Exhibit 10.8

FORM OF

DEVELOPMENT RIGHTS

AND COOPERATION AGREEMENT

BETWEEN

USD TERMINALS CANADA ULC,

a British Columbia unlimited liability company

as “Current Operator”

AND

USD TERMINALS CANADA II ULC,

a British Columbia unlimited liability company

as “Developer”

Dated as of             , 2014

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TABLE OF CONTENTS

 

ARTICLE 1. DEFINED TERMS					2
1.1		Defined Terms			2
ARTICLE 2. EXCLUSIVE DEVELOPMENT RIGHTS, CONSTRUCTION MATTERS, ACCESS AND USE, COOPERATION AND OTHER MATTERS					4
2.1		Exclusive Development Rights			4
2.2		Construction Matters			5
2.3		Access to Existing Improvements; Easements and Related Rights			6
2.4		Ownership of Improvements and Lien Rights			7
2.5		Subordination by Mortgagee(s)			7
2.6		General Cooperation			7
2.7		Memorandum of Agreement.			7
ARTICLE 3. REPRESENTATIONS AND WARRANTIES					8
3.1		Representations and Warranties of Current Operator.			8
3.2		Representations and Warranties of Developer			8
ARTICLE 4. GENERAL PROVISIONS					9
4.1		Covenants Run with Land			9
4.2		Binding Effect			9
4.3		Attorneys’ Fees			9
4.4		Waivers			9
4.5		Governing Law			9
4.6		Time; Time Periods			9
4.7		Notices			9
4.8		Further Documentation			10
4.9		No Third Party Beneficiary			10
4.10		Headings and Counterparts			10
4.11		Entire Agreement; Amendments			10
4.12		Severability			10
4.13		Exhibits			10

EXHIBITS

 

Exhibit A		Legal Description of Hardisty Rail Property
Exhibit B		Current Site Plan of Hardisty Rail Facility
Exhibit C		Legal Description of Undeveloped Land
Exhibit D		General Description of Phase II Expansion
Exhibit E		General Description of Phase IIA Expansion
Exhibit F		General Description of Phase III Expansion
Exhibit G		Preliminary Site Plan for Phase II Expansion and Phase IIA Expansion

 

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DEVELOPMENT RIGHTS

AND COOPERATION AGREEMENT

THIS DEVELOPMENT RIGHTS AND COOPERATION AGREEMENT (“Agreement”) is made and entered into as of             , 2014 (the “Effective Date”), by and between USD TERMINALS CANADA ULC, a British Columbia unlimited liability company (together with its successors and assigns, “Current Operator”), and USD TERMINALS CANADA II ULC, a British Columbia unlimited liability company (together with its successors and assigns, “Developer”). Current Operator and Developer are sometimes referred to herein, collectively as the “Parties,” and individually, as a “Party.”

RECITALS

A. Current Operator is the owner of certain tracts or parcels of real estate located in the vicinity of Hardisty, AB, Canada, as more particularly described on Exhibit A attached hereto (the “Hardisty Rail Property”). The Hardisty Rail Property has been improved with a rail terminal facility (the “Hardisty Rail Terminal Facility”) as generally depicted on the site plan attached hereto as Exhibit B.

B. Pursuant to that certain Purchase and Sale Agreement dated as of             , 2014, by and between Current Operator and Developer, Developer is acquiring from Current Operator on and as of the Effective Date, certain undeveloped tracts or parcels of real estate located adjacent to the Hardisty Rail Property, as more particularly described on Exhibit C attached hereto (the “Undeveloped Land”).

C. Developer desires to obtain certain rights (i) to develop, construct and operate certain proposed expansion(s) of the Hardisty Rail Terminal Facility in, on, over, across and under the Hardisty Rail Property in connection with the Development Projects (as defined below), and each of them, and (ii) to obtain certain other rights in, on, over and across the Hardisty Rail Property in connection with the proposed Development Projects, and each of them.

