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EXHIBIT 10.5
GULFCOAST TERMINALS
SALE OF ASSETS AGREEMENT
AGREEMENT dated May 10, 1999, between AMERADA ▇▇▇▇ CORPORATION, a Delaware
corporation, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
("Seller"), and ▇▇▇▇▇▇▇▇ ENERGY VENTURES, INC., a Delaware corporation, having
an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ("Buyer").
THE PARTIES AGREE AS FOLLOWS:
1. PURCHASED ASSETS. Seller will sell to Buyer and Buyer will purchase from
Seller at the closing of title (defined in Article 3), all of Seller's right,
title and interest in (a) the properties described on Schedule 1.a (collectively
the "Properties," which definition will also include pipeline easements and
rights of way associated with the Properties), (b) the equipment and personal
property located on each property, which shall include but is not limited to
those items listed on Schedule 1.b (the "Personalty"), (c) to the extent
assignable to Buyer, the contracts used and necessary for the ownership and
operation of the Properties and Personalty as currently operated (the
"Contracts") and (d) the merchantable petroleum products inventories, consisting
of all vehicle refueling tanks and line fill owned by Seller ("Petroleum
Inventory") located on the Properties at the Closing as verified pursuant to
Section 4.2 (the Properties, Personalty and Petroleum Inventory referred to
collectively as the "Purchased Assets"); provided that the Purchased Assets to
be transferred to Buyer will not include the assets or contracts described in
Schedule 1.c.
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2. PURCHASE PRICE.
2.1. The purchase price will be Two Hundred and Eleven Million
($211,000,000) Dollars plus the estimated value of the Petroleum Inventory,
determined in accordance with Section 4.2 ("Purchase Price"), paid by wire
transfer of immediately available federal funds at the Closing to an account
designated by Seller.
3. CLOSING.
3.1. The closing will take place at the offices of Seller in
Woodbridge, New Jersey, within sixty (60) days after the date of this Agreement
(the "Closing"). Buyer will designate the Closing date to be held within the
sixty (60) day period by providing at least ten (10) days written notice to
Seller, or, in the absence of notice, the date of Closing will be the last
business day of the sixty (60) day period (the "Closing Date"). The deadline for
the Closing Date (a) may be extended by the consent of Seller and Buyer, (b)
will be extended as provided in Sections 7.2, 8.5, 8.6.2 and Article 13, and (c)
will be extended an additional 30 days if required to allow sufficient time for
survey and title work to be completed together with completion of Buyer's and
Title Company's analysis of same in accordance with Sections 8.4 and 8.5.
3.2. At the Closing, Buyer will pay the Purchase Price to Seller and
Seller will deliver to Buyer, Special Warranty Deeds in the form of Exhibit 3.2a
(to be conformed to meet local custom) for the Properties, in recordable form,
and Bills of Sale in the form of Exhibit 3.2b for the Personalty and Petroleum
Inventory.
3.3. Buyer and Seller agree to negotiate in good faith a transition
services agreement to be entered into at Closing under which Seller agrees to
provide certain services to Buyer including accounting, technical, product
scheduling, information services support, operations support, environmental
support and other services reasonably requested by Buyer to
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avoid disruptions to the operations and conduct of business at the Purchased
Assets for a period of no longer than 120 days in order to transition the
ownership of the Purchased Assets from seller to Buyer, provided, however, that
Seller will make available to Buyer the use of the System 36, as currently used
in support of the Purchased Assets, until December 31, 1999. Buyer agrees to pay
Seller a fee in the amount of Seller's reasonable actual costs and expenses for
performing such services.
3.4. At the Closing, Seller shall deliver, or cause to be delivered,
to Buyer the following in form and substance satisfactory to Buyer:
(a) Assignment and Assumption Agreement related to the Contracts;
(b) Assignment Agreement relating to rights of way, easements and
other grants of real property;
(c) Copies of all written or electronically stored files, maps,
records, documents and other instruments in the possession or control of Seller
primarily related to the Purchased Assets, including, without limitation, those
related to construction, acquisition, maintenance, operation or regulatory
compliance of the Purchased Assets;
(d) Copy of duly adopted resolutions of the Board of Directors of
Seller approving the execution, delivery and performance of this Agreement
certified by an officer;
(e) Officer's certificate that Seller's representations and
warranties are true and correct as of the Closing Date;
(f) A Non-Foreign Affidavit; and
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(g) As applicable, estoppel certificate(s) from each shipper
certifying the portion of petroleum inventory due such shipper as of the Closing
Date pursuant to Section 4.2 herein.
4. CHANGEOVER OF PROPERTIES.
4.1. Seller covenants that during the period from the date of this
Agreement until the Closing Date:
(a) except with the consent of Buyer, it will own and operate the
Purchased Assets and perform the Contracts in the ordinary course of business
and substantially in the some manner as currently operated or performed, as the
case may be;
(b) except with the consent of Buyer, it will maintain the
Properties and Personalty in substantially the some condition as existing on the
date of this Agreement, other than normal wear and tear;
(c) except with the consent of Buyer, it will not sell, lease or
dispose of Properties or Personalty with a value, individually or in the
aggregate, in excess of $50,000 except in the ordinary course consistent with
past practice;
(d) except with the consent of Buyer, it will not terminate, or
amend or modify in any respect, any material permit, governmental approval or
similar authorization, other than in connection with the transaction
contemplated by this Agreement;
(e) it will not take any action that would, or that could
reasonably be expected to, result in any of the conditions set forth in Article
16 not being satisfied;
(f) it will maintain records relating to the Purchased Assets
consistent with past practice;
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(g) it will continue in full force and effect the insurance
currently maintained by Seller on the Purchased Assets with substantially the
same form and with the same limits and deductibles as presently maintained by
Seller;
(h) it will not encumber any of its interest in the Purchased
Assets;
(i) except with the consent of Buyer, it will not enter into any
material agreements, commitments or contracts affecting the Purchased Assets
other than agreements in the ordinary course of business (including agreements
with its customers for storage in the Purchased Assets) or in accordance with
past practices, and in no event for any term in excess of thirty (30) days
following the Closing Date;
(j) it will not settle any pending judicial or administrative
litigation or claim applicable to Seller's interest in the Purchased Assets
except for settlements which does not impose any obligation on the Purchased
Assets or the operation of the Purchased Assets which extends beyond the Closing
Date; and
(k) it will not make any material changes to the physical
characteristics of the Purchased Assets.
4.2. On the Closing Date, the tank portion of the Petroleum Inventory
will be verified and inventoried according to the procedures set out in Section
4.3 and the line fill portion of the Petroleum Inventory will be inventoried by
a method acceptable to the parties. Buyer will purchase the Petroleum Inventory
at the price formulas set forth in Exhibit 4.2. No later than 3 business days
prior to Closing, Seller will provide Buyer with an estimate of Petroleum
Inventory which will be on hand at Closing and Buyer will pay Seller at Closing
based on the estimate by wire transfer of immediately available federal funds to
an account designated by Seller. Any necessary adjustments will be made within
twenty (20) days after
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Closing. In no event will the actual volume of the Petroleum Inventory on the
date of Closing exceed 35,000 barrels of gasoline, 9,000 barrels of #6 oil and
1,500 barrels of vehicle fuels, in each case plus or minus 10%.
4.3. It is understood by the parties that Seller will have, as of the
Closing Date, ownership or custody of an inventory of third party owned products
at the Properties ("Third Party Inventory"). The Third Party Inventory is not
the property of Seller, but is the property of Seller's shippers. The Third
Party Inventory is specifically excluded from this sale, except as to the
transfer of its custody from Seller to Buyer. On the Closing Date, the quality
of the Third Party Inventory will be in compliance with Seller's records
relating to product received from customers and stored at the Purchased Assets,
Seller will transfer custody of the Third Party Inventory to Buyer, and Buyer
will issue to Seller the necessary documentation to acknowledge receipt of the
Third Party Inventory upon Buyer's verification and acceptance of the physical
inventory.
Representatives of both Buyer and Seller will be present to verify and
accept the physical inventory as of the Closing Date. No later than 10 days
prior to Closing, Buyer and Seller will agree to (x) the procedures relating to
the Closing Date transfer of the Properties (including the receipt and delivery
of product on the Closing Date), (y) an independent inspector (the "Independent
Inspector") who will calculate or measure the Third Party Inventory which
consists of all contents located either in above-ground storage tanks or pipe
lines at the Properties, and (z) the timing of such inspection on the Closing
Date. The calculation of the Third Party Inventory will be recorded using the
following categories of items: (A) all volumes of BS&W as measured by hand gauge
lines, and (B) all volumes of petroleum products in storage tanks at the
Properties ("Products") as measured by hand gauge lines. The volumes of
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Products measured will be adjusted to 60 degrees Fahrenheit and, as indicated by
the separate measurement of BS&W, will exclude any water. Buyer (or Buyer's
designated representatives) and Seller (or Seller's designated representatives)
will have the right to observe the identification, calculation and measurement
of the Third Party Inventory. Each of Buyer and Seller will pay fifty percent
(50%) of the Independent Inspector's fees and expenses. Seller will use
reasonable commercial efforts to control BS&W consistent with past practice and
generally accepted industry standards.
Seller will provide Buyer with an estoppel certificate from each
shipper using the Properties and Personalty certifying (i) that to the shipper's
knowledge there is no material default of Seller under the relevant shipper's
agreement with Seller and that Seller has fully performed under the same, (ii) a
statement of the shipper's current inventory (calculated consistent with the
formula set forth in the preceding Paragraph) on the Properties, and (iii) a
statement of any amount paid Seller in advance of services to be rendered under
the shipper's agreement with Seller. Seller will pay to Buyer at Closing the
amount of any such prepayments, applicable to the period following the Closing
Date. As of the Closing Date, Buyer will assume custody responsibility for the
Third Party Inventory on behalf of and in accordance with the direction of the
respective shippers. Seller will settle any differences with its shippers
between book inventory and the Third Party Inventory.
4.4. Seller will remove at its expense any excepted Personalty, as set
forth on Schedule 1.c, at its expense, and all of Seller's (or other parties')
advertising signs, trademarks and other identification from the Properties at or
prior to the Closing.
5. PERMITS; CONTRACTS. Seller will use reasonable efforts, and cooperate
with Buyer, to transfer any permit, license or governmental approval ("Permit")
or Contract for the
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Properties which can be transferred. Buyer will bear any transfer fees and any
reasonable out-of-pocket costs of Seller in doing so. If all Contracts and
Permits necessary to operate the Properties as is and which can be obtained or
transferred in advance of the Closing are not obtained by or transferred to
Buyer before the Closing Date, after diligent effort by Seller and Buyer
(including without limitation by obtaining related consents and promptly making
necessary filings), Buyer will give written notice to Seller but the Closing
will not be delayed. Buyer will, to the extent permitted by law, operate under
and have the benefit of Seller's Permits and Contracts and Seller and Buyer will
cooperate upon and enter into such other arrangements as are necessary and
appropriate to permit Buyer to operate and have the use and benefit of the
Properties pending transfer of the Permits and Contracts. Seller and Buyer will
continue their diligent efforts and proceed promptly to obtain or transfer the
Permits and Contracts.
6. TAXES; ASSESSMENTS.
6.1. Except as otherwise provided in this Section 6, all property
taxes, assessments, water and sewer rents, utility charges, and other expenses
and revenues, if any, arising out of or relating to the Purchased Assets will be
apportioned and adjusted as of midnight preceding the Closing. Buyer and Seller
hereby agree to cooperate fully, following the Closing, in the distribution of
any such expense(s) and/or revenue(s), the amount of which is unknown as of the
Closing Date.
6.2. That portion of real estate, personal property, and other ad
valorem taxes assessed for all years prior to 1999 against the Purchased Assets
shall be the responsibility of Seller. That portion of real estate, personal
property, and other ad valorem taxes assessed for the year 1999 against the
Purchased Assets which is payable by Seller shall be prorated between the
parties to the Closing Date, with Seller being responsible for the prorated
portion of such taxes
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up to the Closing Date, and Buyer being responsible for its prorated portion of
such taxes on the Closing Date and thereafter. In the event such taxes are
payable in arrears, Seller will pay Buyer, at Closing, Seller's estimated
proportionate share of 1999 real estate, personal property, and ad valorem
taxes, such estimate being based on the latest assessment and Buyer shall be
responsible for payment of all such taxes for the 1999 tax year. Upon payment
thereof, necessary corrections to the estimated 1999 amount paid at Closing by
Seller will be paid promptly by the appropriate party to the other party. In the
event that such taxes are payable in advance, Buyer will reimburse to Seller, at
Closing, the amount of such prepaid taxes which is attributable to the period on
and after the Closing Date.
6.3. Buyer shall pay at Closing: (a) all recording fees; (b) all
survey fees; (c) fifty percent (50%) of any and all Title Company (as defined
herein) escrow agent fees and (d) fifty (50%) of the Title Company's cost of
preparing the Title Commitment and any updates thereto;
6.4. Seller shall pay at Closing: (a) fifty percent (50%) of any and
all Title Company escrow agent fees; and (b) fifty (50%) of the Title Company's
cost of preparing the Title Commitment and any updates thereto.
7. IMPROVEMENTS; RISK OF LOSS.
7.1. This Agreement is entered into with Buyer's full knowledge of the
value of the Properties and improvements, and not on any representation as to
their value, character, quality or condition; other than as is expressly
provided in this Agreement. Except as expressly set forth in this Agreement,
Seller makes no warranty or representation, either oral or written, or express
or implied, as to the merchantability or the condition of the Purchased Assets
or their fitness or availability for any particular or general use or purpose
and Buyer waives any claim as
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to the merchantability or condition of the Purchased Assets or their fitness or
suitability for any particular or general use or purpose.
7.2. Risk of loss or damage to the Properties and Personalty will be
on Seller until the Closing. Seller shall promptly notify Buyer of any casualty
in excess of $100,000 to the Purchased Assets prior to the Closing. In the event
of any such casualty, Seller shall notify the Buyer in writing whether it will
take remedial action (e.g. by undertaking repairs) to remedy the situation. If
Seller agrees to take remedial action, except as provided below, the Closing
will not be delayed and Seller shall use commercially reasonable efforts to
complete the remedial action within six (6) months of Closing. If Seller elects
not to take remedial action, Buyer will purchase the Purchased Assets under the
terms and conditions set forth herein with a reduction to Purchase Price as
agreed upon by Buyer and Seller, and in the event the amount of such reduction
cannot be determined by the parties, such matter will be submitted for binding
arbitration for resolution. Notwithstanding anything in this Section 7.2 to the
contrary, if the casualty has a material adverse effect on the Purchased Assets
taken as a whole or on the business conducted with the Purchased Assets, the
Closing may be delayed up to six (6) months so that Seller can make repairs, but
if under such event (i) Seller does not elect to repair or the repairs are not
completed within six (6) months of the original Closing Date or (ii) if the
length of time to complete such repairs has a material adverse effect on the
Purchased Assets taken as a whole or on the business conducted with the
Purchased Assets and the parties can not reasonably agree to a reduction in the
Purchase Price, Buyer may terminate this Agreement.
