STOCK PURCHASE AGREEMENT by and between ENOGEX INC. and ATLAS PIPELINE PARTNERS, L.P. Dated as of September 21, 2005
EXHIBIT
2.1
by
and between
ENOGEX
INC.
and
ATLAS
PIPELINE PARTNERS, L.P.
Dated
as of September 21, 2005
TABLE
OF
CONTENTS
Page
|
|||
ARTICLE
I
|
DEFINITIONS
AND RULES OF CONSTRUCTION
|
1
|
|
1.1
|
Definitions
|
1
|
|
1.2
|
Rules
of Construction
|
9
|
|
ARTICLE
II
|
PURCHASE
AND SALE; CLOSING
|
10
|
|
2.1
|
Purchase
and Sale of Shares
|
10
|
|
2.2
|
Consideration
|
10
|
|
2.3
|
Purchase
Price Adjustment
|
10
|
|
2.4
|
Final
Purchase Price
|
11
|
|
2.5
|
The
Closing
|
12
|
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES RELATING TO SELLER
|
12
|
|
3.1
|
Organization
of Seller
|
12
|
|
3.2
|
Authorization;
Enforceability
|
12
|
|
3.3
|
No
Conflict; Consents
|
12
|
|
3.4
|
Ownership
of Shares
|
13
|
|
3.5
|
Litigation
|
13
|
|
3.6
|
Brokers’
Fees
|
13
|
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES RELATED TO EAPC
|
13
|
|
4.1
|
Organization
of EAPC
|
13
|
|
4.2
|
No
Conflict; Consents
|
14
|
|
4.3
|
Capitalization
|
14
|
|
4.4
|
Ownership
of Partnership Interests
|
15
|
|
4.5
|
Litigation
|
15
|
|
4.6
|
EAPC
Financial Statements
|
15
|
|
4.7
|
EAPC
Taxes
|
16
|
|
4.8
|
No
Other Business
|
16
|
|
ARTICLE
V
|
REPRESENTATIONS
AND WARRANTIES RELATING TO NOARK
|
16
|
|
5.1
|
Organization
of NOARK
|
16
|
|
5.2
|
No
Conflict; Consents
|
16
|
|
5.3
|
NOARK
Subsidiaries
|
17
|
i
TABLE
OF CONTENTS
(continued)
Page
|
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5.4
|
NOARK
Financial Statements
|
17
|
|
5.5
|
No
Undisclosed Liabilities
|
17
|
|
5.6
|
Absence
of Certain Changes
|
18
|
|
5.7
|
Contracts
|
18
|
|
5.8
|
Intellectual
Property
|
19
|
|
5.9
|
Litigation
|
20
|
|
5.10
|
Employee
Benefit Plans
|
20
|
|
5.11
|
NOARK
Taxes
|
21
|
|
5.12
|
Environmental
Matters
|
22
|
|
5.13
|
Compliance
with Laws; Permits
|
22
|
|
5.14
|
No
FERC Proceedings
|
23
|
|
5.15
|
Insurance
|
23
|
|
5.16
|
Labor
Relations
|
23
|
|
5.17
|
Throughput
Data and Information
|
24
|
|
5.18
|
Title
to Assets; Sufficiency
|
24
|
|
ARTICLE
VI
|
REPRESENTATIONS
AND WARRANTIES RELATING TO BUYER
|
24
|
|
6.1
|
Organization
of Buyer
|
25
|
|
6.2
|
Authorization;
Enforceability
|
25
|
|
6.3
|
No
Conflict; Consents
|
25
|
|
6.4
|
Litigation
|
25
|
|
6.5
|
Brokers’
Fees
|
25
|
|
6.6
|
Financial
Ability
|
25
|
|
6.7
|
Securities
Law Compliance
|
26
|
|
ARTICLE
VII
|
COVENANTS
|
26
|
|
7.1
|
Conduct
of Business
|
26
|
|
7.2
|
Access
|
27
|
|
7.3
|
Third
Party Approvals
|
30
|
|
7.4
|
Regulatory
Filings
|
30
|
|
7.5
|
Employee
and Benefit Matters
|
30
|
ii
TABLE
OF CONTENTS
(continued)
Page
|
|||
7.6
|
Seller
Marks
|
33
|
|
7.7
|
Books
and Records; Access
|
33
|
|
7.8
|
Notifications
and Permits; FERC Order 2004; Shared Frequencies
|
33
|
|
7.9
|
Director
and Officer Indemnification
|
34
|
|
7.10
|
Company
Guaranties
|
34
|
|
7.11
|
Conversion
into Single-Member Limited Liability Company
|
35
|
|
7.12
|
Redemption
of NOARK Notes
|
35
|
|
7.13
|
Seller
Interconnection Points
|
36
|
|
ARTICLE
VIII
|
TAX
MATTERS
|
36
|
|
8.1
|
Responsibility
for Filing Tax Returns and Paying Taxes
|
36
|
|
8.2
|
Responsibility
for Tax Audits and Contests
|
36
|
|
8.3
|
Tax
Sharing Agreements
|
37
|
|
8.4
|
Tax
Refunds
|
37
|
|
8.5
|
Transfer
Taxes
|
37
|
|
8.6
|
Disputes
over Tax Provisions
|
37
|
|
8.7
|
Indemnification
for Consolidated Group Tax Liability
|
37
|
|
8.8
|
Section 754
Election
|
37
|
|
ARTICLE
IX
|
CONDITIONS
TO CLOSING
|
37
|
|
9.1
|
Conditions
to Obligations of Buyer
|
37
|
|
9.2
|
Conditions
to the Obligations of Seller
|
38
|
|
ARTICLE
X
|
INDEMNIFICATION
|
39
|
|
10.1
|
Survival
|
39
|
|
10.2
|
Indemnification
|
40
|
|
10.3
|
Procedures
|
41
|
|
10.4
|
Waiver
of Other Representations
|
43
|
|
10.5
|
Exclusive
Remedy and Release
