EXHIBIT 99.4
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), is entered into
effective the 2nd day of May 2002, by and between Shell Pipeline Company LP, a
Delaware limited partnership (formerly known as Equilon Pipeline Company LLC)
and Equilon Enterprises LLC dba Shell Oil Products US, a Delaware limited
liability company (individually "Shell Pipeline" or "SOP US" and collectively
"Seller") and Plains All American Pipeline, L. P. ("Buyer"), a Delaware limited
partnership. Seller and Buyer are hereinafter sometimes referred to
individually as a "Party" or collectively as the "Parties." Other definitions
used in this Agreement are found in Annex A attached hereto and made a part
hereof.
For and in consideration of the mutual covenants, obligations and benefits
made and contained herein, the Parties agree as follows:
Article 1
Purchase and Sale
A. Subject to the terms and conditions set forth below, Seller agrees to
sell, grant, transfer, assign and convey, and Buyer agrees to purchase,
acquire, pay for and accept all of Seller's right, title and interest in and to
the following real and personal property interests, other than the Excluded
Assets (the "Property");
(1) The crude oil pipeline systems shown on Exhibits "A" and "A-1
through "A-4", attached hereto and made a part hereof (the "Pipelines");
(2) All of the partnership interests in Rancho Pipeline Holdings LP
and Basin Pipeline Holdings LP (the "Companies"), including the general
partners of each;
(3) All real property interests described and shown on Exhibits "B-1"
through "B-4" attached hereto and made a part hereof ("Real Property");
(4) Rights-of-Way and Permits appurtenant to or associated with the
Pipelines as further described on Exhibits "C-1" through "C-4", attached
hereto and made a part hereof;
(5) The Assigned Contracts as further described on Exhibits "D-1"
through "D-4" attached hereto and made a part hereof;
(6) Any and all pipe, pumps, motors, valves, fittings, miscellaneous
equipment and facilities, and buildings associated with the Pipelines as
further described on Exhibit "E-1" through "E-4" attached hereto and made a
part hereof ("Equipment"); and
(7) Books and Records.
B. The Property shall not include any real or personal property interests
described on the attached Exhibits "F-1" through "F-4" (the "Excluded Assets").
In particular, Seller is not selling to Buyer any of its allowance oil or other
oil held in inventory for Seller in any of the Pipelines or in the assets of
the Companies. For all of the Excluded Assets, Buyer grants Seller a sixty (60)
day right of access, commencing on the Effective Date, to remove such assets,
in a reasonable, safe and prudent manner, from the Property.
C. Buyer acknowledges that it shall have no rights with respect to the use
of the names "Equilon Pipeline Company LLC", "Shell Pipeline Company LP" or
"Equilon Enterprises LLC dba Shell Oil Products US" or any and all variations
and derivatives thereof, all trademarks, service marks and logos associated
therewith, nor any "Goodwill" associated with any of the foregoing. Within
sixty (60) days after the Effective Date, Buyer shall remove or cause to be
removed, all such names, marks or logos from wherever they may appear on the
Property, including the removal of all Equilon Pipeline, Shell Pipeline or
Equilon Enterprises line markers.
Article 2
Purchase Price
A. Price. The price to be paid by Buyer to Seller for the Property shall
be three hundred fifteen million dollars ($315,000,000.00) (the "Purchase
Price") payable at Closing (as defined below) less the Earnest Money held by
Seller, by wire transfer in immediately available funds to an account to be
designated by Seller.
B. Earnest Money. As evidence of Buyer's ability to perform this
Agreement and good faith intent to comply with the terms hereof, Buyer has
deposited with Seller an amount equal to five percent (5%) of the Purchase
Price as Earnest Money (hereinafter "Earnest Money"). The Earnest Money shall
accrue interest at a per annum rate calculated on a daily basis using the three
month treasury bill rate published in The Wall Street Journal for any
applicable day (with the rate for any day for which a rate is not published
being the rate most recently published). All references to Earnest Money shall
include interest on the Earnest Money as calculated by using the preceding
sentence.
If the transaction fails to close because any of the conditions to Closing
in Section 3A. is not satisfied, Seller will refund the Earnest Money to Buyer
and Buyer and Seller shall each be relieved of all further liability hereunder.
Provided, however, if Buyer violates the terms of this Agreement and such
violation is not cured by Buyer within 30 days following written notice of such
violation from Seller to Buyer, Seller shall be entitled to retain the Earnest
Money, as liquidated damages and not as a penalty.
Provided further, however, if Seller violates the terms of this Agreement
and such violation is not cured by Seller within 30 days following written
notice of such violation from Buyer to Seller, Seller shall return the Earnest
Money to Buyer and shall also pay Buyer an additional fifteen million dollars
($15,000,000.00), as liquidated damages and not as a penalty and Buyer and
Seller shall each be relieved of all further liability hereunder. The Parties
agree that if another owner in either of the Basin or Rancho pipeline systems
attempts to delay Closing by claiming that it was owed a right of first
refusal, Buyer will grant Seller a reasonable time to cure the delay.
Article 3
Closing
Closing shall take place on the first day of the month immediately
following the month in which the waiting period(s) of the HSR Act expire at
Seller's offices in Houston, Texas ("Closing"), or at such other time and place
as agreed to in writing by the Parties. Control of operations, risk of loss,
and transfer of title to the Property from Seller to Buyer shall be effective
as of 7:00 a.m. local time on the Closing Date.
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A. Conditions to Closing. Except as expressly waived by the Parties, the
obligations of the Parties to close this transaction are subject to the
complete satisfaction, prior to Closing, of each of the following conditions,
which conditions the Parties intend to be conditions precedent to Seller's
obligation to convey the Property and to Buyer's obligation to pay the Purchase
Price:
(1) All representations and warranties of the Parties set forth in
this Agreement shall be true in all material respects as of the Closing
Date as if made on the Closing Date, and the Parties shall have performed
all covenants and conditions required by this Agreement to be performed at
or prior to Closing and shall have taken all other actions reasonably
necessary to close this transaction.
(2) No Law shall exist or shall have been enacted restricting or
substantially delaying this transaction.
(3) Neither Party shall have exercised any right it may have to
terminate or refuse to close under this Agreement.
(4) If in the judgment of either Seller or Buyer, the pre-merger
notification requirements of the HSR Act are applicable to this
transaction, then both Seller and Buyer shall file with the Federal Trade
Commission and the Department of Justice their respective Notification and
Report Forms and any supplemental information, if any, and will comply with
the requirements of the HSR Act. The respective obligations of the Parties
to consummate this transaction are expressly made subject to satisfactory
compliance with the HSR Act, including the expiration of any waiting
period(s) required thereunder.
(5) If applicable, each Party shall have complied with the
requirements of federal and state securities Laws.
(6) No Casualty Loss shall have occurred prior to Closing, unless
Buyer notifies Seller that it is willing to close despite the Casualty
Loss. The term "Casualty Loss" shall mean any single event of loss or
damage to the Property or any portion thereof which causes a Material
Adverse Environmental Condition or a Material Defect.
(7) Each Party shall have received a certificate, dated as of the
Closing Date, signed by the other Party's Secretary or Assistant Secretary
certifying the incumbency of the officers executing this Agreement on
behalf of such Party and any documents to be executed and delivered by it
at the Closing.
(8) Seller shall have executed and delivered to Buyer the Conveyance
Documents.
(9) Seller shall have paid to Buyer the Seller's portion of the
property Tax in accordance with Section 6.B.
B. If any condition or obligation of a Party has not been satisfied or
waived, and Closing has not occurred by the close of business on the Closing
Date, the Party to whom said obligation is owed may terminate this Agreement
immediately upon the giving of written notice thereof to the Party owing such
obligation. Buyer shall return all records, maps, files, papers, and other
property of Seller then in its possession, and except as provided in Section
2(B), neither Party shall hereafter have any liability under this Agreement.
This provision shall not, however, apply to limit the liability of a Party who
has willfully caused termination hereof by any act or failure to act in
violation of the terms and provisions of this Agreement.
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Article 4
Allocation of Proceeds and Purchase Price
A. All proceeds attributable to the operation, ownership, use or
maintenance of or otherwise relating to the Property prior to the Effective
Date shall be the property of Seller and to the extent received by Buyer or its
Affiliates, Buyer shall promptly and fully disclose, account for and transmit
same to Seller. All proceeds attributable to the operation, ownership, use, or
maintenance of or otherwise relating to the Property on and after the Effective
Date shall be the property of Buyer and to the extent received by Seller or its
Affiliates, Seller shall promptly and fully disclose, account for and transmit
same to Buyer.
B. The Purchase Price for the Property shall be allocated by the Parties'
mutual agreement prior to the Closing Date in substantially the same form
attached hereto as Exhibit "G" which will represent a reasonable determination
in good faith of the fair market value of the Property. Buyer and Seller agree
that they shall use these allocations to prepare, on a consistent basis, and
file as required, Form 8594 (Asset Acquisition Statement) under Section 1060 of
the Code.
