Document:

ESCROW AGREEMENT

This Escrow Agreement (the "Escrow Agreement") is made as of this 28th day of
October, 2004, by and among Silicon Valley Law Group a law corporation (the
"Escrow Agent"), Pini Ben David (Grunspan), an individual residing in
Switzerland ("Lender"), and Human BioSystems, a California corporation (the
"Company").  Capitalized terms not defined herein shall have the meanings
ascribed to them in the Loan Agreement (as defined below). RECITALS

A.	Lender and the Company have entered into that certain Loan Agreement,
dated as of October 28, 2004 (the "Loan Agreement") whereby Lender is loaning an
aggregate of Two Million Three Hundred Thousand Euros (E 2,300,000) (the
"Loan"). Repayment of the Loan is secured by an aggregate of twenty-three
million (23,000,000) shares of Reg S restricted common stock (the "Shares").

B.	The parties hereto desire to set forth the terms and conditions pursuant
to which the funds to repay the Loan and the Shares will be placed and held in
escrow and the terms and conditions for their release from escrow.

AGREEMENT

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants
contained herein, and intending to be legally bound, hereby agree as follows:

1.	Escrow of Escrow Funds and Shares Prior to Due Date of Loan.  Pursuant
to the Loan Agreement, no later than five (5) business days before the due date
of the Loan, the Company shall deposit into escrow funds in an amount equal to
the unpaid balance of the Loan (including accrued but unpaid interest thereon)
(the "Escrow Funds"), and Lender shall deposit into escrow the Shares.    The
Escrow Funds and the Shares shall be held and distributed by the Escrow Agent in
accordance with the terms and conditions of this Escrow Agreement.

2.	Escrow of Escrow Funds and Shares Upon Prepayment of Loan.  Pursuant to
the Loan Agreement, no later than five (5) business days before any prepayment
of the Loan, the Company shall deposit into escrow funds in an amount equal to
the amount of the Loan to be prepaid (the "Prepayment Funds").  The Escrow Agent
shall then notify Lender of the deposit, and Lender shall deposit into escrow
Shares with a value equal to such prepayment (the "Prepayment Shares").    The
Prepayment Funds and the Shares shall be held and distributed by the Escrow
Agent in accordance with the terms and conditions of this Escrow Agreement.

3.	Rights and Obligations of the Parties.  The Escrow Agent shall be
entitled to such rights and shall perform such duties of the escrow agent as set
forth herein (collectively, the "Duties"), in accordance with the terms and
conditions of this Escrow Agreement.  The Company and Lender shall be entitled
to their respective rights and shall perform their respective duties and
obligations as set forth herein. This Escrow Agreement shall become effective
immediately upon delivery of this Escrow Agreement to the Escrow Agent.

4.	Conditions for Release From Escrow.

(a)	Default by the Company Under Loan Agreement.  In the event that the
Company shall fail to repay the Loan, including accrued but unpaid interest
thereon, on or before November 1, 2007, Lender shall notify Escrow Agent in
writing of such default.  No later than ten (10) days after receipt of such
written notice, Escrow Agent shall release to Lender that portion of the Shares
which represents the unpaid principal and accrued but unpaid interest.  The
balance, if any, of the Shares shall be returned to the Company.

(b)	Repayment in Full of Loan.  Upon receipt by the Escrow Agent of the
Escrow Funds and the Shares, Escrow Agent shall release the Escrow Funds to the
Lender and all of the Shares to the Company.

(c)	Prepayment of Loan.  Upon receipt by the Escrow Agent of the Prepayment
Funds and the Prepayment Shares, Escrow Agent shall release the Prepayment Funds
to the Lender and the Prepayment Shares to the Company.

(d)	Failure to Place Shares or Prepayment Shares in Escrow.  In the event
that the Lender fails to place the Shares or the Prepayment Shares into escrow
pursuant to the terms of this Escrow Agreement, Lender shall be declared in
default, the Escrow Funds or the Prepayment Funds, as the case may be, shall be
promptly returned to the Company and the Shares or the Prepayment Shares, as the
case may be, will be deemed cancelled.  The Company will promptly notify its
transfer agent of such cancellation.

5.	Duties of Escrow Agent.  The Duties of the Escrow Agent shall include
the following:

5.1.	The Escrow Agent shall temporarily hold and safeguard the Escrow Funds,
the Shares, the Prepayment Funds and the Prepayment Shares, shall treat all of
them as a trust fund in accordance with the terms of this Escrow Agreement and
not as the property of Lender or of the Company, and shall hold and dispose of
the Escrow Funds, the Shares, the Prepayment Funds and the Prepayment Shares
only in accordance with the terms hereof.

5.2.	The Escrow Agent shall deliver the Escrow Funds, the Shares, the
Prepayment Funds and the Prepayment Shares pursuant to the terms and conditions
of this Agreement.

