EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
RELATING TO THE ACQUISITION OF
BUCKEYE MANAGEMENT COMPANY
BY
BMC ACQUISITION COMPANY
DATED: JANUARY 5, 1996
TABLE OF CONTENTS
PAGE
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Article 1 Sale and Purchase of Shares.................................... 1
1.1 Sale and Purchase of the Shares................................ 1
1.2 The Purchase Price............................................. 1
Article 2 The Closing.................................................... 1
2.1 Closing Date................................................... 1
2.2 Deliveries..................................................... 2
Article 3 Representations and Warranties of the Shareholder.............. 2
3.1 Organization and Standing...................................... 2
3.2 Capitalization and Share Ownership............................. 2
3.3 Authority and Binding Effect................................... 2
3.4 Validity of Contemplated Transactions.......................... 3
3.5 Subsidiaries................................................... 3
3.6 Taxes.......................................................... 3
3.7 No Material Undisclosed Facts.................................. 3
Article 4 Representations and Warranties of the Buyer.................... 3
4.1 Organization and Standing...................................... 3
4.2 Authority and Binding Effect................................... 4
4.3 Validity of Contemplated Transactions.......................... 4
4.4 Purchase for Investment........................................ 4
4.5 Available Financing............................................ 4
4.6 Financial Projections.......................................... 4
4.7 Investigation and Evaluation................................... 5
4.8 Securities Law Matters......................................... 5
Article 5 Certain Covenants.............................................. 5
5.1 Conduct of Business Pending Closing............................ 5
5.2 Approvals...................................................... 6
5.3 Confidential Information....................................... 6
5.4 Public Announcements........................................... 7
5.5 Tax Matters.................................................... 7
5.6 Audit Adjustments.............................................. 8
5.7 Certain Employee Benefit Arrangements.......................... 9
5.8 Insurance Arrangements......................................... 9
5.9 NJ Environmental Liabilities................................... 10
5.10 Prudential Financing and Special Committee Approval............ 12
5.11 No Solicitation of Transactions................................ 12
Article 6 Conditions Precedent to Obligations of the Buyer............... 12
6.1 Representations and Warranties................................. 12
6.2 Performance by the Shareholder................................. 12
6.3 Certificates................................................... 12
6.4 Intentionally Omitted.......................................... 12
6.5 Litigation Affecting Closing................................... 12
6.6 Regulatory Compliance and Approvals............................ 12
6.7 Consents....................................................... 12
6.8 Financing...................................................... 12
6.9 Special Committee.............................................. 13
PAGE
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Article 7 Conditions Precedent to Obligations of the Shareholder......... 13
7.1 Buyer Representations True at Closing.......................... 13
7.2 Performance by the Buyer....................................... 13
7.3 Officer's Certificate.......................................... 13
7.4 Demand Notes................................................... 13
7.5 Incumbency Certificate......................................... 13
7.6 Opinion of Counsel............................................. 13
7.7 Litigation Affecting Closing................................... 13
7.8 Regulatory Compliance and Approval............................. 13
7.9 Special Committee.............................................. 14
Article 8 Miscellaneous.................................................. 14
8.1 No Survival of Representation and Warranties................... 14
8.2 Payment of Expenses............................................ 14
8.3 Termination.................................................... 14
8.4 Brokers' and Finders' Fees..................................... 14
8.5 Assignment and Binding Effect.................................. 15
8.6 Waiver......................................................... 15
8.7 Notices........................................................ 15
8.8 Pennsylvania Law to Govern..................................... 15
8.9 Remedies Not Exclusive......................................... 15
8.10 No Benefit to Others........................................... 16
8.11 Contents of Agreement.......................................... 16
8.12 Section Headings and Gender.................................... 16
8.13 Cooperation.................................................... 16
8.14 Severability................................................... 16
8.15 Counterparts................................................... 16
Annex I Certain Defined Terms............................................. 17
Schedule 4.1 List of Common Stock Subscribers............................. 20
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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement is dated as of January 5, 1996. The parties
are Pennsylvania Company, a Delaware corporation (the "Shareholder"), being
the owner of all of the issued and outstanding shares of capital stock of
Buckeye Management Company, a Delaware corporation (the "Company"), and BMC
Acquisition Company, a Delaware corporation (the "Buyer").
PREAMBLE
The Shareholder owns 1,000 shares of Common Stock, par value $1.00 per share
(the "Common Stock"), of the Company which constitutes all of the issued and
outstanding shares of capital stock of the Company (the "Shares"). The Buyer
desires to purchase from the Shareholder, and the Shareholder desires to sell
to the Buyer, all of the Shares in exchange for the Purchase Price in
accordance with the terms and conditions set forth in this Agreement. The
parties hereto have determined to make an election under Section 338(h)(10) of
the Internal Revenue Code of 1986, as amended and in effect on the date hereof
(the "Code"), to have the purchase and sale of the Shares hereunder treated
for Federal income tax purposes as a purchase of assets by the Buyer from the
Shareholder.
For convenience and brevity, certain terms used in various parts of this
Agreement are listed in alphabetical order and defined or referred to on Annex
I hereto (such terms to be equally applicable to both singular and plural
forms of the terms defined).
Now, Therefore, in consideration of the respective covenants,
representations and warranties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE 1
Sale and Purchase of Shares
1.1 Sale and Purchase of the Shares. On the Closing Date and subject to the
terms and conditions hereinafter set forth and on the basis of and in reliance
upon the representations, warranties, obligations and agreements set forth
herein, the Shareholder shall sell to the Buyer and the Buyer shall purchase
from the Shareholder all of the Shares in exchange for the payment to the
Shareholder of the Purchase Price.
1.2 The Purchase Price. On the Closing Date and subject to the terms and
conditions hereinafter set forth and on the basis of and in reliance upon the
representations, warranties, obligations and agreements set forth herein, the
Buyer shall pay to the Shareholder $63,000,000 (the "Purchase Price"), payable
by wire transfer of immediately available funds to such account as the
Shareholder shall designate.
ARTICLE 2
The Closing
2.1 Closing Date. The Closing (the "Closing") of the sale and purchase of
the Shares shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Square, Philadelphia, Pennsylvania at 10:00 A.M. local time, on
the later of (i) ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) the fifth business day following the
satisfaction or waiver of all of the conditions set forth in Articles 6 and 7
hereof, or (iii) at
such other time or place or on such other date as the Buyer and the
Shareholder may agree to in writing. The date of the Closing is hereinafter
sometimes referred to as the "Closing Date." The Closing shall be deemed to
have occurred as of the close of business on the Closing Date.
2.2 Deliveries. At the Closing, subject to the provisions of this Agreement,
the Shareholder shall deliver to the Buyer, free and clear of all Liens, the
certificates for the Shares to be sold by such Shareholder, duly endorsed in
blank, or with separate stock transfer powers attached thereto and signed in
blank, and the Buyer shall deliver to the Shareholder the Purchase Price by
wire transfer of immediately available funds. At the Closing, the Shareholder
shall also deliver to the Buyer, and the Buyer shall deliver to the
Shareholder, the certificates, opinions and other instruments and documents
referred to in Articles 6 and 7. The Buyer and the Shareholder shall deliver
executed copies of IRS Form 8023 making the joint election under Section
338(h)(10) of the Code, and in the case of the Buyer the election under
Section 338(g) of the Code to allow the election under Section 338(h)(10) of
the Code to be made. The parties shall cooperate with each other to reach
agreement upon a schedule of the allocation of the Purchase Price to be
attached to the IRS Form 8023 by each of the Buyer and the Shareholder.