Article 5
Responsibility For Contractual Payments and Obligations
A. Seller shall be responsible for all rentals, contractual payments,
compensation owed to employees, operating costs, expenses, fees, vendor and
contractor invoices, billings, charges, assessments and other indebtedness and
obligations arising from the ownership, operation, use or maintenance of the
Property prior to the Effective Date. Buyer shall be responsible for all such
payments and obligations arising from the ownership, operation, use or
maintenance of the Property on and after the Effective Date. Seller shall be
responsible for all Taxes arising from the ownership, operation, use or
maintenance of the Property on or before the Closing Date, and Buyer shall be
responsible for all Taxes arising from the ownership, operation or maintenance
of the Property after the Closing Date. As of the Effective Date (or in the
case of Taxes, after the Closing Date) Buyer shall assume and perform all
obligations and implied covenants of Seller relating to the Property (whether
such obligations are to a grantor, a governmental body or any other Person) to
the extent the same are attributable to periods of time on and after the
Effective Date (or in the case of Taxes, after the Closing Date), including,
but not limited to, any obligations arising with respect to the abandonment, or
removal (as the case may be) of any existing facilities, Pipeline, appurtenant
or associated equipment or other personal property located on or included in
the Property; provided, however, such assumed obligations shall exclude, and
Seller agrees to retain and perform all obligations relating to the Property to
the extent the same arise out of any Contracts which are not described on
Exhibits "D-1" through "D-4" hereto, all obligations that relate to the
Excluded Assets, and all obligations of Seller under Article 12 hereof. For
clarification, the obligations of Seller under this Article 5 shall not be
subject to or governed by Article 12 or Article 13.
B. To the extent utilities have not been placed in Buyer's name as of the
Effective Date, charges and credits for water, electricity, sewage, gas, and
all other utilities shall be adjusted and apportioned between Seller and Buyer
through the Effective Date.
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Article 6
Taxes and Related Matters
A. Cooperation. Buyer and Seller agree to furnish, or cause to be
furnished, to each other, upon request, as promptly as practicable, such
information and assistance relating to the Property as is reasonably necessary
for the filing of all Tax returns, the preparation for any audit by any taxing
authority, and the prosecution or defense of any Proceeding relating to any Tax
return. Seller and Buyer shall cooperate with each other in the conduct of any
audit or other Proceeding related to Taxes involving the Property and each
shall execute and deliver such documents as are necessary to carry out the
intent of this article. Seller and Buyer agree to file such reports,
certificates or returns, and provide such evidence of the applicability of
exemptions, as are reasonably requested by the other Party or are required
under federal, state, local, foreign or other applicable law in order to reduce
or eliminate any Taxes attributable to the transaction contemplated by this
Agreement.
B. Property Taxes. For purposes of this Agreement, general property Taxes
in respect to the ownership or use of the Property for the calendar year in
which the Closing Date occurs shall be prorated between Buyer and Seller as of
the Closing Date regardless of when such general property Taxes are actually
billed and payable. At Closing, Seller shall pay to Buyer Seller's share of
such general property Taxes attributable to the period on or prior to the
Closing Date, using estimates to the extent such general property Taxes have
not been billed or are not determinable as of the Closing Date (such estimates
are to be based upon (i) such Taxes for the prior year and (ii) to the extent
there were no such Taxes for the prior year for any portion of the Property, a
fair market valuation of the portion of the Property for which there were no
such Taxes for the prior year multiplied by the applicable property Tax rates
for the prior year, except in either case that appraised values for the current
year, regardless of whether final, and property Tax rates adopted for the
current year shall be utilized to the extent available as of the Closing Date).
Buyer shall actually pay to the taxing authority all general property Taxes for
the year of Closing. Notwithstanding anything in this Agreement to the
contrary, no further adjustment shall be made for such general property Taxes,
and Buyer hereby agrees to assume the payment of all such general property
Taxes effective upon Closing.
C. Documentary Transfer Taxes. Buyer shall pay and bear all documentary
transfer Taxes that may be required in connection with the purchase and sale of
the Property. Seller shall pay or indemnify Buyer for any such Taxes incurred
in connection with the transfer of any Property by Seller to the Companies
(which indemnity shall survive Closing and not be subject to any deductible or
cap under this Agreement).
D. Other Transfer Taxes. Buyer shall pay and be responsible for any other
applicable transfer Taxes incurred in connection with the purchase and sale of
the Property, including, without limitation, any federal, state or local sales,
use, or excise Taxes, whether levied on Seller or Buyer. Buyer shall be
responsible for, and will file all necessary Tax returns and other
documentation with respect to all such Taxes and remit, upon the request of
Seller, copies of the portions of such returns relevant to this Agreement and
any necessary documentation to Seller. Seller shall pay or indemnify Buyer for
any such Taxes incurred in connection with the transfer of any Property by
Seller to the Companies (which indemnity shall survive Closing and not be
subject to any deductible or cap under this Agreement).
E. Confidential Tax Information. After giving full effect to Article 6A,
notwithstanding anything to the contrary in this Agreement, neither Party shall
be required at any time to disclose to the other Party, or to any other Person,
absent legal constraint, any Tax return or other confidential Tax information.
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F. Deferred Like-Kind Exchange Cooperation. If so requested by Seller,
Buyer shall, at no cost or obligation to Buyer, reasonably cooperate in
structuring and completing all or a portion of this transaction for Seller so
as to effect a disposition of "relinquished property" in connection with a
multiple party deferred like-kind exchange pursuant to Section 1031 of the
Code. In particular, Buyer hereby consents to the assignment of an interest in
the Property to a "qualified intermediary" prior to the Closing hereunder and
the assignment by Seller to such "qualified intermediary" of Seller's right to
receive the Purchase Price hereunder. Buyer, however, shall not be required to
act as a "qualified intermediary." The terms "replacement property," "qualified
intermediary," and "relinquished property" as used herein shall have the
meanings ascribed to them in Treasury Regulations Section 1.1031(k)-1. Seller
shall indemnify Buyer against any Claim arising out of any transaction or
action incidental or related to the matters contemplated by this Section 6.F.,
which indemnity shall survive Closing. No transaction or action contemplated by
this Section 6.F shall result in delaying the Closing to a date later than the
date on which it otherwise would have occurred. Seller's indemnity under this
Section 6.F shall not be subject to any deductible or cap notwithstanding any
other provision of this Agreement.
G. Allocation of Taxable Income to Periods Before and After Closing
Date. Seller (or if applicable a Person or Persons owning a direct or indirect
interest in Seller) shall include in its federal Tax return, and its state Tax
returns for those states that follow the federal rules, any item of income,
gain, loss, deduction and credit with respect to activities of the Companies or
Property on or prior to the Closing Date. Seller (or if applicable a Person or
Persons owning a direct or indirect interest in Seller) shall pay or cause to
be paid all Taxes shown as due (or required to be shown as due) on such Tax
returns. Buyer shall include the income, gain, loss, deduction and credit with
respect to activities of the Companies after the Closing Date, in either (i)
its own federal income Tax return, and in its own state income Tax returns for
those states that follow the federal rules or (ii) in federal and state income
Tax returns filed by an affiliate or affiliates of Buyer. Seller shall make no
election or otherwise take any action to cause the Companies to be treated as
associations under Treasury Regulation sections 7701-2 and 7701-3, and shall
pay, and indemnify Buyer for (which indemnity shall survive Closing and not be
subject to any deductible or cap under this Agreement), any Taxes required to
be paid by the Companies attributable to the treatment of either of the
Companies as an association. Both the Buyer and Seller recognize that the Texas
franchise privilege period pertaining to the Companies does not end at the
Closing Date. Therefore, Seller will provide Buyer with all required Tax
attributes pertaining to the period prior on or prior to the Closing Date for
inclusion into the Tax return to be filed for the Companies by Buyer that
includes such Tax attributes in the calculation of the franchise Tax. Seller
will be responsible, and will reimburse Buyer, for all increased Taxes paid by
Buyer or the Companies, relating to Tax attributes generated on or prior to the
Closing Date in any such Texas franchise Tax return.
H. Sale of the Companies Treated as Asset Sale for Income Tax
Purposes. The sale of the partnership interests in the Companies shall be
treated for federal income tax purposes, and for state income tax purposes in
those states that follow the federal rules, as a sale of the underlying assets
of the Companies in exchange for the Purchase Price at the Closing Date.
I. Occasional Sale. This purchase and sale constitutes an isolated or
occasional sale and is not subject to sales or use tax with any of the taxing
authorities having jurisdiction over this transaction, and no sales tax need be
collected by Seller from Buyer at Closing. Seller agrees to cooperate with
Buyer in demonstrating the requirements for an isolated or occasional sale or
that other sales tax exemptions have been met.
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J. Certification of Non-Foreign Status. Seller shall provide to Buyer
prior to Closing a certification of non-foreign status as described in Treasury
Regulation section 1.1445-2(b)(2).
Article 7
Seller's Representations
Seller represents and warrants the following:
A. EXCEPT AS SET FORTH HEREIN: (1) SELLER IS SELLING THE PROPERTY ON AN
"AS IS", "WHERE IS" BASIS AND DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
CONCERNING THE PROPERTY, (2) SELLER MAKES NO REPRESENTATION OR WARRANTY OF
TITLE OR FITNESS WITH REGARD TO THE PROPERTY AND SELLER EXPRESSLY DISCLAIMS ANY
WARRANTIES (EXPRESS, IMPLIED OR STATUTORY), WHETHER OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR OTHERWISE, COVERING THE PROPERTY, AND (3) SELLER
DOES NOT WARRANT TITLE, DESCRIPTION, VALUE, QUALITY, CONDITION,
MERCHANTABILITY, OR FITNESS FOR PURPOSE OF ANY OF THE FACILITIES, PIPELINES,
APPURTENANT OR ASSOCIATED EQUIPMENT OR OTHER REAL OR PERSONAL PROPERTY LOCATED
ON OR INCLUDED IN THE PROPERTY.
