Exhibit 10.5
================================================================================
OMNIBUS AGREEMENT
among
SUNOCO, INC.
SUNOCO, INC.(R&M)
SUN PIPE LINE COMPANY OF DELAWARE
ATLANTIC PETROLEUM CORPORATION
SUNOCO TEXAS PIPE LINE COMPANY
SUN PIPE LINE SERVICES (OUT) LLC
SUNOCO LOGISTICS PARTNERS L.P.
SUNOCO LOGISTICS PARTNERS OPERATIONS L.P.
and
SUNOCO PARTNERS LLC
================================================================================
OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT ("Agreement") is entered into on, and effective as
of, the Closing Date (as defined herein) among Sunoco, Inc., a Pennsylvania
corporation ("Sunoco"), on behalf of itself and the other Sunoco Entities (as
defined herein), Sunoco, Inc. (R&M), a Pennsylvania corporation ("Sunoco R&M"),
Sun Pipe Line Company of Delaware, a Delaware corporation ("Sun Delaware"),
Atlantic Petroleum Corporation, a Delaware corporation ("Atlantic Petroleum"),
Sunoco Texas Pipe Line Company, a Texas corporation ("Sun Texas"), Sun Pipe Line
Services (Out) LLC, a Delaware limited liability company ("Services Out LLC"),
Sunoco Logistics Partners L.P., a Delaware limited partnership (the
"Partnership"), Sunoco Logistics Partners Operations L.P., a Delaware limited
partnership (the "Operating Partnership"), and Sunoco Partners LLC, a
Pennsylvania limited liability company ("Sunoco Partners LLC"). The above-named
entities are sometimes referred to in this Agreement each as a "Party" and
collectively as the "Parties."
R E C I T A L S:
1. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article II, with respect to
those business opportunities that the Sunoco Entities will not engage in for so
long as the Partnership is an Affiliate of Sunoco unless the Partnership has
declined to engage in any such business opportunity for its own account.
2. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article III, with respect to
certain indemnification obligations of the Parties to each other.
3. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article IV, with respect to the
amount to be paid by the Partnership for the general and administrative services
to be performed by the General Partner (as defined herein) and its Affiliates
(as defined herein) for and on behalf of the Partnership Group (as defined
herein).
4. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article V, with respect to
certain capital and other expenditures to be reimbursed by Sunoco to the
Partnership Group and the completion by Sunoco R&M of certain tank maintenance
and inspection projects.
5. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VI, with respect to the
Partnership Group's option to purchase the Option Assets (as defined herein).
6. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VII, with respect to the
development and construction or acquisition of certain assets by the Partnership
Group.
In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:
ARTICLE I
Definitions
1.1 Definitions.
(a) As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Administrative Fee" is defined in Section 4.1.
"Affiliate" is defined in the Partnership Agreement.
"Assets" means all assets conveyed, contributed, or otherwise
transferred by the Sunoco Entities to the Partnership Group prior to or on
the Closing Date and any assets acquired by the Partnership Group pursuant
to the exercise of the purchase options granted under Article VI.
"Change of Control" means, with respect to Sunoco, any of the
following events: (a) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all of Sunoco's assets to any other Person unless immediately following
such sale, lease, exchange, or other transfer such assets are owned,
directly or indirectly, by Sunoco; (b) the consolidation or merger of
Sunoco with or into another Person pursuant to a transaction in which the
outstanding Voting Stock of Sunoco is changed into or exchanged for cash,
securities, or other property, other than any such transaction where (i)
the outstanding Voting Stock of Sunoco is changed into or exchanged for
Voting Stock of the surviving corporation or its parent and (ii) the
holders of the Voting Stock of Sunoco immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting Stock
of the surviving Person or its parent immediately after such transaction;
and (c) a "person" or "group" (within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act) being or becoming the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50%
of all of the then outstanding Voting Stock of Sunoco, except in a merger
or consolidation that would not constitute a Change of Control under clause
(b) above.
"Closing Date" means the date of the closing of the Partnership's
initial public offering of Common Units.
"Common Units" is defined in the Partnership Agreement.
"Conflicts Committee" is defined in the Partnership Agreement.
"Contribution Agreement" means that certain Contribution, Conveyance
and Assumption Agreement, dated as of the Closing Date, among the General
Partner, the Partnership, the Operating Partnership and certain other
parties, together with the
2
additional conveyance documents and instruments contemplated or referenced
thereunder.
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract, or
otherwise.
"Covered Environmental Losses" is defined in Section 3.1.
"▇▇▇▇▇ Creek Tank Farm" means the tanks and pipelines located near
Philadelphia, Pennsylvania as described on Schedule I to this Agreement.
"Environmental Laws" means all federal, state, and local laws,
statutes, rules, regulations, orders, and ordinances, now or hereafter in
effect, relating to protection of human health and the environment
including, without limitation, the federal Comprehensive Environmental
Response, Compensation, and Liability Act, the Superfund Amendments
Reauthorization Act, the Resource Conservation and Recovery Act, the Clean
Air Act, the Federal Water Pollution Control Act, the Toxic Substances
Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the
Hazardous Materials Transportation Act, and other environmental
conservation and protection laws, each as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exton Facility" means the service station facility located at ▇▇▇ ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ upon the land described in
Schedule VII to this Agreement.
"Guaranty" is defined in Section 3.7.
"General Partner" is defined in the Partnership Agreement.
"Hazardous Substance" means (a) any substance that is designated,
defined, or classified as a hazardous waste, hazardous material, pollutant,
contaminant, or toxic or hazardous substance, or that is otherwise
regulated under any Environmental Law, including, without limitation, any
hazardous substance as defined under the Comprehensive Environmental
Response, Compensation, and Liability Act, and (b) petroleum, oil,
gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet
fuel, and other refined petroleum hydrocarbons.
"Indemnified Party" means the Partnership Group or the Sunoco
Entities, as the case may be, in its capacity as the party entitled to
indemnification in accordance with Article III.
"Indemnifying Party" means either the Partnership Group or Sunoco, as
the case may be, in its capacity as the party from whom indemnification may
be sought in accordance with Article III.
3
"Limited Partner" is defined in the Partnership Agreement.
"Marcus Hook Tank Farm" means the tanks and pipelines located near
Marcus Hook, Pennsylvania as described on Schedule I to this Agreement.
"Mesa Pipeline" means an 80-mile crude oil pipeline from Midland,
Texas to Colorado City, Texas.
"Offer" is defined in Section 2.3.
"Other Equipment" is defined in Section 5.4.
"Option Assets" means the assets listed on Schedule II to this
Agreement.
"Option Asset Owner" means, with respect to an Option Asset, the
applicable Sunoco Entity set forth opposite such Option Asset on Schedule
II to this Agreement.
"Paribas Mortgage" means that certain mortgage from Atlantic Refining
& Marketing Corp. in favor of Banque Paribas and Banque Indosuez, dated
March 10, 1998, as recorded in Book 1077, Page 5, ▇▇▇▇▇▇▇ County,
Pennsylvania.
"Partnership Agreement" means the First Amended and Restated Agreement
of Limited Partnership of Sunoco Logistics Partners L.P., dated as of the
Closing Date, as such agreement is in effect on the Closing Date, to which
reference is hereby made for all purposes of this Agreement. No amendment
or modification to the Partnership Agreement subsequent to the Closing Date
shall be given effect for the purposes of this Agreement unless consented
to by each of the Parties to this Agreement.
"Party" and "Parties" are defined in the introduction to this
Agreement.
"Partnership Group" means the Partnership, the Operating Partnership
and any Subsidiary of any such Person, treated as a single consolidated
entity.