ARTICLE 3
Representations and Warranties of the Shareholder
The Shareholder hereby represents and warrants to the Buyer that:
3.1 Organization and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
having full corporate power and authority to carry on its business as it is
now being conducted and to own, lease and operate its assets. The Company is
duly qualified to do business and is in good standing in every jurisdiction in
which its business or the character of its assets requires such qualification
and in which the failure to be so qualified would have a Company Material
Adverse Effect.
3.2 Capitalization and Share Ownership. The Company's authorized capital
stock consists of 1,000 shares of Common Stock, par value $1.00 per share, of
which 1,000 shares are presently outstanding (previously defined as the
"Shares"), which Shares are owned by the Shareholder free and clear of any
Liens. All of the Shares have been duly authorized and validly issued, are
fully paid and nonassessable, were not issued in violation of the terms of any
Contract binding upon the Company, and were issued in compliance with all
applicable charter documents of the Company. No equity securities of the
Company, other than the Shares, are issued or outstanding. There are, and have
been, no preemptive rights with respect to the issuance of the Shares. There
are no existing Contracts, subscriptions, options, warrants, calls,
commitments or rights of any character to purchase or otherwise acquire any
capital stock or other securities of the Company, whether or not presently
issued or outstanding, from the Shareholder or the Company, at any time, or
upon the happening of any stated event.
3.3 Authority and Binding Effect. The Shareholder has the full corporate
power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement by the
Shareholder has been duly authorized by all necessary corporate and
shareholder action. This Agreement has been, and the other agreements,
documents and instruments required to be delivered by the Shareholder in
accordance with the provisions hereof (the "Shareholder Documents") will be,
duly executed and delivered on behalf of the Shareholder by duly authorized
officers of the Shareholder, and this Agreement constitutes, and the
Shareholder Documents will constitute, the legal, valid and binding
obligations of the Shareholder, enforceable against the Shareholder in
accordance with their respective terms, except as may be limited by bankruptcy
or insolvency laws and other similar laws or equitable principles affecting
rights of creditors generally.
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3.4 Validity of Contemplated Transactions. Neither the execution and
delivery of this Agreement by the Shareholder nor the consummation of the
transactions contemplated hereby will contravene or violate the charter
documents or by-laws of the Shareholder or the Company or any Regulation or
Court Order which is applicable to the Company or the Shareholder, or will
result in a Default under, or require the consent or approval of any party to,
any material Contract relating to its business or its assets or to or by which
the Company or the Shareholder is a party or otherwise bound or affected, or,
to the Shareholder's knowledge based upon oral opinions of counsel, require
the Company or the Shareholder to notify or obtain any License from any
federal, state, local or other court or governmental agency or body or from
any other regulatory authority, except for public utility commission or
environmental approvals required to be obtained by the Company.
3.5 Subsidiaries. Except for interests in Buckeye Pipe Line Company, a
Delaware corporation (the "Management Subsidiary"), and the Master
Partnership, and the interests of the Management Subsidiary in each of the
Operating Partnerships, neither the Company nor the Management Subsidiary has
any subsidiaries or stock or other equity or ownership interest (whether
controlling or not) in any corporation, association, partnership, limited
liability company, joint venture or other entity. The Company owns of record
and beneficially (i) all of the issued and outstanding capital stock of the
Management Subsidiary free and clear of any Liens, and (ii) a 1% general
partnership interest in the Master Partnership in accordance with the Master
Partnership Agreement. The Company is the general partner of the Master
Partnership. The Management Subsidiary owns of record and beneficially a 1%
general partnership interest in each of the Operating Partnerships in
accordance with the Operating Partnership Agreements related thereto and a
.99% limited partnership interest in Buckeye Pipe Line Company of Michigan,
L.P. pursuant to its Operating Partnership Agreement. The Management
Subsidiary is the sole general partner of the Operating Partnerships. There
are: (a) no existing Contracts, subscriptions, options, warrants, calls,
commitments or rights of any character to purchase or otherwise acquire from
the Company or the Management Subsidiary at any time, or upon the happening of
any stated event, any capital shares or other securities of the Company, the
Management Subsidiary, the Master Partnership, or the Operating Partnerships,
whether or not presently issued or outstanding; (b) no outstanding securities
of the Management Subsidiary that are convertible into or exchangeable for
capital shares or other securities of the Management Subsidiary; and (c) no
Contracts, subscriptions, options, warrants, calls, commitments or rights to
purchase or otherwise acquire from the Company or the Management Subsidiary
any such convertible or exchangeable securities.
3.6 Taxes. All United States Federal income tax returns and all other
material tax returns which are required to be filed with respect to the
Company and the Management Subsidiary have been filed (except in instances in
which there is an effective extension of the time in which to file a tax
return) and all taxes due with respect thereto or pursuant to any assessment
with respect to the Company or the Management Subsidiary have been paid,
except for assessments the validity of which is being contested in good faith
by appropriate proceedings.
3.7 No Material Undisclosed Facts. The Shareholder has not omitted to
disclose to the Buyer any material fact with respect to the Company or the
Management Subsidiary, actually known by the Shareholder which is not known to
the Company or the Management Subsidiary.
ARTICLE 4
Representations and Warranties of the Buyer
The Buyer hereby represents and warrants to the Company and the Shareholder
as follows:
4.1 Organization and Standing. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Delaware, having all
requisite corporate power and authority to
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perform its obligations under this Agreement. As of the date hereof, the Buyer
has received legally binding subscriptions from the persons listed on Schedule
4.1 to contribute not less than $5 million to the Company on or before the
Closing Date in return for common stock of the Buyer. (In the case of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇, his subscription is subject to financing to be provided by the
Shareholder or its affiliates in the event that the Closing Date occurs prior
to March 13, 1996.) The Buyer has no assets or liabilities except for its
rights and obligations under this Agreement, the subscriptions and Prudential
Commitment Letter.
4.2 Authority and Binding Effect. The Buyer has the corporate power and
authority to execute, deliver and perform this Agreement and the other
agreements, documents and instruments required to be delivered by the Buyer in
accordance with the provisions hereof (the "Buyer Documents"), and has taken
all actions necessary to secure all approvals required in connection
therewith. The execution, delivery and performance of this Agreement and the
Buyer Documents by the Buyer has been duly authorized by all necessary
corporate and shareholder action. This Agreement has been, and the Buyer
Documents will be, duly executed and delivered on behalf of the Buyer by duly
authorized officers of the Buyer, and this Agreement constitutes, and the
Buyer Documents will constitute, the legal, valid and binding obligation of
the Buyer, enforceable against it in accordance with their respective terms,
except as may be limited by bankruptcy or insolvency and other similar laws or
equitable principles affecting rights of creditors generally.
4.3 Validity of Contemplated Transactions. Neither the execution and
delivery of this Agreement by the Buyer nor the consummation of the
transactions contemplated hereby by the Buyer will contravene or violate any
Regulation or Court Order which is applicable to the Buyer, or the charter
documents or By-Laws of the Buyer, or will result in a Default under any
Contract to which the Buyer is a party or by which it is otherwise bound, or
require the Buyer to notify or obtain any License from any federal, state,
local or other court or governmental agency or body or from any other
regulatory authority.
