PIPELINE PURCHASE AND SALE AGREEMENT

Purchase and Sale Agreement

You are currently viewing:

This Purchase and Sale Agreement involves

DENBURY ONSHORE, LLC | GENESIS FREE STATE PIPELINE, LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: PIPELINE PURCHASE AND SALE AGREEMENT
Governing Law: Texas Date: 6/5/2008
Industry: Oil and Gas Operations Law Firm: Akin Gump;Baker Hostetler Sector: Energy

Exhibit 10.2

PIPELINE PURCHASE AND SALE AGREEMENT

BY AND AMONG

DENBURY ONSHORE, LLC,

AND

GENESIS FREE STATE PIPELINE, LLC

for the Free State Pipeline System in Eastern Mississippi

Dated: May 30, 2008

TABLE OF CONTENTS

		Page

ARTICLE I. DEFINITIONS		1

1.1	Defined Words and Terms	1

ARTICLE II. DESCRIPTION OF PIPELINE SYSTEM		4

2.1	Description of Pipeline System	4

2.2	Assumed Liabilities	5

2.3	Excluded Liabilities	5

ARTICLE III. PURCHASE AND SALE OF PIPELINE SYSTEM		6

3.1	Sale and Delivery of Pipeline System	6

3.2	Consideration	6

3.3	Closing	7

3.4	Allocation of Purchase Price	7

3.5	Deliverables at Closing	7

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER		9

4.1	Organization and Authority	9

4.2	Execution and Effect	10

4.3	No Violation	10

4.4	Title to Rights of Way	10

4.5	Title to Pipeline and Equipment	10

4.6	Litigation	11

4.7	Compliance with Applicable Law	11

4.8	Condition of Pipeline System	11

4.9	Taxes	11

4.10	Preferential Purchase Rights	11

4.11	Environmental Matters	11

4.12	Contracts and Rights of Way	12

4.13	Disclosure	12

4.14	No Unsatisfied Liabilities	12

ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASER		13

5.1	Organization and Authority	13

5.2	Execution and Effect	13

5.3	No Violation	13

5.4	Sufficiency of Funds	14

5.5	Disclaimer	14

5.6	Evaluation by Purchaser	14

5.7	Fairness Opinion	14

5.8	Compliance with Laws	15

5.9	Disclosure	15

ARTICLE VI. OTHER AGREEMENTS AND OBLIGATIONS OF THE PARTIES		15

6.1	Assignments Requiring Consents, Preferential Purchase Rights	15

6.2	No Solicitation of Employees	16

6.3	Incidental Contamination	16

6.4	Document Retention	16

6.5	Further Assurances	17

ARTICLE VII. SURVIVAL OF OBLIGATIONS; INDEMNIFICATION		17

7.1	Survival of Obligations	17

7.2	Indemnification by Seller	17

7.3	Indemnification by Purchaser	18

7.4	Indemnification Procedures	19

7.5	Certain Limitations on Indemnification	19

7.6	Tax Treatment of Indemnity Payments	20

7.7	No Consequential Damages	20

7.8	Exclusive Remedy	21

ARTICLE VIII. TAXES -PRORATIONS AND ADJUSTMENTS		21

8.1	Proration	21

8.2	Sales Taxes	22

8.3	Cooperation	22

8.4	Payables	22

ARTICLE IX. DISPUTE RESOLUTION		23

9.1	Dispute Resolution	23

ARTICLE X. MISCELLANEOUS		23

10.1	No Brokers	23

10.2	Expenses	23

10.3	Further Assurances	23

10.4	Assignment; Parties in Interest	23

10.5	Entire Agreement; Amendments	23

10.6	Severability	24

10.7	Interpretation	24

10.8	Notices	24

10.9	Waiver of Rescission	25

10.10	Governing Law	25

10.11	Counterparts	25

10.12	Exhibits	25

10.13	No Third-Party Beneficiary	25

10.14	Use of Seller’s Name	25

10.15	Conflict with Conveyance Agreements	25

10.16	Denbury Guaranty	25

10.17	Tax Opinion to Genesis MLP and Genesis Energy, Inc.	26

iii

PIPELINE PURCHASE AND SALE AGREEMENT

THIS PIPELINE PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made and entered into on this 30 th day of May, 2008, by and between DENBURY ONSHORE, LLC (the “ Seller ”), a Delaware limited liability company, and GENESIS FREE STATE PIPELINE, LLC (the “ Purchaser ”), a Delaware limited liability company. Seller and Purchaser are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS :

Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Pipeline System (as hereinafter defined) and related assets on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I.