"Partnership Group Member" means any member of the Partnership Group.
"Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization
association, government agency or political subdivision thereof or other
entity.
"Prudent Industry Practice" means such practices, methods, acts,
techniques, and standards as are in effect at the time in question that are
consistent with (a) the standards generally followed by the United States
pipeline and terminalling industries or (b) such higher standards as may be
applied or followed by Sunoco or its Affiliates in the performance of
similar tasks or projects, or by the Partnership Group or its Affiliates in
the performance of similar tasks or projects.
"Restricted Activities" is defined in Section 2.1.
4
"Retained Assets" means the pipelines, terminals and other assets and
investments owned by any of the Sunoco Entities that were not conveyed,
contributed or otherwise transferred to the Partnership Group pursuant to
the Contribution Agreement and other documents relating to the transactions
referred to in the Contribution Agreement, including, without limitation,
the applicable ownership interests in Mid-Valley Pipeline Company, West
Texas Gulf Pipeline Company, the Mesa Pipeline, Inland Corporation, and the
Tank System and the Other Equipment.
"Subject Assets" is defined in Section 2.2.
"Sunoco Entities" means Sunoco and any Person controlled, directly or
indirectly, by Sunoco other than the Partnership Group or the General
Partner; and "Sunoco Entity" means any of the Sunoco Entities.
"Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard
to the occurrence of any contingency) to vote in the election of directors
or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a Subsidiary of such
Person is, at the date of determination, a general or limited partner of
such partnership, but only if more than 50% of the partnership interests of
such partnership (considering all of the partnership interests of the
partnership as a single class) is owned, directly or indirectly, at the
date of determination, by such Person, by one or more Subsidiaries of such
Person, or a combination thereof, or (c) any other Person (other than a
corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or
indirectly, at the date of determination, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
"Tank System" is defined in Section 5.4.
"Units" is defined in the Partnership Agreement.
"Voting Stock" means securities of any class of a Person entitling the
holders thereof to vote on a regular basis in the election of members of
the board of directors or other governing body of such Person.
"Work" is defined in Section 5.4.
ARTICLE II
Business Opportunities
2.1 Restricted Activities. For so long as the Partnership is an
Affiliate of Sunoco, and except as permitted by Section 2.2, each of the Sunoco
Entities shall be prohibited from engaging in or acquiring any business having
assets engaged in the following activities (the "Restricted Activities"):
5
(a) the purchase of crude oil at the wellhead; or
(b) the ownership and/or operation of crude oil pipelines or
terminals, refined products pipelines or terminals, or liquefied petroleum
gas (LPG) terminals in the continental United States.
2.2 Permitted Exceptions.
(a) Notwithstanding any provision of Section 2.1 to the contrary,
the Sunoco Entities may engage in the following activities under the
following circumstances:
(i) the ownership and/or operation of any of the Retained
Assets (including replacements of the Retained Assets);
(ii) the ownership and/or operation of any logistics asset,
including, without limitation, any pipeline or terminal, constructed by a
Sunoco Entity within a manufacturing or refining facility (including,
without limitation, any chemical plant or coke plant) of a Sunoco Entity in
connection with the operation of that facility;
(iii) the ownership and/or operation of any asset or group
of related assets used in the activities described in (a) or (b) of Section
2.1 that are acquired or constructed by a Sunoco Entity after the date of
this Agreement (the "Subject Assets") if:
(A) the fair market value of the Subject Assets (as
determined in good faith by the Board of Directors, or other governing
body, of the Sunoco Entity that will own the Subject Assets) is less than
$5 million at the time of such acquisition by the Sunoco Entity or
completion of construction, as the case may be;
(B) in the case of an acquisition of Subject Assets with a
fair market value (as determined in good faith by the Board of Directors,
or other governing body, of the Sunoco Entity that will own the Subject
Assets) equal to or greater than $5 million at the time of such acquisition
by a Sunoco Entity, the Partnership has been offered the opportunity to
purchase the Subject Assets in accordance with Section 2.3 and the
Partnership (with the concurrence of the Conflicts Committee) has elected
not to purchase the Subject Assets; or
(C) in the case of the construction of Subject Assets with a
fair market value (as determined in good faith by the Board of Directors,
or other governing body, of the Sunoco Entity that will own the Subject
Assets) equal to or greater than $5 million at the time of completion of
construction, the Partnership has been offered the opportunity to purchase
the Subject Assets in accordance with Section 2.3 and the Partnership (with
the concurrence of the Conflicts Committee) has elected not to purchase the
Subject Assets.
6
2.3 Procedures.
(a) If a Sunoco Entity acquires or constructs Subject Assets
described in Section 2.2(a)(iii)(B) or (C), then not later than six months
after the consummation of the acquisition or the completion of construction
by such Sunoco Entity of the Subject Assets, as the case may be, the Sunoco
Entity shall notify the General Partner in writing of such acquisition or
construction and offer the Partnership Group the opportunity to purchase
such Subject Assets in accordance with this Section 2.3 (the "Offer"). The
Offer shall set forth the terms relating to the purchase of the Subject
Assets and, if any Sunoco Entity desires to utilize the Subject Assets, the
Offer will also include the commercially reasonable terms on which the
Partnership Group will provide services to the Sunoco Entity to enable the
Sunoco Entity to utilize the Subject Assets. As soon as practicable, but in
any event within 60 days after receipt of such written notification, the
General Partner shall notify the Sunoco Entity in writing that either (i)
the General Partner has elected, with the approval of the Conflicts
Committee, not to cause a Partnership Group Member to purchase the Subject
Assets, in which event the Sunoco Entity shall be forever free to continue
to own or operate such Subject Assets, or (ii) the General Partner has
elected to cause a Partnership Group Member to purchase the Subject Assets,
in which event the procedures outlined in this Section 2.3 shall apply.
(b) If the Sunoco Entity and the General Partner (with the
concurrence of the Conflicts Committee) are able to agree on the fair
market value of the Subject Assets that are subject to the Offer and the
other terms of the Offer including, without limitation, the terms, if any,
on which the Partnership Group will provide services to the Sunoco Entity
to enable the Sunoco Entity to utilize the Subject Assets, within 60 days
after receipt by the General Partner of the Offer, a Partnership Group
Member shall purchase the Subject Assets for the agreed upon fair market
value as soon as commercially practicable after such agreement has been
reached and, if applicable, enter into an agreement with the Sunoco Entity
to provide services in a manner consistent with the Offer. The purchase
agreement for the Subject Assets will provide for the purchase price to be
paid, at the option of the Sunoco Entity, in cash, Units, or an
interest-bearing promissory note (the interest rate and other terms of
which shall be mutually agreed upon by the Sunoco Entity and the General
Partner).
