MEMBERSHIP INTEREST TRANSFER AGREEMENT by and among SEMMATERIALS, L.P., and SEMMATERIALS ENERGY PARTNERS, L.L.C. effective as of
Exhibit
10.5
by
and among
SEMMATERIALS,
L.P.,
and
SEMMATERIALS
ENERGY PARTNERS, L.L.C.
effective
as of
11:59
PM CDT on March 31, 2009
This
Membership Interest Transfer Agreement (this “Agreement”), dated as
April 7, 2009, to be effective as of 11:59 PM CDT on March 31, 2009 (the “Effective Date”), is
by and between SemMaterials Energy Partners, L.L.C., a Delaware limited
liability company (“SMEP”), and
SemMaterials, L.P., an Oklahoma limited partnership (“SemMaterials”). SemMaterials
and SMEP are sometimes herein referred to individually as a “Party” and
collectively as the “Parties.”
RECITALS
WHEREAS, pursuant to that
certain Contribution Agreement (the “Original Contribution
Agreement”) by and among K.C. Asphalt, L.L.C., a Colorado
limited liability company (“K.C.
Asphalt”), SemMaterials and SMEP, dated
as of January 28, 2008, K.C. Asphalt and SemMaterials contributed and assigned
the Prior Transferred Assets (as defined herein) to SMEP;
WHEREAS, pursuant to the
Original Contribution Agreement, K.C. Asphalt and SemMaterials retained and
reserved the Prior Retained Assets (as defined herein) and retained and reserved
all of the rights and obligations associated with the Prior Retained
Assets;
WHEREAS, pursuant to a
Purchase Agreement, dated as of January 14, 2008, SemMaterials sold and
transferred 100% of the limited liability company membership interests of SMEP
to SemGroup Energy Partners Operating, L.L.C. on February 20, 2008;
WHEREAS, commencing on July
22, 2008, SemMaterials and certain of their Affiliates (as defined herein) filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (as
defined herein), which cases are pending in the Bankruptcy Court (as defined
herein);
WHEREAS, SemMaterials is a
debtor and debtor in possession in the Bankruptcy Cases (as defined herein) and
is currently authorized to conduct its business under Sections 1107 and 1108 of
the Bankruptcy Code;
WHEREAS, as of the Effective
Date, K.C. Asphalt and SemMaterials (i) terminated the Prior Retained Easements
(as defined herein), (ii) transferred, conveyed and assigned the
interests previously retained in the Prior Retained Leasehold Agreements (as
defined herein) to SMEP and (iii) contributed the Asphalt Processing Assets (as
defined herein) to SGLP Asphalt, L.L.C., a Texas limited liability company
(“SGLP
Asphalt”), each pursuant to a Contribution Agreement (the “Asphalt Contribution
Agreement”);
WHEREAS, SemMaterials is the
sole member of SGLP Asphalt and owns 100% of the Equity Interests (as defined
herein) of SGLP Asphalt (the “Transferred
Interest”); and
WHEREAS, SemMaterials desires
to transfer, convey and assign to SMEP the Transferred Interest, and SMEP
desires to have the Transferred Interest transferred, conveyed and assigned to
it, on the terms set forth in this Agreement.
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AGREEMENTS
NOW,
THEREFORE, for and in
consideration of the premises, the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the Parties hereby
agree as follows:
ARTICLE
1
Certain
Definitions
1.01 In this
Agreement, capitalized terms used but not otherwise defined herein shall have
the meaning assigned such term in the Asphalt Contribution Agreement, the terms
defined in the preamble and the Recitals have the meanings indicated and the
following terms will have the meanings indicated below:
“Affiliates” shall
have the meaning given such term in Master Agreement.
“Clawback Notice”
shall have the meaning given such term in Section
4.01(b).
“Clawback Payment”
shall have the meaning given such term in Section
4.01(a).
“Clawback Period”
shall have the meaning given such term in Section
4.01(a).
“Clawback Sale” shall
have the meaning given such term in Section
4.01(a).
“Dispute Notice” shall
have the meaning given such term in Section
4.01(c).
“Disputed Items” shall
have the meaning given such term in Section
4.01(c).
“Equity Interests”
means all limited liability company interests, units, participations or
equivalents of limited liability company interests of SGLP Asphalt, however
designated.