DEFINITIONS

1.1 Defined Words and Terms . Except where the context otherwise indicates another or different meaning or intent, the following words and terms as used herein shall have the meanings indicated:

(a) The term “ Affiliate ” in reference to any Person, means and includes any Person which directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any Person, whether through ownership of voting securities, by contract or otherwise. For purposes of this Agreement only and without thereby altering the determination of the existence of an affiliate relationship of Purchaser and Seller for other circumstances, when used with reference to (i) Purchaser, “Affiliate” shall include Genesis MLP, its subsidiaries and its general partner, Genesis Energy, Inc., and (ii) Seller, “Affiliate” shall include Denbury and its subsidiaries excluding those entities described in (i).

(b) The term “ Applicable Laws ” means and includes any and all laws, ordinances, orders, rules, regulations and other legal requirements of all Governmental Bodies having jurisdiction over the use, occupancy, operation and maintenance of the Pipeline System, as such may be amended or modified from time to time.

(d) The term “ Environmental Costs and Liabilities ” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any of the foregoing by any other Person or in response to any violation of or liability under any Environmental Law, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, Environmental Permit, order or agreement with any Governmental Body or other Person, which relates to any environmental condition, violation of Environmental Law or a Release or threatened Release of Hazardous Materials, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute.

(e) The term “ Environmental Law ” means any foreign, federal, state or local statute, regulation, ordinance or other legal requirement as now or hereafter in effect in any way relating to the protection of or regulation of, the environment or natural resources, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq .), the Hazardous Materials Transportation Act (49 U.S.C. App. § 5101 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq .), the Clean Water Act (33 U.S.C. § 1251 et seq .), the Clean Air Act (42 U.S.C. § 7401 et seq .), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .), and the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq .), as those laws have been amended, any analogous laws and the regulations promulgated pursuant thereto.

(f) The term “ Environmental Permit ” means any Permit required by Environmental Laws for the operation of the Pipeline System.

(g) The term “ Governmental Body ” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, federal, state, or local, or any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).

(h) The term “ Hazardous Material ” means any substance, material or waste which is regulated, classified, or subject to liability under or pursuant to any Environmental Law, including, without limitation, petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold or other fungi, and urea formaldehyde insulation.

(i) The term “ Knowledge ” means as follows: (i) with respect to Purchaser, the individuals listed on Exhibit 1.1(i)(1), or their respective successors in the same or similar officer positions, shall be deemed to have knowledge of a particular fact or other matter if such individual is consciously aware of such fact or other matter at the time of determination after due inquiry; and (ii) with respect to Seller, the individuals listed on Exhibit 1.1(i)(2) , or their respective successors in the same or similar officer positions, shall be deemed to have knowledge of a particular fact or other matter if such individual is consciously aware of such fact or other matter at the time of determination after due inquiry.

(j) The term “ Permits ” means any approvals, authorizations, consents, licenses, permits or certificates.

(k) The term “ Permitted Encumbrances ” shall mean: (a) any liens for Pipeline System Taxes that are not yet due and payable; (b) materialmen’s, mechanic’s, repairmen’s, employees’, contractors’ and other similar liens or charges arising in the ordinary course of business; (c) all rights reserved to or vested in any governmental, statutorial or public authority to control or regulate any of the real property interests constituting a part of the Pipeline System; and (d) easements, rights of way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the Pipeline System as it is currently being used or materially interfere with the ordinary conduct of the Pipeline System.

(l) The term “ Person ” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

(m) The term “ Pipeline System ” shall have the meaning set forth in Section 2.1 below.

(n) The term “ Pipeline System Taxes ” means all Taxes specifically assessed against the Pipeline System, including Taxes imposed on the use, occupancy or possession of the Pipeline System but specifically not including any gross receipts, income or franchise taxes, or other taxes of the nature of income taxes that are imposed upon the Pipeline System or the owner thereof.

(o) The term “ Related Agreements ” means those three (3) Meter Station and Pipeline Lateral Easement and Road Use Agreements (“Easement and Road Agreements”) between Purchaser as Grantee and Seller as Grantor, dated as of the date hereof, made with respect to the Eucutta Field, the Soso Field, and the Martinville Field, and those two (2) Agreements to Provide Electrical Power (“Power Agreements”) between Seller and Purchaser, dated as of the date hereof, made with respect to the Eucutta Field and the Soso Field.

