Exhibit
10.1


 




 





SHARE PURCHASE AND SALE AGREEMENT


 


Among


 


BP CANADA ENERGY COMPANY


 


and


 


RMC ACQUISITION COMPANY


 


and


 


RPC ACQUISITION COMPANY


 


Dated as of


 


February 23, 2004


 


Relating to the


 


Purchase and Sale


 


of the Rangeland Business Unit




 





 

















 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  	
   

  
	
  INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Definitions

  	
   

  
	
  1.2

  	
   

  	
  Derivatives

  	
   

  
	
  1.3

  	
   

  	
  References

  	
   

  
	
  1.4

  	
   

  	
  Headings and Division

  	
   

  
	
  1.5

  	
   

  	
  Extended Meanings

  	
   

  
	
  1.6

  	
   

  	
  References to Agreements or Statutes

  	
   

  
	
  1.7

  	
   

  	
  Currency

  	
   

  
	
  1.8

  	
   

  	
  Accounting Terms

  	
   

  
	
  1.9

  	
   

  	
  Knowledge

  	
   

  
	
  1.10

  	
   

  	
  Schedules

  	
   

  
	
  1.11

  	
   

  	
  Interpretation if Closing Does Not Occur

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  PURCHASE
  AND SALE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Purchase and Sale of the Shares

  	
   

  
	
  2.2

  	
   

  	
  Payment

  	
   

  
	
  2.3

  	
   

  	
  Line Fill and Product Inventory Amount

  	
   

  
	
  2.4

  	
   

  	
  Working Capital

  	
   

  
	
  2.5

  	
   

  	
  Assumed Liabilities

  	
   

  
	
  2.6

  	
   

  	
  Excluded Liabilities

  	
   

  
	
  2.7

  	
   

  	
  Payment of Inter-corporate Payables

  	
   

  
	
  2.8

  	
   

  	
  Damage or Destruction Events

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Closing

  	
   

  
	
  3.2

  	
   

  	
  Seller’s Deliveries

  	
   

  
	
  3.3

  	
   

  	
  Buyer’s Deliveries

  	
   

  
	
  3.4

  	
   

  	
  Completion of Transactions

  	
   

  
	
  3.5

  	
   

  	
  Delivery of Books and Records

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Seller’s Representations and Warranties

  	
   

  
	
  4.2

  	
   

  	
  Environmental Representations and
  Warranties

  	
   

  
	
  4.3

  	
   

  	
  Disclaimers

  	
   

  
	
  4.4

  	
   

  	
  Buyer’s Representations and Warranties

  	
   

  



 


i

















 


	
  4.5

  	
   

  	
  No Consequential Damages

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Covenants of Seller

  	
   

  
	
  5.2

  	
   

  	
  Covenants of Buyer

  	
   

  
	
  5.3

  	
   

  	
  Mutual Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  EMPLOYEES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Employees

  	
   

  
	
  6.2

  	
   

  	
  Employment Offers to Active Employees

  	
   

  
	
  6.3

  	
   

  	
  Employment Offers to Employees on Leave

  	
   

  
	
  6.4

  	
   

  	
  Termination of Employees by Seller

  	
   

  
	
  6.5

  	
   

  	
  Conditions of Transfer

  	
   

  
	
  6.6

  	
   

  	
  Transfer
  Time

  	
   

  
	
  6.7

  	
   

  	
  Level of Employee Benefits Provided by
  Buyer

  	
   

  
	
  6.8

  	
   

  	
  Benefits and Policies

  	
   

  
	
  6.9

  	
   

  	
  Vacation

  	
   

  
	
  6.10

  	
   

  	
  Severance

  	
   

  
	
  6.11

  	
   

  	
  Service
  Credit

  	
   

  
	
  6.12

  	
   

  	
  Employee Records

  	
   

  
	
  6.13

  	
   

  	
  No Third Party Beneficiaries

  	
   

  
	
  6.14

  	
   

  	
  Contractors

  	
   

  
	
  6.15

  	
   

  	
  Employer’s Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Buyer’s Conditions to Closing

  	
   

  
	
  7.2

  	
   

  	
  Seller’s Conditions to Closing

  	
   

  
	
  7.3

  	
   

  	
  Waiver of Conditions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Buyer’s Indemnification of Seller

  	
   

  
	
  8.2

  	
   

  	
  Seller’s Indemnification of Buyer

  	
   

  
	
  8.3

  	
   

  	
  Environmental Indemnifications

  	
   

  
	
  8.4

  	
   

  	
  Exclusive Remedy

  	
   

  
	
  8.5

  	
   

  	
  Holding of Indemnities

  	
   

  
	
  8.6

  	
   

  	
  Procedures Relating to Indemnification
  Between Buyer and Seller

  	
   

  
	
  8.7

  	
   

  	
  Procedures Relating to Indemnification for
  Third Party Claims

  	
   

  
	
  8.8

  	
   

  	
  Losses Net of Insurance and Taxes

  	
   

  



 


ii

















 


	
  8.9

  	
   

  	
  Attorneys’
  Fees

  	
   

  
	
  8.10

  	
   

  	
  Time Limitation

  	
   

  
	
  8.11

  	
   

  	
  Monetary Limitation

  	
   

  
	
  8.12

  	
   

  	
  Limitation of Liability

  	
   

  
	
  8.13

  	
   

  	
  Rights-of-Way Monetary Limitation

  	
   

  
	
  8.14

  	
   

  	
  Mitigation

  	
   

  
	
  8.15

  	
   

  	
  Adjustment to Purchase Price

  	
   

  
	
  8.16

  	
   

  	
  Subrogation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
  TAXES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Transfer
  Taxes

  	
   

  
	
  9.2

  	
   

  	
  Tax
  Returns

  	
   

  
	
  9.3

  	
   

  	
  Tax
  Elections

  	
   

  
	
  9.4

  	
   

  	
  Attribution of Purchase Price

  	
   

  
	
  9.5

  	
   

  	
  Conduct of Tax Matters

  	
   

  
	
  9.6

  	
   

  	
  Receipt of Tax Notice

  	
   

  
	
  9.7

  	
   

  	
  Co-operation on Tax Matters

  	
   

  
	
  9.8

  	
   

  	
  Transaction a Share Sale

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
  RECORDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Access to Records

  	
   

  
	
  10.2

  	
   

  	
  Access to Financial Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
  TERMINATION RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Termination

  	
   

  
	
  11.2

  	
   

  	
  In the Event of Termination

  	
   

  
	
  11.3

  	
   

  	
  Effect of Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Method of Notice

  	
   

  
	
  12.2

  	
   

  	
  Address and Facsimile Number

  	
   

  
	
  12.3

  	
   

  	
  Change of Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Further Assurances

  	
   

  
	
  13.2

  	
   

  	
  Specific Performance

  	
   

  
	
  13.3

  	
   

  	
  Interest Accrues on Amounts Owing

  	
   

  



 


iii

















 


	
  13.4

  	
   

  	
  Governing Law; Submission to Jurisdiction

  	
   

  
	
  13.5

  	
   

  	
  Publicity

  	
   

  
	
  13.6

  	
   

  	
  Survival
  Of Covenants, Representations and Warranties

  	
   

  
	
  13.7

  	
   

  	
  Entire Agreement

  	
   

  
	
  13.8

  	
   

  	
  Assignment

  	
   

  
	
  13.9

  	
   

  	
  Waiver

  	
   

  
	
  13.10

  	
   

  	
  Expenses

  	
   

  
	
  13.11

  	
   

  	
  Counterparts

  	
   

  
	
  13.12

  	
   

  	
  No Strict Construction

  	
   

  
	
  13.13

  	
   

  	
  Schedules

  	
   

  
	
  13.14

  	
   

  	
  Severability

  	
   

  
	
  13.15

  	
   

  	
  No
  Third Party Beneficiaries

  	
   

  
	
  13.16

  	
   

  	
  Time
  of Essence

  	
   

  
	
  13.17

  	
   

  	
  No
  Conditions

  	
   

  
	
  13.18

  	
   

  	
  Joint Liability

  	
   

  
	
  13.19

  	
   

  	
  Enurement

  	
   

  



 


iv

















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule “A”

  	
   

  	
  Active Pipeline System
  Particulars

  	
   

  
	
  Part 1

  	
   

  	
  Main Lines

  	
   

  
	
  Part 2

  	
   

  	
  Gathering System

  	
   

  
	
  Part 3

  	
   

  	
  Pump Stations, Meter Stations
  and Terminals

  	
   

  
	
  Part 4

  	
   

  	
  LACT Facilities

  	
   

  
	
  Schedule “B”

  	
   

  	
  Inactive Facilities
  Particulars

  	
   

  
	
  Part 1

  	
   

  	
  Pump Stations, Meter Stations
  and Terminals

  	
   

  
	
  Part 2

  	
   

  	
  LACT Facilities

  	
   

  
	
  Part 3

  	
   

  	
  Removed Lines

  	
   

  
	
  Schedule “C”

  	
   

  	
  Other Tangibles

  	
   

  
	
  Schedule “D”

  	
   

  	
  Rangeland Pipeline System Real
  Property

  	
   

  
	
  Part 1

  	
   

  	
  Fee Simple Property

  	
   

  
	
  Part 2

  	
   

  	
  Leases, Easements,
  Rights-of-way, Other Access Rights

  	
   

  
	
  Part 3

  	
   

  	
  Common Rights-of-way

  	
   

  
	
  Schedule “E”

  	
   

  	
  Transferable Software

  	
   

  
	
  Schedule “F”

  	
   

  	
  Rangeland Miscellaneous
  Interests

  	
   

  
	
  Part 1

  	
   

  	
  Contracts and Arrangements

  	
   

  
	
  Part 2

  	
   

  	
  Licences and Permits

  	
   

  
	
  Part 3

  	
   

  	
  Radio Licences

  	
   

  
	
  Schedule “G”

  	
   

  	
  Excluded Assets

  	
   

  
	
  Part 1

  	
   

  	
  Excluded Information
  Technology

  	
   

  
	
  Part 2

  	
   

  	
  Excluded Assets and Property

  	
   

  
	
  Part 3

  	
   

  	
  Excluded Contracts

  	
   

  
	
  Part 4

  	
   

  	
  Excluded Licences and Permits

  	
   

  
	
  Schedule “H”

  	
   

  	
  Buy/Sell Agreements

  	
   

  
	
  Schedule “I”

  	
   

  	
  Transportation Agreements

  	
   

  
	
  Schedule “J”

  	
   

  	
  Other RMC Material Agreements

  	
   

  
	
  Schedule “K”

  	
   

  	
  Aurora Pipeline Particulars

  	
   

  
	
  Part 1

  	
   

  	
  Aurora Pipeline Real Property

  	
   

  
	
  Part 2

  	
   

  	
  Aurora Licences

  	
   

  
	
  Schedule “L”

  	
   

  	
  Employees and Contractors

  	
   

  
	
  Part 1

  	
   

  	
  Employees

  	
   

  
	
  Part 2

  	
   

  	
  Contractors

  	
   

  
	
  Part 3

  	
   

  	
  Severance Plan

  	
   

  
	
  Part 4

  	
   

  	
  Benefits

  	
   

  
	
  Schedule “M”

  	
   

  	
  Procedure for Determining Line
  Fill and Product Inventory Amount

  	
   

  
	
  Schedule “N”

  	
   

  	
  Transition Services Agreement

  	
   

  
	
  Schedule “O”

  	
   

  	
  Guarantee

  	
   

  
	
  Schedule “P”

  	
   

  	
  Certificates of Insurance

  	
   

  



 


v

















 


SHARE PURCHASE AND SALE AGREEMENT


(RANGELAND BUSINESS UNIT)


 


THIS AGREEMENT for the purchase and sale of the
Shares is made and entered into as of February 23, 2004,


AMONG:


 


BP CANADA ENERGY COMPANY,  a company formed on an amalgamation
under the laws of Nova Scotia (“Seller”),


 


and


 


RMC ACQUISITION COMPANY, a company formed under the laws of
Nova Scotia (“MarketingCo”),


 


and


 


RPC ACQUISITION COMPANY, a company formed under the laws of
Nova Scotia (“PipelineCo” and, collectively with MarketingCo, “Buyer”).


 


WHEREAS Seller is the registered and
beneficial owner of all of the Shares;


 


AND WHEREAS Seller wishes to sell the RPC Shares
and the Aurora Shares to PipelineCo and the RMC Shares to MarketingCo, and
PipelineCo wishes to purchase from Seller the RPC Shares and the Aurora Shares
and MarketingCo wishes to purchase from Seller the RMC Shares, in each case on
the terms and subject to the conditions set forth in this Agreement;


 


NOW THEREFORE, in consideration of the mutual
promises made in this Agreement and for other good and valuable consideration,
the receipt and sufficiency of which is hereby expressly acknowledged by each
of the Parties, and subject to the conditions hereinafter set forth, the
Parties agree as follows:


 


ARTICLE 1

INTERPRETATION


 


1.1                               Definitions


 


In this Agreement, the following
terms shall have the meanings set forth below:


 


“Abandonment and Reclamation Obligations”
means all obligations respecting the abandonment of any of the Rangeland
Pipeline Business Assets (including any associated closing, decommissioning,
dismantling and removal of any foundations,


 

















 


structures or equipment in
connection with such abandonment) and the restoration, remediation and
reclamation of the surface or subsurface of the associated lands, all in
compliance with applicable HSE Laws;


 


“Accounting Firm” means KPMG
LLP or another mutually agreed upon, nationally recognized accounting firm;


 


“AEUB” means the Alberta
Energy and Utilities Board;


 


“Affiliate” of any Person
means any other Person who directly or indirectly controls, or is controlled
by, or is under common control with, such Person, and for these purposes “control”,
and related terms including “controlling” and “controlled”, shall mean:


 


(a)                                  with respect to a corporation or
other Person having voting shares or the equivalent and elected directors or
individuals performing similar functions, the power to vote, directly or
indirectly, shares or the equivalent representing more than fifty (50%) percent
of the power to vote in the election of directors or individuals performing
similar functions; and


 


(b)                                 with respect to any other Person
(other than an individual), either (i) ownership of more than fifty (50%)
percent of the equity or beneficial interest in that Person, or (ii) the
ability to direct the business and affairs of such Person by acting as a
general partner, manager or other forms of effective control;


 


“Agreement” means this Share
Purchase and Sale Agreement relating to the purchase and sale of the Rangeland
Business Unit, including the recitals and all Schedules hereto;


 


“Alberta Tax Act” means the Alberta
Corporate Tax Act (Alberta);


 


“Applicable Laws” means all applicable statutes, laws (including
common law), rules, orders, regulations, directives or other instruments (and
all applicable requirements thereunder) of any Governmental Authority, as the
same are in effect from time to time;


 


“Applicable Period” has the
meaning given to that term in Section 5.1(e);


 


“Assumed Liabilities” has the
meaning given to that term in Section 2.5;


 


“Aurora” means Aurora Pipeline Company Ltd., a Canadian corporation;


 


“Aurora Assets” means, collectively, the following:


 


(a)                                  the Aurora Pipeline;


 


(b)                                 the Aurora Pipeline Real Property;
and


 


2

















 


(c)                                  the Aurora Miscellaneous Interests;


 


“Aurora Licences” means the
Certificate of Public Convenience and Necessity No. OC-11 and Order No. XO-9-67
issued under the National Energy Board Act (Canada) and those licences issued
by the AEUB described in Part 2 of Schedule “K”;


 


“Aurora Miscellaneous Interests”
means the following:


 


(a)                                  all contracts, agreements and
documents relating to the Aurora Pipeline Real Property;


 


(b)                                 the Permits held by Aurora,
including the Aurora Licences; and


 


(c)                                  all drawings, specifications,
construction reports and other detail relating exclusively to the design,
construction and operation of the Aurora Pipeline;


 


“Aurora Pipeline” means the
crude oil, condensate and butane pipelines owned by Aurora, commonly referred
to as the Aurora Pipeline, which pipelines are approximately 0.75 kilometres in
length and are comprised of a 12-inch diameter line and an 8-inch diameter line
running parallel from the southern end of the southern main line of the
Rangeland Pipeline System to the Glacier Pipeline System at the Canada-United
States international border near Carway, Alberta, together with facilities for
retrieving in-line pipeline inspection tools;


 


“Aurora Pipeline Real Property”
means all lands owned or leased by Aurora, or in respect of which Aurora has an
easement, right-of-way, right of access, right of entry, governmental entry and
access right, crossing agreement and consent, surface lease, option to lease,
option to purchase land, licence of occupation, pipeline installation lease,
license or any other right to enter upon, use, enjoy or occupy the surface of
any land, upon which the Aurora Pipeline is or was located, as applicable,
including those lands in respect of which Aurora has an easement, right-of-way
or other right of access as described in Part 1 of Schedule “K”;


 


“Aurora Shares” means the five
hundred (500) common shares in the capital of Aurora currently issued in the
name of Seller;


 


“Base Price” has the meaning
given to that term in Section 2.2(a)(i);


 


“Books and Records” means the
books, records, data and files recorded or stored by means of any device,
including in electronic form, as are in the possession or under the control of
the Seller Group which are either:


 


(a)                                  used solely and exclusively in the
operation of the Rangeland Business Unit; or


 


3

















 


(b)                                 used in the operation of the
Rangeland Business Unit and other businesses conducted by the BP Group in which
case only copies thereof will be included as Books and Records with any portion
thereof pertaining to businesses other than the Rangeland Business Unit being
redacted therefrom;


 


and which in either case are
necessary for the operation of the Rangeland Business Unit, as it is currently
operated by the Seller Group, including records relating to lease and
Rights-of-Way payments;


 


“BP Group” means Seller, BP
p.l.c. and their other direct or indirect Affiliates, but excluding the
Rangeland Companies;


 


“BP Resources” means BP Canada
Energy Resources Company, a company formed on an amalgamation under the laws of
Nova Scotia;


 


“Business Day” means a
calendar day other than a Saturday, Sunday or statutory holiday in Calgary,
Alberta;


 


“Buyer Indemnified Parties”
has the meaning given to that term in Section 8.2;


 


“Buyer’s Interest Rate” means
the lesser of:


 


(a)                                  the annual rate of interest
announced from time to time by Royal Bank of Canada as its reference rate then
in effect for determining interest rates it will charge on Canadian dollar
loans made by Royal Bank of Canada in Canada (known as its prime rate); or


 


(b)                                 the maximum lawful interest rate;


 


“Buyer’s Objection” has the
meaning given to that term in Section 2.4(b)(ii);


 


“Buyer’s Tax Matter” has the
meaning given to that term in Section 9.5(b);


 


“Buy/Sell Agreements” means
the crude oil, condensate and butane purchase and sale agreements and
entitlements listed in Schedule “H”;


 


“Closing” means the closing
and consummation of the transactions contemplated by this Agreement;


 


“Closing Date” means 10:00
a.m. on the fifteenth (15th) day after the satisfaction of the conditions
precedent set forth in Sections 7.1(d) and 7.2(d) (provided that if such day is
not a Business Day, the Closing Date shall be the first Business Day next
following such fifteenth (15th) day);


 


“Competition Act” means the Competition
Act, R.S.C. 1985, c. C-34;


 


4

















 


“Confidentiality Agreement”
means the letter agreement between an Affiliate of Buyer and Seller with
respect to confidentiality dated July 3, 2003;


 


“Current Assets” means all
cash, Accounts Receivable and all other assets which in the normal course of
business can be converted to cash, sold or consumed within a period of one
year, but specifically excluding Line Fill and Product Inventory.  For purposes of this definition, “Accounts
Receivable” means all accounts receivable of each of the Rangeland
Companies, as applicable, including (i) all trade and commercial accounts and
notes representing dollar amounts, including amounts owing from Seller or any
other member of the BP Group or Seller Group (whether or not invoices have been
rendered for such accounts as of that date); and (ii) income Tax and GST
receivables;


 


“Current Liabilities” means
Accounts Payable and other financial obligations which are payable within one
year.  For purposes of this definition,
“Accounts
Payable” means all accounts payable of each of the Rangeland
Companies, as applicable, including (i) accounts and notes and any other
amounts representing dollar amounts on trade and commercial accounts, including
amounts owing to Seller or any other member of the BP Group or Seller Group
(whether or not invoices have been rendered for the accounts as of that date)
and any other notes payable to any other member of the BP Group or Seller
Group; (ii) direct expenses; (iii) income Tax and GST payables; and (iv)
amounts owing in respect of Permitted Liens;


 


“Damage or Destruction Event”
means damage, destruction or other casualty losses with respect to the Pipeline
Systems or any portion thereof;


 


“Deposit” means a deposit
against the Purchase Price in an amount equal to ten percent (10%) of the Base
Price;


 


“Deposit Return Event” means
the occurrence of any of the following:


 


(a)                                  the Parties mutually agree that the
Closing conditions set forth in Sections 7.1(d) and 7.2(d) have become
incapable of fulfillment and each of Buyer and Seller have complied with the
obligations of Section 5.3(a);


 


(b)                                 the transactions under this
Agreement are terminated pursuant to Section 11.1(a);


 


(c)                                  the transactions under this
Agreement are terminated by Buyer pursuant to Section 11.1(b) (other than
by reason of the Closing conditions set forth in Section 7.1(d), which is
covered in paragraph (a) above), provided, however, that at the time of such
termination, Buyer is not in material breach of its representations,
warranties, covenants or agreements contained in this Agreement;


 


5

















 


(d)                                 the transactions under this
Agreement are terminated by Seller pursuant to Section 11.1(c), provided,
however, that at the time of such termination, Buyer is not in material breach
of its representations, warranties, covenants or agreements contained in this
Agreement;


 


(e)                                  the transactions under this
Agreement are terminated by Seller pursuant to Section 11.1(d), provided,
however, that at the time of such termination, Buyer is not in material breach
of its representations, warranties, covenants or agreements contained in this
Agreement; or


 


(f)                                    the transactions under this
Agreement are terminated by Buyer pursuant to Section 11.1(e), provided,
however, that at the time of such termination, Buyer is not in material breach
of its representations, warranties, covenants or agreements contained in this
Agreement;


 


“Disclosed Environmental Liabilities”
means any and all Environmental Liabilities (whether presently realized or
projected) caused by, arising from, incurred in connection with or otherwise
relating in any way to the matters disclosed in:


 


(a)                                  that certain URS report dated
July 21, 2003, a copy of which has been made available to Buyer or its
Affiliates;


 


(b)                                 the Information Memorandum; or


 


(c)                                  any of the health, safety and
environmental records or reports of the Rangeland Business Unit made available
to Buyer or its Affiliates for review;


 


“Employees” means the
employees of Seller directly employed in the operation of the Rangeland
Business Unit, including those on Leave, to which the provisions of
Article 6 apply, as more particularly set forth in Part 1 of Schedule “L”;


 


