EXECUTION AGREEMENT
PURCHASE AND SALE AGREEMENT
BETWEEN
TEPPCO CRUDE PIPELINE, L.P.
AND
GENESIS CRUDE OIL, L.P.
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PIPELINE SALE AND PURCHASE AGREEMENT
AGREEMENT executed this 15th day of October, 2003 to be effective at 7
a.m. Central Daylight Time on November 1, 2003 ("Effective Time"), between
TEPPCO Crude Pipeline, L.P., a Delaware limited partnership ("Buyer"), and
Genesis Crude Oil, L.P., a Delaware limited partnership ("Seller"); Buyer and
Seller are sometimes individually called "Party" and sometimes collectively
called "Parties".
Certain terms used in this Agreement are defined in Article 15.
In consideration of the premises and the mutual covenants and
conditions contained herein, the Parties agree as follows:
1. DESCRIPTION OF SALE PROPERTY
The property that is the subject of this Agreement ("Sale Property")
consists of the following:
(a) the facilities and equipment listed on Exhibit "A";
(b) the contracts listed on Exhibit "B".
2. PURCHASE AND SALE OF SALE PROPERTY
2.01 Sale and Delivery of Sale Property. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing provided for in
Section 2.03, Seller shall sell, transfer, convey, assign and deliver to Buyer,
or to an Affiliate of Buyer designated by Buyer, and Buyer shall purchase,
acquire and accept from Seller, as of the Effective Time all of Seller's right,
title and interest in and to the Sale Property.
2.02 Consideration. In consideration of the aforesaid sale, conveyance,
assignment, transfer and delivery of Seller's interest in and to the Sale
Property, Buyer shall, at the Closing, in addition to fulfilling its other
obligations hereunder, deliver, or cause to be delivered, funds in the amount of
$700,000.00 ("Purchase Price").
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2.03 Closing. The closing of the sale and purchase contemplated by this
Agreement (the "Closing") shall take place on October 31, 2003 at the offices of
Genesis at 9:00 a.m., Central Daylight Time (unless another date and time or
location are agreed upon in writing by the Parties), or, if all conditions set
forth in Articles 6 and 7 have not been satisfied (or waived by the Party
entitled to the benefit thereof) by such date, then on such other date and time
as shall be agreed upon in writing by the Parties. The Parties further agree
that the Closing may be consummated by the exchange of the closing documents and
items referred to in Section 2.04 hereof by any available means, including
courier delivery, U.S. mail or facsimile transmission.
2.04 Deliveries at Closing.
(a) At the Closing, Seller shall deliver to Buyer or its
designee the following:
(i) deeds, assignments, bills of sale and other
conveyance instruments conveying to Buyer all of Seller's right, title, and
interest in and to the Sale Property (the "Conveyance Instruments"), each in a
form mutually agreed upon by the Parties;
(ii) a certificate of the Secretary or Assistant
Secretary of the general partner of Seller evidencing the incumbency and
specimen signature of each of the corporate officers executing documents on
behalf of Seller; and
(iii) any other agreements, documents, instruments
and writings required to be delivered by Seller or an Affiliate of Seller to
Buyer at or prior to the Closing pursuant to this Agreement, including without
limitation the Transition Services Agreement and Division Agreement.
(b) At the Closing, Buyer will deliver or cause to be
delivered to Seller the following:
(i) the Purchase Price;
(ii) a certificate of the Secretary or Assistant
Secretary of the general partner of Buyer evidencing the incumbency and specimen
signature of each of the corporate officers executing documents on behalf of
Buyer; and
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(iii) any other agreements, documents, instruments
and writings required to be delivered by Buyer to Seller at or prior to the
Closing pursuant to this Agreement.
2.05 Allocation. The Parties agree that the valuations established
herein reflect the fair market value of the Sale Property at the time of
Closing. The Parties further agree that the Purchase Price for the Sale Property
shall be allocated among the assets conveyed to Buyer hereunder in accordance
with Section 1060 of the Internal Revenue Code of 1986, as amended. The Parties
agree to cooperate in good faith in the allocation of the Purchase Price and the
completion and filing of the United States Federal income tax Form 8594 in
accordance with the price allocation. The Parties further agree that they will
report the tax consequences of the purchase and sale hereunder in a manner
consistent with the valuations established herein and that they will not take
any positions inconsistent therewith in connection with the filing of any tax
return.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby jointly and severally make the following representations
and warranties to Buyer as of the date of this Agreement, which representations
and warranties must be true in all material respects at and as of the Closing
(except for any changes contemplated by the terms of this Agreement or consented
to by Buyer in writing) as a condition to Buyer's obligations at the Closing:
3.01 Organization and Authority. Seller is a limited partnership duly
organized and validly existing in good standing under the laws of the State of
Delaware, is duly qualified to transact business in the State of Texas and has
full power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by Seller has been
duly and validly authorized by all necessary action of Seller.
3.02 Execution and Effect. This Agreement has been (and at Closing each
other agreement that is required by this Agreement to be executed and delivered
by Seller or Affiliates of Seller at Closing will be) duly and validly executed
and delivered by Seller or its Affiliates and assuming the due authorization,
execution and delivery by Buyer, constitutes valid, binding and enforceable
obligations of Seller or the Affiliates of Seller executing the agreement.
3.03 No Violation. Neither the execution and delivery of this Agreement
by Seller nor the consummation by Seller of the transactions contemplated hereby
(a) violates any provision of the partnership agreement of Seller, (b)
constitutes a material breach of or default (or an event that,
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with the giving of notice or passage of time or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, or result in the creation or imposition of any security
interest, lien, charge or other encumbrance upon Seller's interest in the Sale
Property under, any material contract, commitment, understanding, agreement,
arrangement or restriction of any kind or character to which Seller is a party
or by which Seller or any of the Sale Property is bound (provided, however, that
this subsection 3.03 (b) shall not be construed as constituting a representation
or warranty as to either (i) whether or not the consent of any third party is
required to assign any of the Seller Assigned Rights (as defined in Section
5.04) or (ii) the effect of failing to obtain any such required consent), or (c)
to the best of Seller's knowledge violates in any material respect any statute,
law, regulation or rule, or any judgment, decree, order, writ or injunction of
any court or governmental authority applicable to Seller, which violation might
adversely affect the ability of Seller to perform its obligations under this
Agreement.
3.04 Ownership of Personal Property. The personal property included in
the Sale Property is free and clear of all liens, claims, charges, mortgages,
security interests, pledges or other encumbrances of any nature whatsoever,
except for (a) those that are not material in amount or do not interfere with
the operations of the Sale Property as presently conducted, (b) those that will
have been released on or prior to the Closing, and (e) liens for taxes not yet
due and payable, or for taxes or other claims being contested or disputed in
good faith by Seller.
3.05 Condition of Sale Property. Buyer shall acquire and accept the
Sale Property "AS IS," "WHERE IS" and, except for and only to the extent of the
express representations and warranties set forth in this Article 3. ANY AND ALL
OTHER REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SALE PROPERTY, WHETHER
EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED, INCLUDING WITHOUT LIMITATION ANY
REPRESENTATIONS OR WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR USE.