(p) The term “ Release ” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, or leaching into the indoor or outdoor environment, or into or out of any property.

(q) The term “ Remedial Action ” means all actions to (i) clean up, remove, treat or in any other way address any Hazardous Material; (ii) prevent the threatened Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care; or (iv) to correct a condition of non-compliance with Environmental Laws.

(r) The term “ Tax ” or “ Taxes ” means, however denominated, (x) any and all taxes, assessments, customs, duties, levies, fees, tariffs, imposts, deficiencies and other governmental charges of any kind whatsoever (including, but not limited to, taxes on or with respect to net or gross income, franchise, profits, gross receipts, capital, sales, use, ad valorem, value added, transfer, real property transfer, transfer gains, transfer taxes, inventory, escheats, unclaimed property, capital stock, license, payroll, employment, social security, unemployment, severance, occupation, real or personal property, estimated taxes, rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative minimum, doing business, withholding and stamp), together with any interest thereon, penalties, fines, damages costs, fees, additions to tax or additional amounts with respect thereto, imposed by any federal, state or local taxing authority of any jurisdiction; (y) any liability for the payment of any amounts described in clause (x) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group or as a result of transferor or successor liability; and (z) any liability for the payments of any amounts as a result of being a party to any tax sharing agreement or as a result of any express or implied obligation to indemnify any other person with respect to the payment of any amounts of the type described in clause (x) or (y).

(s) The term “ Tax Return ” means any report, return, document, declaration or other information or filing (including any amendments, elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to any federal, state or local taxing authority or jurisdiction with respect to Taxes, including, where permitted or required, combined or consolidated returns for any group of entities that includes either Party or any subsidiary of any such Party, any documents with respect to or accompanying payments of estimated taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.

ARTICLE II.

DESCRIPTION OF PIPELINE SYSTEM

2.1 Description of Pipeline System .

(a) As used herein, the term “ Pipeline System ” shall mean the existing Free State pipeline system in Eastern Mississippi, which extends from the upstream flange of the motor control valve which is downstream of Seller’s Free State metering facilities at Seller’s Jackson Dome Field dehydration facilities to the inlet valves which are downstream of all delivery points on the pipeline, including the 4.4 mile lateral pipeline to the Martinville Field, as more specifically described in Exhibit A .

(b) The specific assets and properties comprising the Pipeline System shall also include the following:

(i) the pipeline comprising the Free State pipeline system (the “Pipeline”);

(ii) the surface leases, easements, rights of way, Permits and other grants described in Exhibit B (collectively, the “ Rights of Way ”);

(iii) the contracts, agreements and instruments listed in Exhibit C (the “ Contracts ”);

(iv) the motor control valves, side valves, and meters, as shown on Exhibit A (the “ Equipment ”);

(v) as they may exist on the Closing Date, copies of all studies, analyses, as-built drawings, blueprints, plans, constructions, specifications, surveys, reports, diagrams, and repair records related to the Pipeline System;

(vi) to the extent transferable to Purchaser, all warranties, indemnities and guarantees to Seller from Seller’s vendors and suppliers with respect to materials, goods or services supplied to Seller in connection with the construction, operation, repair and maintenance of the Pipeline System; and

(vii) all rights, claims or causes of action pertaining to the Pipeline System.

(c) Purchaser acknowledges that portions of the Pipeline System (including lateral lines) are located on fee property owned by Seller and Purchaser shall have access to such portions pursuant to Easement and Road Agreements, as discussed hereunder, and Purchaser shall have power supplied to such portions pursuant to Power Agreements, as discussed hereunder.

2.2 Assumed Liabilities . At Closing, Purchaser shall assume and timely perform, perform and discharge in accordance with their respective terms, the following liabilities and obligations of Seller (collectively, the “ Assumed Liabilities ”):

(a) all liabilities and obligations of Seller with respect to the Rights of Way or under the Contracts that are due or to be performed after the Closing Date;

(b) any transfer taxes applicable to the transfer of the Pipeline System;

(c) all liabilities and obligations relating to prorated Pipeline System Taxes and other prorated amounts required to be paid by Purchaser arising under Article VIII of, or arising elsewhere under, this Agreement; and

(d) all other liabilities and obligations with respect to the Pipeline System or the use, occupancy, ownership, maintenance or operation thereof, including but not limited to liabilities and obligations for Pipeline System Taxes not covered by Section 2.2(c) above, that first exist and arise, or are due or to be performed, from and after the Effective Time on the Closing Date, as those terms are defined in Article III below.