|
43
|
|
ARTICLE
XX
|
XXXXXXXXXXX
|
00
|
|
11.1
|
Termination
|
43
|
|
11.2
|
Effect
of Termination
|
44
|
|
ARTICLE
XII
|
MISCELLANEOUS
|
44
|
iii
TABLE
OF CONTENTS
(continued)
Page
|
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12.1
|
Notices
|
44
|
|
12.2
|
Assignment
|
45
|
|
12.3
|
Rights
of Third Parties
|
45
|
|
12.4
|
Expenses
|
46
|
|
12.5
|
Counterparts
|
46
|
|
12.6
|
Entire
Agreement
|
46
|
|
12.7
|
Disclosure
Schedule
|
46
|
|
12.8
|
Acknowledgment
by Buyer
|
46
|
|
12.9
|
Amendments
|
46
|
|
12.10
|
Publicity
|
46
|
|
12.11
|
Severability
|
47
|
|
12.12
|
Governing
Law; Jurisdiction
|
47
|
iv
LIST
OF EXHIBITS
Exhibit A
|
Form
of Transition Services Agreement
|
LIST
OF SCHEDULES
Schedule 1.1
(a)
|
Knowledge
|
Schedule 1.1
(b)
|
Liens
|
Schedule 4.6
|
EAPC
Financial Statements
|
Schedule 4.7
|
EAPC
Taxes
|
Schedule 4.8
|
No
Other Business
|
Schedule 5.2
|
Conflict;
Consents
|
Schedule 5.3
|
Jurisdictions
Licensed or Qualified
|
Schedule 5.4
|
NOARK
Financial Statements
|
Schedule 5.5
|
Undisclosed
Liabilities
|
Schedule 5.6
|
Absence
of Certain Changes
|
Schedule 5.7
|
Material
Contracts
|
Schedule 5.7
(c)
|
Enforceability
of Material Contracts
|
Schedule 5.9
|
Litigation
|
Schedule 5.10
(a)
|
Plans
|
Schedule 5.10
(b)
|
Description
of Plans
|
Schedule 5.11
|
Taxes
|
Schedule 5.12
|
Environmental
Matters
|
Schedule 5.13
(b)
|
FCC
Licenses
|
Schedule 5.14
|
FERC
Proceedings
|
Schedule 5.15
|
Insurance
|
Schedule 5.16
|
Labor
Relations
|
Schedule 5.17
|
Throughput
Data and Information
|
v
TABLE
OF CONTENTS
(continued)
|
|
Page
|
Schedule 5.18
|
Title
to Assets; Sufficiency
|
|
Schedule 6.3
|
No
Conflict; Consents
|
|
Schedule 6.6
|
Financing
Commitment
|
|
Schedule 7.5
(a)
|
Eligible
Employees
|
|
Schedule 7.5
(h)
|
Severance
Benefits
|
|
vi
THIS
STOCK PURCHASE AGREEMENT, dated as of September 21, 2005 (this
“Agreement”),
is
entered into by and between Enogex Inc., an Oklahoma corporation (“Seller”),
and
Atlas Pipeline Partners, L.P., a Delaware limited partnership (“Buyer”).
RECITALS
WHEREAS,
Enogex Arkansas Pipeline Corporation, an Oklahoma corporation (“EAPC”),
owns
a 74% general partner interest and a 1% limited partner interest of NOARK
Pipeline System, Limited Partnership, an Arkansas limited partnership
(“NOARK”);
WHEREAS,
NOARK owns and operates (a) a FERC-regulated interstate natural gas
transmission pipeline system extending from southeast Oklahoma through Arkansas
to southeast Missouri known as Ozark Gas Transmission, L.L.C. and
(b) various natural gas gathering systems that are not subject to FERC
regulation, as well as associated equipment and systems;
WHEREAS,
Seller owns all of the issued and outstanding common stock, par value $1.00
per
share (the “Shares”)
of
EAPC; and
WHEREAS,
on the terms and subject to the conditions set forth herein, Seller desires
to
sell to Buyer, and Buyer desires to purchase from Seller, the
Shares.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE
I
DEFINITIONS
AND RULES OF CONSTRUCTION
1.1
Definitions.
As used
herein, the following terms shall have the following meanings:
“Accountants”
has
the
meaning provided such term in Section 2.3(b)(iv).
“Affiliate”
means,
with respect to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with, such specified
Person through one or more intermediaries or otherwise. For the purposes
of this
definition, “control” means, where used with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the
ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have correlative meanings.
“Aggregate
Redemption Funding Amount”
shall
mean the sum of (i) the Redemption Price (as defined in the NOARK
Indenture) plus (ii) any unpaid interest on the Seller Portion of the NOARK
Notes accrued to the Designated Redemption Date.
