REDEMPTION AGREEMENT by and between ENERGY TRANSFER PARTNERS, L.P. and CCE HOLDINGS, LLC Dated as of September 14, 2006
by
and between
ENERGY
TRANSFER PARTNERS, L.P.
and
CCE
HOLDINGS, LLC
Dated
as of
September
14, 2006
TABLE
OF CONTENTS
|
ARTICLE
I
|
|
|
DEFINITIONS
|
|
|
Section
1.1 Specific Definitions
|
2
|
|
ARTICLE
II
|
|
|
REDEMPTION
OF 50% CCE INTEREST
|
22
|
|
Section
2.1 Agreement
to Redeem 50% CCE Interest
|
22
|
|
Section
2.2 Time
and Place of Closing
|
23
|
|
Section
2.3 Pre-Closing
Matters
|
24
|
|
Section
2.4 Post-Closing
Adjustment
|
25
|
|
Section
2.5 Deliveries
by CCE at the Closing
|
27
|
|
Section
2.6 Deliveries
by ETP at the Closing
|
28
|
|
ARTICLE
III
|
|
|
REPRESENTATIONS
AND WARRANTIES OF CCE
|
28
|
|
Section
3.1 Organization;
Qualification
|
28
|
|
Section
3.2 Authority
Relative to this Agreement and the CCE Acquisition
Agreement
|
30
|
|
Section
3.3 TPC
Interests
|
32
|
|
Section
3.4 Consents
and Approvals
|
32
|
|
Section
3.5 No
Conflict or Violation
|
32
|
|
Section
3.6 Financial
Information
|
34
|
|
Section
3.7 Contracts
|
34
|
|
Section
3.8 Compliance
with Law
|
36
|
|
Section
3.9 Permits
|
36
|
|
Section
3.10 Litigation
|
36
|
|
Section
3.11 Title
to Properties
|
36
|
|
Section
3.12 Employee
Matters
|
38
|
|
Section
3.13 Labor
Relations
|
42
|
|
Section
3.14 Intellectual
Property
|
42
|
|
Section
3.15 Environmental
Matters
|
43
|
|
Section
3.16 Tax
Matters
|
45
|
|
Section
3.17 Absence
of Certain Changes or Events
|
45
|
|
Section
3.18 Absence
of Undisclosed Liabilities
|
46
|
|
Section
3.19 Brokerage
and Finders’ Fees
|
46
|
|
Section
3.20 Affiliated
Transactions
|
46
|
|
Section
3.21 Insurance
|
46
|
|
Section
3.22 Regulatory
Matters
|
46
|
|
Section
3.23 Internal
Controls
|
48
|
|
Section
3.24 Hedging
|
49
|
|
Section
3.25 Bank
Accounts; Powers of Attorney
|
49
|
|
Section
3.26 Gas
Imbalances
|
49
|
|
Section
3.27 No
Other Representations or Warranties
|
49
|
-
i -
ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF ETP 31
Section
4.1 Corporate Organization; Qualification 31
Section
4.2 Authority Relative to this Agreement 32
Section
4.3 50% CCE Interest 32
Section
4.4 Consents
and Approvals 32
Section
4.5 No
Conflict or Violation 33
Section
4.6 Litigation 33
Section
4.7 Availability
of Funds 33
Section
4.8 Brokerage
and Finders’ Fees 33
Section
4.9 Investment
Representations. 33
Section
4.10 No
Other
Representations or Warranties 34
ARTICLE
V
COVENANTS
OF THE PARTIES 34
Section
5.1 Conduct
of Business. 34
Section
5.2 Access
to
Properties and Records. 37
Section
5.3 Consents
and Approvals. 38
Section
5.4 Further
Assurances 39
Section
5.5 Employee
Matters. 39
Section
5.6 Tax
Covenants. 45
Section
5.7 Control
of Administrative and Regulatory Proceedings 50
Section
5.8 Maintenance
of Insurance Policies. 50
Section
5.9 Preservation
of Records 51
Section
5.10 Public
Statements 51
Section
5.11 Assignment
of Trademarks. 52
Section
5.12 Commercially
Reasonable Efforts 52
Section
5.13 Financial
Statements; Financial Records of CCE. 52
Section
5.14 Covenants
Regarding the 50% CCE Interest. 54
Section
5.15 No-Hire/Non-Solicitation54
Section
5.16 CCE
Executive Committee55
Section
5.17 Directors’
and Officers’ Indemnification55
Section
5.18 TPC
Notes55
ARTICLE
VI CONDITIONS55
Section
6.1 Mutual
Conditions to the Closing55
Section
6.2 ETP’s
Conditions to the Closing56
Section
6.3 CCE’s
Conditions to the Closing57
ARTICLE
VII TERMINATION
AND ABANDONMENT58
Section
7.1 Termination58
Section
7.2 Effect
of
Termination59
ARTICLE
VIII SURVIVAL;
INDEMNIFICATION59
Section
8.1 Survival.59
Section
8.2 Indemnification.60
Section
8.3 Calculation
of Damages63
Section
8.4 Procedures
for Third-Party Claims.63
Section
8.5 Procedures
for Inter-Party Claims64
ARTICLE
IX MISCELLANEOUS
PROVISIONS64
Section
9.1 Interpretation64
Section
9.2 Disclosure
Letters65
-
ii
-
Section
9.3 Payments65
Section
9.4 Expenses65
Section
9.5 Choice
of
Law65
Section
9.6 Assignment65
Section
9.7 Notices65
Section
9.8 Consent
to Jurisdiction67
Section
9.9 No
Right
of Setoff67
Section
9.10 Time
is
of the Essence67
Section
9.11 Specific
Performance67
Section
9.12 Entire
Agreement67
Section
9.13 Third
Party Beneficiaries67
Section
9.14 Counterparts68
Section
9.15 Severability68
Section
9.16 Headings68
Section
9.17 Waiver68
Section
9.18 Amendment68
EXHIBITS
A CCE
Disclosure Letter
B Terms
of
TPC Transition Services Agreement
C Form
of
Second Amended and Restated LLC Agreement
D Resolutions
of CCE Executive Committee
-
iii
-
This
REDEMPTION AGREEMENT, dated as of September 14, 2006 (this “Agreement”),
is
made and entered into by and between Energy Transfer Partners, L.P., a Delaware
limited partnership (“ETP”),
and
CCE Holdings, LLC, a Delaware limited liability company (“CCE”).
W
I T N E
S S E T H:
WHEREAS,
CCE, through its subsidiaries, owns and operates a network of natural gas
pipelines and is engaged in the business of the interstate transportation of
natural gas;
WHEREAS,
an indirect Subsidiary of CCE owns all of the issued and outstanding membership
interests of Transwestern Pipeline Company, LLC, a Delaware limited liability
company (“TPC”);
WHEREAS,
EFS-PA, LLC, a Delaware limited liability company, CDPQ Investments (U.S.)
Inc.,
a Delaware corporation, Lake Bluff Inc., a Delaware corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ventures, L.P. 2001, a Delaware limited partnership, and Kings Road Holdings
I
LLC, a Delaware limited liability company (collectively, the “Other
CCE Owners”)
own
Class B membership interests in CCE that collectively represent 50% of the
outstanding membership interests in CCE (the “50%
CCE Interest”);
WHEREAS,
concurrently with the execution and delivery of this Agreement, ETP has entered
into a Purchase and Sale Agreement, dated as of September 14, 2006, with the
Other CCE Owners pursuant to which ETP has agreed, subject to the terms and
conditions thereof, to purchase the 50% CCE Interest from the Other CCE Owners
(the “CCE
Acquisition Agreement”);
WHEREAS,
subject to the terms and conditions of this Agreement, CCE desires to redeem
the
50% CCE Interest that ETP proposes to acquire pursuant to the CCE Acquisition
Agreement by transferring to ETP all of the membership interests in TPC (the
“TPC
Interests”)
as a
redemption payment;
WHEREAS,
in connection with CCE’s redemption of the 50% CCE Interest to be owned by ETP,
CCE intends to cause (i) CrossCountry Energy, LLC, a Delaware limited liability
company that is wholly-owned by CCE (“CC
Energy”),
or
one of its affiliates, to borrow from lenders that are not Affiliates of CCE
an
amount sufficient to enable CC Energy or such affiliate, after paying expenses
related to the incurrence of such debt, to contribute to TW Holdings an amount
necessary to repay all of the outstanding TW Holdings Debt (the “TW
Debt Payoff Amount”)
plus
the Cash Redemption Amount (as defined in Section 1.1 hereof) (the “CC Energy
Debt Proceeds Amount”),
(ii)
CC Energy to contribute the TW Debt Payoff Amount to Transwestern Holding
Company, LLC, a Delaware limited liability company that is wholly-owned by
CC
Energy (“TW
Holdings”),
and
(iii) cause TW Holdings to repay all of its existing debt, in each case prior
to
the redemption of the 50% CCE Interest, described in the preceding
recital;
1
WHEREAS,
each of the Boards of Directors or other governing body of each of CCE and
ETP
has approved, and deems it advisable and in the best interests of their
respective shareholders, partners and members to consummate the transactions
contemplated by, this Agreement upon the terms and subject to the conditions
set
forth herein;
NOW,
THEREFORE, for and in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, CCE and ETP, intending
to
be legally bound hereby, hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Specific
Definitions.
For
purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Action”
shall
mean any administrative, regulatory, judicial or other formal proceeding,
action, Claim, suit, investigation or inquiry by or before any Governmental
Authority, arbitrator or mediator.
”Adjustment
Amount”
shall
mean $14,400,000.
“Affected
Employees”
shall
mean the TPC Employees on the Closing Date, including Transferring Shared
Service Employees who become TPC Employees on the date immediately prior to
the
Closing Date pursuant to the provisions of Section 5.5(g).
“Affiliate”
shall
have the meaning set forth in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act.
“Agreement”
shall
mean this Redemption Agreement, together with the CCE Disclosure Letter and
the
Exhibits hereto, as the same may be amended or supplemented from time to time
in
accordance with the provisions hereof.
“Applicable
Law”
shall
mean any statute, law, ordinance, executive order, rule or regulation (including
a regulation that has been formally promulgated in a rule-making proceeding
but,
pending final adoption, is in proposed or temporary form having the force of
law); guideline or notice having the force of law; or approval, permit, license,
franchise, judgment, order, decree, injunction or writ of any Governmental
Authority applicable to a specified Person or specified property, as in effect
from time to time.
“Auditor”
shall
have the meaning set forth in Section 2.4(b).
“Base
Compensation”
shall
have the meaning set forth in Section 5.5(f).
“Base
Debt Amount”
shall
mean $520,000,000.
“Base Pro
Forma Net Working Capital Amount”
shall
mean zero dollars.
“Benefit
Programs or Agreements”
shall
have the meaning set forth in Section 3.12(b).
2
“Burdensome
Condition”
shall
have the meaning set forth in Section 5.3(b).
“Business
Day”
shall
mean a day other than a Saturday, Sunday or other day on which banks located
in
New York City are authorized or required by law to close.
“Cap
Amount”
shall
have the meaning set forth in Section 8.2(d).
“Cash
Flow”
shall
have the meaning set forth in the
Second Amended and Restated LLC Agreement, calculated without duplication on
a
combined basis for CCE and its Subsidiaries.
“Cash
Redemption Amount”
shall
have the meaning set forth in Section 2.3(d)(iv) hereof.
“Casualty
Insurance Claims”
shall
have the meaning set forth in Section 5.9(a).
“CC
Energy”
shall
have the meaning set forth in the Recitals to this Agreement.
“CC
Energy Debt Proceeds Amount”
shall
have the meaning set forth in the Recitals to this Agreement.
“CCE”
shall
have the meaning set forth in the Recitals to this Agreement.
“CCEA
LLC”
shall
mean CCE Acquisition LLC, a Delaware limited liability company.
“CCEA
Corp.”
shall
mean CCEA Corp., a Delaware corporation.
“CCE
Acquisition”
shall
mean the acquisition of the 50% CCE Interest from the Other CCE Owners pursuant
to the terms and conditions of the CCE Acquisition Agreement.
“CCE
Acquisition Agreement”
shall
have the meaning set forth in the Recitals to this Agreement.
“CCE
Adjustment”
shall
have the meaning set forth in Section 2.4(c).
“CCE
Annual Financial Statements”
shall
mean the audited balance sheets at December 31, 2004 and 2005 and the statements
of income, statements of members’ equity and statements of cash flow of CCE for
the years ended December 31, 2004 and 2005.
“CCE Cash
Flow Amount”
shall
mean the amount of Cash Flow of CCE for the period from the date of the CCE
Acquisition until the Closing Date (for purposes of this definition of CCE
Cash
Flow Amount, the CCE Cash Flow Amount shall be deemed to include without
duplication the amount of Citrus Corp. cash dividends paid after the Closing
Date but relating to any portion of the period from the date of the CCE
Acquisition until the Closing Date; provided, however, that if no dividends
are
paid by Citrus Corp. relating to such period, then the CCE Cash Flow Amount
shall be deemed to include without duplication 50% (i.e., CCE’s share) of Citrus
Corp. net income for such period).
“CCE
Defined Contribution Plan”
shall
have the meaning set forth in Section 5.5(i).
3
“CCE
Disclosure Letter”
means
the letter dated September 14, 2006 from CCE to ETP in the form attached as
Exhibit A to this Agreement.
“CCE
FAS 106 Report” shall
mean the Southern
Union Company Postretirement Medical and Death Benefits for CrossCountry Energy
Employees Application of Statement of Financial Accounting Standards Nos. 106
and 132(R) to the Fiscal Year Ending December 31, 2005.
“CCE
Financial Statements”
means
the CCE Annual Financial Statements, the CCE Six Month Interim Financial
Statements, the CCE Nine Month Interim Financial Statements and the CCE 2006
Financial Statements.
“CCE
Flex Plans”
shall
have the meaning set forth in Section 5.5(h).
“CCE
Indemnified Parties”
shall
have the meaning set forth in Section 8.2(b).
“CCE
Medicare Eligible SPD” shall
mean the Summary Plan Description Options PPO Plan for CrossCountry Energy
(Medicare Eligible Retired Employees).
“CCE
Nine Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of members’
equity and statements of cash flow for CCE as of, and for the nine months ended,
September 30, 2005 and 2006.
“CCE
Six Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of members’
equity and statements of cash flow for CCE as of, and for the six months ended,
June 30, 2005 and 2006.
“CCE
LLC Agreement”
means
the Amended and Restated Limited Liability Company Agreement of CCE, dated
as of
November 5, 2004, as amended by the First Amendment thereto, dated as of
December 2, 2004.
“CCE
Returns”
shall
have the meaning set forth in Section 5.6(a)(i).
“CCE
Stub Period Income Statements”
means
the unaudited income statements for CCE for the three months ended December
31,
2005 and for the one month periods ended December 31, 2004 and
2005.
“CCE
S-X Financial Statements”
shall
mean the CCE Financial Statements, as modified pursuant to the provisions of
Section 5.13(b).
“CCE
Under Age 65 SPD” shall
mean the Summary Plan Description Options PPO Plan for CrossCountry Energy
(Retired Employees under age 65).
“CCE
2006 Financial Statements”
shall
mean the audited balance sheet, statement of income, statement of members’
equity and statement of cash flow of CCE as of, and for the year ended, December
31, 2006.
“CCES”
shall
mean CrossCountry Energy Services, LLC.
4
“Citrus”
shall
mean CrossCountry Citrus, LLC, a Delaware limited liability
company.
“Citrus
S-X Financial Statements”
shall
mean the Citrus Financial Statements, as modified pursuant to the provisions
of
Section 5.13(b).
“Citrus
2006 Financial Statements”
shall
mean the audited balance sheet, statement of income, statement of member’s
equity and statement of cash flow of Citrus as of, and for the year ended,
December 31, 2006.
“Citrus
Annual Financial Statements”
shall
mean the audited balance sheets at December 31, 2004 and 2005 and the statements
of income, statements of member’s equity and statements of cash flow of Citrus
for the years ended December 31, 2004 and 2005.
“Citrus
Financial Statements”
means
the Citrus Annual Financial Statements, the Citrus Six Month Interim Financial
Statements, the Citrus Nine Month Interim Financial Statements, and the Citrus
2006 Financial Statements.
“Citrus
Nine Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of member’s
equity and statements of cash flow for Citrus as of, and for the nine months
ended, September 30, 2005 and 2006.
“Citrus
Six Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of member’s
equity and statements of cash flow for Citrus as of, and for the six months
ended, June 30, 2005 and 2006.
“Citrus
Stub Period Income Statements”
means
the unaudited income statements for Citrus for the three months ended December
31, 2005 and for the one month periods ended December 31, 2004 and
2005.
“Claims”
shall
mean any and all claims, lawsuits, demands, causes of action, investigations
and
other proceedings (whether or not before a Governmental Authority).
“Closing
Adjustment Amount”
shall
have the meaning set forth in Section 2.3(c).
“Closing
Balance Sheet”
shall
have the meaning set forth in Section 2.4(a).
“Closing
Date”
shall
have the meaning set forth in Section 2.2.
“Closing”
shall
have the meaning set forth in Section 2.2.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Confidentiality
Agreement”
shall
mean the confidentiality agreement entered into by and between ETP and Southern
Union, dated July 25, 2006.
“Consolidated
Income Tax Return”
shall
have the meaning set forth in Section 5.6(a)(ix) hereof.
“Continuation
Period”
shall
have the meaning set forth in Section 5.5(f).
5
“Damages”
shall
mean all demands, Claims, causes of action, suits, judgments, damages, amounts
paid in settlement (with the approval of the Indemnifying Party where
applicable), penalties, Liabilities, losses or deficiencies, costs and expenses,
including reasonable attorney’s fees, court costs, expenses of arbitration or
mediation, and other out-of-pocket expenses incurred in investigating or
preparing the foregoing. “Damages” does not include incidental, indirect or
consequential damages, damages for lost profits or other special damages or
punitive or exemplary damages; provided, however, that in the case of
Third-Party Claims, “Damages” shall be deemed to include all forms of relief,
monetary and otherwise, asserted therein, without any of the foregoing
exceptions.
“Determination
Date”
shall
have the meaning set forth in Section 2.4(b).
“Employee
Benefit Plans”
shall
have the meaning set forth in Section 3.12(b).
“Encumbrances”
shall
mean any Claims, Liens, conditional and installment sale agreements or other
title retention agreements, activity and use limitations, easements, deed
restrictions, title defects, reservations, encumbrances and charges of any
kind,
options, subordination agreements or adverse claim of any kind.
“Enron
Inactive Medical Plan” shall
mean the Enron Corp. Medical Plan for Inactive Participants.
“Enron
Plan”
shall
mean any “employee benefit plan,” as defined in Section 3(3) of ERISA, or any
policy, plan, agreement or arrangement providing for employment terms, change
in
control benefits, severance benefits, retention benefits, insurance coverage
(including any self-insured arrangements), workers’ compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, or other forms of
incentive compensation, or post-retirement insurance, compensation or benefits
(whether or not an ERISA plan) entered into, sponsored, maintained, or
contributed to by Enron Corp. or any of its ERISA Affiliates, current or former,
specifically including the Enron Corp. Cash Balance Plan (formerly the Enron
Corp. Retirement Plan), the Enron Corp. Savings Plan (formerly the Enron Corp.
Savings Plan and Enron Corp. Employee Stock Ownership Plan, which were merged
in
August 2002), the Enron Prisma Energy Savings Plan, the Portland General
Electric Company Pension Plan and the Enron Inactive Medical Plan.
“Enron
VEBA”
shall
mean the Enron Gas Pipelines Employee Benefit Trust, as it may be amended,
which
as of the date of this Agreement, is the subject of the Enron VEBA
Motion.
“Enron
VEBA Motion”
shall
mean the Amended and Restated Motion of Enron Corp., et al, for an Order
Pursuant to Sections 105 and 363 of the Bankruptcy Code, Authorizing Termination
of Employee Benefits Trust and Distribution of Trust Assets, dated June 17,
2005, as it may be amended, which motion is currently pending in the United
States Bankruptcy Court for the Southern District of New York.
“Environmental
Claim”
means
any claim, loss, cost, expense, liability, penalty or Damages arising, incurred
or otherwise asserted pursuant to any Environmental Law.
6
“Environmental
Laws”
shall
mean all foreign, federal, state and local laws, regulations, rules and
ordinances relating to pollution or protection of human health or the
environment, including laws relating to releases or threatened releases of
Hazardous Substances into the environment (including ambient air, surface water,
groundwater, land, surface and subsurface strata).
“Environmental
Permit”
shall
mean any Permit, formal exemption, identification number or other authorization
issued by a Governmental Authority pursuant to an applicable Environmental
Law.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder.
“ERISA
Affiliate”
shall
mean, with respect to any Person, any corporation, trade, business, or entity
under common control with such Person, within the meaning of Section 414(b),
(c)
or (m) of the Code or Section 4001 of ERISA.
“ERISA
Plans”
shall
have the meaning set forth in Section 3.12(a).
“Estimated
SUG Expansion Project Expenses”
shall
have the meaning set forth in Section 2.3(a).
“ETP”
shall
have the meaning set forth in the recitals to this Agreement.
“ETP
401(k) Plan”
shall
have the meaning set forth in Section 5.5(i).
“ETP
Adjustment”
shall
have the meaning set forth in Section 2.4(c).
“ETP
Indemnified Parties”
shall
have the meaning set forth in Section 8.2(a).
“ETP
Plans”
shall
have the meaning set forth in Section 5.5(c).
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, and the Regulations
promulgated thereunder.
“Existing
TPC Debt”
shall
mean the existing indebtedness of TPC pursuant to (x) those certain $270,000,000
5.39% Senior Unsecured Notes due November 17, 2014 and $250,000,000 5.54% Senior
Unsecured Notes due November 17, 2016 and (y) that certain $230,000,000 Amended
and Restated Credit Agreement dated as of December 21, 2005 among TPC and the
Lenders, Administrative Agent and Issuing Bank, Syndication Agent,
Co-Documentation Agents and Arrangers parties thereto.
“Existing
TW Holdings Debt”
shall
mean the existing indebtedness of TW Holdings pursuant to (x) those certain
$125,000,000 5.64% Senior Unsecured Notes due November 17, 2014, and
$100,000,000 5.79% Senior Unsecured Notes due November 17, 2016, and (y) that
certain $230,000,000 Amended and Restated Credit Agreement among TW Holdings,
CrossCountry Citrus, LLC, as guarantor, and the Lenders, Administrative Agent,
Syndication Agent, Co-Documentation Agents, and Arrangers parties
thereto.
7
“FCC”
means
the Federal Communication Commission.
“FERC”
shall
mean the Federal Energy Regulatory Commission including any individual office
or
department within FERC.
“For
Cause”
shall
have the meaning set forth in Section 5.5(f).
“GAAP”
shall
mean United States generally accepted accounting principles as in effect from
time to time, applied on a consistent basis.
“Governmental
Authority”
shall
mean any executive, legislative, judicial, tribal, regulatory, taxing or
administrative agency, body, commission, department, board, court, tribunal,
arbitrating body or authority of the United States or any foreign country,
or
any state, local or other governmental subdivision thereof.
“Hazardous
Substances”
shall
mean any chemicals, materials or substances defined as or included in the
definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”,
“hazardous constituents”, “restricted hazardous materials”, “extremely hazardous
substances”, “toxic substances”, “contaminants”, “pollutants”, “toxic
pollutants”, or words of similar meaning and regulatory effect under any
applicable Environmental Law.
“HSR
Act”
means
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder.
“Indemnified
Party”
shall
have the meaning set forth in Section 8.2(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 8.2(c).
“Initial
Termination Date”
shall
have the meaning set forth in Section 7.1(b).
