Exhibit 10.35

ASSET PURCHASE AGREEMENT

Between

MOBIL OIL CORPORATION

and

AGRIFOS FERTILIZER L.P.

Dated as of September 10, 1998

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TABLE OF CONTENTS

 

         Page   ARTICLE I DEFINITIONS AND TERMS    ARTICLE II PURCHASE AND SALE
  

Section 2.1

  Purchase and Sale of Assets      18   

Section 2.2

  Transferred Assets Requiring Third Party Consent or Approval      18   
ARTICLE III PURCHASE PRICE   

Section 3.1

  Purchase Price      20   

Section 3.2

  Deposit      20   

Section 3.3

  Security      21   

Section 3.4

  Post-Closing Adjustment      21   

Section 3.5

  Title Fees, Transfer Taxes and Recording Fees      21    ARTICLE IV CLOSING   

Section 4.1

  Location and Date      22   

Section 4.2

  Deliveries by Buyer      23   

Section 4.3

  Deliveries by Mobil      24   

Section 4.4

  Further Assurances      25    ARTICLE V GYPSUM STACK CLOSURE   

Section 5.1

  Mobil’s Liability      26   

Section 5.2

  Buyer’s Compliance      28   

Section 5.3

  Dispute Resolution      29    ARTICLE VI LIABILITIES   

Section 6.1

  Assumption of Liabilities      30   

Section 6.2

  Excluded Liabilities      31   

Section 6.3

  Handling of Claims Related to Excluded Liabilities      32   

 

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         Page   ARTICLE VII REPRESENTATIONS AND WARRANTIES OF MOBIL   

Section 7.1

  Organization and Qualification      33   

Section 7.2

  Corporate Authorization      33   

Section 7.3

  Consents and Approvals      33   

Section 7.4

  Non-Contravention      34   

Section 7.5

  Binding Effect      34   

Section 7.6

  Litigation and Claims      35   

Section 7.7

  Taxes      35   

Section 7.8

  Employee Benefit Plans/Arrangements      36   

Section 7.9

  Compliance with Laws      37   

Section 7.10

  Labor Matters      37   

Section 7.11

  Contracts      38   

Section 7.12

  Title      39   

Section 7.13

  Brokers’ and Finders’ Fees      39   

Section 7.14

  Real Property Representations      40   

Section 7.15

  Governmental Authorizations      43   

Section 7.16

  Condition of Transferred Assets/Disclaimer of Warranties      44   

Section 7.17

  No Other Representations or Warranties      44   

Section 7.18

  No Omissions      44    ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF BUYER
  

Section 8.1

  Organization and Qualification      45   

Section 8.2

  Authorization      45   

Section 8.3

  Consents and Approvals      45   

Section 8.4

  Non-Contravention      46   

Section 8.5

  Binding Effect      46   

Section 8.6

  Brokers’ or Finders’ Fees      46   

Section 8.7

  Financial Capability      46   

Section 8.8

  Condition of Transferred Assets/Reliance      47   

Section 8.9

  No Other Representations or Warranties      47    ARTICLE IX EMPLOYMENT
MATTERS   

Section 9.1

  Post-Closing Obligations to Certain Employees      48   

Section 9.2

  Compliance with WARN, etc      51   

Section 9.3

  Union Contracts      51   

Section 9.4

  New Assignments, Hiring      51   

Section 9.5

  Assurances      51   

 

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         Page   ARTICLE X MOBIL AND BUYER COVENANTS AND ENVIRONMENTAL
EXAMINATION PERIOD   

Section 10.1

  Access      52   

Section 10.2

  Conduct of Business      52   

Section 10.3

  Best Efforts      53   

Section 10.4

  Environmental Examination and Responsibilities      53   

Section 10.5

  Wetlands Project      59   

Section 10.6

  Exclusivity      59   

Section 10.7

  Subsequent Asset Sales by Buyer      60   

Section 10.8

  Purchase Price Allocation      60    ARTICLE XI CONDITIONS TO CLOSING   

Section 11.1

  Conditions to the Obligations of Buyer and Mobil      61   

Section 11.2

  Conditions to the Obligations of Buyer      61   

Section 11.3

  Conditions to the Obligations of Mobil      63    ARTICLE XII ADDITIONAL
AGREEMENTS   

Section 12.1

  Municipally Financed Property      64    ARTICLE XIII POST-CLOSING OBLIGATIONS
  

Section 13.1

  Post-Closing Obligations      66    ARTICLE XIV SURVIVAL; INDEMNIFICATION   

Section 14.1

  Survival      67   

Section 14.2

  Indemnification by Buyer      67   

Section 14.3

  Indemnification by Mobil      68   

Section 14.4

  Indemnification Procedures      69   

Section 14.5

  Characterization of Indemnification Payments      71   

Section 14.6

  Computation of Losses Subject to Indemnification      71   

Section 14.7

  Crye Litigation      71    ARTICLE XV TERMINATION   

Section 15.1

  Termination      72   

Section 15.2

  Effect of Termination      72   

 

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         Page   ARTICLE XVI MISCELLANEOUS   

Section 16.1

  Amendment; Waiver      73   

Section 16.2

  Assignment      73   

Section 16.3

  Entire Agreement      73   

Section 16.4

  Parties in Interest      74   

Section 16.5

  Continued Confidentiality      74   

Section 16.6

  Public Disclosure      74   

Section 16.7

  Return of Information      74   

Section 16.8

  Expenses, Fees and Brokers      75   

Section 16.9

  Schedules      75   

Section 16.10

  Governing Law; Submission to Jurisdiction; Selection of Forum      75   

Section 16.11

  Notices      76   

Section 16.12

  Counterparts      77   

Section 16.13

  Headings      77   

Section 16.14

  Severability      77   

 

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EXHIBITS AND SCHEDULES

 

Exhibit A    Form of Agreement Regarding Security Exhibit B    Form of Tolling
Agreement Release 1.7    Assigned Easements 1.46    Fixtures and Equipment
(Tangible Personal Property) 1.48    Governmental Authorizations 1.61   
Knowledge 1.81    Other Real Property Interests 1.83    Non-Assignable Contracts
and Non-Assigned Contracts 1.92    Real Property 1.96    Description of Roadway
4.2(e)    Opinion Letter of Buyer’s Counsel 4.3(f)    Opinion Letter of Seller’s
Counsel 5.2(a)    Mobil Standards 7.3    Mobil’s Consents and Approvals 7.6(a)
   Litigation and Claims 7.6(b)    Claims Affecting Transferred Assets 7.8(a)   
Mobil Benefit Plans 7.8(b)    Mobil Benefit Arrangements 7.9    Compliance with
Laws 7.10(a)    Labor Matters 7.10(b)    Employee List 7.11    Contracts 7.12   
Permitted Encumbrances 7.14(c)    Mechanics’, Materialmen’s or Other Liens
7.14(g)    Description of 30 Foot Strip 7.14(i)    Certain Easements 7.,14(j)   
Easements Not Located 8.3    Buyer’s Consents and Approvals 9.1(d)    Retiree
Medical Plan Eligibility 10.4(b)    Identified Environmental Conditions 10.7   
Subsequent Asset Sales by Buyer 12.1(a)    Municipally Financed Property 12.1(b)
   1997 Municipal Bond Documents

 

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (“Agreement”), dated as of the 10th day of
September, 1998, by and between MOBIL OIL CORPORATION, a New York corporation
with offices and principal place of business at 3225 Gallows Road, Fairfax,
Virginia 22037 (“Mobil”), and AGRIFOS FERTILIZER L.P., a limited partnership
organized under the laws of the State of Texas with offices and principal place
of business at 667 Madison Avenue, New York, New York 10021 (“Buyer”). Mobil and
Buyer may be referred to individually as “Party” and collectively as “Parties”.

WITNESSETH

WHEREAS, Mobil desires to sell, transfer and assign to Buyer, and Buyer desires
to purchase and assume from Mobil, certain real property and related phosphate
fertilizer plant operations known as the Pasadena, Texas Fertilizer Facility
located in Pasadena, Texas;

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and subject to and on the terms and conditions herein set
forth, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

The following terms shall be used in this Agreement with their respective
definitions and shall be interpreted in accordance with Section 1.111, herein:

 

1.1 “Affiliates” shall mean, with respect to any Person (as defined in
Section 1.85), any Person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with
such other Person as of the date on which, or at any time during the period for
which, the determination of affiliation is being made.

 

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1.2 “Agreement” shall mean this Agreement along with any attachments hereto, as
the same may be amended or supplemented from time to time in accordance with the
terms hereof.

 

1.3 “Agreement Regarding Security” shall mean that certain Agreement Regarding
Security in the form of Exhibit A attached hereto.

 

1.4 “Agrifos Retiree Medical Plan” shall have the meaning set forth in
Section 9.1(e).

 

1.5 “Ammonia Tank “ shall mean the 79’ diameter by 72’4” high, double wall steel
storage tank with a maximum holding capacity of 7,500 tons of anhydrous ammonia
located at the west-end of the Pasadena Facility.

 

1.6 “Approved Imported Rock” shall have the meaning set forth in Section 5.1(b).

 

1.7 “Assigned Easements” shall mean those certain easements set forth on
Schedule 1.7.

 

1.8 “Assumed Liabilities” shall have the meaning set forth in Section 6.1.

 

1.9 “Bonds” shall have the meaning set forth in Section 12.1.

 

1.10 “Books and Records” shall mean all lists, files and documents (including,
without limitation, all computer media, i.e., computer disks and computer tapes)
relating to those suppliers of the Pasadena Facility whose contracts with Mobil
are included among the Transferred Assets, all ledgers and underlying books of
original entry and other financial records of the Pasadena Facility, appropriate
Employee-related records and documents, and all other records and documents of
the Pasadena Facility.

 

1.11 “Business Day” shall mean any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or executive
order to close.

 

1.12 “Buyer” shall have the meaning set forth in the introductory paragraph of
this Agreement.

 

1.13 “Buyer Cap” shall mean Five Hundred Thousand Dollars ($500,000).

 

1.14 “Buyer Indemnified Parties” shall have the meaning set forth in
Section 14.3.

 

1.15 “Buyer Employees” shall have the meaning set forth in Section 9.1(a).

 

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1.16 “Buyer Losses” shall have the meaning set forth in Section 14.3(a).

 

1.17 “Buyer’s NORM” shall have the meaning set forth in Section 5.2(e).

 

1.18 “Claims” shall mean any and all written claims, demands, charges,
citations, suits, litigation, proceedings, arbitrations, investigations,
actions, causes of action, assessments, orders, directives, notices of potential
responsibility or liability, notices of violations and assessments.

 

1.19 “Claim Notice” shall have the meaning set forth in Section 14.4(a).

 

1.20 “Closing” shall mean the closing of the transactions contemplated by this
Agreement.

 

1.21 “Closing Date” shall have the meaning set forth in Section 4.1(a).

 

1.22 “Closing Statement” shall have the meaning set forth in Section 3.1.

 

1.23 “Closure” shall mean closure of each gypsum stack, including treatment of
all process water generated, resulting from or used in connection with the
Existing Gypsum Stacks and all post-closure care, monitoring or other costs and
expenses associated therewith, in accordance with applicable Laws and permits in
effect at the time of and during closure.

 

1.24 “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

1.25 “Combined NORM” shall have the meaning set forth in Section 5.2(e).

 

1.26 “Confidentiality Agreement” shall mean that certain Mutual Confidentiality
Agreement, dated May 16, 1997, between Buyer and Mobil.

 

1.27 “Consent Decree” shall mean that certain Consent Decree Addressing Natural
Resource Damages entered on June 13, 1996 by the United States District Court
for the Southern District of Texas in the matter of United States of America, et
al. v. Mobil Mining and Minerals Co.

 

1.28 “Contracts” shall mean all agreements, contracts, leases, purchase orders,
commitments, and non-governmental licenses that are related to the Pasadena
Facility or to which the Transferred Assets are subject, except to the extent
the same are included in the Non-Division Assets.

 

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1.29

“Crye Litigation” shall mean (i) that certain action entitled Gene Crye, et al.
v. Reichold Chemicals, Inc., et al., Cause No. 97-24399, filed in the District
Court of Harris County, Texas, 334th Judicial District, (ii) that certain action
entitled Edward Martinez, Jr., et ux v. Shell Oil Company, et al., Cause
No. 98-34532, filed in the District Court of Harris County, Texas, 334th
Judicial District, and (iii) any amendment and/or removal of the actions
identified in subclauses (i) and (ii) above or any other litigation involving
any of the plaintiffs named in the actions identified in subclauses (i) and
(ii) above (or subsequently added thereto) and whose material allegations are
substantially similar to the allegations set forth in the actions identified in
subclauses (i) and (ii) above.

 

1.30 “De Minimis Condition” shall have the meaning set forth in
Section 10.4(f)(1).

 

1.31 “Deposit” shall mean Buyer’s one million dollar ($1,000,000) deposit
delivered to Mobil in the form of the Promissory Note.

 

1.32 “Documents” shall mean this Agreement, and all other documents and
instruments required to be executed and delivered by a Party pursuant to this
Agreement.

 

1.33 “Employee(s)” shall mean employees who are exclusively employed at the
Pasadena Facility by Mobil as of the Closing Date.

 

1.34 “Encumbrances” shall mean liens, charges, encumbrances, security interests,
title defects, Claims, pledges, leases, easements, options or any other
restrictions or impositions of any kind or nature, or third-party rights.

 

1.35 “Environmental Claim” shall mean any written claim, notice of violation or
administrative or judicial action by any governmental authority or other Person
resulting from the presence of an Environmental Condition or alleging the
violation of any Environmental Law in connection with the operations conducted
at the Pasadena Facility or on the Real Property.

 

1.36 “Environmental Condition” shall mean any unauthorized, illegal or
unpermitted release or presence of a Hazardous Substance or any violation of, or
non-compliance with, any Environmental Law resulting from the operations
conducted at the Pasadena Facility or on the Real Property which requires a
Response pursuant to any applicable Environmental Law.

 

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1.37 “Environmental Examination” shall have the meaning set forth in
Section 10.4(a).

 

1.38 “Environmental Examination Period” shall be that time period set forth in
Section 10.4(a), where the Parties shall have the opportunity to inspect the
Transferred Assets, the Pasadena Facility and the Real Property to determine the
presence or absence of an Environmental Condition.

 

1.39 “Environmental Law” shall mean any applicable federal, state or local laws,
statutes, ordinances, rules, regulations, codes, orders, judgments, decrees or
injunctions relating to (a) the protection of the environment, health or safety
(including, without limitation, air, water vapor, surface water, groundwater,
drinking water supply, surface or subsurface land) or (b) the exposure to, or
the use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, protection, release or disposal of, Hazardous Substances,
including, without limitation, (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. § 9601 et seq., (ii) the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801 et seq., (iii) the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq., (iv) the Federal Water Pollution
Control Act, as amended, 33 U.S.C. § 7401 et seq., (vi) the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq., and (vii) the Safe Drinking Water Act, 42
U.S.C. § 300f et seq. and state and local law equivalents.

 

1.40 “Environmental Lien” shall have the meaning set forth in
Section 7.14(h)(viii).

 

1.41 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

1.42 “Excluded Environmental Liabilities” shall have the meaning set forth in
Section 6.2(c).

 

1.43 “Excluded Liabilities” shall have the meaning set forth in Section 6.2.

 

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1.44 “Existing Gypsum Stacks” shall mean the gypsum disposal sites in use or
previously used by Mobil at the time of Closing, including stacks 1, 2, 3 and 4,
and the zone of consolidation between stacks 2 and 3, and otherwise limited to
the existing footprint of the stacks at the time of Closing as the same is shown
on (i) those topographical maps of stacks 1 and 4 derived from aerial
photography dated August 15, 1982 and of stacks 2 and 3 derived from aerial
photography dated February 4, 1998, copies of which have been provided to Buyer
by Mobil and (ii) the detailed final statement of work for the Gypsum Stack
Consolidation Project.

 

1.45 “Financing Agreements” shall mean (i) that certain Note Purchase Agreement,
dated as of September 10, 1998, by and between Agrifos L.L.C. and the
Metropolitan Life Insurance Company, (ii) that certain Amended and Restated Loan
Agreement, dated as of September 10, 1998, by and between First Union National
Bank and Agrifos Mining L.L.C., and (iii) that certain Amended and Restated Loan
and Security Agreement, dated as of September 10, 1998, by and between Congress
Financial Corporation (New England) and Buyer and Agrifos Mining L.L.C.

 

1.46 “Fixtures and Equipment” shall mean all furniture, fixtures, office
equipment, leasehold improvements, furnishings, machinery, vehicles, equipment
(including research and development equipment) and other tangible personal
property related to, or used or useful at, the Pasadena Facility with only such
additions and deletions as may occur in the ordinary and regular course of
Mobil’s business in connection with the replacement of any such items. Schedule
1.46 sets forth a list of tangible personal property located at the Pasadena
Facility as of July 1, 1998.