6.	Exculpatory Provisions.

6.1.	The Escrow Agent shall be obligated only for the performance of such
Duties as are specifically set forth herein and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed to be
genuine and to have been signed or presented by the proper party or parties.
The Escrow Agent shall not be liable for forgeries or false impersonations.  The
Escrow Agent shall not be liable for any act done or omitted hereunder as escrow
agent except for gross negligence or willful misconduct.  The Escrow Agent
shall, in no case or event, be liable for any representations or warranties of
Lender or the Company or for punitive, incidental or consequential damages.  Any
act done or omitted pursuant to the advice or opinion of counsel shall be
conclusive evidence of the good faith of the Escrow Agent.

6.2.	The Escrow Agent is hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person, excepting
only orders or process of courts of law, and is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court.  In case the
Escrow Agent obeys or complies with any such order, judgment or decree of any
court the Escrow Agent shall not be liable to any of the parties hereto or to
any other person by reason of such compliance, notwithstanding any such order,
judgment, decree or ruling being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.

6.3.	The Escrow Agent shall not be liable in any respect on account of the
identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver the Shares or any documents or papers deposited
or called for thereunder.

6.4.	The Escrow Agent shall not be liable for the outlawing of any rights
under any statute of limitations with respect to this Escrow Agreement or any
documents deposited with the Escrow Agent.

7.	Alteration of Duties.  The Duties may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.

8.	Resignation and Removal of the Escrow Agent.  The Escrow Agent may
resign as Escrow Agent at any time with or without cause by giving at least
thirty (30) days prior written notice to each of Lender and the Company, such
resignation to be effective thirty (30) days following the date such notice is
given.

9.	Further Instruments.  If the Escrow Agent reasonably requires other or
further instruments in connection with performance of the Duties, the necessary
parties hereto shall join in furnishing such instruments.

10.	Fees of Escrow Agent.  The fees and charges of the Escrow Agent
hereunder shall be paid by the Company; Lender shall reimburse the Company for
such fees and charges from the proceeds of the Loan.

11.	Disputes.  It is understood and agreed that should any dispute arise
with respect to the delivery and/or ownership or right of possession of the
Escrow Funds, the Shares, the Prepayment Funds or the Prepayment Shares held by
the Escrow Agent hereunder, the Escrow Agent is authorized and directed to act
in accordance with a judgment or court order.  Absent such order or judgment,
Escrow Agent shall perform its duties described in this Agreement.

12.	Indemnification.  In consideration of the Escrow Agent's acceptance of
this appointment, Lender and the Company, jointly and severally, agree to
indemnify and hold the Escrow Agent harmless as to any liability incurred by it
to any person, firm or corporation by reason of its having accepted such
appointment or in carrying out the terms hereof, and to reimburse the Escrow
Agent for all the Escrow Agent's costs and expenses, including, among other
things, counsel fees and expenses, reasonably incurred by reason of any matter
as to which an indemnity is paid; provided, however, that no indemnity need be
paid in case of the Escrow Agent's gross negligence, willful misconduct or
breach of this Escrow Agreement.

13.	General.

13.1.	All notices and other communications hereunder shall be made at the
addresses, in the manner and with the effect provided in the Loan Agreement.

13.2.	The captions in this Escrow Agreement are for convenience only and shall
not be considered a part of or affect the construction or interpretation of any
provision of this Escrow Agreement.

13.3.	This Escrow Agreement may be executed in any number of counterparts,
each of which when so executed shall constitute an original copy hereof, but all
of which together shall constitute one agreement.

13.4.	No party may, without the prior express written consent of each other
party, assign this Escrow Agreement in whole or in part.  This Escrow Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.

13.5.	This Escrow Agreement shall be governed by and construed in accordance
with the laws of the State of California as applied to contracts made and to be
performed entirely within the State of California.  The parties to this Escrow
Agreement hereby agree to submit to personal jurisdiction in the State of
California.

13.6.	This Agreement, including all exhibits hereto, and the Loan Agreement
constitute the entire agreement between Lender and Borrower regarding the Loan.
Where there is a conflict between the terms of this Agreement and the Loan
Agreement, this Agreement shall prevail.

13.7.	Waiver.  Lender hereby acknowledges and agrees that Escrow Agent serves
as outside legal counsel to the Company.  Accordingly, Lender hereby
acknowledges and agrees that Escrow Agent may continue to serve as the Company's
outside legal counsel for any dispute related to this Escrow Agreement, the Loan
Agreement or any related agreement or document thereto.

IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the
date first above written.