4.4 Purchase for Investment. The Buyer is acquiring the Shares solely for
its own account for investment and not with a view to or for the sale or
distribution thereof. The Buyer acknowledges that the Shares are not
registered under the Securities Act of 1933, as amended, and that such Shares
may not be transferred or sold except pursuant to the registration provisions
of the Securities Act or pursuant to an applicable exemption therefrom.
4.5 Available Financing. The Buyer has delivered to the Shareholder a
commitment letter (the "Prudential Commitment Letter") from Prudential Capital
Group to lend the Buyer up to $63,000,000 to purchase the Shares. The Buyer
has no reason to believe that Prudential Capital Group and the Buyer will not
be able to reach agreement on the form and substance of a definitive agreement
reflecting the terms of the Prudential Commitment Letter or that all
conditions precedent to the obligations of Prudential Capital Group contained
therein or in the Prudential Commitment Letter will not be satisfied.
4.6 Financial Projections. The Buyer has provided to the Shareholder
financial projections for the Buyer, the Company, and the Management
Subsidiary, supported by a cost reduction proposal, which reflects the
financial impact of the Company's results of operations, reimbursements from
the Master Partnership and Operating Partnerships, sources of expense savings,
repayment of the financing described in the Prudential Commitment Letter, and
the payment by the Buyer, the Company and the Management Subsidiary of their
obligations as they become due (the "Financial Information"). The Buyer
represents that (i) such Financial Information was prepared in good faith,
(ii) the Buyer reasonably believes the assumptions upon which the projections
contained in the Financial Information are based are reasonable and (iii) the
Buyer currently intends to operate the Company and the Management Subsidiary
in a manner consistent in all material respects with the assumptions contained
in the Financial Information.
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4.7 Investigation and Evaluation. The Buyer acknowledges that (a) the Buyer
is experienced in the operation of the type of business conducted by the
Company, the Management Subsidiary, the Master Partnership and the Operating
Partnerships, (b) the Buyer and its directors, officers, attorneys,
accountants and advisors have been given the opportunity to examine to the
full extent deemed necessary by the Buyer all books, records and other
information with respect to the Company, the Management Subsidiary, the Master
Partnership and the Operating Partnerships, (c) the Buyer has taken full
responsibility for determining the scope of its investigations of the Company,
the Management Subsidiary, the Master Partnership and the Operating
Partnerships, and for the manner in which such investigations have been
conducted, and has examined the Company, the Management Subsidiary, the Master
Partnership and the Operating Partnerships to the Buyer's full satisfaction,
(d) the Buyer is fully capable of evaluating the adequacy and accuracy of the
information and material obtained by the Buyer in the course of such
investigations, (e) the Buyer has not relied on the Shareholder with respect
to any matter in connection with the Buyer's evaluation of the Company, the
Management Subsidiary, the Master Partnership and the Operating Partnerships,
other than the representations and warranties specifically set forth in
Article 3, and (f) the Shareholder is making no representations or warranties,
express or implied, of any nature whatever with respect to the Company, the
Management Subsidiary, the Master Partnership and the Operating Partnerships,
other than the representations and warranties of the Shareholder specifically
set forth in Article 3. The Buyer acknowledges that (a) the Buyer has taken
full responsibility for evaluating the adequacy, completeness and accuracy of
various forecasts, projections, opinions and similar material heretofore
furnished by the Shareholder, its affiliates or their representatives to the
Buyer in connection with the Buyer's investigations of the Company, the
Management Subsidiary, the Master Partnership, and the Operating Partnerships
and their respective businesses, assets and liabilities; (b) there are
uncertainties inherent in attempting to make projections and forecasts and
render opinions, the Buyer is familiar with such uncertainties, and the Buyer
is not relying on any projections, forecasts or opinions furnished to it by
the Shareholder, or any affiliate thereof or any of their representatives; and
(c) neither the Shareholder nor any affiliate of the Shareholder makes any
representations or warranties concerning any such forecasts or projections.
4.8 Securities Law Matters. To the knowledge of the Buyer, neither this
Agreement, nor any other agreement, document, certificate or written statement
furnished to the Buyer by or on behalf of the Shareholder in connection with
the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading. The Buyer, for itself,
its employees, shareholders and affiliates, irrevocably acknowledges and
confirms that the Shareholder has complied in all respects with its
obligations to the Buyer, if any, under Rule 10b-5 under the Securities
Exchange Act of 1934, as amended, and under all other federal and state
securities laws in connection with the transactions contemplated hereby.
ARTICLE 5
Certain Covenants
5.1 Conduct of Business Pending Closing. Until the Closing Date, except as
may be approved by the Buyer in writing or as otherwise provided in this
Agreement, the Shareholder shall use its reasonable efforts (subject to the
fiduciary duty of the Company and the Management Subsidiary to the Master
Partnership and the Operating Partnerships) to cause the Company and the
Management Subsidiary to:
(A) operate the business of the Company, the Management Subsidiary, the
Master Partnership and the Operating Partnerships solely in the ordinary
course and in substantially the same manner as such business has been
operated in the past;
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(B) not issue, repurchase or redeem or commit to issue, repurchase or
redeem, or permit the Master Partnership to issue, repurchase or redeem,
any shares of capital stock or partnership units, any options or other
rights to acquire such stock or units or any securities convertible into or
exchangeable for such stock or units except pursuant to the Buckeye
Partners, L.P. Unit Option and Distribution Equivalent Plan;
(C) not declare or pay any dividend on, or make any other distribution
with respect to, the Shares;
(D) not declare, pay or make any other distribution with respect to, the
partnership units of the Master Partnership, except for periodic
distributions by the Master Partnership with respect to such units in
amounts and at times which are consistent with past practice;
(E) not (1) incur a material amount of long or short-term debt for money
borrowed, (2) guarantee or agree to guarantee the obligations of others,
(3) indemnify or agree to indemnify others, or (4) incur any other material
Liabilities, in each case other than those incurred in the ordinary course
of business consistent with past practice;
(F) use its reasonable efforts to retain the employees of the Management
Subsidiary and maintain the respective businesses of the Company and the
Management Subsidiary so that employees will remain available to the
Management Subsidiary on and after the Closing Date and to maintain
existing relationships with suppliers, customers and others having business
dealings with the Company or the Management Subsidiary;
(G) not amend its Certificate of Incorporation or By-Laws or the Master
Partnership Agreement or the Operating Partnership Agreements;
(H) not merge with or into any other corporation or, except in the
ordinary course of business, sell, assign, transfer, pledge or encumber any
part of the assets of the Company or the Management Subsidiary or agree to
do any of the foregoing;
(I) except in the ordinary course of business, not enter into any
Contract on their own behalf, rather than as agent for or a partner of the
Master Partnership or any of the Operating Partnerships, that is material,
or permit any amendment or termination of any such material Contract to
which the Company or the Management Subsidiary is a party;
(J) except in the ordinary course of business, not waive any rights of
material value that would otherwise accrue to the Company after the Closing
Date;
(K) except in the ordinary course of business (or as disclosed in the
Disclosure Letter), not increase the salaries or benefits of, or make any
bonus or similar payments to or establish or modify any Employee Benefit
Plans for, any of the Company's directors, officers or employees or enter
into or modify any employment, consulting or similar Contracts with any
such persons or agree to do any of the foregoing;
(L) use its reasonable efforts to obtain any consents or approvals
required under any material Contracts that are necessary to complete the
Acquisition or to avoid a Default under any such Contracts; and
(M) not make any capital expenditures on its own behalf, rather than as
agent for or a partner of the Master Partnership or any of the Operating
Partnerships, in excess of $1,000,000.