8. INSPECTION.
8.1. At all reasonable times from the date of this Agreement to
fifteen days prior to the Closing (the "Inspection Period"), Buyer and its
representatives will have the (i) right
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of access to all information in Seller's possession or capable of being obtained
by Seller by request pertaining primarily to the ownership, use and/or operation
of the Purchased Assets reasonably requested by Buyer in writing, including,
without limitation, records, books, contracts, commitments, reports, permits,
applications, monitoring reports, environmental assessments/audits, studies,
correspondence and any other relevant data in order that Buyer may make such
technical, legal, financial, accounting, environmental or other review or
investigation as Buyer deems desirable and Seller shall also make available its
officers, agents, employees and other representatives, during normal business
hours, to discuss with Buyer and Buyer's representatives any and all information
relating to the Purchased Assets and to the ownership, use and operation thereof
and Buyer agrees that Buyer may not contact Seller's customers to discuss
commercial agreements related thereto; and (ii) right of access to the
Properties and Personalty for the purpose of conducting surveys, inspections,
and such other examinations, including, without limitation, environmental
assessments, of the Property and Personalty as Buyer deems pertinent, convenient
or desirable in order to make its own evaluation of the Property and Personalty
(collectively, (i) and (ii) constitute the "Inspection"). Buyer will use
reasonable care in the course of performing the Inspection. Buyer will defend
and indemnify Seller for any claims or liabilities arising out of the
performance of the Inspection, except to the extent due to Seller's negligence.
In the exercise of its rights under this Section Buyer will minimize any
interference with Seller's operations on the Properties, will not engage in
substantive discussions with any site personnel unless accompanied by Seller's
management representatives and will give Seller reasonable advance written
notice of any Inspection activities. Buyer will pay all expenses associated with
the Inspection, including the disposal of any wastes generated by testing.
Seller may otherwise participate in the testing at its cost. Seller
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will have the right to approve, which approval will not be unreasonably
withheld, conditioned or delayed, and witness all testing activities. Upon
written request, Seller will be promptly provided with all nonprivileged written
information and reports, raw data and test results generated by the Inspection.
Buyer makes no representation as to the accuracy of such information. All
information pertaining to the Properties or Personality is subject to the
confidentiality provisions of Article 18.
8.2. The Inspection may include only those environmental assessment
activities which are part of the ASTM Phase I Environmental Assessment Process
(as defined in ASTM standard E-1527), which includes records reviews, site
reconnaissance and interviews, but does not include any testing or sampling of
materials such as soil and groundwater. Buyer may, however, sample buildings and
equipment.
8.3. Within five (5) days following the date of this Agreement, Seller
will provide to Buyer, at no cost to Buyer, any title information which Seller
may currently have in its possession or is reasonably available to Seller
relating to each of the Properties, including, without limitation, (i) any and
all plats of survey prepared prior to the date of this Agreement indicating the
boundaries of each of the Properties, (ii) copies of all recorded deeds or other
conveyance instruments into Seller or Seller's Affiliates, and (iii) copies of
all subsequent deeds or other conveyance instruments from Seller or Seller's
Affiliates into any other entity or individual. Seller makes no representation
as to the accuracy of this information; however, Seller shall make every
reasonable effort to provide Buyer with complete and accurate information to
facilitate preparation of surveys described in Section 8.4.
8.4. Following delivery to Buyer of title information as described in
Section 8.3, Buyer may cause metes and bounds surveys to be made of each of the
Properties,
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excluding the pipeline easements and rights of way, by a registered
surveyor. Such survey shall be certified to Buyer, Seller and the Chicago Title
Insurance Company ("Title Company"). The metes and bounds description of this
survey shall then become the legal description of the Properties, excluding the
pipeline easement and rights of way.
8.5. Promptly following Buyer's receipt of title information from
Seller as described in Section 8.3, Buyer may order a title commitment from the
Title Company ("Title Commitment") with respect to the Properties, excluding the
pipeline easements and rights of way. Within ten (10) days following Buyer's
receipt of the Title Commitment and within five (5) days of Buyer's receipt of
any amendment to any such Title Commitment showing any new title matter, Buyer
shall notify Seller in writing as to whether Buyer objects to any material title
matter which appears on such Title Commitment ("Title Defect"). Seller shall use
its reasonable commercial efforts to remove or cure any Title Defect during the
thirty (30) day period after receipt of Buyer's notice ("Cure Period") to remedy
Title Defects. In the event that Seller fails to remedy the Title Defects to
Buyer's reasonable satisfaction within the Cure Period, Buyer shall have the
option, exercisable within ten (10) days from the expiration of the Cure Period,
to:
(a) accept the status of the title subject to the Title Defects
and proceed with the performance of this Agreement, in which case the Special
Warranty Deeds will be modified to make the Title Defect an exception to
Seller's warranties thereunder and both Seller and Buyer shall endeavor to agree
to an equitable reduction to the Purchase Price; and in the event such amount of
reduction cannot be agreed upon, such matter will be submitted for binding
arbitration for resolution;
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(b) extend the Cure Period for a reasonable period mutually
agreeable to the parties to give Seller an additional opportunity to remedy the
Title Defects (at the end of which period, if Seller still has not cured the
Title Defect to Buyer's reasonable satisfaction, Buyer shall have ten (10) days
after such period ends to elect option (a) or (c) in this Section 8.5); or
(c) terminate this Agreement by giving written notice to Seller,
in which event, except as otherwise provided herein, neither party shall have
any further rights or obligations hereunder.
8.6.1. If prior to Closing either Seller or Buyer learns that any
representation or warranty contained in Article 9, 14 or 15 is or has become
untrue in any material respect, it will promptly so notify the other Party in
writing of the relevant facts and circumstances.
8.6.2. If Seller is the notified Party or learns on its own that any
such representation or warranty is untrue, Seller will have until the earlier of
(i) fifteen (15) days from the date of the notice or its learning of the matter,
as applicable, or (ii) the Closing Date to notify Buyer in writing to either (a)
update the Seller's disclosure schedules to make the relevant representations
true and correct in all material respects in light of the facts and
circumstances or (b) notify Buyer that it will take remedial action (e.g. by
undertaking repairs) to cause the relevant representations to be true and
correct in all material respects in which case the Closing Date will be extended
to the extent necessary. Buyer will have the right to either (x) terminate this
Agreement if Seller (i) elects to take remedial action but the action has not
been completed within thirty (30) days of Seller's notice and the failure has a
material adverse effect on the condition or operation of the Purchased Assets
taken as a whole or on the business conducted with the Purchased Assets or (ii)
updates the Seller's disclosure schedules to the relevant
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representations and warranties and such updates have a material adverse effect
on the condition or operation of the Purchased Assets taken as a whole or on the
business conducted with the Purchased Assets, or (y) reduce the Purchase Price
by an amount to be mutually determined by Buyer and Seller and in the event such
amount cannot be determined by the Parties hereto, then Buyer, in its reasonable
opinion, may elect to terminate this Agreement or cause such matter to be
submitted for binding arbitration for resolution.
8.6.3. If Buyer is the notified Party, and Buyer fails to cure a
breach of a representation and warranty within thirty (30) days of the notice,
Seller will have the right to terminate this Agreement in addition to any other
remedies to which Seller is entitled.
9. ENVIRONMENTAL LIABILITIES
9.1. Definitions.
"Best of Seller's Knowledge" means the knowledge of (i) the
Environmental Aide and Hydrocarbon Recovery Technicians at the Corpus Christi
terminal and (ii) current terminal management employees at a level of terminal
superintendent or higher who, after due inquiry, and in the normal scope of
their employment would have knowledge of the subject matter.
"Buyer Indemnities" has the meaning set forth in Section 10.1.
"Cleanup" means investigation, treatment, removal, containment,
monitoring or other remediation or response actions taken to (i) reduce to
acceptable levels risks from concentrations of Hazardous Substances present or
Released on, at or under a Property, or which are migrating from a Property or
(ii) to prevent or mitigate a Release of Hazardous Substances at a Property.
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"Environmental Law" means any statute, regulation, rule, permit,
administrative order, ordinance, or other criteria or guidelines issued by a
Governmental Authority that regulates, or seeks to Cleanup or prevent, Releases
of pollutants or Hazardous Substances into water, land or air whose primary
purpose is protection of human health or the environment or natural resources.
Environmental Law does not include regulations designed to regulate the
condition, repair or adequacy for use of pipelines, such as requirements in 49
CFR Parts 190 to 195.
"Environmental Claims" means any claims, liabilities, judgments,
obligations, demands, actions or causes of action, assessments, costs of
Cleanup, damages or expenses of every type and nature whatsoever (including,
without limitation, injury to or death of any person or persons, or damage to or
loss of any property), whether known or unknown, which arise under Environmental
Law with respect to the Properties or Personalty.
"Environmental Losses" means any and all financial expenditures,
costs and expenses (including, without limitation, interest, penalties and
reasonable attorneys' fees, reasonable consultant fees and court costs incurred
in connection therewith and all reasonable costs and expenses of investigating
and defending any claim or any order, directive, final judgment, compromise,
settlement, fine, penalty, court costs or proceeding).
"Environmental Tort" means personal injury or death or damage to
property in which a third party has an ownership or control interest, which
damage, injury or death arises from Hazardous Substances present or Released on,
at or under a Property, or migrating or emanating from a Property. Any action by
a third party is not an Environmental Tort to the extent the action seeks to
recover costs or expenses for, or to require, Cleanup. Any such Cleanup will be
conducted as provided in Section 9.3.
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"Governmental Authority" means the United States and any state,
county, city or other political subdivision, agency, department, board, court or
instrumentality that has jurisdiction over the asset, entity or matter in
question.
"Hazardous Substances" means those substances listed in 49 C.F.R.
Section 172.101 and 40 C.F.R. Part 302, petroleum and regulated substances as
defined in Subtitle I to RCRA; radiation; and any other chemical, material or
substance, or combination thereof, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law.
"Release" has the meaning provided in Section 101 (22) of CERCLA.
"Seller Indemnitees" has the meaning set forth in Section 10.2.
"Superseding Release" means a Release which takes place after the
Closing Date which substantially raises the remaining cost of any Cleanup at a
Property.
9.2. Environmental Representations and Warranties.
9.2.1. Seller makes only the following environmental
representations and warranties:
(i) except as disclosed in Schedule 9.2.1 (i), there is no
suit, action, claim, arbitration, administrative, governmental investigation or
other legal proceeding pending or, to the Best of Seller's Knowledge,
threatened, against or related to the Properties or Personalty thereon which
arises under Environmental Law;
(ii) to the Best of Seller's Knowledge, Seller has furnished
or made available to Buyer all documents and information in Seller's custody or
control relating to the environmental condition of the Properties or Personalty
thereon or requested by Buyer to be made available to it under Section 8.1;
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(iii) except as disclosed in Schedule 9.2.1 (iii), there are
no liens arising under any Environmental Law which apply to the Properties;
(iv) except as disclosed on Schedule 9.2.1 (iv), to the Best
of Seller's Knowledge, Seller's ownership, use and operation of the Properties
and/or the Personalty thereon is in material compliance with all Environmental
Laws applicable to the Properties and/or the Personalty and Seller has not
received notice from any Governmental Authority asserting any current act of
noncompliance. For the purposes of this Section 9.2.1(iv), a Release of
Hazardous Substances will not be deemed a violation of Environmental Laws;
(v) except as set forth in Schedule 9.2.1(v), Seller has, or
will have prior to Closing, all permits issued under any Environmental Law
necessary to conduct the business as presently conducted on the Properties;
(vi) except as set forth in Schedule 9.2.1(vi), to the Best
of Seller's Knowledge, there exists no threat of Release at, on, in, under, over
or in any way affecting the Properties or any Personalty located thereon; and
(vii) except as disclosed in Schedule 9.2.1(vii), no Cleanup
projects have been performed in the last two (2) years or are in the process of
being performed at the Properties or with respect to any Personalty located
thereon or to the Best of Seller's Knowledge, there is no pending Cleanup
required by a governmental authority at the Properties or with respect to the
Personalty thereon.
(viii) to the Best of Seller's Knowledge, all offsite
disposal of Hazardous Substances in wastes from the Properties has occurred in
compliance with applicable Environmental Law.
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9.2.2. Seller makes no other representation or warranty as to (i)
Environmental Law or Environmental Liability or (ii) except as set forth in
Article 14, as to the suitability of the Properties or Personalty for any
purpose or as to the physical condition of the Properties or Personalty. ALL
WARRANTIES (WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED) OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, CONDITION, DESIGN OR OTHERWISE ARE EXCLUDED.
9.2.3. Buyer's remedy for the structural soundness, conditions,
repair or adequacy for use of the Personalty and fixtures to Property (included,
but not limited to, tanks and pipelines) will be pursuant to Article 14 and not
this Article 9.
9.3. Seller's Obligation to Cleanup Pre-Closing Releases.
9.3.1. Seller will conduct (in accordance with Section 9.6) and
pay for Cleanup of all Hazardous Substances present or Released prior to Closing
on, at or under each Property or portion of a Property or Personalty located
thereon, to the extent required on Schedule 9.3.1 ("Known Cleanup Obligations");
subject however to the limitations of Section 9.5.
9.3.2. In addition to Seller's obligations under Section 9.3.1
and subject to the limitations of Section 9.5, Seller will pay all costs for,
and will conduct (in accordance with Section 9.6), each Cleanup of Hazardous
Substances on, at, under or migrating from a Property which are present at
concentrations that require Cleanup under applicable Environmental Law (an
"Environmental Noncompliance"), for which Buyer gives Seller written notice (a
"Remediation Notice") within five (5) years after Closing; provided that the
Hazardous Substances giving rise to the Environmental Noncompliance were present
or Released on, at or under a Property prior to Closing ("Unknown Cleanup
Obligations"). The Remediation Notice
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must be given within 90 days of the discovery of the Environmental Noncompliance
and must include (i) analyses of all soil or groundwater samples which identify
an Environmental Noncompliance and (ii) a site map showing the location or
locations from which such samples were taken. The Remediation Notice will be
deemed to provide Seller notice of any Environmental Noncompliance for
contaminated soils or plumes of contaminated groundwater which are directly
contiguous to the soil or groundwater samples identifying an Environmental
Noncompliance included with the Remediation Notice. If Buyer does not provide a
Remediation Notice for an Environmental Noncompliance in accordance with this
Section 9.3.2, then Buyer will assume and will undertake and pay for Cleanup of
such Environmental Noncompliance.
9.4. Environmental Indemnities
9.4.1. Subject to the limitation on liability of Section 9.5 and
the expiration of representations and warranties in Section 9.2, Seller will
defend, indemnify and hold Buyer Indemnitees harmless from and against all
Environmental Claims and resulting Environmental Losses:
(i) arising out of Cleanup which Seller is required to pay
or perform under Section 9.3.1;
(ii) arising out of Cleanup which Seller is required to pay
or perform under Section 9.3.2;
(iii) for fines or penalties for violation of any
Environmental Law to the extent that such violation arises from ownership or
operation of the Properties and/or the Personalty prior to Closing ("Preclosing
Fines"):
(iv) to the extent arising from ownership or operation of
the Properties prior to Closing, including, but not limited to, Environmental
Claims arising from any
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pre-Closing accident, fire, explosion, collapse, mechanical failure, or Release
of any Hazardous Substance, provided further that Buyer provides Seller with
written notice of the Environmental Claim within five (5) years from the date of
Closing. If Buyer does not provide written notice of such Environmental Claim
within the time provided in this Section 9.4.1, then Buyer will assume such
Environmental Claim, and will pay and discharge when due, resulting
Environmental Losses;
(v) arising out of any inaccuracy or breach by Seller of any
representation or warranty in Article 9;
(vi) arising under the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), the Resource Conservation and
Recovery Act ("RCRA") or state law analogs to CERCLA or RCRA based on Seller's
disposal or arrangement for disposal of any Hazardous Substance at a location
other than the Properties ("Superfund Claims"); or
(vii) arising from matters on Schedule 9.2.1 (i) - (vii).