-
1 -
“Agreed
Rate”
means
(a) the annual rate of interest published by The
Wall Street Journal as
one-month LIBOR on the Business Day that interest begins to accrue under
Section 2.4
plus
(b) 250 basis points per annum, such rate to change each month on the
monthly anniversary of such Business Day based on the quotation of one month
LIBOR in The
Wall Street Journal on
the
latest day on or prior to such anniversary that The
Wall Street Journal is
published.
“Agreement”
has
the
meaning provided such term in the preamble to this Agreement.
“Balance
Sheet Date”
means
July 31, 2005.
“Base
Purchase Price”
has
the
meaning provided such term in Section 2.2.
“Business
Day”
means
any day that is not a Saturday, Sunday or legal holiday in the States of
Oklahoma and New York and that is not otherwise a federal holiday in the
United
States.
“Buyer”
has
the
meaning provided such term in the preamble to this Agreement.
“Buyer
Indemnified Parties”
has
the
meaning provided such term in Section 10.2(b).
“CERCLA”
means
the Federal Comprehensive Environmental Response Compensation and Liability
Act,
as amended, 42 U.S.C. § 9601 et seq.
“Claim
Notice”
has
the
meaning provided such term in Section 10.3(a).
“Closing”
has
the
meaning provided such term in Section 2.5.
“Closing
Date”
has
the
meaning provided such term in Section 2.5.
“Closing
Net Working Capital”
has
the
meaning provided such term in Section 2.3(b)(i).
“Closing
Payment”
has
the
meaning provided in such term in Section 2.3(a).
“Closing
Statement”
has
the
meaning provided such term in Section 2.3(b).
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company
Guaranties”
means
those guaranties, letters of credit, bonds, sureties and other forms of credit
support or assurances provided by Seller or its Affiliates (other than any
member of the NOARK Group) in support of obligations of NOARK or any NOARK
Subsidiary.
“Company
Securities”
has
the
meaning provided such term in Section 4.3(b).
“Confidentiality
Agreement”
means
that certain confidentiality agreement, dated as of June 14, 2005, between
Buyer and Seller.
“Constituents
of Concern”
any
substance defined as a hazardous substance, hazardous waste, hazardous material,
pollutant or contaminant by any Environmental Law, any petroleumhydrocarbon
and
any degradation product of a petroleum hydrocarbon, friable asbestos, or
PCBs,
the handling, storage, treatment or exposure of or to which is subject to
regulation under any Environmental Law.
-
2 -
“Continuing
Employee”
has
the
meaning provided such term in Section 7.5(b).
“Contract”
means
any legally binding agreement, commitment, lease, license or contract, but
excluding Plans.
“Delivering
Party”
has
the
meaning provided such term in Section 2.3(b)(i).
“Designated
Redemption Date”
has
the
meaning provided such term in Section 7.12.
“Direct
Claim”
has
the
meaning provided such term in Section 10.3(d).
“Disclosure
Schedule”
means
the schedules attached hereto.
“Dispute
Notice”
has
the
meaning provided such term in Section 8.1.
“Dollars”
and
“$”
mean
the lawful currency of the United States.
“EAPC”
has
the
meaning provided such term in the recitals of this Agreement.
“EAPC
Financial Statements”
has
the
meaning provided such term in Section 4.6.
“Easements”
has
the
meaning provided such term in Section 5.18(b).
“Eligible
Employees”
has
the
meaning provided such term in Section 7.5(a).
“Environmental
Law”
means
all applicable Laws and Environmental Permits of any Governmental Authority
relating to the protection of health or the environment, including: (a) all
requirements pertaining to liability for reporting, management, licensing,
permitting, investigation, and remediation of emissions, discharges, releases,
or threatened releases of a Constituent of Concern; and (b) all other
limitations, restrictions, conditions, standards, prohibitions, obligations,
and
timetables contained therein or in any notice or demand letter issued, entered,
promulgated or approved thereunder. The term “Environmental
Law”
includes, without limitation, CERCLA, the Federal Water Pollution Control
Act
(which includes the Federal Clean Water Act), the Federal Clean Air Act,
the
Federal Solid Waste Disposal Act (which includes the Resource Conservation
and
Recovery Act), the Federal Toxic Substances Control Act, and the Federal
Insecticide, Fungicide and Rodenticide Act, each as amended from time to
time,
any regulations promulgated pursuant thereto, and any state or local
counterparts.
“Environmental
Permits”
all
permits, licenses, registrations, authorizations, certificates and approvals
of
Governmental Authorities relating to or required by Environmental Laws and
necessary for or held in connection with the conduct of the
business.
“Existing
Interconnect”
means
any pipeline interconnect existing on the date hereof that connects a NOARK
System with a Seller System.
-
3 -
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“FERC”
means
the United States Federal Energy Regulatory Commission.
“Financing
Commitment”
has
the
meaning provided such term in Section 6.6.
“GAAP”
means
generally accepted accounting principles of the United States, consistently
applied.
“Governmental
Authority”
means
any federal, state, municipal, local or similar governmental authority,
regulatory or administrative agency, court or arbitral body.
“Hire
Date”
has
the
meaning provided such term in Section 7.5(a).