D. In connection with the proposed Development Projects, including in furtherance of Developer’s ownership and development of the Undeveloped Land and any future land acquired by Developer relating thereto (herein, “Future Acquired Land”), Developer and Current Operator wish to enter into this Agreement to set forth the general intent of the Parties and agreement of the Current Operator (i) to grant to Developer the exclusive right to develop, construct and operate certain aspects of the Development Projects, and each of them, in, on, over, across and under the Hardisty Rail Property, (ii) to grant to Developer the right to use (both on a temporary and permanent basis) certain portions of the Hardisty Rail Property and Hardisty Rail Terminal Facility in connection with the development, construction and operation of the Development Projects, and each of them, (iii) to cooperate with Developer in connection with the development, construction and operation of the Development Projects, and each of them, and (iv) to enter into such further agreements or instruments with or for the benefit of Developer the Undeveloped Land and any Future Acquired Land, and to grant further rights in, on, over, across and under the Hardisty Rail Property to or for the benefit of Developer the Undeveloped Land and any Future Acquired Land, as Developer may reasonably request in connection with the Development Projects, or any of them.

 

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AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, and in consideration of the foregoing Recitals and facts, the mutual covenants contained herein, and the terms and conditions set forth herein, the Parties mutually covenant, declare, and agree as follows:

ARTICLE 1.

DEFINED TERMS

1.1 Defined Terms. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Article and used in this Agreement shall have the meanings assigned to them in this Article and include the plural as well as the singular, (ii) all references in this Agreement to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement, (iii) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and (iv) the word “including” shall have the same meaning as the phrase “including, without limitation,” and other similar phrases.

“Affiliate: Any Person that, directly or indirectly (including through one or more intermediaries), controls or is controlled by or is under common control with any other Person. For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly (including through one or more intermediaries), of the power to direct or cause the direction of the management and policies of such Person, through the ownership or control of voting securities, partnership interests or other equity interests or otherwise.

“Agreement” shall mean this Agreement, as the same may be amended or modified from time to time in accordance with the terms hereof.

“Claims” means any and all obligations, debts, covenants, conditions, representations, costs, and liabilities and any and all demands, causes of action, and claims, of every type, kind, nature or character, direct or indirect, known or unknown, absolute or contingent, determined or speculative, at law, in equity or otherwise, including attorneys’ fees and litigation and court costs.

“Current Operator” shall have the meaning set forth in the Preface hereto, and shall include its successors and assigns.

“Developer” shall have the meaning set forth in the Preface hereto, and shall include its successors and assigns.

“Development Project” shall mean each of the Phase II Expansion, Phase IIA Expansion and Phase III Expansion (collectively, the “Development Projects”). A preliminary site plan of the Phase II Expansion and Phase IIA Expansion is attached hereto as Exhibit G. A preliminary site plan for the Phase III Expansion has not yet been prepared.

 

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“Development Term” shall mean the period commencing on the Effective Date and continuing for seven (7) years thereafter.

“Easements and Related Rights” shall have the meaning set forth in Section 2.3(b) hereof.

“Future Acquired Land” shall have the meaning set forth in the Recitals hereto.

“Hardisty Rail Property” shall have the meaning set forth in the Recitals hereto.

“Hardisty Rail Terminal Facility” shall have the meaning set forth in the Recitals hereto.

“Mortgage” shall mean any mortgage, debenture, deed of trust or other security agreement encumbering the Hardisty Rail Property, or any portion thereof, and securing an indebtedness of Current Operator or any Affiliate of Current Operator.

“Mortgagee” shall mean the holder or beneficiary of a Mortgage and any other rights of the lender or credit party under any loan or credit agreement, lease, note, collateral assignment instruments, guarantees, indemnity agreements and other documents or instruments evidencing, securing or otherwise relating to the loan made, credit extended, or other financing vehicle pursuant thereto.

“Person” means an individual, partnership, corporation, trust, limited liability company or other entity.

“Phase II Expansion” is generally described on Exhibit D attached hereto and depicted on Exhibit G attached hereto, and shall include such changes thereto or modifications thereof as Developer may from time to time determine, provided that any such changes or modifications, whether individually or in the aggregate, do not materially and adversely affect the current operation or use of the Hardisty Rail Terminal Facility. For purposes of this Agreement, the “Phase II Expansion” shall be those development, construction and operational activities and rights conducted in, on, over, across and under the Hardisty Rail Property, it being acknowledged by the Parties that other Phase II Expansion development, construction and operational activities and rights will or may also be conducted by Developer on the Undeveloped Land and/or on any Future Acquired Land.