9.4.2. Buyer will defend, indemnify and hold Seller Indemnitees
harmless from and against all Environmental Claims and resulting Environmental
Losses:
(i) arising out of Environmental Claims, obligations and
liabilities assumed by Buyer under Sections 9.3.2, 9.4.1 (iv) or 9.5.2;
(ii) for fines or penalties for violation of any
Environmental Law to the extent that such violation arises from ownership or
operation of the Properties after the Closing;
(iii) to the extent arising from ownership or operation of
the Properties after the Closing, including, but not limited to, Environmental
Claims arising from
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any post-Closing accident, fire, explosion, collapse, mechanical failure, or
Release of any Hazardous Substance.
9.5. Limits on Environmental Indemnities and Liability
9.5.1. Seller's liability and indemnity and other
obligations under this Article 9 for Environmental Claims and Environmental
Losses are limited as provided in this Section 9.5.
9.5.2. Except as set forth in Section 9.5.2(iii), Seller
will not be liable for and Buyer assumes liability:
(i) for the payment of the first $2,500,000 in
Environmental Losses incurred after the Closing Date for Environmental Claims
for which Seller would otherwise be required to indemnify Buyer under Section
9.4.2(ii), (iv) or (v) ("Seller's Basket") provided, however, that nothing in
this Section 9.5.2(i) affects Seller's obligation to conduct Cleanup under this
Agreement; and
(ii) for Environmental Losses incurred after the
Closing Date to the extent that the aggregate amount of Environmental Losses
(net of the value of any recovered products at Corpus Christi) exceeds, on a
cumulative basis (including Environmental Losses paid by Buyer under Section
9.5.2(i)), $15,000,000 (the "Liability Limit"). Seller will provide Buyer
written notice if the Liability Limit is exceeded. Seller will provide
reasonable documentation for all payments relating to Environmental Losses, if
the payments exceed the Liability Limit. At Seller's option, Buyer will conduct
and pay for all Cleanup at the Properties commencing sixty (60) days after
Seller gives Buyer notice under this Section 9.5.2 that the Liability Limit has
been exceeded.
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(iii) The Seller's Basket and the Liability Limit under
this Section 9.5.2. do not apply to Environmental Losses for: (a) Known Cleanup
Obligations; (b) Preclosing Fines; (c) Superfund Claims; (d) a suit or other
legal proceeding seeking to recover for an Environmental Tort arising solely
from ownership or operation of the Properties and/or the Personalty prior to
Closing and (e) matters on Schedule 9.2.1(i) - (vii).
(iv) Buyer will conduct and pay for Cleanup of the
contamination identified on Schedule 9.3.1 commencing on the fifteenth (15th)
anniversary of the Closing Date, provided that Seller has materially complied
with its obligations under Section 9.6.3.
9.5.3. Seller's obligations under Sections 9.3 and 9.4.1 to
pay for, perform, or indemnify Buyer with respect to Cleanup will terminate if
(i) the Governmental Authority determines that no further action is required by
Seller (x) for the Property (or portion of the Property) or Personalty located
thereon on Schedule 9.3.1 or (y) for an Environmental Noncompliance for which
Buyer has given a timely Remediation Notice, as the case may be, or (ii) there
is a Superseding Release at the Property (or portion of a Property) or from
Personalty located thereon and Seller pays Buyer the net present value of the
cost to Seller (determined without regard to the Superseding Release) to
complete Cleanup at that Property (or portion of a Property) or Personalty
located thereon, as reasonably determined by Seller and reasonably deemed
acceptable by Buyer, in which case Buyer will assume and pay for Cleanup. If the
parties are unable to agree, the issue will be submitted for binding
arbitration.
9.5.4. Seller's obligations under Sections 9.3.1 and 9.3.2
notwithstanding, Buyer will first look to the responsible parties identified on
the Schedule 9.5.4 for Cleanup of any Property (or portion of a Property) or
Personalty located thereon listed on
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Schedule 9.5.4. If Buyer provides Seller a Remediation Notice under Section
9.3.2 for any Environmental Noncompliance for which Seller can reasonably
demonstrate that Seller is not the responsible party (including, but not limited
to, migration of Hazardous Substances onto a Property), Buyer will first look to
the responsible parties identified by Seller for Cleanup of such Environmental
Noncompliance. If the responsible party does not undertake and complete Cleanup
in accordance with Environmental Law, despite Buyer's reasonable efforts over at
least a ninety (90) day period to obtain performance of Cleanup by the
responsible party, then Buyer will notify Seller. If Seller is unable to obtain
performance of Cleanup by the responsible party within the next ninety (90) day
period, then Seller will promptly commence and diligently continue without undue
delay the Cleanup and pay for same in accordance with this Article 9, subject to
the other limitations and exceptions thereto in this Section 9.5.
9.5.5. If Buyer excavates, constructs on, regrades, or
otherwise changes the Property or Personalty located thereon and causes a
material increase in the cost of any Cleanup, Buyer must pay to Seller the
increase in the cost of Cleanup. Buyer's proposed activity may require approval
from a Governmental Authority.
9.5.6. Buyer and Seller agree to waive any rights to
special, incidental, consequential, indirect or punitive damages, including,
without limitation, loss of profits, diminution of value resulting from any
Environmental Claim.
9.5.7. Neither party shall have any liability for
Environmental Claims pursuant to this Article 9 unless written notice of such
claim has been delivered to the other party as required by Section 10.6 within
the applicable survival period as set forth in Section 9.9.
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9.6. Right of Access and Conduct of Remediation.
9.6.1. After Closing, Buyer will permit Seller, its agents,
contractors and employees, rent-free access to the Properties to continue the
performance of Cleanup (which includes, but is not limited to, sampling,
installation and maintenance of monitoring ▇▇▇▇▇, or installation of remediation
systems) which Seller is required to conduct under this Article 9 or by any
appropriate Governmental Authority. Seller's conduct of Cleanup which Seller is
not required to conduct under this Article 9 is not an admission of liability
for the Cleanup or a waiver of Seller's rights under this Agreement.
9.6.2. Buyer will cooperate with Seller so that Seller may
conduct Cleanup in compliance with Environmental Law and in a cost-effective and
efficient manner. Seller will use its reasonable commercial efforts to minimize
any disruption to the operation of the Properties or Personalty located thereon
resulting from Cleanup.
9.6.3. Seller has the sole right to manage any Cleanup which
Seller conducts under this Article 9 or is required to conduct by any
Governmental Authority. All Cleanup undertaken under this Article 9 will (i) be
performed in a professional workerlike manner by qualified and if required by
law, licensed personnel or contractors, (ii) comply with Environmental Laws and
(iii) be performed in accordance with any schedule established by or under
permit, statute, regulation or enforceable order or directive of the relevant
Governmental Authority.
9.6.4. Seller has the right to conduct all Cleanups using the
most cost-effective, commercially reasonable, Cleanup technologies and remedies
which comply with Environmental Laws and are acceptable to the Governmental
Authority. Seller may propose to Cleanup Hazardous Substances using site
specific corrective action standards (including, without
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limitation, risk-based corrective action standards) and exposure controls which
are predicated on the continued use of the Property as a bulk terminal storage
facility, secured from general public access. Buyer will sign and record any
deed or other recordable real property instrument reasonably requested by Seller
either as directed by the Governmental Authority or as required Environmental
Law, which is necessary to permit the use of site specific corrective action
remedies or remedies based on exposure controls, provided that the instrument
does not interfere with the operation of the business as presently conducted on
the Property. Buyer also agrees not to use any groundwater on the Properties, if
such restriction is necessary to permit the use of site specific corrective
action remedies or remedies based on exposure controls.
9.6.5. Materials generated by Cleanup may be treated or stored on
a Property in portable non-permanent property designed storage facilities and
managed in wastewater treatment systems on the Property without cost to Seller,
to the extent that such use (i) has no material impact on availability of the
wastewater system for the Buyer's use or on the cost of operation of such
wastewater system and (ii) is in compliance with Environmental Laws. Seller
shall be designated as the "Generator" of all such waste and shall be
responsible for characterizing and disposing (except for wastewater treated on a
Property under this Section) of same at its cost. Buyer shall be under no
obligation to construct or modify any wastewater treatment system. Buyer will
direct Seller as to where materials generated by any Cleanup may be stored on a
Property and Buyer's decision shall be controlling. Notwithstanding anything to
the contrary herein, Buyer may eliminate or modify any wastewater treatment
systems owned by Buyer as it deems appropriate for the conduct of its business
activities.
9.6.6. Buyer will store any petroleum or petroleum products
recovered during Cleanup at Corpus Christi, and Seller will pay Buyer a
reasonable commercial rental for
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such storage. Buyer will have the option to purchase such recovered
hydrocarbons. If Buyer purchases the recovered hydrocarbon, the reasonable
commercial value of the recovered hydrocarbon will be fixed on the Closing Date
and annually on each anniversary of the Closing Date based on the spot market
price of a comparable petroleum product or blendstock on such date. If Buyer and
Seller cannot agree on a price, Seller may, at its option, have Buyer store,
rather than purchase, recovered hydrocarbons, in which case Seller will pay
Buyer a reasonable commercial rental for such storage.
9.6.7. Seller has installed and uses a wastewater treatment
system and three tanks at Corpus Christi to treat and store recovered
groundwater and to separate hydrocarbon products from the groundwater. Seller
retains ownership of the wastewater system and Buyer will own the tanks, which
may not be used by Buyer or Seller for any purpose other than Cleanup until the
Cleanup is completed. Buyer will operate the wastewater system and tanks in
compliance with Environmental Law without cost to Seller; except that Seller
will reimburse Buyer for the normal and reasonable incremental costs to operate
and maintain the tank and wastewater system. Maintenance costing in excess of
$1,000 requires Seller's advance approval, which will not be unreasonably
withheld. Buyer acknowledges that the No. 6 Fuel Oil heater at Corpus Christi is
used to comply with Environmental Laws as an emissions control device for the
wastewater system and further acknowledges that Seller will be permitted to use
such Fuel Oil heater. Such use will be without cost to Seller, except that
Seller will pay to Buyer the incremental cost to operate the Fuel Oil heater to
the extent that operation of the Fuel Oil heater is not necessary for operation
of the Corpus Christi Terminal as operated by Buyer.
9.6.8. If Buyer or Seller or their respective invitees,
contractors, customers or agents, damage or destroy any personalty owned or used
by the other party (which,
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in Seller's case, includes ▇▇▇▇▇ or other equipment used by Seller for Cleanup),
the party that caused the damage will reimburse the other for the reasonable
cost of repair or replacement of such property.
9.7. Restriction on Transfer. If Buyer sells, leases or otherwise
transfers any Property, the obligations and duties of Seller will not inure or
extend to the transferee and will terminate, unless Buyer gives Seller thirty
(30) days' written notice of transfer and the transferee agrees in writing to be
bound by this Article 9. This provision does not apply to the transfer of a
security interest in the Property or Personalty to a financial institution.
Seller may record this restriction only in the real property records pertaining
to the Properties.
9.8. No Other Remedy. Buyer acknowledges that the Properties were used
by present or prior owners or operators for the storage, manufacture and sale of
petroleum and other products. This use and the possible Release of materials,
including gasoline or other petroleum products, may have caused physical and
other changes in the Properties, including the deposit of solid and hazardous
wastes and Hazardous Substances. Buyer acknowledges having the opportunity to
conduct the Inspection to ascertain the physical characteristics and existing
conditions of the Properties and Personalty. Buyer's sole remedy for
Environmental Liability (including, but not limited to, Environmental Liability
for subsurface and surface conditions, contamination, and solid and hazardous
wastes, Hazardous Substances, and petroleum products or their constituents on,
under or migrating from the Properties) will be as set forth in this Article 9
or under Section 8.6 for a breach of warranty in Section 9.2 and these remedies
are in lieu of any statutory rights that Buyer may have under any Environmental
Laws or common law causes of action.
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9.9. Survival. The provisions of Article 9 survive the Closing and do
not expire, except that Seller's representations and warranties in Section 9.2
expire eighteen (18) months after the Closing Date.
9.10. Coal Tar Plant. Any other provision of this Agreement
notwithstanding, based on Buyer's Inspection, Buyer may, by written notice to
Seller delivered at least 30 days prior to the Closing Date, delete the Coal Tar
Plant (as defined in Schedule 9.3.1.) from the Property to be purchased pursuant
to this Agreement and all references to the Coal Tar Plant will be deemed to be
deleted from this Agreement. Deletion of the Coal Tar Plant will not change the
Purchase Price. If Buyer deletes the Coal Tar Plant, Buyer will grant Seller,
its agents and owners or operators of the Coal Tar Plant site an easement for
access reasonably necessary for the Cleanup or use of Coal Tar Plant site.
Seller hereby grants Buyer a right of first refusal for the Coal Tar Plant for a
twenty-five (25) year period, which right will expire unless Buyer agrees to
meet all terms and conditions of a bona fide offer for the Coal Tar Plant within
30 days after Seller gives Buyer written notice of the terms and conditions of
such offer.
9.11 Cooling Tower. Seller will, at its expense, demolish and remove,
within 90 days after the Closing Date, the cooling tower located in the refinery
section of the Corpus Christi terminal, including, but not limited to, solid
waste disposal costs and Cleanup costs associated with the demolition and
removal. Seller will have a right of access to the Corpus Christi terminal for
this purpose. Conduct of the demolition and removal and the right of entry will
be subject to Section 9.6.
10. INDEMNIFICATION.
10.1. After the Closing and until the eighteen month anniversary of
the Closing Date or, in the case of the representations and warranties in
Section 14.15, the expiration of the
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applicable statute of limitations ("Survival Period"), Seller will defend,
indemnify and hold Buyer, its Affiliates, successors and assigns and their
respective directors, officers and employees (collectively, the "Buyer
Indemnitees") harmless from and against all demands, actions or causes of
action, assessments, judgments, damages, obligations, liabilities and claims
(collectively, "Claims") of every type and nature whatsoever (including, without
limitation, injury to or death of any person or persons, or damage to or loss of
any property) suffered by Buyer Indemnitees in consequence of such Claims to the
extent arising from or related to:
(i) any inaccuracy in or breach by Seller of any representation
or warranty of Seller set forth in this Agreement, except Section 9.2 hereof,
remedies for inaccuracies in or breaches of which shall be solely pursuant to
Article 9;
(ii) the Purchased Assets and based upon events occurring or
conditions existing prior to the Closing Date; provided, however, that this
Section 10.1 shall not apply, and Article 9 shall be the sole remedy, with
respect to Claims arising out of environmental matters; or
(iii) any noncompliance by Seller with any bulk transfer laws
that may be applicable to the transaction contemplated by this Agreement.
The term "Affiliates" means with respect to any individual or legal
business entity, any individual, corporation, general or limited partnership,
limited liability company, joint venture, or other entity ("Person") which
directly or indirectly, controls, is controlled by, or is under a common control
with such individual or legal business entity. The term "control" (including the
terms "controlled by" and "under common control with") as used in the preceding
sentence means the power to direct or cause the direction of management and
policies of a Person.