B. Seller makes no representation concerning the present or future value
of the possible income, costs or profits, if any, to be derived from the
Property.
C. Seller has not incurred any obligation or liability, contingent or
otherwise, nor made any agreement with respect to any broker or finder's fees
arising out of or in any way related to the transaction contemplated by this
Agreement.
D. Shell Pipeline is a limited partnership and SOP US is a limited
liability company, each duly organized, validly existing and in good standing
under the Laws of the State of Delaware and duly qualified to carry on business
in the states in which its business requires it to be qualified. The Companies
will be limited partnerships duly organized and validly existing under the Laws
of the State of Delaware. The Companies have not yet been organized, and will
not, prior to the Closing, engage in any business activities or have any
liabilities or assets other than the ownership interests in the Basin or Rancho
pipeline systems that will be transferred to them in connection with this
Agreement.
E. Seller has the power and authority necessary to enter into and perform
this Agreement and the transaction contemplated hereby, and the execution,
delivery and performance of this Agreement by Seller, and the transaction
contemplated hereby, will not, with the passage of time or the giving of notice
or both: (1) violate any provision of the formation documents of Seller, (2)
violate any material agreement or instrument to which Seller is a party or by
which Seller is bound, (3) violate any judgment, order, ruling or decree
applicable to Seller as a party in interest, (4) violate any Law applicable to
Seller or to this Agreement or (5) result in the creation or imposition of any
Lien on any of the Property.
F. The execution, delivery, and performance by Seller of this Agreement
and the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of Seller. This Agreement has
been duly executed and delivered on behalf of Seller, and, at the Closing,
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all documents and instruments required hereunder to be executed and delivered
by Seller shall have been duly executed and delivered by Seller. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Seller enforceable in accordance with their terms,
subject, however, to the effect of bankruptcy, insolvency, reorganization,
moratorium and similar Laws from time to time in effect relating to the rights
and remedies of creditors, as well as to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law).
G. Seller is not (1) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended or (2) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended or (3) a "foreign person" within the
meaning of Section 1445 of the Code.
H. Except as set forth in the Disclosure Schedule, to Seller's knowledge,
Seller is not in violation of or in default under any Law or governmental
certification requirement.
I. Except as set forth in the Disclosure Schedule, to Seller's knowledge,
Seller and the Companies have filed in a timely manner all required Tax returns
related to the Property and the Companies have paid (except amounts being
diligently contested in good faith by appropriate Proceedings and disclosed in
Section 7I of the Disclosure Schedule) all required Tax or similar assessments
arising from or related to the Property and the Companies, including any
interest, penalties or additions attributable thereto. Except as set forth in
the Disclosure Schedule, no Proceeding or other actions which are pending,
threatened or open seek the assessment or collection of additional Taxes of any
kind from Seller or the Companies specifically relating to any portion of the
Property or the Companies, and no other examination by the Internal Revenue
Service or any other taxing authority affecting any portion of the Property or
the Companies is now pending. Taxes which Seller or the Companies are required
by Law to withhold or collect in respect to the Property or the Companies have
been withheld or collected and have been paid over to the proper Governmental
Authorities or are properly held by Seller or the Companies for such payment
when due and payable. The Companies each are and have at all times been treated
(or, if not yet formed, will be treated) as disregarded entities under Treasury
Regulation sections 7701-2 and 7701-3 and have not elected (or, if not yet
formed, will not elect) to be treated as associations taxable as corporations
under Treasury Regulation sections 7701-2 and 7701-3. None of the Property
(including assets held or to be held by the Companies at Closing) constitutes
an interest in a partnership for federal income tax purposes.
J. Except as disclosed in the Disclosure Schedule, to Seller's knowledge
(1) Seller has all Permits necessary for the operation of the Property as
currently conducted, (2) each such Permit is in full force and effect, (3)
Seller is in compliance with all its obligations with respect to those
necessary Permits, and (4) no event has occurred which allows, or upon the
giving of notice or the passage of time or both would allow, the revocation or
termination of any Permit.
K. Except for the Excluded Assets and any title gaps for which Buyer has
assumed the risk under Section 9D, and except as disclosed in the Disclosure
Schedule, to Seller's knowledge, the Pipelines, Real Property, Rights of Way,
and Equipment constitute all of the properties and assets necessary for the
operation of the Pipelines as the Pipelines are currently used and operated.
Except for any title gaps for which Buyer has assumed the risk under Section
9D, and except as disclosed in the
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Disclosure Schedule, to Seller's knowledge, the Pipelines, Real Property,
Rights of Way, and Equipment are free and clear of all Liens (except for
Permitted Encumbrances) created by, through or under Seller, but not otherwise.
L. Except as disclosed in the Disclosure Schedule, to Seller's knowledge,
Seller has not received (1) any written notice from any Governmental Authority
of any actual or potential non-compliance with the terms and conditions of any
Permits with respect to any portion of the Property; or (2) any written notice
of any civil, criminal or administrative Proceeding involving any portion of
the Property relating in any way to applicable Environmental Laws.
M. Except as set forth in the Disclosure Schedule, to Seller's knowledge,
(1) there is no pending or threatened Proceeding involving Seller or any of the
Property, at law or in equity, by or before any Governmental Authority or any
arbitrator or mediator which on the date hereof is still pending or threatened,
and which, if adversely determined, would impair or prohibit the consummation
of the transaction contemplated hereby and (2) there are no material orders,
writs, judgments, stipulations, injunctions, decrees, determinations, awards or
other decisions of any Governmental Authority, or any arbitrator or mediator,
outstanding against Seller pertaining to any portion of the Property.
N. To Seller's knowledge, the disclosures by Seller in connection with the
environmental insurance provided for under Article 12 are true and complete.
O. Shell Pipeline owns, or will own at Closing, title to 100% of the
partnership interests in each of the Companies and such partnership interests
will be assigned and transferred to Buyer at Closing free and clear of any
encumbrance, security agreement, voting agreement, restriction, preferential
right, lien or charge of any kind or character.
Article 8
Covenants of Seller
Seller covenants with Buyer that in addition to the manner in which
Articles 5, 6, 7 and 12 of this Agreement would otherwise apply, the provisions
of Articles 5, 6, 7 and 12 shall be applied to the assets and liabilities of
the Companies without regard to their separate existence and shall be
interpreted and applied as if such separate existence did not exist.
Article 9
Buyer's Representations
Buyer represents the following:
A. EXCEPT AS SET FORTH HEREIN, BUYER HAS CONDUCTED OR WILL CONDUCT ITS OWN
EVALUATION OF THE PHYSICAL CONDITION OF THE PROPERTY AND IS ACQUIRING THE
PROPERTY ON AN "AS IS", "WHERE IS" BASIS, PURSUANT TO BUYER'S INDEPENDENT
INSPECTIONS, ESTIMATES, COMPUTATIONS, REPORTS, STUDIES, AND EVALUATIONS OF THE
PREMISES. FURTHER, BUYER ACKNOWLEDGES THAT THE PROPERTY HAS BEEN USED FOR THE
TRANSPORTATION OF CRUDE OIL OR PETROLEUM/REFINED PRODUCTS, OR BOTH AND MAY HAVE
BEEN THE SUBJECT OF ONE OR MORE RELEASES OF CRUDE OIL OR PETROLEUM/REFINED
PRODUCTS, OR BOTH AS A RESULT OF ITS USE.
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B. Buyer is acquiring the Property for its own benefit and account and not
with the intent of distributing fractional undivided interests thereof as would
be subject to regulation by federal or state securities Laws.
C. 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 Property and has formed an opinion based solely
upon Buyer's knowledge and experience and not upon any representations or
warranties by Seller other than as specifically set forth herein.
D. Buyer assumes the risk of any transfer restrictions, renegotiation
requirements or expiration of any easements, licenses, Rights-of-Way, Permits,
franchises or other agreements applicable to the Property. Seller agrees to
cooperate, including the execution of customary documents, substantially in the
form attached hereto as Exhibit "M", with Buyer's efforts to obtain the
necessary consent, renewal or reissuance of same.
E. Buyer shall comply with all applicable Laws and shall promptly obtain,
or have transferred to its name, and maintain all permits or consents required
by public or private parties in connection with the Property purchased.
F. Buyer is a limited partnership duly organized, validly existing and in
good standing under the Laws of the State of Delaware and is duly qualified to
carry on business in the states in which the ownership of the Property requires
it to be qualified.
G. Buyer has not incurred any obligation or liability, contingent or
otherwise, nor has it made any agreement with respect to any broker or finder's
fees arising out of or in any way related to the transaction contemplated by
this Agreement for which Seller would have any liability.
H. Buyer has the power and authority necessary to enter into and perform
this Agreement and the transaction contemplated hereby, and the execution,
delivery and performance of this Agreement by Buyer, and the transaction
contemplated hereby, do not violate (1) any provision of the formation
documents of Buyer, (2) any material agreement or instrument to which Buyer is
a party or by which Buyer is bound, (3) any judgment, order, ruling or decree
applicable to Buyer as a party in interest or (4) any Law applicable to Buyer
or to this Agreement.
I. The execution, delivery, and performance by Buyer of this Agreement and
the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of Buyer. This Agreement has
been duly executed and delivered on behalf of Buyer, and, at the Closing, all
documents and instruments required hereunder to be executed and delivered by
Buyer shall have been duly executed and delivered by Buyer. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Buyer enforceable in accordance with their terms,
subject, however, to the effect of bankruptcy, insolvency, reorganization,
moratorium and similar Laws from time to time in effect relating to the rights
and remedies of creditors, as well as to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law).
J. Buyer is not (1) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended or (2) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
10
Company Act of 1935, as amended or (3) a "foreign person" within the meaning of
Section 1445 of the Code.
K. Buyer's management responsible for the consummation of this transaction
has no knowledge that there exists any wrong or inaccurate information,
omissions, misrepresentations or mistakes on the Disclosure Schedule.
Article 10
Pre-Acquisition Review
A. During the period commencing on the date of this Agreement and ending
thirty (30) days prior to Closing (the "Review Period"), Buyer and its
Affiliates and the employees, agents and consultants of either shall have the
right to do the following, at Buyer's expense and with the cooperation and
assistance of Seller, subject to Buyer's executed confidentiality agreement
("Confidentiality Agreement"), and also subject to Buyer supplying to Seller,
at least thirty (30) days prior to Closing, copies of any reports and/or
assessments prepared by Buyer or its Affiliates or the consultants of either,
concerning the condition of the Property:
1. Enter all or part of the Property with Seller's representative,
including all or any easements, to view the Pipelines, facilities,
Equipment, and other operations conducted thereon prior to Closing, and to
conduct a surface only inspection and assessment, inventory, study and
examination of the same, independently of any documents, data or
information furnished by Seller hereunder; and
2. Inspect and review the Books and Records, including all
non-privileged files, records, documents and data related to the above
matters, including, but not limited to, pipeline maintenance and
construction records. Buyer acknowledges that it shall not have access to
Seller's Pipeline Manuals used in the operation of the Pipelines, which are
considered by Seller to be proprietary property.
Buyer shall not have the right to perform any phase II environmental
assessments.
B. Except as required by Law, all information acquired by Buyer in any
inspection, inventory, study, or examination of the Property, and the results
of any analysis thereof, shall be kept confidential by Buyer from anyone other
than Seller or Buyer's representatives in accordance with Buyer's executed
Confidentiality Agreement.
C. Buyer shall indemnify, defend and hold harmless Seller and its
Affiliates and their respective owners, officers, directors, employees,
attorneys, and agents from any and all losses, liabilities, attorneys' fees,
court costs, liens, or encumbrances for labor or materials, claims and causes
of action arising out of any injury to or death of any Persons or damage to
property occurring to or on the Property as a result of the exercise of Buyer's
rights under this article, except to the extent the indemnified event or
occurrence arises from or is caused by the sole negligence or fault of Seller.
Seller shall have the right at all times to participate in the preparation for
and conduct of any hearing or trial related to this indemnification provision,
as well as the right to appear on its own behalf or to retain separate counsel
to represent itself at any such hearing or trial.
11
D. Except as hereinafter provided, Buyer shall have the option of
terminating this Agreement by providing written notice to Seller on or before
the last day of the Review Period, in the event Buyer determines during the
Review Period that the Property is subject to any: (1) Material Adverse
Environmental Condition, or (2) Material Defect. To be effective, any such
notice shall specifically identify and describe the basis for such termination,
and shall include substantiating evidence thereof. Minor deviations in the
location of a pipeline relative to a defined right-of-way in an easement or
encroachments on the right of way shall not be deemed to constitute a Material
Defect for purposes of this Agreement.
E. Notwithstanding the delivery of a notice of termination by Buyer to
Seller, this Agreement shall not be terminated if, within fifteen (15) days
after Seller's receipt of such notice: (1) Seller remedies or agrees to remedy,
to a degree which is mutually agreed during the referenced fifteen (15) day
period, such Material Adverse Environmental Condition or Material Defect; or
(2) Seller and Buyer mutually agree on an adjustment to the Purchase Price.
F. Notwithstanding the above, if Buyer can provide substantiating evidence
that the Property is subject to Material Adverse Environmental Conditions or
Material Defects that, when totaled together, would expose Buyer to costs to
remedy or cure, or the potential for exposure for claims, damages, penalties
assessments or costs in excess of ten percent (10%) of the Purchase Price,
Buyer, in its sole discretion, may terminate this Agreement.
G. If Seller agrees to remedy any specific Material Adverse Environmental
Condition or Material Defect in the Property, then all negotiations and
contacts with state, federal and local agencies for approval and review of such
remedial action shall be made by Seller, and Buyer shall make no independent
contacts with any of the agencies relative to such remedial action. Buyer shall
receive copies of all correspondence between Seller and any agencies regarding
such remedial action.
Article 11
Title
A. At Closing, Seller shall grant, transfer, assign, convey, and deliver
to Buyer or the Companies, and Buyer shall accept from Seller, by means of a
Special Warranty Deed, and other Conveyance Documents, good and marketable
title to the Property, free and clear at Closing of any lawful claims of any
third party claiming by, through or under Seller, but not otherwise.
B. This Agreement is expressly conditioned upon Buyer's approval of
Seller's title to, ownership of, interest in, and right to possess the
Property. During the period commencing on the date of this Agreement and ending
twenty (20) days before Closing ("Title Examination Period"), Buyer and its
Affiliates and their employees, agents and contractors shall have full access
to and the right (subject to the executed Confidentiality Agreement) to examine
all of Seller's records relating to the Property, including but not limited to,
those listed on Exhibits "C-1" through "C-4" attached hereto, for all purposes
related to this transaction.
C. On or before the last day of the Title Examination Period, Buyer shall
give Seller written notice of the land and property interests included in the
Property which have a Significant Title Defect. Minor deviations in the
location of a Pipeline, relative to a defined Right-of-Way in an easement,
shall not be deemed to constitute a Significant Title Defect for purposes of
this Agreement. If any
12
Significant Title Defect cannot be or is not cured by Seller during the period
commencing upon the date of this Agreement and ending on or before the
Effective Date, Buyer may, at its election: (1) terminate this Agreement
without further obligation or liability by giving written notice to Seller any
time prior to Closing; (2) offer to acquire the Property, including the portion
affected by the Significant Title Defect, subject to the terms of this
Agreement, but at a reduced Purchase Price, which offer Seller may accept or
reject in its sole discretion; or (3) acquire the Property, including the
portion affected by the Significant Title Defect, without adjustment to the
Purchase Price.
Article 12
Seller's Responsibility for Claims Relating to the Property
A. Seller's Environmental Responsibilities shall be as follows:
(1) (a) Ongoing Remediation Sites. Seller agrees to retain full
responsibility for all costs, including capital, operating and maintenance
costs, incurred in connection with (i) any investigation or monitoring of
Environmental Conditions or (ii) any clean-up, remedial, removal or
restoration work of those Environmental Conditions, either of which is
ongoing on the Closing Date and that is required by any federal, state or
local governmental agency or political subdivision with applicable
jurisdiction because of the presence, suspected presence, release or
suspected release of a Hazardous Substance in the air, soil, surface water,
or groundwater on or emanating from the Property (hereinafter the "Ongoing
Remedial Work"). The Ongoing Remedial Work is listed in Section 12A. of the
Disclosure Statement. The performance of Ongoing Remedial Work will be by
the Seller, in the name of the Seller. The Seller will obtain all necessary
licenses, manifests, permits and approvals to perform such work. All
Ongoing Remedial Work and the disposal of all waste generated by the
Ongoing Remedial Work will be performed in accordance with all applicable
Laws. Buyer grants to Seller, at no cost to Seller, ingress, egress, access
to and use of lands (including land farming activities) and utilities,
including but not limited to, electricity and water, as needed by Seller to
complete any of the remedial activities described in Section 12A. (1)(a).
Seller's responsibility for sites listed in Section 12A of the Disclosure
Schedule shall terminate upon Seller's receipt from the applicable
regulatory agency of one of the following: (i) concurrence that remediation
efforts are complete and the site may be closed; (ii) No Further Action
Required letter; or (iii) concurrence with the results of Seller's Risk
Based Corrective Action Plan. For releases that were less than the
regulatory reporting threshold at the time of the release, Seller's
responsibility for these sites would terminate when laboratory results
indicate contamination concentrations are below agency clean up
requirements. Seller will conduct all communications concerning Seller's
remediation activities with all regulatory agencies having jurisdiction.
Seller will provide Buyer copies of all correspondence with the applicable
regulatory agency concerning Seller's active remediation sites, but Buyer
is prohibited from communicating with the regulatory agency concerning
Seller's remediation activities.
(b) Subsequent Spill on Ongoing Remediation Site. Should Buyer have a
reportable release that adversely impacts or affects Seller's Ongoing
Remedial Work, then Seller will transfer to Buyer the net present value of
the unexpended dollars remaining in the budgeted amount as listed in
Section 12A of the Disclosure Schedule for the specific Ongoing Remedial
Work at the site where Buyer's release occurred. Buyer shall thereafter
assume full responsibility for the Ongoing Remedial Work at the specific
site along with the remediation of Buyer's own
13
release. Buyer shall immediately indemnify Seller for anything relating to
the particular Ongoing Remedial Work under Sections 13A.(2) or 13C.
(2) Environmental Insurance. Seller will provide Buyer (at Seller's
expense) with an environmental insurance policy which will provide the
following coverages: (i) On-Site Clean Up of Unknown Pre-Existing
Conditions (Coverage A), (ii) Third Party claims for On-Site Bodily Injury
and Property Damage arising from Unknown Pre-Existing Conditions (Coverage
C), (iii) Off-Site Clean Up of Unknown Pre- Existing Conditions (Coverage
D) and (iv) Third Party claims for Off-Site Bodily Injury and Property
Damage arising from Unknown Pre-Existing Conditions (Coverage F). The Buyer
(and its general partner and Affiliates) as well as the Seller will be
named as named insureds under such policy. The limit of liability will be
$70,000,000 each incident/coverage section aggregate, with a deductible of
$100,000 each incident aggregated at $1,000,000 and having a $10,000
maintenance deductible each incident thereafter. In addition, the policy
will include environmental cost cap insurance to include coverage for
Clean-Up costs from identified pollutants within the Remediation Plan and
pollutants different than those in the Remediation Plan with a limit of
$5,000,000 each incident and in the aggregate applying to the Ongoing
Remedial Work for the benefit of Seller. The policies will have a ten (10)
year coverage term, with policy inception being the transaction closure
date. Specific coverage details may be reviewed within the insurance policy
provided at or within a reasonable period prior to Closing. A specimen of
such policy is attached hereto as Exhibit L.
(3) Post Closing Assessment. Buyer is prohibited (for purposes of
this Agreement) from conducting post closing environmental assessments,
except in those cases where a reasonably prudent pipeline operator, not
afforded the indemnities and insurance provided in this Agreement, would
conduct such assessments in the ordinary course of business or where
required by a regulatory agency having jurisdiction as a result of a post
Closing release on the Property. Should Buyer conduct a post Closing
environmental assessment (i) which is not in accordance with the provisions
of the environmental insurance policy referred to in Section 12A(2) of this
Agreement, (ii) in a case where a reasonably prudent pipeline operator, not
afforded the indemnities and insurance provided in this Agreement, would
not conduct such an assessment in the ordinary course of business or (iii)
where not required by a regulatory agency having jurisdiction as a result
of a post Closing release on the Property, the Buyer shall indemnify,
defend, and hold harmless the Buyer Indemnitees from any and all Claims
arising out of such post Closing environmental assessment.
B. SELLER'S GENERAL INDEMNITY OF BUYER. TO THE FULLEST EXTENT PERMITTED BY
LAW, BUT NO FURTHER, SELLER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS BUYER AND
ITS AFFILIATES, AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, OWNERS, EMPLOYEES,
TENANTS, CONTRACTORS, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF ANY OF THEM
("SELLER INDEMNITEES"), FROM ANY AND ALL LOSSES, LIABILITIES, LIENS,
ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES,
FINES, PENALTIES, OR EXPENSES, INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF
LITIGATION WHICH RESULT FROM INJURIES TO OR DEATH OF ANY PERSONS, OR DAMAGES TO
PROPERTY OF ANY KIND OR CHARACTER WHICH OCCUR PRIOR TO THE EFFECTIVE DATE AND
WHICH ARISE OUT OF, IN CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP,
POSSESSION, OPERATION, USE OR MAINTENANCE OF THE PROPERTY BY SELLER BEFORE THE
EFFECTIVE DATE; OR (2) THE MATERIAL BREACH BY SELLER OF ANY OF ITS OBLIGATIONS
OR REPRESENTATIONS HEREUNDER. SUCH
14
INDEMNIFICATION SHALL APPLY EVEN THOUGH THE INDEMNIFIED EVENT OR OCCURRENCE
ARISES FROM OR IS CAUSED BY THE CONCURRENT OR CONTRIBUTORY NEGLIGENCE, OR BOTH
(WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR FAULT OF BUYER, BUT
SUCH INDEMNIFICATION SHALL NOT APPLY IF CAUSED BY THE GROSS NEGLIGENCE OF
BUYER. THIS PARAGRAPH SHALL NOT APPLY TO ANY ENVIRONMENTAL LIABILITIES.
C. LIMITATION ON INDEMNITIES. (1) EXCLUDING THE INDEMNITIES REFERENCED IN
CLAUSE (2) BELOW, THE INDEMNITIES CONTAINED IN SECTION 12B. SHALL APPLY TO
MATTERS ACCRUING OR ARISING PRIOR TO THE EFFECTIVE DATE FOR WHICH SELLER HAS
RECEIVED NOTICE FROM BUYER WITHIN THREE (3) YEARS AFTER THE EFFECTIVE DATE AND
ARE SUBJECT TO A FIVE HUNDRED THOUSAND DOLLAR ($500,000.00) DEDUCTIBLE PER
CLAIM TO BE PAID BY BUYER AND A TOTAL AGGREGATE CAP OF ALL AMOUNTS TO BE PAID
BY SELLER OF TWENTY-FIVE MILLION DOLLARS ($25,000.000.00). EXCEPT WITH REGARD
TO THE INDEMNITIES REFERENCED IN CLAUSE (2) BELOW AND MATTERS COVERED BY
ARTICLE 6, SELLER SHALL NOT BE LIABLE TO ANY PERSON OR COMBINATION OF PERSONS
UNDER SECTION 12B. FOR MORE THAN TWENTY-FIVE MILLION DOLLARS ($25,000,000.00)
NOR SHALL SELLER HAVE ANY LIABILITY UNDER SECTION 12B. FOR ANY CLAIM FOR WHICH
SELLER HAS NOT RECEIVED NOTICE FROM BUYER WITHIN THE THREE (3) YEAR PERIOD
FOLLOWING THE EFFECTIVE DATE.
(2) THE INDEMNITIES CONTAINED IN SECTION 12B. FOR LOSSES, LIABILITIES,
LIENS, ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS,
CHARGES, FINES, PENALTIES OR EXPENSES WHICH RESULT FROM INJURIES TO OR DEATH OF
ANY PERSONS SHALL APPLY TO MATTERS ACCRUING OR ARISING PRIOR TO THE EFFECTIVE
DATE FOR WHICH SELLER HAS RECEIVED NOTICE FROM BUYER AT ANY TIME FOLLOWING THE
EFFECTIVE DATE AND ARE SUBJECT TO A CUMULATIVE DEDUCTIBLE OF FIVE MILLION
DOLLARS ($5,000,000) TO BE PAID BY BUYER.
(3) FOR PURPOSES OF THIS AGREEMENT, SECTIONS 12B. AND 12C. SHALL NOT APPLY
TO ANY CLAIM FOR PERSONAL INJURY OR DEATH THAT IS COVERED BY THE INSURANCE
PROVIDED PURSUANT TO SECTION 12A.(2).
D. Buyer's Participation in Legal Process. Buyer shall have the right at
all times to participate in the preparation for and conducting of any hearing
or trial related to the provisions of this Article 12B for which it would
receive indemnification, as well as the right to appear on its own behalf at
any such hearing or trial. Any such participation or appearance by Buyer shall
be at its sole cost and expense.
Article 13
Buyer's Responsibility for Claims Relating to the Property
A. Buyer's Environmental Responsibility shall be as follows:
(1) Future Remediation Sites. Regardless of when the release causing
the Environmental Condition occurred, Buyer agrees to accept full
responsibility for (i) any investigation or monitoring of Environmental
Conditions or (ii) any clean-up, remedial, removal or restoration
15
work of those Environmental Conditions, if any, either of which may be
necessary on or after the Effective Date and required by any federal, state
or local governmental agency or political subdivision with applicable
jurisdiction because of the presence, suspected presence, release or
suspected release of Hazardous Substances in the air, soil, surface water,
or groundwater on or emanating from the Property (hereinafter the "Future
Remedial Work"). With regard to any Environmental Condition attributable to
a post-closing release, Buyer shall pay all costs, including capital,
operating and maintenance costs. With regard to any Environmental Condition
attributable to a pre-closing release, the environmental insurance
described in 12A.(2) shall apply. The performance of any Future Remedial
Work will be by the Buyer, in the name of Buyer. The Buyer will obtain all
necessary licenses, manifests, permits and approvals to perform such work.
All Future Remedial Work and the disposal of all waste generated by the
Future Remedial Work will be in accordance with all applicable Laws. Except
as otherwise provided in this Agreement, Buyer does not assume any
responsibility for Ongoing Remedial Work as that work is set out in Section
12 A(1) above.
(2) ENVIRONMENTAL INDEMNITY. BUYER HEREBY AGREES TO INDEMNIFY, DEFEND
AND HOLD SELLER AND ITS AFFILIATES AND THE DIRECTORS, OFFICERS,
SHAREHOLDERS, OWNERS, EMPLOYEES, TENANTS, CONTRACTORS, ATTORNEYS, AGENTS,
SUCCESSORS AND ASSIGNS OF ANY OF THEM ("BUYER INDEMNITEES") HARMLESS FROM
ANY CLAIMS (INCLUDING WITHOUT LIMITATION THIRD PARTY CLAIMS FOR PERSONAL
INJURY, INCLUDING EXPOSURE, OR REAL OR PERSONAL PROPERTY DAMAGE), ACTIONS,
ADMINISTRATIVE PROCEEDINGS (INCLUDING INFORMAL PROCEEDINGS), JUDGMENTS,
DAMAGES, PUNITIVE DAMAGES, PENALTIES, FINES, COSTS, LIABILITIES (INCLUDING
SUMS PAID IN SETTLEMENT OF CLAIMS), INTEREST OR LOSSES, CONSULTANT FEES,
ATTORNEYS' FEES AND EXPERT FEES THAT ARISE DIRECTLY OR INDIRECTLY FROM OR
AS A RESULT OF THE EXISTENCE OF ENVIRONMENTAL CONDITIONS ACCRUING OR
ARISING ON OR AFTER THE EFFECTIVE DATE OR A VIOLATION OF APPLICABLE
ENVIRONMENTAL LAW IN CONNECTION WITH THE OPERATION OF THE PIPELINES BY
BUYER ON OR AFTER THE EFFECTIVE DATE. THIS SECTION 13A.(2) SHALL SURVIVE IN
PERPETUITY FROM AND AFTER THE EFFECTIVE DATE.
B. BUYER'S GENERAL INDEMNITY OF SELLER. TO THE FULLEST EXTENT PERMITTED
BY LAW, BUT NO FURTHER, BUYER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER
AND ITS AFFILIATES AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, OWNERS,
EMPLOYEES, TENANTS, CONTRACTORS, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF
ANY OF THEM ("BUYER INDEMNITEES") FROM ANY AND ALL LOSSES, LIABILITIES, LIENS,
ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES,
FINES, PENALTIES, OR EXPENSES (INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF
LITIGATION), WHICH RESULT FROM INJURIES TO OR DEATH OF ANY PERSONS, OR DAMAGES
TO PROPERTY OF ANY KIND OR CHARACTER WHICH OCCUR ON OR AFTER THE EFFECTIVE DATE
AND WHICH ARISE OUT OF, IN CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP,
POSSESSION, OPERATION, USE OR MAINTENANCE OF THE PROPERTY BY BUYER ON AND AFTER
THE EFFECTIVE DATE; OR (2) THE MATERIAL BREACH BY BUYER OF ANY OF ITS
OBLIGATIONS OR REPRESENTATIONS HEREUNDER. SUCH INDEMNIFICATION SHALL APPLY EVEN
THOUGH THE INDEMNIFIED EVENT OR OCCURRENCE ARISES FROM OR IS CAUSED BY THE
CONCURRENT OR CONTRIBUTORY NEGLIGENCE, OR
16
BOTH (WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR FAULT OF SELLER,
BUT SUCH INDEMNIFICATION SHALL NOT APPLY IF CAUSED BY THE GROSS NEGLIGENCE OF
SELLER. THIS PARAGRAPH SHALL NOT APPLY TO ENVIRONMENTAL LIABILITIES AS SET OUT
IN SECTION 13A.(2). THIS SECTION 13B. SHALL SURVIVE IN PERPETUITY FROM AND
AFTER THE EFFECTIVE DATE.
C. BUYER'S FURTHER INDEMNITY. EXCEPT AS OTHERWISE PROVIDED HEREIN, BUYER
FURTHER AGREES TO INDEMNIFY, DEFEND AND HOLD BUYER INDEMNITEES HARMLESS FROM
ANY CLAIMS (INCLUDING WITHOUT LIMITATION THIRD PARTY CLAIMS FOR PERSONAL
INJURY, INCLUDING EXPOSURE, DEATH OR REAL OR PERSONAL PROPERTY DAMAGE) ACTIONS,
ADMINISTRATIVE PROCEEDINGS, [INCLUDING INFORMAL PROCEEDINGS] JUDGMENTS,
DAMAGES, COSTS, LIABILITIES (INCLUDING SUMS PAID IN SETTLEMENT OF CLAIMS)
INTEREST OR LOSSES, CONSULTANT FEES, ATTORNEYS' FEES AND EXPERT FEES (1) FOR
WHICH SELLER DID NOT RECEIVE NOTIFICATION AS REQUIRED BY SECTION 12C(1) WITHIN
THREE (3) YEARS AFTER THE EFFECTIVE DATE, OR (2) WHICH ARE WITHIN BUYER'S PER
CLAIM DEDUCTIBLE SET FORTH IN SECTION 12C(1), OR (3) WHICH ARE WITHIN BUYER'S
CUMULATIVE DEDUCTIBLE SET FORTH IN SECTION 12C(2), OR (4) WHICH ARE COVERED BY
SECTION 12C(1) AND ARE IN EXCESS OF SELLER'S AGGREGATE CAP SET OUT IN SECTION
12.C(1). THIS SECTION 13C. SHALL SURVIVE IN PERPETUITY FROM AND AFTER THE
EFFECTIVE DATE.
D. NO PUNITIVE DAMAGES. THE FOREGOING INDEMNITIES BY BUYER UNDER THIS
ARTICLE 13 SHALL NOT COVER OR INCLUDE ANY PUNITIVE DAMAGES, PENALTIES OR FINES.
E. Seller's Participation in Legal Process. Seller shall have the right
at all times to participate in the preparation for and conduction of any
hearing or trial related to the provisions of this Article 13 for which it
would receive indemnification, as well as the right to appear on its own behalf
at any such hearing or trial. Any such participation or appearance by Seller
shall be at its sole cost and expense.
Article 14
Claims Procedure
All claims for indemnification by a Party under Articles 12 or 13 (the
Party claiming indemnification and the Party against whom such claims are
asserted being herein called the "Indemnified Party" and the "Indemnifying
Party", respectively) shall be asserted and resolved as follows.
A. In the event that any Claim for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a Third Person, such Indemnified Party
shall, within forty-five (45) calendar days of the receipt thereof, give notice
(the "Claim Notice") to the Indemnifying Party of such Claim specifying the
nature of and specific basis for such Claim and the estimated amount thereof,
to the extent then feasible, which estimate shall not be binding upon the
Indemnified Party in its effort to collect the final amount of such Claim. The
failure to give any such notice shall not affect the rights of the Indemnified
Party to indemnification hereunder unless the Indemnified Party has proceeded
to contest, defend or settle the
17
Claim with respect to which it has failed to give prior notice to the
Indemnifying Party. Additionally, to the extent the Indemnifying Party is
prejudiced thereby, the failure to so notify the Indemnifying Party of any such
Claim shall relieve the Indemnifying Party from liability that it may have to
the Indemnified Party under the indemnification provisions contained in Article
12 or Article 13, as applicable, but only to the extent of the loss directly
attributable to such failure to notify and shall not relieve the Indemnifying
Party from any liability that it may have to the Indemnified Party otherwise.
B. The Indemnifying Party shall be given the opportunity, at its cost and
expense, to contest and defend, by all appropriate legal Proceedings, any Claim
with respect to which it is called upon to indemnify the Indemnified Party
under the provisions of this Agreement; provided, however, that notice of the
intention to so contest and defend shall be delivered by the Indemnifying Party
to the Indemnified Party within thirty (30) calendar days following receipt of
the Claim Notice. If the Indemnifying Party does not give notice to the
Indemnified Party of its election to contest and defend any such Claim within
such period then the Indemnifying Party shall be bound by the result obtained
with respect thereto by the Indemnified Party and shall be responsible for all
costs incurred in connection therewith. The Claim which the Indemnifying Party
elects to contest and defend may be conducted in the name and on behalf of the
Indemnifying Party or the Indemnified Party as may be appropriate. Such Claim
shall be conducted by counsel employed by the Indemnifying Party who shall be
reasonably satisfactory to the Indemnified Party and the Indemnified Party
shall have the right to participate in such Claim and to be represented by
counsel of its own choosing at its own cost and expense. If the Indemnified
Party joins in any such Claim, the Indemnifying Party shall have full authority
to determine all action to be taken with respect thereto; provided that if the
Indemnifying Party reserves its rights with respect to its indemnification
obligations under this Agreement as to such Claim, then the Indemnified Party
shall have full authority to determine all action to be taken with respect
thereto. At any time after the commencement of defense of any Claim, the
Indemnifying Party may request the Indemnified Party to agree in writing to the
abandonment of such contest or to the payment or compromise by the Indemnifying
Party of the asserted Claim provided the Indemnifying Party agrees in writing
to be solely liable for all Losses relating to such Claim, whereupon such
action shall be taken unless the Indemnified Party determines that the contest
should be continued and notifies the Indemnifying Party in writing within
fifteen (15) calendar days of such request from the Indemnifying Party. In the
event that the Indemnified Party determines that the contest should be
continued, the amount for which the Indemnifying Party would otherwise be
liable hereunder shall not exceed the amount which the Indemnifying Party had
agreed to pay in payment or consideration of such Claim, provided the other
Party to the contested Claim had agreed in writing to accept such amount in
payment or compromise of the Claim as of the time the Indemnifying Party made
request therefor to the Indemnified Party, and further provided that under such
proposed compromise, the Indemnified Party would be fully and completely
released from any further liability or obligation with respect to the matters
which are the subject of such contested Claim.
