EXHIBIT 2.1
EXECUTION COPY
PURCHASE AND SALE AGREEMENT
CORSICANA TO WICHITA FALLS AND KILGORE TO CORSICANA PIPELINE SYSTEMS
This Purchase and Sale Agreement (the "AGREEMENT") is made and entered into
effective this ____ day of April, 2005 (the "EFFECTIVE DATE"), by and between
MOBIL PIPE LINE COMPANY, a Delaware corporation ("SELLER" or "MPLCO") and SUNOCO
PIPELINE L.P., a Texas limited partnership ("BUYER"). MPLCO and BUYER are
hereinafter sometimes referred to individually as "PARTY" or collectively as
"PARTIES":
WITNESSETH
WHEREAS, MPLCO desires to sell the real and personal property and related
rights described in Section 1 below (collectively, the "ASSETS"), and BUYER
wishes to purchase the Assets from MPLCO on the terms and conditions set forth
below,
NOW, THEREFORE, for the consideration hereinafter specified, MPLCO and
BUYER agree as follows:
Definitions. The following terms shall have the meanings set forth below for all
purposes of this Agreement:
A. "AFFILIATE" shall mean a Party's Parent Company and its Affiliated
Companies; for the purpose of this definition (a) a Party's "Parent
Company" shall mean an entity or entities having a direct or
indirect Controlling Interest in such party; (b) a Party's
"Affiliated Companies" shall mean any and all entities in which such
Party, or the Parent Company of such Party, has a direct or indirect
Controlling Interest; and (c) "Controlling Interest" shall mean a
legal or beneficial ownership of more than fifty percent (50%) of
the voting stock or other equity or ownership interests in an entity
or having the power to direct or cause the direction of the
management and policies of an entity.
B. "AUTHORIZED REPRESENTATIVE" means any employee, agent,
representative, consultant, contractor, or subcontractor.
C. "BOOKS AND RECORDS" means all non-privileged original files, records
and data (excluding any legal opinions) relating to the Assets,
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; accounting records; permitting files; health, safety
and environmental records; and engineering and operating records
(including risk modeling data) relating to the Assets. In the event
that Seller claims that a document is privileged, Seller shall
notify BUYER of that fact in writing prior to Closing.
D. "CLAIM" and "CLAIMS" all liability, costs (including, without
limitation, any reasonable attorney fees and costs), expenses,
claims, demands, fines, penalties, causes of action or other
obligation of whatever nature, whether under express or implied
contract, at common law or under any applicable law, rule or
regulation, including without limitation applicable Environmental
Laws.
E. "CODE" means the Internal Revenue Code of 1986, as amended.
F. "CRACK-LIKE FEATURES" means any crack-like defect identified by the
Crack Assessment Analysis that requires repair in accordance with
prudent petroleum pipeline industry practices and applicable
federal, state, or local laws.
G. "CRACK ASSESSMENT ANALYSIS" means the report or reports prepared by
Tuboscope regarding the integrity of the pipelines described in
Section 1(A)(i), the entire cost of which shall be borne by MPLCO.
H. "CRACK-LIKE FEATURES REPAIR COST" means the cost to repair the
Crack-like Features to the standards prescribed by applicable
federal, state, or local laws and in accordance with prudent
petroleum pipeline industry practices. The amount of the Crack-like
Features Repair Cost shall be determined by Buyer on the basis of
the Crack Assessment Analysis following consultation with MPLCO.
Such costs shall include excavation, technical analysis (on-site
and/or laboratory) expense, purging costs (if required) and material
costs.
I. "DAMAGES" means any and all obligations, liabilities, damages
(including, without limitation, physical damage to real or personal
property or natural resources), fines, liens, penalties,
deficiencies, losses, judgments, settlements, personal injuries
(including, without limitation, injuries or death arising from
exposure to Regulated Substances), costs and expenses (including,
without limitation, environmental costs, reasonable accountants'
fees, attorneys' fees, fees of engineers, health, safety,
environmental and other outside consultants and investigators, and
reasonable court costs, appellate costs, and bonding fees), whether
based in tort, contract or any local, state or federal law, common
law, statute, ordinance or regulation, whether legal or equitable,
past, present or future, ascertained or unascertained, known or
unknown, suspected or unsuspected, absolute or contingent,
liquidated or unliquidated, choate or inchoate or otherwise.
J. "ENVIRONMENTAL CONDITION" means the existence of Regulated
Substances in or on the soil, surface water, groundwater at, on or
under the Assets, or migrating from the Assets to a contiguous
property or properties to the extent the levels of any such
Regulated Substances exceed naturally occurring background levels in
such areas.
K. "ENVIRONMENTAL DOCUMENTS" means all of the documents set forth in
Schedule 7(B).
L. "ENVIRONMENTAL LAW" or "ENVIRONMENTAL LAWS" means any and all
applicable common law, statutes and regulations, of the United
States, the State of Texas, and local and county areas concerning
the environment, preservation or
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reclamation of natural resources, natural resource damages, human
health and safety, prevention or control of spills or pollution, or
to the management (including, without limitation, generation,
treatment, storage, transportation, arrangement for transport,
disposal, arrangement for disposal, or other handling), Release or
threatened Release of Regulated Substances, including without
limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous
Material Transportation Authorization Act of 1994 (49 U.S.C. Section
5101 et seq.), the SoliD Waste Disposal Act (42 U.S.C. Section 6901
et seq.) (including the Resource Conservation and Recovery Act of
1976, as amended), the Clean Water Act (33 U.S.C. Section 1251 et
seq.), the Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et
seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Safe
Drinking Water Act (42 U.S.C. Section 300(f) et seq.), the Emergency
Planning and Right-To-Know Act of 1986 (42 U.S.C. Section 11101 et
seq.), the Endangered Species Act of 1973 (16 U.S.C. Section 1531 et
seq.), thE Lead-Based Paint Exposure Reduction Act (15 U.S.C.
Section 2681 et seq.), and the National Environmental Policy Act of
1969 (42 U.S.C. Section 4321 et seq.), and all State of Texas,
county and local laws of a similar nature tO federal law, and the
rules and regulations promulgated thereunder, each as amended and,
unless otherwise provided in this Agreement, in effect as of the
Closing Date.
M. "ENVIRONMENTAL LIABILITIES" means any Damages or Proceedings
(whether incurred, existing or first occurring on, before or after
the Closing Date) relating to or arising out of ownership or
operation of the Assets (whether on, before or after the Closing
Date) pursuant to any applicable Environmental Laws as in effect at
any time, including without limitation: (i) any Third Party
Environmental Claim; (ii) any Governmental Environmental Enforcement
Action; or (iii) any obligation to conduct environmental remediation
of an Environmental Condition.
N. "ENVIRONMENTAL PERMITS" shall mean those permits, authorizations,
approvals, registrations, certificates, orders, waivers, variances
or other approvals and licenses issued by or required to be filed
with any Governmental Authority under any applicable Environmental
Law that are in the name of Seller or any of its Affiliates, related
solely to the Assets, and shown on Exhibit "H".
O. "EXXONMOBIL/ANCON POLICY" shall mean any property and/or liability
insurance policies issued to MPLCO, Exxon Mobil Corporation or any
of their divisions or Affiliates, including without limitation, any
property and/or liability coverage policies issued to MPLCO, Exxon
Mobil Corporation or any of their divisions or Affiliates by Ancon
Insurance Company, Inc. ("Ancon"), a Vermont corporation, (which is
Exxon Mobil Corporation's wholly-owned captive insurer), or its
predecessor companies or by a locally admitted insurer which are
reinsured by Ancon.
P. "GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL AUTHORITIES" means any
federal, state or local governmental authority, administrative
agency, regulatory body, board, commission, judicial body or other
body having jurisdiction over the matter.
Q. "GOVERNMENTAL ENVIRONMENTAL ENFORCEMENT ACTION" means any Order,
settlement agreement, consent decree, directive, notice of
violation, notice of
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enforcement, letter of notice, notice of noncompliance, corrective
action, or similar type of legal requirement or instrument that is
issued by, entered into with, or otherwise required by a
Governmental Authority with respect to an actual or alleged
noncompliance or liability under applicable Environmental Laws
arising out of the use or operation of the Assets.
R. "IRS" means the United States Internal Revenue Service and, to the
extent relevant, the United States Department of the Treasury.
S. "KNOWLEDGE" means (i) with respect to BUYER the actual knowledge of
the persons set forth in Schedule 1.1(a) and (ii) with respect to
Seller the actual knowledge of the persons set forth in Schedule
1.1(b).
T. "LIEN" means any lien, mortgage, pledge, security interest or
options except for Permitted Encumbrances.
U. "OFF-SITE" means those areas contiguous to the Real Property to be
conveyed under this Agreement and not considered On-Site.
V. "OFF-SITE DISPOSAL ACTIVITIES" means any off-site transportation,
storage, disposal, or treatment, or any arrangement for off-site
transportation, storage, disposal, or treatment of any Regulated
Substance originating from the operation of the Assets; provided
however, that the term "Off-Site Disposal Activities" shall not
include (i) the Off-Site portion of an Environmental Condition that
has migrated from the Assets, and (ii) Environmental Conditions of
waterways extending beyond the pipeline's shoreline, if any.
W. "ON-SITE" means the Real Property, Easements and Shared Easements on
which the Facilites are located.
X. "ORDER" means any current judgment, order, settlement agreement,
writ, injunction or decree of any Governmental Authority having
jurisdiction over the matter and still in effect as of the Closing
Date.
Y. "PERMIT" means any license, permit, concession, franchise,
authority, consent or approval granted by any Governmental
Authority, including without limitation Environmental Permits.
Z. "PERMITTED ENCUMBRANCES" means those agreements and reservations
noted as exceptions to title as set forth on Exhibit A-2.
Z. "PROCEEDINGS" means any actions, causes of action, written demands,
written Claims, suits, investigations, and any appeals.
AA. "REGULATED SUBSTANCE" means any (a) chemical, substance, material,
or waste that is designated, classified, or regulated as "industrial
waste," "hazardous waste," "hazardous material," "hazardous
substance," "toxic substance," or words of similar import, under any
applicable Environmental Law; (b) petroleum, petroleum hydrocarbons,
petroleum products, petroleum substances, crude oil, and components,
fractions, derivatives, or by-products thereof; (c) asbestos or
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asbestos-containing material (regardless of whether in a friable or
non-friable condition), or polychlorinated biphenyls; and (d)
substance that, whether by its nature or its use, is subject to
regulation under any applicable Environmental Law in effect at that
time or which could be the subject of a Governmental Environmental
Enforcement Action.
