SHARE PURCHASE AGREEMENT
Relating to the Acquisition of
BUCKEYE MANAGEMENT COMPANY
by
BMC ACQUISITION COMPANY
Dated: January 5, 1996
TABLE OF CONTENTS
Page
ARTICLE 1 SALE AND PURCHASE OF SHARES 1
1.1 Sale and Purchase of the Shares 1
1.2 The Purchase Price 1
ARTICLE 2 THE CLOSING 2
2.1 Closing Date 2
2.2 Deliveries 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDER 2
3.1 Organization and Standing 2
3.2 Capitalization and Share Ownership 3
3.3 Authority and Binding Effect 3
3.4 Validity of Contemplated Transactions 3
3.5 Subsidiaries 4
3.6 Taxes 4
3.7 No Material Undisclosed Facts 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE BUYER 5
4.1 Organization and Standing 5
4.2 Authority and Binding Effect 5
4.3 Validity of Contemplated Transactions 5
4.4 Purchase for Investment 6
4.5 Available Financing 6
4.6 Financial Projections 6
4.7 Investigation and Evaluation 6
4.8 Securities Law Matters 7
ARTICLE 5 CERTAIN COVENANTS 8
5.1 Conduct of Business Pending Closing 8
5.2 Approvals 9
5.3 Confidential Information. 9
5.4 Public Announcements 10
5.5 Tax Matters 10
5.6 Audit Adjustments. 12
5.7 Certain Employee Benefit Arrangements 13
5.8 Insurance Arrangements 14
5.9 NJ Environmental Liabilities 16
5.10 Prudential Financing and Special Committee
Approval 17
5.11 No Solicitation of Transactions 17
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
BUYER 18
6.1 Representations and Warranties 18
6.2 Performance by the Shareholder 18
6.3 Certificates 18
6.4 Intentionally Omitted 18
6.5 Litigation Affecting Closing 18
6.6 Regulatory Compliance and Approvals 18
6.7 Consents 19
6.8 Financing 19
6.9 Special Committee 19
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SHAREHOLDER 19
7.1 Buyer Representations True at Closing 19
7.2 Performance by the Buyer 19
7.3 Officer's Certificate 19
7.4 Demand Notes 20
7.5 Incumbency Certificate 20
7.6 Opinion of Counsel 20
7.7 Litigation Affecting Closing 20
7.8 Regulatory Compliance and Approval 20
7.9 Special Committee 20
ARTICLE 8 MISCELLANEOUS 20
8.1 No Survival of Representation and Warranties 20
8.2 Payment of Expenses 21
8.3 Termination 21
8.4 Brokers' and Finders' Fees 21
8.5 Assignment and Binding Effect 22
8.6 Waiver 22
8.7 Notices 22
8.8 Pennsylvania Law to Govern 23
8.9 Remedies Not Exclusive 23
8.10 No Benefit to Others 23
8.11 Contents of Agreement 23
8.12 Section Headings and Gender 24
8.13 Cooperation 24
8.14 Severability 24
8.15 Counterparts 24
Annex I Certain Defined Terms
Schedule 4.1 List of Common Stock Subscribers
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT is dated as of January 5,
1996. The parties are PENNSYLVANIA COMPANY, a Delaware
corporation (the "Shareholder"), being the owner of all of the
issued and outstanding shares of capital stock of BUCKEYE
MANAGEMENT COMPANY, a Delaware corporation (the "Company"), and
BMC ACQUISITION COMPANY, a Delaware corporation (the "Buyer").
PREAMBLE
The Shareholder owns 1,000 shares of Common Stock, par
value $1.00 per share (the "Common Stock"), of the Company which
constitutes all of the issued and outstanding shares of capital
stock of the Company (the "Shares"). The Buyer desires to
purchase from the Shareholder, and the Shareholder desires to
sell to the Buyer, all of the Shares in exchange for the Purchase
Price in accordance with the terms and conditions set forth in
this Agreement. The parties hereto have determined to make an
election under Section 338(h)(10) of the Internal Revenue Code of
1986, as amended and in effect on the date hereof (the "Code"),
to have the purchase and sale of the Shares hereunder treated for
Federal income tax purposes as a purchase of assets by the Buyer
from the Shareholder.
For convenience and brevity, certain terms used in
various parts of this Agreement are listed in alphabetical order
and defined or referred to on Annex I hereto (such terms to be
equally applicable to both singular and plural forms of the terms
defined).
NOW, THEREFORE, in consideration of the respective
covenants, representations and warranties herein contained, and
intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES
1.1 Sale and Purchase of the Shares. On the Closing
Date and subject to the terms and conditions hereinafter set
forth and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth
herein, the Shareholder shall sell to the Buyer and the Buyer
shall purchase from the Shareholder all of the Shares in exchange
for the payment to the Shareholder of the Purchase Price.
1.2 The Purchase Price. On the Closing Date and
subject to the terms and conditions hereinafter set forth and on
the basis of and in reliance upon the representations,
warranties, obligations and agreements set forth herein, the
Buyer shall pay to the Shareholder $63,000,000 (the "Purchase
Price"), payable by wire transfer of immediately available funds
to such account as the Shareholder shall designate.
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ARTICLE 2
THE CLOSING
2.1 Closing Date. The Closing (the "Closing") of the
sale and purchase of the Shares shall take place at the offices
of Morgan, Lewis & Bockius LLP, 2000 One Logan Square,
Philadelphia, Pennsylvania at 10:00 A.M. local time, on the later
of (i) March 8, 1996, (ii) the fifth business day following the
satisfaction or waiver of all of the conditions set forth in
Articles 6 and 7 hereof, or (iii) at such other time or place or
on such other date as the Buyer and the Shareholder may agree to
in writing. The date of the Closing is hereinafter sometimes
referred to as the "Closing Date." The Closing shall be deemed
to have occurred as of the close of business on the Closing Date.
2.2 Deliveries. At the Closing, subject to the
provisions of this Agreement, the Shareholder shall deliver to
the Buyer, free and clear of all Liens, the certificates for the
Shares to be sold by such Shareholder, duly endorsed in blank, or
with separate stock transfer powers attached thereto and signed
in blank, and the Buyer shall deliver to the Shareholder the
Purchase Price by wire transfer of immediately available funds.
At the Closing, the Shareholder shall also deliver to the Buyer,
and the Buyer shall deliver to the Shareholder, the certificates,
opinions and other instruments and documents referred to in
Articles 6 and 7. The Buyer and the Shareholder shall deliver
executed copies of IRS Form 8023 making the joint election under
Section 338(h)(10) of the Code, and in the case of the Buyer the
election under Section 338(g) of the Code to allow the election
under Section 338(h)(10) of the Code to be made. The parties
shall cooperate with each other to reach agreement upon a
schedule of the allocation of the Purchase Price to be attached
to the IRS Form 8023 by each of the Buyer and the Shareholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder hereby represents and warrants to the
Buyer that:
3.1 Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, having full corporate
power and authority to carry on its business as it is now being
conducted and to own, lease and operate its assets. The Company
is duly qualified to do business and is in good standing in every
jurisdiction in which its business or the character of its assets
requires such qualification and in which the failure to be so
qualified would have a Company Material Adverse Effect.
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3.2 Capitalization and Share Ownership. The Company's
authorized capital stock consists of 1,000 shares of Common
Stock, par value $1.00 per share, of which 1,000 shares are
presently outstanding (previously defined as the "Shares"), which
Shares are owned by the Shareholder free and clear of any Liens.
All of the Shares have been duly authorized and validly issued,
are fully paid and nonassessable, were not issued in violation of
the terms of any Contract binding upon the Company, and were
issued in compliance with all applicable charter documents of the
Company. No equity securities of the Company, other than the
Shares, are issued or outstanding. There are, and have been, no
preemptive rights with respect to the issuance of the Shares.