C. If requested by the Indemnifying Party, the Indemnified Party agrees,
at the Indemnifying Party's expense, to cooperate with the Indemnifying Party
and its counsel in contesting any Claim that the Indemnifying Party elects to
contest, or, if appropriate and related to the Claim in question, in making any
counterclaim against the Person asserting the Third Person Claim, or any
cross-complaint against any Person other than an Affiliate of the Indemnified
Party.
D. If any Indemnified Party should have a Claim against the Indemnifying
Party hereunder that does not involve a Claim being asserted against or sought
to be collected from it by a Third Person, the Indemnified Party shall send a
Claim Notice with respect to such Claim to the Indemnifying Party. If
18
the Indemnifying Party disputes such Claim, such dispute shall be resolved in
the manner set forth in Article 35 hereof.
E. The Indemnified Party agrees to afford the Indemnifying Party and its
counsel the opportunity, at the Indemnifying Party's expense, to be present at,
and to participate in, conferences with all Persons asserting any Claim against
the Indemnified Party and conferences with representatives of, or counsel for,
such Persons.
F. Upon payment of the amount of any loss, liability, lien, encumbrance,
damage, judgment, demand, suit, claim, assessment, charge, fine, penalty or
expense (including attorneys' fees and other costs of litigation) by the Buyer
pursuant to this Agreement, the Seller shall assign to the Buyer and subrogate
the Buyer to, without payment of any further consideration, all rights and
remedies of the Seller in respect of the payment and shall provide all
reasonable cooperation and assistance required by the Buyer in making and
prosecuting a claim for recovery against any Person to the extent that payment
is made by Buyer. Seller may not take any action to impair any such right or
remedy of Buyer to recover any such payment made by Buyer. By way of
clarification, the provisions of this Section 14F shall apply (without
limitation) to amounts paid by Buyer pursuant to Articles 5, 13, 14 and 15.
Article 15
Incidental Contamination and NORM
Buyer acknowledges that the Property may contain inter alia asbestos in
pipe coating, undisplaced petroleum hydrocarbon products in pipelines, coats of
lead-based paints, PCB's in transformers, mercury in electrical switches, and
Naturally Occurring Radioactive Material ("NORM"). Buyer also expressly
understands that special procedures may be required for the remediation,
removal, transportation and disposal of these affixed or attached substances
from the inside or outside of the piping, Equipment or the Property.
Notwithstanding any contrary provision or definition contained herein, in
connection with these substances affixed to the inside or outside of the
piping, Equipment or the Property, Buyer expressly assumes all liability for or
in connection with the future abandonment and removal of the Pipelines and
other personal property included in the Property and the assessment,
remediation, removal, transportation and disposal of any such Pipelines and
personal property and associated activities in accordance with all relevant
rules, regulations and requirements of governmental agencies.
Article 16
Tariffs and Allocation of Carrier Obligations and Proceeds
A. Buyer agrees that, for a Pipeline which has tariffs on file with a
regulatory agency, it will either adopt the Seller's tariff or file its own to
be effective as of the Effective Date, if required by law to do so. If there is
a protest regarding Seller's cancellation of its tariff, as between Seller and
Buyer, Buyer will manage and direct the response to the protest with Seller's
cooperation. Seller will be responsible for all regulatory agency and Third
Person contacts.
B. The Pipelines contain crude oil which is held for the account of
shipper(s). It is understood that title to the contents of the Pipelines will
remain with the shipper(s) and that Buyer assumes the obligation to handle such
contents in accordance with applicable published tariff provisions. Further, to
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the extent that such crude oil has been tendered for shipment in the Pipelines
under an applicable published tariff, but not yet delivered, Buyer shall
receive that crude oil for transportation in accordance with applicable
published tariffs.
Article 17
Segregations
Buyer will continue the following segregation activities at Wasson and
Hendrick stations for a period of ten (10) years after the Closing at no cost
to Seller or any of its Affiliates.
A. Wasson Segregation: Tanks No. 340 and 818 at Wasson Station shall be
segregated and shall only receive crude commonly known as high gravity sour
crude from the Wasson Gathering System and the Northwest Seminole System. The
gravity of this crude is currently 34 deg API or greater. If nominated in a
sufficient quantity by a shipper, the crude shall be batched to Basin via the
Wasson to Jal line and batched on the Basin pipeline for delivery at Cushing.
B. Hendrick Segregation: Tank No. 256 shall be segregated to receive crude
from the TXL gathering system via Wheeler to the Hendrick pipeline system. The
crude which shall continue to be segregated at Hendrick is commonly referred to
as low sulfur sour crude. If nominated by a shipper, the crude shall be
delivered to Plains All American's Wink Station via the Shell Pipeline 6/8"
pipeline which is one of the Pipelines being sold in this transaction.
C. If neither Seller nor any Affiliate of Seller utilizes the segregated
tank capacity under clause A or B above for a period of 12 consecutive months,
then the rights granted to Seller under such clause A or B (as applicable)
shall terminate.
Article 18
Cooperation
From the date of this Agreement, the Parties shall execute and deliver such
additional documents and shall use all Reasonable Efforts: (1) to take or cause
to be taken all such actions as may be necessary or advisable to close and make
effective this transaction, (2) upon the request of Buyer, after Closing,
Seller shall assist in obtaining consents from Third Persons which are
necessary or appropriate to transfer any portion of the Property, (3) upon the
request of Buyer, assist Buyer in arranging meetings with managerial and
supervisory personnel and employees of Seller engaged in the business conducted
in connection with the Property for the purposes of Buyer describing employment
opportunities with Buyer and Buyer determining to whom it may elect to submit
employment offers, such assistance to include the distribution of notices
prepared by Buyer notifying the employees and/or the collective bargaining
representatives of the time, date and location of such meetings, (4) upon
request by Buyer, to assist Buyer in making presentations to the Texas Railroad
Commission regarding the extension of the time periods for any required testing
of the pipelines included in the Property by making available for attendance at
such meetings the appropriate personnel with the requisite level of knowledge
about such pipelines, (5) upon request by Buyer, to assist Buyer in contacting,
following the expiration of the Review Period, the other owners of the Basin
and Rancho pipeline systems for the purposes of facilitating Buyer succeeding
to Seller's status as operator, and (6) upon or after the Closing, upon request
of Buyer to resign as operator of the Basin and Rancho pipeline systems. It
shall
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be Buyer's responsibility to obtain all governmental and Third Person consents
and approvals necessary for the issuance, reissuance or transfer of
environmental and land use permits, applications, Rights -of-Way, authorities
to construct, Permits to operate, authorizations and licenses used or held by
Seller or otherwise required in connection with the ownership, operation, use
and maintenance of the Property. After Closing, each Party, at the request of
the other Party, and without additional consideration, shall execute and
deliver, from time to time, such additional documents of conveyance and
transfer as may be necessary to accomplish the orderly transfer of the Property
to Buyer in the manner contemplated in this Agreement.
Article 19
Survival of Provisions
All representations and warranties, covenants of the Parties and the
indemnification obligations of the Parties set forth in this Agreement shall
survive the Closing.
Article 20
Costs and Expenses
Except as otherwise expressly provided herein, each Party shall bear and
pay its own costs and expenses, including but not limited to attorneys' fees,
incurred in connection with this transaction.
Article 21
Risk of Loss
The risk of damage, destruction, or other Casualty Loss to or of the
Property shall remain with Seller from and after the execution of this
Agreement until the Effective Date, at which time Seller shall place Buyer in
possession of the Property; and from and after the Effective Date, all risks of
damage, destruction, or other Casualty Loss to or of the Property shall be
borne solely by Buyer.
Article 22
Joint Venture, Partnership and Agency
Nothing contained in this Agreement shall be deemed to create a joint
venture, partnership, tax partnership or agency relationship between the
Parties.
Article 23
Files and Records
Not later than sixty (60) calendar days after Closing, Seller shall deliver
to Buyer originals of the files, records, documents and data referred to in
Section 1.A.7. If this transaction is not closed as to any portion of the
Property, all originals or copies of files, records and documents referred to
in Section 1.A.7, obtained from Seller in connection with the exercise of
Buyer's Pre-Acquisition Review, and related solely to that portion of the
Property not transferred as contemplated herein, shall be returned to Seller
within five (5) calendar days after Closing.
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Article 24
Publicity
Seller and Buyer shall, and each shall use its reasonable efforts to cause
its Affiliates to, cooperate in the development and distribution of all news
releases and other public disclosures, irrespective of the form of
communication, relating to the proposed transaction described in this
Agreement, and to ensure that no such releases or disclosures are made without
prior notice to, and the prior written consent of, the other Party; provided,
however, no news release or other disclosure whatsoever may disclose the terms
of this Agreement unless both Parties agree to the form and content of such
disclosure, including electronic communications, each being under no obligation
to agree and having the right to withhold agreement for any reason; provided,
however, that either Party may make all disclosures which, in the written
opinion of counsel, are required under applicable Law, including, but not
limited to, regulations of the Securities and Exchange Commission, with the
Party making the disclosure giving the other Party as much advance notice
thereof as is feasible.
Article 25
Recording and Filing
Except as may be required by Law, this Agreement shall not be recorded or
filed by either Party, or their successors or assigns, in or with any public or
government office, officer, agency or records repository without the prior
written consent of the other Party.