3.06 Conduct of Business. Since March 1, 2003, the business conducted
by Seller with the Sale Property has been conducted in the ordinary course of
business.
3.07 Litigation. There are no material judgments, orders, writs or
injunctions of any court or governmental authority or other regulatory or
administrative agency, commission or arbitration panel, domestic or foreign,
presently in effect or pending, or to the best of Seller's knowledge threatened,
against Seller with respect to their interests in the Sale Property, and there
are no material claims, actions, suits, proceedings or investigations by or
before any court or
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governmental authority or other regulatory or administrative agency, commission
or arbitration panel pending by or, to the best of Seller's knowledge
threatened, against Seller with respect to their interest in the Sale Property.
3.08 Compliance with Applicable Law. Except (a) for such non-compliance
as is not material with regard to Seller's operation and use of the Sale
Property as presently conducted, and (b) with respect to Environmental
Requirements (as defined in Section 10.02(c) below), which are addressed in
Section 3.13(b) below, to the best of Seller's knowledge, Seller is in
compliance in all material respects with all laws, rules, regulations,
ordinances, orders, judgments and decrees applicable to their operation and use
of the Sale Property as presently conducted and Seller has not received any
written notification that it is not presently in compliance therewith in any
material respect.
3.09 Taxes. All returns required to be filed by federal, state or local
laws with respect to the Sale Property or its operations have been timely filed,
and all taxes imposed or assessed, whether federal, state or local, on the Sale
Property have been timely paid.
3.10 Bulk Sales. The Sale Property does not constitute all or
substantially all of the assets of Seller.
3.11 Preferential Purchase Rights. There are no preferential
purchase rights, options or other rights in any person or entity, not a party to
this Agreement, to purchase or acquire any interest in the Sale Property, in
whole or in part.
3.12 Seller Employees. Seller has not entered into any contract or
promise of employment with any person in respect of the Sale Property that will
be enforceable against Buyer and that cannot be terminated by Buyer at or prior
to the Closing, or that applies to any time period after the Effective Time.
3.13 Environmental Matters
(a) To the best of Seller's knowledge and other than as
disclosed in Exhibit "E", the Sale Property is in compliance with applicable
Environmental Requirements and there is no Environmental Condition relating to
the Sale Property.
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(b) To the best of Seller's knowledge, all of the permits,
licenses and other governmental authorizations required by applicable
Environmental Requirements for Seller to operate the Sale Property in the manner
and in the areas in which the Sale Property is presently being operated have
been granted by the appropriate authority; a list of such permits and licenses
is set forth as Exhibit "C," attached hereto and made a part hereof. Seller does
not represent that all such permits and licenses are transferable or assignable.
To the best of Seller's knowledge, such permits, licenses and other governmental
authorizations are valid and in full force and effect. There are no material
actions or proceedings for the revocation thereof or any other material action
or proceeding before any governmental department, commission, board, bureau,
agency, court or instrumentality.
3.14 Books and Records. Seller represents and warrants that the books
and records of Seller made available to Buyer or an affiliate of Buyer by Seller
for inspection prior to Closing ("Seller Records").
3.15 No Consents Required. To the best of Seller's knowledge, there are
no consents, approvals, or authorizations of, or declarations, filings,
pre-filings, pre-transfer clearances or registrations with or notices to, a
Governmental Body required to close the transactions contemplated hereby.
3.16 Contracts. There are no service, maintenance, utility, and
management contracts affecting the Sale Property to which Seller is a party or
to which the Sale Property is subject, (i) which require payments or commitments
in excess of $100,000 per year, or have a remaining term of one (1) year or
more, and (ii) all other Contracts to which Seller is a party or to which the
Sale Property is subject that are necessary for the conduct of the business of
Seller conducted with the Sale Property. To the best of Seller's knowledge, (A)
all the Contracts are currently in full force and effect, (B) there is no
default, or action or omission of any third party or of either Seller which
either currently or with the giving of notice or passage of time or both would
constitute a material default under any of the Contracts, and (C) there are no
undisclosed rebates or discounts payable to any party under any of the
Contracts.
3.17 Permits. To the best of Seller's knowledge, the Permits set fort
at Exhibit "C" are all of the governmental permits, including environmental
permits, licenses, orders, franchises and related instruments that are presently
held by Seller or by its Affiliates relating to the ownership or operation of
the Sale Property. To the best of Seller's knowledge, no proceeding is pending
and no threat has been received in writing seeking to revoke or limit any
Permit. To the best of Seller's
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knowledge, the Permits constitute all the Permits necessary for Seller's
operation of the Sale Property and the business as currently conducted with the
Sale Property.
3.18 Storage Tanks. To the best of Seller's knowledge, there are no
storage tanks contained wholly under ground level in use or abandoned on the
Sale Property.
3.19 Assets. The assets listed in Exhibits "A," and "B" entail
substantially all of the assets used by Seller in the conduct of the business of
the Sale Property as of the date hereof. There are no agreements or options to
sell, lease or grant rights of first refusal that relate to any of such assets.
There are no agreements or options to sell, lease or grant rights of first
refusal that relate to the Sales Property and to the best of Seller's knowledge
there is no default, or action or omission of any third party or of Seller which
either currently or with the giving of notice or passage of time or both would
constitute a material default.
3.20 Labor Unions. There are no collective bargaining agreements with
any union currently in force with Seller or any Affiliates of Seller related to
the Sale Property or the businesses conducted therewith and there are no pending
or, to the best of Seller's knowledge, threatened organizing campaigns or
pending applications for certification or collective bargaining unit notices
which have been served on Seller or any Affiliate of Seller with respect to the
Sale Property or the businesses conducted therewith.
3.21 Non-foreign Entity. Seller is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust, or foreign estate for
purposes of U.S. income taxation.
3.22 Authorized Expenditures. There are no outstanding authorizations
or expenditures respecting the Sale Property for which Seller or Buyer will be
liable other than ordinary trade payables and well connections made in the
ordinary course of business pursuant to which such expenditures are or may be
required to be made.
3.23 Third Party Consents. To the best of Seller's knowledge, Exhibit
"D" lists all required third party consents for the assignment of the Sale
Property to Buyer.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and warranties to
Seller as of the date of this Agreement, which representations and warranties
must be true in all material respects at and as of the Effective Time (except
for any changes contemplated by the terms of this Agreement or consented to by
Seller in writing) as a condition to Seller's obligations at the Closing:
4.01 Organization and Authority. Buyer is a limited partnership duly
organized and validly existing under the laws of the State of Delaware, is duly
qualified to transact business in the State of Texas, and has full power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Buyer have been duly and
validly authorized by all necessary action of Buyer.
4.02 Execution and Effect. This Agreement has been (and at Closing each
other agreement that is required by this Agreement to be executed and delivered
by Buyer at Closing will be) duly and validly executed and delivered by Buyer
and, assuming the due authorization, execution and delivery by Seller,
constitutes a valid, binding, and enforceable obligation of Buyer.
