PERIODS (OR PORTIONS THEREOF) ENDING, ON OR
BEFORE THE CLOSING DATE, AND (II) ANY LIABILITY OF SEA COAST OR SEA COAST LLC OR
ANY OTHER ENTITY FOR WHICH SEA COAST OR SEA COAST LLC COULD BE HELD LIABLE AFTER
THE CLOSING UNDER TREAS. REG. §1.1361-4(A)(6), TREAS. REG. §1.1502-6, TREAS.
REG. §301.7701-2(C)(2)(III) OR SIMILAR PRINCIPLES (INCLUDING, WITHOUT
LIMITATION, THE ITEMS LISTED ON SCHEDULE 3.26(E)).
THE PARTIES ACKNOWLEDGE AND
AGREE THAT THE ITEMS SCHEDULED AS EXCEPTIONS TO SECTION 3.26 SHALL HAVE NO
IMPACT ON THE INDEMNIFICATION OBLIGATIONS UNDER THIS SECTION 5.10(B) AND THAT
SUCH ITEMS ARE WITHIN THE SCOPE OF THE INDEMNITY PROVIDED BY SELLER HEREUNDER.
(C)
ANY TRANSFER, DOCUMENTARY, SALES, USE, REGISTRATION, REAL
ESTATE TRANSFER OR GAIN OR SIMILAR OR RELATED TAX (COLLECTIVELY, THE "STATE
TAXES") INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE PAID BY SELLER, AND SELLER AND BUYER SHALL
COOPERATE IN TIMELY MAKING ALL TAX RETURNS AS MAY BE REQUIRED TO COMPLY WITH THE
PROVISIONS OF SUCH TAX LAWS.
NOTWITHSTANDING THE FOREGOING, BUYER SHALL
INDEMNIFY SELLER FOR UP TO AN AGGREGATE OF $200,000 OF STATE TAXES IN THE STATES
OF DELAWARE, NEW YORK AND NEW JERSEY TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT
SUCH TAXES ARE INCURRED BY SELLER AS A RESULT (AND ONLY AS A RESULT) OF THE
PRE-CLOSING MERGER, PROVIDED THAT SELLER SHALL MAKE ALL NECESSARY FILINGS AND
OTHERWISE COMPLY WITH TAX LAWS RELATED TO SUCH MERGER IN DELAWARE, NEW YORK AND
NEW JERSEY IN SUCH A MANNER AS TO AVOID OR MINIMIZE SUCH TAXES. IN THE EVENT
SELLER ELECTS TO SELL CERTAIN VESSELS TO BUYER PURSUANT TO THE VESSEL PURCHASE
AGREEMENT UNDER SECTION 5.19, BUYER AGREES TO EXECUTE AND DELIVER TO SELLER AN
EXEMPTION CERTIFICATE FOR THE STATE OF WASHINGTON, AS DESCRIBED IN PARAGRAPH 8
OF SUCH VESSEL PURCHASE AGREEMENT.
(D)
SALTCHUK SHALL CAUSE THE PROVISIONS OF ANY TAX SHARING
AGREEMENT BETWEEN SALTCHUK AND ANY OF ITS AFFILIATES (OTHER THAN SEA COAST), ON
THE ONE HAND, AND SEA COAST, ON THE OTHER HAND, TO BE TERMINATED ON OR BEFORE
THE CLOSING DATE, AND NO FURTHER PAYMENTS SHALL BE MADE THEREUNDER.
SECTION 5.11
RESTRICTIONS ON TRANSFER; LEGENDS.
(A)
SELLER SHALL NOT TRANSFER (WHETHER BY SALE, ASSIGNMENT,
PLEDGE OR OTHERWISE) ANY CLOSING COMMON UNITS TO ANY PERSON UNLESS SUCH PERSON
IS A CITIZEN OF THE UNITED STATES WITHIN THE MEANING OF SECTION 2 OF THE
SHIPPING ACT, 1916, AS AMENDED, FOR THE PURPOSE OF OPERATING VESSELS IN THE
COASTWISE TRADE OF THE UNITED STATES AND UNLESS SUCH PERSON OTHERWISE COMPLIES
WITH THIS SECTION 5.11.
30
(B)
PRIOR TO ANY PROPOSED TRANSFER (WHETHER BY SALE, ASSIGNMENT,
PLEDGE OR OTHERWISE) OF THE CLOSING COMMON UNITS, THE PROPOSED TRANSFEROR (THE
"TRANSFEROR") WILL GIVE WRITTEN NOTICE TO THE PARTNERSHIP OF ITS INTENTION TO
EFFECT SUCH TRANSFER.
EACH SUCH NOTICE SHALL DESCRIBE THE MANNER AND
CIRCUMSTANCES OF THE PROPOSED TRANSFER IN SUFFICIENT DETAIL, CONTAIN EVIDENCE OF
CITIZENSHIP OF THE PROPOSED TRANSFEREE AND SHALL BE ACCOMPANIED BY A WRITTEN
OPINION OF LEGAL COUNSEL WHO SHALL