LENDER					 /s/ Pini Ben David
					 ------------------
				             Pini Ben David

THE COMPANY:				Human BioSystems

By:  /s/ Harry Masuda
     ----------------
         Harry Masuda
Its:  President/CEO
ESCROW AGENT:				Silicon Valley Law Group

						By:  /s/ Cathryn S. Gawne
						     --------------------
						         Cathryn S. Gawne

						Its:   DirectorExhibit 10.1

 

ANCILLARY AGREEMENT

 

ANCILLARY AGREEMENT (this “Agreement”),
dated as of October 29, 2004, by and among PPS Holding Company, a Delaware
corporation (“Seller”), LB Pacific, LP, a Delaware limited partnership (“Buyer”), The Anschutz Corporation, a Kansas
corporation (“TAC”), Pacific Energy Partners, L.P., a Delaware limited
partnership (“Pacific LP”), and Pacific Energy GP, Inc., a Delaware
corporation (“Pacific GP”).

 

W I T N E S S E T H

 

WHEREAS, Pacific GP is the
sole general partner of Pacific LP.

 

WHEREAS, Pacific LP is a
publicly-traded master limited partnership engaged principally in the business
of owning and operating crude oil transportation, marine terminal and storage
assets (the “Business”);

 

WHEREAS, Seller currently
owns in the aggregate all of the issued and outstanding shares of common stock
of Pacific GP (the “Pacific GP Shares”);

 

WHEREAS, Pacific GP owns a
2% general partner interest in Pacific LP, and all of the incentive
distribution rights with respect to Pacific LP;

 

WHEREAS, TAC owns 10,465,000
subordinated units representing subordinated limited partner interests in
Pacific LP (the “Subordinated Units”);

 

WHEREAS, between the date
hereof and the Closing Date (as hereinafter defined), Pacific GP will be
converted into a Delaware limited liability company (the membership interests
into which the Pacific GP Shares will be converted are hereinafter referred to
as the “Pacific GP Interests”);

 

WHEREAS, Seller, Buyer and
TAC have entered into that certain Purchase and Sale Agreement dated as of the
date hereof (the “Purchase Agreement”) pursuant to which Seller agrees
to sell all of the Pacific GP Interests and TAC agrees to sell all of the Subordinated
Units to Buyer, and Buyer agrees to acquire all of the Pacific GP Interests and
Subordinated Units from Seller and TAC; and

 

WHEREAS, pursuant to the
terms and conditions of this Agreement, the Parties desire to agree to (i)
certain transition services to be provided by Seller to Pacific LP, (ii)
non-compete agreements to be provided by Seller, TAC and Buyer, and (iii) cost
sharing arrangements with respect to certain costs and expenses that may be incurred
by the Pacific Energy Entities (as hereinafter defined) in connection with the
transactions contemplated by the Purchase Agreement (the “Transactions”).

 

NOW, THEREFORE, in
consideration of the mutual covenants, representations, warranties and
agreements hereinafter set forth, and intending to be legally bound hereby, the
Parties agree as follows:

 

 

ARTICLE I

 

DEFINITIONS

 

1.1           Definitions.  As used in this Agreement, the following
terms have the meanings specified in this Section 1.1.

 

(1)           “Affiliate”
has the meaning set forth in Rule 12b-2 promulgated under the Exchange Act.

 

(2)           “Closing Date” shall mean the date
upon which the parties consummate the sale to Buyer of the Pacific GP Interests
and the Subordinated Units as contemplated in the Purchase Agreement.

 

(3)           “Commercially
Reasonable Efforts” means efforts which are designed to enable a Party,
directly or indirectly, to satisfy a condition to, or otherwise assist in the
consummation of, the transactions contemplated by this Agreement and which do
not require the performing Party to expend any funds or assume liabilities
other than expenditures and liabilities which are customary and reasonable in
nature and amount in the context of the transactions contemplated by this
Agreement; provided, however, under no circumstances shall Seller
or TAC be obligated to remove a member of the board of directors of Pacific GP
in order to satisfy using its Commercially Reasonable Efforts pursuant to this
Agreement.

 

(4)           “Confidentiality
Agreement” means the Confidentiality Agreement between Pacific LP and Lehman Brothers Merchant Banking
Associates III L.P., a Delaware limited partnership, dated October 20, 2004.

 

(5)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(6)           “Governmental
Authority” means any federal, state, local or other governmental,
regulatory or administrative agency, commission, department, board, or other
governmental subdivision, court, tribunal, arbitrating body or other
governmental authority.

 

(7)           “Pacific Energy
Entities” means Pacific GP, Pacific LP and the Pacific Subsidiaries,
collectively.

 

(8)           “Pacific
Subsidiaries” means the entities listed on Schedule 1 hereto.