“Employer” has the meaning given to that term in Section 6.2;


 


“Environment” means the components of the earth and includes:


 


(a)                                  air, land and water (including
groundwater);


 


(b)                                 all layers of the atmosphere;


 


(c)                                  all organic and inorganic matter and
living organisms; and


 


(d)                                 the interacting natural systems that
include components referred to in subclauses (a) to (c);


 


6

















 


“Environmental Liabilities”
means all obligations, responsibilities, liabilities, costs and expenses of
whatever kind and nature in respect of any Rangeland Pipeline Business Assets
or the conduct of the Rangeland Pipeline Business or Rangeland Marketing
Business arising directly or indirectly from:


 


(a)                                  the presence, use, storage,
treatment, disposal or Release of, or exposure to, Hazardous Substances;


 


(b)                                 the non-compliance with, the breach
of or any liability under, any applicable HSE Laws;


 


(c)                                  any order, notice of responsibility,
directive (including requirements embodied in HSE Laws), injunction, judgment
or similar act (including settlements) by any Governmental Authority arising
out of or under HSE Laws;


 


(d)                                 any impairment or damage to the
Environment, including any Abandonment and Reclamation Obligations, and any other
matters relating to surface, subsurface, air or groundwater contamination;


 


(e)                                  any and all obligations,
responsibilities, liabilities, costs and expenses caused by, arising from,
incurred in connection with or relating in any way to the existence of asbestos
or lead based paint at, on or within the Rangeland Pipeline Business Assets,
including any incidental contamination resulting therefrom; and


 


(f)                                    for greater certainty, any
obligations, responsibilities, liabilities, costs and expenses caused by or resulting
from (i) changes in, modifications to or amendments of HSE Laws that were in
effect prior to the Closing Date, or (ii) HSE Laws promulgated, made or enacted
on or after the Closing Date;


 


“Environmental Matters” means
any activity, event or circumstance in respect of any of the Rangeland Pipeline
Business Assets or the conduct of the Rangeland Pipeline Business or Rangeland
Marketing Business pertaining to the storage, use, holding, collection,
accumulation, assessment, generation, manufacture, construction, processing,
treatment, stabilization, disposition, handling, transportation or Release of
Hazardous Substances on, at or into the Environment;


 


“Environmental Permits” means
the Permits, including any approval, registration, authorization, certificate,
certificate of occupancy, consent, exemption, license, order or permit or other
similar authorization of or filing with any Governmental Authority, required by
applicable HSE Laws in effect on or prior to the Closing Date, as they are
enforced with respect to the Rangeland Pipeline Business for the ownership or
operation of the Pipeline Systems as they are currently operated by the Seller
Group;


 


7

















 


“Exchange Act” has the meaning
given to that term in Section 10.2(a);


 


“Excluded Assets” means,
collectively:


 


(a)                                  all computer systems, software and
other intellectual property other than the Transferable Software, which
excluded information technology includes the information technology described
in Part 1 of Schedule “G”;


 


(b)                                 any assets, property improvements,
appurtenances, fixtures, equipment or goods located at the location of the
Pipeline Systems that are not described or listed in any of Schedules “A” to
“F” and “H” to “K” inclusive and are not owned by the Rangeland Companies,
including spare parts on consignment, certain chemicals on consignment, leased
and rented mobile equipment, leased office equipment, leased copiers, leased
telephones and other leased items;


 


(c)                                  the assets, property and property
improvements, appurtenances, fixtures, equipment, goods and rights listed on
Part 2 of Schedule “G”;


 


(d)                                 the contracts set forth on Part 3 of
Schedule “G”;


 


(e)                                  those licences issued under the Pipeline Act
(Alberta) listed in Part 4 of Schedule “G”;


 


(f)                                    the rights of the BP Group, as buyer
from or seller to RMC, under marketing contracts and arrangements entered into
by members of the BP Group from time to time; and


 


(g)                                 management and other employees of
Seller or other members of the BP Group located at Seller’s Calgary, Alberta or
Fort Saskatchewan, Alberta offices;


 


“Excluded Liabilities” has the
meaning given to that term in Section 2.6;


 


“E & Y” means Ernst &
Young LLP;


 


“E & Y Report” means the
report prepared by E&Y for BP International Limited with respect to the
proposed divestment of the Rangeland Business Unit dated September 16,
2003;


 


“Final Working Capital Statement” has the meaning given to that term
in Section 2.4(b)(i);


 


“Financial Information” means,
the unaudited information regarding financial performance of the Rangeland
Business Unit contained in Exhibits 1 through 5


 


8

















 


inclusive, 7, 8 and 9 of the
E&Y Report and, to the extent not in conflict with the information in such
exhibits of the E&Y Report, in Article 6 of the Information Memorandum
and the Financial Updates;


 


“Financial Updates” means,
with respect to the Rangeland Business Unit, the “3rd Quarter 2003 Financial
Performance Update” for the first three (3) quarters of 2003, and any
additional written financial performance updates provided by Seller to Buyer
(or its Affiliate) in respect of any quarter or financial period subsequent to
the third quarter of 2003;


 


“GAAP” means generally
accepted accounting principles in Canada approved by the Canadian Institute of
Chartered Accountants and which are applicable on the Closing Date;


 


“Governmental Authority”  means
any government, government department, agency, regulatory authority,
commission, board, tribunal or court having jurisdiction on behalf of any
nation, province, state, municipality, district or subdivision thereof over the
Parties, the Rangeland Companies, the Rangeland Business Unit or the Rangeland
Business Unit Assets, or otherwise relating in any way to the subject matter
hereof;


 


“GST”  means the goods and services
tax provided for in the Excise Tax Act, R.S.C. 1985, c. E-15;


 


“Guarantee” means the
guarantee in the form of Schedule “O” given by Guarantor in favour of
Seller concurrently with the execution of this Agreement with respect to the
obligations and liabilities of Buyer under this Agreement;


 


“Guarantor” means an Affiliate
of Buyer that has a long term issuer credit rating from Standard & Poor’s,
a division of The McGraw-Hill Companies, Inc., or its successor, of BBB- or
better;


 


“Hazardous Substances” means
any pollutants, contaminants, dangerous goods or substances, toxic, radioactive
or hazardous substances or materials, asbestos, polychlorinated biphenyls,
petroleum and its derivatives and by-products and other hydrocarbons and
includes any substance, material, chemical or waste that is prohibited,
controlled or regulated by any Governmental Authority pursuant to HSE Laws;


 


“HSE Laws” means any and all
past, present or future local, provincial and federal laws, principles of
common law, statutes, ordinances, regulations, rules, orders, permits,
standards or requirements (including consent decrees, judicial decisions,
judgments, injunctions and administrative orders issued or approved
thereunder), together with all related amendments and implementing regulations
and all common law pertaining to or regulating pollution, protection of the
Environment, health and safety of individuals, pipeline safety, natural
resource damages, conservation of


 


9

















 


resources, wildlife, waste
management, the use, storage, generation, production, treatment, emission,
discharge, Release, remediation, removal, disposal or transport or any other
activity related to a Hazardous Substance, toxic waste or material (including
crude petroleum and its fractions or derivatives thereof), or any other
environmental matter;


 


“Inactive Facilities”  means
all pipelines, pump and metering stations, terminalling facilities, LACT
Facilities, pumps, storage tanks, storage spheres, valves and related assets
that were previously used by RPC or its Predecessors in Interest in the conduct
of the Rangeland Pipeline Business and which, as at the date hereof, are or
have been abandoned, reclaimed, discontinued, suspended, inactive or otherwise
not in service, including the facilities described in Schedule “B”;


 


“Indemnification Notice” has
the meaning given to that term in Section 8.6;


 


“Indemnified Environmental Liabilities”
has the meaning given to that term in Section 8.3(a);


 


“Indemnified Environmental Matters”
has the meaning given to that term in Section 8.3(a);


 


“Indemnified Party” has the
meaning given to that term in Section 8.6;


 


“Indemnifying Party” has the
meaning given to that term in Section 8.6;


 


“Information Memorandum” means
the Confidential Information Memorandum for the Rangeland Business Unit dated
June, 2003;


 


“Insurance Policies” has the
meaning given to that term in Section 2.8(a);


 


“Interest Amount” has the
meaning given to that term in Section 2.2(a)(iv);


 


“Interim Working Capital Amount”
has the meaning given to that term in Section 2.4(a);


 


“Inventory” means all pipe
inventory, new or used spare parts, surplus used equipment, supplies,
chemicals, lubricants, fuels and other inventories of RPC used in the operation
of the Rangeland Pipeline System, including those materials located in the
storage yards or warehouses at the Rangeland Pipeline System offices at Olds
and Pincher Creek or stations at Sundre, Pincher Creek and Hartell;


 


“Investment Canada Act” means
the Investment
Canada Act, R.S.C. 1985, c. 28 (1st Supp.);


 


10

















 


“LACT Facilities” means the
lease automatic custody transfer facilities where crude oil, condensate and/or
butane is delivered from third parties’ facilities into the main line
transmission systems and gathering systems used in the Rangeland Pipeline
Business, which facilities are owned by RPC and are located on or near the site
of facilities owned by those third parties, including those locations described
in Part 4 of Schedule “A”;


 


“Leave” means those Employees
who are receiving short-term disability benefits or are on family and medical,
medical/long-term disability, administrative or military leave or any other
type of leave that entitles the Employee to reinstatement upon completion of
the leave under the applicable leave policies of Seller or other members of the
BP Group;


 


“Level 1 Threshold” has the meaning given to that term in
Section 8.13(a);


 


“Level 2 Threshold” has the meaning given to that term in
Section 8.13(b);


 


“Licences” means the Rangeland
Licences and the Aurora Licences;


 


“Line Fill and Product Inventory”
means the crude oil, condensate and butane contained within the storage tanks,
storage spheres and pipelines forming part of the Pipeline Systems, but
excluding for greater certainty residue hydrocarbon product located in storage
tanks and spheres that is not of merchantable quality;


 


“Line Fill and Product Inventory Amount”
has the meaning given to that term in Section 2.3;


 


“Losses” means any and all
costs, claims, losses, liabilities, obligations (including corrective and
remedial obligations), damages and expenses (including reasonable legal fees
and expenses in accordance with Section 8.9, but excluding any liability
relating to consequential damages, lost profits or punitive damages);


 


“Other RMC Material Agreements”
means the agreements and entitlements described in Schedule “J”;


 


“Other Tangibles” means all
tangible property owned by RPC and used exclusively in the operation of the
Rangeland Pipeline System, including tools, office furniture, computers and
computer equipment and other office equipment, as described in
Schedule “C”, but excluding such assets which form part of the Rangeland
Pipeline System or the Inventory;


 


“Parties” means Seller and
Buyer, and “Party” means any one of them;


 


“Partnership” has the meaning
given to that term in Section 10.2(a);


 


11

















 


“Permits” means all of the
permits, certificates, licences, orders, exemptions, authorizations and
approvals or other instruments required by any Governmental Authority or
otherwise by the Applicable Laws in conjunction with the ownership,
maintenance, operation or use of the Rangeland Business Unit, including those
required in respect of matters pertaining to the Environment and the Licences;


 


“Permitted Liens” means (i)
all caveats and other instruments presently registered against the certificates
of title to the lands described in Part 1 of Schedule “D”; (ii)
mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or
incurred in the ordinary course of business, liens arising under original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business, liens for taxes and
other governmental charges which are not due and payable or which may
thereafter be paid without penalty or which are being contested in good faith
and liens relating to environmental or safety conditions; (iii) other
imperfections of title, restrictions or encumbrances, if any, which
imperfections of title, restrictions or encumbrances do not, individually or in
the aggregate, materially adversely impair the continued use and operation of
the assets to which they relate in the operation of the Rangeland Business Unit
as currently conducted by the Seller Group; (iv) easements, covenants,
conditions, rights-of-way, minor title exceptions and other similar
restrictions; (v) any conditions that would be shown on an accurate survey or
upon a personal inspection of the Rangeland Pipeline Business Real Property;
(vi) existing leases, licenses and similar agreements; (vii) zoning, building,
fire, health, environmental and pollution control laws, ordinances, rules and
safety regulations and other similar restrictions; (viii) the rights of the
owners of outstanding oil, gas and mineral interests and/or their lessees, to
explore for, drill, produce and develop said oil, gas and minerals owned by
them in, on and under said lands, together with the right to use as much of the
surface of said lands as is reasonably necessary to exercise their rights to
explore for and extract said oil, gas and minerals from said lands; and (ix)
acts done or suffered to be done by, and judgments against, Buyer and those
claiming by, through or under Buyer;


 


“Person” means an individual,
corporation, partnership, association, trust, limited liability company or any
other entity or organization, including a government or political subdivision
or agency, unit or instrumentality thereof;


 


“Pipeline Systems” means the
Aurora Pipeline and the Rangeland Pipeline System;


 


“Predecessors in Interest”
means:


 


(a)                                  with respect to RPC, Rangeland Pipe
Line Company Limited, Hudson’s Bay Oil and Gas Company Limited, Dome Petroleum
Limited, Amoco Canada Resources Ltd., Amoco Canada Resources Company, BP Canada
Energy Resources Company and any other Person (other than RPC) at any


 


12

















 


time having an interest in the
portion of the Rangeland Pipeline Business now owned by RPC or a part thereof;


 


(b)                                 with respect to RMC, Amoco Canada
Resources Ltd., Amoco Canada Resources Company, BP Canada Energy Resources
Company, Amoco Canada Petroleum Company Ltd., Amoco Canada Petroleum Company
Limited, Amoco Canada Petroleum Company, Seller and any other Person (other
than RMC) at any time having an interest in the Rangeland Marketing Business or
any part thereof; and


 


(c)                                  with respect to Aurora, Aurora Pipe
Line Company;


 


“Purchase Price” has the
meaning given to that term in Section 2.2(a);


 


“Rangeland Business Unit”
means the Rangeland Pipeline Business and the Rangeland Marketing Business;


 


“Rangeland Business Unit Assets”
means the Rangeland Pipeline Business Assets and the Rangeland Marketing
Business Assets;


 


“Rangeland Companies” means,
collectively, RPC, Aurora and RMC;


 


“Rangeland Licences” means the
licences issued under the Pipeline Act (Alberta) in respect of the
operation of the Rangeland Pipeline System, including those described in Part 2
of Schedule “F”;


 


“Rangeland Marketing Business”
means the business conducted by RMC or its Predecessors in Interest for the
purchase and sale of crude oil, condensate and butane at transfer points along
the Pipeline Systems;


 


“Rangeland Marketing Business Assets”
means, collectively:


 


(a)                                  the Buy/Sell Agreements;


 


(b)                                 the Transportation Agreements;


 


(c)                                  the Other RMC Material Agreements;
and


 


(d)                                 the Line Fill and Product Inventory;


 


“Rangeland Miscellaneous Interests” means, collectively:


 


(a)                                  all contracts, agreements and
documents relating to the ownership, maintenance, operation or use of the
Rangeland Pipeline System, Other Tangibles, Rangeland Pipeline System Real
Property, Inventory or


 


13

















 


Transferable Software to which
RPC is a Party, including those described in Part 1 of Schedule “F”;


 


(b)                                 the Permits held by RPC, including
the Rangeland Licences;


 


(c)                                  the radio licences held by RPC,
including those described in Part 3 of Schedule “F”;


 


(d)                                 the leasehold interests in equipment
leased by RPC;


 


(e)                                  all drawings, specifications,
construction reports and other detail relating to the design, construction and
operation of the Rangeland Pipeline System owned by RPC; and


 


(f)                                    all of the right and benefit of any
warranties under purchase agreements pursuant to which RPC acquired goods or
services;


 


“Rangeland Pipeline Business”
means the business conducted by RPC (or its Predecessors in Interest) and
Aurora (or its Predecessors in Interest) through ownership and operation of the
Rangeland Pipeline System and Aurora Pipeline, respectively;


 


“Rangeland Pipeline Business Assets”
means the RPC Assets and the Aurora Assets;


 


“Rangeland Pipeline Business Real
Property” means the Aurora Pipeline Real Property and the Rangeland
Pipeline System Real Property;


 


“Rangeland Pipeline System”
means the bi-directional crude oil, condensate and butane pipeline system owned
by RPC, commonly referred to as the Rangeland Pipeline, consisting of the
following:


 


(a)                                  the main line transmission systems
described in Part 1 of Schedule “A”;


 


(b)                                 the gathering systems consisting of
the laterals listed in Part 2 of Schedule “A”;


 


(c)                                  the pump stations, meter stations
and terminals listed and described in Part 3 of Schedule “A”;


 


(d)                                 the LACT Facilities; and


 


(e)                                  the Inactive Facilities;


 


including all buildings and
fixtures, line pipe, pipe connections, risers, electrical equipment, motors,
generators, valves, gauges, pig launchers and receivers, pipeline tankage,
storage spheres, pumps, pump drivers and related pumping machinery and
equipment, meters, metering equipment and related measuring and control
equipment,


 


14

















 


vessels and racks used or
associated exclusively with the pipeline system described above;


 


“Rangeland Pipeline System Real Property”
means all lands owned or leased by RPC, or in respect of which RPC
has an easement, right-of-way, right of access, right of entry, governmental
entry and access right, crossing agreement and consent, surface lease, option
to lease, option to purchase land, licence of occupation, pipeline installation
lease, licence or any other right to enter upon, use, enjoy or occupy the
surface of any land, upon which the Rangeland Pipeline System is or was
located, as applicable, including:


 


(a)                                  those lands in respect of which RPC
has fee simple title as described in Part 1 of Schedule “D”;


 


(b)                                 those lands in respect of which RPC
has a lease, easement, right-of-way or other right of access as described in
Part 2 of Schedule “D”; and


 


(c)                                  those easements, rights-of-way and
other access rights described in Part 3 of Schedule “D”, in which one or
more pipelines or other facilities other than pipelines and facilities forming
part of the Rangeland Pipeline System is located;


 


“Release” means any
unauthorized release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration of Hazardous Substances
into or through the Environment or into or out of any of the Rangeland Pipeline
Business Assets that is not authorized under HSE Laws;


 


“Restricted Activity” has the
meaning given to that term in Section 5.1(e);


 


“Rights-of-Way” means
easements, rights-of-way, permits, licences or other rights of access;


 


“Rights-of-Way Losses” means
Losses arising from disruption in the operation of the Rangeland Pipeline
Business resulting from the absence or invalidity of any Rights-of-Way
constituting part of or relating to the Rangeland Pipeline Business Assets;


 


“RMC” means Rangeland
Marketing Company, a company formed under the laws of Nova Scotia;


 


“RMC Shares” means the one
hundred thousand and one (100,001) common shares in the capital of RMC
currently issued in the name of Seller;


 


“ROFO  Agreement” means the letter
agreement dated October 29, 2001, among BP Corporation North America Inc.,
BP Pipelines (North America) Inc. and The Anschutz Corporation, the rights,
title and interest in which ROFO Agreement were assigned by


 


15

















 


The Anschutz Corporation to
Rocky Mountain Pipeline System LLC by an Assignment and Assumption Agreement
dated November 8, 2001 and by Rocky Mountain Pipeline System LLC to Buyer
by an Assignment of ROFO Rights dated as of February 23, 2004;


 


“RPC” means Rangeland Pipeline
Company, a company formed under the laws of Nova Scotia;


 


“RPC Assets” means,
collectively, the following:


 


(a)                                  the Rangeland Pipeline System;


 


(b)                                 the Other Tangibles;


 


(c)                                  the Rangeland Pipeline System Real
Property;


 


(d)                                 the Inventory;


 


(e)                                  the Transferable Software; and


 


(f)                                    the Rangeland Miscellaneous
Interests;


 


“RPC Shares” means the one
hundred thousand and one (100,001) common shares in the capital of RPC
currently issued in the name of Seller;


 


“Seller Group” means,
collectively, Seller and the Rangeland Companies;


 


“Seller Indemnified Parties”
has the meaning given to that term in Section 8.1;


 


“Seller Information” means all
information concerning Seller and/or any other member of the BP Group, other
than information that relates exclusively to the Rangeland Business Unit, the
Rangeland Companies or the Rangeland Business Unit Assets and other than any
such information that is available to the public on the Closing Date, or
thereafter becomes available to the public, other than as a result of a breach
of Section 5.2(b);


 


“Seller’s Interest Rate” means
the rate per annum for 3 month Government of Canada Treasury Bills from time to
time, as posted on Bloomberg screen GGR, plus 0.025%;


 


“Seller’s Review Period” has
the meaning given to that term in Section 2.4(b)(iii);


 


“Seller’s Tax Matter” has the
meaning given to that term in Section 9.5(a);


 


“Seller Vacation Policy” has
the meaning given to that term in Section 6.9;


 


“Shares” means, collectively,
the RPC Shares, the Aurora Shares and the RMC Shares;


 


16

















 


“Subject Instrument” has the
meaning given to that term in Section 5.3(b)(i)(A);


 


“Subject Transaction” has the
meaning given to that term in Section 9.8(a);


 


“Tax Act” means the Income Tax
Act (Canada);


 


“Taxes” means all taxes,
charges, fees, imposts, duties, levies, withholdings or other assessments
imposed by any Governmental Authority, including environmental taxes, excise
taxes, customs, duties, utility, property, income, capital, sales, use, value
added, transfer and fuel taxes, and any interest, fines, penalties or additions
to tax attributable to or imposed on or with respect to any such assessment,
including all applicable income, capital, sales, use, excise, business,
occupation or other tax, if any, relating in any way to this Agreement or any
other service, supply or operating agreement;


 


“Tax Notice” has the meaning
given to that term in Section 9.6;


 


“Third Party Claim” has the
meaning given to that term in Section 8.7(a);


 


“Threshold” has the meaning
given to that term in Section 8.11;


 


“Transferable Software” means
the information technology software as described in Schedule “E”;


 


“Transferred Employees” means
all Employees who accept employment with the Employer pursuant to the offers
described either in Section 6.2 or in Section 6.3;


 


“Transition Services Agreement”
means an agreement between Buyer and Seller in the form attached hereto as
Schedule “N”;


 


“Transportation Agreements”
means the transportation agreements and other entitlements described in
Schedule “I”;


 


“Working Capital” means, with
respect to a Rangeland Company as at a specified date, its Current Assets as at
such date less its Current Liabilities as at such date, which for greater
certainty may be a positive or a negative amount;


 


“Working Capital Amount” means
the aggregate amount of Working Capital in the Rangeland Companies on the
Working Capital Date; and


 


“Working Capital Date” means
the first day of the calendar month in which the Closing Date occurs.


 


1.2                               Derivatives


 


Where a term is defined in this
Agreement, a capitalized derivative of such term shall have a corresponding
meaning unless the context otherwise requires.