 

1.47 “Former Employees” shall mean Employees whose employment at the Pasadena
Facility terminated on or prior to the Closing Date and Employees who do not
accept employment with Buyer in accordance with Section 9.1.

 

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1.48 “Governmental Authorizations” shall mean the licenses, permits,
certificates, variances and other authorizations and approvals which are
necessary to conduct operations at the Pasadena Facility as currently conducted,
under the applicable laws, ordinances or regulations of federal, state, or local
governmental authorities, as the same are set forth on Schedule 1.48 attached
hereto.

 

1.49 “Gypsum Stack Consolidation Project” shall mean the consolidation of gypsum
stacks 2 and 3 in Phases I through III pursuant to that certain proposal
prepared by Ardaman & Associates, Inc. as set forth in an “Evaluation of
Alternatives for Gypsum Field Nos. 2 and 3” Figures 16, 17 and 18 dated
September 21, 1995.

 

1.50 “Hazardous Substances” shall mean (a) petroleum or fractions thereof or
petroleum products, radioactive materials (other than naturally occurring) and,
asbestos-containing materials and (b) any other waste, chemicals, materials or
substances designated, classified or regulated under any Environmental Law
including, but not limited to, those substances regulated under or identified in
42 U.S.C. § 9601 et seq. (CERCLA), 42 U.S.C. § 6901 et seq. (RCRA), Chapters
376, 378 and 403.

 

1.51 “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

 

1.52 “IBEW” shall have the meaning set forth in Section 7.10(a).

 

1.53 “Identified Environmental Condition” shall have the meaning set forth in
Section 10.4(b).

 

1.54 “Inactive Employee” shall mean any Employee listed in Schedule 7.10(b) who,
as of the Closing Date, is temporarily absent from active employment by reason
of disability, illness, injury, workers’ compensation, leave of absence or
layoff.

 

1.55 “Indemnified Environmental Condition” shall have the meaning set forth in
Section 10.4(f).

 

1.56 “Indemnified Parties” shall have the meaning set forth in Section 14.3(a).

 

1.57 “Indemnifying Party” shall have the meaning set forth in Section 14.4(a).

 

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1.58 “Injunction” shall mean any injunctive relief entered by a court of
competent jurisdiction in the Crye Litigation which (A) either (i) results in
cessation of operations at the Pasadena Facility, or (ii) enjoins any operation
of the Pasadena Facility resulting in a Material Adverse Effect, and which
injunctive relief continues for a period of not less than twenty-four
(24) hours, and (B) which did not result from an event occurring after the
Closing Date which is out of the ordinary course of business at the Pasadena
Facility and which is determined to be the primary and proximate cause for the
issuance of such injunctive relief.

 

1.59 “Intellectual Property” shall mean all of Mobil’s rights in and to
technical data, designs, processes, operating manuals, operating data and plans,
maps, inventions and invention disclosures (whether patented, patentable or
unpatented), engineering drawings, schematics, blueprints, flow sheets, designs
and models, patents, and similar data, to the extent such are used or useful in
the operation of the Pasadena Facility.

 

1.60 “Inventory” shall mean all inventory materials (including, but not limited
to, wet and dry rock, spare parts, raw materials, reagents, maintenance items
and supplies, and work-in-process) used in the ordinary operation of the
Pasadena Facility.

 

1.61 “Knowledge” or any similar phrase means the actual knowledge of those
employees of Mobil who are identified on Schedule 1.61.

 

1.62 “Laws” shall include any federal, state, or local law, statute, ordinance,
rule, regulation, order, judgment or decree.

 

1.63 “Material Adverse Change” shall mean a change that materially and adversely
affects the value of the Transferred Assets taken as a whole or materially and
adversely affects the business, financial condition or results of operations of
the Pasadena Facility taken as a whole or Buyer’s ability to operate same from
and after Closing.

 

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1.64 “Material Adverse Effect” shall mean an effect that is materially adverse
to the value of the Transferred Assets taken as a whole or materially adverse to
the business, financial condition or results of operations of the Pasadena
Facility taken as a whole or to Buyer’s ability to operate same from and after
Closing.

 

1.65 “Mobil” shall have the meaning set forth in the introductory paragraph of
this Agreement.

 

1.66 “Mobil Benefit Arrangements” shall have the meaning set forth in
Section 7.8(b).

 

1.67 “Mobil Benefit Plans” shall have the meaning set forth in Section 7.8(a).

 

1.68 “Mobil Cap” shall mean Ten Million Dollars ($10,000,000).

 

1.69 “Mobil Confidentiality Agreements” shall have the meaning set forth in
Section 7.11.

 

1.70 “Mobil Indemnified Parties” shall have the meaning set forth in
Section 14.2.

 

1.71 “Mobil Losses” shall have the meaning set forth in Section 14.2.

 

1.72 “Mobil Retiree Medical Plan” shall have the meaning set forth in
Section 9.1(d).

 

1.73 “Mobil’s NORM” shall have the meaning set forth in Section 5.2(e).

 

1.74 “Mobil Standards” shall have the meaning set forth in Section 5.2(a).

 

1.75 “Municipally Financed Property” shall have the meaning set forth in
Section 12.1.

 

1.76 “Non-Division Assets” shall have the meaning set forth in Section 1.79.

 

1.77 “Notice” shall have the meaning set forth in Section 5.3.

 

1.78 “Notice of Indemnified Environmental Condition” shall have the meaning set
forth in Section 10.4(g)(1).

 

1.79 “Notice Period” shall have the meaning set forth in Section 14.4(b).

 

1.80 “OCAW” shall have the meaning set forth in Section 7.10(a).

 

1.81 “Other Real Property Interests” shall mean the real property interests set
forth in Schedule 1.81.

 

1.82 “Party” shall mean Buyer or Mobil as the case may be, and “Parties” shall
mean Buyer and Mobil, collectively.

 

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1.83 “Pasadena Facility” shall mean Mobil’s phosphate fertilizer plant located
in Pasadena, Texas. Notwithstanding anything herein to the contrary, the
Pasadena Facility and the Transferred Assets shall not include the following
assets which are not used exclusively in the operation of the Pasadena Facility
and which are used by Affiliates of Mobil or other divisions or business groups
within Mobil (collectively, the “Non-Division Assets”):

 

  (a) the assets (including, without limitation, real property, tangible
personal property, intellectual property, computer equipment and contracts) of
all businesses other than the Pasadena Facility conducted by Mobil and its
respective Subsidiaries and/or other Affiliates;

 

  (b) the capital stock of Mobil and all Subsidiaries of Mobil;

 

  (c) all cash, investment securities and other short-term and medium-term
investments and accounts receivable from Mobil and its Affiliates;

 

  (d) all Tax returns of Mobil;

 

  (e) all Books and Records which Mobil is required by law to retain; and

 

  (f) non-assignable and non-assigned Contracts specified on Schedule 1.79.

 

1.84 “Permitted Encumbrances” shall have the meaning set forth in
Section 7.12(b).

 

1.85 “Person” shall mean an individual, a corporation, a limited liability
company, a partnership, an association, a trust, or other entity or
organization.

 

1.86 “Post Closing Statement” shall have the meaning set forth in
Section 3.4(a).

 

1.87 “Prior Bonds” shall have the meaning set forth in Section 12.1.

 

1.88 “Product” shall mean any product processed or manufactured at the Pasadena
Facility including gypsum or any product manufactured or processed from gypsum.

 

1.89 “Promissory Note” shall mean that written promise made by Buyer on
January 20, 1998 to pay Mobil one million dollars ($1,000,000) upon the
conditions set forth therein and bearing an interest rate of eight percent
(8%) per annum.

 

1.90 “Purchase Price” shall have the meaning set forth in Section 3.1.

 

1.91 “Qualifying Purpose” shall have the meaning set forth in Section 12.1.

 

1.92 “Real Property” shall mean all real property owned by Mobil and related to
or used or useful in the operation of the Pasadena Facility, including any
buildings, structures and improvements thereon or appurtenances thereto.
Schedule 1.92 sets forth a description of the Real Property.

 

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1.93 “Required Approvals” shall mean the consents, approvals, waivers,
authorizations, notices and filings referred to in Sections 7.3 and 8.3 and
Schedules 7.3 and 8.3, other than any such consent, approval, waiver,
authorization, notice or filing which, if not obtained or made, would not have a
Material Adverse Effect, would not materially impair or delay the ability of
Mobil, on the one hand, or Buyer, on the other hand, as the case may be, to
effect the Closing, and would not impair the ability of Buyer to operate the
Pasadena Facility from and after the Closing Date in full compliance with
applicable Law as it is being operated immediately prior to the Closing.

 

1.94 “Response” shall mean any action taken in compliance with Environmental
Laws and including risk-based corrective actions (including government
regulatory standards and clean-up criteria) to correct, remove, remediate, clean
up, prevent, mitigate, monitor, evaluate, investigate, assess or abate an
Environmental Condition.

 

1.95 “Response Costs” shall mean all costs known, or estimated in good faith and
pursuant to applicable industry guidelines by a licensed and knowledgeable
Person reasonably acceptable to the Parties, to be related to a Response.

 

1.96 “Roadway” shall mean that certain easement and right of way across a
certain tract of land located in Harris County, Texas which Mobil acquired from
Harris County pursuant to a certain quitclaim deed recorded under File No.
S111810, Film Code 509-98-0226, and being more particularly described in
Schedule 1.96.

 

1.97 “Subsidiary” shall mean, with respect to any Person, any corporation,
partnership, joint venture or other legal entity of which such Person, either
directly or through or together with any other Subsidiary of such Person, owns
more than 50% of the equity interests of such Person.

 

1.98 “Supporting Materials” shall have the meaning set forth in
Section 10.4(g)(1).

 

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1.99 “Taxes” shall mean all federal, state, local or foreign taxes, including
but not limited to income, alternative minimum or add-on minimum, gross
receipts, windfall profits, goods and services, value added, severance,
property, production, sales, use, license, excise, franchise, employment,
withholding or similar taxes, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties.

 

1.100 “Tolling Agreement” shall mean that certain Tolling Agreement, dated as of
February 16, 1996, by and between Buyer (as successor-in-interest to Nichols
Phosphate Acquisition Corp.) and Mobil Mining and Minerals Company, a division
of Mobil.

 

1.101 “Tolling Agreement Release” shall mean an agreement in the form of Exhibit
B attached hereto, providing for the release of all liabilities and obligations
of each party thereunder and the release of all security provided thereunder for
the performance of each party’s respective obligations thereunder, including,
without limitation, the termination and release of the Escrow Account (as such
term is defined in the Tolling Agreement).

 

1.102 “Transaction” shall have the meaning set forth in Section 2.1.

 

1.103 “Transferred Assets” shall have the meaning set forth in Section 2.1.

 

1.104 “Transfer Costs” shall have the meaning set forth in Section 3.5.

 

1.105 “Type A Condition” shall have the meaning set forth in Section 10.4(f)(2).

 

1.106 “Type B Condition” shall have the meaning set forth in Section 10.4(f)(3).

 

1.107 “Union Contracts” shall have the meaning set forth in Section 7.10(a)(i).

 

1.108 “WARN” shall mean the Worker Adjustment and Retraining Notification Act.

 

1.109 “Wetlands” shall mean the approximately seventeen (17) acres of intertidal
estuarine marsh as well as approximately fifteen (15) acres of freshwater
wetlands and enhanced upland habitat created pursuant to the Consent Decree and
situated on the Houston Ship Channel at the northwest corner of the Pasadena
Facility.

 

1.110 “Wetlands Liabilities” shall mean the obligations and liabilities of Mobil
under the Consent Decree, including, without limitation, with respect to the
creation of the Wetlands.

 

1.111 Interpretation. The words “hereof”, “herein”, and “hereunder” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The terms “dollars”
and “$” shall mean United States dollars. Personal pronouns, when used in this
Agreement, whether in the masculine, feminine or neuter gender, shall include
all other genders, and the singular shall include the plural, and vice versa.
All references herein to Articles, Sections or subsections shall refer to the
corresponding Article, Section or subsection of this Agreement unless specific
reference is made to an Article, Section or subsection of another document or
instrument. All references herein to a Schedule shall refer to the corresponding
Schedule attached hereto.

 

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ARTICLE II

PURCHASE AND SALE

 

2.1 Purchase and Sale of Assets. Subject to the terms and conditions of this
Agreement, Mobil shall, at Closing, sell, convey, transfer, assign and deliver
to Buyer, and Buyer shall purchase, receive and acquire all of Mobil’s right,
title and interest in and to all of the assets which are used or useful in the
ownership and operation of the Pasadena Facility, whether tangible or
intangible, real or personal, as they exist on the date hereof as shown on the
balance sheet of the Pasadena Facility which will be made available to Buyer no
later than ninety (90) days after the Closing Date, with only such changes,
deletions or additions thereto as may occur in the ordinary course of business
from the date hereof to the Closing Date consistent with the terms and
conditions of this Agreement (the “Transaction”). The assets shall include,
without limitation, all of the direct and indirect right, title and interest of
Mobil in the following:

 

  (a) the Real Property and the Other Real Property Interests;

 

  (b) the Fixtures and Equipment (including spares and replacement parts);

 

  (c) the Intellectual Property;

 

  (d) the Contracts;

 

  (e) the Books and Records;

 

  (f) all transferable Governmental Authorizations; and

 

  (g) the Inventory.

The foregoing shall collectively be referred to as the “Transferred Assets.”

 

2.2 Transferred Assets Requiring Third Party Consent or Approval.

 

  (a) To the extent that any of the Transferred Assets may not be sold or
assigned to Buyer without the consent or waiver of one or more third parties
between the date hereof and the Closing Date, Mobil shall use its best efforts
to obtain each required consent or waiver, including, without limitation, the
Required Approvals, prior to the Closing Date, except as otherwise provided in
this Agreement.

 

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  (b) Except as set forth in Schedules 7.3 and 1.48 and notwithstanding anything
to the contrary contained in this Agreement, to the extent that the sale,
assignment, transfer, conveyance or delivery or attempted sale, assignment,
transfer, conveyance or delivery to Buyer of any Transferred Asset is prohibited
by any applicable law or would require any governmental or third-party
authorizations, approvals, consents or waivers and such authorizations,
approvals, consents or waivers shall not have been obtained prior to the
Closing, this Agreement shall not constitute a sale, assignment, transfer,
conveyance or delivery, or any attempted sale, assignment, transfer, conveyance
or delivery, thereof.

 

  (c) Following the Closing, the Parties shall use reasonable efforts for a
reasonable period of time, and cooperate with each other, to obtain promptly
such authorizations, approvals, consents or waivers as shall not have been
obtained prior to the Closing; provided, however, that Mobil shall not be
required to pay any consideration, cost, expense or incur any financial exposure
therefor and Buyer shall be responsible for any filing, recordation or similar
fees payable to any governmental authority in order to effectuate such transfer.
Pending such authorization, approval, consent or waiver, the Parties shall
cooperate with each other in any reasonable and lawful arrangements designed to
provide to Buyer the benefits and liabilities of use of such Transferred Asset.

 

  (d) Once such authorization, approval, consent or waiver for the sale,
assignment, transfer, conveyance or delivery of a Transferred Asset not sold,
assigned, transferred, conveyed or delivered at the Closing is obtained, Mobil
shall promptly assign, transfer, convey and deliver, or cause to be assigned,
transferred, conveyed and delivered, such Transferred Asset to Buyer for no
additional consideration.

 

  (e) To the extent that any such Transferred Asset cannot be transferred or the
full benefits and liabilities of use of any such Transferred Asset cannot be
provided to Buyer following the Closing pursuant to this Section, Buyer and
Mobil shall enter into such reasonable and lawful arrangements (including
subleasing or subcontracting, if permitted) to provide to Buyer the operational
equivalent of obtaining such authorization, approval, consent or waiver and the
performance by Buyer of the obligations thereunder, provided that (i) any such
arrangement shall terminate no later than one (1) year from the Closing Date or
earlier upon default by Buyer, (ii) any cost, expense, charge or adverse change
in the terms under such arrangement shall be Buyer’s sole responsibility and
(iii) Mobil shall not be required to provide any financial or credit support
therefor beyond the terms previously enjoyed by Mobil.

 

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ARTICLE III

PURCHASE PRICE

 

3.1 Purchase Price. On the terms and subject to the conditions set forth herein,
in full consideration of the sale, transfer, conveyance, assignment and delivery
of the Transferred Assets by Mobil to Buyer, Buyer shall pay to Mobil, in
immediately available funds, an aggregate of U.S. forty-two million dollars
($42,000,000), subject to the adjustments and prorations as required herein and
as set forth on a statement (the “Closing Statement”), and shall assume all of
the Assumed Liabilities at Closing (the cash payment amount and the value of the
Assumed Liabilities collectively being referred to as the “Purchase Price”).