“GAAP” means United
States generally accepted accounting principles as in effect from time to
time.
“Net Proceeds” means
the aggregate cash proceeds received by SMEP or any of its Affiliates in respect
of an asset sale that includes Asphalt Processing Assets, net of (i) the direct
and indirect costs relating to such asset sale, including, without limitation,
legal, accounting and investment banking fees, (ii) Taxes paid or payable as a
result thereof, and (iii) the value of and any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP,
including, without limitation, in respect of sales price adjustments,
non-competition agreements and assumed or retained liabilities associated with
the asset or assets disposed of in such transaction, including, without
limitation, liabilities related to environmental matters or against any
indemnification obligations associated with such asset sale.
“Referee” shall have
the meaning given such term in Section
4.01(c).
“Resolution Period”
shall have the meaning given such term in Section
4.01(c).
3
ARTICLE
2
Conveyance,
Transfer and Assignment
of
the Transferred Interests
2.01 Conveyance
of the Transferred Interests. For good and valuable
consideration, the sufficiency of which is hereby acknowledged, SemMaterials
hereby transfers, assigns, conveys and delivers to SMEP, the Transferred
Interests free and clear of any and all Liens (other than Permitted
Exceptions).
2.02 Assumed
Liabilities. As of the Effective Date, SMEP does hereby assume
and thereafter in due course will pay and fully satisfy any Liabilities
associated with the Transferred Interests.
ARTICLE
3
Further
Assurances
3.01 Further
Assurances of SemMaterials to SMEP. From time to time after
the Effective Date, and without any further consideration, each of SemMaterials
and SMEP shall execute, acknowledge and deliver such additional assignments and
other conveyance documents, and will do all such other acts and things, all in
accordance with Applicable Law, as may be necessary or reasonably appropriate to
more fully and effectively to vest in SMEP and its successors and assigns
beneficial and record title to the Transferred Interests, and/or to more fully
and effectively carry out the purposes and intent of this
Agreement.
ARTICLE
4
Covenants
4.01 Sale of
the Asphalt Processing Assets.
(a) If SMEP
or any of its Affiliates (as defined in the Master Agreement) consummates a sale
(other than to SMEP or any of its Affiliates), including by way of merger or
consolidation, of any Asphalt Processing Assets (a “Clawback Sale”)
during the period beginning on the Effective Date and ending on December 31,
2009 (the “Clawback
Period”), then SMEP will pay SemMaterials 20% of the Net Proceeds
received from each such sale attributable to the sold Asphalt Processing Assets
(the “Clawback
Payment”) in accordance with the terms of this Section
4.01.
(b) Within
fifteen (15) days after a Clawback Sale consummated during the Clawback Period,
SMEP shall deliver a schedule (the “Clawback Notice”) to
SemMaterials listing the following in reasonable detail: (i) the Asphalt
Processing Assets that were sold in such Clawback Sale, (ii) the assets other
than Asphalt Processing Assets that were sold in such Clawback Sale, if any,
(iii) an allocation of the Net Proceeds from such sale showing the Net Proceeds
attributable to the Asphalt Processing Assets and the Net Proceeds attributable
to assets other than Asphalt Processing Assets, if any, and (iv) the proposed
Clawback Payment.
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(c) If
SemMaterials disputes the allocation reflected in any Clawback Notice, then
SemMaterials may, within thirty (30) days after receipt of such statement or
invoice, deliver a written notice to SMEP (the “Dispute Notice”)
setting forth the items in dispute in reasonable detail (the “Disputed
Items”). During the thirty (30) day period following delivery
of the Dispute Notice (the “Resolution Period”),
the Parties will use their commercially reasonable efforts to reach agreement on
the Disputed Items set forth in the Dispute Notice. If the Parties
are unable to reach an agreement during the Resolution Period, then they will
appoint a mutually acceptable independent party to review the Dispute Notice and
determine the final amount of the Disputed Items. If the Parties are
unable to agree on a single independent party within fifteen (15) days after the
end of the Resolution Period, then the Parties will each appoint one (1)
independent party, who will jointly select a third independent party (singly or
collectively, the “Referee”), within
thirty (30) days after the end of the Resolution Period. The Referee
shall deliver its determination to the Parties within thirty (30) days from the
date of its engagement. The Referee’s report shall be final and
binding upon the Parties. The cost of the Referee’s engagement and
report shall be shared fifty percent (50%) by SMEP and fifty percent (50%) by
SemMaterials.