 


17

















 


1.3                               References


 


In this Agreement, references
to:


 


(a)                                  “this Agreement”, “hereof”,
“hereto”
or “hereunder”
and similar expressions mean and refer to this Agreement and not to any
particular provision of this Agreement;


 


(b)                                 Articles or Sections are to articles
or sections in or to this Agreement, unless otherwise stated;


 


(c)                                  Schedules are to schedules attached
to this Agreement, each of which is hereby incorporated and made a part of this
Agreement for all purposes as if set forth in full herein;


 


(d)                                 “including” means “including,
without limitation,” and “includes” and other derivatives thereof
shall have corresponding meanings; and


 


(e)                                  a time of day means that time in
Calgary, Alberta, unless otherwise specified.


 


1.4                               Headings and
Division


 


The division of this Agreement
into Articles and Sections and the provision of headings in this Agreement are
for convenience of reference only and shall not affect the construction or the
interpretation of this Agreement.


 


1.5                               Extended Meanings


 


In this Agreement, words
importing the singular shall include the plural and vice versa and words
importing gender shall include the masculine, feminine and neuter genders, all
as may be applicable by the context.


 


1.6                               References to
Agreements or Statutes


 


Any reference in this Agreement
to an agreement shall, unless the context otherwise requires, mean and refer to
such agreement as modified, amended, restated or supplemented from time to
time, and a reference to any statute is a reference to it as re-enacted,
varied, amended, modified, supplemented or replaced from time to time.


 


1.7                               Currency


 


Unless otherwise noted in this
Agreement, all amounts payable under this Agreement are payable in Canadian
dollars and references in this Agreement to monetary amounts are references to
lawful currency of Canada.


 


18

















 


1.8                               Accounting Terms


 


Unless otherwise noted in this
Agreement, all items of revenue, expense, cost, liability or disposition
proceeds and all determinations with respect to accruals in respect thereof and
all accounting matters or terms in this Agreement shall be determined or
construed in accordance with GAAP, whether or not so stated.


 


1.9                               Knowledge


 


For purposes of this Agreement,
“knowledge,”
when used in the phrase “Seller’s knowledge” (or other variations
thereof) in this Agreement means, and shall be limited to, the actual knowledge
(without independent investigation) of Gerald Maxwell, Ed Scheibelhut, Daniel
Tober and Richard Danilkewich.


 


1.10                        Schedules


 


The following Schedules are
attached to, incorporated by reference in and form part of this Agreement:


 


Schedule “A”                      Active Pipeline System Particulars


Part 1                                                Main Lines


Part 2                                                Gathering System


Part 3                                                Pump Stations, Meter Stations and
Terminals


Part 4                                                LACT Facilities


Schedule “B”                        Inactive Facilities Particulars


Part 1                                                Pump Stations, Meter Stations and
Terminals


Part 2                                                LACT Facilities


Part 3                                                Removed Lines


Schedule “C”                        Other Tangibles


Schedule “D”                       Rangeland Pipeline System Real
Property


Part 1                                                Fee Simple Property


Part 2                                                Leases, Easements, Rights-of-way,
Other Access Rights


Part 3                                                Common Rights-of-way


Schedule “E”                         Transferable Software


Schedule “F”                         Rangeland Miscellaneous Interests


Part 1                                                Contracts and Arrangements


Part 2                                                Licences and Permits


Part 3                                                Radio Licences


Schedule “G”                        Excluded Assets


Part 1                                                Excluded Information Technology


Part 2                                                Excluded Assets and Property


Part 3                                                Excluded Contracts


Part 4                                                Excluded Licences and Permits


Schedule “H”                       Buy/Sell Agreements


Schedule “I”                            Transportation Agreements


Schedule “J”                           Other RMC Material Agreements


Schedule “K”                       Aurora Pipeline Particulars


Part 1                                                Aurora Pipeline Real Property


 


19

















 


Part 2                                                Aurora Licences


Schedule “L”                         Employees and Contractors


Part 1                                                Employees


Part 2                                                Contractors


Part 3                                                Severance Plan


Part 4                                                Benefits


Schedule “M”                    Procedure for Determining Line Fill
and Product Inventory Amount


Schedule “N”                       Transition Services Agreement


Schedule “O”                       Guarantee


Schedule “P”                         Certificates of Insurance


 


1.11                        Interpretation if
Closing Does Not Occur


 


In the event that Closing does
not occur, each provision of this Agreement which presumes that Buyer has
acquired the Shares shall be construed as having been contingent upon Closing
having occurred.


 


ARTICLE 2

PURCHASE AND SALE


 


2.1                               Purchase and Sale
of the Shares


 


Subject to the terms and
conditions of this Agreement, for the consideration specified in
Section 2.2(a), Seller shall sell, assign, transfer and convey to:


 


(a)                                  PipelineCo, and PipelineCo shall
purchase and receive from Seller, Seller’s entire right, title and interest in
and to the RPC Shares and the Aurora Shares; and


 


(b)                                 MarketingCo, and MarketingCo shall
purchase and receive from Seller, Seller’s entire right, title and interest in
and to the RMC Shares;


 


in each case on the Closing
Date.


 


2.2                               Payment


 


(a)                                  Purchase Price.  As
consideration for the purchase of the Shares, Buyer shall pay to Seller in cash
the following amounts (collectively, the “Purchase Price”):


 


(i)                                     an amount (the “Base Price”) equal to one
hundred thirty million dollars ($130,000,000); plus


 


(ii)                                  an amount equal to the Line Fill and
Product Inventory Amount; plus or minus, as applicable


 


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(iii)                               an amount equal to the Working
Capital Amount; plus


 


(iv)                              an amount (the “Interest Amount”) equal to
interest at Buyer’s Interest Rate on that amount equal to the Base Price plus
the Line Fill and Product Inventory Amount plus the Interim Working Capital
Amount less the Deposit (including interest thereon at the Seller’s Interest Rate
from and including the date on which the Deposit was received by Seller to but
excluding the Closing Date), from and including the Working Capital Date to but
excluding the Closing Date;


 


which Purchase Price shall be
attributed among the RPC Shares, RMC Shares and Aurora Shares in accordance
with Section 9.4.


 


(b)                                 Deposit. 
Concurrent with its execution of this Agreement, Buyer shall pay to
Seller in immediately available funds, by wire transfer to an account
designated by Seller, the Deposit.  The
Deposit shall be non-refundable in that it shall not be returned to Buyer under
any circumstances, unless the transactions under this Agreement shall be
terminated by Buyer or by Seller, the Closing shall not have occurred and a
Deposit Return Event has occurred; in which event Seller shall transfer to
Buyer, in immediately available funds by wire transfer to an account designated
by Buyer, a cash amount equal to the Deposit plus interest thereon at the
Seller’s Interest Rate from and including the date on which the Deposit was
received by Seller to but excluding the date on which such Deposit plus
interest thereon is paid to Buyer.  In
all cases where Seller retains the Deposit, Seller shall retain the Deposit,
plus all interest thereon, as liquidated damages, not as a penalty and as its
sole remedy hereunder against Buyer for all breaches hereof prior to the
Closing or in connection with the termination of the transactions under this
Agreement.


 


(c)                                  Closing Date Payment. 
On the Closing Date, Buyer shall pay to Seller (or Seller’s designee),
in immediately available funds by wire transfer to an account designated by
Seller, an amount equal to:


 


(i)                                     the sum of the Base Price, the Line
Fill and Product Inventory Amount, the Interim Working Capital Amount (if positive)
and the Interest Amount; minus


 


(ii)                                  an amount equal to the Deposit
(which amount shall already have been paid by Buyer to Seller upon the
execution of this Agreement) plus interest thereon at the Seller’s Interest
Rate from and including the date on which the Deposit was received by Seller to
but


 


21

















 


excluding the Closing Date plus
the Interim Working Capital Amount (if negative).


 


(d)                                 Guarantee. 
Concurrent with the execution of this Agreement, Buyer shall cause to be
delivered to Seller the Guarantee, duly executed by Guarantor, together with an
opinion of Guarantor’s external legal counsel as to the capacity, authority and
execution of the Guarantee by Guarantor, in a form satisfactory to Seller, acting
reasonably.


 


2.3                               Line Fill and
Product Inventory Amount


 


The value of the Line Fill and
Product Inventory in the Pipeline Systems on the Working Capital Date (the “Line Fill
and Product Inventory Amount”) shall be determined by the Seller
prior to Closing in accordance with the procedure set forth in
Schedule “M”.  The amount so
determined shall be conclusive and binding upon the Parties.


 


2.4                               Working Capital


 


(a)                                  Interim Working Capital Amount. 
Seller shall, not later than two (2) Business Days prior to the Closing
Date, provide to Buyer a statement setting forth Seller’s good faith estimate
(the “Interim
Working Capital Amount”) of the Working Capital Amount.  The Interim Working Capital Amount shall be
included in the amount payable by Buyer to Seller on the Closing Date pursuant
to Section 2.2(c).


 


(b)                                 Post-Closing Adjustment of Working Capital Amount.


 


(i)                                     Seller, with the assistance of
E&Y, shall prepare and deliver to Buyer, within ninety (90) days after the
Closing Date, a statement setting forth Seller’s determination of the Working
Capital Amount (the “Final Working Capital Statement”) based
upon the actual information available from accounting systems of Seller and
other members of the BP Group and neither Seller nor E&Y will independently
verify the accuracy of such information. 
Seller will be responsible for E&Y’s fees and disbursements in
connection with the Final Working Capital Statement.  Buyer and Seller will make readily available to E&Y all
relevant books and records and all other items and information reasonably
requested by E&Y in connection with preparation of the Final Working
Capital Statement.


 


(ii)                                  Buyer shall, within thirty (30) days
after Seller’s delivery of the Final Working Capital Statement, complete its
review of the Final Working Capital Statement. 
In the event that Buyer disputes Seller’s determination of the Working
Capital Amount as set forth


 


22

















 


in the Final Working Capital
Statement,Buyer will so notify Seller, on or before the last Business Day of
such thirty (30) day period, in writing (the “Buyer’s Objection”), and such
notice will set forth a specific description of the basis of Buyer’s Objection
and the adjustments to the Final Working Capital Statement that Buyer believes
should be made.  In the event Buyer does
not deliver a Buyer’s Objection within such period, the Final Working Capital
Statement shall be conclusive and binding on the Parties.


 


(iii)                               Seller will have thirty (30) days
(the “Seller’s
Review Period”) from its receipt of the Buyer’s Objection to review
and respond to it, and the Parties will thereafter attempt in good faith to
reach an agreement with respect to any matters in dispute.  If Seller and Buyer are unable to resolve
their disagreement  within sixty (60) days following the
Seller’s Review Period, they will refer such disagreement to the Accounting
Firm, who will, acting as experts and not as arbitrators, determine, only with
respect to the remaining differences so submitted, whether and to what extent,
if any, the Final Working Capital Statement requires adjustment.


 


Seller and Buyer will direct the
Accounting Firm to use its best efforts to render its determination within
twenty (20) Business Days. The Accounting Firm’s determination will be
conclusive and binding upon Buyer and Seller. 
In resolving any disputed item, the Accounting Firm may not assign a
value to any item greater than the greatest value for such item claimed by
either Seller or Buyer or less than the smallest value for such item claimed by
either Seller or Buyer.  Buyer and
Seller will each pay one half (1/2) of the fees and disbursements incurred by
the Accounting Firm.  Buyer and Seller
will make readily available to the Accounting Firm all relevant books and
records and all other items and information reasonably requested by the
Accounting Firm.


 


(iv)                              The Working Capital Amount, as set
forth in the Final Working Capital Statement, shall be revised to reflect any
revisions agreed to by the Parties or determined by the Accounting Firm.  If the Working Capital Amount set forth in
the Final Working Capital Statement, as may be revised in accordance with the
immediately preceding sentence, is:


 


(A)                              greater than the Interim Working
Capital Amount by more than one million five hundred thousand dollars
($1,500,000), Buyer shall pay Seller an amount equal to the amount by which
such difference exceeds one million five hundred


 


23

















 


thousand dollars ($1,500,000)
together with interest thereon at the Buyer’s Interest Rate from the Working
Capital Date to but excluding the date of payment; or


 


(B)                                less than the Interim Working
Capital Amount by more than one million five hundred thousand dollars
($1,500,000), Seller shall pay Buyer an amount equal to the amount by which
such difference exceeds one million five hundred thousand dollars ($1,500,000)
together with interest thereon at the Seller’s Interest Rate from the Working
Capital Date to but excluding the date of payment;


 


which payment is to be made
within five (5) Business Days following the final determination of the Working
Capital Amount.  No further adjustments
shall be made to the Purchase Price with respect to the Rangeland Companies’
Working Capital.


 


2.5                               Assumed Liabilities


 


On Closing, Buyer hereby,
without any further action on the part of Seller or Buyer, assumes and agrees
to pay, perform and discharge each of the following liabilities:


 


(a)                                  all obligations, responsibilities,
liabilities, costs and other expenses of Seller or any other member of the BP
Group of whatever kind and nature, primary or secondary, direct or indirect,
absolute or contingent, whether based in common law or statute or arising under
written contract or otherwise, known or unknown, liquidated or unliquidated,
real or potential, tangible or intangible, whether or not accrued, caused by,
arising out of, incurred in connection with or relating in any way to, the
Shares or the Rangeland Business Unit (as heretofore, currently or hereafter
conducted) now existing or arising at any time before, on or after the Closing
Date, including as may have arisen or may arise under Applicable Laws; and


 


(b)                                 without limiting the generality of
the foregoing, all obligations, responsibilities, liabilities, costs and other
expenses of Seller or any other member of the BP Group caused by, arising from,
incurred in connection with or relating in any way to:


 


(i)                                     the Shares or the Rangeland Business
Unit under, relating to or otherwise required or incurred to achieve or
maintain compliance with HSE Laws, as the same are in effect from time to time;
and


 


(ii)                                  all other Environmental Matters and
Environmental Liabilities;


 


24

















 


irrespective of whether the
events or conditions giving rise to such obligations, responsibilities,
liabilities, costs and expenses occurred before, on or after the Closing Date;


 


(collectively, the “Assumed
Liabilities”, which for greater certainty shall not include the
Excluded Liabilities).


 


2.6                               Excluded Liabilities


 


The liabilities and obligations
of Seller or any other member of the BP Group assumed by Buyer pursuant to
Section 2.5 shall not include the following:


 


(a)                                  any liability or obligation of
Seller or any other member of the BP Group in respect of Taxes which may be or
may become payable solely by reason of the sale of the Shares to Buyer
hereunder;


 


(b)                                 any liability or obligation in
respect of Taxes of any of the Rangeland Companies in respect of, or accruing
within, the taxable periods ending on or before the Closing Date, save and
except for any Taxes included as a Current Liability in determining the Working
Capital Amount pursuant to Section 2.4;


 


(c)                                  liabilities or obligations in
respect of indebtedness for borrowed money of Seller or its Affiliates;


 


(d)                                 liabilities or obligations of Seller
or any other member of the BP Group with respect to salaries, benefits and
other costs pertaining to (i) the Employees arising or accruing prior to the
Working Capital Date, and    (ii)
Employees who do not become Transferred Employees arising or accruing at or
after the Working Capital Date;


 


(e)                                  any accounts payable owed by Seller
or any other member of the BP Group to any of the Rangeland Companies that was
included as a Current Asset of the applicable Rangeland Company in determining
the Working Capital Amount;


 


(f)                                    to the extent attributable primarily
to periods ending prior to the Closing Date, all liabilities or obligations
with respect to personal injury or wrongful death claims relating to the
pre-Closing operation of the Rangeland Pipeline Business, provided that this
clause shall not be deemed to include any liability or obligation for property
damage;


 


(g)                                 any responsibility for the payment
of any criminal sanctions and statutory fines or penalties imposed at any time
arising from the operation of the Rangeland Business Unit prior to the Closing
Date;


 


25

















 


(h)                                 any liabilities or obligations,
including those arising under HSE Laws, relating to the offsite burial or
disposal of Hazardous Substances to the extent attributable to periods ending
prior to the Closing Date, except for such liabilities or obligations (or any
increase in such liabilities or obligations) arising due to a change in
Applicable Laws with respect to such matters occurring after the date hereof;


 


(i)                                     any liabilities or obligations,
excluding any liabilities or obligations that pertain to Environmental
Liabilities or Environmental Matters (unless otherwise included in
Section 2.6(f)), relating to any litigation commenced or, to the knowledge
of Seller, threatened prior to the date hereof with respect to the pre-Closing
operation of the Rangeland Business Unit, to the extent attributable to periods
ending prior to the Closing Date, including any litigation by employees and any
liabilities or obligations relating to the proceeding initiated by Sinclair Oil
Corporation in the United States Federal Energy Regulatory Commission against
certain members of the BP Group (Docket Number OR02-6-000); and


 


(j)                                     any and all liabilities and
obligations relating to any of the Excluded Assets;


 


(collectively, the “Excluded
Liabilities”); provided that Buyer shall provide Seller with
reasonable access to (and permission to take copies of) all records and
reasonable access to all relevant personnel of the Rangeland Business Unit in
connection with the defence of any such matters or claims.


 


2.7                               Payment of
Inter-corporate Payables


 


Seller shall, and shall cause
each other applicable member of the BP Group to, make payment to the Rangeland
Companies of all accounts and notes payable and other indebtedness owed by
Seller or such member of the BP Group as of the Closing Date to the Rangeland
Companies within one hundred twenty (120) days of the Closing Date.


 


Buyer shall cause each of the
Rangeland Companies to make payment to Seller and each other applicable member
of the BP Group of all accounts and notes payable and other indebtedness owed
by the Rangeland Companies as of the Closing Date to Seller or other members of
the BP Group within one hundred twenty (120) days of the Closing Date.


 


2.8                               Damage or
Destruction Events


 


(a)                                  Attached to this Agreement as
Schedule “P” are certificates of insurance with respect to the Rangeland
Companies’ policies of insurance maintained at the date of this Agreement with
respect to third party liability, property and business interruption coverage
regarding the


 


26

















 


Pipeline Systems (the “Insurance
Policies”).  Seller shall
cause such Insurance Policies to be maintained until Closing.


 


(b)                                 If one or more Damage or Destruction
Events occurs on or after the date hereof and prior to Closing, then:


 


(i)                                     Seller shall cause the applicable
Rangeland Companies to diligently pursue recovery of any insurable loss
pursuant to the Insurance Policies to the extent applicable to the Damage or
Destruction Events and apply any insurance proceeds received by the Rangeland
Companies in respect of the Damage or Destruction Events to remediate damage
and repair or replace property destroyed by such Damage or Destruction Events;


 


(ii)                                  the Parties shall co-operate fully,
both before and after the Closing Date, in respect of any insurance claims that
may arise in relation to such Damage or Destruction Events and Seller shall
cause the Rangeland Companies not to settle, adjust or compromise any such
insurance claims prior to Closing except on terms and conditions that are
satisfactory to Buyer, acting reasonably, including the basis on which any
insurance proceeds in respect of such Damage or Destruction Events will be
held, distributed or used prior to Closing; and


 


(iii)                               if the estimated cost to remediate
damage and repair or replace property as a consequence of the Damage or
Destruction Events (as determined by Seller in good faith) will exceed five
million dollars ($5,000,000), then any deductible, self insurance, risk
retention or other amount that is not recoverable under the Insurance Policies
with respect to the Damage or Destruction Events in excess of five million
dollars ($5,000,000) in the aggregate shall be deemed to constitute a Current
Liability for the purposes of determining the Working Capital Amount;


 


provided that, notwithstanding
such Damage or Destruction Events, but subject to Section 7.1(e) and Section 7.2(e),
Buyer shall purchase the Shares and proceed with Closing.


 


27



















 


ARTICLE 3

CLOSING


 


3.1                               Closing


 


Subject to the Parties’
satisfaction or waiver of the conditions precedent set forth in Sections 7.1
and 7.2, the Closing shall take place at 10:00 a.m., at the offices of Stikeman
Elliott LLP at 4300 Bankers Hall West, 888 – 3rd Street S.W., Calgary, Alberta,
T2P 5C5, on the Closing Date.


 


3.2                               Seller’s Deliveries


 


On the Closing Date, Seller
shall deliver to Buyer the following:


 


(a)                                  share certificates representing the
RPC Shares and the Aurora Shares to PipelineCo and share certificates
representing the RMC Shares to MarketingCo, each duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank, in either case by the holder of record, together with
evidence satisfactory to Buyer (acting reasonably) that PipelineCo or its
nominee(s) have been entered in the share register of each of RPC and Aurora as
the registered holder of the RPC Shares and the Aurora Shares, respectively,
and MarketingCo or its nominee(s) have been entered into the share register of
RMC as the registered holder of the RMC Shares;


 


(b)                                 an incumbency certificate, duly
executed by an authorized officer of Seller, attesting to the due appointment
and authorization of individuals signing this Agreement on behalf of Seller,
any agreement contemplated hereby or any agreement related to the transactions
contemplated hereby;


 


(c)                                  a current certificate of good
standing in the jurisdiction of formation and a certificate of extra-provincial
registration in Alberta for each member of the Seller Group;


 


(d)                                 a duly executed resignation from and
release by each director of each of the Rangeland Companies effective as of the
Closing Date; and


 


(e)                                  an original of the Transition
Services Agreement, duly executed by Seller.


 


3.3                               Buyer’s Deliveries


 


On the Closing Date, Buyer shall
deliver to Seller the following:


 


(a)                                  the payment specified in
Section 2.2(c);


 


(b)                                 a certified copy of the
resolution(s) adopted by the Board of Directors of each of PipelineCo and MarketingCo
authorizing the transactions


 


28

















 


contemplated by this Agreement
and authorizing specified individuals to act on behalf of PipelineCo and
MarketingCo, respectively, in connection therewith;


 


(c)                                  an incumbency certificate, duly
executed by an authorized officer of each of PipelineCo and MarketingCo
attesting to the due appointment and authorization of individuals signing this
Agreement on its behalf, any agreement contemplated hereby or any agreement
related to the transactions contemplated hereby;


 


(d)                                 a current certificate of each of
PipelineCo’s and MarketingCo’s good standing in the jurisdiction of its
formation;


 


(e)                                  evidence of Investment Canada Act
and Competition Act approval; and


 


(f)                                    an original of the Transition
Services Agreement, duly executed by Buyer.


 


3.4                               Completion of
Transactions


 


All of the transactions
identified in this Article 3 shall occur simultaneously, and none shall be
completed until all are completed.