“Insurance
Policies”
shall
have the meaning set forth in Section 3.21(a).
“IRS”
shall
mean the Internal Revenue Service.
“June
30 TPC Expansion Project Expenses”
shall
mean $7,750,000.
“Knowledge”
shall
mean, as to CCE, the actual knowledge, after due inquiry, of the persons listed
on Section 1.1(a) of the CCE Disclosure Letter, or any Person who replaces
any
of such listed persons between the date of this Agreement and the Closing Date.
“Liabilities”
shall
mean any and all debts, liabilities, commitments and obligations, whether or
not
fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whether or not required by GAAP to
be
reflected in financial statements or disclosed in the notes thereto.
“Liens”
shall
mean any lien, mortgage, pledge, charge, claim, assignment by way of security
or
similar security interest.
“LIBOR”
shall
mean the London Interbank Offer Rate.
8
“Make-Whole
Amount”
shall
have the meaning set forth in the TW Holdings Note Purchase
Agreement.
“Material
Adverse Effect”
shall
mean any change or effect that is materially adverse to the business, financial
condition or assets of the business of TPC; provided, however, that Material
Adverse Effect shall exclude any change or effect due to (a) the negotiation,
execution, announcement and consummation of this Agreement and the transactions
contemplated hereby, including the impact thereof on relationships, contractual
or otherwise, with customers, suppliers, distributors, partners, joint owners
or
venturers, or employees, (b) any action taken by CCE, ETP or any of their
respective representatives or Affiliates or other action required or permitted
by the terms of this Agreement or necessary to consummate the transactions
contemplated by this Agreement, (c) the general state of the industries in
which
TPC operates (including (i) pricing levels, (ii) changes in the international,
national, regional or local wholesale or retail markets for natural gas, (iii)
changes in the North American, national, regional or local interstate natural
gas pipeline systems, and (iv) rules, regulations or decisions of the FERC
or
the courts affecting the interstate natural gas transmission industry as a
whole, or rate orders, motions, complaints or other actions affecting TPC),
except, in all cases for such effects which disproportionately impact TPC,
(d)
general legal, regulatory, political, business, economic, capital market and
financial market conditions (including prevailing interest rate levels), or
conditions otherwise generally affecting the industries in which TPC operates,
except, in all cases, for such effects which disproportionately impact TPC
and
(e) any condition set forth in the CCE Disclosure Letter (but only to the extent
set forth therein).
“Material
Contract”
shall
have the meaning set forth in Section 3.7(a).
“Minimum
Claim Amount”
shall
have the meaning set forth in Section 8.2(d).
“Net
Working Capital Amount”
as
of a
particular date shall mean (a) the current assets of TPC as of such date minus
(b) the current liabilities of TPC as of such date, with both current assets
and
current liabilities determined in accordance with GAAP, applied in a manner
consistent with the preparation of the Pro Forma Adjusted Balance Sheet (subject
to the exceptions from GAAP relating to the adjustments reflected on the Pro
Forma Adjusted Balance Sheet).
“NGA”
shall
have the meaning set forth in Section 3.22.
“NGPA”
shall
have the meaning set forth in Section 3.22.
“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.
“Other
CCE Owners”
shall
have the meaning set forth in the Recitals of this Agreement.
“PBGC”
shall
mean the Pension Benefit Guaranty Corporation.
9
“PEPL”
shall
mean Panhandle Eastern Pipe Line Company, LP, a Delaware limited
partnership.
“Permitted
Encumbrances”
shall
mean (a) zoning, planning and building codes and other applicable laws
regulating the use, development and occupancy of real property and permits,
consents and rules under such laws; (b) encumbrances, easements, rights-of-way,
covenants, conditions, restrictions and other matters affecting title to real
property (other than Liens) which do not materially detract from the value
of
such real property or materially restrict the use of such real property; (c)
leases and subleases of real property; (d) all easements, encumbrances or other
matters that are necessary for utilities and other similar services on real
property; (e) Liens to secure indebtedness reflected on the TPC Financial
Statements, (f) Liens to secure indebtedness incurred after the date thereof,
to
the extent permitted pursuant to Section 5.1(b)(xii), (g) Liens for Taxes and
other governmental levies not yet due and payable or, if due, (i) not delinquent
or (ii) being contested in good faith by appropriate proceedings during which
collection or enforcement against the property is stayed and with respect to
which adequate reserves have been established on the books of TPC and are being
maintained to the extent required by GAAP, (h) mechanics’, workmen’s,
repairmen’s, materialmen’s, warehousemen’s, carriers’ or other similar Liens,
including all statutory Liens, arising or incurred in the ordinary course of
business; (i) original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course of business,
(j)
Liens that do not materially interfere with or materially affect the value
or
use of the respective underlying asset to which such Liens relate, (k)
Encumbrances that are capable of being cured through condemnation procedures
under the NGA at a total cost to TPC of less than $1,000,000 and (l)
Encumbrances that are reflected in any Material Contract.
“Person”
shall
mean any natural person, corporation, company, general partnership, limited
partnership, limited liability partnership, joint venture, proprietorship,
limited liability company, or other entity or business organization or vehicle,
trust, unincorporated organization or Governmental Authority or any department
or agency thereof.
“Post-Closing
Adjustment Amount”
shall
have the meaning set forth in Section 2.4(a).
“Post-Closing
Taxes”
shall
have the meaning set forth in Section 5.6(a)(iv).
“Pre-Closing
Taxes”
shall
have the meaning set forth in Section 5.6(a)(iv).
“Pro
Forma Adjusted Balance Sheet”
shall
mean the pro forma balance sheet of TPC as of June 30, 2006 derived from the
TPC
Interim Balance Sheet, adjusted to:
(a) reflect,
among the other matters reflected in the adjustments set forth in Section 1.1(b)
of the CCE Disclosure Letter, that current liabilities shall exclude short
term
debt and current portions of long term debt; and
(b) reflect
as a reduction in cash the payment of a $22,000,000 cash distribution to the
sole member of TPC to be made prior to the Closing.
The
Pro
Forma Adjusted Balance Sheet, reflecting the adjustments listed above, is set
forth in Section 1.1(b) of the CCE Disclosure Letter.
10
“Real
Property”
shall
have the meaning set forth in Section 3.11.
“Regulation”
shall
mean any rule or regulation of any Governmental Authority having the effect
of
Law or of any rule or regulation of any self-regulatory organization, such
as
the New York Stock Exchange.
“Release”
means
any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping,
leaching, dumping, or disposing.
“Rights-Of-Way”
shall
have the meaning set forth in Section 3.11.
“▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”
means
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the Regulations promulgated
thereunder.
“SEC”
means
the Securities and Exchange Commission.
“Second
Amended and Restated LLC Agreement”
shall
mean that certain Second Amended and Restated Limited Liability Company
Agreement of CCE, in the form attached hereto as Exhibit
D
to be
entered into by and among ETP, CCEA LLC and CCEA Corp. as of the date of the
CCE
Acquisition.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended, and the Regulations promulgated
thereunder.
“Severance
Benefits”
shall
have the meaning set forth in Section 5.5(f).
“Shared
Service Employees”
shall
have the meaning set forth in Section 5.5(g).
“Southern
Union”
shall
mean Southern Union Company, a Delaware corporation.
“Straddle
Period”
shall
have the meaning set forth in Section 5.6(a)(ii).
“Straddle
Period Return(s)”
shall
have the meaning set forth in Section 5.6(a)(ii).
“Straddle
Statement”
shall
have the meaning set forth in Section 5.6(a)(ii).
“Subsidiary”
of
any
entity means, at any date, any Person (a) the accounts of which would be
consolidated with and into those of the applicable entity in such entity’s
consolidated financial statements if such financial statements were prepared
in
accordance with GAAP as of such date or (b) of which securities or other
ownership interests representing more than fifty percent (50%) of the equity
or
more than fifty percent (50%) of the ordinary voting power or, in the case
of a
partnership, more than fifty percent (50%) of the general partnership interests
or more than fifty percent (50%) of the profits or losses of which are, as
of
such date, owned, controlled or held by the applicable entity or one or more
subsidiaries of such entity.
“SUG
Expansion Project Expenses”
shall
mean all expenditures incurred at any time prior to the Closing Date by
Affiliates of TPC (other than TPC), including Southern Union,
11
Valley
Pipeline Company, LP and PEPL, in connection with the TPC Expansion Projects
that have not been reimbursed by TPC on or prior to the Closing
Date.
“Survival
Period”
shall
have the meaning set forth in Section 8.1(c).
“Tax
Claim”
shall
have the meaning set forth in Section 5.6(d)(i).
“Tax
Indemnified Party”
shall
have the meaning set forth in Section 5.6(d)(i).
“Tax
Indemnifying Party”
shall
have the meaning set forth in Section 5.6(d)(i).
“Tax
Return”
shall
mean any report, return, declaration, or other information required to be
supplied to a Governmental Authority in connection with Taxes including any
claim for refund or amended return.
“Taxes”
shall
mean all taxes, levies or other like assessments, including net income, gross
income, gross receipts, capital gains, profits, environmental, excise, value
added, ad valorem, real or personal property, withholding, asset, sales, use,
transfer, registration, license, payroll, transaction, capital, business,
occupation, corporation, employment, withholding, wage, net worth, franchise,
minimum, alternative minimum, and estimated taxes, or other governmental taxes
imposed by or payable to any foreign, Federal, state or local taxing authority,
whether computed on a separate, consolidated, unitary, combined or any other
basis; and in each instance such term shall include any interest, penalties
or
additions to tax attributable to any such Tax.
“Third-Party
Claim”
shall
have the meaning set forth in Section 8.4(a).
“Threshold
Amount”
shall
have the meaning set forth in Section 8.2(d).
“Total
Debt”
shall
mean all short-term and long-term indebtedness of TPC as reflected on its
balance sheet, prepared in accordance with GAAP, of TPC as of a particular
date.
“TPC”
shall
have the meaning set forth in the Recitals of this Agreement.
“TPC
2006 Financial Statements”
shall
mean the audited balance sheet, statement of income, statement of members’
equity and statement of cash flow of TPC as of, and for the period ended,
December 31, 2006.
“TPC
Annual Financial Statements”
shall
mean the audited balance sheets at December 31, 2004 and 2005 and the statements
of income, statements of members’ interests and statements of cash flow for the
years ended December 31, 2004 and 2005, in each case for TPC.
“TPC
Cash Flow Amount”
shall
mean the amount of cash flow of TPC included in the CCE Cash Flow Amount for
the
period from the date of the CCE Acquisition until the Closing Date.
“TPC
Employees”
shall
mean all employees employed by TPC, including employees absent due to vacation,
illness or similar circumstance, workers’ compensation, short-term
12
disability,
military leave, maternity leave or paternity leave, leave under the Family
and
Medical Leave Act of 1993 and other approved leaves of absence from active
employment. When the term “TPC Employees” is used herein in reference to a
specific date, “TPC Employees” shall include the employees of TPC referenced in
the preceding sentence as of such date.
“TPC
Expansion Project Expenses”
shall
mean all expenditures incurred at any time prior to the Closing Date (including
amounts properly accrued in accordance with GAAP and included on the Closing
Balance Sheet) by TPC in connection with the TPC Expansion Projects, including
reimbursed SUG Expansion Project Expenses.
“TPC
Expansion Projects”
shall
mean the Phoenix and San ▇▇▇▇ expansion projects as approved by the Executive
Committee of CCE by written consent on September 14, 2006.
“TPC
Financial Statements”
shall
mean the TPC Annual Financial Statements, the TPC Six Month Interim Financial
Statements, the TPC Nine Month Interim Financial Statements and the TPC 2006
Financial Statements.
“TPC
Interests”
shall
have the meaning set forth in the Recitals of this Agreement.
“TPC
Interests Assignment”
means
the assignment of the TPC Interests in a form to be agreed to by ETP and CCE
prior to the Closing Date.
“TPC
Interim Balance Sheet”
shall
mean the balance sheet as of June 30, 2006 included in the TPC Six Month Interim
Financial Statements.
“TPC
Marks”
shall
have the meaning set forth in Section 5.12.
“TPC
Nine Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of members’
equity and statements of cash flow of TPC as of, and for the nine months ended,
September 30, 2005 and 2006.
“TPC
Note Purchase Agreement”
shall
mean the note purchase agreement, dated as of November 17, 2004, between TPC
and
the note purchasers listed therein.
“TPC
Permits”
shall
have the meaning set forth in Section 3.9.
“TPC
Rate Case”
shall
mean the Natural Gas Act Section 4 rate case which TPC is required to file
pursuant to the terms and conditions of TPC’s rate settlement in FERC Docket
Nos. RP95-271, et
al.,
together with any proceeding consolidated with or ancillary
thereto.
“TPC
Severance Plan” shall
mean the Transwestern Pipeline Company Severance Pay Plan.
“TPC
S-X Financial Statements”
shall
mean the TPC Financial Statements, as modified pursuant to the provisions of
Section 5.13(b).
13
“TPC
Six Month Interim Financial Statements”
shall
mean the unaudited balance sheets, statements of income, statements of members’
equity and statements of cash flow of TPC as of, and for the six months ended,
June 30, 2005 and 2006.
“TPC
Stub Period Income Statements”
means
the unaudited income statements for TPC for the three months ended December
31,
2005 and for the one month periods ended December 31, 2004 and
2005.
“TPC
Transition Services Agreement”
shall
mean a Transition Services Agreement to be agreed to by CCE, PEPL and ETP prior
to the Closing Date, which shall include the terms and conditions set forth
on
Exhibit
B
to this
Agreement.
“TPC
VEBA”
shall
mean the Transwestern Pipeline Company, LLC VEBA to Provide for Retiree Health
Care and Other Benefits.
“Transfer
Tax(es)”
shall
have the meaning set forth in Section 5.6(e).
“Transferring
Shared Service Employees”
shall
have the meaning set forth in Section 5.5(g).
“Treasury
Regulation”
shall
mean the income Tax regulations, including temporary and proposed regulations,
promulgated under the Code, as amended.
“TW
Holdings”
shall
have the meaning set forth in the Recitals of this Agreement.
“TW
Holdings Note Purchase Agreement”
shall
mean the Note Purchase Agreement, dated November 17, 2004, among TW Holdings
and
the note purchasers named therein.
“50%
CCE Interest”
shall
have the meaning set forth in the Recitals of this Agreement.
“50%
CCE Interest Assignment”
means
the assignment of the 50% CCE Interest in a form to be agreed to by ETP and
CCE
prior to the Closing Date.
ARTICLE
II
REDEMPTION
OF 50% CCE INTEREST
Section
2.1 Agreement
to Redeem 50% CCE Interest.
Subject
to the terms and conditions of this Agreement, at the Closing, (i) CCE shall
cause TW Holdings to convey, assign, transfer and deliver to ETP the TPC
Interests, free and clear of all Encumbrances, and (ii) ETP shall convey,
assign, transfer and deliver to CCE the 50% CCE Interest. At the Closing, if
the
Cash Redemption Amount is positive, CCE shall pay to ETP the Cash Redemption
Amount by wire transfer of immediately available funds to an account designated
in writing by ETP or, in the event that the Cash Redemption Amount is negative,
then ETP shall pay to CCE the absolute value of the Cash Redemption Amount
by
wire transfer of immediately available funds to an account designated in writing
by CCE.
Section
2.2 Time
and
Place of Closing. Upon the terms and subject to the satisfaction of the
conditions contained in this Agreement, the closing of the transactions
contemplated by this
Agreement (the “Closing”)
shall
take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, at 10:00 a.m., local time, on the next
Business Day that is both the first Business Day of a calendar month and at
least five (5) Business Days after the date on which all of the conditions
to
the Closing specified in Article VI hereof (other than the deliveries specified
in Section 2.5 and Section 2.6, which deliveries shall be made at the Closing)
have been satisfied or waived, or at such other place or time as ETP and CCE
may
mutually agree in writing. The Closing shall be effective as of 12:01 a.m.
The
date and time at which the Closing actually occurs is hereinafter referred
to as
the “Closing
Date.”
Section
2.3 Pre-Closing
Matters.
(a) At
least
three (3) Business Days prior to the Closing Date, CCE shall deliver to ETP
its
good faith estimate of the amount of the SUG Expansion Project Expenses (the
“Estimated
SUG Expansion Project Expenses”),
together with reasonably detailed support for such estimate.
(b) CCE
shall
deliver to ETP its calculations of the Closing Adjustment Amount (as defined
in
Section 2.3(c)) within three (3) Business Days prior to the Closing Date and
shall provide, upon reasonable advance notice, ETP and ETP’s accountants prompt
and full reasonable access during normal business hours to the personnel,
accountants and books and records of CCE, to the extent reasonably related
to
the preparation of the Closing Adjustment Amount (and the elements of such
calculation). ETP and CCE shall in good faith attempt to resolve any objections
of ETP to such calculation of the Closing Adjustment Amount; if ETP and CCE
are
in disagreement with respect to the calculation of the Closing Adjustment Amount
as of the Closing Date, the Closing Adjustment Amount delivered by CCE to ETP
pursuant to this Section 2.3, as adjusted to reflect any changes to the Closing
Adjustment Amount agreed to by the parties, prior to the Closing Date shall
be
utilized for purposes of determining the Cash Redemption Amount payable at
the
Closing.
(c) The
“Closing
Adjustment Amount”
shall
mean an amount equal to (i) the Estimated SUG Expansion Project Expenses plus
(ii) 50% of the June 30 TPC Expansion Project Expenses plus (iii) 50% of the
Make-Whole Amount actually paid by TW Holdings pursuant to the TW Holdings
Note
Purchase Agreement plus (iv) the Adjustment Amount.
(d) Prior
to
the Closing Date, CCE shall cause (i) CC Energy or one of its affiliates (such
entity to be reasonably determined by CCE) to incur debt in an amount equal
to
the CC Energy Debt Proceeds Amount plus the amount necessary for the payment
of
expenses related to the incurrence of such debt, (ii) CC Energy to contribute
to
TW Holdings the CC Energy Debt Proceeds Amount, (iii) TW Holdings to repay
all
of the outstanding TW Holdings Debt, (iv) CC Energy to distribute to CCE an
amount equal to $30,000,000 (Thirty Million Dollars) less
the
Closing Adjustment Amount (the difference between $30,000,000 (Thirty Million
Dollars) and the Closing Adjustment Amount is referred to herein as the
“Cash
Redemption Amount”),
(v)
TW Holdings to distribute the TPC Interests to CC Energy, and (vi) CC Energy
to
distribute the TPC Interests to CCE.
Section
2.4 Post-Closing
Adjustment.
(a) No
later
than 60 days after the Closing Date, CCE shall prepare and deliver to ETP (i)
a
balance sheet of TPC as of the close of business on the date immediately prior
to the Closing Date (the “Closing
Balance Sheet”),
and
(ii) a calculation of the “Post-Closing
Adjustment Amount,”
which
shall mean the amount equal to (w) 50% of the difference obtained by subtracting
(A) the sum of the Base Pro Forma Net Working Capital Amount, the Total Debt
as
of the Closing Date, and the June 30 TPC Expansion Project Expenses from (B)
the
sum of the Net Working Capital Amount as of the Closing Date, as reflected
on
the Closing Balance Sheet, the Base Debt Amount, and the TPC Expansion Project
Expenses, calculated as of the Closing Date, minus (x) 50% of the difference
obtained by subtracting the TPC Cash Flow Amount from the CCE Cash Flow Amount
plus (y) the SUG Expansion Project Expenses as of the Closing Date minus (z)
the
Estimated SUG Expansion Project Expenses, which calculation may result in an
amount that is positive or negative (together with reasonable back-up
information providing the basis for such balance sheet and other calculations).
In order for CCE to prepare the Closing Balance Sheet and calculate the
Post-Closing Adjustment Amount, ETP will provide to CCE and CCE’s accountants
prompt and full access to the personnel, accountants and books and records
of
TPC (and shall provide copies of the applicable portions of such books and
records as may be reasonably requested), to the extent reasonably related to
the
preparation of the Closing Balance Sheet and the calculation of the Post-Closing
Adjustment Amount (and the elements of such calculation). In order for ETP
to
review the Closing Balance Sheet and the calculation of the Post-Closing
Adjustment Amount, CCE will provide to ETP and ETP’s accountants prompt and full
access to the personnel, accountants and books and records of CCE and its
Subsidiaries used by CCE (and shall provide copies of the applicable portions
of
such books and records as may be reasonably requested), to the extent reasonably
related to the preparation of the Closing Balance Sheet and the calculation
of
the Post-Closing Adjustment Amount (and the elements of such calculation).
The
Closing Balance Sheet and the calculation of the Post-Closing Adjustment Amount
relating to TPC shall be prepared in a manner consistent with the preparation
of
the Pro Forma Adjusted Balance Sheet (subject to, in the case of the Closing
Balance Sheet, the exceptions from GAAP relating to the adjustments reflected
on
the Pro Forma Adjusted Balance Sheet).
(b) Disputes.
If ETP
disagrees with the calculation of the Post-Closing Adjustment Amount, it shall
notify CCE of such disagreement in writing within thirty (30) days after its
receipt of the last item to be received by ETP pursuant to the first sentence
of
Section 2.4(a), which notice shall set forth in detail the particulars of such
disagreement. In the event that ETP does not provide such a notice of
disagreement within such thirty (30) day period, ETP shall be deemed to have
accepted the Closing Balance Sheet and the calculation of the Post-Closing
Adjustment Amount (and each element of such calculation) delivered by CCE,
which
shall be final, binding and conclusive for all purposes hereunder. In the event
any such notice of disagreement is timely provided by ETP, then ETP and CCE
shall use their commercially reasonable efforts for a period of thirty (30)
days
(or such longer period as they may mutually agree) to resolve any disagreements
with respect to the calculation of the Post-Closing Adjustment Amount (or any
element thereof). If, at the end of such period, they are unable to resolve
such
disagreements, then, upon the written request of either party, an independent
accounting firm (not providing services to ETP or CCE) acceptable to ETP and
CCE
(the “Auditor”)
shall
resolve any remaining disagreements. The Auditor shall determine as promptly
as
practicable (but in any event within sixty (60) days) following the date on
which such dispute is referred to the Auditor, based solely on written
submissions, which shall be forwarded by ETP and CCE to the Auditor within
thirty (30) days following the Auditor’s selection, whether the Closing Balance
Sheet was prepared in accordance with the standards set forth in this Section
2.4 with respect to any items identified as disputed in the notice of
disagreement and not previously resolved by ETP and CCE, and if not, whether
and
to what extent (if any) the Post-Closing Adjustment Amount (or any element
thereof) requires adjustment. Each party shall bear its own expenses and the
fees and expenses of its own representatives and experts in connection with
the
preparation, review, dispute (if any) and final determination of the Closing
Balance Sheet and the Post-Closing Adjustment Amount. The parties shall share
the costs, expenses and fees of the Auditor in inverse proportion to the extent
to which their respective positions are sustained (e.g., if CCE’s position is
one hundred percent (100%) sustained, it shall bear none of such costs,
expenses, and fees of the Auditor). The determination of the Auditor shall
be
final, conclusive and binding on the parties. The Auditor’s determination of the
amount of the Post-Closing Adjustment Amount shall then be deemed to be the
Post-Closing Adjustment Amount for purposes of this Section 2.4. The date on
which such items are accepted or finally determined in accordance with this
Section 2.4 is referred as to the “Determination
Date.”
As
used in this Agreement, the term “commercially reasonable efforts” shall not
include efforts which require the performing party (i) to do any act that is
unreasonable under the circumstances, (ii) to make any capital contribution
not
expressly contemplated hereunder, (iii) to amend or waive any rights under
this
Agreement, or (iv) to incur or expend any funds other than reasonable
out-of-pocket expenses incurred in satisfying its obligations hereunder,
including the reasonable fees, expenses and disbursements of accountants,
counsel and other professionals.