“Phase IIA Expansion” is as generally described on Exhibit E attached hereto hereto and depicted on Exhibit G attached hereto and shall include such changes thereto or modifications thereof as Developer may from time to time determine, provided that any such changes or modifications, whether individually or in the aggregate, do not materially and adversely affect the current operation or use of the Hardisty Rail Terminal Facility. For purposes of this Agreement, the “Phase IIA Expansion” shall be those development, construction and operational activities and rights conducted in, on, over, across and under the Hardisty Rail Property, it being acknowledged by the Parties that other Phase IIA Expansion development, construction and operational activities and rights will or may also be conducted by Developer on the Undeveloped Land and/or on any Future Acquired Land.

 

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“Phase III Expansion” is as generally described on Exhibit F attached hereto and shall include such changes thereto or modifications thereof as Developer may from time to time determine, provided that any such changes or modifications, whether individually or in the aggregate, do not materially and adversely affect the current operation or use of the Hardisty Rail Terminal Facility. For purposes of this Agreement, the “Phase III Expansion” shall be those development, construction and operational activities and rights conducted in, on, over, across and under the Hardisty Rail Property, it being acknowledged by the Parties that other Phase III Expansion development, construction and operational activities and rights will or may also be conducted by Developer on the Undeveloped Land and/or on any Future Acquired Land.

“Permits” shall mean, with respect to any improvements to be constructed or installed on the Hardisty Rail Property in connection with a Development Project, any and all governmental permits, licenses and approvals required in connection therewith.

“Plans” shall mean, with respect to any improvements to be constructed or installed on the Hardisty Rail Property in connection with a Development Project, including any improvements that will be connected to or otherwise integrated with the Hardisty Rail Terminal Facility for joint use with such Development Project, the plans and specifications therefor as prepared by Developer and approved by Current Operator and, if required, by any Mortgagee; provided, however, that Current Operator shall not unreasonably withhold, condition or delay any such approval and shall cooperate in good faith with Developer in seeking the approval of any Mortgagee so long such Development Project and the operation thereof will not, in the reasonable, good faith judgment of Current Operator, materially and adversely affect the current operation or use of the Hardisty Rail Terminal Facility.

“Site Work” shall have the meaning set forth in Section 2.2.

“Unavoidable Delays” shall mean any cause whatsoever beyond the reasonable control of Developer, including war, act of terrorism, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, acts of God, freight embargoes, lack of transportation, governmental restrictions, requirements or priority, change in applicable law, administrative appeals, arbitration or litigation (including litigation challenging any Permits), unusually severe weather, inability to secure necessary labor, materials or tools, acts or failure to act of any governmental authority.

“Undeveloped Land” shall have the meaning set forth in the Recitals hereto.

ARTICLE 2.

EXCLUSIVE DEVELOPMENT RIGHTS, CONSTRUCTION MATTERS, ACCESS

AND USE, COOPERATION AND OTHER MATTERS

2.1 Exclusive Development Rights. The Parties agree that during the Development Term, Developer shall have the exclusive right to develop and construct the Development Projects, including any portion thereof, on the Hardisty Rail Property. Current Operator shall not, and shall not permit any other Person during the Development Term, to develop, construct or install any facilities or other improvements on the Hardisty Rail Property that would expand the operational capacity of the Hardisty Rail Terminal Facility without the prior written approval of Developer, which approval maybe given or withheld in the sole and absolute discretion of Developer.

 

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2.2 Construction Matters.

(a) Generally. In connection with any improvements to be constructed or installed on the Hardisty Rail Property in connection with any Development Project (any such work on the Hardisty Rail Property, and any required access thereto, relating to such Development Project, or any portion thereof, the “Site Work”) shall be in accordance with the following:

(i) Such Site Work shall be the sole responsibility of Developer, both as to performance and payment of costs therefor;

(ii) Such Site Work shall not commence until (A) the applicable Plans therefor shall have been approved by Current Operator and, if required, by any Mortgagee, in accordance with the definition of “Plans” set forth above, and (B) Developer shall have procured and paid for all required Permits therefor; provided, however, that at the request of Developer, at no cost or expense to Current Operator, Current Operator shall join in the application for any such Permits whenever such action is necessary or required;

(iii) Developer shall notify Current Operator not less than ten (10) days prior to the commencement of such Site Work;

(iv) There shall be no material changes in the approved Plans for such Site Work, without first obtaining the prior written approval of Current Operator, and if required, any Mortgagee, with respect thereto; provided, however, that Current Operator shall not unreasonably withhold, condition or delay any such approval and shall cooperate in good faith with Developer in seeking the approval of any Mortgagee so long as such changes will not, in the reasonable, good faith judgment of Current Operator, materially and adversely affect the current operation or use of the Hardisty Rail Terminal Facility;

(v) Once commenced, such Site Work shall be performed in material compliance with the approved Plans (and any approved changes thereto) and shall be diligently prosecuted to completion (subject to Unavoidable Delays); provided, however, that nothing herein shall require Developer to use any overtime or special rate of labor;

(vi) At all times during the performance of such Site Work, Developer shall maintain or cause to be maintained customary builder’s risk and liability insurance for the benefit of Developer and Current Operator; and

(vii) All Site Work shall be performed and completed in a good and workmanlike manner and in conformity with all applicable laws.