There are no existing Contracts, subscriptions, options,
warrants, calls, commitments or rights of any character to
purchase or otherwise acquire any capital stock or other
securities of the Company, whether or not presently issued or
outstanding, from the Shareholder or the Company, at any time, or
upon the happening of any stated event.
3.3 Authority and Binding Effect. The Shareholder has
the full corporate power, authority and legal right to execute,
deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by the Shareholder has been duly
authorized by all necessary corporate and shareholder action.
This Agreement has been, and the other agreements, documents and
instruments required to be delivered by the Shareholder in
accordance with the provisions hereof (the "Shareholder
Documents") will be, duly executed and delivered on behalf of the
Shareholder by duly authorized officers of the Shareholder, and
this Agreement constitutes, and the Shareholder Documents will
constitute, the legal, valid and binding obligations of the
Shareholder, enforceable against the Shareholder in accordance
with their respective terms, except as may be limited by
bankruptcy or insolvency laws and other similar laws or equitable
principles affecting rights of creditors generally.
3.4 Validity of Contemplated Transactions. Neither
the execution and delivery of this Agreement by the Shareholder
nor the consummation of the transactions contemplated hereby will
contravene or violate the charter documents or by-laws of the
Shareholder or the Company or any Regulation or Court Order which
is applicable to the Company or the Shareholder, or will result
in a Default under, or require the consent or approval of any
party to, any material Contract relating to its business or its
assets or to or by which the Company or the Shareholder is a
party or otherwise bound or affected, or, to the Shareholder's
knowledge based upon oral opinions of counsel, require the
Company or the Shareholder to notify or obtain any License from
any federal, state, local or other court or governmental agency
or body or from any other regulatory authority, except for public
utility commission or environmental approvals required to be
obtained by the Company.
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3.5 Subsidiaries. Except for interests in Buckeye
Pipe Line Company, a Delaware corporation (the "Management
Subsidiary"), and the Master Partnership, and the interests of
the Management Subsidiary in each of the Operating Partnerships,
neither the Company nor the Management Subsidiary has any
subsidiaries or stock or other equity or ownership interest
(whether controlling or not) in any corporation, association,
partnership, limited liability company, joint venture or other
entity. The Company owns of record and beneficially (i) all of
the issued and outstanding capital stock of the Management
Subsidiary free and clear of any Liens, and (ii) a 1% general
partnership interest in the Master Partnership in accordance with
the Master Partnership Agreement. The Company is the general
partner of the Master Partnership. The Management Subsidiary
owns of record and beneficially a 1% general partnership interest
in each of the Operating Partnerships in accordance with the
Operating Partnership Agreements related thereto and a .99%
limited partnership interest in Buckeye Pipe Line Company of
Michigan, L.P. pursuant to its Operating Partnership Agreement.
The Management Subsidiary is the sole general partner of the
Operating Partnerships. There are: (a) no existing Contracts,
subscriptions, options, warrants, calls, commitments or rights of
any character to purchase or otherwise acquire from the Company
or the Management Subsidiary at any time, or upon the happening
of any stated event, any capital shares or other securities of
the Company, the Management Subsidiary, the Master Partnership,
or the Operating Partnerships, whether or not presently issued or
outstanding; (b) no outstanding securities of the Management
Subsidiary that are convertible into or exchangeable for capital
shares or other securities of the Management Subsidiary; and (c)
no Contracts, subscriptions, options, warrants, calls,
commitments or rights to purchase or otherwise acquire from the
Company or the Management Subsidiary any such convertible or
exchangeable securities.
3.6 Taxes. All United States Federal income tax
returns and all other material tax returns which are required to
be filed with respect to the Company and the Management
Subsidiary have been filed (except in instances in which there is
an effective extension of the time in which to file a tax return)
and all taxes due with respect thereto or pursuant to any
assessment with respect to the Company or the Management
Subsidiary have been paid, except for assessments the validity of
which is being contested in good faith by appropriate
proceedings.
3.7 No Material Undisclosed Facts. The Shareholder
has not omitted to disclose to the Buyer any material fact with
respect to the Company or the Management Subsidiary, actually
known by the Shareholder which is not known to the Company or the
Management Subsidiary.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Company
and the Shareholder as follows:
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4.1 Organization and Standing. The Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware, having all requisite corporate power
and authority to perform its obligations under this Agreement.
As of the date hereof, the Buyer has received legally binding
subscriptions from the persons listed on Schedule 4.1 to
contribute not less than $5 million to the Company on or before
the Closing Date in return for common stock of the Buyer. (In
the case of Alfred W. Martinelli, his subscription is subject to
financing to be provided by the Shareholder or its affiliates in
the event that the Closing Date occurs prior to March 13, 1996.)
The Buyer has no assets or liabilities except for its rights and
obligations under this Agreement, the subscriptions and
Prudential Commitment Letter.
4.2 Authority and Binding Effect. The Buyer has the
corporate power and authority to execute, deliver and perform
this Agreement and the other agreements, documents and
instruments required to be delivered by the Buyer in accordance
with the provisions hereof (the "Buyer Documents"), and has taken
all actions necessary to secure all approvals required in
connection therewith. The execution, delivery and performance of
this Agreement and the Buyer Documents by the Buyer has been duly
authorized by all necessary corporate and shareholder action.
This Agreement has been, and the Buyer Documents will be, duly
executed and delivered on behalf of the Buyer by duly authorized
officers of the Buyer, and this Agreement constitutes, and the
Buyer Documents will constitute, the legal, valid and binding
obligation of the Buyer, enforceable against it in accordance
with their respective terms, except as may be limited by
bankruptcy or insolvency and other similar laws or equitable
principles affecting rights of creditors generally.
4.3 Validity of Contemplated Transactions. Neither
the execution and delivery of this Agreement by the Buyer nor the
consummation of the transactions contemplated hereby by the Buyer
will contravene or violate any Regulation or Court Order which is
applicable to the Buyer, or the charter documents or By-Laws of
the Buyer, or will result in a Default under any Contract to
which the Buyer is a party or by which it is otherwise bound, or
require the Buyer to notify or obtain any License from any
federal, state, local or other court or governmental agency or
body or from any other regulatory authority.
4.4 Purchase for Investment. The Buyer is acquiring
the Shares solely for its own account for investment and not with
a view to or for the sale or distribution thereof. The Buyer
acknowledges that the Shares are not registered under the
Securities Act of 1933, as amended, and that such Shares may not
be transferred or sold except pursuant to the registration
provisions of the Securities Act or pursuant to an applicable
exemption therefrom.
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4.5 Available Financing. The Buyer has delivered to
the Shareholder a commitment letter (the "Prudential Commitment
Letter") from Prudential Capital Group to lend the Buyer up to
$63,000,000 to purchase the Shares. The Buyer has no reason to
believe that Prudential Capital Group and the Buyer will not be
able to reach agreement on the form and substance of a definitive
agreement reflecting the terms of the Prudential Commitment
Letter or that all conditions precedent to the obligations of
Prudential Capital Group contained therein or in the Prudential
Commitment Letter will not be satisfied.
4.6 Financial Projections. The Buyer has provided to
the Shareholder financial projections for the Buyer, the Company,
and the Management Subsidiary, supported by a cost reduction
proposal, which reflects the financial impact of the Company's
results of operations, reimbursements from the Master Partnership
and Operating Partnerships, sources of expense savings, repayment
of the financing described in the Prudential Commitment Letter,
and the payment by the Buyer, the Company and the Management
Subsidiary of their obligations as they become due (the
"Financial Information"). The Buyer represents that (i) such
Financial Information was prepared in good faith, (ii) the Buyer
reasonably believes the assumptions upon which the projections
contained in the Financial Information are based are reasonable
and (iii) the Buyer currently intends to operate the Company and
the Management Subsidiary in a manner consistent in all material
respects with the assumptions contained in the Financial
Information.