BB. "RELEASE" shall have the meaning specified in CERCLA; provided,
however, that, to the extent the Environmental Laws in effect at any
time after the Closing Date establish a meaning for "Release" that
is broader than that specified in CERCLA, such broader meaning shall
apply to any "Release" occurring after Closing.
CC. "TAX" means any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental, windfall profit, customs, vehicle, airplane, boat,
vessel or other title or registration, capital stock, franchise,
employees' income withholding, foreign or domestic withholding,
social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on
minimum and other tax, fee, assessment, levy, tariff, charge or duty
of any kind whatsoever and any interest, penalty, addition or
additional amount thereon imposed, assessed or collected by or under
the authority of any Governmental Authority or payable under any
tax-sharing agreement or any other contract.
DD. "THIRD PARTY" means any individual or legal business entity other
than: (i) a Party; (ii) a Party's Affiliates; (iii) a Party's
Authorized Representatives; (iv) employees, officers, directors,
agents and representatives and all successors of a Party and its
Affiliates; and, (v) a Party's permitted assigns.
EE. "THIRD PARTY ENVIRONMENTAL CLAIM" means a Proceeding by any Third
Party alleging Damages relating to or arising out of a Release of,
exposure to, or Off-Site migration of, a Regulated Substance
(including, without limitation, Damages for Proceedings arising
under applicable Environmental Laws in connection with Damages for
environmental investigation and/or remediation undertaken by a Third
Party at its property).
FF. "TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement, dated as of the Closing Date, substantially in the form
of Exhibit J.
GG. "TUBOSCOPE" means Tuboscope Pipeline Services.
1. Purchase and Sale. Subject to the terms and conditions of this Agreement,
MPLCO agrees to sell and BUYER agrees to buy all of MPLCO's right, title
and interest in the following:
(A) The MPLCO Corsicana to Wichita Falls crude pipeline system
consisting of approximately 187 miles of 16-inch mainline pipe, and
originating in Corsicana, Texas and having delivery points in
Ringgold, Texas and Wichita Falls, Texas, collectively described as
the "16 inch System" and more specifically described as follows:
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(i) The Corsicana to Ringgold pipeline segment consisting of
approximately 154 miles of 16-inch diameter pipe extending
from Corsicana Station in Corsicana, Texas to Ringgold Station
in Ringgold, Texas; and
(ii) The Ringgold to Wichita Falls pipeline segment consisting of
approximately 33 miles of 16-inch diameter pipe extending from
MPLCO's Ringgold Station to Wichita Falls, Texas; and
(iii) Corsicana Station which includes 26 storage tanks, pumps,
meters, and other appurtenances in Corsicana, Texas; and
(iv) Ringgold Station which includes 4 storage tanks, pumps, meters
and other appurtenances in Ringgold, Texas; and
(v) The following Booster stations associated with the 16 inch
System: Midlothian, Keller and Alvord.
(B) The idled MPLCO Kilgore to Corsicana pipeline system consisting of
approximately 104 miles of 12-inch mainline pipe, and originating in
Kilgore, Texas and having a delivery point in Corsicana, Texas and,
having injection systems at Fisher and Frankston, collectively
described as the "12 inch System" and more specifically described as
follows:
(i) The Kilgore to Corsicana pipeline segment consisting of
approximately 104 miles of 12-inch diameter pipe extending
from Kilgore Station in Kilgore, Texas to Corsicana Station in
Corsicana, Texas ; and
(ii) The Hawkins Creek line connecting Fisher Station to Kilgore
Station consisting of approximately 8 miles of 8-inch pipe;
and
(iii) The Frankston Gathering System consisting of approximately
11.5 miles of 6 and 8-inch diameter pipe extending from Hunt
Cen. Battery #15 to the Kilgore to Corsicana segment at
Brownsboro Station; and
(iv) A pipeline segment connecting MPLCO's Kilgore Station to Black
Hill's Kilgore Station consisting of approximately 1 mile of
4-inch pipe; and
(v) Kilgore Station which includes 3 storage tanks, pumps, meters,
and other appurtenances in Kilgore, Texas; and
(vi) The following Booster station associated with the 12 inch
System: Brownsboro.
All of the assets as listed in sections 1(A) and 1(B) above as more
particularly described in Exhibit A-1 hereto and made a part hereof
are referred to herein as the "FACILITIES".
(C) Subject to the Permitted Encumbrances, including those granted to
MPLCO prior to the date of this Agreement, all of (i) MPLCO's real
property related to the Assets and owned in fee, listed in Exhibit
A-2 hereto and (ii) the buildings and
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improvements located on such real property. The real property,
buildings and improvements listed in the preceding sentence are
referred to herein as the "REAL PROPERTY", and all of which shall be
conveyed to BUYER pursuant to one or more Special Warranty Deeds in
the form of Exhbit T hereto. Commencing with the Closing, Buyer
shall lease back to MPLCO the buildings and improvements listed in
Exhibit A-3 pursuant to a Ground Lease in the form of Exhibit A-4
hereto.
(D) All of MPLCO's rights in, to and under the easements, and/or right
of way agreements, and to the extent assignable, those land-use and
water crossing licenses or permits and governmental authorizations
relating to the Facilities, listed in Exhibit B hereto (collectively
the "EASEMENTS"). At Closing, MPLCO shall execute and deliver to
Buyer Assignments in the form of Exhibit G hereto.
(E) A partial assignment of MPLCO's rights in, to and under the
easements, and/or right of way agreements, and to the extent
assignable, those land-use and water crossing licenses or permits
and governmenal authorizations relating to the Facilities listed in
Exhibit B-1 hereto (collectively the "SHARED EASEMENTS"). The rights
being assigned to Buyer shall consist of all of MPLCO's rights in,
to and under the Shared Easements, as they pertain to the 16-inch
pipeline and related facilities currently installed on the Shared
Easements, except for MPLCO's right, if any, to install additional
pipelines on the Shared Easements. MPLCO retains all right, title
and interest in, to and under the Shared Easements with regard to
the pipelines installed on the Shared Easements, but not included in
the purchase and sale that is the subject of this Agreement. Buyer
acknowledges and agrees that, in the future, MPLCO may transfer the
remainder of its retained rights in, to and under the Shared
Easements to a third party, but subject in all such cases to the
rights of Buyer and its successors and assigns in, to and under the
Shared Easements. At Closing, MPLCO shall execute and deliver one or
more Assignments in the form of Exhibit G-1, and MPLCO and Buyer
shall execute and deliver an Easement Sharing Agreement in the form
of Exhibit "P".
(F) MPLCO's right-of-way files and United States and Texas Departments
of Transportation files pertaining to the Easements and the
Facilities, subject to MPLCO's right to retain copies of records,
files and other data deemed necessary or required for MPLCO's
compliance with applicable regulations or which pertain to MPLCO
facilities not included in the Assets.
(G) Copies of MPLCO's right-of-way files and United States and Texas
Departments of Transportation files pertaining to the Shared
Easements.
(H) The Books and Records.
(I) To the extent assignable, those contracts described in Schedule
1(G).
(J) All spare parts (including, without limitation, pipe, elements,
seals and bearings) relating to the Assets, a true and correct list
of which is set forth in Schedule 1 (H).
(K) The proceeds from the sale of that portion of the Ringgold Station
subject to the surface lease between Seller and Valero Logistics
Operations, L.P. ("Valero"), as
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successor-in-interest to TPI Pipeline Corporation, effective July 1,
2000, recorded in Volume 184, Page 612 and Volume 185, Page 597,
Deed records, if Valero exercises its option to purchase the leased
premises as provided under the terms of such surface lease prior to
the Closing hereunder.
2. Exclusions.
(A) Except as specifically provided in Section 1 or Exhibit "A-1", the
Assets do not include any vehicles, boats, tools, warehouse stock,
equipment or materials temporarily located on the property where any
of the Assets are located or any inventory, equipment, materials,
pipelines, fixtures or interests owned by any person or entity other
than MPLCO.
(B) The Assets do not include the following:
(i) any furniture, equipment and other personal property located
in any of the buildings and other improvements included among
the Real Property identified in Exhibit A-3; and
(ii) Those mainline pumps and motors and related equipment that are
dedicated to MPLCO's 20" crude systems that originate and
terminate at Corsicana Station.
(C) This Agreement does not license or authorize BUYER to use or display
the "Mobil" name or any trademark owned by MPLCO, Exxon Mobil
Corporation, or any of their Affiliates and BUYER shall, at its
expense, remove (or, with respect to pipeline markers, cover) all
signs and markings at or on the Assets which indicate that they were
ever owned or operated by MPLCO, Exxon Mobil Corporation or any of
their Affiliates and return any removed signs to MPLCO. BUYER shall
remove (or, with respect to pipeline markers, cover) all signs and
markings located at or on the Assets within sixty (60) days after
Closing (as defined in Section 15).
(D) The Assets do not include any interest in any insurance or bonds
maintained by or on behalf of MPLCO or Exxon Mobil Corporation, or
any of their divisions or Affiliates. No claims regarding any matter
whatsoever, whether or not arising from events occurring prior to
Closing, shall be made by BUYER, its successors or assigns, against
or with respect to any insurance policy covering the assets or
operations of MPLCO, any other ExxonMobil entity insurance policy or
ExxonMobil/Ancon Policy regardless of their date of issuance.
Accordingly, BUYER, individually and on behalf of its successors and
assigns, does hereby disclaim any right or interest under any
insurance policy covering the assets or operations of MPLCO, any
other ExxonMobil entity insurance policies or such ExxonMobil/Ancon
Policies generally and specifically with regard to the Assets or any
claims associated with the Assets. Nothing in this Section 2(D)
shall limit Seller's obligations set forth in Section 14 hereof.