4.03 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby (a) violates any
provision of the partnership agreement of Buyer, (b) constitutes a material
breach of or default (or an event that, with the giving of notice or passage of
time or both, would constitute a default) under, or will result in the
termination of, or accelerate the performance required by, or result in the
creation or imposition of any security interest, lien, charge or other
encumbrance upon any of the assets of Buyer under, any material contract,
commitment, understanding, agreement, arrangement or restriction of any kind or
character to which Buyer is a party or by which Buyer or any of its assets is
bound, or (c) to the best of buyer's knowledge violates in any material respect
any statute, law, regulation or rule, or any judgment, decree, order, writ or
injunction of any court or governmental authority applicable to Buyer or any of
its assets.
4.04 Investigation of Books and Records. Buyer is experienced and
knowledgeable in transactions of the type contemplated by this Agreement and (a)
has or, assuming Seller complies with its obligations set forth in Section 5.02
hereof to provide Buyer access to the books and records pertaining to the Sale
Property, will have reviewed the books and records pertaining to the Sale
Property and has, or by the Closing will have, fully satisfied itself with
respect thereto and (b)
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acknowledges that it is purchasing the Sale Property based solely upon its own
investigation and examination of such books and records, the environmental
investigation referred to in Section 8.10, and the express representations and
warranties of Seller set forth in Article 3 hereof.
5. OTHER OBLIGATIONS OF THE PARTIES
5.01 Conduct of Business Pending Closing. From the date hereof to the
Effective Time, Seller shall (i) operate and maintain the Sale Property in good
working order, condition and repair in accordance with past practices
(including, without limitation, a mutually agreeable level of linefill and other
minimum operating inventory), and in compliance with all applicable agreements,
laws and regulations, and (ii) conduct its business with respect to the Sale
Property only in the ordinary course, consistent with past practices, or as
specifically contemplated hereby.
Without limiting the generality of the foregoing, except as expressly
provided in this Agreement, from the date hereof through the Effective ▇▇▇▇
▇▇▇▇▇▇ shall not, without the prior written consent of Buyer:
(a) sell, transfer, encumber, or otherwise dispose of any
assets comprising the Sale Property without the written consent of Buyer;
(b) enter into any material agreements, commitments or
contracts affecting the Sale Property unless necessary to maintain public safety
and operational integrity of the Sale Property;
(c) make any changes in the insurance coverage relating to the
Sale Property; or
(d) agree or commit to do any of the foregoing.
5.02 Access to Books, Records and Pipeline System. Consistent with the
Confidentiality Agreement, Seller will have permitted Buyer access at any time
prior to and up to Closing, upon such advance notice to Seller as is reasonable
under the circumstances existing at the time notice is given, to the Sale
Property and the books, contracts, commitments and records pertaining thereto,
and have furnished Buyer during such period with such information concerning
Seller's business and operations with respect to the Sale Property as Buyer has
reasonably requested. Prior to and after the Closing, Seller shall provide Buyer
with all files, information (other than shipper information) and data in the
possession of Seller that relate directly to: (a) the
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present ability of the Sale Property to comply in all material respects with
applicable requirements concerning environmental law or laws for the protection
of occupational health and safety, or (b) the presence of pollutants, toxic
elements or contaminants in the air, surface or subsurface, including
groundwater, of the Sale Property, which would materially affect the Sale
Property.
5.03 Best Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, each of the Parties agrees to use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to cause the conditions to the Parties'
respective obligations hereunder to be satisfied and to consummate and make
effective the transactions contemplated by this Agreement and shall use its best
efforts to obtain promptly all waivers, permits, consents and approvals of, and
to effect all registrations, filings and notices with or to, third parties or
governmental or public bodies or authorities which are necessary or desirable in
connection with the transactions contemplated by this Agreement, including,
without limitation, filings to the extent required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act"); provided,
however, that no Party shall be required to make any material expenditure or
commitment therefore in order to obtain any such waiver, permit, consent or
approval. All notices to third parties shall be jointly coordinated among the
Parties.
5.04 Assignments Requiring Consents. To the extent that the assignment
of any rights of Seller (collectively, the "Seller's Assigned Rights") shall
require the consent of any other party thereto, Seller shall use reasonable
commercial efforts to obtain the required consent for a reasonable time
following Closing. The refusal of any of said other parties to give such consent
or the fact that the attempted assignment of any rights by Seller is ineffective
shall not constitute a breach of any of the representations, warranties or
covenants of Seller hereunder, including without limitation the representation
and warranty in Section 3.03(b), provided that Seller has complied with this
Section 5.04 and, further, has assisted Buyer in making or seeking alternatives.
Seller shall provide Buyer with copies of all correspondence requesting consent
to the assignments described in this paragraph. Buyer shall cooperate with and
assist Seller in obtaining such consents, but shall in no case be liable for,
and Seller shall not agree to any payment or agree to or modify any arrangement
that will result in the obligation of Buyer to make payments in excess of, the
amount theretofore payable by Seller, without the prior written consent of
Buyer. In the event that neither Seller nor Buyer is able to obtain any consent,
and Buyer has not been able to make reasonably satisfactory alternative
arrangements to eliminate the need to obtain such consent, then Seller shall be
obligated to pay to Buyer the costs of obtaining the consent or making
reasonably satisfactory alternative arrangements; provided that Buyer shall be
required to give Seller advance written notice of any case in which it will seek
reimbursement from Seller pursuant to this provision.
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5.05 Publicity. Each of the Parties shall consult with the other in
advance of issuing or permitting any of its affiliates or representatives to
issue any press release or otherwise making any public statement with respect to
the transactions contemplated hereby, including the signing of this Agreement,
and obtain the prior written approval of the other Party as to the content of
any such disclosure, which approval shall not be unreasonably withheld. This
provision shall not apply, however, to any announcement or written statement
that, upon advice of counsel, is required by law to be made, except that any
Party required to make such announcement or statement shall, whenever
practicable, consult with the other Party concerning the timing and content of
such announcement or statement before it is made.
5.06 Confidentiality. All of the terms and provisions of the letter
agreement dated January 31, 2002 among the Parties are hereby incorporated
herein in their entirety by this reference.
5.07 Changes of Events. Each of the Parties shall notify the others
promptly in the event that at any time prior to the Closing the notifying Party
becomes aware that any representation or warranty made by the notifying Party
hereunder is untrue in any respect or that it is unlikely that any condition to
the other Party's obligation to consummate the transactions contemplated by this
Agreement will be satisfied by the Closing. In the event that a Party shall have
notified the other Party that any representation or warranty made by such
notifying Party is untrue in any material respect, or any condition to the other
Party's obligations is unlikely to be satisfied, unless such other Party elects
to terminate this Agreement in accordance with Section 12.01(b) hereof, such
other Party shall be deemed to have waived any claim that the representation or
warranty described in the notice has been breached, or that such condition has
not been fulfilled, and such representation, warranty, or condition shall be
deemed not to have been breached or unfulfilled, as the case may be.