“HSR
Act”
means
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“Indebtedness
for Borrowed Money”
means
all obligations to any Person for borrowed money, including (a) any
obligation to reimburse any bank or other Person in respect of amounts paid
or
payable under a standby letter of credit or (b) any guaranty with respect
to indebtedness for borrowed money of another Person.
“Indemnified
Party”
has
the
meaning provided such term in Section 10.3(a).
“Indemnifying
Party”
has
the
meaning provided such term in Section 10.3(a).
“Intellectual
Property”
means
intellectual property rights, statutory or common law, worldwide, including
(a) trademarks, service marks, trade dress, slogans, logos and all goodwill
associated therewith, and any applications or registrations for any of the
foregoing; (b) copyrights and any applications or registrations for any of
the
foregoing; and (c) patents, all confidential know-how, trade secrets and
similar proprietary rights in confidential inventions, discoveries,
improvements, processes, techniques, devices, methods, patterns, formulae,
specifications, and lists of suppliers, vendors, customers, and
distributors.
“IRS”
means
Internal Revenue Service of the United States.
“Knowledge”
as
to
Seller means the actual knowledge of those persons listed on Schedule
1.1(a).
“Law”
means
any applicable statute, writ, law, common law, rule, regulation, ordinance,
order, judgment, injunction, award, determination or decree of a Governmental
Authority, or any requirement under the common law, in each case as in effect
on
and as interpreted on the date of this Agreement or on and as of the Closing
Date, as applicable, unless the context otherwise clearly requires a different
date, in which case on and as of such date.
“Lien(s)”
means
any charges, pledges, options, mortgages, deeds of trust, hypothecations,
encumbrances or security interests.
-
4 -
“Losses”
has
the
meaning provided such term in Section 10.2.
“Management
Committee”
means
the committee that manages NOARK pursuant to the Partnership Agreement and
as
further defined therein.
“Material
Adverse Effect”
means,
with respect to any Person, any circumstance, change or effect that (a) is
materially adverse to the business, operations (including results of operation),
assets, liabilities or financial condition of such Person and its Subsidiaries,
taken as a whole, or (b) that materially impedes the ability of such Person
or any of its Affiliates to complete the transactions contemplated herein,
but
in respect of NOARK and the NOARK Subsidiaries shall exclude for purposes
of
clause (a) above any circumstance, change or effect resulting or arising
from: (i) any change in general economic conditions in the industries or
markets
in which NOARK or any of the NOARK Subsidiaries operates; (ii) seasonal
reductions in revenues and/or earnings of NOARK or any of the NOARK Subsidiaries
in the ordinary course of its business and consistent with past performance;
(iii) national or international political conditions, including any
engagement in hostilities, whether or not pursuant to the declaration of
a
national emergency or war, or the occurrence of any military or terrorist
attack; (iv) changes in Law, GAAP, RAP or the interpretation thereof;
(v) subject to the final sentence of each of Sections 3.3,
4.2
and
5.2,
the
entry into or announcement of this Agreement or actions contemplated by this
Agreement or the consummation of the transactions contemplated hereby; (vi)
matters that will be reflected in the determination of the Net Working Capital
as of the Closing Date; or (vii) the loss of any employee of EAPC, NOARK or
any Eligible Employee.
“Material
Contracts”
has
the
meaning provided such term in Section 5.7(a).
“Net
Working Capital”
means,
as of any given date, an amount (which may be positive or negative) equal
to 75%
of the total current assets of NOARK and the NOARK Subsidiaries as of such
date
minus
the
sum
of 75% of the total current liabilities of NOARK and the NOARK Subsidiaries
as
of such date (excluding short-term debt identified on the NOARK Financial
Statements and excluding accrued interest with respect to the NOARK Notes),
in
each case determined in accordance with RAP and without giving effect to
the
transactions contemplated hereby. Notwithstanding any provision in this
Agreement to the contrary, and as illustrated on Schedule 2.2,
for
purposes of calculating Net Working Capital as of any given date, the cash
component included in current assets will be the actual EAPC cash allocation
amount as detailed on the monthly “NOARK Pipeline System, LP Recap of Cash
Balances Schedule” as of such date.
“NOARK”
has
the
meaning provided such term in the recitals to this Agreement.
“NOARK
Financial Statements”
has
the
meaning provided such term in Section 5.4.
“NOARK
Group”
means,
collectively, EAPC, NOARK and the NOARK Subsidiaries.
“NOARK
Group Documents”
means,
collectively, all data room materials and all books and records of the NOARK
Group that relate to the business or operations of EAPC or NOARK on or before
the Closing Date.
-
5 -
“NOARK
Indenture”
means
the Indenture, dated as of June 1, 1998, between NOARK Pipeline Finance
L.L.C. and UMB Bank, N.A., successor trustee to The Bank of New York (the
“Trustee”).
“NOARK
Notes”
means
the notes in an original aggregate principal amount of $80,000,000
authenticated, issued and delivered pursuant to the NOARK
Indenture.
“NOARK
Permits”
has
the
meaning provided such term in Section 5.13(b).
“NOARK
Subsidiaries”
means,
collectively, NOARK Pipeline Finance, L.L.C., an Oklahoma limited liability
company, Ozark Gas Transmission, L.L.C., an Oklahoma limited liability company,
Ozark Gas Gathering, L.L.C., an Oklahoma limited liability company, and NOARK
Energy Services, L.L.C., an Oklahoma limited liability company.