(E) Rectifiers Nos. 3T-1 and 3T-2, which are located within the Shared
Easements between Corsicana, Texas and Iatan, Texas at Milepost
333.3 and 332.2, respectively (the "Rectifiers"); provided, however,
that in the event MPLCO assigns to Buyer the relevant portion of the
Facilities Sharing Agreement dated April 1,
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2004, by and among MPLCO, ExxonMobil Pipeline Company and Dreyfus
Pipeline L.P. at Closing, the Rectifiers shall be included in the
Facilities transferred to Buyer hereunder, without additional
consideration to MPLCO
3. Purchase Price.
(A) The "PURCHASE PRICE" (hereby defined) to be paid for the Assets
shall be ONE HUNDRED MILLION AND NO/100 U.S. DOLLARS
($100,000,000.00) cash or other immediately available funds in
MPLCO's account. As evidence of good faith, BUYER has deposited or
will deposit with MPLCO on the Effective Date (i) the amount of FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000) (the "EARNEST
MONEY"), and (ii) the amount of FIVE HUNDRED AND NO/100 DOLLARS
($500.00) (the "INDEPENDENT CONSIDERATION"). The Independent
Consideration shall be in addition to and independent of any other
consideration provided under this Agreement, shall be non-refundable
and shall be retained by MPLCO under all circumstances. The parties
acknowledge the sufficiency of the Independent Consideration to
support this Agreement. The Earnest Money, exclusive of any interest
(which MPLCO shall retain for its own account), will be applied to
the Purchase Price at Closing. Except as specifically provided
otherwise in this Agreement, the Earnest Money shall be
non-refundable.
(B) MPLCO and BUYER shall, within ninety (90) days after the Closing
Date, agree to an allocation of the Purchase Price among the Assets
in accordance with Section 1060 of the Code. After the Closing, the
parties shall make consistent use of the above allocation for all
Tax purposes and in all filings, declarations and reports with the
IRS in respect thereof, including the reports required to be filed
under Section 1060 of the Code. BUYER shall prepare and deliver IRS
Form 8594 to MPLCO within ninety (90) days after the Closing Date to
be filed with the IRS. In any proceeding related to the
determination of any Tax, neither BUYER nor MPLCO shall contend or
represent that such allocation is not a correct allocation.
4. MPLCO's Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES OF MPLCO EXPRESSLY SET FORTH IN THIS SECTION 4, MPLCO WILL SELL
THE ASSETS TO BUYER ON AN AS-IS, WHERE-IS AND WITH ALL FAULTS BASIS. MPLCO
MAKES NO REPRESENTATIONS OR EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO
THE ASSETS. MPLCO MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
AS TO THE ACCURACY OR COMPLETENESS OF ANY FILES, RECORDS, DATA,
INFORMATION, OR MATERIALS HERETOFORE OR HEREAFTER FURNISHED BUYER IN
CONNECTION WITH THE ASSETS AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE
AT BUYER'S SOLE RISK. BUYER EXPRESSLY WAIVES THE PROVISIONS OF CHAPTER
XVII, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN
SECTION 17.555, WHICH IS NOT WAIVED), VERNON'S TEXAS CODE ANNOTATED,
BUSINESS AND COMMERCE CODE (THE "DECEPTIVE TRADE PRACTICES - CONSUMER
PROTECTION ACT" AS WELL AS THE PROVISIONS OF ANY SIMILAR LAW OF ANY OTHER
STATE HAVING JURISDICTION OVER ANY PARTY HERETO OR THE ASSETS). MPLCO
represents and warrants on the date hereof that:
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(A) MPLCO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly
qualified to carry on its business in Texas and if the Assets are
not located in Texas, the state in which the Assets are located.
(B) MPLCO has the corporate power and authority to execute and deliver
this Agreement and each agreement and instrument to be delivered by
MPLCO pursuant hereto, and to carry out its obligations hereunder.
The execution, delivery and performance of this Agreement and each
agreement and instrument to be delivered pursuant hereto by MPLCO,
and the consummation of the transactions provided for hereby have
been duly authorized and approved by all requisite corporate action
of MPLCO and no other corporate act or proceeding on the part of
MPLCO or its shareholders is necessary to authorize the execution,
delivery or performance of this Agreement, this Agreement has been
duly executed and delivered by MPLCO and this Agreement is a legal,
valid, binding and enforceable obligation of MPLCO, except as may be
limited by bankruptcy or other laws of such general application
affecting creditors' rights generally.
(C) No consent, approval, or notices of or to any other person
("CONSENT") is required with respect to MPLCO in connection with the
execution, delivery or enforceability of this Agreement or the
consummation of the transactions provided for hereby other than (i)
those for which any adverse consequences arising out of the failure
to obtain such Consent or to make such filing are immaterial,
individually and in the aggregate, to the Assets, (ii) those
required for the transfer of the Easements and the Shared Easements,
if any, and (iii) filings made under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
(D) MPLCO has not incurred any obligation or liability, contingent or
otherwise, for brokers' or finders' fees in connection with the
transactions contemplated by this Agreement for which BUYER shall
have any responsibility or liability. MPLCO agrees to pay and to
indemnify fully, hold harmless and defend BUYER and its Affiliates
from and against, and pay, any claims by any person alleging a right
to a broker's or finder's fee based upon any actions of MPLCO or its
Affiliates in connection with these transactions.
(E) Except for the Easements and Shared Easements, Seller has, and at
Closing will have, good and valid title to the Assets, free and
clear of all Liens of any kind.
(F) Neither the execution and delivery of this Agreement nor the
consummation of the transactions and performance of the terms and
conditions hereof by MPLCO will (i) result in a violation or breach
of or default under any provision of the Certificate of
Incorporation, By-laws or other similar governing document of MPLCO,
(ii) not violate any agreement, contract, indenture or other
instrument to which MPLCO is a party, it being understood that MPLCO
makes no representation with respect to the Easements or Shared
Easements; or (iii) violate any Law applicable to MPLCO or any of
its properties.
(G) For all taxes that are due and payable on or before the Closing,
MPLCO has paid, or prior to the Closing will pay, all Taxes arising
from or related to the Assets
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(except amounts being diligently contested in good faith by
appropriate Proceedings and disclosed in Schedule 4(G) for all
taxable years or taxable periods prior to the Closing (including
portions of taxable years or periods with respect to which taxes are
due and payable on or before the Closing).
(H) Except as disclosed in Schedule 4(H), MPLCO has not received notice
from any Governmental Authority of any alleged actual or potential
non-compliance with the terms and conditions of any Permits relating
to any portion of the Assets.
(I) Except for the exclusions set forth in Section 2 hereof, the Assets
constitute all of the properties and assets necessary for the
operation of the Facilities as they are currently used and operated,
it being understood that MPLCO makes no representation or warranty
with respect to the Easements or the Shared Easements.
(J) Except as set forth in Schedule 4(J), (1) there is no Proceeding
affecting the Assets or MPLCO's ownership or operation thereof on
the date hereof that is pending or, to MPLCO's Knowledge,
threatened, and that, if adversely determined, would impair or
prohibit the consummation of the transaction contemplated hereby or
would result in a Material Defect and (2) there are no material
Orders, writs, judgments, stipulations, injunctions, decrees,
determinations, awards or other decisions of any Governmental
Authority, or any arbitrator or mediator, outstanding against MPLCO
pertaining to any portion of the Assets.
(K) Exhibit "I" includes or references all material information, to
MPLCO's Knowledge, relating to, affecting or concerning any
Environmental Condition or status of the Assets as of the Closing
Date.
(L) MPLCO has diligently reviewed, or caused to be reviewed, the
relevant files and records relating to the pipelines described in
Section 1(B)(ii) & (iii), and any Environmental Condition disclosed
in such files and records is listed on Exhibit "I", whether or not
considered material by MPLCO.
5. BUYER's Representations and Warranties. BUYER represents and warrants on
the date hereof that:
(A) BUYER IS ACQUIRING THE ASSETS FOR ITS OWN BENEFIT AND ACCOUNT AND
NOT WITH THE INTENT OF DISTRIBUTING FRACTIONAL UNDIVIDED INTERESTS
THEREOF SUCH AS WOULD BE SUBJECT TO REGULATION BY FEDERAL OR STATE
SECURITIES LAWS.
(B) 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 ASSETS AND HAS
FORMED AN OPINION BASED SOLELY UPON BUYER'S KNOWLEDGE AND EXPERIENCE
AND NOT UPON ANY REPRESENTATIONS OR WARRANTIES BY MPLCO (OTHER THAN
AS EXPRESSLY SET FORTH IN
- 11 -
THIS AGREEMENT) WITH RESPECT TO THE ASSETS OR AS TO THE ACCURACY OR
COMPLETENESS OF ANY FILES, RECORDS, DATA, INFORMATION, OR MATERIALS
HERETOFORE OR HEREAFTER FURNISHED TO BUYER IN CONNECTION WITH THE
ASSETS, AND ANY RELIANCE ON OR USE OF THE SAME HAS BEEN AND WILL BE
AT BUYER'S SOLE RISK.
(C) BUYER HAS MADE ALL INVESTIGATION NECESSARY TO DETERMINE THE
ENVIRONMENTAL AND PHYSICAL CONDITION OF THE FACILITIES AND THE
PREMISES COVERED BY THE EASEMENTS AND THE SHARED EASEMENTS, AND ALL
OTHER INVESTIGATION NECESSARY TO PURCHASE THE ASSETS.
(D) BUYER is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Texas, and is duly
qualified to conduct business in Texas or if the Assets are not
located in Texas, the state in which the Assets are located.
(E) BUYER has the requisite limited partnership power and authority to
execute and deliver this Agreement and each agreement and instrument
to be delivered by BUYER pursuant hereto, and to carry out its
obligations hereunder. The execution, delivery and performance of
this Agreement and each agreement and instrument to be delivered
pursuant hereto by BUYER and the consummation of the transactions
provided for hereby have been duly authorized and approved by all
requisite limited partnership action of BUYER and no other act or
proceeding on the part of BUYER or its Affiliates or partners is
necessary to authorize the execution, delivery or performance of
this Agreement, this Agreement has been duly executed and delivered
by BUYER and this Agreement is a legal, valid, binding and
enforceable obligation of BUYER, except as may be limited by
bankruptcy or other laws of such general application affecting
creditor's rights generally.
(F) No Consent or filing is required with respect to BUYER or any of its
Affiliates in connection with the execution, delivery or
enforceability of this Agreement or the consummation of the
transactions provided for hereby, other than (i) those for which any
adverse consequences arising out of the failure to obtain such
Consent are immaterial, individually and in the aggregate, to the
purchase and sale of the Assets, and (ii) filings made under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(G) The execution and delivery of this Agreement and the consummation of
the transactions provided for hereby does not violate any other
agreement, contract, or instrument to which BUYER is subject or is a
party.
(H) No action, suit, proceeding or claim is pending, or to BUYER's
knowledge threatened against BUYER seeking to restrain or prohibit
this Agreement or the transactions contemplated hereby, or to obtain
damages, a discovery order or other relief in connection with this
Agreement or the transactions contemplated hereby.