5.08 Risk of Loss. Subject to the terms of Article 11, Seller shall
bear the risk of loss of or damage to the Sale Property until the Effective
Time.
6. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to effect the transactions contemplated by
this Agreement at the Closing shall be subject to the fulfillment, prior to or
at the Closing, of each of the following conditions (unless waived in writing by
Buyer):
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6.01 Representations and Warranties True. All representations and
warranties made by Seller in this Agreement shall have been true in all material
respects when made and shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
such date, except for any changes contemplated by the terms of this Agreement or
consented to by Buyer in writing.
6.02 Performance. Seller shall have performed 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.
6.03 HSR Act Waiting Periods. All filings applicable to this Agreement
or the transactions contemplated hereby under the HSR Act shall have been made,
and the waiting period thereunder with respect to the transactions contemplated
by this Agreement shall have expired or been terminated.
6.04 Litigation. No action or proceeding shall be pending or threatened
against Seller or Buyer in any court of law or by any administrative or
governmental agency wherein an unfavorable judgment, decree or order could
prevent, make unlawful or materially affect consummation of the transactions
contemplated by this Agreement or materially impair Buyer's operation of the
Pipeline System in the manner heretofore operated by Seller or Buyer's conduct
of the Crude Marketing Business in the manner heretofore conducted by Seller.
6.05 Authorization and Approvals. All authorizations and approvals by
any governmental or regulatory body or any other third party necessary for the
consummation of the transactions contemplated by this Agreement shall have been
received.
6.06 Access Agreement Claims. At Closing, there shall be no unresolved
material claims of any Party arising under the terms of the Access Agreement and
any and all such material claims shall have been fully settled and released
prior to Closing.
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6.07 Other Closing Matters. Prior to or at Closing, Seller shall have
executed and delivered to Buyer or an Affiliate of Buyer each of the agreements
required by this Agreement to be executed and delivered at or prior to Closing.
6.08 Environmental Insurance. Prior to or at Closing Buyer shall obtain
from an insurance carrier a policy of environmental insurance insuring the Sale
Property on terms and conditions and for a policy premium acceptable to it in
its sole discretion. As part of the Closing, the Purchase Price will be reduced
by fifty percent (50%) of the policy premiums paid by Buyer for such
environmental insurance.
6.09 Sale of Texas Gulf Coast Business. Closing of the transaction
entered into pursuant to the Purchase and Sale Agreement between Teppco Crude
Pipeline, L.P. and Genesis Crude Oil, L.P. and Genesis Pipeline Texas, L.P.
dated October 14, 2003 shall be closed at or prior to Closing.
6.10 Marathon Consent. Prior to or at Closing Seller shall obtain the
consent to assign its rights and obligations under the Surface Lease and Right
of Way dated March 1, 2003 between Marathon Oil Company and Genesis Crude Oil,
L.P. from Marathon Oil Company.
7. CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to effect the transactions contemplated by
this Agreement at the Closing shall be subject to the fulfillment, prior to or
at the Closing, of each of the following conditions (unless waived in writing by
Seller):
7.01 Representations and Warranties True. All representations and
warranties of Buyer contained herein shall have been true in all material
respects when made and shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
such date, except for any changes contemplated by the terms of this Agreement or
consented to by Seller in writing.
7.02 Performance. Buyer shall have performed 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.
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7.03 HSR Act Waiting Periods. All filings applicable to this Agreement
or the transactions contemplated hereby under the HSR Act shall have been made,
and the waiting period thereunder with respect to the transactions contemplated
by this Agreement shall have expired or been terminated.
7.04 Litigation. No action or proceeding shall be pending or threatened
against Seller or Buyer in any court of law or by any administrative or
governmental agency wherein an unfavorable judgment, decree or order could
prevent, make unlawful or materially affect consummation of the transactions
contemplated by this Agreement or materially impair Buyer's operation of the
Sale Property in the manner heretofore operated by Seller.
7.05 Authorization and Approvals. All authorizations and approvals by
any governmental or regulatory body or other third party necessary for the
consummation of the transactions contemplated by this Agreement shall have been
received.
7.06 Sale of Texas Gulf Coast Business. Closing of the transaction
entered into pursuant to the Purchase and Sale Agreement between Teppco Crude
Pipeline, L.P. and Genesis Crude Oil, L.P. and Genesis Pipeline Texas, L.P.
dated October 14, 2003 shall be closed at or prior to Closing.
8. OTHER AGREEMENTS
8.01 Buyer's Assumption of Rights and Obligations. From and after the
Effective Time, subject to Buyer's indemnification agreement pursuant to Section
10.03(b) below, and the conditions set forth in this Agreement, Buyer agrees to
pay, perform and discharge in due course those obligations of Seller arising to
the extent that such obligations accrue or arise out of or in respect of the
Sale Property from and after the Effective Time. From and after the Effective
Time, subject to Seller's indemnification agreement pursuant to Section 10.03(a)
below, and the conditions set forth in this Agreement, Seller agrees to pay,
perform and discharge in due course those obligations of Seller to the extent
that such obligations accrue or arise out of or in respect of the Sale Property
prior to the Effective Time.
9. EMPLOYEES
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(a) Buyer shall have no liability whatsoever to employees of
Seller with respect to accrued pension benefits, if any, or other employee
benefits for such employees' services with Seller, including severance payments,
whether or not any such employees are offered employment by, or become employees
of, Buyer. Seller shall indemnify and hold harmless and defend Buyer from and
against any claim, debt, demand, loss, liability, expense, or cause of action
asserted or to be asserted by or on behalf of any of Seller's employees and
officers, or arising from such assertions including, without limitation, workers
compensation claims, arising out of events or occurrences up to and including
the Effective Time.
(b) Seller shall within 10 days after signing this Agreement
provide Buyer with a list of employees of Seller engaged in the business of the
Sale Property, including name and position. Buyer may offer employment to any
such employee on such terms and conditions as it determines in its sole
discretion. Buyer shall have no obligation to offer employment to any employees
of Seller.
(c) With respect to employees hired by Buyer, Buyer shall
indemnify and hold Seller harmless from and against liability under any pension
plan or benefit policy or arrangement maintained or sponsored by Buyer arising
out of events and conditions occurring subsequent to such employee's date of
hire by Buyer.
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.01 Survival of Representations. All representations and warranties
made by Seller and Buyer in this Agreement shall survive the Closing hereunder
for a period of two years from the Effective Time; provided, however,
representations and warranties with respect to any particular tax made by Seller
or Buyer in this Agreement shall survive the Closing hereunder until the tax
period, including any period for recovery of a deficiency, is closed. All
covenants and agreements contained in this Agreement, including but not limited
to agreements to indemnify either Party shall, except to the extent specifically
limited herein, be perpetual in term.
10.02 Definitions. For the purposes of this Article 10 only, the
following terms shall have the meanings indicated:
16
(a) "Seller" shall mean, when Seller is an indemnifying party,
Genesis Crude Oil, L.P.; and when Seller is an indemnified party, Genesis Crude
Oil, L.P, its Affiliates, successors and assigns, and any of their employees,
officers, directors, agents and representatives.