 

(9)           “Partnership
Credit Facilities” means the Credit Agreement between RPC Acquisition
Company, as borrower and Royal Bank of Canada, Bank of America, N.A. Canada
Branch, Bank of Montreal, The Bank of Nova Scotia, BNP Paribas (Canada),
Congress Financial Corporation (Canada) and Union Bank of California, N.A.,
Canada Branch, as lenders and Royal Bank of Canada as agent of the lenders
dated May 11, 2004, as amended, and the Credit Agreement between Pacific Energy
Group LLC, as borrower, Pacific LP, as guarantor, and Fleet National Bank, as
administrative agent, U.S. Bank National Association, as syndication agent, Fortis
Capital Corp., and the Bank of Nova Scotia as co-documentation agents and Fleet

 

2

 

Securities, Inc. and U.S. Bank National Association as co-arrangers and
co-book managers and certain financial institutions, as lenders dated July 19,
2002, as amended.

 

(10)         “Party,”
and collectively, “Parties” shall mean Seller, Buyer, TAC, Pacific LP
and Pacific GP.

 

(11)         “Person”
means any individual, partnership, limited liability company, joint venture,
corporation, trust, association, unincorporated organization or Governmental
Authority.

 

(12)         “Restricted Unit” has the meaning set forth in the Pacific
Energy GP, Inc. Long-Term Incentive Plan.

 

(13)         “Senior Notes” shall mean the 7 1/8 % Senior Notes due June 2014 issued by Pacific LP
and Pacific Energy Finance Corporation (“PEFC”) pursuant to that
Indenture dated as of June 16, 2004 among Pacific LP, PEFC, the guarantors
party thereto and Wells Fargo Bank, National Association (the “Indenture”).

 

ARTICLE II

 

COVENANTS OF THE
PARTIES

 

2.1           Transition
Services Agreement.  TAC agrees, on or
prior to the Closing Date, to enter into a Transition Services Agreement with
Pacific LP that will have a term expiring on the later to occur of (i) six (6)
months from the Closing Date and (ii) December 31, 2005, pursuant to which it
will agree to provide (a) access to the JD Edwards software systems currently
licensed by TAC; (b) access to all other TAC information technology systems
that are presently being used by Pacific LP, including but not limited to the
Optio and Citrix applications; and (c) IT support services and access to TAC
personnel (including support that may be necessary to meet the requirements of
the Sarbanes Oxley Act) at the same levels that are presently being provided by
TAC to Pacific LP.  The transition services shall be provided to Pacific
LP at a cost determined in accordance with the same cost allocation methodology
used by TAC as of the date hereof.  In
addition, Pacific LP shall pay costs for travel and other reasonable
out-of-pocket expenses of TAC personnel assisting in the set up of Pacific LP’s
computer systems.

 

2.2           Seller
Non-Competition.  For a period of two
years from the Closing Date, neither TAC or its Affiliates nor Seller shall,
directly or indirectly, (a) engage in the Business in competition with Pacific
LP within 10 miles of any of the operations of the Pacific Energy Entities as
conducted on the Closing Date, (b) pursue opportunities that are included on
the Pacific LP Acquisition and Development List dated October 22, 2004 provided
to Buyer as of the date hereof, or (c) own or operate, directly or indirectly,
any California port facility. 
Notwithstanding anything to the contrary contained in this Section 2.2,
this covenant shall not apply to any activities performed by TAC or its
Affiliates primarily in connection with oil and gas properties owned jointly by
TAC or its Affiliates with other Persons, whether such activities are performed
as the operator pursuant to an operating agreement or otherwise.  In addition,

 

3

 

notwithstanding anything to the contrary herein, nothing in this Section
2.2 shall in any way restrict or impair:

 

(i)            the
business activities of (A) Forest Oil Corporation or its successors, or (B) any
entity in which TAC or its Affiliates, at the time such other entity engages in
a business activity that would be prohibited but for this provision, (1) owns,
directly or indirectly, less than a majority of the outstanding voting
securities (and which entity TAC or its Affiliates does not control) or (2)
owns, directly or indirectly, any equity interest so long as such other entity
has voting securities that are listed on a national securities exchange or
quoted on Nasdaq or is otherwise required to file periodic reports under the Exchange
Act;

 

(ii)           TAC’s
or its Affiliates’ ownership, direct or indirect, of voting securities or other
equity securities of any such other entities described in clause (i) above;

 

(iii)          the
ownership and/or operation of any assets owned by TAC or its Affiliates on the
Closing Date, including without limitation any capital improvements,
replacements or direct expansions of such assets; or

 

(iv)          the
ownership or operation of any assets or group of related assets used in the
Business that are acquired or constructed by TAC or its Affiliates after the
Closing Date if the fair market value of such assets is less than $10 million.

