EXHIBIT 10.2
PURCHASE AGREEMENT
BY AND BETWEEN
E-BIRCHTREE, LLC
AND
E-CYPRESS, LLC
DATED AS OF
JULY 31, 2002
TABLE OF CONTENTS
ARTICLE I SALE AND PURCHASE..............................................................................2
Section 1.1 Agreement to Sell and to Purchase...................................................2
Section 1.2 Closing.............................................................................2
Section 1.3 Deliveries by the Seller............................................................3
Section 1.4 Deliveries by the Buyer.............................................................4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER..................................................4
Section 2.1 Corporate Organization..............................................................4
Section 2.2 Capitalization; Title...............................................................5
Section 2.3 Subsidiaries and Equity Interests...................................................5
Section 2.4 Validity of Agreement; Authorization................................................6
Section 2.5 No Conflict or Violation............................................................6
Section 2.6 Consents and Approvals..............................................................7
Section 2.7 Financial Statements................................................................7
Section 2.8 Absence of Certain Changes or Events................................................7
Section 2.9 Tax Matters.........................................................................8
Section 2.10 Absence of Undisclosed Liabilities..............................................10
Section 2.11 Real and Personal Property; Sufficiency of Assets of the Company................10
Section 2.12 Regulatory Matters..............................................................12
Section 2.13 Intellectual Property...........................................................12
Section 2.14 Compliance with Law.............................................................13
Section 2.15 Litigation......................................................................13
Section 2.16 Contracts.......................................................................14
Section 2.17 Books and Records of the Company................................................15
Section 2.18 Employee Plans..................................................................16
Section 2.19 Insurance.......................................................................17
Section 2.20 Transactions with Directors, Officers and Affiliates............................17
Section 2.21 Environmental; Health and Safety Matters........................................18
Section 2.22 Brokers.........................................................................20
Section 2.23 No Default......................................................................20
Section 2.24 Contemporaneous Transactions....................................................20
Section 2.25 Bank Accounts...................................................................20
Section 2.26 Reserved........................................................................20
Section 2.27 Reserved Financial Derivatives/Hedging Agreements...............................20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER.................................................21
Section 3.1 Organization.......................................................................21
Section 3.2 Validity of Agreement..............................................................21
Section 3.3 No Conflict or Violation; No Defaults..............................................21
Section 3.4 Consents and Approvals.............................................................22
Section 3.5 Brokers............................................................................22
Section 3.6 Financial Ability..................................................................22
ARTICLE IV COVENANTS....................................................................................22
Section 4.1 Certain Changes and Conduct of Business............................................22
Section 4.2 Access to Properties and Records...................................................24
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Section 4.3 Reserved...........................................................................25
Section 4.4 Consents and Approvals.............................................................25
Section 4.5 Further Assurances.................................................................25
Section 4.6 Reasonable Best Efforts............................................................25
Section 4.7 Notice of Breach...................................................................25
Section 4.8 Confidential Information...........................................................25
Section 4.9 Non-Solicitation of Employees......................................................26
Section 4.10 Negotiations....................................................................27
Section 4.11 Tax Covenants...................................................................27
Section 4.12 Reserved........................................................................29
Section 4.13 Reserved........................................................................29
Section 4.14 Bonds...........................................................................29
Section 4.15 Transitional Trademark License..................................................29
Section 4.16 Non-Software Copyright License..................................................30
Section 4.17 Intercompany Indebtedness.......................................................30
Section 4.18 SEC Required Financial Statements...............................................30
Section 4.19 Release of Certain Obligations..................................................30
Section 4.20 Delivery of Records.............................................................31
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE BUYER........................................................31
Section 5.1 Reserved...........................................................................31
Section 5.2 No Violation of Orders.............................................................31
Section 5.3 Compliance.........................................................................31
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE SELLER......................................................32
Section 6.1 Reserved...........................................................................32
Section 6.2 No Violation of Orders.............................................................32
Section 6.3 Compliance.........................................................................32
ARTICLE VII TERMINATION AND ABANDONMENT.................................................................33
Section 7.1 Methods of Termination.............................................................33
Section 7.2 Procedure Upon Termination.........................................................33
ARTICLE VIII INDEMNIFICATION............................................................................34
Section 8.1 Survival...........................................................................34
Section 8.2 Indemnification Coverage...........................................................34
Section 8.3 Procedures.........................................................................36
Section 8.4 Remedy.............................................................................37
ARTICLE IX MISCELLANEOUS PROVISIONS.....................................................................37
Section 9.1 Publicity..........................................................................37
Section 9.2 Successors and Assigns; No Third-Party Beneficiaries...............................37
Section 9.3 Investment Bankers, Financial Advisors, Brokers and Finders........................37
Section 9.4 Fees and Expenses..................................................................38
Section 9.5 Notices............................................................................38
Section 9.6 Entire Agreement...................................................................39
Section 9.7 Waivers and Amendments.............................................................39
Section 9.8 Severability.......................................................................40
Section 9.9 Titles and Headings................................................................40
Section 9.10 Signatures and Counterparts.....................................................40
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Section 9.11 Enforcement of the Agreement....................................................40
Section 9.12 Governing Law...................................................................40
Section 9.13 Certain Definitions.............................................................41
Section 9.14 Reserved........................................................................42
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PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT (this "Agreement") is made and entered into as
of this 31st day of July, 2002, by and between E-Birchtree, LLC, a
Delaware
limited liability company (the "Seller"), and E-Cypress, LLC, a
Delaware limited
liability company (the "Buyer").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇▇ Natural Gas Liquids, Inc., a
Delaware corporation
("WNGL"), owned 100% of the issued and outstanding equity interests of
Mid-America Pipeline Company, a
Delaware corporation ("MAPCO"), and 80% of each
class of issued and outstanding capital stock of Seminole Pipeline Company, a
Delaware corporation ("Seminole," and such interest in such capital stock, the
"Seminole Stock");
WHEREAS, MAPCO was converted (the "MAPL Conversion") into Mid-America
Pipeline Company, LLC, a
Delaware limited liability company ("MAPL") and WNGL
owned all of the issued and outstanding limited liability company interests in
MAPL immediately following the MAPL Conversion (the "MAPL Membership
Interests");
WHEREAS, MAPL distributed ("Excluded Subsidiaries Distribution") all of
its equity interests in the ▇▇▇▇▇▇ Pipeline Company and MAPL Investments, Inc.
to WNGL (such entities, together with any subsidiaries of such entities, the
"Excluded Subsidiaries");
WHEREAS, ▇▇▇▇▇▇▇▇ Midstream Natural Gas Liquids, Inc., a
Delaware
limited liability company ("WMNGL") owned (i) the natural gas liquids terminals
described on Exhibit A to the Mapletree
Purchase Agreement (defined below) and
(ii) the storage and other facilities (the "Terminals and Storage Assets")
described on Exhibit B to the Mapletree
Purchase Agreement;
WHEREAS, WMNGL formed and owned 100% of the issued and outstanding
limited liability company interests (the "Sapling Membership Interests") of
Sapling, LLC, a
Delaware limited liability company ("Sapling") and contributed
the Terminals and Storage Assets to Sapling (the "Sapling Asset Transfer");
WHEREAS, WMNGL distributed the Sapling Membership Interests to The
▇▇▇▇▇▇▇▇ Companies, Inc., a
Delaware corporation ("WMB"), which then contributed
the Sapling Membership Interests to WNGL, which then contributed the Sapling
Membership Interests to MAPL (such distribution and contribution, together with
the Sapling Asset Transfer, collectively the "Sapling Contributions");
WHEREAS, WNGL has formed and owned 100% of the issued and outstanding
limited liability company interests (the "Mapletree Membership Interests") of
Mapletree, LLC, a
Delaware limited liability company ("Mapletree");
WHEREAS, WNGL contributed the MAPL Membership Interests to Mapletree
(the "MAPL Contributions");
WHEREAS, WNGL has formed and owned 100% of the issued and outstanding
limited liability company interests of E-Oaktree, LLC, a Delaware limited
liability company (the "Company") (such interests, the "Company Membership
Interest");
WHEREAS, WNGL contributed the Seminole Stock to the Company (the
"Seminole Contributions");
WHEREAS, except for the Class B Unit, as defined in the amended and
restated limited liability company agreement of Seller (the "Seller Golden
Unit"), which unit has not been issued prior to the transactions contemplated by
the
Purchase Agreement by and between Seller and Enterprise Products Operating
L.P. ("Buyer Parent") dated as of even date herewith (the "Mapletree
Purchase
Agreement"), WNGL has formed and owns 100% of the issued and outstanding limited
liability company interests of Seller ("Seller Membership Interests" and
together with the Company Membership Interest, the "Membership Interests");
WHEREAS, WNGL contributed the Mapletree Membership Interests and the
Company Membership Interest to Seller (the "Seller Contributions" and, together
with the Sapling Contributions, the Seminole Contributions and the MAPL
Contributions, the "Contributions");
WHEREAS, upon the terms and subject to the conditions set forth herein
the Seller desires to sell to the Buyer, and the Buyer desires to purchase from
Seller 98% of the Company Membership Interests (the "Subject Membership
Interest").
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
SALE AND PURCHASE
Section 1.1 Agreement to Sell and to Purchase. Upon the terms
and subject to the conditions set forth in this Agreement, at the Closing (as
hereinafter defined), the Seller shall sell, assign, transfer, convey and
deliver to the Buyer the Subject Membership Interest free and clear of any
pledges, restrictions on transfer, proxies and voting or other agreements,
liens, claims, charges, mortgages, security interests or other legal or
equitable encumbrances, limitations or restrictions of any nature whatsoever
("Encumbrances"), and the Buyer shall purchase and accept the Subject Membership
Interest from Seller, in exchange for an aggregate purchase price of
$254,800,000 payable as set forth in Section 1.4(b) (the "Purchase Price").
Section 1.2 Closing. The closing of the sale and purchase of
Subject Membership Interest (the "Closing") shall take place at 10:00 A.M. one
business day after the satisfaction or waiver of the last to be satisfied of the
conditions contained in
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Articles V and VI (other than those conditions that by their nature are to be
fulfilled at Closing) or at such other time and date as the parties hereto shall
agree in writing (the "Closing Date"), at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other place as
the parties hereto shall agree in writing.
Section 1.3 Deliveries by the Seller.
(a) On the date hereof, the Seller is delivering to
the Buyer or its designee:
(i) resolutions of the Board of Directors of
the Seller authorizing the execution, delivery and performance of this
Agreement and a certificate of an officer of the Seller, dated as of
the date of this Agreement, to the effect that such resolutions were
duly adopted and are in full force and effect;
(ii) a copy of the fairness opinion
delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to Seller or its affiliates covering the
transactions under this Agreement;
(iii) a guaranty agreement, in form and
substance reasonably satisfactory to the Buyer, duly executed by WMB
and WNGL; and
(iv) properly executed Internal Revenue
Service Forms 8832 electing to treat the Seller and the Company as
corporations for federal income tax purposes effective July 29, 2002,
which forms shall be returned to Seller upon receipt of evidence that
identical forms have been properly filed with the Internal Revenue
Service.
(b) At the Closing, the Seller shall deliver to the
Buyer or its designee:
(i) an amended and restated limited
liability company agreement of the Company in the form and substance
satisfactory to Buyer;
(ii) resolutions of the Board of Directors
of the Seller authorizing the execution, delivery and performance of
this Agreement and a certificate of an officer of the Seller, dated as
of the Closing Date, to the effect that such resolutions were duly
adopted and are in full force and effect;
(iii) a release, in form and substance
reasonably satisfactory to the Buyer, duly executed by WMB and WNGL;
and
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(iv) all other previously undelivered
documents required to be delivered by the Seller to the Buyer at or
prior to the Closing Date.
Section 1.4 Deliveries by the Buyer.