 


3.5                               Delivery of Books
and Records


 


The Parties shall make
reasonable arrangements for the transfer and delivery of the Books and Records
by Seller to Buyer as soon as practicable following Closing.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


4.1                               Seller’s
Representations and Warranties


 


Subject to the exceptions,
disclaimers and other matters set forth in this Section 4.1 and
Section 4.3, the matters set forth on the Schedules to this Agreement, any
written disclosures made to Buyer or its Affiliates prior to the date hereof, and
any other written disclosures made to Buyer or its Affiliates at any time from
the date hereof until the Closing Date in accordance with Section 5.1(c),
Seller hereby represents and warrants to Buyer as of the date of this Agreement
and as of the Closing Date (except with respect to those representations and
warranties that speak as to a particular date or time, which need only be true
and correct as of such date or time), acknowledging that Buyer is relying upon
such representations and warranties in entering into this Agreement and
completing the purchase and sale of the Shares, as follows:


 


(a)                                  Organization and Good Standing.  Each member of Seller Group is
a body corporate duly organized, validly existing and in good standing


 


29

















 


under the laws of its
jurisdiction of formation and is duly registered to carry on business as an
extra-provincial corporation in Alberta.


 


(b)                                 Authority of Seller. 
Seller has the corporate power and authority to enter into this
Agreement and the transactions contemplated hereby and to carry out its
obligations hereunder.  The execution,
delivery and performance of this Agreement and each of the transactions
contemplated hereby to which Seller is a party have been duly authorized, and
this Agreement has been duly executed and delivered, by Seller and constitutes
a valid and binding agreement of Seller enforceable against Seller in
accordance with its terms, except as such enforceability is limited by general
principles of equity and applicable provisions of bankruptcy, insolvency,
moratorium, reorganization or similar laws.


 


(c)                                  Consents. 
Other than with respect to: (i) the Competition Act, (ii) the Investment
Canada Act,  (iii) authorizations or other consents and approvals required
for, or as a consequence of, the sale of the Shares from all other applicable
Governmental Authorities, and (iv) 
consents required in connection with the Rights-of-Way relating to the
Pipeline Systems and certain agreements, contracts, licences, leases,
easements, rights-of-way and permits, including any consents that may be
required as a result of the conveyance of the RPC Assets and Rangeland
Marketing Business Assets from members of the BP Group to RPC and RMC,
respectively, and the subsequent sale of the RPC Shares to PipelineCo and RMC
Shares to MarketingCo hereunder, no consent, approval of or by, or filing with
or notice to any Person is required with respect to Seller in connection with
the execution, delivery or enforceability of this Agreement or the consummation
of the transactions provided for hereby, except where the failure to obtain
such consent or approval, make such filing or give such notice would not have a
material adverse effect on the Shares or the Rangeland Business Unit, taken as
a whole, as it is currently operated by the Seller Group.


 


(d)                                 No Breach. 
Subject to obtaining the consents described in Sections 4.1(c)(i), (ii),
(iii) and (iv), and, except for such matters as would not have a material
adverse effect on the Shares or the Rangeland Business Unit, taken as a whole,
as it is currently operated by the Seller Group, the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby and
the compliance by Seller with any of the provisions hereof does not and will
not (i) violate or conflict with, or result in a breach of, any provisions of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in termination of, or accelerate
the performance required by, or result in the creation of any lien or other
encumbrance upon the


 


30

















 


Shares or the Rangeland Business
Unit Assets under, any of the terms, conditions or provisions of the articles,
by-laws or other organizational documents of any member of the Seller Group or
under any material agreement, instrument or obligation to which any member of
the Seller Group is a party, or by which the Rangeland Business Unit Assets are
otherwise bound, or (ii) violate any Applicable Laws.


 


(e)                                  Authorized Capital. 
The authorized capital of RPC consists of one million (1,000,000) common
shares, of which only the RPC Shares are issued and outstanding.  The authorized capital of Aurora consists of
an unlimited number of common shares and an unlimited number of preferred
shares, of which only the Aurora Shares are issued and outstanding.  The authorized capital of RMC consists of
one million (1,000,000) common shares, of which only the RMC Shares are issued
and outstanding.


 


(f)                                    Title to Shares. 
All of the Shares are owned by Seller as legal and beneficial owner
thereof, free and clear of all mortgages, liens, charges, security interests,
adverse claims, pledges, encumbrances, options, rights of first refusal and
demands whatsoever, whether contingent or absolute, save and except for the
rights granted to Buyer pursuant to the ROFO Agreement.


 


(g)                                 Unissued Shares. 
Neither Seller nor any third party has any agreement or option, or any
right or privilege (including convertible securities, warrants or convertible
obligations of any nature) which is capable of becoming an agreement or option,
for the purchase, subscription, allotment or issuance of any of the unissued
shares in the share capital of any of the Rangeland Companies or of any other
securities of the Rangeland Companies, save and except for Buyer under the ROFO
Agreement.


 


(h)                                 Transferability of Shares.  There are no restrictions in
the constating documents, nor in the by-laws, of any of the Rangeland
Companies, nor are there any collateral agreements, including any unanimous
shareholders agreement or voting trust agreement, which would arise by
execution of this Agreement, completion of the sale by Seller to Buyer of the
Shares or otherwise, which would affect the transferability of the Shares from
Seller to Buyer, which will not have been complied with at Closing.


 


(i)                                     Real Property. 
Title to the Rangeland Pipeline System Real Property that is owned in
fee simple by RPC, as set out in Part 1 of Schedule ”D”, is good and
marketable, free and clear of all liens and encumbrances, except for Permitted
Liens.  Seller does not warrant title to
any other Rangeland Pipeline Business Real Property.


 


31

















 


(j)                                     Machinery and Equipment.  Other than with respect to
items leased from third parties, RPC and Aurora have, and as of the Closing,
subject to Section 5.1(b), will have, valid title to all major items of
machinery and equipment included in the Rangeland Business Unit Assets free and
clear of all liens and encumbrances, except for Permitted Liens.


 


(k)                                  Brokers. 
Seller has not retained any broker or finder or incurred any liability
or obligation for any brokerage fees, commissions, finders’ fees or similar
compensation with respect to this Agreement or the transactions contemplated
hereby for which Buyer or any of the Rangeland Companies may be liable.


 


(l)                                     Compliance With Laws. 
To Seller’s knowledge, other than with respect to HSE Laws (which are
addressed in Section 4.2), the Rangeland Business Unit is in compliance in
all material respects with all Applicable Laws, as they are currently enforced
with respect to the operation of the Rangeland Business Unit by the Seller
Group, except for violations, non-compliance or other matters, if any, which
would not have a material adverse effect on the operation of the Rangeland
Business Unit, taken as a whole, as it is currently operated by the Seller
Group.


 


(m)                               Permits.  The
Rangeland Companies possess all Permits necessary for the operation of the
Rangeland Business Unit, taken as a whole, as it is currently operated by the
Seller Group, except for (i) Environmental Permits (which are addressed in
Section 4.2) and (ii) such Permits for which the failure to possess would
not, individually or in the aggregate, have a material adverse effect on the
operation of the Rangeland Business Unit, taken as a whole, as it is currently
operated by the Seller Group. 
Notwithstanding the foregoing, this Section 4.1(m) shall not apply
to the Rangeland Pipeline Business Real Property.


 


(n)                                 Actions and Proceedings. 
Except for such matters as would not have a material adverse effect on
the operation of the Rangeland Business Unit, taken as a whole, as it is
currently operated by the Seller Group, and except for the proceedings
initiated by Sinclair Oil Corporation in the United States Federal Energy
Regulatory Commission against certain members of the BP Group (Docket Number
OR02-6-000):


 


(i)                                     there is no action, suit,
arbitration or regulatory proceeding or claim pending or, to Seller’s
knowledge, threatened against any member of the Seller Group and/or any member
of the BP Group involving or affecting the Rangeland Business Unit, and, other
than Permitted Liens, there are no decrees, injunctions, liens, orders or
judgments of or with any Governmental Authority outstanding


 


32

















 


against any member of the Seller
Group and/or any member of the BP Group relating to or affecting the Rangeland
Business Unit;


 


(ii)                                  no action, suit, arbitration or
regulatory proceeding is pending or, to Seller’s knowledge, threatened seeking
to restrain or prohibit this Agreement or any agreement, instrument or
transaction contemplated hereby, or to obtain damages, a discovery order or
other relief in connection with this Agreement or the transactions contemplated
hereby; and


 


(iii)                               there is no pending or, to Seller’s
knowledge, threatened condemnation or other governmental taking of any of the
Rangeland Pipeline Business Real Property.


 


(o)                                 Assets.  Except for (i) assets disposed
of in the ordinary course of business subsequent to the date hereof, (ii)
assets disposed of in accordance with Section 5.3(a), (iii) Rights-of-Way,
and (iv) Excluded Assets, the Rangeland Business Unit Assets include all
material assets which are reasonably required to operate the Rangeland Business
Unit immediately following the Closing Date substantially in the manner in
which the Rangeland Business Unit is currently operated by the Seller Group,
except for such assets the failure of which to include would not individually
or in the aggregate, have a material adverse effect on the Rangeland Business
Unit, taken as a whole, as it is currently conducted by the Seller Group.


 


(p)                                 Tangible Assets. 
The Pipeline Systems and Other Tangibles (excluding, for greater
certainty, all Rangeland Pipeline Business Real Property and the Inactive
Facilities) are free from material defects, have been maintained substantially
in accordance with normal industry practice, and are in substantially good
operating condition and repair for their age (taking account of their nature,
current usage, normal wear and tear and continued repair and replacement in
accordance with Seller’s past practice).


 


(q)                                 Rights-of-Way. 
Except for such matters as would not have a material adverse effect on
the operation of the Pipeline Systems, taken as a whole, as it is currently
operated by the Seller Group, there is no action, suit, arbitration or claim
pending or, to Seller’s knowledge, threatened against the Seller Group and/or
any member of the BP Group involving the invalidity of any agreement respecting
a Right-of-Way.


 


(r)                                    Financial Information.  Seller has delivered to Buyer
the Financial Information.  The
Financial Information fairly presents in all material aspects the financial
information it purports to present as of the dates set


 


33

















 


forth in the E&Y Report, the
Information Memorandum and the Financial Updates.


 


(s)                                  Subsequent Events.  Since September 30, 2003 or the end of any
subsequent financial quarter or other period prior to the Closing Date in
respect of which Seller has provided a Financial Update to Buyer (or an
Affiliate), there has not occurred any event that would constitute a material
adverse effect on the Rangeland Business Unit, taken as a whole, as it is
currently conducted by the Seller Group.


 


(t)                                    Material Contracts. 
The Seller Group has not received as of the date hereof written notice
of breach of agreements set forth in Schedules “F”, “H”, “I” and “J” that
individually or taken together would be material to the Rangeland Business
Unit, taken as a whole, as it is currently operated by the Seller Group.  The Seller Group has not executed any
agreement calling for, after the date hereof, (i) capital expenditures relating
to the Pipeline Systems in excess of eight hundred thousand dollars ($800,000)
in the aggregate or (ii) the payment of any bonus or salary to any Employee
involving an aggregate amount in excess of two hundred thousand dollars
($200,000).


 


(u)                                 Collective Bargaining Agreements.  The Seller Group is not a party
to a collective bargaining agreement and is not currently negotiating any such
agreement with respect to any Employees. 
No complaint against the Seller Group is currently pending before the
Labour Relations Board that would have a material adverse effect on the
Rangeland Business Unit, taken as a whole, as it is currently operated by the
Seller Group.


 


(v)                                 Preferential Transfer Rights.  At Closing, Seller will not be
subject to any contract or commitment that requires Seller to sell, transfer or
otherwise dispose of any of the Shares or Rangeland Business Unit Assets, other
than this Agreement and the ROFO Agreement.


 


(w)                               Rangeland Companies’ Assets. 
None of the Rangeland Companies have ever owned or otherwise held any
material assets of any kind unrelated to the Rangeland Business Unit, have ever
conducted any material business other than pertaining to the Rangeland Pipeline
Business or the Rangeland Marketing Business, have ever had any employees
(other than officers) and have ever been a party to any contract other than
contracts in relation to the Rangeland Pipeline Business or the Rangeland
Marketing Business.


 


(x)                                   Rangeland Companies’ Liabilities. 
None of the Rangeland Companies have ever incurred any material
obligations or material liabilities of any


 


34

















 


kind, absolute or contingent,
liquidated or unliquidated, except for their obligations arising under, in
connection with or related to the Rangeland Pipeline Business or the Rangeland
Marketing Business.


 


(y)                                 Residency. 
Seller is not a non-resident of Canada within the meaning of the Tax
Act.


 


(z)                                   Prepaid Amounts. The Rangeland Companies do not have
any obligations to any other parties to sell or deliver crude oil or other
hydrocarbons to any such parties after the Working Capital Date without being
entitled in due course after such delivery to receive and retain full payment therefor.


 


4.2                               Environmental
Representations and Warranties


 


(a)                                  Environmental Representations.   Subject
to the exceptions, disclaimers and other matters set forth in this
Section 4.2 and Section 4.3, the matters set forth on the Schedules
to this Agreement, the Disclosed Environmental Liabilities, any written
disclosures made to Buyer or its Affiliates prior to the date hereof, and any
other written disclosures made to Buyer or its Affiliates at any time from the
date hereof until the Closing Date in accordance with Section 5.1(c), to
Seller’s knowledge, as of the date hereof and as of the Closing Date:


 


(i)                                     all Environmental Permits necessary
for the operation of the Pipeline Systems as they are currently operated by the
Seller Group have been obtained and are in effect and, where applicable,
applications for renewal thereof have been timely filed, except where the
failure to obtain such Environmental Permits or have them in effect or file for
such renewals would not, individually or in the aggregate, have a material
adverse effect on the Rangeland Business Unit, taken as a whole, as it is
currently operated by the Seller Group;


 


(ii)                                  all environmental control equipment
necessary for the operation of the Pipeline Systems  as they are currently
operated by the Seller Group is in substantial compliance with HSE Laws, as
they are currently enforced with respect to the operation of the Pipeline
Systems by the Seller Group, is installed at the location of the Pipeline
Systems, and such equipment is operating in a manner sufficient to achieve and
maintain such compliance under normal operating conditions, except where the
failure to be in such compliance would not, individually or in aggregate, have
a material adverse effect on the Rangeland Business Unit, taken as a whole, as
it is currently operated by the Seller Group;


 


35

















 


(iii)                               there are no existing or known
Environmental Liabilities, or existing or known violations of, or reportable
spills that require remediation under, Environmental Permits or HSE Laws, as
they are currently enforced with respect to the operation of the Pipeline
Systems  by
the Seller Group, which, individually or in the aggregate, would have a
material adverse effect on the Rangeland Business Unit, taken as a whole, as it
is currently operated by the Seller Group; and


 


(iv)                              there has been no burial of
Hazardous Substances at any location comprising part of the Rangeland Pipeline
Business Real Property by Seller or RPC’s Predecessors in Interest in the
conduct of the Rangeland Pipeline Business at any time prior to the date hereof
that requires remediation under Environmental Permits or HSE Laws, as they are
currently enforced with respect to the operation of the Pipeline Systems by the
Seller Group.


 


(b)                                 Limitation. 
The representations and warranties set forth in Section 4.2(a)
represent the sole and exclusive representations and warranties of Seller with
respect to Environmental Matters, including any matters arising under or
relating to HSE Laws.


 


4.3                               Disclaimers


 


Except as otherwise expressly
set forth in this Agreement and the instruments, documents and agreements
executed in connection with the transactions contemplated hereby:


 


(a)                                  neither Seller nor any other member
of the BP Group makes any representations or warranties of any kind or nature,
express or implied, at law or in equity, with respect to itself, the Shares,
the Rangeland Companies, the Rangeland Business Unit, the Rangeland Business
Unit Assets, the Assumed Liabilities or any portion thereof, and Seller and the
other members of the BP Group expressly disclaim any implied warranties or any
representation or warranty as to value.


 


(b)                                 Buyer expressly acknowledges that it
is relying on its own examination of the Rangeland Companies and the Rangeland
Business Unit Assets, and is taking the Rangeland Companies, including the
Rangeland Business Unit Assets owned by the Rangeland Companies, on an “as is,
where is” basis and “with all faults”.


 


(c)                                  neither Seller nor any other member
of the BP Group makes any representations or warranties with respect to (i) the
condition or merchantability of any of the Rangeland Business Unit Assets, (ii)
the


 


36

















 


fitness of any Rangeland
Business Unit Assets for any purpose, or (iii) the assignability, completeness
or contiguity of any Rights-of-Way, Permits, Rangeland Pipeline Business Real
Property and other property rights, and Seller and the other members of the BP
Group expressly disclaim any and all such representations and warranties of any
kind or nature.


 


(d)                                 Buyer expressly acknowledges that
none of Seller, any other member of the BP Group or any other Person has made
any representation or warranty, express or implied, at law or in equity, as to
the accuracy or completeness of any information regarding the Shares, the
Rangeland Companies, the Rangeland Business Unit, the Rangeland Business Unit
Assets or the Assumed Liabilities, except as expressly set forth in this
Agreement, and Buyer further agrees that none of Seller, any other member of
the BP Group or any other Person shall have or be subject to any liability to
Buyer or any other Person resulting from the distribution to Buyer or its
Affiliates of, or Buyer’s or its Affiliates’ use of, any such information,
including the Information Memorandum, the Financial Updates and any
information, document or material made available to Buyer or its Affiliates in
certain “data rooms”, management presentations or any other form in expectation
of the transactions contemplated by this Agreement.


 


(e)                                  Buyer expressly acknowledges the
disclaimers of Seller and the other members of the BP Group, including those
set forth in Sections 4.3(a), 4.3(b), 4.3(c) and 4.3(d), and Buyer further
acknowledges that: (i) there are uncertainties inherent in any estimates,
projections and other forecasts and plans provided by Seller and other members
of the BP Group to Buyer, including any such information contained in the
Information Memorandum and the Financial Information, (ii) Buyer is aware of
and familiar with such uncertainties, and (iii) Buyer takes full responsibility
for making its own evaluation of the adequacy and accuracy of any such
estimates, projections and other forecasts and plans (including the
reasonableness of the assumptions underlying such estimates, projections and
forecasts) in connection with the transactions contemplated by this
Agreement.  Accordingly, neither Seller
nor any other member of the BP Group makes any representations or warranties
with respect to such estimates, projections and other forecasts and plans
(including the reasonableness of the assumptions underlying such estimates,
projections and forecasts).  Buyer
acknowledges that it has had sufficient opportunity to make whatever
investigation it has deemed necessary and advisable for purposes of determining
whether or not to enter into this Agreement.


 


(f)                                    except with respect to the
representations and warranties in Sections 4.1 and 4.2, Buyer forever releases
and discharges Seller, the other members


 


37

















 


of the BP Group and their
respective directors, officers, servants, agents and employees from any claims
and all liability to Buyer or Buyer’s assigns and successors, as a result of
the use or reliance upon advice, information or materials pertaining to the
Shares, the Rangeland Companies, the Rangeland Business Unit or the Rangeland
Business Unit Assets which was delivered or made available to Buyer or its
Affiliates by Seller, the other members of the BP Group or their respective
directors, officers, servants, agents or employees prior to or pursuant to this
Agreement, including any evaluations, projections, reports and interpretative
or non-factual materials prepared by or for Seller, or otherwise in the
Seller’s possession.


 


4.4                               Buyer’s
Representations and Warranties


 


Each of PipelineCo and
MarketingCo hereby represents and warrants to Seller as of the date of its
execution of this Agreement and as of the Closing Date (except with respect to
those representations and warranties that speak as to a particular date or
time, which need only be true and correct as of such date or time),
acknowledging that Seller is relying upon such representations and warranties
in entering into this Agreement and completing the purchase and sale of the
Shares, as follows:


 


(a)                                  Organization and Good Standing.  It is a company duly organized,
validly existing and in good standing under the laws of Nova Scotia.


 


(b)                                 Authority of Buyer. 
It has the power and authority to enter into this Agreement and the
transactions contemplated hereby and to carry out its obligations
hereunder.  The execution, delivery and
performance of this Agreement and the transactions contemplated hereby have been
duly authorized, and this Agreement has been duly executed and delivered, by it
and constitutes its valid and binding agreement, enforceable against it in
accordance with its terms, except as such enforceability is limited by general
principles of equity and applicable provisions of bankruptcy, insolvency,
moratorium, reorganization or similar laws.


 


(c)                                  Consents. 
Other than with respect to (i) the Competition Act, (ii) the Investment
Canada Act, and (iii) authorizations or other consents and approvals required
for, or as a consequence of, the purchase and sale of the Shares from all other
applicable Governmental Authorities, no consent, approval of or by, or filing
with or notice to any other Persons is required with respect to Buyer in
connection with the execution, delivery or enforceability of this Agreement or
the consummation of the transactions provided for hereby.


 


(d)                                 No Breach. 
Subject to obtaining the consents described in Sections 4.4(c)(i), (ii)
and (iii), the execution and delivery of this Agreement and the


 


38

















 


consummation of the transactions
contemplated hereby and the compliance by it with any of the provisions hereof
does not and will not:  (i) violate or
conflict with, or result in a breach of, any provisions of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in termination of, or accelerate the
performance required by any of the terms, conditions or provisions of its
articles, by-laws or other organizational documents or under any material
agreement, instrument or obligation to which it is a party or (ii) violate any
Applicable Laws.


 


(e)                                  Litigation. 
No action, suit, arbitration or regulatory proceeding is pending or, to
its knowledge, threatened seeking to restrain or prohibit this Agreement, or
any agreement, instrument or transaction contemplated hereby, or to obtain
damages, a discovery order or other relief in connection with this Agreement or
the transactions contemplated hereby.


 


(f)                                    Brokers. 
It has not incurred any liability or obligation for any brokerage fees,
commissions, finders’ fees or similar compensation with respect to this
Agreement or the transactions contemplated hereby for which Seller will be
liable.


 


(g)                                 Availability of Funds.  It has sufficient cash
available to enable it to consummate the transactions contemplated by this
Agreement, to operate the Rangeland Business Unit for the reasonably
foreseeable future and to meet the financial obligations of the Rangeland
Business Unit as such are presently known to or reasonably anticipated by
Buyer.


 


(h)                                 No Knowledge of Misrepresentations or Omissions.  Except for matters that are the
subject of written disclosures made to Seller on or before the Closing Date, it
has no knowledge that any representation or warranty of Seller in this
Agreement or any agreement contemplated hereby is not true and correct in all
material respects and it has no knowledge of any material errors in, or
material omissions from, the Schedules to this Agreement or attachments to any
agreement contemplated hereby.


 


(i)                                     Investment Canada Act.  It shall comply with the Investment
Canada Act.


 


(j)                                     Purchaser as Principal.  It is acquiring the RPC Shares
and the Aurora Shares or the RMC Shares, as applicable, in its capacity as
principal, and is not purchasing those Shares for the purpose of resale or
distribution to a third party.