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(I) BUYER has not incurred any obligation or liability, contingent or
otherwise, for brokers' or finders' fees in connection with the
transactions contemplated by this Agreement for which MPLCO shall
have any responsibility or liability. BUYER agrees to pay and to
indemnify fully, hold harmless and defend MPLCO and its Affiliates
from and against, and pay, any claims by any person alleging a right
to a broker's or finder's fee based upon any actions of BUYER or its
Affiliates in connection with these transactions.
(J) BUYER has no Knowledge prior to the Closing of any facts or
circumstances which would serve as the basis for a claim by BUYER
against MPLCO based upon a breach of any representation or warranty
of MPLCO in this Agreement. BUYER will be deemed to have waived in
full any breach of MPLCO's representations and warranties of which
BUYER has Knowledge at Closing.
6. Operational Review Period; Crack-like Features.
(A) BUYER shall have a time period which shall end on the later of (i)
the expiration of sixty (60) days following the date of this
Agreement and (ii) fifteen days following the delivery by MPLCO to
BUYER of the Crack-like Assessment Analysis (defined below), to
conduct or have conducted, at its own risk and expense and to
BUYER's satisfaction, an assessment of the Assets consisting of (a)
Easements, Shared Easements, permits, licenses or other matters
related to title of the Assets; (b) operational files, including
available historical files regarding maintenance and regulatory
required inspections, if any, for the Assets; and (c) financial data
associated specifically with the Assets. BUYER acknowledges that
MPLCO makes no representations or warranties, express or implied,
with regard to the accuracy or completeness of any files or other
records reviewed. The activities covered by this paragraph are
collectively called the "OPERATIONAL ASSESSMENT". MPLCO agrees to
make such personnel who shall have knowledge of the Assets and their
operation reasonably accessible to BUYER during the Operational
Assessment for the purpose of answering questions BUYER may have.
(B) As promptly as practicable following its receipt thereof, MPLCO
shall deliver a copy of the Crack-like Assessment Analysis to Buyer.
If (i) subject to the final sentence of this Section 6(B), within
180 days after the Closing Buyer shall notify MPLCO of its election
to repair the Crack-like Features, (ii) such repairs are completed
within 24 months after the Closing, and (ii) the Crack-like Features
Repair Cost shall exceed $500,000.00, MPLCO shall pay or reimburse
Buyer for such portion of the Crack-like Features Repair Cost as
shall exceed $500,000; provided that in no event shall MPLCO have
any obligation to pay more than $1,000,000.00 under this Section
6(B). Buyer shall be solely responsible for the repair of the
Crack-like Features, although it shall discuss its plans for such
repair with MPLCO in reasonable detail and shall consider in good
faith any suggestions that MPLCO may make. Any payments to be made
by MPLCO to Buyer under this Section 6(B) shall be made to Buyer
promptly upon demand following Buyer's providing MPLCO with such
information as shall reasonably support the amounts being demanded
by Buyer. If within three months following the date of the
Crack-like Assessment Analysis Buyer shall notify MPLCO that it has
reason to believe that the Linalog and associated tools and
equipment used in performing
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the services that formed the basis of the Crack-like Assessment
Analysis were defective or deficient, or had not been properly used
or operated by Tuboscope, so as to yield data accurate to the extent
possible within the environment and conditions of their use, MPLCO
shall require that Tuboscope perform a reinspection at no cost to
Buyer so as to confirm or correct the results described in the
Crack-like Assessment Analysis. In the case of any such
reinspection, the 180 day period referred to in clause (i) of this
Section 6(B) shall be extended to 180 days following the delivery to
Buyer of the results of such reinspection.
7. Environmental Review Period.
(A) BUYER acknowledges that prior to signing this Agreement, BUYER was
given the opportunity and waived such opportunity to conduct, or
BUYER conducted or had conducted on its behalf, at its own risk and
expense and to BUYER's satisfaction, an environmental assessment of
the Assets consisting of (i) a non-intrusive surface inspection of
the Assets, and (ii) an inspection of Seller's available historical
files for information, if any, covering any environmental issues,
including but not limited to, spills or disposal of crude oil,
petroleum, petroleum products or hazardous substances, underground
injection or solid waste disposal on the real property on which the
Assets are located. In the event that BUYER determines that
additional assessments or inspections in addition to (i) above are
necessary, BUYER shall submit an inspection plan to Seller which
details the locations, methods and other information pertaining to
the desired inspection for Seller's approval. Such approval shall
not be unreasonably withheld. BUYER acknowledges that Seller makes
no representations or warranties, express or implied, with regard to
the accuracy or completeness of any files or other records reviewed.
The activities covered by this paragraph are collectively called the
"ENVIRONMENTAL ASSESSMENT".
(B) BUYER and its Authorized Representatives have reviewed the
Environmental Documents, which include results of all tests
conducted by BUYER and its Authorized Representatives under Section
7A, if any.
(C) Seller's Retained Environmental Liabilities. Seller shall retain and
be solely responsible only for Environmental Liabilities in
connection with Off-Site Disposal Activities prior to the Closing
Date ("RETAINED ENVIRONMENTAL LIABILITY").
(D) BUYER's Assumed Environmental Liabilities. Except for the Retained
Environmental Liability, from and after the Closing Date, BUYER
shall assume and, as between BUYER and Seller, be solely responsible
for all Environmental Liabilities relating to or arising out of the
Assets, whether existing or asserted before, on or after the Closing
Date, whether known or unknown, whether based on past, present or
future conditions or events, but excluding any of the foregoing
resulting from MPLCO's use of the easement granted to it by Buyer
across the Real Property (the "Assumed Environmental Liabilities").
Except where BUYER has obtained Seller's written consent (which
consent shall not be unreasonably withheld, conditioned or delayed),
BUYER's obligations under this Section 7 shall not terminate upon
the lease, sale, or other transfer of the Assets or any portion of
the Assets regardless of any assumption of such obligations by a
subsequent lessee, purchaser, or other transferee.
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(E) Seller's Environmental Indemnity. For purposes of this Section 7(E),
where BUYER is the indemnified party, the term "BUYER" shall include
BUYER and its Affiliates and the directors, officers, and employees
and all successors and assigns of the foregoing. Seller agrees to
indemnify, hold harmless and defend BUYER from and against any
Damages and Proceedings asserted against or incurred by BUYER
relating to or arising out of the Retained Environmental
Liabilities. The foregoing indemnity obligations of Seller shall not
be affected by any negligence or other action or inaction of Buyer
from and after the Closing.
(F) BUYER's Environmental Indemnity. For purposes of this Section 7(F),
where Seller is the indemnified party, the term "Seller" shall
include Seller and its Affiliates and the directors, officers and
employees, and all successors and assigns of the foregoing. From and
after the Closing Date, except, for all purposes of this Section
7(F), for the Retained Environmental Liability, BUYER shall
indemnify, hold harmless and defend Seller from and against any
Damages and Proceedings asserted against or incurred by Seller
relating to the Assumed Environmental Liabilities, including but not
limited to:
(i) Any Environmental Liabilities, whether On-Site or Off-Site;
(ii) Any Release of any Regulated Substance related to operations
of the Assets occurring prior to, on or after the Closing
Date;
(iii) Any residual Environmental Condition remaining at the Assets
or any areas Off-Site on or after the Closing Date;
(iv) Any Third Party Environmental Claim made by a Third Party on
or after the Closing Date;
(v) Any Governmental Environmental Enforcement Action that is
taken against BUYER or Seller for events or conditions that
occurred prior to, on or after the Closing Date;
(vi) Any Off-Site Disposal Activities resulting from the ownership
or operation of the Assets on or after the Closing Date;
(vii) Any liability for On-Site or Off-Site Environmental
Conditions resulting from the ownership or operation of the
Assets prior to, on or after the Closing Date;
(viii) Exacerbation of any Environmental Condition (whether
resulting in On-Site or Off-Site impacts) by BUYER or its
Authorized Representatives (which for purposes of this
Section 7(E) shall include its tenants, customers, invitees,
licensees, or any users of the Assets (except Seller)); and
(ix) Failure to comply with any Permit or Order, including
transferred or assigned Environmental Permits or Orders
identified on Exhibit H and Schedules 4(H) and 4(J), by BUYER
or its Authorized Representatives.
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(G) BUYER's Release of Seller for Environmental Liabilities. Except as
expressly set forth in this Agreement, BUYER, in consideration of
the negotiated amount of the Purchase Price, hereby unconditionally,
completely and forever releases and discharges Seller, its
Affiliates, and employees, officers, directors, agents and
representatives and all successors and assigns of the foregoing,
from all Environmental Liabilities except Seller's Retained
Environmental Liability, including but not limited to the following:
(i) Any Governmental Environmental Enforcement Action taken
against BUYER and attributable to any failure by Seller to own
or operate the Assets prior to the Closing Date in compliance
with applicable Environmental Laws;
(ii) Any Third Party Environmental Claim with respect to the Assets
resulting from any Release occurring prior to the Closing Date
and caused by Seller's ownership or operation of the Assets;
and
(iii) Any obligation by Seller to remediate or ensure the
remediation of any Environmental Condition.
BUYER shall deliver to Seller on the Closing Date the release in the
form of Exhibit "K" hereto.
(H) Seller's Access to the Assets. Upon request by Seller in connection
with any written request or demand from any Governmental Authority
in respect of the Assets, BUYER shall, at no cost to Seller, permit
Seller, its Affiliates, and its Authorized Representatives
reasonable access to the Assets. Seller, its Affiliates or
Authorized Representatives shall provide forty-eight (48) hours'
written notice to BUYER for any routine access by Seller or its
Affiliates or Authorized Representatives. Seller will provide thirty
(30) days' written notice to BUYER for any access that Seller
believes may result in a material impact to BUYER's operations.
Seller will make reasonable efforts to minimize impacts on BUYER's
operations. The BUYER's obligations will be set forth in any Special
Warranty Deed or other instrument of conveyance, conveying any Real
Property to be conveyed under this agreement and will under this
Section 7 be a covenant running with the land and will bind the
successors and assigns of BUYER. Upon written request by Seller, in
connection with any request to Seller from any Governmental
Authority, BUYER shall provide Seller copies of all reports,
correspondence, notices and communications sent or received from
Governmental Authorities regarding the Environmental Condition of
the Assets or any remediation and/or investigation at the Assets or
other copies of all reports, correspondence, notices and
communications sent to or received from third parties concerning
conditions that would obligate Seller (financially or otherwise);
provided, however, that BUYER shall not be under any obligation to
disclose reports, correspondence, notices or other communications to
the extent any of the foregoing is protected by privilege or to the
extent BUYER is otherwise prevented by applicable law from providing
such materials to Seller.