(a) On the date hereof, the Buyer is delivering to
the Seller resolutions of the Board of Directors of the general partner
of the Buyer authorizing the execution, delivery and performance of
this Agreement and a certificate of an officer of the general partner
of the Buyer, dated as of the date of this Agreement, to the effect
that such resolutions were duly adopted and are in full force and
effect;
(b) Upon the Closing, the Buyer shall deliver to the
Seller:
(i) the Purchase Price by delivery of cash,
by wire transfer of immediately available funds to the account or
accounts specified by the Seller in a written notice to be delivered to
the Buyer two business days prior to the Closing;
(ii) resolutions of the Board of Directors
of the general partner of the Buyer authorizing the execution, delivery
and performance of this Agreement and a certificate of an officer of
the general partner of the Buyer, dated as of the date of this
Agreement, to the effect that such resolutions were duly adopted and
are in full force and effect;
(iii) an amended and restated limited
liability company agreement of the Company in the form and substance
satisfactory to the Buyer; and
(iv) all other previously undelivered
documents required to be delivered by the Buyer to the Seller at or
prior to the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants as follows:
Section 2.1 Corporate Organization. The Seller and the Company
are each limited liability companies duly organized and validly existing under
the laws of Delaware. The Seller, the Company and each of the Subsidiaries (as
defined below in Section 2.3) of the Company have all requisite power and
authority and all governmental licenses, authorizations, permits, consents and
approvals to own their respective properties and assets and to conduct their
businesses as now conducted, except for
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immaterial failures to have such licenses, authorizations, permits, consents and
approvals. The Seller, the Company and each of the Subsidiaries of the Company
are duly qualified to do business as a foreign entity and are in good standing
in every jurisdiction where the character of the properties owned or leased by
them or the nature of the business conducted by them makes such qualification
necessary, except where the failure to be so qualified or in good standing would
not individually or in the aggregate have a Material Adverse Effect (as defined
in Section 9.13). Schedule 2.1 sets forth all of the jurisdictions in which the
Seller, the Company and each of the Subsidiaries of the Company are qualified to
do business. Copies of the Organizational Documents (as defined below) of the
Seller and each of its Subsidiaries with all amendments thereto to the date
hereof, have been furnished by the Seller to the Buyer or their representatives,
and such copies are accurate and complete as of the date hereof. "Organizational
Documents" shall mean certificates of incorporation, by-laws, certificates of
formation, limited liability company operating agreements, partnership or
limited partnership agreements or other formation or governing documents of a
particular entity.
Section 2.2 Capitalization; Title. Prior to the issuance of
the Seller Golden Unit to Buyer Parent, all of the outstanding Seller Membership
Interests are owned of record and beneficially by WNGL, free and clear of any
Encumbrances. The outstanding Company Membership Interest is owned of record and
beneficially by Seller, free and clear of any Encumbrances. The Seminole Stock
is owned of record and beneficially by the Company, free and clear of any
Encumbrances except as set forth on Schedule 2.2. All of the Membership
Interests and the Seminole Stock have been duly authorized and validly issued.
Except for this Agreement, the Mapletree
Purchase Agreement and as set forth on
Schedule 2.2, there are no outstanding options, warrants, agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any of the Membership Interests. There are no voting trusts or
other agreements or understandings to which any of the Seller or any of its
Subsidiaries is a party with respect to the voting of the Membership Interests.
There is no indebtedness of the Company having general voting rights issued and
outstanding. Except for this Agreement and the Seminole
Purchase Agreement,
there are no outstanding obligations of any person to repurchase, redeem or
otherwise acquire outstanding Membership Interests or any securities convertible
into or exchangeable for any Membership Interests. The Seller has valid and
marketable title to the Subject Membership Interest and the sale and transfer of
the Subject Membership Interest by the Seller to the Buyer hereunder will
transfer title to the Subject Membership Interest to the Buyer free and clear of
any Encumbrances.
Section 2.3 Subsidiaries and Equity Interests. Except for the
Company, MAPL, Sapling, Mapletree and Seminole, which are Subsidiaries of the
Seller, the Seller does not own, directly or indirectly, any shares of capital
stock, voting rights or other equity interests or investments in any other
person or any interests in any other asset. Except for the Seminole Stock, the
Company does not own, directly or indirectly, any shares of capital stock,
voting rights or other equity interests or investments in any other person.
"Subsidiary" shall mean, with respect to a specified person, any person in which
such specified person owns, directly or indirectly, any shares of capital stock,
voting rights or other equity interests or investments. The Company and each of
its
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Subsidiaries do not have any rights to acquire by any means, directly or
indirectly, any capital stock, voting rights, equity interests or investments in
another person. All references in this Agreement to the Company and its
Subsidiaries shall in no way be deemed to include any reference to assets or
businesses previously owned by the Company or its Subsidiaries which were
distributed out of such entities (including, without limitation, the Excluded
Subsidiaries) prior to the Closing.
Section 2.4 Validity of Agreement; Authorization. The Seller
has the power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the performance of
its obligations hereunder have been duly authorized by the Seller, and no other
proceedings on the part of the Seller are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by each of the
Seller and constitutes the Seller's valid and binding obligation enforceable
against the Seller in accordance with its terms (except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar law affecting the enforcement of creditors'
rights generally or by general equitable principles). Each of the Seminole
Contribution and the contribution of the Company Membership Interest to the
Seller (collectively, the "Reorganization Transactions") were duly authorized,
and the instruments executed in connection therewith (the "Reorganization
Instruments") were duly executed and constitute the valid and binding
obligations enforceable against the parties thereto (the "Reorganization
Parties") in accordance with their terms (except to the extent that their
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar law affecting the enforcement of creditors'
rights generally or by general equitable principles).
Section 2.5 No Conflict or Violation. Except as set forth on
Schedule 2.5, (x) the execution, delivery and performance by the Seller of this
Agreement and the documents to be delivered at the Closing and (y) the
execution, delivery and performance of the Reorganization Instruments by the
Reorganization Parties, does not and will not:
(a) violate or conflict with any provision of the
Organizational Documents of the Seller, the Company or any of its
Subsidiaries or any other Reorganization Party;
(b) materially violate any applicable provision of a
material law, statute, judgment, order, writ, injunction, decree,
award, rule, or regulation of any foreign, federal, tribal, state or
local government, court, arbitrator, agency or commission or other
governmental or regulatory body or authority ("Governmental
Authority");
(c) materially violate, result in a material breach
of, constitute (with due notice or lapse of time or both) a material
default or cause any material obligation, penalty or premium to arise
or accrue under, accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or
approval under (i) any material contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other material
agreement or
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instrument to which the Seller, the Company, or any of its Subsidiaries
or any other Reorganization Party are a party or by which any of them
is bound or to which any of their respective properties or assets is
subject or (ii) any mortgage, security agreement, trust indenture, loan
or debt agreement or any other agreement or instrument evidencing
indebtedness for money borrowed to which the Seller or any of its
affiliates, the Company, any of its Subsidiaries or any other
Reorganization Party is a party or by which any of them is bound or to
which any their respective properties or assets is subject; or
(d) result in the creation or imposition of any
Encumbrance except Permitted Encumbrances upon any of the properties or
assets of the Seller or any of its affiliates, the Company or any of
its Subsidiaries.
Section 2.6 Consents and Approvals. Except as set forth on
Schedule 2.6, no material consent, approval, authorization, license, order or
permit, or declaration, filing or registration with, or notification to any
Governmental Authority or any other person, is required to be obtained by the
Seller or the Seller's affiliates (including, without limitation, the Company
and its Subsidiaries) in connection with the Reorganization Transactions, the
execution and delivery of this Agreement by the Seller or the performance of the
Seller's obligations hereunder. Except as set forth on Schedule 2.6, the
Reorganization Transactions do not (a) breach, violate or result in any default
under any agreements or instruments to which the Seller or any of the Seller's
affiliates (including the Company and its Subsidiaries) are parties or otherwise
are bound or (b) trigger, violate or otherwise create any right in or for any
person under any right of first refusal, preferential rights to purchase or
similar rights applicable in connection with the Reorganization Transactions or
the transactions contemplated by this Agreement.
Section 2.7 Financial Statements. The Seller has heretofore
furnished to the Buyer copies of the audited financial statements of Seminole as
of December 31, 2001 and the unaudited financial statements of Seminole as of
June 30, 2002 (collectively, the "Financial Statements"). The Financial
Statements were prepared on the basis of the information contained in the books
and records of Seminole in accordance with U.S. generally accepted accounting
principles consistently applied. Except as described on Schedule 2.7, the
Financial Statements fairly present in all material respects the financial
position, results of operations and changes in cash flow of Seminole as of the
dates of such Financial Statements and for the periods then ended (subject to
normal year-end audit adjustments consistent with prior periods).
Section 2.8 Absence of Certain Changes or Events. Except as
set forth in Schedule 2.8(a) and except for the Reorganization Transactions,
since (x) December 31, 2001, the business of the Company and its Subsidiaries
has been conducted in the ordinary course consistent with past practices and (y)
June 30, 2002, neither the Company nor any of its Subsidiaries has taken any of
the actions described in Section 4.1(a), except in connection with entering into
this Agreement. Since June 30, 2002, there has not been:
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(a) any material destruction of, damage to, or loss
of, any material asset of the Company or its Subsidiaries (whether or
not covered by insurance) that has not been repaired or replaced;
(b) any material citation received, or to the
Seller's knowledge, any other citation received by the Seller, the
Company or any of its Subsidiaries for any material violations of any
act, law, rule, regulation, or code of any Governmental Authority
related to the activities or business of the Seller, the Company or any
of its Subsidiaries; or
(c) any other event or condition of any character
that has had, or would reasonably be expected to have, a Material
Adverse Effect.
Section 2.9 Tax Matters.
(a) For purposes of this Agreement, (i) "Tax
Returns" shall mean returns, reports, exhibits, schedules, information
statements and other documentation (including any additional or
supporting material) filed or maintained, or required to be filed or
maintained, in connection with the calculation, determination,
assessment or collection of any Tax and shall include any amended
returns; (ii) "Tax" or "Taxes" shall mean any and all Federal, state,
local, foreign and other taxes, levies, fees, imposts, duties and
charges of whatever kind (including any interest, penalties or
additions to the tax imposed in connection therewith or with respect
thereto), including, without limitation, taxes imposed on, or measured
by, income, franchise, profits or gross receipts, ad valorem, value
added, sales, use, service, real or personal property, capital stock,
license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits,
transfer and gains taxes and customs duties; (iii) the "Code" shall
mean the Internal Revenue Code of 1986, as amended from time to time
(or any corresponding provision of succeeding law) and (iv) "Treasury
Regulations" shall mean the Income Tax Regulations promulgated under
the Code, as such regulations may be amended from time to time.