 


39

















 


4.5                               No Consequential
Damages


 


Except as otherwise expressly
set forth in this Agreement, neither Buyer nor Seller shall be liable for
special, punitive, exemplary, consequential, incidental or indirect losses or
damages as a result of the performance or non-performance of its obligations
under this Agreement, or its acts or omissions related to this Agreement,
whether or not arising from sole, joint or concurrent negligence or strict
liability or otherwise.  The above
limitation of liability shall apply to indirect liability involving suits
brought against third parties who, directly or through one or more other
parties, have a right of indemnification, interpleader, cross-claim,
contribution or other right of recovery against Buyer or Seller.


 


ARTICLE 5

COVENANTS


 


5.1                               Covenants of Seller


 


Seller covenants and agrees as
follows:


 


(a)                                  Access and Information.  Subject to the provisions of
the Confidentiality Agreement and upon reasonable notice, Seller shall grant,
or cause to be granted, to Buyer the following access during normal business
hours throughout the period between the date of this Agreement and the Closing
Date to the Rangeland Business Unit Assets and the Books and Records and other
information relating to the operation of the Pipeline Systems.  During the periods specified above, Seller
shall use all commercially reasonable efforts to furnish, or cause to be
furnished, to Buyer and its representatives all data and information concerning
the specified matters which may reasonably be requested by Buyer and shall use
all commercially reasonable efforts to make available, or cause to be made
available, such personnel of Seller as may reasonably be requested for the
furnishing of such data and information. 
During this period, Buyer shall not contact or communicate with any
Employees or customers of or suppliers to the Rangeland Business Unit without
Seller’s prior written consent.  Buyer
shall indemnify and hold Seller and its Affiliates harmless against any and all
Losses suffered in connection with the exercise of Buyer’s rights under this
Section 5.1(a).  Notwithstanding
any provision in this Agreement to the contrary, Buyer’s obligations under this
Section 5.1(a) shall survive the termination of the transactions under
this Agreement and the consummation of the transactions contemplated hereby.


 


(b)                                 Conduct of Business. 
Except as provided on the Schedules attached hereto, from the date of
execution of this Agreement by Buyer to and including the Closing Date Seller
shall cause the Seller Group to:


 


40

















 


(i)                                     operate the Rangeland Business Unit
in the ordinary course of business consistent with past practice or as
described in the Information Memorandum;


 


(ii)                                  use commercially reasonable efforts
to maintain satisfactory relationships with Employees, suppliers, distributors,
customers and others having business relationships with the Rangeland Business
Unit;


 


(iii)                               use commercially reasonable efforts
to maintain the Rangeland Business Unit Assets in reasonably good operating
condition, normal wear and tear excepted;


 


(iv)                              maintain the Inventory and keep its
books of account, records and files, in each case in the ordinary course of
business, consistent with past practice; and


 


(v)                                 refrain from (A) amending,
modifying, waiving any rights under or terminating (or allowing the termination
of) any material contract forming part of the Rangeland Business Unit Assets,
except to the extent notice of termination has been given or received prior to
the date hereof or otherwise in the ordinary course of business, (B) disposing
of, selling or otherwise transferring any Rangeland Pipeline Business Real
Property, (C) disposing of, encumbering, selling or otherwise transferring any
of the material assets constituting Rangeland Business Unit Assets or other
rights of the Rangeland Business Unit (other than Rangeland Pipeline Business
Real Property, which is addressed in sub-paragraph (B) above), except in the
ordinary course of business, (D) commencing any new capital projects or making
any additional commitments for capital expenditures relating to the Rangeland
Business Unit in excess of eight hundred thousand dollars ($800,000) in the
aggregate, or (E) granting or agreeing to grant any bonus to any Employees,
except for any bonus approved prior to the date hereof or made in the ordinary
course of business, or enter into any contract of employment involving
aggregate annual salary in excess of two hundred thousand dollars ($200,000),
collective bargaining agreement or other labour contract with respect to any
such Employees outside of the ordinary course of business;


 


provided that Seller may: (I)
take any action to which Buyer consents (which consent shall not be
unreasonably withheld taking account of Buyer’s and Seller’s commercial
objectives with respect to the Rangeland Business Unit Assets); and (II) amend
the schedules to the agreements


 


41

















 


dated as of April 1, 2003
with respect to the conveyance of the RPC Assets and the Rangeland Marketing
Business Assets by members of the BP Group to RPC and RMC, respectively, to the
extent necessary to correspond with the schedules hereto; provided that Seller
shall provide a copy of the amendment to Buyer.  Notwithstanding the foregoing, the Rangeland Companies shall have
the right at any time prior to Closing to declare and pay a dividend. To the
extent a dividend is paid by any of the Rangeland Companies to Seller after the
Working Capital Date, the amount of the Closing Date payment in
Section 2.2(c) will be adjusted downward by the amount of the dividend
paid.


 


(c)                                  Schedules.


 


(i)                                     Prior to the Closing Date, Seller
shall notify Buyer of additions or changes to the Schedules to this Agreement
required to reflect events since the date of this Agreement or facts discovered
by Seller after the date hereof so as to cause Seller’s representations and
warranties contained herein (other than any which speak as to a particular
date) to be true and correct in all material respects as of the Closing
Date.  Notices given by Seller pursuant
to this Section 5.1(c) will be deemed to have amended the Schedules to
this Agreement, to have qualified the representations and warranties contained
in Sections 4.1 and 4.2, and to have corrected any misrepresentation or breach
of warranty that otherwise might have existed hereunder by reason of the fact,
circumstance, event or development (with the result that no misrepresentation
or breach shall be deemed to have occurred), in each case to the extent of the
disclosure contained in such notice, including for purposes of
Section 7.1(b).  For greater
certainty, Seller shall not be entitled to effect amendments to any of
Schedule ”N” (the Transition Services Agreement), Schedule ”O” (the
Guarantee) or Schedule ”P” (Certificate of Insurance) pursuant to this
Section 5.1(c).


 


(ii)                                  If such additions or changes would
have a material adverse effect on the Rangeland Business Unit, taken as a
whole, as it is currently operated by the Seller Group, the Parties shall
negotiate in good faith to determine a reasonable adjustment to the Purchase
Price to fully reflect the diminution in value and/or additional liability to
be suffered by Buyer resulting from such matters.  For purposes of this Section 5.1(c) only, such additions or
changes shall be deemed to have a material adverse effect on the Rangeland
Business Unit only if the aggregate adverse effect of such additions or changes
exceeds five million dollars ($5,000,000).


 


42

















 


(iii)                               In the event that the Parties are
unable to agree upon an adjustment to the Purchase Price prior to the Closing
Date, each Party agrees that the Closing will take place without delay as set
forth in this Agreement and Buyer shall pay the full Purchase Price.  The Parties further agree, upon the demand
of either Party, to submit the need for, and size of, any adjustment to the
Purchase Price to binding arbitration. 
A Party desiring to submit to arbitration any such matter shall furnish
its demand for arbitration in writing to the other Party within a ten (10) day
period commencing on the Closing Date. 
The arbitration shall be conducted before three (3) arbitrators who are
experienced in matters pertaining to the pipeline industry.  The arbitrators shall not be a past or
present officer, director or employee of either Party or any of its Affiliates.  The arbitration shall be governed by the Arbitration
Act (Alberta).  Should the
arbitrators render a decision in favour of Buyer for an adjustment in the
Purchase Price, Seller shall pay to Buyer such amount plus interest at the
Seller’s Interest Rate from the Closing Date to and including the date payment
is made.


 


(d)                                 Confidentiality. 
After the Closing, Seller shall maintain the confidentiality of all
information, documents and materials relating exclusively to the Rangeland
Business Unit, including all such materials which remain in the possession of
Seller, except to the extent that disclosure of any such information is
requested or required by law (by oral questions, interrogatories, requests for
information or other documents in legal proceedings, subpoena, civil
investigative demand or any other similar legal process) or legal or
administrative process or authorized by Buyer or reasonably occurs in
connection with disputes over the terms of this Agreement.  The provisions of this Section 5.1(d)
shall not apply to any information, documents or materials which are in the
public domain or shall come into the public domain, other than by reason of a
breach by Seller or the other members of the BP Group of its obligations
hereunder.  Furthermore, notwithstanding
the foregoing, Seller shall be permitted to disclose: (i) any confidential
information (A) to any other member of the BP Group or (B) as required to
operate Seller’s ongoing business, provided such member shall comply with the
terms of this Section 5.1(d); and (ii) this Agreement to a Person agreeing
to purchase the Shares from Seller, subject to Seller’s obligations under the
ROFO Agreement, on a confidential basis.


 


(e)                                  Non-Competition.  If
Closing occurs, Seller agrees that, during the Applicable Period (as defined
below), Seller will not, and will cause the other members of the BP Group not
to, undertake the construction and


 


43

















 


operation of, have any ownership
or financial interest in or otherwise manage or operate a pipeline or gathering
lateral constructed after the date of this Agreement that is connected to a
LACT Facility existing as of the date hereof for the purpose of transporting
any or all of crude oil, condensate or field-grade butane (the “Restricted
Activity”); provided that such restriction shall not apply so as to
preclude the acquisition and subsequent ownership by Seller or any of its
Affiliates of an entity which carries on a Restricted Activity, so long as the
value of the Restricted Activity does not constitute more than twenty percent
(20%) of the value of the entity.  For
purposes hereof, the “Applicable Period” in respect of crude oil
or condensate pipelines or gathering laterals is five (5) years after the
Closing Date and in respect of field-grade butane pipelines or gathering
laterals is three (3) years after the Closing Date.


 


(f)                                    Financial Encumbrances.  Seller
shall cause to be discharged from the applicable title documents respecting
Rangeland Pipeline Business Real Property any encumbrance registered thereon at
any time prior to the Closing Date against the Rangeland Companies or their
Predecessors in Interest relating to any loan or other indebtedness for
borrowed money made in favour of any such Persons prior to the Closing Date as
soon as commercially practical after being advised thereof by Buyer.


 


(g)                                 Mid-Alberta Pipeline.  If, at
any time during the period ending two (2) years from the date hereof, Seller or
any other member of the BP Group acquires ownership of the Mid-Alberta Pipeline
currently owned by Imperial Oil, Seller shall provide notice thereof to
Buyer.  PipelineCo or an Affiliate of
PipelineCo shall have the option, exercisable upon written notice to Seller at
any time within thirty (30) days following receipt of notice, to purchase the
Mid-Alberta Pipeline from Seller or the applicable member of the BP Group at
the all in cost paid by Seller or the applicable member of the BP Group and
otherwise on the same terms and conditions, mutatis mutandis, as such pipeline was
acquired by Seller or the applicable member of the BP Group.


 


5.2                               Covenants of Buyer


 


Buyer covenants and agrees as
follows:


 


(a)                                  Access. 
To the extent that any Excluded Assets owned by Seller or other members
of the BP Group are located at any owned or leased real property constituting
part of the Rangeland Business Unit Assets after the Closing Date, Buyer shall
grant to Seller and other members of the BP Group and their respective
representatives reasonable access to such property from and after the Closing
Date for a reasonable period of time


 


44

















 


not to exceed three hundred
sixty five (365) days in order to permit Seller and such Persons to review and
remove such Excluded Assets and make any other appropriate arrangements with
respect thereto.  Seller agrees that it
will consult with Buyer in advance of taking any such actions following the
Closing Date with a view towards establishing a mutually agreeable plan for
such review and removal so that these actions will not unreasonably interfere
with the normal operation of the Rangeland Business Unit.


 


(b)                                 Confidentiality.


 


(i)                                     Buyer acknowledges that all
information provided to any of it and its Affiliates, directors, officers,
employees, counsel, auditors, accountants, agents, advisors and other
representatives by Seller and other members of the BP Group and their
respective directors, officers, employees, counsel, auditors, accountants,
agents, advisors and other representatives is subject to the terms of the
Confidentiality Agreement, the terms of which are hereby incorporated herein by
reference.  Effective upon, and only
upon, the Closing, the Confidentiality Agreement shall terminate only with
respect to information provided to any of Buyer and its Affiliates, directors,
officers, employees, counsel, auditors, accountants, agents, advisors and other
representatives that relates solely to the Rangeland Business Unit; provided
that Buyer acknowledges that any and all information provided or made available
to any of it and its Affiliates, directors, officers, employees, counsel,
auditors, accountants, agents, advisors and other representatives by or on
behalf of Seller (other than information relating solely to the Rangeland
Business Unit) shall remain subject to the terms and conditions of the
Confidentiality Agreement on and after the Closing Date.


 


(ii)                                  From and after the Closing Date,
Buyer shall, and shall cause its Affiliates, directors, officers, employees,
counsel, auditors, accountants, agents, advisors and other representatives to,
keep Seller Information confidential following the Closing Date, except to the
extent that disclosure of any such Seller Information is requested or required
by law (by oral questions, interrogatories, requests for information or other
documents in legal proceedings, subpoena, civil investigative demand or any
other similar legal process) or legal or administrative process or authorized
by Seller or reasonably occurs in connection with disputes over the terms of
this Agreement.  Notwithstanding the
foregoing, Buyer shall be permitted to disclose Seller Information to any of
its Affiliates,


 


45

















 


provided such Affiliate shall
comply with the terms of this Section 5.2(b)(ii).  In connection with the Transferred
Employees, Buyer shall use commercially reasonable efforts, at Seller’s request
and at Buyer’s expense, to enforce existing confidentiality agreements and rights
requiring Employees to keep trade secrets confidential.


 


(c)                                  Title Policies.  Buyer
may procure, and shall pay the cost of the premium for, commitments or policies
from title insurance companies to provide owner’s title insurance policies with
respect to the portions of the Rangeland Pipeline Business Real Property;
provided, however, that Buyer’s ability or inability to obtain title insurance
(and without regard to (i) any exceptions contained therein and (ii) any title
insurance premium Buyer is required to pay in order to obtain such title insurance)
on such real property for any reason shall not cause there to be an adjustment
to the Purchase Price and shall not cause the Closing of the transactions
contemplated by this Agreement to be delayed.


 


(d)                                 Insurance. 
Buyer agrees that, from and after Closing, Buyer will, or will cause RPC
to, obtain and maintain insurance with respect to the RPC Assets on terms and
conditions satisfactory to comply with insurance requirements of the AEUB, from
time to time.


 


(e)                                  Removal of Seller Marks.  Buyer agrees that, within one
hundred twenty (120) days after the Closing Date or such shorter period of time
as may be stipulated pursuant to AEUB requirements or Applicable Law, Buyer
shall (i) remove, obliterate, cover or replace, as appropriate, all signs,
billboards, containers, storage tanks, storage vessels, drums, advertisements
or other media containing any service marks, trade names, trade dress or other
indicia of origin of Seller or any member of the BP Group, including the words
“Amoco” and “Standard,” any items that include the words “Amoco” or “Standard,”
the Amoco torch and oval design, the letters “BP,” any items that include the
word “BP,” the phrase “BP Oil,” the BP Group shield or the BP Group Helios
logo, the words “Dome” or “Hudson’s Bay Oil and Gas” and/or variants thereof
located on or appurtenant to any of the Rangeland Business Unit Assets,
including signs, billboards and advertisements or other media located at
offices and facilities related to the Rangeland Business Unit; and (ii) return
to Seller or, at Seller’s option, destroy (and certify such destruction to
Seller) all items and materials, including stationery, letterhead and purchase
orders, located at any of the Rangeland Business Unit Assets containing the
above described marks.  In addition,
Buyer agrees that, within one hundred (120) days after the Closing Date or such
shorter period of time as may be stipulated pursuant to AEUB requirements or


 


46

















 


Applicable Law, Buyer shall
replace all signs located along the Pipeline Systems, including at pump
stations, measurement stations, LACT Facilities, river crossings and road
crossings, that identify Seller or any other member of the BP Group as the
operator of such Pipeline Systems.


 


5.3                               Mutual Covenants


 


Buyer and Seller covenant and
agree as follows:


 


(a)                                  Regulatory Approvals.  Buyer
and Seller shall:


 


(i)                                     each file or cause to be filed with:


 


(A)                              the Competition Bureau any
notification required to be filed under the Competition Act; and


 


(B)                                the Investment Review Division of
Industry Canada any notification or application for review required to be filed
under the Investment Canada Act;


 


in each case with respect to the
transactions contemplated hereby, and Buyer and Seller shall bear the costs and
expenses of their respective filings; provided that Buyer alone shall pay the
filing fees in connection therewith. 
Buyer and Seller shall use their respective reasonable best efforts to:
(I) make such filings promptly (and in any event within fourteen (14) days)
following the date of execution of this Agreement by Buyer; (II) respond
promptly to any requests for additional information and documentary materials
made by the Competition Bureau and/or the Investment Review Division of
Industry Canada; (III) make any further filings that may be necessary, proper
or advisable in connection therewith; (IV) cause the waiting periods under the
Competition Act to expire or to obtain a no-action letter or advance ruling
certificate under the Competition Act at the earliest possible date; (V)
successfully complete the approval process under the Investment Canada Act at
the earliest possible date;  and (VI) resist in good faith, at each of
their respective cost and expense (including the institution or defence of legal
proceedings), any assertion that the transactions contemplated hereby should
not proceed to completion; all to the end of expediting consummation of the
transactions contemplated hereby.  Each
of Buyer and Seller shall consult with the other prior to any meetings, by
telephone or in person, with the staff of the applicable Governmental
Authorities and each of Buyer and Seller shall have the right to have a
representative present at any such meeting (except that Buyer, with respect to
Buyer’s application for


 


47

















 


review under the Investment
Canada Act, need only keep Seller apprised as to the status of Buyer’s meetings
with Industry Canada); and


 


(ii)                                  cooperate with each other and take
all reasonable steps necessary to obtain authorizations and other consents,
Permits and approvals for, or as a consequence of, the purchase and sale of the
Shares from all other applicable Governmental Authorities.


 


(b)                                 Specific Assignments.


 


(i)          (A)                                     With respect to any agreement,
contract, licence, lease, easement, Right-of-Way or Permit (a “Subject
Instrument”) which (1) is material to the operation of the Rangeland
Business Unit as it is currently operated by the Seller Group, and either (2)
required consent for the assignment thereof to RPC or RMC in connection with
the conveyance of the RPC Assets and the Rangeland Marketing Business Assets by
members of the BP Group to RPC and RMC, respectively, or (3) now requires
consent for the assignment thereof to RPC or RMC by reason of the change of
control respecting RPC and RMC that will occur upon consummation of the
transactions contemplated hereby, Seller shall take such actions as are
commercially reasonable and necessary, and Buyer shall cooperate fully with
Seller in all commercially reasonable respects, to effect assignment thereof as
of the Closing Date.  It is understood
that such actions by Seller shall not include any requirement of Seller to
expend money, commence any litigation or offer or grant any accommodation
(financial or otherwise) to any third party. 
In the event that Seller is unable to obtain the requisite approval for
assignment of any such Subject Instrument, or in the event such Subject
Instrument is required to be amended or supplemented and is not so amended or
supplemented as of the Closing Date, and such assignment is reasonably
necessary to conduct the operation of the Rangeland Business Unit in the
ordinary course of business without giving rise to a material adverse effect on
the Rangeland Business Unit, at the written request of Buyer on or before the
Closing Date (except where such action would be unlawful or prohibited by such
Subject Instrument), Seller shall (x) retain any such Subject Instrument and
shall enter into an arrangement with Buyer to provide the applicable Rangeland
Company with the benefits of such Subject


 


48

















 


Instrument, provided that the
applicable Rangeland Company shall perform Seller’s obligations thereunder
arising on or after the Closing Date (and indemnify Seller against Losses
suffered in connection therewith) until such Subject Instrument is assigned to
the applicable Rangeland Company or expires at the earliest opportunity in
accordance with its terms, or is properly amended or supplemented, and (y) take
all commercially reasonable and necessary actions required to assign to the
applicable Rangeland Company, or amend or supplement, any such Subject
Instrument as soon as practicable after the Closing Date.


 


(B)                                In addition to the obligations of
Seller under Section 5.3(b)(i)(A), from the Closing Date until the first
anniversary of the Closing Date, Seller shall take such actions as are
commercially reasonable and necessary, including expending money in an
aggregate amount not to exceed three million dollars ($3,000,000), and Seller
shall cooperate fully with Buyer in all commercially reasonable respects, to
remedy or cure the absence or invalidity of or defect in any easement,
right-of-way, permit, licence or other right of access forming part of the
Rangeland Pipeline Business Assets. 
Expenditures by Seller under this Section 5.3(b)(i)(B) shall not be
included for purposes of satisfying any of the limits under Section 8.11
but shall be included for purposes of determining the limit under
Section 8.13(c).


 


(ii)                                  Notwithstanding Seller’s obligations
pursuant to Section 5.3(b)(i), the assignment of any Subject Instrument
which requires consent for assignment, or amendment or supplement, may be
effected after the Closing Date.  The
Purchase Price shall not be subject to adjustment, and the Closing of the
transactions contemplated by this Agreement shall not be delayed, by reason of
any inability to obtain consent for assignment of any such Subject Instrument
or any such amendment or supplement. 
Buyer acknowledges that certain consents to the transactions
contemplated by this Agreement may be required from parties to Subject
Instruments (written or otherwise) to which any of Seller or other member of
the Seller Group is a party, and such consents may not be obtained (provided
that Seller has complied with its obligations under this
Section 5.3(b)).  Buyer agrees that
Seller shall not have any liability


 


49

















 


whatsoever to Buyer arising out
of or relating to the failure to obtain any consents that may have been or may
be required in connection with the transactions contemplated by this Agreement
or because of the default, acceleration or termination of any such Subject
Instrument as a result thereof (provided that Seller has complied with its
obligations under this Section 5.3(b)). 
Buyer further agrees that no representation, warranty or covenant of
Seller contained herein shall be breached or deemed breached and no condition
of Buyer shall be deemed not to be satisfied as a result of the failure to
obtain any consent or as a result of any such default, acceleration or
termination or any lawsuit, action, claim, proceeding or investigation
commenced or threatened by or on behalf of any Persons arising out of or
relating to the failure to obtain any consent or any such default, acceleration
or termination (provided that Seller has complied with its obligations under
this Section 5.3(b)).


 


(iii)                               With respect to any Subject
Instrument that may not be properly assigned to a Rangeland Company because of
the failure to obtain the required consent as described in
Section 5.3(b)(i)(A)(2) or (3) or that may not be operated or used by
Seller for the applicable Rangeland Company’s benefit, Buyer shall indemnify,
defend and hold harmless Seller and the other members of the BP Group from and
against any liability that Seller or any other members of the BP Group may have
in connection with such non-transferred Subject Instruments as a result of the
transactions contemplated by this Agreement; provided that, for the avoidance
of doubt, it is expressly understood and agreed that, in the event Seller is
unable to provide the Rangeland Companies the benefits of any such Subject
Instrument, Buyer shall not be required to indemnify Seller against Losses
suffered in connection therewith until and to the extent Seller, with full
cooperation from Buyer and the Rangeland Companies in all respects, is able to
provide the Rangeland Companies the benefit of any such Subject Instrument.