(c) ETP
and CCE Adjustments.
If the
Post-Closing Adjustment Amount is positive, then ETP shall pay to CCE an amount
equal to the Post-Closing Adjustment Amount (the “ETP
Adjustment”),
and
if the Post-Closing Adjustment Amount is negative, then CCE shall pay to ETP
an
amount equal to the absolute value of the Post-Closing Adjustment Amount (the
“CCE
Adjustment”).
The
CCE Adjustment, if any, and the ETP Adjustment, if any, shall bear simple
interest at a rate equal to daily average one month LIBOR plus one percent
(1%)
per annum measured from the Closing Date to the date of such payment. Amounts
owing by CCE, if any, pursuant to this Section 2.4 shall be paid by CCE within
five (5) Business Days after the Determination Date by delivery of immediately
available funds to an account designated by ETP. Amounts owing by ETP, if any,
pursuant to this Section 2.4 shall be paid by ETP within five (5) Business
Days
after the Determination Date by delivery of immediately available funds to
an
account designated by CCE.
(d) CCE
Capital Contributions.
ETP
shall have no obligation to make any capital contributions pursuant to the
CCE
LLC Agreement as the owner of the 50% CCE Interest following the consummation
of
the transactions contemplated by the CCE Acquisition Agreement unless this
Agreement is terminated in accordance with Article VII hereof.
Section
2.5 Deliveries
by CCE at the Closing.
At the
Closing, CCE shall deliver, or cause its appropriate Affiliates to deliver,
to
ETP:
(a) an
executed copy of the TPC Interests Assignment;
14
(b) a
cross-receipt acknowledging receipt of the 50% CCE Interest
Assignment;
(c) a
certificate from an authorized officer of CCE, dated as of the Closing Date,
to
the effect that the conditions set forth in Section 2.3(d), Section 6.2(a),
Section 6.2(c), Section 6.2(g) and Section 6.2(i) of this Agreement have been
satisfied;
(d) all
other
previously undelivered documents required by this Agreement to be delivered
by
CCE or its Affiliates to ETP at or prior to the Closing;
(e) resignations
of each of the managers and officers (or persons acting in similar capacities)
of TPC who are not employees of TPC;
(f) the
TPC
Transition Services Agreement, duly executed by CCE and PEPL; and
(g) all
such
other instruments of sale, assignment, conveyance and transfer and releases,
consents and waivers as in the reasonable opinion of ETP may be necessary to
effect the sale, transfer, assignment, conveyance and delivery of the TPC
Interests to ETP in accordance with this Agreement, in each case, as is
necessary to effect the transactions contemplated by this
Agreement.
Section
2.6 Deliveries
by ETP at the Closing.
At the
Closing, ETP shall deliver to CCE:
(a) an
executed copy of the 50% CCE Interest Assignment;
(b) a
cross-receipt acknowledging receipt of the TPC Interests
Assignment;
(c) a
certificate from an authorized officer of ETP, dated as of the Closing Date,
to
the effect that the conditions set forth in Section 6.3(a) and Section 6.3(c)
of
this Agreement have been satisfied;
(d) the
TPC
Transition Services Agreement, duly executed by ETP; and
(e) all
other
previously undelivered documents required by this Agreement to be delivered
by
ETP or its Affiliates to CCE at or prior to the Closing.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF CCE
CCE
hereby represents and warrants to ETP as follows:
Section
3.1 Organization;
Qualification.
(a) CCE
is a
limited liability company duly organized, validly existing and duly qualified
or
licensed and in good standing under the laws of the state or jurisdiction of
its
formation and has all requisite corporate power to own, lease and operate its
properties and to carry
on
its business as currently conducted. CCE is duly qualified or licensed to do
business as a foreign limited liability company, and is, and has been, in good
standing in each jurisdiction in which the nature of its business or the
property it owns, leases or operates requires it to so qualify, be licensed
or
be in good standing, except for such failures to be qualified, licensed or
in
good standing that would not have a Material Adverse Effect. The CCE LLC
Agreement is a legal, valid and binding agreement of the parties specified
as
parties thereto, enforceable against the parties thereto in accordance with
its
terms, except that such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors’ rights generally or general principles of
equity.
(b) CC
Energy, TW Holdings and TPC are limited liability companies duly organized,
validly existing and duly qualified or licensed and in good standing under
the
laws of the state or jurisdiction of their respective formation and have all
requisite limited liability company power, as applicable, to own, lease and
operate their respective properties and to carry on their respective businesses
as currently conducted. True and correct copies of the Organizational Documents
of TPC with all amendments thereto to the date hereof, have been made available
by CCE to ETP or its representatives. CC Energy, TW Holdings and TPC are each
duly qualified or licensed to do business as foreign limited liability companies
and are, and have been, in good standing in each jurisdiction in which the
nature of the respective businesses conducted by them or the property they
own,
lease or operate requires them to so qualify, be licensed or be in good standing
except where the failure to be so authorized, qualified or licensed and in
good
standing would not have a Material Adverse Effect. Section 3.1(b) of the CCE
Disclosure Letter sets forth all of the jurisdictions in which TPC is qualified
to do business.
Section
3.2 Authority
Relative to this Agreement and the CCE Acquisition Agreement.
CCE has
full limited liability company power and authority to execute and deliver this
Agreement and the other agreements, documents and instruments to be executed
and
delivered by it in connection with this Agreement, and to consummate the
transactions contemplated hereby and thereby. Except as set forth in Section
3.2
of the CCE Disclosure Letter, the execution, delivery and performance of this
Agreement and the other agreements, documents and instruments to be executed
and
delivered in connection with this Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all the necessary action on the part of CCE, and no other
corporate or other proceedings on the part of CCE or its members are necessary
to authorize this Agreement and the other agreements, documents and instruments
to be executed and delivered in connection with this Agreement, to consummate
the transactions contemplated hereby and thereby or to consummate the
transactions contemplated hereby or thereby. The resolutions attached hereto
as
Exhibit D have been duly approved and adopted by all of the members of the
Executive Committee of CCE in accordance with the terms of the CCE LLC
Agreement. This Agreement has been, and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement
as of
the Closing Date will be, duly and validly executed and delivered by CCE, and
assuming that this Agreement and the other agreements, documents and instruments
to be executed and delivered in connection with this Agreement constitute legal,
valid and binding agreements of each of the other parties hereto and thereto,
are (in the case of this Agreement) or will be as of the Closing Date (in the
case of the other agreements, documents and instruments to be executed and
delivered in connection with this Agreement) enforceable against CCE in
accordance with their respective terms, except that such enforceability may
be
limited
by applicable bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to enforcement of creditors’ rights generally or general principles
of equity.
Section
3.3 TPC
Interests.
(a) The
TPC
Interests are duly authorized, validly issued, fully paid membership interests
of TPC and were not issued in violation of any preemptive rights. Except as
set
forth in Section 3.3(a) of the CCE Disclosure Letter, (i) there are no
membership interests of TPC authorized, issued or outstanding or reserved for
any purpose other than the TPC Interests, and (ii) there are no (A) existing
options, warrants, calls, rights of first refusal, preemptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the TPC Interests, obligating CCE, TPC or any of their
respective Affiliates to issue, transfer or sell, or cause to be issued,
transferred or sold, any of the TPC Interests, (B) outstanding securities of
CCE, TPC or any of their respective Affiliates that are convertible into or
exchangeable or exercisable for any of the TPC Interests, (C) options, warrants
or other rights to purchase from CCE, TPC or any of their respective Affiliates
any such convertible or exchangeable securities or (D) other than this
Agreement, contracts, agreements or arrangements of any kind relating to the
issuance of any of the TPC Interests, or any such options, warrants or rights,
pursuant to which, in any of the foregoing cases, CCE, TPC or any of their
respective Affiliates are subject or bound.
(b) Except
as
set forth in Section 3.3(b) of the CCE Disclosure Letter, TW Holdings owns
all
of the issued and outstanding TPC Interests and has good and valid title to
the
TPC Interests, free and clear of all Encumbrances or other defects in title,
and
the TPC Interests have not been pledged or assigned to any Person. At the
Closing, the TPC Interests will be transferred to ETP free and clear of all
Encumbrances. The TPC Interests are not subject to any restrictions on
transferability or voting agreements other than those imposed by this Agreement
and by applicable securities laws.
(c) Except
as
set forth in Section 3.3(c) of the CCE Disclosure Letter, TPC does not have
any
subsidiaries or any stock or other equity interest (controlling or otherwise)
in
any corporation, limited liability company, partnership, joint venture or other
entity.
Section
3.4 Consents
and Approvals.
Except
as set forth in Section 3.4 of the CCE Disclosure Letter, neither CCE nor any
of
its Affiliates requires any consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Authority, or any other
Person, as a condition to the execution and delivery of this Agreement or the
performance of its obligations hereunder, except where the failure to obtain
such consent, approval or authorization of, or filing of, registration or
qualification with, any Governmental Authority, or any other Person would not
materially and adversely impact the operations of TPC as currently
conducted.
Section
3.5 No
Conflict or Violation. Except as set forth in Section 3.5 of the CCE Disclosure
Letter, the execution, delivery and performance by CCE of this Agreement does
not:
(a) violate
or conflict with any provision of the Organizational Documents of CCE or
TPC;
15
(b) violate
any applicable provision of a law, statute, judgment, order, writ, injunction,
decree, award, rule or regulation of any Governmental Authority, except where
such violation would not have a Material Adverse Effect; or
(c) violate,
result in a breach of, constitute (with due notice or lapse of time or both)
a
default or cause any obligation, penalty or premium to arise or accrue under
any
Material Contract, lease, loan, mortgage, security agreement, trust indenture
or
other material agreement or instrument to which TPC is a party or by which
it is
bound or to which any of its properties or assets is subject, except as would
not have a Material Adverse Effect.
Section
3.6 Financial
Information.
The CCE
Annual Financial Statements and the CCE Six Month Interim Financial Statements
present fairly in all material respects, in accordance with GAAP consistently
applied, the financial condition and results of operation of CCE as of the
dates
thereof and for the periods set forth therein, subject, in the case of the
CCE
Six Month Interim Financial Statements, to normal recurring year-end adjustments
that are not material, either individually or in the aggregate, and the absence
of full footnote disclosure. The Citrus Annual Financial Statements and the
Citrus Six Month Interim Financial Statements present fairly in all material
respects, in accordance with GAAP consistently applied, the financial condition
and results of operation of Citrus as of the dates thereof and for the periods
set forth therein, subject, in the case of the Citrus Six Month Interim
Financial Statements, to normal recurring year-end adjustments that are not
material, either individually or in the aggregate, and the absence of full
footnote disclosure. The TPC Annual Financial Statements and the TPC Six Month
Interim Financial Statements present fairly in all material respects, in
accordance with GAAP consistently applied, the financial condition and results
of operation of TPC as of the dates thereof and for the periods set forth
therein, subject, in the case of the TPC Six Month Interim Financial Statements,
to normal recurring year-end adjustments that are not material, either
individually or in the aggregate, and the absence of full footnote
disclosure.
Section
3.7 Contracts.
(a) Section
3.7(a) of the CCE Disclosure Letter sets forth a list, as of the date hereof,
of
each contract and lease to which TPC is a party that is material to TPC (each
contract set forth in Section 3.7(a) of the CCE Disclosure Letter being referred
to herein as a “Material
Contract”);
provided,
however,
that
any purchase or sale order arising in the ordinary course of business and any
contract reasonably expected to involve the payment or receipt of an aggregate
amount of less than $2,000,000 during its term remaining after the date of
this
Agreement shall not be deemed to be a Material Contract.
(b) Section
3.7(b) of the CCE Disclosure Letter sets forth a list, as of the date hereof,
of
each contract that TPC has with an Affiliate, other than with respect to any
purchases and sales arising in the ordinary course of business.
(c) Except
as
set forth in Section 3.7(c) of the CCE Disclosure Letter, each Material Contract
is a valid and binding agreement of TPC and, to the Knowledge of CCE, is in
full
force and effect.
16
17
(d) Except
as
set forth in Section 3.7(d) of the CCE Disclosure Letter, CCE has no Knowledge
of any default under any Material Contract, other than defaults that have been
cured or that would not have a Material Adverse Effect. TPC and, to CCE’s
Knowledge, the other parties to any Material Contract, have performed in all
respects all obligations required to be performed by them under any Material
Contract, except where the failure so to perform would not have a Material
Adverse Effect. CCE has made available to ETP or its representatives true and
complete originals or copies of all the Material Contracts.
Section
3.8 Compliance
with Law.
Except
for Environmental Laws and Tax Laws, which are the subject of Section 3.15
and
Section 3.16, respectively, and except as set forth in Section 3.8 of the CCE
Disclosure Letter, since November 17, 2004, TPC has complied with all federal,
state, local or foreign laws, statutes, ordinances, rules, regulations,
judgments, orders, writs, injunctions or decrees of any Governmental Authority
applicable to its properties, assets and business, except where such
noncompliance would not have a Material Adverse Effect. TPC has not received
written notice of any material violation of any such law, license, regulation,
order or other legal requirement or, to the Knowledge of CCE, is in material
default with respect to any order, writ, judgment, award, injunction or decree
of any Governmental Authority, applicable to TPC or any of its assets,
properties or operations.
Section
3.9 Permits.
Except as set forth in Section 3.9(a) of the CCE Disclosure Letter, TPC has
all
permits, licenses, certificates of authority, orders and approvals of, and
has
made all filings, applications and registrations with, Governmental Authorities
necessary for the conduct of the business operations of TPC as presently
conducted (collectively, the “TPC
Permits”),
except for those Permits the absence of which would not, individually or in
the
aggregate, have a Material Adverse Effect. Set forth on Section 3.9(b) of the
CCE Disclosure Letter is a list of the material TPC Permits.
Section
3.10 Litigation.
Except as identified in Section 3.10 of the CCE Disclosure Letter, there are
no
lawsuits, actions, proceedings or investigations, pending, or, to CCE’s
Knowledge, threatened, against CCE or any of its Affiliates or any executive
officer, manager or director thereof relating to the transactions contemplated
hereby or the assets or business of TPC, except, in the case of lawsuits,
actions, proceedings, investigations relating to the assets or business of
TPC,
as would not, individually or in the aggregate, have a Material Adverse Effect.
CCE and its Affiliates are not subject to any outstanding judgment, order,
writ,
injunction, decree or award entered in an Action to which CCE or any of its
Affiliates was a named party relating to the transactions contemplated hereby
or
the assets or business of TPC, except, in the case of lawsuits, actions,
proceedings, investigations relating to the assets or business of TPC, as would
not, individually or in the aggregate, have a Material Adverse
Effect.
Section
3.11 Title
to
Properties. TPC has good and valid title to all of the tangible assets and
properties that are reflected in the TPC Interim Balance Sheet (except for
assets and properties sold, consumed or otherwise disposed of in the ordinary
course of business since the date of the TPC Interim Balance Sheet), and such
tangible assets and properties are owned free and clear of all Encumbrances,
except for (a) Encumbrances listed in Section 3.11 of the CCE Disclosure Letter,
(b) Permitted Encumbrances, and (c) Encumbrances which will be discharged on
or
before the Closing Date. To the Knowledge of CCE, except as set forth in Section
3.11 of the CCE Disclosure Letter, TPC owns valid and defeasible fee title
to,
or holds a valid leasehold interest
in, or a valid right-of-way or easement (all such rights-of-way and easements
collectively, the “Rights-Of-Way”)
through, all real property (“Real
Property”)
used
or necessary for the conduct of business of TPC as presently conducted, and
all
such Real Property (other than Rights-Of-Way) is owned or leased free and clear
of all Encumbrances, in each case except for (a) Encumbrances listed in Section
3.11 of the CCE Disclosure Letter, (b) Permitted Encumbrances and (c)
Encumbrances that will be discharged on or before the Closing Date.
Section
3.12 Employee
Matters.
(a) Except
as
set forth in Section 3.12(a) of the CCE Disclosure Letter, none of TPC, CCE
or
their respective ERISA Affiliates sponsors, maintains, contributes to or has
an
obligation to contribute to, any “employee benefit plan,” as defined in Section
3(3) of ERISA, in which any current or former TPC Employee is or has been
eligible to participate since November 17, 2004 (“ERISA
Plans”).
For
the avoidance of doubt, (1) the term “ERISA Plans” does not include any Enron
Plan, (2) November 17, 2004 is the date of the closing of the acquisition by
CCE
of indirect ownership of TPC from Enron Corp. and certain of its affiliates,
and
(3) CCE was formed on May 14, 2004, in connection with such
acquisition.
(b) Except
as
set forth in Section 3.12(b) of the CCE Disclosure Letter, none of TPC, CCE
or
any of their respective ERISA Affiliates has established, sponsors, maintains,
or contributes to any policy, plan, agreement or arrangement that is not set
forth in Section 3.12(a) of the CCE Disclosure Letter providing for employment
terms, change in control benefits, severance benefits, retention benefits,
insurance coverage (including any self-insured arrangements), workers’
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
or other forms of incentive compensation, or post-retirement insurance,
compensation or benefits (whether or not an ERISA Plan) that (i) is entered
into, sponsored, maintained, or contributed to, as the case may be, by TPC,
or
(ii) has covered any current or former TPC Employee or independent contractor
to
TPC since November 17, 2004. The policies, plans, agreements, and arrangements
described in this Section 3.12(b) are hereinafter referred to as the “Benefit
Programs or Agreements.” For the avoidance of doubt, the term “Benefit
Programs or Agreements” does
not
include any Enron Plan. The Benefit Programs and Agreements and the ERISA Plans
are hereinafter referred to collectively as the “Employee
Benefit Plans.”
(c) True,
correct, and complete copies of each of the ERISA Plans sponsored, maintained
or
contributed to on behalf of the TPC Employees or in which such employees are
otherwise eligible to participate, and related trusts, if applicable, including
all amendments thereto, have been furnished to ETP. There has also been
furnished to ETP, with respect to each ERISA Plan required to file such report
and description, the most recent report on Form 5500, the summary plan
description and any summaries of material modifications thereto, all actuarial
reports or valuations relating to each ERISA Plan subject to Title IV of ERISA
or required to be accounted for pursuant to Statements of Financial Accounting
Standard Nos. 106 and 132(R), if any, and the most recent determination letter,
if any, issued by the IRS with respect to any ERISA Plan intended to be
qualified under Section 401 of the Code. True, correct, and complete copies
or
descriptions of all Benefit Programs and Agreements have also been furnished
to
ETP.
18
(d) Except
as
set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or described
in
Section 5.5(e), with respect to retiree medical benefits, none of TPC, CCE
or
any of CCE’s ERISA Affiliates has any legal commitment to create, incur
liability with respect to or cause to exist any other employee benefit plan,
program or arrangement for the benefit of any current or former TPC Employee
or
to enter into any contract or agreement to provide compensation or benefits
to
any former or current TPC Employee.
(e) Except
as
set forth in Section 3.12(e) of the CCE Disclosure Letter, with respect to
each
Employee Benefit Plan:
(i) the
applicable reporting, disclosure and other requirements of ERISA (and other
Applicable Law) have been complied with in all material respects;
(ii) there
is
no act or omission of TPC or any of its ERISA Affiliates that would (a)
constitute a breach of fiduciary duty under Section 404 of ERISA or a
transaction (including the transactions contemplated by this Agreement) intended
to evade liability under Section 4069 of ERISA, in either case that would
subject TPC to a liability, or (b) constitute a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code that would subject TPC or
any
plan fiduciary, directly or indirectly (through indemnification obligations
or
otherwise), to an excise Tax or civil penalty under Section 4975 of the Code
or
Section 502(i) of ERISA in an amount that would be material;
(iii) no
ERISA
Plan is subject to Title IV of ERISA;
(iv) all
contributions or payments required to be made under each ERISA Plan by reason
of
Part 3 of Subtitle B of Title I of ERISA, Section 412 of the Code, or otherwise
prior to the Closing Date have been and will be timely made;
(v) there
are
no pending or, to CCE’s Knowledge, threatened actions, suits or claims pending
(other than routine claims for benefits);
(vi) to
CCE’s
Knowledge, there is no matter pending (other than routine qualification
determination filings) with respect to any Employee Benefit Plan before the
IRS,
the Department of Labor, the PBGC, or any other Governmental
Authority;
(vii) except
to
the extent required under Section 601 of ERISA or Section 4980 of the Code,
TPC
has no present or future obligation to make any payment to or with respect
to
any former or current TPC Employee or any dependent of any such former or
current TPC Employee under any retiree medical benefit plan or other retiree
welfare benefit plan;
(viii) there
is
no Employee Benefit Plan covering any former or current TPC Employee that
provides for the payment by TPC of any amount that is or is reasonably likely
to
be (a) not deductible as a result of Section 162(a)(1) or 404 of the Code,
(b)
an “excess parachute payment” pursuant to Section 280G of the Code or (c)
subject to the additional tax pursuant to Section 409A of the
Code;
19
(ix) except
as
otherwise provided in this Agreement, neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will (a) entitle
any TPC Employee to severance, retention or change in control payments or
benefits to which such employee was not previously entitled, or any increase
in
severance retention or change in control payments or benefits upon a termination
of employment or consummation of the transactions contemplated by this
Agreement, (b) require CCE, TPC or any of their respective ERISA Affiliates
to
make a larger contribution to, pay greater benefits under, or provide any
additional vesting, service credit or other rights under any Employee Benefit
Plan than it otherwise would, whether or not some subsequent action or event
would be required to cause such payment or provision to be triggered or (c)
trigger any other material obligation pursuant to the Employee Benefit Plans
that would be a liability of ETP or TPC after the Closing Date;
(x) each
ERISA Plan intended to qualify under Section 401(a) of the Code has been
determined to be so qualified by the IRS and, to the Knowledge of CCE, nothing
has occurred which has resulted or is likely to result in the revocation of
such
determination or which requires or is reasonably likely to require action under
the compliance resolution programs of the IRS to preserve such
qualification;
(xi) as
to any
ERISA Plan intended to be qualified under Section 401(a) of the Code, there
has
been no termination or partial termination of any ERISA Plan within the meaning
of Section 411(d)(3) of the Code;
(xii) all
contributions required to be made to or with respect to the Employee Benefit
Plans pursuant to their terms and the provisions of ERISA, the Code, or any
other Applicable Law have been timely made;
(xiii) each
trust funding an Employee Benefit Plan, which trust is intended to be exempt
from federal income taxation pursuant to Section 501(c)(9) of the Code,
satisfies the requirements of such section and has received a favorable
determination letter from the IRS regarding such exempt status and has not,
since receipt of the most recent favorable determination letter, been amended
or
operated in a way which would adversely affect such exempt status;
(xiv) except
as
set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or described
in
Section 5.5(e), each ERISA Plan which is an “employee welfare benefit plan,” as
such term is defined in Section 3(1) of ERISA, may be unilaterally amended
or
terminated in its entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination; and
(xv) except
as
set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or described
in
Section 5.5(e), no Employee Benefit Plan provides retiree medical or retiree
life insurance benefits to any Person and TPC is not contractually or otherwise
obligated (whether or not in writing) to provide any Person with life insurance
or medical benefits upon
20
retirement
or termination of employment, other than as required by the provisions of
Sections 601 through 608 of ERISA and Section 4980B of the Code.