4.7 Investigation and Evaluation. The Buyer
acknowledges that (a) the Buyer is experienced in the operation
of the type of business conducted by the Company, the Management
Subsidiary, the Master Partnership and the Operating
Partnerships, (b) the Buyer and its directors, officers,
attorneys, accountants and advisors have been given the
opportunity to examine to the full extent deemed necessary by the
Buyer all books, records and other information with respect to
the Company, the Management Subsidiary, the Master Partnership
and the Operating Partnerships, (c) the Buyer has taken full
responsibility for determining the scope of its investigations of
the Company, the Management Subsidiary, the Master Partnership
and the Operating Partnerships, and for the manner in which such
investigations have been conducted, and has examined the Company,
the Management Subsidiary, the Master Partnership and the
Operating Partnerships to the Buyer's full satisfaction, (d) the
Buyer is fully capable of evaluating the adequacy and accuracy of
the information and material obtained by the Buyer in the course
of such investigations, (e) the Buyer has not relied on the
Shareholder with respect to any matter in connection with the
Buyer's evaluation of the Company, the Management Subsidiary, the
Master Partnership and the Operating Partnerships, other than the
representations and warranties specifically set forth in Article
3, and (f) the Shareholder is making no representations or
warranties, express or implied, of any nature whatever with
respect to the Company, the
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Management Subsidiary, the Master Partnership and the Operating
Partnerships, other than the representations and warranties of
the Shareholder specifically set forth in Article 3. The Buyer
acknowledges that (a) the Buyer has taken full responsibility for
evaluating the adequacy, completeness and accuracy of various
forecasts, projections, opinions and similar material heretofore
furnished by the Shareholder, its affiliates or their
representatives to the Buyer in connection with the Buyer's
investigations of the Company, the Management Subsidiary, the
Master Partnership, and the Operating Partnerships and their
respective businesses, assets and liabilities; (b) there are
uncertainties inherent in attempting to make projections and
forecasts and render opinions, the Buyer is familiar with such
uncertainties, and the Buyer is not relying on any projections,
forecasts or opinions furnished to it by the Shareholder, or any
affiliate thereof or any of their representatives; and (c)
neither the Shareholder nor any affiliate of the Shareholder
makes any representations or warranties concerning any such
forecasts or projections.
4.8 Securities Law Matters. To the knowledge of the
Buyer, neither this Agreement, nor any other agreement, document,
certificate or written statement furnished to the Buyer by or on
behalf of the Shareholder in connection with the transactions
contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading. The
Buyer, for itself, its employees, shareholders and affiliates,
irrevocably acknowledges and confirms that the Shareholder has
complied in all respects with its obligations to the Buyer, if
any, under Rule 10b-5 under the Securities Exchange Act of 1934,
as amended, and under all other federal and state securities laws
in connection with the transactions contemplated hereby.
ARTICLE 5
CERTAIN COVENANTS
5.1 Conduct of Business Pending Closing. Until the
Closing Date, except as may be approved by the Buyer in writing
or as otherwise provided in this Agreement, the Shareholder shall
use its reasonable efforts (subject to the fiduciary duty of the
Company and the Management Subsidiary to the Master Partnership
and the Operating Partnerships) to cause the Company and the
Management Subsidiary to:
(A) operate the business of the Company, the
Management Subsidiary, the Master Partnership and the Operating
Partnerships solely in the ordinary course and in substantially
the same manner as such business has been operated in the past;
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(B) not issue, repurchase or redeem or commit to
issue, repurchase or redeem, or permit the Master Partnership to
issue, repurchase or redeem, any shares of capital stock or
partnership units, any options or other rights to acquire such
stock or units or any securities convertible into or exchangeable
for such stock or units except pursuant to the Buckeye Partners,
L.P. Unit Option and Distribution Equivalent Plan;
(C) not declare or pay any dividend on, or make any
other distribution with respect to, the Shares;
(D) not declare, pay or make any other distribution
with respect to, the partnership units of the Master Partnership,
except for periodic distributions by the Master Partnership with
respect to such units in amounts and at times which are
consistent with past practice;
(E) not (1) incur a material amount of long or
short-term debt for money borrowed, (2) guarantee or agree to
guarantee the obligations of others, (3) indemnify or agree to
indemnify others, or (4) incur any other material Liabilities, in
each case other than those incurred in the ordinary course of
business consistent with past practice;
(F) use its reasonable efforts to retain the employees
of the Management Subsidiary and maintain the respective
businesses of the Company and the Management Subsidiary so that
employees will remain available to the Management Subsidiary on
and after the Closing Date and to maintain existing relationships
with suppliers, customers and others having business dealings
with the Company or the Management Subsidiary;
(G) not amend its Certificate of Incorporation or
By-Laws or the Master Partnership Agreement or the Operating
Partnership Agreements;
(H) not merge with or into any other corporation or,
except in the ordinary course of business, sell, assign,
transfer, pledge or encumber any part of the assets of the
Company or the Management Subsidiary or agree to do any of the
foregoing;
(I) except in the ordinary course of business, not
enter into any Contract on their own behalf, rather than as agent
for or a partner of the Master Partnership or any of the
Operating Partnerships, that is material, or permit any amendment
or termination of any such material Contract to which the Company
or the Management Subsidiary is a party;
(J) except in the ordinary course of business, not
waive any rights of material value that would otherwise accrue to
the Company after the Closing Date;
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(K) except in the ordinary course of business (or as
disclosed in the Disclosure Letter), not increase the salaries or
benefits of, or make any bonus or similar payments to or
establish or modify any Employee Benefit Plans for, any of the
Company's directors, officers or employees or enter into or
modify any employment, consulting or similar Contracts with any
such persons or agree to do any of the foregoing;
(L) use its reasonable efforts to obtain any consents
or approvals required under any material Contracts that are
necessary to complete the Acquisition or to avoid a Default under
any such Contracts; and
(M) not make any capital expenditures on its own
behalf, rather than as agent for or a partner of the Master
Partnership or any of the Operating Partnerships, in excess of
$1,000,000.
5.2 Approvals. The Buyer and the Shareholder shall
use their reasonable efforts to obtain promptly all Licenses from
all Regulatory Bodies and all consents required under the terms
of any Contracts which are required in connection with the
consummation of the Acquisition.
5.3 Confidential Information. Promptly, but in no
event later than 5 business days, following the later of (a) the
approval by the Special Committee of the matters described in
Section 7.9 and (b) the delivery by the Buyer to the Shareholder
of written confirmation from Prudential Capital Group that the
Finance Committee of the Board of Directors of The Prudential
Insurance Company of America has authorized Prudential Capital
Group to purchase a note or notes in accordance with the
Prudential Commitment Letter, the Shareholder shall cause Furman
Selz LLC to require all parties to any confidentiality agreement
between Furman Selz LLC on behalf of the Shareholder and any
other party with respect to a sale of the Company to return or
destroy all confidential information of the Company, the
Management Subsidiary, the Master Partnership and the Operating
Partnerships in accordance with the terms of such confidentiality
agreements. At the Closing, the Shareholder will, to the extent
legally assignable, assign all of its rights under such
confidentiality agreements to the Company.
5.4 Public Announcements. The Buyer and the
Shareholder shall not make any public announcement of the
transactions contemplated hereby without the prior written
consent of the other party. Nothing contained herein shall
prevent either party at any time from furnishing any information
to any governmental agency or pursuant to any Court Order or
which is required by any Regulation or any rule of the New York
Stock Exchange.
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5.5 Tax Matters.
(A) Section 338(h)(10) Election. The Shareholder and
the Buyer shall make a timely joint election under Section
338(h)(10) of the Code and pursuant to the applicable provisions
of the Temporary Treasury Regulations in order that the
transaction contemplated by this Agreement will be treated for
Federal income tax purposes as a purchase of assets by the Buyer
from the Company. Any liability for taxes resulting from the
election by the Buyer and the Shareholder under Section
338(h)(10) of the Code will be paid by the Shareholder.