 


(c)                                  Notification. 
From the date hereof to and including the Closing Date, each Party shall
promptly notify the other Party if it obtains knowledge that any representation
or warranty of Seller in this Agreement or any agreement contemplated hereby or
information set forth in the Schedules hereto is not true and correct in all
material respects, or if such Party obtains knowledge of any material errors
in, or omissions from, the Schedules to this Agreement.


 


50

















 


(d)                                 Transition Services Agreement. 
Buyer and Seller shall execute and deliver at Closing the Transition
Services Agreement.


 


(e)                                  Working Capital Amount.   The
Parties agree to use commercially reasonable efforts to minimize the Working
Capital Amount and the aggregate Working Capital of the Rangeland Companies at
Closing.


 


(f)                                    Other Actions. 
Buyer and Seller shall otherwise use their respective commercially
reasonable efforts to cause the satisfaction of all covenants in this
Article 5 and the conditions precedent in Sections 7.1 and 7.2 and the
Closing to occur as soon as reasonably practicable after the date of this
Agreement.


 


ARTICLE 6

EMPLOYEES


 


6.1                               Employees


 


Part 1 of Schedule ”L”
attached hereto contains an accurate and complete list of the Employees.  Seller shall be entitled to update
Schedule ”L” as necessary at any time prior to Closing to reflect any and
all employment changes; provided that Seller shall not increase the number of
Employees prior to the Closing Date without prior notice to and agreement of
Buyer.


 


6.2                               Employment Offers
to Active Employees


 


No later than ten (10) days
after the date of execution of this Agreement by Buyer (and thereafter no later
than three (3) days after any update of Schedule ”L”), Buyer shall offer
employment with Buyer or an Affiliate of Buyer (the “Employer”), effective as of
the Closing Date, to all active Employees, at the same or better salaries or
wages with substantially similar duties and responsibilities, at the same
location with respect to Employees listed in Group A of Part 1 of
Schedule ”L” and at any of Buyer’s offices with respect to Employees
listed in Group B of Part 1 of Schedule ”L” and on the same status (e.g.,
full-time or part-time) as provided by Seller or other members of the BP Group
immediately prior to the Closing Date. 
Seller shall be entitled to review for compliance with the provisions of
this Article 6 each offer prior to Buyer issuing such employment offers.  Buyer will give each active Employee no less
than seven (7) days in which to accept or reject Buyer’s employment offer.


 


6.3                               Employment Offers
to Employees on Leave


 


In addition, no later than ten
(10) days after the date of execution of this Agreement by Buyer, Buyer shall
offer employment with the Employer to each Employee who is on Leave, effective
as of the Closing Date, commencing at such time as such Employee is ready to
return to work, at the same or better salaries or wages, with substantially
similar duties and responsibilities, at the same location with respect


 


51

















 


to Employees listed in Group A
of Part 1 of Schedule ”L” and at any of Buyer’s offices with respect to
Employees listed in Group B of Part 1 of Schedule ”L” and on the same
status (e.g., full-time or part-time) as provided by Seller or other members of
the BP Group immediately prior to the commencement of such Employee’s Leave;
provided, however, that such Employee is ready to return to work within one
hundred twenty (120) days after the Closing Date or, where the Employee is on a
pregnancy or parental leave, upon completion of such Leave.  Seller shall be entitled to review for
compliance with the provisions of this Article 6 each offer prior to Buyer
issuing such employment offers.  Buyer
will give each Employee on Leave no less than seven (7) days in which to accept
or reject Buyer’s employment offer. 
Seller shall be responsible for compensation, benefits and liabilities
owed to Employees during any period of Leave.


 


6.4                               Termination of Employees
by Seller


 


On or about the Closing Date,
Seller shall issue notices of termination of employment to each Transferred
Employee.


 


6.5                               Conditions of
Transfer


 


All offers of employment by
Buyer and terminations of employment by Seller pursuant to this Article 6
and the Parties’ respective obligations in this Article 6 shall be
conditional upon the Closing pursuant to this Agreement and the execution and
delivery by each Transferred Employee of a release of Seller in form and
substance satisfactory to Seller, acting reasonably.


 


6.6                               Transfer Time


 


All Transferred Employees shall
become employees of the Employer as of 12:01 a.m. on the Closing Date and,
except as otherwise provided herein, at such time Employer shall assume and be
responsible for payment of all salaries and benefits and all other costs and
liabilities relating to services by the Transferred Employees after the Closing
Date except that, with regard to an Employee on Leave, such obligations shall
not attach until such Employee commences employment with the Employer.  The Employer shall have no obligations for
Employees who do not become Transferred Employees; Seller shall be responsible
for all severance costs in respect of those Employees who do not become
Transferred Employees.


 


6.7                               Level of Employee
Benefits Provided by Buyer


 


The Employer shall provide to
all Transferred Employees employee benefits in accordance with employee benefit
plans (such as non-registered employee savings plans, registered retirement
savings plans and welfare benefit plans), programs, policies and pay practices
(such as vacations, bonuses and sick and disability leaves) provided to
employees of the Employer in substantially similar employment circumstances,
which shall, in aggregate, be the same as or better than the benefits specified
in Part 4 of Schedule ”L”, with coverage effective as of the Closing Date,
and the Employer shall


 


52

















 


waive all coverage exclusions
and limitations relating to waiting periods or pre-existing conditions.  No later than the Closing Date, Seller will
provide to Buyer the Transferred Employees’ recognized credited service, and
participation, vesting and, to the extent as elsewhere required in this Article 6,
benefit accrual periods of service amounts, with Seller or other members of the
BP Group as of the day immediately prior to the Closing Date.


 


6.8                               Benefits and
Policies


 


For each Transferred Employee
who participates in any benefit plan, or is subject to any policy or pay
practice, of the Employer, both the Employer and the applicable benefit, policy
and pay practice (i) shall recognize the Transferred Employee’s recognized
credited service amounts with Seller and other members of the BP Group for all
purposes including eligibility, vesting, and benefit determination and accrual;
(ii) shall not require a physical examination or other proof of insurability;
(iii) shall waive all coverage exclusions and limitations relating to waiting
periods or pre-existing conditions; (iv) shall provide similar levels of
coverage, with respect to any of the Transferred Employees or any dependent
covered by Seller’s and other members of the BP Group’s comparable benefit
plan, policy or pay practice in effect as of the Closing Date; and (v) shall
credit the expenses of the Transferred Employees which were credited toward
2004 deductibles or co-payments under the applicable benefit plan of Seller or
other members of the BP Group against satisfaction of any 2004 deductibles or
co-payments under the Employer’s benefit plan for the Transferred
Employees.  The Employer shall not
reduce any Transferred Employee’s initial salary or wages as an employee of the
Employer during the eighteen (18) month period after the Closing Date.


 


6.9                               Vacation


 


Seller shall be responsible for
paying the Transferred Employees for any vacation due as of the Closing Date
under the applicable vacation policy of Seller or other members of the BP Group
(“Seller
Vacation Policy”).  The
Employer will provide Transferred Employees who, based upon the recognized
credited service amounts of such Transferred Employees with Seller or other
members of the BP Group, were eligible for a greater amount of annual vacation
under Seller Vacation Policy than they are under the Employer’s vacation policy
even after the Employer recognizes such Transferred Employees’ credited service
amounts, with their Seller annual vacation amount; provided that the annual
vacation amount for any Transferred Employee shall not in any event exceed five
(5) weeks.  Between the Closing Date and
the end of the year in which the Closing occurs, the Employer shall permit all
Transferred Employees to take the same number of hours of vacation on an unpaid
basis as those Transferred Employees would have been eligible to take immediately
prior to the Closing Date under the Seller Vacation Policy based upon the
recognized credited service amounts of such Transferred Employees with Seller
or other members of the BP Group.


 


53

















 


6.10                        Severance


 


The Employer shall establish a
severance policy substantially similar to or better than Seller’s severance
plan attached hereto as Part 3 of Schedule ”L” with respect to any
Transferred Employee who has actions taken against such Transferred Employee by
Buyer within eighteen (18) months after the Closing Date that would make the
Transferred Employee eligible for severance benefits under the involuntary
terminations section of Seller’s severance plan.  The Employer’s severance policy established under this
Section 6.10 shall recognize the Transferred Employees’ recognized
credited service amounts with Seller or other members of the BP Group.


 


6.11                        Service Credit


 


From and after the Closing Date,
the Transferred Employees shall be given credit for their service recognized by
Seller or other members of the BP Group prior to the Closing Date for all
purposes, including eligibility, vesting and benefit determination and accrual
under all applicable plans and programs of the Employer, as well as for
purposes of determining any vacation, severance or other related benefits to be
provided in the manner described above.


 


6.12                        Employee Records


 


Buyer agrees that all
information with respect to Employees provided to it or its Affiliates by
Seller shall be kept and maintained by Buyer and its Affiliates as confidential
information and shall not be divulged to any third party unless the Employer
has the consent of the Employee or, alternatively, is under legal compulsion
pursuant to Applicable Laws to disclose such confidential information.


 


6.13                        No Third Party
Beneficiaries


 


Notwithstanding the foregoing,
the Parties do not intend that any other party, including but not limited to,
any such Transferred Employee or such Transferred Employee’s dependants, heirs,
estate, executor or other representative, shall have any rights as a third
party beneficiary with respect to the agreements between Buyer and Seller set
forth herein.


 


6.14                        Contractors


 


Seller shall, to the extent
assignable, assign to the Employer at Closing the service contracts of those
individuals listed in Part 2 of Schedule ”L” who are, as at Closing,
providing services to Seller exclusively in relation to the Rangeland Business
Unit.


 


6.15                        Employer’s
Obligations


 


Buyer is responsible for the
covenants and other obligations of the Employer in this Agreement.  Any breach by the Employer of any of its
covenants or its other obligations under this Agreement shall constitute a
breach by Buyer under this Agreement.


 


54



















ARTICLE 7

CONDITIONS TO CLOSING


 


7.1                               Buyer’s Conditions
to Closing


 


Buyer’s obligation to close the
transactions contemplated under this Agreement is subject to the fulfillment on
or prior to the Closing Date of each of the following conditions precedent (except
to the extent that Buyer shall have hereafter agreed in writing to waive one or
more of such conditions):


 


(a)                                  Compliance with Agreement.  Seller shall have, and shall at
Closing have certified in writing to Buyer that it has, performed and complied
in all material respects with all covenants, agreements and conditions required
by this Agreement to be performed or complied with by Seller on or prior to the
Closing Date.


 


(b)                                 Representations and Warranties. 
The representations and warranties of Seller made in this Agreement (as
amended by Seller in accordance with Section 5.1(c)) shall be, and Seller
shall at Closing have certified in writing to Buyer that the said
representations and warranties are, true and correct in all material respects
as of the date hereof and on and as of the Closing Date, as though made on and
as of the Closing Date, except for representations and warranties that speak as
of a specific date or time (which need only be true and correct as of such date
or time).


 


(c)                                  Litigation. 
There shall not be any judicial restraining order or injunction,
preliminary or otherwise, in effect prohibiting the Closing of the transactions
contemplated by this Agreement.  There
shall not be pending or threatened any litigation or proceeding instituted to
restrain, prohibit or otherwise interfere with or obtain substantial monetary
damages in connection with the consummation of the transactions contemplated by
this Agreement, or the operation of the Rangeland Business Unit by Buyer after
the Closing Date.


 


(d)                                 Governmental Consents.  (i) Notice of the proposed
transactions shall have been given under the Competition Act and the applicable
waiting period thereunder and any extension thereof shall have expired without
challenge or, in the alternative, Buyer shall have received a no-action letter
satisfactory to Buyer, acting reasonably, or an advance ruling certificate, in
each case from the Competition Bureau in respect of the proposed transactions,
(ii) the transactions contemplated by this Agreement shall have been approved
as contemplated in sections 21 to 23 of the Investment Canada Act, and (iii)
authorizations, Permits and other consents and approvals required for, or as a
consequence of, the purchase


 


55

















 


and sale of the Shares have been
obtained from all other applicable Governmental Authorities.


 


(e)                                  Damage or Destruction Event. 
No Damage or Destruction Events shall have occurred on or after the date
hereof in respect of which the estimated aggregate cost to remediate damage and
repair or replace property (as determined by Seller in good faith) will exceed
eighty million dollars ($80,000,000) that has not been substantially repaired
or rectified by the Rangeland Companies by the Closing Date and is not
reasonably capable of being substantially repaired or rectified by the
Rangeland Companies within ninety (90) days following the Closing Date.


 


7.2                               Seller’s Conditions
to Closing


 


Seller’s obligation to close the
transactions contemplated under this Agreement is subject to the fulfillment on
or prior to the Closing Date of each of the following conditions precedent
(except to the extent that Seller shall have hereafter agreed in writing to
waive one or more of such conditions):


 


(a)                                  Compliance with Agreement.  Each of PipelineCo and
MarketingCo shall have, and shall at Closing have certified in writing to
Seller that it has, performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by Buyer on or prior to the Closing Date.


 


(b)                                 Representations and Warranties.  The representations and
warranties of each of PipelineCo and MarketingCo made in this Agreement shall
be, and each of PipelineCo and MarketingCo shall at Closing have certified in
writing to Seller that the said representations and warranties are, true and
correct in all material respects as of the date of execution hereof by Buyer
and on and as of the Closing Date, as though made on and as of the Closing
Date, except for representations and warranties that speak as of a specific
date or time (which need only be true and correct as of such date or time).


 


(c)                                  Litigation. 
There shall not be any judicial restraining order or injunction,
preliminary or otherwise, in effect prohibiting the Closing of the transactions
contemplated by this Agreement.  There
shall not be pending or threatened any litigation or proceeding instituted to
restrain, prohibit or otherwise interfere with or obtain substantial monetary
damages in connection with the consummation of the transactions contemplated by
this Agreement, or the operation of the Rangeland Business Unit by Buyer after
the Closing Date.


 


56

















 


(d)                                 Governmental Consents.  (i) Notice of the proposed
transactions shall have been given under the Competition Act and the applicable
waiting period thereunder and any extension thereof shall have expired without
challenge or, in the alternative, Buyer shall have received a no-action letter
satisfactory to Seller, acting reasonably, or an advance ruling certificate, in
each case from the Competition Bureau in respect of the proposed transactions,
(ii) the transactions contemplated by this Agreement shall have been approved as
contemplated in sections 21 to 23 of the Investment Canada Act,  and
(iii) authorizations, Permits and other consents and approvals required for, or
as a consequence of, the purchase and sale of the Shares have been obtained
from all other applicable Governmental Authorities.


 


(e)                                  Damage or Destruction Event. 
No Damage or Destruction Events shall have occurred on or after the date
hereof in respect of which the estimated aggregate cost to remediate damage and
repair or replace property (as determined by Seller in good faith) will exceed
eighty million dollars ($80,000,000) that has not been substantially repaired
or rectified by the Rangeland Companies by the Closing Date and is not
reasonably capable of being substantially repaired or rectified by the Rangeland
Companies within ninety (90) days following the Closing Date.


 


7.3                               Waiver of
Conditions


 


The conditions precedent in
Section 7.1 and Section 7.2 are for the sole benefit of Buyer and
Seller, respectively.  The Party for the
benefit of which such conditions precedent have been included may waive any of
them, in whole or in part, by written notice to the other Party.


 


ARTICLE 8

INDEMNIFICATION


 


8.1                               Buyer’s
Indemnification of Seller


 


Except as otherwise provided
herein and subject to the provisions of this Article 8, from and after the
Closing Date Buyer shall indemnify, defend, save and hold harmless Seller, the
other members of the BP Group, and their respective directors, officers,
employees, shareholders, partners, counsel, auditors, accountants, agents,
advisors and other representatives and each of the heirs, executors, successors
and assigns of any of the foregoing (collectively, the “Seller Indemnified Parties”)
from and against any and all Losses of any kind which are caused by, arise
from, are incurred in connection with or relate in any way to:


 


(a)                                  the ownership of the Shares or the
operation and/or ownership of the Rangeland Business Unit Assets before, on and
after the Closing Date,


 


57

















 


including those Losses arising
under any foreign, federal, provincial, local or other Applicable Law, or under
contract, warranty, tort or other theory of law;


 


(b)                                 the modification of any technology,
software, know-how or proprietary information held by RPC, RMC or Aurora;


 


(c)                                  Buyer’s breach of:


 


(i)                                     any covenant or agreement in this
Agreement requiring performance by Buyer on or after the Closing Date
(including any discontinuance, suspension or modification of any compensation
or employee benefit plan or program maintained by the Employer as contemplated
by Article 6), or failure to perform same; or


 


(ii)                                  any representation or warranty made
by Buyer in this Agreement which survives the Closing; or


 


(d)                                 the Assumed Liabilities;


 


provided, however, that Buyer
shall not have any liability under Section 8.1(c) for any breach of a
representation or warranty contained in this Agreement or the other agreements
contemplated hereby if Seller had knowledge of such breach at the time of
Closing and failed to notify Buyer of such breach.


 


8.2                               Seller’s
Indemnification of Buyer


 


Except as otherwise provided
herein and subject to the provisions of this Article 8, from and after the
Closing Date Seller shall indemnify, defend, save and hold harmless Buyer, its
Affiliates and their respective directors, officers, employees, shareholders,
partners, counsel, auditors, accountants, agents, advisors and other
representatives and each of the heirs, executors, successors and assigns of any
of the foregoing (collectively, the “Buyer Indemnified Parties”) from and
against any and all Losses of any kind which are caused by, arise from, are
incurred in connection with or relate in any way to:


 


(a)                                  the Excluded Liabilities provided,
however, that the provisions of Sections 8.11 and 8.12 shall not apply to or
take into account Excluded Liabilities;


 


(b)                                 Seller’s breach of:


 


(i)                                     any covenant or agreement in this
Agreement requiring performance by Seller on or after the Closing Date, or
failure to perform same, provided, however, that with respect to breaches of


 


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Sections 2.4(b), 2.7, 3.5,
5.1(c)(iii), 5.1(e), 5.1(f) and 5.3(b)(i)(B) the provisions of
Section 8.11 shall not apply; or


 


(ii)                                  any representation or warranty made
by Seller in this Agreement which survives the Closing, provided, however, that
for the purpose of this Article 8, no occurrence relating to Seller’s
representation in Section 4.1(o) shall be deemed to be material or have a
material adverse effect on the Rangeland Business Unit unless such effect or
adverse effect exceeds five  million dollars  ($5,000,000); or


 


(c)                                  subject to the limitations set forth
in Section 8.13, Rights-of-Way Losses;


 


provided, however, that:


 


(d)                                 Seller shall not have any liability
under Section 8.2(b) for any breach of a representation or warranty
contained in this Agreement or the other agreements contemplated hereby if
Buyer had knowledge of such breach at the time of Closing and failed to notify
Seller of such breach in accordance with Section 5.3(c), and no Losses
caused by, arising from, incurred in connection with or related in any way
thereto shall be aggregated for purposes of Section 8.11; and


 


(e)                                  in calculating Losses that are
caused by, arise from, are incurred in connection with or relate in any way to
Section 8.2(b)(ii) for all purposes under this Article 8, all such
representations and warranties that contain the word “material” or the phrase
“material adverse” shall be read as if they did not contain that word or
phrase.


 


8.3                               Environmental Indemnifications


 


Except as provided in
Section 4.2, Seller makes no warranty or representation, express, implied,
statutory or otherwise, with respect to Environmental Matters and shall have no
obligation in respect of Environmental Liabilities (other than Excluded
Liabilities) to Buyer.  In addition to
its obligations to indemnify the Seller Indemnified Parties contained elsewhere
in the Agreement, subject to Closing occurring:


 


(a)                                  Buyer shall indemnify, defend, save
and hold harmless the Seller Indemnified Parties from and against any and all
Losses of any kind which may be brought against or suffered by the Seller
Indemnified Parties or which any of them may sustain, pay or incur, in each
case which are caused by, arise from, are incurred in connection with or relate
in any way directly or indirectly to any past, present or future Environmental
Matters or past, present or future Environmental Liabilities, including all
Disclosed Environmental Liabilities, but excluding any Environmental


 


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Matters or Environmental
Liabilities the existence of which reflects an inaccuracy or misrepresentation
in any of the representations or warranties in Section 4.2 hereof and any
Excluded Liabilities, (Environmental Matters and Environmental Liabilities in
respect of which the Seller Indemnified Parties are indemnified pursuant to
this Section 8.3 are referred to as the “Indemnified Environmental Matters”
and the “Indemnified
Environmental Liabilities”, respectively) and Buyer hereby assumes
all Losses, obligations, covenants and liabilities in respect of any such
Indemnified Environmental Matters and Indemnified Environmental Liabilities,
regardless of whether such Indemnified Environmental Matters or Indemnified
Environmental Liabilities are attributable to, occurred, arose or accrued at,
prior to or subsequent to the Closing Date;


 


(b)                                 Buyer shall have no rights to
recovery, indemnification or contribution against the Seller Indemnified
Parties for Indemnified Environmental Liabilities or Indemnified Environmental
Matters referred to in Section 8.3(a) under this Agreement under
Applicable Laws, in equity or otherwise, and all other rights and remedies
which Buyer may have at or under Applicable Law (including any past, present or
future HSE Law) or in equity, including any right of contribution or
reimbursement, against the Seller Indemnified Parties with respect to any such
Indemnified Environmental Liabilities or Indemnified Environmental Matters are
expressly waived; and


 


(c)                                  Buyer does hereby release, acquit
and forever discharge the Seller Indemnified Parties from any and all Losses,
including all claims for contribution and indemnity under Applicable Laws or in
equity, which may be asserted now or in the future (or both) and that in any
way relate to or arise out of Indemnified Environmental Liabilities or
Indemnified Environmental Matters referred to in Section 8.3(a),
regardless of whether such Indemnified Environmental Matters or Indemnified
Environmental Liabilities are attributable to, occurred, arose or accrued at,
prior to or subsequent to the Closing Date; and Buyer covenants not to make any
claim or other demand, or institute any action or other proceeding against the
Seller Indemnified Parties for indemnity and contribution for any such
Indemnified Environmental Liabilities or Indemnified Environmental Matters or
against a Person other than a Seller Indemnified Party where a claim for
contribution or indemnity may be brought against a Seller Indemnified Party.