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Seller's maximum liability under this Article 10 shall not exceed
$5,000,000 ("Seller's Maximum Liability"), provided however that if Buyer seeks
indemnification for any Claims relating to the pipelines under the Houston Ship
Channel (the "Pipeline Claims") Buyer will be entitled to indemnification in an
amount not to exceed $1,000,000, which amount will not reduce Seller's Maximum
Liability. Any amounts paid to Buyer in excess of $1,000,000 with regard to the
Pipeline Claims will reduce Seller's Maximum Liability dollar for dollar.
10.2. After the Closing, Buyer shall indemnify, defend and hold
Seller, its Affiliates, successors and assigns and their respective directors,
officers and employees (collectively, the "Seller Indemnitees") harmless from
and against any and all Claims of every type and nature whatsoever (including,
without limitation, injury to or death of any person or persons, or damage to or
loss of any property) suffered by Seller Indemnitees in consequence of such
Claims to the extent arising from or related to:
(a) any inaccuracy in or breach by Buyer of any representation or
warranty of Buyer set forth in this Agreement; or
(b) the Purchased Assets and relating to the period of time from
and after the Closing Date.
10.3. The indemnities in Sections 10.1 and 10.2 do not apply to any
claim under Environmental Law, or for Environmental Liabilities, Cleanup or
Environmental Torts, as to which Seller's and Buyer's remedies are limited to
the remedies provided in Article 9.
10.4. The Parties hereto agree to waive any rights to special,
incidental, consequential, indirect or punitive damages, including, without
limitation, loss of profits, resulting from any Claim.
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10.5. Buyer and Seller shall cooperate fully with one another in
connection with any matters covered by the indemnity obligations under this
Agreement. Such cooperation shall include, without limitation, providing the
other Party with reasonable access to files, properties and personnel and
advance notification of any meeting or communications with any third parties
which could reasonably be expected to affect the rights or obligations of the
other Party under this Agreement.
10.6. All Environmental Claims under Article 9 and/or Claims under
Article 10 shall be asserted and resolved pursuant to this Section 10.6. Any
person claiming indemnification hereunder is hereinafter referred to as the
"Indemnified Party" and any person against whom such claims are asserted
hereunder is hereinafter referred to as the "Indemnifying Party".
(i) Third Party Claims. In the event that any Claims are asserted
against or sought to be collected from an Indemnified Party by a third party,
the Indemnified Party shall with reasonable promptness provide to the
Indemnifying Party a Claim Notice. The Indemnifying Party shall not be obligated
to indemnify the Indemnified Party with respect to any such Claims if the
Indemnified Party fails to notify the Indemnifying Party thereof in accordance
with the provisions of this Agreement in reasonably sufficient time so that the
Indemnifying Party's ability to defend against the Claims is not prejudiced. The
Indemnifying Party shall have 30 days from the personal delivery or receipt of
the Claim Notice ("Notice Period") to notify the Indemnified Party (a) whether
or not it disputes the liability of the Indemnifying Party to the Indemnified
Party hereunder with respect to such Claims and/or (b) whether or not it
desires, at the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such Claims. In the event that the Indemnifying Party
notifies the Indemnified Party within the
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Notice Period that it desires to defend the Indemnified Party against such
Claims, the Indemnifying Party shall have the right to defend all appropriate
proceedings, and with counsel of its own choosing, which proceedings shall be
promptly settled or prosecuted by them to a final conclusion. If the Indemnified
Party desires to participate in, but not control, any such defense or settlement
it may do so at its sole cost and expense. If requested by the Indemnifying
Party, the Indemnified Party agrees to cooperate with the Indemnifying Party and
its counsel in contesting any Claims that the Indemnifying Party elects to
contest or, if appropriate and related to the claim in question, in making any
counterclaim against the person asserting the third party Claims, or any
cross-complaint against any person. No claim may be settled or otherwise
compromised in a manner which imposes any obligation or liability on the
Indemnified Party without the prior written consent of the Indemnified Party.
(ii) Other Claims. A claim for indemnification for any matter not
involving a third party claim may be asserted by delivery of a Claim Notice to
the party from whom indemnification is sought. The Indemnified Party shall with
reasonable promptness provide to the Indemnifying Party such Claim Notice. The
Indemnifying Party shall not be obligated to indemnify the Indemnified Party
with respect to any such claims if the Indemnified Party fails to provide notice
to the Indemnifying Party thereof in accordance with the provisions of this
Agreement in reasonably sufficient time so that the Indemnifying Party's ability
to address the subject of the indemnification is not prejudiced.
10.8. Except as otherwise provided herein, as between the Buyer and
Seller, the rights and obligations set forth in this Article 10 will be the
exclusive rights and obligations with respect to this Agreement, the events
giving rise to this Agreement, and the transactions provided for herein or
contemplated hereby or thereby, it being understood and agreed between Seller
and
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Buyer that all other rights and obligations between Seller on the one hand and
the Buyer on the other hand shall be governed by this Agreement.
11. CONDEMNATION. If, prior to the Closing, a condemnation proceeding is
commenced affecting the Properties or any of the Properties is taken by eminent
domain and such proceeding or taking would have a material adverse effect on the
Purchased Assets taken as a whole or on the business conducted with the
Purchased Assets, either party may, by written notice to the other, elect to
cancel this Agreement prior to the Closing Date. If either party so elects, both
parties will be relieved of any further liability hereunder except as provided
in Article 12. Unless this Agreement is so canceled, it will remain in effect
and Seller, upon Closing, will assign to Buyer all Seller's right, title and
interest to any awards that may be made for the taking. If, prior to the
Closing, any of the Properties is taken by eminent domain such that neither
party has the right to cancel this Agreement, Seller, upon Closing, will assign
to Buyer all Seller's right, title and interest to any awards that may be made
for the taking.
12. BROKERS.
12.1. Seller will pay all fees and commissions, if any, charged by any
brokers or agents (including ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.), for or on behalf of Seller,
in connection with this Agreement, and will defend and indemnify Buyer from all
fees, commissions, suits and related expenses arising from claims of all real
estate brokers or agents claiming through Seller.
12.2. Buyer will pay all fees and commissions, if any, charged by any
brokers or agents, for or on behalf of Buyer, in connection with this Agreement,
and will defend and indemnify Seller from all fees, commissions, suits and
related expenses arising from claims of all real estate brokers or agents
claiming through Buyer.
12.3. The provisions of this Section survive the Closing indefinitely.
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13. GOVERNMENTAL APPROVALS. If this transaction is subject to the approval
of the United States Department of Justice, the Federal Trade Commission or if
the approval of any other governmental agency is necessary in order to convey
title to the Properties, including expiration of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act
waiting period, Seller and Buyer will make such filings as are required for this
transaction by the appropriate governmental agency as soon as reasonably
possible following the date of this Agreement. Seller and Buyer will use their
best efforts to provide any required information, and each will diligently
pursue the necessary approvals. The Closing Date will be extended to the extent
necessary; however, if the transaction is not approved consistent with the terms
of this Agreement on or before October 1, 1999, either party may terminate this
Agreement.
14. SELLER'S WARRANTIES.
14.1. Seller is a corporation validly existing and in good standing
under the laws of the State of Delaware, is duly qualified to transact business
and is in good standing under the laws of the States of Delaware, Louisiana and
Texas and has the corporate power and authority to make and perform this
Agreement and to consummate the transaction contemplated herein. The execution,
delivery and performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and approved by all
necessary corporate action. This Agreement is a legal, valid and binding
obligation of Seller enforceable against it in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting creditors' rights generally and by general
equity principles.
14.2. Seller has, and upon consummation of the transactions
contemplated under this Agreement at the Closing, Buyer will have, good and
marketable title to the Purchased
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Assets free and clear of all liens, charges, mortgages, security interests,
pledges or other encumbrances of any nature whatsoever, except for (a) any
claims or encumbrances that do not arise by, through or under Seller, (b) any
which do not materially adversely affect marketability or the current use of the
Properties or (c) any lien for taxes that are not yet due and payable.
14.3. Seller has delivered to Buyer, true and complete copies of all
material contracts, agreements and instruments or other legally enforceable
obligations affecting or related to the Purchased Assets and all amendments or
modifications thereof. There are no material Contracts that affect or may affect
the ownership, use, operations, management or maintenance of the Properties
and/or Personalty, except for the Contracts set forth in Schedule 14.3(a). Each
of the Contracts is valid, binding and in effect, and neither Seller, nor to the
Best of Seller's Knowledge, any other party thereto, is in default under any
Contract. Except as set forth on Schedule 14.3(b), each material Contract maybe
assigned to Buyer without the consent of a third party. It is understood that
for purposes of this Section 14.3 only, "material" shall be defined as having a
term of more than one year or a value in excess of $100,000.
14.4. The Properties and Personalty, taken as a whole, are in good
operating condition and repair, and none of such Properties and/or Personalty is
in need of maintenance or repairs except ordinary, routine maintenance and
repairs that are not material in nature or cost.
14.5. The Purchased Assets (including the Contracts and Permits),
taken as a whole, will permit in their condition as of the Closing Date,
operation of the Purchased Assets by Buyer immediately after the Closing in a
manner consistent with Seller's past practices.
14.6. Except as set forth in Schedule 14.6, there are no material
claims, actions or proceedings pending or, to the Best of Seller's Knowledge,
threatened against Seller relating to the Purchased Assets to be transferred to
Buyer.
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14.7. The execution, delivery and performance of this Agreement by
Seller or the consummation of the transaction contemplated herein will not
violate any law, rule, regulation, order, or decree of any Governmental
Authority to which Seller is subject, nor result in a material breach of any
contract to which Seller is bound and to which the Properties, Personalty or
Petroleum Inventory is subject, nor result in a violation or breach by Seller of
any judgment, order, writ, injunction or decree issued against or imposed upon
Seller, nor result in a material breach or default under (or an event that, with
giving of notice or passage of time or both, would constitute a breach of or
default under), or termination of, or accelerate the performance required by, or
result in the creation or imposition of any material security interest, lien,
charge or other encumbrance upon the Purchased Assets under, any contract,
instrument or agreement to which Seller is a party or by which Seller or any of
its assets are bound.
14.8. Schedule 14.8(a) sets forth an accurate and complete list of all
material permits, licenses and governmental approvals necessary to operate the
Purchased Assets as is (the "Material Permits") (other than Permits under
Environmental Law). Except as specified in Schedule 14.8(b), (i) all Material
Permits (other than Permits under Environmental Law) relating to the Purchased
Assets as currently operated are in effect and (ii) Seller has, to the extent
required, made all filings necessary to request the timely renewal or issuance
of all Material Permits necessary prior to the Closing for Seller to own and
operate the Purchased Assets as currently operated.
14.9. Seller will execute all documents reasonably required to effect
the transfer of the Properties, Personalty and Petroleum Inventory, whether at
the Closing or after.
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14.10. Governmental/Regulatory Notices/Judicial Actions.
(a) there are no material violations of or instances of
noncompliance with any laws, rules, regulations, ordinances, orders, judgments
and decrees applicable to Seller's ownership, use, and operation of the
Purchased Assets or the condition thereof;
(b) there are no judgments, orders, writs or injunctions of any
Governmental Authority presently in effect against Seller with respect to its
interest in the Purchased Assets; and
(c) there are no pending condemnation or similar proceedings
affecting the Purchased Assets or any portion thereof, nor to the Best of
Seller's Knowledge, is any such action presently threatened against all or any
portion of the Purchased Assets.
14.11. Taxes. All returns required to be filed pursuant to federal,
state or local laws with respect to the ownership and operation of the Purchased
Assets have been or will be timely filed, and all taxes (other than income
taxes) imposed or assessed, whether federal, state or local, on the Purchased
Assets which would result in a lien attaching to the Purchased Assets if not
paid, have been or will be timely paid.
14.12. Foreign Person. Seller is not a "foreign person" as defined in
Section 1445 of the Code and the regulations promulgated thereunder.
14.13. Preferential Purchase Rights. There are no preferential
purchase rights, options, or other rights held by any person or entity not a
party to this Agreement to purchase or acquire any interest in the Purchased
Assets, in whole or in part, as a result of the transactions contemplated by
this Agreement.
14.14. Records. All records and documents relating to the operation
and maintenance of the Purchased Assets furnished to Buyer were prepared and
maintained in the
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ordinary course of business, and, to the Best of Seller's Knowledge, are
complete and accurate in all material respects.
14.15. Seller represents and warrants that no sales and use tax
applies to this agreement because of the exemptions provided under Texas and
Louisiana laws for occasional sales. Seller shall pay all excise (other than
sales and use taxes) or personal property transfer taxes, if applicable, it
being understood that Buyer shall provide any exemption certificates or other
documentation requested by the Seller to establish the nonapplicability of these
taxes.
14.16. The representations and warranties in this Article 14 do not
apply to facts, events, circumstances or conditions which constitute
Environmental Liabilities. Buyer's sole remedies for Environmental Liabilities
are set forth in Article 9.
14.17. The warranties in Article 14 will survive the Closing Date for
18 months except for those contained in Section 14.15 which shall expire on the
expiration of the applicable statute of limitations.
15. BUYER'S WARRANTIES.
15.1. Buyer is a corporation validly existing and in good standing
under the laws of the State of Delaware, and has the corporate power and
authority to make and perform this Agreement and to consummate the transaction
contemplated herein. The execution, delivery and performance by Buyer of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized and approved by all necessary corporate action. This Agreement
is a legal, valid and binding obligation of Buyer enforceable against it in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
creditors' rights generally and by general equity principles.
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15.2. There are no claims, actions, or proceedings pending or
threatened against Buyer relating to the transfer of assets as contemplated
herein. Buyer has no knowledge of any facts that would prohibit Buyer from
acquiring the Properties, Personalty or Petroleum Inventory of Seller.
15.3. The execution, delivery and performance of this Agreement by
Buyer or the consummation of the transaction contemplated herein will not
violate any law, rule, regulation, order or decree to which the Buyer is
subject, nor result in a breach of any contract to which Buyer is bound, nor
result in a violation or breach by Buyer of any judgment, order, writ,
injunction or decree issued against or imposed upon Buyer.
15.4. Buyer will execute all documents reasonably required to effect
the transfer of the Properties, Personalty and Petroleum Inventory, whether at
the Closing or thereafter,
16. BUYER'S CONDITIONS TO CLOSE. The obligations of Buyer to effect the
transactions contemplated by this Agreement on the Closing Date shall be subject
to the fulfillment, prior to or at the Closing, of each of the conditions set
forth in this Article 16 (unless waived, in whole or in part, in writing by
Buyer).
16.1. Representation and Warranties True. The representations and
warranties made by Seller as set forth in Articles 9 and 14 of this Agreement
shall have been true and correct when made and shall be true and correct in all
material respects (except for those representatives and warranties qualified by
materiality, which shall be true and correct) as of the Closing Date as though
such representations and warranties were made at and as of such date without
giving effect to any update to Seller's disclosure schedules except as otherwise
provided in Section 8.6.2 herein.
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16.2. Performance of Obligations. Seller shall have performed,
observed and complied with, in all material respects, all agreements,
obligations, covenants and conditions required by this Agreement to be performed
or complied with by it on or prior to the Closing Date.
16.3. Litigation. No action or proceeding shall be pending or, to
Seller's knowledge, threatened against Seller or Buyer in any court of law or by
any administrative or governmental agency on the Closing Date, wherein an
unfavorable judgment, decree or order could prevent, make unlawful or materially
affect the consummation of the transactions contemplated by this Agreement.