“NOARK
System”
means
any pipeline system owned by any member of the NOARK Group on the date
hereof.
“NOARK
Workforce”
has
the
meaning provided such term in Section 5.16.
“Objection
Notice”
has
the
meaning provided such term in Section 2.3(b)(iii).
“Organizational
Documents”
means
any charter, certificate of incorporation, articles of association, partnership
agreements, limited liability company agreements, bylaws, operating agreement
or
similar formation or governing documents and instruments.
“Parties”
means
Seller and Buyer.
“Partnership
Agreement”
means
the Amended and Restated Agreement of Limited Partnership of NOARK Pipeline
System, Limited Partnership, dated as of January 12, 1998, as
amended.
“Partnership
Interests”
has
the
meaning provided such term in Section 4.4.
“Permits”
means
authorizations, licenses, permits, franchises, grants, variances, exemptions,
consents, approvals, orders or certificates issued by Governmental Authorities;
provided,
right-of-way agreements and similar approvals are not included in the definition
of Permits.
“Permitted
Liens”
means
(a) Liens for Taxes not yet delinquent or being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established, (b) statutory Liens (including materialmen’s, warehousemen’s,
mechanic’s, repairmen’s, landlord’s, and other similar Liens) arising in the
ordinary course of business securing payments not yet delinquent or being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, (c) the rights of lessors and lessees under
leases, and the rights of third parties under any agreement, executed in
the
ordinary course of business and listed on Schedule 1.1(b),
(d) the rights of licensors and licensees under licenses executed in the
ordinary course of business, (e) restrictive covenants, easements and
defects, imperfections or irregularities of title, if any, as would not
reasonably be expected to materially and adverse affect the use or operation
of
the assets affected thereby, (f) purchase money Liens and Liens securing
rental payments under capital lease arrangements listed on Schedule 1.1(b),
(g)
preferential purchase rights and other similar arrangements listed on
Schedule 1.1(b)
with
respect to which consents or waivers are obtained for this transaction or
as to
which the time for asserting such rights has expired at the Closing Date
without
an exercise of such rights, (h) restrictions on transfer listed on Schedule 1.1(b)
with
respect to which consents or waivers are obtained for this transaction,
(i) any Liens created pursuant to operating or similar agreements,
(j) Liens entered into in the ordinary course of business that do not
secure the payment of Indebtedness for Borrowed Money and that do not materially
and adversely affect the ability of NOARK to conduct its business,
(k) Liens referenced in any agreements listed on Schedule 1.1(b),
(l) Liens referenced in the Disclosure Schedules, (m) Liens contained
in the Organizational Documents of NOARK, (n) Liens listed on Schedule 1.1(b)
and
(o) Liens created by Buyer, or its successors or assigns.
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“Person”
means
any individual, firm, corporation, partnership, limited liability company,
incorporated or unincorporated association, joint venture, joint stock company,
Governmental Authority or other entity of any kind.
“Plans”
has
the
meaning provided such term in Section 5.10(a).
“Post-Closing
Tax Period”
means
any Tax period (or a portion thereof) that is not a Pre-Closing Tax
Period.
“Pre-Closing
Tax Period”
means
any Tax period (or a portion thereof) ending on or before the Closing
Date.
“Purchase
Price”
has
the
meaning provided such term in Section 2.2.
“RAP”
means
the regulatory accounting principles set forth in the Uniform System of Accounts
prescribed by the FERC.
“Reasonable
Efforts”
means
efforts in accordance with reasonable commercial practice and without the
incurrence of material expense.
“Receiving
Party”
has
the
meaning provided such term in Section 2.3(b)(i).
“Representatives”
means
a
Person’s directors, officers, employees, agents or advisors (including, without
limitation, attorneys, accountants, consultants, bankers, financial advisors
and
any representatives of those advisors).
“Required
Contract”
has
the
meaning provided such term in Section 7.1(b)(xi).
“Restricted
Information”
has
the
meaning provided such term in Section 7.2(c).
“Retention
Period”
has
the
meaning provided such term in Section 7.7(b).
“Seller”
has
the
meaning provided such term in the preamble to this Agreement.
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“Seller
Guaranty”
means
the Guaranty, dated as of June 1, 1998, by the Seller in favor of the
Trustee.
“Seller
Indemnified Parties”
has
the
meaning provided such term in Section 10.2(a).
“Seller
Marks”
has
the
meaning provided such term in Section 7.6.
“Seller
Portion”
means
the portion of the NOARK Notes guaranteed by the Seller Guaranty.
“Seller
System”
means
any pipeline system owned by Seller or an Affiliate of Seller that is controlled
by Seller (other than a member of the NOARK Group).
“Shared
Frequencies”
means
those frequencies that (i) are covered by licenses issued by the United
States Federal Communications Commission that are listed on Schedule 5.13(b)
and
(ii) have been historically shared by Seller and certain members of the
NOARK Group.
“Shares”
has
the
meaning provided such term in the recitals to this Agreement.
“Signatory
Member”
has
the
meaning provided such term in Section 5.7(c).
“Straddle
Period”
has
the
meaning provided such term in Section 8.1.
“Submission”
has
the
meaning provided such term in Section 2.3(b)(iv).