(f) None
of
TPC or any of its ERISA Affiliates contributes to or has an obligation to
contribute to, and has not at any time within six years prior to the Closing
Date contributed to or had an obligation to contribute to, a multiemployer
plan
(as defined in Section 4001(a)(3) of ERISA), on behalf of a present or former
TPC Employee;
(g) No
current circumstance has arisen or future circumstance could arise that would
lead TPC or, after the transaction contemplated by this Agreement, ETP, to
incur
any ERISA Title IV liability or suffer the imposition of any Lien on any of
their assets with respect to liabilities relating to any ERISA Plan or any
employee benefit plan subject to Title IV of ERISA that was sponsored,
maintained or contributed to by (A) CCE, (B) an ERISA Affiliate of CCE, or
(C)
any corporation, trade, business or entity under common control with CCE or
an
ERISA Affiliate of CCE, within the meaning of Section 414(b), (c) or (m) of
the
Code or Section 4001 of ERISA, within the six (6) years prior to the Closing
Date, or to which any of them had an obligation to contribute during such
period; and
(h) With
respect to circumstances not addressed in Section 3.12(g), except as set forth
in Section 3.12(e)(vii) of the CCE Disclosure Letter or described in Section
5.5(e), no current circumstance has arisen or future circumstance could arise
that would lead TPC or, after the transaction contemplated by this Agreement,
ETP, to incur any liability directly or indirectly (through indemnification
or
otherwise), or suffer the imposition of a Lien on any of their assets, relating
to or arising from the participation of the TPC employees or former employees
in
any of the Enron Plans or the status of TPC, during the period preceding
November 17, 2004, as an ERISA Affiliate of Enron Corp.
Section
3.13 Labor
Relations.
TPC
is
not a party to any labor or collective bargaining agreements, and there are
no
labor or collective bargaining agreements which pertain to any employees of
TPC.
Within the preceding eighteen (18) months, there have been no representation
or
certification proceedings, or petitions seeking a representation proceeding,
pending or, to the Knowledge of CCE, threatened in writing to be brought or
filed with the National Labor Relations Board or any other labor relations
tribunal or authority with respect to TPC. Within the preceding eighteen (18)
months, to the Knowledge of CCE, there have been no organizing activities
involving TPC with respect to any group of its employees. Since May 1, 2006,
neither TPC nor any Affiliate of TPC has terminated the employment of any TPC
Employee or any employee of any of its Affiliates who provides services in
connection with TPC’s business for reasons other than misconduct or failure to
perform the employee’s duties and no circumstance has occurred that would give
rise to a requirement that TPC give notice under the Worker Adjustment and
Retraining Notification Act or any similar state law. As of the date of this
Agreement, no TPC Employee or Shared Service Employee has a legal or contractual
right to reinstatement with TPC or any Affiliate of TPC.
Section
3.14 Intellectual
Property. Except as set forth in Section 3.14 of the CCE Disclosure Letter,
on the Closing Date TPC will, either in its own name or by operation of the
TPC
Transition Services Agreement, own or possess licenses or other legally
enforceable rights to use all patents, copyrights (including any copyrights
in
proprietary software), trademarks, service
marks, trade names, logos, and other intellectual property rights, software
object and source code as are necessary to conduct its business as currently
conducted, except those the lack of which would not materially and adversely
affect the operations of TPC as currently conducted; and to CCE’s Knowledge,
there is no conflict by CCE or TPC with the rights of others therein that would
materially and adversely affect the operations of TPC as currently
conducted.
Section
3.15 Environmental
Matters. Except as set forth in Section 3.15 of the CCE Disclosure
Letter:
(a) TPC
and
its properties and operations are, and to CCE’s Knowledge, during the relevant
time periods specified in all applicable statutes of limitation, have been,
in
compliance with all applicable Environmental Laws, except for such noncompliance
as would not, individually or in the aggregate, have a Material Adverse Effect;
(b) TPC
possesses all Environmental Permits required in order to conduct its operations
as presently conducted or, where such Environmental Permits have expired, has
applied for a renewal of such Environmental Permits in a timely fashion and,
to
CCE’s knowledge, all such Environmental Permits are in the name of the proper
entity and will remain in full force and effect immediately following the
Closing, except where the failure to possess an Environmental Permit or to
have
applied for a renewal of an Environmental Permit would not, individually or
in
the aggregate, have a Material Adverse Effect;
(c) TPC
and
its properties and operations are not subject to any pending or, to CCE’s
Knowledge, threatened Environmental Claims, nor has TPC received any notice
of
violation, noncompliance, or enforcement or any notice of investigation or
remediation from any Governmental Authority pursuant to Environmental Laws,
except for such matters as would not, individually or in the aggregate, have
a
Material Adverse Effect;
(d) Since
November 17, 2004, there has been no, and to CCE’s Knowledge, prior to November
17, 2004, there has been no, Release of Hazardous Substances on or from the
properties of TPC or from or in connection with the operations of TPC in
violation of any Environmental Laws or in a manner that could give rise to
any
remedial or corrective action obligations pursuant to Environmental Laws, except
such as would not, individually or in the aggregate, have a Material Adverse
Effect;
(e) Since
November 17, 2004, there has been no, and, to CCE’s Knowledge, prior to November
17, 2004, there has been no exposure of any Person or property to any Hazardous
Substances in connection with the business, properties or operations of TPC
that
could reasonably be expected to form the basis for an Environmental Claim or
any
other claim for Damages or compensation, except for such Environmental Claims
or
other claims for Damages as would not, individually or in the aggregate, have
a
Material Adverse Effect; and
(f) CCE
has
made available for inspection by ETP complete and correct copies of all
environmental assessment and audit reports and studies completed since January
1, 2003, addressing potentially material environmental matters and all
correspondence completed since January 1, 2003 addressing potentially material
Environmental Claims relating to TPC that are
in
the possession of CCE or TPC, except for any such materials as CCE reasonably
believes are subject to the attorney-client privilege.
The
representations and warranties set forth in this Section 3.15 are CCE’s sole and
exclusive representations and warranties relating to environmental
matters.
Section
3.16 Tax
Matters.
(a) Except
as
set forth in Section 3.16(a) of the CCE Disclosure Letter or as would not have
a
Material Adverse Effect, all federal, state and local Tax Returns required
to be
filed by or on behalf of TPC, and each consolidated, combined, unitary,
affiliated or aggregate group of which TPC is a member, has been timely filed
(taking into account applicable extensions), and all Taxes shown as due on
such
Tax Returns have been paid, or adequate reserves therefor have been established.
(b) Except
as
set forth in Section 3.16(b) of the CCE Disclosure Letter or as would not have
a
Material Adverse Effect, there is no deficiency, proposed adjustment, or matter
in controversy that has been asserted or assessed in writing with respect to
any
Taxes due and owing by TPC that has not been paid or settled in full.
(c) Except
as
would not have a Material Adverse Effect, TPC has timely withheld and timely
paid all Taxes required to be withheld by them in connection with any amounts
paid or owing to any employee, creditor, independent contractor or other third
party.
(d) Except
as
would not have a Material Adverse Effect, there are no liens for Taxes upon
any
of the assets of TPC except for liens for Taxes not yet due and payable.
(e) Except
as
would not have a Material Adverse Effect, no property of TPC is required to
be
treated as “tax-exempt use property” within the meaning of Code Section 168(h),
and no property of TPC is subject to a tax benefit transfer lease subject to
the
provisions of former Section 168(f)(8) of the Code.
(f) At
all
times since its formation, CCE has been treated as a partnership for federal
tax
purposes pursuant to Treasury Regulation Section 301.7701-3.
(g) At
all
times since their formation, each of CC Energy, TW Holdings and TPC have been
disregarded as separate entities for federal tax purposes pursuant to Treasury
Regulation Section 301.7701-3.
(h) CCE
has
made or will make a valid election under Section 754 of the Code that will
be in
effect at the time of the CCE Acquisition.
Section
3.17 Absence
of Certain Changes or Events.
(a) Except
as
set forth in Section 3.17(a) of the CCE Disclosure Letter, since December 31,
2005, TPC has conducted its business in the ordinary course of business,
consistent with past practice (as such practice existed during the period of
CCE’s ownership of TPC).
21
(b) Except
as
set forth in Section 3.17(b) of the CCE Disclosure Letter, since December 31,
2005, there has not been with respect to TPC any event or development or change
which has resulted or would reasonably be expected to result in a Material
Adverse Effect.
(c) Except
as
set forth in Section 3.17(c) of the CCE Disclosure Letter, since June 30, 2006,
TPC has not taken any action that would have been prohibited had Section 5.1(b)
been in effect from and after June 30, 2006.
Section
3.18 Absence
of Undisclosed Liabilities.
Since
June 30, 2006, TPC has incurred no Liabilities (whether absolute, accrued,
contingent or otherwise) that would be required by GAAP to be included in the
financial statements of TPC, except those Liabilities (a) disclosed and reserved
against in the TPC Interim Balance Sheet, (b) set forth in Section 3.18 of
the
CCE Disclosure Letter, (c) incurred in the ordinary course of business since
June 30, 2006 and (d) that have not resulted in a Material Adverse
Effect.
Section
3.19 Brokerage
and Finders’ Fees. None of CCE, TPC or any of their Affiliates or their
respective stockholders, partners, managers, directors, officers or employees,
has incurred, or will incur any brokerage, finders’ or similar fee in connection
with the transactions contemplated by this Agreement.
Section
3.20 Affiliated
Transactions. Except as described in Section 3.20 of the CCE Disclosure
Letter, and except for trade payables and receivables arising in the ordinary
course of business for purchases and sales of goods or services consistent
with
past practice, TPC has not been a party over the past twelve (12) months to
any
material transaction or agreement with CCE or any Affiliate of CCE (other than
TPC) and no director or officer of CCE or its Affiliates (other than TPC),
has,
directly or indirectly, any material interest in any of the assets or properties
of TPC.
Section
3.21 Insurance.
(a) Section
3.21 of the CCE Disclosure Letter sets forth a true and complete list of all
current policies of all material property and casualty insurance, insuring
the
properties, assets, employees and/or operations of TPC (collectively, the
“Insurance
Policies”).
To
the Knowledge of CCE, all premiums payable under the Insurance Policies have
been paid in a timely manner and TPC has complied in all material respects
with
the terms and conditions of all such Insurance Policies.
(b) As
of the
date hereof, CCE has not received any written notification of the failure of
any
of the Insurance Policies to be in full force and effect. To the Knowledge
of
CCE, TPC is not in default under any provision of the Insurance Policies, and
except as set forth in Section 3.21 of the CCE Disclosure Letter, there is
no
claim by TPC or any other Person pending under any of the Insurance Policies
as
to which coverage has been denied or disputed by the underwriters or issuers
thereof.
Section
3.22 Regulatory
Matters.
(a) TPC
is a
“natural gas company” as that term is defined in Section 2 of the Natural Gas
Act (“NGA”).
TPC
is in compliance in all material respects with the provisions
of the
NGA,
the Natural Gas Policy Act of 1978 (“NGPA”),
the
Pipeline Safety Improvement Act of 2002, and the rules and regulations
promulgated by FERC pursuant thereto. TPC is in compliance in all material
respects with the terms and conditions of all tariff provisions, FERC rate
and
certificate orders, and other orders and authorizations issued by FERC, in
each
case as applicable to TPC. No approval by FERC under the NGA or the Federal
Power Act is required in connection with the execution and delivery of this
Agreement by CCE or the consummation of the transactions contemplated hereby.
Except as identified in Section 3.22 of the CCE Disclosure Schedule, the Form
No. 2 Annual Reports filed by TPC with FERC for the years ended December 31,
2004 and December 31, 2005 were true and correct in all material respects as
of
the dates thereof, and since January 1, 2005, TPC has not become subject to
any
proceeding under Section 5 of the NGA or, except as otherwise permitted by
Section 5.1, any general rate case proceeding commenced under Section 4 of
the
NGA by reason of a filing made with the FERC after January 1, 2005.
(b) Except
as
identified in Section 3.22 of the CCE Disclosure Letter and except for general
industry proceedings including audits or reviews of individual companies arising
from general industry proceedings such as Order 2004, there are no pending
or,
to CCE’s Knowledge, reasonably anticipated FERC administrative or regulatory
proceedings, including without limitation any rate proceeding under Section
4 or
Section 5 of the NGA or any NGA Section 7 certificate proceeding, investigation,
complaint, audit, or show cause proceedings to which TPC is a party. CCE
acknowledges that, as a result of a rate settlement in FERC Docket Nos.
RP95-271, et al., TPC is obligated to prepare and file the TPC Rate Case for
rates to be effective November 1, 2006.
Section
3.23 Internal
Controls.
(a) The
system of internal accounting controls that is applicable to TPC is sufficient
to provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for physical assets
is compared with the existing physical assets at reasonable intervals and
appropriate actions are taken with respect to any differences.
(b) Since
November 17, 2004, neither TPC nor, to CCE’s Knowledge, any director, manager,
officer, employee, auditor, accountant or representative of TPC, has received
or
otherwise had or obtained knowledge of any complaint, allegation, assertion
or
claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or internal accounting controls of or for TPC,
including any complaint, allegation, assertion or claim that TPC has engaged
in
fraudulent accounting or auditing practices. Since November 17, 2004, no
attorney representing TPC, whether or not employed by TPC, has reported evidence
of a violation of securities laws, breach of fiduciary duty or similar violation
by TPC or any of its officers, directors, managers, employees or agents to
TPC’s
board of managers (or comparable managing body) or any committee thereof or
to
any manager or officer of TPC.
22
(c) Except
as
disclosed in Section 3.23(c) of the CCE Disclosure Letter, there are no
off-balance sheet structures or off-balance sheet transactions with respect
to
TPC or that would be required to be reported or set forth in the periodic
reports filed by a reporting company under the Exchange Act.
Section
3.24 Hedging.
Except
as set forth on Section 3.24 of the CCE Disclosure Letter, TPC is not engaged
in
any natural gas or other futures or options trading in respect of which it
has
any material future liability, or is a party to any swaps, ▇▇▇▇▇▇, futures
or
similar instruments.
Section
3.25 Bank
Accounts; Powers of Attorney. Section 3.25 of the CCE Disclosure Letter sets
forth (a) the name of each financial institution with which TPC has borrowing
or
investment agreements, deposit or checking accounts or safe deposit boxes,
(b)
the types of those arrangements and accounts including the names in which the
accounts or boxes are held, the account or box numbers and the name of each
Person authorized to draw thereon or have access thereto and (c) the names
of
all Persons, if any, holding powers of attorney (other than powers of attorney
incidental to commercial relationships entered into in the ordinary course
of
business) from TPC and a summary statement of the terms thereof. No Contract
to
which TPC is a party provides for the payment by the counterparty to any bank
account other than those set forth on Section 3.25 of the CCE Disclosure
Letter.
Section
3.26 Gas
Imbalances. Section 3.26 of the CCE Disclosure Letter sets forth all gas
imbalances on TPC’s pipeline system as of June 30, 2006. All gas imbalances on
TPC’s pipeline system (whether as of June 30, 2006 or thereafter) are resolved
pursuant to the terms of Operational Balancing Agreements (“▇▇▇▇”).
The
majority of ▇▇▇▇ follow the valuation methodology described in TPC’s tariff,
which calls for imbalances to be resolved using a Monthly Index Price as
calculated under Section 27 of the tariff’s General Terms and Conditions and
Section 5(c) of the tariff’s Operator Balancing Agreement - Form N. TPC has
certain grandfathered volumetric ▇▇▇▇ that do not follow Form N and for which
the revaluation of outstanding volumetric imbalances impacts TPC's monthly
income statement. Volumetric imbalances are noted in Section 3.26 of the CCE
Disclosure Letter. The values of gas imbalances as determined pursuant to the
imbalance resolution methodology set forth in the ▇▇▇▇ are used in preparing
each balance sheet included in the TPC Annual Financial Statements and the
TPC
Six Month Interim Financial Statements.
Section
3.27 No
Other Representations or Warranties. Except for the representations and
warranties contained in this Article III, neither CCE nor any other Person
makes
any other express or implied representation or warranty on behalf of
CCE.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF ETP
ETP
hereby represents and warrants to CCE as follows:
Section
4.1 Corporate
Organization; Qualification.
ETP is
a limited partnership duly organized, validly existing and duly qualified or
licensed and in good standing under the laws of the state or jurisdiction of
its
formation and has all requisite limited partnership power to
own, lease
and
operate its properties and to carry on its business as currently conducted.
ETP
is duly qualified or licensed to do business as a foreign limited partnership
and is, and has been, in good standing in each jurisdiction in which the nature
of the business conducted by it or the property it owns, leases or operates
requires it to so qualify, be licensed or be in good standing, except for such
failures to be qualified, licensed or in good standing that would not materially
affect the consummation of the transactions contemplated by this
Agreement.
Section
4.2 Authority
Relative to this Agreement. ETP has full limited partnership power and
authority to execute and deliver this Agreement and the other agreements,
documents and instruments to be executed and delivered by it in connection
with
this Agreement, including the CCE Acquisition Agreement, and to consummate
the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement
(including the CCE Acquisition Agreement) and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all the necessary action on the part of ETP, and no other
proceedings on the part of ETP are necessary to authorize this Agreement and
the
other agreements, documents and instruments to be executed and delivered in
connection with this Agreement (including the CCE Acquisition Agreement) or
to
consummate the transactions contemplated hereby and thereby. This Agreement
and
the CCE Acquisition Agreement each have been, and the other agreements,
documents and instruments to be executed and delivered in connection with this
Agreement as of the Closing Date will be, duly and validly executed and
delivered by ETP, and assuming that this Agreement, the CCE Acquisition
Agreement and the other agreements, documents and instruments to be executed
and
delivered in connection with this Agreement and the CCE Acquisition Agreement
constitute legal, valid and binding agreements of the other parties thereto
are
(in the case of this Agreement) or will be as of the Closing Date (in the case
of the other agreements, documents and instruments to be executed and delivered
in connection with this Agreement), enforceable against ETP in accordance with
their respective terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
or
relating to enforcement of creditors’ rights generally or general principles of
equity.
Section
4.3 50%
CCE Interest. Effective as of the closing of the transactions under the CCE
Acquisition Agreement, ETP will own all of the issued and outstanding 50% CCE
Interest and will have good, valid and marketable title to the 50% CCE Interest,
free and clear of all Encumbrances or other defects in title, and the 50% CCE
Interest will not have not been pledged or assigned to any Person. At the
Closing, the 50% CCE Interest will be transferred by ETP to CCE free and clear
of all Encumbrances. Effective as of the closing of the transactions under
the
CCE Acquisition Agreement, the 50% CCE Interest will not be subject to any
restrictions on transferability or voting agreements other than those imposed
by
this Agreement, the limited liability company agreement of CCE and applicable
securities laws.
Section
4.4 Consents
and Approvals. Except for any approvals of the transactions contemplated by
the CCE Acquisition Agreement (or expiration of waiting periods) under the
HSR
Act and except for approvals required from the FCC, ETP does not require any
consent, approval or authorization of, or filing, registration or qualification
with, any Governmental Authority, or any other Person as a condition to the
execution and delivery of this Agreement or the performance of the obligations
hereunder, except where the failure to obtain such consent, approval
or authorization of, or filing of, registration or qualification with, any
Governmental Authority, or any other Person would not materially affect the
consummation of the transactions contemplated by this Agreement.
Section
4.5 No
Conflict or Violation. The execution, delivery and performance by ETP of
this Agreement does not:
(a) violate
or conflict with any provision of the Organizational Documents of
ETP;
(b) violate
any applicable provision of a law, statute, judgment, order, writ, injunction,
decree, award, rule or regulation of any Governmental Authority; or
(c) violate,
result in a breach of, constitute (with due notice or lapse of time or both)
a
default or cause any material obligation, penalty or premium to arise or accrue
under any material contract, lease, loan, agreement, mortgage, security
agreement, trust indenture or other material agreement or instrument to which
ETP is a party or by which it is bound or to which any of its properties or
assets is subject.
Section
4.6 Litigation.
There
are no lawsuits, actions, proceedings, or, to ETP’s knowledge, any
investigations, pending or, to ETP’s knowledge, threatened, against ETP or any
of its Subsidiaries or any executive officer or director thereof which would
prohibit or impair ETP from undertaking any of the transactions contemplated
by
this Agreement, except as would not materially affect the consummation of the
transactions contemplated by this Agreement. ETP is not subject to any
outstanding judgment, order, writ, injunction, decree or award entered in an
Action to which ETP was a named party which would prohibit or impair ETP from
undertaking any of the transactions contemplated by this Agreement, except
as
would not materially affect the consummation of the transactions contemplated
by
this Agreement.
Section
4.7 Availability
of Funds. ETP will have sufficient funds available to pay the purchase price
under the CCE Acquisition Agreement on the closing date thereof and to
consummate the transactions contemplated hereby. The ability of ETP to
consummate the transactions contemplated under the CCE Acquisition Agreement
and
this Agreement is not subject to any condition or contingency with respect
to
financing.
Section
4.8 Brokerage
and Finders’ Fees. Except for Credit Suisse Securities (USA) LLC, whose fees
will be paid by ETP, none of ETP, any of its Affiliates, or its partners,
directors, officers or employees, has incurred, or will incur any brokerage,
finders’ or similar fee in connection with the transactions contemplated by this
Agreement.
Section
4.9 Investment
Representations.
(a) ETP
is
acquiring the TPC Interests to be acquired by it hereunder for its own account,
solely for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the federal securities
laws or any applicable foreign or state securities law.
23
(b) ETP
is an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act.
(c) ETP
understands that the acquisition of the TPC Interests to be acquired by it
pursuant to the terms of this Agreement involves substantial risk. ETP and
its
officers have experience as an investor in securities and equity interests
of
companies such as the ones being transferred pursuant to this Agreement and
ETP
acknowledges that it can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that ETP is capable
of
evaluating the merits and risks of its investment in the TPC Interests to be
acquired by it pursuant to the transactions contemplated hereby.
(d) ETP
understands that the TPC Interests to be acquired by it hereunder have not
been
registered under the Securities Act on the basis that the sale provided for
in
this Agreement is exempt from the registration provisions thereof. ETP
acknowledges that such securities may not be transferred or sold except pursuant
to the registration and other provisions of applicable securities laws or
pursuant to an applicable exemption therefrom.
(e) ETP
acknowledges that the offer and sale of the TPC Interests to be acquired by
it
in the transactions contemplated hereby has not been accomplished by the
publication of any advertisement.
Section
4.10 No
Other Representations or Warranties.
Except
for the representations and warranties contained in this Article IV, neither
ETP
nor any other Person makes any other express or implied representation or
warranty on behalf of ETP.
ARTICLE
V
COVENANTS
OF THE PARTIES
Section
5.1 Conduct
of Business.
(a) Except
as
expressly provided in this Agreement or as set forth in Section 5.1(a) of the
CCE Disclosure Letter, from and after the date of this Agreement and until
the
Closing Date, CCE shall use commercially reasonable efforts to cause TPC to
conduct and maintain its business in the ordinary course of business, consistent
with past practice.