(c) If the Sunoco Entity and the General Partner are unable to
agree on the fair market value of the Subject Assets that are subject to
the Offer or the other terms of the Offer including, if applicable, the
terms on which the Partnership Group will provide services to the Sunoco
Entity to enable the Sunoco Entity to utilize the Subject Assets within 60
days after receipt by the General Partner of the Offer, the Sunoco Entity
and the General Partner will engage a mutually agreed upon, nationally
recognized investment banking firm to determine the fair market value of
the Subject Assets and/or the other terms on which the Partnership Group
and the Sunoco Entity are unable to agree. Such investment banking firm
will determine the fair market value of the Subject Assets and/or the other
terms on which the Partnership Group and the Sunoco Entity are unable to
agree within 30 days of its engagement and furnish the Sunoco Entity and
the General Partner its determination. The fees of the investment banking
firm will be split equally between the Sunoco Entity and the Partnership
Group. Once the investment
7
banking firm has submitted its determination of the fair market value of
the Subject Assets and/or the other terms on which the Partnership Group
and the Sunoco Entity are unable to agree, the General Partner will have
the right, but not the obligation, subject to the approval of the Conflicts
Committee, to cause a Partnership Group Member to purchase the Subject
Assets pursuant to the Offer as modified by the determination of the
investment banking firm. If the General Partner elects to cause a
Partnership Group Member to purchase the Subject Assets, then the
Partnership Group Member shall purchase the Subject Assets pursuant to the
Offer as modified by the determination of the investment banking firm as
soon as commercially practicable after such determination and, if
applicable, enter into an agreement with the Sunoco Entity to provide
services in a manner consistent with the Offer, as modified by the
determination of the investment banking firm, if applicable. The purchase
agreement for the Subject Assets will provide for the purchase price to be
paid, at the option of the Sunoco Entity, in cash, Units, or an
interest-bearing promissory note (the interest rate and other terms of
which shall be mutually agreed upon by the Sunoco Entity and the General
Partner).
2.4 Scope of Prohibition. Except as provided in this Article II and
the Partnership Agreement, each Sunoco Entity shall be free to engage in any
business activity, including those that may be in direct competition with any
Partnership Group Member.
2.5 Enforcement. The Sunoco Entities agree and acknowledge that the
Partnership Group does not have an adequate remedy at law for the breach by the
Sunoco Entities of the covenants and agreements set forth in this Article II,
and that any breach by the Sunoco Entities of the covenants and agreements set
forth in this Article II would result in irreparable injury to the Partnership
Group. The Sunoco Entities further agree and acknowledge that any Partnership
Group Member may, in addition to the other remedies which may be available to
the Partnership Group, file a suit in equity to enjoin the Sunoco Entities from
such breach, and consent to the issuance of injunctive relief under this
Agreement.
ARTICLE III
Indemnification
3.1 Environmental Indemnification.
(a) Subject to Section 3.2, Sunoco shall indemnify, defend and
hold harmless the Partnership Group for a period of 30 years after the
Closing Date from and against environmental and toxic tort losses
(including, without limitation, economic losses, diminution in value
suffered by third parties, and lost profits), damages, injuries (including,
without limitation, personal injury and death), liabilities, claims,
demands, causes of action, judgments, settlements, fines, penalties, costs,
and expenses (including, without limitation, court costs and reasonable
attorney's and expert's fees) of any and every kind or character, known or
unknown, fixed or contingent, suffered or incurred by the Partnership Group
or any third party by reason of or arising out of:
(i) any violation or correction of violation of
Environmental Laws, or
8
(ii) any event or condition associated with ownership
or operation of the Assets (including, without limitation, the
presence of Hazardous Substances on, under, about or migrating to or
from the Assets or the disposal or release of Hazardous Substances
generated by operation of the Assets at non-Asset locations)
including, without limitation, (A) the cost and expense of any
investigation, assessment, evaluation, monitoring, containment,
cleanup, repair, restoration, remediation, or other corrective action
required or necessary under Environmental Laws, (B) the cost or
expense of the preparation and implementation of any closure,
remedial, corrective action, or other plans required or necessary
under Environmental Laws, and (C) the cost and expense for any
environmental or toxic tort pre-trial, trial, or appellate legal or
litigation support work;
but only to the extent that such violation complained of under Section
3.1(a)(i) or such events or conditions included under Section 3.1(a)(ii)
occurred before the Closing Date (collectively, "Covered Environmental
Losses").
(b) The Partnership Group shall indemnify, defend and hold
harmless the Sunoco Entities from and against environmental and toxic tort
losses (including, without limitation, economic losses, diminution in value
suffered by third parties, and lost profits), damages, injuries (including,
without limitation, personal injury and death), liabilities, claims,
demands, causes of action, judgments, settlements, fines, penalties, costs,
and expenses (including, without limitation, court costs and reasonable
attorney's and expert's fees) of any and every kind or character, known or
unknown, fixed or contingent, suffered or incurred by the Sunoco Entities
or any third party by reason of or arising out of:
(i) any violation or correction of violation of
Environmental Laws, or
(ii) any event or condition associated with ownership
or operation of the Assets (including, but not limited to, the
presence of Hazardous Substances on, under, about or migrating to or
from the Assets or the disposal or release of Hazardous Substances
generated by operation of the Assets at non-Asset locations)
including, without limitation, (A) the cost and expense of any
investigation, assessment, evaluation, monitoring, containment,
cleanup, repair, restoration, remediation, or other corrective action
required or necessary under Environmental Laws, (B) the cost or
expense of the preparation and implementation of any closure,
remedial, corrective action, or other plans required or necessary
under Environmental Laws, and (C) the cost and expense for any
environmental or toxic tort pre-trial, trial, or appellate legal or
litigation support work;
and regardless of whether such violation complained of under Section
3.1(b)(i) or such events or conditions included under Section 3.1(b)(ii)
occurred before or after the Closing Date, except to the extent that any of
the foregoing are Covered Environmental Losses for which the Partnership
Group is entitled to indemnification from Sunoco under this Article III.
9
3.2 Limitations Regarding Environmental Indemnification. Sunoco shall
be obligated to indemnify, defend and hold harmless the Partnership Group for
100% of all Covered Environmental Losses asserted within the first 21 years
after the Closing Date. Sunoco's obligation to indemnify, defend and hold
harmless the Partnership Group for Covered Environmental Losses asserted in any
given year thereafter shall decrease by 10% a year in accordance with Schedule
III attached hereto. There is no monetary cap on the amount of indemnity
coverage provided by Sunoco under Section 3.1(a) or by the Partnership Group
under Section 3.1(b).
3.3 Right of Way Indemnification. Sunoco shall indemnify, defend and
hold harmless the Partnership Group from and against any losses, damages,
liabilities, claims, demands, causes of action, judgments, settlements, fines,
penalties, costs, and expenses (including, without limitation, court costs and
reasonable attorney's and expert's fees) of any and every kind or character,
known or unknown, fixed or contingent, suffered or incurred by the Partnership
Group by reason of or arising out of (a) the failure of the applicable
Partnership Group Member to be the owner of such valid and indefeasible easement
rights or fee ownership interests in and to the lands on which any crude oil or
refined products pipeline or related pump station, tank farm or equipment
conveyed or contributed to the applicable Partnership Group Member on the
Closing Date is located as of the Closing Date; (b) the failure of the
applicable Partnership Group Member to have the consents, licenses and permits
necessary to allow any such pipeline referred to in clause (a) of this Section
3.3 to cross the roads, waterways, railroads and other areas upon which any such
pipeline is located as of the Closing Date; and (c) the cost of curing any
condition set forth in clause (a) or (b) above that does not allow any Asset to
be operated in accordance with Prudent Industry Practice, to the extent that
Sunoco is notified in writing of any of the foregoing within 10 years after the
Closing Date.