 

In consideration of the foregoing, effective on the
Closing Date, Pacific GP and Pacific LP agree, and agree to cause Pacific
Energy Group LLC (“PEG”), to amend the terms of that Omnibus Agreement dated
July 2002 by and among TAC, Pacific GP, Pacific LP and PEG to provide that the
provisions of Article II of the Omnibus Agreement shall be of no further force
and effect after the Closing Date.

 

2.3           Buyer
Non-Competition.  For as long as the
general partner of Pacific LP is an Affiliate of Buyer, Buyer shall be
prohibited from directly engaging in or acquiring the following businesses:

 

(i)            The transportation of crude oil by
pipeline in any state in the United States or in the province of Alberta,
Canada for any Person other than a Pacific Energy Entity; and

 

(ii)           Crude oil or related dark products storage
and terminalling activities in any state in the United States or in the
province of Alberta, Canada for any Person other than the Pacific Energy
Entities and their Affiliates.

 

Notwithstanding
anything to the contrary contained in this Section 2.3, this covenant
shall not apply to any activities performed by Buyer or its Affiliates
primarily in connection with oil and gas properties owned jointly by Buyer or
its Affiliates with other Persons, whether such activities are performed as the
operator pursuant to an operating agreement or otherwise.

 

2.4           Confidential
Information.  For so long as the
general partner of Pacific LP is an Affiliate of Buyer, Buyer agrees not to
disclose any confidential information regarding or in the possession of the
Pacific Energy Entities to any of its Affiliates unless such Affiliates agree
to be

 

4

 

bound by the restrictions on competition with
the Pacific Energy Entities contained in Section 2.3.  Notwithstanding anything to the contrary
contained in this Agreement, Buyer may disclose confidential information to
officers, directors, employees, representatives or other agents of its Affiliates
either to comply with internal reporting obligations or to seek assistance in
evaluating the investment in the Pacific Energy Entities without creating a
noncompetition obligation on such Affiliates if such personnel agree to keep
such information confidential and not use such information other than for such
purposes.

 

2.5           Severance
Costs and Expenses Paid by Buyer.  Buyer
shall promptly reimburse the Pacific Energy Entities for all severance payments
that arise under the Employment Agreements and the Employment Memorandum set
forth on Schedule 2 hereto within 180 days after the Closing Date and all
severance payments authorized by the Board of Directors of Pacific GP to be
made to any vice president level employee or above in the event of their
termination without Cause (as defined in the Employment Agreement of Irvin
Toole, Jr.) within 180 days after the Closing Date.

 

2.6           Certain
Capped Costs and Expenses Paid by Buyer and Seller.  Buyer and Seller agree that, upon receipt of
invoices, they shall promptly reimburse the Pacific Energy Entities for the
following expenses that may be incurred by the Pacific Energy Entities, subject
to an aggregate cap of $650,000:

 

(i)            The
cost and expenses, including the fees of counsel to the lenders, of obtaining a
written waiver of any events of default resulting from the Transactions from
the requisite lenders under the Partnership Credit Facilities;

 

(ii)           The
legal fees and expenses of (a) counsel to the independent directors and the Conflicts
Committee of the Board of Directors of Pacific GP and (b) counsel to Pacific LP,
in each case incurred in connection with the Transactions;

 

(iii)          Fees
and expenses of the Pacific Energy Entities related to assistance with Buyer’s
due diligence efforts in connection with the Transactions; and

 

(iv)          Fees
and expenses of accountants and tax consultants incurred by the Pacific Energy
Entities in connection with the Transactions, including such fees and expenses
related to additional tax return preparation as a result of the technical tax
termination of Pacific LP resulting from the Transactions.

 

Buyer
and Seller agree to allocate such costs equally among themselves; provided,
however, such allocation shall not limit the amount required to be reimbursed
pursuant to this Section 2.6.

 

2.7             Certain
Uncapped Costs and Expenses.

 

(i)            Buyer,
Seller and TAC shall pay all costs and expenses related to director and officer
liability insurance coverage for directors and officers of Pacific GP that
resign or are terminated on the Closing Date or within one year thereafter in
accordance with the provisions of Section 6.9 of the Purchase Agreement; and

 

5

 

(ii)           Buyer
and Seller agree that, upon receipt of invoices, they shall promptly reimburse
the Pacific Energy Entities for the fees and expenses of counsel and filing
fees that may be incurred by the Pacific Energy Entities in connection with
obtaining the necessary regulatory approvals for the Transactions from the
California Public Utility Commission and the Wyoming Public Service Commission
and, to the extent required, under the Canadian Competition Act and the
Investment Canada Act.  Buyer and Seller
agree to allocate such costs equally among themselves; provided, however, such
allocation shall not limit the amount required to be reimbursed pursuant to
this Section 2.7.

