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Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 1 of 71

From: Strawbridge, Sean


Sent: Monday, April 18, 2016 3:51 PM
To: 'joshua.sussberg@kirkland.com'; Pesce, Gregory F.; 'Geoffrey Frankel';
'rrussell@andrewskurth.com'; 'sreisman@curtis.com'; 'srochester@curtis.com'
Cc: jwelder@welderleshin.com; LaRue, John; Zahn, Charles; dbaker@bakerwotring.com;
Lynn.Butler@huschblackwell.com
Subject: Project Sandy Binding Bid Submission - Port of Corpus Christi Authority
Dear Ladies & Gentlemen:
On behalf of the Port of Corpus Christi Authority (PCCA), attached please find the attached Bid
Submissions and associated Exhibits. Per the conditions of Transaction approval, PCCA Staff will be
requesting PCCA Commission approvals of the attached effective tomorrow. We will also seek authority
to participate in the Asset Sale Auction, scheduled for 11:00 Eastern Time at the Kirkland & Ellis New York,
New York offices. Three representatives from PCCA (Commission, Staff, Legal), will be in New York for the
Auction.
PLEASE CONFIRM RECEIPT IN GOOD ORDER. Wire confirmation of Good Faith Deposit has been received.
Should you have any question, please advise to all on copy.
Thanks,

Sean C. Strawbridge
Chief Operating Officer
Port of Corpus Christi Authority

222 Power Street


Corpus Christi, Texas 78401
361.885.6133 Direct
361.730.8174 Mobile
361.882.7110 Fax
sstrawbridge@pocca.com
www.portofcc.com

EXHIBIT A

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April 18, 2016

KIRKLAND & ELLIS LLP


601 Lexington Avenue
New York, New York 10022
Attn: Joshua A. Sussberg, P.C.

ANDREWS KURTH LLP


600 Travis Street, Suite 4200
Houston, Texas 77002
Attn: Robin Russell

KIRKLAND & ELLIS LLP


300 North LaSalle
Chicago, Illinois 60654
Attn: Gregory F. Pesce

CURTIS, MALLET-PREVOST, COLT &


MOSLE LLP
101 Park Avenue
New York, New York 100178-0061
Attn: Steven J. Reisman & Shaya Rochester

HURON CONSULTING SERVICES LLC


2000 Auburn Drive, Suite 200
Beachwood, Ohio 44122
Attn: Mr. Geoffrey Frankel
Re: Qualified Bid(s) for Purchase of Sherwin Alumina Real Property & Equipment
Dear Sirs / Madams:
The Port of Corpus Christi Authority ("PCCA") is pleased to submit two Qualified Bids (Bids),
for all assets located in the Sherwin Alumina ("Sherwin" or the "Company") marine port operations
(Port Area) located in Gregory, Texas. These Assets include the uplands and submerged lands
(Lands), the docks and piers, bauxite storage shed, marine building, and other improvements
("Improvements"), the cargo handling equipment ("Equipment"), as outlined in Exhibits A and
Exhibit B hereto, and which are collectively referred to as the Port Assets or Assets as defined
in Exhibits A1 A4 and Exhibit B of the attached Asset Purchase Agreements (Agreements).
Either of the bids (but not both) may be considered binding by Sherwin and/or the United States
Bankruptcy Court for the Southern District of Texas Corpus Christi Division (the "Court") on the
terms and conditions specified in the Agreements for the acquisition of 100% of the Sherwin Port
Assets, including the Land, the Improvements, and the material handling Equipment (collectively
the "Transaction").
With approximately $435 million in assets and over 100 million tons per year of goods moving
through its facilities, PCCA is a regional economic engine for South Texas. The PCCA core values
are to facilitate maritime commerce through development and stewardship of port assets. Thus the
Sherwin Port Area is a natural fit for the PCCA portfolio.
While neither of the PCCA bids are predicated on the facilitys continued operations, the PCCA
views its Bid as a white knight option based not only on its fair price offer, but PCCAs further

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 3 of 71

commitment to remedy certain environmental conditions at the facility, to invest significant


additional capital in the Port Area, and to work with the Company (or Alternate Operator), should
existing operations continue, to formulate an operating lease structure which accounts for current
market conditions in an effort to support the long-term viability of the Non-Port Assets and
operations.
Bid Offer & Consideration
The PCCA and its Agents conducted a fairly intensive review of the materials the Company made
available in the data room, as well as conducted site visits and inspections of the land,
improvements, and equipment. However, as requested access to the Port Area to conduct requisite
soil and ground water sampling was not granted to PCCA or its Agents, nor were relevant
environmental conditional reports or documentation more recent than 2001 provided, PCCA is
therefore offering two separate but Qualified Bids.
The first Bid (Conditional Bid) offers an all cash purchase price of Twenty-Million Dollars
(US$20,000,000) payable in cash at the conditional closing of the Transaction. The closing
conditions are outlined in Section 3 of the Conditional Asset Purchase Agreement, and include
among other conditions an environmental remediation escrow amount not to exceed Three-Million
Three-Hundred Thousand Dollars (US$3,300,000), subject to the terms and conditions of the
Environmental Escrow Agreement in Exhibit C. The Company will allow PCCA to conduct
further environmental due diligence for a period not to exceed 90 days from Bid acceptance.
The second Bid (Unconditional Bid) is unconditional to the extent described in Section 3 of the
Unconditional Asset Purchase Agreement, and offers an all cash purchase price of Twelve-Million
Nine-Hundred Thousand Dollars (US$12,900,000) payable in cash at the closing of the
Transaction.
Also, in both the Conditional and Unconditional Bids, the PCCA is prepared to make an additional
Thirteen-Million Dollars (US$13,000,000) in Capital, Deferred Maintenance, and Environmental
Improvements in the Port Area if the Company (or Alternate Operator) continues to operate the
non-Port Assets in the production of alumina, as per Section 2.4 of the Agreement.
The Transaction assumes Company obtains all requisite approvals by the Court, and all relevant
State and Federal Regulatory Agencies prior to or upon Closing.
Good Faith Deposit and Funding
Per the bidding procedures, PCCA has made a Good Faith Deposit of Two-Million Dollars
(US$2,000,000) with the Debtors claims and noticing agent KCC c/o Bank of America, in the
account of Computershare Inc. AFF Sherwin Sale Funding Account (Fed/SWIFT confirmation
0418I1B7032R010426). Upon acceptance of PCCA Bid and all closing requirements, PCCA will
deliver the remaining cash balance from its internal cash resources. The Bids are not subject to any
financing contingency or lender approval requirements.

2
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

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Necessary Approvals
The Bids and attached Asset Purchase Agreements are subject to PCCA Commission approval,
scheduled for vote on Tuesday, April 19th, 2016. At that time, PCCA Staff shall also seek
authorization and approvals to participate in the Asset Auction scheduled (if necessary) scheduled
for April 20th at 11:00 a.m. Eastern Time in the offices of Kirkland & Ellis, located at 601
Lexington Avenue, New York, New York 10022. Notification of PCCA Commission approval or
rejection will be sent in writing by 5 p.m. Eastern Time, on Tuesday, April 19th, 2016.
Conditions to Closing
Conditions to Closing shall, in addition to those outlined in each Agreement, also include an
easement in perpetuity granted to PCCA for unrestricted access to the Port Area via the La Quinta
Road as outlined in the attached Exhibit A-4 of the Agreement.
Contact Information
If there are any questions regarding our proposal, please do not hesitate to contact directly:
Counsel: Port of Corpus Christi Authority
800 Shoreline Blvd, Suite 300N
Corpus Christi, Texas, 78401
Attn: Jimmy Welder
Office: 361-561-8002
Email: jwelder@welderleshin.com

Port of Corpus Christi Authority


222 Power Street
Corpus Christi, Texas, U.S.A.
Attn: Sean C. Strawbridge,
Chief Operating Officer
Office: 361-885-6133 | Cell: 361-730-8174
Email: sstrawbridge@pocca.com
Conclusion

These binding Bids reflect certain Terms and Conditions upon which the PCCA is prepared to
pursue in the acquisition of a 100% interest in the Port Assets of the Company as well as make
significant capital improvements in the dock structures and the environmental conditions of the
Port Area. PCCA believes these Bids may serve as an opportunity for the Company (or Alternate),
its Creditors, Employees, and Regulators to be satisfied with the credibility of PCCA as an owner
of the Port Area and associated Port Assets.
Based on the conditions described in the Agreement(s) and the mutual interest in a successful
closing, we intend to make every effort to advance the proposed Transaction in a timely and
expeditious manner.

3
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

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Cordially,
PORT OF CORPUS CHRISTI AUTHORITY

John P. LaRue
Executive Director

cc:

POCCA Commission
Sean Strawbridge Chief Operating Officer, POCCA
Jarl Pedersen Chief Commercial Officer, POCCA
Jimmy Welder General Counsel, Welder Leshin LLP
Darrin Aldrich Director of Real Estate, POCCA
Debra Baker Baker Wotring, LLP
John Muir Baker Wotring, LLP
Lynn Butler Husch Blackwell, LLP

Attachments: Conditional Asset Purchase Agreement


Unconditional Asset Purchase Agreement
Exhibit A-1 Overview of Port Area
Exhibit A-2 Tract A Plat Map
Exhibit A-3 Metes & Bounds Descriptions
Exhibit A-4 Overview of Requisite Access / Egress Easement
Exhibit B Description of Equipment / Improvements
Exhibit C Environmental Escrow Agreement
Exhibit D Environmental Due Diligence, Scope of Work
and Estimated Time Line
Exhibit D-1 Due Diligence Sampling and Analysis Plan
Exhibit D-2 Monitor Well and Sample Location Map
Exhibit E -- Consent to Evaluate, Investigate and Survey Permit

JPL/scs

4
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

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CONDITIONAL ASSET PURCHASE AGREEMENT


This Asset Purchase Agreement (this Agreement) is made and entered as of the ___ day
of April, 2016, by and between SHERWIN ALUMINA COMPANY, LLC, a Delaware limited
liability company (Seller) and the PORT OF CORPUS CHRISTI AUTHORITY OF NUECES
COUNTY, TEXAS, a navigation district and political subdivision of the State of Texas (the
Buyer). Seller and Buyer are sometimes referred to herein, collectively, as the Parties and,
individually, as a Party.
RECITALS:
WHEREAS, Seller and various affiliates commenced cases under chapter 11 of title 11 of
the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the
Southern District of Texas, Corpus Christi Division (the Bankruptcy Court); and
WHEREAS, in Case No. 16-20012, In re: Sherwin Alumina Company, LLC, et al, Debtors,
the Bankruptcy Court has entered a Bidding Procedures Order setting forth the process by which
the debtors, including Seller, are authorized to conduct one or more sale transactions and an auction
of all or substantially all of their assets (the Bidding Procedures); and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, the submerged land in
Nueces County, Texas, and the fast land in San Patricio County, Texas, depicted and described on
Exhibits A-1, A-2 and A-3 attached hereto, together with the all rights, title and interest of Seller
in and to the rights, benefits, privileges, easements, and appurtenances thereon or in anywise
appertaining thereto (collectively, the Land); and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, the Port Area located in
Gregory, Texas, including the land (Land) as outlined and described on Exhibits A-1, A-2 and
A-3, the docks, piers, mooring structures, bauxite storage barn, and other improvements as
(collectively, the Improvements), and the cranes, loaders, material handling equipment and other
assets as described in Exhibit B hereto (collectively, the Equipment) and, together with the Land
and Improvements, are collectively referred to as the Acquired Port Assets (Acquired Assets)
pursuant to the terms and conditions of this Agreement; and
WHEREAS, subject to the receipt of any required approvals and orders from the
Bankruptcy Court, the Parties hereto have agreed that Seller will sell and Buyer will acquire the
Acquired Assets free and clear of any liens under Section 363 of the Bankruptcy Code.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
agreements herein contained Seller and Buyer hereby agree as follows.
1.

Sale and Transfer of Assets.


1.1

Pursuant to Section 363 of the Bankruptcy Code, for the consideration hereinafter
set forth and subject to the terms and conditions of this Agreement and the Sale
Order, Buyer agrees to purchase from Seller and Seller agrees to sell, transfer and
assign to Buyer, all of Sellers right, title and interests in, to and under the Acquired
Assets as of the Closing free and clear of all liens and encumbrances.
1

EXHIBIT A

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1.2

2.

3.

Sale Order means an order of the Bankruptcy Court approving: (a) the execution,
delivery and performance by Seller of this Agreement, and (b) the sale of the
Acquired Assets to Buyer hereunder.

Payment and Other Consideration. The consideration for the sale, transfer and
assignment of the Acquired Assets by Seller to Buyer is Buyers payment of cash to Seller
in the amount of Twenty Million Dollars ($20,000,000) (the Purchase Price). The
Purchase Price shall be paid by Buyer to Seller as follows:
2.1

Not later than 4:00 P.M. CST on April 18, 2016, Buyer shall deliver by wire transfer
of immediately available funds a down payment in the amount of Two Million
Dollars ($2,000,000) of the Purchase Price (the Earnest Money) to an account or
accounts designated by Seller in accordance with Section V1(n) of the Bidding
Procedures (as defined in the Recitals of this Agreement). At the Closing the Earnest
Money will be credited to the Purchase Price as provided in Section XIV of the
Bidding Procedures. Except as provided in Sections 3.7 and 3.9, if Buyer is the
Successful Bidder (as defined in the Bidding Procedures) and the conditions set forth
in Sections 3.8 and 3.10 are met and Buyer fails to close the purchase through no
fault of Seller, then the Earnest Money shall be forfeited to, and retained irrevocably
by, Seller. Except as provided in Section 3.7, if Buyer is not the Successful Bidder,
the Earnest Money shall be returned to Buyer (with any interest earned on the
Earnest Money) within ten (10) business days after consummation of any Sale (as
defined in the Bidding Procedures) or upon permanent withdrawal of the proposed
Sale.