(b) Restoration. In the event that any portion of the Hardisty Rail Terminal Facility is damaged by any Site Work being performed by Developer pursuant to the rights granted to Developer hereunder, Developer shall promptly repair or replace the same at Developer’s sole cost and expense.

 

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(c) Indemnification. Developer shall indemnify, defend and hold harmless Current Operator and its Affiliates from and against all Claims arising out of the performance or completion of any such Site Work.

2.3 Access to Existing Improvements; Easements and Related Rights; Master Agreement(s).

(a) Access. Subject to the provisions of this Section 2.3 below, Developer shall have reasonable access in, on, over, across and under the Hardisty Rail Property and any and all existing improvements located or hereinafter located thereon for the purposes of developing, constructing and operating the Development Projects, and each of them, as herein provided. In the event that Current Operator determines that Developer is subjecting any such improvements to excess wear and tear, Current Operator shall have the right to charge Developer reasonable costs related to Developer’s use of any such improvements.

(b) Easements and Related Rights. Without limiting the provisions of Section 2.3(a) above, Current Operator shall, at the request of Developer, grant such permanent and/or temporary easements, access rights and development and use rights (the “Easements and Related Rights”) in, on, over, under and across the Hardisty Rail Property as the servient tenement for such purposes as Developer may reasonably request in connection with the Development Projects, and each of them, including, but not limited to, easements and related rights for access (including vehicle road access), rail purposes, utilities, drainage and storm water retention facilities, construction and grading (including for slopes and roads), aerial easements and for other general use purposes as necessary to support the commencement, completion and operation of the Development Projects, and each of them, to or for the benefit of Developer and the Undeveloped Land and/or any Future Acquired Land as the dominant tenement, provided that the location of such Easements and Related Rights shall be in locations reasonably approved by Current Operator and, if required, any Mortgagee, and shall not permanently and materially interfere with Current Operator’s current operation and use of the Hardisty Rail Terminal Facility. All such Easement and Related Rights shall be on customary terms and conditions to be agreed upon by Current Operator and Developer, each in good faith and in their reasonable discretion, and if required, approved by any Mortgagee. Without limiting the general nature of the foregoing, the Parties further agree as follows:

(i) Such Easements and Related Rights may include easements to the county, city, municipality, utility companies and other entities that may require development, utility and similar easements in connection with the Development Projects, and either of them; and

(ii) Such Easements and Related Rights may be requested by Developer in form acceptable for recording in the official land records in the jurisdiction in which the Hardisty Rail Property, the Undeveloped Land and/or any Future Acquired Land are located;

 

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(c) Master Agreement(s). Without limiting the Parties obligations pursuant to this Section 2.3, if either Party determines that it is reasonably necessary or desirable to enter into one or more construction, reciprocal easement, joint use and operation, shared facilities or similar agreement(s) pertaining to the development, construction, operation and/or use of the Development Projects, or either of them, and the Hardisty Rail Terminal Facility, then upon the request of either such Party, the Parties shall each promptly and in good faith and in their reasonable discretion negotiate for and enter into such agreement(s), which agreement(s) (i) may contain customary terms and conditions pertaining to, among other matters, the matters set forth in this Agreement, future maintenance and capital expenses for any shared facilities, apportionment of shared operating and capital expenses, coordination of business activities, non-interference covenants, restrictions on changes in use, maintenance of insurance and mutual indemnification, and (ii) shall be in form acceptable for recording in the official land records in the jurisdiction in which the Hardisty Rail Property, the Undeveloped Land and any Future Acquired Land are located.