5.2 Approvals. The Buyer and the Shareholder shall use their reasonable
efforts to obtain promptly all Licenses from all Regulatory Bodies and all
consents required under the terms of any Contracts which are required in
connection with the consummation of the Acquisition.
5.3 Confidential Information. Promptly, but in no event later than 5
business days, following the later of (a) the approval by the Special
Committee of the matters described in Section 7.9 and (b) the delivery by the
Buyer to the Shareholder of written confirmation from Prudential Capital Group
6
that the Finance Committee of the Board of Directors of The Prudential
Insurance Company of America has authorized Prudential Capital Group to
purchase a note or notes in accordance with the Prudential Commitment Letter,
the Shareholder shall cause ▇▇▇▇▇▇ ▇▇▇▇ LLC to require all parties to any
confidentiality agreement between ▇▇▇▇▇▇ ▇▇▇▇ LLC on behalf of the Shareholder
and any other party with respect to a sale of the Company to return or destroy
all confidential information of the Company, the Management Subsidiary, the
Master Partnership and the Operating Partnerships in accordance with the terms
of such confidentiality agreements. At the Closing, the Shareholder will, to
the extent legally assignable, assign all of its rights under such
confidentiality agreements to the Company.
5.4 Public Announcements. The Buyer and the Shareholder shall not make any
public announcement of the transactions contemplated hereby without the prior
written consent of the other party. Nothing contained herein shall prevent
either party at any time from furnishing any information to any governmental
agency or pursuant to any Court Order or which is required by any Regulation
or any rule of the New York Stock Exchange.
5.5 Tax Matters.
(A) Section 338(h)(10) Election. The Shareholder and the Buyer shall make a
timely joint election under Section 338(h)(10) of the Code and pursuant to the
applicable provisions of the Temporary Treasury Regulations in order that the
transaction contemplated by this Agreement will be treated for Federal income
tax purposes as a purchase of assets by the Buyer from the Company. Any
liability for taxes resulting from the election by the Buyer and the
Shareholder under Section 338(h)(10) of the Code will be paid by the
Shareholder.
(B) Taxes Prior to and After the Closing Date. The Shareholder shall include
the Company in the applicable consolidated federal income tax return for the
period prior to and including the Closing Date. Taxes as a result of the joint
election under Section 338(h)(10) will be borne by the Shareholder. Any
adjustments in taxes of the Company for the period to and including the
Closing Date shall be borne by the Shareholder. The liability for any taxes of
the Company for the periods beginning after the Closing Date shall be borne by
the Company and the Buyer. The Buyer shall make an election under Section
338(g) of the Code to the extent necessary to allow the Section 338(h)(10)
election to be made. The Buyer will indemnify and hold harmless the
Shareholder and the Company against any and all liability (including, without
limitation, interest, additions to tax and penalties) for or with respect to
federal, state or local income taxes of the Company claimed or assessed for
all taxable periods beginning after the Closing Date. The Shareholder will
indemnify and hold harmless the Buyer and the Company against any and all
liability (including, without limitation, interest, additions to tax and
penalties) for or with respect to federal, state or local income taxes of the
Company claimed or assessed for all taxable periods including periods to and
including the Closing Date.
(C) Indemnification With Respect to Taxes. Without limiting the
indemnification obligations of any party contained elsewhere herein: After the
Closing, the Shareholder will indemnify and hold harmless the Buyer and the
Company against any and all liability (including, without limitation,
interest, additions to tax and penalties) for or with respect to federal
income taxes (and state or local income taxes in states in which tangible
personal property or real property of the Company is located) of the Company
claimed or assessed for all taxable periods ending on or prior to the Closing
Date attributable to gain realized by the Company as a result of the purchase
and sale of the Shares pursuant hereto and the making of the joint election by
the Shareholder and the Buyer under Section 338(h)(10) of the Code (and by the
Buyer under Section 338(g) of the Code but only to the extent it is required
for the election under Section 338(h)(10) of the Code)), net of any tax
benefit resulting from such payment. If the parties are unable to agree with
respect to the amount of any payment due under the preceding sentence, the
matter shall be submitted to an independent accounting firm selected by both
parties. The decision of such independent accounting firm shall be binding
upon both parties and the expense of such independent accounting firm shall be
borne equally by the parties.
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(D) Prior Period Adjustments. The Shareholder shall have the right to
contest any adjustment that increases the liability of the Company or the
Shareholder for taxes which arose during the period or periods ending on or
prior to the Closing Date (including federal income taxes (and state or local
income taxes in states which tangible personal property or real property of
the Company is located) attributable to gain realized by the Company as a
result of the purchase and sale of the Shares pursuant hereto and the making
of the joint election by the Shareholder and Buyer under Section 338(h)(10) of
the Code (and by the Buyer under Section 338(g) of the Code but only to the
extent it is required for the election under Section 338(h)(10) of the Code)).
The Buyer agrees to cooperate or cause the Company to cooperate in the
negotiation, settlement or litigation of any such adjustment. All decisions
with respect to the negotiation, settlement or litigation of any such
adjustment shall be made by the Shareholder and shall be binding upon the
Buyer. All expenses to contest such adjustment on behalf of the Company shall
be borne by the Shareholder. Any indemnity payable by the Shareholder to the
Buyer or the Company pursuant to this Section 5.5(D) shall be payable within
10 days of the Buyer's and/or the Company's request therefor, which request
shall be no sooner than within 20 days of the required remittance to the tax
authority. The parties agree that any payment made pursuant to this Section
5.5(D) shall be deemed an adjustment to the Purchase Price hereunder.
(E) Cooperation. After the Closing Date, the Buyer, the Shareholder and the
Company shall cooperate fully with each other and shall make available to the
other, as reasonably requested, and to any taxing authority, all information,
records or documents relating to tax liabilities or potential tax liabilities
of the Company for all periods prior to or ending on the Closing Date and
shall preserve all such information, records and documents until the
expiration of any applicable statutes of limitation or extensions thereof. The
Buyer, the Shareholder and the Company shall also make available to each
other, as reasonably requested, personnel responsible for preparing or
maintaining information, records and documents in connection with tax matters.
(F) Audits. So long as taxable periods of the Company ending on or before
the Closing Date remain open, the Buyer and the Shareholder shall promptly
notify the other in writing within 10 days from receipt by the Buyer or the
Shareholder of notice of (i) any pending or threatened federal, state or local
income tax audits or assessments of the Company, and (ii) any pending or
threatened federal, state or local income tax audits or assessments of the
Buyer which may affect the tax liabilities of the Company for taxable periods
ending on or before the Closing Date. The Shareholder shall have the right to
represent the interests of the Company in any tax audit or administrative or
court proceeding relating to fiscal periods ending on or before the Closing
and to employ counsel of its choice at its expense. The Buyer agrees that it
will, at the Shareholder's expense, cooperate fully with the Shareholder and
its counsel in the defense against or compromise of any claim in any said
proceeding.