(d) If
SemMaterials does not deliver a Dispute Notice to SMEP within the time period
indicated in Section 4.01(c), then SMEP shall promptly deliver to SemMaterials
the Clawback Payment indicated in the Clawback Notice. If
SemMaterials delivers a Dispute Notice to SMEP within the time period indicated
in Section 4.01(c), then, after such Dispute has been resolved, SMEP shall
promptly deliver to SemMaterials the Clawback Payment.
ARTICLE
5
Miscellaneous
5.01 Headings; References; Interpretation. All
article and section headings in this Agreement are for convenience only and
shall not be deemed to control or affect the meaning or construction of any of
the provisions hereof. The words “hereof,” “herein” and “hereunder”
and words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole, including without limitation, all exhibits and schedules
attached hereto, and not to any particular provision of this
Agreement. All references herein to articles, sections, exhibits and
schedules shall, unless the context requires a different construction, be deemed
to be references to the articles, sections, exhibits and schedules of this
Agreement, respectively, and all such exhibits and schedules attached hereto are
hereby incorporated herein and made a part hereof for all
purposes. All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders,
and the singular shall include the plural and vice versa. The use
herein of the word “including” following any general statement, term or matter
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as “without limitation,”
“but not limited to,” or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
could reasonably fall within the broadest possible scope of such general
statement, term or matter.
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5.02 Binding
Effect; Successors. The provisions of
this Agreement shall be binding upon and inure to the benefit of the Parties and
the respective successors and assigns of each of the Parties, including, without
limitation, any trustee hereinafter appointed in the Bankruptcy Cases as the
representative of the estates of the SemGroup Parties (as defined in the Master
Agreement), or any other representative of the SemGroup Parties who qualifies in
a case under the Bankruptcy Code or in connection with any other state,
provincial, or federal proceeding. The terms and conditions of this
Agreement shall survive:
(a) the entry
of any subsequent Order converting any of the Bankruptcy Cases from chapter 11
of the Bankruptcy Code to chapter 7 of the Bankruptcy Code;
(b) the
appointment of any trustee in any of the Bankruptcy Cases in any ensuing chapter
7 cases under the Bankruptcy Code;
(c) the
confirmation of a plan of reorganization for SemMaterials under the Bankruptcy
Code;
(d) the
dismissal of any of the Bankruptcy Cases or an Order withdrawing the reference
from the Bankruptcy Court;
(e) an Order
from the Bankruptcy Court abstaining from handling any of the SemMaterials’
Bankruptcy Cases; or
(f) a sale,
assignment or other disposition of all or part of the Seller’s assets or this
Agreement to any third party and/or assignee.
5.03 No Third
Party Rights. The provisions of
this Agreement are intended to bind the Parties hereto and their successors and
assigns as to each other and are not intended to and do not create rights in any
other person or confer upon any other person any benefits, rights or remedies
and no person is or is intended to be a third party beneficiary of any of the
provisions of this Agreement.
5.04 Counterparts. This Agreement
may be executed in any number of counterparts, each of which, when so executed
and delivered (including by facsimile or electronic mail transmission), will be
deemed an original, but all of which together will constitute one and the same
instrument.
5.05 Governing
Law. THIS AGREEMENT,
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR
CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT,
TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED,
AND DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
OKLAHOMA (WITHOUT
REGARD TO ANY CONFLICT OF LAWS PROVISION THAT WOULD REQUIRE THE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION).
6
5.06 Submission
to Jurisdiction.
(a) Without
limiting any Party’s right to appeal any order of the Bankruptcy Court, (i) the
Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of
this Agreement and to decide any claims or disputes which may arise or result
from, or be connected with, this Agreement, any breach or default hereunder, or
the transactions contemplated hereby, and (ii) any and all actions related to
the foregoing shall be filed and maintained only in the Bankruptcy Court, and
the Parties hereby consent to and submit to the jurisdiction and venue of the
Bankruptcy Court and shall receive notices at such locations as indicated in
Section 5.07;
provided, however, that if a
plan of reorganization in the Bankruptcy Cases has become effective, the Parties
agree to and hereby unconditionally and irrevocably submit to the exclusive
jurisdiction of the federal or state courts of the State of Oklahoma and any
appellate court from any thereof, for the resolution of any such claim or
dispute.
