. Indemnification by the Company. The Company agrees to indemnify and hold harmless each LDC Holder, its officers, directors and agents and each person who controls (within the meaning of the 1933 Act and the Exchange Act) such LDC Holder against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus in which such LDC Holder is participating or in any document incorporated by reference therein or any omission or alleged omission to state therein a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except insofar as the same are caused by, based upon or contained in any information with respect to such LDC Holder furnished in writing to the Company by such LDC Holder expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any LDC Holder from whom the person asserting such loss, claim, damage or liability purchased shares of Common Stock if it 16 16 is determined that it was the responsibility of such LDC Holder to provide such person with a current copy of the prospectus and such current copy of the prospectus would have cured such loss, claim, damage or liability. The Company shall also indemnify underwriters (as such term is defined in the 1933 Act), their officers and directors and each person who controls such persons (within the meaning of the 1933 Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the LDC Holders. 2.5.2. Indemnification by LDC. In connection with any Registration in which an LDC Holder is participating, such LDC Holder shall furnish to the Company in writing such information and affidavits with respect to such LDC Holder as the Company may reasonably request for use in connection with any registration statement or prospectus and LDC agrees to indemnify and hold harmless the Company, its directors, officers and agents and each person who controls (within the meaning of the 1933 Act and the Exchange Act) the Company against any losses, claims, damages, liabilities and expenses arising out of or based upon any untrue statement of a material fact or any omission to state a material fact necessary to make the statements in the registration statement or prospectus or preliminary prospectus (in the case of the prospectus or preliminary prospectus, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information or affidavit with respect to such LDC Holder furnished in writing to the Company by such LDC Holder expressly for use therein; provided, however, that the amount recoverable by the Company from LDC under this indemnification provision shall not exceed the amount of net proceeds received by all LDC Holders from the sale of Registrable Securities in connection with any such Registration; and provided further that the indemnity agreement contained in this Section 2.5.2 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action arising pursuant to a Registration if such settlement is effected without the consent of LDC (which consent shall not be unreasonably withheld). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any of the prospective sellers, or any of their respective Affiliates, directors, officers or controlling persons and shall survive the transfer of such securities by such seller. 2.5.3 Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall 17 17 (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest may exist between such indemnified and indemnifying party, permit the indemnifying party to assume the defense of such claim, with counsel reasonably satisfactory to the indemnified party. The failure to so notify the indemnifying party shall relieve the indemnifying party from any liability hereunder with respect to the action to the extent that such failure materially prejudices the indemnifying party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party shall not be subject to any liability for any settlement made without its consent (which consent shall not be unreasonably withheld). No indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim. 2.5.4. Contribution. If for any reason the indemnification provided for in the preceding Sections 2.5.1 and 2.5.2 is unavailable to an indemnified party as contemplated by the preceding Sections 2.5.1 and 2.5.2 for any reason, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. Notwithstanding the foregoing, if the indemnifying party is LDC, any contribution pursuant to this Section 2.5.4 shall be limited to the amount of net proceeds received by all LDC Holders from the sale of Registrable Securities in connection with the applicable Registration. 2.5.5. Other Indemnification. Indemnification similar to that set forth in the preceding subdivisions of this Section 2.5 (with appropriate modifications) shall be given by the Company and LDC with respect to any required registration or other qualification of securities under any Federal or state law or regulation or governmental authority other than the 1933 Act. 18 18 SECTION 2.6. Exchange Act Reports. The Company agrees that it will use its best efforts to file in a timely manner all reports required to be filed by it pursuant to the Exchange Act to the extent the Company is required to file such reports. Upon request of an LDC Holder, the Company will furnish the requesting LDC Holder with such information as may be necessary to enable such LDC Holder to effect sales pursuant to Rule 144A. Notwithstanding the foregoing, the Company may deregister any class of its equity securities under Section 12 of the Exchange Act or suspend its duty to file reports with respect to any class of its securities pursuant to Section 15(d) of the Exchange Act if it is then permitted to do so pursuant to the Exchange Act and rules and regulations thereunder. SECTION 2.7. Restrictions on Public Sale by Holder of Securities. 