3.4 Additional Indemnification.
(a) In addition to and not in limitation of the indemnification
rovided under Sections 3.1(a) and 3.3, Sunoco shall indemnify, defend, and
old harmless the Partnership Group from and against any losses, damages,
iabilities, claims, demands, causes of action, judgments, settlements,
▇▇▇▇, penalties, costs, and expenses (including, without limitation, court
osts and reasonable attorney's and expert's fees) of any and every kind or
haracter, known or unknown, fixed or contingent, suffered or incurred by
he Partnership Group by reason of or arising out of (i) events and
onditions associated with the operation of the Assets and occurring before
he Closing Date (other than Covered Environmental Losses which are
rovided for under Sections 3.1 and 3.2) to the extent that Sunoco is
otified in writing of any of the foregoing within 10 years after the
losing Date, (ii) the currently pending legal actions against the Sunoco
ntities set forth on Schedule IV attached hereto, (iii) events and
onditions associated with the Retained Assets and whether occurring before
r after the Closing Date, (iv) the completion of the tank maintenance and
nspection projects for the ▇▇▇▇▇ Creek Tank Farm that are listed on
chedule I to this Agreement, (v) the failure to obtain any necessary
onsent from the Public Utilities Commission of Ohio for the conveyance to
he Partnership Group of the crude oil pipeline located in Ohio, (vi) the
ailure to cause the Paribas Mortgage to be released of record in ▇▇▇▇▇▇▇
ounty, Pennsylvania to the extent it covers the property in Exton,
ennsylvania more particularly described on Schedule VIII to this
greement, and
10
(vii) all federal, state and local income tax liabilities attributable to
the operation of the Assets prior to the Closing Date, including any such
income tax liabilities of the Sunoco Entities that may result from the
consummation of the formation transactions for the Partnership Group and
the General Partner.
(b) In addition to and not in limitation of the indemnification
provided under Section 3.1(b) or the Partnership Agreement, the Partnership
Group shall indemnify, defend, and hold harmless the Sunoco Entities from
and against any losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs, and expenses
(including, without limitation, court costs and reasonable attorney's and
expert's fees) of any and every kind or character, known or unknown, fixed
or contingent, suffered or incurred by the Sunoco Entities by reason of or
arising out of events and conditions associated with the operation of the
Assets and occurring on or after the Closing Date (other than Covered
Environmental Losses which are provided for under Section 3.1), unless such
indemnification would not be permitted under the Partnership Agreement by
reason of one of the provisos contained in Section 7.7(a) of the
Partnership Agreement.
3.5 Indemnification Procedures.
(a) The Indemnified Party agrees that within a reasonable period
of time after it becomes aware of facts giving rise to a claim for
indemnification under this Article III, it will provide notice thereof in
writing to the Indemnifying Party, specifying the nature of and specific
basis for such claim.
(b) The Indemnifying Party shall have the right to control all
aspects of the defense of (and any counterclaims with respect to) any
claims brought against the Indemnified Party that are covered by the
indemnification under this Article III, including, without limitation, the
selection of counsel, determination of whether to appeal any decision of
any court and the settling of any such matter or any issues relating
thereto; provided, however, that no such settlement shall be entered into
without the consent of the Indemnified Party unless it includes a full
release of the Indemnified Party from such matter or issues, as the case
may be.
(c) The Indemnified Party agrees to cooperate fully with the
Indemnifying Party, with respect to all aspects of the defense of any
claims covered by the indemnification under this Article III, including,
without limitation, the prompt furnishing to the Indemnifying Party of any
correspondence or other notice relating thereto that the Indemnified Party
may receive, permitting the name of the Indemnified Party to be utilized in
connection with such defense, the making available to the Indemnifying
Party of any files, records or other information of the Indemnified Party
that the Indemnifying Party considers relevant to such defense and the
making available to the Indemnifying Party of any employees of the
Indemnified Party; provided, however, that in connection therewith the
Indemnifying Party agrees to use reasonable efforts to minimize the impact
thereof on the operations of the Indemnified Party and further agrees to
maintain the confidentiality of all files, records, and other information
furnished by the Indemnified Party pursuant to this Section 3.5. In no
event shall the obligation of the
11
Indemnified Party to cooperate with the Indemnifying Party as set forth in
the immediately preceding sentence be construed as imposing upon the
Indemnified Party an obligation to hire and pay for counsel in connection
with the defense of any claims covered by the indemnification set forth in
this Article III; provided, however, that the Indemnified Party may, at its
own option, cost and expense, hire and pay for counsel in connection with
any such defense. The Indemnifying Party agrees to keep any such counsel
hired by the Indemnified Party informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole
control over such defense.
(d) In determining the amount of any loss, cost, damage or
expense for which the Indemnified Party is entitled to indemnification
under this Agreement, the gross amount of the indemnification will be
reduced by (i) any insurance proceeds realized by the Indemnified Party,
and such correlative insurance benefit shall be net of any incremental
insurance premium that becomes due and payable by the Indemnified Party as
a result of such claim and (ii) all amounts recovered by the Indemnified
Party under contractual indemnities from third Persons.
(e) The date on which notification of a claim for indemnification
is received by the Indemnifying Party shall determine whether such claim is
timely made and the percentage of the indemnification obligation that
applies under Section 3.2, if applicable.
3.6 Sunoco Guarantee of the General Partner's Indemnification Relating
to Section 4.1 of the Contribution Agreement. Sunoco agrees to guarantee the
obligations of the General Partner to make any payments required under the terms
of Section 4.1 of the Contribution Agreement (the "Guaranty"). The Guaranty is
an absolute, irrevocable, and continuing guaranty of payment, not collection,
and the fact that at any time, or from time to time, the General Partner's
obligations under Section 4.1 of the Contribution Agreement may be paid in full
does not affect Sunoco's obligation with respect to any future liability of the
General Partner under Section 4.1 of the Contribution Agreement. Sunoco may not
rescind or revoke its obligations with respect to the Guaranty.
12
ARTICLE IV
General and Administrative Expenses
4.1 General.
(a) The Partnership will pay the General Partner an
administrative fee (the "Administrative Fee") of $8.0 million per year for
the provision by the General Partner and its Affiliates for the Partnership
Group's benefit of all the general and administrative services that Sunoco
and its Affiliates have traditionally provided in connection with the
Assets including, without limitation, the general and administrative
services listed on Schedule V to this Agreement. Sunoco may increase the
Administrative Fee on the second and third anniversary date of this
Agreement by an amount up to the lesser of (i) 2.5% or (ii) the Consumer
Price Index-- All Urban Consumers, U.S. City Average, Not Seasonally
Adjusted for the applicable year. The General Partner, with the approval
and consent of its Conflicts Committee, may agree on behalf of the
Partnership to further increases in the Administrative Fee in connection
with expansions of the operations of the Partnership Group through the
acquisition or construction of new assets or businesses. After this
three-year period, the General Partner will determine the amount of general
and administrative expenses that will be properly allocated to the
Partnership in accordance with the terms of the Partnership Agreement.
(b) At the end of each year, the Partnership will have the right
to submit to the General Partner a proposal to reduce the amount of the
Administrative Fee for that year if the Partnership believes, in good
faith, that the general and administrative services performed by the
General Partner and its Affiliates for the benefit of the Partnership Group
for the year in question do not justify payment of the full Administrative
Fee for that year. If the Partnership submits such a proposal to the
General Partner, the General Partner agrees that it will negotiate in good
faith with the Partnership to determine if the Administrative Fee for that
year should be reduced and, if so, by how much.
(c) The Administrative Fee shall not include and the Partnership
Group shall reimburse the General Partner for:
(i) salaries of employees of the General Partner, to
the extent, but only to the extent, such employees perform services
for the Partnership Group; and
(ii) the cost of employee benefits relating to
employees of the General Partner, such as 401(k), pension, and health
insurance benefits, to the extent, but only to the extent, such
employees perform services for the Partnership Group.
ARTICLE V
Capital and Other Expenditures
5.1 Reimbursement of Maintenance Capital and Other Expenditures for
Pipeline Integrity Management. Sunoco will reimburse the Partnership Group for
maintenance capital and any other expenditures incurred by the Partnership Group
during the
13
five-year period commencing on January 1, 2002 in order to comply with the U.S.