 


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8.4                               Exclusive Remedy


 


Any claim or cause of action
based on, arising out of or relating in any way to any of the transactions
contemplated under this Agreement (including all Schedules attached hereto or
referenced herein) must be brought by the applicable Party in accordance with
the provisions and limitations of this Agreement, whether such claim arises out
of any contract, tort or otherwise. 
Except as otherwise provided in this Agreement, the Parties hereby
waive, to the fullest extent permitted under Applicable Laws, any and all
rights, claims and causes of action they may have against each other relating
to the subject matter of this Agreement (and the other agreements contemplated
hereby) arising under or based on Applicable Laws, breaches of statutory or
implied warranties or otherwise, nuisance or other tort actions, and common law
rights of contribution.  Buyer
acknowledges and agrees that:


 


(a)                                  other than the representations and
warranties of Seller specifically contained in this Agreement, there are no
representations or warranties of Seller, any other member of the BP Group or
their respective directors, officers, employees, shareholders, partners,
counsel, auditors, accountants, agents, advisors or other representatives or
any other Person either express or implied with respect to any of them, the
Rangeland Companies, the Rangeland Business Unit, the Rangeland Business Unit
Assets or the Assumed Liabilities; and


 


(b)                                 it shall have no claim or right to
indemnification with respect to any information, documents or materials
furnished by Seller, any other member of the BP Group or their respective
directors, officers, employees, shareholders, partners, counsel, auditors,
accountants, agents, advisors or other representatives or any other Person,
including the Information Memorandum, the Financial Information and any
information, documents or material made available to Buyer or its Affiliates in
certain “data rooms”, management presentations or any other form in expectation
of the transactions contemplated by this Agreement.


 


8.5                               Holding of
Indemnities


 


Buyer shall hold the indemnity
contained in Section 8.2 in trust on behalf of the Buyer Indemnified
Parties, and may enforce the same on its and their behalf.  Seller shall hold the indemnities contained
in Sections 8.1 and 8.3 in trust on behalf of the Seller Indemnified Parties,
and may enforce the same on its and their behalf.


 


8.6                               Procedures Relating
to Indemnification Between Buyer and Seller


 


Following the discovery of any
facts or conditions which could reasonably be expected to give rise to a Loss
or Losses for which indemnification is provided under this Agreement, the Party
seeking indemnification (the “Indemnified Party”) shall, as promptly as reasonably
possible thereafter, provide written notice to the Party from


 


61

















 


whom indemnification is sought
(the “Indemnifying
Party”), setting forth the specific facts and circumstances, in
reasonable detail, relating to such Loss or Losses and the amount of Loss or
Losses (or a reasonable, good-faith estimate thereof if the actual amount is
not known or not capable of reasonable calculation) (“Indemnification Notice”);
provided, however, that failure to give such Indemnification Notice on a timely
basis shall not affect the indemnification provided hereunder except to the
extent the Indemnifying Party shall have been actually and materially
prejudiced as a result of such failure. 
Notwithstanding the foregoing:


 


(a)                                  a Buyer Indemnified Party shall not
be entitled to make a claim against Seller under Section 8.2(b) unless and
until (i) Buyer shall have provided Seller written notice of default; and (ii)
Seller shall have failed to cure such default within sixty (60) days after
Seller’s receipt of Buyer’s notice; and


 


(b)                                 a Seller Indemnified Party shall not
be entitled to make a claim against Buyer under Section 8.1(c) unless and
until (i) Seller shall have provided Buyer written notice of default; and (ii)
Buyer shall have failed to cure such default within sixty (60) days after
Buyer’s receipt of Seller’s notice.


 


8.7                               Procedures Relating
to Indemnification for Third Party Claims


 


(a)                                  In order for an Indemnified Party to
be entitled to any indemnification provided for under this Agreement in respect
of, arising out of or involving a claim or demand made by any Person against
the Indemnified Party (a “Third Party Claim”), such Indemnified Party
must provide an Indemnification Notice to the Indemnifying Party of the Third
Party Claim as promptly as reasonably possible after receipt by such
Indemnified Party of notice of the Third Party Claim.  Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, within five (5) Business Days after the Indemnified Party’s
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim; provided,
however, that failure to provide an Indemnification Notice, or deliver copies
of all notices and documents, in a timely manner shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually and materially prejudiced as a result of such failure.


 


(b)                                 If a Third Party Claim is made
against an Indemnified Party, the Indemnifying Party shall be entitled to
participate in the defence thereof and, if it so chooses and acknowledges its
obligation to indemnify the Indemnified Party therefor, to assume the defence
thereof with counsel selected by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party. 
Notwithstanding any acknowledgment made


 


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pursuant to the immediately
preceding sentence, the Indemnifying Party shall continue to be entitled to
assert any limitation on its indemnification responsibility contained in
Sections 8.11 and 8.12.  Should the
Indemnifying Party so elect to assume the defence of a Third Party Claim, the Indemnifying
Party shall not be liable to the Indemnified Party for legal expenses
subsequently incurred by the Indemnified Party in connection with the defence
thereof.  If the Indemnifying Party
assumes such defence, the Indemnified Party shall have the right to participate
in the defence thereof and to employ counsel, at its own expense, separate from
the counsel employed by the Indemnifying Party, it being understood, however,
that the Indemnifying Party shall control such defence.  The Indemnifying Party shall be liable for
the fees and expenses of counsel employed by the Indemnified Party for any
period during which the Indemnifying Party has not assumed the defence
thereof.  If the Indemnifying Party
chooses to defend any Third Party Claim, the Parties shall cooperate in the
defence or prosecution of such Third Party Claim.  Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to the Indemnifying Party of
records and information which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.  Whether or not the Indemnifying Party shall
have assumed the defence of a Third Party Claim, the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge, or
consent to the entry of any judgment with respect to, such Third Party Claim
without the Indemnifying Party’s prior written consent (which consent shall not
be unreasonably withheld).


 


8.8                               Losses Net of
Insurance and Taxes


 


(a)                                  Insurance.  The
amount of any and all Losses under this Article 8 and elsewhere under this
Agreement shall be determined net of any amounts recovered or recoverable by
the Indemnified Party under insurance policies, indemnities or other
reimbursement arrangements with respect to such Losses.  Each Party hereby waives, or will procure
the waiver of, any subrogation rights that its insurer may have with respect to
any indemnifiable Losses.


 


(b)                                 Taxes.  In determining the amount of
any Loss for which any Party is entitled to indemnification under this
Article 8, the gross amount thereof shall be reduced by any net Tax
Benefit realized by such Party in connection with such Loss to the extent such
Tax Benefit results directly from the incurrence of such Loss. If an
indemnification payment


 


63

















 


hereunder results in incremental
Tax being payable by the Indemnified Party, the amount shall be equal to:


 


(i)                                     the gross amount of such Loss minus
the Tax Benefit realized by such Party as determined above, divided by


 


(ii)                                  one (1) minus the Tax Rate;


 


provided, however, that no
indemnification payment shall be payable until final settlement of such Tax
liability with the relevant Tax authority, and only upon receipt by the
Indemnifying Party of a copy of an official communication issued by the
relevant Tax authority which evidences such final settlement of the Tax
liability and, in such circumstances, the Indemnifying Party will also pay to
the Indemnified Party interest, at the Seller’s Interest Rate if the
Indemnifying Party is Seller or at the Buyer’s Interest Rate if the
Indemnifying Party is Buyer, on the indemnification amount payable from the
date the obligation to make such indemnification payment arose until the date
on which such indemnification payment is made. 
For purposes of this Section 8.8:


 


“Tax Benefit” means, as to a
Party which is indemnified against Losses hereunder, the Tax Rate multiplied by
the amount of any income tax deduction or allowance in any year arising from
any Loss that entitles the Indemnified Party to indemnity under this Agreement.
If a change in law replaces or otherwise supplements the federal or provincial
income tax on corporations with another method of taxation, the Parties hereto
agree to negotiate in good faith a new definition of Tax Benefit; and


 


“Tax Rate” means the rate of
Tax exigible under the laws applicable to a relevant Person for any relevant
period of time.


 


8.9                               Attorneys’ Fees


 


In connection with any
litigation arising out of this Agreement or to enforce any indemnification
claim pursuant to this Agreement, the prevailing Party shall be entitled to
recover from the non-prevailing Party the prevailing Party’s reasonable
attorneys’ fees and costs, on appeal or otherwise.


 


8.10                        Time Limitation


 


Except as otherwise provided
herein, any claim by any Buyer Indemnified Party for indemnity arising under
this Agreement, including pursuant to Section 8.2, shall be brought within
one (1) year after the Closing Date; provided that any claim arising under
Section 8.2(a) for Excluded Liabilities, Section 5.1(f) or under
Sections  9.3(c) and 9.3(f) may be
brought within ten (10) years of the Closing Date, any claim arising under


 


64

















 


Section 5.1(g) may be
brought within two (2) years of the Closing Date and any claim arising under
Section 5.1(e) may be brought within the Applicable Period.  A claim shall be deemed to have been brought
only upon delivery of a proper Indemnification Notice to the other Party at the
notice address set forth in Section 12.2. 
Any claim required to be made within such one (1) year period, ten (10)
year period or other period referred to in this Section 8.10, as the case
may be, not so timely made shall be forever barred.


 


8.11                        Monetary Limitation


 


Except as otherwise provided in
this Agreement, Buyer shall have no claim under this Agreement against Seller
or any other member of the BP Group for any Losses unless and until the
aggregate of all such Losses incurred or sustained by Buyer Indemnified Parties
(excluding any expenditures pursuant to Section 5.3(b)(i)(B)) exceeds five
million dollars ($5,000,000) and then only for the excess over five million dollars
($5,000,000) (the “Threshold”); provided that Losses amounting
to less than four hundred thousand dollars ($400,000) in the aggregate arising
out of the same occurrence or matter shall not be aggregated with other Losses
for purposes of determining whether and when the Threshold has been
reached.  After the Threshold has been
reached, Seller shall have no obligation to indemnify Buyer Indemnified Parties
under this Agreement with respect to such matters for any Losses amounting to
less than four hundred thousand dollars ($400,000) in the aggregate arising out
of the same occurrence or matter.  For
purposes of this Section 8.11, Losses shall exclude Rights-of-Way Losses,
which are addressed in Section 8.13 below.


 


8.12                        Limitation of
Liability


 


Seller’s aggregate liability for
indemnification pursuant to this Agreement, including Section 8.2, but
subject to Sections 8.2(a) and 9.3(f), shall in no event exceed an amount equal
to fifty million dollars ($50,000,000).


 


8.13                        Rights-of-Way
Monetary Limitation


 


(a)                                  Buyer shall have no claim under this
Agreement against Seller or any other member of the BP Group for any
Rights-of-Way Losses unless and until the aggregate of all such Rights-of-Way
Losses incurred or sustained by the Buyer Indemnified Parties exceeds four million
dollars ($4,000,000) and then only for the excess over four million dollars
($4,000,000) (the “Level 1 Threshold”), subject to Sections
8.13(b), (c) and (d).


 


(b)                                 For any Rights-of-Way Losses
incurred or sustained by the Buyer Indemnified Parties in an aggregate amount
in excess of the Level 1 Threshold but less than or equal to eight million
dollars ($8,000,000) (the “Level 2 Threshold”), Buyer shall only have
a claim under this Agreement against Seller for fifty percent (50%) of such
excess over the Level 1 Threshold.


 


65

















 


(c)                                  Subject to Section 8.12, Buyer
shall have a claim under this Agreement against Seller for one hundred percent
(100%) of the excess of the aggregate amount of Rights-of-Way Losses incurred
or sustained by Buyer Indemnified Parties over the Level 2 Threshold, provided
that the sum of Seller’s aggregate liability for indemnification for
Rights-of-Way Losses pursuant to this Agreement, including Section 8.2 and
this Section 8.13, plus any payment made by Seller to Buyer pursuant to
Section 5.3(b)(i)(B),  shall in no event exceed five million
dollars ($5,000,000).


 


(d)                                 Notwithstanding the foregoing,
Seller shall have no obligation to indemnify the Buyer Indemnified Parties
under this Agreement with respect to such matters for any Rights-of-Way Losses
amounting to less than four hundred thousand dollars ($400,000) in the
aggregate arising out of the same occurrence or matter.


 


8.14                        Mitigation


 


Each Party hereto shall take all
reasonable steps and use all commercially reasonable efforts to mitigate any
and all Losses.


 


8.15                        Adjustment to
Purchase Price


 


Any indemnity payment under this
Agreement shall be treated as an adjustment to the Purchase Price.


 


8.16                        Subrogation


 


Each Party shall assign to the
other Party and subrogate the other Party to all its rights and remedies
against any Person (other than, with respect to rights and remedies of Seller,
those against the BP Group and its insurers) in respect of any payment made by
the other Party in respect of any indemnification or liability assumed by the
other Party pursuant to this Agreement or as a result of this Agreement
(including legal fees and other costs of litigation).  Each Party shall provide all reasonable cooperation of assistance
required by the other Party in making and prosecuting any claim for recovery
against any such Person to the extent that payment is made by the other
Party.  Neither Party shall knowingly
take any action to impair any such right or remedy of the other Party to
recover any such payment.


 


ARTICLE 9

TAXES


 


9.1                               Transfer Taxes


 


All transfer, withholding,
documentary, sales, use, stamp, registration and other such Taxes, and all
conveyance fees, recording charges and other fees and charges


 


66

















 


(including any penalties and
interest) incurred in connection with the consummation of the transactions
contemplated by this Agreement shall be paid by Buyer when due, and Buyer will,
at its own expense, file all necessary Tax returns and other documentation with
respect to all such Taxes, fees and charges, and, if required by Applicable
Law, the Parties will, and will cause their Affiliates to, join in the
execution of any such Tax returns and other documentation.  Buyer and Seller will cooperate in providing
each other with appropriate resale exemption certification and other similar
Tax and fee documentation.


 


9.2                               Tax Returns


 


(a)                                  Seller shall prepare, or cause to be
prepared, and timely file, or cause to be timely filed, all Tax returns for the
Rangeland Companies for all taxable periods ending on or before the Closing
Date. Buyer shall, and shall cause the Rangeland Companies to, co-operate with
the Seller pursuant to Section 9.5(a) of this Agreement with respect to the
preparation and filing of all Tax returns for the Rangeland Companies for all
taxable periods ending on or before the Closing Date.  Prior to filing such Tax returns, Seller shall make such Tax
returns available for Buyer’s review.   Buyer shall prepare, or cause to be prepared, and timely file, or
cause to be timely filed, all other Tax returns for the Rangeland Companies.


 


(b)                                 Seller shall provide to Buyer,
within 120 days of Closing, copies of all income Tax returns filed by Seller
with respect to the Rangeland Companies for the taxation year ending
immediately prior to the Closing Date. 
Seller shall also provide to Buyer, within 10 Business Days of receipt
by Seller, copies of any Notices of Assessment or Reassessment issued by the
relevant taxation authorities after the Closing Date with respect to the income
Tax returns filed by Seller with respect to the Rangeland Companies for the
taxation year ending immediately prior to the Closing Date.


 


9.3                               Tax Elections


 


(a)                                  Within 90 days after the Closing
Date, Seller, acting on its own behalf and that of RMC, shall prepare, or cause
to be prepared, and, in co-operation with the Buyer and RMC pursuant to
Section 9.5(a) of this Agreement, file in the prescribed form one or more
elections under subsection 85(1) of the Tax Act and subsection 14.1
of the Alberta Tax Act with respect to the sale, assignment, transfer and
conveyance of the Rangeland Marketing Business Assets by Seller to RMC pursuant
to the Conveyance Agreement (Rangeland Marketing Business) dated effective
April 1, 2003. For the purposes of such elections, the agreed amounts in
respect of the Transferred Assets (as that term is defined in the Conveyance
Agreement) shall be such amounts as shall be determined by Seller in its sole


 


67

















 


discretion, provided however
that the agreed amounts shall not be less than the lesser or least amounts, as
the case may be, specified within paragraphs 85(1)(c.1), (d) and (e) of the Tax
Act (as adopted by reference in subsection 14.1 of the Alberta Tax Act).
Seller hereby agrees to provide copies of the elections to Buyer at the time of
filing of the elections.


 


(b)                                 Within 90 days after the Closing
Date, Seller shall cause BP Resources, acting on its own behalf and that of RPC,
to prepare, or cause to be prepared, and, in co-operation with the Buyer and
RPC pursuant to Section 9.5(a) of this Agreement, file in the prescribed
form one or more elections under subsection 85(1) of the Tax Act and
subsection 14.1 of the Alberta Tax Act with respect to the sale,
assignment, transfer and conveyance of the RPC Assets by BP Resources to RPC
pursuant to the Conveyance Agreement (Rangeland Pipeline Business) dated
effective April 1, 2003. For the purposes of such elections, the agreed
amounts in respect of the Transferred Assets (as that term is defined in such
Conveyance Agreement) shall be such amounts as shall be determined by BP
Resources in its sole discretion, provided however that the agreed amounts
shall not be less than the lesser or least amounts, as the case may be,
specified within paragraphs 85(1)(c.1), (d) and (e) of the Tax Act (as adopted
by reference in subsection 14.1 of the Alberta Tax Act). Seller shall
cause BP Resources to provide copies of the elections to Buyer at the time of
filing of the elections.


 


(c)                                  For purposes of Sections 9.3(a) and
(b), in the event that any competent taxing authority should assess or reassess
any or all of Seller, BP Resources, RMC or RPC on the basis that the agreed
amounts pursuant to the elections specified in Sections 9.3(a) and (b) are
incorrect, Seller shall advise the Buyer (acting on its own behalf and that of
RPC and RMC) of the revised agreed amounts within thirty (30) days of receiving
formal notification of such revisions from the competent taxing authority.
Should Seller or BP Resources, acting on their own behalf and that of RMC and
RPC, disagree with the competent taxing authority’s proposed revisions to the
agreed amounts, Seller or BP Resources, acting in their sole discretion, shall
decide whether to file notices of objection with the competent taxing authority
or notices of appeal to a court of competent jurisdiction (both in accordance
with the Tax Act and the Alberta Tax Act) with respect to any such assessment
or reassessment. In the event that such notices of objection or notices of
appeal are to be filed, Buyer and RMC or RPC, as the case may be, shall
cooperate (in accordance with Section 9.5(a) of this Agreement) with
Seller or BP Resources in the preparation, execution and filing of the
appropriate documents, and Seller shall provide Buyer with copies.  Seller shall advise Buyer, RMC and RPC of
the ultimate


 


68

















 


disposition of the notices of
objection and/or notices of appeal within thirty (30) days of such disposition.


 


(d)                                 Buyer, on its own behalf and on
behalf of its Affiliates (including the Rangeland Companies), hereby expressly
acknowledges and agrees that after Closing, other than the rights to receive
copies and notifications, neither Buyer nor its Affiliates (including the
Rangeland Companies) shall have any rights with respect to the elections to be
filed by Seller, BP Resources, RPC and RMC pursuant to Sections 9.3(a) and (b),
nor to any objections or appeals that may be filed pursuant to
Section 9.3(c).


 


(e)                                  Buyer, on its own behalf and on
behalf of its Affiliates (including the Rangeland Companies), hereby expressly
acknowledges and agrees that neither Seller nor BP Resources are providing to
Buyer or its Affiliates (including the Rangeland Companies) any
representations, warranties, covenants or indemnities with respect to any
matters relating to the elections to be filed by Seller, BP Resources, RPC and
RMC pursuant to Sections 9.3(a) and (b), including the agreed amounts, nor to
any objections or appeals that may be filed pursuant to Section 9.3(c).


 


(f)                                    Notwithstanding any exceptions,
disclaimers or other matters set forth in this Agreement (including, without
limitation, those contained in Section 4.3), Seller hereby represents and
warrants to and covenants with Buyer as of the date of this Agreement and as of
the Closing Date, acknowledging that Buyer is relying upon such representations
and warranties in entering into this Agreement and completing the purchase and
sale of the Shares, that immediately following the purchase and sale of the
Shares described in Section 2.1, RPC’s tax pool balances for the purposes
of the Alberta Tax Act and the Tax Act (taking into account, for greater
certainty, deductions to be claimed in respect of the Tax returns described in
Section 9.2(a)) will not be less than:


 


(i)                                     thirty million dollars ($30,000,000)
of Class 1 undepreciated capital cost; and


 


(ii)                                  ten million dollars ($10,000,000) of
Class 8 undepreciated capital cost.


 


Claims in respect of this
Section 9.3(f) shall not count in determining whether the monetary limit
has been reached under, or otherwise be subject to, the provisions of Sections
8.11 and 8.12.


 


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9.4                               Attribution of
Purchase Price


 


The Purchase Price shall be
attributed as amongst the RPC Shares, Aurora Shares and RMC Shares as follows:


 


(a)                                  the Base Price specified in
Section 2.2(a)(i) shall be attributed to the Shares of the Rangeland
Companies on a basis to be determined by Seller, in its sole discretion, and
communicated to Buyer in writing at time of Closing, subject to the following
limitations:


 


(i)                                     the portion of the Base Price that
is attributable to the Aurora Shares shall not be greater than five hundred
thousand dollars ($500,000);


 


(ii)                                  the portion of the Base Price that
is attributable to the RMC Shares shall not be greater than ten million dollars
($10,000,000); and


 


(iii)                               the portion of the Base Price that
is attributable to the RPC Shares shall equal the difference between the Base
Price and the sum of the amounts attributed to the Aurora Shares and the RMC
Shares pursuant to Sections 9.4(a)(i) and 9.4(a)(ii) respectively;


 


(b)                                 the Line Fill and Product Inventory
Amount specified in Section 2.2(a)(ii) shall be attributed to the RMC
Shares;


 


(c)                                  the Working Capital Amount specified
in Section 2.2(a)(iii) shall be attributed to the Aurora Shares, the RMC
Shares and the RPC Shares in proportion to their respective Working Capital on
the Working Capital Date; and


 


(d)                                 the Interest Amount specified in
Section 2.2(a)(iv) shall be attributed to the Shares of the Rangeland
Companies on the following basis:


 


(i)                                     to the Aurora Shares, the Interest
Amount multiplied by the sum of the portion of the Base Price attributed to the
Aurora Shares pursuant to Section 9.4(a)(i) and the portion of the Working
Capital Amount attributed to the Aurora Shares pursuant to Section 9.4(c),
and divided by the sum of the Base Price, the Line Fill and Product Inventory
Amount and the Working Capital Amount;


 


(ii)                                  to the RMC Shares, the Interest
Amount multiplied by the sum of the portion of the Base Price attributed to the
RMC Shares pursuant to Section 9.4(a)(ii), the Line Fill and Product
Inventory Amount and the portion of the Working Capital Amount attributed to
the RMC Shares pursuant to 9.4(c), and divided by the sum of the Base


 


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Price, the Line Fill and Product
Inventory Amount and the Working Capital Amount; and


 


(iii)                               to the RPC Shares, the Interest
Amount multiplied by the sum of the portion of the Base Price attributed to the
RPC Shares pursuant to Section 9.4(a)(iii) and the portion of the Working
Capital Amount attributed to the RPC Shares pursuant to Section 9.4(c),
and divided by the sum of the Base Price, the Line Fill and Product Inventory
Amount and the Working Capital Amount.