2.4 Ownership of Improvements and Lien Rights. Notwithstanding any rule of law or equity, at all times Developer shall have (a) ownership of any and all improvements constructed or installed in, on, over, across and under the Hardisty Rail Property, the Undeveloped Land and any Future Acquired Land in connection with the Development Projects, and each of them, notwithstanding that any portion thereof may be annexed or affixed to the Hardisty Rail Property and (b) the right to grant liens on said improvements and to any access, use or other rights in, on, over, across and under the Hardisty Rail Property granted to or for the benefit of Developer, the Undeveloped Land and/or any Future Acquired Land under or pursuant to this Agreement (including any rights under any agreement(s) entered into pursuant to Section 2.3(c) above), in each case without the consent or approval of Current Operator or any Mortgagee, and (c) the right to remove any or all such improvements from time to time.

2.5 Subordination by Mortgagee(s). Current Operator covenants and agrees to cooperate with Developer and to use commercially reasonable, good faith efforts to cause any Mortgagee holding a superior lien on the Hardisty Rail Property to approve any Easements and Related Rights and any agreements(s) entered into pursuant to Section 2.3(c) above, in each case to the extent required by the terms of any Mortgage and/or related loan documents, and to subordinate such Mortgagee’s lien to the rights and obligations granted thereunder.

2.6 General Cooperation. Current Operator agrees and covenants to fully cooperate with Developer in connection with the Development Projects, and each of them, including, without limitation, by (a) granting those rights and easements reasonably necessary to commence and complete any Site Work and to operate and use the Development Projects, and each of them, and (b) executing and delivering any additional documents and/or instruments reasonably requested by Developer in connection therewith.

2.7 Memorandum of Agreement. At the request of either Party, the Parties shall execute, acknowledge (if applicable) and deliver a short form memorandum of or other instrument evidencing this Agreement in form and substance reasonably acceptable to the Parties. Following execution, acknowledgement (if applicable) and delivery thereof, either Party, at its sole cost and expense, shall be entitled to record such instrument in the official land records in the jurisdiction in which the Hardisty Rail Property and Undeveloped Land are located.

 

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ARTICLE 3.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Current Operator. Current Operator represents and warrants to Developer as follows:

(a) Organizational Status. Current Operator is an unlimited liability company validly existing under the laws of British Columbia and extra-provincially registered in Alberta and has full power and authority to enter into and to perform its obligations under this Agreement. The Persons executing this Agreement on behalf of Current Operator have full power and authority to do so and to perform every act and to execute and deliver every document and instrument necessary or appropriate to consummate the transactions contemplated by this Agreement. Current Operator has all necessary power and authority to own its properties and to conduct its business as now owned and conducted by Current Operator.

(b) Entity Action. All corporate action on the part of Current Operator which is required for the execution, delivery and performance by Current Operator of this Agreement has been taken, and each of the documents and agreements to be delivered by Current Operator concurrently herewith or hereafter has been or will be duly and effectively taken.

(c) Enforceable Nature of Agreement. This Agreement and each of the documents and agreements to be delivered by Current Operator concurrently herewith or hereafter, constitute and will constitute legal, valid and binding obligations of Current Operator, enforceable against Current Operator in accordance with their respective terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, or similar laws affecting the enforcement of creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a court of law or equity).

3.2 Representations and Warranties of Developer. Developer represents and warrants to Current Operator as follows:

(a) Organizational Status. Developer is an unlimited liability company validly existing under the laws of British Columbia and extra-provincially registered in Alberta and has full power and authority to enter into and to perform its obligations under this Agreement. The Persons executing this Agreement on behalf of Developer have full power and authority to do so and to perform every act and to execute and deliver every document and instrument necessary or appropriate to consummate the transactions contemplated by this Agreement. Developer has all necessary power and authority to own its properties and to conduct its business as now owned and conducted by Developer.

(b) Entity Action. All corporate action on the part of Developer which is required for the execution, delivery and performance by Developer of this Agreement has been taken, and each of the documents and agreements to be delivered by Developer concurrently herewith or hereafter has been or will be duly and effectively taken.

 

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(c) Enforceable Nature of Agreement. This Agreement and each of the documents and agreements to be delivered by Developer concurrently herewith or hereafter, constitute and will constitute legal, valid and binding obligations of Developer, enforceable against Developer in accordance with their respective terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, or similar laws affecting the enforcement of creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a court of law or equity).

ARTICLE 4.

