EXHIBIT 2.1
REVISED AND RESTATED
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), is entered into
effective the 30th day of June 2004, and is amended and restated as of September
30, 2004, by and between SHELL PIPELINE COMPANY LP, a Delaware limited
partnership and EQUILON ENTERPRISES LLC d/b/a SHELL OIL PRODUCTS US, a Delaware
limited liability company (collectively "Seller"), and BUCKEYE PARTNERS, L.P., a
Delaware limited partnership ("Buyer"). Seller and Buyer are hereinafter
sometimes referred to individually as a "Party" or collectively as the
"Parties." Other definitions used in this Agreement are found in Annex A
attached hereto and made a part hereof.
For and in consideration of the mutual covenants, obligations and
benefits made and contained herein, the Parties agree as follows:
ARTICLE 1
PURCHASE AND SALE
A. INCLUDED ASSETS. Subject to the terms and conditions set forth
below, Seller agrees to sell, and Buyer agrees to purchase, all of Seller's
right, title and interest (the "Subject Interest") in and to the following real
and personal property interests, other than the Excluded Assets (the
"Property"):
(1) the refined products pipelines (the "Pipelines"), the
refined products tank farms (the "Tank Farms") and the refined products
terminals (the "Terminals") all as shown on Exhibits "A" - Maps and
"A-1" - System Descriptions, attached hereto and made a part hereof;
(2) other than the Rights-of-Way and Permits, all fee
interests in real property appurtenant to or associated with the
Pipelines, the Tank Farms and the Terminals, as may be further
described and shown on Exhibit "B" attached hereto and made a part
hereof ("Real Property");
(3) rights-of-way and permits appurtenant to or associated
with the Pipelines, the Tank Farms or the Terminals, as may be further
described on Exhibit "C", attached hereto and made a part hereof
("Rights-of-Way and Permits");
(4) the contracts (including any leases or similar agreements)
described on Exhibit "D" attached hereto and made a part hereof
("Assigned Contracts");
(5) any and all pipe, tanks, loading racks, pumps, motors,
valves, materials and supplies, fittings, miscellaneous equipment and
facilities, buildings and fixtures associated with the Pipelines, the
Tank Farms or the Terminals as may be further described on Exhibit "E"
attached hereto and made a part hereof ("Equipment");
(6) the Books and Records;
(7) the membership interest in Ferrysburg Terminal, L.L.C.;
and
(8) a surface lease of the land related to the Hartford
Terminal.
B. INTENTIONALLY OMITTED.
C. EXCLUDED ASSETS. The Property shall not include any items described
on the attached Exhibit "F" ("Excluded Assets"). Further, Seller is not selling
to Buyer any of its allowance oil or the products held in inventory for Seller
or for the account of customers in any of the Pipelines, Tank Farms or
Terminals. For all of the Excluded Assets, Buyer grants Seller a ninety (90) day
right of access, commencing at the Effective Time, to remove such assets from
the Property.
D. RETAINED OBLIGATIONS. Buyer shall not assume or be responsible for,
and Seller shall retain responsibility for, all Retained Obligations.
E. SIGNAGE. Buyer acknowledges that it shall have no rights with
respect to the use of the names "Shell Pipeline Company LP", "Shell Oil Products
US" or any and all variations and derivatives thereof, all trademarks, service
marks and logos associated therewith, nor any "Goodwill" associated with any of
the foregoing. Within ninety (90) days after the Effective Time, Buyer shall
remove or cause to be removed, all such names, marks or logos from wherever they
may appear on the Property, including the removal of all Shell Pipeline Company
LP or Shell Oil Products US line markers. Should Buyer fail to have such line
markers removed within ninety (90) days of the Effective Time, then Buyer shall
pay to Seller one hundred dollars ($100.00) per month for each of the line
markers with Seller's or its Affiliates name on it still on the Property on or
after the ninetieth (90th) day after the Effective Time.
F. ONE-CALL. Buyer will promptly, but in no event later than ninety
(90) days after the Effective Time, contact every appropriate one-call agency in
the vicinity of any of the Property and have the contact information for
one-calls changed from Seller's name to Buyer's name. This obligation of Buyer
shall include sending revised maps to the one-call agencies where appropriate or
required. Buyer shall send Seller a letter, to the Notices address contained in
Article 28 of this Agreement, when the one-call notification information has
been changed. Should Buyer fail to have the one-call information and maps
changed to Buyer's name within ninety (90) days of the Effective Time, then
Buyer shall pay to Seller one hundred dollars ($100.00) for each one-call
received by Seller for any of the Property on or after the ninetieth (90th) day
after the Effective Time.
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ARTICLE 2
PURCHASE PRICE
A. PRICE. The price (as adjusted pursuant to this Agreement, the
"Purchase Price") to be paid by Buyer to Seller for the Subject Interests shall
be $517,000,000.00. The Purchase Price shall be reduced by the prorated Tax
amount determined under Section 6B. The Purchase Price shall be paid first by
applying the Xxxxxxx Money and then the balance shall be paid by wire transfer
in immediately available funds to an account to be designated by Seller. Seller
shall prepare a Closing Statement, substantially in the form attached hereto as
Exhibit "G", detailing the items which are to be added to or subtracted from the
Purchase Price as permitted under this Agreement in order to determine the
amount of money to be included in the wire transfer. Buyer and Seller shall
agree to the figures on the Closing Statement.
X. XXXXXXX MONEY. As evidence of Buyer's ability to perform this
Agreement and good faith intent to comply with the terms hereof, Buyer has
deposited with Seller an amount equal to five percent (5%) of the original
Purchase Price as xxxxxxx money ($26,500,000.00) (hereinafter "Xxxxxxx Money").
The Xxxxxxx Money shall accrue interest at a per annum rate calculated on a
daily basis using the three month treasury xxxx rate published in The Wall
Street Journal for any applicable day (with the rate for any day for which a
rate is not published being the rate most recently published). All references to
Xxxxxxx Money shall include interest on the Xxxxxxx Money as calculated in
accordance with the preceding sentence.
C. DISTRIBUTION OF THE XXXXXXX MONEY. The Xxxxxxx Money shall be
distributed as follows:
(1) If the Closing occurs, then the Xxxxxxx Money shall be
applied to and credited against the Purchase Price at Closing.
(2) In the event this Agreement is terminated, for any reason
(other than the reason described in Section 2C(3)), Seller will refund the
Xxxxxxx Money to Buyer and Buyer and Seller shall each be relieved of all
liability hereunder.
(3) In the event the transaction fails to close because any of
the conditions to Closing in Section 3A is not satisfied solely because Buyer
has violated the terms of this Agreement, Seller shall be entitled to retain the
Xxxxxxx Money, as liquidated damages and not as a penalty, and Buyer and Seller
shall each be relieved of all further liability hereunder.
ARTICLE 3
CLOSING
Closing shall take place on the first day of the month immediately following the
month in which the waiting period(s) of the HSR Act expire and all other
conditions to Closing set forth in Section 3A are waived or satisfied, but no
later than December 1, 2004, at Seller's offices in Houston, Texas ("Closing"),
or at such other time and place as agreed to in writing by the Parties. Control
of operations, risk of loss, and transfer of title to the Subject Interest from
Seller to Buyer shall be effective as of 12:01 a.m. local time on the Closing
Date.
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A. CONDITIONS TO CLOSING. Except as expressly waived by the Parties,
the obligations of the Parties to close this transaction are subject to the
satisfaction, at or prior to Closing, of each of the following conditions, which
conditions the Parties intend to be conditions precedent to Seller's obligation
to convey the Subject Interest and to Buyer's obligation to pay the Purchase
Price:
(1) All representations and warranties of the other Party set
forth in this Agreement shall be true in all material respects (except for
representations and warranties qualified by materiality, which shall be true in
all respects) as of the Closing Date as if made on the Closing Date, and the
other Party shall have performed in all material respects all covenants and
conditions required by this Agreement to be performed at or prior to Closing and
shall have taken all other actions reasonably necessary to close this
transaction.
(2) No Law shall exist or shall have been enacted restricting
or substantially delaying this transaction.
(3) Neither Party shall have exercised any right it may have
to terminate this Agreement under the express terms hereof.
(4) If in the judgment of either Seller or Buyer, the
pre-merger notification requirements of the HSR Act are applicable to this
transaction, then both Seller and Buyer shall file with the Federal Trade
Commission and the Department of Justice their respective Notification and
Report Forms and supplemental information, if any, and will comply with the
requirements of the HSR Act. The respective obligations of the Parties to
consummate this transaction are expressly made subject to satisfactory
compliance with the HSR Act, including the expiration of any waiting period(s)
required thereunder.
(5) If applicable, each Party shall have complied with the
requirements of federal and state securities Laws.
(6) No Casualty Loss shall have occurred between the end of
the Review Period and Closing. The term "Casualty Loss" shall mean a single
event of loss or damage to the Property or any portion thereof which causes (or
could reasonably be expected to cause) a Material Adverse Environmental
Condition or a Material Defect. Neither shall there have been a single casualty
or other event occurring between the date of this Agreement and Closing that
adversely affects the operations of any pipeline or refinery directly connected
to (but not constituting a portion of) the Property, which event results in (or
could reasonably be expected to result in) a reduction of over ten million
dollars ($10,000,000.00) in revenues attributable to the Property during a
period of twelve (12) consecutive months following such event.
(7) Each Party shall have received a certificate, dated as of
the Closing Date, signed by the other Party's Secretary or Assistant Secretary
certifying the incumbency of the officers executing this Agreement, and any
documents to be executed and delivered by it and its applicable Affiliates at
the Closing, on behalf of such Party.
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(8) Seller shall have (and shall have caused its applicable
Affiliates to) executed and delivered to Buyer the Conveyance Documents, which
are attached to this Agreement as Exhibits "H", "I", "J" and "K".
(9) The Parties shall each have (and shall have caused its
applicable Affiliates to) executed and delivered to the other the Ancillary
Agreements, which are attached to this Agreement as Exhibits "L", "M" and "N".
(10) Seller's portion of the property Tax owed in accordance
with Section 6B shall have been deducted from the Purchase Price on the Closing
Statement.
(11) Seller shall have received from Buckeye Partners, L.P. a
guarantee of the performance, in substantially the form attached hereto as
Exhibit "O", of any Affiliate of Buyer who has not been financially qualified by
Seller to whom assets are to be conveyed under this Agreement.
B. TERMINATION. If any condition to a Party's obligation to close this
transaction has not been satisfied or waived, and Closing has not occurred by
the close of business on October 1, 2004, such Party (or either Party, in the
case of a condition or obligation that is not owed to either party, such as
compliance with the HSR Act) may terminate this Agreement immediately upon the
giving of written notice thereof to the other Party. If this Agreement is
terminated, Buyer shall promptly return all records, maps, files, papers, and
other property of Seller then in its possession, and neither Party shall
hereafter have any liability under this Agreement. This provision shall not,
however, apply to limit the liability of a Party in violation of the terms and
provisions of this Agreement.
ARTICLE 4
ALLOCATION OF PROCEEDS AND PURCHASE PRICE
A. PROCEEDS FROM OPERATIONS. All proceeds attributable to the
operation, ownership, use or maintenance of or otherwise relating to the Subject
Interest prior to the Effective Time shall be the property of Seller and to the
extent received by Buyer or its Affiliates, Buyer shall promptly and fully
disclose, account for and transmit same to Seller. All proceeds attributable to
the operation, ownership, use, or maintenance of or otherwise relating to the
Subject Interest on and after the Effective Time shall be the property of Buyer
and to the extent received by Seller or its Affiliates, Seller shall promptly
and fully disclose, account for and transmit same to Buyer.
B. PURCHASE PRICE ALLOCATION. Buyer and Seller shall, no later than
sixty (60) days after Closing, agree to allocate the Purchase Price among the
Subject Interest in substantially the same form attached hereto as Exhibit "P"
which will represent a reasonable determination in good faith of the fair market
value of the Subject Interest. Seller and Buyer agree (i) to report the federal,
state and local income and other Tax consequences of the transactions
contemplated herein, and in particular to report the information required by
Section 1060(b) of the Code on Form 8594 in a manner consistent with such
allocation and (ii) not to take any position inconsistent therewith upon
examination of any Tax return, in any refund claim, in any litigation,
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investigation or otherwise, unless required by applicable Laws or with the
consent of the other Party.