 

3.2 Deposit.

 

  (a) Except as otherwise expressly set forth herein, in the event that the
Transaction is not consummated for any reason other than: (i) the assertion of
an objection to the Transaction by the United States Justice Department or the
Federal Trade Commission; (ii) an event or circumstance which renders Buyer’s
performance impossible or commercially impracticable provided that the event or
circumstance was not within Buyer’s control and that Buyer exercised diligent
efforts to overcome or satisfy the obstacle created by the event or
circumstances; (iii) the condition of the Pasadena Facility or the Transferred
Assets, or the operating income, costs or capital expenditure requirements
thereof differs as of the Closing Date from the condition of the Pasadena
Facility or the Transferred Assets, or the operating costs, income or capital
expenditure requirement thereof, as the same shall have been previously
disclosed or described to Buyer as of the date hereof and such difference
constitutes a Material Adverse Change, then Buyer shall forfeit the full Deposit
and the Promissory Note shall become immediately due and payable. Buyer’s
failure to obtain financing at less than prime (as quoted in the Wall Street
Journal) plus four percent (4%) or the consent of the Board of Managers of its
general partner shall not fall within the definition contained in (ii) above and
shall not be a basis for the return of Buyer’s Deposit or satisfaction of the
Promissory Note unless the failure to obtain financing is by reason of the
occurrence of the event set forth in clause (iii) above.

 

  (b) Upon full payment of the Purchase Price as set forth in 3.1 above, the
Promissory Note shall be deemed satisfied in whole, shall be marked “Canceled,”
and shall be returned by Mobil to Buyer.

 

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3.3 Security. In recognition of the potentially non-assignable nature of

 

  (i) Mobil’s potential liability for non-compliance by Buyer with applicable
Environmental Laws from and after the Closing Date and

 

  (ii) Mobil’s liability under that certain guarantee from Mobil to Air Products
Manufacturing Corporation,

Buyer agrees to execute and deliver to Mobil at Closing the Agreement Regarding
Security.

 

3.4 Post-Closing Adjustment.

 

  (a) Within ninety (90) days following the date of Closing, Mobil shall, at its
expense, prepare, or cause to be prepared, and deliver to Buyer a post closing
statement (the “Post Closing Statement”) which shall set forth the basis for any
final adjustments and prorations as of the Closing Date, including but not
limited to (to the extent not determined at Closing) real estate taxes, utility
charges, and prepaid expenses relating to the Transferred Assets. Buyer shall
have the right to review the Post Closing Statement and, if Buyer questions such
Post Closing Statement in writing within ten (10) Business Days after Buyer’s
receipt thereof, the Post Closing Statement will not be considered final until
Mobil and Buyer agree upon all issues raised by Buyer. The Parties shall
negotiate a mutually-agreeable resolution within ten (10) Business Days
following Mobil’s receipt of Buyer’s inquiry. Should the Parties fail to reach
agreement on any item in the Post Closing Statement within such ten (10) day
period, the resolution of such item shall be referred to Ernst & Young LLP or
another nationally recognized firm of independent certified public accountants
mutually acceptable to Buyer and Seller, whose determination shall be binding on
the Parties. The costs of such accounting firm shall be borne equally by the
Parties. All amounts shown on the Post Closing Statement that are not in dispute
shall be paid within ten (10) days of receipt of such statement. To the extent
that the Post Closing Statement, as finally agreed upon, reflects any payment or
credit due to either Party, such amount shall be paid within seven (7) days of
receipt of invoice by Mobil or Buyer, as the case may be.

 

  (b) Buyer shall provide Mobil and its accountants full access to the Books and
Records, any other information, including work papers of its accountants, and to
any of Buyer’s employees to the extent necessary for Mobil to prepare the Post
Closing Statement.

 

3.5 Title Fees, Transfer Taxes and Recording Fees. All sales taxes, transfer
taxes and recording fees, if any, imposed upon the transfer of the Transferred
Assets hereunder, use taxes, title insurance premiums, title search
expenditures, survey costs and reports, documentary stamp taxes and costs of
filing any instruments (collectively, the “Transfer Costs”) shall be the
responsibility of, and shall be paid by, Buyer.

 

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ARTICLE IV

CLOSING

 

4.1 Location and Date.

 

  (a) The Closing shall take place at the offices of Seward & Kissel, New York,
New York at 10:00 A.M., local time, on the earlier to occur of September 10,
1998 and the second Business Day following the satisfaction or waiver (by the
Party entitled to waive the condition) of all conditions to the Closing set
forth in Article XI, or at such other time and place as the Parties hereto may
mutually agree. The date on which the Closing occurs is called the “Closing
Date”.

 

  (b) Notwithstanding the provisions of Section 4.1(a), Buyer shall have the
right, at any time or from time to time, by notice to Mobil in writing before
the scheduled date of Closing, to reschedule the date of Closing to a
mutually-agreed date not later than September 15, 1998. In addition, should
Buyer determine that it cannot complete the Closing by September 15, 1998 due to
circumstances beyond Buyer’s control (Buyer having exercised diligent efforts to
overcome or satisfy such circumstances but which circumstances shall not include
Buyer’s efforts or inability to obtain financing for the Transactions unless the
failure to obtain financing is by reason of the occurrence of an event set forth
in clause (iii) of Section 3.2(a) above), Buyer shall so notify Mobil in writing
(giving reasonable details) before such date, the Closing shall be rescheduled
to a mutually-agreeable date on or before September 30, 1998, and the Parties
shall use best efforts to overcome or satisfy such circumstances as
expeditiously as possible (but Mobil shall be under no obligation to incur any
cash expense or liability to overcome such circumstances).

 

  (c) Should the rescheduled Closing not occur by September 30, 1998 for any
reason whatsoever, then Mobil shall have the exclusive right to terminate this
Agreement by giving written notice thereof to Buyer, upon which termination
Mobil shall deem satisfied the Promissory Note, shall mark the same “Canceled,”
and shall return such Promissory Note to Buyer.

 

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4.2 Deliveries by Buyer. At Closing, Buyer shall deliver to Mobil the following:

 

  (a) an amount equal to (i) forty-two million dollars ($42,000,000), plus or
minus (ii) any adjustments or prorations determined as of the Closing Date in
immediately available funds by wire transfer to an account designated by Mobil
not less than two (2) Business Days prior to the Closing;

 

  (b) the Agreement Regarding Security;

 

  (c) such instruments of assumption and other instruments or documents, in form
and substance reasonably acceptable to Mobil, as may be necessary to effect
Buyer’s assumption of the Assumed Liabilities;

 

  (d) the certificates to be delivered pursuant to Section 11.3(a) and 11.3(b);

 

  (e) an opinion letter from Buyer’s counsel, bearing the Closing Date, in form
and substance similar to Schedule 4.2(e);

 

  (f) a certified copy of the Resolutions of the Board of Managers of Buyer’s
general partner authorizing the execution, delivery, and performance of the
Documents and all obligations undertaken therein and under any other instruments
to be delivered therewith;

 

  (g) and the Tolling Agreement Release, together with all documents,
instruments and other agreements as shall be required to be delivered
thereunder; and

 

  (h) such other instruments and documents, in form and substance reasonably
acceptable to Mobil, as may be necessary or appropriate to more effectively
consummate the Transactions.

 

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4.3 Deliveries by Mobil. At the Closing, Mobil shall deliver to Buyer the
following:

 

  (a) deed, in special warranty form, transferring all Real Property to Buyer,
free and clear of all Encumbrances except for the Permitted Encumbrances, and
transferring all of Mobil’s right, title and interest in the Other Real Property
Interests to Buyer without warranty of title, express or implied;

 

  (b) deed, in quitclaim form, transferring all of Mobil’s right, title and
interest in the Roadway to Buyer without warranty of title, express or implied;

 

  (c) an assignment, assigning all of Mobil’s right, title and interest in and
to the Assigned Easements to Buyer without warranty of title, express or
implied;

 

  (d) bills of sale, assignments, consents to assignment, novations,
endorsements or such other instruments of conveyance and transfer as are
necessary to convey to Buyer all other Transferred Assets, free and clear of any
and all Encumbrances;

 

  (e) the certificates and other documents to be delivered pursuant to
Section 11.2;

 

  (f) an opinion letter from Mobil’s counsel, bearing the Closing Date, in form
and substance similar to Schedule 4.3(f);

 

  (g) a certified copy of the Resolutions of its Board of Directors authorizing
the execution, delivery, and performance of the Documents and all obligations
undertaken therein and under any other instruments to be delivered therewith;

 

  (h) such other instruments or documents (including a certificate of
Non-Foreign Status in accordance with Section 1445 of the Code), in form and
substance reasonably acceptable to Buyer, as may be necessary or appropriate to
more effectively consummate the Transactions;

 

  (i) any title or other affidavit or certificate with respect to the Real
Property or the Other Real Property Interests reasonably required by Buyer’s
title insurer and agreed upon by Mobil (including, without limitation, an
affidavit to induce the title insurer to omit the tenancy, and other printed
exceptions to the extent agreed upon by Mobil from Buyer’s title commitment and
a gap affidavit and indemnity to the extent agreed upon by Mobil);

 

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  (j) any local transfer tax returns, certificates and/or affidavits required by
law to be executed by a seller of real property in the jurisdiction in which the
Real Property is located;

 

  (k) possession of all Real Property, free and clear of all occupants and
tenants, except as otherwise provided herein;

 

  (l) the Tolling Agreement Release, together with all documents, instruments
and other agreements as shall be required to be delivered thereunder; and

 

  (m) the duly authorized assignments or novations of all Governmental
Authorizations, and other agreements for facilitating the transfer of the
Transferred Assets to Buyer except as otherwise provided in this Agreement.

 

4.4 Further Assurances. Buyer and Mobil agree that each will, at any time and
from time to time after the Closing Date upon the request of the other, do,
execute, acknowledge, and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney, receipts, acknowledgments,
acceptances and assurances as may be reasonably required to procure for the
party so requesting and its successors and assigns, or for aiding and assisting
in collecting and reducing to possession, any and all of the Transferred Assets.

 

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ARTICLE V

GYPSUM STACK CLOSURE

 

5.1 Mobil’s Liability.

 

  (a) Mobil assumes all liability for the Closure of the Existing Gypsum Stacks
and agrees to pay for all those costs arising out of or which are related to the
Closure of the Existing Gypsum Stacks at the Pasadena Facility, based upon the
assumption that the Pasadena Facility will continue to be operated in accordance
with those standards and practices upon which it is being operated on the
Closing Date and provided such costs are necessary to meet the requirements of
those Laws, regulations and permits applicable at Closure, as determined by
Ardaman & Associates, Inc. or such other mutually acceptable independent third
party expert in gypsum stack closures selected and retained by the Parties.
Mobil’s liability for the Closure of the Existing Gypsum Stacks shall survive
the Closing of the Transactions and shall not be subject to the provisions of
Article XIV hereof, including, without limitation, the minimum and maximum
dollar limitations set forth therein. Notwithstanding the foregoing, Mobil shall
have no liability for costs which are the result of the modification of the
operation of the Pasadena Facility or the reconfiguration of the Existing Gypsum
Stacks by Buyer after the Closing Date. Mobil assumes the risk of any additional
costs of Closure arising from changes in regulatory or legal requirements
relating to Closure of the Existing Gypsum Stacks which may arise after the
Closing Date.

 

  (b) The Parties agree that the use of imported phosphate rock from Togo,
Morocco or Kola (the “Approved Imported Rock”) in place of or in addition to
phosphate rock from Florida shall not constitute a modification of the operation
of the Pasadena Facility or the Existing Gypsum Stacks; provided, however, that
if Buyer uses any imported phosphate rock other than the Approved Imported Rock
in place of or in addition to phosphate rock from Florida any material
additional costs related to the Closure of the Existing Gypsum Stacks resulting
directly or indirectly from the use of such imported rock shall be borne solely
by Buyer).

 

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  (c) Notwithstanding anything herein to the contrary, including, without
limitation, the provisions of Sections 10.4, 14.1, 14.3 and 14.4, Mobil’s
liability under this Section 5.1 is not limited by the timing of the Closure and
shall survive the Closing of the Transactions indefinitely until such time as
Closure shall have occurred; however, Buyer shall notify Mobil in writing not
less than twelve (12) months prior to Buyer’s intention to cease operations at
the Pasadena Facility. The Parties agree that, to the extent Buyer shall not
have ceased operations at the Pasadena Facility, Mobil may not initiate or
prosecute Closure without Buyer’s consent unless such Closure shall be required
by applicable Law.

 

  (d) If Mobil must under applicable Law close gypsum stack 4 earlier than the
other Existing Gypsum Stacks, Buyer will, upon Mobil’s request and at Mobil’s
expense, make every reasonable effort to incorporate the water from stack 4 into
the existing water balance. In the event the water from stack 4 cannot be
incorporated into the existing water balance and must be treated separately,
such separate treatment will be the sole responsibility of Mobil.

 

  (e) If Buyer develops a new gypsum stack, Mobil will have no responsibility
for Closure of such new stack. If the treatment of process water involves
treating water from both the Existing Gypsum Stacks and any such new stack,
Buyer will share the cost of treating all the water based on the relative
physical volumes of the stacks involved or such other method as the parties may
mutually agree.

 

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5.2 Buyer’s Compliance.

 

  (a) In consideration of Mobil retaining liability for Closure of the Existing
Gypsum Stacks, Buyer agrees to maintain the condition of the Existing Gypsum
Stacks, including the process water within and on top of the Existing Gypsum
Stacks, to Mobil standards as the same are set forth on Schedule 5.2(a) attached
hereto (the “Mobil Standards”) and to allow Mobil and its agents reasonable
access to the Pasadena Facility in accordance with the Agreement Regarding
Security.

 

  (b) Buyer may not modify the footprint or the operation of the Existing Gypsum
Stacks unless such modification may be made in compliance with the requirements
of applicable Law and permits and the Mobil Standards and provided Mobil gives
its prior written consent and continues to have such rights of audit and
inspection as described herein. Buyer shall be responsible for any additional
costs of Closure resulting from any modifications to the footprint or operation
of the Existing Gypsum Stacks, whether or not the modifications are in
compliance with this Section.

 

  (c) Buyer agrees to cooperate fully with Mobil in providing an appropriate
site within the Real Property for a new water treatment plant, which will be
constructed at Mobil’s cost. Mobil is responsible for identifying a site for the
sludge resulting from water treatment, and Buyer agrees to assist Mobil in this
regard but will not be under an obligation to provide a site.

 

  (d) Buyer may dispose on, in, or under Existing Gypsum Stack 1 that material
generated from normal maintenance and operation activities of the Pasadena
Facility, as described in the Texas Natural Resource Conservation Commission
Notice of Registration Industrial and Hazardous Waste, dated May 30, 1998 and
set forth in Schedule 1.48. Buyer is prohibited from disposing on, in or under
any of the Existing Gypsum Stacks any material generated from remediation or
demolition activities. Only phosphogypsum byproduct and wastewaters generated
from the phosphoric acid manufacturing process may be deposited on Existing
Gypsum Stacks 2, 3 and 4. Buyer shall be responsible for any additional costs of
Closure that may result from its failure to comply with this Section 5.2.

 

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  (e) Buyer agrees to allow Mobil to continue to store Mobil generated naturally
occurring radioactive material which was generated by Mobil at the Pasadena
Facility on or before the Closing Date (“Mobil’s NORM”) in the staging area
located on Existing Gypsum Stack 1. Buyer agrees to maintain the proper storage
of Mobil’s NORM at the staging area and Mobil assumes all liability for proper
disposal of Mobil’s NORM. Buyer generated naturally occurring radioactive
material (“Buyer’s NORM”) may also be stored in a staging area on Existing
Gypsum Stack 1 but must be removed prior to commencement of the Closure of
Existing Gypsum Stack 1. Buyer assumes all liability for proper storage and
subsequent disposal of Buyer’s NORM. Buyer must not commingle Buyer’s NORM with
Mobil’s NORM. To the extent that commingling does occur to make Mobil’s NORM and
Buyer’s NORM indistinguishable (“Combined NORM”), Buyer assumes all liability
for the proper storage and subsequent disposal of the Combined NORM and will
indemnify and defend Mobil for any Claims that may arise in connection with the
Combined NORM.