(b) Except as disclosed on Schedule 2.9, (i) all
income and other material Tax Returns required under applicable law to
be filed by or with respect to the Company or any of its Subsidiaries
have been timely filed; (ii) all such Tax Returns are true, correct and
complete in all material respects; (iii) all income and other material
Taxes required to be paid by or with respect to the Company or any of
its Subsidiaries (whether or not shown on any Tax Return) have been
timely paid; (iv) there is no action, suit, proceeding, audit or claim
now pending or threatened in writing against, or with respect to, the
Company or any of its Subsidiaries in respect of any income or other
material Tax or income or other material Tax assessment; (v) all
deficiencies or assessments asserted against or with respect to income
or other material Taxes of the Company or any of its Subsidiaries by
any Tax authority have been paid or fully and finally settled and, to
the knowledge of Seller, no issue previously raised in writing by any
such Tax
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authority reasonably could be expected to result in a material
assessment on or after the date hereof; (vi) no written claim has been
made by any Tax authority in a jurisdiction where the Company or any of
its Subsidiaries does not currently file a Tax Return that any of them
are or may be subject to Tax by such jurisdiction, nor to the Seller's
knowledge has any such assertion been threatened in writing; (vii)
there are no extensions or outstanding requests for extensions of time
within which to pay Taxes or file Tax Returns of or with respect to the
Company or any of its Subsidiaries; (viii) there has been no waiver,
extension or request for extension of any applicable statute of
limitations for the assessment or collection of any Taxes of the
Company or any of its Subsidiaries; (ix) valid elections to treat the
Seller and the Company as corporations effective July 29, 2002 for
federal income tax purposes have been filed with the Internal Revenue
Service; (x) the Seller is not a "foreign person" within the meaning of
Section 1445 of the Code; (xi) neither the Company nor any of its
Subsidiaries is a party to any agreement, whether written or unwritten,
providing for the payment of Taxes, payment for Tax losses,
entitlements to refunds or similar Tax matters; (xii) each of the
Company and its Subsidiaries has withheld and paid all material Taxes
required to be withheld by it in connection with any amounts paid or
owing to any employee, creditor, independent contractor or other third
party; (xiii) there are no liens, pledges, charges, claims,
restrictions on transfer, mortgages, security interests or other
encumbrances of any sort (collectively "Liens") on the assets of the
Company or any of its Subsidiaries relating to or attributable to
Taxes, other than Liens for Taxes not yet due and payable or Taxes
being contested in good faith by appropriate proceedings; (xiv) each of
the Seller, the Company and its Subsidiaries are members of the
affiliated group, within the meaning of Section 1504 of the Code, of
which WMB is the common parent (the "Seller Parent Group") (Seminole
having been a member since March 27, 1998); (xv) neither the Company
nor any of its Subsidiaries, except for Seminole, has been a member of
an affiliated group (within the meaning of Section 1504 of the Code) or
an affiliated, combined, consolidated, unitary or similar group for
state, local or foreign Tax purposes, other than the Seller Parent
Group; (xvi) neither the Company nor any of its Subsidiaries has any
liability for the Taxes of any person (other than the Seller Parent
Group) under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise; (xvii) neither the Company nor any
of its Subsidiaries is a party to any contract, agreement, plan or
arrangement that, individually or in the aggregate, could give rise to
the payment of any amount that would not be deductible pursuant to
Section 280G or 162(m) of the Code; (xviii) neither the Company nor any
of its Subsidiaries has constituted either a "distributing corporation"
or a "controlled corporation" in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code in the two years prior
to the date of this Agreement or in a distribution which could
otherwise constitute part of a "plan" or "series of related
transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the transactions contemplated by this Agreement; (xix)
none of the assets or properties of the Company or any of its
Subsidiaries is required to be treated as tax-exempt use property
within the
9
meaning of Section 168(h)(1) of the Code; (xx) neither the Company nor
any of its Subsidiaries has participated in a reportable transaction
within the meaning of Treasury Regulations Section 1.6011-4T or
participated in a transaction that has been disclosed pursuant to IRS
Announcement 2002-2, 2002-2 I.R.B. 304; and (xxi) the Financial
Statements include adequate provision under generally accepted
accounting principles for all unpaid Taxes of the Company and its
Subsidiaries as of the date thereof.
Section 2.10 Absence of Undisclosed Liabilities.
(a) Except as disclosed on Schedule 2.10, the
Company and its Subsidiaries have no material, individually or in the
aggregate, indebtedness or liability, absolute or contingent, direct or
indirect, which is not shown or provided for in the Financial
Statements other than liabilities incurred or accrued in the ordinary
course of business (including liens for current Taxes not yet due and
payable and assessments not in default) since December 31, 2001. Except
for liabilities arising in connection with its ownership of the Company
or Mapletree or under the Mapletree
Purchase Agreement, Seller has no
indebtedness or liability, absolute or contingent, direct or indirect.
(b) None of the Company or any of its Subsidiaries
is obligated for any "off balance sheet indebtedness" which, but for
the structure of such indebtedness would be required to be reflected on
a balance sheet in accordance with generally accepted accounting
principles.
Section 2.11 Real and Personal Property; Sufficiency of Assets
of the Company
(a) Except as set forth on Schedule 2.11(a), the
Company or one of its Subsidiaries owns marketable fee title to, or
holds a valid leasehold interest in, or right-of-way easements through
(collectively, the "Rights of Way") all material real property
(collectively, "Real Property") used or necessary for the conduct of
the Company's and its Subsidiaries' businesses, as they are presently
conducted and as conducted immediately prior to the Contributions and
except for the Omnibus Excluded Assets, the Company or one of its
Subsidiaries has good and valid title to all of the material tangible
assets used or necessary for the conduct of the Company's and its
Subsidiaries' businesses as they are presently conducted and as
conducted immediately prior to the Contributions or which material
tangible assets are reflected on the Financial Statements (except for
assets sold, consumed or otherwise disposed of in the ordinary course
of business since the date of the Financial Statements) and (ii) all
such material Real Property and assets (other than Rights of Way) are
owned or leased by the Company or its Subsidiaries free and clear of
all Encumbrances, except for (A) Encumbrances set forth on Schedule
2.11(a), (B) liens for current Taxes not yet due and payable or for
Taxes the validity of which is being contested in good faith in
appropriate proceedings, (C) rights of way, laws, ordinances and
regulations affecting building use and occupancy (collectively,
10
"Property Restrictions") imposed or promulgated by law or any
Governmental Authority with respect to Real Property, including zoning
regulations, provided they do not materially adversely affect the
current use of the applicable real property, and (D) mechanics',
carriers', workmen's and repairmen's liens and other Encumbrances of
any kind, if any, which do not materially detract from the value of or
materially interfere with the present use of any Real Property or
assets subject thereto or affected thereby and which have arisen or
been incurred in the ordinary course of business (clauses (A) through
(D) above are referred to collectively as "Permitted Encumbrances").
All Rights of Way used or necessary for the conduct of the Company's
and its Subsidiaries' businesses, as they are presently conducted and
as conducted immediately prior to the Contributions, are owned or
leased by the Company or one of its Subsidiaries, free and clear of all
Encumbrances created by the Seller, any affiliate of the Seller, the
Company or any Subsidiary of Company, except for the Permitted
Encumbrances. The Pipeline Systems are contiguous to all points of
delivery and receipt, except for such failures to be contiguous that,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
(b) There are no material structural defects
relating to any of the improvements to the Real Property (including,
without limitation, the Pipeline Systems) and all tangible assets and
seasonal property used or necessary for the conduct of the Company's
and its Subsidiaries' businesses, as they are presently conducted and
as conducted immediately prior to the Contributions, are in good
operating condition, ordinary wear and tear and obsolescence excepted.
To the Company's knowledge, all improvements to the real property used
or necessary for the conduct of the Company's and its Subsidiaries'
businesses, as they are presently conducted and as conducted
immediately prior to the Contributions, do not encroach in any respect
on property of others (other than encroachments that would not
materially impair the operations of the Company and its Subsidiaries
currently conducted thereon).
(c) Except as set forth on Schedule 2.11(c) and
except for the Omnibus Excluded Assets, the assets owned, leased or
licensed by the Company and its Subsidiaries constitute all of the
assets and rights used by the Seller, the Seller's affiliates, the
Company and its Subsidiaries to conduct the businesses of the Company
and its Subsidiaries and the operation of the Pipeline Systems as they
are presently conducted and as conducted immediately prior to the
Contributions.
(d) Except as set forth on Schedule 2.11(d), there
is no pending or, to the Seller's knowledge, threatened condemnation of
any part of the Real Property used or necessary for the conduct of the
Company's and its Subsidiaries' businesses, as they are presently
conducted and as conducted immediately prior to the Contributions, by
any Governmental Authority which would materially adversely affect the
Company's or its Subsidiaries' use of such Real Property.
11
Section 2.12 Regulatory Matters.
(a) None of the Company or any of its Subsidiaries
is a "Natural Gas Company" as that term is defined in Section 2 of the
Natural Gas Act ("NGA"). None of the Company or its Subsidiaries is a
"public utility company," "holding company" or "subsidiary" or
"affiliate" of a holding company as such terms are defined in the
Public Utility Holding Company Act of 1935 (the "1935 Act"). No
approval of (i) the Securities and Exchange Commission under the 1935
Act or (ii) FERC under the NGA, the Interstate Commerce Act ("ICA") or
the Federal Power Act is required in connection with (x) the
Reorganization Transactions, (y) the execution of this Agreement by the
Seller or (z) the performance of the transactions contemplated hereby
by the Seller.
(b) Reserved.
(c) The Company and its Subsidiaries have all
licenses, permits and authorizations (other than licenses or permits
for the use of land) issued or granted by Governmental Authorities that
are necessary for the conduct of the Company's and its Subsidiaries'
businesses, as they are presently conducted and as conducted
immediately prior to the Contributions, except for such failures that,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
Section 2.13 Intellectual Property.
(a) Except as set forth on Schedule 2.13(a) and for
such matters as would not have a Material Adverse Effect, each of the
Company and its Subsidiaries owns all right, title and interest in and
to, or has a valid and enforceable license or other right to use, all
the Intellectual Property (as defined below) used by the Company in
connection with its business, which represents all Intellectual
Property rights necessary for the Company to conduct its business as
presently conducted.
(b) Neither the Company nor any of its Subsidiaries
has violated, materially infringed upon or unlawfully or wrongfully
used the intellectual property of others, and neither of the Company's
nor any of its Subsidiaries' Intellectual Property or any related
rights as used in the businesses now or heretofore conducted by the
Company or any of its Subsidiaries, materially infringes upon or
otherwise materially violates the rights of others, nor has any person
or Governmental Authority asserted in writing a material claim of such
infringement or misuse or initiated (or indicated in writing any
present or future intention to initiate) any material proceeding with
respect to such Intellectual Property.
12
(c) Except as set forth on Schedule 2.13(c), neither
the Company nor any of its Subsidiaries will from and after the Closing
be obligated to make any payments for royalties, fees or otherwise to
any person in connection with any of the Company's or any of its
Subsidiaries' Intellectual Property. None of the Seller, the Company or
any of its Subsidiaries is aware of any infringement of the Company's
or any of its Subsidiaries' Intellectual Property, and there are no
pending infringement actions against another for infringement of the
Company's or any of its Subsidiaries' Intellectual Property or theft of
trade secrets.
(d) The only representations and warranties given in
respect of Intellectual Property and matters and agreements relating
thereto are those contained in this Section 2.13, and none of the other
representations and warranties shall be deemed to constitute, directly
or indirectly, a representation and warranty in respect of Intellectual
Property and matters or agreements relating thereto.
(e) As used in this Agreement, "Intellectual
Property" shall mean the trademarks, service marks, trade names,
inventions, trade secrets, copyrights and domain names used in
connection with the Company's or its Subsidiaries' businesses.
Section 2.14 Compliance with Law. Except as relates to Tax
matters (which are provided for in Section 2.9), NGA, ICA and the 1935 Act
matters (which are provided for in Section 2.12), or environmental, health and
safety matters (which are provided for in Section 2.21) and except as set forth
on Schedule 2.14, the operations of the Company, its Subsidiaries and their
respective Assets have been conducted in material compliance since December 31,
2001, with all applicable material laws, licenses, regulations, orders and other
material requirements of all Governmental Authorities having jurisdiction over
the Company and any Subsidiary and their assets, properties and operations.
Except as relates to Tax matters (which are provided for in Section 2.9), NGA,
ICA and the 1935 Act matters (which are provided for in Section 2.12) or
environmental, health and safety matters (which are provided for in Section
2.21), none of the Seller, the Seller's affiliates, the Company or its
Subsidiaries has materially violated, been charged with materially violating or,
to the knowledge of Seller or any of its affiliates, been threatened with a
charge of materially violating of any such law, license, regulation, order or
other legal requirement, or are in material default with respect to any material
order, writ, judgment, award, injunction or decree of any Governmental
Authority, in each case as applicable to the Company, its Subsidiaries or any of
the Company's and its Subsidiaries' assets, properties or operations.