ARTICLE 5
RESPONSIBILITY FOR PAYMENTS AND OBLIGATIONS
A. PAYMENTS, TAXES, EMPLOYEE OBLIGATIONS. Seller shall be responsible
for all rentals, contractual payments, compensation owed to employees, operating
costs, expenses, fees, vendor and contractor invoices, xxxxxxxx, Taxes, charges,
any claims for overcharges or rate discrimination or other complaints under or
pertaining to Seller's tariffs (including rates and regulations), assessments
and other indebtedness and obligations attributable to the ownership, operation,
use or maintenance of the Property prior to the Effective Time. Buyer shall be
responsible for all such payments and obligations attributable to the ownership,
operation, use or maintenance of the Subject Interest on and after the Effective
Time. Seller shall be responsible for all Taxes attributable to the ownership,
operation, use or maintenance of the Property on or before the Closing Date and
Buyer shall be responsible for all Taxes arising from the ownership, operation
or maintenance of the Subject Interest first arising after the Closing Date. The
Parties agree that the Buyer is not the successor employer to any employee of
Seller whether or not hired by Buyer, and Buyer does not assume any obligations
or liabilities of Seller to such employees.
B. ASSUMPTION OF LIABILITIES AND OBLIGATIONS RELATING TO THE SUBJECT
INTEREST. On and after the Effective Time, but subject to Seller's indemnities
set forth in Article 13, Buyer shall assume all liabilities and perform all
obligations of Seller relating to the Subject Interest (whether such obligations
are to a grantor, a Governmental Authority or any other Person) and whether such
liabilities or obligations are attributable to periods of time prior to or after
the Effective Time, including, but not limited to, any obligations arising with
respect to the abandonment or removal (as the case may be) of any existing
facilities, Pipeline, Tank Farm, Terminal, appurtenant or associated Equipment
or other personal property located on and included in the Subject Interest.
C. ADJUSTMENTS REGARDING UTILITIES. To the extent utilities have not
been placed in Buyer's name as of the Effective Time, charges and credits for
water, electricity, sewage, gas and all other utilities shall be adjusted and
apportioned between Seller and Buyer through the Effective Time. If Buyer
receives invoices for utilities for any period of time prior to the Effective
Time, Buyer will promptly forward the invoices to Seller for payment. Likewise,
if Seller receives invoices for utilities for any period of time on or after the
Effective Time, Seller will promptly forward the invoices to Buyer for payment.
If new utility connections or meters are required for Buyer's assumption of
utility services, the cost shall be borne by Buyer. After Closing, Buyer shall
promptly place in its own name all utilities associated with the Subject
Interest.
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ARTICLE 6
TAXES AND RELATED MATTERS
A. COOPERATION. Buyer and Seller agree to furnish, or cause to be
furnished, to each other, upon request, as promptly as practicable, such
information and assistance relating to the Property as is reasonably necessary
for the filing of all Tax returns, the preparation for any audit by any taxing
authority, and the prosecution or defense of any Proceeding relating to any Tax
return. Seller and Buyer shall cooperate with each other in the conduct of any
audit or other Proceeding related to Taxes involving the Property and each shall
execute and deliver such documents as are necessary to carry out the intent of
this article.
B. PROPERTY TAXES. All real estate, ad valorem and personal property
taxes shall be prorated between Buyer and Seller as of the Closing Date based
upon the number of days during the applicable tax period each Party owned the
Property subject to such tax. For purposes of this Agreement, general property
Taxes in respect to the ownership or use of the Property for the calendar year
in which the Effective Time occurs shall be prorated between Buyer and Seller as
of the Effective Time regardless of when such general property Taxes are
actually billed and payable. At Closing, Seller's portion of such general
property Taxes attributable to the period prior to the Effective Time shall be
deducted from the Purchase Price to be paid to Seller. Buyer shall actually pay
to the taxing authority all general property Taxes for the year of Closing which
are payable after the Closing. Notwithstanding anything in this Agreement to the
contrary, a post-closing adjustment will be made to accurately reflect Seller's
responsibility for that portion of general property Taxes attributable to the
period prior to the Effective Time, and Buyer's responsibility for general
property Taxes attributable to the period following the Effective Time. The
post-closing adjustment will be made six (6) months following the Closing Date
based on information available to Buyer at that time. No post-closing adjustment
will be made with respect to general property Taxes unless the amount proposed
as an adjustment by Buyer varies from the allocation made as of the Closing Date
by at least $50,000. Any post-closing adjustment proposed by Buyer will be
supported by reasonable documentation acceptable to Seller.
C. DOCUMENTARY TRANSFER TAXES. Buyer shall pay and bear all documentary
transfer Taxes, realty transfer Taxes and charges or fees with respect to the
transfer of real property or to the recordation of the documents necessary for
the transfer of real property that may be required for the transfer of the
Property from Seller to Buyer.
D. OTHER TRANSFER TAXES. Buyer shall pay and be responsible for any
other applicable transfer Taxes incurred in connection with the purchase and
sale of the Property, including, without limitation, any federal, state or local
sales, use, or excise Taxes, whether levied on Seller or Buyer. Buyer shall be
responsible for, and will file all necessary Tax returns and other documentation
with respect to all such Taxes and remit, upon the request of Seller, copies of
the portions of such returns relevant to this Agreement and any necessary
documentation to Seller.
E. CONFIDENTIAL TAX INFORMATION. Notwithstanding anything to the
contrary in this Agreement, neither Party shall be required at any time to
disclose to the other Party, or to any other Person, absent legal constraint,
any Tax return or other confidential Tax information.
F. DEFERRED LIKE-KIND EXCHANGE COOPERATION. If so requested by a Party,
the other Party shall, at no cost or obligation to such other Party, cooperate
in structuring and completing all or a portion of this transaction so as to
effect a disposition of "relinquished
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property" in connection with a multiple party deferred like-kind exchange
pursuant to Section 1031 of the Code. In particular, Buyer hereby consents to
the assignment of an interest in the Subject Interest to a "qualified
intermediary" prior to the Closing hereunder and the assignment by Seller to
such "qualified intermediary" of Seller's right to receive the Purchase Price
hereunder. The terms "qualified intermediary," and "relinquished property" as
used herein shall have the meanings ascribed to them in Treasury Regulations
Section 1.1031(k)-1. The requesting Party agrees to indemnify and hold harmless
the other Party from any costs, expenses and claims relating to its cooperation
arising out of a like-kind exchange of the requesting Party, which indemnity
shall survive Closing. Nothing in this Section 6F is intended to relieve any
Party from its obligations hereunder.
G. CERTIFICATION OF NON-FOREIGN STATUS. On the Closing Date, Seller
shall deliver to the Buyer a certificate in the form attached hereto as Exhibit
"Q" (Certification of Non-Foreign Status) signed under penalty of perjury (i)
stating that it is not a foreign corporation, foreign partnership, foreign trust
or foreign estate, (ii) providing its U.S. Employer Identification Number, and
(iii) providing its address, all pursuant to Section 1445 of the Code.
ARTICLE 7
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer the following:
A. NO BROKERS. Seller has not incurred any obligation or liability,
contingent or otherwise, nor made any agreement with respect to any broker or
finder's fees arising out of or in any way related to the transaction
contemplated by this Agreement for which Buyer will be in any way liable.
B. ORGANIZATION. Shell Pipeline Company LP is a limited partnership and
Shell Oil Products US is a limited liability company, both duly formed, validly
existing and in good standing under the Laws of the State of Delaware and duly
qualified to carry on business in the states in which their business requires
them to be qualified.
C. POWER AND AUTHORITY. Seller has the power and authority necessary to
enter into and perform this Agreement and the transaction contemplated hereby,
and assuming compliance with the requirements of the HSR Act, the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby by Seller will not, with the passage of time or the giving of notice or
both: (1) violate any provision of the formation documents of Seller, (2)
materially violate any agreement or instrument to which Seller is a party or by
which Seller is bound, (3) materially violate any judgment, order, ruling or
decree applicable to Seller as a party in interest, (4) violate any Law
applicable to Seller or to this Agreement or (5) result in the creation or
imposition of any Lien on any of the Property.
D. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery, and
performance by Seller of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by all requisite action on the
part of Seller. This Agreement has been duly executed and delivered on behalf of
Seller, and, at the Closing, all documents and instruments
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required hereunder to be executed and delivered by Seller shall have been duly
executed and delivered by Seller. This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of Seller
enforceable in accordance with their terms, subject, however, to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar Laws from time to
time in effect relating to the rights and remedies of creditors, as well as to
general principles of equity (regardless of whether such enforceability is
considered in a Proceeding in equity or at law).
E. INVESTMENT COMPANY ACT; PUCHA. Seller is not (1) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended or (2) a "holding company" or
a "subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended or (3) a "foreign
person" within the meaning of Section 1445 of the Code.
F. VIOLATIONS OF LAW. Except as set forth in the Disclosure Schedule,
to Seller's knowledge, Seller is not in violation of or in default under any Law
in connection with its ownership and/or operation of the Property.
G. TAXES. Except as set forth in the Disclosure Schedule, to Seller's
knowledge, Seller has filed in a timely manner all required federal, state, and
local income, sales, use, property, and franchise Tax returns related to the
Property, and has paid (except amounts being diligently contested in good faith
by appropriate Proceedings and in the Disclosure Schedule) all required Tax or
similar assessments arising from or related to the Property, including any
interest, penalties or additions attributable thereto shown as due on all such
filings. Taxes which Seller was required by Law to withhold or collect in
respect to the Property have been withheld or collected and have been paid over
to the proper Governmental Authorities or are properly held by Seller for such
payment when due and payable.
H. PERMITS. Except as disclosed in the Disclosure Schedule, to Seller's
knowledge (1) the Subject Interest includes all Permits necessary for the
operation of the Property as currently conducted, (2) each such Permit is in
full force and effect, and (3) Seller is in compliance with all its obligations
with respect to such Permits.
I. NECESSARY ASSETS. Except for the Excluded Assets and any title gaps
for which Buyer has assumed the risk under Section 8D, and except as disclosed
in the Disclosure Schedule, to Seller's knowledge, the Pipelines, Terminals,
Tank Farms, Real Property, Rights-of-Way and Permits, Equipment and Assigned
Contracts constitute all of the properties and assets necessary for the
operation of the Pipelines, Tank Farms, and Terminals as they are currently used
and operated and as they were used and operated during 2003.
J. NO PROCEEDINGS. Except as set forth in the Disclosure Schedule, to
Seller's knowledge, (1) there is no Proceeding directly affecting the Property
or Seller's ownership or operation thereof on the date hereof that is pending or
threatened, and that, if adversely determined, would impair or prohibit the
consummation of the transaction contemplated hereby and (2) there are no
material orders, writs, judgments, stipulations, injunctions, decrees,
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determinations, awards or other decisions of any Governmental Authority, or any
arbitrator or mediator, outstanding against Seller pertaining to any portion of
the Subject Interest.
K. DISCLOSURE SCHEDULE UPDATES. Seller will (with Buyer's consent,
which shall not be unreasonably withheld) update the Disclosure Schedule between
the signing of this Agreement and Closing in order to make these representations
true as stated at Closing.
L. NO LIENS. Except for interests in real property (including
rights-of-way), Seller has good and marketable title to all of the Property,
free and clear of all Liens other than Permitted Encumbrances. None of the
Property is subject to a Lien securing indebtedness (including obligations under
sale-leaseback transactions).