 

5.3 Dispute Resolution. In the event of a dispute between Mobil and Buyer
arising out of the subject matter of this Article V, each Party shall have the
right to submit the matter to arbitration by providing written notice (the
“Notice”) to the other Party advising of its intent to institute arbitration
proceedings. Within ten (10) days of such Notice, the parties shall each choose
one arbitrator, and within five (5) days thereafter, the two arbitrators so
chosen shall appoint a third arbitrator. All arbitrators selected and appointed
under this Section 5.3 shall be environmental professionals knowledgeable of the
chemical fertilizer industry and gypsum stack issues. Unless otherwise mutually
agreed by the Parties, no arbitrator selected and appointed hereunder shall have
previously been in the employ of Mobil or Buyer or any Affiliate of either
Party. The panel of arbitrators shall decide the issues submitted to them within
forty-five (45) days of the Notice. The decision of any two (2) arbitrators
shall be conclusive. Each Party shall be solely responsible for the expense of
the arbitrator selected by such Party, and the expense of the third arbitrator
and all other deposits and costs incurred in conducting the arbitration (other
than fees of counsel or other advisors) shall be borne equally by the Parties.
Each Party shall be solely responsible for its own attorneys’ fees, or other
fees for professional services rendered to such Party in connection with such
arbitration.

 

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ARTICLE VI

LIABILITIES

 

6.1 Assumption of Liabilities. On the terms and subject to the conditions set
forth herein, at the Closing, Buyer agrees to assume and discharge or perform
when due, all debts, liabilities or obligations whatsoever that arise out of or
are related to the following (the “Assumed Liabilities”) and no others:

 

  (a) the Contracts;

 

  (b) the Transfer Costs;

 

  (c) except as provided in Section 6.2(b), (c), (d) and (e), all Environmental
Conditions, Environmental Claims and associated liabilities arising under any
Environmental Laws;

 

  (d) except as provided in Section 6.2(b) and (e), all liabilities arising out
of or related to any actions, suits, proceedings, disputes, Claims or
investigations arising out of or related to the Pasadena Facility or the
Transferred Assets, at law, in equity or otherwise to the extent such
liabilities arise after the Closing Date, including, without limitation, any
such liabilities relating to the Ammonia Tank and future or Existing Gypsum
Stacks;

 

  (e) all product liability claims with respect to any Product processed or
manufactured at the Pasadena Facility after the Closing Date;

 

  (f) any liabilities and obligations relating to the employment or termination
of employment of Buyer Employees with respect to periods commencing after the
Closing Date;

 

  (g) performance of all operations and obligations in accordance with the
Governmental Authorizations after the Closing Date; and

 

  (h) any consents, approvals, waivers or authorizations, including Governmental
Authorizations, necessary, proper or required to operate the Pasadena Facility
and Transferred Assets after the Closing Date in substantially the same manner
as operated prior to the Closing Date.

 

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6.2 Excluded Liabilities. Except for the Assumed Liabilities, Buyer shall not
assume or become liable for any obligations, liabilities or indebtedness of
Mobil, its assets or the Pasadena Facility whatsoever (the “Excluded
Liabilities”), including, without limitation, the following:

 

  (a) all liabilities arising out of or relating to the Non-Division Assets;

 

  (b) all Existing Gypsum Stack Closure costs which are the obligation of Mobil
pursuant to Article V;

 

  (c) all Environmental Conditions and Response Costs which are the obligation
of Mobil pursuant to Section 10.4 (the “Excluded Environmental Liabilities”);

 

  (d) the Wetlands Liabilities;

 

  (e) all liabilities arising out of actions, suits, proceedings, disputes or
Claims identified in Schedule 7.6(a) or which arose out of actions or omissions
by Mobil or its agents occurring on or prior to the Closing Date;

 

  (f) all liabilities to Employees with respect to periods ending on the Closing
Date and for Claims which arose out of actions or omissions occurring on or
prior to the Closing Date (including, without limitation, any Claims related to
the individuals identified in Schedule 7.6(a), regardless of whether such
individuals are Buyer’s Employees), and all liabilities with respect to Former
Employees and Inactive Employees;

 

  (g) all liabilities under the Mobil Benefit Plans and the Mobil Benefit
Arrangements and any other employee benefit plan (as defined in Section 3(3) of
ERISA) which is or has been established or maintained, or to which contributions
are or have been made by Mobil or a Mobil Affiliate;

 

  (h) all liabilities for Taxes imposed with respect to the taxable periods, or
portions thereof, ending on or before the Closing Date;

 

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  (i) all liabilities for commercial Claims and accounts payable of Mobil or its
Affiliates for pre-Closing activities at the Pasadena Facility, including,
without limitation, all liabilities arising out of the provision of the work and
materials identified on Schedule 7.14(c) as being for Mobil’s account and
expense;

 

  (j) all liabilities arising out of a breach by Buyer of the terms and
conditions of any Mobil Confidentiality Agreement from and after the Closing
Date where the terms and conditions of such Mobil Confidentiality Agreement were
not disclosed by Mobil to Buyer on or before the Closing Date;

 

  (k) all liabilities arising out of the Bonds and/or the Prior Bonds; and

 

  (l) all debts, liabilities or obligations whatsoever, that do not arise out of
or are not related to the operations of the Pasadena Facility or that do not
otherwise arise out of or are not otherwise related to the Transferred Assets.

 

6.3 Handling of Claims Related to Excluded Liabilities. With respect to all
Excluded Liabilities (including, without limitation, the Crye Litigation), Buyer
shall cooperate fully with Mobil and use its best efforts to provide Mobil as
promptly as possible with notices and other information received by Buyer as
well as all relevant materials, information and data requested by Mobil and
shall grant Mobil, without charge, reasonable access to Buyer Employees and data
of the Pasadena Facility and to the Real Property, including the right to
conduct environmental or other tests thereon and to take samples therefrom.
Notwithstanding anything to the contrary contained in Section 14.4, Mobil shall
have the exclusive obligation to manage and control the handling of, to assume
the defense of, and to settle or otherwise compromise claims relating to
Excluded Liabilities, subject, in the case of Excluded Environmental
Liabilities, Wetlands Liabilities and the Crye Litigation, to the consent of
Buyer (which consent shall not unreasonably be withheld or delayed) to the
extent the resolution of any such claim would have a Material Adverse Effect.

 

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ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF MOBIL

Mobil represents and warrants to Buyer, such representations and warranties to
be true and correct on the date hereof and on the Closing Date, that:

 

7.1 Organization and Qualification. Mobil is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has the requisite corporate power and authority to own and operate the
Transferred Assets as currently operated, and to sell or otherwise convey,
directly or indirectly, the Transferred Assets to Buyer. Mobil is in good
standing as a foreign corporation qualified to do business in the state of
Texas.

 

7.2 Corporate Authorization. Mobil has full corporate power and authority to
execute and deliver the Documents and to perform its obligations thereunder. The
execution, delivery and performance by Mobil of the Documents and the
consummation of the transactions contemplated therein have been duly and validly
authorized and no additional corporate authorization or consent is required in
connection with the execution, delivery and performance by Mobil of the
Documents.

 

7.3 Consents and Approvals. No consent, approval, waiver or authorization is
required to be obtained by Mobil from, and no notice or filing is required to be
given by Mobil to, any federal, state, or local governmental authority or other
Person in connection with the execution, delivery and performance by Mobil of
the Documents except: (i) as specifically set forth in Schedule 7.3; (ii) as
required by the HSR Act; or (iii) where the failure to obtain any consent,
approval, waiver or authorization or to give notice or make a filing would not,
individually or in the aggregate, have a Material Adverse Effect or materially
impair or delay the ability of Mobil to effect the Closing.

 

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7.4 Non-Contravention. The execution, delivery and performance by Mobil of the
Documents, and the consummation of the transactions contemplated thereby, does
not and will not (i) violate any provision of the charter, bylaws or other
organizational documents of Mobil, (ii) conflict with, or result in the breach
of, or constitute a default under, or result in the termination, cancellation or
acceleration of, or in the right of any other Person to terminate, cancel or
accelerate (whether after the filing of notice or the lapse of time or both),
any right or obligation of Mobil under or to a loss of any benefit to which
Mobil is entitled under any Contract or result in the creation of any
Encumbrance upon any of the Transferred Assets; (iii) violate, or result in a
breach of or constitute a default under any law, rule, regulation, judgment,
injunction, order, decree or other restriction of any court or governmental
authority to which Mobil is subject, including any Governmental Authorization,
other than, in the cases of clauses (ii) and (iii), any conflict, breach,
termination, default, cancellation, acceleration, loss, violation or Encumbrance
which, individually or in the aggregate, would not have a Material Adverse
Effect or materially impair or delay the ability of Mobil to perform its
obligations hereunder or the ability of Buyer to operate the Pasadena Facility
and the Transferred Assets in the manner in which such Pasadena Facility and
Transferred Assets have heretofore been operated, or (iv) violate any Contract,
agreement, instrument, lease or license which is included in the Transferred
Assets.

 

7.5 Binding Effect. This Agreement and all other Documents executed herewith
constitute valid and legally binding obligations of Mobil, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.

 

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7.6 Litigation and Claims.

 

  (a) Except as set forth in Schedule 7.6(a), there is no civil, criminal or
administrative action, suit, demand, Claim, hearing, proceeding or investigation
pending or, to the Knowledge of Mobil, has been threatened in writing, which
involves the Pasadena Facility or any of the Transferred Assets or any Employee,
Former Employee, Inactive Employee, or contract “employee” at the Pasadena
Facility.

 

  (b) Except as set forth in Schedule 7.6(b), none of the Transferred Assets is
subject to any order, writ, judgment, award, injunction, or decree of any court
or governmental or regulatory authority of competent jurisdiction or any
arbitrator or arbitrators.

 

7.7 Taxes.

 

  (a) None of the Transferred Assets is tax-exempt use property within the
meaning of Section 168(h) of the Internal Revenue Code. None of the Transferred
Assets is property that is or will be required to be treated as being owned by
another person pursuant to the provisions of Section 168(f)(8) of the Internal
Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986.

 

  (b) Mobil is not a foreign person within the meaning of, and no tax is
required to be withheld as a result of, the transfer contemplated by this
Agreement pursuant to, Section 1445 of the Internal Revenue Code.

 

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  (c) Mobil has timely filed all tax returns, estimates and reports (federal,
state and local) with respect to the Pasadena Facility and the Transferred
Assets required to be filed by it under the Laws of all applicable
jurisdictions, including, without limitation, income taxes, franchise taxes,
gross receipts taxes, sales taxes, use taxes, wage taxes, excise taxes, real and
personal property taxes and taxes imposed on or measured by capital (“Taxes”),
and all Taxes shown to be due and payable by such returns, estimates or reports
have been paid. There is no action, suit, proceeding, investigation, audit or
claim now pending against or with respect to the Pasadena Facility or any
Transferred Assets in respect of any Tax or assessment, nor is there any matter
under discussion with any taxing authority relating to any Tax or assessment or
any claim for additional Tax or assessment asserted by any such authority with
respect to the Pasadena Facility or any Transferred Asset.

 

7.8 Employee Benefit Plans/Arrangements.

 

  (a) Schedule 7.8(a) lists each employee benefit plan as defined in
Section 3(3) of ERISA maintained by or to which Mobil contributes on behalf of
any Employee, Inactive Employee or Former Employee (including any dependent or
beneficiary thereof) or with respect to which Mobil may have any liability or
obligation to an Employee, Inactive Employee or Former Employee (or any
dependent or beneficiary thereof), including, without limitation: pension,
savings plans, life, medical, dental or disability plans; and severance pay and
sick leave (collectively, the “Mobil Benefit Plans”). None of the Mobil Benefit
Plans constitute a “multi-employer plan” (as defined in Section 4001(a)(3) of
ERISA). True and complete copies, summaries or other written descriptions of all
Mobil Benefit Plans have been provided to Buyer.

 

  (b) Schedule 7.8(b) lists all other compensation and benefit plans, programs
and arrangements, whether or not in writing, maintained by or to which Mobil
contributes on behalf of any Employee, Inactive Employee or Former Employee
(including any dependent or beneficiary thereof) or with respect to which Mobil
may have any liability or obligation to an Employee, Inactive Employee or Former
Employee (or any dependent or beneficiary thereof) (collectively, the “Mobil
Benefit Arrangements”). True and complete copies, summaries or other written
descriptions of all Mobil Benefit Arrangements have been provided to Buyer.

 

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7.9 Compliance with Laws. Except as set forth in Schedule 7.9, to the best of
Mobil’s Knowledge, the Pasadena Facility is being conducted in compliance with
all Laws, except where the failure to so comply, individually or in the
aggregate, would not have a Material Adverse Effect. The Pasadena Facility has
all Governmental Authorizations necessary for the conduct of the Pasadena
Facility as currently conducted.

 

7.10 Labor Matters.

 

  (a) Except as disclosed on Schedule 7.10(a):

 

  (i) the Oil, Chemical and Atomic Workers International Union (“OCAW”) Local
No. 4-367 and the International Brotherhood of Electrical Workers (“IBEW”) Local
No. 716 are the only labor unions or labor association representing the
Employees. Mobil has furnished Buyer with copies of the union contracts between
Mobil and each of OCAW and IBEW each effective June 6, 1996 (and any amendments
or supplements thereto) (the term “Union Contracts” shall include the foregoing
contracts and any amendment or supplement thereto) which are the only collective
bargaining agreements between Mobil and any union, currently in effect, which
covers any of the Employees;

 

  (ii) there are no strikes, work stoppages, slowdowns, lockouts, union
organizing campaigns, unfair labor practice charges, arbitrations or grievances
pending or, to Mobil’s Knowledge, threatened against or involving the Pasadena
Facility;

 

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  (iii) there are no complaints, charges or claims against Mobil or, to Mobil’s
Knowledge, threatened to be brought or filed with any governmental authority,
arbitrator or court based on or arising out of the employment by Mobil of any
Employee; and

 

  (iv) Mobil is in compliance with all laws and orders relating to employment
and employment practices, including all such laws and orders relating to wages,
hours, collective bargaining, discrimination, civil rights, safety and health,
workers’ compensation and the collection and payment of withholding and/or
Social Security Taxes and similar Taxes except for non-compliance which,
individually or in the aggregate, would not have a Material Adverse Effect.

 

  (b) Schedule 7.10(b) sets forth a correct and complete list as of September 3,
1998, of all Persons who would have been Employees or Inactive Employees had the
Closing occurred on such date, indicating each such Person who would have been
an “Inactive Employee,” along with the respective position, salary rate and date
of hire of each Person listed thereon and the reason for inactive status, the
date such absence began and expected return-to-work date for each Inactive
Employee.

 

7.11 Contracts. Other than confidentiality agreements entered into in the usual
course of business (the “Mobil Confidentiality Agreements”), to the best of
Mobil’s Knowledge, Schedule 7.11 sets forth a list, as of the date hereof, of
each written Contract. Except as set forth in Schedule 7.11, each Contract is a
valid and binding agreement and, to Mobil’s Knowledge, is in full force and
effect. Except as otherwise provided in Schedule 7.11, Mobil has no Knowledge of
any material default under any Contract listed on Schedule 7.11 which default
has not been cured or waived.

 

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7.12 Title. (a) Mobil has good and marketable title to all of the Transferred
Assets (excluding the Real Property and the Other Real Property Interests), free
and clear of all Encumbrances.

 

  (b) Mobil has good and marketable title to the Real Property, free and clear
of all Encumbrances except for the following (collectively, the “Permitted
Encumbrances”):

 

  (i) those matters set forth in Schedule 7.12 and any other covenants,
conditions, restrictions, easements, provisions, exceptions and reservations
contained in instruments of record;

 

  (ii) liens for Taxes, assessments and other governmental charges not yet due
and payable or due but not delinquent;

 

  (iii) any conditions that would be shown by a current survey, provided that
same (including the location of any easements or rights of way described in
Schedule 7.12) do not (A) render title to the Real Property unmarketable or
uninsurable, (B) show any encroachments of improvements over easement or
right-of-way areas or over the boundary of the Real Property which individually
or in the aggregate would have a Material Adverse Effect, or (C) have a Material
Adverse Effect; and

 

  (iv) any zoning, building, other restrictions imposed by an operating permit,
or other agreement with regulatory agencies, Governmental Authorizations and
other similar restrictions, which individually or in the aggregate would not
have a Material Adverse Effect.

 

7.13 Brokers’ and Finders’ Fees. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Mobil who might be entitled to any fee or commission from Mobil in
connection with the transactions contemplated by this Agreement.

 

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7.14 Real Property Representations.

 

  (a) Leases. There are no leases relating to, or licensees, tenancies or
occupants (other than Mobil) of, any portion of the Real Property.

 

  (b) Taxes. There are no proceedings pending seeking reductions in real estate
taxes imposed upon any of the Real Property or its assessed valuation. To the
best of Mobil’s Knowledge, there is no actual or pending imposition of any
assessments for public betterments and no improvements have been constructed or
planned which would be paid for by means of assessments upon any of the Real
Property.

 

  (c) Work on Property. Except as stated on Schedule 7.14(c), to the best of
Mobil’s Knowledge no work has been completed or is in process and no materials
have been ordered, delivered or supplied to the Real Property that have given
rise or may give rise to mechanics’, materialmen’s, or other liens against the
Real Property.

 

  (d) Other Interests in the Real Property. To the best of Mobil’s Knowledge, no
Person except Mobil has or has asserted any rights in, or to acquire, the Real
Property or any part thereof.

 

  (e) Condemnation. There has been no actual or, to the best of Mobil’s
Knowledge, any threatened condemnation or taking by eminent domain of any of the
Real Property. Mobil will give Buyer prompt notice of any actual or, if known to
Mobil, any threatened condemnation of any of the Real Property.

 

  (f) Access. The Real Property has direct access to one or more public roads
and access to telephone, electric, water and gas utility lines.

 

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  (g) Zoning. To the best of Mobil’s Knowledge, all Real Property listed on
Schedule 1.92 hereof is available for use in the conduct of the business and
operations of the Pasadena Facility and complies in all material respects with
all applicable deed restrictions or other applicable restrictions, building or
zoning codes and the regulations of any governmental authority having
jurisdiction over such Real Property. To the best of Mobil’s Knowledge, there
are no zoning, building, other restrictions imposed by an operating permit or
any other agreement with regulatory agencies or other similar restrictions which
individually or in the aggregate would have a Material Adverse Effect. Except as
set forth on Schedule 7.14(g), the Real Property and the Other Real Property
Interests include all such real property as is necessary to conduct the business
and operations of the Pasadena Facility as presently conducted and there is no
real property other than the Real Property and the Other Real Property Interests
which is owned or leased by Mobil and used in connection with the ownership and
operation of the Pasadena Facility. To the best of Mobil’s knowledge, no
improvements located on the Real Property encroach on any adjoining premises.

 

  (h) Environmental. Except as set forth in Schedule 10.4(b):

 

  (i) To Mobil’s Knowledge, all Transferred Assets (including underlying
groundwater) owned or leased by Mobil have been and continue to be owned or
leased by Mobil in compliance with all Environmental Laws.

 

  (ii) To the best of Mobil’s Knowledge, other than the matters giving rise to
the Consent Decree, there have been no past and there are no pending (1) Claims
received by Mobil with respect to any alleged violation of any Environmental
Law, or (2) complaints, notices, or requests for information to Mobil regarding
potential liability under any Environmental Law.

 

  (iii) To the best of Mobil’s Knowledge, there are no Environmental Conditions
at, on, or under any Real Property now owned by Mobil nor have there been any
Environmental Conditions at, on or under any property previously owned,
currently leased, or previously leased by Mobil in connection with the ownership
and operation of the Pasadena Facility that, singly or in the aggregate, have or
may reasonably be expected to have a Material Adverse Effect.

 

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  (iv) To the best of Mobil’s Knowledge, Mobil has been issued, and is in
compliance with, all permits, certificates, approvals, licenses, and other
authorizations relating to environmental matters and necessary for its ownership
and operation of the Pasadena Facility and the Transferred Assets, if any.

 

  (v) No property now or previously owned or leased by Mobil in connection with
the ownership and operation of the Pasadena Facility is listed or, to the best
of Mobil’s Knowledge, is proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS, or on any other similar state list of sites
requiring investigation or cleanup.

 

  (vi) To the best of Mobil’s Knowledge, there are no underground storage tanks,
active or abandoned, including petroleum storage tanks, on or under any Real
Property now or previously owned by Mobil.

 

  (vii) To the best of Mobil’s Knowledge, in connection with its ownership and
operation of the Pasadena Facility and the Transferred Assets, Mobil has not
transported or arranged for the transportation of any Hazardous Substances to
any location that is listed or proposed for listing on the national Priorities
List pursuant to CERCLA, on the CERCLIS, or on any other similar state list, or
which is the subject of federal, state, or local enforcement actions or other
investigations that may lead to material claims against Mobil for any remedial
work, damage to natural claims against Mobil for any remedial work, damage to
natural resources, or personal injury, including claims under CERCLA.

 

  (viii) There are no Environmental Liens recorded against any of the
Transferred Assets. As used here, “Environmental Lien” means a lien in favor of
any government or costs incurred by such government entity in response to the
release or threatened release of any substance into the environment.

 

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  (i) Certain Easements. To the best of Mobil’s Knowledge, the instruments
described on Schedule 7.14(i) do not have a Material Adverse Effect.

 

  (j) Easements Not Located. To the best of Mobil’s Knowledge, Mobil has
delivered to Buyer true and complete copies of each of the instruments described
on Schedule 7.14(j), and such instruments have not been modified or amended
except as set forth on said Schedule 7.14(j).

 

  (k) No Default of Covenants. To the best of Mobil’s Knowledge, no default
exists nor has any event occurred that, with the giving of notice or the passage
of time, or both, would constitute a default under the covenants contained in
that certain deed dated April 27, 1951 by Beck Cattle & Land Company to
Mathieson Chemical Corporation.

7.15 Governmental Authorizations. Schedule 1.48 hereto sets forth a true and
accurate listing of all Governmental Authorizations, all of which are in full
force and effect as of the Closing Date. Other than the Governmental
Authorizations listed on Schedule 1.48, to the best of Mobil’s Knowledge, there
are no permits, licenses, approvals, variances or authorizations necessary in
order to fully and completely use, operate, maintain and manage the Real
Property in the manner in which such Real Property has been used, operated and
maintained. To the best of Mobil’s Knowledge, Schedule 1.48 indicates which
Governmental Authorizations are assignable and transferable to Buyer. Except as
set forth on Schedule 1.48, to the best of Mobil’s Knowledge no application by
Mobil for a Governmental Authorization has been denied or withdrawn nor is any
application therefor pending.

 

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7.16 Condition of Transferred Assets/Disclaimer of Warranties.

 

  (a) The Transferred Assets shall be operational on the Closing Date and are
being conveyed on an “as is-where is” basis (except with respect to the
environmental condition of the Transferred Assets). There are no oral
agreements, warranties or representations, collateral to or affecting the
Transferred Assets by Mobil, any agent of Mobil or any third party. Mobil is not
liable or bound in any manner by any verbal or written statements,
representations, or information pertaining to the Transferred Assets made by any
broker, agent, employee, servant or other Person, unless the same are
specifically set forth herein.

 

  (b) EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE VII AND IN ARTICLES V, X
AND XII, NEITHER MOBIL NOR ANY OTHER PERSON MAKES ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS, STATUTORY, OR IMPLIED, WITH
RESPECT TO THE TRANSFERRED ASSETS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR
REPRESENTATIONS AS TO MATTERS OF TITLE, ZONING, TAX CONSEQUENCES, PHYSICAL OR
ENVIRONMENTAL CONDITIONS, AVAILABILITY OF ACCESS, INGRESS OR EGRESS, OPERATING
HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL
REGULATIONS OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
TRANSFERRED ASSETS INCLUDING, WITHOUT LIMITATION: (I) THE VALUE, CONDITION,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OF THE REAL PROPERTY, APPURTENANCES, EQUIPMENT AND
STRUCTURES THEREON, (II) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO ANY OF THE PROPERTY, STRUCTURES, APPURTENANCES OR EQUIPMENT,
(III) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE TRANSFERRED
ASSETS, ANY APPURTENANCES THERETO, EQUIPMENT OR STRUCTURES THEREON, AND (IV) THE
PRESENCE OR ABSENCE OF RADIOACTIVE MATERIALS.

 

7.17 No Other Representations or Warranties. Except for the representations and
warranties contained in this Article VII, neither Mobil nor any other Person
makes any other express or implied representation or warranty on behalf of
Mobil.

 

7.18 No Omissions. No representation or warranty of Mobil in this Agreement, any
Schedule or Exhibit attached hereto, or any certificate delivered by Mobil at
Closing pursuant to the terms and conditions of this Agreement, contains or will
contain any untrue statement of a material fact nor do such representations and
warranties taken as a whole omit any matter necessary in order to make any
material statement contained herein or therein not misleading. Mobil will not
voluntarily take any action which would make any of its representations or
warranties herein untrue in any respect on and as of the Closing Date.

 

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Mobil as follows:

 

8.1 Organization and Qualification. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite partnership power and
authority to purchase, own, lease and operate the Transferred Assets.

 

8.2 Authorization. Buyer has full partnership power and authority to execute and
deliver the Documents and to perform its obligations thereunder. The execution,
delivery and performance by Buyer of the Documents have been duly and validly
authorized by all requisite action of Buyer and no additional authorization or
consent is required in connection with the execution, delivery and performance
by Buyer of the Documents.

 

8.3 Consents and Approvals. Except as set forth on Schedule 8.3, no consent,
approval, waiver or authorization is required to be obtained by Buyer from, and
no notice or filing is required to be given by Buyer to, or made by Buyer with,
any federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by Buyer of this
Agreement, other than in all cases where the failure to obtain such consent,
approval, waiver or authorization, or to give or make such notice or filing,
would not, individually or in the aggregate, have a Material Adverse Effect or
materially impair or delay the ability of Buyer to effect the Closing.

 

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8.4 Non-Contravention. The execution, delivery and performance by Buyer of the
Documents and consummation of the Transactions contemplated thereby, does not
and will not (i) violate any provision of the certificate of limited partnership
or limited partnership agreement of Buyer; or (ii) violate or result in a breach
of or constitute a default under any law, rule, regulation, judgment,
injunction, order, decree or other restriction of any court or governmental
authority to which Buyer is subject, including any Governmental Authorization,
other than any conflict, breach, termination, default, cancellation,
acceleration, loss, or violation which, individually or in the aggregate, would
not have a Material Adverse Effect or materially impair or delay the ability of
Buyer to perform its obligations hereunder.

 

8.5 Binding Effect. When executed, the Documents will constitute valid and
legally binding obligations of Buyer, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles.

 

8.6 Brokers’ or Finders’ Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from Buyer in connection
with the Transactions contemplated by this Agreement.

 

8.7 Financial Capability. Buyer will have on the Closing Date sufficient funds:
(i) to effect the Closing and all other Transactions contemplated by this
Agreement, and (ii) to operate the Pasadena Facility in a manner substantially
similar to Mobil’s operation of the Pasadena Facility as of the Closing Date.

 

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8.8 Condition of Transferred Assets/Reliance.

 

  (a) Buyer agrees that, with respect to the Transferred Assets, Buyer has not
relied upon and will not rely upon, either directly or indirectly, any
representation or warranty of Mobil or any agent of Mobil unless the specific
terms of the warranty or representation are set forth in this Agreement. Buyer
acknowledges that the Parties have conducted and documented an inspection of the
Pasadena Facility’s Ammonia Tank for the purpose of assuring full disclosure
regarding the condition of the Ammonia Tank upon conveyance to Buyer. Buyer has
reviewed all documentation provided to it by Mobil regarding the Ammonia Tank
and represents and warrants that Buyer is competent and willing to take all
measures reasonably necessary to maintain the Ammonia Tank in a safe condition.

 

  (b) Buyer acknowledges that the Transferred Assets are being conveyed
hereunder “as is-where is,” (as more specifically represented in
Section 7.16(a)) with any and all faults and that there are no oral agreements,
warranties or representations, collateral to or affecting the Transferred Assets
by Mobil, any agent of Mobil or any third party. Buyer acknowledges that Mobil
is not liable or bound in any manner by any verbal or written statements,
representations, or information pertaining to the assets made by any broker,
agent, employee, servant or other Person, unless the same are specifically set
forth herein in writing.

 

  (c) Except as specifically set forth in this Agreement, Buyer releases Mobil
from any obligation with regard to the condition of any Transferred Asset
subsequent to the Closing Date.

 

  (d) The terms and conditions of this Section 8.8 shall expressly survive the
Closing and not merge into any deed, contract or bill of sale issued in
connection herewith.

 

8.9 No Other Representations or Warranties. Except for the representations and
warranties contained in this Article VIII and in Section 12.1, neither Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer.

 

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ARTICLE IX

EMPLOYMENT MATTERS

 

9.1 Post-Closing Obligations to Certain Employees.

 

  (a) Buyer shall offer employment on an “at-will basis” effective as of the
Closing Date to all Employees immediately prior to the Closing Date (said number
of Employees to be consistent with Mobil’s operating plans); provided, however,
that any Inactive Employee who is absent from active service on the Closing Date
by reason of such Inactive Employee’s entitlement to short-term disability,
long-term disability or workers’ compensation benefits, and who is medically
certified to return to work within six (6) months of the Closing Date, (unless
otherwise provided in the Union Contract), shall be offered for a reasonable
time thereafter employment by Buyer effective upon such Inactive Employee’s
availability to return to active service, provided, however, that Buyer shall
not be required to offer employment to any such Inactive Employee unless Buyer
shall have determined that a business need for such Inactive Employee’s services
exists at the Pasadena Facility. Each offer of employment to an Employee shall
be at the same compensation rate, position and place of employment held by such
Employee immediately prior to the Closing Date and upon such other terms and
conditions of employment as may be determined by Buyer in its sole discretion,
provided, however, that the offer to each Employee shall be on terms and
conditions not materially less favorable to such Employee than the terms and
conditions applicable immediately prior to the Closing Date. From the Closing
Date through the first anniversary thereof, Buyer shall provide Employees who
accept employment with Buyer (“Buyer Employees”) a commensurate employee
benefits program as to which contributions shall be substantially equal in the
aggregate to the amounts contributed by Mobil under the Mobil Benefits Plan
maintained for Employees (including the enhancements to the Mobil Benefits Plan
announced during the fourth quarter of 1997) and which became effective on or
before the Closing Date. Mobil acknowledges that the determination of a
“commensurate employee benefits program” shall take into consideration the costs
associated with Buyer and its Affiliates maintaining an employee benefits
program that is substantially consistent for all of Buyer’s and its Affiliates’
employees.

 

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  (b) Buyer shall grant all Buyer Employees credit for purposes of eligibility
and vesting (but with appropriate offsets so as not to duplicate benefits) under
Buyer’s employee benefit plans (including vacation) for their service with Mobil
prior to the Closing Date, to the same extent such service is taken into account
under the Mobil Benefit Plans as of the Closing Date.

 

  (c) Buyer shall provide a medical plan the benefits of which in the aggregate
are substantially similar to the medical plan in effect as of the Closing Date
so as to ensure immediate coverage of all Buyer Employees, subject to the
provisions of Section 9.1(a). Such medical plan shall, if applicable, grant
credit for amounts paid by Buyer Employees toward deductibles during the
applicable plan year, including the Closing Date, and shall not exclude from
coverage services and supplies related to an illness or injury covered under the
Mobil medical plan solely because such illness or injury would otherwise be
deemed a pre-existing condition under Buyer’s medical plan. Buyer shall
establish and maintain from the Closing Date through the first anniversary of
the Closing Date, a retiree life insurance plan for Buyer Employees
substantially similar to the retiree life insurance plans of Mobil applicable to
Employees and in effect immediately prior to the Closing Date. A true, correct
and complete list of all Employees who are currently eligible for retiree life
insurance benefits if their employment were terminated as of the date hereof,
and their current ages and years of service, is set forth on Schedule 7.10(b).

 

  (d) With respect to Buyer Employees who (i) meet the requirements for retiree
medical coverage under any Mobil Benefits Plan (a “Mobil Retiree Medical Plan”)
on the Closing Date or (ii) would have met such requirements within 12 months of
the Closing Date had their employment with Mobil continued during such 12-month
period and who subsequently meet such requirements (determined by crediting
service with Buyer, and age attained during such service, as service with
Mobil), Mobil agrees to, at its own expense, offer such Buyer Employees coverage
under the applicable Mobil Retiree Medical Plan. Mobil will offer coverage under
the Mobil Retiree Medical Plan to any Buyer Employee who has met such
eligibility requirements at the Closing Date and when employment with Buyer
terminates (whether or not such Buyer Employee was eligible for an offer at the
Closing Date). The eligibility requirements for coverage under a Mobil Retiree
Medical Plan are as follows: (1) a salaried employee must be at least 50 years
old and have at least 10 years of service with Mobil; and (2) an hourly employee
must be at least 55 years old and have at least 20 years of service with Mobil.
Mobil will retain all liabilities for retiree medical coverage for this group of
Buyer Employees.

 

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Schedule 9.1(d) lists all Employees who, as of the date of this Agreement, are
eligible or may become eligible for retiree medical coverage under a Mobil
Retiree Medical Plan in accordance with the preceding paragraph. Prior to the
Closing Date, Mobil will provide individual notification to such Employees of
their right or potential right to elect retiree medical coverage under the
applicable Mobil Retiree Medical Plan as above-described (at the time they
terminate their employment with Mobil, if applicable, and with Buyer). Within
two (2) Business Days after the Closing Date, Mobil will provide Buyer with a
final list of Buyer Employees eligible or potentially eligible for retiree
medical coverage under an applicable Mobil Retiree Medical Plan (subject to the
addition of any Inactive Employees who are later employed by Buyer in accordance
with this Section 9.1).

 

  (e) With respect to Buyer Employees not described in subsection (d) above,
Buyer agrees to provide certain retiree medical coverage to such Buyer Employees
who satisfy the eligibility requirements for coverage under the Mobil Medical
Plan (as described in subsection (d) above) upon termination of employment with
Buyer, except that “service” shall include service with Buyer. Buyer Employees
who are eligible for coverage under a Mobil Retiree Medical Plan shall be
specifically excluded from eligibility for retiree medical coverage with Buyer.
Buyer shall provide such retiree medical coverage as it is able to obtain from
the insurer for its group medical plan for active employees, as such insurer may
be changed from time to time (an “Agrifos Retiree Medical Plan”). The aggregate
cost to Buyer for providing such coverage shall not exceed $566,000, which is
the amount that the Parties agree is the present value of the projected cost for
providing coverage under the Agrifos Retiree Medical Plan. Buyer and Mobil agree
to split this projected cost $198,000 and $368,000, respectively. Mobil agrees
to pay its share of the projected cost by means of a credit to Buyer against
payment of the Purchase Price at Closing. Coverage under the Agrifos Retiree
Medical Plan shall be unfunded and shall be provided on a pay-as-you-go basis.

 

  (f) Buyer shall provide all Buyer Employees with vacation time rather than
cash in lieu of vacation time for all vacation earned, accrued and unpaid
through the Closing Date. Mobil shall pay to Buyer any accrued vacation
settlement as part of the Post Closing Statement.

 

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  (g) Buyer shall establish and maintain from the Closing Date through the first
anniversary of the Closing Date a severance pay plan providing benefits to
salaried Buyer Employees, the terms and benefits of which are substantially
similar to the severance benefits provided by Mobil under the Separation Benefit
Plan of Mobil Corporation in existence as of the Closing Date (a complete and
correct copy of which has been provided to Buyer). Such plan shall recognize
service with Mobil prior to the Closing Date.

 

  (h) Mobil shall retain sponsorship of the Mobil Benefit Plans and Mobil
Benefit Arrangements, and Buyer shall not be entitled to any assets of the Mobil
Benefit Plans or the Mobil Benefit Arrangements. If Buyer maintains or
establishes a defined contribution savings plan, such plan shall, subject to
applicable law, accept rollovers by Buyer Employees.

 

  (i) Except as otherwise specifically provided herein, nothing herein shall
affect Buyer’s right to amend or terminate any employee benefit plan or to
terminate any employee, including any Buyer Employee, at any time and for any
reason.

 

9.2 Compliance with WARN, etc. Mobil with respect to the Employees will timely
give all notices required to be given under WARN or other similar statutes or
regulations of any jurisdiction relating to any plant closing or mass layoff or
as otherwise required by any such statute.

 

9.3 Union Contracts. At Closing, Mobil shall convey and Buyer shall assume all
of Mobil’s rights and obligations under the Union Contracts, and the Parties
shall use reasonable efforts to obtain the release of Mobil from each such Union
Contract by the union which is party thereto.

 

9.4 New Assignments, Hiring. Mobil shall inform Buyer promptly and obtain
Buyer’s approval of the hiring or assignment of any new salaried employees for
the Pasadena Facility after this Agreement becomes effective and prior to the
Closing.

 

9.5 Assurances. Prior to the Closing, Buyer shall keep Mobil advised of Buyer’s
plans, programs and activities to comply with the provisions of this Article IX
upon the Closing Date, and Mobil shall have the right, in its reasonable
discretion, to determine whether such plans and programs adequately satisfy
Buyer’s obligations hereunder.

 

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ARTICLE X

MOBIL AND BUYER COVENANTS AND ENVIRONMENTAL EXAMINATION PERIOD

 

10.1 Access. Prior to the Closing, Mobil shall permit Buyer and its
representatives to have access, during regular business hours and upon
reasonable advance notice, to the Transferred Assets, subject to reasonable
rules and regulations of Mobil, and shall furnish, or cause to be furnished, to
Buyer, any cost and operating data, permits, approvals and other information
that is available with respect to the Pasadena Facility as Buyer shall from time
to time reasonably request. All information coming into the possession or
knowledge of either Buyer or any of Buyer’s agents as a result of such access is
deemed Confidential Information under the terms of the Confidentiality
Agreement.

 

10.2 Conduct of Business. From the date hereof to the Closing, except as
otherwise provided for in this Agreement or as agreed to in writing by the
Parties, Mobil covenants and agrees (i) to conduct the Pasadena Facility in the
ordinary and usual course of business; (ii) to use reasonable efforts to
preserve intact the Pasadena Facility and its relationships with third parties;
(iii) to maintain all necessary Governmental Authorizations in full force and
effect; (iv) to not create any new Mobil Benefit Plans or Mobil Benefit
Arrangements; and (v) not to create or suffer to exist, with respect to the Real
Property, any liens, encumbrances, easements, restrictions, claims, reversions,
options or other agreements (other than the Permitted Encumbrances) which could
reasonably be expected to have a Material Adverse Effect. This Section 10.2
shall not restrict any actions Mobil may take with respect to Non-Division
Assets.

 

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10.3 Best Efforts. Mobil and Buyer will cooperate and use their respective best
efforts to fulfill the conditions precedent to the other Party’s obligations
hereunder, including, but not limited to, securing as promptly as practicable
all consents, approvals, waivers and authorizations required in connection with
the transactions contemplated hereby. Mobil and Buyer shall promptly notify the
other Party of any Claim or liability which is known to Mobil or Buyer but which
may be the responsibility or obligation of the other Party pursuant to the terms
of this Agreement.

 

10.4 Environmental Examination and Responsibilities.

 

  (a) The Parties shall conduct and complete an environmental examination (the
“Environmental Examination”) of the Transferred Assets (which may include soil,
surface and groundwater sampling). The Environmental Examination may commence at
any time but shall end on or before the Closing (the “Environmental Examination
Period”). Mobil shall provide reasonable access to the Transferred Assets for
the purpose of conducting the Environmental Examination, provided that any
person entering the Pasadena Facility for such purpose has been furnished with
and is bound by a confidentiality agreement satisfactory to Mobil. Prior to
permitting any agents, consultants or contractors to enter the Pasadena
Facility, Mobil reserves the right to (i) cause any such party to execute and
deliver to Mobil a satisfactory form of waiver; and (ii) cause any such party to
deliver current certificates of insurance certifying that such party has in
place public liability insurance during such inspection period in the minimum
sum of one million dollars ($1,000,000) combined single limit for death, bodily
injury and property damage, with companies and in single or blanket coverage
forms reasonably satisfactory to Mobil. The Parties agree to share equally the
costs and expenses of the examination.

 

  (b) If any suspected Environmental Condition is discovered regarding the
Transferred Assets, both Parties shall be notified, provided that following the
Closing, any such notice must be given to Mobil not later than one (1) year
thereafter and that Buyer’s failure to give timely any such notice after the
Closing Date shall relieve and release Mobil from any Claim hereunder with
respect to such Environmental Condition. In the event that an Indemnified
Environmental Condition is determined to have resulted from releases or
activities occurring both before and after the Closing Date, responsibility for
the remediation thereof shall be shared by Mobil and Buyer based upon each
Party’s proportional responsibility therefor but subject to the timing and
expenditure limitations set forth in Section 10.4(f). In the event of
disagreement by the Parties regarding the existence of, time of causation or
proportionality responsibility for such an Indemnified Environmental Condition,
which disagreement is not resolved within fifteen (15) days of the date either
Party provides written notice of such disagreement, then Parties shall cause a
re-examination, retesting or re-evaluation to be done promptly by ERM Southwest,
Inc. or another entity mutually agreeable to the Parties. The costs of such
firm’s work shall be borne equally by the Parties, and such firm’s report shall
be binding on the Parties as to the existence or non-existence, contribution and
timing of such Indemnified Environmental Condition. The provisions of this
Section 10.4(b) shall survive the Closing. The Parties hereby agree that
Schedule 10.4(b) sets forth the Environmental Conditions discovered by the
Parties prior to the Closing Date as the result of the Environmental Examination
(the “Identified Environmental Conditions”).

 

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  (c) The Identified Environmental Conditions shall be remedied by one of the
three mechanisms below, as shall be agreed by the Parties (such agreement to be
evidenced by a writing signed by both Parties and delivered at Closing);
provided, however, that in the event that the Response Costs with respect to
such Identified Environmental Conditions are determined by an expert mutually
agreeable to the Parties to exceed five million dollars ($5,000,000), either
Party shall have the right to terminate this Agreement immediately upon written
notice to the other Party and thereafter neither Party shall have any
obligation, legal, equitable or otherwise, to the other Party with respect to
the Transaction and the Deposit shall be returned to Buyer:

 

  (1) Subject to the provisions of Section 10.4(d), Mobil shall remediate or
otherwise correct the Identified Environmental Condition at Mobil’s own expense
to the point where such Identified Environmental Condition complies with
Environmental Law, such compliance to be evidenced by (A) the issuance of a no
further action letter, certificate of compliance or other form of approval or
release by the relevant regulatory agency or agencies, or (B) in the event that
such Identified Environmental Condition is not currently the subject of an
enforcement action by any regulatory agency, the opinion of a recognized,
qualified environmental consultant reasonably satisfactory to Buyer; or

 

  (2) Subject to the provisions of Section 10.4(e), such Identified
Environmental Condition shall be deemed and scheduled as an Assumed Liability,
and the Parties shall agree on a resulting reduction in the Purchase Price; or

 

  (3) The Transferred Asset affected by such Identified Environmental Condition
shall be deemed and scheduled as a Non-Division Asset, and the Parties shall
agree on a resulting reduction in the Purchase Price; provided, however, that
this mechanism shall not be available if and to the extent that the inclusion of
such Transferred Asset as a Non-Division Asset would have a Material Adverse
Effect on the ability of Buyer to operate the Pasadena Facility from after the
Closing Date in substantially the manner such Pasadena Facility was operated by
Mobil on or prior to the Closing Date.

 

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  (d) If the Parties elect mechanism #1 of Section 10.4(c) above with respect to
any Identified Environmental Condition, then Mobil shall retain all liability
for such Identified Environmental Condition as it existed immediately prior to
the Closing Date until such Identified Environmental Condition is corrected or
remediated as required by mechanism #1 and such Identified Environmental
Condition shall be an Excluded Liability. During the period required for
correction or remediation, Mobil shall remain liable for the Identified
Environmental Condition with respect to any Claims made on Buyer by any Person
with regard thereto including any fines, penalties, exemplary or punitive
damages assessed with respect thereto. Buyer shall cooperate with and provide
Mobil with the same rights and assistance as are provided in Section 6.3 in
order that Mobil can complete the remediation or correction, and Mobil shall
provide reasonable notice to Buyer before undertaking such remediation or
correction. In accordance with Section 6.3 and subject to the provisions
thereof, Mobil and Buyer agree that the correction/remediation and the ongoing
operation of the Transferred Assets shall not unreasonably interfere with each
other. Upon completion of the remediation or correction as required by mechanism
#1, whichever occurs earlier, Mobil shall be automatically released from
responsibility for such Identified Environmental Condition and, with respect to
any such Identified Environmental Condition, Buyer shall fully indemnify, hold
harmless and defend Mobil from such former condition and any related damages,
losses and liabilities, as if the condition had been an Assumed Liability. The
provisions of this Section 10.4(d) shall survive the Closing.

 

  (e) In the event that the Parties elect mechanism #2 of Section 10.4(c) above
with respect to any Identified Environmental Condition, then Buyer shall fully
release Mobil as to such Identified Environmental Condition, and, with respect
to any such Identified Environmental Condition, Buyer shall fully indemnify,
defend and hold Mobil harmless from and against any damages, losses and
liabilities with regard to such Identified Environmental Condition, including
any Claim brought by any Person or agency with respect to the Environmental
Laws, and shall assume full obligation to bring such Identified Environmental
Condition into compliance with all Environmental Laws. The provisions of this
Section 10.4(e) shall survive the Closing.

 

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  (f) Notwithstanding any other provision in this Agreement to the contrary,
Mobil’s liability for Buyer Losses relating to or arising out of any
Environmental Condition (other than the Identified Environmental Conditions)
which is discovered after Closing and within the one-year period thereafter but
which arose out of actions or omissions occurring prior to the Closing Date (an
“Indemnified Environmental Condition”) shall be limited specifically in time and
amount as follows, and the provisions of this Section 10.4(f) shall survive the
Closing:

 

  (1) Mobil shall not have any liability for any Indemnified Environmental
Condition unless and until the aggregate amount of all Response Costs with
respect to such Indemnified Environmental Condition exceeds ten thousand dollars
($10,000). Buyer shall assume all liability with respect to any Indemnified
Environmental Condition with respect to which the Response Costs do not exceed
$10,000 (a “De Minimis Condition”) and each such De Minimis Condition shall
constitute an Assumed Liability hereunder. No De Minimis Condition shall be
included in the calculation of or count toward the Buyer Cap.

 

  (2) In the event that the Response Costs for any Indemnified Environmental
Condition are more than $10,000 but less than $150,000 (a “Type A Condition”),
then Buyer shall be responsible for all such Response Costs with respect thereto
subject to the limitations of subparagraph (4) below. All Response Costs
incurred by Buyer with respect to a Type A Condition shall be included in the
calculation and shall count toward the Buyer Cap and shall be deemed and
scheduled as an Assumed Liability of Buyer.

 

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  (3) In the event that the Response Costs for any Indemnified Environmental
Condition are more than $150,000 (a “Type B Condition”), then Buyer shall be
responsible for (A) the first $150,000 of Response Costs with respect thereto
and (B) 35% of all remaining Response Costs with respect thereto, in each case
subject to the limitations of subparagraph (4) below. All Response Costs
incurred by Buyer with respect to a Type B Condition shall be included in the
calculation and shall count toward the Buyer Cap and shall be deemed and
scheduled as an Assumed Liability of Buyer.

 

  (4) Notwithstanding anything to the contrary herein, expenditures by Buyer
with respect to Indemnified Environmental Conditions (excluding expenditures
with respect to De Minimis Conditions) shall not, in the aggregate, exceed the
Buyer Cap; provided, however, that expenditures with respect to Indemnified
Environmental Conditions in excess of the Mobil Cap shall be for the account of
Buyer as set forth in subparagraph (5) below.

 

  (5) Notwithstanding anything to the contrary herein, expenditures by Mobil
with respect to Indemnified Environmental Conditions shall not, in the
aggregate, exceed the Mobil Cap; and Buyer shall release, hold harmless and
indemnify Mobil for any responsibility or liability for Indemnified
Environmental Conditions in excess of the Mobil Cap and for any Environmental
Condition for which Mobil was not notified within one (1) year following the
Closing Date. Value determination shall be by an expert mutually-agreeable to
the Parties.

 

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  (g)    (1) In the event that Buyer discovers any Indemnified Environmental
Condition within the one-year period from and after the Closing Date, Buyer
shall promptly give written notice of such Indemnified Environmental Condition
to Mobil specifying the factual basis of such Indemnified Environmental
Condition (a “Notice of Environmental Condition”). To the extent practicable,
such Notice of Environmental Condition shall be accompanied by a report from a
professional environmental consultant retained by Buyer setting forth such
testing, sampling or analytical results to evidence its determination of the
existence of such Indemnified Environmental Condition, the proposed Response to
such Indemnified Environmental Condition and an estimate of the Response Costs
reasonably required to implement such Response (the “Supporting Materials”).
Notwithstanding anything herein to the contrary, the failure of Buyer to provide
such Supporting Materials with the Notice of Environmental Condition shall not
cause the Notice of Environmental Condition to be deemed to have been untimely
given for purposes of the limitation requiring Buyer to give notice of any
Indemnified Environmental Condition within the one-year period from and after
the Closing Date, provided that Buyer shall provide Mobil with such Supporting
Materials within 180 days of the date of delivery of the Notice of Environmental
Condition. In the event that (i) a Notice of Environmental Condition is given on
or prior to the date which is one (1) year from and after the Closing Date and
(ii) the Supporting Materials with respect to such Notice of Environmental
Condition are provided within such 180-day period, then Mobil’s liability for
the Indemnified Environmental Condition which is the subject of such Notice of
Environmental Condition shall survive until such time as the Indemnified
Environmental Condition is remediated in accordance with the standards set forth
in Section 10.4(c)(1) of this Agreement.

 

  (2) Following receipt of a Notice of Environmental Condition and the
Supporting Material with respect thereto, Mobil shall have ninety (90) days to
make such investigation of such Indemnified Environmental Condition as Mobil
deems reasonably necessary or desirable and to provide Buyer with written notice
of Mobil’s objection to Buyer’s Notice of Environmental Condition, accompanied
by a report from a professional environmental consultant retained by Mobil
setting forth such testing, sampling or analytical results evidencing the basis
for its objection to the existence of such Indemnified Environmental Condition,
the proposed Response to such Indemnified Environmental Condition and/or Buyer’s
estimate of the Response Costs associated therewith.

 

  (3) Following receipt of such written objection by Mobil, the environmental
consultant retained by Buyer and the environmental consultant retained by Mobil
shall work each with the other to resolve such dispute within thirty (30) days
of Buyer’s receipt of Mobil’s written objections. In the event such
environmental consultants cannot resolve such dispute within such period, such
environmental consultants shall mutually agree on the selection of a third
environmental consultant (which shall not have been employed previously by
either Party or an Affiliate thereof). The determination of such third
environmental consultant shall govern. The Parties shall share equally in the
costs and expenses of such third environmental consultant.

 

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  (4) If Mobil does not provide Buyer with such written notice of Mobil’s
objection to Buyer’s Notice of Environmental Condition within such ninety
(90) day period or upon agreement by Mobil’s and Buyer’s environmental
consultant, as the case may be, Buyer shall implement the proposed Response and,
upon the incurrence of such Response Costs and subject to the limitations set
forth in paragraph (f) above, Mobil shall reimburse Buyer the full amount of
such Response Costs within ten (10) days of Buyer’s presentation of invoices to
Mobil for such Response Costs.

 

  (5) Notwithstanding anything herein to the contrary, as between Mobil and
Buyer, Mobil shall not be permitted to maintain an objection to any Indemnified
Environmental Condition if the proposed Response with respect thereto is
required as the result of an emergency or as the result of an order of any
federal, state or local governmental authority having jurisdiction over the
Indemnified Environmental Condition and the failure to comply with such order
would (A) subject Buyer to criminal prosecution or criminal or civil penalty, or
(B) cause the Pasadena Facility, the Real Property or any Transferred Asset to
be subject to an Environmental Lien or foreclosure.

 

10.5 Wetlands Project. Notwithstanding anything herein to the contrary, Mobil
shall retain liability for the Wetlands Liabilities, including any and all
liability arising under the Consent Decree, and shall indemnify and hold Buyer
harmless with respect thereto. This Section 10.5 shall survive the Closing and
shall not be subject to the limitations on liability set forth in
Section 10.4(f) or Section 14.3.

 

10.6 Exclusivity. Until the Closing Date or the termination of this Agreement, a
Party shall not negotiate or discuss with any third party (without the prior
written consent of the other Party) the acquisition or divestiture of the
Transferred Assets, provided that each Party may discuss the transactions
contemplated in this Agreement with its agents, consultants, attorneys and
accountants, and Buyer may discuss such matters with its lenders or prospective
lenders.

 

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10.7 Subsequent Asset Sales by Buyer. Without the prior written consent of Mobil
(which consent shall be limited to review and consideration of the subject
matter listed on Schedule 10.7 and which consent shall not be unreasonably
withheld), Buyer shall not sell or agree to sell any portion of the Transferred
Assets, including all or any portion of the Existing Gypsum Stacks or their
contents, at any time prior to the last to occur of (i) Closure and (ii) the
satisfaction of all of Mobil’s outstanding obligations under the Sulfuric Acid
Exchange Agreement between Mobil Oil Corporation and Air Products Manufacturing
Corporation dated January 1, 1989, as amended by Addendum No. 1 executed on
August 8, 1994 and further amended by Addendum No. 2 executed on August 28,
1996. Mobil’s consent may be contingent upon Buyer first entering into a written
agreement with the subsequent buyer providing therein such provisions from this
Agreement as Mobil may reasonably request, including but not limited to adequate
security arrangements and other reasonable assurances intended to protect
Mobil’s interests should a future sale of the Transferred Assets by the
subsequent buyer be contemplated. Buyer shall give Mobil reasonable notice and
time to review such third-party agreement to ensure that Mobil is adequately
protected as contemplated herein. In addition, Buyer agrees that the deed
conveying title to the Real Property to Buyer shall contain the following
restrictive covenant and notice:

“As part of the consideration for this conveyance, Buyer for itself, its
successors or permitted assigns, covenants and agrees that (i) (A) neither the
contents and/or material comprising the Existing Gypsum Stacks nor any part
thereof shall at any time be used, moved, sold, distributed or disposed of
without the prior written consent of Mobil or its successors or assigns and
(B) neither any land herein conveyed on which the Existing Gypsum Stacks are
located nor any part thereof shall at any time from the date of this deed
forward through the date of Closure be used, moved, sold, distributed or
disposed of without the prior written consent of Mobil or its successors or
assigns, (ii) this covenant shall survive delivery of this deed, (iii) this
covenant and agreement is to run with the land herein conveyed, and (iv) a
similar restrictive covenant shall be inserted in any deed, lease or other
instrument conveying or demising the Existing Gypsum Stacks or any land herein
conveyed on which such Existing Gypsum Stacks are located or any part thereof.

 

     Notice: The land conveyed herein may be or may have been used for the
manufacture and storage of naturally occurring radioactive materials which may
remain on or may have spilled, leaked, seeped or entered onto or under the
ground or into ground waters of the land conveyed herein.”

 

10.8 Purchase Price Allocation. Mobil and Buyer will negotiate in good faith to
agree to an allocation of the Purchase Price for the Transferred Assets among
the Transferred Assets; provided, however, that such Purchase Price allocation
conforms in all respects to the requirements of the Code and the regulations
promulgated thereunder, as well as any applicable state, local or foreign law.
Mobil and Buyer will use the asset values determined from such allocation for
purposes of all reports and returns with respect to Taxes, including Internal
Revenue Service Form 8594 or any equivalent statement.

 

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ARTICLE XI

CONDITIONS TO CLOSING

 

11.1 Conditions to the Obligations of Buyer and Mobil. The obligations of Mobil
and Buyer to effect the Closing are subject to the satisfaction or waiver of the
following conditions prior to Closing:

 

  (a) HSR Act. All filings under the HSR Act have been made and any required
waiting period under such laws (including any extensions thereof obtained by
request or other action of any governmental authority) applicable to the
transactions contemplated hereby shall have expired or been earlier terminated.

 

  (b) No Injunctions. No court or governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, non-appealable judgment, decree, injunction or other
order with respect to the Transaction which is, and no action, investigation,
suit or other challenge shall be, in effect on the Closing Date which prohibits
the consummation of the Closing.

 

11.2 Conditions to the Obligations of Buyer. The obligation of Buyer to effect
the Closing is subject to the satisfaction or waiver by Buyer of the following
conditions at or prior to Closing:

 

  (a) Representations and Warranties. The representations and warranties of
Mobil contained herein shall be true and correct in all material respects as of
the Closing Date with the same force and effect as if made on the Closing Date,
except that representations and warranties that are made as of a specific date
need be true in all material respects only as of such date, and Buyer shall have
received certificates to such effect dated the Closing Date and executed by a
duly authorized officer of Mobil.

 

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  (b) Covenants. The covenants and agreements of Mobil to be performed on or
prior to the Closing shall have been duly performed in all material respects,
and Buyer shall have received certificates to such effect dated the Closing Date
and executed by a duly authorized officer of Mobil.

 

  (c) Legal Opinions. Buyer shall have received the opinion of Mobil counsel,
dated as of the Closing Date, addressed to Buyer substantially to the effect set
forth in Schedule 4.3(f) hereto.

 

  (d) No Material Adverse Change. Since the date of this Agreement, the
Transferred Assets shall not have suffered a Material Adverse Change.

 

  (e) Buyer’s Financing. Buyer shall have received the proceeds of borrowings
under the Financing Agreements necessary to fund the payment of the Purchase
Price.

 

  (f) Governmental Authorizations. Buyer shall have received executed
assignments, applications for transfer letters or transfer applications prepared
jointly by Mobil and Buyer no later than the Closing Date, when required by law
for all Governmental Authorizations, so as to enable Buyer to acquire the
Transferred Assets and to continue the operations of the Pasadena Facility from
and after the Closing Date in substantially the same manner as conducted by
Mobil prior thereto, except only those consents to assignment, novations and
other such instruments, the absence of which, in Buyer’s reasonable judgment,
will not have a Material Adverse Effect. The Parties shall cooperate using
reasonable commercial efforts to complete the transfers. Buyer specifically
recognizes that, as set forth in Schedule 7.3, many authorizations cannot be
effected until post-Closing and are contingent upon Buyer being able to
demonstrate reasonable assurances to the appropriate agency that it can operate
the Transferred Assets in accord with the Governmental Authorizations. Buyer
shall have assisted Mobil in the preparation of all documents associated with
this Section 11.2(f) by the Closing Date.

 

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  (g) Title Insurance. Buyer shall have received title insurance from a licensed
title insurer insuring title to the Real Property free and clear of all title
exceptions except the Permitted Encumbrances.

 

  (h) Turnaround. Mobil shall have completed all regularly scheduled turnarounds
of the Pasadena Facility in accordance with established schedules and scope of
work.

 

11.3 Conditions to the Obligations of Mobil. The obligation of Mobil to effect
the Closing is subject to the satisfaction or waiver prior to the Closing of the
following conditions:

 

  (a) Representations and Warranties. The representations and warranties of
Buyer contained herein shall be true and correct in all material respects as of
the Closing Date with the same force and effect as if made on the Closing Date,
except that representations and warranties that are made as of a specific date
need be true in all material respects only as of such date, and Mobil shall have
received a certificate to such effect dated the Closing Date and executed by a
duly authorized officer of Buyer.

 

  (b) Covenants. The covenants and agreements of Buyer to be performed on or
prior to the Closing shall have been duly performed in all material respects,
and Mobil shall have received a certificate to such effect dated the Closing
Date and executed by a duly authorized officer of Buyer.

 

  (c) Legal Opinions. Mobil shall have received the opinion letter of Buyer’s
counsel, dated as of the Closing Date, addressed to Mobil substantially to the
effect set forth in Schedule 4.2(e) hereto.

 

  (d) Payment. Mobil shall have received the moneys payable at Closing pursuant
to Article III.

 

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ARTICLE XII

ADDITIONAL AGREEMENTS

 

12.1 Municipally Financed Property. Mobil has informed Buyer that certain of the
Transferred Assets described in Schedule 12.1(a) (the “Municipally Financed
Property”) has been financed with the proceeds of certain bonds (the “Bonds”
issued as a refinancing on July 1, 1997 of certain bonds issued to refund the
then outstanding bonds issued in 1978 (the “Prior Bonds”). The Bonds have a
maturity date of July 1, 2007. Mobil has provided Buyer with copies of the
relevant agreements and the Offering Circular issued in connection with the
Bonds and copies of the relevant agreements issued in connection with the Prior
Bonds. (Such documents are listed in Schedule 12.1(b) hereto.) Mobil hereby
covenants to Buyer that Mobil shall not without Buyer’s prior written consent
agree to any amendment of the Bonds or any financing document executed in
connection therewith which would result in the extension of the final maturity
date of the Bonds past July 1, 2007. Buyer represents to Mobil that until the
final maturity date of the Bonds, or such earlier date on which all of the Bonds
have been redeemed, it will not use the Municipally Financed Property for
purposes other than pollution control and/or sewage treatment (a “Qualifying
Purpose”) and that it will not take any action which will cause the Bonds to
cease being exempt from tax under provisions of applicable law as in effect on
the date of this Agreement.

 

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     Buyer agrees that if any of the Municipally Financed Property is retired
from service, or ceases to be used for a Qualifying Purpose, it will provide
written notice to Mobil within ten (10) days of the decision to retire such
property or the date such property ceases to be used for such Qualifying Purpose
if such cessation is through damage to the property, describing in such detail
as Mobil may reasonably require the facilities that cease to be used for a
Qualifying Purpose and the use, if any, that is intended to be made of such
property. Buyer further agrees to notify Mobil within ten (10) days of the
occurrence of any of the following events:

 

  (a) the Municipally Financed Property is damaged or destroyed to such an
extent that either (i) the required restoration and repair could not reasonably
be expected to be completed within a period of six (6) months after commencement
of restoration or repair, (ii) Buyer (or any subsequent assignee) is prevented
or would likely be prevented from using the Municipally Financed Property for
its normal purposes for a period of six (6) months or more or (iii) the cost of
restoration and repair would exceed twenty-five percent (25%) of eleven million
one hundred twenty-two thousand, five hundred dollars ($11,122,500.00); or

 

  (b) title to the whole or any part of the Municipally Financed Property or the
use of possession thereof is taken or condemned by a competent authority to such
an extent that Buyer (or any subsequent assignee) is prevented or would likely
be prevented from using the Municipally Financed Property for its normal
purposes for a period of six (6) months or more; or

 

  (c) changes, which Buyer cannot reasonably control or overcome, in the
economic availability of materials, supplies, labor, equipment and other
properties and things necessary for the efficient operation of the Municipally
Financed Property as pollution control or sewage facilities occur, or
technological or other changes occur, which render the continued operation of
the Municipally Financed Property uneconomic for such purposes; or

 

  (d) unreasonable burdens of excessive liabilities are imposed upon Buyer (or
any subsequent assignee) with respect to the Municipally Financed Property or
the operation of the Municipally Financed Property, including, but without being
limited to, federal, state or other ad valorem, property, income or other taxes,
other than such taxes as are currently imposed on the date of this Agreement,
including, but without limitation, ad valorem taxes imposed on the date of this
Agreement, upon privately owned property used for the same general purposes as
the Municipally Financed Property.

Buyer further agrees that, upon any sale, conveyance or other transfer of the
Municipally Financed Property or control of the Municipally Financed Property to
any person or entity, it shall require that such person or entity give such
notice to Buyer and Mobil in the time period set forth above.

In addition, Buyer shall allow Mobil and its agents access to the Municipally
Financed Property at reasonable times and on reasonable notice and shall provide
such additional information as Mobil may request for the purpose of determining
whether the Municipally Financed Property is being used for a Qualifying Purpose
or for determining whether or demonstrating that the Bonds (or any bonds issued
to refund the Bonds) are, were or will be exempt from tax.

Buyer agrees not to sell or otherwise transfer the Municipally Financed Property
to any person unless the purchaser or transferee undertakes to comply with the
requirements of this Section 12.1.

 

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ARTICLE XIII

POST-CLOSING OBLIGATIONS

 

13.1 Post-Closing Obligations.

 

  (a) At any time after the Closing Date, either Party, at the request of the
other, shall promptly execute, acknowledge and deliver any other assurances or
documents reasonably required to effectuate the sale, assignment, transfer or
delivery of the Transferred Assets or to satisfy their respective obligations
hereunder or obtain the benefits contemplated hereby. Should Mobil be billed for
any real estate taxes applicable to the Transferred Assets for any period after
the Closing Date, which taxes were not allocated and paid by Buyer at the
Closing or pursuant to the Post-Closing Statement, Mobil shall forward such bill
to Buyer who will pay it directly and timely.

 

  (b) The Parties shall cooperate using reasonable commercial efforts to
complete transfers or to effect the issuance of Governmental Authorizations in
the name of Buyer. Notwithstanding the fact that a Governmental Authorization
shall not have been effectively transferred or issued to Buyer as of the Closing
Date, Buyer agrees that, with respect to each such Governmental Authorization
which is required for the continued operation of the Pasadena Facility, it shall
comply with the terms and conditions thereof as if such Governmental
Authorization had been transferred to or issued in the name of Buyer as of the
Closing Date.

 

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ARTICLE XIV

SURVIVAL; INDEMNIFICATION

 

14.1 Survival. All of the representations and warranties of Mobil contained in
this Agreement and all claims and causes of action with respect thereto shall
terminate upon the Closing Date, except that (i) the representations and
warranties in Sections 7.1, 7.2, 7.3, 7.4, 7.5 and 7.12 shall have no expiration
date and (ii) the representations and warranties in Sections 7.6, 7.7, 7.9,
7.10, 7.11, 7.13, 7.14 and 7.15 shall survive for one (1) year from the Closing
Date. The representations and warranties of Buyer contained in this Agreement
shall expire upon the earlier of (i) completion of Closure and (ii) expiration
of the applicable statute of limitations. In the event notice of any claim for
indemnification under Section 14.2(i) or Section 14.3(a)(i) is given within the
applicable survival period, and as otherwise permitted by the provisions of this
Agreement, the representations and warranties that are the subject of such
indemnification claim (but only such claim) shall survive until such time as
such claim is finally resolved. Except as expressly set forth in Section 14.7
below, all claims for indemnification under Section 14.3(a)(ii) shall survive
the Closing Date and shall survive until each such claim is finally resolved.

 

14.2 Indemnification by Buyer. Buyer hereby agrees that it shall indemnify,
defend and hold harmless Mobil, its Affiliates and, if applicable, their
respective directors, officers, attorneys, accountants, agents, employees (other
than the Employees) and representatives and their heirs, successors and assigns
(the “Mobil Indemnified Parties”) from, against and in respect to any damages,
claims, losses, liabilities, charges, actions, suits, proceedings, deficiencies,
Taxes, interest, penalties, fines and costs and expenses (including, without
limitation, removal costs, Response Costs, remediation and correction costs,
changes to plant or equipment, fines, penalties and expenses of investigation
and ongoing monitoring, and reasonable attorneys’ fees) but excluding
consequential, indirect, special, punitive or exemplary damages related solely
to actions or inactions of any of the Mobil Indemnified Parties (collectively,
the “Mobil Losses”) imposed on, sustained, incurred or suffered by or asserted
against any of the Mobil Indemnified Parties, directly or indirectly, relating
to or arising out of (i) any breach of any representation or warranty made by
Buyer contained in this Agreement (ii) the Assumed Liabilities, (iii) the breach
of any covenant or agreement of Buyer contained in this Agreement, and
(iv) operation of the Transferred Assets after the Closing Date.

 

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14.3 Indemnification by Mobil.

 

  (a) Mobil shall indemnify, defend and hold harmless Buyer, and, if applicable,
its directors, officers, partners, attorneys, accountants, agents and employees
(other than the Buyer Employees) and their heirs, successors and assigns (the
“Buyer Indemnified Parties” and, collectively with the Mobil Indemnified
Parties, the “Indemnified Parties”) from, against and in respect to any damages,
claims, losses, liabilities, changes, actions, suits, proceedings, deficiencies,
Taxes, interest, penalties, fines and costs and expenses (including, without
limitation, removal costs, Response Costs, remediation and correction costs,
charges to plant or equipment, fines, penalties and expenses of investigation
and ongoing monitoring, and reasonable attorneys’ fees) but excluding
consequential, indirect, special, punitive or exemplary damages related solely
to actions or inactions of any of the Buyer Indemnified Parties (the “Buyer
Losses”) imposed on, sustained, incurred or suffered by or asserted against any
of Buyer Indemnified Parties, directly or indirectly, relating to or arising out
of (i) the breach of any representation or warranty made by Mobil contained in
this Agreement for the period such representation or warranty survives, (ii) all
Excluded Liabilities and (iii) subject to Section 14.3(b), the breach of any
covenant or agreement of Mobil contained in this Agreement. Buyer acknowledges
that Section 10.4 and this Article XIV constitute Buyer’s sole remedy with
respect to any of the matters referred to herein and expressly waives any other
rights or causes of action, including those arising under any Environmental Law
or with respect to any claim involving the presence of or exposure to any
Hazardous Substance, including but not limited to 42 U.S.C. 9610, et seq., and
42 U.S.C. 6901, et seq.

 

  (b) Mobil shall not be liable to Buyer Indemnified Parties for any Buyer
Losses (other than for (i) Buyer Losses relating to or arising out of any
Environmental Conditions which Buyer Losses shall be subject to the provisions
of Section 10.4(f) and (ii) Buyer Losses relating to or arising out of a breach
of the representation and warranties set forth in Section 7.12) with respect to
the matters contained in Section 14.3(a)(i) and (iii) unless either (x) the
Buyer Losses from any single breach of representation, warranty, covenant or
agreement exceed one hundred thousand dollars ($100,000) or (y) the aggregate
Buyer Losses from all such breaches exceed three hundred seventy-five thousand
dollars ($375,000), in either of which cases Mobil shall be liable to Buyer
Indemnified Parties for the full amount of such Buyer Losses; provided, that
Mobil’s liability under this Section 14.3(b) with respect to the matters
contained in Section 14.3(a)(1) and (iii) shall be limited in time to those
Buyer Losses with respect to which a notice of claim for indemnification is
given by Buyer Indemnified Parties within the applicable survival period set
forth in Section 14.1 and shall be further limited to an aggregate amount equal
to the Purchase Price in all events. Any Buyer Losses which are Excluded
Liabilities or the liability of Mobil pursuant to Section 6.2(c) shall not be
included in the foregoing amounts and time period nor limited to the Purchase
Price total.

 

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14.4 Indemnification Procedures.

 

  (a) With respect to third-party claims, all claims for indemnification by any
Indemnified Party hereunder shall be asserted and resolved as set forth in this
Section 14.4. In the event that any written claim or demand for which Buyer or
Mobil, as the case may be (an “Indemnifying Party”), would be liable to any
Indemnified Party hereunder, is asserted against or sought to be collected from
any Indemnified Party by a third party, such Indemnified Party shall promptly,
but in no event more than fifteen (15) days following such Indemnified Party’s
receipt of such claim or demand, notify the Indemnifying Party of such claim or
demand and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final amount of such
claim or demand) (the “Claim Notice”).

 

  (b) The Indemnifying Party shall have thirty (30) days from the delivery of
the Claim Notice (the “Notice Period”) to notify the Indemnified Party
(i) whether or not the Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such claim
or demand and (ii) whether or not it desires to defend the Indemnified Party
against such claim or demand; provided, however, that the Indemnifying Party may
not assume the defense of any such claim or demand unless it acknowledges to the
Indemnified Party that it is liable therefor hereunder. All costs and expenses
incurred by the Indemnifying Party in defending such claim or demand shall be a
liability of, and shall be paid by, the Indemnifying Party; provided, however,
that the amount of such costs and expenses that shall be a liability of Mobil
hereunder shall be subject to the limitations set forth in Section 14.3(b).

 

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  (c) Except as hereinafter provided, in the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, the Indemnifying
Party shall have the right, at its sole cost and expense, to defend the
Indemnified Party by appropriate proceedings and shall have the sole power to
direct and control such defense, unless the Indemnified Party notifies the
Indemnifying Party that, in the opinion of its counsel, there are defenses
available to it which would not be available to the Indemnifying Party. If any
Indemnified Party desires to participate in any such defense, it may do so at
its sole cost and expense. The Indemnified Party shall not settle a claim or
demand without the consent of the Indemnifying Party. The Indemnifying Party
shall not, without the prior written consent of the Indemnified Party, settle,
compromise or offer to settle or compromise any such claim or demand on a basis
which would adversely and unreasonably restrict the future activity or conduct
of the Indemnified Party or any Subsidiary or Affiliate thereof. If the
Indemnifying Party elects not to defend the Indemnified Party against such claim
or demand, whether by not giving the Indemnified Party timely notice as provided
above or otherwise, then the amount of any such claim or demand or, if the same
be contested by the Indemnified Party, then that portion thereof as to which
such defense is unsuccessful (and the reasonable costs and expenses pertaining
to such defense), shall be the liability of the Indemnifying Party hereunder,
subject to the limitations set forth in Section 14.3(b).

 

  (d) To the extent the Indemnifying Party shall direct, control or participate
in the defense or settlement of any third party claim or demand, the Indemnified
Party will give the Indemnifying Party and its counsel access to, during normal
business hours, the relevant business records and other documents, and shall
permit them to consult with the employees and counsel of the Indemnified Party,
and the Indemnifying Party will advise the Indemnified Party and its counsel of
all material developments in such defense or settlement. The Indemnified Party
and, if applicable, the Indemnifying Party shall use its best efforts in the
defense of all such claims.

 

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14.5 Characterization of Indemnification Payments. All amounts paid by Buyer or
Mobil to the other under this Agreement shall be treated as adjustments to the
Purchase Price for all Tax purposes unless a determination (as defined in
Section 1313 of the Code) with respect to the Indemnified Party causes any such
payment not to constitute an adjustment to the Purchase Price for United States
federal income tax purposes.

 

14.6 Computation of Losses Subject to Indemnification. The amount of any Mobil
Losses or Buyer Losses, as the case may be, for which indemnification is
provided under this Article XIV shall (i) be computed net of any insurance
proceeds or Tax benefits received by the Indemnified Party in connection with
such Losses and (ii) exclude consequential and punitive damages and lost profits
(except to the extent recovered by a third-party claimant).

 

14.7 Crye Litigation. In addition to, and not in derogation of, the
indemnification provided for Excluded Liabilities in Section 14.3 of this
Agreement and solely with respect to the Crye Litigation, Mobil and Buyer hereby
agree as follows:

 

(a) Any monetary damages which shall be assessed against, or any settlement
entered into by, Mobil and/or Buyer, as between Mobil and Buyer, shall be
allocated proportionally such that Mobil shall pay eighty percent (80%) and
Buyer shall pay twenty percent (20%) of the total of such damages award or
settlement amount.

 

(b) In the event that there shall be issued any Injunction at any time on or
before the commencement of the trial on the merits of the Crye Litigation, then
Mobil shall pay to Buyer (i) $55,000 per day for each of the first 30 days that
such Injunction shall be in effect, and (ii) $30,000 per day for each of the
next 365 days thereafter during which such Injunction shall be in effect.

 

(c) Notwithstanding the provisions of Section 16.2 of this Agreement, Buyer
shall be entitled to collaterally assign any or all of its rights to
indemnification under this Section 14.7 and the other provisions of this
Agreement to its lenders under the Financing Agreements.

 

(d) The Crye Litigation shall be handled in accordance with the provisions of
Section 6.3 of this Agreement and Mobil shall, in accordance with Section 14.4,
defend the Buyer Indemnified Parties at Mobil’s sole cost and expense; provided,
however, that in the event that any of the Buyer Indemnified Parties elect to
participate in such defense, the expenses of participating in such defense shall
be borne by such Buyer Indemnified Party.

 

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ARTICLE XV

TERMINATION

 

15.1 Termination. This Agreement may be terminated at any time prior to the
Closing:

 

  (a) by either party giving written notice of such termination to the other if
the environmental examination has not been completed within the Environmental
Examination Period; or

 

  (b) by Mobil in accordance with Section 4.1(c); or

 

  (c) by either Buyer or Mobil if there shall be in effect any law or regulation
that prohibits the consummation of the Closing or if consummation of the Closing
would violate any non-appealable final order, decree or judgment of any court or
governmental body having competent jurisdiction.

 

15.2 Effect of Termination. In the event of the termination of this Agreement in
accordance with Section 15.1, this Agreement shall thereafter become void and
have no effect, and no Party hereto shall have any liability to the other Party
hereto or their respective Affiliates, directors, officers or employees, except
for the obligations of the Parties hereto contained in Sections 3.2, 10.1,
10.4(a), 16.5, 16.6, 16.7, and 16.8 and except that nothing herein will relieve
any Party from liability for any breach of this Agreement prior to such
termination.

 

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ARTICLE XVI

MISCELLANEOUS

 

16.1 Amendment; Waiver. Any provision of this Agreement may be amended only if
such amendment is in writing and signed by Buyer and Mobil. Any provision of
this Agreement may be waived only if such waiver is in writing and signed by the
Party against whom the waiver is to be effective. No failure or delay by any
Party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

16.2 Assignment. Neither Party to this Agreement may assign any of its rights or
obligations hereunder without the prior written consent of the other Party
hereto, except that Buyer (with Mobil’s prior consent not to be unreasonably
withheld or delayed) may assign its rights and obligations hereunder to an
Affiliate of Buyer.

 

16.3 Entire Agreement. This Agreement (including all Schedules, which are
incorporated herein by this reference, and all other Documents) contains the
entire agreement between the Parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral or written,
with respect to such matters, except for the Confidentiality Agreement which
will remain in full force and effect for the term specified therein.

 

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16.4 Parties in Interest. None of the Employees, Former Employees, Inactive
Employees, OCAW, IBEW nor any other Person shall be deemed to be a third party
beneficiary of this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any Person other than Buyer, Mobil, the Indemnified
Parties and their respective successors or permitted assigns, any rights or
remedies under or by reason of this Agreement. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and permitted assigns.

 

16.5 Continued Confidentiality. Nothing contained herein shall be construed to
alter or amend the Confidentiality Agreement or any part thereof, and the
Parties acknowledge the continuing nature of the obligations to each other
regarding confidential information as set forth therein. The termination or
expiration of this Agreement shall not affect the ongoing obligations of
confidentiality set forth in the Confidentiality Agreement.

 

16.6 Public Disclosure. Except as may be required to comply with the
requirements of any applicable Laws, no press release or similar public
announcement or communication shall ever be made or caused to be made by a Party
prior to or subsequent to the Closing concerning the execution or performance of
this Agreement unless specifically approved in advance by the other Party,
except that, from and after the Closing, Buyer may publicize the fact that the
acquisition has occurred.

 

16.7 Return of Information. If for any reason whatsoever the transactions
contemplated by this Agreement are not consummated, Buyer shall promptly return
to Mobil all Books and Records furnished by Mobil, the Pasadena Facility or any
of their respective agents, employees or representatives (including all copies,
if any, thereof), and shall not use or disclose the information contained in
such Books and Records for any purpose or make such information available to any
other entity or person.

 

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16.8 Expenses, Fees and Brokers.

 

  (a) Except as otherwise expressly provided in this Agreement, whether or not
the transactions contemplated by this Agreement are consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including attorneys’ fees, shall be borne by the Party
incurring such expenses.

 

  (b) All negotiations relating to this Agreement, the agreements and
instruments to be delivered pursuant hereto and the transactions contemplated
hereby and thereby have been carried on without the intervention of any Person
acting on behalf of Mobil in such manner as to give rise to any valid claim
against Mobil or Buyer for any broker’s or finder’s fee or similar compensation
in connection with the transactions contemplated hereby or thereby.

 

16.9 Schedules. The disclosure of any matter in any schedule to this Agreement
shall be deemed to be a disclosure for all purposes of this Agreement to which
such matter could reasonably be expected to be pertinent, but shall expressly
not be deemed to constitute an admission by Buyer or Mobil or to otherwise imply
that any such matter is material for the purposes of this Agreement.

 

16.10 Governing Law; Submission to Jurisdiction; Selection of Forum. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. EACH PARTY HERETO SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, WAIVES ANY OBJECTION TO LAYING VENUE IN SUCH COURT, WAIVES ANY
OBJECTION THAT SUCH COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE JURISDICTION
OVER ANY PARTY HERETO AND AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY
SUCH ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE
WITH SECTION 16.12 OF THIS AGREEMENT.

 

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16.11 Notices. Any notice or other communications hereunder must be in writing
and shall be deemed to have been duly given and received on the day on which it
is served by personal delivery upon the Party for whom it is intended, on the
third (3rd) Business Day after it is mailed by registered or certified mail,
return receipt requested, on the Business Day after it is delivered to a
national courier service addressed to the Party for whom it is intended, or on
the Business Day on which it is sent by telecopier; provided that the telecopy
is promptly confirmed by telephone confirmation thereof, to the person at the
address set forth below, or such other address as may be designated in writing
hereafter, in the same manner, by such person:

To Buyer:

Agrifos Fertilizer L.P.

667 Madison Avenue

New York, New York 10021

Telephone: (212) 832-2400

Telecopy: (212) 750-4788

Attn: Mr. Lewis W. van Amerongen

With a copy to:

Seward & Kissel

One Battery Park Plaza

New York, New York 10004

Attention: Margaret R. Kilgore

(212) 480-8421 (Facsimile)

To Mobil:

MOBIL OIL CORPORATION

3225 Gallows Road

Fairfax, Virginia 22037

Telephone: (703) 846-3000

Telecopy: (703) 846-4669

Attn: General Manager

         Chemical Products Division

With a copy to:

Noreen Tama, Counsel (Chemical)

Mobil Business Resources Corporation

Office of Legal Counsel

3225 Gallows Road #2D1915

Fairfax, VA 22037-0001

(703) 846-4672 (Facsimile)

 

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16.12 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same Agreement.

 

16.13 Headings. The heading references herein and the table of contents hereto
are for convenience purposes only, do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof.

 

16.14 Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

 

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IN WITNESS WHEREOF, the Parties hereto have executed or caused this Agreement to
be executed as of the date first written above.

 

MOBIL OIL CORPORATION     AGRIFOS FERTILIZER L.P.       By:    Agrifos
Fertilizer GP L.L.C., its general partner By:   /s/ James M. Trest     By:   
/s/ Timothy Cotton Name:    James M. Trest     Name:     Timothy Cotton Title:  
Attorney-in-Fact     Title:    Chief Operating Officer

 

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