Department of Transportation's Pipeline Integrity Management Rule 49CFR195.452
to the extent such expenditures exceed $8.0 million in any calendar year and
subject to a maximum aggregate reimbursement by Sunoco under this Section 5.1 of
$15.0 million over this five-year period.
5.2 Completion of Tank Maintenance and Inspection Projects. Sunoco R&M
will, at its sole cost and expense, complete the tank maintenance and inspection
projects for the ▇▇▇▇▇ Creek Tank Farm that are listed on Schedule VI to this
Agreement. Sunoco will dedicate the necessary resources in order to complete the
tank and maintenance projects under this Section 5.2 in accordance with Prudent
Industry Practice, in a manner consistent with the observance of all safety and
environmental qualities, and in compliance with the terms of all agreements
between Sunoco and the Partnership Group with regard to such duties. Sunoco R&M
will coordinate such tank maintenance and inspection projects with the
Partnership Group and use its best efforts to minimize any inconvenience to or
interruption of the conduct of business by the Partnership Group and its tenants
and invitees.
5.3 Reimbursement For Expenditures For ▇▇▇▇▇ Creek Tank Farm And
Marcus Hook Tank Farm. In addition to its obligations under Sections 5.1 and
5.2, Sunoco R&M will reimburse the Partnership Group for maintenance capital and
any other expenditures incurred by the Partnership Group that are required to
conform the ▇▇▇▇▇ Creek Tank Farm and the Marcus Hook Tank Farm to applicable
industry standards and regulatory requirements as of the Closing Date, subject
to a maximum aggregate reimbursement by Sunoco under this Section 5.3 of $10.0
million. The maintenance capital and other expenditures required to be
reimbursed under this Section 5.3 shall include the following: (i) cathodic
protection upgrades in existence on the date of this Agreement; (ii) raising
tank farm pipelines above ground; (iii) repair or demolition of the two riveted
tanks at the Marcus Hook Tank Farm; and (iv) any other upgrades or maintenance
required to put the ▇▇▇▇▇ Creek Tank Farm and the Marcus Hook Tank Farm in
compliance with all applicable industry standards and regulatory requirements as
of the Closing Date.
5.4 Completion of Removal Services at Exton Facility. Sunoco will
cause a Sunoco Entity to complete, at its sole cost and expense, the
following activities at the Exton Facility as soon as practicable, but, in
the case of clauses (a), (b), (c) and (d) of this Section 5.4, in no event
later than 120 days after the Closing Date:
(a) the removal of the underground storage tank system and
ancillary equipment located at the Exton Facility including, without
limitation, the three 10,000 gallon tanks (no.'s 005, 006 and 007),
all dispensers, piping, underground tank anchors, and other related
pipes and equipment (collectively, the "Tank System");
(b) the removal of the 250 gallon above-ground bulk storage
tank used for motor oil storage and all related pipes and other
equipment;
(c) the removal of all fuel pumps;
14
(d) the removal of the canopy located above the fuel pumps
(hereinafter, the equipment as identified in clauses (b), (c) and (d)
of this Section 5.4 that is destined for removal are collectively
referred to as the "Other Equipment");
(e) the performance of investigatory, remedial, and
monitoring activities required under applicable Environmental Laws to
address any petroleum hydrocarbons or other substances that have
emanated from operation of the Tank System or the Other Equipment (the
"Work"); and
(f) the securing of a "no further action" or similar closure
letter from the governmental entity with regulatory oversight of the
Tank System, the Other Equipment and the Work that is reasonably
acceptable to the Partnership Group indicating that no further
investigatory, remedial or monitoring activities are required to be
taken with respect to the conditions on the Exton Facility site for
which the applicable Sunoco Entity is pursuing removal of the Tank
System and the Other Equipment and performance of any Work. In
pursuing removal of the Tank System and the Other Equipment and
performance of the Work, the applicable Sunoco Entity shall timely, at
its sole cost and expense: (i) coordinate such activities with the
Partnership Group and use its best efforts to minimize any
inconvenience to or interruption of the conduct of business by the
Partnership Group and its tenants and invitees; (ii) perform such
activities in compliance with all applicable Environmental Laws; (iii)
obtain all permits, registrations, licenses or authorizations that may
be required to perform such activities; (iv) deliver to the
Partnership Group copies of all data, reports, and correspondence
either submitted to or received from the applicable governmental
entity with regulatory oversight of such activities with respect to
conditions at the Exton Facility site; and (v) repair any and all
damages to the Exton Facility site (or, if repair is not possible,
replace the damaged property) caused by removal of the Tank System or
the Other Equipment and performance of the Work, and leave the Exton
Facility site in the approximate same or better condition than it was
prior to commencement of removal of the Tank System and the Other
Equipment and performance of the Work. In granting access to the Exton
Facility site to the applicable Sunoco Entity for removal of the Tank
System and the Other Equipment and performance of any Work, the
Partnership Group does not consent in any way to the imposition of any
use restrictions, deed certification requirements, or any other form
of restriction on the current or future use of the Exton Facility
site.
Sunoco and the applicable Sunoco Entity will not be responsible for
the removal of the building or the above-ground heating oil tank located at
the Exton Facility.
5.5 Release of Paribas Mortgage. Sunoco will ensure that the
applicable Sunoco Entity will, at its sole cost and expense, cause the
Paribas Mortgage (to the extent it covers the property in Exton,
Pennsylvania more particularly described on Schedule VIII to this
Agreement) to be released of record in ▇▇▇▇▇▇▇ County, Pennsylvania as soon
as practicable after the Closing Date.
15
ARTICLE VI
Purchase Options
6.1 Option to Purchase Certain Assets retained by Sunoco Entities.
(a) Each Option Asset Owner hereby grants to the Partnership
Group the unconditional right and option for a period of 10 years from the
Closing Date to purchase for fair market value at the time of purchase all
of such Option Asset Owner's right title and interest in, to and under the
Option Asset(s) set forth next to its name on Schedule II. The Partnership
Group may exercise this purchase option from time to time for all, part or
none of the Option Assets.
(b) Sunoco will take all action required to cause the Option
Asset Owners to comply with the terms of this Article VI.
(c) The Parties acknowledge that all potential transfers of
Option Assets pursuant to this Article VI are subject to obtaining any and
all written consents of governmental authorities and other third parties
and to the terms of all existing agreements in respect of the Option Assets
including, without limitation, any rights of first refusal of the parties
to such agreements to purchase the Option Assets.
6.2 Procedures.
(a) If a Partnership Group Member decides to exercise the option
to purchase an Option Asset, it will provide written notice to the
applicable Option Asset Owner of such exercise, the fair market value it
proposes to pay for the Option Asset, and the other terms of the purchase
including, if requested by a Sunoco Entity, the terms on which the
Partnership Group Member will provide services to the Sunoco Entity to
enable the Sunoco Entity to utilize the Option Asset. The decision to
purchase an Option Asset, the fair market value to be paid for the Option
Asset, and the other terms of the purchase including, if applicable, the
terms on which the Partnership Group Member will provide services to the
Sunoco Entity to enable the Sunoco Entity to utilize the Option Asset shall
be approved by the Conflicts Committee. If the Partnership Group Member and
the applicable Option Asset Owner are unable to agree on the fair market
value of the Option Asset or the other terms of the purchase including, if
applicable, the terms on which the Partnership Group Member will provide
services to the Sunoco Entity to enable the Sunoco Entity to utilize the
Option Asset, the Partnership Group Member and the applicable Option Asset
Owner will engage a mutually-agreed-upon, nationally recognized investment
banking firm to determine the fair market value of the Option Asset and/or
the other terms on which the Partnership Group Member and the Sunoco Entity
are unable to agree. The fees of the investment banking firm will be split
equally between the applicable Option Asset Owner and the Partnership
Group. Once the investment banking firm submits its determination of the
fair market value of the Option Asset and/or the other terms on which the
applicable Option Asset Owner and the Partnership Group Member are unable
to agree, the Partnership Group Member will have the right, but not the
obligation, to purchase the Option Asset on the terms as modified by the
determination of the investment banking firm. The Partnership Group Member
will
16
provide written notice of its decision to the applicable Option Asset Owner
within 15 days after the investment banking firm has submitted its
determination. Failure to provide such notice within such 15-day period
shall be deemed to constitute a decision not to purchase the Option Asset.