ARTICLE 8
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller the following:
A. INDEPENDENT INVESTIGATION. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES OF SELLER EXPRESSLY SET FORTH IN ARTICLE 7 HEREOF, BUYER ACKNOWLEDGES
THAT (1) SELLER IS SELLING AND BUYER IS ACQUIRING THE SUBJECT INTEREST ON AN "AS
IS", "WHERE IS" BASIS, WITHOUT ANY REPRESENTATIONS AND WARRANTIES CONCERNING THE
SUBJECT INTEREST (EXPRESS, IMPLIED OR STATUTORY), (2) SELLER HAS NOT MADE AND IS
NOT MAKING ANY REPRESENTATION OR WARRANTY OF TITLE, FITNESS FOR A PARTICULAR
PURPOSE, MERCHANTABILITY OR OTHERWISE WITH REGARD TO THE SUBJECT INTEREST AND
SELLER HAS EXPRESSLY DISCLAIMED ANY WARRANTIES (EXPRESS, IMPLIED OR STATUTORY),
AND (3) SELLER HAS NOT AND DOES NOT WARRANT DESCRIPTION, VALUE, QUALITY, OR
CONDITION OF ANY OF THE PROPERTY (INCLUDING THE PIPELINES, TANK FARMS,
TERMINALS, APPURTENANT OR ASSOCIATED EQUIPMENT OR OTHER REAL OR PERSONAL
PROPERTY LOCATED ON OR INCLUDED IN THE PROPERTY). BUYER FURTHER ACKNOWLEDGES
THAT SELLER HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATION OR WARRANTY
CONCERNING THE PRESENT OR FUTURE VALUE OF THE POSSIBLE INCOME, COSTS OR PROFITS
IF ANY, TO BE DERIVED FROM THE SUBJECT INTEREST. BUYER HAS MADE INDEPENDENT
INSPECTIONS, ESTIMATES, COMPUTATIONS, REPORTS, STUDIES, AND EVALUATIONS OF THE
SUBJECT INTEREST AND HAS SATISFIED OR WILL SATISFY ITSELF PRIOR TO THE
EXPIRATION OF THE REVIEW PERIOD WITH RESPECT TO THE CONDITION OF THE PROPERTY.
FURTHER, BUYER ACKNOWLEDGES THAT THE PROPERTY HAS BEEN USED FOR THE
TRANSPORTATION OF REFINED PETROLEUM PRODUCTS OR CRUDE OIL AND MAY HAVE BEEN THE
SUBJECT OF ONE OR MORE RELEASES OF REFINED PETROLEUM PRODUCTS OR CRUDE OIL AS A
RESULT OF ITS USE.
B. INVESTMENT. Buyer is acquiring the Subject Interest for its own
benefit and account and not with the intent of distributing fractional undivided
interests thereof as would be subject to regulation by federal or state
securities Laws.
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C. EVALUATION BY BUYER. By reason of Buyer's knowledge and experience
in the evaluation, acquisition and operation of similar properties, Buyer has
evaluated the merits and risks of purchasing the Subject Interest and has formed
an opinion based solely upon Buyer's knowledge and experience and not upon the
Information Memoranda or any representations or warranties by Seller or any of
its representatives other than Seller's representations set forth in Article 7
hereof.
D. TRANSFER RESTRICTIONS. Buyer assumes the risk of any transfer
restrictions or renegotiation requirements associated with, or the expiration
of, any Rights-of-Way, Permits, franchises, Assigned Contracts or other
agreements applicable to the Subject Interest.
E. COMPLIANCE WITH LAWS. Buyer shall comply with all applicable Laws
and shall promptly obtain, or have transferred to its name, and maintain all
Permits or consents required by public or private parties in connection with the
Property purchased.
F. ORGANIZATION. Buyer is a limited partnership duly formed, validly
existing and in good standing under the Laws of the State of Delaware and is
duly qualified to carry on business in the states in which the ownership of the
Subject Interest requires it to be qualified.
G. NO BROKERS. Buyer has not incurred any obligation or liability,
contingent or otherwise, nor has it made any agreement with respect to any
broker or finder's fees arising out of or in any way related to the transaction
contemplated by this Agreement for which Seller will be in any way liable.
H. POWER AND AUTHORITY. Buyer has the power and authority necessary to
enter into and perform this Agreement and the transaction contemplated hereby,
and assuming compliance with the requirements of the HSR Act, the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby by Buyer will not (1) violate any provision of the formation documents of
Buyer, (2) materially violate any agreement or instrument to which Buyer is a
party or by which Buyer is bound, (3) violate any judgment, order, ruling or
decree applicable to Buyer as a party in interest or (4) violate any Law
applicable to Buyer or to this Agreement.
I. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery, and
performance by Buyer of this Agreement and the consummation of the transaction
contemplated hereby have been duly authorized by all requisite action on the
part of Buyer. This Agreement has been duly executed and delivered on behalf of
Buyer, and, at the Closing, all documents and instruments required hereunder to
be executed and delivered by Buyer shall have been duly executed and delivered
by Buyer. This Agreement does, and such documents and instruments shall,
constitute legal, valid and binding obligations of Buyer enforceable in
accordance with their terms, subject, however, to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar Laws from time to time in
effect relating to the rights and remedies of creditors, as well as to general
principles of equity (regardless of whether such enforceability is considered in
a Proceeding in equity or at law).
11
J. INVESTMENT COMPANY ACT AND PUCHA. Buyer is not (1) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended or (2) a "holding company" or
a "subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended or (3) a "foreign
person" within the meaning of Section 1445 of the Code.
K. NO KNOWLEDGE. Buyer's management responsible for the consummation of
this transaction has no knowledge that there exists any wrong or inaccurate
information, omissions, misrepresentations or mistakes on the Disclosure
Schedule.
ARTICLE 9
COVENANTS OF SELLER
A. ANCILLARY AGREEMENTS. Seller shall (and shall cause its applicable
Affiliates to) execute the Ancillary Agreements in substantially the form
attached hereto as Exhibits "L", "M" and "N" as of the Closing Date.
B. NON-ASSIGNED ASSETS. Notwithstanding anything to the contrary
contained in this Agreement, to the extent the Parties elect or are required to
consummate the transactions contemplated hereby prior to obtaining a third party
consent required with respect to a portion of the Subject Interest (each a
"Non-Assigned Asset"), such Non-Assigned Asset shall be held by Seller for all
times during the Holding Period (as defined below). Within sixty (60) days after
Closing, Buyer shall provide Seller with a proposed list of all of the
Non-Assigned Assets. Within thirty (30) days of receipt of the list from Buyer,
Seller and Buyer will agree to the final list of Non-Assigned Assets. During the
Holding Period (a) Seller shall provide Buyer with the economic benefits and
risks thereof, (b) the Parties shall continue to use their Reasonable Efforts to
obtain the third party consent(s) related to such Non-Assigned Asset, and (c)
upon Buyer's request, Seller shall enforce, at Buyer's sole cost and expense,
any and all rights of Seller against a third party with respect to such
Non-Assigned Asset, including instituting and prosecuting all proceedings which
Buyer may in its reasonable discretion deem proper in order to assert or enforce
any right, title or interest in, to or under the Non-Assigned Assets or take
other actions reasonably necessary to obtain the benefits of such Non-Assigned
Assets, and defending or compromising any and all actions, suits or proceedings
in respect of such Non-Assigned Assets. Buyer shall be entitled to retain for
its own account any amounts collected pursuant to the foregoing, including any
amounts payable as interest in respect thereof. Seller will promptly pay to
Buyer when received all monies received by Seller under any Non-Assigned Asset
or any claim or right or any benefit arising thereunder, except to the extent
the same represents an Excluded Asset. At such time as the third party consent
for a Non-Assigned Asset is obtained, Seller shall promptly assign such
Non-Assigned Asset to Buyer using the form of Conveyance Document appropriate
for such Assigned Asset. For purposes of this Agreement, if the Non-Assigned
Asset is an easement or similar right, then the term Non-Assigned Asset shall
include that portion of the associated pipeline or other asset located thereon.
For purposes of this Agreement, the term "Holding Period" for any particular
Non-Assigned Asset shall mean the period beginning on the Closing Date and
ending on earlier of (i) the date upon which the contract for which consent was
12
not obtained expires, (ii) the date upon which such consent or an alternative
arrangement is obtained on terms that are substantially similar to Buyer in both
operational and economical respects or (iii) the second anniversary of the
Closing Date. At the end of the Holding Period, Seller shall assign any
remaining Non-Assigned Assets to Buyer.
C. OPERATION OF THE PROPERTY. During the period between the date of
this Agreement and the Closing, except to the extent Buyer has otherwise
consented (which consent will not be unreasonably withheld) or an item has been
previously disclosed on the Disclosure Schedule, (1) Seller and its Affiliates
will not engage in any practice, take any action, or enter into any transaction
with respect to (or binding on) any portion of the Property outside the ordinary
course of the Property's business or inconsistent with past custom and practice
(including lowering or applying to lower tariff rates), (2) Seller and its
Affiliates will keep the significant components of the Property substantially
intact (including its present operations, physical facilities, working
conditions, and relationships with significant lessors, licensors, suppliers and
customers), (3) Seller and its Affiliates shall obtain consent from Buyer prior
to implementing operational decisions of a material nature, and (4) Seller shall
not (a) sell or dispose of any of the Property, (b) amend or permit to terminate
(other than expiration in accordance with its terms) any Assigned Contract, (c)
enter into any material agreement with respect to the Property, or (d) incur any
indebtedness or Liens affecting or with respect to the Property.
D. MERCHANT'S BRIDGE. With regard to the removal of the St. Louis 6"
Pipeline from the Merchant's Bridge and the rerouting of the pipeline under the
Mississippi River near St. Louis, Missouri, Seller shall retain financial
responsibility for, and will complete the work required to (i) re-route the
pipeline, including obtaining any required permits, (ii) bore under the
Mississippi River, and (iii) perform any work required to remove, clean or
abandon the existing pipeline following the rerouting. All work will be
performed by Seller in compliance with applicable industry standards and DOT and
other laws, rules and regulations. The work required to (i) tie-in the rerouted
river crossing with Buyer's active pipeline, (ii) install the new valve site and
install cathodic protection will be performed expeditiously and without delay by
Buyer, but will be the financial responsibility of Seller up to the amount of
Buyer's cost estimate for such work received by Seller on September 22, 2004.
Buyer will submit to Seller invoices and other documentation demonstrating costs
incurred by Buyer in connection with such work, and Seller will promptly
thereafter reimburse Buyer for any such reasonable expenses. In addition to the
foregoing, prior to the Effective Time, Buyer and Seller will agree on a design
basis document outlining the work to be performed by Buyer and Seller. Buyer
will have the right to observe the work to be performed by Seller. In addition,
upon notification from Seller that the work has been substantially complete,
Buyer will have the right to accept the work or to suggest corrective action to
Seller. Buyer may only reject the work in the event it does not comply with the
design basis document or otherwise violates this Section. Buyer's acceptance of
the work may not be unreasonably withheld. Finally, Seller shall indemnify Buyer
against any claims that arise out of the performance of the work under Section
13B of this Agreement.
X. XXXXX TERMINALLING AGREEMENT. To the extent that there is additional
capacity available after satisfying existing customer's needs at Niles, Seller
agrees that it will enter into standard terminalling agreements with Buyer's
customers to transship through Niles Terminal to Ferrysburg Terminal. The fee
for any such terminalling shall be a market rate, currently $0.21 per barrel,
which rate may be escalated annually in the same manner as the fees in the
Terminalling
13
Agreement attached hereto as Exhibit "L" are allowed to be escalated. The term
of any such Niles Terminalling Agreement would be for up to eight (8) years from
the Effective Time. Seller agrees that it will include this obligation relating
to a Niles Terminalling Agreement in any purchase and sale agreement it enters
into with a buyer of the Niles Terminal other than Buyer.
ARTICLE 10
COVENANTS OF BUYER
A. NO CHANGE IN USE. Buyer will not materially change the use of any of
the Property in such a way as to increase the level of clean-up required by any
Governmental Authority for any pollution condition which had affected the
Property prior to the Effective Time. Buyer also agrees that it will require
that the condition outlined in the previous sentence of any of its successors or
assigns of any portion of the Property.
B. ANCILLARY AGREEMENTS. Buyer shall (and shall cause its applicable
Affiliates to) execute the Ancillary Agreements in substantially the form
attached hereto as Exhibits "L", "M" and "N" as of the Closing Date.
C. CHANGES TO THE PIPELINES. After the initial commitment period under
the Transportation Agreement, for a period of eight (8) additional years, Buyer
agrees that it will provide at least two (2) years notice to Seller of any
changes to be made to the Pipelines that would materially impact the ability of
Shell to continue shipments at the level shipped by Shell during the calendar
year immediately preceding such notice.
D. COMPLIANCE WITH LAWS AND TRANSFER RESTRICTIONS. Buyer shall comply
with all applicable Laws and shall promptly obtain, or have transferred to its
name, and maintain all Permits or consents required by public or private parties
in connection with the transfer of the Subject Interest as contemplated hereby.