(b) Except
as
contemplated by this Agreement or as set forth in Section 5.1(b) of the CCE
Disclosure Letter, prior to the Closing Date, without the prior written consent
of ETP (which consent shall not be unreasonably withheld or delayed), CCE shall
cause TPC not to:
(i) Amend
its
organizational documents or governance documents;
(ii) Issue,
sell, pledge, dispose of or encumber, or authorize or propose the issuance,
sale, pledge, disposition or encumbrance of, any shares of, or securities
convertible or exchangeable for, or options, puts, warrants, calls, commitments
or rights of any kind to acquire, any of its membership or ownership interests
or subdivide or in any way reclassify any membership or ownership interests
or
change or agree to change in any manner the rights of its outstanding membership
or ownership interests;
24
(iii) (A)
Except for the payment of a distribution of $22,000,000 to the sole member
of
TPC, as necessary to meet debt covenants under the Existing TW Holdings Debt
or
for the payment of a distribution to the sole member of TPC in order to make
the
distributions contemplated by Section 5.1(c) hereof, declare, set aside or
pay
any dividend or other distribution with respect to any shares of any class
or
series of equity interests of TPC; (B) split, combine or reclassify any shares
of any class or series of capital stock of TPC; or (C) redeem, purchase or
otherwise acquire directly or indirectly any shares of any class or series
of
equity interests of TPC, or any instrument or security which consists of or
includes a right to acquire such equity interests;
(iv) Except
as
may be required by agreements or arrangements identified in Section 5.1(b)(iv)
of the CCE Disclosure Letter:
▇. ▇▇▇▇▇
any
▇▇▇▇▇▇▇▇▇ or termination payments;
B. enter
into or extend or amend any employment, consulting, severance or other
compensation agreement with, or otherwise increase the compensation or benefits
provided to any of its officers or other employees, either individually or
as
part of a class of similarly situated employees other than in the ordinary
course of business, consistent with past practice;
C. except
as
required by Applicable Law, amend or take any other actions, including, but
not
limited to, acceleration of vesting and waiver of performance criteria, with
respect to any Employee Benefit Plan; or
D. terminate
any TPC Employee other than for cause;
(v) Sell,
lease, license, mortgage or otherwise dispose of any properties or assets
material to its business, other than (A) sales made in the ordinary course
of
business consistent with past practice or (B) sales of obsolete or other assets
not presently utilized in its business;
(vi) Merge
with or into or consolidate with any other Person;
(vii) Make
any
change in its accounting principles, practices, estimates or methods, other
than
as may be required by GAAP, Applicable Law or any Governmental
Authority;
(viii) Organize
any new Subsidiary or acquire any capital stock of, or equity or ownership
interest in, any other Person;
(ix) Materially
modify or amend or terminate any Material Contract or waive, release or assign
any material rights or Claims under a Material Contract, except in the ordinary
course of business;
(x) Pay,
repurchase, discharge or satisfy any of its Claims, Liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than
in the ordinary course of business and consistent with past
practice;
25
(xi) Enter
into any contract or transaction relating to the purchase of assets material
to
TPC, other than in the ordinary course of business consistent with past
practice;
(xii) (A)
Incur
or assume any short-term debt or long-term debt except for debt incurred to
pay
for any TPC Expansion Project Expense, any SUG Expansion Project Expense, any
budgeted capital expenditure or the distributions contemplated by Section 5.1(c)
hereof, (B) modify the terms of any indebtedness or other liability, other
than
modifications of short-term debt in the ordinary course of business, consistent
with past practice; (C) assume, guarantee, endorse or otherwise become liable
or
responsible (whether directly, contingently or otherwise) for the obligations
of
any other Person, except as described in Section 5.1(b)(xii)(C) of the CCE
Disclosure Letter;
(xiii) Adopt
a
plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization;
(xiv) Make
or
change any material election in respect of Taxes, adopt or request permission
of
any Taxing authority to change any material accounting method in respect of
Taxes, or enter into any closing agreement in respect of Taxes that would
increase the Tax liability of ETP, without ETP’s written consent, which consent
shall not be unreasonably withheld;
(xv) Other
than routine compliance filings, make any filings or submit any documents or
information to FERC without prior consultation with ETP;
(xvi) Enter
into any settlement agreement related to FERC-regulated tariff rates without
ETP’s written consent, which consent shall not be unreasonably
withheld;
(xvii) Fail
to
use commercially reasonable efforts to pursue the TPC Expansion Projects;
or
(xviii) Fail
to
use commercially reasonable efforts to prepare, file and defend the TPC Rate
Case; or
(xix) Authorize
any of, or commit or agree to take any of, the actions referred to in the
paragraphs (i) through (xviii) above.
(c) On
or
prior to the Closing Date, CCE shall make cash distributions in the aggregate
amount of $50.0 million plus all Cash Flow for the period beginning July 1,
2006
until the date of the closing of the CCE Acquisition, of which $25.0 million
shall be distributed to ETP, $25.0 million shall be distributed to the Class
A
Members (as defined in the Second Amended and Restated LLC Agreement) and the
balance of such Cash Flow which shall be distributed one-half to ETP and
one-half to the Class A Members (for purposes of this definition of Cash Flow,
Cash Flow shall be deemed to include without duplication the amount of Citrus
Corp. cash dividends actually paid with respect to the period from July 1,
2006
until September 30, 2006 and an estimated amount of Citrus Corp. cash dividends
with respect to the period from
26
October
1, 2006 until the date of the closing of the CCE Acquisition using for such
estimate 50% (i.e., CCE’s share) of Citrus Corp. net income for such
period).
(d) CCE
shall, or shall cause TPC to, provide to ETP copies of any filings made with
any
Governmental Entities after the date of this Agreement and prior to the Closing
Date.
(e) CCE
shall
use its commercially reasonable efforts to cause TPC to have a Net Working
Capital Amount as of the Closing Date that is greater than zero but it shall
not
be a condition to closing that this covenant be satisfied.
(f) From
the
date of this Agreement until the Closing Date, CCE shall not make any cash
distributions to its members except as specified in Section 5.1(c) or as
specified in the Second Amended and Restated LLC Agreement.
Section
5.2 Access
to Properties and Records.
(a) CCE
shall, and shall cause TPC to, afford to ETP and ETP’s accountants, counsel and
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 of the properties, books,
contracts, commitments and records (including all environmental studies, reports
and other environmental records and all pipeline cost-of-service and
rate-related studies, reports and records related to TPC and, during such
period, shall furnish to ETP all information concerning the business,
properties, Liabilities and personnel related to TPC as ETP may request,
provided,
however,
that no
investigation or receipt of information pursuant to this Section 5.2 shall
affect any representation or warranty of CCE or the conditions to the
obligations of ETP. To the extent not located at the offices or properties
of
TPC as of the Closing Date, as promptly as practicable thereafter, CCE shall
deliver, or cause its appropriate Affiliates to deliver to ETP all of the books
of accounts, minute books, record books and other records (including safety,
health, environmental, maintenance and engineering records and drawings)
pertaining to the business operations of TPC and all financial and accounting
records related to TPC. Such
delivery shall include all work papers, pleadings, testimony, exhibits, spread
sheets, research, drafts, memoranda, correspondence and other documents related
to the TPC Rate Case (“TPC
Rate Case Work Product”).
TPC
Rate Case Work Product has been and will be prepared in contemplation of
litigation, and the use of TPC Rate Case Work Product has been and will be
under
the control of TPC’s attorneys. Notwithstanding anything to the contrary
contained in this Agreement, CCE shall not be obligated to provide to ETP any
documents or records relating to litigation and regulatory matters in which
TPC
is involved to the extent that CCE reasonably believes such documents or records
are subject to the attorney-client or other applicable privilege in
circumstances in which TPC is not the sole client unless the parties
entitled to such attorney-client or other applicable privilege shall consent
thereto and enter into an appropriate joint defense agreement for the purpose
of
preservation of such attorney-client or other applicable
privilege.
(b) The
information contained herein, in the CCE Disclosure Letter or heretofore or
hereafter delivered to ETP or its authorized representatives in connection
with
the transactions contemplated by this Agreement shall be held in confidence
by
ETP and its
27
representatives
in accordance with the Confidentiality Agreement until the Closing Date with
respect to information relating to TPC. Following the Closing Date, CCE shall
keep confidential all information related to the business and properties of
TPC
to the same extent as ETP is obligated to keep such information confidential
in
accordance with the terms of the Confidentiality Agreement (without regard
to
the preceding sentence) prior to the Closing Date.
Section
5.3 Consents
and Approvals.
(a) Upon
the
terms and subject to the conditions of this Agreement, each of the parties
hereto agrees to use, and will cause its Affiliates to use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary or advisable under Applicable Law and
regulations to consummate and make effective the transactions contemplated
by
this Agreement as promptly as practicable including the preparation and filing
of all forms, registrations and notices required to be filed by such party
in
order to consummate the transactions contemplated by this Agreement, the taking
of all appropriate action necessary, proper or advisable to satisfy each of
the
conditions to Closing that are to be satisfied by that party or any of its
Affiliates and the taking of such actions as are necessary to obtain any
approvals, consents, orders, exemptions or waivers of Governmental Authorities
and any other Person required to be obtained by such party in order to
consummate the transactions contemplated by this Agreement.
(b) Each
party shall, and shall cause their respective Affiliates to, with respect to
a
threatened or pending preliminary or permanent injunction or other order, decree
or ruling or statute, rule, regulation or executive order that would adversely
affect the ability of any party to this Agreement to consummate the transactions
contemplated hereby or those contemplated by the CCE Acquisition Agreement,
use
their respective commercially reasonable best efforts to prevent the entry,
enactment or promulgation thereof, as the case may be (including by pursuing
any
available appeal process). Each of ETP and CCE shall use its respective
commercially reasonable best efforts to, and shall cause their respective
Affiliates to use their commercially reasonable best efforts to, promptly take
or cause to be taken all actions necessary to comply with any requests made,
or
conditions set, by a Governmental Authority to consummate the transactions
contemplated by this Agreement or the CCE Acquisition Agreement. Each party
agrees to use its commercially reasonable best efforts to procure any
third-party consents required in the preceding sentence. Notwithstanding the
foregoing, in no event shall the term “commercially reasonable best efforts”
require a party to agree to any divestiture, agreement, condition, restriction
or requirement requested by any Governmental Entity to avoid the entry,
enactment or promulgation of any threatened preliminary or permanent injunction
or other order, decree or ruling or statute, rule, regulation or executive
order
that would constitute a material adverse effect on the financial condition,
results of operations or prospects of such party and its Affiliates (including,
with respect to ETP, TPC), taken as a whole (a “Burdensome
Condition”).
All
cooperation shall be conducted in such a manner so as to preserve all applicable
privileges.
(c) By
the
later of (i) the seventh Business Day after the date hereof and (ii) the fifth
Business Day after the approval by the FCC of the transfer of control
contemplated by the CCE Acquisition Agreement, CCE and ETP shall file
applications with the FCC for consent to the transfer of control of CCE and
its
Affiliates as contemplated by this Agreement.
28
(d) For
purposes of this Section 5.3, each party shall require their respective counsel
to cooperate to the same extent as each party is required to cooperate with
the
other party.
(e) Without
limiting the generality of the undertakings pursuant to this Section 5.3 and
subject to appropriate confidentiality protections and limitations set forth
in
Section 5.3(b) above, CCE, ETP and their respective Affiliates shall each
furnish to the parties to this Agreement such necessary information and
reasonable assistance a party may request in connection with the foregoing
and,
upon reasonable request shall each provide counsel for the other party with
copies of all filings made by such party or such Affiliate, and all
correspondence between such party or such Affiliate (and its advisors) with
any
Governmental Authority and any other information supplied by such party and
such
party’s Affiliates to a Governmental Authority in connection with this Agreement
and the transactions contemplated hereby, provided,
however,
that
materials may be redacted (i) to remove references concerning the valuation
of
TPC, (ii) as necessary to comply with contractual arrangements and (iii) to
remove information that is proprietary; and provided
further,
that
information protected by the attorney client, work product privilege, or any
other applicable privilege, shall be exchanged in a manner so as to preserve
any
such privilege. CCE and ETP agree to inform each other of all communications
with any Governmental Authority.
Section
5.4 Further
Assurances.
On and
after the Closing Date, CCE and ETP shall cooperate and use their respective
commercially reasonable efforts to take or cause to be taken all appropriate
actions and do, or cause to be done, all things necessary or appropriate to
consummate and make effective the transactions contemplated hereby, including
the execution of any additional documents or instruments of any kind, the
obtaining of consents which may be reasonably necessary or appropriate to carry
out any of the provisions hereof and the taking of all such other actions as
such party may reasonably be requested to take by the other party hereto from
time to time, consistent with the terms of this Agreement, in order to
effectuate the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section
5.5 Employee
Matters.
(a) Except
as
provided in the following sentence, on the Closing Date, CCE shall terminate
the
active participation of the Affected Employees in all of the Employee Benefit
Plans listed in Sections 3.12(a) and 3.12(b) of the CCE Disclosure Letter,
except for (i) the Benefit Programs and Agreements listed as Items 5 and 6
in
Section 3.12(b) of the CCE Disclosure Letter, (ii) the TPC VEBA and (iii) the
life and long term disability insurance coverage contemplated by Section 5.5(b).
Prior to the Closing Date, CCE shall, or shall cause TPC to, terminate the
TPC
Severance Plan. CCE shall notify Affected Employees of the termination of such
active participation and the termination of the TPC Severance Plan prior to
the
Closing Date. Subject to the provisions of this Agreement, after the Closing
Date, TPC shall be solely responsible for all obligations and Liabilities with
respect to the Benefit Programs and Agreements listed as Items 5 and 6 in
Section 3.12(b) of the CCE Disclosure Letter, the TPC VEBA, the retiree medical
benefits addressed in Section 5.5(e), the accrued vacation days addressed in
Section 5.5(c), the flexible benefit plan accounts addressed in Section 5.5(h),
and each employee benefit policy, plan, agreement or arrangement that TPC,
ETP
or an Affiliate of either establishes, maintains or contributes to with respect
to the TPC Employees, on or after the
29
Closing
Date, and no such obligations or Liabilities shall be assumed or retained by
CCE
or its Affiliates. ETP shall, or shall cause TPC to, honor any continuing pay
or
salary obligations and any applicable legal or contractual rights to
reinstatement with respect to all Affected Employees. Except as provided in
the
preceding provisions of this Section 5.5(a) and in Section 5.5(e), CCE shall
retain all obligations or Liabilities and assets with respect to current and
former TPC Employees and any Shared Service Employees who do not become
Transferring Shared Service Employees in accordance with Section 5.5(g) or
otherwise under all of the Employee Benefit Plans listed in Sections 3.12(a)
and
3.12(b) of the CCE Disclosure Letter and all other employee benefit plans,
policies and arrangements of CCE and its ERISA Affiliates, and no such
obligations or Liabilities shall be assumed or retained by ETP or its
Affiliates, including after the transactions contemplated hereby,
TPC.
(b) Any
Affected Employee who is unable to report to work with TPC as of the Closing
Date due to disability shall continue to be eligible for any applicable
long-term disability and life insurance coverage pursuant to CCE’s or PEPL’s
long-term disability and life insurance plans until such time, if any, as such
Affected Employee returns to active employment with TPC; provided, however,
that
in order to be eligible for such benefits, each such Affected Employee, pending
approval for long-term disability benefits or return to active employment,
must
continue to pay all applicable long-term disability and life insurance premiums
due following the Closing Date for such coverage. ETP shall, or shall cause
TPC
to, pay Affected Employees who are on short-term disability as of the Closing
Date the short-term disability benefits that apply under the short-term
disability program that covers the TPC Employees as of the date of this
Agreement. Any Affected Employees who are on short-term disability as of the
Closing Date but who subsequently transition to long-term disability shall
be
eligible for, and covered by, CCE’s or PEPL’s, as applicable, long-term
disability and life insurance coverages but not ETP’s long-term disability and
life insurance coverages, subject to the provisions of this Section 5.5(b).
(c) For
no
less than one year following the Closing Date, ETP shall, and shall cause TPC
to, provide to Affected Employees those employee benefits that are provided
by
ETP to its similarly situated employees except with respect to short-term
disability benefits, as provided in Section 5.5(b). With respect to those
employee benefit plans of TPC, ETP or their Affiliates in which Affected
Employees may participate on or after the Closing Date (“ETP
Plans”),
ETP
shall cause the ETP Plans to credit prior service of the Affected Employees
with
TPC, PEPL and the Affiliates of either, past or present, for purposes of
eligibility and vesting under ETP Plans and for all purposes with respect to
any
vacation, sick days, severance and post-retirement medical benefits; provided,
however, that such service need not be credited to the extent it would result
in
a duplication of benefits. Following the Closing Date, ETP shall, or shall
cause
TPC to, honor the accrued vacation days of the Affected Employees that remain
unused as of the Closing Date to the extent such accruals are shown, either
as
accruals for TPC Employees or full-time equivalent employees providing services
to TPC, on the Closing Balance Sheet. Affected Employees shall also be given
credit for any deductible or co-insurance payment amounts payable in respect
of
the ETP Plan year in which the Closing Date occurs, to the extent that,
following the Closing Date, they participate in any ETP Plan during such plan
year for which deductibles or co-payments are required. Any preexisting
condition restrictions and waiting period limitations that were deemed satisfied
with respect to a particular person under
30
any
Employee Benefit Plan or any other benefit plan that covered a Transferring
Shared Service Employee immediately prior to the Closing Date shall be deemed
satisfied by ETP and its Affiliates under ETP Plans with respect to such person
on and after the Closing Date. The provisions of this Section 5.5(c) and Section
5.5(f) shall not alter the status of the Affected Employees as at-will employees
of TPC or its Affiliates. Except as otherwise contemplated by this Agreement,
the provisions of this Section 5.5(c) and Section 5.5(f) shall not affect the
right of TPC, ETP or any of their Affiliates to amend or terminate any of their
employee benefit plans, programs or arrangements with respect to ETP employees
generally.
(d) ETP
shall
be responsible for all Liabilities and obligations under the Worker Adjustment
and Retraining Notification Act and similar foreign, state and local rules,
statutes and ordinances resulting from the actions of ETP or TPC after the
Closing Date. ETP agrees to hold CCE harmless in accordance with Article VIII
for any breach of such responsibility and ETP’s indemnification of CCE in this
regard specifically includes any Claim by the Affected Employees for back pay,
front pay, benefits or compensatory or punitive damages, any Claim by any
Governmental Authority for penalties regarding any issue of prior notification
(or lack thereof) of any plant closing or mass layoff occurring after the
Closing Date and CCE’s costs, including reasonable attorney’s fees, in defending
any such Claims.
(e) TPC
has
established the TPC VEBA, the assets and liabilities of which will be retained
by TPC as of the Closing Date. TPC is or will be responsible for those
post-retirement medical benefits described in Section 3.12(e)(vii) of the CCE
Disclosure Letter or described in and/or valued under the CCE FAS 106 Report.
In
addition to the CCE FAS 106 Report, the Enron Inactive Medical Plan sets forth
eligibility requirements relating to post-retirement medical benefits available
to eligible current and former employees and retirees of TPC (and their eligible
spouses, surviving spouses and dependents). The post-retirement medical benefits
that TPC currently provides to eligible retirees (and their eligible spouses,
surviving spouses and dependents) are described in the CCE Under Age 65 SPD
and
the CCE Medicare Eligible SPD. The employer subsidies that TPC currently makes
available under cost sharing arrangements with respect to post-retirement
medical benefits are described in the CCE FAS 106 Report as well as in a
November 9, 2005 letter to then current TPC employees who had satisfied
applicable age, service and hire date eligibility requirements. Both the CCE
FAS
106 Report and the November 9, 2005 letter describe fixed dollar per year of
service employer subsidies for eligible post-1989 retirees (and their eligible
spouses, surviving spouses and dependents). The CCE FAS 106 Report describes
a
60 percent employer subsidy for eligible pre-1990 retirees (and their eligible
spouses, surviving spouses and dependents). True and complete copies of the
CCE
FAS 106 Report, the Enron Inactive Medical Plan, the CCE Under Age 65 SPD and
the CCE Medicare Eligible SPD, as well as the November 9, 2005 letter have
been
provided to ETP. Effective as of the Closing Date, ETP shall, or shall cause
TPC
to, establish a plan to provide post-retirement medical benefits to eligible
current and former employees and retirees of TPC (and their eligible spouses,
surviving spouses and dependents). The eligibility requirements and employer
subsidies under such plan shall be as described in the CCE FAS 106 Report and/or
the Enron Inactive Medical Plan, and such eligibility requirements and employer
subsidies shall be applied to all Affected Employees, including all Transferring
Shared Service Employees, with such Transferring Shared Service Employees
receiving prior service credit in accordance with the provisions of Section
5.5(c). Any provision of this
31
Agreement
to the contrary notwithstanding, TPC shall, and ETP shall cause TPC to, take
all
actions with respect to the partition and distribution of assets and liabilities
associated with the Enron VEBA as may be required of TPC by, or contemplated
with respect to TPC under, any order of the Bankruptcy Court relating to the
Enron VEBA Motion or any order of any other court of competent jurisdiction
relating to the partition of assets held under the Enron VEBA and/or the
distribution of liabilities associated with the Enron VEBA. For the avoidance
of
doubt, pursuant to the preceding sentence, TPC shall assume liabilities and
the
TPC VEBA shall receive certain allocated assets with respect to current and
former employees and retirees of TPC, former employees and retirees of former
affiliates of TPC who provided services to TPC, and their respective eligible
spouses, surviving spouses and dependents, all in accordance with the terms
of
an order relating to the Enron VEBA Motion or any other order of a court of
competent jurisdiction relating to the partition and distribution of assets
and
liabilities under the Enron VEBA, and all such individuals shall be eligible
to
participate in the post-retirement medical benefits plan established by TPC
or
ETP under this Section 5.5(e). Except as otherwise indicated in Section
3.12(e)(vii) of the CCE Disclosure Letter or as otherwise required by Applicable
Law or the provisions of a final order entered in connection with the Enron
VEBA
Motion or by another court of competent jurisdiction relating to the partition
and distribution of assets and liabilities under the Enron VEBA, nothing in
this
Agreement shall prohibit TPC or CCE from
exercising their respective rights as the sponsor of TPC’s post-retirement
medical benefits program
to amend, modify or terminate the benefits provided thereunder, whether before
or after the Closing Date; provided, however, that between the date hereof
and
the Closing Date, CCE shall not amend its post-retirement medical benefits
program to increase the benefits provided thereunder, reduce retiree
contribution or premium rates for coverage thereunder or expand eligibility
under such programs.
(f) In
the
event that, on the Closing Date or during the Continuation Period, (i) the
employment of an Affected Employee is terminated by TPC, ETP or an Affiliate
of
either other than For Cause, (ii) TPC, ETP or an Affiliate of either fails
to
provide an Affected Employee with at least the same level of Base Compensation
as was in effect immediately prior to the Closing Date, or (iii) without the
consent of an Affected Employee, TPC, ETP or an Affiliate of either changes
the
primary work location of such Affected Employee to a location that is more
than
50 miles away from the Affected Employee’s primary work location immediately
prior to the Closing Date, ETP shall be responsible for and shall pay to such
Affected Employee, in a lump sum payment, not later than sixty (60) days
following the date of the Affected Employee’s termination of employment, the
following severance benefits (the “Severance
Benefits”):
two
(2) weeks of the Affected Employee’s Base Compensation for each full or partial
year of service measured from the Affected Employee’s date of hire reflected in
Section 5.5(g) of the CCE Disclosure Letter, not to exceed fifty-two (52) weeks
of such Base Compensation; provided, however, that in no event shall such
Severance Benefits be less than eight (8) weeks of such Base Compensation.