(B) Taxes Prior to and After the Closing Date. The
Shareholder shall include the Company in the applicable
consolidated federal income tax return for the period prior to
and including the Closing Date. Taxes as a result of the joint
election under Section 338(h)(10) will be borne by the
Shareholder. Any adjustments in taxes of the Company for the
period to and including the Closing Date shall be borne by the
Shareholder. The liability for any taxes of the Company for the
periods beginning after the Closing Date shall be borne by the
Company and the Buyer. The Buyer shall make an election under
Section 338(g) of the Code to the extent necessary to allow the
Section 338(h)(10) election to be made. The Buyer will indemnify
and hold harmless the Shareholder and the Company against any and
all liability (including, without limitation, interest, additions
to tax and penalties) for or with respect to federal, state or
local income taxes of the Company claimed or assessed for all
taxable periods beginning after the Closing Date. The
Shareholder will indemnify and hold harmless the Buyer and the
Company against any and all liability (including, without
limitation, interest, additions to tax and penalties) for or with
respect to federal, state or local income taxes of the Company
claimed or assessed for all taxable periods including periods to
and including the Closing Date.
(C) Indemnification With Respect to Taxes. Without
limiting the indemnification obligations of any party contained
elsewhere herein: After the Closing, the Shareholder will
indemnify and hold harmless the Buyer and the Company against any
and all liability (including, without limitation, interest,
additions to tax and penalties) for or with respect to federal
income taxes (and state or local income taxes in states in which
tangible personal property or real property of the Company is
located) of the Company claimed or assessed for all taxable
periods ending on or prior to the Closing Date attributable to
gain realized by the Company as a result of the purchase and sale
of the Shares pursuant hereto and the making of the joint
election by the Shareholder and the Buyer under Section
338(h)(10) of the Code (and by the Buyer under Section 338(g) of
the Code but only to the extent it is required for the election
under Section 338(h)(10) of the Code)), net of any tax benefit
resulting from such payment. If the parties are unable to agree
with respect to the amount of any payment due under the preceding
sentence, the matter shall be submitted to an independent
accounting firm selected by both parties. The decision of such
independent accounting firm shall be binding upon both parties
and the expense of such independent accounting firm shall be
borne equally by the parties.
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(D) Prior Period Adjustments. The Shareholder shall
have the right to contest any adjustment that increases the
liability of the Company or the Shareholder for taxes which arose
during the period or periods ending on or prior to the Closing
Date (including federal income taxes (and state or local income
taxes in states which tangible personal property or real property
of the Company is located) attributable to gain realized by the
Company as a result of the purchase and sale of the Shares
pursuant hereto and the making of the joint election by the
Shareholder and Buyer under Section 338(h)(10) of the Code (and
by the Buyer under Section 338(g) of the Code but only to the
extent it is required for the election under Section 338(h)(10)
of the Code)). The Buyer agrees to cooperate or cause the
Company to cooperate in the negotiation, settlement or litigation
of any such adjustment. All decisions with respect to the
negotiation, settlement or litigation of any such adjustment
shall be made by the Shareholder and shall be binding upon the
Buyer. All expenses to contest such adjustment on behalf of the
Company shall be borne by the Shareholder. Any indemnity payable
by the Shareholder to the Buyer or the Company pursuant to this
Section 5.5(D) shall be payable within 10 days of the Buyer's
and/or the Company's request therefor, which request shall be no
sooner than within 20 days of the required remittance to the tax
authority. The parties agree that any payment made pursuant to
this Section 5.5(D) shall be deemed an adjustment to the Purchase
Price hereunder.
(E) Cooperation. After the Closing Date, the Buyer,
the Shareholder and the Company shall cooperate fully with each
other and shall make available to the other, as reasonably
requested, and to any taxing authority, all information, records
or documents relating to tax liabilities or potential tax
liabilities of the Company for all periods prior to or ending on
the Closing Date and shall preserve all such information, records
and documents until the expiration of any applicable statutes of
limitation or extensions thereof. The Buyer, the Shareholder and
the Company shall also make available to each other, as
reasonably requested, personnel responsible for preparing or
maintaining information, records and documents in connection with
tax matters.
(F) Audits. So long as taxable periods of the Company
ending on or before the Closing Date remain open, the Buyer and
the Shareholder shall promptly notify the other in writing within
10 days from receipt by the Buyer or the Shareholder of notice of
(i) any pending or threatened federal, state or local income tax
audits or assessments of the Company, and (ii) any pending or
threatened federal, state or local income tax audits or
assessments of the Buyer which may affect the tax liabilities of
the Company for taxable periods ending on or before the Closing
Date. The Shareholder shall have the right to represent the
interests of the Company in any tax audit or administrative or
court proceeding relating to fiscal periods ending on or before
the Closing and to employ counsel of its choice at its expense.
The Buyer agrees that it will, at the Shareholder's expense,
cooperate fully with the Shareholder and its counsel in the
defense against or compromise of any claim in any said
proceeding.
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5.6 Audit Adjustments.
(A) If, as a result of the examination of the
consolidated federal, state or local income tax return of the
Shareholder or the Company (or any predecessor) for a taxable
year ending on or before or including the Closing Date, there
shall be any adjustment which decreases deductions, losses or
credits against taxes ("Tax Benefits") or which increases income,
gains or recaptures of credits against taxes ("Tax Detriments")
for any such taxable year and which will permit the Buyer or the
Company (or any corporation in an affiliated group of which the
Buyer or the Company is a member) to increase the Tax Benefits or
decrease the Tax Detriments to which they would otherwise have
been entitled for any taxable year beginning on or after the
Closing Date, the Shareholder will notify the Buyer of such
adjustment and provide the Buyer with such information as may be
necessary for the Buyer to take account of such increases or
decreases through the filing of a claim for refund or otherwise.
The Buyer shall take such action as is necessary to secure the
benefit of such increases or decreases and shall pay the
Shareholder the amount of such benefit (together with interest,
if any, received), such amount to be paid when and as such
benefit is realized, less the amount, if any, of the Buyer's
reasonable expenses incurred in securing such benefit for the
Shareholder.
(B) If, as a result of the examination of the
consolidated or separate federal, state or local income tax
return of any group of corporations of which the Buyer or the
Company (or any successor) is a member for a taxable year
beginning on or after the Closing Date, there shall be any
adjustment which decreases Tax Benefits or increases Tax
Detriments for any such taxable year and which will permit the
Shareholder or any member of the Shareholder's consolidated group
to increase Tax Benefits or decrease Tax Detriments to which the
Shareholder would otherwise have been entitled for any taxable
year ending on or before and including the Closing Date, the
Buyer will notify the Shareholder of such adjustment and provide
the Shareholder with such information as may be necessary for the
Shareholder to take account of such increase or decrease through
the filing of a claim for refund or otherwise. The Shareholder
shall take such action as is necessary to secure the benefit of
such increases or decreases and shall pay to the Buyer the amount
of such benefit (together with interest, if any, received), such
amount to be paid when and as such benefit is realized, less the
amount, if any, of the Shareholder's reasonable expenses incurred
in securing such benefit for the Buyer.
5.7 Certain Employee Benefit Arrangements. From and
after the Closing:
(A) The Buckeye Pipe Line Company Retirement Income
Guarantee Plan. The Buckeye Pipe Line Company Retirement Income
Guarantee Plan (the "RIGP") is funded through a master defined
benefit trust (the "Master DB
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Trust"). After the Closing Date, Buckeye Pipe Line Company will
continue to be the "Plan Sponsor", as defined in ERISA, for such
RIGP (and will continue to be responsible for any contributions
required or due with respect to the RIGP). Within 45 days after
the Closing Date, the Buyer shall identify a successor trust to
hold the assets of the RIGP, and promptly after identification of
such successor trust, the trustee of the Master DB Trust shall
transfer the pro rata share of the assets of the Master DB Trust
allocable to the RIGP to the trustee of such successor trust.