5.6 Audit Adjustments.
(A) If, as a result of the examination of the consolidated federal, state or
local income tax return of the Shareholder or the Company (or any predecessor)
for a taxable year ending on or before or including the Closing Date, there
shall be any adjustment which decreases deductions, losses or credits against
taxes ("Tax Benefits") or which increases income, gains or recaptures of
credits against taxes ("Tax Detriments") for any such taxable year and which
will permit the Buyer or the Company (or any corporation in an affiliated
group of which the Buyer or the Company is a member) to increase the Tax
Benefits or decrease the Tax Detriments to which they would otherwise have
been entitled for any taxable year beginning on or after the Closing Date, the
Shareholder will notify the Buyer of such adjustment and provide the Buyer
with such information as may be necessary for the Buyer to take account of
such increases or decreases through the filing of a claim for refund or
otherwise. The Buyer shall take such action as is necessary to secure the
benefit of such increases or decreases and shall pay the Shareholder the
amount of such benefit (together with interest, if any, received), such amount
to be paid when and as such benefit is realized, less the amount, if any, of
the Buyer's reasonable expenses incurred in securing such benefit for the
Shareholder.
8
(B) If, as a result of the examination of the consolidated or separate
federal, state or local income tax return of any group of corporations of
which the Buyer or the Company (or any successor) is a member for a taxable
year beginning on or after the Closing Date, there shall be any adjustment
which decreases Tax Benefits or increases Tax Detriments for any such taxable
year and which will permit the Shareholder or any member of the Shareholder's
consolidated group to increase Tax Benefits or decrease Tax Detriments to
which the Shareholder would otherwise have been entitled for any taxable year
ending on or before and including the Closing Date, the Buyer will notify the
Shareholder of such adjustment and provide the Shareholder with such
information as may be necessary for the Shareholder to take account of such
increase or decrease through the filing of a claim for refund or otherwise.
The Shareholder shall take such action as is necessary to secure the benefit
of such increases or decreases and shall pay to the Buyer the amount of such
benefit (together with interest, if any, received), such amount to be paid
when and as such benefit is realized, less the amount, if any, of the
Shareholder's reasonable expenses incurred in securing such benefit for the
Buyer.
5.7 Certain Employee Benefit Arrangements. From and after the Closing:
(A) The Buckeye Pipe Line Company Retirement Income Guarantee Plan. The
Buckeye Pipe Line Company Retirement Income Guarantee Plan (the "RIGP") is
funded through a master defined benefit trust (the "Master DB Trust").
After the Closing Date, Buckeye Pipe Line Company will continue to be the
"Plan Sponsor", as defined in ERISA, for such RIGP (and will continue to be
responsible for any contributions required or due with respect to the
RIGP). Within 45 days after the Closing Date, the Buyer shall identify a
successor trust to hold the assets of the RIGP, and promptly after
identification of such successor trust, the trustee of the Master DB Trust
shall transfer the pro rata share of the assets of the Master DB Trust
allocable to the RIGP to the trustee of such successor trust.
(B) The Buckeye Pipe Line Company Retirement and Savings Plan. After the
Closing Date, Buckeye Pipe Line Company will continue to be the "Plan
Sponsor", as defined in ERISA, with respect to the Buckeye Pipe Line
Company Retirement and Savings Plan (the "RASP") (and will continue to be
responsible for any contributions required or due with respect to the
RASP). The Buyer agrees to retain, through the end of 1996, the provision
in the RASP allowing participants in the RASP to transfer their account
balances from the RASP to the American Premier Retirement and Savings Plan.
A portion of the assets of the RASP are invested in a trust which holds
fixed income assets on behalf of the RASP and other qualified retirement
plans (the "Fixed Income Trust"). Within 45 days after the Closing Date,
the Buyer shall identify a successor trust to hold the assets of the RASP
invested in the Fixed Income Trust and, promptly after identification of
such successor trust, the trustee of the Fixed Income Trust shall transfer
a pro rata share of the assets in the Fixed Income Trust allocable to the
RASP to the trustee of such successor trust.
5.8 Insurance Arrangements. From and after the Closing:
(a) The Company and the Management Subsidiary shall cease to be covered
with respect to any occurrence after the Closing under the insurance
policies and agreements obtained and maintained by the Shareholder and its
affiliates covering the Company and the Management Subsidiary, (the
"Policies"). All such occurrences prior to the Closing which are insured
under the Policies shall continue to be so insured, and the Company and
Management Subsidiary shall be entitled to the benefits thereof, subject to
applicable Retention Levels. The Buyer shall cause the Company and the
Management Subsidiary to pay to the Shareholder and its affiliates any
retrospective premium adjustments and premium audit adjustments payable to
insurance carriers and all retention payments in respect of insurance
covering the Company and the Management Subsidiary for periods prior to the
Closing Date. The Shareholder shall, or shall cause its affiliates to, pay
to the Company any rebate received with respect to any premiums paid prior
to the Closing Date in respect of Policies covering the Company and the
Management Subsidiary for
9
periods subsequent to the Closing Date as a result of the removal of the
Company and the Management Subsidiary from coverage under such Policies.
(b) Provided the Buyer is not in breach of its obligations under
subsection (c) hereof, the Shareholder shall indemnify and hold the Company
and the Management Subsidiary to the extent they are named insured under
the applicable Policy or Policies harmless from and against any and all
Insured Losses to the extent such Insured Losses exceed the applicable
Retention Level of the Company or the Management Subsidiary but do not
exceed the Retention Level applicable to the Shareholder and its affiliates
with respect thereto. Neither the Shareholder nor its affiliates shall have
any liability to the Company or the Management Subsidiary for any Insured
Losses to the extent such Insured Losses (a) are within the applicable
Retention Level for the particular company or (b) exceed the applicable
Retention Level for the Shareholder and its affiliates. In addition, the
Shareholder and its affiliates shall have no liability to the Buyer, the
Company or the Management Subsidiary for any Loss which would not be
covered by the insuring terms and conditions of the applicable Policy,
assuming a Retention Level for the Shareholder and its affiliates of zero.
(c) The Company and the Management Subsidiary shall be liable and
responsible for all the Insured Losses that are within the Retention Levels
applicable to them. Accordingly, provided the Shareholder and its
affiliates are not in breach of their obligations under section (b) hereof,
the Buyer will cause the Company and the Management Subsidiary to either,
as the Shareholder shall direct, (a) reimburse the Shareholder and its
affiliates for such payments as the Shareholder and its affiliates may make
in the normal course of their claims management program to the applicable
insurer or claims administrator of Insured Losses that are within the
Retention Levels of the Company and the Management Subsidiary, such
reimbursement to be made promptly and in any event within 15 days of
presentation of the Shareholder's written invoices therefor or (b) pay such
Insured Losses directly to the applicable insurer or claims administrator.
The Buyer will, and will cause the Company and the Management Subsidiary
to, negotiate in good faith to settle all claims under the Policies within
the applicable Retention Levels of the Company and the Management
Subsidiary and promptly notify and consult with the Shareholder regarding
any such claim that may exceed the applicable Retention Levels of the
Company and the Management Subsidiary. The Shareholder shall have the right
to control and direct the defense of any such claim that is likely to
exceed the Retention Levels of the Company and the Management Subsidiary.
(d) The parties hereto shall give, and shall cause the Company and the
Management Subsidiary to give, to each other prompt notice of the assertion
by any person of any claim against the Shareholder or any of its
affiliates, or the Company and the Management Subsidiary, as the case may
be, which might be subject to the insurance coverage or related obligations
described in this Section 5.8. The parties hereto shall cooperate, and
shall cause the Company and the Management Subsidiary to cooperate, with
the Shareholder and its affiliates, or the Company and the Management
Subsidiary, as the case may be, and any applicable insurance carrier or
claims administrator in any investigation by the Shareholder and its
affiliates, or by the Company and the Management Subsidiary, as the case
may be, or any applicable insurance carrier or claims administrator, of any
such claim, including without limitation any currently pending claim which
relates to a pre-Closing occurrence; and the Buyer shall give, and shall
cause the Company and the Management Subsidiary to give, to the Shareholder
and its affiliates, and any applicable insurance carrier or claims
administrator, reasonable access to the books, records and personnel of the
Company and the Management Subsidiary to the extent reasonably necessary to
enable the Shareholder or any of its affiliates, and any applicable
insurance carrier or claims administrator, to investigate such claim.