The
costs incurred directly or indirectly in connection with the termination of
employment of any Affected Employee on or after the Closing Date shall be borne
exclusively by ETP. ETP’s obligation to provide the Severance Benefits shall be
subject to the Affected Employee’s execution of a release of all claims against
TPC, ETP and the Affiliates of either, and CCE, PEPL and the Affiliates of
either, in a form reasonably satisfactory to ETP and CCE. For purposes of this
Section 5.5(f), “Continuation
Period”
shall
mean the one-year period following the Closing Date. For purposes of this
Section
32
5.5,
“For
Cause” shall
mean (i) the commission by the Affected Employee of a criminal or other act
that
causes or is reasonably likely to cause substantial economic damage to TPC
or
substantial injury to the business reputation of TPC, (ii) the commission by
the
Affected Employee of an act of fraud, theft or financial dishonesty in the
performance of the Affected Employee’s duties on behalf of TPC, (iii) the
continuing failure or continuing refusal of the Affected Employee to
satisfactorily perform the duties of the Affected Employee to TPC, (iv) the
material disregard or violation by the Affected Employee of the legal rights
of
any employees of TPC or of TPC’s written policies regarding harassment or
discrimination, or (v) any other conduct materially detrimental to TPC’s
business. For purposes of this Section 5.5(f), “Base
Compensation”
shall
mean an Affected Employee’s base hourly wages or base salary, as applicable, at
termination of employment; provided, however, that in no event shall an Affected
Employee’s Base Compensation for purposes of calculating the Severance Benefits
provided for under this Section 5.5(f) be less than such Affected Employee’s
base hourly wages or base salary, as applicable, in effect as of the date of
this Agreement. For the avoidance of doubt, two weeks of each Affected
Employee’s Base Compensation as of the date of this Agreement is reflected in
the “BiWkly Salary” columns in Section 5.5(g) of the CCE Disclosure
Letter.
(g)
Section
5.5(g) of the CCE Disclosure Letter sets forth a list of the TPC Employees
as of
the date hereof, including each such TPC Employee’s current annual base
compensation, annual bonus, job title, work location, hire date, and vacation
balance as of the date of this Agreement, as well as two weeks of each such
TPC
Employee’s Base Compensation as of the date of this Agreement, as reflected in
the “BiWkly Salary” columns, for purposes of Section 5.5(f). Also listed in
Section 5.5(g) of the CCE Disclosure Letter, as it may be amended as
contemplated by this Section 5.5(g), are employees of CCES or PEPL on the date
of this Agreement, who provide services to TPC, and who are being made available
for transfer to TPC on the date immediately preceding the Closing Date pursuant
to the provisions of this Section 5.5(g) (“Shared
Service Employees”).
With
respect to each Shared Service Employee, Section 5.5(g) of the CCE Disclosure
Letter sets forth, as of the date hereof, such Shared Service Employee’s current
annual base compensation, annual bonus, job title, work location, hire date,
and
vacation balance as of the date of this Agreement, as well as two weeks of
each
such Shared Service Employee’s Base Compensation as of the date of this
Agreement, as reflected in the “BiWkly Salary” columns, for purposes of Section
5.5(f). In the event that CCE or ETP requests that the list of Shared Service
Employees be amended, by adding an employee to the list or deleting an employee
from the list within the first thirty (30) days following the execution of
this
Agreement, the parties agree to negotiate in good faith to determine if such
request can be accommodated. Not later than thirty (30) days following the
execution of this Agreement, ETP may identify to CCE, in writing, not more
than
five (5) Shared Service Employees who shall not be transferred to TPC. Each
Shared Service Employee not so identified by ETP shall be considered a
“Transferring
Shared Service Employee” under
this Agreement. All of the Transferring Shared Service Employees shall be
transferred to TPC, and become employees of TPC, on the date preceding the
Closing Date. CCE shall pay, or CCE shall cause CCES or PEPL, as applicable,
to
pay any severance costs relating to any Shared Service Employees who do not
become Transferring Shared Service Employees under the preceding provisions
of
this Section 5.5(g). In accordance with the provisions of Section 5.5(f), ETP
shall pay the Severance Benefits, if any, relating to any Shared Service
Employees who become Transferring Shared Service Employees under the preceding
provisions of this Section 5.5(g). ETP shall, or shall
33
cause
TPC
to, pay each Affected Employee a base hourly wage or base salary, as applicable,
that is not less than his or her base hourly wage or base salary, as applicable,
in effect with TPC, CCES or PEPL, as applicable, immediately prior to the
Closing Date. CCE agrees that, within the thirty (30) day period following
the
execution of this Agreement, neither CCES nor PEPL shall terminate the
employment of any Shared Service Employee other than For Cause, without the
written consent of ETP. CCE further agrees that, prior to the Closing Date,
neither CCES nor PEPL shall terminate the employment of any Transferring Shared
Service Employee other than For Cause, without the written consent of ETP.
(h) As
soon
as administratively feasible after the Closing Date, CCE and PEPL shall transfer
to ETP’s flexible benefits plan, an amount, in cash, equal to any health care
and dependent care balances standing to the credit of Affected Employees under
the CCE and PEPL flexible benefit plans (the “CCE
Flex Plans”)
as of
the day immediately preceding the Closing Date, and ETP shall, or shall cause
TPC to, reimburse Affected Employees for all eligible health and dependent
care
expenses that would otherwise be payable under the terms of the CCE Flex Plans
on or after the Closing Date. As soon as administratively feasible after the
Closing Date, CCE shall provide to ETP a list of those Affected Employees who
have participated in the health or dependent care reimbursement accounts under
the CCE Flex Plans, together with their elections made prior to the Closing
Date
with respect to such accounts, and balances standing to their credit as of
the
day immediately prior to the Closing Date.
(i) Affected
Employees will be eligible to participate in the Energy Transfer Partners Profit
Sharing and 401(k) Plan (the “ETP
401(k) Plan”)
following the Closing Date. ETP shall take reasonable measures designed to
facilitate the ETP 401(k) Plan’s acceptance from any Affected Employee of a
rollover or direct rollover of all of his or her account balances under the
CrossCountry Energy Savings Plan 001, the CrossCountry Energy Savings Plan
002
and/or the Southern Union Savings Plan (each a “CCE
Defined Contribution Plan”),
including his or her loan balances and related loan documentation under the
CCE
Defined Contribution Plan(s); provided that an Affected Employee shall only
be
permitted to roll over his or her loan balances and related loan documentation
if the Affected Employee makes a rollover or direct rollover of all of his
or
her account balances under the CCE Defined Contribution Plan or Plans which
include the Affected Employee’s outstanding loan balances. The trustee or
recordkeeper of CCE’s Defined Contribution Plans shall transfer to the trustee
or recordkeeper of the ETP 401(k) Plan any loan documentation for loans to
be
rolled over or transferred to the ETP 401(k) Plan pursuant to the provisions
of
this Section 5.5(i). The provisions of this Section 5.5(i) shall not be
construed to require that any Affected Employee roll over or otherwise transfer
his or her account balances under a CCE Defined Contribution Plan to the ETP
401(k) Plan. CCE shall, or shall cause PEPL to, fully vest the account balances
of all Affected Employees under the CCE Defined Contribution Plans.
(j) Notwithstanding
any provisions of the Southern Union Company Annual Incentive Plan (the
“Annual
Incentive Plan”)
to the
contrary, no payment for the 2006 Plan Year (as defined in the Annual Incentive
Plan) shall be made to any Affected Employee, and including any accelerated
payment pursuant to Section VI of the Annual Incentive Plan), except as provided
in this Section 5.5(j). On or before March 15, 2007, ETP shall, or shall cause
TPC to, pay to the Affected Employees the amount determined by multiplying,
the
sum of the total of
34
the
amounts reflected in the “Amount at Midpt” column for the TPC Employees as set
forth in Section 5.5(g) of the CCE Disclosure Letter plus the total of the
amounts reflected in the “Amount at Midpt” column for the Shared Service
Employees who become Affected Employees as set forth in Section 5.5(g) of the
CCE Disclosure Letter (as it may be amended pursuant to Section 5.5(g)), by
a
fraction, the numerator of which is the number of completed calendar months
in
2006 occurring on or before the Closing Date, and the denominator of which
is
twelve (12). Each such Affected Employee who is employed by ETP, TPC or an
affiliate of either on the date that the amount determined under the preceding
sentence is paid shall receive a percentage, that is not less than nor greater
than the percentage reflected in the individual Affected Employee’s “Target
Bonus Range,” of such Affected Employee’s “Annual Salary” as reflected in
Section 5.5(g) of the CCE Disclosure Letter (as it may be amended pursuant
to
Section 5.5(g)), multiplied by a fraction, the numerator of which is the number
of completed calendar months in 2006 occurring on or before the Closing Date,
and the denominator of which is twelve (12). Notwithstanding the foregoing
provisions of this Section 5.5(j), no payments for the 2006 Plan Year under
the
Annual Incentive Plan shall be made to the extent that they are not accrued
for
the Annual Incentive Plan on the Closing Balance Sheet.
(k) Until the Closing Date, CCE shall provide ETP an opportunity to particpate
with TPC as a participating employer in discussions regarding the Enron VEBA
Motion, including the allocation of assets and liabilities to TPC thereunder,
and in settlement negotiations, if any, relating to any proceeding in another
court of compentent jurisdiction relating to the partition and distribution
of
assets and liabilitites under the Enron VEBA.
Section
5.6 Tax
Covenants.
(a) Tax
Return Filings, Refunds, and Credits.
(i) CCE
shall
timely prepare and file (or cause such preparation and filing) with the
appropriate Tax authorities all Tax Returns (including any Consolidated Income
Tax Returns) due on or before the 30th day following the Closing Date required
to be filed by or on behalf of TPC (and make all elections with respect to
such
Tax Returns) for Tax periods that end on or before the Closing Date, and CCE
may
timely prepare and file (or cause such preparation and filing) with the
appropriate Tax authorities all other Tax Returns (including any Consolidated
Income Tax Returns) required to be filed by or on behalf of TPC (and make all
elections with respect to such Tax Returns) for Tax periods that end on or
before the Closing Date (all such returns required to be prepared and filed
or
actually prepared and filed by CCE, the “CCE
Returns”).
(ii) ETP
shall
timely prepare and file (or cause such preparation and filing) with the
appropriate Tax authorities all Tax Returns (the “Straddle
Period Returns”)
required to be filed by or on behalf of TPC (and make all elections with respect
to such Tax Returns) for all Tax periods ending after the Closing Date that
include the Closing Date (the “Straddle
Period”),
and
ETP shall timely prepare and file (or cause such preparation and filing) with
the appropriate Tax authorities all Tax Returns required to be filed by or
on
behalf of TPC (and make all elections with respect to such Tax Returns) for
Tax
periods that end on or before the Closing Date, other than CCE Returns (all
such
returns required to be prepared and filed by ETP, the “ETP
Returns”).
All
ETP Returns shall be prepared in accordance with past practice to the extent
consistent with applicable law and the operations of TPC. ETP shall provide
CCE
with copies of any ETP Returns at least forty-five (45) days prior to the due
date thereof (giving effect to any extensions thereto), accompanied by a
statement (the “Straddle
35
Statement”)
setting forth and calculating in reasonable detail the Pre-Closing Taxes as
defined below. If CCE agrees with the ETP Return and Straddle Statement, the
amount of Pre-Closing Taxes shall be as shown thereon. If, within fifteen (15)
days of the receipt of the ETP Return and Straddle Statement, CCE notifies
ETP
that it disputes the manner of preparation of the ETP Return or the amount
calculated in the Straddle Statement, and provides ETP its proposed form of
ETP
Return, a statement setting forth and calculating in reasonable detail the
Pre-Closing Taxes, and a written or oral explanation of the reasons for its
adjustment, then ETP and CCE shall attempt to resolve their disagreement within
the five (5) days following CCE’s notification or ETP of such disagreement. If
ETP and CCE are unable to resolve their disagreement, the dispute shall be
submitted to a mutually agreed upon nationally recognized independent accounting
firm, whose expense shall be borne equally by ETP and CCE, for resolution within
twenty (20) days of such submission. The decision of such accounting firm with
respect to such dispute shall be binding upon ETP and CCE.
(iii) From
and
after the Closing Date, ETP and its Affiliates (including TPC) will not file
any
amended Tax Return, carryback claim or other adjustment request by or on behalf
of TPC for any Tax period that includes or ends on or before the Closing Date
unless CCE consents in writing.
(iv) For
purposes of this Agreement, in the case of any Taxes of TPC that are payable
with respect to any Straddle Period, the portion of any such Taxes that
constitutes “Pre-Closing
Taxes”
shall
be the excess of (A) (i) in the case of Taxes that are either (x) based upon
or
related to income or receipts or (y) imposed in connection with any sale,
transfer or assignment or any deemed sale, transfer or assignment of property
(real or personal, tangible or intangible) be deemed equal to the amount that
would be payable if the Tax period ended at the close of business on the Closing
Date and (ii) in the case of Taxes (other than those described in clause (i))
imposed on a periodic basis with respect to the business or assets of TPC,
be
deemed to be the amount of such Taxes for the entire Straddle Period (or, in
the
case of such Taxes determined on an arrears basis, the amount of such Taxes
for
the immediately preceding Tax period) multiplied by a fraction the numerator
of
which is the number of calendar days in the portion of the Straddle Period
ending on and including the Closing Date and the denominator of which is the
number of calendar days in the entire Straddle Period over (B) any prepayment
or
advances of Taxes or any payments of estimated Taxes with respect to the
Straddle Period. For purposes of clause (i) of the preceding sentence, any
exemption, deduction, credit or other item that is calculated on an annual
basis
shall be allocated to the portion of the Straddle Period ending on the Closing
Date on a pro rata basis determined by multiplying the total amount of such
item
allocated to the Straddle Period by a fraction, the numerator of which is the
number of calendar days in the portion of the Straddle Period ending on the
Closing Date and the denominator of which is the number of calendar days in
the
entire Straddle Period. In the case of any Tax based upon or measured by capital
(including net worth or long-term debt) or intangibles, any amount thereof
required to be allocated under this Section 5.6(a)(iv) shall be computed by
reference to the level of such items at the close of business on the Closing
Date. The parties hereto will, to the extent permitted by Applicable Law, elect
with the relevant Tax authority to treat a portion of any Straddle Period as
a
short taxable period ending as of
36
the
close
of business on the Closing Date. For purposes of this Agreement, “Post-Closing
Taxes”
shall
include any Taxes of TPC that are payable with respect to a Straddle Period,
except for the portion of any such Taxes that constitutes Pre-Closing Taxes.
For
purposes of this Agreement, the Texas corporate franchise tax determined based
on the income or capital of any entity for the year during which the Closing
Date occurs shall be considered to be a Tax due with respect to the Straddle
Period.
(v) CCE
and
ETP shall reasonably cooperate in preparing and filing all Tax Returns required
to be filed by or on behalf of TPC, including maintaining and making available
to each other all records reasonably necessary in connection with Taxes of
TPC
and in resolving all disputes and audits with respect to all Tax periods
relating to Taxes of TPC.
(vi) For
a
period of six (6) years after the Closing Date, CCE and its representatives
shall have reasonable access to the books and records (including the right
to
make extracts thereof) of TPC to the extent that such books and records relate
to Taxes and to the extent that such access may reasonably be required by CCE
in
connection with matters relating to or affected by the operation of TPC prior
to
the Closing Date. Such access shall be afforded by ETP upon receipt of
reasonable advance notice and during normal business hours. If ETP shall desire
to dispose of any of such books and records prior to the expiration of such
six-year period, ETP shall, prior to such disposition, give CCE a reasonable
opportunity, at CCE’s expense, to segregate and remove such books and records as
CCE may select.
(vii) If
a Tax
Indemnified Party receives a refund or credit or other reimbursement with
respect to Taxes for which it was indemnified under this Agreement, the Tax
Indemnified Party shall pay over such refund or credit or other reimbursement
to
the Tax Indemnifying Party.
(viii) ETP
shall
not, and shall cause TPC to not, make, amend or revoke any Tax election if
such
action would adversely affect any of CCE or its Affiliates with respect to
any
Tax period ending on or before the Closing Date or for the Pre-Closing Period
or
any Tax refund with respect thereto unless ETP and its Affiliates indemnify
and
make CCE and its Affiliates whole for any detriment or cost incurred (or to
be
incurred) by them as a result of such action.
(ix) For
purposes of this Agreement a “Consolidated
Income Tax Return”
is
any
income Tax Return filed with respect to any consolidated, combined, affiliated
or unified group provided for under Section 1501 of the Code and the Treasury
regulations under Section 1502 of the Code, or any comparable provisions of
state or local law, other than any income Tax Return that includes only
TPC.
(b) Indemnity
for Taxes.
(i) CCE
hereby agrees to indemnify ETP and its affiliates against and hold them harmless
from and against all liability for (A) all Taxes that are attributable to CCE
or
any member of an affiliated, consolidated, combined or unitary Tax group of
37
which
TPC
(or any direct or indirect predecessor(s) of TPC) was a member at any time
on or
prior to the Closing Date and not after the Closing Date that is imposed under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign Tax law), except to the extent reflected on the TPC Six Month Interim
Financial Statements, (B) any Taxes of TPC incurred as a transferee or a
successor relating to any full or partial Tax period ending on or before the
Closing Date, except to the extent reflected on the TPC Six Month Interim
Financial Statements, (C) CCE’s portion of Transfer Taxes pursuant to Section
5.6(f), and (D) any Damages arising out of, resulting from, or incurred in
connection with any breach or inaccuracy of any representation or warranty
set
forth in Section 3.16; provided,
however,
that
the determination of whether such a breach or inaccuracy of Section 3.16(c),
(d), or (e) occurred will be made without the Material Adverse Effect
qualifications contained therein.
(ii) ETP
hereby agrees to indemnify CCE and its Affiliates against and hold them harmless
from all liability for (A) all Taxes of TPC with respect to all Tax periods
beginning after the Closing Date, (B) Post-Closing Taxes with respect to any
Straddle Period, (C) ETP’s portion of Transfer Taxes pursuant to Section 5.6(f),
(D) all Taxes imposed on TPC with respect to Tax periods ending on or before
the
Closing Date, and (E) Pre-Closing Taxes with respect to any Straddle
Period.
(iii) The
obligation of CCE to indemnify and hold harmless ETP, on the one hand, and
the
obligations of ETP to indemnify and hold harmless CCE, on the other hand,
pursuant to this Section 5.6, shall terminate upon the expiration of the
applicable statutes of limitations with respect to the Tax Liabilities in
question (giving effect to any waiver, mitigation or extension thereof) or
if a
Claim is brought with respect thereto, until such time as such Claim is
resolved.
(c) Certain
Payments.
ETP and
CCE agree to treat (and cause their Affiliates to treat) any payment by CCE
under Section 5.6(b) as an adjustment to the property distributed by CCE to
ETP
in redemption of the 50% CCE Interest for all Tax purposes.
(d) Contests.
(i) After
the
Closing Date, CCE and ETP each shall notify the other party in writing within
ten (10) days of the commencement of any Tax audit or administrative or judicial
proceeding affecting the Taxes of TPC that, if determined adversely to the
taxpayer (the “Tax
Indemnified Party”)
or
after the lapse of time would be grounds for indemnification under this Section
5.6 by the other party (the “Tax
Indemnifying Party”
and
a
“Tax
Claim”).
Such
notice shall contain factual information describing any asserted Tax liability
in reasonable detail and shall include copies of any notice or other document
received from any Tax authority in respect of any such asserted Tax liability.
Failure to give such notification shall not affect the indemnification provided
in this Section 5.6 except to the extent the Tax Indemnifying Party shall have
been prejudiced as a result of such failure (except that the Tax Indemnifying
Party shall not be liable for any expenses incurred during the period in which
the Tax Indemnified Party failed to give such notice). Thereafter, the Tax
Indemnified Party shall deliver to the Tax Indemnifying Party, as promptly
as
possible but in no event later than ten (10)
38
days
after the Tax Indemnified Party’s receipt thereof, copies of all relevant
notices and documents (including court papers) received by the Tax Indemnified
Party.
(ii) In
the
case of an audit or administrative or judicial proceeding involving any asserted
liability for Taxes relating to any Taxable years or periods ending on or before
the Closing Date, CCE shall have the right, at its expense, to control the
conduct of such audit or proceeding; provided,
however,
that if
CCE does not timely take control of such audit or proceeding, ETP may, at its
expense, control the conduct of the audit or proceeding. In the case of an
audit
or administrative or judicial proceeding involving any asserted liability for
Taxes relating to any Straddle Period, ETP shall have the right, at its expense,
to control the conduct of such audit or proceeding; provided,
however,
that
(A) ETP shall keep CCE reasonably informed with respect to the status of such
audit or proceeding and provide CCE with copies of all written correspondence
with respect to such audit or proceeding in a timely manner and (B) if such
audit or proceeding would be reasonably expected to result in a material
increase in Tax liability of TPC for which CCE would be liable under this
Section 5.6, CCE may participate in the conduct of such audit or proceeding
at
its own expense.
(iii) In
the
case of an audit or administrative or judicial proceeding involving any asserted
liability for Taxes relating to any Taxable years or periods beginning after
the
Closing Date, ETP shall have the right, at its expense, to control the conduct
of such audit or proceeding.
(iv) ETP
and
CCE shall reasonably cooperate in connection with any Tax Claim, and such
cooperation shall include the provision to the Tax Indemnifying Party of records
and information that are reasonably relevant to such Tax Claim and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
(e) Transfer
and Similar Taxes.
Notwithstanding any other provisions of this Agreement to the contrary, all
sales, use, transfer, gains, stamp, duties, recording and similar Taxes, but
not
including any Federal or state income taxes (collectively, “Transfer
Taxes”)
incurred in connection with the transactions contemplated by this Agreement
shall be borne equally by ETP and CCE, and CCE shall accurately file all
necessary Tax Returns and other documentation with respect to Transfer Taxes
and
timely pay all such Transfer Taxes. If required by Applicable Law, ETP will
join
in the execution of any such Return. CCE shall provide copies of any Tax Returns
with respect to Transfer Taxes to ETP no later than five (5) days after the
due
dates of such Tax Returns.
(f) Termination
of Tax Sharing Agreements.
On or
prior to the Closing Date, CCE shall cause all Tax sharing agreements between
CCE or any of its Affiliates (as determined immediately after the Closing Date)
on the one hand, and TPC on the other hand, to be terminated, and all
obligations thereunder shall be settled, and no additional payments shall be
made under any provisions thereof after the Closing Date.
Section
5.7 Control
of Administrative and Regulatory Proceedings.
CCE and
ETP agree and acknowledge that, up to the Closing Date, CCE shall be entitled
to
control, defend and
39
otherwise
conduct any administrative or regulatory proceeding involving TPC. CCE will
use
commercially reasonable efforts to, and will cause TPC to, conduct any
administrative or regulatory proceeding in a manner that is intended to maximize
the value of TPC on and after the Closing Date. The Parties agree and
acknowledge that, prior to the Closing Date, ETP shall be entitled to
participate at its expense in any administrative or regulatory proceeding,
meeting, or settlement conference, in administrative or regulatory proceedings
involving or affecting TPC. The Parties agree and acknowledge that, after the
Closing Date, ETP will assume control of any administrative or regulatory
proceeding involving or affecting TPC subject to the terms of the TPC Transition
Services Agreement.
Section
5.8 Maintenance
of Insurance Policies.
(a) CCE
and
ETP agree that to the extent the Insurance Policies provide coverage, CCE will
process the Casualty Insurance Claims relating to the business of TPC (including
reported claims and including incurred but not reported claims) and that such
Casualty Insurance Claims shall remain with TPC following the Closing. For
purposes hereof, “Casualty
Insurance Claims”
shall
mean workers’ compensation, auto liability, general liability and products
liability claims and claims for damages caused to the facilities of TPC
generally insured under all risk, real property, boiler and mechanical breakdown
insurance coverage all with dates of occurrence prior to the date of Closing.