 


9.5                               Conduct of Tax
Matters


 


(a)                                  Seller and the other members of the
BP Group shall have the sole right to control and direct the conduct, defence
or compromise of matters relating to:


 


(i)                                     the preparation and filing of all
Tax returns for the Rangeland Companies for all taxable periods ending on or
before the Closing Date in accordance with Section 9.2(a),


 


(ii)                                  Section 9.3 (Tax Elections),


 


(iii)                               Section 9.4 (Attribution of
Purchase Price), and


 


(iv)                              Section 9.8 (Transaction a
Share Sale),


 


including any audit, proposed
adjustment, claim, assessment, reassessment, administrative or judicial
proceeding or the filing of any amended return or claim for refund, involving
any Tax liability for which the Rangeland Companies, Seller or the other
members of the BP Group may be responsible (a “Seller’s Tax Matter”) and to
employ counsel of its own choice at its own expense.  Buyer and its Affiliates (including the Rangeland Companies)
shall co-operate fully with Seller and its counsel in the conduct, defence or
compromise of any such Seller’s Tax Matter, including by executing and
delivering waivers of relevant statutes of limitations and powers of attorney;
provided, however, that if the matters in issue have the potential to
prospectively affect the Tax liability of Buyer or any of its Affiliates
(including the Rangeland Companies), Buyer shall have the right to participate
in such proceeding to the extent reasonable in the circumstances.


 


(b)                                 Buyer and its Affiliates (including
the Rangeland Companies) shall have the sole right to control and direct the
conduct, defence or compromise of any matter, including any audit, proposed
adjustment, claim, assessment, reassessment, administrative or judicial
proceeding or the filing of any


 


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amended return or claim for
refund, involving any Tax liability for which Buyer or its Affiliates
(including the Rangeland Companies) may be responsible (excluding, for greater
certainty, any Seller’s Tax Matters) (a “Buyer’s Tax Matter”) and to employ counsel
of its own choice at its own expense. 
Seller shall co-operate fully, and shall cause the other members of the
BP Group to co-operate fully, with Buyer and its counsel in the conduct,
defence or compromise of any such Buyer’s Tax Matter, including by executing
and delivering waivers of relevant statutes of limitations and powers of
attorney; provided, however, that if the matters in issue have the potential to
retroactively affect the Tax liability of Seller or the other members of the BP
Group, Seller shall have the right to participate in such proceeding to the
extent reasonable in the circumstances.


 


9.6                               Receipt of Tax
Notice


 


Seller shall notify Buyer in
writing (a “Tax Notice”) within ten (10) Business Days of the receipt by
Seller or the other members of the BP Group of written notice of any pending or
proposed Buyer’s Tax Matter or matter relating to Tax returns for the taxable
periods ending on or before the Closing Date that may affect the Tax
liabilities for which Buyer may be liable, in whole or in part.  Buyer shall notify Seller in writing within
ten (10) Business Days of the receipt by Buyer or any Affiliate of Buyer
(including the Rangeland Companies) of written notice of any pending or
proposed Seller’s Tax Matter.


 


9.7                               Co-operation on Tax
Matters


 


From and after the Closing Date,
Seller and Buyer shall, and Buyer shall cause its Affiliates (including the
Rangeland Companies) to, co-operate fully, as and to the extent reasonably
requested by Seller in the conduct of any Seller’s Tax Matter with respect to
Tax returns for the taxable periods (or portions thereof) ending on or before
the Closing Date.  Such co-operation
shall include the retention and (upon a Seller request) the provision of
records and information which are reasonably relevant to the conduct of any
such Seller’s Tax Matter and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.  Buyer
shall, and shall cause Rangeland Companies to, to the extent provided to Buyer,
(i) retain all Books and Records with respect to Seller’s Tax Matters pertinent
to the Rangeland Companies relating to any taxable period (or portion thereof)
ending on or before the Closing Date until the expiration of the statute of
limitation (and, to the extent notified by Seller, any extensions thereof) of
the respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (ii) give Seller reasonable written
notice prior to transferring, destroying or discarding any such Books and
Records and, if Seller so requests, shall allow Seller to take possession of
such Books and Records.


 


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9.8                               Transaction a Share
Sale


 


(a)                                  Seller and Buyer (on its own behalf
and that of its Affiliates, including the Rangeland Companies) hereby
acknowledge and agree that the purchase and sale of the Shares, as described in
Section 2.1 of this Agreement (the “Subject Transaction”), shall be, for
purposes of the Tax Act and the Alberta Tax Act, treated at all material times
as the purchase and sale of shares which are non-depreciable “capital property”
as that term is defined in Section 54 of the Tax Act. For greater
certainty, Seller and Buyer (on its own behalf and that of its Affiliates,
including the Rangeland Companies) acknowledge and agree that they will not
advocate in any way or at any time that the Subject Transaction should be
treated for purposes of the Tax Act and the Alberta Tax Act as the sale and
purchase of depreciable assets or any type of transaction other than as
specified above.


 


(b)                                 Should any relevant taxing authority
take the view that the Subject Transaction is in law anything other than the
purchase and sale of shares which are non-depreciable “capital property” as
that term is defined in Section 54 of the Tax Act, Buyer (and its Affiliates,
including the Rangeland Companies) shall co-operate (in accordance with
Section 9.5(a) of this Agreement) with Seller in advocating by whatever
means necessary that the Subject Transaction is to be treated for Tax purposes
as the purchase and sale of shares which are non-depreciable “capital property”
as that term is defined in Section 54 of the Tax Act .


 


(c)                                  Should it ultimately be determined
by a court of competent jurisdiction or otherwise that the Subject Transaction
is not in law a purchase and sale of shares which are non-depreciable “capital
property” as that term is defined in Section 54 of the Tax Act, but is
instead the sale and purchase of depreciable assets or any other type of
transaction that results in a tax benefit to Buyer (or its Affiliates,
including the Rangeland Companies), Buyer shall make a payment to Seller equal
in amount to the value of the tax benefit realized by Buyer (or its Affiliates,
including the Rangeland Companies) as a result of the recharacterization of the
Subject Transaction, such value to be determined by Seller in a reasonable
manner.


 


ARTICLE 10

RECORDS


 


10.1                        Access to Records


 


For a period of ten (10) years
following the Closing Date, Buyer shall provide to Seller and other members of
the BP Group (and their counsel, auditors, accountants, agents, advisors or
other representatives) reasonable access to and permission to take


 


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copies of any Books and Records
relating exclusively to the Rangeland Business Unit through and including the
Closing Date; and Buyer shall not destroy or dispose of any such Books and
Records for a period of at least ten (10) years after the Closing Date without
first offering to surrender to Seller such Books and Records which Buyer may
intend to destroy or dispose of.  Seller
agrees that it will consult with Buyer in advance of taking any such actions
following the Closing Date with a view towards establishing a mutually
agreeable plan for such visits so that these actions will not unreasonably
interfere with the normal operation of the Rangeland Business Unit.


 


10.2                        Access to Financial
Information


 


(a)                                  Buyer shall cause Pacific Energy
Partners, L.P. (the “Partnership”) to use reasonable commercial
efforts to obtain written confirmation from the staff of the United States
Securities and Exchange Commission that the Partnership is not required to
disclose historical financial statement information regarding or relating to
the Rangeland Companies and the Rangeland Business Unit Assets, for any period
prior to the acquisition thereof by Buyer as required under Rule 3-05 of
Regulation S-X promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”).


 


(b)                                 To the extent the Partnership is
unable to obtain the written confirmation contemplated in Section 10.2(a)
within thirty (30) days from the date this Agreement is signed, then upon the
written request of Buyer, at Buyer’s sole cost and expense and only to the
extent necessary to comply with the Partnership’s disclosure obligations under
Rule 3-05 of Regulation S-X, Seller shall use reasonable commercial efforts to
provide the Partnership and its representatives (including its legal counsel
and independent auditors) reasonable access during normal business hours to
such historical financial information as may then be in Seller’s possession or
control (and to those persons who are responsible for such information) that is
necessary to allow the Partnership to prepare the historical financial
statements required by Rule 3-05 of Regulation S-X, and to enable the audit
thereof.


 


(c)                                  The obligations of Seller to
disclose or provide reasonable access to any such historical financial
information shall terminate three (3) years after the date of this
Agreement.  Seller shall have no
liability whatsoever to Buyer or any other Person for information provided or
disclosed hereunder, or the accuracy or sufficiency thereof or in connection
with any claim arising out of such information.  Buyer acknowledges that Seller makes no representation or
warranty with respect to any such information and expressly disclaims any
implied or constructive representation or warranty.  Buyer shall reimburse Seller for all actual costs incurred by


 


74

















 


Seller in performing its
obligations under this Section 10.2 and shall indemnify Seller for any and
all Losses suffered, sustained, paid or incurred by Seller directly or
indirectly with respect to such matter.


 


ARTICLE 11

TERMINATION RIGHTS


 


11.1                        Termination


 


The transactions contemplated by
this Agreement may be terminated at any time prior to Closing as follows and in
no other manner:


 


(a)                                  by mutual written consent of Buyer
and Seller;


 


(b)                                 by Buyer, if any of the conditions
set forth in Section 7.1 shall have become incapable of fulfillment, and
shall not have been waived by Buyer (provided, however, that Buyer is not in
material breach of its representations, warranties, covenants or agreements
contained in this Agreement);


 


(c)                                  by Seller, if any of the conditions
set forth in Section 7.2 shall have become incapable of fulfillment, and
shall not have been waived by Seller (provided, however, that Seller is not in
material breach of its representations, warranties, covenants or agreements
contained in this Agreement);


 


(d)                                 by Seller, if the Closing does not
occur on or prior to October 31, 2004; or


 


(e)                                  by Buyer, if the Closing does not
occur on or prior to October 31, 2004; provided, however, that, in the
event that all conditions of Section 7.1 other than the conditions set forth
in Section 7.1(d) are satisfied, then Buyer may not terminate under this
Section 11.1(e) until December 31, 2004.


 


11.2                        In the Event of
Termination


 


In the event of termination by
Buyer or Seller pursuant to this Article 11, written notice thereof shall
forthwith be given to the other Party and the transactions contemplated by this
Agreement (including the Parties’ obligation to consummate the transactions)
shall be terminated without further action by either Party.  If the transactions contemplated by this
Agreement are terminated as provided herein:


 


(a)                                  Buyer shall return to Seller all
documents and copies and other materials received from or on behalf of Seller
relating to the transactions


 


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contemplated hereby, whether so
obtained before or after the execution hereof; and


 


(b)                                 all confidential information
received by Buyer with respect to the Rangeland Business Unit Assets and the
Rangeland Business Unit shall be treated in accordance with the terms and
conditions of the Confidentiality Agreement, which shall remain in full force
and effect notwithstanding the termination of the transactions contemplated by
this Agreement.


 


11.3                        Effect of
Termination


 


Each Party’s rights of
termination under this Article 11 are in addition to any other rights it
may have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies.  Nothing in this Article 11 shall limit or affect any other
rights or causes of action any of the Parties may have with respect to the
representations, warranties, covenants and indemnities in such Party’s favour
contained in this Agreement, which representations, warranties, covenants and
indemnities shall survive the termination of the transactions contemplated by
this Agreement.  Nothing in this
Article 11 shall be deemed to release either Party from any liability for
any breach by such Party of the terms and provisions of this Agreement or to
impair the right of either Party to compel specific performance by the other
Party of its obligations under this Agreement.


 


ARTICLE 12

NOTICES


 


12.1                        Method of Notice


 


All notices or other
communications required or permitted to be given hereunder shall be in writing
and shall be delivered by hand, sent by facsimile or sent by reputable courier
service.  Notices shall be deemed given
when so delivered by hand or by courier (provided that if not delivered during
normal business hours on a Business Day notice shall be deemed to occur at the
start of normal business hours on the next Business Day) or, if notice is given
by facsimile, it is deemed received when actually received by the other Party
if received during normal business hours on a Business Day or at the
commencement of normal business hours on the next Business Day otherwise.


 


12.2                        Address and
Facsimile Number


 


Notice shall be delivered to the
Parties at the following address and facsimile number:


 


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If to Buyer, at the address or
facsimile number set forth on the execution page of this Agreement for Buyer.


 


If to Seller:


 


BP Canada Energy Company


240 – 4th Avenue S.W.


Calgary, Alberta, Canada T2P 2H8


Attn:                    Secretary


Facsimile:                                            (403) 233-1852


 


with a copy to:


 


BP Canada Energy Company


240 – 4th Avenue S.W.


Calgary, Alberta, Canada T2P 2H8


Attn:                    Joanne J. Ruitenschild, Senior Legal
Counsel


Facsimile:                                            (403) 233-1852


 


12.3                        Change of Address


 


Any Party may change the address
or facsimile number to which such communications are to be directed to it by
giving written notice to the other in the manner contemplated in
Section 12.1.


 


ARTICLE 13

MISCELLANEOUS


 


13.1                        Further Assurances


 


From time to time, as and when
reasonably requested by either Party, the other Party shall execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions (subject to the limitations set forth in Section 5.3(b)), which
documents, instruments or actions are consistent with, and customary and
necessary for, the consummation of the transactions contemplated by this
Agreement.


 


13.2                        Specific
Performance


 


Each Party acknowledges and
agrees that the other Party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. 
Accordingly, each Party agrees that the other Party shall be entitled to
an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in the Court of Queen’s


 


77

















 


Bench of Alberta, in addition to
any other remedy to which they may be entitled, at law or in equity.


 


13.3                        Interest Accrues on
Amounts Owing


 


Subject to any provision
otherwise in this Agreement, any amount owing to a Party by the other Party
pursuant to any provision of this Agreement and remaining unpaid when due shall
bear interest, calculated daily and compounded monthly, from the day such
amount was due to be paid until the day such amount was paid, at the Seller’s
Interest Rate if owed by Seller or at the Buyer’s Interest Rate if owed by
Buyer, regardless of whether such Party has given the other Party prior notice
of the accrual of interest hereunder.


 


13.4                        Governing Law;
Submission to Jurisdiction


 


This Agreement and the
obligations of the Parties hereunder shall be governed by and construed and
enforced in accordance with the substantive and procedural laws of the Province
of Alberta and the substantive and procedural federal laws of Canada applicable
in Alberta, without regard to rules on choice of law.  Any action to enforce the terms hereof shall be brought in the
Court of Queen’s Bench of Alberta in Calgary on an exclusive basis.  Each Party hereto agrees that it shall
submit to the jurisdiction of such courts for purposes of actions to enforce
the terms of this Agreement.


 


13.5                        Publicity


 


Buyer and Seller agree that, from
the date hereof to and including the Closing Date, no public release or
announcement concerning the transactions contemplated hereby shall be issued or
made by either Party (including any member of the BP Group) without the prior
consent of the other Party (which consent shall not be unreasonably withheld),
except (a) as such release or announcement may be required by Applicable Laws
or the rules or regulations of any securities exchange, whether in Canada or
elsewhere (or in the opinion of counsel such release or announcement is
appropriate or desirable under or in light of such laws and regulations), in
which case the Party making the release or announcement shall allow the other
Party reasonable time to comment on such release or announcement in advance of
such issuance, and (b) that any member of the BP Group, including Seller, may
make such an announcement to its employees. 
Notwithstanding the foregoing, Buyer and Seller shall cooperate to
prepare a joint press release to be issued on the Closing Date and, upon the
request of either Buyer or Seller, at the time of the signing of this
Agreement.  Buyer and Seller agree to
keep the terms of this Agreement confidential, except to the extent required by
Applicable Laws or for financial reporting purposes or as otherwise provided
herein and except that the Parties may disclose such terms to their respective
(and in the case of Seller, the BP Group’s) counsel, auditors, accountants,
agents, advisors and other representatives as necessary in connection with the
ordinary conduct of their respective businesses (so long as such Persons agree
to keep the terms of this Agreement confidential).


 


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13.6                        Survival Of Covenants, Representations and Warranties


 


The covenants, representations
and warranties in this Agreement and in any other document delivered in
connection herewith shall survive the Closing solely for purposes of Sections
8.1, 8.2 and 8.3.  The representations
and warranties in Section 4.1(i) with respect to the Rangeland Pipeline
System Real Property set forth in Part 1 of Schedule ”D” shall not survive
and shall terminate at Closing.


 


13.7                        Entire Agreement


 


This Agreement, the attached
Schedules and the agreements referred to herein or executed simultaneously
herewith, set forth the entire agreement and understanding of the Parties in
respect to the transactions contemplated hereby and thereby and supersede all
prior agreements, arrangements and undertakings, whether written or oral,
relating to the subject matter hereof (other than the Confidentiality
Agreement, which shall continue in effect). 
No representation, promise, inducement or statement of intention,
whether written or oral, has been made by either Party which is not embodied in
or superseded by this Agreement or the Confidentiality Agreement or in the
documents referred to herein, and no Party shall be bound by or liable for any
alleged representation, promise, inducement or statement of intention not so
set forth whether in the Information Memorandum, in certain “data rooms”,
management presentations or any other form in expectation of the transactions
contemplated by this Agreement.  Except
as otherwise specifically provided in this Agreement, no conditions, usage of
trade, course of dealing or performance, understanding or agreement purporting
to modify, vary, explain or supplement the terms or conditions of this
Agreement will be binding unless hereafter made in writing and signed by the
Party to be bound, and no modification will be effected by the acknowledgment
or acceptance of documents containing terms or conditions at variance with or
in addition to those set forth in this Agreement, except as otherwise
specifically agreed to by the Parties in writing.


 


13.8                        Assignment


 


This Agreement and any rights
and obligations hereunder shall not be assignable or transferable by Buyer or
Seller (including by operation of law in connection with a merger or sale of
stock, or sale of substantially all the assets, of Buyer or Seller) without the
prior written consent of the other Party and any purported assignment without
such consent shall be void and without effect; provided, however, that each of
Buyer and Seller may (a) assign any and all of its rights and interests
hereunder to one or more of its Affiliates and (b) designate one or more of its
Affiliates to perform its obligations hereunder; provided further that each of
Buyer and Seller shall remain responsible for the performance of all of its
respective obligations hereunder.


 


13.9                        Waiver


 


Any of the terms, covenants,
representations, warranties or conditions hereof may be waived only by a
written instrument executed by or on behalf of the Party


 


79

















 


waiving compliance.  The failure of either Party at any time or
times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. 
No waiver by either Party of any condition, or of any breach of any
term, covenant, representation or warranty contained in this Agreement, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or a waiver of any other
condition or of any breach of any other term, covenant, representation or warranty.


 


13.10                 Expenses


 


Whether or not the transactions
contemplated hereby are consummated, and except as otherwise specifically
provided in this Agreement, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, including legal, due
diligence, accounting and investment banking fees and expenses, shall be paid
by the Party incurring such costs or expenses.


 


13.11                 Counterparts


 


This Agreement may be executed
simultaneously in one or more counterparts (including by means of facsimile
signature pages), all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the Parties and delivered to the other Party.


 


13.12                 No Strict
Construction


 


Notwithstanding the fact that
this Agreement has been drafted or prepared by one of the Parties, Buyer and
Seller confirm that both they and their respective counsel have reviewed,
negotiated and adopted this Agreement as the joint agreement and understanding
of the Parties, and the language used in this Agreement shall be deemed to be
the language chosen by the Parties to express their mutual intent, and no
doctrine of strict construction shall be applied against any Person.


 


13.13                 Schedules


 


The disclosures in the Schedules
hereto (including any disclosures made in amendments made pursuant to
Section 5.1(c)) are to be taken as relating to the representations and
warranties of Seller as a whole.  Matters
listed once on the Schedules shall be deemed disclosed with reference to all
sections of the Schedules and all of Sections 4.1 and 4.2 of this
Agreement.  The inclusion of information
in the Schedules hereto shall not be construed as an admission that such
information is material to the Rangeland Business Unit, the Rangeland Business
Unit Assets or the Seller Group.  In
addition, matters reflected in the Schedules are not necessarily limited to
matters required by this Agreement to be reflected in such Schedules.  Such additional matters are set forth for
informational purposes only and do not necessarily include other matters of a
similar nature.  Prior to the Closing,
Seller shall have the right at all times to supplement, modify or update the
Schedules hereto; provided, however, that any such supplements, modifications
or updates shall be subject to the provisions


 


80

















 


of Section 5.1(c).  The Schedules are incorporated herein by
reference and made a part hereof.


 


13.14                 Severability


 


Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be valid
and effective under Applicable Laws, but if any provision of this Agreement or
the application of any such provision to any Person or circumstance shall be
held invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, (a) such provision shall be deemed to be automatically amended to
the extent necessary to comply with Applicable Laws and permit enforcement and
(b) such finding shall not affect the binding effect of the other provisions of
this Agreement, unless, in either case, such amendment or finding (after giving
effect to any permitted amendment) materially impairs the economic benefit or
protections to be derived by a Party from the transactions contemplated hereby,
taken as a whole.


 


13.15                 No Third Party Beneficiaries


 


Except as provided with respect
to indemnification as set forth in Article 8 and elsewhere in this
Agreement, nothing in this Agreement shall confer any rights upon any Person
other than the Parties and their respective successors and permitted assigns.


 


13.16                 Time of Essence


 


With regard to all rights and
obligations of the Parties and all dates and time periods set forth or referred
to in this Agreement, time is of the essence.


 


13.17                 No Conditions


 


For the avoidance of doubt, the
only conditions to Closing are those set forth in Sections 7.1 and 7.2 herein,
and no other covenants or conditions set forth in this Agreement are intended
to have any effect on the Closing or the payment of the Purchase Price.


 


13.18                 Joint Liability


 


The liabilities of PipelineCo
and MarketingCo in respect of any covenants or any other obligations stated
under this Agreement to be covenants or obligations of Buyer shall be joint.


 


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13.19                 Enurement


 


This Agreement shall be binding
upon and enure to the benefit of the Parties and their respective successors
and permitted assigns.


 


IN WITNESS WHEREOF, the Parties have duly executed
this Agreement as of the day and year first above written.


 


	
   

  	
  BP CANADA ENERGY COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ed Scheibelhut

  	
   

  
	
   

  	
   

  	
  Ed Scheibelhut

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  RMC ACQUISITION COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irvin Toole, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  Irvin Toole, Jr.

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
  5900 Cherry Avenue

  	
   

  
	
   

  	
   

  	
  Long Beach, CA 90805

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number for Notices:

  
	
   

  	
   

  	
  562-728-2823

  
	
   

  	
   

  	
   

  
	
   

  	
  RPC ACQUISITION COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irvin Toole, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  Irvin Toole, Jr.

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number for Notices:

  
	
   

  	
   

  	
   

  



 


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