(B) The Buckeye Pipe Line Company Retirement and
Savings Plan. After the Closing Date, Buckeye Pipe Line Company
will continue to be the "Plan Sponsor", as defined in ERISA, with
respect to the Buckeye Pipe Line Company Retirement and Savings
Plan (the "RASP") (and will continue to be responsible for any
contributions required or due with respect to the RASP). The
Buyer agrees to retain, through the end of 1996, the provision in
the RASP allowing participants in the RASP to transfer their
account balances from the RASP to the American Premier Retirement
and Savings Plan. A portion of the assets of the RASP are
invested in a trust which holds fixed income assets on behalf of
the RASP and other qualified retirement plans (the "Fixed Income
Trust"). Within 45 days after the Closing Date, the Buyer shall
identify a successor trust to hold the assets of the RASP
invested in the Fixed Income Trust and, promptly after
identification of such successor trust, the trustee of the Fixed
Income Trust shall transfer a pro rata share of the assets in the
Fixed Income Trust allocable to the RASP to the trustee of such
successor trust.
5.8 Insurance Arrangements. From and after the
Closing:
(a) The Company and the Management Subsidiary
shall cease to be covered with respect to any occurrence after
the Closing under the insurance policies and agreements obtained
and maintained by the Shareholder and its affiliates covering the
Company and the Management Subsidiary, (the "Policies"). All
such occurrences prior to the Closing which are insured under the
Policies shall continue to be so insured, and the Company and
Management Subsidiary shall be entitled to the benefits thereof,
subject to applicable Retention Levels. The Buyer shall cause
the Company and the Management Subsidiary to pay to the
Shareholder and its affiliates any retrospective premium
adjustments and premium audit adjustments payable to insurance
carriers and all retention payments in respect of insurance
covering the Company and the Management Subsidiary for periods
prior to the Closing Date. The Shareholder shall, or shall cause
its affiliates to, pay to the Company any rebate received with
respect to any premiums paid prior to the Closing Date in respect
of Policies covering the Company and the Management Subsidiary
for periods subsequent to the Closing Date as a result of the
removal of the Company and the Management Subsidiary from
coverage under such Policies.
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(b) Provided the Buyer is not in breach of its
obligations under subsection (c) hereof, the Shareholder shall
indemnify and hold the Company and the Management Subsidiary to
the extent they are named insured under the applicable Policy or
Policies harmless from and against any and all Insured Losses to
the extent such Insured Losses exceed the applicable Retention
Level of the Company or the Management Subsidiary but do not
exceed the Retention Level applicable to the Shareholder and its
affiliates with respect thereto. Neither the Shareholder nor its
affiliates shall have any liability to the Company or the
Management Subsidiary for any Insured Losses to the extent such
Insured Losses (a) are within the applicable Retention Level for
the particular company or (b) exceed the applicable Retention
Level for the Shareholder and its affiliates. In addition, the
Shareholder and its affiliates shall have no liability to the
Buyer, the Company or the Management Subsidiary for any Loss
which would not be covered by the insuring terms and conditions
of the applicable Policy, assuming a Retention Level for the
Shareholder and its affiliates of zero.
(c) The Company and the Management Subsidiary
shall be liable and responsible for all the Insured Losses that
are within the Retention Levels applicable to them. Accordingly,
provided the Shareholder and its affiliates are not in breach of
their obligations under section (b) hereof, the Buyer will cause
the Company and the Management Subsidiary to either, as the
Shareholder shall direct, (a) reimburse the Shareholder and its
affiliates for such payments as the Shareholder and its
affiliates may make in the normal course of their claims
management program to the applicable insurer or claims
administrator of Insured Losses that are within the Retention
Levels of the Company and the Management Subsidiary, such
reimbursement to be made promptly and in any event within 15 days
of presentation of the Shareholder's written invoices therefor or
(b) pay such Insured Losses directly to the applicable insurer or
claims administrator. The Buyer will, and will cause the Company
and the Management Subsidiary to, negotiate in good faith to
settle all claims under the Policies within the applicable
Retention Levels of the Company and the Management Subsidiary and
promptly notify and consult with the Shareholder regarding any
such claim that may exceed the applicable Retention Levels of the
Company and the Management Subsidiary. The Shareholder shall
have the right to control and direct the defense of any such
claim that is likely to exceed the Retention Levels of the
Company and the Management Subsidiary.
(d) The parties hereto shall give, and shall
cause the Company and the Management Subsidiary to give, to each
other prompt notice of the assertion by any person of any claim
against the Shareholder or any of its affiliates, or the Company
and the Management Subsidiary, as the case may be, which might be
subject to the insurance coverage or related obligations
described in this Section 5.8. The parties hereto shall
cooperate, and shall cause the Company and the Management
Subsidiary to cooperate, with the Shareholder and its affiliates,
or the Company and the Management Subsidiary, as the case may be,
and any applicable insurance carrier or claims administrator in
any investigation by the Shareholder and its affiliates, or
-14-
by the Company and the Management Subsidiary, as the case may be,
or any applicable insurance carrier or claims administrator, of
any such claim, including without limitation any currently
pending claim which relates to a pre-Closing occurrence; and the
Buyer shall give, and shall cause the Company and the Management
Subsidiary to give, to the Shareholder and its affiliates, and
any applicable insurance carrier or claims administrator,
reasonable access to the books, records and personnel of the
Company and the Management Subsidiary to the extent reasonably
necessary to enable the Shareholder or any of its affiliates, and
any applicable insurance carrier or claims administrator, to
investigate such claim.
5.9 NJ Environmental Liabilities. From and after the
Closing, the Shareholder or an affiliate of the Shareholder (the
Shareholder and each of its affiliates, the "Shareholder Group")
shall continue to retain the liabilities described that certain
Administrative Consent Order, dated November 17, 1986, issued by
the New Jersey Department of Environmental Protection (such
liabilities, the "NJ Environmental Liabilities"). In connection
with the NJ Environmental Liabilities, the parties agree as
follows:
(a) The Buyer shall cooperate, and cause the
employees and officers of the Company and the Management
Subsidiary to cooperate, with the Shareholder Group in connection
with all matters related to the NJ Environmental Liabilities and
shall provide, at no charge, such administrative assistance with
respect thereto as the Shareholder may reasonably request (which
may include, without limitation, review of documents and
attendance at meetings and teleconferences regarding the NJ
Environmental Liabilities).
(b) The Buyer shall, and shall cause the
Company and the Management Subsidiary to, provide to the
Shareholder Group such services, labor and materials, to the
extent reasonably available, as the Shareholder may request in
connection with the NJ Environmental Liabilities. The
Shareholder shall reimburse the Buyer, the Company or the
Management Subsidiary, as appropriate, for such entity's direct,
out-of-pocket cost (i) of all hourly labor furnished by such
entity at the request of the Shareholder, (ii) of all services
provided by non-employees of the Buyer, the Company or the
Management Subsidiary at the request of the Shareholder, and
(iii) of all materials provided by such entity at the request of
the Shareholder. The Shareholder Group shall have the right to
use, without cost, the water filtration system/waste recovery
system and plant located at the Linden, New Jersey premises of
the Operating Partnerships (the "Waste Recovery System") in
connection with the activities of the Shareholder Group related
to the NJ Environmental Liabilities, subject to reimbursement by
the Shareholder Group of any costs incurred for activated carbon
attributed solely to the Shareholder Group's utilization of the
Waste Recovery System.