(b) "Buyer" shall mean, when Buyer is an indemnifying party
TEPPCO Crude Pipeline, L.P.; and when Buyer is an indemnified party, TEPPCO
Crude Pipeline, L.P, its Affiliates, successors and assigns, and any of their
employees, officers, directors, agents, and representatives.
10.03 Damages. (a) Subject to the terms and conditions of this Article
10, and except with respect to Environmental Damages, which are dealt with
exclusively in Section 10.04 below, Seller shall defend and hold harmless Buyer
from and against and shall reimburse Buyer for any and all Damages associated
with, relating to, arising from, incidental to, growing out of or caused in any
degree by:
(i) any breach by Seller of any representation or
warranty of Seller contained in this Agreement, but only if Seller receives
written notice of any claim for indemnification by Buyer pursuant to 10.05 below
on or before the date three years after the Effective Time.
(ii) any breach by Seller of any covenant or
agreement contained in this Agreement;
(iii) any injury to or death of any person or persons
relating to the Sale Property and the activities thereon, including omissions
and failures to act, prior to and up to the Effective Time;
(iv) any damage to or loss of any third party
property relating to the Sale Property and the activities thereon, including
omissions and failures to act, prior to and up to the Effective Time;
(v) any violation of or failure to comply with any
applicable law, regulation, decree, understanding, ordinance, rule or order
relating to the Sale Property and activities thereon, including omissions and
failures to act, prior to and up to the Effective Time; and
(vi) any other obligation or liability based upon or
arising out of the ownership or operation of the Sale Property prior to and up
to the Effective Time.
17
(b) Subject to the terms and conditions of this Article 10,
and except with respect to Environmental Damages, which are dealt with
exclusively in Section 10.04 below, Buyer shall indemnify, defend and hold
harmless Seller from and against and shall reimburse Seller for any and all
Damages associated with, relating to, arising from, incidental to, growing out
of or caused in any degree by:
(i) any breach by Buyer of any representation or
warranty of Buyer contained in this Agreement, but only if Buyer receives
written notice of any claim for indemnification by Seller pursuant to 10.05
below, on or before the date three years after the Effective Time;
(ii) any breach by Buyer of any covenant or agreement
contained in this Agreement;
(iii) any injury to or death of any person or persons
relating to the Sale Property and activities thereon, including omissions and
failures to act, from and after the Effective Time;
(iv) any damage to or loss of any third party
property relating to the Sale Property and activities thereon, including
omissions and failures to act, from and after the Effective Time;
(v) any violation of or failure to comply with any
applicable law regulation, decree, understanding, ordinance, rule or order
relating to the Sale Property and activities thereon, including omissions and
failures to act, from and after the Effective Time; and
(vi) any other obligation or liability based upon or
arising out of the ownership or operation of the Sale Property from and after
the Effective Time.
10.04 Environmental Damages. (a) Notwithstanding the terms and
provisions of Section 10.03 above, but subject to Section 10.04(b) below, Buyer
shall indemnify, defend, reimburse, and hold harmless Seller from and against
any and all Environmental Damages (i) pertaining in any manner whatsoever to the
activities that occur on the Sale Property at any time after the Effective Time,
and (ii) that are attributable to any Environmental Condition that is not
discovered within ten (10) years after the Effective Time.
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(b) Notwithstanding the terms and provisions of Section 10.03
and 10.04(a) above, Seller shall defend, reimburse and hold harmless Buyer from
and against Environmental Damages based upon or arising out of the ownership or
operation of the Sale Property prior to and up to the Effective Time, subject to
the following limitations:
(i) Buyer shall not be entitled to be indemnified by Seller against any
Environmental Damages that are attributable to any Environmental Condition that
is not discovered within ten (10) years after the Effective Time;
(ii) Buyer's requirement to bear any portion of the of Environmental
Damages attributable to any Environmental Condition or Environmental Claim shall
be included in and with its obligations under that certain Purchase and Sale
Agreement between Buyer and Seller and Genesis Pipeline Texas, L.P. dated
October 14, 2003; and
(iii) Buyer's right to indemnification from Seller for Environmental
Damages shall be included in and with its obligations under that certain
Purchase and Sale Agreement between Buyer and Seller and Genesis Pipeline Texas,
L.P. dated October 14, 2003.
(iv) For so long as the indemnifications of this Section 10.04(b)
survive, Buyer shall not, and shall cause its Affiliates to not, perform any
environmental due diligence beyond a Phase I environmental analysis nor any
subsurface investigation or invasive or destructive sampling on the Sale
Property, unless (1) required or requested by a federal, state, or local
regulatory or judicial body or required by any Legal Requirement, (2) in
connection with investigating a release by Buyer or (3) reasonably necessary to
protect Buyer's interest in a dispute with Seller or any third party. A breach
of this covenant by Buyer shall terminate Seller's indemnification pursuant to
this Section 10.04(b) with respect to the pipeline segment or station where such
environmental due diligence is conducted.
10.05 Indemnification Procedure. In the event that any Party receives
written notice of the commencement of any action or proceeding, the assertion of
any claim by a third party or the imposition of any penalty or assessment for
which indemnity may be sought pursuant to this Article 10, and such Party
intends to seek indemnity from the other Party pursuant to this Section 10.05,
such Party shall provide the other Party with written notice of such intent,
within 30 days of the receipt by the party seeking indemnification of notice of
such action, proceeding, claim, penalty or assessment, and such other Party
shall be entitled to participate in or, at such other Party's option, assume
control of the defense, appeal or settlement of such action, proceeding, claim,
penalty or assessment with respect to which such indemnity has been invoked, and
the Party that requested
19
indemnification will fully cooperate with the other Party in connection
therewith; provided that no party shall settle or compromise any such action,
proceeding, claim, penalty or assessment with respect to which indemnification
has been sought without the other Party's prior written consent, which consent
shall not be unreasonably withheld.
11. DAMAGE OR CONDEMNATION
If, prior to the Closing, any substantial damage to or destruction of
the Sale Property occurs which interferes in a materially adverse manner with
the operation, value or use of the Sale Property as a whole, or should all or
any portion of the Sale Property be condemned or should there be filed prior to
the Closing condemnation proceedings affecting all or any portion of the Sale
Property the condemnation of which would interfere in a materially adverse
manner with the operation, value or use of the Sale Property as a whole, Seller
shall notify Buyer immediately upon learning of such event. Seller shall then
have the right, but not the obligation, to cure the same by substantially
restoring the Sale Property to its condition immediately prior to such damage or
condemnation, provided that such restoration can be completed by the Closing or
other date acceptable to Buyer. Should Seller determine not to restore the Sale
Property to its condition immediately prior to such damage or condemnation,
Buyer may elect either to waive the damage or condemnation, or declare this
Agreement terminated, without liability to either Party.