ARTICLE 11
PRE-ACQUISITION REVIEW
A. REVIEW PERIOD. During the period commencing on the date of this
Agreement and ending forty-five (45) days after the date of this Agreement (the
"Review Period"), Buyer and its Affiliates and the employees, agents and
consultants of either shall have the right to do the following, at Buyer's
expense and with the cooperation and assistance of Seller, subject to Buyer's
executed confidentiality agreement ("Confidentiality Agreement"), and also
subject to Buyer supplying to Seller, prior to the end of the Review Period,
copies of any reports and/or assessments prepared by Buyer or its Affiliates or
the consultants of either, concerning the condition of the Property which are
relied upon as the basis of Buyer's termination option under Section 11E, and
allowing Seller to discuss the reports or assessments with the Person who
prepared them:
1. Enter all or part of the Property with Seller's
representative, including all or any easements, to view the Pipelines, Tank
Farms, Terminals, facilities, Equipment, and other
14
operations conducted thereon, and to conduct a surface only inspection and
assessment, inventory, study and examination of the same, independently of any
documents, data or information furnished by Seller hereunder; and
2. Inspect and review the Books and Records. Buyer
acknowledges that it shall not have access to (a) Seller's Pipeline Manuals used
in the operation of the Pipelines or (b) the process used by Seller for
integrity assessments, which are considered by Seller to be proprietary
property.
B. NO SAMPLING. Buyer shall not have the right to perform any sampling
of any kind in connection with any site assessment, including, but not limited
to, any phase II site assessment on any portion of the Property.
C. INFORMATION IS CONFIDENTIAL. Except as required by Law, all
information acquired by Buyer in any inspection, inventory, study, or
examination of the Property, and the results of any analysis thereof, shall be
kept confidential by Buyer from anyone other than Seller in accordance with
Buyer's executed Confidentiality Agreement. Should Buyer be required by any Law
to disclose any information concerning the Property, Buyer shall notify Seller
at least five (5) days prior to Buyer's disclosure of such information.
D. INDEMNITY. Buyer shall indemnify, defend and hold harmless Seller
and its Affiliates and their respective owners, officers, directors, employees,
attorneys, and agents from any and all Losses, liabilities, attorneys' fees,
court costs, liens, or encumbrances for labor or materials, claims and causes of
action arising out of any injury to or death of any Persons or damage to
property occurring to or on the Property as a result of the exercise of Buyer's
rights under this article, except to the extent the indemnified event or
occurrence arises from or is caused by the sole negligence or fault of Seller.
Seller shall have the right at all times to participate in the preparation for
and conducting of any hearing or trial related to this indemnification
provision, as well as the right to appear on its own behalf or to retain
separate counsel to represent itself at any such hearing or trial.
E. TERMINATION OPTION. Except as hereinafter provided, Buyer shall have
the option of terminating this Agreement by providing written notice to Seller
on or before the last day of the Review Period, in the event Buyer determines,
during the Review Period, that the Property is subject to any: (1) Material
Adverse Environmental Condition or (2) Material Defect. To be effective, any
such notice shall specifically identify and describe the basis for such
termination, and shall include reasonable evidence of the Material Defect or
Material Adverse Environmental Condition leading to the termination notice.
Neither (i) a minor deviation in the location of a Pipeline, relative to a
defined Right-of-Way in an easement, (ii) a gap in the Right-of-Way nor (iii) an
encroachment onto a Right-of-Way shall be deemed to constitute a Material Defect
for purposes of this Agreement.
F. SELLER'S REMEDY. Notwithstanding the delivery of a notice of
termination by Buyer to Seller, this Agreement shall not be terminated if,
within thirty (30) days after Seller's receipt of such notice: (1) Seller
remedies or agrees to remedy, to a degree which is mutually agreed during the
referenced thirty (30) day period, such Material Adverse Environmental
15
Condition or Material Defect; or (2) Seller and Buyer mutually agree on an
adjustment to the Purchase Price.
G. BUYER'S TERMINATION. Notwithstanding the above, if Buyer can provide
reasonable evidence that the Property is subject to Material Adverse
Environmental Conditions or Material Defects that, when totaled together would,
or could reasonably be expected to, (i) cost more than ten percent (10%) of the
Purchase Price to remedy or cure the condition or defect, or (ii) result in
Losses in excess of ten percent (10%) of the Purchase Price, Buyer, in its sole
discretion, may terminate this Agreement.
H. NEGOTIATION WITH AGENCIES. If Seller agrees to remedy any specific
Material Adverse Environmental Condition or Material Defect in the Property,
then all negotiations and contacts with Governmental Agencies for approval and
review of such remedial action shall be made by Seller, and Buyer shall make no
independent contacts with any of the Governmental Agencies relative to such
remedial action. Buyer shall receive copies of all correspondence between Seller
and any Governmental Agencies regarding such remedial action.
I. NOTICE OF END OF REVIEW PERIOD. When the Review Period has ended, or
prior to that time if Buyer has completed its pre-acquisition review, Buyer
shall send Seller a Notice, to the address provided in Article 28, that it has
completed its pre-acquisition review.
J. TRANSITION. When Buyer notifies Seller, in writing, that its
pre-acquisition review is complete, then Buyer and Seller shall enter into a
period of transition. During the transition period, Buyer's representatives
shall be allowed to "job-shadow" and/or consult with the appropriate Seller
employees for an agreed upon period of time. Seller shall also make available to
Buyer those of Seller's employees who are interested in discussing employment
with Buyer.
ARTICLE 12
TITLE
A. CONVEYANCES. At Closing, Seller shall transfer to Buyer title to the
Subject Interest by means of the Conveyance Documents. In the case of the Real
Property, it shall be free and clear at Closing of any Liens (except for
Permitted Encumbrances) of any Person claiming by, through or under Seller or
any of its Affiliates, but not otherwise, and transfer shall be by means of a
Special Warranty Deed in substantially the form attached hereto as Exhibit "I".
B. TITLE EXAMINATION. During the period commencing on the date of this
Agreement and ending sixty-five (65) days after the date of this Agreement
("Title Examination Period"), Buyer and its Affiliates and their employees,
agents and contractors shall have full access to and the right (subject to the
executed Confidentiality Agreement) to examine all of Seller's title records
relating to the Property, including but not limited to, those listed on Exhibits
"B" and "C" attached hereto.
C. NOTICE OF SIGNIFICANT TITLE DEFECT. On or before the last day of the
Title Examination Period, Buyer shall give Seller written notice of the land and
property interests included in the Property, if any, which have a Significant
Title Defect. None of the following
16
shall be deemed to constitute a Significant Title Defect for purposes of this
Agreement (i) a minor deviation in the location of a Pipeline, relative to a
defined Right-of-Way in an easement, (ii) a gap in a Right-of-Way or (iii) an
encroachment onto a Right-of-Way. If any Significant Title Defect cannot be or
is not cured by Seller prior to the Effective Time, Buyer may, at its election,
in writing: (1) terminate this Agreement without further obligation or liability
by giving written notice of termination to Seller at any time prior to Closing;
(2) offer to acquire the Subject Interest, including the portion affected by the
Significant Title Defect, subject to the terms of this Agreement, but at a
reduced Purchase Price, which offer Seller may accept or reject in its sole
discretion; or (3) acquire the Subject Interest, including the portion affected
by the Significant Title Defect, without adjustment to the Purchase Price.
ARTICLE 13
SELLER'S RESPONSIBILITY FOR CLAIMS RELATING TO THE PROPERTY
A. Seller's Environmental Responsibilities shall be as follows:
(1) ONGOING REMEDIAL WORK.
(a) Unless otherwise agreed, Seller shall retain full
responsibility for all costs, including capital, operating and maintenance
costs, incurred in connection with (i) any investigation and monitoring of
Environmental Conditions or (ii) any clean-up, remedial, removal or restoration
work of those Environmental Conditions, either of which is ongoing on the
Closing Date and that is required by any Governmental Authority with applicable
jurisdiction because of the presence, suspected presence, release or suspected
release of a Hazardous Substance in the air, soil, surface water, or groundwater
on or emanating from the Property (hereinafter the "Ongoing Remedial Work"). The
Ongoing Remedial Work is listed on the Disclosure Schedule. Any equipment
associated with the Ongoing Remedial Work will remain the property of Seller.
The performance of Ongoing Remedial Work will be by the Seller, in the name of
the Seller. The Seller will obtain all necessary licenses, manifests, permits
and approvals to perform such work. All Ongoing Remedial Work and the disposal
of all waste generated by the Ongoing Remedial Work will be performed in
accordance with all applicable Laws.
(b) Buyer grants to Seller, at no cost to Seller,
ingress, egress, access to the Subject Interest and use of the lands (including
land farming activities) and utilities, including, but not limited to,
electricity and water, as needed by Seller to complete any of the Ongoing
Remedial Work described in this Section 13A.(1). Seller's responsibility for any
Ongoing Remedial Work shall terminate upon Seller's receipt from the applicable
Governmental Authority of one of the following: (i) concurrence in any form that
remediation efforts are complete and the site may be closed; (ii) No Further
Action Required Letter or a similar document issued by a Governmental Authority
exercising jurisdiction over the Ongoing Remedial Work; (iii) concurrence with
the results of Seller's risk based corrective action plan or (iv) regulatory
concurrence that active remediation may be discontinued subject only to periodic
monitoring. Seller will conduct all communications concerning Seller's
remediation activities with all Governmental Authorities having jurisdiction.
Seller will provide Buyer with copies of all correspondence with the applicable
Governmental Authorities concerning Seller's Ongoing
17
Remedial Work, but Buyer shall not communicate with the Governmental Authorities
concerning Seller's Ongoing Remedial Work.
(c) Buyer shall notify Seller within seventy-two (72)
hours of any release within 500 feet of any of Seller's Ongoing Remedial Work.
If such a release occurs, Seller shall, at Seller's sole discretion and expense,
have the right to be present during Buyer's release cleanup activities, take
photographs, take notes or take soil samples.
(d) Should Buyer have a reportable release that
directly impacts or affects Seller's Ongoing Remedial Work at a site, then
Seller will transfer to Buyer the net present value of the amount of money
Seller's remediation consultants or personnel reasonably determine is required
for such Ongoing Remedial Work at the site where Buyer's release occurred. Buyer
shall thereupon assume full responsibility for the Ongoing Remedial Work at the
specific site along with the remediation of Buyer's own release.
(2) ENVIRONMENTAL INDEMNITY. SUBJECT TO SECTION 13A.(4),
SELLER HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD BUYER, AND ITS AFFILIATES,
AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, OWNERS, EMPLOYEES, TENANTS,
CONTRACTORS, ATTORNEYS, AND AGENTS OF ANY OF THEM, ("BUYER INDEMNITEES")
HARMLESS FROM ANY CLAIMS (INCLUDING, WITHOUT LIMITATION, THIRD PARTY CLAIMS FOR
PERSONAL INJURY OR DEATH, INCLUDING EXPOSURE, OR REAL OR PERSONAL PROPERTY
DAMAGE), ACTIONS, ADMINISTRATIVE PROCEEDINGS (INCLUDING INFORMAL PROCEEDINGS),
JUDGMENTS, DAMAGES, PENALTIES, FINES, COSTS, LIABILITIES (INCLUDING SUMS PAID IN
SETTLEMENT OF CLAIMS), INTEREST OR LOSSES, CONSULTANT FEES, ATTORNEYS' FEES AND
EXPERT FEES THAT ARISE OR ACCRUE DIRECTLY OR INDIRECTLY FROM OR AS A RESULT OF
(i) THE EXISTENCE OF ENVIRONMENTAL CONDITIONS PRIOR TO THE EFFECTIVE TIME OR
(ii) VIOLATION OF APPLICABLE ENVIRONMENTAL LAW, EITHER OF WHICH WAS IN
CONNECTION WITH THE OPERATION OF THE PIPELINES, TANK FARMS OR TERMINALS PRIOR TO
THE EFFECTIVE TIME.