Section 2.15 Litigation. Except as set forth on Schedule 2.15
as of the date hereof, there are no Legal Proceedings (as hereinafter defined)
pending or, to the knowledge of the Seller, the Seller's affiliates, the Company
or its Subsidiaries, threatened against or involving the Seller, any of the
Seller's affiliates, the Company or any of its Subsidiaries that, individually
or in the aggregate, are reasonably likely to:
(a) incur damages or costs to the Company or any of
its Subsidiaries in excess of $500,000;
13
(b) have a Material Adverse Effect; or
(c) materially impair or delay the ability of the
Seller to perform their obligations under this Agreement or consummate
the transactions contemplated by this Agreement.
Except as set forth on Schedule 2.15 as of the date hereof, there is no
order, judgment, injunction or decree of any Governmental Authority outstanding
against the Seller, the Company or any of its Subsidiaries or any of Seller's
affiliates with respect to the Assets that, individually or in the aggregate,
would have any effect referred to in the foregoing clauses (a) and (b). "Legal
Proceeding" shall mean any judicial, administrative or arbitral actions, suits,
proceedings (public or private), investigations or governmental proceedings
before any Governmental Authority.
Section 2.16 Contracts. Except for Commitments (as defined
below in Section 2.16(o)) listed on Schedule 2.13(a) or Schedule 2.18(a),
Schedule 2.16 sets forth (subject to the dollar amount limitations of clauses
(b) or (c) below) a true and complete list of the following contracts,
agreements, instruments and commitments to which the Company or any of its
Subsidiaries is a party or otherwise relating to or affecting any of the Assets
or the operations of the Company or any of its Subsidiaries, whether written or
oral:
(a) any material contracts, agreements and
commitments not made in the ordinary course of business;
(b) contracts calling for payments by or to the
Company or any of its Subsidiaries of amounts greater than $1,000,000;
(c) contracts, loan agreements, letters of credit,
repurchase agreements, mortgages, security agreements, guarantees,
pledge agreements, trust indentures and promissory notes and similar
documents relating to the borrowing of money or for lines of credit;
(d) agreements with respect to the sharing or
allocation of Taxes or Tax costs;
(e) agreements for the sale of any material assets,
property or rights other than in the ordinary course of business or for
the grant of any options or preferential rights to purchase any
material assets, property or rights;
(f) documents granting any power of attorney with
respect to the affairs of the Company or its Subsidiaries;
(g) suretyship contracts, performance bonds, working
capital maintenance, support agreements, contingent obligation
agreements and other forms of guaranty agreements;
14
(h) any material contracts or commitments limiting
or restraining the Company or any Subsidiary from engaging or competing
in any lines of business or with any person;
(i) with respect to natural gas liquids, any
transportation agreements, product purchase agreements, fractionation
agreements, processing agreements, balancing agreements,
interconnection agreements and storage agreements other than
terminaling contracts terminable on notice of one year or less;
(j) any collective bargaining agreements;
(k) any contracts between the Company or its
Subsidiaries, on the one hand, and the Seller or its affiliates (other
than the Company or its Subsidiaries), on the other hand;
(l) any indemnification agreements not made in the
ordinary course of business;
(m) any material partnership, joint venture or
similar agreements;
(n) capital leases; and
(o) all amendments, modifications, extensions or
renewals of any of the foregoing (the types of contracts, agreements
and documents described in subsections (a) through (o) are hereinafter
referred to collectively as the "Commitments" and individually as a
"Commitment").
Each Commitment is valid, binding and enforceable against the Company
and/or each Subsidiary of the Company that is a party thereto in accordance with
its terms, and in full force and effect on the date hereof (except to the extent
that its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar law affecting the enforcement of creditors'
rights generally or by general equitable principles). The Company and each of
its Subsidiaries, as the case may be, have performed in all material respects
all obligations required to be performed by them under, and are not in material
default or breach of in respect of, any Commitment, and no event has occurred
which, with due notice or lapse of time or both, would constitute such a
default. To the knowledge of the Seller and the Company or any of its
Subsidiaries, no other party to any Commitment is in default in any material
respect thereof, and no event has occurred which, with due notice or lapse of
time or both, would constitute such a default. The Seller has made available to
the Buyer or its representatives true and complete originals or copies of all
the Commitments and a copy of every material default notice received by the
Seller or the Company or any of its Subsidiaries during the past one year with
respect to any of the Commitments.
Section 2.17 Books and Records of the Company. The books of
account, minute books, record books, and other records of the Company and its
15
Subsidiaries, all of which have been made available to the Buyer or its
representatives, are complete and correct in all material respects.
Section 2.18 Employee Plans.
(a) Except as set forth in Schedule 2.18(a), neither
the Company nor any of its Subsidiaries sponsors or maintains or has
any liability or obligation with respect to, and at any time during the
past five years or, if longer, for any period for which an applicable
statute of limitations has not expired, has not sponsored, maintained
or had any liability or obligation with respect to, any "employee
benefit plan," as defined under Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or any other bonus,
pension, stock option, stock purchase, benefit, welfare,
profit-sharing, retirement, disability, vacation, severance,
hospitalization, insurance, incentive, deferred compensation and other
similar fringe or employee benefit plans, funds, programs or
arrangements, whether written or oral ("Employee Plans"), in each of
the foregoing cases which cover, are maintained for the benefit of, or
relate to any or all current or former employees of the Company.
Schedule 2.18(a) sets forth a true and complete list of all Employee
Plans which cover, are maintained for the benefit of, or relate to any
or all employees of the Seller or its affiliates who are assigned to or
perform services primarily for the business of the Company or its
Subsidiaries (the "Business Employees," and such Employee Plans
hereinafter referred to as the "Seller Plans"). For purposes of
determining Business Employees, a person shall be deemed to be
performing services primarily for the business of the Company or any of
its Subsidiaries if such person spends at least 50% of their working
time in the conduct of the business of operations of the Company or its
Subsidiaries.
(b) The Company and its Subsidiaries have no current
or former employees. Schedule 2.18(b) sets forth a true and complete
list showing the names of all Business Employees. Except as set forth
on Schedule 2.18(b), there are no contracts, agreements, plans or
arrangements covering any Business Employee with "change of control",
severance or similar provisions that would be triggered as a result of
the consummation of this Agreement or that could otherwise result in
liability to the Company or its Subsidiaries. To the Seller's and the
Company's knowledge, no Business Employee is obligated under any
contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would interfere with the use of
such employee's efforts to promote the interests of the Company or the
Buyer or that would conflict with the Company's or its Subsidiaries'
business as conducted or proposed to be conducted.
(c) None of the employees who provide services to
the Company or its Subsidiaries are covered by collective bargaining
agreements and, to the Seller's knowledge, there are no union or labor
organization efforts respecting such employees.
(d) Neither the Company nor any of its Subsidiaries
will have any liability to any person for compensation pursuant to
employment or termination of employment as a result of consummating the
transactions contemplated by this Agreement.
16
Section 2.19 Insurance.
(a) Schedule 2.19 sets forth a true and complete
list of all policies of property and casualty insurance, including
crime insurance, liability and casualty insurance, property insurance,
business interruption insurance, workers' compensation, excess or
umbrella liability insurance and any other type of property and
casualty insurance insuring the properties, assets, employees and/or
operations of the Company or its Subsidiaries (collectively, the
"Policies"). Upon request, the Seller will make available to the Buyer
certificates of insurance and insurance summaries from the insurance
broker evidencing the existence of the Policies. All premiums payable
under such Policies have been paid in a timely manner and the Seller,
the Seller's affiliates, the Company and the Company's Subsidiaries
have complied fully with the terms and conditions of all such Policies.
(b) Except as set forth on Schedule 2.19, all such
Policies are in full force and effect and coverage of the Company and
its Subsidiaries under the Policies will terminate upon the Closing
Date. The Seller shall use its reasonable best efforts to cause the
Company and its Subsidiaries to maintain the coverage under all
Policies (or replacements thereof for Policies expiring prior to the
Closing Date) in full force and effect through the Closing Date.
Neither the Company nor any of its Subsidiaries is in default under any
provisions of the Policies, and there is no claim by the Seller, the
Seller's affiliates, the Company or any Subsidiary of the Company or
any other person pending under any of the Policies as to which coverage
has been questioned, denied or disputed by the underwriters or issuers
of such Policies. Except as set forth on Schedule 2.19, none of the
Seller, the Seller's affiliates, the Company or any Subsidiary of the
Company has received written notice from an insurance carrier issuing
any Policies that alteration of any equipment or any improvements
located on Real Property, purchase of additional equipment, or
modification of any of the methods of doing business of the Company or
its Subsidiaries, will be required or suggested after the date hereof.
The Policies are adequate in accordance with industry standards, the
requirements of any applicable agreements and are in at least the
minimum amounts required by, and are otherwise sufficient for purposes
of, any currently applicable law, rule, or regulation of any Federal,
state or local government, agency or authority, including, without
limitation, environmental regulations. All Policies are of at least
like character and amount as are customarily carried by like businesses
similarly situated.
Section 2.20 Transactions with Directors, Officers and
Affiliates. Except as set forth on Schedule 2.20 and for intercompany
transactions in the ordinary course of business, since December 31, 2001, there
have been no transactions between the Company or its Subsidiaries and any
director, officer, employee, stockholder, member or other "affiliate" (as such
term is defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) of the Company, or any Subsidiary or the Seller, including,
without limitation, loans, guarantees or pledges to, by or for the
17
Company or Subsidiary from, to, by or for any of such persons. Except as set
forth on Schedule 2.11(d), neither the Seller nor any of their "affiliates" (as
such term is defined in Rule 405 under the Securities Act) (other than the
Company or any Subsidiary) owns or has any rights in or to any of the assets,
properties or rights used by the Company or its Subsidiaries in the ordinary
course of their business.
Section 2.21 Environmental; Health and Safety Matters.
(a) Except as set forth on Schedule 2.21:
(i) the Company and its Subsidiaries and
their respective operations and the Assets are in material compliance
with all applicable Environmental Laws, and have been in material
compliance with Environmental Laws and, in the case of pipeline safety,
prudent industry practices, except for non-compliance that would not
reasonably be expected to result in the Company or its Subsidiaries
incurring material liabilities under applicable Environmental Laws;
(ii) none of the Seller, the Company or its
Subsidiaries has received any written request for information, or has
been notified that it is a potentially responsible party, under CERCLA
(as hereinafter defined) or any similar state law with respect to any
on-site or off-site location for which material liability is currently
being asserted against them with respect to the activities or
operations of the Company or its Subsidiaries;
(iii) there are no material writs,
injunctions, decrees, orders or judgments outstanding, or any actions,
suits, proceedings or investigations pending or to their knowledge
threatened, involving the Company or its Subsidiaries relating to (A)
their compliance with any Environmental Law, or (B) the release,
disposal, discharge, spill, treatment, storage or recycling of
Hazardous Materials into the environment at any location which would
reasonably be expected to result in the Company or any Subsidiary
incurring any material liability under Environmental Laws;
(iv) the Company and its Subsidiaries have
obtained, currently maintain and are in material compliance with all
material licenses which are required under Environmental Laws for the
operation of their respective businesses (collectively, "Environmental
Permits"), all such material Environmental Permits are in effect and no
appeal nor any other action is pending to revoke any such material
Environmental Permit;
(v) there have been no Releases of Hazardous
Materials at any current or former property owned, leased or operated
by the Company or its Subsidiaries that are reasonably likely to
18
result in material liabilities under applicable Environmental Laws
after the Closing Date;
(vi) there have been no ruptures in the
Pipeline Systems resulting in injury, loss of life, or material
property damage, except to the extent that any liabilities or costs
arising as a result of such ruptures have been fully resolved so that
the Seller does not expect that the Company or its Subsidiaries will
incur material liabilities or costs after the Closing Date; and
(vii) to the knowledge of the Seller and its
affiliates, there are no defects, corrosion or other damage to any of
the Pipeline Systems that would create a material risk of pipeline
integrity failure.