2.2

At the Closing, Buyer shall deliver by wire transfer of immediately available funds
Three Million Three Hundred Thousand Dollars ($3,300,000) of the Purchase Price
(the Environmental Escrow Payment) to the Environmental Escrow Administrator
(as defined in Section 6.7), and the Environmental Escrow Payment shall be
administered in accordance with the Environmental Escrow Agreement in the form
attached hereto as Exhibit C.

2.3

At the Closing, Buyer shall deliver to Seller by wire transfer of immediately


available funds the balance of the purchase price, Fourteen Million Seven Hundred
Thousand Dollars ($14,700,000) (the Closing Cash Payment); that is, the Purchase
Price minus the Good Faith Deposit, minus the Environmental Escrow Payment.

2.4

Should Seller (or Alternate Operator of the Non-Port Assets) continue operations of
the Non-Port Assets, Buyer agrees that, upon reaching mutually agreeable Lease
Terms and Conditions with Seller or Alternate Operator, it will make a minimum of
Thirteen-Million Dollars ($13,000,000) in Capital, Deferred Maintenance, and
Environmental improvements to the Buyers Acquired Assets.

Closing; Termination. The closing of the transactions described herein contemplated by


this Agreement (the Closing) shall take place as follows.

EXHIBIT A

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3.1

The Closing shall take place by electronic exchange of documents as soon as


possible after the Sale Order is issued by the Bankruptcy Court, and the provisions
in Section 3.8 are satisfied, but in no event later than five (5) business days after
such order is issued or the date on which Seller notifies Buyer of such order, if later.

3.2

At the Closing, Buyer shall deliver the Environmental Escrow Payment to the
Environmental Escrow Administrator as provided in Section 2.2 and shall pay by
wire transfer the Closing Cash Payment into an account designated by the Seller at
least 48 hours prior to the Closing.

3.3

At the Closing, the Parties shall execute and deliver such instruments as are
necessary to effect the transfer of the Acquired Assets to Buyer.

3.4

If the Sale Order has not been entered within thirty (30) days following the date
hereof, either Party may terminate this Agreement upon written notice to the other
Party, and upon such termination, neither Party shall have any obligation or liability
to the other Party (except pursuant to any confidentiality agreement between the
Parties).

3.5

In the event that Buyer has not consummated the Closing within the time frame
contemplated by Section 3.1, from and after the expiration of such time frame, Seller
may terminate this Agreement upon written notice to Buyer; provided that such
termination will not relieve Buyer of any liability for breach of this Agreement in
failing to so consummate.

3.6

This Agreement may be terminated by Seller, upon written notice to Buyer, if it or


its governing body determines, in consultation with outside legal counsel, that
proceeding with the transaction contemplated hereby or failing to terminate this
Agreement would be inconsistent with its fiduciary duties.

3.7

This Agreement shall be terminated by Buyer, upon written notice to Seller, if the
governing body of Buyer does not approve this Agreement at its meeting on April
19, 2016. Notwithstanding anything to the contrary contained in this Agreement, if
Buyer terminates this Agreement pursuant to this Section 3.7, the Earnest Money
shall be returned to Buyer on or before 3:00 p.m. CST on April 20, 2016

3.8

Closing is conditioned upon the Office of the Attorney General of Texas (the AG),
in its representation of the Texas Commission on Environmental Quality (the
TCEQ), issuing a letter to Buyer stating that the AG and TCEQ consent to the
partition of the Land from the remainder of the Debtors real property and that the
Buyer obtains the protections and benefits of an Innocent Owner/Operator
Certificate (IOC) under Texas Health & Safety Code sections 361.751-361.754
with respect to the Land. Alternatively, this requirement to Closing may be satisfied
by the AG and TCEQ agreeing to covenant not to sue or assert civil or criminal
claims or causes of action against Buyer arising out of the Land for any events or
environmental contamination occurring prior to the acquisition of the Land pursuant
to Sections 106, 107 of CERCLA, 42 U.S.C. 9606, 9607; RCRA 3008, 7002,

EXHIBIT A

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7003, 42 U.S.C. 6928, 6972, 6973; and any similar state law, including but not
limited to Texas Health & Safety Code Chapter 361 and Texas Water Code Chapter
26.
3.9

Immediately after Closing, the Buyer shall commence its work to determine the
condition of the subsurface soil and groundwater of the Land (the "Environmental
Due Diligence"), as set forth in the Environmental Due Diligence, Scope of Work
and Estimated Time Line attached hereto as Exhibit D. After completion of the
Environmental Due Diligence, Buyer will establish an appropriate remediation cost
estimate for soil and/or groundwater conditions of the Land. Buyer shall provide
Seller with a Statement of Funds Used during remediation and any remaining
Environmental Escrow Funds not expended in the remediation process shall be
released to Seller at the completion of remediation per the Terms of the
Environmental Escrow Agreement in Exhibit C, of which release shall not exceed
twenty-four (24) months after Closing.

3.10

The Sale Order shall provide Buyer with an access easement to the Land from State
Hwy 361 over Sellers private roadway known as La Quinta Road as depicted on
Exhibit A-4 attached hereto and made a part hereof, situated in San Patricio County,
Texas, if Buyer has been unable to obtain such an easement before the Closing.

3.11

Seller agrees to grant Buyer access to the Land and Improvements from the date of
this Agreement to Closing for purposes of Buyers Environmental Due Diligence,
inspecting and investigating the Land, under the terms set forth in the Access
Agreement attached hereto as Exhibit E.

3.12

If, between the date of this Agreement and Closing, all or a material portion of the
Acquired Assets are damaged or destroyed as a result of natural occurring events,
and not through fault or negligence of Seller or Sellers agents, Buyer shall
nevertheless consummate the transactions contemplated hereby, provided that
Sellers right to all insurance proceeds resulting from such damage or destruction
shall be assigned to Buyer at the Closing and shall be retained by Buyer without a
reduction in the Purchase Price, and Seller shall have no further obligation to Buyer
with regard to such damage or destruction provided Seller has maintained adequate
property insurance on the Improvements.

4.

Taxes. Buyer shall pay or cause to be paid all excise taxes (including, but not limited to,
sales and use, gross receipts, transfer, transaction, conveyance fees and stamp taxes)
imposed by any government authority on or with respect to this transaction but shall not be
obligated to pay any taxes previously levied against the Acquired Assets that apply to
periods prior to, or unrelated to, this transaction. If Seller is required to remit or pay taxes
that are the responsibility of Buyer, Buyer shall promptly reimburse Seller for any such
taxes. If Buyer is entitled to an exemption from such taxes, Buyer shall furnish Seller with
an exemption certificate.

5.

As-Is Transfer.

EXHIBIT A

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6.

5.1

(I) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS,


STATUTORY OR IMPLIED AND (II) SELLER EXPRESSLY DISCLAIMS,
AND BUYER HEREBY WAIVES, ALL LIABILITY AND RESPONSIBILITY
FOR, AND BUYER IS NOT RELYING ON, ANY REPRESENTATION,
WARRANTY,
STATEMENT
OR
INFORMATION
MADE
OR
COMMUNICATED (ORALLY OR IN WRITING) TO BUYER OR ANY OF ITS
AFFILIATES,
EMPLOYEES,
AGENTS,
CONSULTANTS
OR
REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION,
PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO BUYER
BY SELLER OR ANY OFFICER, DIRECTOR, SUPERVISOR, EMPLOYEE,
AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF SELLER OR
ANY OF ITS RESPECTIVE AFFILIATES).

5.2

SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER IS NOT


RELYING ON AND HEREBY EXPRESSLY WAIVES (I) ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY, (II) ANY IMPLIED OR
EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (III)
ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS, (IV) ANY RIGHTS OF PURCHASERS
UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF
CONSIDERATION, (V) ANY CLAIMS BY BUYER FOR DAMAGES
BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN AS OF THE
DATE OF THIS AGREEMENT OR THE CLOSING DATE, AND (VI) ANY AND
ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW; IT
BEING THE EXPRESS INTENTION OF BOTH BUYER AND SELLER THAT
THE ASSETS SHALL BE CONVEYED TO BUYER IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, AS IS AND WHERE IS, WITH ALL
FAULTS, AND THAT BUYER HAS MADE OR SHALL MAKE PRIOR TO
CLOSING SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE.

Definitions. The following terms shall have the meanings set forth below for all purposes
of this Agreement and corresponding Exhibits.
6.1

Acceptable Environmental Standard is Texas Risk Reduction Program Remedy


Standard A commercial/industrial land use standards for all exposure pathways in
accordance with 30 Texas Administrative Code 350.32.

6.2

"Authority" means any state, federal and local governmental entity, agency or
agencies having jurisdiction over the Port Real Property.

6.3

COC means a Certificate of Completion letter from the TCEQ under the Texas
Voluntary Cleanup Program (VCP), or the equivalent, showing that no further
work is required to meet the Acceptable Environmental Standard.

6.4

Contamination means the presence at, on, under, originating from or migrating
to the Land of any chemical, compound, material, substance or other matter that (i)
is a flammable, corrosive, explosive, hazardous, toxic or regulated material,

EXHIBIT A

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substance or waste, or other injurious or potentially injurious material, whether


injurious or potentially injurious by itself or in combination with other materials;
(ii) is controlled, designated in or governed by any Environmental Law (as herein
defined); and (iii) gives rise to any requirements or obligations (including but not
limited to reporting, notice or publication requirements or response, removal or
remediation) under any applicable Environmental Law.
6.5

"Covered Contamination" for the Land, means Contamination that (a) existed at,
on or under, or originated from the Land prior to the Closing Date, or (b) migrated
onto the Land from any property currently or previously owned or operated by the
Seller or Sellers Affiliates and (b) is required to be remediated to
industrial/commercial standards by any Authority pursuant to Environmental Laws.
For purposes of this Agreement, it is presumed that Contamination first identified
in the NEI Phase II Environmental Site Assessment conducted in 2001 and final
report dated March 1, 2001, and subsequent sampling conducted during Due
Diligence period, is Covered Contamination unless it is proven that the
Contamination was caused solely by the actions of the Buyer or another person or
entity not related to the Buyer after the date of the Closing.

6.6

Environmental Escrow Account means the account with the funds set aside from
the Closing Cash Payment to be held by a third party escrow agent intended for use
by the Buyer to cover any and all Remediation Costs of Covered Contamination on
the Land following Closing.

6.7

Environmental Escrow Administrator means a third party administrator of the


Environmental Escrow mutually acceptable to Buyer and Seller.

6.8

Environmental Law or Environmental Laws means any and all federal, state,
county or local laws, ordinances, rules, decrees, orders or regulations relating to
hazardous substances, hazardous materials, hazardous waste, toxic substances,
pollutants or words of similar import, or environmental conditions on, under or
about the Properties, or soil and groundwater conditions, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. 9601, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. 6901, et seq., any amendments to the foregoing, and any
similar federal, state or local laws, ordinances, rules, decrees, orders or regulations.

6.9

"Remediation Activities" means any investigation (including without limitation,


any site investigation), study, assessment, testing, monitoring, containment,
removal, disposal, closure, corrective action, remediation (whether active or
passive), natural attenuation, bioremediation, response, cleanup or abatement,
whether on-site or off-site, of Covered Contamination to industrial/commercial
standards as required by Environmental Laws in effect at such time.

6.10

"Remediation Costs" means all costs incurred for or in connection with


Remediation Activities at or relating to the Properties to attain an
industrial/commercial standard necessary to achieve the Acceptable Environmental

EXHIBIT A

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Standard and obtain a COC for the Covered Contamination at the Land.
Remediation Costs include, without limitation, investigation and evaluation costs,
sampling and analysis costs, reporting costs, planning and design costs, consultant
and contractor costs, labor costs, equipment costs, construction costs, access costs,
disposal costs, transportation costs, legal fees and expenses, permit fees and costs,
TCEQ Voluntary Cleanup Costs or any other Agency costs, monitoring costs, and
oversight costs incurred after the Closing Date by an Authority. Remediation Costs
also include, but are not limited to, costs related to any liability for off-site disposal
of material containing Covered Contamination that is removed from a Land and
disposed off-site as part of the Remediation of Covered Contamination within the
scope of this Agreement.
7.

Environmental Escrow Agreement


7.1

At least one business day prior to Closing, Buyer and Seller will enter into an
Environmental Escrow Agreement (Exhibit C) with the Environmental Escrow
Administrator selected by the Parties.

7.2

At the time of the Closing, Buyer will deliver to the Environmental Escrow
Administrator the sum of Three Million Three Hundred Thousand U.S. Dollars
($3,300,000) (the Environmental Escrow Payment) to be held by the
Environmental Escrow Administrator under the terms of the Environmental Escrow
Agreement. The Environmental Escrow Payment and all interest earned thereon
shall be disbursed under the conditions set forth the Environmental Escrow
Agreement.

7.3

Buyer will have a period of twenty-four (24) months after Closing to conduct
Remediation Activities to determine if the Land meets the Acceptable
Environmental Standard. If Buyer discovers during the Environmental Due
Diligence period that Covered Contamination exists which exceeds reporting
standards under the Environmental Law or that the Land does not meet the
Acceptable Environmental Standard, Buyer will provide notice to the Seller and the
TCEQ, or other applicable Authority.

7.4

If, Remediation Activities or notice to the TCEQ, or other applicable Authority, is


required to meet the Acceptable Environmental Standard and obtain a COC, Buyer
will first seek to place the Land into the Texas VCP and proceed with the
Remediation Activities. Buyer shall have the right to instruct the Environmental
Escrow Administrator to disburse funds from the Environmental Escrow Account
under the terms of the Environmental Escrow Agreement.