GENERAL PROVISIONS

4.1 Covenants Run with Land. The rights granted, created and made herein for the benefit of Developer and the Undeveloped Land and any Future Acquired Land, in each case as dominant tenement, together with the benefits and burdens thereof, shall run with and bind the Hardisty Rail Property as servient tenement and shall bind and inure to the benefit of the Undeveloped Land and any Future Acquired Land; provided, however, that only Developer and its successors and assigns shall have any right to enforce the rights granted to Developer hereunder and inuring to the benefit of the Undeveloped Land and any Future Acquired Land.

4.2 Binding Effect. The provisions of this Agreement are binding upon and will inure to the benefit of the Parties and their respective heirs, personal representatives, successors and assigns.

4.3 Attorneys’ Fees. If any action or arbitration is brought by either party in respect to its rights under this Agreement, the prevailing Party will be entitled to reasonable attorneys’ fees and court costs as determined by the court.

4.4 Waivers. No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision, whether or not similar, nor will any waiver be a continuing waiver. No waiver will be binding unless executed in writing by the party making the waiver. Either party may waive any provision of this Agreement intended for its benefit; provided, however, such waiver will in no way excuse the other Party from the performance of any of its other obligations under this Agreement.

4.5 Governing Law. This Agreement will be construed according to the laws of Alberta, Canada, without giving effect to its conflict of laws principles.

4.6 Time; Time Periods. Time is of the essence of this Agreement. Any reference in this Agreement to “days” shall mean calendar days.

4.7 Notices. Notices will be in writing and will be given by personal delivery, by deposit in the United States mail, certified mail, return receipt requested, postage prepaid, by facsimile transmission, or by express delivery service, freight prepaid. Notices will be delivered or addressed to a Party at the addresses or facsimile numbers set forth below or at such other address or number as a Party may designate in writing. The date notice is deemed to have been given, received and become effective will be (a) the date on which the notice is delivered, if notice is given by personal delivery, (b) the date of actual receipt, if the notice is sent through the United States mail or by express delivery service, or (c) if notice is sent by facsimile transmission, on the date of transmission, if the transmission is commenced prior to 5:00 p.m. (Houston time) and continuously transmitted thereafter until complete, otherwise on the day following the date of transmission.

 

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If to Current Operator:

c/o USD Partners LP

811 Main, Suite 2800

Houston, TX 77002

Attn: Adam Altsuler

Fax: 855-435-6255

If to Developer:

c/o USD Group LLC

811 Main, Suite 2800

Houston, TX 77002

Attn: Chris Robbins

Fax: 866-480-6637

4.8 Further Documentation. Each Party agrees in good faith to execute such further or additional documents as may be reasonably necessary or appropriate to fully carry out the intent and purpose of this Agreement.

4.9 No Third Party Beneficiary. No term or provision of this Agreement is intended to, or shall, be for the benefit of any Person not a party hereto and no such Person shall have any right or cause of action hereunder.

4.10 Headings and Counterparts. The headings of this Agreement are for purposes of reference only and will not limit or define the meaning of any provision of this Agreement. This Agreement may be executed in any number of counterparts, each of which will be an original but all of which will constitute one and the same instrument.

4.11 Entire Agreement; Amendments. This Agreement and the exhibits hereto and thereto constitute the entire agreement between the parties pertaining to the subject matter contained in this Agreement. All prior and contemporaneous agreements and understandings of the Parties, oral or written, are superseded by and merged in this Agreement. No supplement, modification or amendment of this Agreement will be binding unless in writing and executed by the Parties.

4.12 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable the remainder of this Agreement shall nonetheless remain in full force and effect; provided that the invalidity or unenforceability of such provision does not materially adversely affect the benefits accruing to any Party hereunder.

4.13 Exhibits. All exhibits attached to this Agreement are incorporated herein by reference.

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of Effective Date set forth above.

 

 

 

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EXHIBIT A

LEGAL DESCRIPTION OF HARDISTY RAIL PROPERTY

PLAN 1322469

BLOCK 1

LOT 1

EXCEPTING THEREOUT ALL MINES AND MINERALS

AREA: 142.56 HECTARES (352.27 ACRES) MORE OR LESS

 

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EXHIBIT B

CURRENT SITE PLAN OF HARDISTY RAIL FACILITY

[To be attached.]