2.3 Excluded Liabilities

. Notwithstanding anything hereinto the contrary, the Purchaser shall not and does not assume or agree to pay, perform or discharge any Excluded Liabilities. The “ Excluded Liabilities ” means:

(a) all liabilities and obligations of Seller with respect to the Rights of Way or under the Contracts that are due or to be performed on or prior to the Closing Date;

(b) all liabilities and obligations relating to prorated Pipeline System Taxes and other prorated amounts required to be paid by Seller arising under Article VIII of, or arising elsewhere under, this Agreement;

(c) all other liabilities and obligations with respect to the Pipeline System or the use, occupancy, ownership, maintenance or operation thereof that first exist and arise, or are due to be performed prior to the Effective Time on the Closing Date;

(d) all liabilities and obligations of Seller for Taxes (expressly excluding those transfer taxes specifically assumed by Purchaser pursuant to Section 2.2(b) above and those Pipeline System Taxes expressly assumed by Purchaser pursuant to Section 2.2(c) and Section 2.2(d) above); and

(e) all other obligations or liabilities of Seller or otherwise related to the Pipeline System not included within the definition of Assumed Liabilities.

ARTICLE III.

PURCHASE AND SALE OF PIPELINE SYSTEM

3.1 Sale and Delivery of Pipeline System . Upon the terms and subject to the conditions set forth in this Agreement, at the Closing provided for in Section 3.3, Seller shall sell, transfer, convey, assign and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from Seller, as of the Effective Time (as defined below) on the Closing Date (as defined in Section 3.3 hereof), all of Seller’s right, title and interest in and to the Pipeline System, free of all liens, charges, mortgages, security interests, pledges or other encumbrances of any nature whatsoever, claimed by any party claiming by, through or under Seller but not otherwise, except for Permitted Encumbrances. The “Effective Time” shall mean 7:00 a.m. Central Standard Time on the Closing Date.

3.2 Consideration . Upon the terms and subject to the conditions set forth in this Agreement, in consideration of the aforesaid sale, conveyance, assignment, transfer and delivery of all of Seller’s rights, title and interest in and to the Pipeline System as provided in Section 3.1 above, Purchaser will assume all Assumed Liabilities in connection with the Pipeline System from and after Closing, and Purchaser shall pay to Seller consideration totaling Seventy-Five Million and No/100 Dollars ($75,000,000) (the “ Purchase Price ”), consisting of the following: (a) Fifty Million and No/100 Dollars ($50,000,000) in immediately available funds to be paid to Seller by Federal Reserve wire transfer, plus (b) issuance to Seller or its affiliates by Genesis Energy, L.P. (“ Genesis MLP ”) of that number of Common Units of Genesis MLP representing limited partner interest in Genesis MLP (“ Genesis Common Units ”) determined by dividing Twenty-Five Million and No/100 Dollars ($25,000,000) by the average, closing price on the American Stock Exchange of a Genesis Common Unit during the five consecutive trading days ending on the date that is the second trading day immediately following the Closing Date, and rounding such number of Genesis Common Units up to the nearest whole number of Genesis Common Units.

3.3 Closing . The closing of the sale and purchase contemplated by this Agreement (the “ Closing ”) shall take place on the date of this Agreement as hereinabove stated. The date on which the Closing occurs is referred to herein as the “ Closing Date .”

3.4 Allocation of Purchase Price . The Purchase Price shall be allocated among the assets and properties comprising the Pipeline System acquired by the Purchaser from Seller pursuant to this Agreement, as shall mutually be agreed to by the Purchaser and Seller on or before the Closing Date. Such agreed allocation of the Purchase Price shall be set forth on Exhibit 3.4 attached hereto. Purchaser and Seller agree that they shall use these allocations to prepare, on a consistent basis, and file as required, Form 8594 under Section 1060 of the Internal Revenue Code and not to take any position inconsistent therewith upon examination of any tax return, in any refund claim, in any litigation, investigation or otherwise, unless required by Applicable Laws or with the consent of the other Party.