7.5

Upon receipt of a final COC, or a determination by the TCEQ, or other applicable


Authority that no further Remediation Activity is required to meet the Acceptable
Environmental Standard, Buyer shall instruct the Environmental Escrow
Administrator to release any remaining funds in the Environmental Escrow
Account, pursuant to the terms of the Environmental Escrow Agreement, and close
the Environmental Escrow Account.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 13 of 71

8.

Miscellaneous.
8.1

Non-Compensatory Damages. Neither Buyer nor Seller shall be entitled to recover


from the other, or its respective affiliates, any indirect, special, consequential,
punitive or exemplary damages, or damages for lost profits of any kind or loss of
business opportunity, arising under or in connection with this Agreement or the
transactions contemplated hereby. Subject to the preceding sentence, Buyer, on
behalf of itself and each of its affiliates, and Seller, on behalf of itself and its
affiliates, waive any right to recover any indirect, special, consequential, punitive or
exemplary damages, or damages for lost profits of any kind or loss of business
opportunity, arising in connection with or with respect to this Agreement or the
transactions contemplated hereby.

8.2

Specific Performance. Each of the Parties agrees that irreparable damage would
occur and that the Parties would not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that each
of the Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement without proof of damages or posting of any bond or other security, this
being in addition to any other remedy to which it is entitled at law or in equity.

8.3

Entire Agreement. This Agreement, the documents to be executed pursuant hereto


and all exhibits attached hereto constitute the entire agreement between the Parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the Parties
pertaining to the subject matter hereof.

8.4

Publicity. Each Party shall consult with the other Parties prior to making any public
release concerning this Agreement, and, except as required by applicable Law or by
any Governmental Authority or stock exchange (including the Bankruptcy Court in
connection with the Bankruptcy Cases) (in which case the Party required to make
such release shall allow the other Parties reasonable time to comment on such release
in advance of such issuance), no Party shall issue any such release without the prior
written consent of the other Party, which consent shall not be unreasonably withheld
or delayed.

8.5

Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS


AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING
ANY CONFLICTS OF LAW, RULE OR PRINCIPLE THAT MIGHT REFER
CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER
JURISDICTION, AND THE APPLICABLE PROVISIONS OF THE
BANKRUPTCY CODE.

8.6

Exclusive Jurisdiction; Waiver of Jury Trial.


ALL ACTIONS AND
PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 14 of 71

IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS


AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
SHALL BE EXCLUSIVELY LITIGATED, HEARD AND DETERMINED IN
THE BANKRUPTCY COURT, AND THE PARTIES HEREBY
UNCONDITIONALLY AND IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION AND AUTHORITY OF THE BANKRUPTCY COURT TO
HEAR AND DETERMINE ANY SUCH ACTION OR PROCEEDING;
PROVIDED, HOWEVER, THAT IF THE BANKRUPTCY CASES ARE CLOSED
OR THE BANKRUPTCY COURT IS UNWILLING OR UNABLE TO HEAR
ANY SUCH DISPUTE, THE PARTIES HEREBY UNCONDITIONALLY AND
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS. EACH PARTY HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.7

Approval of the Bankruptcy Court. Notwithstanding anything herein to the


contrary, any and all obligations under this Agreement are subject to entry of the
Sale Order.

8.8

Severability. If any term or other provision of this Agreement is invalid, illegal or


incapable of being enforced by any rule of Law or public policy, all other terms and
provision of this Agreement shall nevertheless remain in full force and effect;
provided, however, that in such case the Parties hereto shall use their reasonable best
efforts to achieve the purpose of the invalid term or provision.

8.9

Counterparts. This Agreement may be executed in any number of counterparts,


and each counterpart hereof shall be deemed to be an original instrument, but all
such counterparts shall constitute but one instrument. Any signature hereto
delivered by a Party by facsimile or electronic transmission shall be deemed an
original signature hereto.

8.10

Expenses. Whether or not the transactions contemplated herein are consummated,


except as set forth in Section 4, each of the Parties shall be responsible for the
payment of its own respective costs and expenses incurred in connection with this
Agreement, including the fees of any attorneys, accountants, brokers or advisors
employed or retained by or on behalf of such party.

[The remainder of this page is left intentionally blank.]

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 15 of 71

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
SELLER:
SHERWIN ALUMINA COMPANY, LLC

By:
Its:

BUYER:
PORT OF CORPUS CHRISTI AUTHORITY OF
NUECES COUNTY. TEXAS

By:

John P. LaRue

Its:

Executive Director

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 16 of 71

EXHIBIT A
To Asset Purchase Agreement
DESCRIPTION OF PORT AREA

EXHIBIT A

EXHIBIT A-1
Sherwin Alumina Option 4 +/- 79.5 Acres

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 17 of 71

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 18 of 71

EXHIBIT A-2
EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 19 of 71


Tract A
METES & BOUNDS DESCRIPTION
79.5 ACRES
April 2016
STATE OF TEXAS COUNTY OF
NUECES AND SAN PATRICIO

EXHIBIT A-3

Being a tract of 79.5 acres of land, more or less, with submerged portion in Corpus Christi Bay, Nueces
County, Texas within the limits of the submerged land conveyed by the State of Texas to Nueces County
Navigation District (now known as Port of Corpus Christi Authority) by Patent 106 dated July 31, 1951,
recorded in V. 522, pages 201-203 in Nueces County Deed Records. Upland portion of said Tract is situated
in San Patricio County, Texas, all within the property owned by Sherwin Alumina. Said Tract A further
described as follows:
BEGINNING at a point (P.O.B.) on the south boundary of Sherwin Alumina submerged Tract 1-Parcel 4.
Said P.O.B. also being on the Port of Corpus Christi Authority (PCCA) bulkhead line.
THENCE, North 77 31' 20" West along said bulkhead line at approximately 1,519 to a point on the
northeast corner of a mooring-turning structure easement designated as Tract B (see attached plat) in all,
for a distance of 2,159 to a point on the southwest corner of Sherwin Alumina submerged Tract 1-Parcel
5,
THENCE, North 1 10' 31" West along a common boundary between said Sherwin Alumina Parcel 5 and
Cheniere Energy to a corner for a distance of 767,
THENCE, along said common boundary, North 17 32' 43" West for a distance of approximately 1,465 to
the northwest corner of this Tract,
THENCE, East along north boundary of this Tract to a point between south edge of road and the conveyor
buildings retaining wall for a distance of approximately 1,190,
THENCE, South along said retaining wall to a point on the Southerly limit of conveyor building for a
distance of approximately 1,283,
THENCE, East for a distance of approximately 357 to an interior corner,
THENCE, South to a point marking the location of a fence line shown per Reynolds Metals Co. plant plot
plan-drawing #300-L-3014, for a distance of approximately 112,
THENCE, East along said fence line for a distance of approximately 525 to a fence corner,
THENCE, South, passing an existing conveyor at approximately 300, in all for a distance of approximately
340 to an interior corner,
THENCE, East for a distance of approximately 684 to a point being on the east property line of Sherwin
Alumina,
THENCE, South along said east property line for a distance of approximately 514 to a point on the East
corner of the aforementioned Sherwin Alumina Tract 1-Parcel 4,
THENCE, South 25 59' 40" West along east boundary of said Parcel 4 and property line for a distance of
411.83 to the point of beginning (P.O.B.).
Containing approximately 79.5 Acres of land, more or less.Tract B-See attached plat.EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 20 of 71

Exhibit A-4 Access along the LaQuinta Road

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 21 of 71

EXHIBIT B
To Asset Purchase Agreement
DESCRIPTION OF EQUIPMENTS/IMPROVEMENTS

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 22 of 71

EXHIBIT B
To Asset Purchase Agreement
DESCRIPTION OF IMPROVEMENTS AND EQUIPMENT
Plant Plot Plan #
Facility 300-L-3014 (R19)
5
5
5
5

15
15
15
15
15
15
15
15
15
15
15
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90

5
5-C-2

14A
14B
14-1
15C-8
15A
15A-C-1
15A-C-2
15A-C-3
15B
15B-C-1
15B-C-2
15B-C-3
15C-30
15-T-9
90
90-C-57
90-C-32
90-1
90-T-1
90-C-16
90-C-15
90-C-51
90-T-2
90-C-48
90-C-54
90-T-3
90-C-47
90-C-49
No Number
130
No Number
No Number
No Number
51A-C-78

Description of Improvements and Equipment


(Including but Not Limited to the Following)
5 Dock Pier 739' long X 60' wide (Bauxite Unloading Dock)
Conveyor belt 1,997' long X 4' wide (Dock Conveyor)
2 E-Cranes and accessories (Spares, Buckets, etc.)
2 Receiving Hoppers and accessories (Spares, Environmental Controls, etc.)
Sample Building (Bauxite)
Transfer Building (Bauxite)
S.H.
14 Cross Conveyor
Bauxite Storage Building 1200' long X 100' wide
15A Conveyor Belt (Overhead/Tripper)
15A South Reclaim Conveyor
15A North Reclaim Conveyor
Bauxite Storage Building 1200' long X 100' wide
15B Conveyor Belt (Overhead/Tripper)
15B South Reclaim Conveyor
15B North Reclaim Conveyor
DLA Reclaim Conveyor (Bauxite Stockpile Area)
DLA Truck Dump Hopper (Bauxite Stockpile Area)
90 Dock Pier 668' long X 40' wide (Alumina Loading Dock)
Alumina Loading Tower and accessories
Shuttle Conveyor (Alumina Loading Dock)
90 Dock Belt Conveyor
S.H.
Unloading Building (Rail)
1 Silo (Alumina Storage) 110' diameter X 64' high
1 Silo to Belt Airslide
1 Silo Chamber Blower
Elevator to 1 Silo Airslide
2 Silo (Alumina Storage) 160' diameter X 74' high
2 Silo Belt Conveyor Airslide
Elevator to 2 Silo Airslide
3 Silo (Alumina Storage) 230' Diameter X 64' High
3 Silo to Belt Airslide
Elevator to 3 Silo Airslide
Parts Storage Building (East of Alumina Silos)
Operations & Maintenance Building- Area 1 & 2
Maintenance Building (Adjacent to Building 130)
Maintenance Building (Adjacent to Storage Pad)
Guard Building (no building number on plans)
3 51/90 Alumina Conveyor

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 23 of 71

EXHIBIT C
To Asset Purchase Agreement
ENVIRONMENTAL ESCROW AGREEMENT
THIS ENVIRONMENTAL ESCROW AGREEMENT (Agreement) is made and
entered into as of this ____ day of ______________, 2016, between SHERWIN ALUMINA
COMPANY, LLC, a Delaware limited liability company (Seller) and the PORT OF CORPUS
CHRISTI AUTHORITY OF NUECES COUNTY, TEXAS, a navigation district and political
subdivision of the State of Texas (the Buyer), and ________________ (Environmental Escrow
Administrator or Administrator) (collectively, the Parties.)
RECITALS
WHEREAS, Seller and Buyer have executed an Asset Purchase Agreement (Purchase
Agreement), dated _____________, 2016, in connection with the transfer of certain Land,
Improvements and Equipment collectively the Acquired Assets (all as defined in the Purchase
Agreement) and identified in Attachment One, attached hereto;
WHEREAS, under the terms of the Purchase Agreement, Buyer has agreed to deposit with
the Administrator funds in the amount of $3,300,000 of the purchase price in U.S. Dollars (the
Environmental Escrow Payment) to be held in an Environmental Escrow Account (Escrow
Account) and the parties are entering into this Environmental Escrow Agreement (Escrow
Agreement) to set forth the terms and conditions pursuant to which the Environmental Escrow
Payment will be escrowed, held and disbursed.
NOW, THEREFORE, in consideration of the agreements set forth in the Purchase
Agreement and the mutual covenants set forth in this Agreement, the parties agree as follows:
1.
Establishment of Account. Prior to Closing, Seller and Buyer shall mutually agree upon
and appoint a person or entity to serve as Administrator pursuant to the Agreement. Prior to
Closing, Seller, Buyer and Administrator shall establish a money market interest-bearing Escrow
Account with a federally insured bank with a net worth no less than $1,000,000,000.00 that is
mutually acceptable to Buyer and Seller and set up for the benefit of Buyer and Seller. At Closing,
Buyer shall make the Environmental Escrow Payment to Administrator for deposit into the Escrow
Account. The Administrator shall promptly, upon written directions from Buyer, invest the funds
according to guidelines included in Attachment Two, and shall provide Seller and Buyer with
prompt written notice of all fund investments and reinvestments. If no written instructions from
the Buyers Representatives are received by the Administrator, then the Administrator shall invest
all available funds in _____________. Interest will accrue to the benefit of the Escrow Account
and will be disbursed to Buyer for the payment of Remediation Costs only after the Environmental
Escrow Payment has been exhausted, otherwise interest will be released to Seller with the release
of any remaining funds at the closure of the Escrow Account.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 24 of 71