(I) Environmental Issues.
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(i) BUYER acknowledges that there may have been spills of wastes,
crude oil, petroleum products, produced water, or other
materials in the past at or on the Assets or in connection
with their operation, and tank bottoms or other wastes may
have been placed at, on or under the Assets. In addition, the
Assets may contain asbestos in piping coating, undisplaced
crude oil, coats of lead-based paints, PCB's in transformers,
mercury in electrical switches, Naturally Occurring
Radioactive Material (NORM), and other materials, substances
and contaminants. Except to the extent it may constitute a
Seller's Retained Environmental Liability under Section 7(C),
BUYER assumes all liability for or in connection with the
assessment, remediation, removal, transportation, and disposal
of any such materials and associated activities in accordance
with all relevant rules, regulations, and requirements of
governmental agencies.
(ii) As part of the consideration for the sale of the Assets, BUYER
for itself, its successors and permitted assigns, covenants
and agrees that neither the Real Property, nor any part
thereof shall at any time be used for any of the following
specifically listed facilities or uses, or any similar
facility or use: residential, child care, nursery school,
preschool, or any other educational facility, place of
worship, playground, hotel, motel, inn, bed and breakfast or
rooming house, nursing home, rehabilitation center, hospital
or community center and that the installation of any water
wells for drinking or irrigation purposes along with the
construction of basements is prohibited; that these covenants
and agreements shall survive the Closing; that these covenants
and agreements are to run with the Real Property; that these
restrictive measures will be inserted in the Special Warranty
Deed to be delivered at the Closing and that similar
restrictive covenants shall be inserted in any deed, lease or
other instrument conveying or demising the Real Property or
any part thereof. Furthermore, BUYER for itself, its
successors and permitted assigns agrees to execute any
documents legally required by any Governmental Authority
having jurisdiction over the Assets that are consistent with
the above use restrictions.
(iii) If Closing does not occur within the time required by this
Agreement, or upon earlier termination of this Agreement, upon
Seller's request, BUYER shall promptly deliver to Seller or
destroy all originals and copies (whether written or
electronic) that are in BUYER's or its Authorized
Representatives' possession of the information, reports, or
materials including specifically those concerning the
environmental or other condition of the Assets together with
all information, reports, or material furnished to BUYER by
Seller, and BUYER shall promptly cause third parties to whom
Buyer provided documents to destroy or deliver to Seller such
materials that are in their possession. Should BUYER elect to
destroy rather than return any information, reports, or
materials covered by this Section 7(I)(iii), BUYER shall
promptly deliver to SELLER a certificate, signed by an officer
of BUYER, certifying such destruction.
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(iv) BUYER and Seller shall cooperate with each other in all
reasonable respects as to the transfer or assignment of the
Environmental Permits or Orders that can be transferred or
assigned under applicable Environmental Laws and the making of
any filings or notifications or obtaining any authorizations
required under applicable Environmental Laws in connection
with the transfer of the Assets to BUYER. Seller shall, if
applicable, assist BUYER in the transfer or assignment of any
Environmental Permits or Orders. BUYER, however, shall be
solely responsible for all subsequent communications and
filings needed to follow through and complete the timely
transfer or assignment of such Environmental Permits or
Orders. With respect to any Environmental Permits or Orders
issued under applicable Environmental Laws prior to the
Closing Date that are transferred to BUYER, Seller, within
thirty (30) calendar days after the Closing Date shall submit
a letter to each applicable Governmental Authority
acknowledging that BUYER is assuming the obligations of Seller
under such Permit or Order.
(v) As between BUYER and Seller, BUYER shall be responsible for
all filing costs and administrative expenses associated with
such transfer or assignment of any Environmental Permits or
Orders pursuant to this Agreement and for all costs and
expenses relating to or arising out of any change in terms or
conditions of such Environmental Permits or Orders resulting
from any transfer, assignment or re-issuance of such
Environmental Permits or Orders to BUYER, except for any such
costs and expenses related to or arising out of Seller's
non-compliance with such Environmental Permits or Orders. With
respect to those Environmental Permits or Orders that cannot
be transferred or assigned under applicable Environmental
Laws, BUYER will use reasonable efforts at BUYER's cost and
expense to obtain new permits or orders.
8. Right of Entry. BUYER agrees that the provisions of this Section shall
apply to any and all access to the Assets or other MPLCO property in
connection with this Agreement, whether such access occurred before or
will occur after the execution of this Agreement. MPLCO will, to the
extent it has the legal right to do so, provide BUYER (or its Authorized
Representative) with reasonable access to the Assets to conduct the
Operational Assessment. BUYER and/or its Authorized Representative shall
comply with prudent safety and industrial hygiene procedures, including
without limitation, the Safety Requirements set forth in Exhibit "C"
attached hereto, and shall review such procedures with MPLCO prior to
commencement of the Assessment. BUYER, its employees, agents and/or
contractors shall comply with the Drug and Alcohol Prohibitions and
Requirements set forth in Exhibit "D" attached hereto, while present on
the Assets or other MPLCO property. BUYER shall submit schedules to MPLCO
which show when BUYER plans to enter the Assets or other MPLCO property.
Said schedules shall be in sufficient detail to allow MPLCO to determine
in advance the approximate number of employees, contractors,
subcontractors and equipment that BUYER will have on the sites where the
Assets are located at any time, and shall be provided to MPLCO
sufficiently in advance of the date or dates of entry to enable MPLCO to
arrange to have an inspector(s) present at the site(s). BUYER shall not
enter the real property on which the Assets are located without the
presence of an MPLCO employee or MPLCO contractor. It is understood that
there are risks associated with entry onto the Assets,
- 18 -
and BUYER assumes responsibility for the safety of personnel and property
of both BUYER and BUYER's contractors. BUYER agrees to inspect the Assets
for safety purposes prior to such entry and to exercise precautions and
conduct all actions in a way that will, in so far as reasonably possible,
assure the safety of persons and property.
9. Review of Title. Before the conclusion of the Operational Assessment
period, BUYER will have conducted a review of the Easements and Shared
Easements, including permits and licenses, made available by MPLCO to
determine whether MPLCO has good title to the Easements and Shared
Easements and whether any consents or approvals are required for
assignment of the Easements, Shared Easements, and/or permits and
licenses. If consents or approvals are required for assignment of any
Easement or Shared Easement, MPLCO shall, prior to, and if necessary
following, Closing, use commercially reasonable efforts to obtain such
consents and/or approvals, provided that (i) MPLCO shall not be required
to incur any expense beyond MPLCO's usual overhead expense, (ii) BUYER
shall cooperate, but shall not be required to pay any amounts in addition
to the Purchase Price, in obtaining any such consents and or approvals and
(iii) BUYER shall execute any reasonable documentation requested by the
parties whose consent or approval may be required.
10. Confidentiality. The Confidentiality Agreement executed by and between
MPLCO and BUYER, dated August 31, 2004, a copy of which is attached hereto
as Exhibit "E" is hereby incorporated into this Agreement and shall from
and after the date hereof and following Closing be deemed to apply not
only to the Evaluative Information described therein but also to any other
information obtained from MPLCO in connection with or as part of the
Assets.
11. Records. BUYER shall not destroy or otherwise dispose of any records,
files and other data acquired hereunder for a period of three (3) years
following Closing (except as to tax records, for which the period shall be
the applicable statute of limitations) except upon thirty (30) days prior
written notice to MPLCO. During such periods, BUYER shall make such
records, files and other data available to MPLCO or its authorized
representatives for any business, legal or technical need in a manner
which does not unreasonably interfere with BUYER's business operations.
Additionally, MPLCO shall have the right to retain copies of any records,
files or other data transferred to BUYER hereunder.
12. Option to Terminate.
(A) Except as hereinafter provided, BUYER shall have the option of terminating
this Agreement by providing written notice to MPLCO no later than three
(3) days following the conclusion of the Operational Assessment period in
the event BUYER determines during the Operational Assessment period that
the Assets are subject to any (i) Material Defect (as defined below) in
the Facilities or (ii) Material Defect in the title to any of the Assets.
To be effective, any such notice shall specifically identify and describe
the basis for such termination, and shall include reasonable evidence
thereof. Minor deviations in the location of a pipeline relative to a
defined right of way in an Easement or Shared Easement shall not be deemed
to constitute a title defect for purposes of this Agreement.
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A "MATERIAL DEFECT" shall mean (i) a condition or an accumulation of
conditions which would significantly impair the operating functions or
safety of the Facilities including, without limitation, any Crack-like
Features, or (ii) a defect or accumulation of defects in title, which in
either case:
(i) would cost in excess of FIVE MILLION AND NO/100 DOLLARS
($5,000,000) cash to cure or remedy, excluding any amount paid by
MPLCO pursuant to Section 6(B); and
(ii) was not disclosed in writing to, or to the Knowledge of, BUYER
prior to BUYER's execution of this Agreement.
To be included in the calculation of the cumulative amount of Material
Defect an applicable individual Material Defect must exceed FIVE HUNDRED
THOUSAND AND NO/100 U.S. DOLLARS ($500,000.00).
Notwithstanding the delivery of such a notice of termination by BUYER to
MPLCO, this Agreement shall not be terminated if within thirty (30) days
after MPLCO's receipt of such notice (1) MPLCO remedies or agrees to
remedy, to a degree which is mutually agreed upon prior to Closing, such
Material Defect or (2) MPLCO and BUYER mutually agree on an adjustment to
the Purchase Price.
(B) In addition to the rights under Section 12(A), this Agreement may be
terminated at any time prior to the Closing:
(i) by the mutual consent of Seller and BUYER; or
(ii) if the Closing has not occurred by the close of business on December
31, 2005, then by Seller if any condition specified in Section 15(A) has not
been satisfied on or before such close of business, and shall not theretofore
have been waived by Seller, provided that the failure to consummate the
transactions contemplated hereby on or before such date did not result from the
failure by Seller to fulfill any undertaking or commitment provided for herein
on the part of Seller that is required to be fulfilled on or prior to Closing;
or
(iii) if the Closing has not occurred by the close of business on December
31, 2005, then by BUYER if any condition specified in Section 15(B) has not been
satisfied or waived on or before such close of business, and shall not
theretofore have been waived by BUYER, provided that the failure to consummate
the transactions contemplated hereby on or before such date did not result from
the failure by BUYER to fulfill any undertaking or commitment provided for
herein on the part of BUYER that is required to be fulfilled on or prior to
Closing.
If the Agreement is terminated pursuant to any option specified in this Section
12, the Earnest Money shall be returned to BUYER.