“Submission
Deadline”
has
the
meaning provided such term in Section 2.3(b)(iv).
“Subsidiary”
means,
with respect to any Person, (a) any corporation, of which a majority of the
total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote generally in the election of directors thereof
is at
the time owned or controlled, directly or indirectly, by that Person or one
or
more of the other Subsidiaries of that Person or a combination thereof or
(b) any limited liability company, partnership, association or other
business entity, of which a majority of the partnership or other similar
ownership interests thereof is at the time owned or controlled, directly
or
indirectly, by that Person or one or more Subsidiaries of that Person or
a
combination thereof. For purposes of this definition, a Person or Persons
will
be deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
will
be allocated a majority of limited liability company, partnership, association
or other business entity gains or losses, or is or controls the managing
member
or general partner of such limited liability company, partnership, association
or other business entity.
“Tax
Authority”
means
any Governmental Authority or any subdivision, agency, commission or authority
thereof, or any quasi-governmental or private body having jurisdiction over
the
assessment, determination, collection or imposition of any Tax.
“Tax
Returns”
means
any report, return, election, document, estimated tax filing, declaration
or
other filing provided to any Governmental Authority including any amendments
thereto.
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“Taxes”
means
all taxes, assessments, charges, duties, fees, levies, imposts or other similar
charges imposed by a Governmental Authority, including all income, franchise,
profits, capital gains, capital stock, transfer, gross receipts, sales, use,
transfer, service, occupation, ad valorem, property, excise, severance, windfall
profits, premium, stamp, license, payroll, employment, social security,
unemployment, disability, environmental, alternative minimum, add-on,
value-added, withholding and other taxes, assessments, charges, duties, fees,
levies, imposts or other similar charges of any kind, and all estimated taxes,
deficiency assessments, additions to tax, penalties and interest.
“Third
Party Claim”
has
the
meaning provided such term in Section 10.3(a).
“Transition
Services Agreement”
has
the
meaning provided such term in Section 9.1(f).
“Trustee”
has
the
meaning provided such term in the definition of NOARK Indenture.
“United
States”
means
United States of America.
1.2
Rules
of Construction.
(a)
All
article, section, schedule and exhibit references used in this Agreement
are to
articles and sections of, and schedules and exhibits to, this Agreement unless
otherwise specified. The schedules and exhibits attached to this Agreement
constitute a part of this Agreement and are incorporated herein for all
purposes.
(b)
If a
term is defined as one part of speech (such as a noun), it shall have a
corresponding meaning when used as another part of speech (such as a verb).
Terms defined in the singular have the corresponding meanings in the plural,
and
vice versa. Unless the context of this Agreement clearly requires otherwise,
words importing the masculine gender shall include the feminine and neutral
genders and vice versa. The term “includes” or “including” shall mean “including
without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,”
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular section or article
in which such words appear.
(c)
With
respect to Seller, or any member of the NOARK Group, the term “ordinary
course of business”
will
be
deemed to refer to the ordinary conduct of the Business in a manner consistent
with the past practices and customs of Seller, or such member of the NOARK
Group, as the case may be.
(d)
The
Parties acknowledge that each Party and its attorney have reviewed this
Agreement and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party, or any similar rule operating
against the drafter of an agreement, shall not be applicable to the construction
or interpretation of this Agreement.
(e)
The
captions in this Agreement are for convenience only and shall not be considered
a part of or affect the construction or interpretation of any provision of
this
Agreement.
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9 -
(f)
All
references to currency herein shall be to, and all payments required hereunder
shall be paid in, Dollars.
(g)
All
accounting terms used herein and not expressly defined herein shall have
the
meanings given to them under GAAP or RAP, as applicable.
ARTICLE
II
PURCHASE
AND SALE; CLOSING
2.1
Purchase
and Sale of Shares.
At the
Closing, upon the terms and subject to the conditions set forth in this
Agreement, Seller shall sell, assign, transfer and convey to Buyer, and Buyer
shall purchase and acquire from Seller, the Shares, free and clear of any
Liens
other than transfer restrictions imposed thereon by applicable securities
Laws.
2.2
Consideration.
In
consideration for the purchase of the Shares contemplated by Section 2.1,
Buyer
shall pay to Seller an aggregate of $173,247,812 in cash by wire transfer
of
immediately available funds to an account designated by Seller, subject to
adjustment as provided in Section 2.3
(the
“Purchase
Price”).
If
Closing Net Working Capital is less than $10,247,812 then the Purchase Price
shall be decreased dollar-for-dollar by such amount. If Closing Net Working
Capital is greater than $10,247,812, then the Purchase Price shall be increased
dollar-for-dollar by such amount.
2.3
Purchase
Price Adjustment.
(a)
Closing
Payment.
At the
Closing, Buyer shall pay to Seller the Closing Payment in cash by wire transfer
of immediately available funds to the accounts designated by Seller. The
“Closing
Payment”
shall
be the Purchase Price that would result if the Closing Net Working Capital
were
the actual Net Working Capital as of the Balance Sheet Date (as reflected
in the
NOARK Financial Statements as of the Balance Sheet Date).
(b)
Post-Closing
Purchase Price Reconciliation.