2.
Performance of Remediation Activities. Buyer agrees to undertake and perform, in good
faith and with due diligence, the initial Remediation Activities to determine the environmental
condition of the Land. If Buyer discovers during the period that Covered Contamination exists
which exceeds reporting standards under the Environmental Law or that the Land does not meet
the Acceptable Environmental Standard (as defined in the Purchase Agreement), Buyer will
provide notice to the Seller and the TCEQ, or other applicable Authority.
3.
Purpose for Environmental Escrow Payment. The Environmental Escrow Payment will
be held in the Escrow Account for use by the Buyer to pay for any and all Remediation Costs or
Remediation Activities associated with the Land needed to obtain a Final Certificate of Closure
letter (COC) from the TCEQ or the equivalent from any other applicable Authority with
jurisdiction over the environmental condition of the Land, demonstrating that the Remediation
Activities for the Land has been completed.
4.
Disbursement of Environmental Escrow Payment. After commencement of the
Remediation Activities, Buyer may periodically instruct the Administrator to disburse funds for
Remediation Costs required to meet the Acceptable Environmental Standard and obtain a COC, as
Buyer sees fit for the Remediation Activities.
5.
Release of Environmental Escrow Payment. If after Buyers receipt of the COC letter
demonstrating that the Remediation Activities for the Land has been completed, any funds remain,
including interest, after disbursement to cover all Remediation Activities, Buyer shall instruct the
Administrator to release any remaining funds to Seller. The Parties understand and agree that the
Account is established for the sole purpose of ensuring that Remediation Activities are completed
and paid for and in no event shall Seller be allowed to withdraw any funds from or close out this
Account without the written authorization and approval of Buyer.
6.
Duties of the Administrator. The Administrator shall have no liability or responsibility
hereunder other than to hold and disburse funds from the Escrow Account in accordance with this
Agreement. The Administrator shall be obligated only for the good faith performance of such
duties as are specifically set forth in this Agreement, using the customary degree of care and skill
ordinarily exercised by similar professionals, and shall be obligated to act only in accordance with
written instructions received by it from Buyer, or Buyers designated representative, as provided
in this Agreement. It is agreed that Administrators duties hereunder are ministerial in nature and
that Administrator shall incur no liability in connection with the performance of its duties under
this Agreement, except for damages, losses or expenses caused by the gross negligence, willful
misconduct or bad faith of the Administrator.
7.
Records and Accounting. The Administrator shall maintain a record of all deposits,
income, disbursements and other transactions concerning the Account and shall provide to Buyer
and Seller a written accounting of all transactions every six (6) months. Upon request, Buyer and
Seller shall have the right to inspect, at reasonable times, all Records and Accounting described
herein, of the Administrator concerning the Account. Buyer or Seller may also make a request for
copies of such Records and Accounting and Administrator shall such copy shall be made to a Party
within thirty (30) calendar days of a request.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 25 of 71

8.
Compensation of Administrator. The Administrator shall be entitled to compensation
for its services from the funds in the Escrow Account (as well as reimbursement of its reasonable
and necessary fees and expenses) under this Agreement in accordance with the fee schedule set
forth in attached Attachment Three.
9.
Resignation, Removal, and Successor Administrator. If the Administrator is unable or
unwilling to continue to act as Administrator for this Agreement, it may resign upon giving of at
least ten (10) business days notice to Seller and Buyer. The Administrator may also be removed
at any time by written notice signed by the Seller and Buyer and delivered to Administrator. If at
any time the Administrator resigns, is removed, is dissolved or otherwise becomes incapable of
serving as Administrator, the Seller and Buyer shall promptly agree upon and designate a successor
Administrator.
10.
Dispute Resolution. The Parties agree that all controversies, claims or disputes between
them arising out of this Agreement (including but not limited to all contractual, tortious, common
law, statutory, legal or equitable claims or any other claims or disputes concerning the terms,
meaning of implementation of the Agreement (collectively Disputes) shall be resolved in
accordance with the following provisions:
(a) After written notice of such Dispute, the Parties shall in good faith use commercially
reasonable efforts to resolve the Dispute by meeting and conferring;
(b) In the event that the Parties are unable to resolve any Dispute by negotiation pursuant
to paragraph (a) above within twenty (20) business days after receipt of written notice
of Dispute, the Parties shall engage in a binding arbitration with a mutually agreedupon person. Any fees and costs of the mediation shall be shared equally between the
Seller and Buyer. The Parties shall make commercially reasonable efforts and take all
steps necessary to successfully resolve their Dispute by arbitration within ninety (90)
business days from the submission of the Dispute to the arbitrator.
11.
Notification. Any notice, request, consent, waiver or other communication required or
permitted to be given throughout this Agreement shall be effective only if in writing and shall be
deemed sufficient only if delivered in person, via Federal Express or other recognized overnight
courier, or by certified or registered mail, postage prepaid, return receipt requested, addressed as
follows:
To Seller:

_______________________
_______________________
_______________________
_______________________

To Buyer:

_______________________
_______________________
_______________________
_______________________

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 26 of 71

To Administrator:

_______________________
_______________________
_______________________
_______________________

12.
Choice of Law. This Agreement shall be construed according to the laws of the State of
Texas without regard to its application of its conflicts of laws rules.
13.
Non-assignment. All rights and obligations given herein to or imposed upon the Parties
hereto shall extend to and bind the respective successors and assigns, heirs, executors and
administrators of said Parties; however, Seller and Administrator may not transfer, convey or
assign their rights and obligations under this Agreement without the prior written consent of Buyer,
which consent shall not be unreasonably withheld.
14.
Multiple Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall constitute an original, and all counterparts shall constitute on Agreement.
15.
Severability. To the extent that any provision of this Agreement is prohibited by or held
invalid under applicable law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions in
the Agreement.
16.
Tax Matters: Form 1099 for interest earned on the Escrow Funds shall be furnished by
Administrator to Seller and any tax owing thereon shall be the obligation of Seller, except if the
interest earned is disbursed to cover Remediation Costs, in which case it will be furnished to Buyer
and any tax owing thereon shall be the obligation of the Buyer.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective on the latest date
executed below:
BY SELLER [insert full corporate name]:
BY ITS DULY AUTHORIZED REPRESENTATIVE:
SIGNATURE:___________________________________
PRINTED NAME:_______________________________
TITLE:________________________________________
DATE:________________________________________

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 27 of 71

BY BUYER [insert full corporate name]:


BY ITS DULY AUTHORIZED REPRESENTATIVE:
SIGNATURE:___________________________________
PRINTED NAME:_______________________________
TITLE:________________________________________
DATE:________________________________________

BY ADMINISTRATOR [insert full corporate name]


BY ITS DULY AUTHORIZED REPRESENTATIVE:
SIGNATURE:___________________________________
PRINTED NAME:_______________________________
TITLE:________________________________________
DATE:________________________________________

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 28 of 71

Escrow Agreement Attachment One


Description of Property and Equipment/Improvements
(Same as Exhibits A & B of Conditional Asset Purchase Agreement)

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 29 of 71

Escrow Agreement Attachment Two


Investment Guidelines
These guidelines cover the investment of funds held in the Escrow Account.
The classes of obligations listed below refer to conventional, interest bearing or discounted
securities and/or deposits. Investments in derivatives, structured securities (excluding assetbacked commercial paper) or structured deposits, including but not limited to inverse-floating rate
notes, range notes, indexed notes, yield curve notes, equity-linked notes, commodity-linked notes,
currency-linked notes, collateralized thrift and mortgage obligations, mortgage-backed interest
only/principal only notes or any derivative notes of any kind, are prohibited regardless of whether
such investments meet the credit criteria set forth below.
Approved Investments list
Maximum Term
12 months

1. U.S. Government - Direct Obligations


(e.g. US Treasury bills)
2. Bank Time Deposits (TD), Commercial Paper (CP)
And Other Corporate Obligations

3 months

- Investments in obligations unconditionally and irrevocably guaranteed by a


qualified institution are to be treated as obligations of the guaranteeing institution.
The obligor or guarantor, if applicable, must have minimum book equity of $1
billion.
- The obligor or guarantor's long term unsecured debt must be rated AA- or higher
by S&P and Fitch, or Aa3 by Moody's
3. Institutional Investment Funds

Redemption On
Demand

General -- All funds must have a(n):


- Long-term credit rating of "Aaa" or "AAA" by Moody's or S&P,
respectively.
- Minimum daily net asset value of $1 billion
- Derivatives guideline consistent with Rule 2a-7 of the 1940 Act
- Investment portfolio with a weighted average maturity of 120 days or less.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 30 of 71

Escrow Agreement Attachment Three


Escrow Administrators Fees

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 31 of 71

EXHIBIT D
To Asset Purchase Agreement
ENVIRONMENTAL DUE DILIGENCE, SCOPE OF WORK
AND ESTIMATED TIME LINE

1.

Complete activities related to Phase I Environmental Site Assessment including All


Appropriate Inquiries in accordance with ASTM 1527-13.
a. Obtain and review records from reasonably ascertainable sources that will help
identify recognized environmental conditions in connection with the Land.
b. Conduct visual and physical observations of the Land and all Equipment Assets for
purposes of identifying recognized environmental conditions in connection with the
Land.
c. Conduct interviews with past and present owners and occupants to identify
recognized environmental conditions in connection with the Land.
d. Conduct interviews with State and Local Governments to identify recognized
environmental conditions in connection with the Land.

Activity Start Third party reports and interviews are scheduled to start promptly upon start
of Due Diligence period. Physical survey of the Land are scheduled to start within
approximately 2 days of notice of start of Due Diligence period.
Estimated Activity Completion Activities under this first task are scheduled to be completed
within approximately 10 days of the start of the Due Diligence period.
2.

Complete activities related to Phase II Environmental Site Assessment including


subsurface investigation and testing in accordance with ASTM 1903-11.
a. Advance soil borings to a depth of 20-feet below ground surface in 20 locations
approximately identified on the attached Exhibit D-1. The locations of the soils
borings could be modified based on the results of the Phase I Environmental Site
Assessment. Samples will be collected from the vadose zone on two (2) feet
intervals and screened using photo-ionization detector (PID) equipment and from
the capillary fringe. The soil samples exhibiting the highest PID reading from each
soil boring and the soil samples collected from the capillary fringe of each soil
boring will be submitted to a laboratory for analyses of Total Metals including
Nickel, Copper, Aluminum, and Thallium by EPA Method 200.8; Benzene,
Toluene, Ethyl-Benzene, and Xylenes and Poly-Aromatic Hydrocarbons by EPA
Method 8260; Total Petroleum Hydrocarbons by Texas Method 1005; Polychlorinated Biphenyls by EPA Method 608; Flouride by EPA Method 300; Cyanide
by Method SM 4500; and analyses for normally occurring radioactive materials
1

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 32 of 71

using industry-recognized and agency approved test methods. A total of 40 soils


samples will be collected for analyses.
b. Collect groundwater samples from all existing monitoring wells (MW-1 through
MW-25) as identified on the attached Exhibit D-2. All existing monitor wells will
be purged using a pump prior to groundwater sample collection. Groundwater
samples (25) will be submitted to a laboratory for analyses of Total Dissolved
Solids by Method SM2540C; Total Metals including Nickel, Copper, Aluminum,
and Thallium by EPA Method 200.8; Benzene, Toluene, Ethyl-Benzene, and
Xylenes and Poly-Aromatic Hydrocarbons by EPA Method 8260; Total Petroleum
Hydrocarbons by Texas Method 1005; Poly-chlorinated Biphenyls by EPA Method
608; Flouride by EPA Method 300; Cyanide by Method SM 4500; and analyses for
normally occurring radioactive materials using industry recognized and agency
approved test methods.
c. Four (4) 2-inch groundwater monitoring wells will be installed to a total depth of
approximately 30-feet below ground surface in the approximate locations identified
in Exhibit D-1. The locations of the new groundwater monitoring wells could be
modified based on the results of the Phase I Environmental Site Assessment. During
installation, soil samples will be collected from the vadose zone on two (2) feet
intervals and screened using photo-ionization detector (PID) equipment, from the
capillary fringe, and from the total depth of each monitoring well location. The soil
samples exhibiting the highest PID reading from each monitoring well location, the
soil samples collected from the capillary fringe of each monitoring well location,
and the soil sample collected from the total depth of each monitoring well location
will be submitted to a laboratory for analyses of Total Metals including Nickel,
Copper, Aluminum, and Thallium by EPA Method 200.8; Benzene, Toluene,
Ethyl-Benzene, and Xylenes and Poly-Aromatic Hydrocarbons by EPA Method
8260; Total Petroleum Hydrocarbons by Texas Method 1005; Poly-chlorinated
Biphenyls by EPA Method 608; Flouride by EPA Method 300; Cyanide by Method
SM 4500; and analyses for normally occurring radioactive materials using industryrecognized and agency approved test methods. A total of 12 soils samples will be
collected for analyses. The four monitoring wells will be completed with PVC
casing with slotted screen from five feet above the capillary fringe to 30-feet below
ground surface and a concrete surface completion. Following installation, the new
monitor wells will be developed and purged using a pump. Groundwater samples
will then be collected from the new monitoring wells and groundwater samples (4)
will be submitted to a laboratory for analyses of Total Dissolved Solids by Method
SM2540C; Total Metals including Nickel, Copper, Aluminum, and Thallium by
EPA Method 200.8; Benzene, Toluene, Ethyl-Benzene, and Xylenes and PolyAromatic Hydrocarbons by EPA Method 8260; Total Petroleum Hydrocarbons by
Texas Method 1005; Poly-chlorinated Biphenyls by EPA Method 608; Flouride by
EPA Method 300; Cyanide by Method SM 4500; and analyses for normally
occurring radioactive materials using industry recognized and agency approved test
methods.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 33 of 71

Activity Start Well development and sampling of existing monitor wells are scheduled to
be started within approximately 10 days of notice of the start of the Due Diligence period.
Advancement of soil borings and installation of four new groundwater monitoring wells on
the Land are scheduled to be started within approximately 15 days of notice of the start of
Due Diligence period.
Estimated Activity Completion Activities under this second task are scheduled to be
completed within approximately 25 days of the start of the Due Diligence period.
3.

Upon receipt of final laboratory reports, a final report summarizing data collected
during Phase I and Phase II activities will be prepared.