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(c) Without the prior consent of the Shareholder,
the Buyer shall not take any action which it knows is reasonably
likely to increase the amount of the NJ Environmental
Liabilities. In addition, the Buyer shall, and shall cause the
Company and the Management Subsidiary to, take all commercially
reasonable actions to mitigate the expense and liability of the
Shareholder Group with respect to the NJ Environmental
Liabilities.
(d) In connection with the NJ Environmental
Liabilities, the Shareholder Group agrees to use commercially
reasonable efforts to obtain a Declaration of Environmental
Restriction ("DER"). Buyer hereby consents to the issuance of a
DER, and agrees that it shall execute, and shall cause the
Company, the Management Subsidiary, the Master Partnership and
the Operating Partnership, to execute all commercially reasonable
documents necessary to obtain a DER.
(e) Upon request of the Shareholder the Buyer
will use reasonable efforts to support and facilitate any
reasonable proposal from the Shareholder Group that the Master
Partnership, in consideration for a payment by the Shareholder
Group, assume the remaining costs anticipated to be associated
with the NJ Environmental Liabilities.
(f) The Buyer acknowledges on its own behalf and
on behalf of The Company and the Management Subsidiary that there
are no unpaid charges for services, labor, materials or
facilities provided by the Company or the Management Subsidiary
in connection with the NJ Environmental Liabilities.
(g) The Buyer acknowledges that the Shareholder
Group will not be liable for any environmental liability or
expense related to, or arising out of the business of, the
Company, the Management Subsidiary, the Master Partnership, or
any of the Operating Partnerships, other than the NJ
Environmental Liabilities.
(h) The Buyer shall indemnify the Shareholder
Group against any failure by the Company, the Management
Subsidiary, the Master Partnership and the Operating Partnerships
to comply with the provisions of this Section 5.9.
5.10 Prudential Financing and Special Committee
Approval. The Buyer shall use its best efforts to diligently and
as promptly as practicable (i) obtain the approval of the Special
Committee of the matters described in Section 6.9 hereof and
provide such information in connection therewith as the Special
Committee may request; and (ii) negotiate, execute and deliver,
and consummate a definitive agreement with Prudential Capital
Group providing for the financing described in the Prudential
Commitment Letter. Upon the Shareholder's request from time to
time, the Buyer shall report to the Shareholder concerning the
status of such matters.
-16-
5.11 No Solicitation of Transactions. Prior to the
termination of this Agreement pursuant to Section 8.3, none of
the Shareholder or any of its affiliates or any of their
respective directors, officers, employees, representatives,
investment bankers or agents shall, directly or indirectly,
solicit or initiate inquiries or proposals form, or provide
confidential information to or participate in any discussions or
negotiations with, any corporation, partnership, person, trust or
other entity or group (other than the Buyer and its affiliates
and representatives) concerning the sale of stock of the Company
or the Management Subsidiary or any of their respective assets or
any merger, consolidation, recapitalization, liquidation or
similar transaction involving the Company or the Management
Subsidiary. This Section 5.11 shall not be considered to limit
any rights or remedies the Buyer may have a result of a breach of
this Agreement by the Shareholder.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
Subject to waiver as set forth in Section 8.6, the
obligations of the Buyer under this Agreement are subject to the
fulfillment prior to or at the Closing of each of the following
conditions:
6.1 Representations and Warranties. The
representations and warranties of the Shareholder set forth in
Article 3 shall be true and correct in all material respects on
the Closing Date with the same effect as if made at that time.
6.2 Performance by the Shareholder. The Shareholder
shall have performed and satisfied in all material respects all
agreements and conditions which it is required by this Agreement
to perform or satisfy prior to or on the Closing Date.
6.3 Certificates. The Buyer shall have received
certificates from the Shareholder dated the Closing Date
certifying in such detail as the Buyer may reasonably request
that each of the conditions described in Sections 6.1 and 6.2 has
been fulfilled.
6.4 Intentionally Omitted.
6.5 Litigation Affecting Closing. No Court Order
shall have been issued or entered which prohibits the completion
of the Acquisition.
6.6 Regulatory Compliance and Approvals. All
approvals required under any Regulations to carry out the
Acquisition shall have been obtained and the Company and the
Shareholder shall have complied in all material respects with all
Regulations applicable to the Acquisition.
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6.7 Consents. The Shareholder or the Company shall
have delivered to the Buyer all consents required to be obtained
in connection with the Acquisition in order to avoid a Default
under any material Contract to or by which the Company is a party
or may be bound.
6.8 Financing. The Buyer and Prudential Capital Group
shall have entered into a definitive agreement reflecting the
terms of the Prudential Commitment Letter and the Prudential
Capital Group shall be prepared to fund the loan provided for
thereby in the amount of $63,000,000 contemporaneously with the
Closing.
6.9 Special Committee. A committee of independent
directors of the Company which will exclude all directors who are
employees of the Shareholder, the Company or their affiliates
(the "Special Committee") shall have approved on behalf of the
Master Partnership (i) the form of opinion of Morgan, Lewis &
Bockius LLP relating to the satisfaction by the Buyer of the
Company's capital requirement in compliance with Sections 17.6
and 19.1 of the Master Partnership Agreement after giving effect
to the cancellation of the Demand Notes and (ii) the Buyer's
employee stock ownership plan as a fringe benefit, the cost of
which may be reasonably allocated to the Partnership pursuant to
Section 7.4 of the Master Partnership Agreement.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDER
Subject to waiver as set forth in Section 8.6, the
obligations of the Shareholder under this Agreement are subject
to the fulfillment prior to or at the Closing of each of the
following conditions:
7.1 Buyer Representations True at Closing. The
representations and warranties of the Buyer set forth in Article
4 shall be true and correct in all material respects on the
Closing Date with the same effect as if made at that time.
7.2 Performance by the Buyer. The Buyer shall have
performed and satisfied all agreements and conditions which it is
required by this Agreement to perform or satisfy prior to or on
the Closing Date.
7.3 Officer's Certificate. The Shareholder shall have
received a certificate from an appropriate officer of the Buyer
dated the Closing Date certifying in such detail as the
Shareholder may reasonably request that each of the conditions
described in Sections 7.1 and 7.2 has been fulfilled.
7.4 Demand Notes. The Shareholder shall have been
released from its obligations under the Demand Notes, and the
Buyer shall have provided for capitalization of the Company in
the amount of at least $6 million.
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7.5 Incumbency Certificate. The Shareholder shall
have received a certificate of the Secretary or an Assistant
Secretary of the Buyer dated the Closing Date certifying to the
incumbency of the officers of the Buyer signing for it and as to
the authenticity of their signatures.
7.6 Opinion of Counsel. The Shareholder shall have
received the written opinion dated the Closing Date of Morgan,
Lewis & Bockius LLP, counsel for the Buyer, in form and substance
reasonably satisfactory to the Shareholder.
7.7 Litigation Affecting Closing. No Court Order
shall have been issued or entered which would be prohibits the
completion of the Acquisition. No person who or which is not a
party to this Agreement shall have commenced or threatened to
commence any Litigation seeking to restrain or prohibit, or to
obtain substantial damages in connection with, this Agreement or
the transactions contemplated by this Agreement.
7.8 Regulatory Compliance and Approval. All approvals
required under any Regulations to carry out the Acquisition shall
have been obtained and that the Buyer shall have complied in all
material respects with all Regulations applicable to the
Acquisition.
7.9 Special Committee. The Special Committee shall
have approved on behalf of the Master Partnership (i) the form of
opinion of Morgan, Lewis & Bockius LLP relating to the
satisfaction by the Buyer of the Company's capital requirement in
compliance with Sections 17.6 and 19.1 of the Master Partnership
Agreement after giving effect to the cancellation of the Demand
Notes, (ii) cancellation of the Demand Notes effective at the
Closing and (iii) the Buyer's employee stock ownership plan as a
fringe benefit, the cost of which may be reasonably allocated to
the Partnership pursuant to Section 7.4 of the Master Partnership
Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 No Survival of Representation and Warranties.