13. INDEMNIFICATION AND RELEASE. Except for Sellers' Retained Environmental
Liability, and except for Assumed Environmental Liabilities, the indemnity
for which is set out in Section 7(D), in addition to BUYER's release or
indemnity in any other Section of this Agreement or in any other agreement
executed pursuant to or in connection with this Agreement, BUYER agrees as
follows:
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(A) BUYER, its successors and assigns (hereinafter in this Section 13
individually and collectively, "BUYER INDEMNITOR") agrees to
release, indemnify, defend, and hold harmless MPLCO, ExxonMobil
Corporation and its Affiliates, and their respective officers,
directors, employees, contractors, representatives, successors, and
assigns (hereinafter in this Section 13 individually and
collectively, "MPLCO INDEMNITEE") from all Claims asserted against a
MPLCO Indemnitee by any person or entity arising from or related to
MPLCO Indemnitee's or BUYER Indemnitor's ownership, operation, use,
repair, removal, separation or control of the Assets, before or
after Closing including, without limitation, performance of BUYER
Indemnitor's obligations under Sections 5, 6, 8, 10, and 19 of this
Agreement; provided, however, that no MPLCO Indemnitee shall have
any rights under this Section 13 in respect of any Claim resulting
from MPLCO's use of the easement granted to it by Buyer across the
Real Property.
(B) BUYER Indemnitor agrees to release, indemnify, defend and hold
harmless MPLCO Indemnitee from any Claim relating to the Assets made
after the Closing against any insurance policy covering the Assets
or operations of MPLCO, including without limitation the
ExxonMobil/Ancon Policies by or through BUYER Indemnitor or any
person subrogated to BUYER Indemnitor's rights.
(C) IT IS THE EXPRESS INTENTION OF THE PARTIES THAT THE RELEASES AND
INDEMNITIES IN THIS SECTION 13 SHALL APPLY TO CLAIMS THAT MAY ARISE
IN WHOLE OR IN PART FROM THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL
MISCONDUCT, OR STRICT LIABILITY OF MPLCO'S INDEMNITEE, WHETHER
ACTIVE, PASSIVE, JOINT, CONCURRENT, OR SOLE. THE PARTIES HERETO ALSO
ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE
RULE AND CONSTITUTES CONSPICUOUS NOTICE.
(D) If any provision or provisions of this Section, or any portions
thereof, should be deemed invalid or unenforceable pursuant to a
final determination of any court of competent jurisdiction or as a
result of future laws, such determination or action shall be
construed so as not to affect the validity or effect of any other
portion or portions of this Section not held to be invalid or
unenforceable.
(E) If any action, suit, proceeding or claim is commenced, or if any
claim, demand or assessment is asserted, by a third party in respect
of which MPLCO is entitled to be indemnified under this Section 13
or any other agreement or instrument delivered pursuant or in
connection with this Agreement, MPLCO may defend against the action,
suit, proceeding or claim and enter into any reasonable compromise
or settlement; provided, however, that in no event may MPLCO defend,
compromise or settle any such Proceeding or Claim without the prior
written consent of BUYER, to be provided or withheld in BUYER's sole
discretion. MPLCO may thereafter collect from BUYER the reasonable
costs and expenses related to such defense and compromise or
settlement, if applicable, including without limitation, attorneys
fees, together with the amount paid or owed to such third party
pursuant the action, suit, proceeding, claim, demand, compromise or
settlement.
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14. Indemnification. In addition to Seller's indemnity in any other Section of
this Agreement or in any other agreement executed pursuant to or in
connection with this Agreement, Seller agrees as follows:
(A) Seller, its successors and assigns (hereinafter in this Section 14
individually and collectively, "SELLER INDEMNITOR") agrees to
release, indemnify, defend, and hold harmless BUYER and its
Affiliates, and their respective officers, directors, partners,
employees, contractors, representatives, successors, and permitted
assigns (hereinafter in this Section 14 individually and
collectively, "BUYER INDEMNITEE") from all Claims asserted against a
BUYER Indemnitee by any person or entity arising from or related to
the inaccuracy of any representation or the breach of any
representation, warranty, covenant, obligation, condition, or
agreement of Seller set forth in this Agreement.
(B) If any provision or provisions of this Section 14, or any portions
thereof, should be deemed invalid or unenforceable pursuant to a
final determination of any court of competent jurisdiction or as a
result of future laws, such determination or action shall be
construed so as not to affect the validity or effect of any other
portion or portions of this Section not held to be invalid or
unenforceable.
(C) If any action, suit, proceeding or claim is commenced, or if any
claim, demand or assessment is asserted, by a third party in respect
of which BUYER is entitled to be indemnified under this Section 14
or any other agreement or instrument delivered pursuant or in
connection with this Agreement, BUYER may defend against the action,
suit, proceeding or claim and enter into any reasonable compromise
or settlement; provided, however, that in no event may BUYER defend,
compromise or settle any such Proceeding or Claim without the prior
written consent of MPLCO, to be provided or withheld in MPLCO's sole
discretion. BUYER may thereafter collect from Seller the reasonable
costs and expenses related to such defense and compromise or
settlement, if applicable, including without limitation, attorneys
fees, together with the amount paid or owed to such third party
pursuant the action, suit, proceeding, claim, demand, compromise or
settlement.
(D) MPLCO will have no indemnification obligation under this Section 14
unless MPLCO has received a claim from BUYER, specifying in
reasonable detail the basis for such claim, within one (1) year
following the Closing.
15. Closing Conditions and Closing Deliverables. The "CLOSING" (hereby
defined) of this sale shall occur as soon as practicable following the
conclusion of the Operational Assessment period or, if later, the date on
which the transactions contemplated by this Agreement may be consummated
under applicable law, at the offices of MPLCO at 800 Bell Street, Houston,
Texas, unless the Parties mutually agree to another location. Time shall
be of the essence to this Agreement.
(A) Conditions Precedent to Seller's Obligations. Seller's obligation to
consummate the transactions contemplated by this Agreement is subject to
the satisfaction (or waiver by Seller) of each of the following
conditions:
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(i) the representations and warranties of BUYER in Section 5
as of the Closing Date shall be true and correct (in the case
of any such representation and warranty qualified by
materiality) and true and correct in all material respects (in
the case of all other representation and warranties);
(ii) BUYER must have performed and complied with in all
material respects all of its covenants required by this
Agreement to be performed or complied with on or prior to the
Closing;
(iii) all consents and notifications necessary for the
transfer of the Assets to BUYER (except those consents related
to the assignment of the Easements and Shared Easements, if
any), and the assumption by BUYER of the obligations and
liabilities to be transferred to and assumed by BUYER, at the
Closing shall have been obtained or made (and must be in full
force and effect), in each case in form and substance
reasonably satisfactory to Seller, all necessary declarations,
filings, and registrations with Governmental Authorities shall
have been made by BUYER, and all applicable waiting and other
time periods (including extensions thereof, if any) under any
applicable legislation or regulation, including under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, of any relevant jurisdiction shall have expired,
lapsed, or been terminated;
(iv) there must not be issued and in effect any order, decree
or ruling restraining, enjoining or prohibiting the
transactions contemplated hereby;
(v) BUYER shall have executed and delivered the documents to
which it is a party listed in Section 15(C); and
(vi) BUYER shall have delivered to Seller a certificate in
form and substance reasonably satisfactory to Seller to the
effect that each of the conditions specified above in this
Section 15(A) is satisfied in all respects.
(B) Conditions Precedent to BUYER'S Obligations. BUYER'S obligation
to consummate the transactions contemplated by this Agreement is
subject to the satisfaction (or waiver by BUYER) of each of the
following conditions:
(i) the representations and warranties of Seller in Section 4
as of the Closing Date shall be true and correct (in the case
of any such representation and warranty qualified by
materiality) and true and correct in all material respects (in
the case of all other representation and warranties);
(ii) Seller must have performed and complied with in all
material respects all of its covenants required by this
Agreement to be performed or complied with on or prior to the
Closing;
(iii) all consents and notifications necessary for the
transfer of the Assets to BUYER (except those consents related
to the assignment of the Easements and Shared Easements, if
any), and the assumption by BUYER of the obligations and
liabilities to be transferred and assumed by BUYER, at the
Closing shall have been obtained or made (and must be in full
force and effect), in each case
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in form and substance reasonably satisfactory to BUYER, all
necessary declarations, filings, and registrations with
Governmental Authorities shall have been made by Seller, and
all applicable waiting and other time periods (including
extensions thereof, if any) under any applicable legislation
or regulation, including under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, of any relevant
jurisdiction shall have expired, lapsed, or been terminated;
(iv) there must not be issued and in effect any order, decree
or ruling restraining, enjoining or prohibiting the
transactions contemplated hereby;
(v) Sellers shall have delivered to BUYER a certificate in
form and substance reasonably satisfactory to BUYER to the
effect that each of the conditions specified above in this
Section 15(B) is satisfied in all respects;
(vi) Seller shall have executed and delivered the documents to
which it is a party listed in Section 15(C);
(vii) BUYER shall have accepted each of the amendments to the
Disclosure Schedules pursuant to Section 31; and
(viii) To the extent assignable, Seller shall have assigned to
Buyer all of its rights under that certain release relating to
the Hawkins Creek line dated January 6, 1988, from Nancy
Horton and Margaret Gunn to MPLCO, pursuant to the form of
assignment attached hereto as Exhibit "O".
(C) At the Closing, MPLCO and/or BUYER, as appropriate, shall execute
and/or deliver each of the following documents:
(i) Each of BUYER and SELLER shall deliver a certificate of
one of its authorized officers as to the matters set forth in
Section 15(A)(i) and 15(B)(i), respectively.