(b) The following terms shall have the following
meanings:
"Environmental Claim" shall mean any notice of violation, action,
claim, lien, demand, abatement or other order or directive (conditional or
otherwise) by any person or Governmental Authority for personal injury
(including sickness, disease or death), tangible or intangible property damage,
damage to the environment (including natural resources), nuisance, pollution,
contamination, trespass or other adverse effects on the environment, or for
fines, penalties or restrictions resulting from or based upon (i) the existence,
or the continuation of the existence, of a Release (including, without
limitation, sudden or non-sudden accidental or non-accidental Releases) of, or
exposure to, any Hazardous Material, odor or audible noise; (ii) the
transportation, storage, treatment or disposal of Hazardous Materials; or (iii)
the violation, or alleged violation, of any Environmental Laws or Permits issued
thereunder.
"Environmental Law" shall mean current local, county, state, federal,
and/or foreign law (including common law), statute, code, ordinance, rule,
regulation or other legal obligation relating to the protection of the
environment or natural resources, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C.
section 9601 et seq.), as amended ("CERCLA"), the Resource Conservation and
Recovery Act (42 U.S.C. section 6901 et seq.), as amended ("RCRA"), the Federal
Water Pollution Control Act (33 U.S.C. section 1251 et seq.), as amended, the
Clean Air Act (42 U.S.C. section 7401 et seq.), as amended, the Toxic Substances
Control Act (15 U.S.C. section 2601 et seq.), as amended, the Occupational
Safety and Health Act (29 U.S.C. section 651 et seq.), as amended, the Federal
Natural Gas Pipeline Safety Act of 1968, as amended, the Hazardous Materials
Transportation Act (49 U.S.C. section 1801 et seq.), as amended, the Oil
Pollution Act (33 U.S.C. section 2701 et seq.), the Safe Drinking Water Act (42
U.S.C. section 300(f) et seq.), as amended, analogous state, tribal or local
laws, and any similar, implementing or successor law, and any amendment, rule,
regulation, or directive issued thereunder.
19
"Hazardous Material" shall mean any substance, material or waste which
is regulated by any Environmental Law as hazardous, toxic, a pollutant,
contaminant or words of similar meaning including, without limitation,
petroleum, petroleum products, asbestos, urea formaldehyde and polychlorinated
biphenyls.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of a
Hazardous Material.
(c) The representations set forth in this Section
2.21 are the Seller's sole and exclusive representation and warranties
related to any environmental matters.
Section 2.22 Brokers. Neither Seller nor any of Seller's
affiliates has employed the services of a broker or finder in connection with
this Agreement or any of the transactions contemplated hereby for which the
Buyer, the Buyer's affiliates, the Company or any of the Subsidiaries of the
Company would be responsible for paying any fee, commission or other amount.
Section 2.23 No Default. The Company and each of its
Subsidiaries is not in default under, and no condition exists that with notice
or lapse of time or both would constitute a default under (a) any judgment,
order or injunction of any court, arbitrator or governmental agency or (b) any
other agreement, contract, lease, license or other instrument, which default, in
the case of either clause (a) or (b), might reasonably be expected to have a
Material Adverse Effect or prevent, hinder or delay consummation of the
transactions contemplated by this Agreement.
Section 2.24 Contemporaneous Transactions. The Contemporaneous
Transactions (as hereinafter defined) have been consummated. The term
"Contemporaneous Transactions" shall mean that certain Consent and Fourth
Amendment of even date herewith to that certain Credit Agreement dated as of
July 25, 2000 among The ▇▇▇▇▇▇▇▇ Companies, Inc., Northwest Pipeline
Corporation, Transcontinental Gas Pipe Line Corporation, and Texas Gas
Transmission Corporation, as Borrowers, the financial institutions from time to
time party thereto, The Chase Manhattan Bank and Commerzbank AG, as
Co-Syndication Agents, Credit Lyonnais New York Branch, as Documentation Agent,
and Citibank, N.A., as Agent, as amended by a letter agreement dated as of
October 10, 2000, by a Waiver and First Amendment dated as of January 31, 2001,
by a Second Amendment to Credit Agreement dated as of February 7, 2002, by a
Third Amendment dated as of March 3, 2002.
Section 2.25 Bank Accounts. Schedule 2.25 includes the names
and locations of all banks in which the Seller or any of its affiliates
(including the Company and its Subsidiaries) has an account or safe deposit box
relating to the business or operations conducted by the Company or its
Subsidiaries.
Section 2.26 Reserved.
Section 2.27 Reserved Financial Derivatives/Hedging
Agreements. Except as set forth on Schedule 2.27 hereto, neither the Company nor
any of its
20
Subsidiaries are parties to or otherwise are bound by any Financial
Derivative/Hedging Agreement. For purposes of this Section 2.27, "Financial
Derivative/Hedging Agreement" includes (a) any transaction (including an
agreement with respect thereto) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions) and (b) any combination of these
transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants as follows:
Section 3.1 Organization. The Buyer is a limited liability
company duly organized and validly existing under the laws of the state of
Delaware and has all requisite power and authority to own its properties and
assets and to conduct its business as now conducted. The Buyer is duly qualified
to do business as a foreign entity in every jurisdiction where the character of
the properties owned or leased by the Buyer or the nature of the business
conducted by the Buyer makes such qualifications necessary.
Section 3.2 Validity of Agreement. The Buyer has the power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the performance of the Buyer's
obligations hereunder have been duly authorized by the Buyer, and no other
proceedings on the part of the Buyer are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by the Buyer and
constitutes the valid and binding obligation of the Buyer enforceable against
the Buyer in accordance with its terms (except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar law affecting the enforcement of creditors'
rights generally or by general equitable principles).
Section 3.3 No Conflict or Violation; No Defaults. The
execution, delivery and performance by the Buyer of this Agreement does not and
will not violate or conflict with any provision of its Organizational Documents
and does not and will not violate any applicable provision of law, or any order,
judgment or decree of any Governmental Authority, nor violate or result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any contract, lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Buyer is a party or by
which it is bound or to which any of its properties or assets is subject, nor
result in the creation or imposition of any Encumbrance upon any of its
properties or assets where such violations, breaches or defaults in the
aggregate would have a material adverse effect on the transactions contemplated
hereby or on the assets, properties, business, operations or financial condition
of the Buyer.
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Section 3.4 Consents and Approvals. Except as set forth on
Schedule 3.4, no consent, approval, authorization, license, order or permit, or
declaration, filing or registration with, or notification to any Governmental
Authority or any other person, is required to be obtained by the Buyer or the
Buyer's affiliates in connection with the execution and delivery of this
Agreement by the Buyer or the performance of the Buyer's obligations hereunder.
Section 3.5 Brokers. None of the Buyer or any of its
affiliates has employed the services of an investment broker, financial advisor,
broker or finder in connection with the Agreement or any of the transactions
contemplated hereby for which the Seller or any affiliate of the Seller would be
responsible for paying any fee, commission or other amount.
Section 3.6 Financial Ability. The Buyer will have sufficient
immediately available funds, in cash, at the Closing to pay the Purchase Price,
as adjusted.
ARTICLE IV
COVENANTS
Section 4.1 Certain Changes and Conduct of Business.
(a) Except as expressly provided by this Agreement
or Schedule 4.1, from and after the date of this Agreement and until
the Closing Date, (x) the Company shall, and shall cause each of its
Subsidiaries to, conduct and maintain its business solely in the
ordinary course consistent with past practices and (y) without the
prior written consent of the Buyer (not to be unreasonably withheld or
delayed), the Seller will not permit the Company or any of its
Subsidiaries to:
(i) make any material change in the conduct
of its businesses or operations;
(ii) make any change in its Organizational
Documents or issue any additional equity securities or grant any
option, warrant or right to acquire any equity securities or issue any
security convertible into or exchangeable for its equity securities or
alter any term of any of its outstanding securities or make any change
in its outstanding equity securities or other ownership interests or in
its capitalization, whether by reason of a reclassification,
recapitalization, stock split or combination, exchange or readjustment
of shares, stock dividend or otherwise;
(iii) incur, assume or guarantee any
indebtedness for borrowed money, issue any notes, bonds, debentures or
other corporate securities or grant any option, warrant or right to
purchase any thereof or issue any securities convertible or
exchangeable for debt
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securities of the Company or any Subsidiary;
(iv) make any sale, assignment, transfer,
abandonment or other conveyance of any of its assets or any part
thereof except for dispositions of inventory or of worn-out or obsolete
equipment for fair or reasonable value in the ordinary course of
business consistent with past practices;
(v) subject any of its assets, or any part
thereof, to any Encumbrance other than a Permitted Encumbrance, or
permit the imposition of any Encumbrance other than a Permitted
Encumbrance;
(vi) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of its equity interests or
declare, set aside or pay any dividends or other distribution in
respect of such equity interests, other than dividends made by Seminole
to the holders of its common stock in the ordinary course of business
consistent with past practices, as set forth in the formula set forth
in Schedule 4.1;
(vii) acquire any assets or properties other
than in the ordinary course of business consistent with past practices;
(viii) enter into any new or materially
amend any existing employee benefit plan, program or arrangement or any
employment, severance or consulting agreement, grant any general
increase in the compensation of officers or employees (including any
such increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or grant any increase in the compensation payable
or to become payable to any employee, except in accordance with
pre-existing contractual provisions;
(ix) make or commit to make any capital
expenditure or to invest, advance, loan, pledge or donate any monies to
any clients or other persons or to make any similar commitments with
respect to outstanding bids or proposals, except as disclosed on
Schedule 4.1;
(x) pay, except in the ordinary course of
business consistent with past practices, loan or advance any amount to,
or sell, transfer or lease any properties or assets to, or enter into
any agreement or arrangement with, any of its affiliates;
(xi) intentionally take any other action
that would cause any of the representations and warranties made herein
not to remain true and correct in all material respects;
(xii) make any loan, advance or capital
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contribution to or investment in any person;
(xiii) other than routine compliance
filings, make any filings or submit any documents or information to
FERC without prior consultation with the Buyer;
(xiv) enter into any material settlement of
any pending or threatened litigation;
(xv) consent to the entry of any decree or
order by a Governmental Authority or pay any fine or penalty that would
have a Material Adverse Effect;
(xvi) merge into or with or consolidated
with any other corporation or acquired all or substantially all of the
business or assets of any corporation, person or entity;
(xvii) enter into any agreement or
amendment, modification, or termination of any contract, lease, or
license to which the Company or any Subsidiary is a party, or by which
it or any of its assets or properties are bound, except those
agreements, amendments, modifications or terminations effected in the
ordinary course of business consistent with past practices;
(xviii) enter into any transaction that is
reasonably likely to delay materially or to affect materially and
adversely the ability of any of the parties hereto to obtain any
consent, authorization, order or approval of any governmental
commission, board or other regulatory body or the expiration of any
applicable waiting period required to consummate the transactions
contemplated by this Agreement; or itself to do any of the foregoing.
(b) From and after the date hereof and until the
Closing Date, the Seller shall cause the Company and each Subsidiary
to:
(i) keep its books of account, records and
files in the ordinary course and in accordance with existing practices;
and
(ii) use reasonable efforts to continue to
maintain existing business relationships with affiliates, suppliers and
customers to the extent that such relationships are, at the same time,
reasonably judged by the Seller to be economically beneficial to the
Company acting reasonably.
Section 4.2 Access to Properties and Records. Except as may be
otherwise provided for in the Transition Services Agreement, the Seller shall
afford, and shall cause the Company to afford, to the Buyer and the Buyer's
accountants, counsel and
24
representatives full reasonable access during normal business hours throughout
the period prior to the Closing Date (or the earlier termination of this
Agreement pursuant to Article VII hereof) to all the Company's and its
Subsidiaries' properties, books, contracts, Commitments and records (including,
but not limited to, all environmental studies, reports and other environmental
records) and, during such period, shall furnish promptly to the Buyer all
information concerning the Company's and its Subsidiaries' business, properties,
liabilities and personnel as the Buyer may reasonably request, provided that no
investigation or receipt of information pursuant to this Section 4.2 shall
affect any representation or warranty of the Seller or the conditions to the
obligations of the Buyer.
Section 4.3 Reserved.