Activity Start Upon completion of fieldwork identified under task 1 and 2 and receipt of final
laboratory data, a report summarizing the results will be started within approximately 30 days
after the notice of the start of Due Diligence period.
Estimated Activity Completion Activities under this task are scheduled to be completed
within approximately 60 days of the start of the Due Diligence period.
4.

Conduct thorough review and analysis of summary report and develop detailed
remediation scope, schedule, and estimated costs.

Activity Start Upon completion of the final report, analysis and evaluation of all the data
will be used to develop the remediation scope for the Land and is scheduled to start within
approximately 60 days after the notice of the start of Due Diligence period.
Estimated Activity Completion Activities under this task are scheduled to be completed
within approximately 90 days of the start of the Due Diligence period.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 34 of 71

EXHIBIT D-1
To Asset Purchase Agreement

EXHIBIT A

Sampling and Analysis Plan

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 35 of 71


Soil Borings = 20+ 3 monitoring wells
2 Samples per boring (highest PID + Capillary Interface)
46 total samples:
Total Metals + Ni, Tl, Cu, Al
BTEX
PAH
TPH
PCB
Fluoride
Cyanide
NORM

Exhibit D1

Groundwater Samples = 25 existing MW + 3 new MW


28 total samples:
Same analyses as soil samples + TDS
Total Analysis Cost: $43,724
Soil: $23,644
Groundwater: $20080

SB1

MWA

SB2

SB4
SB6

SB3
SB5

Legend

SB13

Soil Boring Location

MWB

SB7

SB4

SB9
SB10
SB14
SB8

SB15

Monitoring Well Location

SB16
MWA

SB12
SB17
MWC
SB11
SB18
SB20
SB19

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 36 of 71

EXHIBIT D-2
To Asset Purchase Agreement

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 37 of 71

03/30/2016 1:35:54 PM
jmuir@bakerwotring.com
Sandy

CONFIDENTIAL
Exhibit D-2

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 38 of 71

EXHIBIT E
To Asset Purchase Agreement
CONSENT TO EVALUATE, INVESTIGATE AND SURVEY PERMIT
THIS CONSENT TO EVALUATE, INVESTIGATE AND SURVEY PERMIT (THE
AGREEMENT) IS MADE THIS _______ DAY OF APRIL 2016 (THE EFFECTIVE DATE)
BY AND BETWEEN THE PORT OF CORPUS CHRISTI AUTHORITY OF NUECES
COUNTY, TEXAS, A POLITICAL SUBDIVISION OF THE STATE OF TEXAS, WITH
OFFICES AT 222 POWER STREET, CORPUS CHRISTI, TEXAS 78401 (THE
AUTHORITY) AND SHERWIN ALUMINA COMPANY, LLC, A DELAWARE
LIMITED LIABILITY COMPANY, HAVING AN ADDRESS AT 4633 HIGHWAY 361,
GREGORY, TX 78359 (SHERWIN).
The Authority has requested the consent of Sherwin to enter upon the lands of Sherwin as
depicted on the attached Exhibit E-1 (the Land) located in San Patricio County, Texas for the
purpose of inspecting and performing other necessary evaluation including the collection of soil
samples, collection of groundwater samples from existing groundwater monitoring wells, the
installation and sampling of groundwater monitoring wells and other necessary studies or activities
to be conducted in connection with the Authoritys proposed environmental due diligence
investigation on the Land.
Sherwin is willing to grant such consent under the following terms and conditions:
a. The Authority agrees to indemnify, protect, and hold Sherwin harmless from and
against any liability, damage, cost or reasonable expenses incurred by Sherwin in
connection with the Authoritys activities on the Land.
b. The consent granted pursuant to this agreement is subject to pipeline and utility
rights of way and other encumbrances, whether of record or not, and shall not be
construed as any promise or offer of Sherwin to grant the Authority an easement,
Lease or any other rights to use the Land for any purpose other than expressly
provided for herein.
c. The Authority shall adhere to all applicable State and Federal rules and regulations
in carrying out the activities permitted hereunder.
d. Upon the completion of survey and sampling activities, the Authority shall restore
the surface of any areas disturbed by the Authority to the same condition, as nearly
as practicable, to the condition existing prior to the Authoritys entry upon the Land.
e. The Authority shall furnish Sherwin with complete copies of all reports, including
but not necessarily limited to, any surveys, wetland delineations, analytical results,
1

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 39 of 71

laboratory results or other such reports generated in connection with the activities
permitted under this Agreement.
f. In the event the Authority fails to commence the activities permitted
hereunder within 30 days of the effective date of this agreement, the consent
granted herein shall expire and the rights granted hereby shall be of no further
force and effect.
g. The Authority shall contact Sherwins designated contact at ___________ prior to
entry upon the Land and shall comply with any request or demand by Sherwin or
its security personnel to vacate the Land for safety reasons and the Authority shall
promptly notify Sherwins designated contact provided herein of such event.

Sherwin contact name: __________________


Authority contact name: ____
______

Phone:
Phone:

So agreed and acknowledged this _____ day of April 2016.

GRANTOR

GRANTEE

Sherwin Alumina Company, LLC

Port of Corpus Christi Authority

By:

By:

(Title)

(Title)

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 40 of 71

Exhibit E-1

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 41 of 71

April 18, 2016

KIRKLAND & ELLIS LLP


601 Lexington Avenue
New York, New York 10022
Attn: Joshua A. Sussberg, P.C.

ANDREWS KURTH LLP


600 Travis Street, Suite 4200
Houston, Texas 77002
Attn: Robin Russell

KIRKLAND & ELLIS LLP


300 North LaSalle
Chicago, Illinois 60654
Attn: Gregory F. Pesce

CURTIS, MALLET-PREVOST, COLT &


MOSLE LLP
101 Park Avenue
New York, New York 100178-0061
Attn: Steven J. Reisman & Shaya Rochester

HURON CONSULTING SERVICES LLC


2000 Auburn Drive, Suite 200
Beachwood, Ohio 44122
Attn: Mr. Geoffrey Frankel
Re: Qualified Bid(s) for Purchase of Sherwin Alumina Real Property & Equipment
Dear Sirs / Madams:
The Port of Corpus Christi Authority ("PCCA") is pleased to submit two Qualified Bids (Bids),
for all assets located in the Sherwin Alumina ("Sherwin" or the "Company") marine port operations
(Port Area) located in Gregory, Texas. These Assets include the uplands and submerged lands
(Lands), the docks and piers, bauxite storage shed, marine building, and other improvements
("Improvements"), the cargo handling equipment ("Equipment"), as outlined in Exhibits A and
Exhibit B hereto, and which are collectively referred to as the Port Assets or Assets as defined
in Exhibits A1 A4 and Exhibit B of the attached Asset Purchase Agreements (Agreements).
Either of the bids (but not both) may be considered binding by Sherwin and/or the United States
Bankruptcy Court for the Southern District of Texas Corpus Christi Division (the "Court") on the
terms and conditions specified in the Agreements for the acquisition of 100% of the Sherwin Port
Assets, including the Land, the Improvements, and the material handling Equipment (collectively
the "Transaction").
With approximately $435 million in assets and over 100 million tons per year of goods moving
through its facilities, PCCA is a regional economic engine for South Texas. The PCCA core values
are to facilitate maritime commerce through development and stewardship of port assets. Thus the
Sherwin Port Area is a natural fit for the PCCA portfolio.
While neither of the PCCA bids are predicated on the facilitys continued operations, the PCCA
views its Bid as a white knight option based not only on its fair price offer, but PCCAs further

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 42 of 71

commitment to remedy certain environmental conditions at the facility, to invest significant


additional capital in the Port Area, and to work with the Company (or Alternate Operator), should
existing operations continue, to formulate an operating lease structure which accounts for current
market conditions in an effort to support the long-term viability of the Non-Port Assets and
operations.
Bid Offer & Consideration
The PCCA and its Agents conducted a fairly intensive review of the materials the Company made
available in the data room, as well as conducted site visits and inspections of the land,
improvements, and equipment. However, as requested access to the Port Area to conduct requisite
soil and ground water sampling was not granted to PCCA or its Agents, nor were relevant
environmental conditional reports or documentation more recent than 2001 provided, PCCA is
therefore offering two separate but Qualified Bids.
The first Bid (Conditional Bid) offers an all cash purchase price of Twenty-Million Dollars
(US$20,000,000) payable in cash at the conditional closing of the Transaction. The closing
conditions are outlined in Section 3 of the Conditional Asset Purchase Agreement, and include
among other conditions an environmental remediation escrow amount not to exceed Three-Million
Three-Hundred Thousand Dollars (US$3,300,000), subject to the terms and conditions of the
Environmental Escrow Agreement in Exhibit C. The Company will allow PCCA to conduct
further environmental due diligence for a period not to exceed 90 days from Bid acceptance.
The second Bid (Unconditional Bid) is unconditional to the extent described in Section 3 of the
Unconditional Asset Purchase Agreement, and offers an all cash purchase price of Twelve-Million
Nine-Hundred Thousand Dollars (US$12,900,000) payable in cash at the closing of the
Transaction.
Also, in both the Conditional and Unconditional Bids, the PCCA is prepared to make an additional
Thirteen-Million Dollars (US$13,000,000) in Capital, Deferred Maintenance, and Environmental
Improvements in the Port Area if the Company (or Alternate Operator) continues to operate the
non-Port Assets in the production of alumina, as per Section 2.4 of the Agreement.
The Transaction assumes Company obtains all requisite approvals by the Court, and all relevant
State and Federal Regulatory Agencies prior to or upon Closing.
Good Faith Deposit and Funding
Per the bidding procedures, PCCA has made a Good Faith Deposit of Two-Million Dollars
(US$2,000,000) with the Debtors claims and noticing agent KCC c/o Bank of America, in the
account of Computershare Inc. AFF Sherwin Sale Funding Account (Fed/SWIFT confirmation
0418I1B7032R010426). Upon acceptance of PCCA Bid and all closing requirements, PCCA will
deliver the remaining cash balance from its internal cash resources. The Bids are not subject to any
financing contingency or lender approval requirements.

2
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 43 of 71

Necessary Approvals
The Bids and attached Asset Purchase Agreements are subject to PCCA Commission approval,
scheduled for vote on Tuesday, April 19th, 2016. At that time, PCCA Staff shall also seek
authorization and approvals to participate in the Asset Auction scheduled (if necessary) scheduled
for April 20th at 11:00 a.m. Eastern Time in the offices of Kirkland & Ellis, located at 601
Lexington Avenue, New York, New York 10022. Notification of PCCA Commission approval or
rejection will be sent in writing by 5 p.m. Eastern Time, on Tuesday, April 19th, 2016.
Conditions to Closing
Conditions to Closing shall, in addition to those outlined in each Agreement, also include an
easement in perpetuity granted to PCCA for unrestricted access to the Port Area via the La Quinta
Road as outlined in the attached Exhibit A-4 of the Agreement.
Contact Information
If there are any questions regarding our proposal, please do not hesitate to contact directly:
Counsel: Port of Corpus Christi Authority
800 Shoreline Blvd, Suite 300N
Corpus Christi, Texas, 78401
Attn: Jimmy Welder
Office: 361-561-8002
Email: jwelder@welderleshin.com

Port of Corpus Christi Authority


222 Power Street
Corpus Christi, Texas, U.S.A.
Attn: Sean C. Strawbridge,
Chief Operating Officer
Office: 361-885-6133 | Cell: 361-730-8174
Email: sstrawbridge@pocca.com
Conclusion

These binding Bids reflect certain Terms and Conditions upon which the PCCA is prepared to
pursue in the acquisition of a 100% interest in the Port Assets of the Company as well as make
significant capital improvements in the dock structures and the environmental conditions of the
Port Area. PCCA believes these Bids may serve as an opportunity for the Company (or Alternate),
its Creditors, Employees, and Regulators to be satisfied with the credibility of PCCA as an owner
of the Port Area and associated Port Assets.
Based on the conditions described in the Agreement(s) and the mutual interest in a successful
closing, we intend to make every effort to advance the proposed Transaction in a timely and
expeditious manner.