(i)
As
soon as reasonably practicable following the Closing Date, and in any event
within 30 days thereafter, Buyer shall prepare and deliver to Seller a
calculation of Closing Net Working Capital as of the Closing Date (“Closing
Net Working Capital”),
together with reasonably detailed supporting information (the “Closing
Statement”),
provided,
however,
that
notwithstanding the foregoing, if within such 30-day period Seller is providing
accounting services under the Transition Services Agreement, and if requested
in
writing by Buyer, Seller shall prepare and deliver to Buyer the Closing
Statement. For purposes of this Section, the Party that prepares and delivers
the Closing Statement is called the “Delivering
Party”
and
the
Party that receives the Closing Statement is called the “Receiving
Party.”
(ii)
From
and after the delivery of the Closing Statement, the Buyer shall provide
the
Seller and its Representatives reasonable access to the records and employees
of
EAPC and shall cause the employees of EAPC to cooperate in all reasonable
respects with the Seller in connection with its review of such work papers
and
other documents and information relating to the calculation of Closing Net
Working Capital as of the Closing Date as the Seller shall reasonably request
and that are available to the Buyer and EAPC or their independent public
accountants.
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(iii)
Within 45 days after the Receiving Party’s receipt of the Closing
Statement, the Receiving Party shall notify the Delivering Party as to whether
the Receiving Party agrees or disagrees with the Closing Statement and, if
the
Receiving Party disagrees, such notice shall set forth in reasonable detail
the
particulars of such disagreement (“Objection
Notice”).
If
the Receiving Party provides a notice of agreement or does not provide a
notice
of disagreement within such 45-day period, then the Receiving Party shall
be
deemed to have accepted the calculations and the amounts set forth in the
Closing Statement delivered by the Delivering Party, which shall then be
final,
binding and conclusive for all purposes hereunder. If any such notice of
disagreement is timely provided, then the Parties shall each use Reasonable
Efforts for a period of 30 days thereafter to resolve any disagreements
with respect to the calculations in the Closing Statement.
(iv)
If,
at the end of the 30-day resolution period, the Parties are unable to resolve
any disagreement between them with respect to the preparation of the Closing
Statement, then each Party shall deliver simultaneously to KPMG LLP (or if
such
firm is unwilling or unable to serve, another nationally recognized accounting
firm mutually agreed on by the Parties; the accounting firm ultimately chosen,
the “Accountants”))
the
Objection Notice and the Closing Statement (each a “Submission”)
within
five days of retaining the Accountants (the “Submission
Deadline”).
The
Parties shall instruct the Accountants to (a) determine whether Buyer’s
Submission or the Seller’s Submission most accurately reflects the calculation
of Closing Net Working Capital (i.e., the Accountants will not have authority
to
select a figure for Closing Net Working Capital other than one of the two
Submissions), and (b) to deliver its written determination of the selected
Submission (which Submission shall serve as the definitive figures for Closing
Net Working Capital) to Seller and Buyer no later than the 20th day after
the
Submission Deadline.
(v)
The
fees and disbursements of the Accountants shall be paid by the party whose
Submission is not selected by the Accountants. The determination of the
Accountant shall be final, binding and conclusive for all purposes hereunder.
Such amounts as finally determined by the Accountant shall be used to determine
the Purchase Price.
2.4
Final
Purchase Price.
If,
after Closing Net Working Capital has been determined under Section 2.3(b),
the
Purchase Price is less than the Closing Payment, Seller shall, within five
Business Days after the final determination of Closing Net Working Capital
under
Section 2.3(b),
promptly pay to Buyer in cash by wire transfer of immediately available funds
to
an account designated by Buyer, an amount equal to such difference. If the
Closing Payment is less than the Purchase Price, Buyer shall, within five
Business Days after the final determination of Closing Net Working Capital
pursuant to Section 2.3(b),
promptly pay to Seller in cash by wire transfer of immediately available
funds
to the accounts designated by Seller, an amount equal to such difference.
Any
payment due either Buyer or Seller under this Section 2.4
shall
accrue interest at an annual rate equal to the Agreed Rate, which interest
shall
begin to accrue on the Business Day following the day such payment was due
and
end on the date such payment is made.
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2.5
The
Closing.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
take place at the offices of Xxxxx Day, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx
00000,
commencing on the third Business Day following the satisfaction or waiver
of all
conditions to the obligations of the Parties set forth in Article IX
or such
other date as Buyer and Seller may mutually determine (the date on which
the
Closing occurs is referred to herein as the “Closing
Date”).
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES RELATING TO SELLER
Except
as
disclosed in the Disclosure Schedule, Seller hereby represents and warrants
to
Buyer as follows:
3.1
Organization
of Seller.
Seller
is a corporation, duly incorporated, validly existing and in good standing
under
the laws of Oklahoma.
3.2
Authorization;
Enforceability.
Seller
has all requisite corporate power and authority to execute and deliver this
Agreement and to perform all obligations to be performed by it hereunder.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by all requisite corporate action on the part of Seller. This Agreement
has been duly and validly executed and delivered by Seller, and this Agreement
constitutes a valid and binding obligation of Seller, enforceable against
Seller
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar Laws affecting
creditors’ rights generally and subject, as to enforceability, to general
principles of equity.
3.3
No
Conflict; Consents.