16.4. Absence of Certain Changes. There shall not have occurred any
act or omission constituting a material violation of any Environmental Law, rule
or regulation of any Governmental Authority between the date of this Agreement
and the Closing Date nor any damage or destruction in the nature of a casualty
loss, whether covered by insurance or not, which in either case could materially
adversely affect the normal utilization and operations of the Purchased Assets.
16.5. Documents and Deliveries. All instruments and documents required
on Seller's part to effectuate this Agreement and the transactions contemplated
hereby shall be delivered to Buyer and shall be in form and substance consistent
with the requirements herein.
16.6. Title Insurance Policy. The Title Company shall have committed
to issue to Buyer at Closing, an extended coverage ALTA owner's policy of title
insurance upon payment by Buyer of its regularly scheduled premium, insuring fee
title to the real property associated with the Purchased Assets in Buyer in the
amount equal to the Purchase Price, as set
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forth in Section 2, subject only to the printed provisions of such policy, and
such title matters accepted by Buyer pursuant to Section 8.5 or Schedule 14.2.
16.7. Board Approval. Buyer's Board of Directors and the Board of
Directors of The ▇▇▇▇▇▇▇▇ Companies, Inc. shall have approved the execution,
delivery and performance of this Agreement.
17. SELLER'S CONDITIONS TO CLOSE. The obligations of Seller to effect the
transactions contemplated by this Agreement on the Closing Date shall be subject
to the fulfillment, prior to or at the Closing, of each of the conditions set
forth in this Article 17 (unless waived, in whole or in part, in writing by
Seller).
17.1. Representation and Warranties True. If any of Buyer's warranties
in Article 15 is not true in any material respect as of the Closing or if Buyer
is in material breach of this Agreement as of Closing, the provisions of Section
8.6 will apply.
17.2. Performance of Obligations. Buyer shall have performed, observed
and complied with, in all material respects, all agreements, obligations,
covenants and conditions required by this Agreement to be performed or complied
with by it on or prior to the Closing Date, including, but not limited to,
payment to Seller of the Purchase Price.
17.3. Litigation. No action or proceeding shall be pending or, to
Buyer's knowledge, threatened against Seller or Buyer in any court of law or by
any administrative or governmental agency on the Closing Date, wherein an
unfavorable judgment, decree or order could prevent, make unlawful or materially
affect the consummation of the transactions contemplated by this Agreement.
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17.4. Documents and Deliveries. All instruments and documents required
on Buyer's part to effectuate this Agreement and the transactions contemplated
hereby shall be delivered to Seller and shall be in form and substance
consistent with the requirements herein.
17.5. Board Approval. Seller's Board of Director's shall have approved
the execution, delivery and performance of this Agreement.
18. CONFIDENTIALITY. This Agreement will be treated by the parties and
their agents, employees and contractors, as confidential. Any announcements of
the parties relating to this Agreement prior to the Closing must have the
written approval of the parties.
19. ASSIGNMENT. Buyer may not assign this Agreement except with the written
consent of Seller; provided, however, that the preceding requirement for consent
shall not apply to Buyer if Buyer assigns this Agreement, in whole or in part,
to one or more of its Affiliates. In the later case, Buyer shall give Seller
prompt notice of such assignment.
20. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED, INTERPRETED, ENFORCED,
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CHOICE OF
LAW PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
21. NOTICES. All notices will be in writing and delivered by certified
mail, return receipt requested, or by recognized overnight carrier, to Seller at
the address given above, c/o F. ▇▇▇▇▇ ▇▇▇▇▇, Senior Vice President, Terminal
Operations Department, with a copy to
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President and Associate General Counsel, Law
Department, at the same address, and to Buyer at the address set forth above c/o
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, Hydrocarbon Development.
22. ENTIRE AGREEMENT. This Agreement merges and supersedes all prior
negotiations, representations and agreements (other than the confidentiality
agreement between the parties dated February 23, 1999 and constitutes the entire
agreement between Seller and Buyer concerning the conveyance of the Purchased
Assets and the consideration therefor. The terms of this Agreement cannot be
changed or terminated orally.
23. BINDING EFFECT. Except as herein otherwise provided, this Agreement
will be binding on and inure to the benefit of the successors and permitted
assigns of the parties.
24. EMPLOYEES.
24.1. Buyer will consider for employment all employees of Seller
employed at the Properties in accordance with Buyer's standard employment
policies and practices; provided, however, that Buyer is not obligated under
this Agreement to employ any employees of Seller. Notwithstanding anything in
this Agreement to the contrary, Buyer agrees that it will not speak to any
employees of Seller about future employment by Buyer until after May 20, 1999.
24.2. Except for any employee(s) terminated for reasons unrelated to
this transaction, Seller will continue the employment of all of Seller's other
current employees at the Properties until the Closing Date. Buyer will use its
reasonable commercial efforts to avoid the loss of employment by sufficient
numbers of Seller's current employees at any single site to incur liability
under the Workers Adjustment and Retraining Notification ("WARN") Act, or under
any other plant closing or mass layoff statute or law, and Buyer will indemnify
Seller for all fees and costs associated with defense against and for any
damages or other relief awarded
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under, any claim(s) under WARN or other similar statute or law. Fifteen days
prior to Closing, Buyer will notify Seller in writing of the employees Buyer
will make offers to at Closing. Any employees who have not received an offer
from Buyer or do not accept an offer from Buyer will remain the employees of
Seller or be terminated by Seller and Seller will be responsible for all
severance and other costs associated with such employees.
25. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
26. HEADINGS. The article and section headings contained herein are for
convenience only and shall not in any way affect the meaning, construction or
interpretation of this Agreement.
27. PARTIAL INVALIDITY. In the event any provision or portion of a
provision hereof is held to be invalid, void, or unenforceable, such holding
shall not affect the remaining portion of that provision or any other provision
hereof.
28. INTERPRETATION. This Agreement is the product of negotiations during
which all parties have had an opportunity to make alterations, changes, and
deletions to the text and have, in fact, made such alterations, deletions, and
additions. This Agreement should be read as if drafted equally by all concerned
with no presumption or penalty attached to any party for its particular role in
producing any preliminary of final draft of this Agreement.
29. EXPENSES. Except as otherwise provided herein, each party hereto shall
bear its own expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated herein.
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30. FURTHER ASSURANCES. Buyer and Seller shall upon request execute and
deliver or cause to be executed and delivered all documents, conveyances, deeds,
assignments, or other instruments or further assurance, and shall do or cause to
be done any acts or things as may be reasonably necessary or advisable to
implement and give full effect to the provisions of this Agreement.
31. SECTION 1060 REPORTING REQUIREMENTS. Seller and Buyer acknowledge that
this transaction is not subject to the reporting requirements of Section 1060 of
the Code and that IRS Form 8594, Asset Acquisition Statement, will not be filed
for this transaction. Each party hereto agrees to timely inform the other if it
subsequently determines that such reporting is required.
32. WAIVER. Except as otherwise provided herein, neither the failure nor
any delay on the part of any party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, or of any other right, power or
remedy; nor shall any single or partial exercise of any right, power or remedy
preclude any further or other exercise thereof, or the exercise of any other
right, power or remedy. No waiver of any of the provisions of this Agreement
shall be valid unless it is in writing and signed by the party against whom it
is sought to be enforced.
33. PARTIES IN INTEREST. Except as otherwise provided herein, nothing in
this Agreement, expressed or implied, is intended to confer upon any third
person any rights or remedies under or by reason of this Agreement.
34. DISPUTE RESOLUTION.
34.1. Covered Disputes. Any claims, action or disputes arising out of
or relating to this Agreement, including without limitation the meaning of its
provisions, or the proper performance of any of its terms, its breach,
termination or invalidity ("Dispute") will be resolved
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in accordance with the procedures specified in this Section, which will be the
sole and exclusive procedure for the resolution of any such Dispute, except that
any Party, without prejudice to the following procedures, may file a complaint
to seek preliminary injunctive or other provisional judicial relief, if in its
sole judgment, that action is necessary to avoid irreparable damage or to
preserve the status quo. Despite that action, the Parties will continue to
participate in good faith in the procedures specified in this Article.
34.2. Arbitration. Any Party wishing to initiate the dispute
resolution procedures set forth in this Article with respect to a Dispute not
resolved in the ordinary course of business must give written notice of the
Dispute to the other Party (the "Arbitration Notice"). Any arbitration hereunder
shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., as
amended, to the exclusion of any other arbitration acts, statutes, or rules of
any other jurisdiction, state or federal.
34.3. Arbitration Procedure. Any arbitration hereunder shall be
conducted in accordance with the then current CPR Rules for Non-Administered
Arbitration, except to the extent terms expressly set forth in this Article are
in conflict with or supplement such Rules, by three independent and impartial
arbitrators, of whom each Party to a Dispute shall appoint one, and the two so
appointed by the Parties shall appoint the third arbitrator. The Arbitration
Notice shall name the noticing Party's arbitrator, and shall contain a statement
of the issue(s) presented for arbitration. Within fifteen (15) Days of receipt
of an Arbitration Notice, the other Party shall name its arbitrator by written
notice to the other and may designate any additional issue(s) for arbitration.
The two named arbitrators shall select the third arbitrator within fifteen (15)
Days after the date on which the second arbitrator was named. Should the two
arbitrators fail to agree on the selection of the third arbitrator, either Party
shall be entitled to request CPR to select the
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third arbitrator. Should either Party fail and/or refuse to name its arbitrator
within the required fifteen (15) Day period, the other Party shall be entitled
to request CPR to select the arbitrator for such Party. All arbitrators shall be
qualified by education or experience within the refined products portion of the
energy industry to decide the issues presented for arbitration. No arbitrator
shall be: a current or former director, officer, or employee of either Party or
its Affiliates; an attorney (or member of a law firm) who has rendered legal
services to either Party or its Affiliates within the preceding three years; or
an owner of any of the common stock of either Party, or its Affiliates.
34.4. Arbitration Hearing. The three arbitrators shall commence the
arbitration proceedings within twenty-five (25) Days following the appointment
of the third arbitrator. The arbitration proceedings shall be held at a mutually
acceptable site and if the Parties are unable to agree on a site, the
arbitrators shall select the site. The arbitrators shall have the authority to
establish rules and procedures governing the arbitration proceedings, including,
without limitation, rules concerning discovery. Each Party shall have the
opportunity to present its evidence at the hearing. The arbitrators may call for
the submission of pre-hearing statements of position and legal authority, but no
post-hearing briefs shall be submitted. The arbitration panel shall only have
authority to award compensatory damages alone and shall not have the authority
to award incidental, consequential, special, punitive or exemplary damages. Each
Party shall submit to the arbitration panel a final offer of its proposed
resolution of the Dispute. The arbitration panel shall be charged to select from
the two proposals the one which the panel finds to be the most reasonable and
consistent with the terms and conditions of this Agreement, and the arbitration
panel shall not average the Parties' proposals or otherwise craft its own
remedy. All evidence submitted in an arbitration proceeding, transcripts of such
proceedings, and all
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documents submitted by the Parties in an arbitration proceeding shall be kept
confidential and shall not be disclosed to any third party by either Party
hereto.
34.5. Arbitration Decision and Costs. The decision of the arbitrators
or a majority of them, shall be in writing and shall be final and binding upon
the Parties as to the issue(s) submitted. The cost of the hearing shall be
shared equally by the Parties, and each Party shall be responsible for its own
expenses and those of its counsel or other representatives. Each Party hereby
irrevocably waives, to the fullest extent permitted by law, any objection it may
have to the arbitrability of any such Disputes, controversies or claims and
further agrees that a final determination in any such arbitration proceeding
shall be conclusive and binding upon each Party.
34.6. Enforcement of Award. Judgment upon any award rendered by the
arbitrators may be entered in any court having jurisdiction. The prevailing
Party shall be entitled to reasonable attorneys' fees in any contested court
proceeding brought to enforce or collect any award of judgment rendered by the
arbitrators.
34.7. Tolling and Performance. Except as otherwise provided in this
Article 34, all applicable statutes of limitation and defenses based upon the
passage of time and all contractual limitation periods specified in this
Agreement, if any, will be tolled while the procedures specified in this Article
34 are pending. The Parties will take all actions to effectuate the tolling of
any applicable statute of limitation or contractual limitation periods. All
deadlines specified herein may be extended by mutual written agreement of the
Parties or, if an Arbitration Notice has been sent regarding the Dispute, by
written order of a majority of the arbitrators. Each Party is required to
continue to perform its obligations under this Agreement pending final
resolution of any Dispute, unless to do so would be impossible or impracticable
under the
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circumstances. Notwithstanding the foregoing, the statute of limitations of the
State of New York applicable to the commencement of a lawsuit will apply to the
commencement of an arbitration under this Agreement, except that no defenses
will be available based upon the passage of time during any negotiation or
mediation called for by the preceding Sections of this Article.
35. FUTURE REVENUE.
35.1. Within 30 days of the end of Fiscal Year 1999, Buyer shall
submit to Seller a notice (the "Revenue Notice") setting forth the 1999 Total
Revenue. If the 1999 Total Revenue is less than $44.1 million, the Revenue
Notice shall also set forth the shortfall (the "1999 Shortfall") and, with
reasonable specificity, the reasons for the decrease in revenue and the dollar
amount associated with each such reason. Subject to the provisions of Section
35.2, within 30 days of receipt of the Revenue Notice, Seller will pay to Buyer
the following amount of any 1999 Shortfall ("Seller's Payment Obligation"):
(a) the amount of the 1999 Shortfall resulting solely from a
reduction in the revenue associated with the business of Equistar and its
Affiliates ("Equistar") at the Purchased Assets, it being understood that (i)
for purposes of determining Equistar's Affiliates, it shall be only those
Affiliates as of December 31, 1998 and (ii) for purposes of calculating
Equistar's calendar year 1998 revenues, only those contracts in effect during
December 1998 shall be used; plus
(b) the amount, if any, by which the 1999 Shortfall exceeds $4.4
million, provided that in no event shall Seller's Payment Obligation under this
Article 35 exceed $4.4 million and, provided further that Seller will not have
any obligation to pay Buyer any amount of the 1999 Shortfall that results from
(i) Buyer's failure to use its reasonable
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commercial efforts to enter into contracts with customers on reasonable
commercial terms, (ii) Buyer's failure to offer contracts to Equistar on terms
and conditions no less favorable to Equistar than Seller's most recent contracts
with Equistar, having due regard to changes in market conditions, (iii) Buyer's
implementation of API 653 or other non-routine maintenance, repair or
construction activities, or (iv) acts of God, war, acts of war, revolution,
civil commotion, riots, fire, explosion, labor dispute, breakdown of equipment
or facilities, casualty or accident, earthquake, epidemic, flood, cyclone,
tornado, hurricane, contingencies interfering with production or with customary
means of transportation of raw materials or products, or by reason of any law,
order, proclamation, regulation ordinance, demand, requisition or requirement or
any other act of any governmental authority, local state or federal, including
court orders, judgments or decrees or any other cause similar to those
enumerated above.
35.2. If Seller disputes any items on the Revenue Notice, Seller (i)
will provide Buyer with a written notice within 10 business days of receipt of
the Revenue Notice, which notice will set forth, with reasonable specificity,
the items in dispute and (ii) will have the right to audit Buyer's books and
records as they related to the Purchased Assets. If the parties are unable to
reach agreement on the disputed items within 60 days, the dispute will be
subject to arbitration as set forth in Article 34.