3
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 44 of 71

Cordially,
PORT OF CORPUS CHRISTI AUTHORITY

John P. LaRue
Executive Director

cc:

POCCA Commission
Sean Strawbridge Chief Operating Officer, POCCA
Jarl Pedersen Chief Commercial Officer, POCCA
Jimmy Welder General Counsel, Welder Leshin LLP
Darrin Aldrich Director of Real Estate, POCCA
Debra Baker Baker Wotring, LLP
John Muir Baker Wotring, LLP
Lynn Butler Husch Blackwell, LLP

Attachments: Conditional Asset Purchase Agreement


Unconditional Asset Purchase Agreement
Exhibit A-1 Overview of Port Area
Exhibit A-2 Tract A Plat Map
Exhibit A-3 Metes & Bounds Descriptions
Exhibit A-4 Overview of Requisite Access / Egress Easement
Exhibit B Description of Equipment / Improvements
Exhibit C Environmental Escrow Agreement
Exhibit D Environmental Due Diligence, Scope of Work
and Estimated Time Line
Exhibit D-1 Due Diligence Sampling and Analysis Plan
Exhibit D-2 Monitor Well and Sample Location Map
Exhibit E -- Consent to Evaluate, Investigate and Survey Permit

JPL/scs

4
Sherwin Alumina Port Assets Bid Cover Letter

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 45 of 71

UNCONDITIONAL ASSET PURCHASE AGREEMENT


This Asset Purchase Agreement (this Agreement) is made and entered as of the ___ day
of April, 2016, by and between SHERWIN ALUMINA COMPANY, LLC, a Delaware limited
liability company (Seller) and the PORT OF CORPUS CHRISTI AUTHORITY OF NUECES
COUNTY, TEXAS, a navigation district and political subdivision of the State of Texas (the
Buyer). Seller and Buyer are sometimes referred to herein, collectively, as the Parties and,
individually, as a Party.
RECITALS:
WHEREAS, Seller and various affiliates commenced cases under chapter 11 of title 11 of
the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the
Southern District of Texas, Corpus Christi Division (the Bankruptcy Court); and
WHEREAS, in Case No. 16-20012, In re: Sherwin Alumina Company, LLC, et al, Debtors,
the Bankruptcy Court has entered a Bidding Procedures Order setting forth the process by which
the debtors, including Seller, are authorized to conduct one or more sale transactions and an auction
of all or substantially all of their assets (the Bidding Procedures); and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, the submerged land in
Nueces County, Texas, and the fast land in San Patricio County, Texas, depicted and described on
Exhibits A-1, A-2 and A-3 attached hereto, together with the all rights, title and interest of Seller
in and to the rights, benefits, privileges, easements, and appurtenances thereon or in anywise
appertaining thereto (collectively, the Land); and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, the Port Area located in
Gregory, Texas, including the land (Land) as outlined and described on Exhibits A-1, A-2 and
A-3, the docks, piers, mooring structures, bauxite storage barn, and other improvements as outlined
in Exhibit A-4 (collectively, the Improvements), and the cranes, loaders, material handling
equipment and other assets as described in Exhibit B hereto (collectively, the Equipment) and,
together with the Land and Docks, are collectively referred to as the Acquired Port Assets
(Acquired Assets) pursuant to the terms and conditions of this Agreement; and
WHEREAS, subject to the receipt of any required approvals and orders from the
Bankruptcy Court, the Parties hereto have agreed that Seller will sell and Buyer will acquire the
Acquired Assets free and clear of any liens under Section 363 of the Bankruptcy Code.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
agreements herein contained Seller and Buyer hereby agree as follows.
1.

Sale and Transfer of Assets.Pursuant to Section 363 of the Bankruptcy Code, for the
consideration hereinafter set forth and subject to the terms and conditions of this
Agreement and the Sale Order, Buyer agrees to purchase from Seller and Seller agrees to
sell, transfer and assign to Buyer, all of Sellers right, title and interests in, to and under the
Acquired Assets as of the Closing free and clear of all liens and encumbrances.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 46 of 71

1.2

2.

3.

Sale Order means an order of the Bankruptcy Court approving: (a) the execution,
delivery and performance by Seller of this Agreement, and (b) the sale of the
Acquired Assets to Buyer hereunder.

Payment and Other Consideration. The consideration for the sale, transfer and
assignment of the Acquired Assets by Seller to Buyer is Buyers payment of cash to Seller
in the amount of Twelve Million Nine Hundred Thousand Dollars ($12,900,000) (the
Purchase Price). The Purchase Price shall be paid by Buyer to Seller as follows:
2.1

Not later than 4:00 P.M. CST on April 18, 2016, Buyer shall deliver by wire transfer
of immediately available funds a down payment in the amount of Two Million
Dollars ($2,000,000) of the Purchase Price (the Earnest Money) to an account or
accounts designated by Seller in accordance with Section V1(n) of the Bidding
Procedures (as defined in the Recitals of this Agreement). At the Closing the Earnest
Money will be credited to the Purchase Price as provided in Section XIV of the
Bidding Procedures. Except as provided in Sections 3.7, if Buyer is the Successful
Bidder (as defined in the Bidding Procedures) and the conditions set forth in Sections
3.8 and 3.9 are met and Buyer fails to close the purchase through no fault of Seller,
then the Earnest Money shall be forfeited to, and retained irrevocably by, Seller.
Except as provided in Section 3.7, if Buyer is not the Successful Bidder, the Earnest
Money shall be returned to Buyer (with any interest earned on the Earnest Money)
within ten (10) business days after consummation of any Sale (as defined in the
Bidding Procedures) or upon permanent withdrawal of the proposed Sale.

2.2

At the Closing, Buyer shall deliver to Seller by wire transfer of immediately


available funds the balance of the Purchase Price, calculated as the Purchase Price
minus the Good Faith Deposit (the Closing Cash Payment).

2.3

Should Seller (or Alternate Operator of the Non-Port Assets) continue operations of
the Non-Port Assets, Buyer agrees that, upon reaching mutually agreeable Lease
Terms and Conditions with Seller or Alternate Operator, it will make a minimum of
Thirteen-Million Dollars ($13,000,000) in Capital, Deferred Maintenance, and
Environmental improvements to the Buyers Acquired Assets.

Closing; Termination. The closing of the transactions described herein contemplated by


this Agreement (the Closing) shall take place as follows.
3.1

The Closing shall take place by electronic exchange of documents as soon as


possible after the Sale Order is issued by the Bankruptcy Court, and the provisions
in Section 3.8 are satisfied, but in no event later than five (5) business days after
such order is issued or the date on which Seller notifies Buyer of such order, if later.

3.2

At the Closing, Buyer shall pay by wire transfer the Closing Cash Payment an
account designated by the Seller at least 48 hours prior to the Closing.

3.3

At the Closing, the Parties shall execute and deliver such instruments as are
necessary to effect the transfer of the Acquired Assets to Buyer.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 47 of 71

3.4

If the Sale Order has not been entered within thirty (30) days following the date
hereof, either Party may terminate this Agreement upon written notice to the other
Party, and upon such termination, neither Party shall have any obligation or liability
to the other Party (except pursuant to any confidentiality agreement between the
Parties).

3.5

In the event that Buyer has not consummated the Closing within the time frame
contemplated by Section 3.1, from and after the expiration of such time frame, Seller
may terminate this Agreement upon written notice to Buyer; provided that such
termination will not relieve Buyer of any liability for breach of this Agreement in
failing to so consummate.

3.6

This Agreement may be terminated by Seller, upon written notice to Buyer, if it or


its governing body determines, in consultation with outside legal counsel, that
proceeding with the transaction contemplated hereby or failing to terminate this
Agreement would be inconsistent with its fiduciary duties.

3.7

This Agreement shall be terminated by Buyer, upon written notice to Seller, if the
governing body of Buyer does not approve this Agreement at its meeting on April
19, 2016. Notwithstanding anything to the contrary contained in this Agreement, if
Buyer terminates this Agreement pursuant to this Section 3.7, the Earnest Money
shall be returned to Buyer on or before 3:00 p.m. CST on April 20, 2016

3.8

Closing is conditioned upon the Office of the Attorney General of Texas (the AG),
in its representation of the Texas Commission on Environmental Quality (the
TCEQ), issuing a letter to Buyer stating that the AG and TCEQ consent to the
partition of the Land from the remainder of the Debtors real property and that the
Buyer obtains the protections and benefits of an Innocent Owner/Operator
Certificate (IOC) under Texas Health & Safety Code sections 361.751-361.754
with respect to the Land. Alternatively, this requirement to Closing may be satisfied
by the AG and TCEQ agreeing to covenant not to sue or assert civil or criminal
claims or causes of action against Buyer arising out of the Land for any events or
environmental contamination occurring prior to the acquisition of the Land pursuant
to Sections 106, 107 of CERCLA, 42 U.S.C. 9606, 9607; RCRA 3008, 7002,
7003, 42 U.S.C. 6928, 6972, 6973; and any similar state law, including but not
limited to Texas Health & Safety Code Chapter 361 and Texas Water Code Chapter
26.

3.9

The Sale Order shall provide Buyer with an access easement to the Land from State
Hwy 361 over Sellers private roadway known as La Quinta Road as depicted on
Exhibit A-4 attached hereto and made a part hereof, situated in San Patricio County,
Texas, if Buyer has been unable to obtain such an easement before the Closing.

3.10

Seller agrees to grant Buyer access to the Land and Improvements from the date of
this Agreement to Closing for purposes of inspecting and surveying the Land.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 48 of 71

3.11

If, between the date of this Agreement and Closing, all or a material portion of the
Acquired Assets are damaged or destroyed as a result of natural occurring events,
and not through fault or negligence of Seller or Sellers agents, Buyer shall
nevertheless consummate the transactions contemplated hereby, provided that
Sellers right to all insurance proceeds resulting from such damage or destruction
shall be assigned to Buyer at the Closing and shall be retained by Buyer without a
reduction in the Purchase Price, and Seller shall have no further obligation to Buyer
with regard to such damage or destruction provided Seller has maintained adequate
property insurance on the Improvements.

4.

Taxes. Buyer shall pay or cause to be paid all excise taxes (including, but not limited to,
sales and use, gross receipts, transfer, transaction, conveyance fees and stamp taxes)
imposed by any government authority on or with respect to this transaction but shall not be
obligated to pay any taxes previously levied against the Acquired Assets that apply to
periods prior to, or unrelated to, this transaction. If Seller is required to remit or pay taxes
that are the responsibility of Buyer, Buyer shall promptly reimburse Seller for any such
taxes. If Buyer is entitled to an exemption from such taxes, Buyer shall furnish Seller with
an exemption certificate.

5.

As-Is Transfer.(I) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES,


EXPRESS, STATUTORY OR IMPLIED AND (II) SELLER EXPRESSLY DISCLAIMS,
AND BUYER HEREBY WAIVES, ALL LIABILITY AND RESPONSIBILITY FOR,
AND BUYER IS NOT RELYING ON, ANY REPRESENTATION, WARRANTY,
STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN
WRITING) TO BUYER OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS,
CONSULTANTS OR REPRESENTATIVES (INCLUDING ANY OPINION,
INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED
TO BUYER BY SELLER OR ANY OFFICER, DIRECTOR, SUPERVISOR,
EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF
SELLER OR ANY OF ITS RESPECTIVE AFFILIATES).
5.2

SELLER EXPRESSLY DISCLAIMS AND NEGATES, AND BUYER IS NOT


RELYING ON AND HEREBY EXPRESSLY WAIVES (I) ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY, (II) ANY IMPLIED OR
EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (III)
ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS, (IV) ANY RIGHTS OF PURCHASERS
UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF
CONSIDERATION, (V) ANY CLAIMS BY BUYER FOR DAMAGES
BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN AS OF THE
DATE OF THIS AGREEMENT OR THE CLOSING DATE, AND (VI) ANY
AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW;
IT BEING THE EXPRESS INTENTION OF BOTH BUYER AND SELLER
THAT THE ASSETS SHALL BE CONVEYED TO BUYER IN THEIR
PRESENT CONDITION AND STATE OF REPAIR, AS IS AND WHERE IS,
WITH ALL FAULTS, AND THAT BUYER HAS MADE OR SHALL MAKE

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 49 of 71

PRIOR TO CLOSING
APPROPRIATE.
6.

SUCH

INSPECTIONS

AS

BUYER

DEEMS

Miscellaneous.Non-Compensatory Damages. Neither Buyer nor Seller shall be entitled


to recover from the other, or its respective affiliates, any indirect, special, consequential,
punitive or exemplary damages, or damages for lost profits of any kind or loss of business
opportunity, arising under or in connection with this Agreement or the transactions
contemplated hereby. Subject to the preceding sentence, Buyer, on behalf of itself and
each of its affiliates, and Seller, on behalf of itself and its affiliates, waive any right to
recover any indirect, special, consequential, punitive or exemplary damages, or damages
for lost profits of any kind or loss of business opportunity, arising in connection with or
with respect to this Agreement or the transactions contemplated hereby.
6.2

Specific Performance. Each of the Parties agrees that irreparable damage would
occur and that the Parties would not have any adequate remedy at law in the event
that any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that each
of the Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement without proof of damages or posting of any bond or other security, this
being in addition to any other remedy to which it is entitled at law or in equity.

6.3

Entire Agreement. This Agreement, the documents to be executed pursuant hereto


and all exhibits attached hereto constitute the entire agreement between the Parties
pertaining to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the Parties
pertaining to the subject matter hereof.

6.4

Publicity. Each Party shall consult with the other Parties prior to making any public
release concerning this Agreement, and, except as required by applicable Law or by
any Governmental Authority or stock exchange (including the Bankruptcy Court in
connection with the Bankruptcy Cases) (in which case the Party required to make
such release shall allow the other Parties reasonable time to comment on such release
in advance of such issuance), no Party shall issue any such release without the prior
written consent of the other Party, which consent shall not be unreasonably withheld
or delayed.

6.5

Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS


AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING
ANY CONFLICTS OF LAW, RULE OR PRINCIPLE THAT MIGHT REFER
CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER
JURISDICTION, AND THE APPLICABLE PROVISIONS OF THE
BANKRUPTCY CODE.

6.6

Exclusive Jurisdiction; Waiver of Jury Trial.


ALL ACTIONS AND
PROCEEDINGS WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 50 of 71

IN CONNECTION WITH, OUT OF, RELATED TO, OR FROM THIS


AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
SHALL BE EXCLUSIVELY LITIGATED, HEARD AND DETERMINED IN
THE BANKRUPTCY COURT, AND THE PARTIES HEREBY
UNCONDITIONALLY AND IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION AND AUTHORITY OF THE BANKRUPTCY COURT TO
HEAR AND DETERMINE ANY SUCH ACTION OR PROCEEDING;
PROVIDED, HOWEVER, THAT IF THE BANKRUPTCY CASES ARE CLOSED
OR THE BANKRUPTCY COURT IS UNWILLING OR UNABLE TO HEAR
ANY SUCH DISPUTE, THE PARTIES HEREBY UNCONDITIONALLY AND
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF TEXAS. EACH PARTY HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6.7

Approval of the Bankruptcy Court. Notwithstanding anything herein to the


contrary, any and all obligations under this Agreement are subject to entry of the
Sale Order.