(3) POST CLOSING ASSESSMENT. Buyer, and its Affiliates and
transferees, are prohibited from conducting post Closing environmental
assessments, except in those cases (i) where a reasonably prudent pipeline
operator, not afforded the indemnities provided in this Agreement, would conduct
such assessments in the ordinary course of business, (ii) where required or
directed by a Governmental Authority having jurisdiction or (iii) due to any
contractual requirement existing at the Effective Time or any legal requirement
related to the Property. Notwithstanding anything to the contrary herein, should
Buyer, or its Affiliates or transferees, conduct a post Closing environmental
assessment which is neither (i) of a type which a reasonably prudent pipeline
operator, not afforded the indemnities provided in this Agreement, would conduct
in the ordinary course of business or (ii) required or directed by a
Governmental Authority having jurisdiction or (iii) due to any contractual
requirement existing at the Effective Time or any legal requirement related to
the Property, then Buyer, or its Affiliates or transferees, shall indemnify,
defend and hold harmless Seller Indemnitees from any and all Claims (including
Claims for personal injury, death and/or property damage) arising out of or
resulting from such post Closing environmental assessment.
18
(4) LIMITATIONS ON SELLER'S ENVIRONMENTAL INDEMNITY. THE
INDEMNITIES CONTAINED IN SECTION 13A.(2) SHALL ONLY APPLY TO MATTERS FOR WHICH
SELLER HAS RECEIVED NOTICE FROM BUYER WITHIN TWO (2) YEARS AFTER THE EFFECTIVE
TIME AND ARE SUBJECT TO A TWO HUNDRED FIFTY THOUSAND DOLLAR ($250,000.00)
DEDUCTIBLE PER CLAIM TO BE PAID BY BUYER AND A TOTAL AGGREGATE CAP ON ALL
AMOUNTS TO BE PAID BY SELLER OF TWENTY-NINE MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS ($29,250,000.00). IN NO EVENT SHALL SELLER BE LIABLE TO ANY PERSON OR
COMBINATION OF PERSONS UNDER SECTION 13A.(2) FOR MORE THAN TWENTY- NINE MILLION
TWO HUNDRED FIFTY THOUSAND DOLLARS ($29,250,000.00). EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, SELLER SHALL HAVE NO LIABILITY UNDER SECTION 13A.(2)
WITH RESPECT TO MATTERS FOR WHICH SELLER HAS NOT RECEIVED NOTICE FROM BUYER
AFTER THE EXPIRATION OF TWO (2) YEARS AFTER THE EFFECTIVE TIME.
B. SELLER'S GENERAL INDEMNITY OF BUYER. TO THE FULLEST EXTENT PERMITTED
BY LAW, BUT NO FURTHER, SELLER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS BUYER
INDEMNITEES FROM ANY AND ALL LOSSES, LIABILITIES, LIENS, ENCUMBRANCES, DAMAGES,
JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES, FINES, PENALTIES OR
EXPENSES (INCLUDING ATTORNEYS' AND EXPERTS' FEES AND OTHER COSTS OF LITIGATION)
OF ANY KIND OR CHARACTER THAT ARISE OR ACCRUE DIRECTLY OR INDIRECTLY FROM EVENTS
OR CONDITIONS OCCURRING PRIOR TO THE EFFECTIVE TIME AND WHICH ARISE OUT OF, IN
CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP, POSSESSION, OPERATION, USE
OR MAINTENANCE OF THE PROPERTY BEFORE THE EFFECTIVE TIME, OR (2) THE BREACH OF
ANY OF SELLER'S REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT. SUCH
INDEMNIFICATION SHALL NOT APPLY TO THE EXTENT THE INDEMNIFIED EVENT OR
OCCURRENCE ARISES FROM OR IS CAUSED BY THE CONCURRENT OR CONTRIBUTORY
NEGLIGENCE, OR BOTH (WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR
FAULT OF BUYER OR IF CAUSED BY THE GROSS NEGLIGENCE OF BUYER. THIS PARAGRAPH
SHALL NOT APPLY TO ENVIRONMENTAL LIABILITIES AS SET OUT IN SECTIONS 13A.(1) AND
13A.(2).
C. LIMITATION ON SELLER'S GENERAL INDEMNITY. THE INDEMNITIES CONTAINED
IN SECTION 13B.(1) AND (2) SHALL APPLY TO MATTERS FOR WHICH SELLER HAS RECEIVED
NOTICE FROM BUYER WITHIN TWO (2) YEARS AFTER THE EFFECTIVE TIME AND ARE SUBJECT
TO A ONE HUNDRED FIFTY THOUSAND DOLLAR ($150,000.00) DEDUCTIBLE PER CLAIM TO BE
PAID BY BUYER AND A TOTAL AGGREGATE CAP ON ALL AMOUNTS TO BE PAID BY SELLER OF
SIX MILLION EIGHT HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($6,825,000.00). IN NO
EVENT SHALL SELLER BE LIABLE TO ANY PERSON OR COMBINATION OF PERSONS UNDER
SECTION 13B. FOR MORE THAN SIX MILLION EIGHT HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($6,825,000.00). EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, SELLER
SHALL HAVE NO LIABILITY UNDER
19
SECTION 13B(1) AND (2) AFTER THE EXPIRATION OF TWO (2) YEARS AFTER THE EFFECTIVE
TIME.
D. Seller agrees that, to the extent there remains an indemnity
obligation to Seller from a previous owner of the Ferrysburg, Hartford, South
Lima or Xxxxxx terminals, Seller will seek indemnity from that previous owner
for any Claim which Seller may have relating to Environmental Conditions at that
particular terminal. Buyer also agrees that it will provide Seller with as much
notification as possible whenever the previous owner of the terminal enters or
plans to enter to terminal in order to do any remedial work at the site.
E. NO PUNITIVE DAMAGES. THE FOREGOING INDEMNITIES BY SELLER UNDER THIS
ARTICLE 13 SHALL NOT COVER OR INCLUDE ANY PUNITIVE, OR EXEMPLARY DAMAGES EXCEPT
TO THE EXTENT THAT SUCH DAMAGES ARE AWARDED TO A THIRD PERSON CLAIMANT UNDER ANY
CLAIM FOR WHICH SELLER HAS AN INDEMNITY OBLIGATION TO BUYER.
F. NO TRANSFER OF INDEMNITIES. SELLER'S INDEMNITIES CONTAINED IN THIS
AGREEMENT ARE PERSONAL TO BUYER AND MAY NOT BE ASSIGNED TO A THIRD PERSON.
SHOULD BUYER SELL OR TRANSFER ALL OR ANY PORTION OF THE PROPERTY PURCHASED UNDER
THIS AGREEMENT TO A THIRD PERSON, SELLER'S INDEMNITY RELATING TO THAT PORTION SO
SOLD OR TRANSFERRED WILL BE IMMEDIATELY EXTINGUISHED.
ARTICLE 14
BUYER'S RESPONSIBILITY FOR CLAIMS RELATING TO THE PROPERTY
A. Buyer's Environmental Responsibility shall be as follows:
(1) FUTURE REMEDIATION SITES. Regardless of when the release
causing the Environmental Condition occurred, Buyer agrees to accept full
responsibility for all costs, including capital, operating and maintenance
costs, incurred in connection with (i) any investigation or monitoring of
Environmental Conditions or (ii) any clean-up, remedial, removal or restoration
work of those Environmental Conditions, if any, either of which may be necessary
on or after the Effective Time and required by any Governmental Authority with
applicable jurisdiction because of the presence, suspected presence, release or
suspected release of Hazardous Substances in the air, soil, surface water, or
groundwater on or emanating from the Property (hereinafter the "Future Remedial
Work"); provided however, that as long as Seller's Environmental Indemnity of
Buyer is in place, such indemnity shall apply to any Environmental Condition
which would be included under that indemnity. The performance of any Future
Remedial Work will be by the Buyer, in the name of Buyer. The Buyer will obtain
all necessary licenses, manifests, permits and approvals to perform such work.
All Future Remedial Work and the disposal of all waste generated by the Future
Remedial Work will be in accordance with all applicable Laws. It is expressly
understood that Buyer, under this section, does not assume any responsibility
for Ongoing Remedial Work as that work is set out in Section 13A.(1) above, and
that no Ongoing Remedial Work shall be considered under or included in the
indemnity cap or deductible amounts set forth in Article 13.
20
(2) MONITORING OF XXXXX. At such time as testing of Monitoring
Xxxxx is the only work left with regard to a site on which Ongoing Remedial Work
was being done at the Effective Time, Buyer assumes the obligation to continue
any required testing of any Monitoring Xxxxx on the Subject Interest for
Environmental Conditions. Buyer will promptly file any required reports and send
a copy of same to Seller. In addition, Buyer assumes, as of the Effective Time
all responsibility, including all costs and expenses, for the testing of and
reporting related to any other Monitoring Xxxxx associated with the Subject
Interest and shown on the Monitoring Well List attached to the Disclosure
Schedule. Buyer will conduct these monitoring activities until site closure is
obtained as outlined in Section 13A.(1)(b).
(3) ENVIRONMENTAL INDEMNITY. EXCEPT WITH RESPECT TO RETAINED
OBLIGATIONS, BUYER HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD SELLER AND ITS
AFFILIATES AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, OWNERS,
EMPLOYEES, TENANTS, CONTRACTORS, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF
ANY OF THEM ("SELLER INDEMNITEES") HARMLESS FROM ANY CLAIMS (INCLUDING WITHOUT
LIMITATION THIRD PARTY CLAIMS FOR PERSONAL INJURY OR DEATH, INCLUDING EXPOSURE,
OR REAL OR PERSONAL PROPERTY DAMAGE), ACTIONS, ADMINISTRATIVE PROCEEDINGS
(INCLUDING INFORMAL PROCEEDINGS), JUDGMENTS, DAMAGES, PENALTIES, FINES, COSTS,
LIABILITIES (INCLUDING SUMS PAID IN SETTLEMENT OF CLAIMS), INTEREST OR LOSSES,
CONSULTANT FEES, ATTORNEYS' FEES AND EXPERT FEES THAT ARISE OR ACCRUE DIRECTLY
OR INDIRECTLY FROM OR AS A RESULT OF (i) THE EXISTENCE OF ENVIRONMENTAL
CONDITIONS OR (ii) VIOLATION OF APPLICABLE ENVIRONMENTAL LAW, EITHER OF WHICH IS
IN CONNECTION WITH THE OPERATION OF THE PIPELINES, TANK FARMS OR TERMINALS ON OR
AFTER THE EFFECTIVE TIME. THIS SECTION 14A.(3) SHALL SURVIVE IN PERPETUITY FROM
AND AFTER THE EFFECTIVE TIME.
B. BUYER'S GENERAL INDEMNITY OF SELLER. TO THE FULLEST EXTENT PERMITTED
BY LAW, BUT NO FURTHER, BUYER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER
INDEMNITEES FROM ANY AND ALL LOSSES, LIABILITIES, LIENS, ENCUMBRANCES, DAMAGES,
JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES, FINES, PENALTIES OR
EXPENSES (INCLUDING ATTORNEYS' FEES, EXPERT FEES AND OTHER COSTS OF LITIGATION)
OF ANY KIND OR CHARACTER THAT ARISE OR ACCRUE DIRECTLY OR INDIRECTLY FROM EVENTS
OR CONDITIONS OCCURRING ON OR AFTER THE EFFECTIVE TIME AND WHICH ARISE OUT OF,
IN CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP, POSSESSION, OPERATION,
USE OR MAINTENANCE OF THE SUBJECT INTEREST BY BUYER ON AND AFTER THE EFFECTIVE
TIME; (2) THE BREACH OF ANY OF BUYER'S REPRESENTATIONS OR WARRANTIES HEREUNDER
OR (3) THE BREACH OF ANY OF BUYER'S OBLIGATIONS UNDER THIS AGREEMENT. SUCH
INDEMNIFICATION SHALL NOT APPLY TO THE EXTENT THE INDEMNIFIED EVENT OR
OCCURRENCE ARISES FROM OR IS CAUSED BY THE CONCURRENT OR CONTRIBUTORY
NEGLIGENCE, OR BOTH (WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR
FAULT OF SELLER OR IF CAUSED BY THE GROSS
21
NEGLIGENCE OF SELLER. THIS PARAGRAPH SHALL NOT APPLY TO ENVIRONMENTAL
LIABILITIES AS SET OUT IN SECTION 14A.(1), (2) AND (3). THIS SECTION 14B. SHALL
SURVIVE IN PERPETUITY FROM AND AFTER THE EFFECTIVE TIME.