2.7.1. To the extent not inconsistent with applicable law, any LDC Holder whose Registrable Securities are included in a Registration relating in whole or in part to an underwritten public offering agrees not to effect any public sale or distribution of the issue being registered or any similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a public sale pursuant to Rule 144 under the 1933 Act, during the 14 days prior to, and during the 180-day period beginning on, the effective date of such registration statement (except as part of such Registration); provided, however, that the foregoing shall only apply if and to the extent requested by the managing underwriter or underwriters. 2.7.2. Each LDC Holder agrees that, in the event the Company files a registration statement under the 1933 Act with respect to an underwritten public offering of any shares of Common Stock or Common Stock Equivalent, such LDC Holder shall not effect any public sale or distribution of any Common Stock owned by it (other than as part of such underwritten public offering) within 7 days prior to, and during the 180-day period beginning on, the effective date of such registration statement and the Company hereby also so agrees and agrees to use its best efforts to cause, as the managing underwriters may require, each other holder of any equity security, or of any security convertible into or exchangeable or exercisable for any equity security, of the Company purchased from the Company (at any time other than in a public offering) to so agree. SECTION 2.8. Participation in Registrations. No LDC Holder may participate in any Registration hereunder 19 19 unless such LDC Holder (i) agrees to sell such LDC Holder's securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements. SECTION 2.9. Remedies. LDC shall have the right and remedy to have the provisions of Sections 2.1 and 2.2 specifically enforced by any court having jurisdiction in the event that the Company breaches such provisions, and the Company shall reimburse LDC for the reasonable costs of the expenses for counsel for LDC incurred in connection with such proceeding. ARTICLE III Restrictions on Transfer of Common Stock by LDC; Standstill SECTION 3.1. Restrictions on Transfer. Prior to December 31, 1999, LDC shall not sell, assign, transfer, pledge, hypothecate, deposit in a voting trust or otherwise dispose of any portion of the LDC Shares (any such disposition, a "Share Transfer"), other than (x) to a Covered Employee in connection with the distribution of Bonus Shares or (y) to a Permitted Affiliate of LDC that has agreed in writing (the "Permitted Affiliate Section 3.1 Agreement") to be bound by the terms and provisions of this Section 3.1 to the same extent that LDC would be bound if it beneficially owned the shares of Common Stock transferred to such Permitted Affiliate of LDC and acknowledging the last sentence of Section 4.4. LDC shall promptly notify the Company of any Share Transfer to a Permitted Affiliate of LDC, which notification shall include a Permitted Affiliate Section 3.1 Agreement executed by each Permitted Affiliate of LDC to whom any shares of Common Stock have been transferred. If any Permitted Affiliate of LDC which owns any shares of Common Stock ceases for any reason to be a Permitted Affiliate of LDC, LDC shall promptly thereupon cause such former Permitted Affiliate of LDC to transfer all shares of Common Stock held by it to LDC or a Permitted Affiliate of LDC, and in no event shall any such former Permitted Affiliate of LDC effect any Share Transfer in a manner that would be prohibited by this Section 3.1 if such Share Transfer were effected by LDC. On or after December 31, 1999, LDC shall not, and shall not permit any of its Affiliates to, directly or indirectly, effect any Share Transfer (other than to a Permitted Affiliate of LDC) 20 20 in a manner that would result in the acquisition by any other person to the extent that, to LDC's knowledge after due inquiry (it being understood that no such inquiry is required in respect of a non-prearranged sale over a securities exchange or other transactions where it is not possible to determine who the acquiror is, or in connection with a registered public offering where the Company controls the placement of shares), after giving effect to such Share Transfer, such acquiring person would hold in excess of five percent (5%) of the total voting power of all voting securities of the Company. SECTION 3.2. Standstill. For a period of five years from the Closing Date (as such term is defined in Section 2(a)(i) of the Stock