6.8

Severability. If any term or other provision of this Agreement is invalid, illegal or


incapable of being enforced by any rule of Law or public policy, all other terms and
provision of this Agreement shall nevertheless remain in full force and effect;
provided, however, that in such case the Parties hereto shall use their reasonable best
efforts to achieve the purpose of the invalid term or provision.

6.9

Counterparts. This Agreement may be executed in any number of counterparts,


and each counterpart hereof shall be deemed to be an original instrument, but all
such counterparts shall constitute but one instrument. Any signature hereto
delivered by a Party by facsimile or electronic transmission shall be deemed an
original signature hereto.

6.10

Expenses. Whether or not the transactions contemplated herein are consummated,


except as set forth in Section 4, each of the Parties shall be responsible for the
payment of its own respective costs and expenses incurred in connection with this
Agreement, including the fees of any attorneys, accountants, brokers or advisors
employed or retained by or on behalf of such party.

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 51 of 71

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
SELLER:
SHERWIN ALUMINA COMPANY, LLC

By:
Its:

BUYER:
PORT OF CORPUS CHRISTI AUTHORITY OF
NUECES COUNTY. TEXAS

By:

John P. LaRue

Its:

Executive Director

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 52 of 71

EXHIBIT A
To Asset Purchase Agreement
DESCRIPTION OF PORT AREA

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 53 of 71

EXHIBIT B
To Asset Purchase Agreement
DESCRIPTION OF EQUIPMENTS/IMPROVEMENTS

EXHIBIT A

EXHIBIT A-1
Sherwin Alumina Option 4 +/- 79.5 Acres

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 54 of 71

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 55 of 71

EXHIBIT A-2
EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 56 of 71


Tract A
METES & BOUNDS DESCRIPTION
79.5 ACRES
April 2016
STATE OF TEXAS COUNTY OF
NUECES AND SAN PATRICIO

EXHIBIT A-3

Being a tract of 79.5 acres of land, more or less, with submerged portion in Corpus Christi Bay, Nueces
County, Texas within the limits of the submerged land conveyed by the State of Texas to Nueces County
Navigation District (now known as Port of Corpus Christi Authority) by Patent 106 dated July 31, 1951,
recorded in V. 522, pages 201-203 in Nueces County Deed Records. Upland portion of said Tract is situated
in San Patricio County, Texas, all within the property owned by Sherwin Alumina. Said Tract A further
described as follows:
BEGINNING at a point (P.O.B.) on the south boundary of Sherwin Alumina submerged Tract 1-Parcel 4.
Said P.O.B. also being on the Port of Corpus Christi Authority (PCCA) bulkhead line.
THENCE, North 77 31' 20" West along said bulkhead line at approximately 1,519 to a point on the
northeast corner of a mooring-turning structure easement designated as Tract B (see attached plat) in all,
for a distance of 2,159 to a point on the southwest corner of Sherwin Alumina submerged Tract 1-Parcel
5,
THENCE, North 1 10' 31" West along a common boundary between said Sherwin Alumina Parcel 5 and
Cheniere Energy to a corner for a distance of 767,
THENCE, along said common boundary, North 17 32' 43" West for a distance of approximately 1,465 to
the northwest corner of this Tract,
THENCE, East along north boundary of this Tract to a point between south edge of road and the conveyor
buildings retaining wall for a distance of approximately 1,190,
THENCE, South along said retaining wall to a point on the Southerly limit of conveyor building for a
distance of approximately 1,283,
THENCE, East for a distance of approximately 357 to an interior corner,
THENCE, South to a point marking the location of a fence line shown per Reynolds Metals Co. plant plot
plan-drawing #300-L-3014, for a distance of approximately 112,
THENCE, East along said fence line for a distance of approximately 525 to a fence corner,
THENCE, South, passing an existing conveyor at approximately 300, in all for a distance of approximately
340 to an interior corner,
THENCE, East for a distance of approximately 684 to a point being on the east property line of Sherwin
Alumina,
THENCE, South along said east property line for a distance of approximately 514 to a point on the East
corner of the aforementioned Sherwin Alumina Tract 1-Parcel 4,
THENCE, South 25 59' 40" West along east boundary of said Parcel 4 and property line for a distance of
411.83 to the point of beginning (P.O.B.).
Containing approximately 79.5 Acres of land, more or less.Tract B-See attached plat.EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 57 of 71

Exhibit A-4 Access along the LaQuinta Road

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 58 of 71

EXHIBIT B
To Asset Purchase Agreement
DESCRIPTION OF IMPROVEMENTS AND EQUIPMENT
Plant Plot Plan #
Facility 300-L-3014 (R19)
5
5
5
5

15
15
15
15
15
15
15
15
15
15
15
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90
90

5
5-C-2

14A
14B
14-1
15C-8
15A
15A-C-1
15A-C-2
15A-C-3
15B
15B-C-1
15B-C-2
15B-C-3
15C-30
15-T-9
90
90-C-57
90-C-32
90-1
90-T-1
90-C-16
90-C-15
90-C-51
90-T-2
90-C-48
90-C-54
90-T-3
90-C-47
90-C-49
No Number
130
No Number
No Number
No Number
51A-C-78

Description of Improvements and Equipment


(Including but Not Limited to the Following)
5 Dock Pier 739' long X 60' wide (Bauxite Unloading Dock)
Conveyor belt 1,997' long X 4' wide (Dock Conveyor)
2 E-Cranes and accessories (Spares, Buckets, etc.)
2 Receiving Hoppers and accessories (Spares, Environmental Controls, etc.)
Sample Building (Bauxite)
Transfer Building (Bauxite)
S.H.
14 Cross Conveyor
Bauxite Storage Building 1200' long X 100' wide
15A Conveyor Belt (Overhead/Tripper)
15A South Reclaim Conveyor
15A North Reclaim Conveyor
Bauxite Storage Building 1200' long X 100' wide
15B Conveyor Belt (Overhead/Tripper)
15B South Reclaim Conveyor
15B North Reclaim Conveyor
DLA Reclaim Conveyor (Bauxite Stockpile Area)
DLA Truck Dump Hopper (Bauxite Stockpile Area)
90 Dock Pier 668' long X 40' wide (Alumina Loading Dock)
Alumina Loading Tower and accessories
Shuttle Conveyor (Alumina Loading Dock)
90 Dock Belt Conveyor
S.H.
Unloading Building (Rail)
1 Silo (Alumina Storage) 110' diameter X 64' high
1 Silo to Belt Airslide
1 Silo Chamber Blower
Elevator to 1 Silo Airslide
2 Silo (Alumina Storage) 160' diameter X 74' high
2 Silo Belt Conveyor Airslide
Elevator to 2 Silo Airslide
3 Silo (Alumina Storage) 230' Diameter X 64' High
3 Silo to Belt Airslide
Elevator to 3 Silo Airslide
Parts Storage Building (East of Alumina Silos)
Operations & Maintenance Building- Area 1 & 2
Maintenance Building (Adjacent to Building 130)
Maintenance Building (Adjacent to Storage Pad)
Guard Building (no building number on plans)
3 51/90 Alumina Conveyor

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 59 of 71

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
In re:
SHERWIN ALUMINA COMPANY, LLC, et al.,
Debtors

Chapter 11
Case No. 16-20012
David R. Jones
(Jointly Administered)

ORDER GRANTING MOTION FOR ORDER APPROVING SALE OF ASSETS OF


DEBTOR AND GRANTING OTHER RELATED RELIEF
On this day, the Court considered the Motion for Order Approving Sale of Assets of
Debtor and Granting Other Related Relief (Sale Motion1) filed by Sherwin Alumina Company,
LLC Inc. (Debtor). The Debtor brought the Sale Motion pursuant to 11 U.S.C. 105, 363,
363(m), and 365 and Rules 2002, 6004, 6006, and 9014 of the Federal Rules of Bankruptcy
Procedure. The Sale Motion sought an order (A) authorizing the sale of certain of the Debtors
assets (the Port Assets) free and clear of liens, claims, encumbrances, and interests, including
approving certain terms for sale of the assets set forth in the Purchase Agreement (the Sale
Terms) by and between the Debtor and the Port of Corpus Christi Authority of Nueces County,
Texas (Purchaser) and granting related relief. After carefully reviewing the Sale Motion and
such other matters in the file as the Court deemed appropriate, after receiving and weighing the
testimony and other evidence offered at the Hearing, after hearing the statements and
representations of counsel and all persons who desired to be heard at the Hearing, and after
considering such other and further matters as the Court deemed appropriate, the Court hereby
FINDS AND CONCLUDES as follows:

Capitalized Terms not otherwise specifically defined herein shall have the meanings ascribed to them in that certain
Asset Purchase Agreement by and between the Debtor and the Port of Corpus Christi Authority of Nueces County,
Texas (Purchaser), a copy of which is attached and incorporated hereto as Exhibit 1 (The Purchase Agreement).

1
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EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 60 of 71

A.

This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334.

This matter concerns the administration of the bankruptcy estates and is, therefore, a core
proceeding pursuant to 28 U.S.C. 157(b)(2). Venue in this District is proper pursuant to 28
U.S.C. 1408 and 1409. The predicates for the relief requested herein are 11 U.S.C. 105, 363,
363(m) and 365 and Rules 2002, 6004, 6006, and 9014 of the Federal Rules of Bankruptcy
Procedure (the Bankruptcy Rules).
B.

Notice of the Sale Motion and this hearing was appropriate and sufficient given the

circumstances. The Court finds that a reasonable opportunity to object or be heard with respect
to the Sale Motion and the relief requested therein has been afforded to all interested persons
and entities, including: (i) the United States Trustee; (ii) counsel for the Official Committee of
Unsecured Creditors; (iii) any persons who have entered an appearance in the case or otherwise
requested notice; (iv) all persons known to have expressed an interest in a transaction with
respect to the Port Assets; (v) all federal, state, and local regulatory or taxing authorities or
recording offices which have a known interest in the relief requested by the Motion; (vi) all
secured creditors of the Debtor; (vii) all known unsecured creditors of the Debtor; (viii) all
known equity security holders of the Debtor; (ix) the United States Department of Justice
(DOJ); (xi) the Office of the Attorney General of Texas (OAG); and (xii) the Internal
Revenue Service.
C.

The Court finds that the Debtor has expended considerable effort in identifying and

evaluating all possible sale, reorganization and financing options to understand which alternatives
best maximize a return for the estate and the Debtors creditors.
D.

The Court finds that the Debtor has demonstrated both (i) a good, sufficient, and

sound business purpose and justification, and (ii) compelling circumstances to proceed with
2
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EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 61 of 71

the Proposed Sale, prior to (or contemporaneously with), and outside of, a plan of
reorganization pursuant to Section 363(b) of the Bankruptcy Code. The Debtors ability to sell
the Port Assets to Purchaser enhances and benefits the marketing process by providing a
motivation for potential Purchasers to submit offers with a high market value. Without the sale to
Purchaser, the Debtors estate is in danger of decreasing in value.
E.

The Court finds that all reasonable possibilities for maximizing the value of the

Debtors estate have been explored and that the Proposed Sale to Purchaser embodies the best
result for the maximization of value to the estate and for the creditors.
F.

The Court finds that the Debtor has articulated good and sufficient reasons for:

(i) approving the Proposed Sale free and clear of all liens, claims, encumbrances, and interests,
and (ii) determining that the Proposed Sale is exempt from any stamp, transfer, recording, or
similar tax.
G.

The Court finds that the Purchase Agreement was negotiated, proposed, and

entered into by the Debtor and Purchaser without collusion, in good faith and from
arms-length bargaining positions. Neither the Debtor nor Purchaser has engaged in any
conduct that would cause or permit the Purchase Agreement to be avoided under Section
363(n) of the Bankruptcy Code.
H.

The Court finds that Purchaser is a good faith purchaser under Section 363(m) of

the Bankruptcy Code and, as such, is entitled to all of the protections afforded under said
section of the Bankruptcy Code. Purchaser will be acting in good faith within the meaning of
Section 363(m) of the Bankruptcy Code in consummating the transactions contemplated by the
Purchase Agreement and this Order.

3
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EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 62 of 71

I.

The Court finds that the consideration provided by Purchaser for the Port Assets

pursuant to the Purchase Agreement (i) is fair and reasonable, (ii) is the highest and best offer
for the Port Assets, (iii) will provide a greater recovery for the Debtors creditors than would be
provided by any other practicable alternative, and (iv) constitutes reasonably equivalent value
and fair consideration under the Bankruptcy Code and under the laws of the State of Texas.
J.

The Court finds that the sale of the Port Assets to Purchaser will be a legal, valid,

and effective transfer of the Port Assets, and will vest Purchaser with all right, title, and interest
of the Debtor to the Port Assets free and clear of all mortgages, security interests, conditional
sale, or other title retention agreements, pledges, liens (as defined in 11 U.S.C. 101(37)),
claims (as defined in 11 U.S.C. 101(5)), judgments, demands, easements, charges,
encumbrances, defects, options, rights of first refusal, interests, or restrictions of any kind
(collectively, Interests)(except those expressly assumed, pursuant to and as described in the
Purchase Agreement), including, without limitation, Interests (i) that purport to give to any party
a right or option to effect any forfeiture, modification, right of first refusal, or termination of the
Debtors interest in the Port Assets, or any similar rights, and (ii) relating to taxes arising
under, out of, or in connection with the transfer of the Port Assets or in any way relating to the
operation of the Debtors business prior to the date that operation of the Port Assets are
transferred to Purchaser (the Closing Effective Date).
K.