C. BUYER'S FURTHER INDEMNITY. EXCEPT WITH RESPECT TO RETAINED
OBLIGATIONS, BUYER FURTHER AGREES TO INDEMNIFY, DEFEND AND HOLD SELLER
INDEMNITEES HARMLESS FROM ANY CLAIMS (INCLUDING WITHOUT LIMITATION THIRD PARTY
CLAIMS FOR PERSONAL INJURY OR DEATH, INCLUDING EXPOSURE, OR REAL OR PERSONAL
PROPERTY DAMAGE) ACTIONS, ADMINISTRATIVE PROCEEDINGS, (INCLUDING INFORMAL
PROCEEDINGS) JUDGMENTS, DAMAGES, COSTS, LIABILITIES (INCLUDING SUMS PAID IN
SETTLEMENT OF CLAIMS), INTEREST OR LOSSES, CONSULTANT FEES, ATTORNEYS' FEES AND
EXPERT FEES FOR WHICH SELLER DID NOT RECEIVE NOTIFICATION WITHIN TWO (2) YEARS
AFTER THE EFFECTIVE TIME, WHICH ARE WITHIN BUYER'S PER CLAIM DEDUCTIBLE, OR
WHICH ARE IN EXCESS OF SELLER'S AGGREGATE CAPS SET OUT IN SECTIONS 13A(4) AND
13C. THIS SECTION 14C. SHALL SURVIVE IN PERPETUITY FROM AND AFTER THE EFFECTIVE
TIME. SUCH INDEMNIFICATION SHALL APPLY TO CLAIMS RELATING TO EVENTS OR
CONDITIONS OCCURRING PRIOR TO THE EFFECTIVE TIME EVEN THOUGH THE INDEMNIFIED
EVENT OR OCCURRENCE ARISES FROM OR IS CAUSED BY THE CONCURRENT OR CONTRIBUTORY
NEGLIGENCE, OR BOTH (WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR
FAULT OF SELLER, BUT SUCH INDEMNIFICATION SHALL NOT APPLY IF CAUSED BY THE GROSS
NEGLIGENCE OF SELLER.
D. PUNITIVE DAMAGES. THE FOREGOING INDEMNITIES BY BUYER UNDER THIS
ARTICLE 14 SHALL NOT COVER OR INCLUDE ANY PUNITIVE OR EXEMPLARY DAMAGES. EXCEPT
TO THE EXTENT THAT SUCH DAMAGES ARE AWARDED TO A THIRD PERSON CLAIMANT UNDER ANY
CLAIM FOR WHICH BUYER HAS AN INDEMNITY OBLIGATION TO SELLER.
ARTICLE 15
CLAIMS PROCEDURE
All claims for indemnification by a Party under Articles 13 or 14 (the
Party claiming indemnification and the Party against whom such claims are
asserted being herein called the "Indemnified Party" and the "Indemnifying
Party", respectively) with respect to claims brought by a Third Person shall be
asserted and resolved as follows.
A. CLAIM NOTICE. In the event that any Claim for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted against or
sought to be collected from such Indemnified Party, such Indemnified Party
shall, within forty-five (45) calendar days of the receipt thereof, give notice
(the "Claim Notice") to the Indemnifying Party of such Claim specifying the
nature of and specific basis for such Claim and the estimated amount thereof, to
the extent then feasible, which estimate shall not be binding upon the
Indemnified Party in its effort
22
to collect the final amount of such Claim. The failure to give any such notice
shall not affect the rights of the Indemnified Party to indemnification
hereunder except to the extent the Indemnifying Party is prejudiced thereby, the
failure to so notify the Indemnifying Party of any such Claim shall relieve the
Indemnifying Party from liability that it may have to the Indemnified Party
under the indemnification provisions contained in Article 13 or Article 14, as
applicable, but only to the extent of the loss directly attributable to such
failure to notify and shall not relieve the Indemnifying Party from any
liability that it may have to the Indemnified Party otherwise.
B. DEFENSE OF CLAIM. The Indemnifying Party shall be given the
opportunity, at its cost and expense, to contest and defend, by all appropriate
legal Proceedings, any Claim with respect to which it is called upon to
indemnify the Indemnified Party under the provisions of this Agreement;
provided, however, that notice of the intention to so contest and defend shall
be delivered by the Indemnifying Party to the Indemnified Party within thirty
(30) calendar days following receipt of the Claim Notice. If the Indemnifying
Party does not give notice to the Indemnified Party of its election to contest
and defend any such Claim within such period then the Indemnifying Party shall
be bound by the result obtained with respect thereto by the Indemnified Party
and shall be responsible for all costs incurred in connection therewith. The
Claim which the Indemnifying Party elects to contest and defend may be conducted
in the name and on behalf of the Indemnifying Party or the Indemnified Party as
may be appropriate. Such Claim shall be conducted by counsel employed by the
Indemnifying Party who shall be reasonably satisfactory to the Indemnified Party
and the Indemnified Party shall have the right to participate in such Claim and
to be represented by counsel of its own choosing at its own cost and expense. If
the Indemnified Party joins in any such Claim, the Indemnifying Party shall have
full authority to determine all action to be taken with respect thereto;
provided that if the Indemnifying Party reserves its rights with respect to its
indemnification obligations under this Agreement as to such Claim, then the
Indemnified Party shall have full authority to determine all action to be taken
with respect thereto. At any time after the commencement of defense of any
Claim, the Indemnifying Party may request the Indemnified Party to agree in
writing to the abandonment of such contest or to the payment or compromise by
the Indemnifying Party of the asserted Claim provided the Indemnifying Party
agrees in writing to be solely liable for all Losses relating to such Claim,
whereupon such action shall be taken unless the Indemnified Party determines
that the contest should be continued and notifies the Indemnifying Party in
writing within fifteen (15) calendar days of such request from the Indemnifying
Party. In the event that the Indemnified Party determines that the contest
should be continued, the amount for which the Indemnifying Party would otherwise
be liable hereunder shall not exceed the amount which the Indemnifying Party had
agreed to pay in payment or consideration of such Claim, provided the other
Party to the contested Claim had agreed in writing to accept such amount in
payment or compromise of the Claim as of the time the Indemnifying Party made
request therefor to the Indemnified Party, and further provided that under such
proposed compromise, the Indemnified Party would be fully and completely
released from any further liability or obligation with respect to the matters
which are the subject of such contested Claim.
C. COOPERATION. If requested by the Indemnifying Party, the Indemnified
Party agrees, at the Indemnifying Party's expense, to cooperate with the
Indemnifying Party and its counsel in contesting any Claim that the Indemnifying
Party elects to contest, or, if appropriate and related to the Claim in
question, in making any counterclaim against the Person asserting the
23
Third Person Claim, or any cross-complaint against any Person other than an
Affiliate of the Indemnified Party.
D. THIRD PARTY CLAIM. If any Indemnified Party should have a Claim
against the Indemnifying Party hereunder that does not involve a Claim being
asserted against or sought to be collected from it by a Third Person, the
Indemnified Party shall send a Claim Notice with respect to such Claim to the
Indemnifying Party. If the Indemnifying Party disputes such Claim, such dispute
shall be resolved in the manner set forth in Article 35 hereof.
E. PRESENCE AT CONFERENCES. The Indemnified Party agrees to afford the
Indemnifying Party and its counsel the opportunity, at the Indemnifying Party's
expense, to be present at, and to participate in, conferences with all Persons
asserting any Claim against the Indemnified Party and conferences with
representatives of, or counsel for, such Persons.
F. EXCLUSIVE REMEDY. AS BETWEEN THE BUYER INDEMNITEES AND THE SELLER
INDEMNITEES AFTER CLOSING, THE INDEMNIFICATION PROVISIONS SET FORTH IN THIS
AGREEMENT AND THE SPECIAL WARRANTY OF TITLE SET FORTH IN THE SPECIAL WARRANTY
DEED WILL BE THE SOLE AND EXCLUSIVE RIGHTS, OBLIGATIONS AND REMEDIES OF THE
PARTIES WITH RESPECT TO THIS AGREEMENT, THE EVENTS GIVING RISE TO THIS
AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREBY. IF THE CLOSING OCCURS,
NEITHER PARTY NOR ANY OF ITS RESPECTIVE SUCCESSORS OR ASSIGNS SHALL HAVE ANY
RIGHTS AGAINST THE OTHER PARTY OR ITS AFFILIATES AFTER THE CLOSING DATE OTHER
THAN AS IS EXPRESSLY PROVIDED IN THIS AGREEMENT OR WITH RESPECT TO THE SPECIAL
WARRANTY OF TITLE SET FORTH IN THE SPECIAL WARRANTY DEED.
24
ARTICLE 16
CONSENT DECREE
Buyer acknowledges that certain Pipelines to be transferred as part of this
Agreement have been subject to those requirements outlined in that Consent
Decree Between The United States of America and Shell Pipeline Company LP fka
Equilon Pipeline Company LLC (and appendices) (the "CD") entered in the United
States District Court/Western District of Washington on June 30, 2003. Buyer
further acknowledges that certain of the Programs (as defined in the CD) will
not have been completed by the Effective Time. Buyer agrees that it will
complete any work remaining to be done on any of the Programs on the time
schedule required in the CD. In order to monitor Buyer's compliance with this
article, Buyer agrees to (i) provide such periodic updates and reports to Seller
as are required by the CD, and to (ii) allow such inspections by or periodic
meetings with Seller as Seller may reasonably request.
ARTICLE 17
INCIDENTAL CONTAMINATION AND NORM
Buyer acknowledges that the Subject Interest may contain inter alia asbestos in
piping coating, undisplaced petroleum hydrocarbon products in pipelines, coats
of lead-based paints, PCB's in transformers or rectifiers, mercury in electrical
switches, and Naturally Occurring Radioactive Material ("NORM") in various
potential forms. Buyer also expressly understands that special procedures may be
required for the remediation, removal, transportation and disposal of these
affixed or attached substances from the inside or outside of the piping,
Equipment or the Subject Interest. Notwithstanding any contrary provision or
definition contained herein, in connection with these substances affixed to the
inside or outside of the piping, Equipment or the Subject Interest, Buyer
expressly assumes all liability for or in connection with the future abandonment
and removal of the Pipelines, tanks, Equipment and other personal property
included in the Subject Interest and the assessment, remediation, removal,
transportation and disposal of any such Pipelines, Equipment and personal
property and associated activities in accordance with all relevant rules,
regulation and requirements of Governmental Authorities.
ARTICLE 18
TARIFFS AND ALLOCATION OF CARRIER OBLIGATIONS
A. ADOPTION OF TARIFFS. Buyer agrees that, for a Pipeline which has
tariffs on file with a regulatory agency, it will either adopt Seller's tariff
or file its own to be effective as of the Effective Time, if required by Law to
do so.
B. REFINED PRODUCT IN THE PIPELINES, TANK FARMS OR TERMINALS. The
Pipelines, Tank Farms and Terminals contain refined products which are held for
the account of shipper(s) or customer(s). It is understood that title to the
contents of the Pipelines, Tank Farms and Terminals will remain with the
shipper(s) and customer(s) and that as of the Effective Time Buyer assumes the
obligation to handle such contents in accordance with applicable published
tariff or contract provisions. Further, to the extent that such refined product
has been tendered for
25
shipment in the Pipelines under an applicable published tariff, but not yet
delivered, Buyer shall receive that refined product for transportation in
accordance with applicable published tariffs.
ARTICLE 19
COOPERATION
The Parties shall execute and deliver such additional documents and shall use
all Reasonable Efforts to take or cause to be taken all such actions as may be
necessary or advisable to close and make effective this transaction (including
satisfying conditions for which they are responsible or otherwise in control).
It shall be Buyer's responsibility to obtain all governmental and Third Person
consents and approvals necessary for the issuance, reissuance or transfer of
environmental and land use permits, applications, Rights-of-Way, authorities to
construct, Permits to operate, authorizations and licenses used or held by
Seller or otherwise required in connection with the ownership, operation, use
and maintenance of the Property. Upon the request of Buyer, Seller shall assist,
with no out of pocket expense to Seller, in obtaining consents from Third
Persons which are necessary or appropriate to transfer any portion of the
Property. After Closing, each Party, at the request of the other Party, and
without additional consideration, shall execute and deliver, from time to time,
such additional documents of conveyance and transfer as may be necessary to
accomplish the orderly transfer of the Subject Interest to Buyer in the manner
contemplated in this Agreement.
ARTICLE 20
SURVIVAL OF PROVISIONS
All representations and warranties, covenants of the Parties and the
indemnification obligations of the Parties set forth in this Agreement shall
survive in accordance with the provisions of this Agreement.