(ii) a BILL OF SALE in the form attached hereto as Exhibit
"F," covering the Facilities;
(iii) ASSIGNMENTS in the form attached hereto as Exhibit "G"
and Exhibit "G-1", as appropriate, covering the Easements and
Shared Easements, respectively;
(iv) the GROUND LEASE in the form attached hereto as Exhibit
"A-4";
(v) SPECIAL WARRANTY DEED(S) in the form attached hereto as
Exhibit "L";
(vi) a certificate of non-foreign status provided to BUYER by
MPLCO;
(viii) Incumbency certificates for all signatory officers of
BUYER and MPLCO;
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(viiii) Articles of Incorporation & Bylaws, or other similar
organizational documents, of BUYER and MPLCO, certified as
true and correct by the corporate secretary or officer of
similar authority;
(ix) Certified Corporate Resolutions of BUYER and MPLCO
authorizing all aspects of transactions contemplated herein;
(x) the joint tariff filed, or to be filed immediately
following Closing, by MPLCO and BUYER with the Federal Energy
Regulatory Commission for MPLCO's 20-inch pipeline from
Nederland, Texas to Corsicana, Texas, and the 16-inch pipeline
from Corsicana, Texas to Wichita Falls, Texas and Ringgold,
Texas, being acquired by Buyer pursuant to this Agreement,
such tariff to provide for: (i) such division of rates as
shall entitle MPLCO or its Affiliate to receive $0.15 (net of
terminaling costs at Nederland) thereunder and Buyer to
receive the remainder thereunder, and (ii) MPLCO's ability to
terminate that portion of the joint tariff applicable to its
20-inch pipeline from Nederland to Corsicana at such time as
the direction of such 20-inch pipeline is reversed, or
December 31, 2005, which ever occurs first;
(xi) the Transition Services Agreement substantially in the
form attached hereto as Exhibit "J";
(xii) the Facilities Separation Agreement, substantially in
the form attached hereto as Exhibit "N";
(xiii) the Easement Sharing Agreement, substantially in the
form attached hereto as Exhibit "P";
(xiv) an Easement Agreement pertaining to an easement for
MPLCO's 20-inch pipeline and related facilities to cross the
Real Property, substantially in the form of Exhibit "Q";
(xv) a Release Agreement substantially in the form of Exhibit
"K";
(xvi) an update to the Schedules or a Certificate of an
officer of Seller stating no updates to the Schedules has been
made;
(xvii) the Books and Records to be delivered by MPLCO to
BUYER; and
(xviii) any other documents, instruments, and/or certificates
reasonably requested by MPLCO or BUYER or otherwise
contemplated by this Agreement.
The above listed closing documents shall be executed at Closing and made
effective as of 12:01 a. m. on the date of Closing ("CLOSING DATE") unless
MPLCO and BUYER mutually agree to the contrary. BUYER shall deliver the
balance of the Purchase Price to MPLCO's account by wire transfer of
immediately available funds at Closing, without discount or deduction
other than as expressly set forth in this Agreement and shown on a closing
statement executed by both BUYER and MPLCO.
- 25 -
16. Permits. It shall be BUYER's responsibility to obtain the issuance or
transfer of all Permits (except for the issuance, transfer, or assignment
of Environmental Permits, which shall be governed by the provisions of
Sections 7(I)(iv) and (v)); provided however, that MPLCO shall reasonably
cooperate with BUYER's reasonable efforts to obtain the transfer of such
permits.
17. Property Taxes. All ad valorem real and tangible personal property taxes
and special assessments for the current year ("PROPERTY TAXES") applicable
to the Assets shall be allocated between MPLCO and Buyer as of the Closing
Date on the basis of no applicable discount. The allocation shall be based
on the number of days that each party owns the Assets during the year of
the sale. If the amount of such Property Taxes with respect to any of the
Assets for the calendar year in which the Closing occurs has not been
determined as of the Closing date, then the Property Taxes with respect to
such Assets for the preceding calendar year, on the basis of no applicable
discount, shall be used to calculate such allocations, with known changes
in valuation or millage applied. MPLCO's allocated share of Property Taxes
for the current year shall be credited to Buyer at closing as a reduction
in Purchase Price and Buyer shall assume the responsibility to pay the
Property Taxes, unless MPLCO has already paid the current year's Property
Taxes, in which case MPLCO shall be credited at Closing as an increase in
Purchase Price with Buyer's allocated share of the Property Taxes. If the
actual amount of any such Property Taxes varies by more than Twenty
Thousand Dollars ($20,000) from estimates used at the Closing to prorate
such taxes, then the parties shall re-prorate such Property Taxes within
ten (10) days following a request by either party based on the actual
amount of the tax bills.
18. Other Taxes. As may be required by relevant taxing agencies, MPLCO shall
collect and BUYER shall pay on the date of Closing all applicable state
and local sales tax, use tax, gross receipts tax, business license tax,
other taxes except taxes imposed by reason of capital or income of MPLCO,
and fees. MPLCO and BUYER agree that no Texas sales and use taxes will be
reported on any of the Assets transferred to BUYER since such Assets fall
within the Texas occasional sale exemption. Any state or local tax
specified above, inclusive of any penalty and interest, assessed at a
future date against MPLCO with respect to the transaction covered herein
shall be paid by BUYER or, if paid by MPLCO, BUYER shall promptly
reimburse MPLCO therefor. Any documentary stamp tax which may be due shall
be paid by BUYER.
19. Allocation of Carrier Obligations and Proceeds. The Facilities may contain
crude petroleum which is held for the account of shipper(s). It is
understood that title to the contents of the Facilities will remain with
the shipper(s) and that BUYER assumes the obligation to deliver such
contents in accordance with MPLCO's existing arrangements with the
shipper(s), whether under a published tariff or a private transportation
or storage agreement. Further, to the extent that petroleum products have
been offered for shipment in the Facilities under a published tariff or
pursuant to rights under a private transportation agreement, but not yet
delivered to MPLCO, BUYER shall receive those products for transportation
in the normal course of business. Tariff charges for transportation during
the month of sale shall be allocated between MPLCO and BUYER on the basis
of the number of days that each Party owns the Facilities during the month
of sale, provided that payments of such charges shall be allocated and
divided between MPLCO and BUYER only after receipt thereof, unless
received prior to the date of Closing. On the day immediately preceeding
the Closing, the amount of petroleum
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products in the Facilities shall be determined by MPLCO and BUYER in
accordance with the procedures set forth in Exhibit "M" hereto, and MPLCO
will adjust shippers' book inventory to the physical inventory measured as
of Closing.
20. Notices. All notices, requests, demands, instructions and other
communications required or permitted to be given hereunder shall be in
writing and shall be delivered personally or mailed by registered mail,
postage prepaid, as follows:
If to BUYER, addressed to:
Sunoco Logistics Partners L.P.
Attention: Vice President & General Counsel
1801 Market Street
Philadelphia, PA 19103
Fax: (215) 246-8113
If to MPLCO, addressed to:
Mobil Pipe Line Company
Attention: Business Development Manager
P.O. Box 2220
Houston, Texas 77252-2220
or to such other place as either Party may designate as to itself by
written notice to the other. All notices will be deemed given on the date
of receipt at the appropriate address.
21. Default. If BUYER defaults on or prior to the Closing Date in a material
way on BUYER's obligations, including but not limited to BUYER's absence
at the designated time and place for Closing, MPLCO shall be entitled to
retain the Earnest Money as liquidated damages in addition to all of its
other rights or remedies at law or in equity. Further, MPLCO shall be free
immediately to sell the Assets to any third party without any restriction
under or by reason of this Agreement. If MPLCO defaults on or prior to the
Closing Date in a material way on MPLCO's obligations, including but not
limited to MPLCO's absence at the designated time and place for Closing,
BUYER, as its sole and exclusive remedy hereunder, may terminate this
Agreement and receive a refund of the Earnest Money.
22. Governing Law and Venue. The provisions of this Agreement and the
documents delivered pursuant hereto shall be governed by and construed in
accordance with the laws of the State of Texas without regard to its
conflicts of laws provisions which if applied might require the
application of the laws of another jurisdiction. Each Party hereby submits
to the exclusive jurisdiction of the courts of the State of Texas and the
United States District Court located in Harris County Texas in connection
with any dispute based on or arising out of this Agreement and the
transactions contemplated hereby. Furthermore, each Party hereby waives
any right or basis it may have to object to or claim a venue other than
Harris County Texas.
23. Assignment. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
permitted assigns. Except for any assignment of this Agreement to
effectuate a like kind exchange in accordance with Section 1031 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (the "CODE"), this Agreement may not be assigned, in whole or
- 27 -
in part, without the prior written consent of the other Party hereto, and
any such assignment that is made without such consent shall be void and of
no force and effect.
24. Entire Agreement; Amendments. This Agreement, including the attached
Schedules and Exhibits, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, superseding any
and all prior negotiations, discussions, agreements and understandings,
whether oral or written, relating to such subject matter. Exhibits "A"
through "N" and the enumerated Schedules, as more specifically described
herein or in the attached "Schedules and Exhibits", are incorporated
herein for all purposes. This Agreement may not be amended and no rights
hereunder may be waived except by a written document signed by the Party
to be charged with such amendment or waiver.
25. Publicity. The Parties agree that there shall be no press releases or
other public announcements prior to Closing by either Party, except to the
extent required by applicable laws, rules, or regulations, without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld, conditioned or delayed. If either Party determines
that a press release is required or desired, it will so notify the other
Party in writing and thereafter the Parties shall consult with each other
with regard to the same. The Parties further agree to consult with each
other in respect of all press releases and announcements issued at or
after Closing concerning the transactions contemplated by this Agreement.
Except as required by law, no such release or announcement shall disclose
the Purchase Price.
26. Survival. The following provisions of this Agreement shall not survive the
Closing: 3(A), and 15. Such provisions will be merged with and will be
superseded by the documents executed at Closing. Notwithstanding the fact
that the other provisions of this Agreement are not expressly included in
the conveyance documents, all other provisions of this Agreement shall
survive Closing and shall not be deemed merged therewith.
27. No Third Party Beneficiary. It is expressly understood that the provisions
of this Agreement do not impart enforceable rights in anyone who is not a
Party or a successor or assign of a Party.
28. Joint Efforts. This Agreement was prepared with each of the Parties having
access to their own legal counsel. Accordingly, the Parties stipulate and
agree that this Agreement shall be deemed and considered for all purposes
as prepared through the joint efforts of the Parties and shall not be
construed against one Party or the other as a result of the preparation,
submittal or other event of negotiation or drafting.
29. Headings. The division of this Agreement into articles, sections, and
subsections and the insertion of headings and table of contents, if any,
are for convenience only and shall not be used in or affect the
construction or interpretation of this Agreement.
30. Severability. If any term or provision or portions thereof is deemed
invalid or unenforceable pursuant to a final determination of any court of
competent jurisdiction or as a result of future laws, such determination
or action shall be construed so as not to affect the validity or effect of
any other portion or portions of this Agreement. Furthermore, it is the
intent and agreement of the Parties that this Agreement shall be deemed
amended by modifying such term or provision to the extent necessary to
render
- 28 -
it valid and enforceable while preserving the original intent of the
affected term or provision or if that is not possible, by substituting
therefor another provision that is valid and enforceable and achieves the
same objective.