 

2.8           Senior
Notes.  Buyer has provided to Pacific
LP “highly confident” letters from Citigroup Global Markets, Inc. (“Citigroup”)
that provide that Citigroup is highly confident that if a change of control
offer (a “Change of Control Offer”) is required pursuant to the terms
and conditions of the Indenture, Citigroup can underwrite or syndicate the
financing necessary to finance a Change of Control Offer.  Buyer and Seller agree to cooperate with
Pacific LP to approach the rating agencies and request a rating indication from
them with respect to the Senior Notes. 
In the event Buyer and Seller, after consultation with the members of
the Conflicts Committee of the Board of Directors of Pacific GP, decide to seek
a consent from the holders of the Senior Notes to amend the Indenture and the
Senior Notes to provide that the Transactions do not trigger the Change of
Control Offer, Buyer and Seller agree to bear the costs and expenses associated
with such consent solicitation, including any consent fee, so long as such
solicitation is on terms and conditions reasonably acceptable to Buyer and
Seller.

 

In the event a Change of Control Offer is required
pursuant to the Indenture, Buyer and Seller will agree to bear the following costs
and expenses associated with the Change of Control Offer: legal fees and
expenses, the 1% premium and the upfront fees and expenses (including any
underwriting gross spread) of any new financing, the proceeds of which would be
used to fund the Change of Control Offer, so long as such new financing is on
terms and conditions reasonably acceptable to Buyer and Seller.  The Pacific Energy Entities will bear
the cost of a higher interest rate, or receive the benefit of a lower interest rate,
if any.

 

2.9           Acceleration of Vesting. 
Buyer agrees between the date hereof and the Closing Date to consult
with senior management of Pacific GP in an effort to try to minimize the
economic impact on Pacific LP as a result of the accelerated vesting of
Restricted Units that will occur upon the closing of the Transactions.  The Parties hereto acknowledge and agree that
this Section 2.9 does not require (i) any specific approach to be implemented
by Buyer to minimize such economic impact or (ii) any actual outcome to be
achieved.

 

2.10         Appointment of Certain Directors. 
Prior to December 31, 2005, Buyer agrees that no director will be appointed
to the Board of Directors of Pacific GP and no executive officer will be hired
by Pacific GP without the consent of the Conflicts Committee, other than
Permitted Appointees.  “Permitted
Appointee” means (i) any employee of Buyer or its Affiliates as of the date
hereof, (ii) any Person selected to serve as a director of Pacific GP who is an
employee of a private equity fund unaffiliated with Buyer who makes an equity
investment in Buyer or a Pacific Energy Entity in excess of $25 million and
(iii) Forrest E. Wylie and Khalid A. Muslih.

 

6

 

Notwithstanding
the foregoing, no provision of this Agreement shall be construed as restricting
the Persons to whom Buyer or a Pacific Energy Entity may sell securities or
incur Indebtedness.

 

 

ARTICLE III

 

MISCELLANEOUS
PROVISIONS

 

3.1           Amendment
and Modification.  Subject to
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of Seller, Buyer, TAC, Pacific GP and the Conflicts Committee
on behalf of Pacific LP hereto.

 

3.2           Termination;
Survival.  This Agreement shall
terminate if the Purchase Agreement is terminated prior to the Closing Date.  The covenants and obligations of the Parties
set forth in this Agreement shall survive from and after the Closing Date indefinitely
and the Parties shall be entitled to full performance thereof by the other
Parties hereto, without limitation as to time (except as otherwise specifically
set forth herein).  From and after the
Closing Date, this Agreement may not be terminated other than by written
agreement Seller, Buyer, TAC, Pacific GP and the Conflicts Committee on behalf
of Pacific LP hereto.

 

3.3           Waiver
of Compliance; Consents.  Except as
otherwise provided in this Agreement, any failure of any of the Parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

3.4           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission, or mailed by overnight courier or registered or certified
mail (return receipt requested), postage prepaid, to the recipient Party at its
address (or at such other address or facsimile number for a Party as shall be
specified by like notice; provided, however, that notices of a
change of address shall be effective only upon receipt thereof):

 

a.             If
to Seller:

 

 

	
  PPS
  Holding Company

  
	
  555
  17th Street, Suite 2400

  
	
  Denver,
  CO 80202

  
	
  Attention:   Clifford
  P. Hickey

  
	
  Telecopy:    303-299-1333

  
	
   

  
	
  with
  a copy to

  

 

7

 

	
  Hogan
  & Hartson LLP

  
	
  One
  Tabor Center

  
	
  1200
  17th Street, Suite 1500

  
	
  Denver,
  Colorado 80202-5840

  
	
  Attention:   Christopher
  J. Walsh, Esq.