5.9 NJ Environmental Liabilities. From and after the Closing, the
Shareholder or an affiliate of the Shareholder (the Shareholder and each of
its affiliates, the "Shareholder Group") shall continue
10
to retain the liabilities described that certain Administrative Consent Order,
dated November 17, 1986, issued by the New Jersey Department of Environmental
Protection (such liabilities, the "NJ Environmental Liabilities"). In
connection with the NJ Environmental Liabilities, the parties agree as
follows:
(a) The Buyer shall cooperate, and cause the employees and officers of
the Company and the Management Subsidiary to cooperate, with the
Shareholder Group in connection with all matters related to the NJ
Environmental Liabilities and shall provide, at no charge, such
administrative assistance with respect thereto as the Shareholder may
reasonably request (which may include, without limitation, review of
documents and attendance at meetings and teleconferences regarding the NJ
Environmental Liabilities).
(b) The Buyer shall, and shall cause the Company and the Management
Subsidiary to, provide to the Shareholder Group such services, labor and
materials, to the extent reasonably available, as the Shareholder may
request in connection with the NJ Environmental Liabilities. The
Shareholder shall reimburse the Buyer, the Company or the Management
Subsidiary, as appropriate, for such entity's direct, out-of-pocket cost
(i) of all hourly labor furnished by such entity at the request of the
Shareholder, (ii) of all services provided by non-employees of the Buyer,
the Company or the Management Subsidiary at the request of the Shareholder,
and (iii) of all materials provided by such entity at the request of the
Shareholder. The Shareholder Group shall have the right to use, without
cost, the water filtration system/waste recovery system and plant located
at the Linden, New Jersey premises of the Operating Partnerships (the
"Waste Recovery System") in connection with the activities of the
Shareholder Group related to the NJ Environmental Liabilities, subject to
reimbursement by the Shareholder Group of any costs incurred for activated
carbon attributed solely to the Shareholder Group's utilization of the
Waste Recovery System.
(c) Without the prior consent of the Shareholder, the Buyer shall not
take any action which it knows is reasonably likely to increase the amount
of the NJ Environmental Liabilities. In addition, the Buyer shall, and
shall cause the Company and the Management Subsidiary to, take all
commercially reasonable actions to mitigate the expense and liability of
the Shareholder Group with respect to the NJ Environmental Liabilities.
(d) In connection with the NJ Environmental Liabilities, the Shareholder
Group agrees to use commercially reasonable efforts to obtain a Declaration
of Environmental Restriction ("DER"). Buyer hereby consents to the issuance
of a DER, and agrees that it shall execute, and shall cause the Company,
the Management Subsidiary, the Master Partnership and the Operating
Partnership, to execute all commercially reasonable documents necessary to
obtain a DER.
(e) Upon request of the Shareholder the Buyer will use reasonable efforts
to support and facilitate any reasonable proposal from the Shareholder
Group that the Master Partnership, in consideration for a payment by the
Shareholder Group, assume the remaining costs anticipated to be associated
with the NJ Environmental Liabilities.
(f) The Buyer acknowledges on its own behalf and on behalf of The Company
and the Management Subsidiary that there are no unpaid charges for
services, labor, materials or facilities provided by the Company or the
Management Subsidiary in connection with the NJ Environmental Liabilities.
(g) The Buyer acknowledges that the Shareholder Group will not be liable
for any environmental liability or expense related to, or arising out of
the business of, the Company, the Management Subsidiary, the Master
Partnership, or any of the Operating Partnerships, other than the NJ
Environmental Liabilities.
(h) The Buyer shall indemnify the Shareholder Group against any failure
by the Company, the Management Subsidiary, the Master Partnership and the
Operating Partnerships to comply with the provisions of this Section 5.9.
11
5.10 Prudential Financing and Special Committee Approval. The Buyer shall
use its best efforts to diligently and as promptly as practicable (i) obtain
the approval of the Special Committee of the matters described in Section 6.9
hereof and provide such information in connection therewith as the Special
Committee may request; and (ii) negotiate, execute and deliver, and consummate
a definitive agreement with Prudential Capital Group providing for the
financing described in the Prudential Commitment Letter. Upon the
Shareholder's request from time to time, the Buyer shall report to the
Shareholder concerning the status of such matters.
5.11 No Solicitation of Transactions. Prior to the termination of this
Agreement pursuant to Section 8.3, none of the Shareholder or any of its
affiliates or any of their respective directors, officers, employees,
representatives, investment bankers or agents shall, directly or indirectly,
solicit or initiate inquiries or proposals form, or provide confidential
information to or participate in any discussions or negotiations with, any
corporation, partnership, person, trust or other entity or group (other than
the Buyer and its affiliates and representatives) concerning the sale of stock
of the Company or the Management Subsidiary or any of their respective assets
or any merger, consolidation, recapitalization, liquidation or similar
transaction involving the Company or the Management Subsidiary. This Section
5.11 shall not be considered to limit any rights or remedies the Buyer may
have a result of a breach of this Agreement by the Shareholder.
ARTICLE 6
Conditions Precedent to Obligations of the Buyer
Subject to waiver as set forth in Section 8.6, the obligations of the Buyer
under this Agreement are subject to the fulfillment prior to or at the Closing
of each of the following conditions:
6.1 Representations and Warranties. The representations and warranties of
the Shareholder set forth in Article 3 shall be true and correct in all
material respects on the Closing Date with the same effect as if made at that
time.
6.2 Performance by the Shareholder. The Shareholder shall have performed and
satisfied in all material respects all agreements and conditions which it is
required by this Agreement to perform or satisfy prior to or on the Closing
Date.
6.3 Certificates. The Buyer shall have received certificates from the
Shareholder dated the Closing Date certifying in such detail as the Buyer may
reasonably request that each of the conditions described in Sections 6.1 and
6.2 has been fulfilled.
6.4 Intentionally Omitted.
6.5 Litigation Affecting Closing. No Court Order shall have been issued or
entered which prohibits the completion of the Acquisition.
6.6 Regulatory Compliance and Approvals. All approvals required under any
Regulations to carry out the Acquisition shall have been obtained and the
Company and the Shareholder shall have complied in all material respects with
all Regulations applicable to the Acquisition.
6.7 Consents. The Shareholder or the Company shall have delivered to the
Buyer all consents required to be obtained in connection with the Acquisition
in order to avoid a Default under any material Contract to or by which the
Company is a party or may be bound.
6.8 Financing. The Buyer and Prudential Capital Group shall have entered
into a definitive agreement reflecting the terms of the Prudential Commitment
Letter and the Prudential Capital
12
Group shall be prepared to fund the loan provided for thereby in the amount of
$63,000,000 contemporaneously with the Closing.
6.9 Special Committee. A committee of independent directors of the Company
which will exclude all directors who are employees of the Shareholder, the
Company or their affiliates (the "Special Committee") shall have approved on
behalf of the Master Partnership (i) the form of opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP relating to the satisfaction by the Buyer of the Company's capital
requirement in compliance with Sections 17.6 and 19.1 of the Master
Partnership Agreement after giving effect to the cancellation of the Demand
Notes and (ii) the Buyer's employee stock ownership plan as a fringe benefit,
the cost of which may be reasonably allocated to the Partnership pursuant to
Section 7.4 of the Master Partnership Agreement.