Section 4.4 Consents and Approvals. The Seller and the Buyer
shall each use their commercially reasonable best efforts to obtain, or, in the
case of the Seller, cause the Company to obtain, all necessary consents,
waivers, authorizations and approvals of all Governmental Authorities, and of
all other persons required in connection with the execution, delivery and
performance by them of this Agreement.
Section 4.5 Further Assurances. Upon the request of the Buyer
at any time after the Closing Date, the Seller will promptly execute and deliver
such further instruments of assignment, transfer, conveyance, endorsement,
direction or authorization and other documents as the requesting party or
parties or its or their counsel may reasonably request in order to perfect title
of the Buyer and its successors and assigns to the Subject Membership Interest
or otherwise to effectuate the purposes of this Agreement. If it is determined
following the Closing that record and/or beneficial title to any of the Assets,
are not held by the Company or its Subsidiaries but rather is held by Seller or
any of its affiliates, Seller agrees to and to cause its affiliates to execute
such documents, agreements and instruments and take such action as may be
reasonably required to cause such title to be effectively transferred and
conveyed from Seller or its affiliates to the Company or its Subsidiaries free
and clear of any Encumbrances.
Section 4.6 Reasonable Best Efforts. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto will use
its commercially reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable, consistent with applicable law to consummate and make effective in
the most expeditious manner practicable the transactions contemplated hereby.
Section 4.7 Notice of Breach. Through the Closing Date, each
of the parties hereto shall promptly give to the other parties written notice
with particularity upon having knowledge of any matter that constitutes a breach
of any representation, warranty, agreement or covenant contained in this
Agreement.
Section 4.8 Confidential Information. During the period
commencing on the date of this Agreement and ending on the second anniversary of
the Closing Date hereunder, except as required by law, Governmental Authority or
stock exchange rule or under the Seller's and its affiliates' obligations
pursuant to any other agreement between
25
the Seller and the Buyer, the Seller and its affiliates shall not, directly or
indirectly, disclose to any person or entity other than an affiliate or use any
information not in the public domain or generally known in the industry, in any
form, whether acquired prior to or after the Closing Date, relating to the
business and operations of the Company or any of its Subsidiaries, including but
not limited to information regarding customers, vendors, suppliers, trade
secrets, training programs, manuals or materials, technical information,
contracts, systems, procedures, mailing lists, know-how, trade names,
improvements, price lists, financial or other data (including the revenues,
costs or profits associated with any of the Company's services), business plans,
code books, invoices and other financial statements, computer programs, software
systems, databases, discs and printouts, plans (business, technical or
otherwise), customer and industry lists, correspondence, internal reports,
personnel files, sales and advertising material, telephone numbers, names,
addresses or any other compilation of information, written or unwritten, which
is or was used by the Company or any Subsidiary, regardless of whether such
information was or is owned on the date hereof by the Company or any Subsidiary
(collectively, "Protected Information"); provided, however, that if any of the
Seller or its affiliates are presently in possession of Protected Information
that (x) is necessary to use in the ordinary course of business of WMB or any
controlled affiliate of WMB other than the Company or any of its Subsidiaries
(collectively, "WMB and its Other Subsidiaries") and (y) cannot reasonably be
redacted, segregated or otherwise separated from information about or owned by
WMB and its Other Subsidiaries which is necessary to use in the ordinary course
of business of WMB and its Other Subsidiaries (hereinafter, "Mixed
Information"), then the Protected Information which is so imbedded in such Mixed
Information may be used by WMB and its Other Subsidiaries in the ordinary course
of business; provided, that WMB and its Other Subsidiaries may not use any such
Protected Information to compete or seek to compete with the business or
operations of the Company or any of its Subsidiaries as existing on the Closing
Date. Upon the request of the Company, Seller Parent and its Other Subsidiaries
shall reasonably cooperate with the Company in the development of procedures
intended to further implement the intent of this Section 4.8.
Section 4.9 Non-Solicitation of Employees. During the period
commencing on the date of this Agreement and ending on the second anniversary of
the Closing Date hereunder, neither the Seller nor any affiliate thereof shall
for themselves or on behalf of or in conjunction with any person, directly or
indirectly, solicit, endeavor to entice away from the Buyer or its affiliates
(including the Company or its Subsidiaries), or otherwise directly or indirectly
interfere with the relationship of the Buyer or its affiliates (including the
Company or its Subsidiaries) with any person who, to the knowledge of the
Seller, is employed by the Buyer or its affiliates (including the Company or its
Subsidiaries) and, directly or indirectly, involved with the business or
operations of the Company and its Subsidiaries; provided, however, neither the
Seller nor any affiliates thereof shall be precluded from soliciting or hiring
any such employee:
(a) who initiates discussions regarding such
employment without any direct or indirect solicitation by the Seller or
its affiliates;
26
(b) whose employment with the Company or its
Subsidiaries has been terminated prior to commencement of employment
with the Seller or its affiliates; or
(c) who responds to a general solicitation of
employment not specifically addressed to such employees.
Notwithstanding the foregoing, the Seller may continue to employ each
Business Employee until such time as such Business Employee becomes a
Transferred Employee.
Section 4.10 Negotiations. Subject to applicable law, from and
after the date hereof, neither the Seller nor the Company, nor their officers,
directors, employees, affiliates, stockholders, representatives, agents, nor
anyone acting on behalf of them shall, directly or indirectly, encourage,
solicit, engage in discussions or negotiations with, or provide any information
to, any person, firm, or other entity or group (other than the Buyer or its
representatives) concerning any merger, sale of assets, purchase or sale of the
Subject Membership Interest or similar transaction involving the Company or any
division or Subsidiary thereof unless this Agreement is terminated pursuant to
and in accordance with Article VII hereof. The Seller shall promptly communicate
to the Buyer any inquiries or communications concerning any such transaction
which they may receive or of which they may become aware.
Section 4.11 Tax Covenants.
(a) WMB and Buyer shall make timely, irrevocable and
effective elections under Section 338(h)(10) of the Code and any
similar elections under any applicable state, local or foreign income
tax law (collectively the "Section 338(h)(10) Elections") with respect
to Buyer's purchase of the Subject Membership Interest and the deemed
purchase(s) for Tax purposes of the stock or interests in Seminole and
any other Subsidiary of the Company that is a corporation for United
States federal income tax purposes (collectively, the "Qualified Stock
Purchases"). To facilitate such elections, within ninety (90) days of
the Closing Date, WMB shall deliver to Buyer an Internal Revenue
Service Form 8023 and any similar forms under applicable state, local
or foreign income tax law (the "Forms") with respect to the Qualified
Stock Purchases, which Forms shall have been duly executed by an
authorized person for WMB. Buyer and WMB shall, within one hundred and
twenty (120) days of the Closing Date, agree to a schedule showing the
allocation of the deemed purchase price for Seminole among the assets
of Seminole and any relevant Subsidiaries of Seminole, consistent with
the principles of Section 338(h)(10) of the Code and the regulations
thereunder (the "Allocation"). Buyer shall complete the Forms in a
manner consistent with the Allocation, cause the Forms to be duly
executed by an authorized person for Buyer, cause the Forms to be
timely filed with the appropriate Tax authorities and provide a copy of
the executed Forms to WMB. If, after filing such Forms, any changes or
supplements are required to such Forms, WMB and Buyer shall promptly
endeavor to agree on such changes and, if agreed, properly execute such
amended Forms. Buyer shall timely file the Forms
27
and any required supplements thereto that have been agreed to by the
parties, and shall promptly deliver a copy of such Forms to WMB. WMB
and Seller shall provide such information as Buyer shall reasonably
request in connection with the preparation of the Forms and any
amendments or supplements thereto. Buyer, the Company and its
Subsidiaries, Seller, and WMB will file all Tax Returns in a manner
consistent with the Allocation.
(b) The Seller shall be liable for, and shall
indemnify and hold the Buyer and its affiliates harmless from (i) any
Taxes caused by or arising from the sale of the Subject Membership
Interest (including, without limitation, all Taxes caused by or
resulting from the Section 338(h)(10) Elections), (ii) all liability
for Taxes of the Company and each of its Subsidiaries for all taxable
periods ending on or before the Closing Date; (iii) the portion,
determined as described below, of any Taxes which are incurred by the
Company or any of its Subsidiaries for any taxable period which begins
before and ends after the Closing Date (a "Straddle Period") which is
allocable to the portion of the Straddle Period ending on the Closing
Date (the "Pre-Closing Period") and (iv) all liability imposed upon the
Company or any of its Subsidiaries on account of the inclusion of the
Company or any of its Subsidiaries in a consolidated, combined, unitary
or similar group, for any period or portion of a period prior to
Closing. The portion of the Taxes for a Straddle Period which are
allocable to a Pre-Closing Period shall be determined, in the case of
property, ad valorem or franchise Taxes (which are not measured by, or
based upon, net income), on a per diem basis and excluding the
consequences of the Section 338(h)(10) Elections and, in the case of
other Taxes, by assuming that the Pre-Closing Period is a separate
taxable period and by taking into account the taxable events during
such period.
(c) The Seller shall prepare and timely file (or
cause to be prepared and timely filed), on a basis consistent with
prior Tax Returns, all Tax Returns with the appropriate Federal, state,
local and foreign governmental agencies relating to the Company and its
Subsidiaries for taxable periods ending on or prior to the Closing Date
and shall timely pay all Taxes required to be paid with respect to such
Tax Returns. The Buyer shall prepare and file (or cause to be prepared
and timely filed), on a basis consistent with prior Tax Returns, all
Tax Returns for Straddle Periods required to be filed by the Company or
any of its Subsidiaries and shall timely pay all Taxes required to be
paid with respect to such Straddle Tax Return, provided, however, that
the Seller shall promptly reimburse the Buyer for the portion of such
Tax that relates to the Pre-Closing Period. The Seller shall furnish to
the Buyer all information and records reasonably requested by the Buyer
for use in preparation of any Tax Returns. The Buyer and the Seller
agree to cause the Company and each of its Subsidiaries after the
Closing Date to file all Tax Returns for any Straddle Period on the
basis that the relevant taxable period ended as of the close of
business on the Closing Date, to the extent permitted by applicable
law.
(d) The Seller shall cause any tax sharing agreement
or
28
similar arrangement with respect to Taxes involving the Company or any
Subsidiary to be terminated effective as of the Closing Date, to the
extent any such agreement or arrangement relates to the Company or any
Subsidiary, and after the Closing Date neither the Company nor any of
its Subsidiaries shall have any obligation to make any payment under
any such agreement or arrangement.
(e) All excise, sales, use, transfer (including real
property transfer or gains), stamp, documentary, filing, recordation
and other similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such
additions or penalties, resulting directly from the transactions
contemplated by this Agreement (the "Transfer Taxes"), shall be borne
by the party on which such Transfer Taxes are imposed by applicable
law. Notwithstanding anything to the contrary in this Section 4.11, any
Tax Returns that must be filed in connection with Transfer Taxes shall
be prepared and filed when due by the party primarily or customarily
responsible under the applicable local law for filing such Tax Returns,
and such party shall use reasonable commercial efforts to provide such
Tax Returns to the other party at least 10 days prior to the due date
for such Tax Returns.
Section 4.12 Reserved.
Section 4.13 Reserved.
Section 4.14 Bonds. The Seller shall use its reasonable best
efforts to maintain the Bonds until they are released and replaced by the Buyer.
"Bonds" shall mean all surety bonds, letters of credit, guarantees, cash
collateral, performance bonds and bid bonds issued by the Seller and its
affiliates (other than the Company and its Subsidiaries) on behalf of the
Company or any of its Subsidiaries. The Buyer shall use its reasonable best
efforts to replace and release the Bonds as promptly as reasonably practicable
after the Closing Date but in no event later than 90 days from the Closing Date.
The Buyer shall indemnify, defend and hold harmless the Seller and its
affiliates for any and all liability, loss, damage, cost and expense incurred
under such Bonds in connection with activities performed after the Closing.