  
	
  Telecopy:    303-899-7333

  

 

 

b.             If
to Buyer:

 

	
  LB
  Pacific, LP

  
	
  c/o
  Lehman Brothers

  
	
  399
  Park Avenue, 9th Floor

  
	
  New
  York, New York 10022

  
	
  Attention:   Christopher
  R. Manning

  
	
  Telecopy:    646-758-3708

  
	
   

  
	
  With
  a copy to:

  
	
   

  
	
  Baker
  Botts L.L.P.

  
	
  One
  Shell Plaza

  
	
  910
  Louisiana

  
	
  Houston,
  TX 77002-4995

  
	
  Attention:   Joshua
  Davidson, Esq.

  
	
  Telecopy:   713-229-2727

  

 

 

c.             If
to Pacific LP or Pacific GP:

 

	
  Pacific
  Energy Partners, LP

  
	
  5900
  Cherry Ave

  
	
  Los
  Angeles, CA 90805 4405

  
	
   

  
	
  Attention:   Irvin
  Toole, Jr.

  
	
  Telecopy:    562-728-2823

  
	
   

  
	
  With
  copies to:

  
	
   

  
	
  Pacific
  Energy Partners, LP

  
	
  5900
  Cherry Ave

  
	
  Los
  Angeles, CA 90805-4405

  
	
   

  
	
  Attention:
  Lynn T. Wood, Esq.

  
	
  Telecopy:
  562-728-2823

  

 

8

 

	
  Vinson
  & Elkins LLP

  
	
  666
  Fifth Avenue, 25th Floor

  
	
  New
  York, New York 10103

  
	
   

  
	
  Attention:
  Alan P. Baden

  
	
  Telecopy:
  212-237-0100

  
	
   

  
	
  Richards,
  Layton & Finger, P.A.

  
	
  One
  Rodney Square

  
	
  920
  North King Street

  
	
  Wilmington,
  Delaware 19899

  
	
   

  
	
  Attention:
  Srinivas M. Raju

  
	
  Telecopy:
  302-651-7701

  

 

3.5           Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties hereto and
their respective successors and permitted assigns, and except as provided herein,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any Party hereto, including by operation of law,
without the prior written consent of the other Party.

 

3.6           Parties
in Interest; No Third-Party Beneficiaries. 
This Agreement is for the sole benefit of the Parties hereto and their
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the Parties hereto, and such
assigns, any legal or equitable rights hereunder.

 

3.7           Specific
Performance; No Punitive or Consequential Damages.  THE PARTIES AGREE THAT BECAUSE AN AWARD OF
MONEY DAMAGES WOULD BE INADEQUATE FOR ANY BREACH OF SECTIONS 2.1, 2.2, 2.3, 2.4,
2.8, 2.9 OR 2.10 OF THIS AGREEMENT BY BUYER, SELLER OR TAC AND WOULD CAUSE
PACIFIC LP IRREPARABLE HARM, BUYER, SELLER AND TAC AGREE THAT, IN THE EVENT OF
ANY BREACH BY BUYER, SELLER OR TAC OF SUCH SECTIONS, PACIFIC LP WILL BE
ENTITLED TO SEEK SPECIFIC PERFORMANCE. 
WITH RESPECT TO A BREACH OF ALL OTHER PROVISIONS OF THIS AGREEMENT BY
BUYER, SELLER OR TAC NOT SPECIFICALLY IDENTIFIED ABOVE, THE PARTIES AGREE THAT
PACIFIC LP’S REMEDIES AT LAW SHALL BE ADEQUATE AND PACIFIC LP SHALL NOT BE
ENTITLED TO SPECIFIC PERFORMANCE IN CONNECTION WITH THOSE SECTIONS OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY FOR ANY ACTUAL OR IMPENDING
BREACH HEREOF.  NO PARTY OR ITS
AFFILIATES SHALL SEEK OR BE LIABLE FOR ANY PUNITIVE OR CONSEQUENTIAL DAMAGES,
INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE OR INCOME, OR LOSS OF BUSINESS
REPUTATION OR OPPORTUNITY RELATING TO ANY BREACH OR ALLEGED BREACH OF THIS
AGREEMENT.

 

3.8           Remedies
as between Buyer, Seller and TAC.  Buyer, Seller and TAC each agree that any
breach of this Agreement by any of them shall be deemed to be a breach under
the

 

9

 

Purchase Agreement and
that their sole and exclusive remedies as to each other with respect to such
breach shall be governed by the provisions, limitations and exclusions set
forth in the Purchase Agreement.

 

3.9           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the law of the State of Delaware
(without giving effect to conflict of law principles) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies.  THE PARTIES
HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE COURTS OF THE STATE OF
DELAWARE LOCATED IN WILMINGTON, DELAWARE AND THE FEDERAL COURTS IN AND FOR THE
STATE OF DELAWARE, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR SUCH
PURPOSE, AND THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. SERVICE
OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

3.10         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

3.11         Interpretation.  The article, section and schedule headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the Parties and shall not in any way affect the
meaning or interpretation of this Agreement.