ARTICLE 7
Conditions Precedent to Obligations of the Shareholder
Subject to waiver as set forth in Section 8.6, the obligations of the
Shareholder under this Agreement are subject to the fulfillment prior to or at
the Closing of each of the following conditions:
7.1 Buyer Representations True at Closing. The representations and
warranties of the Buyer set forth in Article 4 shall be true and correct in
all material respects on the Closing Date with the same effect as if made at
that time.
7.2 Performance by the Buyer. The Buyer shall have performed and satisfied
all agreements and conditions which it is required by this Agreement to
perform or satisfy prior to or on the Closing Date.
7.3 Officer's Certificate. The Shareholder shall have received a certificate
from an appropriate officer of the Buyer dated the Closing Date certifying in
such detail as the Shareholder may reasonably request that each of the
conditions described in Sections 7.1 and 7.2 has been fulfilled.
7.4 Demand Notes. The Shareholder shall have been released from its
obligations under the Demand Notes, and the Buyer shall have provided for
capitalization of the Company in the amount of at least $6 million.
7.5 Incumbency Certificate. The Shareholder shall have received a
certificate of the Secretary or an Assistant Secretary of the Buyer dated the
Closing Date certifying to the incumbency of the officers of the Buyer signing
for it and as to the authenticity of their signatures.
7.6 Opinion of Counsel. The Shareholder shall have received the written
opinion dated the Closing Date of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP, counsel for the
Buyer, in form and substance reasonably satisfactory to the Shareholder.
7.7 Litigation Affecting Closing. No Court Order shall have been issued or
entered which would be prohibits the completion of the Acquisition. No person
who or which is not a party to this Agreement shall have commenced or
threatened to commence any Litigation seeking to restrain or prohibit, or to
obtain substantial damages in connection with, this Agreement or the
transactions contemplated by this Agreement.
7.8 Regulatory Compliance and Approval. All approvals required under any
Regulations to carry out the Acquisition shall have been obtained and that the
Buyer shall have complied in all material respects with all Regulations
applicable to the Acquisition.
13
7.9 Special Committee. The Special Committee shall have approved on behalf
of the Master Partnership (i) the form of opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP relating to the satisfaction by the Buyer of the Company's capital
requirement in compliance with Sections 17.6 and 19.1 of the Master
Partnership Agreement after giving effect to the cancellation of the Demand
Notes, (ii) cancellation of the Demand Notes effective at the Closing and
(iii) the Buyer's employee stock ownership plan as a fringe benefit, the cost
of which may be reasonably allocated to the Partnership pursuant to Section
7.4 of the Master Partnership Agreement.
ARTICLE 8
Miscellaneous
8.1 No Survival of Representation and Warranties. None of the
representations, warranties, covenants and agreements made by each party in
this Agreement or in any attachment, Exhibit, certificate, document or list
delivered by any such party pursuant hereto or in connection with the
Acquisition shall survive the Closing.
8.2 Payment of Expenses. The Buyer shall pay all legal, accounting and other
fees and expenses which it incurs in connection with this Agreement and the
transactions contemplated hereby, and all legal, accounting and other fees and
expenses incurred by the Shareholder in connection with this Agreement shall
be paid by the Shareholder (other than expenses and costs incurred for, by or
on account of employees of the Company or the Company's auditors and other
than expenses and costs, including without limitation reasonable attorney's
fees, related to the securing of all requisite Regulatory Approvals, all of
which shall be paid by the Company).
8.3 Termination. This Agreement may be terminated before the Closing occurs
only as follows:
(a) By written consent of the Shareholder and the Buyer;
(b) By written notice by the Shareholder to the Buyer at any time after
February 22, 1996, unless on or prior thereto the Buyer shall have provided
the Shareholder with satisfactory evidence that the Special Committee has
approved the matters described in Section 7.9 hereof;
(c) By written notice by the Shareholder to the Buyer at any time after
February 22, 1996, unless on or prior thereto the Buyer shall have
delivered to the Shareholder written confirmation from Prudential Capital
Group that the Finance Committee of the Board of Directors of The
Prudential Insurance Company of America has authorized Prudential Capital
Group to purchase a note or notes in accordance with the Prudential
Commitment Letter;
(d) By written notice by the Shareholder to the Buyer, at any time after
April 15, 1995, except that no such notice may be given under this clause
(d) if as of the date of such notice the only condition specified in
Article 7 that is not satisfied or able to be satisfied is the condition
specified in Section 7.8; or
(e) By written notice by the Shareholder or the Buyer to the other at any
time after June 30, 1995.
8.4 Brokers' and Finders' Fees. The Shareholder and the Buyer each to the
other represents and warrants that all negotiations relative to this Agreement
have been carried on by them directly without the intervention of any person,
firm, corporation or other entity who or which may be entitled to any
brokerage fee or other commission in respect of the execution of this
Agreement or the consummation of the transactions contemplated hereby except
for (i) ▇▇▇▇▇▇ ▇▇▇▇ LLC, whose fees shall be paid by the Shareholder and (ii)
Houlihan, Lokey, ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., whose fees shall be paid by the Buyer,
and each of them shall indemnify and hold the other or any affiliate of them
harmless against any and all claims, losses, liabilities or expenses which may
be asserted against any
14
of them as a result of any dealings, arrangements or agreements by the
indemnifying party with any such person, firm, corporation or other entity.
8.5 Assignment and Binding Effect. This Agreement may not be assigned prior
to the Closing by any party hereto without the prior written consent of the
other parties. Subject to the foregoing, all of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of the Shareholder and by the
successors and assigns of the Buyer.
8.6 Waiver. Any term or provision of this Agreement may be waived at any
time by the party entitled to the benefit thereof by a written instrument
executed by such party.
8.7 Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given only if delivered personally to the address set forth
below (to the attention of the person identified below) or sent by facsimile
message, Federal Express (or other reputable overnight delivery service) or by
registered or certified mail, postage prepaid, as follows:
If to the Buyer, to:
BMC Acquisition Company
5 Radnor Corporate Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇. ▇. ▇▇▇▇▇▇▇▇▇▇
With required copies to:
Buckeye Management Company
If by Federal Express:
If by mail:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
If to the Shareholder, to:
American Financial Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
With a required copy to the Corporate Secretary of the Shareholder at the
same address.
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have given as of
the date so delivered or sent by facsimile message, the day after the date
sent when sent by Federal Express (or other reputable overnight delivery
service), or, if mailed, three business days after the date so mailed.
8.8 Pennsylvania Law to Govern. This Agreement shall be governed by and
interpreted and enforced in accordance with the substantive laws of the
Commonwealth of Pennsylvania applicable to contracts made and to be performed
in that Commonwealth.
8.9 Remedies Not Exclusive. Nothing in this Agreement shall be deemed to
limit or restrict in any manner other rights or remedies that any party may
have against any other party at law, in equity or otherwise.
15
8.10 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and the Company and their successors and assigns, and they shall not be
construed as conferring and are not intended to confer any rights on any other
persons.