None of the representations, warranties, covenants and agreements
made by each party in this Agreement or in any attachment,
Exhibit, certificate, document or list delivered by any such
party pursuant hereto or in connection with the Acquisition shall
survive the Closing.
8.2 Payment of Expenses. The Buyer shall pay all
legal, accounting and other fees and expenses which it incurs in
connection with this Agreement and the transactions contemplated
hereby, and all legal, accounting and other fees and expenses
incurred by the Shareholder in connection with this Agreement
shall be paid by the Shareholder (other than expenses and costs
-19-
incurred for, by or on account of employees of the Company or the
Company's auditors and other than expenses and costs, including
without limitation reasonable attorney's fees, related to the
securing of all requisite Regulatory Approvals, all of which
shall be paid by the Company).
8.3 Termination. This Agreement may be terminated
before the Closing occurs only as follows:
(a) By written consent of the Shareholder and the
Buyer;
(b) By written notice by the Shareholder to the
Buyer at any time after February 22, 1996, unless on or prior
thereto the Buyer shall have provided the Shareholder with
satisfactory evidence that the Special Committee has approved the
matters described in Section 7.9 hereof;
(c) By written notice by the Shareholder to the
Buyer at any time after February 22, 1996, unless on or prior
thereto the Buyer shall have delivered to the Shareholder written
confirmation from Prudential Capital Group that the Finance
Committee of the Board of Directors of The Prudential Insurance
Company of America has authorized Prudential Capital Group to
purchase a note or notes in accordance with the Prudential
Commitment Letter;
(d) By written notice by the Shareholder to the
Buyer, at any time after April 15, 1995, except that no such
notice may be given under this clause (d) if as of the date of
such notice the only condition specified in Article 7 that is not
satisfied or able to be satisfied is the condition specified in
Section 7.8; or
(e) By written notice by the Shareholder or the
Buyer to the other at any time after June 30, 1995.
8.4 Brokers' and Finders' Fees. The Shareholder and
the Buyer each to the other represents and warrants that all
negotiations relative to this Agreement have been carried on by
them directly without the intervention of any person, firm,
corporation or other entity who or which may be entitled to any
brokerage fee or other commission in respect of the execution of
this Agreement or the consummation of the transactions
contemplated hereby except for (i) Furman Selz LLC, whose fees
shall be paid by the Shareholder and (ii) Houlihan, Lokey, Howard
& Zukin, Inc., whose fees shall be paid by the Buyer, and each of
them shall indemnify and hold the other or any affiliate of them
harmless against any and all claims, losses, liabilities or
expenses which may be asserted against any of them as a result of
any dealings, arrangements or agreements by the indemnifying
party with any such person, firm, corporation or other entity.
8.5 Assignment and Binding Effect. This Agreement may
not be assigned prior to the Closing by any party hereto without
the prior written consent of the other parties. Subject to the
foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of the Shareholder and
by the successors and assigns of the Buyer.
-20-
8.6 Waiver. Any term or provision of this Agreement
may be waived at any time by the party entitled to the benefit
thereof by a written instrument executed by such party.
8.7 Notices. Any notice, request, demand, waiver,
consent, approval or other communication which is required or
permitted hereunder shall be in writing and shall be deemed given
only if delivered personally to the address set forth below (to
the attention of the person identified below) or sent by
facsimile message, Federal Express (or other reputable overnight
delivery service) or by registered or certified mail, postage
prepaid, as follows:
If to the Buyer, to:
BMC Acquisition Company
5 Radnor Corporate Center
100 Matson Ford Road
Radnor, PA 19087
Attention: A. W. Martinelli
With required copies to:
Buckeye Management Company
If by mail: If by Federal Express:
P.O. Box 368 3900 Hamilton Boulevard
Emmaus, PA 18049 Allentown, PA 18103
Attention: Stephen C. Muther, Esquire
If to the Shareholder, to:
American Financial Group, Inc.
One East Fourth Street
Cincinnati, OH 45202
Attention: Neil M. Hahl
With a required copy to the Corporate Secretary of
the Shareholder at the same address.
or to such other address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communication
will be deemed to have given as of the date so delivered or sent
by facsimile message, the day after the date sent when sent by
Federal Express (or other reputable overnight delivery service),
or, if mailed, three business days after the date so mailed.
-21-
8.8 Pennsylvania Law to Govern. This Agreement shall
be governed by and interpreted and enforced in accordance with
the substantive laws of the Commonwealth of Pennsylvania
applicable to contracts made and to be performed in that
Commonwealth.
8.9 Remedies Not Exclusive. Nothing in this Agreement
shall be deemed to limit or restrict in any manner other rights
or remedies that any party may have against any other party at
law, in equity or otherwise.
8.10 No Benefit to Others. The representations,
warranties, covenants and agreements contained in this Agreement
are for the sole benefit of the parties hereto and the Company
and their successors and assigns, and they shall not be construed
as conferring and are not intended to confer any rights on any
other persons.
8.11 Contents of Agreement. This Agreement sets forth
the entire agreement of the parties hereto with respect to the
transactions contemplated hereby. This Agreement may not be
amended except by an instrument in writing signed by the parties
hereto, and no claimed amendment, modification, termination or
waiver shall be binding unless in writing and signed by the party
against whom or which such claimed amendment, modification,
termination or waiver is sought to be enforced. The Shareholder
agrees that upon request of the Buyer, it will amend this
Agreement and take such other action as may be necessary to
modify the structure of the transaction contemplated hereby from
a stock purchase to a partial stock purchase and partial stock
redemption, except that the Shareholder shall be so obligated
only if such modification will not have an adverse effect on the
Shareholder or its affiliates.
8.12 Section Headings and Gender. All section headings
and the use of a particular gender are for convenience only and
shall in no way modify or restrict any of the terms or provisions
hereof. Any reference in this Agreement to a Section, Annex or
Exhibit shall be deemed to be a reference to a Section, Annex or
Exhibit of this Agreement unless the context otherwise expressly
requires.
8.13 Cooperation. Subject to the provisions hereof,
the parties hereto shall use their reasonable efforts to take, or
cause to be taken, such action, to execute and deliver, or cause
to be executed and delivered, such additional documents and
instruments and to do, or cause to be done, all things necessary,
proper or advisable under the provisions of this Agreement and
under applicable law to consummate and make effective the
transactions contemplated by this Agreement.
8.14 Severability. Any provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
-22-
8.15 Counterparts. This Agreement may be executed in
two or more counterparts, each of which is an original and all of
which together shall be deemed to be one and the same instrument.
This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by all of
the parties. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first written above.
PENNSYLVANIA COMPANY
By: /s/ Neil M. Hahl
Title: Senior Vice President
BMC ACQUISITION COMPANY
By: /s/ A.W. Martinelli
Title: Chairman
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ANNEX I
CERTAIN DEFINED TERMS
"Acquisition" means the acquisition of all of the Shares by
the Buyer and all related transactions provided for in or
contemplated by this Agreement.
"Agreement" means this Share Purchase Agreement.
"Buyer" means BMC, a Delaware corporation.
"Company Material Adverse Effect" shall mean a material
adverse change in, or material adverse effect on, the results of
operations, financial condition or business of the Company and
the Management Subsidiary, taken as a whole; but in any case
after application of the proceeds of any insurance or indemnity
under any contract or agreement with any third party.
"Contract" means any written or oral contract, agreement,
lease, instrument or other commitment that is binding on any
person or its property under applicable law.
"Court Order" means any judgment, decree, injunction, order
or ruling of any federal, state or local court or governmental or
regulatory body or authority that is binding on any person or its
property under applicable law.
"Default" means (1) a material breach of or material default
under any Contract, (2) the occurrence of an event that with the
passage of time or the giving of notice or both would constitute
a material breach of or material default under any Contract, or
(3) the occurrence of an event that with or without the passage
of time or the giving of notice or both would give rise to a
right of termination, renegotiation or acceleration under any
Contract.