 

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EXHIBIT C

LEGAL DESCRIPTION OF UNDEVELOPED LAND

Firstly:

MERIDIAN 4 RANGE 9 TOWNSHIP 42

SECTION 26

QUARTER SOUTH WEST

CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS

EXCEPTING THEREOUT :

A) 0.413 HECTARES (1.02 ACRES) MORE OR LESS

AS SHOWN ON ROAD PLAN 1656TR

B) 0.417 HECTARES (1.03 ACRES) MORE OR LESS

AS SHOWN ON ROAD PLAN 8320717

EXCEPTING THEREOUT ALL MINES AND MINERALS

AND THE RIGHT TO WORK THE SAME

Secondly:

THE SOUTH EAST QUARTER OF SECTION TWENTY SIX (26)

TOWNSHIP FORTY TWO (42)

RANGE NINE (9)

WEST OF THE FOURTH MERIDIAN

CONTAINING 64.7 HECTARES (160 ACRES) MORE OR LESS.

EXCEPTING THEREOUT:

0.417 HECTARES (1.03 ACRES) MORE OR LESS, AS SHOWN

ON ROAD PLAN 8320717.

EXCEPTING THEREOUT ALL MINES AND MINERALS

AND THE RIGHT TO WORK THE SAME.

 

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EXHIBIT D

GENERAL DESCRIPTION OF PHASE II EXPANSION

 

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Increase capacity to support one (1) additional train per day (total of 3).

 

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Construction of three (3) additional support rail tracks and one (1) additional loading rail track.

 

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Construction of an additional manifold pipeline connection to Gibsons’ existing 24” crude feeder pipeline to include replication of all pig cleans, strainers and cruder feeder monitoring equipment. Note: assumes that Gibsons has sufficient pumping, pipeline and tankage equipment to support loading of two (2) additional trains per day. Also note: Gibsons will be required to construct an additional crude feeder pipeline to tie into the new manifold pipeline connecting to the 2nd side of the Phase II Expansion rail loading rack.

 

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Installation of additional rack components to support the 2nd side of the Phase II Expansion rail loading rack (includes tying into the existing VCU system and industrial drainage, of which are designed to accommodate up to 4 trains per day).

 

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All site civil and drainage works to support the construction activities above.

 

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EXHIBIT E

GENERAL DESCRIPTION OF PHASE IIA EXPANSION

 

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Increase capacity to support one (1) additional train per day (total of 4).

 

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Construction of two (2) northern loop connection tracks to include southern portion of the future further expansion of operating loop track (i.e., the Phase III Expansion).

 

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Construction of three (3) additional support rail tracks and one (1) additional loading rail track.

 

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All site civil, road crossing and drainage works to support construction activities above.

 

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EXHIBIT F

GENERAL DESCRIPTION OF PHASE III EXPANSION

 

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Increase capacity to support 1 additional train per day (total of 5) with focus on supporting the loading of stabilized bitumen as well as the potential for inbound offloading of units trains handling diluent.

 

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Construction of five (5) additional support rail tracks and one (1) additional loading rail track.

 

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Construction of an additional manifold pipeline connection to a new Gibsons 24” crude feeder pipeline to include replication of all pig clean-outs, strainers and crude feeder monitoring equipment. Note: will require Gibsons to construct additional pumping, pipeline and tankage equipment to sufficiently support the loading of one (1) additional train per day.

 

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Construction of a new manifold pipeline connection and new 16” diluent recovery line to include all required pumps, surge tanks and monitoring equipment to support the offload of diluent by rail. Note: will require Gibsons to construct additional pumping, pipeline and tankage equipment to sufficiently connect to the surge tankage and pipeline supporting inbound unit trains of diluent offloaded at the new Phase III rail terminal and pumped to Gibsons for storage and further distribution.

 

•

Construction of a new Diluent Recovery Unit (DRU) and support tankage capable of supporting the processing of inbound diluted crude from Gibsons and stabilizing the feeder crude for railcar loading as bitumen. Note: will require construction of all required pumping, pipeline, tankage and utility connections to sufficient support the diluent recovery process as well as move the recovered diluent to Gibsons for storage and further distribution.

 

•

Installation of an additional rack structure, components and control systems to support both rail loading of bitumen and offloading of diluent to include additional Vapor Recovery Unit (VCU) and industrial drainage/containment equipment to support an additional one (1) train per day in rail volume through-put.

 

•

7) All site civil and drainage works to support the construction activities above.

 

F-1

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EXHIBIT G

PRELIMINARY SITE PLAN FOR PHASE II EXPANSION AND PHASE IIA EXPANSION

[To be attached.]

 

G-1