Article 26
Confidentiality
Seller and Buyer (and their respective Affiliates) each acknowledge that
the information and material, in whatever form, including, but not limited to,
this Agreement and the Exhibits, Annex and Disclosure Schedule (collectively,
the "Confidential Information") disclosed or made available to it by, and
relating to the other (and its Affiliates) prior to the Effective Date is
confidential. Seller and Buyer (and their respective Affiliates) each further
agree that it shall use reasonable efforts not to make disclosure of the
Confidential Information to any Person, irrespective of the form of
communication, other than its members or owners, officers, employees, advisers
and representatives to whom such disclosure is necessary or convenient for (i)
the completion of the transaction contemplated by this Agreement, (ii) as
required to convey title, (iii) as required by Law, including regulations of
the Securities and Exchange Commission (iv) in an arbitration proceeding as
described in Article 35 or (v) as may be required by a court of competent
jurisdiction. Seller and Buyer (and their respective Affiliates) shall each
appropriately notify each officer, employee, adviser and representative to whom
any such disclosure is made, that such disclosure is made in confidence and
shall be kept in confidence.
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Article 27
Notices
All notices and consents required or authorized hereunder shall be in
writing and shall be deemed to have been duly given by one Party if delivered
personally, faxed with receipt acknowledged, mailed by registered or certified
mail, delivered by a recognized commercial courier or otherwise actually
received by the other Party at the address set forth below, or such other
address as one Party shall have designated by ten (10) calendar days prior
written notice to the other Party:
Buyer's Address: Seller's Address:
---------------- -----------------
Plains All American Pipeline, L.P. Shell Pipeline Company LP
333 Clay Street, Suite 1600 777 Walker Street
Houston, Texas 77002 Houston, Texas 77002
Attn: Harry N. Pefanis Attn: Arlene Warden
Telephone: (713) 646-4242 Telephone: (713) 241-4492
Fax: (713) 646-4378 Fax: (713) 241-7643
With a copy to:
Plains All American Pipeline, L.P.
333 Clay Street, Suite 1600
Houston, Texas 77002
Attn: Lawrence J. Dreyfuss
Telephone: (713) 646-4143
Fax: (713) 646-4216
Article 28
Time of Performance
Time is of the essence in the performance of all covenants and obligations
under this Agreement.
Article 29
Entire Agreement
This Agreement constitutes the entire agreement between the Parties with
respect to this transaction and supersedes all prior negotiations, statements,
representations, discussions, correspondence, offers, agreements, and
understandings relating to this transaction. This Agreement may be modified,
amended or supplemented only upon the prior written agreement of the Parties.
Article 30
Assignment
Buyer may not sell, assign, transfer, or convey, option, mortgage, pledge
or hypothecate its rights and obligations hereunder to any Third Person without
the prior written consent of Seller, which consent shall not be unreasonably
withheld, other than the pre-existing security agreements in favor of the
lenders under Buyer's senior secured credit facility which do not have a
detrimental effect on
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Seller. Upon any authorized sale, assignment, transfer, conveyance, option,
mortgage, pledge or hypothecation hereunder, all of the terms, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Buyer, but Buyer shall remain liable
for the performance of its obligations hereunder. In connection with Closing,
Buyer shall have the right to designate one or more of its Affiliates to be the
transferee under the Conveyance Documents.
Article 31
Crude Oil Inventory
The Pipelines will be gauged at 7:00 a.m. local time on the Effective Date,
at which time the custody of all shippers' oil will be transferred to Buyer,
and Buyer shall become responsible to each shipper for oil in Buyer's custody.
The inventory will be determined by the inventory determination procedure
contained in Exhibit "K" attached hereto and the quantity and quality of the
crude oil in Seller's possession shall be accurately set forth on the final
shipper's statements. At the time of the transfer of custody of the shippers'
oil, Seller shall become a shipper of any allowance oil or other oil held in
inventory for Seller which remains in the Pipelines on the Effective Date.
Article 32
Applicable Law
THIS AGREEMENT, OTHER DOCUMENTS EXECUTED AND DELIVERED PURSUANT HERETO, AND
THE LEGAL RELATIONS BETWEEN THE PARTIES WITH RESPECT TO THIS AGREEMENT, SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO RULES CONCERNING CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE
PERFORMED IN HARRIS COUNTY, TEXAS.
Article 33
Headings
The headings used in this Agreement are inserted for convenience only and
shall be disregarded in construing it.
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Article 34
Exhibits
The Exhibits, Annex, and Schedule listed below are attached to this
Agreement and by this reference are fully incorporated herein:
Annex A Definitions
Exhibits "A" & "A-1-A-4" Pipelines
Exhibits "B-1-B-4" Real Property
Exhibits "C-1-C-4" Rights-of Way and Permits
Exhibits "D-1-D-4" Assigned Contracts
Exhibits "E-1-E-4" Equipment
Exhibits "F-1-F-4" Excluded Assets
Exhibit "G" Purchase Price Allocation
Exhibit "H" Assignment [Partial Assignment]
Exhibit "I" Special Warranty Deed
Exhibit "J" Bill of Sale
Exhibit "K" Inventory Determination Procedure
Exhibit "L" Specimen Insurance Policy
Exhibit "M" Form of Consent to Assignment
Disclosure Schedule
Article 35
Dispute Resolution
Any dispute, controversy or claim ("Dispute"), whether based on contract,
tort, statute or other legal or equitable theory (including, but not limited
to, any Dispute concerning fraud, misrepresentation, or fraudulent inducement
or any question of validity or effect of this Agreement, including this clause)
arising out of or related to this Agreement (including any amendments or
extensions) the breach or termination hereof or thereof, shall be settled by
arbitration in accordance with the then current CPR Institute for Dispute
Resolution Rules for Non-Administered Arbitration of Business Disputes and this
provision The arbitration shall be governed by the United States Arbitration
Act 9 U.S.C.(S)(S)1-16 to the exclusion of any provision of state law
inconsistent therewith or which would produce a different result and judgment
upon the award rendered by the arbitrator may be entered by any court having
jurisdiction.
Article 36
Other Provisions
A. Transition Services. Seller will assist and cooperate with Buyer in
order to effectuate an orderly transition. Upon Buyer's request, and at Buyer's
expense, Seller will provide transition services, to the extent it can perform
these services requested by Buyer, including services relating to the
operatorship of the Basin or Rancho pipeline systems if Buyer encounters
problems in succeeding to Seller's position as operator of those systems for a
period not to exceed six (6) months. The transition services shall include
monitoring and control services, joint interest accounting services, field
operations as needed, and such other services as may be reasonably requested by
Buyer which can
25
be performed by Seller. At the Closing Seller and Buyer shall execute an
agreement covering such transition services, which agreement shall be in form
and content reasonably satisfactory to Seller and Buyer.
B. Records. Notwithstanding the inclusion of certain records, files and
other data in the Property under Article 1, Seller shall have the right to copy
and retain any copies of records, files and other data relating to the Property
for which it has, or may have, any business, technical or legal need. To the
extent that those records, files and other data or any other information made
available to Buyer before or after the Closing contain proprietary business or
technical information of Seller or its Affiliates, Buyer agrees to hold such
records, files and other data in confidence and limit their use to the Property.
Buyer shall not destroy or otherwise dispose of any records, files and
other data acquired hereunder for a period of three (3) years following the
Closing (except as to Tax records for which the period shall be the applicable
statute of limitations) except upon thirty (30) days prior written notice to
Seller. During such periods, Buyer shall make such records, files and other
data available to Seller or its authorized representatives for any business,
legal or technical need in a manner which does not unreasonably interfere with
Buyer's business operations.
C. No Third Person Beneficiaries. Except to the extent a Third Person is
expressly given rights herein, any agreement contained, expressed or implied in
this Agreement shall be only for the benefit of the Parties hereto and their
respective legal representatives, successors and permitted assigns, and such
agreements shall not inure to the benefit of the obligees of any indebtedness
of either Party hereto, it being the intention of the Parties hereto that no
Person shall be deemed a Third Person beneficiary of this Agreement, except to
the extent a Third Person is expressly given rights herein. Notwithstanding
anything herein to the contrary, nothing herein shall be deemed to create any
rights with respect to any employee of either Party or any employee of any
Affiliate of a Party, except as expressly provided herein with respect to an
Indemnified Party under Article 12 or Article 13.
D. Counterparts and Facsimiles. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument. A facsimile transmission of a
signed copy of this Agreement shall be deemed an original and shall have the
same valid and binding effect thereof.
E. Governing Agreement. In the event of a conflict between the terms of
this Agreement and the terms of any other documents (including the Conveyance
Documents) delivered pursuant to the terms hereto, this Agreement shall prevail
and the terms of this Agreement shall not be merged into or superseded by any
Conveyance Documents.
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
SHELL PIPELINE COMPANY LP
/s/ Stacy Methvin
By:________________________________
Title: President
EQUILON ENTERPRISES LLC DBA
SHELL OIL PRODUCTS US
/s/ Rob J. Routs
By:________________________________
Title: President
PLAINS ALL AMERICAN PIPELINE, L. P.
By Plains AAP, L. P.
Its General Partner
By Plains All American GP LLC
Its General Partner
/s/ Harry N. Pefanis
By:________________________________
Title: President
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