 

3.12         Entire
Agreement.  As among and between
Buyer, Seller and TAC, this Agreement, the Purchase Agreement and the
Confidentiality Agreement, including the schedules, exhibits, documents,
certificates and instruments referred to herein or therein, embody the entire
agreement and understanding of Buyer, Seller and TAC in respect of the
transactions contemplated by this Agreement. 
As between Buyer, Seller and TAC, on the one hand, and Pacific LP and
Pacific GP, on the other hand, this Agreement including the schedules,
documents, certificates and instruments referenced herein, embodies the entire
agreement and understanding of such Parties in respect of the transactions
contemplated by this Agreement.  This
Agreement supersedes all prior agreements and understandings between the
Parties with respect to such transactions.

 

3.13         Severability.  Any provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

10

 

IN WITNESS WHEREOF, the Parties have caused
this Agreement to be signed by their respective duly authorized officers as of
the date first above written.

 

 

	
   

  	
  PPS
  HOLDING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  CLIFFORD P. HICKEY

  	
   

  
	
   

  	
   

  	
  Name:  Clifford P. Hickey

  
	
   

  	
   

  	
  Title:    Vice President

  
	
   

  	
   

  
	
   

  	
  THE ANSCHUTZ
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  CRAIG D. SLATER

  	
   

  
	
   

  	
   

  	
  Name:  Craig D. Slater

  
	
   

  	
   

  	
  Title:    Executive Vice President

  
	
   

  	
   

  
	
   

  	
  LB
  PACIFIC, LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  LB Pacific GP, LLC,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/
  CHRISTOPHER R. MANNING

  	
   

  
	
   

  	
   

  	
   

  	
  Christopher R. Manning

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  ENERGY PARTNERS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Pacific
  Energy Partners GP, Inc.

  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/
  IRVIN TOOLE, JR.

  	
   

  
	
   

  	
   

  	
  Name:  Irvin Toole, Jr.

  
	
   

  	
   

  	
  Title:    President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PACIFIC
  ENERGY PARTNERS GP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  IRVIN TOOLE, JR.

  	
   

  
	
   

  	
   

  	
  Name:  Irvin Toole, Jr.

  
	
   

  	
   

  	
  Title:    President & CEO

  
						

 

 

SCHEDULE 1

 

Pacific Subsidiaries

 

	
  Subsidiary

  	
   

  	
  Jurisdiction of Formation

  
	
  Pacific Energy
  Finance Corporation

  	
   

  	
  Delaware

  
	
  PEG Canada GP
  LLC

  	
   

  	
  Delaware

  
	
  Pacific Energy
  Group LLC

  	
   

  	
  Delaware

  
	
  PEG Canada, L.P.

  	
   

  	
  Delaware

  
	
  Pacific
  Terminals LLC

  	
   

  	
  Delaware

  
	
  Pacific Pipeline
  System LLC

  	
   

  	
  Delaware

  
	
  Pacific
  Marketing and Transportation LLC

  	
   

  	
  Delaware

  
	
  Rocky Mountain
  Pipeline System LLC

  	
   

  	
  Delaware

  
	
  Ranch Pipeline
  LLC

  	
   

  	
  Delaware

  
	
  Rangeland
  Pipeline Company

  	
   

  	
  Nova Scotia

  
	
  Aurora Pipeline
  Company Ltd.

  	
   

  	
  Canada

  
	
  Rangeland
  Pipeline Partnership

  	
   

  	
  Alberta

  
	
  Rangeland
  Northern Pipeline Company

  	
   

  	
  Nova Scotia

  
	
  Rangeland
  Marketing Company

  	
   

  	
  Nova Scotia

  

 

 

SCHEDULE 2

 

Employment Agreements

 

1.             Employment
Agreement dated October 1, 2002 between Pacific Energy GP, Inc. and Douglas L.
Polson.

 

2.             Employment
Agreement dated September 16, 2002 between Pacific Energy GP, Inc. and Lynn T.
Wood.

 

3.             Employment
Agreement dated November 1, 2002 between Pacific Energy GP, Inc. and Gerald A.
Tywoniuk.

 

4.             Employment
Agreement dated January 1, 2002 between Pacific Energy GP, Inc. and Gary L.
Zollinger.

 

5.             Employment
Agreement dated January 1, 2002 between Pacific Energy GP, Inc. and David E.
Wright.

 

6.             Employment
Agreement dated January 1, 2002 between Pacific Energy GP, Inc. and Irvin
Toole, Jr.

 

7.             Memorandum
dated March 31, 2004 governing the employment of Ed Scheibelhut.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]