3.5 Deliverables at Closing .

(a) Simultaneously with the execution of this Agreement, at the Closing, Seller is conveying the Pipeline System to Purchaser, and delivering to Purchaser the following (the documents referred to in clauses (i) and (ii) below being herein referred to as the “ Conveyance Agreements ”, and together with the Transportation Services Agreement, Right of First Refusal and Option to Purchase Agreement, Special Covenants and Representations Agreement, Proration Agreement, Easement and Road Agreements and Power Agreements shall be collectively the “ Ancillary Agreements ”):

(i) a Pipeline Deed, Bill of Sale and Assignment of Rights of Way Interest in substantially the form attached hereto as Exhibit 3.5(a)(i) conveying the Pipeline and Equipment and the Rights of Way to Purchaser;

(ii) a Assignment and Assumption of Contracts in substantially the form attached hereto as Exhibit 3.5(a)(ii) assigning all Contracts comprising a part of the Pipeline System to Purchaser;

(iii) a certified copy of the resolutions of the Board of Managers of Seller by which the disposition of the Pipeline System was authorized;

(iv) a certificate of the Secretary or Assistant Secretary of Seller evidencing the incumbency and specimen signature of the officer executing documents to be delivered at the Closing on behalf of Seller;

(v) a Transportation Services Agreement in substantially the form attached hereto as Exhibit 3.5(a)(v) by and between Seller and Purchaser;

(vi) a Right of First Refusal and Option to Purchase Agreement in substantially the form attached hereto as Exhibit 3.5(a)(vi) by and between Seller, Genesis Free State Holdings, LLC (“Genesis Holdings”) and Purchaser;

(vii) a Special Covenants and Representations Agreement in substantially the form attached hereto as Exhibit 3.5(a)(vii) by and between Seller, Genesis Holdings and Genesis MLP;

(viii) any other agreements, documents, instruments and writings required to be delivered by Seller to Purchaser at or prior to the Closing pursuant to this Agreement;

(ix) a legal opinion from counsel to the Seller in the form attached hereto as Exhibit 3.5(a)(ix) (the “ Seller’s Legal Opinion ”);

(x) a certification to Purchaser in a form acceptable to Purchaser as required by regulations under Section 1445 of the Internal Revenue Code, that Seller is not a “foreign person” within the meaning of Treasury Regulations 1.1445-2(b)(2)(i) (the “ FIRPTA Affidavit ”);

(xi) all Required Consents (as defined in Section 6.1 below) set forth in Exhibit 3.5(a)(xi)-(1) , other than the Outstanding Consents (as defined in Section 6.1 below) set forth in Exhibit 3.5(a)(xi)-(2) which will be subject to Section 6.1 below;

(xii) a Proration Agreement in substantially the form attached hereto as Exhibit 3.5(a)(xii) by and between Seller and Purchaser;

(xiii) all Easement and Road Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xiii) by and between Seller and Purchaser;

(xiv) the Guaranty in the form attached hereto as Exhibit 3.5(a)(xiv) executed by Denbury Resources Inc., in favor of Purchaser; and

(xv) all Power Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xv) by and between Seller and Purchaser.

(b) Simultaneously with the execution of this Agreement, at Closing, Purchaser is delivering to Seller the following:

(i) the cash portion of the Purchase Price;

(ii) a certified copy of the resolutions of the sole Member of Purchaser and the Audit Committee of Genesis MLP by which the acquisition of the Pipeline System was authorized;

(iii) a certificate of the Secretary or Assistant Secretary of Purchaser evidencing the incumbency and specimen signature of the officer executing documents to be delivered at the Closing on behalf of Purchaser;

(iv) a Transportation Services Agreement in substantially the form attached hereto as Exhibit 3.5(a)(v) by and between Seller and Purchaser;

(v) a Right of First Refusal and Option to Purchase Agreement in substantially the form attached hereto as Exhibit 3.5(a)(vi) by and between Seller, Genesis Holdings and Purchaser;

(vi) a Special Covenants and Representations Agreement in substantially the form attached hereto as Exhibit 3.5(a)(vii) by and between Seller, Genesis Holdings and Genesis MLP;

(vii) executed counterparts of the Conveyance Agreements;

(viii) a legal opinion from counsel to Purchaser in the form attached hereto as Exhibit 3.5(b)(viii) (the “ Purchaser’s Legal Opinion ”);

(ix) a Proration Agreement in substantially the form attached hereto as Exhibit 3.5(a)(xiii) by and between Seller and Purchaser;