The Court finds that Purchaser would not have entered into the Purchase

Agreement and would not consummate the transactions contemplated thereby, thus adversely
affecting the Debtor, its estate and its creditors, if the sale of the Port Assets to Purchaser was
not free and clear of all Interests of any kind or nature whatsoever, or if Purchaser would, or in
the future could, be liable for any of the Interests.
4
AUS-6245413-2

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 63 of 71

L.

The Court finds that Debtor may sell the Port Assets free and clear of all

Interests of any kind or nature whatsoever because, in each case, one or more of the standards set
forth in Section 363(f)(1)-(5) of the Bankruptcy Code has been satisfied. Those holders of
Interests to the Transaction or to the Motion are deemed to have consented pursuant to Section
363(f)(2) of the Bankruptcy Code. Those holders of Interests who did timely object fall within
one or more of the other subsections of Section 363(f) of the Bankruptcy Code, and are
adequately protected by having their Interests, if any, attach to the cash proceeds resulting from
the sale contemplated herein which are ultimately attributable to the property against or in which
they claim an Interest, which proceeds exceed the value of all such interests in the aggregate
(see 11 U.S.C. 363(f)(3)).
M.

The Court finds that the transfer of the Port Assets to Purchaser under the terms and

conditions set forth in the Purchase Agreement will not subject Purchaser to any liability
whatsoever with respect to the operation of the Debtors business prior to the Closing Date, or by
reason of such transfer based, in whole or in part, directly or indirectly, on any theory of law or
equity, including, without limitation, any theory of equitable law, including, without limitation,
any theory of antitrust or successor or transferee liability (except those expressly assumed,
pursuant to and as described in the Purchase Agreement). The transfer of the Port Assets to
Purchaser complies with all applicable laws and regulations.
N.

The Court finds that the transfer of the Port Assets to Purchaser is a prerequisite

to the Debtors ability to confirm and consummate a chapter 11 plan of reorganization or a plan
of liquidation. The sale of the Port Assets is a transfer in contemplation of a plan and,
accordingly, is a transfer pursuant to Section 1146(a) of the Bankruptcy Code, which shall not
be taxed under any law imposing a stamp tax, transfer, or similar tax.
5
AUS-6245413-2

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 64 of 71

O.

The Court finds that Purchaser does not intend to require the Debtor to assume

and assign any of the executory contracts identified by the Debtor in the Notice to Contract
Parties to Potentially Assumed Executory Contracts and Unexpired Leases and any supplements
thereto (the Executory Contracts) as part of its bid, and Purchaser is not requiring the
assignment of any of the Executory Contracts as a requirement of its bid. Consequently, the
Purchaser shall have no liability for any of the Debtors Executory Contracts.
P.

The Court finds that Purchaser has adequately demonstrated its financial ability

to consummate the Proposed Sale.


Q.

The Court finds that Approval of the Purchase Agreement and consummation of

the Proposed Sale at this time under the terms and conditions set forth in the Purchase
Agreement are in the best interests of the Debtor, its creditors, its estate, and all other
parties-in-interest.
R.

Based upon the pleadings, the representations of the Debtor, the arguments of the

parties and the evidence at trial, the Court finds that the Sale Motion is meritorious under
Bankruptcy Code 363 and 365 and should be granted.
THEREFORE, the Court GRANTS the Sale Motion under the terms and conditions set
forth in the attached Purchase Agreement and the terms and conditions set forth below.
1.

The Court (i) authorizes the sale of the Port Assets to Purchaser; (ii) orders that the

sale is free of all liens, claims and encumbrances to the fullest extent allowed under Bankruptcy
Code 363; (iii) waives the 14-day stay incorporated by Bankruptcy Rules 6004(h) and 6006(d);
(iv) finds that the requirements imposed by Bankruptcy Code section 363(f) have been satisfied,
(v) finds that the potential Purchaser is a good faith Purchaser entitled to the protections of
Bankruptcy Code section 363(m), and (vi) finds that the terms of the Sale are fair and reasonable.
6
AUS-6245413-2

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 65 of 71

2.

Except as expressly permitted or otherwise specifically provided by the

Purchase Agreement or this Sale Order, all persons and entities (including, but not limited to,
all equity security holders, governmental, tax and regulatory authorities, lenders, trade, and
other creditors) holding claims or Interests of any kind or nature whatsoever in or against the
Debtor or the Port Assets (whether legal or equitable, secured or unsecured, matured or
unmatured, contingent or non-contingent, senior or subordinated), arising under, out of, in
connection with, or in any way relating to the Debtor or the Port Assets, the operation of the
Debtors business prior to the Closing Effective Date, shall be and hereby are forever barred and
estopped from asserting against Purchaser, its successors or assigns, its property, or the Port
Assets, such persons or entities claims or Interests. The transfer of the Port Assets to
Purchaser pursuant to the Purchase Agreement constitutes a legal, valid, and effective transfer
of the Port Assets, and the sale of the Port Assets shall vest Purchaser with all right, title, and
interest of the Debtor in and to the Port Assets free and clear of all Interests of any kind or
nature whatsoever, and the assertion of any such Interests in or against the Port Assets shall be
and hereby is prohibited.
3.

All objections to the Sale Motion or to the relief requested therein that have not

been withdrawn, waived, or settled, and all reservations of rights identified in such objections,
are overruled on the merits.
4.

The Debtor is authorized and directed to effectuate the sale of the Port Assets to

Purchaser effective on the Closing Effective Date under the terms and conditions set forth in the
attached Purchase Agreement and the terms and conditions set forth below.
5.

On or before the Closing Effective Date, Purchaser may designate one or more

designees to take title to the Port Assets. References to Purchaser in this Sale Order, the
7
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EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 66 of 71

Stipulation and the Purchase Agreement shall apply to such designee(s); provided however,
that any such designation shall not release Purchaser from any of its duties or obligations under
the Purchase Agreement, the Stipulation or this Sale Order.
6.

The Purchase Agreement between the Debtor and Purchaser, and all of the terms

and conditions thereof, are approved. Purchaser will acquire the Port Assets, as that term is
defined in the Purchase Agreement, free and clear of all liens, claims and encumbrances to the
fullest extent possible under Bankruptcy Code 363(f).
7.

The closing of the Proposed Sale will be subject to the conditions set forth in the

Purchase Agreement, unless such conditions are specifically waived by the Purchaser.
8.

This Sale Order is binding on the Parties successors, assigns, agents and

contractors.
9.

Purchaser shall not have or incur any liability to any holder of any Interests, for any

act, event, or omission from the Petition Date to the Closing Effective Date in connection with or
arising out of the Case, the Purchase Agreement or this Sale Order. No parties-in-interest shall
bring any claims against Purchaser for any actions known or unknown as a result of the conduct or
actions of the Debtor, its predecessors, the Debtor, their owners, employees, related entities, or
others, prior to the Closing Effective Date. The provision is effective as to all parties-in-interests in
the Case.
10.

Nothing in this Sale Order shall be construed to release Purchaser from any

obligation it has to comply with all applicable laws following the Closing Effective Date.
11.

Nothing in this Sale Order shall be construed to release Purchaser from any

obligation it has to comply with all applicable laws following the Closing Effective Date.

8
AUS-6245413-2

EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 67 of 71

12.

The transfer of the Port Assets to Purchaser in accordance with the Asset Purchase

Agreement constitute a good faith transaction entitled to the protections afforded by section
363(m) of the Bankruptcy Code in the event of a reversal or modification on appeal of any or all of
the provisions of this Sale Order. The consideration provided by Purchaser for the Port Assets
under the Purchase Agreement constitutes reasonably equivalent value and fair consideration
under the Bankruptcy Code and under the laws of the State of Texas.
13.

The consideration provided by Purchaser for the Port Assets under the Purchase

Agreement is fair and reasonable and the sale of the Port Assets may not be avoided under
Section 363(n) of the Bankruptcy Code.
14.

On the Closing Effective Date, each of the Debtors creditors shall execute such

documents and take all other actions as may be necessary to release its Interests, if any, in the
Port Assets and to give Purchaser clear title to the Port Assets. If any such creditor fails or
refuses to do so, the Debtor is hereby granted a lifetime power of attorney to act on such
creditors behalf, but only to the extent necessary to take any such action. This provision shall
not apply to the United States of America.
15.

This Sale Order (a) shall be effective as a determination that, on the Closing

Effective Date, all Interests of any kind or nature whatsoever existing as to the Port Assets
prior to the Closing Effective Date have been unconditionally released, discharged, and
terminated, and that the conveyances described herein have been effected, and (b) shall be
binding upon and shall govern the acts of all entities including without limitation, all filing
agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds,
registrars of deeds, administrative agencies, governmental departments, secretaries of state,
federal, state, and local officials, and all other persons and entities who may be required by
9
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EXHIBIT A

Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 68 of 71

operation of law, the duties of their office, or contract, to accept, file, register or otherwise record
or release any documents or instruments, or who may be required to report or insure any title or
state of title in or to any of the Port Assets.
16.

Each and every federal, state, and local governmental agency or department is

hereby directed to accept any and all documents and instruments necessary and appropriate to
consummate the transactions contemplated by the Purchase Agreement.
17.

If any person or entity that has filed financing statements, mortgages,

mechanics liens, lis pendens, or other documents or agreements evidencing Interests in the Port
Assets shall not have delivered to the Debtor, prior to the Closing Effective Date, in proper
form for filing and executed by the appropriate parties, termination statements, instruments of
satisfaction, releases of all Interests which the person or entity has with respect to the Port
Assets, then (a) the Debtor is authorized and directed to execute and file such statements,
instruments, releases, and other documents on behalf of the person or entity with respect to the
Port Assets, and (b) Purchaser is authorized to file, register, or otherwise record a certified
copy of this Sale Order, which, once filed, registered or otherwise recorded, shall constitute
conclusive evidence of the release of all Interests in the Port Assets of any kind or nature
whatsoever.
18.

All entities who are presently, or on the Closing Effective Date may be, in

possession of some or all of the Port Assets are hereby directed to surrender possession of the
Port Assets to Purchaser on the Closing Effective Date.
19.

Except as otherwise specifically provided herein or in the Purchase Agreement,

Purchaser shall have no liability or responsibility for any liability or other obligation of the
Debtor arising under or related to the Port Assets. Without limiting the generality of the
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foregoing, and except as otherwise specifically provided herein and in the Purchase
Agreement, Purchaser shall not be liable for any claims against the Debtor, or any of its
predecessors or affiliates, except as set forth in the Purchase Agreement, and Purchaser shall
have no successor or vicarious liabilities of any kind or character, whether known or unknown
as of the Closing Effective Date, now existing or hereafter arising, whether fixed or contingent,
with respect to the Debtor or any obligations of the Debtor arising prior to the Closing Effective
Date, including, but not limited to, liabilities on account of any taxes arising, accruing, or
payable under, out of, in connection with, or in any way relating to the transfer of the Port
Assets or the operation of the Debtors business prior to the Closing Effective Date.
20.

Under no circumstances shall Purchaser be deemed a successor of or to the

Debtor for any claim or Interest in or against the Debtor or the Port Assets, of any kind or
nature whatsoever. The sale, transfer, assignment, and delivery of the Port Assets shall not be
subject to any claims or Interests, and claims and interests of any kind or nature whatsoever shall
remain with, and continue to be obligations of, the Debtor. All persons holding claims or
Interests in or against the Debtor or the Port Assets, of any kind or nature whatsoever, shall be
and hereby are forever barred and estopped from asserting, prosecuting, or otherwise pursuing
such claim or Interests against Purchaser, its property, its successors and assigns, or the Port
Assets with respect to any claim or Interest of any kind or nature whatsoever such person or
entity had, has, or may have in or against the Debtor, its estate, officers, directors,
shareholders, or the Port Assets. Following the Closing Effective Date, no holder of any claim
or Interest in or against the Debtor shall interfere with Purchasers title to, or use and
enjoyment of, the Port Assets based on or related to such claim or Interest.

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21.

The terms and provisions of the Purchase Agreement and this Sale Order shall

be binding in all respects upon, and shall inure to the benefit of, the Debtor, the Debtor, its
estate, its creditors and equity security holders, Purchaser, and its respective affiliates,
designees, successors, and assigns, and any affected third parties including, but not limited to,
all persons asserting Interests in the Port Assets to be sold to Purchaser pursuant to the Purchase
Agreement, notwithstanding any subsequent appointment of a Debtor under chapter 7 of the
Bankruptcy Code, as to which Debtor(s) such terms and provisions likewise shall be binding.
The transfer of the Port Assets to Purchaser, pursuant to the Purchase Agreement and this Sale
Order, is not contrary to any applicable law or regulation.
22.

The failure specifically to include any particular provisions of the Purchase

Agreement in this Sale Order shall not diminish or impair the effectiveness of such provision,
it being the intent of the Court that the Purchase Agreement be authorized and approved in its
entirety.
23.

The transfer of the Port Assets pursuant to Purchase Agreement is a transfer

pursuant to Section 1146(a) of the Bankruptcy Code, and accordingly shall not be taxed under
any law imposing a stamp tax or a sale, transfer, or any other similar tax.
24.

The Closing Effective Date shall not occur, nor shall the parties be bound to

consummate the Proposed Sale unless and until this Sale Order, and the attachments thereto, and
the relief granted therein, are approved and/or adopted by a United States District Court with
jurisdiction over this proceeding.
SIGNED this ________ day of _______________, 2016.

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Case 16-20012 Document 556-1 Filed in TXSB on 04/18/16 Page 71 of 71

Honorable David Jones


United States Bankruptcy Judge
ORDER PREPARED BY:
Lynn Hamilton Butler
State Bar No. 03527350
HUSCH BLACKWELL LLP
111 Congress Avenue, Suite 1400
Austin, Texas 78701
(512) 479-9758
(512) 226-7318 (fax)

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