(b) The
Parties hereto hereby unconditionally and irrevocably waive, to the fullest
extent permitted by Applicable Law, any objection which they may now or
hereafter have to the laying of venue of any dispute arising out of or relating
to this Agreement or any of the transactions contemplated hereby brought in any
court specified in paragraph (a) above, or any defense of inconvenient forum for
the maintenance of such dispute. Each of the Parties hereto agrees
that a judgment in any such dispute may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Each of
the Parties hereto hereby consents to process being served by any Party to this
Agreement in any suit, action or proceeding by the mailing of a copy thereof in
accordance with the provisions of Section
5.07.
5.07 Notices. All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be given or made (and shall be deemed to have been
duly given or made upon receipt) by delivery in person, by overnight courier
service, by facsimile or electronic transmission with receipt confirmed
(followed by delivery of an original via overnight courier service) or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective Parties at the following addresses (or at such other address for a
Party as shall be specified in a notice given in accordance with this Section 5.07):
If to
Licensor:
SemGroup,
L.P.
Two
▇▇▇▇▇▇ Place
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▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇)
▇▇▇-▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
7
SemMaterials,
L.P.
Two
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Phone: (▇▇▇)
▇▇▇-▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
With a
copy to:
Weil,
Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
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Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
If to
Licensee:
Two
▇▇▇▇▇▇ Place
▇▇▇▇ ▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
With a
copy to:
▇▇▇▇▇
▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇,
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Phone: (▇▇▇)
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Fax: (▇▇▇)
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Attention:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
5.08 Severability. If any of the
provisions of this Agreement are held by any court of competent jurisdiction to
contravene, or to be invalid under, the laws of any political body having
jurisdiction over the subject matter hereof, such contravention or invalidity
shall not invalidate the entire Agreement. Instead, this Agreement
shall be construed as if it did not contain the particular provision or
provisions held to be invalid, and an equitable adjustment shall be made and
necessary provisions added so as to give effect to the intention of the Parties
as expressed in this Agreement at the time of execution of this
Agreement.
5.09 Amendment
or Modification. This Agreement
may be amended or modified from time to time only by the written agreement of
all the Parties hereto.
5.10 Integration. This Agreement
(including the schedules and exhibits), the Master Agreement and the other
Transaction Documents (as defined in the Master Agreement), including the
Asphalt Contribution Agreement and Real Property Transfer Agreement, represent
the entire understanding and agreement between the Parties hereto with respect
to the subject matter hereof; provided, however, that in the
event of any dispute, this Agreement, (including the schedules and exhibits)
shall be interpreted to be consistent with the SGLP Settlement Orders (as
defined in the Master Agreement).
8
5.11 Representations
and Warranties. SemMaterials
represents and warrants to SMEP hereto as follows: (i) SGLP Asphalt is a limited
liability company duly organized, validly existing and in good standing under
the Laws of the State of Texas; (ii) upon the transfer, assignment, conveyance
and delivery of the Transferred Interests contemplated by this Agreement, SMEP
will acquire 100% of the issued and outstanding Equity Interests; and (iii) as
of the date hereof, except for obligations or Liabilities incurred in connection
with its formation and the transactions contemplated hereby and in the Asphalt
Contribution Agreement, SGLP Asphalt has not incurred, directly or indirectly
through any Affiliate, any obligations or Liabilities or engaged in any business
or activities of any type or kind whatsoever or entered into any agreements or
arrangements with any Person.
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IN
WITNESS WHEREOF, each party hereto has executed and delivered this Agreement as
of the date first written above to be effective as of the Effective
Date.
TRANSFEREE:
SEMMATERIALS
ENERGY PARTNERS, L.L.C.
By:/s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief
Financial Officer and Secretary
TRANSFEROR:
SEMMATERIALS,
L.P.
By:
SemOperating G.P., L.L.C., its general partner
By:/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Title: President and CEO
Title: President and CEO