The Casualty Insurance Claims are subject to the provisions of the Insurance
Policies with insurance carriers and contractual arrangements with insurance
adjusters maintained by CCE or its Affiliates prior to the Closing. With respect
to the Casualty Insurance Claims where coverage is available under the Insurance
Policies, the following procedures shall apply: (i) CCE or its Affiliates shall
continue to administer, adjust, settle and pay, on behalf of TPC, all Casualty
Insurance Claims; provided, however, that CCE will obtain the consent of ETP
prior to adjusting, settling or paying any Casualty Insurance Claim of an amount
greater than $100,000 and provided further, that CCE shall permit ETP to join
CCE in any settlement negotiations with claimants, insurers, or insurance
adjusters and (ii) CCE shall invoice TPC at the end of each month for Casualty
Insurance Claims paid on behalf of TPC. ETP shall cause TPC to pay the invoice
within thirty (30) days of its date. In the event that TPC does not pay CCE
within thirty (30) days of such invoice, interest at the rate of ten percent
(10%) per annum shall accrue on the amount of such invoice. Casualty Insurance
Claims to be paid by CCE hereunder shall include all costs necessary to settle
claims including compensatory, medical, legal and other allocated expenses,
net
of insurance proceeds. In the event that any Casualty Insurance Claims exceeds
a
deductible or self-insured retention under the Insurance Policies, CCE shall
be
entitled to the benefit of any insurance proceeds that may be available to
discharge any portion of such Casualty Insurance Claim.
(b) After
the
Closing, ETP shall be responsible for, and neither CCE nor any of its Affiliates
shall have any responsibility for, the payment of any deductible amounts or
underlying limits attributable to the Insurance Policies for Casualty Insurance
Claims relating to TPC. ETP acknowledges that certain of the Insurance Policies
may require CCE or any of its Affiliates to provide an indemnity to the
insurance carrier for deductible amounts and to provide collateral to secure
such indemnity obligations. ETP hereby agrees to indemnify and hold harmless
CCE
or any of its Affiliates (as applicable) for any and all of the costs of
maintaining such collateral and for any charges made against such collateral
or
indemnification payments in connection with claims arising or alleged to arise
from the operations of TPC required to be paid
40
by
CCE of
any of its Affiliates (as applicable) under or with respect to such Insurance
Policies from and after the Closing Date.
(c) Other
than as set forth in Section 3.21 hereof, CCE makes no representation or
warranty with respect to the applicability, validity or adequacy of any
Insurance Policies, and CCE shall not be responsible to ETP or any of its
Affiliates for the failure of any insurer to pay under any such Insurance
Policy.
(d) Nothing
in this Agreement is intended to provide or shall be construed as providing
a
benefit or release to any insurer or claims service organization of any
obligation under any Insurance Policies. CCE and ETP confirm that the sole
intention of this Section 5.8 is to divide and allocate the benefits and
obligations under the Insurance Policies between them as of the Closing Date
and
not to affect, enhance or diminish the rights and obligations of any insurer
or
claims service organization thereunder. Nothing herein shall be construed as
creating or permitting any insurer or claims service organization the right
of
subrogation against CCE or ETP or any of their Affiliates in respect of payments
made by one to the other under any Insurance Policy.
(e) If
ETP
requests a copy of an Insurance Policy relating to a pending or threatened
Casualty Insurance Claim, CCE shall provide a copy of all relevant insurance
policies which insure such Casualty Insurance Claims within five (5) Business
Days, provided, however, that if CCE cannot provide such policy within five
(5)
Business Days after exercising commercially reasonable efforts to locate such
policy, CCE shall continue to exercise its commercially reasonable efforts
to
provide such policy to ETP as soon as possible thereafter.
(f) Except
to
the extent specified in this Section 5.8, TPC shall not participate in any
insurance policy or program of CCE or any of its Affiliates following the
Closing.
Section
5.9 Preservation
of Records.
ETP
agrees that it shall, at its own expense, preserve and keep the records held
by
it relating to the business of TPC that could reasonably be required after
the
Closing by CCE for as long as may be required for such categories of records
by
the time periods required by Applicable Law and in accordance with CCE’s
document retention practices. In addition, ETP shall make such records available
to CCE as may reasonably be required by CCE in connection with, among other
things, any insurance claim, legal proceeding or governmental investigation
relating to the respective businesses of CCE and its Affiliates, including
TPC.
Section
5.10 Public
Statements. Neither party shall, nor shall 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, unless such disclosure is required by Applicable Law,
or
by obligations pursuant to any agreement with any national securities exchange;
provided,
however,
that
the party intending to make such release shall give the other parties prior
notice and shall use its commercially reasonable efforts consistent with such
Applicable Law or obligation to consult with the other parties with respect
to
the text thereof.
Section
5.11 Assignment
of Trademarks.
41
(a) Effective
upon the Closing Date, CCE shall assign or cause to be assigned to TPC, the
trademarks, service marks, and trade names listed on Section 5.11 of the CCE
Disclosure Letter, together with all slogans, logotypes, designs and trade
dress
associated therewith, including all applications and registrations therefor,
which are, in each case, in existence on the Closing Date and currently being
used in the conduct of the business of TPC (collectively, the “TPC
Marks”).
(b) CCE
shall
use commercially reasonable efforts to assist ETP in protecting and maintaining
the rights of TPC in connection with use of the TPC Marks by TPC, including
preparation and execution of documents necessary or appropriate in the ordinary
course to register TPC Marks and/or record this Agreement. As between the
parties, ETP shall have the sole right to, and in its sole discretion may,
commence, prosecute or defend, and control any action concerning the TPC Marks.
Section
5.12 Commercially
Reasonable Efforts.
Upon
the terms and subject to the conditions of this Agreement, each of the parties
hereto will use, and will cause their respective Affiliates to use, all
commercially reasonable 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
5.13 Financial
Statements; Financial Records of CCE.
(a) If
Closing does not occur on or prior to September 30, 2006, then CCE shall (i)
no
later than November 15, 2006, prepare and deliver to ETP the CCE Nine Month
Interim Financial Statements, (ii) no later than November 15, 2006, cause TPC
to
prepare and deliver to ETP the TPC Nine Month Interim Financial Statements
and
(iii) no later than December 1, 2006, cause Citrus to prepare and deliver to
ETP
the Citrus Nine Month Interim Financial Statements, and CCE shall cause the
financial statements referred to in clauses (i), (ii) and (iii) of this sentence
to present fairly in all material respects, in accordance with GAAP consistently
applied, the financial condition and results of operation of CCE, Citrus and
TPC, respectively, as of and for the periods set forth therein, subject, in
the
case of the CCE Nine Month Interim Financial Statements, the Citrus Nine Month
Interim Financial Statements and the TPC Nine Month Interim Financial
Statements, to normal recurring year-end adjustments that are not material,
either individually or in the aggregate, and the absence of full footnote
disclosure. If Closing does not occur on or prior to December 31, 2006, then
CCE
(w) no later than March 1, 2007, shall prepare and deliver to ETP the CCE 2006
Financial Statements and the Citrus 2006 Financial Statements, and (x) no later
than March 1, 2007, cause TPC to prepare and deliver to ETP the TPC 2006
Financial Statements. CCE shall cause the financial statements referred to
in
clauses (w) and (x) of the preceding sentence to present fairly in all material
respects, in accordance with GAAP consistently applied, the financial condition
and results of operation of CCE, Citrus and TPC, respectively, as of and for
the
periods set forth therein. No later than (y) November 1, 2006, CCE shall prepare
and deliver to ETP the CCE Stub Period Income Statements and (z) November 1,
2006, cause TPC and Citrus to prepare and deliver to ETP the TPC Stub Period
Financial Statements and the Citrus Stub Period Financial Statements,
respectively. CCE shall cause the financial statements for three month periods
referred to in
42
clauses
(y) and (z) of the preceding sentence to fairly present in all material
respects, in accordance with GAAP consistently applied, subject to normal
recurring year-end adjustments that are not material, either individually or
in
the aggregate, and the absence of full footnote disclosure, and shall cause
the
financial statements for one month periods referred to in clauses (y) and (z)
of
the preceding sentence to be prepared in a manner not inconsistent with the
financial statements for the quarterly period from which such one month
financial statements were taken.
(b) CCE
shall
use commercially reasonable efforts, at ETP’s expense, to (i) cause the CCE
Financial Statements, the Citrus Financial Statements and the TPC Financial
Statements to be modified so that the CCE Financial Statements, the Citrus
Financial Statements and the TPC Financial Statements comply in all material
respects with the requirements of Regulation S-X, as adopted by the SEC, and
(ii) deliver such modified financial statements to ETP (A) no later than
November 1, 2006 in the case of the CCE Annual Financial Statements, the Citrus
Annual Financial Statements, the TPC Annual Financial Statements, the CCE Six
Month Interim Financial Statements, the Citrus Six Month Interim Financial
Statements and the TPC Six Month Interim Financial Statements, (B) no later
than
December 15, 2006 in the case of the CCE Nine Month Interim Financial
Statements, the Citrus Nine Month Interim Financial Statements and the TPC
Nine
Month Interim Financial Statements, (C) no later than March 1, 2007 in the
case
of the CCE 2006 Financial Statements and the Citrus 2006 Financial Statements
and (D) no later than March 15, 2007 in the case of the TPC 2006 Financial
Statements; provided, however, that notwithstanding the foregoing, such modified
financial statements shall only be required to be delivered by CCE to ETP to
the
extent that the corresponding non-modified financial statements contemplated
by
Section 5.13(a) are required to be delivered by CCE to ETP.
(c) CCE
consents to the inclusion or incorporation by reference of the CCE S-X Financial
Statements, the Citrus S-X Financial Statements and the TPC S-X Financial
Statements in any registration statement, report or other document of ETP or
any
of its Affiliates to be filed with the SEC in which ETP or such Affiliates
reasonably determines that the CCE S-X Financial Statements, the Citrus S-X
Financial Statements and/or the TPC S-X Financial Statements are required to
be
included or incorporated by reference to satisfy any rule or regulation of
the
SEC or to satisfy relevant disclosure obligations under the Securities Act
or
the Exchange Act. CCE shall use commercially reasonable efforts to cause
PricewaterhouseCoopers LLP to consent to the inclusion or incorporation by
reference of its audit opinion with respect to the CCE 2006 Financial
Statements, the CCE Annual Financial Statements, the TPC 2006 Financial
Statements, the TPC Annual Financial Statements, the Citrus 2006 Financial
Statements and the Citrus Annual Financial Statements in any such registration
statement, report or other document. CCE shall execute and deliver to
PricewaterhouseCoopers LLP such representation letters, in form and substance
customary for representation letters provided to external audit firms by
management of the company whose financial statements are the subject of an
audit
or are subject of a review pursuant to Statement of Accounting Standards 100
(Interim Financial Information) (or any successor statement related to the
topic
of accountants’ comfort letters), as may be reasonably requested by
PricewaterhouseCoopers LLP, with respect to the CCE S-X Financial Statements,
the Citrus S-X Financial Statements and the TPC S-X Financial Statements. CCE
shall use commercially reasonable efforts to cause PricewaterhouseCoopers to
deliver a comfort letter in form and substance customary with respect to
offerings of securities registered under the Securities Act with respect to
the
CCE S-X
43
Financial
Statements, the Citrus S-X Financial Statements, the TPC S-X Financial
Statements and financial information related to CCE, Citrus and/or TPC that
is
included in a prospectus or offering memorandum related to an offering of
securities of the type for which comfort letters are customarily provided to
the
underwriters or initial purchasers in connection therewith. Any costs related
to
any of the foregoing described in Sections 5.13(b) and (c), including the
preparation of such S-X financial statements, SAS 100 reviews, obtaining any
consent of, or comfort letters from, PricewaterhouseCoopers LLP, shall be borne
by ETP.
(d) CCE
shall, and shall cause its Subsidiaries to, afford to ETP and any of its
Affiliates, and their respective accountants, counsel and representatives full
reasonable access during normal business hours for three years following the
Closing Date to all financial and accounting records, and contracts and other
documentation reasonably related thereto, of CCE and its Subsidiaries, including
Citrus, to the extent (i) such records and other information are not part of
the
books and records of TPC delivered to ETP pursuant to Section 5.2(a) hereof
and
(ii) such records and other information is reasonably necessary for ETP and
any
of its Affiliates in connection with (A) the preparation of pro forma financial
statements related to the transactions contemplated by this Agreement, (B)
the
preparation of any report or other filing required for compliance with federal
or state securities laws, including prospectuses or offering memoranda relating
to securities offerings, by ETP or any of its Affiliates, (C) a subsequent
audit
of the financial statements of CCE or TPC in connection with a change in
external audit firms, (D) a subsequent restatement of the financial statements
of the financial statements of CCE, Citrus or TPC or (E) any inquiry,
investigation or legal proceeding by any Governmental Authority related to
the
financial statements of CCE, Citrus or TPC.
Section
5.14 Covenants
Regarding the 50% CCE Interest.
(a) From
and
after the date of this Agreement until the closing of the transactions
contemplated by the CCE Acquisition Agreement, ETP shall undertake its
commercially reasonable efforts to consummate the transactions contemplated
by
the CCE Acquisition Agreement.
(b) From
and
after the closing of the transactions contemplated by the CCE Acquisition
Agreement until Closing, ETP shall not cause or permit the 50% CCE Interest
to
be subject to any Encumbrances.
Section
5.15 No-Hire/Non-Solicitation.
For a
period of twelve (12) months following the Closing Date, neither ETP, TPC nor
any of their Affiliates shall, directly or indirectly, hire or solicit (with
the
exception of any general solicitation of employment through any general
advertising medium in the ordinary course of business for employment as an
employee or consultant), any employee of CCE or any of its Affiliates, unless
such employee's employment is or has been terminated by CCE and its
Affiliates.
Section
5.16 CCE
Executive Committee. On or immediately prior to the Closing Date, ETP shall
cause any members of the executive committee of CCE designated by ETP to have
(a) agreed to the appointment of successor members to such executive committee
as designated by CCE to take office upon the Closing and (b) submitted their
resignations as members of such executive committee effective upon the
Closing.
44
Section
5.17 Directors’
and Officers’ Indemnification. For a period of not less than six (6) years
after the Closing Date, ETP shall cause the certificate of formation and limited
liability company or other organizational documents of TPC to continue to
include the same provisions concerning the exculpation, indemnification,
advancement of expenses to and holding harmless of, all past and present
employees, officers, agents, managers and directors of TPC for acts or omissions
occurring at or prior to the Closing as are contained in such documents as
of
the date of execution of this Agreement, and ETP shall cause TPC to honor all
such provisions, including making any indemnification payments and expense
advancements thereunder. In the event that any indemnifiable claim is asserted
or made within such six (6) year period, all rights to indemnification and
advancement of expenses in respect of such claim shall continue to the extent
currently permitted under TPC’s certificate of formation and limited liability
company agreement or other organizational documents until such claim is disposed
of or all orders in connection with such claim are fully satisfied. CCE agrees
to submit any such claims for indemnification for acts or omissions that
occurred at or prior to the Closing by any such person to any of its applicable
directors’ and officers’ insurance policy covering the matters that give rise to
any such claim and CCE shall use reasonable efforts to obtain such pre-closing
insurance coverage on behalf of TPC, if available. CCE makes no representation
or warranty with respect to the applicability, validity or adequacy of any
directors’ and officers’ insurance policy covering the matters specified in this
Section 5.17 and CCE shall not be responsible to ETP or any of its Affiliates
for the failure of any insurer to pay under any such directors’ and officers’
insurance policy.
Section
5.18 TPC
Notes. If any of TPC’s $270,000,000 5.39% Senior Unsecured Notes due
November 17, 2014 or $250,000,000 5.54% Senior Unsecured Notes due November
17,
2016 are required to be prepaid in accordance with the terms of the TPC Note
Purchase Agreement due to a Change of Control (as defined therein) of TPC (as
a
result of either the transactions contemplated by this Agreement or the CCE
Acquisition Agreement), ETP shall use its commercially reasonable best efforts
to facilitate TPC’s refinancing of such notes (with the cooperation of CCE) and
ETP shall bear all costs and expenses (including legal fees) associated with
(i)
any consent solicitation for amendments to, or waivers under, the TPC Note
Purchase Agreement and (ii) any credit facility, bond offering or other
financing transaction that is effected to raise funds for the repayment of
such
notes.
ARTICLE
VI
CONDITIONS
Section
6.1 Mutual
Conditions to the Closing.
The
respective obligations of each party to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction or waiver of each of
the
following conditions at or prior to the Closing Date:
(a) All
waiting periods applicable to the transactions contemplated by this Agreement
under any applicable law shall have expired or been terminated, and all filings
required by law to be made prior to Closing by CCE or ETP with, and all
consents, approvals and authorizations required by law to be obtained prior
to
Closing by CCE or by ETP from, any Governmental Authority under any law in
order
to consummate the transactions contemplated by this Agreement shall have been
made or obtained (as the case may be), except where the failure to make such
filings, or to obtain any such authorizations, individually or in the aggregate,
would
45
not
have
a Material Adverse Effect; provided,
however,
if any
consent, approval or authorization from any Governmental Authority the absence
of which would not have a Material Adverse Effect is not obtained prior to
or at
the Closing and, as a result, the transfer of one or more assets, rights or
interests is prevented at the Closing, from and after the Closing, CCE and
ETP
shall continue to use their commercially reasonable efforts to obtain such
requisite consent, approval or authorization;
(b) No
court
of competent jurisdiction or other competent Governmental Authority shall have
issued a statute, rule, regulation, order, decree or injunction or taken any
other action that has the effect of restraining or enjoining the consummation
of
the transactions contemplated hereby or imposing a Burdensome Condition;
and
(c) The
FCC
shall have granted its consent to the transfer of control contemplated by this
Agreement.
Section
6.2 ETP’s
Conditions to the Closing.
The
obligations of ETP to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver of each of the following
conditions at or prior to the Closing Date:
(a) The
representations and warranties of CCE contained in this Agreement (A) if subject
to any limitations as to “materiality” or “Material Adverse Effect” shall be
true and correct at and as of the Closing Date as if made at and as of such
time
(except to the extent expressly made as of an earlier date, in which case as
of
such earlier date), and (B) if not subject to any limitations as to
“materiality” or “Material Adverse Effect,” shall be true and correct at and as
of the Closing Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date)
except where the failure of such representations and warranties to be true
and
correct would not, individually or in the aggregate, reasonably be expected
to
have a Material Adverse Effect;
(b) CCE
and
its Affiliates shall have made all deliveries required under Section
2.5;
(c) CCE
shall
have performed in all material respects all of its obligations required to
be
performed by it under this Agreement at or prior to the Closing Date, and ETP
shall have received a certificate to such effect executed by an officer of
CCE;
(d) ETP
shall
have received a properly executed statement of CCE dated as of the Closing
Date
and conforming to the requirements of Treasury Regulation Section
1.1445-2(b)(2);
(e) TPC
shall
have been fully and unconditionally released as a guarantor of any obligations
of CCE or any of its Affiliates (other than TPC);
(f) ETP
shall
have acquired the 50% CCE Interest pursuant to the CCE Acquisition
Agreement;
(g) CCE
shall
have made the cash distributions as specified in Section 5.1(c);
46
(h) CCE
and
PEPL shall have executed and delivered to ETP the TPC Transition Services
Agreement; and
(i) all
of
the Existing TW Holdings Debt, including all unpaid interest and premiums,
if
any, shall have been repaid.
Section
6.3 CCE’s
Conditions to the Closing.
The
obligations of CCE to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or waiver of each of the following
conditions at or prior to the Closing Date:
(a) The
representations and warranties of ETP contained in this Agreement (A) if subject
to any limitations as to “materiality” or “Material Adverse Effect,” shall be
true and correct at and as of the Closing Date as if made at and as of such
time
(except to the extent expressly made as of an earlier date, in which case as
of
such earlier date), and (B) if not subject to any limitations as to
“materiality” or “Material Adverse Effect,” shall be true and correct at and as
of the Closing Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date)
except where the failure of such representations and warranties to be true
and
correct would not, individually or in the aggregate, reasonably be expected
to
have a material adverse effect on the ability of ETP to consummate the
transactions contemplated by this Agreement;
(b) ETP
shall
have made all deliveries required under Section 2.6;
(c) ETP
shall
have performed in all material respects all of its obligations required to
be
performed by it under this Agreement at or prior to the Closing Date, and CCE
shall have received a certificate to such effect executed by an officer of
ETP;
(d) CCE
shall
have received a properly executed statement of ETP dated as of the Closing
Date
and conforming to the requirements of Treasury Regulation Section
1.1445-2(b)(2);
(e) CCE
shall
have obtained all approvals, consents and releases that are listed in Section
6.3(e) of the CCE Disclosure Letter;
(f) ETP
shall
have acquired the 50% CCE Interest pursuant to the CCE Acquisition Agreement;
and
(g) CCE
shall
have made the cash distributions as specified in Section 5.1(c);
ARTICLE
VII
TERMINATION
AND ABANDONMENT
Section
7.1 Termination.
This
Agreement may be terminated at any time prior to the Closing Date
by:
(a) mutual
written consent of the parties;
47
(b) by
either
ETP or CCE, upon written notice to the other parties, if the Closing shall
not
have occurred on or before February 1, 2007 (the “Initial
Termination Date”);
provided,
however,
that if
on the Initial Termination Date the conditions to closing set forth in Section
6.1(a) and Section 6.1(b) shall not have been fulfilled but are reasonably
capable of being fulfilled no later than March 1, 2007, then, if a written
notice requesting an extension of the termination date has been delivered by
either ETP to CCE, or by CCE to ETP, at any time during the ten business day
period ending on the Initial Termination Date, the termination date shall be
extended to March 1, 2007;
(c) by
either
ETP or CCE upon written notice to the other party, if any of the mutual
conditions to the Closing set forth in Section 6.1 shall have become incapable
of fulfillment by February 1, 2007 or March 1, 2007, as the case may be, and
shall not have been waived in writing by the other party;
(d) by
ETP,
so long as ETP is not then in breach of its obligations under this Agreement,
upon a breach of any covenant or agreement on the part of CCE set forth in
this
Agreement, or if any representation or warranty of CCE shall have been or become
untrue, in each case such that the conditions set forth in Section 6.2 would
not
be satisfied; provided,
however,
that
ETP may not terminate this Agreement if such breach or untruth is capable of
being cured by CCE by not later than February 1, 2007 or March 1, 2007, as
the
case may be, through the exercise of its commercially reasonable efforts, so
long as CCE continues to exercise such commercially reasonable efforts (until
February 1, 2007 or March 1, 2007, as the case may be);
(e) by
CCE,
so long as CCE is not then in breach of its obligations under this Agreement,
upon a breach of any covenant or agreement on the part of ETP set forth in
this
Agreement, or if any representation or warranty of ETP shall have been or become
untrue, in each case such that the conditions set forth in Section 6.3 would
not
be satisfied; provided,
however,
that
CCE may not terminate this Agreement if such breach or untruth is capable of
being cured by ETP by not later than February 1, 2007 or March 1, 2007, as
the
case may be, through the exercise of its commercially reasonable efforts, so
long as ETP continues to exercise such commercially reasonable efforts (until
February 1, 2007 or March 1, 2007, as the case may be); and
(f) by
either
CCE or ETP if any Governmental Authority shall have issued an order, decree
or
ruling or taken any other action, which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement or the
CCE
Acquisition Agreement and which order, decree, ruling or other action is not
subject to appeal; unless failure to consummate closing because of such action
by the Governmental Authority is due to the failure of the party seeking to
terminate to have fulfilled its obligations under Section 5.3 and Section
5.4.
The
right
of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
48
Section
7.2 Effect
of Termination.
If this
Agreement is terminated pursuant to Section 7.1, this Agreement (but not the
Confidentiality Agreement) shall become void and of no effect with no liability
on the part of any party (or any member, stockholder or representative of such
party) to the other party hereto; provided,
however,
that,
if such termination shall result from the willful (i) failure of a party to
fulfill a condition to the performance of the obligations of the other parties,
(ii) failure of a party to perform a material covenant hereof or (iii) breach
by
a party hereto of any representation or warranty or agreement contained herein,
such party shall be fully liable for any and all liabilities and damages
incurred or suffered by the other parties as a result of such willful failure
or
breach; and provided
further,
that
notwithstanding the foregoing or anything else in this Agreement to the
contrary, the provisions of this Section 7.2 and Article IX shall survive any
termination hereof.