ARTICLE 21
COSTS AND EXPENSES
Each Party shall bear and pay its own costs and expenses, including but not
limited to attorneys' fees, incurred in connection with this transaction.
ARTICLE 22
RISK OF LOSS
The risk of damage, destruction, or other casualty loss to or of the Property
shall remain with Seller from and after the execution of this Agreement until
the Effective Time, at which xxxx Xxxxxx shall place Buyer in possession of the
Subject Interest; and from and after the Effective Time, all risks of damage,
destruction, or other casualty loss to or of the Subject Interest shall be borne
solely by Buyer.
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ARTICLE 23
JOINT VENTURE, PARTNERSHIP AND AGENCY
Nothing contained in this Agreement shall be deemed to create a joint venture,
partnership, Tax partnership or agency relationship between the Parties.
ARTICLE 24
BOOKS AND RECORDS
A. DELIVERY OF BOOKS AND RECORDS. Not later than ninety (90) calendar
days after Closing, Seller shall deliver to Buyer the Books and Records. Buyer
understands that there may be certain voluminous documents included within the
Books and Records, especially data from Seller's control center. Seller will
retain the control center data, on behalf of Buyer, for the applicable
Department of Transportation ("DOT") required record retention period and will
deliver it to Buyer in a timely manner when Buyer requests the data for a DOT
audit. Buyer will give Seller reasonable notice of its need for the data. If
this transaction is not closed as to any portion of the Property, all of the
Books and Records obtained from Seller in connection with the exercise of
Buyer's pre-acquisition review, and related solely to that portion of the
Property not transferred as contemplated herein, shall be returned to Seller
within five (5) calendar days after Closing.
B. RETENTION OF BOOKS AND RECORDS. Notwithstanding the inclusion of the
Books and Records in the Property under Article 1, Seller shall have the right
to copy and retain any copies of any of the Books and Records relating to the
Property for which it has, or may have, any business, technical or legal need.
To the extent that those Books and Records made available to Buyer before or
after the Closing contain proprietary business or technical information of
Seller or its Affiliates, Buyer agrees to hold such Books and Records in
confidence and limit their use to the Property. Buyer shall not destroy or
otherwise dispose of any of the Books and Records acquired hereunder for a
period of three (3) years following the Closing (except as to Tax records for
which the period shall be the applicable statute of limitations) and except upon
thirty (30) days prior written notice to Seller. During such periods, Buyer
shall make such Books and Records, available to Seller or its authorized
representatives for any business, legal or technical need in a manner which does
not unreasonably interfere with Buyer's business operations.
ARTICLE 25
PUBLICITY
Seller and Buyer shall, and each shall use its Reasonable Efforts to cause its
Affiliates to, cooperate in the development and distribution of all news
releases and other public disclosures, irrespective of the form of
communication, relating to the proposed transaction described in this Agreement,
and to ensure that no such releases or disclosures are made without prior notice
to, and the consent of, the other Party; provided, however, no news release or
other disclosure whatsoever may disclose the terms of this Agreement unless both
Parties agree to the form and content of such disclosure, including electronic
communications, each being under no obligation to agree and having the right to
withhold agreement for any reason; provided, however, that either
27
Party may make all disclosures which, in the written opinion of counsel, are
required under applicable Law, including, but not limited to, regulations of the
Securities and Exchange Commission, with the Party making the disclosure giving
the other Party as much advance notice thereof as is feasible.
ARTICLE 26
RECORDING AND FILING
Except as may be required by Law, this Agreement shall not be recorded or filed
by either Party, or their successors or assigns, in or with any Governmental
Authority without the prior written consent of the other Party. The Parties
acknowledge that Buyer will be required (and is permitted, without obtaining
consent) to file this Agreement with the Securities and Exchange Commission.
ARTICLE 27
CONFIDENTIALITY
Seller and Buyer (and their respective Affiliates) each acknowledge that this
Agreement and the transactions contemplated hereby are subject to the
Confidentiality Agreement. Buyer and Seller do not intend for any obligations of
confidentiality contained herein to limit disclosure of the transaction in any
way that would cause it to be treated as a "confidential transaction" under
Treasury Regulation 1.6011-4(b)(3).
ARTICLE 28
NOTICES
All notices and consents required or authorized hereunder shall be in writing
and shall be deemed to have been duly given by one Party if delivered
personally, faxed with receipt acknowledged, mailed by registered or certified
mail, delivered by a recognized commercial courier or otherwise actually
received by the other Party at the address set forth below, or such other
address as one Party shall have designated by ten (10) calendar days prior
written notice to the other Party:
Buyer's Address: Seller's Address:
Buckeye Partners, L.P. Shell Pipeline Company LP
5 Radnor Corporate Center 000 Xxxxxx Xxxxxx
Xxxxx 000 Xxxxxxx, Xxxxx 00000
000 Xxxxxxxxxx Xxxx Attn: Xxxxxx Xxxxxx
Xxxxxx, XX 00000 Telephone: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx Fax: (000) 000-0000
28
With a copy to (which shall not constitute notice):
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
Attn: J. Xxxxxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: 000-000-0000
ARTICLE 29
TIME OF PERFORMANCE
Time is of the essence in the performance of all covenants and obligations under
this Agreement.
ARTICLE 30
ENTIRE AGREEMENT; GOVERNING AGREEMENT
This Agreement and the other Transaction Documents constitute the entire
agreement between the Parties with respect to this transaction and supersede all
prior negotiations, statements, representations, discussions, correspondence,
offers, agreements, and understandings relating to this transaction. This
Agreement may be modified, amended or supplemented only upon the prior written
agreement of the Parties. In the event of a conflict between the terms of this
Agreement and the terms of any other Transaction Document (including the
Conveyance Documents), this Agreement and each other Transaction Document shall
continue and the terms of this Agreement and each other Transaction Document
shall not be merged into or superseded by any other Transaction Document. For
example, without in any way limiting the generality of the previous sentence,
Seller shall be entitled to full benefit of the indemnities provided in the
Transition Services Agreement, even though those indemnities provide more
protection to Seller under certain circumstances than the indemnities contained
in this Agreement.
ARTICLE 31
ASSIGNMENT
Buyer may not sell, assign, transfer, convey, option, mortgage, pledge or
hypothecate its rights and obligations hereunder to any Third Person without the
prior written consent of Seller, which consent shall not be unreasonably
withheld. Upon any authorized sale, assignment, transfer, conveyance, option,
mortgage, pledge or hypothecation hereunder, all of the terms, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Buyer. To the extent assignment is
allowed under this Agreement, Buyer shall remain liable for the performance of
Buyer's obligations hereunder.
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ARTICLE 32
INVENTORY
The Pipelines, Tank Farms and Terminals will be gauged at 12:01 a.m. local time
on the Effective Time, at which time the custody of all shippers' or customers'
refined product will be transferred to Buyer, and Buyer shall become responsible
to each shipper or customer for the refined products in Buyer's custody. The
inventory will be determined by the Inventory Determination Procedure attached
hereto as Exhibit "R". At the time of the transfer of custody of the shippers'
refined products, Seller shall become a shipper of any allowance oil or other
refined products held in inventory for Seller which remains in the Pipelines,
Tank Farms or Terminals at the Effective Time.
ARTICLE 33
APPLICABLE LAW
THIS AGREEMENT, OTHER DOCUMENTS EXECUTED AND DELIVERED PURSUANT HERETO, AND THE
LEGAL RELATIONS BETWEEN THE PARTIES WITH RESPECT TO THIS AGREEMENT, SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO RULES CONCERNING CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE PERFORMED
IN XXXXXX COUNTY, TEXAS.
ARTICLE 34
HEADINGS
The headings used in this Agreement are inserted for convenience only and shall
be disregarded in construing it.
ARTICLE 35
DISPUTE RESOLUTION
Any dispute, controversy or claim ("Dispute"), whether based on contract, tort,
statute or other legal or equitable theory (including, but not limited to, any
Dispute concerning any question of validity or effect of this Agreement,
including this clause) arising out of or related to this Agreement (including
any amendments or extensions) the breach or termination hereof or thereof, shall
be settled by arbitration in accordance with the then current CPR Institute for
Dispute Resolution Rules for Non-Administered Arbitration of Business Disputes
and this provision The arbitration shall be governed by the United States
Arbitration Act 9 U.S.C. Sections 1-16 to the exclusion of any provision of
state law inconsistent therewith or which would produce a different result and
judgment upon the award rendered by the arbitrator may be entered by any court
having jurisdiction.
30
ARTICLE 36
TRANSITION SERVICES
Seller will assist and cooperate with Buyer in order to effectuate an orderly
transition. Upon Buyer's request, and at Buyer's expense, Seller will provide
transition services, to the extent it can perform these services requested by
Buyer under the terms and conditions contained in the Transition Services
Agreement attached hereto as Exhibit "N". For purposes of this Agreement,
transition services shall not include any field operations.
ARTICLE 37
NO THIRD PERSON BENEFICIARIES AND SELLER OBLIGATIONS
Except to the extent a Third Person is expressly given rights in Articles 13 and
14, any agreement contained, expressed or implied in this Agreement shall be
only for the benefit of the Parties hereto and their respective legal
representatives, successors and permitted assigns, and such agreements shall not
inure to the benefit of the obligees of any indebtedness of either Party hereto,
it being the intention of the Parties hereto that no Person shall be deemed a
Third Person beneficiary of this Agreement, except to the extent a Third Person
is expressly given rights herein. Notwithstanding anything herein to the
contrary, nothing herein shall be deemed to create any rights with respect to
any employee of either Party or any employee of any Affiliate of a Party, except
as expressly provided herein with respect to an Indemnified Party under Article
13 or Article 14. All obligations of Seller under this Agreement are joint and
several obligations of the entities that comprise "Seller."
ARTICLE 38
COUNTERPARTS AND FACSIMILES
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument. A facsimile transmission of a signed copy of this Agreement shall be
deemed an original and shall have the same valid and binding affect thereof.
ARTICLE 39
EXHIBITS
The Exhibits, Annex, and Schedule listed below are attached to this Agreement
and by this reference are fully incorporated herein:
31
Annex A Definitions
Exhibit "A" and "A-1" Maps and System Descriptions
Exhibit "B" Real Property
Exhibit "C" Rights-of-Way and Permits
Exhibit "D" Assigned Contracts
Exhibit "E" Equipment
Exhibit "F" Excluded Assets
Exhibit "G" Closing Statement
Exhibit "H" Assignment / Partial Assignment
Exhibit "I" Special Warranty Deed
Exhibit "J" Xxxx of Sale
Exhibit "K" Assignment of Contracts
Exhibit "L" Terminalling Agreement
Exhibit "M" Transportation Agreement
Exhibit "N" Transition Services Agreement
Exhibit "O" Performance Guarantee
Exhibit "P" Purchase Price Allocation
Exhibit "Q" Certification of Non-Foreign Status
Exhibit "R" Inventory Determination Procedure
Disclosure Schedule
[REMAINDER OF PAGE INTENTIONALY LEFT BLANK]
32
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
SHELL PIPELINE COMPANY LP
BY ITS GENERAL PARTNER
SHELL PIPELINE GP LLC
By: /s/ X.X. Xxxxxxxxx
___________________________________________
Name: X.X. Xxxxxxxxx
Title: President
EQUILON ENTERPRISES LLC dba
SHELL OIL PRODUCTS US
By: /s/ Xxxxxxx X. Xxxxxx
___________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
BUCKEYE PARTNERS, L.P.
BY BUCKEYE PIPE LINE COMPANY LLC
ITS SOLE GENERAL PARTNER
By: /s/ Xxxxxxx X. Xxxxxx
___________________________________________
Name: Xxxxxxx X. Xxxxxx.
Title: Senior Vice President, Administration,
General Counsel and Secretary
33
ANNEX A
Attached to and Made Part of
Purchase and Sale Agreement
Dated June 30, 2004 between
Shell Pipeline Company LP
and
Shell Oil Products US
and
Buckeye Partners, L.P.
DEFINITIONS
As used herein and in the Agreement, the following terms shall have the meanings
defined below:
ACCOUNTING RECORDS shall include detail of property accounting and tax records
and up to two (2) years of shipper and customer revenue invoices, subject to any
objection from shippers or customers.