Section 4.15 Transitional Trademark License. Effective upon
the Closing Date, the Seller and the Seller's affiliates hereby grant to the
Company, the Subsidiaries of the Company and the Buyer a nonexclusive,
nontransferable, royalty-free license, without right to sublicense, to use,
solely in the Company's and its Subsidiaries' businesses as they are presently
conducted, any and all trademarks, service marks, and trade names owned by the
Seller and the Seller's affiliates solely to the extent appearing on existing
inventory, advertising materials and property of the Company or its Subsidiaries
(such as signage, vehicles, and equipment) (collectively "Seller's Marks") for a
period of six (6) months from the Closing Date ("License Period"). The Buyer,
the Company and its Subsidiaries may use such existing inventory, advertising
materials and property during the License Period, but shall not create new
inventory, advertising
29
materials or property using Seller's Marks. The Buyer, the Company and its
Subsidiaries shall promptly replace or remove Seller's Marks on inventory,
advertising materials and Property, provided that all such use shall cease no
later than the end of the License Period. The nature and quality of all uses of
the Seller's Marks by the Buyer, the Company and its Subsidiaries shall conform
to the Seller's existing quality standards. Immediately upon expiration of the
License Period, the Buyer, the Company and its Subsidiaries shall cease all
further use of Seller's Marks and shall adopt new trademarks, service marks, and
trade names which are not confusingly similar to Seller's Marks. All rights not
expressly granted in this section with respect to Seller's Marks are hereby
reserved. In the event Buyer, the Company or its Subsidiaries materially breach
the provisions of this section, the Seller may immediately terminate the License
Period upon twenty (20) days written notice.
Section 4.16 Non-Software Copyright License. Effective upon
the Closing Date, the Seller, for themselves and on behalf of their affiliates,
hereby grant to the Company, the Subsidiaries of the Company and the Buyer a
nonexclusive royalty-free, perpetual license, without right to sublicense, to
use, copy, modify, enhance, and to upgrade, solely for their internal business
purposes and not as a service bureau, all proprietary manuals, user guides,
standards and operation procedures and similar documents owned by Seller and/or
its Affiliates and used by Company or its Subsidiaries. All copies of the
foregoing must reproduce and include all copyright and other intellectual
property rights notices provided by the Seller.
Section 4.17 Intercompany Indebtedness. Immediately prior to
the Closing, the Seller shall (a) pay or cause its affiliates to pay to the
Company and its Subsidiaries all indebtedness for borrowed money owed by the
Seller or any of its affiliates (other than the Company or its Subsidiaries) as
of such time and (b) pay to the Company a capital contribution and cause such
capital contribution to be applied to pay or satisfy all indebtedness for
borrowed money owed by the Company and its Subsidiaries to the Seller or its
affiliates (other than the Company and its Subsidiaries) as of such time.
Section 4.18 SEC Required Financial Statements. The Seller, at
its sole cost and expense, shall prepare and cause to be delivered to the Buyer
prior to September 15, 2002, audited and unaudited financial statements of the
Company and its Subsidiaries and their respective operations, in such form and
covering such periods as may be required by applicable securities laws to be
filed with the Securities and Exchange Commission by the Buyer or its affiliates
as a result of or in connection with the transactions contemplated by this
Agreement. Seller shall further provide and cause its affiliates to provide
access to their personnel and books and records to the extent necessary for the
Buyer and its representatives to confirm and verify the accuracy of such
financial statements.
Section 4.19 Release of Certain Obligations. The Seller, for
itself and its affiliates, hereby agrees, from and after the Closing, not to
make or allow its affiliates to make any claims against and hereby releases,
acquits and discharges the Company and its Subsidiaries and the Buyer from any
and all claims, demands, obligations or causes of
30
action which the Seller or its affiliates may have against the Companies or its
Subsidiaries or the Buyer out of the activities of the Company and its
Subsidiaries prior to the Closing Date, including any claims, demands,
obligations or causes of action which have arisen or may arise under any
agreements between the Seller or an affiliate of the Seller (other than the
Company or its Subsidiaries), on the one hand, and one or more of the Company or
its Subsidiaries, on the other hand, to the extent that such agreements have
been terminated or have expired in accordance with their terms on or prior to
the Closing or are otherwise required to be terminated by the provisions of this
Agreement. Nothing in this Section 4.19 shall be interpreted or construed as a
release of any claims, demands, obligations or causes of action pursuant to this
Agreement or pursuant to agreements which continue beyond the Closing or are
entered into following the Closing Date.
Section 4.20 Delivery of Records. The Seller shall as soon as
possible following the Closing and in any event no later than 30 days following
the Closing, deliver to the Buyer all Records (as hereinafter defined)
pertaining to the Company, the Company's Subsidiaries and their businesses. The
term "Records" shall mean all existing land, title, engineering, environmental,
operating, FERC, Department of Transportation and other data (whether electronic
or hard copy), files, documents (including design documents), instruments,
notes, papers, ledgers, journals, reports, abstracts, surveys, maps, books,
records and studies arising out of or relating to the Assets (including the Real
Property) or such businesses and which are held by the Seller or its affiliates
for use in connection with, the ownership, use, operation or maintenance of the
Assets (including the Real Property) or such businesses.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE BUYER
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Buyer in its sole discretion:
Section 5.1 Reserved.
Section 5.2 No Violation of Orders. No preliminary or
permanent injunction or other order issued by any Governmental Authority, nor
any statute, rule, regulation, decree or executive order promulgated or enacted
by any Governmental Authority, which declares this Agreement invalid or
unenforceable in any respect or prevents the consummation of the transactions
contemplated hereby, shall be in effect which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement and which
order, decree, ruling or other action is not subject to appeal; provided,
however, that prior to invoking this condition with regard to any injunction or
other order issued by any Governmental Authority, the Buyer shall have used its
reasonable best efforts to have such injunction or other order lifted or
vacated.
31
Section 5.3 Compliance.
(a) The Seller shall have performed and complied in
all material respects with each of the covenants and agreements it is
required under this Agreement to have performed or complied with prior
to Closing; and
(b) Each of the Seller's representations and
warranties made in this Agreement qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of the time of the Closing as
though made as of such time, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of such earlier time.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE SELLER
The obligations of the Seller to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Seller in its sole discretion:
Section 6.1 Reserved.
Section 6.2 No Violation of Orders. No preliminary or
permanent injunction or other order issued by any Governmental Authority, nor
any statute, rule, regulation, decree or executive order promulgated or enacted
by any Governmental Authority, that declares this Agreement invalid or
unenforceable in any respect or prevents the consummation of the transactions
contemplated hereby shall be in effect which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement and which
order, decree, ruling or other action is not subject to appeal; provided,
however, that prior to invoking this condition with regard to any injunction or
other order issued by any Governmental Authority, the Seller shall have used its
reasonable best efforts to have such injunction or other order lifted or
vacated.
Section 6.3 Compliance.
(a) The Buyer shall have performed and complied in
all material respects with each of the covenants and agreements it is
required under this Agreement to have performed or complied with prior
to Closing; and
(b) Each of the Buyer's representations and
warranties made in this Agreement qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of the time of the Closing as
though made as of such time, except to the extent such representations
and warranties expressly relate to an earlier date, in which case such
representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of such earlier time.
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ARTICLE VII
TERMINATION AND ABANDONMENT
Section 7.1 Methods of Termination. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
before the Closing:
(a) by the mutual written consent of the Seller and
the Buyer;
(b) by the Seller, in the event that any of the
conditions set forth in Section 6.1 or 6.2 cannot be satisfied;
(c) by the Buyer, in the event that any of the
conditions set forth in Sections 5.1 or 5.2 cannot be satisfied;
(d) by the Buyer, in the event that Seller breaches
or fails to perform any of its representations, warranties, covenants
or agreements contained herein, which breach or failure to perform
would give rise to the failure of the conditions set forth in Section
5.3 and shall not have been cured within 10 business days after receipt
of written notice thereof by Buyer;
(e) by the Seller, in the event that Buyer breaches
or fails to perform any of its representations, warranties, covenants
or agreements contained herein, which breach or failure to perform
would give rise to the failure of the conditions set forth in Section
6.3 and shall not have been cured within 10 business days after receipt
of written notice thereof by Seller; and
(f) by the Buyer or the Seller at any time after
December 31, 2002; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.1(d) shall not be available if the
party seeking to terminate under this provision shall have failed to
perform or observe in any material respect any of its obligations under
this Agreement and such failure shall have been the cause of, or
resulted in, the failure of the Closing to occur on or before such
date.
Section 7.2 Procedure Upon Termination. In the event of
termination and abandonment of this Agreement pursuant to Section 7.1, written
notice thereof shall forthwith be given to the other party hereto and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by the Seller or the Buyer. If this Agreement
is terminated as provided herein, no party to this Agreement shall have any
liability or further obligation to any other party to this Agreement except as
provided in Sections 9.3 and 9.4 hereof; provided, however, that no termination
of this Agreement pursuant to this Article VII shall relieve any party of
liability for a willful and material breach of any provision of this Agreement
occurring before such termination.
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ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival. The respective representations and
warranties of the parties hereto contained herein or in any certificates or
other documents delivered pursuant to this Agreement on the Closing shall
survive the Closing for a period of 18 months following the Closing Date;
provided however, that the representations and warranties set forth in Section
2.2 (Capitalization; Title) shall survive indefinitely, the representations and
warranties set forth in Section 2.21 (Environmental; Health and Safety Matters)
shall survive until the fifth anniversary of the Closing Date and the
representations and warranties in Section 2.9 (Taxes) shall survive for a period
equal to the applicable statute of limitations (including any extensions
thereof). The respective covenants and agreements of the parties hereto
contained herein or in any certificates or other documents delivered pursuant to
this Agreement on the Closing shall survive the Closing for indefinitely.
Section 8.2 Indemnification Coverage.
(a) Notwithstanding the Closing or the delivery of
the Subject Membership Interest, and regardless of any investigation at
any time made by or on behalf of the Buyer or of any knowledge or
information that the Buyer may have the Seller hereby indemnifies and
agrees to defend, save and hold the Buyer, the Company, the
Subsidiaries of the Company and each of their officers, directors,
employees, agents and affiliates (other than the Seller) (collectively,
the "Buyer Indemnified Parties") harmless for any damage, judgment,
fine, penalty, demand, settlement, liability, loss, cost, Tax, expense
(including reasonable attorneys', consultants' and experts' fees),
claim or cause of action (each, a "Loss") suffered by any such Buyer
Indemnified Party at any time or from time to time arising out of,
relating to or resulting from any of the following:
(i) any breach or inaccuracy in any
representation by the Seller or the breach of any warranty by the
Seller contained in this Agreement or any certificates or other
documents delivered pursuant to this Agreement on Closing;
(ii) any failure by the Seller to perform or
observe any term, provision, covenant, or agreement on the part of the
Seller to be performed or observed under this Agreement; or
(iii) the Reorganization Transactions.
(b) Notwithstanding the Closing or the delivery of
the Subject Membership Interest and regardless of any investigation at
any time made by or on behalf of the Seller or of any knowledge or
information that the Seller may have, the Buyer hereby indemnifies and
agrees to defend, save and hold the
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Seller and their officers, directors, employees, agents and affiliates
(collectively, the "Seller Indemnified Parties") harmless for any Loss
suffered by any such Seller Indemnified Party at any time or from time
to time arising out of, relating to or resulting from any of the
following:
(i) any breach or inaccuracy in any
representation by the Buyer or the breach of any warranty by the Buyer
contained in this Agreement or any certificates or other documents
delivered pursuant to this Agreement on Closing; or
(ii) any failure by the Buyer to perform or
observe any term, provision, covenant, or agreement on the part of the
Buyer to be performed or observed under this Agreement.