8.11 Contents of Agreement. This Agreement sets forth the entire agreement
of the parties hereto with respect to the transactions contemplated hereby.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto, and no claimed amendment, modification, termination or
waiver shall be binding unless in writing and signed by the party against whom
or which such claimed amendment, modification, termination or waiver is sought
to be enforced. The Shareholder agrees that upon request of the Buyer, it will
amend this Agreement and take such other action as may be necessary to modify
the structure of the transaction contemplated hereby from a stock purchase to
a partial stock purchase and partial stock redemption, except that the
Shareholder shall be so obligated only if such modification will not have an
adverse effect on the Shareholder or its affiliates.
8.12 Section Headings and Gender. All section headings and the use of a
particular gender are for convenience only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference in this
Agreement to a Section, Annex or Exhibit shall be deemed to be a reference to
a Section, Annex or Exhibit of this Agreement unless the context otherwise
expressly requires.
8.13 Cooperation. Subject to the provisions hereof, the parties hereto shall
use their reasonable efforts to take, or cause to be taken, such action, to
execute and deliver, or cause to be executed and delivered, such additional
documents and instruments and to do, or cause to be done, all things
necessary, proper or advisable under the provisions of this Agreement and
under applicable law to consummate and make effective the transactions
contemplated by this Agreement.
8.14 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
8.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which is an original and all of which together shall be
deemed to be one and the same instrument. This Agreement shall become binding
when one or more counterparts taken together shall have been executed and
delivered by all of the parties. It shall not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any of the
other counterparts.
In Witness Whereof, the parties hereto have duly executed this Agreement as
of the date first written above.
Pennsylvania Company
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By: _________________________________
Title: Senior Vice President
BMC Acquisition Company
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
By: _________________________________
Title: Chairman
16
ANNEX I
CERTAIN DEFINED TERMS
"Acquisition" means the acquisition of all of the Shares by the Buyer and
all related transactions provided for in or contemplated by this Agreement.
"Agreement" means this Share Purchase Agreement.
"Buyer" means BMC, a Delaware corporation.
"Company Material Adverse Effect" shall mean a material adverse change in,
or material adverse effect on, the results of operations, financial condition
or business of the Company and the Management Subsidiary, taken as a whole;
but in any case after application of the proceeds of any insurance or
indemnity under any contract or agreement with any third party.
"Contract" means any written or oral contract, agreement, lease, instrument
or other commitment that is binding on any person or its property under
applicable law.
"Court Order" means any judgment, decree, injunction, order or ruling of any
federal, state or local court or governmental or regulatory body or authority
that is binding on any person or its property under applicable law.
"Default" means (1) a material breach of or material default under any
Contract, (2) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a material breach of or material
default under any Contract, or (3) the occurrence of an event that with or
without the passage of time or the giving of notice or both would give rise to
a right of termination, renegotiation or acceleration under any Contract.
"Demand Notes" mean that certain Demand Promissory Note, dated November 18,
1986, in the aggregate principal amount of $24,000,000, by the Shareholder to
the Company, and that certain Demand Promissory Note, dated December 23, 1986,
in the aggregate principal amount of $4,000,000, by the Shareholder to the
Company.
"Employee Benefit Plans" means "employee benefit plans" as defined in
section 3(3) of ERISA and any other plan, policy, program, practice or
arrangement providing benefits to any officer or employee of the Company, the
Management Subsidiary, or any dependent or beneficiary thereof, which are now
maintained by the Company or the Management Subsidiary, or under which the
Company or the Management Subsidiary has any obligation or liability,
including, without limitation, all incentive, bonus, deferred compensation,
medical, disability, share purchase, unit purchase, retirement or other
similar plans, policies, programs, practices or arrangements; provided,
however, that such term shall not include (i) any employment agreements
entered into by the Company or the Management Subsidiary with their respective
employees, or (ii) any regular payroll practices of the Company or the
Management Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Insured Losses" shall mean Losses under the Policies and any related loss
adjustment expense, including attorney fees and claims administration and
handling costs.
"IRS" means the Internal Revenue Service.
"Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, deficiency, guaranty or endorsement of or by any
person (other than endorsements of notes, bills and checks presented to banks
for collection or deposit in the ordinary course of business).
17
"Licenses" means licenses, franchises, permits, easements, rights and other
authorizations.
"Lien" means any mortgage, lien, security interest, pledge, encumbrance,
restriction on transferability, defect of title, charge or claim of any nature
whatsoever on any property or property interest.
"Litigation" means any lawsuit, action, arbitration, administrative or other
proceeding, criminal prosecution or governmental investigation or inquiry
involving the Company, the Management Subsidiary, their respective businesses
or assets, or any Contracts to which the Company or the Management Subsidiary
is a party or by which it or any of their respective businesses or assets may
be bound.
"Loss" or "Losses" shall mean: liabilities, damages, costs, judgments, costs
of investigating claims, amounts paid in settlement, interest, penalties,
assessments and out-of-pocket expenses (including reasonable attorneys' and
auditors' and actuaries' fees) actually incurred.
"Master Partnership" means Buckeye Partners, L.P., a Delaware limited
partnership.
"Master Partnership Agreement" means that certain Amended and Restated
Agreement of Limited Partnership of the Master Partnership, dated as of
December 23, 1986.
"Operating Partnerships" means Buckeye Pipe Line Company, L.P., a Delaware
limited partnership, Buckeye Pipe Line Company of Michigan, L.P., a Delaware
limited partnership, Buckeye Tank Terminals Company, L.P., a Delaware limited
partnership, Everglades Pipe Line Company, L.P., a Delaware limited
partnership, and Laurel Pipe Line Company, L.P., a Delaware limited
partnership.
"Regulation" means any statute, law, ordinance, regulation, order or rule of
any federal, state, local or other governmental agency or body or of any other
type of regulatory body, including, without limitation, those covering
environmental, energy, safety, health, transportation, bribery, recordkeeping,
zoning, antidiscrimination, antitrust, wage and hour, and price and wage
control matters.
"Retention Levels" shall mean the retention levels specified in the Policies
for the respective companies, time periods and types of insurance coverage
specified thereon.
18
INDEX OF DEFINED TERMS
Acquisition................................................................. 26
Agreement................................................................... 26
Buyer....................................................................... 1
Buyer Documents............................................................. 5
Closing..................................................................... 2
Closing Date................................................................ 2
Code........................................................................ 1
Common Stock................................................................ 1
Company..................................................................... 1
Company Material Adverse Effect............................................. 26
Contract.................................................................... 26
Court Order................................................................. 26
Default..................................................................... 26
Demand Notes................................................................ 26
Employee Benefit Plans...................................................... 26
ERISA....................................................................... 27
Financial Information....................................................... 6
Fixed Income Trust.......................................................... 14
Insured Losses.............................................................. 27
IRS......................................................................... 27
Liability................................................................... 27
Licenses.................................................................... 27
Lien........................................................................ 27
Litigation.................................................................. 27
Loss or Losses.............................................................. 27
Management Subsidiary....................................................... 4
Master DB Trust............................................................. 13
Master Partnership.......................................................... 27
Master Partnership Agreement................................................ 27
Operating Partnerships...................................................... 28
Plan Sponsor................................................................ 13
Policies.................................................................... 14
Prudential Commitment Letter................................................ 6
Purchase Price.............................................................. 2
RASP........................................................................ 13
Regulation.................................................................. 28
Retention Levels............................................................ 28
RIGP........................................................................ 13
Shareholder................................................................. 1
Shareholder Documents....................................................... 3
Shares...................................................................... 1
Special Committee........................................................... 19
Tax Benefits................................................................ 12
Tax Detriments.............................................................. 12
19
SCHEDULE 4.1
(Names of subscribers for common stock)
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C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
20