12. TERMINATION OF AGREEMENT
12.01 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing:
(a) by either Buyer or Seller if the Closing shall not have
occurred on or before November 1, 2003, if the failure of the Closing to occur
on or before such date did not result from the failure by the Party seeking such
termination to fulfill any material undertaking or commitment provided for
herein that is required to be fulfilled by it prior to the Closing;
(b) by either Buyer or Seller, within 15 days after receipt of
notice from the other that any representation or warranty made by the other
Party is untrue in any material respect or any condition to such Party's
obligations is unlikely to be satisfied, provided that such misrepresentation or
failure of a condition did not result from the failure by the Party seeking such
termination to fulfill any material undertaking or commitment provided for
herein which is required to be fulfilled prior to the Closing;
20
(c) by Buyer if environmental assessments, inspection and
monitoring reveal any condition that materially impairs the conduct of the
business of the Sale Property in substantially the manner heretofore conducted
by Seller; or
(d) by Buyer if its review of Seller's books and records
pursuant to Section 4.04 above or review of any item or information disclosed in
any exhibit to this Agreement, reveals any condition that materially impairs the
value of the Sale Property.
12.02 Procedure Upon Termination. In order to terminate this Agreement
pursuant to Article 11, or Section 12.01 hereof, written notice shall forthwith
be given by the Party electing to terminate this Agreement to the other Party
and, except as provided by Section 12.03 hereof, if applicable, and Section
12.04 hereof, this Agreement and the transactions contemplated by this Agreement
shall thereupon be terminated and abandoned, without further action by Buyer or
Seller. If the transactions contemplated by this Agreement are terminated and
abandoned as provided herein:
(a) each Party will promptly redeliver to the other Party all
documents, work papers and other material furnished by such Party relating to
the transactions contemplated hereby (including all copies made thereof),
whether so obtained before or after the execution hereof;
(b) all confidential information received by any Party with
respect to the other Party or any of its affiliates shall be treated in
accordance with the letter agreement referenced in Section 5.08 hereof; and
(c) notwithstanding the foregoing, termination of this
Agreement pursuant to Section 12.01(a) or 12.01(b) hereof shall not in any way
limit or restrict the rights and remedies of any Party against any other Party
that has violated or breached any of the representations, warranties, agreements
or other provisions of this Agreement prior to termination hereof, but no Party
shall have any rights or claim against the other Party if a representation or
warranty of such other Party becomes untrue or a condition is not fulfilled
unless such breach or failure is due to a breach by such other Party of its
obligations under Section 5.03 hereof.
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12.03 Seller Right to Cure. Any termination notice delivered by Buyer
pursuant to Section 12.01(c) or (d) shall be effective only if it specifies in
reasonable detail the condition that materially impairs the conduct of the
business or the value of the Sale Property, as applicable. Seller shall then
have the right for thirty days following receipt of such notice to elect, by
written notice to Buyer, to remedy such condition; in such event, this Agreement
shall not be terminated, but rather shall remain in force and effect, so long as
Seller is engaged during such 30-day cure period in a good faith effort to
remedy the condition identified by Buyer in its notice.
12.04 Effects of Termination. The provisions of Sections 5.05, 5.06,
12.02, 14.01 and 14.02 shall survive the termination of this Agreement.
13. TAXES - PRORATIONS AND ADJUSTMENTS
13.01 Proration. Proration of the following items relating to the Sale
Property will be made as of the Effective Time, with all such items attributable
to the period prior to the Effective Time being for the sole account of Seller
and all such items attributable to the period after the Effective Time being for
the sole account of Buyer:
(a) Water taxes and taxes related to solid or hazardous waste
management, if any, on or with respect to the Sale Property. There will be an
initial proration of such taxes, if necessary, based on the most recent tax
bills plus or minus any known increase or decrease and a final proration based
on the actual tax bills relating thereto. Such final proration and remittance of
any balance due shall be accomplished among Buyer and Seller promptly following
receipt of the actual tax bills and determination of amounts owed.
(b) Personal property taxes and real estate taxes on or with
respect to the Sale Property. Proration of such taxes will be based on the most
recent tax bills, plus or minus any increase or decrease known as of the
Closing. The owner of record on the assessment date shall file all required
reports and returns and shall pay all such taxes due with respect to the tax
period within which the Effective Time occurs. If Seller is the owner of record
on the assessment date, then Buyer shall pay its prorated portion of taxes
within 30 days after receipt of Seller's invoice therefore.
(c) The amount of rents and charges for water, sewer,
telephone, electricity and other utilities and fuel.
22
(d) Such other amounts and charges as are normally subject to
proration between a buyer and a seller of real and personal property interests
such as rents, fees and other amounts paid by or to Seller under any lease or
other contract or arrangement covering the Sale Property.
(e) Annual permits and/or inspection fees.
Seller and Buyer shall furnish each other with such documents and other records
as shall be reasonably requested in order to confirm all proration calculations.
13.02 Deposits. All rental deposits and prepayments which Seller has
made in respect of the operation of the Sale Property as of the Effective Time
and which can be transferred to Buyer shall be purchased by Buyer from Seller at
the Closing.
13.03 Sales Taxes; Recording Fees. Seller and Buyer believe that this
purchase and sale of the Interests constitutes an isolated or occasional sale
and is not subject to sales Tax; provided, however, if any sales, transfers, use
Taxes or other similar Taxes are due or should hereafter become due (including
penalty and interest thereon) by reason of this transaction, Buyer shall timely
pay and solely bear all such Taxes. Buyer shall pay all fees for recording all
instruments of conveyance or applications for permits or licenses or the
transfer relating thereof to the transfer of the interests included in the Sale
Property.
13.04 Cooperation. Each Party shall provide the other Party with
reasonable access to all relevant documents, data and other information, which
may be required by the other Party for the purpose of preparing tax returns and
responding to any audit by any taxing jurisdiction. Each Party shall cooperate
with all reasonable requests of the other Party made in connection with
determining or contesting tax liabilities attributable to the Sale Property.
Notwithstanding anything to the contrary contained in this Agreement, neither
Party to this Agreement shall be required at any time to disclose to the other
Party any tax returns or other confidential tax information.
13.05 Document Retention. (a) Subject to the provisions of 13.05(b),
Buyer agrees that all books and records delivered to Buyer by Seller pursuant to
the provisions of this Agreement shall be open for inspection by representatives
of Seller at reasonable times and upon reasonable notice during regular business
hours following the Effective Time for such period as may be required by law or
governmental regulation (in the case of tax records, for a period of ten years
following the Effective Time), and that Seller may during such period at its
expense make such
23
copies thereof as it may reasonably request; provided, however, that Buyer may
condition Seller's access to such books and records upon the adequate protection
of information concerning Buyer's post-Closing affairs, including, without
limitation the execution of a formal confidentiality agreement in form and
substance comparable to the confidentiality agreement referenced in Section
5.07. Seller agrees that such documents and materials as shall be retained by
Seller shall be open for inspection by Buyer, provided such inspection is
related to the Sale Property, or the conduct of business or the operation of the
Sale Property at reasonable times and upon reasonable notice during regular
business hours for such period following the Effective Time as may be required
by law or governmental regulation, and that Buyer may during such period at its
expense make such copies thereof as it may reasonably request.