35.3. As used in this Article 35 the following terms have the
following meaning:
"Fiscal Year 1999" means the 12 month period beginning on the Closing
Date and ending one day prior to the one year anniversary of the Closing Date.
"1999 Total Revenue" means revenues for Fiscal Year 1999 relating to
the Purchased Assets determined consistent with Seller's past practice.
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IN WITNESS WHEREOF, the parties have caused these presents to be
executed and delivered as of the day and year first above written.
SELLER:
AMERADA ▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board
BUYER:
▇▇▇▇▇▇▇▇ ENERGY VENTURES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Attorney in Fact
Sale of Assets Agreement - GulfCoast Terminals
52
53
AMENDMENT NO. 1 TO SALE OF ASSETS AGREEMENT
Amendment No. 1 dated as of July 29, 1999 (this "Amendment") to the
Sale of Assets Agreement (as defined below) between Amerada ▇▇▇▇ Corporation, a
Delaware corporation ("Seller") and ▇▇▇▇▇▇▇▇ Terminals Holdings, L.L.C., a
Delaware limited liability company ("Buyer").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ Energy Ventures, Inc. ("WEV") and Seller have
entered into a Sale of Assets Agreement dated May 10, 1999 (the "Agreement"),
which agreement was assigned by WEV to Buyer on July 15, 1999; and
WHEREAS, Buyer and Seller desire to amend the Agreement.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound by this Amendment, the Buyer and Seller hereby agree as follows:
1. Definition. All capitalized terms not defined herein shall
have the respective meanings assigned to such terms in the Agreement.
2. Amendments. Effective as of the date hereof, the Agreement is
hereby amended as follows:
a) A new Section 9.12 shall be added as follows:
"9.12 Vapor Recovery Unit.
9.12.1. At its expense, Seller will take all actions
(including, but not limited to, installation of additional emissions
control equipment) necessary for the Galena Park terminal to be in
compliance with the MTBE removal efficiency and mass emissions limits
in Permit #4850 (as in effect at Closing) and any other Environmental
Laws currently applicable to marine vapor recovery at Galena Park,
which actions will be completed in a manner which will permit Buyer to
conduct the business as presently conducted on the Properties. Seller
anticipates that its obligations under this Section 9.12 will be met
by September 30, 1999. Seller will use diligent efforts and proceed
promptly to comply with its obligations under this Section 9.12.
Seller will have a right of
Amendment No. 1 to Sale of Assets Agreement
54
access to the Galena Park terminal for this purpose and Seller will
use its reasonable commercial efforts to minimize any disruption to
the operation of the Properties or Personalty located thereon.
9.12.2. In addition to the indemnities provided in
Section 9.4.1 and notwithstanding the provisions of Sections
9.4.1(iii) or 9.4.2(ii), Seller will defend, indemnify and hold Buyer
Indemnitees harmless from and against all Environmental Claims and
resulting Environmental Losses:
(i) for fines or penalties arising from
non-compliance with the MTBE removal efficiency and mass emissions
limits in Permit #4850 (as in effect at Closing) to the extent that
such violation arises from ownership or operation of the Petrogas
marine vapor recovery unit after Closing and until Seller complies
with its obligations under this Section 9.12; provided that Buyer
operates in a manner after the Closing materially consistent with
Seller's past practices and operates the Petrogas lean oil marine
vapor recovery unit in accordance with the manufacturer's
recommendations and maintains it in good operating condition and
repair; or
(ii) arising out of access to Galena
Park pursuant to this Section 9.12.
9.12.3. Title to all equipment installed at Galena Park
pursuant to this Section 9.12 will be transferred to Buyer. Seller
hereby grants to Buyer a nonexclusive, royalty-free and perpetual
license to use any intellectual property necessary for Buyer to use or
operate the equipment or process installed pursuant to this Section
9.12 (the "Necessary Intellectual Property") which Seller presently
Amendment No. 1 to Sale of Assets Agreement
2
55
owns or otherwise has the right to license. To the best of Seller's
knowledge, Seller presently owns or has the right to license the
Necessary Intellectual Property. To the extent that Seller does not
own or have the right to license the Necessary Intellectual Property,
Seller will also execute and deliver, or will cause to be executed and
delivered, to the Buyer any other appropriate agreements, documents or
other instruments as may be necessary to ensure that the Buyer has a
nonexclusive license to use any Necessary Intellectual Property
without cost to Buyer.
9.12.4. Provided that Seller has fully performed and
satisfied its obligations under Section 9.12., Buyer waives any rights
it may have under Articles 8, 10, 14 or 16 with respect to the marine
vapor recovery system at Galena Park or the amendment of item 2 of
Schedule 9.2.1(iv), attached hereto.
9.12.5. By no later than September 30, 1999, Seller will
provide to Buyer detailed, written operating and maintenance
procedures related to the marine vapor recovery system."
b) Section 9.6.7 is hereby amended and restated in its
entirety:
"9.6.7. Seller has installed and uses a wastewater treatment
system and three tanks at Corpus Christi to treat and store recovered
groundwater and to separate hydrocarbon products from the groundwater.
Seller has also installed a pipeline to convey wastewater offsite for
treatment, which Seller plans to place in use, and which may require
the installation of limited amounts of additional piping on the Corpus
Christi Property to complete. Seller retains ownership of the
wastewater system and pipeline and Buyer will own the tanks, which may
not be
Amendment No. 1 to Sale of Assets Agreement
3
56
used by Buyer or Seller for any purpose other than Cleanup until the
Cleanup is completed. Seller or, at Seller's option, Buyer will
operate and/or maintain the wastewater system, pipeline and tanks in
compliance with Environmental Law and will have a right of access
pursuant to Section 9.6.1 for this purpose. If Seller exercises its
option to have Buyer maintain or operate, Buyer will maintain and/or
operate the tanks, pipeline or wastewater system without cost to
Seller, except that Seller will reimburse Buyer for the normal and
reasonable incremental costs to operate and maintain the tank.
pipeline and wastewater system. Maintenance costing in excess of
$1,000 requires Seller's advance approval, which will not be
unreasonably withheld. Buyer acknowledges that the No. 6 Fuel Oil
heater at Corpus Christi is used to comply with Environmental Laws as
an emissions control device for the waste water system and further
acknowledges that Seller will be permitted to use such Fuel Oil
heater. Such use will be without cost to Seller, except that Seller
will pay to Buyer the incremental cost to operate the Fuel Oil heater
to the extent that operation of the Fuel Oil heater is not necessary
for operation of the Corpus Christi Terminal as operated by Buyer."
3. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
4. Continuation. The parties hereto agree and acknowledge that the
Agreement, as amended by this Amendment, continues in full force and effect
according to its terms.
5. Counterpart. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
Amendment No. 1 to Sale of Assets Agreement
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57
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be
duly executed and delivered as of the day and year first above written.
AMERADA ▇▇▇▇ CORPORATION
By: /s/ F. ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: F. ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Senior Vice President
---------------------------------
▇▇▇▇▇▇▇▇ TERMINALS
HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
Amendment No. 1 to Sale of Assets Agreement
5
58
AMENDMENT NO. 2 TO SALE OF ASSETS AGREEMENT
Amendment No. 2 dated as of September 30, 1999 (this "Amendment") to
the Sale of Assets Agreement (as defined below) between Amerada ▇▇▇▇
Corporation, a Delaware corporation ("Seller") and ▇▇▇▇▇▇▇▇ Terminals Holdings,
L.L.C. and ▇▇▇▇▇▇▇▇ Pipeline Holdings, L.L.C., each a Delaware limited liability
company (together, "Buyer").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ Energy Ventures, Inc. ("WEV") and Seller have entered
into a Sale of Assets Agreement dated May 10, 1999, as amended by Amendment No.
1 dated July 29, 1999 (the "Agreement"), which agreement was assigned by WEV to
Buyer on July 15, 1999; and
WHEREAS, Buyer served Seller with an Arbitration notice by letter dated
July 29, 1999 which asserted claims under Section 8.6 of the Agreement.
WHEREAS, Buyer and Seller desire to amend the Agreement to reflect
resolution of the claims asserted by Buyer and certain other claims.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound by this Amendment, the Buyer and Seller hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the
respective meanings assigned to such terms in the Agreement.
2. Amendments. Effective as of the date hereof, the Agreement is hereby
amended as follows:
a) New Sections 8.7 and 8.8 shall be added as follows:
"8.7. Resolution of Pre-Closing Claims.
8.7.1. Work to be performed by Seller.
8.7.1.1. At its expense, Seller will undertake and
perform the actions set forth in this Section 8.7.1 (collectively,
the "Work") to the extent that such actions have not already been
completed as of the date hereof:
(a) Install poured conduit seals at all
Properties in areas where such seals are required by applicable laws
or electrical codes and are not currently present.
(b) Move the two sets of transformer primary
fused cutouts at Galena Park identified in Item 9 of the letter of
July 9, 1999 letter (the "July 9 Letter") from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to F.
▇▇▇▇▇ ▇▇▇▇▇ as being below the top of the tank dike wall to above
the level of the tank dike wall.
Amendment No. 2 to Sale of Assets Agreement
59
(c) Replace the non-explosion proof pump
motor in Cargo Pit #2 at Corpus Christi identified in Item 9 of the
July 9 Letter with an explosion proof pump motor.
(d) Install an approved disconnecting means
for the transformers and remove the starters in the VRU area at
Galena Park identified in Item 10 in the July 9 Letter.
(e) Install bonding jumpers at all Properties
in areas where they are required by applicable laws or electrical
codes.
(f) Provide working space clearance at the
480V switchrack near tank 738 at ▇▇▇▇▇▇▇ as identified in Item 13 to
the July 9 Letter by removing an unneeded pump.
(g) Remove the Butadiene piping from the
refrigeration platform at Galena Park, including all piping,
exchangers, tanks and pumps, to the extent necessary to remove the
flammable components so that the area can be electrically
declassified.
(h) Obtain and provide information on the
materials of construction and safe operating ranges of the heat
exchangers and pressure vessel in the butadiene tank car loading
area at Galena Park to the extent necessary to comply with the
requirements for process safety information under 29 CFR
1910.119(d).
(i) Determine whether Tanks 260, 261, 262,
263, 264, 307, 308 and 370 at Galena Park, and tank fields 4, 8, 9
and 10 at Corpus Christi have sufficient dike capacity to comply
with secondary containment requirements in 40 CFR Part 112.7(e)(ii)
and 29 CFR 1910.106(b)(2)(vii)(c)(l) and provide ▇▇▇▇▇▇▇▇ with a
written report of the results of this determination.
(j) Take steps necessary to correct low
cathodic protection potential readings at Galena Park identified in
Item 19 of the July 9 Letter for tanks and lines only, so that
readings meet or exceed recognized protective levels of -.85 volts,
which may include, but is not limited to, replacing system
components or increasing rectifier output; provided that Buyer
provides Seller with results of Buyer's corrosion protection
information obtained after Closing.
8.7.1.2. Seller anticipates that the Work required
under this Section 8.7.1 will be completed by November 30, 1999, but
in any event shall be completed by January 31, 2000. Seller will use
reasonable commercial efforts to complete the Work in a timely
fashion and proceed promptly to comply with its obligations under
this Section.
Amendment No. 2 to Sale of Assets Agreement
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60
8.7.1.3. To facilitate Seller's completion of the
Work, Buyer will permit Seller, its agents, contractors and
employees, rent-free access to the Properties to perform the Work
which Seller is required to conduct under this Section 8.7.1. Seller
may use up to two (2) offices at Galena Park terminal designated by
Buyer without cost until November 30, 1999 for Seller personnel,
agents or contractors performing or supervising the Work
8.7.1.4. Buyer will cooperate with Seller so that
Seller may conduct the Work in compliance with applicable laws and
regulations and in a cost-effective and efficient manner. Seller
will use its reasonable commercial efforts to minimize any
disruption to the operation of the Properties or Personalty located
thereon resulting from the Work.
8.7.1.5. Seller has the right (i) to manage the
Work and (ii) to conduct the Work using the most cost-effective,
commercially reasonable, techniques and materials that comply with
applicable laws and regulations. Seller's right to manage the Work
is subject to the duty to consult in good faith with Buyer. Buyer
shall have the right to review in advance any Work that has not
already been conducted as of the date hereof. All Work will (i) be
performed in a professional workerlike manner by qualified personnel
and if required by law, licensed personnel or contractors and (ii)
comply with applicable laws and regulations.
8.7.1.6. If Buyer believes that Seller has not
fully performed and satisfied its obligations in all material
respects, Buyer will give Seller written notice of its objections to
the Work by no later than February 29, 2000. If the parties are
unable to reach agreement on the disputed items within 60 days, the
dispute will be subject to arbitration as set forth in Article 34.
This Section 8.7.1. sets forth Buyer's sole remedy with respect to
the Work and this remedy is in lieu of any other remedy under the
Agreement, applicable law or common law causes of action. Provided
that Seller has fully performed and satisfied its obligations in all
material respects with respect to an item of Work or if Buyer does
not give notice of an objection an item of Work in accordance with
this Section 8.7.1.6., Buyer waives and releases all claims, rights
or causes of action Buyer may have with respect to such item of
Work, including, but not limited to, any rights Buyer may have under
Articles 8, 10, 14 or 16.
8.7.1.7. Notwithstanding the waiver and release
provided by Section 8.7.1.6., Buyer may assert (and Seller may
contest) a post-Closing claim under Article 10 for breach of any
applicable warranty in Article 14 (without reference to Section
14.16), if (i) insufficient spill containment capacity exists with
respect to Tanks 260, 261, 262, 263, 264, 307, 308 or 370 at Galena
Park, or tank fields 4, 8, 9 and 10 at Corpus Christi to comply with
any laws, rules, regulations, ordinances, orders, judgments and
decrees applicable to such tanks and tankfields; (ii) if the
information developed pursuant to 8.7.1.1(h) or subsequently
developed by Buyer indicates that the heat exchanger and pressure
vessel in the butadiene tank car loading area loading area were
designed or
Amendment No. 2 to Sale of Assets Agreement
3
61
presently in a condition such that they cannot be operated (as
operated by Seller prior to Closing) in a safe manner as
contemplated under 29 CFR 1910.119; or (iii) any item of Work does
not comply with applicable laws or regulations or was not performed
in a professional workerlike manner. Such claim shall be subject to
all provisions of Article 10. This Section 8.7.1.7. sets forth
Buyer's sole remedy with respect to the foregoing items and this
remedy is in lieu of any other remedy under the Agreement,
applicable law or common law causes of action, including, but not
limited to, any other rights Buyer may have under Articles 8, 10, 14
or 16.
8.7.1.8. Title to any equipment installed pursuant
to this Section 8.7.1. will be transferred to Buyer within 30 days
after its installation.
8.7.1.9. Indemnity
8.7.1.9.1. Subject to the limitation set
forth in this Section 8.7.1.9., Seller agrees to and does hereby
indemnify Buyer against and agrees to hold them harmless from and
against any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and
reasonable attorneys fees and expenses in connection with any
action, suit or proceeding) of every type and nature whatsoever
(including, without limitation, injury to or death of any person or
persons, or damage to or loss of any property) suffered by Buyer or
its affiliates in consequence of such damage, loss, liability and
expense to the extent arising from or related to the negligence or
willful misconduct of Seller or Seller's employees or contractors in
the performance of the Work, except to the extent such damage, loss,
liability and expense arises out of the negligence or willful
misconduct of Buyer. Buyer's sole remedy for the structural
soundness, condition, repair, fitness for use or adequacy of the
Work will be to the extent provided by Section 8.7.1.7(iii) and not
this Section 8.7.1.9.1.