(b) If a Partnership Group Member chooses to exercise its option
to purchase an Option Asset under Section 6.2(a), this Agreement shall
become a contract of sale and purchase for the Option Asset pursuant to
which the applicable Option Asset Owner shall be obligated to sell the
Option Asset to the Partnership Group Member and the Partnership Group
Member shall be obligated to purchase the Option Asset from the applicable
Option Asset Owner and, if applicable, the Partnership Group Member will
enter into an agreement with the Sunoco Entity setting forth the terms on
which the Partnership Group Member will provide services to the Sunoco
Entity to enable the Sunoco Entity to utilize the Option Asset. The terms
of the purchase and sale agreement will include the following:
(i) the Partnership Group Member will deliver a cash
purchase price (unless the Partnership Group Member and the applicable
Option Asset Owner agree that the consideration will be paid by means
of Units or an interest-bearing promissory note);
(ii) the Partnership Group will be entitled to the
benefit of the indemnification contained in Article III of this
Agreement for the remaining term of such indemnification with respect
to events or conditions associated with the operation of the Option
Asset and occurring before the date of acquisition of the Option Asset
by the Partnership Group Member;
(iii) the applicable Option Asset Owner will represent
that it has good and indefeasible title to the Option Asset, subject
to all recorded and unrecorded matters and all physical conditions and
other matters in existence on the closing date for the purchase of the
applicable Option Asset, plus any other such matters as the
Partnership Group Member may approve, which approval will not be
unreasonably withheld. If the Partnership Group Member desires to
obtain any title insurance with respect to the Option Asset, the full
cost and expense of obtaining the same (including but not limited to
the cost of title examination, document duplication and policy
premium) shall be borne by the Partnership Group Member;
(iv) the applicable Option Asset Owner will grant to
the Partnership Group Member the right, exercisable at the Partnership
Group Member's risk and expense, to make such surveys, tests and
inspections of the Option Asset as the Partnership Group Member may
deem desirable, so long as such surveys, tests or inspections do not
damage the Option Asset or interfere with the activities of the
applicable Option Asset Owner thereon and so long as the Partnership
Group Member has furnished the applicable Option Asset Owner with
evidence that adequate liability insurance is in full force and
effect;
17
(v) the Partnership Group Member will have the right to
terminate its obligation to purchase the Option Asset under this
Article VI if the results of any searches, surveys, tests or
inspections conducted pursuant to Section 6.2(b)(iii) or (iv) above
are, in the reasonable opinion of the Partnership Group,
unsatisfactory;
(vi) the closing date for the purchase of the Option
Asset shall occur no later than 180 days following receipt by Sunoco
of written notice by the Partnership Group Member of its intention to
exercise its option to purchase the Option Asset pursuant to Section
6.2(a);
(vii) the applicable Option Asset Owner shall execute,
have acknowledged and deliver to the Partnership Group Member a
special warranty deed, assignment of easement, or comparable document,
as appropriate, in the applicable jurisdiction, on the closing date
for the purchase of the Option Asset constituting a real property
interest conveying the Option Asset unto the Partnership Group Member
free and clear of all encumbrances other than those set forth in
Section 6.2(b)(iii) above;
(viii) the sale of any Option Asset constituting a real
property interest shall be made on an "as is," "where is" and "with
all faults" basis, and the instruments conveying such Option Asset
shall contain appropriate disclaimers; and
(ix) neither the applicable Option Asset Owner nor the
applicable Partnership Group Member shall have any obligation to sell
or buy the applicable Option Asset if any of the consents referred to
in Section 6.1(c) has not been obtained.
(c) If a Partnership Group Member chooses or is deemed to have
chosen not to exercise its option to purchase an Option Asset at the price
determined by the investment banking firm under Section 6.2(a), all future
rights to purchase such Option Asset by the Partnership Group will be
extinguished.
ARTICLE VII
Development and Purchase of Assets
7.1 Development and Purchase of Assets. For so long as the Partnership
is an Affiliate of Sunoco, Sunoco may at any time propose to the General Partner
that the Partnership Group develop and construct, or acquire an asset, and if
the General Partner determines in its good faith judgment, with the concurrence
of its Conflicts Committee, that the development and construction, or
acquisition of the asset, including the terms on which a Sunoco Entity would
agree to use the asset, will be beneficial on the whole to the Partnership Group
and that proceeding with the development and construction, or acquisition of the
asset will not effectively preclude the Partnership Group from undertaking
another project that will be more beneficial to the Partnership Group, the
Partnership Group will use its commercially reasonable efforts to finance,
develop and construct, or acquire the asset, as the case may be.
18
ARTICLE VIII
Miscellaneous
8.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be
subject to and governed by the laws of the Commonwealth of Pennsylvania,
excluding any conflicts-of-law rule or principle that might refer the
construction or interpretation of this Agreement to the laws of another state.
Each Party hereby submits to the jurisdiction of the state and federal courts in
the Commonwealth of Pennsylvania and to venue in Philadelphia, Pennsylvania.
8.2 Notice. All notices or requests or consents provided for by, or
permitted to be given pursuant to, this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the Person to
be notified, postpaid, and registered or certified with return receipt requested
or by delivering such notice in person or by telecopier or telegram to such
Party. Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth
below such Party's signature to this Agreement or at such other address as such
Party may stipulate to the other Parties in the manner provided in this Section
8.2.
if to the Sunoco Entities:
Sunoco, Inc.
Ten Penn Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President - Refining
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President and General Counsel
Sunoco, Inc.
Ten Penn Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Partnership Group
Sunoco Logistics Partners L.P.
c/o Sunoco Partners LLC, its general partner
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19
Attn: President and Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
General Counsel and Secretary
Sunoco Partners LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 Entire Agreement. This Agreement constitutes the entire agreement
of the Parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein.
8.4 Termination of Article II. The provisions of Article II of this
Agreement may be terminated by Sunoco upon a Change of Control of Sunoco.
8.5 Amendment or Modification. This Agreement may be amended or
modified from time to time only by the written agreement of all the Parties
hereto; provided, however, that the Partnership may not, without the prior
approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that, in the reasonable discretion of the General Partner, will
adversely affect the holders of Common Units. Each such instrument shall be
reduced to writing and shall be designated on its face an "Amendment" or an
"Addendum" to this Agreement.
8.6 Assignment. No Party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other Parties
hereto.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
8.8 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by a court or regulatory body of competent
jurisdiction, the remainder of this Agreement shall remain in full force and
effect.
8.9 Further Assurances. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
8.10 Rights of Limited Partners. The provisions of this Agreement are
enforceable solely by the Parties to this Agreement, and no Limited Partner of
the Partnership shall have the right, separate and apart from the Partnership,
to enforce any provision of this
20
Agreement or to compel any Party to this Agreement to comply with the terms of
this Agreement.
21
IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.
SUNOCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President And
-----------------------------------
Chief Financial Officer
-----------------------------------
SUNOCO, INC. (R&M)
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President and
-----------------------------------
Chief Financial Officer
-----------------------------------
SUN PIPE LINE COMPANY OF DELAWARE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: President
-----------------------------------
ATLANTIC PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
SUNOCO TEXAS PIPE LINE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
-----------------------------------
22
SUN PIPE LINE SERVICES (OUT) LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: President
-----------------------------------
SUNOCO LOGISTICS PARTNERS L.P.
By: Sunoco Partners LLC, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------
SUNOCO LOGISTICS PARTNERS
OPERATIONS L.P.
By: Sunoco Logistics Partners GP LLC, its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------
SUNOCO PARTNERS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
-----------------------------------
23
SCHEDULE I
Tanks and Pipelines located at ▇▇▇▇▇ Creek Tank Farm and Marcus Hook Tank Farm:
▇▇▇▇▇ Creek Tank Farm:
1. Twenty-one active tanks and seven out of service tanks with a total capacity
of 3.050 million barrels.
Marcus Hook Tank Farm:
1. Seventeen tanks with a total capacity of 2,057,722 barrels.
2. The following pipeline connections:
a. Twin Oaks refined product terminal.
b. Twin Oaks to Newark 14" pipeline.
c. Twin Oaks to Montello 8" pipeline.
d. Twin Oaks to Buckeye's Laurel pipeline.
Schedule I - 1
SCHEDULE II
Option Assets Option Asset Owner
------------- ------------------
(i) Mid-Valley Pipeline. A 55% interest in Mid-Valley Pipeline Sun Delaware
Company (50% voting interest). Mid-Valley Pipeline Company owns and
operates a 994-mile crude oil pipeline from Longview, Texas to
Samaria, Michigan.
(ii) West Texas Gulf Pipeline. A 17% interest in West Texas Gulf Sun Texas
Pipeline Company. West Texas Gulf Pipeline Company owns and
operates a 581-mile crude oil pipeline from Colorado City,
Texas and Nederland, Texas to Longview, Texas.
(iii) Mesa Pipeline. An undivided 6% interest in the Mesa Services Out LLC
pipeline, an 80-mile crude oil pipeline from Midland, Texas
to Colorado City, Texas.
(iv) Inland Pipeline. A 10% interest in Inland. Inland Sun Texas
Corporation owns and operates a 611-mile refined products
pipeline from Lima and Toledo, Ohio to Canton, Cleveland,
Columbus and Dayton, Ohio.
(v) Icedale Pipeline. The idled 370-mile, 6-inch refined Sun Texas
product pipeline from Icedale, Pennsylvania to Cleveland,
Ohio.
Schedule II - 1
SCHEDULE III
Sunoco's and Partnership's Respective Share of Liability under Section 3.2
for Covered Environmental Losses Arising more than 21 Years after the Closing
Date
Year Following the Closing Date
during which Covered Sunoco's Respective Share
Environmental Loss is First of Liability under Partnership's Respective Share
Asserted Section 3.2 of Liability under Section 3.2
------------------------------- ------------------------- ------------------------------
During years 1 through
and including year 21 100% 0%
During year 22 90% 10%
During year 23 80% 20%
During year 24 70% 30%
During year 25 60% 40%
During year 26 50% 50%
During year 27 40% 60%
During year 28 30% 70%
During year 29 20% 80%
During year 30 10% 90%
After year 30 0% 100%
Schedule III - 1
Schedule IV - 5
SCHEDULE IV
Pending Litigation
PIPELINE AND CRUDE TRUCKING LITIGATION
--------------------------------------
1. USA v. NCH Corporation, et. al. v. Sunoco, et al.
2. Creek County Oil (JADCO) v. Mid-Continent Pipe Line Company
3. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. Sun Pipe Line Company
4. In Re: Explorer Pipeline Company
5. ▇▇▇▇ v. Sun Pipe Line Company
6. PECO v. Sun Pipe Line Company
7. ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ v. Sunoco, Inc. and Sun Pipe Line Company
8. ▇▇▇▇▇▇▇▇▇▇▇ v. Mid-Continent Pipe Line Company
9. ▇▇▇▇▇▇▇ v. Mid-Continent Pipe Line Company
10. Denman v. Sun Oil Company
11. ▇▇▇▇▇▇▇▇ v. Atlantic Pipeline
12. Sun Pipe Line Company v. Bavarian Pretzel
13. ▇▇▇▇ v. Sun Pipe Line Company
14. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Sun Pipe Line Company
15. ▇▇▇▇▇▇▇ Farms v. Mid-Continent Pipe Line Company
16. Sun Pipe Line Company v. ▇▇▇▇ ▇▇▇▇▇▇, et al.
17. Sun Pipe Line Company ▇. ▇▇▇▇▇▇▇
18. Mid-Continent Pipe Line Company and Total Petroleum ▇. ▇▇▇▇▇▇ Petroleum
19. Township of Washington v. Sun Pipe Line Company
20. Delacruz v. Sun Pipe Line Company
21. SPL v. Theta Land Corp.
22. City of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and SPL
Schedule IV - 1
23. American Asphalt Paving Co. v. SPL
24. Pezda ▇. ▇▇▇▇▇▇▇▇
25. ▇▇▇▇▇▇ V. Explorer Pipeline, et al. (Explorer) (District Court, ▇▇▇▇
County, Texas)
26. Steuben Contracting ▇. ▇▇▇▇▇▇▇▇ Oil, Gulf and Sun
27. Sun Pipeline Company v. Transco Damage Claim (Harbor)
28. ▇▇▇▇▇▇ v. Sun Pipe Line Company
29. Carter v. Sun Pipe Line Company
30. ▇▇▇▇▇▇ ▇. Sunoco (Crude Trucking)
31. Sun Pipe Line Company v. M/T Wapello and Mobil Shipping
32. Sun Pipe Line Company v. M/T Wenatchi and Mobil Shipping
33. Sun Pipe Line Company ▇. ▇▇▇▇▇▇▇
34. ▇▇▇▇ Pressure Controls v. Sun Pipe Line Company
35. Macomb County Road Commission v. Sun Pipe Line Company
36. ▇▇▇▇ v. Sun Pipe Line Company
37. Sun Pipe Line Company ▇. ▇▇▇▇▇
38. ▇▇▇▇▇▇▇▇ v. City of ▇▇▇▇▇▇▇
39. ▇▇▇▇▇▇▇▇ v. Lehigh Gas
40. Sun Pipe Line Company v. Wal-Mart
41. General Technology Applications, Inc. v. ARCO, et al.
42. State of Oklahoma v. Mid-Continent Pipeline Company
TOXIC TORT LITIGATION
---------------------
1. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, et al. v. Air Liquide America Corporation, et al.
2. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
3. ▇▇▇▇▇, ▇▇▇▇▇▇▇ - Tolling
Schedule IV - 2
4. ▇▇▇▇▇▇, ▇▇▇▇▇ - Tolling
5. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇., et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
6. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., et al. v. A.M.F., Inc.
7. Bible, ▇▇▇▇▇ ▇▇▇, et al. ▇. ▇▇▇▇▇▇▇▇▇
8. ▇▇▇▇▇▇, ▇▇▇▇▇▇ - Tolling
9. ▇▇▇▇▇▇, ▇▇▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
10. ▇▇▇▇▇▇▇, ▇▇▇, et al. v. AcandS, Inc.
11. ▇▇▇▇▇, ▇▇▇▇▇▇ - Tolling
12. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. A.M.F., Inc., et al.
13. ▇▇▇▇▇, ▇▇▇▇▇▇, et al. v. AC&S, Inc.
14. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., et al. v. A.M.F., Inc.
15. ▇▇▇▇▇▇▇▇, ▇▇▇ - Tolling
16. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇, et al.
17. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, et al. v. ▇. ▇. ▇▇▇▇▇▇▇▇, et al.
18. Conway, Robert, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
19. Cotton, ▇▇▇▇▇▇▇ ▇., et al. v. A. P. Green
20. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., et al. v. AC&S
21. ▇▇▇▇▇▇, ▇▇▇▇ - Tolling
22. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Tolling
23. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇., et al. v. O.C.
24. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ - Tolling
25. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇., et al. v. A.M.F., Inc.
26. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, et al. v. A.M.F.
27. ▇▇▇▇▇, ▇▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇, et al.
28. ▇▇▇▇, ▇▇▇▇▇ - Tolling
Schedule IV - 3
29. Green, ▇▇▇▇▇ ▇. - Tolling
30. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, et al. v. A.M.F.
31. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, et al. v. PC, et al.
32. Hunter, ▇▇▇▇▇ ▇▇▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
33. Jones, Hillery, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇, et al.
34. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇, et al.
35. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, et al. ▇. ▇▇▇▇▇ & Root
36. ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, et al. v. A.M.F., Inc.
37. ▇▇▇▇, ▇▇▇▇▇▇▇, et al. v. ▇. ▇. ▇▇▇▇▇▇, et al.
38. ▇▇▇▇▇▇, ▇▇▇▇ ▇. - Tolling
39. Lotfis, ▇▇▇▇▇▇ - Tolling
40. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. - Tolling
41. ▇▇▇▇▇▇, ▇▇▇▇▇, et al. v. A.M.F.
42. ▇▇▇▇▇, ▇▇▇▇▇ ▇., et al. v. Atofina, et al.
43. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, et al. v. O.C.
44. Music, ▇▇▇▇▇▇▇ - Tolling
45. ▇▇▇▇, ▇▇▇▇▇ ▇. - Tolling
46. Peek, ▇▇▇▇▇▇ ▇. - Tolling
47. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. v. Able Supply
48. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Ind. as Rep. of Estate of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
49. Scarborough, ▇▇▇▇▇▇ ▇▇▇, et al. v. AC&S
50. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, et al. v. AC&S
51. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ v. AC&S
52. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, et al. ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
53. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, et al. v. AC&S, et al.
Schedule IV - 4
54. Twist, ▇▇▇▇▇ ▇. - Tolling
55. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, et al. v. A.M.F., Inc., et al.
56. Vanouwerkerk, ▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇
57. ▇▇▇▇▇▇▇▇ v. Sun Pipe Line
LEASE CRUDE OIL ACQUISITION
---------------------------
1. ▇▇▇▇▇▇▇ v. Amerada ▇▇▇▇ et al MDL 1206 (U.S. District Court, Southern
District of Texas)
2. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
3. ▇▇▇▇▇▇▇▇▇ v. Sunoco, Inc.
4. ▇▇▇▇▇▇▇▇ v. Bancorpsouth, et al.
5. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ v. ▇▇▇▇▇ ▇▇▇▇ d/b/a ▇▇▇▇ Oil Company
EEO AND LABOR PROCEEDINGS AND CASES
-----------------------------------
1. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇▇ ▇▇▇
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
4. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
5. ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Schedule IV - 5
SCHEDULE V
General and Administrative Services
General and Administrative Services provided by the following divisions of
the General Partner and its Affiliates:
(1) systems administration,
(2) administrative division (which includes human resources, safety and
environmental),
(3) finance division (which includes planning, accounts payable, and
accounting),
(4) credit division,
(5) legal division,
(6) insurance division (which includes insurance administration and
insurance claims investigation, but does not include payment of premiums or the
allocated cost thereof),
(7) engineering division (which includes engineering design and
purchasing),
(8) payroll division,
(9) tax division, and
(10) internal audit division.
Schedule V - 1
SCHEDULE VI
Tanks Maintenance and Inspection Projects to be completed by Sunoco R&M at ▇▇▇▇▇
Creek Tank Farm.
▇▇▇▇▇ Creek Tank Farm:
Sunoco R&M will perform all inspection, maintenance and repair services
necessary to return the seven out of service tanks at ▇▇▇▇▇ Creek Tank Farm to
service.
Schedule VI - 1
SCHEDULE VII
Exton Facility Property Discription.
A parcel of property containing 1.38 acres, being described as all that certain
parcel of ground on the north side of U.S. Route 30, west of Old Ship Road,
situate in West Whiteland Township, ▇▇▇▇▇▇▇ County, Pennsylvania, being shown on
a boundary survey plan prepared by Ludgate Engineering Corporation, Plan No.
D-7703001, and being more fully bounded and described as follows TO WIT:
BEGINNING at a point in the center of U.S. Route 30 and a corner of
Atlantic Richfield Company; thence in the center line of U.S. Route 30
North 87 degrees 45 minutes 35 seconds West 494.33 feet to a point; thence
leaving the center line of U.S. Route 30 North 02 degrees 14 minutes 25
seconds East 55.16 feet to a point being a corner of a fence within the
property of Sunoco Exton Terminal; thence along the existing fence and
within property of Sunoco Exton Terminal the five following courses and
distances:
(1) North 63 degrees 22 minutes 09 seconds East 123.42 feet to a
point.
(2) North 02 degrees 30 minutes 56 seconds East 62.25 feet to a
point.
(3) South 87 degrees 42 minutes 07 seconds East 200.11 feet to a
point.
(4) South 02 degrees 21 minutes 29 seconds West 62.99 feet to a
point.
(5) South 69 degrees 49 minutes 21 seconds East 194.28 feet to a
point in the line of lands of Atlantic Richfield Company.
thence along Atlantic Richfield Company and in the pavement of U.S. Route 30
South 01 degree 01 minute 58 seconds West 54.00 feet to a point, the Place of
Beginning.
Schedule VII - 1
SCHEDULE VIII
Exton Terminal Site Property Description.
ALL THAT CERTAIN tract or piece of land with the buildings and improvements
thereon erected, situate in the Township of West Whiteland, County of ▇▇▇▇▇▇▇,
State of Pennsylvania, bounded and described in accordance with the survey and
plan thereof made by Ludgate Engineering Corporation Plan Number D-7703001 dated
11-06-01 being more fully bounded and described as follows to WIT:
BEGINNING at a point in the center of U.S.Route 30 and in line of lands of MARIS
Inc. ▇/▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇ degrees 42 minutes 01 seconds West 458.96 feet to
a point in the centerline of the Philadelphia and Reading Railway, ▇▇▇▇▇▇▇
Valley Branch; thence along center of said Railway North 72 degrees 27 minutes
02 seconds East 1119.03 feet to a point in the centerline of Old Ship Road
thence in and along the centerline of ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ degrees 49 minutes
58 seconds East 580.32 feet to a point a corner of lands of Atlantic Richfield
Company thence along lands of Atlantic Richfield Company the two following
courses and distances:
1. South 75 degrees 01 minutes 28 seconds West 217.61 feet to a point
2. South 01 degrees 01 minutes 58 seconds West 208.16 feet to a point in
the pavement of U.S. Route 30.
thence in and along the centerline of U.S. Route 30 North 87 degrees 45 minutes
35 seconds West 911.03 feet to a point the Place Of Beginning Containing 15.82
Acres
Being the same property conveyed in Deed dated September 6, 1985 from Atlantic
Richfield Company to Atlantic Refining & Marketing Corp., and recorded in Deed
Book 100, page 462.
Schedule VIII - 1