(b) Without limiting the generality of the foregoing, for such
period as may be required by law or governmental regulation, Buyer shall not
destroy any original or final copy of any of the books and records delivered to
Buyer by Seller hereunder without first offering Seller the reasonable
opportunity, at Seller's expense (without any payment to Buyer), to obtain such
original or final copy or a copy thereof. After the conclusion of such period,
Buyer shall offer Seller the reasonable opportunity to recover all such books
and records prior to destroying the same.
(c) From and after the Effective Time, Seller and Buyer each
shall use its best efforts to afford the other access to its employees who are
familiar with the operations of the Sale Property for proper corporate purposes,
including without limitation, the defense of legal proceedings. Such access may
include interviews or attendance at depositions or legal proceedings; provided,
however, that in any event all expenses (including wages and salaries)
reasonably incurred by either Party in connection with this Section 13.05(c)
shall be paid or promptly reimbursed by the Party requesting such services.
13.06 Receivables. Notwithstanding the Closing, all of the accounts
receivable due to Seller from third parties based upon its operation of the Sale
Property through the Effective Time shall be retained by Seller. Buyer shall
utilize reasonable commercial efforts to assist Seller, at Seller's reasonable
request, in the collection of such accounts receivable; provided, however, that
such assistance shall not require Buyer to expend any sum of money.
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14. MISCELLANEOUS
14.01 No Brokers. Each Party represents and warrants that there are no
claims for brokerage commissions or finders' fees or other like payments in
connection with the transactions contemplated by this Agreement. Each Party will
pay or discharge, and will indemnify and hold harmless the other from and
against, any and all claims for brokerage commissions or finders' fees incurred
by reason of any action taken by such indemnifying Party.
14.02 Expenses; Taxes. Except as otherwise provided herein, each Party
will pay all fees and expenses incurred by it in connection with this Agreement
and the consummation of the transactions contemplated hereby.
14.03 Further Assurances. Each Party will from time to time after the
Closing and without further consideration, upon the request of the other Party,
execute and deliver such documents and take such actions as the other Party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby; provided, however, that no such request shall require
either Party to make any expenditure.
14.04 Assignment; Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by the respective successors
and permitted assigns of the Parties; provided that neither Party may transfer
or assign any of its rights or obligations hereunder or any interest herein
without the prior written consent of the other Party; and provided further that
the assignment by either Party of its rights under this Agreement to a corporate
subsidiary or affiliate of the Party shall be a permitted assignment for the
purposes of this Section, but no such assignment shall relieve the assigning
party of its obligations hereunder.
14.05 Entire Agreement; Amendments. This Agreement, including the
exhibits and any agreements or other writings referred to herein or delivered
pursuant hereto, contains the entire understanding of the Parties with respect
to the matters addressed by its terms. There are no restrictions, agreements,
promises, representations, warranties, covenants or undertakings other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and undertakings between the Parties with respect to its
subject matter, except to the extent any such prior agreement is specifically
referred to herein. This Agreement may be amended or modified only by a written
instrument duly executed by each of the Parties. Unless otherwise provided
25
herein, any condition to a Party's obligations hereunder may be waived only in
writing by such Party.
14.06 Severability. In case any one or more of the provisions contained
herein shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never been
contained herein, unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
14.07 Interpretation. The article and section headings are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.08 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder must be in writing and will be deemed to have
been duly given if delivered by hand, telex, telecopy or mailed (registered or
certified mail, postage prepaid, return receipt requested) as follows:
(a) If to Buyer:
TEPPCO Crude Pipeline, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
(b) If to Seller:
Genesis Energy, L.P.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above;
provided, however, that any notice of change of address shall not be deemed to
have been given to any Party until actually received by such Party.
26
14.09 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Texas.
14.10 Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same instrument.
14.11 Certain Rights. The Parties waive any rights to incidental or
consequential damages resulting from a breach of this Agreement, including
without limitation, loss of profits. In the event suit or action arising out of
this Agreement should be brought by either Party hereto, the prevailing Party,
after conclusion of all appeals, shall be entitled, as a part of such judgment,
to costs and expenses incurred with respect thereto, including court costs and
reasonable attorney's fees.
14.12 Arbitration.
(a) Any and all claims, demands, causes of action, disputes,
controversies, and other matters in question arising out of or relating to this
Agreement, any of its provisions, or the relationship between the Parties
created by this Agreement, whether sounding in contract, tort, or otherwise,
whether provided by statute or the common law, for damages or any other relief
(all of which are referred to herein as "Disputes"), shall be resolved by
binding arbitration pursuant to the Federal Arbitration Act. The arbitration may
be initiated by either Party by providing to the other a written notice of
arbitration specifying the Disputes to be arbitrated. If a Party refuses to
honor its obligations to arbitrate, the other Party may seek to compel
arbitration in either federal or state court. The arbitration proceeding shall
be conducted in Houston, Texas, or other location mutually agreed upon by the
Parties. Within 30 days of the notice initiating the arbitration procedure, each
Party shall designate one arbitrator, who need not be impartial. If a Party
fails to designate an arbitrator, the other Party shall have the right to
designate a second arbitrator. The two arbitrators shall select a third
arbitrator. Each Party shall pay the costs and expenses of the arbitrator
selected by it or for it, and 1/2 of the costs and expenses of the third
arbitrator and other costs of the arbitration (facilities rental charges, if
applicable, etc.).
(b) The three arbitrators shall make all of their decisions by
majority vote. The enforcement of this Agreement to arbitrate, the validity,
construction, and interpretation of this Agreement to arbitrate, and all
procedural aspects of the proceeding pursuant to this Agreement to arbitrate,
including, without limitation, the issues subject to arbitration, the scope
27
of the arbitrable issues, allegations of "fraud in the inducement" to enter into
this entire Agreement or to enter into this Agreement to arbitrate, allegations
of waiver, delay or defenses to arbitrability, and the rules governing the
conduct of the arbitration, shall be governed by and construed pursuant to the
Federal Arbitration Act. In deciding the substance of the Parties' Disputes, the
arbitrators shall apply the substantive laws of the State of Texas (excluding
Texas choice-of-law principles that might call for the application of some other
State's law). The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
modified in this Agreement. It is contemplated that although the arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, the arbitration proceeding will be
self-administered by the Parties; provided, if a Party believes the process will
be enhanced if it is administered by the American Arbitration Association, such
Party shall have the right to cause the process to become administered by the
American Arbitration Association by applying to the American Arbitration
Association and, thereafter, the arbitration shall be conducted pursuant to the
administration of the American Arbitration Association. In determining the
extent of discovery, the number and length of depositions, and all other
pre-hearing matters, the arbitrators shall endeavor to the extent possible to
streamline the proceedings and minimize the time and cost of the proceedings.
There shall be no transcript of the hearing. The final hearing shall be
conducted within 120 days of the selection of the third arbitrator. The final
hearing shall not exceed 10 Business Days, with each Party to granted one-half
of the allocated time to present its case to the arbitrators. All proceedings
conducted hereunder and the decision of the arbitrators shall be kept
confidential by the Parties.