(c) The foregoing indemnification obligations shall
be subject to the following limitations:
(i) the Seller's aggregate liability under
Section 8.2(a)(i) and 8.2(a)(iii) and the Buyer's aggregate liability
under Section 8.2(b)(i) shall not, in either case, exceed 30% of the
Purchase Price (the "Cap"); provided, however, that the Cap shall not
be applicable to breaches by Seller under Section 2.2 and 2.9;
(ii) no indemnification for any Losses
asserted against the Buyer or the Seller, as the case may be, under
Section 8.2(a)(i) or Section 8.2(b)(i) shall be required unless and
until the cumulative aggregate amount of such Losses exceeds $2,000,000
(the "Threshold"), at which point the Seller or the Buyer, as the case
may be, shall be obligated to indemnify the Indemnified Party (as
hereinafter defined) only as to the amount of such Losses in excess of
$250,000 (the "Deductible"), subject to the limitation in Section
8.2(c)(i); provided, however, that the Threshold and the Deductible
shall not be applicable to breaches under Sections 2.2 and 2.9;
(iii) the amount of any Losses suffered by a
Seller Indemnified Party or a Buyer Indemnified Party, as the case may
be, shall be reduced by any third-party insurance which such party
actually receives in respect of or as a result of such Losses. If any
Losses for which indemnification was provided hereunder is subsequently
reduced by any third-party insurance or other indemnification benefit
or recovery actually received by the party for which indemnification
was provided, the amount of the reduction shall be remitted to the
Indemnifying Party (as hereinafter defined);
(iv) no claim may be asserted nor may any
action be commenced (A) against the Seller for breach or inaccuracy of
any representation or breach of a warranty, unless written notice of
such
35
claim or action is received by the Seller describing in reasonable
detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the
representation or warranty on which such claim or action is based
ceases to survive as set forth in Section 8.1 (it being agreed and
understood that if a claim for a breach of a representation or warranty
is timely made, the representation or warranty shall survive until the
date on which such claim is finally liquidated or otherwise resolved),
or (B) against the Buyer for breach or inaccuracy of any representation
or breach of a warranty, unless written notice of such claim or action
is received by the Buyer describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or
action on or prior to the date on which the representation or warranty
on which such claim or action is based ceases to survive as set forth
in Section 8.1 (it being agreed and understood that if a claim for a
breach of a representation or warranty is timely made, the
representation or warranty shall survive until the date on which such
claim is finally liquidated or otherwise resolved); and
(v) an Indemnified Party shall not be
entitled under this Agreement to multiple recovery for the same Losses.
(d) Notwithstanding anything in this Agreement to
the contrary (including, without limitation, the provisions of Section
8.2(c)(i) and (ii)), Seller hereby indemnifies and agrees to defend,
save and hold the Buyer harmless from all Losses suffered by the Buyer
resulting from any judgment or order by a Governmental Authority to
return or reassign the Subject Membership Interest or the underlying
assets of the Company and its Subsidiaries to the Seller or any
affiliate of the Seller.
Section 8.3 Procedures. Any Indemnified Party shall notify the
Indemnifying Party (with reasonable specificity) promptly after it becomes aware
of facts supporting a claim or action for indemnification under this Article
VIII, and shall provide to the Indemnifying Party as soon as practicable
thereafter all information and documentation in its possession reasonably
necessary to support and verify any Losses associated with such claim or action.
Subject to Section 8.2(v), the failure to so notify the Indemnifying Party shall
not relieve the Indemnifying Party of any liability that it may have to any
Indemnified Party, except to the extent that the Indemnifying Party demonstrates
that it has been materially prejudiced by the Indemnified Party's failure to
give such notice, in which case the Indemnifying Party shall be relieved from
its obligations hereunder to the extent and only to the extent of such material
prejudice. The Indemnifying Party shall defend, contest or otherwise protect the
Indemnified Party against any such claim or action by counsel of the
Indemnifying Party's choice at its sole cost and expense; provided, however,
that the Indemnifying Party shall not make any settlement or compromise without
the prior written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed) unless the sole relief provided is monetary
damages that are paid in full by the Indemnifying Party. The Indemnified Party
shall have the right, but not the obligation, to participate at its own
36
expense in the defense thereof by counsel of the Indemnified Party's choice and
shall in any event use its reasonable best efforts to cooperate with and assist
the Indemnifying Party. If the Indemnifying Party fails timely to defend,
contest or otherwise protect against such suit, action, investigation, claim or
proceeding, the Indemnified Party shall have the right to do so, including,
without limitation, the right to make any compromise or settlement thereof, and
the Indemnified Party shall be entitled to recover the entire cost thereof from
the Indemnifying Party, including, without limitation, reasonable attorneys'
fees, disbursements and amounts paid as the result of such suit, action,
investigation, claim or proceeding.
Section 8.4 Remedy. Absent fraud, and except for seeking
equitable relief, from and after the Closing the sole remedy of a party in
connection with (i) a breach or inaccuracy of the representations, or breach of
warranties, in this Agreement or any certificates or other documents delivered
pursuant to this Agreement on Closing, or (ii) any failure by a party to perform
or observe any term, provision, covenant, or agreement on the part of such party
to be performed or observed under this Agreement, shall, in each case, be as set
forth in this Article VIII.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Publicity. On or prior to the Closing Date,
neither party shall, nor shall it permit its affiliates to, issue or cause the
publication of any press release or other announcement with respect to this
Agreement or the transactions contemplated hereby without the consent of the
other party hereto. Notwithstanding the foregoing, in the event any such press
release or announcement is required by law or stock exchange rule to be made by
the party proposing to issue the same, such party shall use its reasonable best
efforts to consult in good faith with the other party prior to the issuance of
any such press release or announcement.
Section 9.2 Successors and Assigns; No Third-Party
Beneficiaries. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and assigns; provided,
however, that neither party shall assign or delegate any of the obligations
created under this Agreement without the prior written consent of the other
party. Except as contemplated by Article VIII, nothing in this Agreement shall
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
Section 9.3 Investment Bankers, Financial Advisors, Brokers
and Finders.
(a) The Seller shall indemnify and agree to defend
and hold the Buyer Indemnified Parties harmless against and in respect
of all claims, losses, liabilities and expenses which may be asserted
against any Buyer Indemnified Parties by any broker or other person who
claims to be entitled to an
37
investment banker's, financial advisor's, broker's, finder's or similar
fee or commission in respect of the execution of this Agreement or the
consummation of the transactions contemplated hereby, by reason of his
acting at the request of the Seller, the Company or any of their
Affiliates.
(b) The Buyer shall indemnify and agree to save and
hold the Seller Indemnified Parties harmless against and in respect of
all claims, losses, liabilities, fees, costs and expenses which may be
asserted against them by any broker or other person who claims to be
entitled to an investment banker's, financial advisor's, broker's,
finder's or similar fee or commission in respect of the execution of
this Agreement or the consummation of the transactions contemplated
hereby, by reason of his acting at the request of the Buyer or any of
its affiliates (other than the Company or any Subsidiary of the
Company).
Section 9.4 Fees and Expenses. Except as otherwise expressly
provided in this Agreement, all legal, accounting and other fees, costs and
expenses of a party hereto incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs or expenses; provided, however, that the Seller shall be solely
responsible for all legal, accounting and other fees, costs and expenses
incurred by the Seller and the Company and the Subsidiaries of the Company.
Section 9.5 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made if delivered personally or sent by overnight courier or
sent by facsimile (with evidence of confirmation of receipt) to the parties at
the following addresses:
(a) If to the Buyer, to:
E-Cypress, LLC
c/o Enterprise Products GP, LLC
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
Enterprise Products GP, LLC
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
38
(b) If to the Seller, to:
The ▇▇▇▇▇▇▇▇ Companies, Inc.,
▇▇▇▇▇▇▇▇ Natural Gas Liquids, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Esq.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
or to such other persons or at such other addresses as shall be furnished by
either party by like notice to the other, and such notice or communication shall
be deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 9.5 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 9.5.
Section 9.6 Entire Agreement. This Agreement, together with
the Disclosure Schedules and the exhibits hereto, represent the entire agreement
and understanding of the parties in connection with the purchase and sale of the
Subject Membership Interest and no representations or warranties have been made
in connection with this Agreement other than those expressly set forth herein or
in the Disclosure Schedules, exhibits, certificates and other documents
delivered in accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this Agreement
and all prior drafts of this Agreement, all of which are merged into this
Agreement. No prior drafts of this Agreement and no words or phrases from any
such prior drafts shall be admissible into evidence in any action or suit
involving this Agreement.
Section 9.7 Waivers and Amendments. The Seller, as a group, or
the Buyer, may by written notice to the other:
(a) extend the time for the performance of any of
the obligations or other actions of the other;
(b) waive any inaccuracies in the representations or
warranties of the other contained in this Agreement or in any document
delivered pursuant to this Agreement by the other party;
(c) waive compliance with any of the covenants of
the other contained in this Agreement;
(d) waive performance of any of the obligations of
the other created under this Agreement; or
39
(e) waive fulfillment of any of the conditions to
its own obligations under this Agreement or in any documents delivered
pursuant to this Agreement by the other party. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach, whether or not
similar, unless such waiver specifically states that it is to be
construed as a continuing waiver. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the
parties hereto.
Section 9.8 Severability. This Agreement shall be deemed
severable, and the invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of this Agreement or of
any other term or provision hereof. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.
Section 9.9 Titles and Headings. The Article and Section
headings and any table of contents contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 9.10 Signatures and Counterparts. Facsimile
transmission of any signed original document and/or retransmission of any signed
facsimile transmission shall be the same as delivery of an original. At the
request of the Buyer or the Seller, the parties will confirm facsimile
transmission by signing a duplicate original document. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall be considered one and the same agreement.
Section 9.11 Enforcement of the Agreement. The parties hereto
agree that irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereto, this being in addition to
any other remedy to which they are entitled at law or in equity. In no event
shall any party hereto be entitled to any punitive, incidental, indirect,
special or consequential damages resulting from or arising out of this Agreement
or the transactions contemplated hereby.
Section 9.12 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal and substantive laws of
Delaware and without regard to any conflicts of laws concepts which would apply
the substantive law of some other jurisdiction.
40
Section 9.13 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a person means a person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, the first mentioned
person: the Company and its Subsidiaries shall be deemed to be
affiliates (i) of the Seller prior to the Closing and (ii) of the Buyer
from and after the Closing.
(b) "Assets" means all of the assets (including Real
Property, and tangible and intangible assets) used or necessary for the
conduct of the Company's and its Subsidiaries' businesses as they are
presently conducted and as conducted immediately prior to the
Contributions, excluding the Omnibus Excluded Assets.
(c) "Material Adverse Effect" means a material
adverse effect on the assets, properties, business, operations, net
income or financial condition of the Company and its Subsidiaries taken
as a whole, it being understood that none of the following shall be
deemed to constitute a Material Adverse Effect: (i) any effect
resulting from entering into this Agreement or the announcement of the
transactions contemplated by this Agreement; and (ii) any effect
resulting from changes in the United States or global economy as a
whole, except for such effects which disproportionately impact the
Company and its Subsidiaries.
(d) "Omnibus Excluded Assets" means (i) the
Intellectual Property which is being addressed through the IT Migration
Plan and Transition Services Agreement (as such terms are defined in
the Mapletree Purchase Agreement), (ii) any assets that are designated
under this Agreement or the Transition Services Agreement as excluded
assets or shared assets to be retained by Seller or its affiliates and
(iii) assets that are used primarily in the conducts of the business
and operation of the assets owned by the Seller or any of its
Affiliates (other than Company or its Subsidiaries) immediately
following the Closing, and (iv) any assets used by MAPL and not owned
by Seminole to provide operating services to Seminole.
(e) "person" means an individual, corporation,
association, trust, limited liability company, limited partnership,
limited liability partnership, partnership, incorporated organization,
other entity or group (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934).
(f) "Pipeline Systems" means the natural gas liquids
and other pipelines, lateral lines, pumps, pump stations and other
related machinery and equipment that are located on or under the Real
Property and that are used or necessary for the conduct of the
Company's and its Subsidiaries' businesses as they are presently
conducted and as conducted immediately prior to the Contributions.
41
Section 9.14 Reserved.
42
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
E-BIRCHTREE, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: V.P.
E-CYPRESS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: V.P.
43