8.7.1.9.2. Except as provided in Section
8.7.1.9.1., SELLER MAKES NO WARRANTY OF ANY KIND AND SPECIFICALLY
MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AND NONE SHALL BE IMPLIED. ALL WARRANTIES, EXPRESSED OR
IMPLIED, ARE EXCLUDED.
8.7.1.9.3. IN NO EVENT SHALL SELLER BE
LIABLE TO BUYER FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES HEREUNDER, OR LOSS OF PROFITS OR DAMAGES FOR
BUSINESS INTERRUPTION. BUYER HEREBY RELEASES SELLER AND ITS
OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS, AND COVENANTS NOT TO ▇▇▇
ANY OF THEM FOR, ANY SUCH SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES, OR LOSS OF PROFITS OR BUSINESS
INTERRUPTION.
Amendment No. 2 to Sale of Assets Agreement
4
62
8.7.2. Reimbursement for Buyer's Work.
8.7.2.1. Subject to the limits in this Section
8.7.2., Seller will reimburse Buyer for 110% of all out of pocket
costs and expenses payable by Buyer to third parties which are
incurred after the Closing, and until the third anniversary of the
Closing Date to perform any of the actions set forth in this Section
8.7.2. ("Buyer's Work"):
(a) Modification, engineering design, repair
or replacement of 43 pump motor starter assemblies at the Properties
identified in the July 9 Letter (36 at Galena Park, 6 at ▇▇▇▇▇▇▇ and
1 at Corpus Christi, collectively, the "Starters").
(b) Modification, engineering design, repair
or replacement of platforms used for access to the Starters at
Galena Park and installation of permanent ladders to the platforms.
(c) Modification, engineering design, repair
or replacement of disconnecting means to the Starters at Galena
Park.
(d) Modification, engineering design, repair
or replacement of the 8" line pipeline under Huntington Bayou near
the Galena Park facility identified in the July 9 Letter so that the
pipeline is not exposed or suspended above the bottom of Huntington
Bayou.
(e) Updating maps of offsite pipeline systems
associated with Galena Park which were purchased from the Seller.
(f) Repair of the eight (8) shorted pipeline
casings in offsite pipeline systems associated with Galena Park
which were purchased from the Seller identified in the letter dated
July 20, 1999 from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to F. ▇▇▇▇▇ ▇▇▇▇▇ (the "July 20
Letter").
(g) Modification, engineering design repair
or replacement of the tank bottom to Tank 372 at Galena Park.
8.7.2.2. Notwithstanding anything to the contrary
set forth herein or in the Agreement, any amounts paid to Buyer in
excess of $1,500,000 with regard to the Buyer's Work will reduce
Seller's Maximum Liability under Article 10 dollar for dollar. In no
event shall the total of Seller's payments to Buyer under this
Section 8.7.2 and Article 10 exceed on a cumulative basis
$6,500,000, plus any amounts for Pipeline Claims for which Seller is
required to indemnify Buyer under Section 10.1 which do not reduce
Seller's Maximum Liability under that Section. Seller's obligation
to reimburse Buyer pursuant to this Section 8.7.2. shall terminate
in such event.
8.7.2.3. Within 30 days after the end of each
calendar quarter, Buyer shall submit to Seller a notice (a
"Reimbursement Notice")
Amendment No. 2 to Sale of Assets Agreement
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63
requesting reimbursement for Buyer's Work for which payment has not
been made to Buyer under this Section 8.7.2. The Reimbursement
Notice will itemize and identify with reasonable specificity the
Buyer's Work to which it pertains, and will include reasonable
documentation, such as invoices and receipts, to substantiate the
amount of reimbursement requested. Reimbursement Notices may be
submitted until November 1, 2002.
8.7.2.4. Buyer has the sole right to manage Buyers
Work; provided, however, that Buyer's Work shall be performed, to
the extent reasonably possible and consistent with Buyer's normal
and customary operating practices for the Properties, by Buyer's
employees. Seller's agreement to pay under Section 8.7.2.1. a 10%
premium over and above Buyer's out of pocket costs constitutes
Buyer's sole right to reimbursement for costs and expenses for
Buyer's Work performed by Buyer's employees.
8.7.2.5. Seller may dispute costs for which Buyer
seeks reimbursement pursuant to this Section 8.7.2 only if and to
the extent that (a) Buyer does not materially comply with Sections
8.7.2.3 or 8.7.2.4.; (b) it does not pertain to the Buyer's Work; or
(c) if the amount claimed is mathematically incorrect or fraudulent.
If Seller disputes any costs itemized in a Reimbursement Notice,
Seller (i) will provide Buyer with a written notice within 10
business days of receipt of the Reimbursement Notice, which notice
will set forth, with reasonable specificity, the costs in dispute
and (ii) will have the right to review Buyer's records as they
relate to the Buyer's Work. If the parties are unable to reach
agreement on the disputed costs within 60 days, the dispute will be
subject to arbitration as set forth in Article 34. Seller will pay
to Buyer 110% of any costs not in dispute within 30 business days of
the receipt of the Reimbursement Notice.
8.7.2.6. This Section 8.7.2. sets forth Buyer's
sole remedy with respect to Buyer's Work and this remedy is in lieu
of any other remedy under the Agreement, applicable law or common
law causes of action. Except as provided in this Section 8.7.2.,
Buyer waives and releases all claims, rights or causes of action
Buyer may have with respect to an item of Buyer's Work, including,
but not limited to, any rights Buyer may have under Articles 8, 10,
14 or 16; provided that Seller materially complies with its
obligation to reimburse Buyer pursuant to this Section with respect
to such item of Buyer's Work.
8.7.3. Release of Certain Claims
8.7.3.1 Provided that Seller materially complies
with its obligations under this Amendment No. 2, Buyer waives and
releases all claims, rights or causes of action Buyer may have,
including, but not limited to, any rights Buyer may have under
Articles 8, 10, 14 or 16, with respect to the following items:
Amendment ▇▇. ▇ ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇
▇▇
(▇) The settlement and structural condition
of Tanks 739, 740, 780, 782, 783 and 785 at ▇▇▇▇▇▇▇.
(b) Compliance with secondary containment
requirements for tanks at ▇▇▇▇▇▇▇.
(c) The shorted pipeline casings at ▇▇▇▇▇▇▇
identified in July 9 Letter.
(d) Low cathodic protection potential
readings at Corpus Christi identified in Item 19 of the July 9
Letter.
(e) The condition of roofs on storage tanks
17, 43, 104, 108 and 113 at Corpus Christi.
8.7.3.2. Notwithstanding the waiver and release
provided by Section 8.7.3.1., Buyer may assert (and Seller may
contest) a post-Closing claim under Article 10 for breach of any
applicable warranty in Article 14 (without reference to Section
14.16), if Buyer obtains information from testing, examinations or
inspections conducted after the date hereof that Tanks 739, 740,
780, 782, 783 or 785 at ▇▇▇▇▇▇▇ are in need of maintenance or
repairs. Such claim shall be subject to all provisions of Article
10. This Section 8.7.3.2. sets forth Buyer's sole remedy with
respect to the foregoing items and this remedy is in lieu of any
other remedy under the Agreement, applicable law or common law
causes of action, including, but not limited to, any other rights
Buyer may have under Articles 8, 10, 14 or 16.
8.7.4. Buyer hereby withdraws its request for arbitration
in the July 29, 1999 letter from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to F. ▇▇▇▇▇ ▇▇▇▇▇
(the "July 29 Letter"). Buyer waives and releases any claims, rights
or causes of action Buyer may have under Section 8.6 of this
Agreement other than those asserted in the July 29, 1999 letter,
which are waived and released in accordance with and pursuant to
Sections 8.7.1.6., 8.7.2.6. and 8.7.3.1.
8.7.5. In consideration of the waivers and releases
provided by Buyer to Seller, Seller waives and releases any claims,
rights or causes of action Seller may have against Hazleton Fuel
Management Company ("HFMC") and its affiliates, and predecessors or
successors in interest, arising from the October 9, 1987 Natural Gas
Purchase and Sale Agreement between HFMC and Seller. Seller will
execute all documents reasonably requested by Buyer to effect the
waiver and release provided by this Section 8.7.5. For purposes of
this Agreement, Buyer and Seller allocate a value of $100,000 to the
waiver and release of this claim.
8.7.6. This Amendment or the performance of Work by Seller
will not be construed or admissible as an admission by Seller or
knowledge of Seller that the facts and circumstances outlined the
July 9 Letter, the July 20
Amendment No. 2 to Sale of Assets Agreement
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65
Letter or the July 29 Letter are true, or, if true, constitute a
breach of any representation or warranty in this Agreement.
8.8. Resolution of Dock Damage Claim. Seller has previously
notified Buyer pursuant to Section 7.2 of the Agreement of a
casualty loss to Ship Dock No. 2 at Galena Park as a result of the
collision on July 24, 1999 of the San Leandio and Barges B-503 and
B-404 with such dock (the "Dock Damage") and that Seller had elected
to take remedial action. Seller will obtain bids for the repair of
the dock damage so that the dock will be in substantially the same
condition as prior to the accident. Seller will provide Buyer with
copies of such bids and the scope of work and will cooperate in good
faith with Seller to reach agreement on the work to be performed. If
the parties are unable to reach agreement on scope of work within 60
days, the dispute will be subject to arbitration as set forth in
Article 34. Seller will pay to Buyer the full amount of the lowest
bid to perform the agreed upon scope of work (the "Repair Bid
Amount") and Buyer will be responsible to arrange for performance of
such work. Provided that Seller has paid the Repair Bid Amount,
Buyer waives and releases any other claims, rights or causes of
action Buyer may have against Seller with respect to the Dock
Damage."
3. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
4. Continuation. The parties hereto agree and acknowledge that the
Agreement, as amended by this Amendment, continues in full force and effect
according to its terms.
5. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be
duly executed, effective as of the day and year first above written.
AMERADA ▇▇▇▇ CORPORATION
By: /s/ F. ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: F. ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Amendment No. 2 to Sale of Assets Agreement
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▇▇▇▇▇▇▇▇ TERMINALS HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President
-----------------------------
▇▇▇▇▇▇▇▇ PIPELINE HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Vice President
-----------------------------
Amendment No. 2 to Sale of Assets Agreement
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AMENDMENT NO. 3 TO SALE OF ASSETS AGREEMENT
Amendment No. 3 dated as of September 8, 2000 (this "Amendment") to the
Sale of Assets Agreement (as defined below) between Amerada ▇▇▇▇ Corporation, a
Delaware corporation ("Seller") and ▇▇▇▇▇▇▇▇ Terminals Holdings, L.L.C. and
▇▇▇▇▇▇▇▇ Pipeline Holdings, L.L.C., each a Delaware limited liability company
(together, "Buyer").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ Energy Ventures, Inc. ("WEV") and Seller have entered
into a Sale of Assets Agreement dated May 10, 1999, as amended by Amendment No.
1 dated July 29, 1999 and Amendment No. 2 dated September 30, 1999 (the
"Agreement"), which agreement was assigned by WEV to Buyer on July 15, 1999; and
WHEREAS, Buyer sent Seller a letter dated October 15, 1999 (the
"October 15 Letter") which asserted claims under Section 10.1(i) of the
Agreement for alleged breach of the representations and warranties in Sections
14.4 and 14.5 of the Agreement relating to the condition and repair of Tank 134
at Corpus Christi terminal and Tanks 331, 367, 370 and 388 at Galena Park
terminal.
WHEREAS, Buyer served Seller with a notice of objection under Section
8.7.1.6 to the performance of certain work to be performed by Seller under
Sections 8.7.1(a) and (g) of the Agreement by letter dated February 28, 2000
(the "February 28 Letter").
WHEREAS, Seller has objected to $119,695.54 of amounts billed to Seller
for repairs to Tank 372 at Galena Park under Section 8.7.2 of the Agreement, of
which $49,143,38 was subsequently paid by Seller.
WHEREAS, Buyer and Seller desire to amend the Agreement to reflect
resolution of the respective claims asserted.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound by this Amendment, the Buyer and Seller hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the
respective meanings assigned to such terms in the Agreement.
2. Amendments. Effective as of the date hereof, the Agreement is hereby
amended as follows:
a) New Sections 8.7.1.10 and 8.9 shall be added as follows:
"8.7.1.10. Buyer hereby withdraws its objections
submitted by the February 28 Letter to the Work performed by Seller in
satisfaction of Seller's obligations pursuant to Section 8.7.1(a) and
(g) of the Agreement. The time for the parties to reach agreement on
the remaining disputed item set forth in the February 28 letter (which
pertains to the Seller's obligations pursuant to Section 8.7.1(d))
shall be extended to 60 days from the date of this Agreement."
Amendment No. 3 to Sale of Assets Agreement
68
"8.9. Resolution of October 15 Breach of Warranty Claim.
8.9.1. Within thirty (30) days of the date of this
Amendment, Seller will pay to Buyer the sum of $476,628.79 (the "Tank
Settlement Amount"), representing the sum of (x) 100% of the costs for
materials, supplies, contractors and services for Tanks 331, 367 and
388 submitted to Seller by Buyer by Reimbursement Notices dated April
18, 2000 and (y) 50% of the costs for materials, supplies, contractors
and services for Tank 370 submitted to Seller by Buyer by Reimbursement
Notice dated April 18, 2000. All amounts payable pursuant to this
Section 8.9.1. will reduce Seller's Maximum Liability under Article 10
dollar for dollar.
8.9.2. Seller withdraws its objections to payment of
those portions of Reimbursement Notices pertaining to Tank 372 at
Galena Park to which Seller has objected prior to the date of this
Amendment. Within thirty (30) days of the date of this Amendment,
pursuant to Section 8.7.2, Seller will pay to Buyer the sum of
$70,552.16 (the "Tank 372 Amount"), representing the amounts of the
"Total Amount Due" to which Seller had previously objected. Buyer does
not presently anticipate the submittal of additional Reimbursement
Notices for Seller's Work with respect to Tank 372. If Buyer submits
additional Reimbursement Notices with respect to Tank 372, Seller may
dispute such notices to the extent provided by Section 8.7.2.5.
8.9.3. Provided that Seller has paid the Tank Settlement
Amount and the Tank 372 Amount, Buyer waives and releases any other
claims, rights or causes of action Buyer may have against Seller,
including, but not limited to, any rights Buyer may have under Articles
8, 10, 14 or 16, with respect to the condition, repair, fitness for use
or operability of Tank 134 at Corpus Christi terminal and Tanks 331,
367, 370 and 388 at Galena Park terminal, but excluding any claims
Buyer may have under Article 9 of the Agreement.
8.9.4. This Amendment will not be construed or
admissible as an admission by Seller or knowledge of Seller that the
facts and circumstances outlined the October 14 Letter or the February
28 Letter are true, or, if true, constitute a breach of any
representation or warranty in the Agreement."
3. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
4. Continuation. The parties hereto agree and acknowledge that the
Agreement, as amended by this Amendment, continues in full force and effect
according to its terms.
5. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
Amendment No. 3 to Sale of Assets Agreement
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IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be
duly executed, effective as of the day and year first above written.
AMERADA ▇▇▇▇ CORPORATION
By: /s/ F. ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: F. ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇▇ TERMINALS HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Title: Vice President
-----------------------------------------
▇▇▇▇▇▇▇▇ PIPELINE HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Title: Vice President
-----------------------------------------
Amendment No. 3 to Sale of Assets Agreement
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AMENDMENT NO. 4 TO SALE OF ASSETS AGREEMENT
Amendment No. 4 dated as of September 19, 2000 (this "Amendment") to
the Sale of Assets Agreement (as defined below) between Amerada ▇▇▇▇
Corporation, a Delaware corporation ("Seller") and ▇▇▇▇▇▇▇▇ Terminals Holdings,
L.L.C. and ▇▇▇▇▇▇▇▇ Pipeline Holdings, L.L.C., each a Delaware limited liability
company (together, "Buyer").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ Energy Ventures, Inc. ("WEV") and Seller have entered
into a Sale of Assets Agreement dated May 10, 1999, as amended by Amendment No.
1 dated July 29, 1999, Amendment No. 2 dated September 30, 1999, and Amendment
No. 3 dated September 8, 2000 (the "Agreement"), which agreement was assigned by
WEV to Buyer on July 15, 1999; and
WHEREAS, Buyer sent Seller a letter dated January 10, 2000 (the
"Pipeline Letter") which asserted claims under Section 10.1(i) of the Agreement
for alleged breach of the representations and warranties in Sections 14.4 of the
Agreement relating to the condition and repair of the D-2 Dock line at Corpus
Christi terminal; and
WHEREAS, Buyer served Seller with a notice of objection under Section
8.7.1.6 to the performance of certain work to be performed by Seller under
Sections 8.7.1(d) of the Agreement by letter dated February 28, 2000 (The
"February 28 Letter"); and
WHEREAS, Buyer has requested certain information from the Seller, which
Seller has agreed to supply, provided that this Amendment No. 4 is signed; and
WHEREAS, Buyer and Seller desire to amend the Agreement to reflect the
foregoing.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound by this Amendment, the Buyer and Seller hereby agree as follows:
1. Definitions. All capitalized terms not defined herein shall have the
respective meanings assigned to such terms in the Agreement.
2. Amendments. Effective as of the date hereof, the Agreement is hereby
amended as follows:
a) New Sections 8.7.1.11 and 8.10 shall be added as follows:
"8.7.1.11. Provided that Seller has complied with its
obligations under Article 36, Buyer hereby withdraws its objections
submitted by the February 28 Letter to the Work performed by Seller in
satisfaction of Seller's obligations pursuant to Section 8.7.1(d) of
the Agreement."
"8.10. Resolution of January 10 Breach of Warranty Claim.
8.10.1. Provided that Seller has complied with its obligations
under Article 36, Buyer waives and releases any other claims, rights or
causes of
71
action Buyer may have against Seller, including, but not limited to,
any rights Buyer may have under Articles 8, 10, 14 or 16, with
respect to the condition, repair, fitness for use or operability of
the D-2 Dock line at Corpus Christi terminal, but excluding any
claims Buyer may have under Article 9 of the Agreement.
8.10.2. This Amendment will not be construed or admissible as
an admission by Seller or knowledge of Seller that the facts and
circumstances outlined the Pipeline Letter or the February 28 Letter
are true, or, if true, constitute a breach of any representation or
warranty in the Agreement."
b) Section 9.12 is hereby amended and restated in its entirety.
"9.12 Vapor Recovery Unit.
9.12.1. Responsibility for Vapor Recovery Unit
9.12.1.1. At its expense, Seller will take
all actions (including, but not limited to, installation of
additional emissions control equipment) necessary for the
Galena Park terminal to be in compliance with the MTBE removal
efficiency and mass emissions limits in Permit #4850 (as in
effect at Closing) and any other Environmental Laws currently
applicable to marine vapor emissions at Galena Park, which,
actions will be completed in a manner which will permit Buyer
to conduct the business as presently conducted on the
Properties. Seller anticipates that its obligations under this
Section 9.12 will be met by September 30, 1999. Seller will
use diligent efforts and proceed promptly to comply with its
obligations under this Section 9.12. Seller will have a right
of access to the Galena Park terminal for this purpose and
Seller will use its reasonable commercial efforts to minimize
any disruption to the operation of the Properties or
Personalty located thereon.
9.12.1.2. Seller will pay to Buyer the sum
of $260,000 (the "VRU Settlement Amount") on October 19, 2000
(the "Payment Date") or on any date prior to the Payment Date.
The amounts payable pursuant to this Section 9.12.1.2. do not
reduce Seller's Maximum Liability under Article 10.
9.12.1.3. Notwithstanding the provisions of
Section 9.12.1.1 or any other provision of this Agreement and
provided that Seller has complied with its obligations under
Article 36, upon payment of the VRU Settlement Amount as
provided in Section 9.12.1.2, Seller's obligation under
Section 9.12.5 will be null and void and Buyer assumes
responsibility for all actions (including, but not limited to,
installation of additional emissions control equipment)
necessary for the Galena Park terminal to be in compliance
with the MTBE removal efficiency and mass emissions limits in
Permit #4850 and any other Environmental Laws applicable to
marine vapor emissions at Galena Park. Buyer shall assume
responsibility for, and indemnify Seller against,
Environmental Claims brought against Seller by or on behalf of
any governmental
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agency to the extent that such Environmental Claim seeks
compliance (but not fines or penalties, which are addressed
under Section 9.12.2) with Environmental Laws applicable to
marine vapor emissions after September 19, 2000.
9.12.2. Indemnity
9.12.2.1. Notwithstanding the provisions of
Sections 9.4.1.(iii) or 9.4.2.(ii), Seller will defend,
indemnify and hold Buyer Indemnitees harmless from and against
all Environmental Claims and resulting Environmental Losses:
(i) arising out of access to Galena
Park pursuant to this Section 9.12.; and
(ii) for civil fines or penalties
arising from non-compliance with the MTBE removal efficiency
and mass emissions limits in Permit #4850 to the extent that
such violation arises from ownership or operation of the
Petrogas marine vapor recovery unit prior to and after Closing
until 60 days after the Payment Date; provided that Buyer
complies with any lawful order or directive of a governmental
agency and Buyer operates the Petrogas marine vapor recovery
unit in a reasonable and prudent fashion judged by industry
practices, given. current and past circumstances; and provided
further that Seller shall not be obligated to indemnify Buyer
for, and shall be indemnified by Buyer against, any portion of
civil fines or penalties relating to marine vapor emissions
which are attributable to ownership or operation of the Galena
Park Terminal more than 60 days after the Payment Date.
9.12.2.2. All claims for indemnity by Buyer
or Seller under Section 9.12.1.3 or 9.12.2.1 shall be
asserted, managed and resolved in accordance with Section
10.6.
9.12.2.3. Notwithstanding Section 10.6, if
an Environmental Claim results in a good faith claim for
indemnity under Section 9.12 by both Buyer and Seller, then:
(a) both Parties will jointly
participate and cooperate in good faith in the defense,
conduct and settlement of such Environmental Claim; and
(b) each Party will bear its own
costs and expenses, including legal fees, and neither Party
shall be required to notify the other regarding intent to
defend such Claim; and
(c) each Party will have the
opportunity to attend all meetings, hearings and conferences
with the third party asserting the Environmental Claim or held
by the judicial or administrative body adjudicating the
Environmental Claim.
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In the event that the Parties cannot agree on conduct or
defense of a portion of an Environmental Claim subject to this
Section 9.12.2.3., (i) Buyer has the right to control the
defense or settlement of that portion of an Environmental
Claim which seeks compliance with Environmental Laws
applicable to marine vapor emissions after September 19, 2000,
and (ii) the Party which will have to pay the larger
percentage of fines and penalties sought by an Environmental
Claim has the right to control the defense or settlement of
that portion of the Environmental Claim. No portion of the
Environmental Claim may be settled or otherwise compromised by
one Party in a manner which imposes any obligation or
liability on the other Party without the prior written consent
of the other Party, which consent will not be unreasonably
withheld.
9.12.3. Title to all equipment installed at
Galena Park pursuant to this Section 9.12 will be transferred
to Buyer. Seller hereby grants to Buyer a nonexclusive,
royalty-fee and perpetual license to use any intellectual
property necessary for Buyer to use or operate the equipment
or process installed pursuant to this Section 9.12 (the
"Necessary Intellectual Property") which Seller presently owns
or otherwise has the right to license. To the best of Seller's
knowledge, Seller presently owns or has the right to license
the Necessary Intellectual Property. To the extent that Seller
does not own or have the right to license the Necessary
Intellectual Property, Seller will also execute and deliver,
or will cause to be executed and delivered, to the Buyer any
other appropriate agreements, documents or other instruments
as may be necessary to ensure that the Buyer has a
nonexclusive license to use any Necessary Intellectual
Property without cost to Buyer.
9.12.4. Provided that Seller has fully
performed and satisfied its obligations under Section 9.12.1.2
and Article 36, Buyer waives any rights it may have under
Articles 8, 9 (except for rights Buyer may have under Article
9.4.1.(i), (ii), (iv) or (vi)), 10, 14 or 16 with respect to
the marine vapor recovery system at Galena Park or the
amendment of item 2 of Schedule 9.2.1(iv), attached to
Amendment No. 1, except for the right of indemnification
provided under Section 9.12.2 or the right to enforce any
other provision of this Amendment No. 4 that Seller has not
complied with.
9.12.5. By no later than September 30, 1999,
Seller will provide to Buyer detailed, written operating and
maintenance procedures related to the marine vapor recovery
system."
c) A new Section 10.7 shall be added as follows:
"10.7. Provided that Seller has complied with its
obligations under Article 36, the Survival Period under
Section 10.1 will end on October 31, 2000, except for any
Claims relating to the pipelines und the Houston Ship Channel
(as referenced in the last paragraph of Section 10.1), as to
which the Survival Period under Section 10.1 will not change."
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d) New Article 36 shall be added as follows:
"36. SELLER'S OBLIGATION TO PROVIDE INFORMATION
36.1 Seller agrees to use its best efforts to provide
the information set forth in the Attachment to Amendment No. 4
(the "Attachment"). Seller recognizes the importance to Buyer
of Buyer's or Ernst & Young's prompt receipt of the
information set forth in the Amendment and agrees that if, for
any reason, Buyer (in the exercise of its sole discretion,
which shall be exercised reasonably and in good faith),
determines that the requirements to provide information have
not been satisfied by 11:59 PM EST, on Tuesday, September 19,
2000 (the "Deadline"), Buyer shall have the right to cancel
this Amendment No. 4. Buyer shall give prompt written notice
to Seller of Buyer's exercise of its election to cancel. The
Deadline for Seller to satisfy its obligations to provide
information required under this Article 36 shall be
automatically extended for (i) a 24 hour period ending on
11:59 PM EST on September 20, 2000, unless written notice of
an election to cancel is provided to Seller by 1:00 PM EST on
September 20, 2000, and (ii) up to nine (9) additional
successive 24 hour periods, unless a written notice of an
election to cancel is given by 1:00 PM EST during the relevant
24 hour period. Seller shall supply to Shepherd, no later than
the Deadline (as it may be extended) a summary of the
information set forth in item 3 of the Attachment.
Notwithstanding the foregoing, Seller shall have at least
until 6:00 PM EST on Thursday, September 21, 2000, to (i)
provide copies to Shepherd of support for the Seller Vendor
Invoices and (ii) to provide the information required pursuant
to item 4 of the Attachment. Buyer's and/or Seller's
obligation to provide written notices and copies under this
Article 36 may be met by (x) electronically confirmed
facsimile or (y) by certified mail, return receipt requested,
or by recognized overnight carrier, in which case such copies
will be deemed to have been provided by 5:00 PM EST on the day
after mailing or entrustment to a recognized carrier. Notice
or copies sent by facsimile will be deemed to have been
received at the time of electronic confirmation of receipt
provided that the notice or copies are sent by certified mail,
return receipt requested or by recognized overnight courier
the same day.
36.2 Section 36.1 notwithstanding, Seller shall not
be obligated to disclose, with respect to accrual for
severance on the July 31 trial balance, any specific
information relating to individual employees.
36.3 Information required to provided by Seller or
▇▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ by this Article 36 shall be kept
confidential and not disclosed to Buyer, except to the extent
necessary to prepare audited balance sheets relating to the
Purchased Assets.
36.4 Except as otherwise specifically provided by
this Article 36, the provisions of the Confidentiality
Agreement between Buyer and Seller dated August 29, 2000,
apply to the information provided pursuant to this Article 36,
which will be Confidential Information for purposes of that
Agreement.
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36.5 If Buyer cancels this Amendment No. 4 in
accordance with Section 36.1, then Buyer shall promptly repay
to Seller all amounts paid (if any) under Section 9.12.1.2.
and Buyer, its Affiliates, agents and auditors shall not use
or disclose for any purpose whatsoever, either directly or
indirectly, the information provided to Buyer or Shepherd by
Seller pursuant to this Article 36, and will return or cause
to be returned to Seller all copies of any written or
electronic information provided by Seller within ten (10) days
of cancellation. If, after notice of cancellation provided in
accordance with Section 36.1, Buyer, its Affiliates, agents or
auditors use, disclose or do not return such information or
promptly discontinue its use, then Buyer's cancellation of
this Amendment No. 4 will be null and void and Seller may
enforce it in accordance with its terms. Buyer's obligation
after cancellation of this Amendment No. 4 to discontinue use
of information provided by Seller in accordance with the
requirements of this Article 36 includes, but is not limited
to, promptly withdrawing (or causing the withdrawal of) from
use or distribution any offering document, financial
statement, preliminary prospectus, final prospectus or a
registration statement which was prepared using or relying on
such information.
36.6 If Buyer does not cancel this Amendment No. 4 by
September 30, 2000, or such other date as the Buyer and Seller
agree in writing, then Seller will, for all purposes of this
Amendment No. 4, be deemed to have complied with its
obligations under this Article 36.
36.7 Buyer shall indemnify, defend and hold Seller,
its Affiliates, successors and assigns and their respective
directors, officers and employees (collectively, the "Seller
Indemnitees") harmless from and against any and all Claims of
every type and nature whatsoever suffered by Seller
Indemnitees in consequence of such Claim to the extent arising
from or related to the Securities Act of 1933 or otherwise,
insofar as such Claims (or actions in respect thereof) (x)
relate to the Purchased Assets and relate to the period of
time from and after the Closing Date including offerings of
securities and financings by Buyer relating to the Purchased
Assets after the Closing Date and (y) relate to, arise out of
or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any of Buyer's (or
its Affiliates) future offering documents, financial
statements, preliminary prospectuses, final prospectuses,
registration statements or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading."
3. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.
4. Continuation. The parties hereto agree and acknowledge that the
Agreement, as amended by this Amendment No. 4, continues in full force and
effect according to its terms and
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the parties specifically reserve all of their respective rights under the
Agreement not specifically waived, amended or modified by this Amendment No. 4.
5. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment
to be duly executed, effective as of the day and year first above written.
AMERADA ▇▇▇▇ CORPORATION
By: /s/ F. ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: F. ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇▇ TERMINALS HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
▇▇▇▇▇▇▇▇ PIPELINE HOLDINGS, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
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