(c) Only damages allowed pursuant to this Agreement may be
awarded. It is expressly agreed that the arbitrators shall have no authority to
award treble, exemplary or punitive damages of any type under any circumstances
regardless of whether such damages may be available under Texas law, the parties
hereby waiving their right, if any, to recover treble, exemplary or punitive
damages in connection with any Dispute, either in arbitration or in litigation.
The arbitrators shall render their final decision within 20 days of the
completion of the final hearing fully resolving all of the Disputes that are the
subject of the arbitration proceeding. The arbitrators' ultimate decision after
final hearing shall be in writing. The arbitrators shall certify in their
decision that no part of their award includes any amount for treble, exemplary
or punitive damages not allowed hereunder. The arbitrators' decision shall be
final and non-appealable to the maximum extent permitted by law. Any and all of
the arbitrators' orders and decisions may be enforceable in, and judgment upon
any award rendered in the arbitration proceeding may be confirmed and entered
by, any federal or state court having jurisdiction.
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15. DEFINITIONS.
"Affiliate" means with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
Person. For purposes of the definition of "Affiliate," the term "control"
(including the correlative terms "controlled by" and "under the common control
of"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, through the ownership of voting securities, by
contract, or otherwise.
"Claims" means any demand, claim, damage, expense, action, suit,
proceeding, judgment, damage, loss, payment, obligation, penalty, assessment,
disbursement, cost or expense (including interest), awards, judgments,
settlements, fines, costs of remediation (including, without limitation,
investigation and assessment required in connection therewith), diminutions in
value, fees, disbursements and expenses, and fees of attorneys, accountants, and
other professional advisors and of expert witnesses and costs of investigation
and preparation of any kind or nature whatsoever actually incurred, suffered, or
paid by a Party or liability of any nature whatsoever relating to the ownership,
operation, or maintenance of any asset included in the Sale Property or the
provisions of this Agreement.
"Damages" means losses, damages (whether compensatory, punitive,
consequential, or special in nature), obligations, liabilities, costs and
expenses (including, but not limited to, reasonable attorneys' fees, expenses
and court costs).
"Environmental Audit" means the environmental studies or audits with
respect to the Sale Property conducted prior to the Closing by an environmental
consulting firm at the request of Buyer.
"Environmental Claims" means Claims by any Governmental Body or Person
for Environmental Conditions, situations, circumstances, events or incidents on,
at or concerning, originating at or relating to any of the Sale Property and
arising from or related to a violation of, or remedial requirement under, any
Environmental Law.
"Environmental Condition" means surface soil, subsurface soil, surface
water, and/or groundwater contamination, or other types of Releases of Hazardous
Materials or environmental damage or contamination in, on, around or under the
Assets or arising, originating or migrating
29
offsite from the Assets, including offsite disposal thereof and which requires
containment, remediation, clean-up, restoration, removal or monitoring under
Environmental Laws.
"Environmental Damages" means Damages, together with the costs of
remediation including, but not limited to, reasonable consultant and lab fees,
arising out of Environmental Claims, Environmental Conditions or Environmental
Requirements.
"Environmental Laws" means any and all Legal Requirements or orders,
rules, codes, policies, directives, standards, licenses or permits of any
Governmental Body relating to Hazardous Materials, the abatement of
pollution, protection or restoration of the environment, or ensuring public
health and safety from environmental hazards, specifically including,
but not limited to, those relating to the exposure to, or the use, Release,
emission, presence, storage, treatment, generation, transportation, processing
or handling, management or control of, Hazardous Materials, in effect as of
the Effective Time, including, but not limited to, the Safe Drinking Water
Act, 42 U.S.C.ss.300f et seq.; Federal Water Pollution Control Act,
33 U.S.C.ss.1251, et. seq.; the Federal Insecticide, Fungicide & Rodenticide
Act, 7 U.S.C.ss.136 et seq.; the Toxic Substances Control Act, 15 ▇.▇.▇.▇▇.
2601 et seq.; the Oil Pollution Act of 1990, 33 ▇.▇.▇.▇▇. 2701 et seq.; the
Clean Water Act, 33 ▇.▇.▇.▇▇. 1251 et seq.; the Clean Air Act,
42 U.S.C.ss.7401 et seq.; the Resource Conservation and Recovery Act,
42 U.S.C.ss.6901 et seq., as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 ▇.▇.▇.▇▇. 9601 et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act,
42 U.S.C.ss.9601 et seq.; and the Emergency Planning and Community Right to
Know Act, 42 ▇.▇.▇.▇▇. 11001 et seq., and all similar statutes adopted by the
State of Texas, in effect as of the Effective Time.
"Environmental Requirements" means all applicable past, present and
future statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions, franchises, and similar
items, of all governmental agencies, departments, commissions, boards, bureaus,
or instrumentalities of the United States, and the states and political
subdivisions thereof, and all principles of common law, pertaining to protection
of the environment, and injury to the health of humans and damages to natural
resources resulting from failure to protect the environment.
"Hazardous Material" means (a) any chemicals, materials or substances
defined as "hazardous waste", "hazardous substance", "extremely hazardous
substance", "toxic chemical", "hazardous chemical", "toxic pollutants",
"contaminants", "chemical", "chemical substance", or "asbestos", as such terms
are defined in any of the Environmental Laws in such quantities or
30
concentrations as are regulated by such Environmental Laws; and (b) any
petroleum or petroleum products, natural or synthetic gas, radioactive
materials, Asbestos, urea formaldehyde foam insulation in such quantities,
condition or concentrations as are regulated by Environmental Laws.
"Governmental Body" means any (a) nation, state, county, city, town,
village, district, territory, or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign, or other government; (c) governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); or (d) body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature, including any
arbitrator or arbitration panel.
"Legal Requirement" means any order, constitution, law, ordinance,
regulation, statute, or treaty issued by any Governmental Body, or any principle
of common law or governmental interpretation thereof.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, unincorporated organization, business, syndicate, sole
proprietorship, association, organization, labor union, or other entity or
Governmental Body.
"Release" or "Released" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
migrating or disposing (including, but not limited to, the abandoning or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) of a substance into the environment.
"Third Person" means any Person other than Seller or Buyer or their
respective Affiliates.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date first above written.
TEPPCO Crude Pipeline, L.P.
By: TEPPCO Crude GP, LLC,
general partner
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Genesis Crude Oil, L.P.
By: Genesis Energy, Inc.
general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
32
LIST OF EXHIBITS
Exhibit "A" Description of Personal Property and Equipment [Sec. 1. (a)]
Exhibit "A-1" Diagram of Personal Property and Equipment [Sec. 1.(a)]
Exhibit "B" Assigned Contracts [Sec. 1. (b)]
Exhibit "C" Permits [Sec. 3.13]
Exhibit "D" Required Consents [Sec. 3.23]
Exhibit "E" Disclosure of Environmental Conditions [Sec. 3.13]
33