Purchase Agreement), LDC shall not, and shall not permit any of its Affiliates to, directly or indirectly, (i) without the prior written consent of the Company, by purchase or otherwise, acquire, agree to acquire or offer to acquire beneficial ownership of any voting securities of the Company or direct or indirect rights or options to acquire such beneficial ownership (including, without limitation, any voting trust certificates representing such securities) if such acquisition would result in the aggregate beneficial ownership by LDC and all Affiliates of LDC of voting securities having voting power equal to or in excess of 15% of the then aggregate voting power of the Company, (ii) enter, propose to enter into, solicit or support any merger or business combination or change of control or other similar transaction involving the Company or any of its subsidiaries, or purchase, acquire, propose to purchase or acquire or solicit or support the purchase or acquisition of any portion of the business or assets of the Company or any of its subsidiaries other than in the ordinary course of business, (iii) initiate or propose any matter for submission to a vote of the shareholders of the Company or make, or in any way participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules promulgated by the SEC under the Exchange Act) to vote, or seek to advise or influence any person with respect to the voting of, the Common Stock or any other voting securities of the Company or request or take any action to obtain any list of shareholders of the Company for such purposes, (iv) form, join or in any way participate in any group (other than a group composed solely of LDC and its Affiliates) formed for the purpose of acquiring, holding, voting or disposing of or taking any other action with respect to the Common Stock or any other voting securities of the Company that would be required under Section 13(d) of the Exchange Act to file a Schedule 13D with respect to such voting securities, (v) deposit any shares of Common Stock or any other voting 21 21 securities of the Company in a voting trust or enter into any voting agreement or arrangement with respect thereto, (vi) seek representation on the Board (other than as contemplated by Section 7(b) of the Stock Purchase Agreement), the removal of any directors from the Board or a change in the size or composition of the Board, (vii) make any request to amend or waive any provision of this Section 3.2, which request would require public disclosure under applicable law, rule or regulation, (viii) disclose any intent, purpose, plan, arrangement or proposal inconsistent with the foregoing (including any such intent, purpose, plan, arrangement or proposal that is conditioned on or would require the waiver, amendment, nullification or invalidation of any of the foregoing) or take any action that would require public disclosure of any such intent, purpose, plan, arrangement or proposal, (ix) take any action challenging the validity or enforceability of the foregoing, (x) assist, advise, encourage or negotiate with any person with respect to, or seek to do, any of the foregoing or (xi) take, or solicit, propose to or agree with any other person to take, any similar actions designed to influence the management or control of the Company. Nothing in this Section 3.2 shall (i) prohibit or restrict LDC or its Affiliates from responding to any inquiries from any shareholders of the Company as to LDC's or any such Affiliate's intention with respect to the voting of shares of Common Stock or any other voting securities of the Company beneficially owned by LDC or such Affiliate so long as such response is consistent with the terms of this Agreement, (ii) prohibit the purchase or other acquisition of beneficial ownership of Common Stock or other voting securities of the Company in compliance with Section 3.2(i) or (iii) restrict the right of any director on the Board designated by LDC as contemplated by Section 7(b) of the Stock Purchase Agreement to vote on any matter as such designee believes appropriate in light of his duties as a director of the Company or the manner in which such designee may participate in his capacity as a director of the Company in deliberations or discussions at meetings of the Board or as a member of any committee thereof. ARTICLE IV Miscellaneous SECTION 4.1. Notices. 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, cable or telecopy or sent, postage 22 22 prepaid, by registered, certified or express mail or reputable overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service), as follows: (i) if to the Company, TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Phone: (303) 626-8200 Fax: (303) 626-8228 Attention: Richard E. Gathright President and Chief Operating Officer with copies to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Phone: (303) 626-8200 Fax: (303) 626-8228 Attention: Erik B. Carlson, Esq. Senior Vice President, General Counsel and Corporate Secretary Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Attention: Philip A. Gelston, Esq.; and 23 23 (ii) if to LDC, Louis Dreyfus Corporation Ten Westport Road P.O. Box 810 Wilton, Connecticut 06897 Phone: (203) 761-8369 Fax: (203) 761-8085 Attention: Peter Griffin President with copies to: Louis Dreyfus Corporation Ten Westport Road P.O. Box 810 Wilton, Connecticut 06897 Phone: (203) 761-8317 Fax: (302) 761-8321 Attention: Andrew J. Connelly, Esq. General Counsel; and Dewey Ballantine LLP 1301 Avenue of the Americas New York, New York 10019 Attention: Stanton J. Lovenworth, Esq. SECTION 4.2. Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement, the other LDC Holders, if any, and their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein. This Agreement constitutes the entire agreement and understanding, and supersedes and terminates all prior agreements and understandings, both oral and written (including those contained in the Stock Purchase Agreement), between the parties hereto relating to the subject matter hereof. SECTION 4.3. Waiver. Each party hereto may, by written notice to the other party (i) extend the time for the performance of any of the obligations or other actions 24 24 of such other party under this Agreement; (ii) waive compliance with any of the conditions or covenants of such other party contained in this Agreement; and (iii) waive or modify performance of any of the obligations of such other party under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. Neither the waiver by either party hereto of a breach of any provision hereof or any preceding or succeeding breach nor the failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party's rights or privileges hereunder nor shall it be deemed a waiver of such party's rights to exercise the same at any subsequent time or times hereunder. SECTION 4.4. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto. Any such amendment, modification or waiver in respect of this Agreement executed by or on behalf of LDC shall bind each other LDC Holder, if any, to the terms and conditions thereof. SECTION 4.5. Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or LDC (other than, in the case of LDC, to a Permitted Affiliate of LDC in connection with a transfer of a portion of the LDC Shares). SECTION 4.6. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. SECTION 4.7. Attorney Fees. A party in breach of this Agreement shall, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other party may be entitled. SECTION 4.8. Section and Other Headings. The section and other headings contained in this Agreement are 25 25 for reference purposes only and shall not affect the meaning or interpretation of this Agreement. SECTION 4.9. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be 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. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. TRANSMONTAIGNE INC., by -------------------------------------------- Name: Title: LOUIS DREYFUS CORPORATION, by ------------------------------------------ Name: Title: 26 ANNEX A [AMENDMENT AND WAIVER TO INSTITUTIONAL INVESTOR REGISTRATION RIGHTS AGREEMENT--TO COME WHEN EXECUTED] EX-99.4 5 AGREEMENT RE: SHARE ISSUANCE 1 Exhibit 4 --------- Agreement re Share Issuance WHEREAS, Louis Dreyfus Corporation ("LDC") and TransMontaigne Inc. ("TM") entered into a Stock Purchase Agreement dated as of September 13, 1998 (the "Agreement") for the sale of all outstanding shares of Louis Dreyfus Energy Corp. ("LDEC") by LDC to TM; WHEREAS, the Agreement contemplates that part of the purchase price paid by TM would be in the form of shares of TM (the "Shares"); WHEREAS, pursuant to the Agreement, in which LDC is defined as "Seller," TM is required to deliver such Shares to LDC at the Closing "registered in the name of the Seller or its designee"; WHEREAS, LDC requested that 148,920 Shares (the "Designee Shares") be registered in the name of Louis Dreyfus Holding Company Inc. ("LDHC") as its designee; WHEREAS, all Shares to be delivered to LDC at the Closing were inadvertently registered in the name of LDHC rather than solely the Designee Shares, with the remainder in LDC's name; and WHEREAS, LDC is willing to complete the scheduled Closing in spite of this error upon the parties' recognition thereof as expressed in this Agreement; NOW, THEREFORE, the undersigned parties hereto hereby agree that LDC is the direct owner of all outstanding shares of LDEC and, absent any designation by LDC pursuant to the Agreement, is the sole party entitled to receive and intended by the parties to receive the Buyer Shares (as defined in the Agreement) other than the Designee Shares (as to which such a designation has been made, as stated above), and LDC shall be deemed the recipient of the Shares upon the Closing, it being understood by the parties that LDHC will be in registered receipt of the Shares solely as nominee for LDC and without any other interest of its own in the Shares other than as LDC's parent, and LDHC may promptly transfer such Shares (other than the Designee Shares) to LDC. 2 TRANSMONTAIGNE INC. By_____________________ LOUIS DREYFUS CORPORATION By____________________________ LOUIS DREYFUS HOLDING COMPANY INC. By______________________________________ Date: October 30, 1998 -----END PRIVACY-ENHANCED MESSAGE-----