31. Updates to Schedules. MPLCO will update the Schedules hereto between the
signing of this Agreement and Closing in order to make these
representations true as stated at Closing; provided, however, that for the
purpose of determining whether MPLCO's obligation pursuant to Section
15(B) has been satisfied, no such update by MPLCO to the Schedules
subsequent to the signing of this Agreement shall be considered to have
been made unless expressly accepted by BUYER.
32. Further Assurances and Documents; Additional Joint Tariffs.
(A) Each Party shall promptly take such further actions, including the
execution of further documents, as shall be reasonably required in order
to carry out the intent and purposes of this Agreement or to protect the
rights and remedies hereby created or intended to be created in favor of
one or both Parties including, without limitation, assisting in obtaining
any consents that may be required for the transfer of any of the Assets.
(B) Without limiting Section 32(A), the Parties covenant and agree that
following the Effective Date, they will cooperate in good faith with
third-party pipeline owners to establish and file with the Federal Energy
Regulatory Commission new joint tariffs to replace any existing joint
tariffs with such third-party owners that incorporate MPLCO's 20-inch
pipeline from Nederland, Texas to Corsicana, Texas and the 16-inch
pipeline from Corsicana, Texas to Wichita Falls, Texas and/or Ringgold,
Texas, being acquired by Buyer pursuant to this Agreement. The division of
rates for any such new joint tariffs shall shall entitle MPLCO or its
Affiliate to receive $0.15 (net of terminaling costs at Nederland)
thereunder with the remainder thereunder to be shared by Buyer and such
third-party pipeline owners as they may determine.
33. Tax-deferred Exchange. Notwithstanding the general prohibition against an
assignment of all or any portion of this Agreement contained in Section 23
of this Agreement, BUYER hereby agrees that MPLCO may elect to structure
the transaction contemplated herein as a tax-deferred exchange in
accordance with Section 1031 of the Code provided that MPLCO shall give
the BUYER notice not less ten (10) days prior to the Closing. In the event
that MPLCO elects to effect a tax-deferred exchange, BUYER further agrees
to reasonably assist and accommodate MPLCO by (1) consenting and agreeing
to the assignment from MPLCO to a qualified intermediary of all of MPLCO's
right, title and interest in and to this Agreement; and (2) agreeing to
accept title to the Property in the form of a cash sale direct from MPLCO,
and (3) agreeing to pay the full purchase price, adjusted for any Closing
Credits due to BUYER hereunder, for the Property at the closing of the
sale contemplated herein direct to the qualified intermediary. MPLCO will
defend, indemnify and hold harmless BUYER against any and all losses,
costs, Taxes of any kind whatsoever, damages, and expenses, including all
attorneys' fees and costs of litigation, which may be sustained by it on
account of, or in connection with, the MPLCO election to structure the
transaction as a deferred like-kind exchange under Section 1031 of the
Code.
- 29 -
34. Limitations of Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, NEITHER PARTY SHALL BE LIABLE OR RESPONSIBLE TO ANOTHER PARTY
HERETO OR ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL OR PUNITIVE
DAMAGES, OR FOR LOSS OF PROFITS OR REVENUES (COLLECTIVELY REFERRED TO AS
SPECIAL DAMAGES) INCURRED BY SUCH PARTY OR ITS AFFILIATES THAT ARISE OUT
OF OR RELATE TO THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIM ARISES
UNDER OR RESULTS FROM CONTRACT, TORT OR STRICT LIABILITY, provided that
the foregoing limitation is not intended and shall not affect Special
Damages imposed in favor OF individuals or entities that are not Parties
to this Agreement.
35. Employee Offers and Related Matters.
(A) Upon execution of this Agreement by BUYER, MPLCO hereby consents to
BUYER interviewing and making conditional offers of employment to those
employees of MPLCO or MPLCO's Affiliates who are involved in operating
the Facilities (the "Available Employees") as determined in the sole
discretion of BUYER and listed on Schedule 35(a) hereto. Such list is a
complete list of the Available Employees (determined as of the date
hereof), which list includes each such Available Employee's name, race,
sex, birth date, home address, hire date, salary (including any profit
sharing, bonus or other form of compensation), job title, job
description, work location and any other relevant information. Seller
shall provide BUYER the opportunity to review employment records at
least forty-five (45) days prior to Closing Date. NEITHER BUYER NOR ANY
OF ITS AFFILIATES SHALL BE UNDER ANY OBLIGATION TO OFFER EMPLOYMENT TO
ANY PARTICULAR AVAILABLE EMPLOYEE OR UNDER ANY OBLIGATION TO ACCEPT,
ASSUME OR ADOPT ANY EXISTING COLLECTIVE BARGAINING AGREEMENT,
PROVISIONS, LETTERS OF UNDERSTANDING, AMENDMENTS, LETTERS, NOTICES,
MEMORANDUM OF AGREEMENT OR OTHER SIMILAR DOCUMENTS RELATING TO ANY
AVAILABLE EMPLOYEE OR SELLER. BUYER shall provide to Seller at least
five (5) days prior to the Closing Date a list of the Available
Employees to whom BUYER may offer employment commencing as of the
Closing Date. Those Available Employees who accept offers of employment
with BUYER shall be referred to herein as a "RETAINED EMPLOYEE." Seller
shall make appropriate arrangements so that all Retained Employees are
available for employment with the BUYER on the Closing Date.
(B) Seller Plans.
MPLCO shall remain solely responsible for all liabilities with respect
to the Seller Plans which are all listed on Schedule 35(b), and shall
indemnify and hold BUYER harmless from any liabilities arising directly
or indirectly, whether before, on, or after the Closing Date (i) under
any Seller Plans, (ii) relating to any group health or insurance plans
sponsored or maintained by Seller or any member of its controlled group
(as determined under Section 414 of the Code) (an "ERISA AFFILIATE")
with respect to termination of any such plan arising under Section
4980B of the Code, or (iii) under Title IV of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations
promulgated thereunder ("ERISA") with respect to any plan that is
subject to Title IV of ERISA, and is or has within the six-year period
preceding the Closing Date been sponsored or maintained by Seller or
any ERISA Affiliate. Neither BUYER nor any of its
- 30 -
Affiliates shall assume or be deemed to have assumed any Seller
Plans nor shall any of them have any obligations under, or assume
any liabilities with respect to, any Seller Plans. Without limiting
the scope of the preceding sentence, Seller shall retain all
responsibility and liabilities for all severance and employment
obligations for the Available Employees (regardless of whether they
become Retained Employees) for the period prior to the Closing and
associated with the termination of any Available Employee's
employment from Seller.
(C) Retained Employees.
Effective as of the Closing Date, and subject to the consummation of
the Closing, each Retained Employee who has accepted the BUYER offer
of employment shall be considered new hires with a BUYER service
date as of the Closing Date. Each Retained Employee and his or her
eligible dependents shall be eligible for coverage under employee
benefit plans, programs, practices or arrangements as determined and
provided for in the sole discretion of BUYER.
(i) Workers' Compensation.
Claims by Retained Employee for workers' compensation benefits from
claims arising out of the period prior to the Closing Date, whether
such claims were made prior to, on or after the Closing Date, shall
be the responsibility of Seller. Claims by Retained Employee for
workers' compensation benefits arising out of occurrences on or
after the Closing Date shall be the responsibility of BUYER.
(ii) Other Matters
Claims by a Retained Employee for all other employment related
issues arising out of the period prior to the Closing Date, whether
such claims were made prior to, on or after the Closing Date, shall
be the responsibility of Seller. Claims by a Retained Employee
arising out of occurrences on or after the Closing Date shall be the
responsibility of BUYER.
(D) No Restrictions on Changes.
Nothing herein shall be deemed or construed to (i) give rise to any
rights, claims, benefits, or causes of action by any Retained
Employee or (ii) prevent, restrict, or limit BUYER following the
Closing from terminating the employment of any Retained Employee,
modifying the terms of employment of any Retained Employee, or
modifying, terminating or replacing any of its employee related
matters as it may deem appropriate.
(E) Conflict.
In the event of any conflict between this Section 36 and any other provisions
which address employee matters, the provisions of this Section 36 shall control
and prevail.
- 31 -
For the purposes of this Section 35, the term (a) "AVAILABLE EMPLOYEES" shall
mean such employees set forth on Schedule 35(a), and (b) "SELLER PLANS" shall
mean the complete list of each employee benefit plan subject to ERISA maintained
by Seller as set forth on Schedule 35(b).
- 32 -
Executed on behalf of the parties hereto on the dates set forth below the
respective signature lines but effective as of the date first set forth herein
above.
MPLCO: BUYER:
Mobil Pipe Line Company Sunoco Pipeline L.P.
By: Sunoco Logistics Partners
Operations GP LLC, its general
partner
By: __________________
Name:
Title: By: __________________
Date: Name:
Title:
Date:
SIGNATURE PAGE TO THAT CERTAIN PURCHASE AND SALE AGREEMENT BY AND BETWEEN MOBIL
PIPE LINE COMPANY AND SUNOCO PIPELINE L.P., AS OF THE DATE FIRST SET FORTH
ABOVE.
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SCHEDULES AND EXHIBITS
Schedule 1.1(a) BUYER Knowledge
Schedule 1.1(b) Seller Knowledge
Schedule 1(G) Contracts
Schedule 1(H) Spare Parts
Schedule 4(G) Tax Proceedings
Schedule 4(H) Non-Compliance
Schedule 4(J) Proceedings
Schedule 35(a) Available Employees
Schedule 35(b) Seller Plans
Exhibit "A-1" Facilities
Exhibit "A-2" Real Property
Exhibit "A-3" Buildings and Improvements to be Leased
Exhibit "A-4" Ground Lease
Exhibit "B" Easements
Exhibit "B-1" Shared Easements
Exhibit "C" Safety Requirements
Exhibit "D" Drug and Alcohol Prohibitions and Requirements
Exhibit "E" Confidentiality Agreement
Exhibit "F" Bill of Sale
Exhibit "G" Form of Assignment
Exhibit "G-1" Form of Assignment for Shared Easements
Exhibit "H" Environmental Permits
Exhibit "I" Environmental Documents
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Exhibit "J" Transition Services Agreement
Exhibit "K" BUYER'S release of MPLCO for Environmental Liability
Exhibit "L" Special Warranty Deed
Exhibit "M" Inventory Measurement Procedures
Exhibit "N" Facilities Separation Agreement
Exhibit "O" Assignment of Landowners' Release
Exhibit "P" Easement Sharing Agreement
Exhibit "Q" Form of Easement for MPLCO 20-inch Pipeline and Related
Facilities
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