"Demand Notes" mean that certain Demand Promissory Note,
dated November 18, 1986, in the aggregate principal amount of
$24,000,000, by the Shareholder to the Company, and that certain
Demand Promissory Note, dated December 23, 1986, in the aggregate
principal amount of $4,000,000, by the Shareholder to the
Company.
"Employee Benefit Plans" means "employee benefit plans" as
defined in section 3(3) of ERISA and any other plan, policy,
program, practice or arrangement providing benefits to any
officer or employee of the Company, the Management Subsidiary, or
any dependent or beneficiary thereof, which are now maintained by
the Company or the Management Subsidiary, or under which the
Company or the Management Subsidiary has any obligation or
liability, including, without limitation, all incentive, bonus,
deferred compensation, medical, disability, share purchase, unit
purchase, retirement or other similar plans, policies, programs,
practices or arrangements; provided, however, that such term
shall not include (i) any employment agreements entered into by
the Company or the Management Subsidiary with their respective
employees, or (ii) any regular payroll practices of the Company
or the Management Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Insured Losses" shall mean Losses under the Policies and
any related loss adjustment expense, including attorney fees and
claims administration and handling costs.
"IRS" means the Internal Revenue Service.
"Liability" means any direct or indirect liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of or by any person (other than endorsements of
notes, bills and checks presented to banks for collection or
deposit in the ordinary course of business).
"Licenses" means licenses, franchises, permits, easements,
rights and other authorizations.
"Lien" means any mortgage, lien, security interest, pledge,
encumbrance, restriction on transferability, defect of title,
charge or claim of any nature whatsoever on any property or
property interest.
"Litigation" means any lawsuit, action, arbitration,
administrative or other proceeding, criminal prosecution or
governmental investigation or inquiry involving the Company, the
Management Subsidiary, their respective businesses or assets, or
any Contracts to which the Company or the Management Subsidiary
is a party or by which it or any of their respective businesses
or assets may be bound.
"Loss" or "Losses" shall mean: liabilities, damages, costs,
judgments, costs of investigating claims, amounts paid in
settlement, interest, penalties, assessments and out-of-pocket
expenses (including reasonable attorneys' and auditors' and
actuaries' fees) actually incurred.
"Master Partnership" means Buckeye Partners, L.P., a
Delaware limited partnership.
"Master Partnership Agreement" means that certain Amended
and Restated Agreement of Limited Partnership of the Master
Partnership, dated as of December 23, 1986.
"Operating Partnerships" means Buckeye Pipe Line Company,
L.P., a Delaware limited partnership, Buckeye Pipe Line Company
of Michigan, L.P., a Delaware limited partnership, Buckeye Tank
Terminals Company, L.P., a Delaware limited partnership,
Everglades Pipe Line Company, L.P., a Delaware limited
partnership, and Laurel Pipe Line Company, L.P., a Delaware
limited partnership.
"Regulation" means any statute, law, ordinance, regulation,
order or rule of any federal, state, local or other governmental
agency or body or of any other type of regulatory body,
including, without limitation, those covering environmental,
energy, safety, health, transportation, bribery, recordkeeping,
zoning, antidiscrimination, antitrust, wage and hour, and price
and wage control matters.
"Retention Levels" shall mean the retention levels specified
in the Policies for the respective companies, time periods and
types of insurance coverage specified thereon.
INDEX OF DEFINED TERMS
Acquisition 26
Agreement 26
Buyer 1
Buyer Documents 5
Closing 2
Closing Date. 2
Code 1
Common Stock 1
Company 1
Company Material Adverse Effect 26
Contract 26
Court Order 26
Default 26
Demand Notes 26
Employee Benefit Plans 26
ERISA 27
Financial Information 6
Fixed Income Trust 14
Insured Losses 27
IRS 27
Liability 27
Licenses 27
Lien 27
Litigation 27
Loss or Losses 27
Management Subsidiary 4
Master DB Trust 13
Master Partnership 27
Master Partnership Agreement 27
Operating Partnerships 28
Plan Sponsor 13
Policies 14
Prudential Commitment Letter 6
Purchase Price 2
RASP 13
Regulation 28
Retention Levels 28
RIGP 13
Shareholder 1
Shareholder Documents 3
Shares 1
Special Committee 19
Tax Benefits 12
Tax Detriments 12
SCHEDULE 4.1
(Names of subscribers for common stock)
Alfred W. Martinelli
C. Richard Wilson
Stephen C. Muther
Steven C. Ramsey
Michael P. Epperly
AMENDMENT TO SHARE PURCHASE AGREEMENT
THIS AMENDMENT is made as of this 22nd day of March, 1996 by
Pennsylvania Company, a Delaware corporation (the "Shareholder")
and BMC Acquisition Company, a Delaware corporation (the
"Buyer").
WHEREAS, the Shareholder and the Buyer have entered into a
Share Purchase Agreement (the "Agreement") dated as of January 5,
1996 providing for the acquisition of all of the issued and
outstanding shares of capital stock of Buckeye Management
Company, a Delaware corporation ("Company") by the Buyer from the
Shareholder; and
WHEREAS, the Shareholder and the Buyer desire to amend the
Agreement as set forth in this Amendment.
NOW, THEREFORE, intending to be legally bound, the parties
hereto agree as follows:
1. The Shareholder and the Buyer hereby agree that, prior
to the Closing, the Buyer may terminate the existing subscription
agreements from the persons listed on the form of Schedule 4.1
originally attached to the Agreement and simultaneously enter
into a new subscription agreement with Glenmoor Partners, LLP, a
Pennsylvania limited liability partnership, to acquire not less
than $5,000,000 of common stock of the Buyer on or before the
Closing Date.
2. The Shareholder and the Buyer hereby agree that the
date "April 15, 1995" in Section 8.3(d) and the date "June 30,
1995" in Section 8.3(e) were intended to be and are hereby
amended to be "April 15, 1996" and "June 30, 1996" respectively.
3. The Shareholder and the Buyer hereby agree that Section
8.1 of the Agreement shall be amended to insert the phrase
"Except as otherwise specifically set forth in this Agreement in
the case of covenants and agreements," at the beginning of such
section.
4. Buyer shall use commercially reasonable efforts to
obtain as soon as practicable following the Closing Date, but in
no event later than August 14, 1996, the release of Shareholder
and its affiliates from all surety bonds for which Shareholder or
any of its affiliates is a guarantor or an account party, but
which relate to the operations of the Company, the Master
Partnership and the Operating Partnerships. Shareholder agrees
to keep any such surety bonds in place until August 14, 1996,
after which time Shareholder or its affiliates may give notice of
cancellation with respect to their guaranty. Buyer agrees to
indemnify and hold harmless Seller and its affiliates from any
loss arising out of such surety bonds.
5. All capitalized terms used in this Amendment but not
defined herein shall have the same meaning as such term has in
the Agreement.
6. Any provision of this Amendment that is inconsistent
with the provisions of the Agreement shall be deemed amended to
effectuate the intention of the parties as expressed herein.
Every other provision of the Agreement shall remain unchanged and
shall remain in full force and effect.
7. This Amendment may be executed in two or more
counterparts, each of which is an original, and all of which
together shall be deemed to be one and the same instrument. This
Amendment shall become binding when one or more counterparts
taken together shall have been executed and delivered by both of
the parties. It shall not be necessary in making proof of this
Amendment or any counterpart hereof to produce or account for any
of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Amendment as of the date first written above.
PENNSYLVANIA COMPANY
By: /s/ Neil M. Hahl
Name: Neil M. Hahl
Title: Senior Vice President
BMC ACQUISITION COMPANY
By: /s/ C. Richard Wilson
Name: C. Richard Wilson
Title: President