ARTICLE
VIII
SURVIVAL;
INDEMNIFICATION
Section
8.1 Survival.
(a) The
representations and warranties provided for in this Agreement shall survive
the
Closing and remain in full force and effect until the twelve-month (12)
anniversary of this Agreement; provided
however,
that
the representations and warranties set forth in Section 3.2 (Authority Relative
to this Agreement), Section 3.3 (TPC Interests), Section 3.19 (Brokerage and
Finders’ Fees), Section 4.2 (Authority Relative to this Agreement), Section 4.3
(50% CCE Interests) and Section 4.8 (Brokerage and Finders’ Fees) shall survive
indefinitely, the representations and warranties set forth in Section 3.16
(Tax
Matters) shall survive for a period equal to the applicable statute of
limitations for each Tax and taxable year, the representations and warranties
set forth in Section 3.15 (Environmental Matters) shall survive until the second
(2nd) anniversary of the Closing Date, and the representations and warranties
set forth in Section 3.12 (Employee Matters) shall survive for a period equal
to
the applicable statutes of limitations with respect to the matters described
therein. Each covenant and agreement of CCE and ETP contained in this Agreement
that by its terms requires performance after the Closing Date shall survive
the
Closing and shall remain in full force and effect until such covenant or
agreement is fully performed.
(b) No
Claim
for damages or other relief of any kind (including a Claim for indemnification
under Section 8.2 hereof) arising against an Indemnified Party out of or
relating to this Agreement or the transactions contemplated hereby, whether
sounding in contract, tort, breach of warranty, securities law, other statutory
cause of action, deceptive trade practice, strict liability, product liability
or other cause of action or theory of liability (except, in all cases Claims
alleging fraud, intentional misrepresentation or intentional misconduct), may
be
brought unless suit thereon is filed, or a written notice describing the nature
of that Claim, the theory of liability, the nature of the relief sought and
the
material factual assertions upon which the Claim is based is given to the other
party, before the termination of the Survival Period.
(c) The
survival period of each representation or warranty as provided in this Section
8.1 is referred to herein as the “Survival
Period.”
Notwithstanding the foregoing, any representation or warranty that would
otherwise terminate shall survive with respect to Damages which respect to
which
suit thereon is filed or of which notice describing the nature of that
49
Claim,
the theory of liability, the nature of the relief sought and the material
factual assertions upon which the Claim is based is given pursuant to this
Agreement prior to the end of the Survival Period, until the matter is finally
resolved and any related Damages are paid.
Section
8.2 Indemnification.
(a) Subject
to the limitations set forth in this Article VIII, subsequent to the Closing,
CCE shall indemnify, defend, save and hold harmless, ETP, TPC, their respective
successors and permitted assigns, and their shareholders, members, partners
(general and limited), officers, directors, managers, trustees, incorporators,
employees, agents, attorneys, consultants and representatives, and each of
their
heirs, executors, successors and assigns (collectively, the “ETP
Indemnified Parties”),
against and in respect of any and all Damages to the extent incurred by the
ETP
Indemnified Party arising out of, resulting from or incurred in connection
with:
(i) any
breach or inaccuracy of any representation or warranty of CCE contained in
this
Agreement;
(ii) any
breach by CCE of any covenant or agreement contained in this Agreement;
and
(iii) any
Third
Party Claim against ETP arising out of or resulting from ETP’s indirect
ownership interests in CrossCountry Citrus, LLC, Citrus Corp. or any
Subsidiaries of Citrus Corp. other than for actions authorized, or intentional
acts of omission, by ETP in its capacity as the Class B Member or by any Class
B
Executive Committee Member under, and as defined in, the CCE LLC Agreement.
(b) Subject
to the limitations set forth in this Article VIII, subsequent to the Closing,
ETP shall indemnify, defend, save and hold harmless, CCE and its Affiliates,
their respective successors and permitted assigns, and their shareholders,
members, partners (general and limited), officers, directors, managers,
trustees, incorporators, employees, agents, attorneys, consultants and
representatives, and each of their heirs, executors, successors and assigns
(collectively, the “CCE
Indemnified Parties”)
against and in respect of any and all Damages to the extent incurred by the
CCE
Indemnified Party arising out of, resulting from or incurred in connection
with:
(i) any
breach or inaccuracy of any representation or warranty of ETP contained in
this
Agreement;
(ii) any
breach by ETP of any covenant or agreement contained in this Agreement;
and
(iii) any
liability or obligation of TPC, whether arising before or after Closing, to
the
extent such liability or obligation (x) cannot be properly asserted against
CCE
under Section 8.2(a) or otherwise by ETP, except to the extent such liability
or
obligation cannot be properly asserted against CCE because of limitations under
Section 8.2(d), and (y) do not arise as a result of any other obligation of
CCE
to any ETP Indemnified Party arising under this Agreement.
50
(c) Any
Person providing indemnification pursuant to the provisions of this Section
8.2
is referred to herein as an “Indemnifying
Party,”
and
any Person entitled to be indemnified pursuant to the provisions of this Section
8.2 is referred to herein as an “Indemnified
Party.”
(d) CCE’s
indemnification obligations contained in Section 8.2(a)(i) shall not apply
to
any Claim for Damages until the aggregate of all such Damages total $15,000,000
(the “Threshold
Amount”),
in
which event CCE’s indemnity obligation contained in Section 8.2(a)(i) shall
apply to all Claims for Damages in excess of the Threshold Amount, subject
to a
maximum liability to all Indemnified Parties, in the aggregate, of $75,000,000
(the “Cap
Amount”)
for
all Claims under Section 8.2(a)(i) in the aggregate; provided, however, that
the
limitations set forth in this sentence shall not apply with respect to CCE’s
indemnification obligations related to breaches of the representations and
warranties contained in Section 3.2 (Authority Relative to this Agreement)
or
Section 3.3 (TPC Interests); and provided further that, notwithstanding anything
in this Agreement to the contrary, claims for indemnification relating to the
representations and warranties contained in Section 3.12(g) will not be subject
to the Threshold Amount or the Cap Amount and shall be independently determined
without regard to such limitations. Damages relating to any single breach or
series of related breaches of CCE’s representations and warranties shall not
constitute Damages, and therefore shall not be applied towards the Threshold
Amount or be indemnifiable hereunder, unless such Damages relating to any single
breach or series of related breaches exceed $300,000 (the “Minimum
Claim Amount”).
(e) ETP’s
indemnification obligations contained in Section 8.2(b)(i) shall not apply
to
any Claim for Damages until the aggregate of all such Damages equals the
Threshold Amount, in which event ETP’s indemnification obligation contained in
Section 8.2(b)(i) shall apply to all Claims for Damages in excess of the
Threshold Amount, subject to a maximum liability to all Indemnified Parties,
in
the aggregate, of the Cap Amount for all Claims under Section 8.2(b)(i) in
the
aggregate; provided,
however,
that
the limitations set forth in this sentence shall not apply with respect to
ETP’s
indemnification obligations related to breaches of the representations and
warranties contained in Section 4.2 (Authority Relative to this Agreement)
or
Section 4.3 (50% CCE Interests). Damages relating to any single breach or series
of related breaches of ETP’s representations and warranties shall not constitute
Damages, and therefore shall not be applied towards the Threshold Amount or
be
indemnifiable hereunder, unless such Damages relating to any single breach
or
series of related breaches exceeds the Minimum Claim Amount.
(f) The
indemnification obligations of each party hereto under this Section 8.2 shall
inure to the benefit of the ETP Indemnified Parties and CCE Indemnified Parties,
and such ETP Indemnified Parties and CCE Indemnified Parties will be obligated
to keep and perform the obligations imposed on an Indemnified Party by this
Section 8.2, on the same terms as are applicable to such other
party.
(g) In
all
cases in which a Person is entitled to be indemnified in accordance with this
Agreement, such Indemnified Party shall be under a duty to take all commercially
reasonable measures to mitigate all losses. Without limiting the foregoing,
each
Indemnified Party shall use its commercially reasonable efforts to collect
any
amount available under
51
insurance
coverage, or from any other Person alleged to be responsible, for any Damages
for which an indemnity claim is being made; provided,
however,
that
the reasonable costs incurred by the Indemnified Party in taking such measures
shall be included in the amount of any Claim.
(h) An
Indemnified Party shall not be entitled under this Agreement to multiple
recovery for the same losses. If an Indemnified Party receives any amount under
applicable insurance policies, or from any other Person alleged to be
responsible for any Damages, subsequent to an indemnification payment by the
Indemnifying Party, then such Indemnified Party shall promptly reimburse the
Indemnifying Party for any payment made or expense incurred by such Indemnifying
Party in connection with providing such indemnification payment up to the amount
received by the Indemnified Party, net of any expenses incurred by such
Indemnified Party in collecting such amount.
(i) All
amounts paid by CCE or ETP, as the case may be, under this Article VIII shall
be
treated as adjustments to the property distributed by CCE to ETP in redemption
of the 50% CCE Interest for all Tax purposes.
(j) Notwithstanding
any other provision in the Agreement to the contrary, this Section 8.2 shall
not
apply to any Claim of indemnification with respect to Tax matters. Claims for
indemnification with respect to Tax matters shall be governed by Section 5.6.
(k) For
purposes of this Article VIII only, the existence of a breach of a
representation or warranty in this Agreement and the calculation of Damages
arising out of a breach of any representation or warranty in this Agreement
shall be determined without giving effect to any exception or qualification
of
such representation or warranty as to the materiality of the breach thereof
or
the Material Adverse Effect on any Person of such breach.
Except
as
provided in Section 5.6 hereof, the provisions of this Article VIII shall
constitute the sole and exclusive remedy of any Indemnified Party for Damages
arising out of, resulting from or incurred in connection with any inaccuracy
in
any representation or the breach of any warranty made by ETP, on the one hand,
or CCE, on the other hand, in this Agreement; provided,
however,
that
this exclusive remedy for Damages does not preclude a party from bringing an
Action for specific performance or other equitable remedy to require a party
to
perform its obligations under this Agreement; provided further, that this
exclusive remedy for Damages does not preclude a party from bringing an Action
alleging fraud, intentional misrepresentation or intentional misconduct without
reference to the provisions of this Article VIII.
Section
8.3 Calculation
of Damages.
The
Damages suffered by any Indemnified Party shall be calculated after giving
effect to the actual receipt of any available insurance proceeds paid directly
to the Indemnified Party. In computing the amount of any insurance proceeds,
such insurance proceeds shall be reduced by a reasonable estimate of the present
value of future premium increases attributable to the payment of such
Claim.
Section
8.4 Procedures
for Third-Party Claims.
(a) In
the
case of any Claim for indemnification arising from a Claim of a third party
against an Indemnified Party arising under paragraph 8.2(a) or 8.2(b) as the
case may
52
be
(a
“Third-Party
Claim”),
an
Indemnified Party shall give prompt written notice to the Indemnifying Party
of
any Claim or demand of which such Indemnified Party has knowledge, and as to
which it may request indemnification hereunder, specifying (to the extent known)
the amount of such Claim and any relevant facts and circumstances relating
thereto; provided,
however,
that
any failure to give such prompt notice or to provide any such facts and
circumstances will not waive any rights of the Indemnified Party, except to
the
extent that the rights of the Indemnifying Party are actually materially
prejudiced thereby. The Indemnifying Party shall have the right (and, if it
elects to exercise such right, to do so by written notice within thirty (30)
days after receiving notice from the Indemnified Party) to defend and to direct
the defense against any such Third-Party Claim, in its name or in the name
of
the Indemnified Party, as the case may be, at the expense of the Indemnifying
Party, and with counsel selected by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party, unless (i) the Indemnifying Party shall
not have taken any action to defend such Third-Party Claim within such thirty
(30) day period, or (ii) the Indemnified Party shall have reasonably concluded
that there is a conflict of interest between the Indemnified Party and the
Indemnifying Party in the conduct of the defense of such Third-Party Claim.
Notwithstanding anything in this Agreement to the contrary (other than the
last
sentence of this Section 8.4(a)), the Indemnified Party, at the expense of
the
Indemnifying Party (which shall include only reasonable out-of-pocket expenses
actually incurred), shall cooperate with the Indemnifying Party and keep the
Indemnifying Party fully informed in the defense of such Third-Party Claim.
The
Indemnified Party shall have the right to participate in the defense of any
Third-Party Claim with counsel employed at its own expense; provided,
however,
that in
the case of any Third-Party Claim (A) described in clause (ii) above, or (B)
as
to which the Indemnifying Party shall not in fact have employed counsel to
assume the defense of such Third-Party Claim within such thirty-day (30-day)
period, or (C) that involves assertion of criminal liability on the Indemnified
Party, or (D) seeks to force the Indemnified Party to take (or prevent the
Indemnified Party from taking) any action, then in each such case the
Indemnified Party shall have the right, but not the obligation, to conduct
and
control the defense thereof for the account of, and at the risk of, the
Indemnifying Party, and the reasonable fees and disbursements of such
Indemnified Party’s counsel shall be at the expense of the Indemnifying Party.
Except as provided in the last sentence of Section 8.4(b), the Indemnifying
Party shall have no indemnification obligations with respect to any Third-Party
Claim which shall be settled by the Indemnified Party without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, delayed or conditioned.
(b) The
Indemnifying Party, if it has assumed the defense of any Third Party Claim
as
provided in this Agreement, shall not consent to a settlement of, or the entry
of any judgment arising from, any such Third-Party Claim without the Indemnified
Party’s prior written consent (which consent shall not be unreasonably withheld,
delayed or conditioned) unless (i) such settlement or judgment relates solely
to
monetary damages, and (ii) prior to consenting to such settlement or such entry
of judgment, the Indemnifying Party delivers to the Indemnified Party a writing
(in form reasonably acceptable to the Indemnified Party) which unconditionally
provides that, subject to the provisions of Section 8.2(d) or Section 8.2(e),
as
appropriate, relating to the Minimum Claim Amount, the Threshold Amount and
the
Cap Amount, the Damages represented thereby are the responsibility of the
Indemnifying Party pursuant to the terms of this Agreement and that, subject
to
the provisions of the Threshold Amount, the Indemnifying Party shall pay all
Damages associated therewith in accordance with the terms of this Agreement.
The
Indemnifying Party shall not, without the Indemnified Party’s prior written
53
consent,
enter into any compromise or settlement that (x) commits the Indemnified Party
to take, or to forbear to take, any action or (y) involves a reasonable
likelihood of an imposition of criminal liability on the Indemnified Party,
or
(z) does not provide for a complete release by such third party of the
Indemnified Party. With the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld, conditioned or delayed, the
Indemnified Party shall have the sole and exclusive right to settle any
Third-Party Claim, on such terms and conditions as it deems reasonably
appropriate, to the extent such Third-Party Claim involves equitable or other
nonmonetary relief against the Indemnified Party or involves a reasonable
likelihood of an imposition of criminal liability on the Indemnified Party,
and
shall have the right to settle any Third-Party Claim involving money damages
for
which the Indemnifying Party has not assumed the defense pursuant to this
Section 8.4.
Section
8.5 Procedures
for Inter-Party Claims.
In the
event that an Indemnified Party determines that it has a Claim for Damages
against an Indemnifying Party hereunder (other than as a result of a Third-Party
Claim), the Indemnified Party shall give prompt written notice thereof to the
Indemnifying Party, specifying the amount of such Claim and any relevant facts
and circumstances relating thereto, and such notice shall be promptly given
even
if the nature or extent of the Damages is not then known. The notification
shall
be subsequently supplemented within a reasonable time as additional information
regarding the Claim or the nature or extent of Damages resulting therefrom
becomes available to the Indemnified Party. Any failure to give such prompt
notice or supplement thereto or to provide any such facts and circumstances
will
not waive any rights of the Indemnified Party, except to the extent that the
rights of the Indemnifying Party are actually materially prejudiced thereby.
The
Indemnified Party and the Indemnifying Party shall negotiate in good faith
for a
thirty-day (30-day) period regarding the resolution of any disputed Claims
for
Damages. Promptly following the final determination of the amount of any Damages
claimed by the Indemnified Party, the Indemnifying Party, subject to the
limitations of the Minimum Claim Amount, Threshold Amount and the Cap Amount,
shall pay such Damages to the Indemnified Party by wire transfer or check made
payable to the order of the Indemnified Party.
ARTICLE
IX
MISCELLANEOUS
PROVISIONS
Section
9.1 Interpretation.
Unless
the context of this Agreement otherwise requires, (a) words of any gender
include the other gender; (b) words using the singular or plural number also
include the plural or singular number, respectively; (c) the terms “hereof,”
“herein,” “hereby” and derivative or similar words refer to this entire
Agreement; (d) the terms “Article,” “Section” and “Exhibit” refer to the
specified Article, Section and Exhibit of this Agreement, respectively; and
(e)
“including,” shall mean “including, but not limited to.” Unless otherwise
expressly provided, any agreement, instrument, law or regulation defined or
referred to herein means such agreement, instrument, law or regulation as from
time to time amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the case of a law or
regulation) by succession of comparable successor law and includes (in the
case
of agreements or instruments) references to all attachments thereto and
instruments incorporated therein.
54
Section
9.2 Disclosure
Letter. The CCE Disclosure Letter is incorporated into this Agreement by
reference and made a part hereof.
Section
9.3 Payments.
All payments set forth in this Agreement and Exhibits are in United States
Dollars. Such payments shall be made by wire transfer of immediately available
funds or by such other means as the parties to such payment shall
designate.
Section
9.4 Expenses.
Except as expressly set forth in Section 7.2 and in this Section 9.4, or as
agreed upon in writing by the parties, whether or not the transactions
contemplated hereby are consummated, each party shall bear its own costs, fees
and expenses, including the expenses of its Representatives, incurred by such
party in connection with this Agreement and the Related Agreements and the
transaction contemplated hereby and thereby; provided,
however,
that
CCE shall be solely responsible for all legal, accounting and other fees, costs
and expenses incurred by CCE, and TPC in connection with the negotiation,
execution and closing of this Agreement.
Section
9.5 Choice
of Law. This Agreement shall be governed by and construed in accordance with
the law of the State of New York (regardless of the laws that might otherwise
govern under applicable New York principles of conflicts of law).
Section
9.6 Assignment.
This Agreement may not be assigned by either party without the prior written
consent of the other party; provided,
however,
that
without the prior written consent of the other party, each party shall have
the
right to assign its rights and obligations under this Agreement to any third
party successor to all or substantially all of its entire business. This
Agreement shall be binding upon and, subject to the terms of the foregoing
sentence, inure to the benefit of the parties hereto and their successors,
legal
representatives and assigns.
Section
9.7 Notices.
All demands, notices, consents, approvals, reports, requests and other
communications hereunder must be in writing, will be deemed to have been duly
given only if delivered personally or by facsimile transmission (with
confirmation of receipt) or by an internationally-recognized express courier
service or by mail (first class, postage prepaid) to the parties at the
following addresses or telephone or facsimile numbers and will be deemed
effective upon delivery; provided,
however,
that
any communication by facsimile shall be confirmed by an
internationally-recognized express courier service or regular mail.
(i) If
to
CCE:
c/o
Southern Union Company
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
SVP
and
CFO
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
55
With
a
required copy (which shall not constitute notice to CCE) to:
Southern
Union Company
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
SVP
and
Associate General Counsel
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
And
a
required copy (which shall not constitute notice to CCE) to:
▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇, L.L.P.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
(ii) If
to
ETP:
Energy
Transfer Partners, L.P.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice
President and General Counsel
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
And
a
required copy (which shall not constitute notice to ETP) to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.P.
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
or
to
such other address as the addressee shall have last furnished in writing in
accord with this provision to the addressor.
Section
9.8 Consent
to Jurisdiction.
Each
party shall maintain at all times a duly appointed agent in the State of New
York, which may be changed upon ten (10) Business Days’ notice to the other
party, for the service of any process or summons in connection with any issue,
litigation, action or proceeding brought in any such court. Any such process
or
summons may also be served on it by mailing a copy of such process or summons
to
it at its address set forth, and in the manner provided, in Section 9.7. Each
party hereby irrevocably consents to the
56
exclusive
personal jurisdiction and venue of any New York State court located in the
Borough of Manhattan or to any United States Federal court of competent
jurisdiction located in the Southern District of the State of New York, in
any
action, Claim or proceeding arising out of or in connection with this Agreement
and agrees not to commence or prosecute any action, Claim or proceeding in
any
other court. Each of the parties hereby expressly and irrevocably waives and
agrees not to assert the defense of lack of personal jurisdiction, forum non
conveniens or any similar defense with respect to the maintenance of any such
action or proceeding in New York.
Section
9.9 No
Right of Setoff. Neither party hereto nor any Affiliate thereof may deduct
from, set off, holdback or otherwise reduce in any manner whatsoever against
any
amounts such Persons may owe to the other party hereto or any of its Affiliates
any amounts owed by such Persons to the other party or its
Affiliates.
Section
9.10 Time
is of the Essence. Time is of the essence in the performance of the
provisions of this Agreement.
Section
9.11 Specific
Performance. The parties hereto agree that irreparable damage would occur in
the event that any provision of this Agreement was not performed in accordance
with the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or
equity, subject to the limitations set forth in Section 7.2 of this
Agreement.
Section
9.12 Entire
Agreement. This Agreement, together with the CCE Disclosure Letter, the
Exhibits hereto and the Confidentiality Agreement constitute the entire
agreement between the parties hereto with respect to the subject matter herein
and supersede all previous agreements, whether written or oral, 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. In case of any material conflict
between any provision of this Agreement and any other such document, this
Agreement shall take precedence.
Section
9.13 Third
Party Beneficiaries. Except as expressly provided in Article VIII hereof,
none of the provisions of this Agreement shall be for the benefit of or
enforceable by any third party, including any creditor of any party or any
of
their affiliates. Except as expressly provided in Article VIII hereof, no such
third party shall obtain any right under any provision of this Agreement or
shall by reasons of any such provision make any Claim in respect of any
Liability (or otherwise) against either party hereto.
Section
9.14 Counterparts.
This Agreement may be executed in two or more counterparts, which, when
executed, shall be deemed to be an original and which together shall constitute
one and the same document.
Section
9.15 Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any applicable present or future law, and if the rights
or
obligations of either party under this Agreement will not be materially and
adversely affected thereby, (i) such provision shall be fully severable, (ii)
this Agreement shall be construed and enforced as if such illegal, invalid
or
unenforceable provision had never comprised a part hereof,
57
(iii)
the
remaining provisions of this Agreement shall remain in full force and effect
and
shall not be affected by the illegal, invalid or unenforceable provision or
by
its severance herefrom and (iv) in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to
such
illegal, invalid or unenforceable provision as may be possible.
Section
9.16 Headings.
The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
Section
9.17 Waiver.
Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of the
party or parties waiving such term or condition. No waiver by any party of
any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
Section
9.18 Amendment.
This Agreement may be altered, amended or changed only by a writing making
specific reference to this Agreement and signed by duly authorized
representatives of each party.
IN
WITNESS WHEREOF, CCE and ETP, by their duly authorized officers, have executed
this Agreement as of the date first written above.
ENERGY
TRANSFER PARTNERS, L.P.
|
By:
|
Energy
Transfer Partners GP, L.P., its general
partner
|
|
By:
|
Energy
Transfer Partners, L.L.C., its general
partner
|
By:/s/
▇▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Co-Chief Executive Officer
CCE
HOLDINGS, LLC
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇
Title:
Senior Vice President & Chief Legal Officer
Signature
Page to Redemption Agreement
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