(x) any other agreements, documents, instruments and writings required to be delivered by Purchaser to Seller at or prior to the Closing pursuant to this Agreement;

(xi) all Easement and Road Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xiv) by and between Seller and Purchaser;

(xii) all Power Agreements in substantially the form attached hereto as Exhibit 3.5(a)(xvii) by and between Seller and Purchaser; and

(xiii) a copy of the tax opinion addressed to Genesis MLP and Genesis Energy, Inc., referenced in Section 10.17 below.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser that as of the Closing Date:

4.1 Organization and Authority . Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to transact business in the State of Mississippi, and has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby. Seller and its applicable Affiliates have full power and authority to enter into the Ancillary Agreements and each other agreement, instrument, certificate, exhibit, schedule or other document that is required by this Agreement to be executed by Seller or its Affiliates at Closing and to carry out the transactions contemplated thereby. The execution and delivery of this Agreement, the Ancillary Agreements and the Other Seller Documents (as defined in Section 4.2 below), and the consummation of the transactions contemplated hereby and thereby by Seller and its applicable Affiliates have been duly and validly authorized by all necessary action of Seller and its applicable Affiliates.

4.2 Execution and Effect . This Agreement and the Ancillary Agreements have been (and at Closing each other agreement, instrument, certificate, exhibit, schedule or other document that is required by this Agreement to be executed and delivered by Seller or its Affiliates, which are herein called collectively the “Other Seller Documents”) duly and validly executed and delivered by Seller and its applicable Affiliates and assuming the due authorization, execution and delivery of this Agreement and Ancillary Agreements and such other documents to which Purchaser is a party by Purchaser, constitutes a valid, binding and enforceable obligation of Seller and its applicable Affiliates; subject, however, to the effect of bankruptcy, insolvency, reorganization, moratorium and similar laws from time to time in effect relating to the rights and remedies of creditors, as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

4.3 No Violation . Neither the execution and delivery of this Agreement, the Ancillary Agreements or the Other Seller Documents by Seller and its applicable Affiliates nor the consummation by Seller and its applicable Affiliates of the transactions contemplated hereby or thereby (a) violates any provision of the Limited Liability Company Agreement of Seller or the formation documents of such applicable Affiliates, (b) subject to obtaining the Outstanding Consents which are set forth on Exhibit 3.5(a)(xi)-(2) , constitutes a breach of or default under (or an event that, with the giving of notice or passage of time or both, would constitute a breach of or 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 Pipeline System 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 its assets are bound ((provided, however, that this Section 4.3 shall not be construed as constituting a representation or warranty as to either (i) whether or not any of the Outstanding Consents, which are set forth on Exhibit 3.5 (a)(xi)-(2), will be obtained or (ii) the effect of failing to obtain any such Outstanding Consent), or (c) violates in any material respect any statute, law, regulation or rule, or any judgment, decree, writ or injunction or any Governmental Body applicable to Seller or any of its assets.

4.4 Title to Rights of Way . Except as set forth on Schedule 4.4, the Rights of Way (including easements and other non-fee property) identified in Exhibit B constitute all material Rights of Way encompassing, relating to, or required for the proper operation of, the Pipeline System, and Seller has title thereto, free and clear of all liens, charges, mortgages, security interests, pledges or other encumbrances of any nature whatsoever, claimed by any party claiming by, through or under Seller but not otherwise, except for the Permitted Encumbrances.

4.5 Title to Pipeline and Equipment . The Equipment shown on Exhibit A constitutes all material motor control, side valves and meters relating to, or required for the proper operation of, the Pipeline System, and Seller has title thereto, free and clear of all liens, claims, charges, mortgages, security interests, pledges or other encumbrances of any nature whatsoever, claimed by any party claiming by, through or under Seller but not otherwise, except for the Permitted Encumbrances (to the extent same pertain to or affect Equipment).

4.6 Litigation . Except as set forth in Schedule 4.6 and to Seller’s Knowledge: (a) there are no judgments, orders, writs or injunctions of any Governmental Body, presently in effect or pending or threatened, against Seller with respect to its interest in the Pipeline System or the operation thereof, or, which, if adversely determined, would impair or prohibit the consummation of the transaction contemplated hereunder or under the Ancillary Agreements, (b) there are no claims, actions, suits or proceedings by or before any Gov

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates