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This First Amendment to Asset Purchase Agreement (this “Amendment”) dated as of
April 18, 2017 between Carbo Industries, Inc. (“Carbo”), Carbo Realty, LLC (“Carbo Realty”;
Carbo and Carbo Realty collectively, “Sellers”) and Sprague Operating Resources LLC
(“Buyer”). Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed in the Agreement (defined below).
WHEREAS, reference is hereby made to that certain Asset Purchase Agreement dated as
of March 13, 2017 (the “Agreement”) among Sellers, Paul Hochhauser and Buyer;
WHEREAS, Section 3.02(a) of the Agreement required Sellers, among other things, to
execute and deliver to Buyer at Closing (i) the Inip Easements Agreement (as defined in the
Agreement) and (ii) the consent and subordination from Genworth Life and Annuity Insurance
Company (the “Inip Mortgagee”), as successor to Federal Home Life Insurance Company, holder
of that certain Fee and Leasehold Mortgage, Assignment of Rents and Leases, and Security
Agreement (as amended, the “Genworth Mortgage”) dated September 24, 2003 made by Carbo
Realty affecting the Inip Property (as defined in the Agreement) which Genworth Mortgage is
security for that certain loan (the “Loan”) made by Genworth to Carbo Realty;
WHEREAS, the Inip Mortgagee will not grant its consent to the granting of the Inip
Easements or the recordation of the Inip Easements Agreement; and
WHEREAS, Buyer is willing to waive delivery of the Inip Easements Agreement and the
consent and subordination of the Inip Mortgagee thereto as a condition to Closing upon the terms
and conditions of this Amendment;
NOW THEREFORE, the parties hereto have agreed as follows:
1. At or prior to Closing, Carbo Realty shall execute and deliver to Buyer a license
agreement (the “License Agreement”) in the form annexed hereto as Exhibit A.
2. Within forty-five (45) days following Closing, Carbo Realty shall deliver to Buyer the
written consent (the “Gate Gourmet Consent”) of Gate Gourmet, Inc. (“Gate Gourmet”)
as lessee of the Inip Property, to the execution and delivery of the License Agreement, in
form and substance acceptable to Buyer. In the event the Gate Gourmet lease terminates
or expires, any future lease of the Inip Property shall specifically exclude the Easement
Areas (as defined in the Inip Easements Agreement).
3. Carbo Realty shall not enter into or grant any other license, leases or easements affecting
the Easement Areas unless and until (i) the Inip Easements Agreement is duly recorded in
the Land Records (defined below) and (ii) Buyer shall have obtained a title insurance
policy, at Buyer’s cost and expense, insuring Buyer’s interest in the Inip Easements
subject only to those encumbrances set forth on Exhibit B annexed hereto (the “Permitted
Easement Encumbrances”; such title policy, a “Satisfactory Title Policy”).
4. At or prior to Closing, Carbo Realty will execute and deliver to Buyer the Inip Easements
Agreement and a New York State Transfer Tax Return (TP-584) pertaining to the Inip
Easements Agreement (the TP584, the “Transfer Form”; the Transfer Form together with
the Inip Easements Agreement executed pursuant to this Paragraph 4, the “Escrowed
Exhibit 2.1
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Documents”). Buyer shall accept delivery of the same and hold agrees to hold the same
in escrow the occurrence of an Escrow Termination Event (as hereinafter defined). Upon
the occurrence of an Escrow Termination Event, the Escrowed Documents may be
submitted to the Office of the Clerk of Nassau County (the “County Clerk”) for
recordation in the Nassau County land records (the “Land Records”). In the event any of
the Escrowed Documents are not accepted by the County Clerk due to date of recordation
or the requirement of a new or updated form(s) required to accompany the Inip
Easements Agreement in order to record the same, Buyer shall notify Carbo Realty and,
if Carbo Realty fails to execute such documents within seven (7) days following such
notice, Buyer shall have the right to execute any such documents on behalf of Carbo
Realty. In furtherance of the foregoing, Carbo Realty hereby grants to Buyer a limited
power of attorney to execute such documents and take such actions in the name of Carbo
Realty in order to cause Inip Easements Agreement to be recorded in the Land Records,
including without limitation, the execution or re-execution, as the case may be, of the
Inip Easements Agreement, the Transfer Form or any other form required by the County
Clerk to accompany the Inip Easements Agreement in order to record the same in the
Land Records. An “Escrow Termination Event” shall refer to (i) a default by Carbo
Realty under the Loan and/or the Mortgage, (ii) failure of Carbo Realty to deliver the
Gate Gourmet Consent within the time period set forth in Paragraph 2 hereof, or (iii) a
breach by Carbo Realty of any covenant or obligation set forth in in this Amendment.
5. Notwithstanding the execution and delivery of the Escrowed Documents, within thirty
(30) days following satisfaction of the Loan, Carbo Realty shall execute and deliver the
Inip Easements Agreement, Transfer Form and any other documents then required for the
recordation of the Inip Easements Agreement in the Land Records. Buyer shall join in
the execution of the Inip Easements Agreement and the Transfer Form. Upon the same
being fully executed, Carbo Realty shall cause the same to be recorded at Carbo Realty’s
sole cost and expense, with the County Clerk. Carbo Realty shall provide Buyer with
evidence reasonably satisfactory to Buyer of its recordation and Buyer shall obtain a
Satisfactory Title Policy.
6. Carbo Realty shall not transfer the Inip Property or transfer controlling interest in Carbo
Realty (whether effectuated through one or more transfers), unless and until the Inip
Easements Agreement has been duly recorded in the Land Records regardless of whether
the execution, delivery and recordation of the Inip Easements Agreement will result in a
default under the Loan or the Inip Mortgage. Buyer shall have the right to file a UCC-1
with New York State Department of State against Carbo Realty, as debtor, to provide
notice to third parties of the covenants set forth in this Paragraph 6.
7. Carbo Realty shall not refinance the Loan, extend the maturity date of the Loan or enter
into any additional, substitute, new or subordinate financing secured by the Inip Property
unless and until the Inip Easement Agreement has been duly recorded in the Land
Records so that the recorded Inip Easements Agreement has priority over any
Encumbrance affecting the Inip Property other than the Permitted Easement
Encumbrances.
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8. Promptly following Closing, Carbo shall deliver written instructions to Lender that copies
of all notices under the Loan and the Mortgage which are to be delivered to Carbo Realty
shall concurrently be delivered to Buyer. Buyer shall have the right, but not the
obligation, to remedy any monetary default by Carbo Realty under the Loan or the
Mortgage without notice to Carbo Realty or affording Carbo Realty the opportunity to
remedy the same. Any costs incurred by Buyer in connection therewith including without
limitation payment of past-due amounts, repayment of the Loan in its entirety, including
the payment of any prepayment penalty and the payment of real estate taxes, shall be
deducted from the next installments of the Deferred Amount due and payable under the
Agreement. Any default under the Loan shall be an Escrow Termination Event and upon
the occurrence of the same, Buyer shall have the right to release the Escrowed
Documents and submit the same for recording to the County Clerk. Carbo Realty shall be
liable for all costs and expenses incurred in connection with the recordation and Buyer
shall have the right to deduct such costs and expenses from the next installments of the
Deferred Amount due under the Agreement. Buyer shall concurrently apply for a
Satisfactory Title Policy.
9. Prior to the recordation of the Inip Easements Agreement in accordance with the terms of
this Amendment, Buyer shall have the right, from time to time, to cause a title report to
be prepared with respect to the Inip Property in order to ensure Carbo Realty’s
compliance with the terms of this Amendment. The cost incurred by Buyer in connection
with the preparation of any such title report shall be deducted from the Deferred Amount.
10. If prior to the recordation of the Inip Easements Agreement, Carbo Realty breaches any
of its obligations under this Amendment, Buyer shall have no obligation to make any
installment payment of the Deferred Amount from and after the occurrence of such
breach until such time the Inip Easements Agreement is duly recorded in the Land
Records, the recorded Inip Easements Agreement shall have priority over all
Encumbrances affecting the Inip Property other than the Permitted Easement
Encumbrances and Buyer shall be eligible to receive a Satisfactory Title Policy.
11. Following Buyer’s receipt of evidence satisfactory to it of the recordation of the Inip
Easements Agreement in the Land Records and Buyer’s receipt of a Satisfactory Title
Policy, the License Agreement shall terminate and be of no further force and effect.
12. For clarification, it is expressly acknowledged and agreed that upon the recordation of the
Inip Easement Agreement in the Land Records, Buyer shall be eligible to receive a
Satisfactory Title Policy. If Buyer is unable to obtain a Satisfactory Title Insurance
Policy due to the existence of an Encumbrance (other than a Permitted Encumbrance) to
which the Inip Easement Agreement is subordinate in priority following its recordation in
the Land Records, Buyer shall have the right to take such actions as Buyer deems
necessary, in Buyer’s sole discretion, to operate the Doughty Terminal without the Inip
Easements, including without limitation, the construction of containment structures
within the boundary lines of the Doughty Property and the acquisition of alternative
easements or rights to Buckeye Easement Areas (as defined in the Inip Easements
Agreement). All costs and expenses incurred by Buyer shall be offset against the
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Deferred Amount and Buyer shall have no obligation to make any payment of the
Deferred Amount until such time as Buyer has completed such action.
[SIGNATURE PAGE TO FOLLOW]
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The parties hereto have executed this Amendment as of the date first above written.
Carbo Industries, Inc.
By: /s/ Clifford Hochhauser
Name: Clifford Hochhauser
Title: Vice President
Carbo Realty, LLC.
By: /s/ Clifford Hochhauser
Name: Clifford Hochhauser
Title: Manager
Sprague Operating Resources LLC
By: /s/ Paul Scoff
Name: Paul Scoff
Title: Vice President, General Counsel,
Chief Compliance Officer and
Secretary