AFFILIATE shall mean, when used with respect to a specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the specified Person as of the time or for the time
periods during which such determination is made. For purposes of this definition
"control", when used with respect to any specified Person, means the power to
direct the management and policies of the Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have the meanings correlative to
the foregoing.
AGREEMENT shall mean this Purchase and Sale Agreement, including this Annex, the
Exhibits and the Disclosure Schedule attached hereto, as amended, modified and
supplemented from time to time.
ANCILLARY AGREEMENTS shall mean the Terminalling Agreement, the Transportation
Agreement and the Transition Services Agreement, if any.
ASSIGNED CONTRACTS shall mean those contracts that are a part of the Subject
Interest and are described on Exhibit "D", as the same have been amended,
modified and supplemented prior to the Closing to the extent permitted by
Article 9C.
BOOKS AND RECORDS shall mean all non-privileged original files, records and data
(excluding any legal opinions) relating to the Property, including, but not
limited to, lease, land, and title records (including abstracts of title, title
opinions and title curative documents); contracts; communications to and from
any Governmental Authorities; Tax and Accounting Records; permitting files;
health, safety and environmental records; and engineering and operating records
relating to the Pipelines, Tank Farms or Terminals. In the event that Seller
claims that a document is privileged, Seller shall notify Buyer of that fact in
writing prior to Closing. Files relating to litigation concerning the Property,
Pipeline Manuals used in the operation and
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maintenance of the Pipelines and the process used by Seller for integrity
assessments shall not be considered to be Books and Records.
BUYER INDEMNITEES shall have the meaning given such term in Article 13.
CASUALTY LOSS shall have the meaning set forth in Section 3A.(6).
CD shall have the meaning set forth in Article 16.
CHEMICAL SUBSTANCE shall mean any chemical substance, including, but not limited
to, any sort of pollutants, contaminants, chemicals, raw materials,
intermediates, products, industrial or solid substances, materials, wastes, or
petroleum products, including crude oil or any component or refraction hereof.
CLAIM shall mean any demand, claim, notice of noncompliance or violation, loss,
cost (including investigatory costs and attorneys' fees), damage, expense,
action, suit, Proceeding, judgment, or liability of any nature whatsoever.
CLAIM NOTICE shall have the meaning set forth in Section 15A.
CLOSING shall mean the Closing of the purchase and sale of the Subject Interest
as contemplated by this Agreement.
CLOSING DATE shall mean the date set for the Closing in accordance with Article
3.
CLOSING STATEMENT shall have the meaning set forth in Article 2.
CODE shall mean the Internal Revenue Code of 1986, as amended.
CONFIDENTIALITY AGREEMENT shall mean the agreement executed by Seller and Buyer
on March 26, 2004.
CONVEYANCE DOCUMENTS shall mean all deeds, bills of sale, assignments and other
good and sufficient instruments of transfer, conveyance and assignment, in such
form as attached to this Agreement as Exhibits "H", "I", "J", and "K".
DISCLOSURE SCHEDULE shall mean the disclosure schedule of even date with this
Agreement prepared, and delivered to Buyer, by Seller, as the same is updated
(with Buyer's consent, which shall not be unreasonably withheld) between the
date of this Agreement and Closing.
DISPUTE shall have the meaning set forth in Article 35.
DOT shall have the meaning set forth in Article 24.
XXXXXXX MONEY shall have the meaning set forth in Section 2B.
EFFECTIVE TIME shall mean 12:01 a.m. (local time), on the Closing Date.
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ENVIRONMENTAL CONDITION shall mean any Hazardous Substance or Chemical Substance
which is on or affects the Property or which is released, emitted, or discharged
from the Property.
ENVIRONMENTAL LAW shall include, but shall not be limited to, CERCLA, RCRA, the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean
Air Act, 42 U.S.C., Section 8401, et seq., and the regulations thereunder, and
any other local, state, and/or federal Laws or regulations, whether currently in
effect, or promulgated or amended in the future, that govern:
- The existence, cleanup and/or remedy of contamination on the Property;
- The protection of the environment from spilled, deposited or otherwise
emplaced contamination;
- The control of hazardous wastes; or
- The use, generation, transport, treatment, disposal, removal or
recovery of Hazardous Substances or Chemical Substances, including
building materials.
EQUIPMENT shall have the meaning set forth in Section 1A.(5).
EXCLUDED ASSETS shall mean those assets and properties listed or described on
Exhibit "F".
GOVERNMENTAL AUTHORITY shall mean any entity of or pertaining to government,
including any federal, state, local, foreign, other governmental or
administrative authority, agency, court, tribunal, arbitrator, commission, board
or bureau.
HAZARDOUS SUBSTANCE shall mean any substance which at any time shall be listed
as "hazardous" or "toxic" in the regulations implementing the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") 43 U.S.C. 6901
et seq., the Resource Conservation and Recovery Act ("RCRA) 42 U.S.C.A. 6901 et.
seq., the Toxic Substances Control Act (TSCA) 15 U.S.C.A. 2601 et. seq., or the
Emergency Planning and Community Right to Know Act ("EPCRA") 42 U.S.C.A. 11001
et seq. or which has been or shall be determined at any time by any agency or
court to be a hazardous or toxic substance and/or a threat to human health
and/or the environment and regulated under applicable Law. The term "Hazardous
Substance" shall also include, for purposes of this Agreement, without
limitation, the products of any manufacturing or other activities on the subject
Property.
HSR ACT shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
INDEMNIFIED PARTY shall have the meaning set forth in Article 15.
INDEMNIFYING PARTY shall have the meaning set forth in Article 15.
LAW shall mean all applicable local, state, federal and foreign laws and rules,
regulations, codes, and ordinances promulgated thereunder, as well as case law,
judgments, orders, consent orders, or decrees.
LIEN shall mean any lien, mortgage, pledge, security interest or options other
than Permitted Encumbrances.
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LOSSES shall mean any and all damages, losses, liabilities, payments,
obligations, penalties, assessments, costs, disbursements or expenses (including
interest, awards, judgments, settlements, fines, costs of redemption,
diminutions in value, fees, disbursements and expenses of attorneys, accountants
and other professional advisors and of expert witnesses and costs of
investigation and preparation of any kind or nature whatsoever) and court costs.
MATERIAL ADVERSE ENVIRONMENTAL CONDITION shall mean a single Environmental
Condition which is not set forth on the Disclosure Schedule and which would (or
could reasonably be expected to) require the expenditure to cure or remedy (or
cause a Loss) in excess of one percent (1%) of the Purchase Price.
MATERIAL DEFECT shall mean a single defect in the Property (other than a title
defect) which is not set forth on the Disclosure Schedule and which would (or
could reasonably be expected to): (1) impair the operating functions, safety,
conversion, or use of the Property; and (2) cost to cure or remedy (or cause a
Loss) in excess of one percent (1%) of the Purchase Price.
MONITORING WELL shall mean a properly installed and completed well which allows
for the collection of groundwater information including, but not limited to,
both physical and chemical characteristics.
ONGOING REMEDIAL WORK shall have the meaning set forth in Section 13A.(1)(a).
PARTY AND PARTIES shall have the meaning set forth in the preamble.
PERMIT shall mean any license, permit, concession, franchise, authority, consent
or approval granted by any Governmental Authority.
PERMITTED ENCUMBRANCES shall mean (a) the Liens described in the Disclosure
Schedule, and (b) Liens for current Taxes which are not yet due and payable or
which Seller is contesting in good faith, and in either case which are disclosed
on the Disclosure Schedule.
PERSON shall mean any individual, corporation, partnership, joint venture,
association, joint stock company, limited partnership, trust, unincorporated
organization, Governmental Authority.
PIPELINE MANUALS shall mean the manuals developed by Seller, or its
predecessors, and used in the operation and maintenance of its pipeline systems.
PIPELINES shall have the meaning set forth in Section 1A.1.
PROCEEDING shall mean any action, suit, claim, investigation, review or other
proceeding, at law or in equity, by or before any Governmental Authority or any
arbitrator, board of arbitration or similar entity.
PROPERTY shall have the meaning set forth in Section 1A. of the Agreement.
PURCHASE PRICE shall have the meaning set forth in Article 2.
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REAL PROPERTY shall have the meaning set forth in Section 1A.(2).
REASONABLE EFFORTS shall mean efforts in accordance with reasonable commercial
practice and without the incurrence of unreasonable expense.
RETAINED OBLIGATIONS shall mean any Losses, costs, expenses, liabilities, and
other obligations with respect to the Property that arise out of or are related
to (1) the Excluded Assets, (2) contracts other than the Assigned Contracts, (3)
indebtedness (including obligations under sale-leaseback transactions) incurred
prior to the Closing, (4) the breach of any of Seller's covenants or agreements
under this Agreement, (5) Seller's obligations under Section 13A.(1) with
respect to Ongoing Remedial Work, (6) Seller's share of property Taxes as
contemplated by Section 6B and 100% of any other Taxes (income, franchise or
other) attributable to the ownership, possession or operation of the Property
prior to the Effective Time, (7) employee benefit plans or benefits or any kind
for employees (or former employees) of Seller or its Affiliates prior to the
Closing, (8) claims or litigation pending or asserted (but not unasserted
claims) on or before the Closing, or (9) the offsite disposal prior to the
Closing of Hazardous Materials arising from the operation or use of the
Property.
REVIEW PERIOD shall have the meaning set forth in Section 11A.
RIGHT-OF-WAY shall mean any right-of-way, easement, license or prescriptive
right that is listed on Exhibit "C".
SELLER INDEMNITEES shall have the meaning set forth in Article 14.
SIGNIFICANT TITLE DEFECT as used in this Agreement, includes, but is not limited
to, a single reservation, exception, limitation, restriction, lien, encumbrance,
or other defect which is not set forth on the Disclosure Schedule and which
would (or could reasonably be expected to) result in Buyer having to expend to
cure or remedy (or otherwise causing a Loss) in excess of one percent (1%) of
the Purchase Price. Neither (i) a minor deviation in the location of a Pipeline,
relative to a defined Right-of-Way in an easement, (ii) a gap in a Right-of-Way
nor (iii) an encroachment onto a Right-of-Way shall be deemed to constitute a
Significant Title Defect for purposes of this Agreement.
SUBJECT INTEREST shall have the meaning set forth in Section 1A.
TANK FARMS shall have the meaning set forth in Section 1.(A) 1.
TERMINALS shall have the meaning set forth in Section 1.(A) 1.
TERMINALLING AGREEMENT shall mean the agreement to be executed between Seller
and Buyer (or their respective Affiliates) relating to a commitment to provide
certain revenue to Buyer through the Terminals.
TAX shall mean, as relating to any of the Property, any federal, state or local
income tax, ad valorem tax, excise tax, sales tax, use tax, franchise tax, real
or personal property tax, transfer tax,
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gross receipts tax, or other tax, assessment, duty, fee, levy or other
governmental charge, together with and including, without limitation, any and
all interest, fines, penalties, assessments and additions to tax resulting from,
relating to, or incurred in connection with any such tax or any contest or
dispute thereof.
THIRD PERSON shall mean any Person other than Seller or Buyer or their
Affiliates.
TITLE EXAMINATION PERIOD shall have the meaning set forth in Section 11B.
TRANSACTION DOCUMENTS shall mean this Agreement, the Transition Service
Agreement, the Transportation Agreement, the Terminalling Agreement, the
Conveyance Documents and the Side Letter between Buyer and Shell Pipeline
Company LP dated as of the date of this Agreement.
TRANSITION SERVICE AGREEMENT shall have the meaning set forth in Article 36.
TRANSPORTATION AGREEMENT shall mean the agreement to be executed between Seller
and Buyer relating to a commitment to provide certain revenue to the Buyer
through the Pipelines.
OTHER TERMS. Other terms may be defined elsewhere in the text of the Agreement
and shall have the meaning indicated throughout the Agreement.
Other Definitional Provisions
1. The words "hereof, "herein", and "hereunder" and words of
similar import, when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision
of this Agreement.
2. The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
3. Whenever a statement is qualified by the term "knowledge", or
similar term or phrase, it is intended to indicate actual
knowledge, or the possession of information, data or documents
that would give actual knowledge, on the part of a Person or
its officers, directors or employees with direct
responsibility for the matter.
4. Whenever the Parties have agreed that any approval or consent
shall not be "unreasonably withheld," such phrase shall also
include the Parties' agreement that the approval or consent
shall not be unreasonably delayed or conditioned.
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