Except
as would not reasonably be expected to have a Material Adverse Effect on
the
ability of Seller to enter into and perform its obligations under this
Agreement, the execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby by Seller do not and
shall
not:
(a)
violate any Law applicable to Seller or require any filing with, consent,
approval or authorization of, or notice to, any Governmental
Authority;
(b)
violate any Organizational Document of Seller;
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12 -
(c)
require any filing with or permit, consent or approval of, or the giving
of any
notice to, any Person; or
(d)
(i) breach any Material Contract to which Seller is a party or by which
Seller may be bound, (ii) result in the termination of any such Material
Contract, (iii) result in the creation of any Lien under any Material
Contract or (iv) constitute an event that, after notice or lapse of time or
both, would result in any such breach, termination or creation of a
Lien.
For
purposes of this Section 3.3,
Material Adverse Effect shall be determined without giving effect to clause
(v) of the exclusions to the definition of Material Adverse
Effect.
3.4
Ownership
of Shares.
(a)
Seller owns good and valid title to all of the Shares, and such Shares are
lawfully owned of record and beneficially by the Seller, free and clear of
any
Liens or other limitation or restriction (including any restriction on the
right
to vote, sell or otherwise dispose of such shares, subject only to applicable
securities Laws).
(b)
The
Shares are not subject to any voting trust agreement or other contract,
agreement, arrangement, commitment, option, proxy, right of first refusal
or
understanding, including any Contract restricting or otherwise relating to
the
voting, dividend rights or disposition of the Shares.
3.5
Litigation.
As of
the date of this Agreement (a) there are no lawsuits or actions before any
Governmental Authority pending or, to the Knowledge of Seller, threatened
in
writing against Seller that would reasonably be expected to have a Material
Adverse Effect on the ability of Seller to perform its obligations under
this
Agreement and (b) there are no orders or unsatisfied judgments from any
Governmental Authority binding upon Seller that would reasonably be expected
to
have a Material Adverse Effect on the ability of Seller to perform its
obligations under this Agreement.
3.6
Brokers’
Fees.
Except
for Xxxxxx Brothers, Inc., no broker, finder, investment banker or other
Person
is entitled to any brokerage fee, finders’ fee or other commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by Seller or any of its Affiliates. No Person other than Seller has
any
liability or obligations for any costs or expenses related to Seller’s
engagement of Xxxxxx Brothers, Inc.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES RELATED TO EAPC
Except
as
disclosed in the Disclosure Schedule, Seller hereby represents and warrants
to
Buyer as follows:
4.1
Organization
of EAPC.
EAPC is
a corporation, duly incorporated, validly existing and in good standing under
the laws of Oklahoma and has the requisite corporate power and authority
to own
or lease its assets and to conduct its business as it is now being
conducted.
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13 -
EAPC
is
duly licensed or qualified in each jurisdiction in which the ownership or
operation of its assets or the character of its activities is such as to
require
it to be so licensed or qualified, except where the failure to be so licensed
or
qualified would not reasonably be expected to have a Material Adverse Effect
on
EAPC or NOARK. Seller has made available to Buyer true copies of all existing
Organizational Documents of EAPC. The minute books of EAPC, NOARK and each
NOARK
Subsidiary, true and complete copies of which have been made available to
Buyer,
contain true and correct records of all meetings and other corporate or
organizational actions held or taken of its stockholders (or, if applicable,
members) and board of directors or similar governing body (including committees
thereof). No meeting of any of any such board or body or such committees
has
been held for which minutes have not been prepared and are not contained
in such
minute books.
4.2
No
Conflict; Consents.
Except
as would not reasonably be expected to have a Material Adverse Effect on
the
ability of EAPC to enter into and perform its obligations under this Agreement,
the execution and delivery of this Agreement by Seller and the consummation
of
the transactions contemplated hereby by Seller do not and shall
not:
(a)
violate any Law applicable to EAPC or require any filing with, consent, approval
or authorization of, or notice to, any Governmental Authority;
(b)
violate any Organizational Document of EAPC;
(c)
require any filing with or permit, consent or approval of, or the giving
of any
notice to, any Person; or
(d)
(i) breach any Material Contract to which EAPC is a party or by which EAPC
may be bound, (ii) result in the termination of any such Material Contract,
(iii) result in the creation of any Lien under any Material Contract or
(iv) constitute an event that, after notice or lapse of time or both, would
result in any such breach, termination or creation of a Lien.
For
purposes of this Section 4.2,
Material Adverse Effect shall be determined without giving effect to clause
(v) of the exclusions to the definition of Material Adverse
Effect.
4.3
Capitalization.
(a)
The
Shares constitute all of the issued and outstanding shares of capital stock
of
EAPC. The Shares are duly authorized, validly issued, fully paid, nonassessable
and are free and clear of any Lien or other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such shares,
subject only to applicable securities Laws) and were not issued in violation
of
any preemptive or other similar right.
(b)
There
are no (i) outstanding shares of capital stock, equity interests or other
securities of EAPC other than the Shares, (ii) outstanding securities of
EAPC convertible into, exchangeable or exercisable for shares of capital
stock,
equity interests or other securities of EAPC, (iii) authorized or
outstanding options, warrants or other rights to purchase or acquire from
EAPC,
or obligations of EAPC to issue, any capital stock, equity interests or other
securities, including securities convertible into or exchangeable for capital
stock or other securities of EAPC or (iv) authorized or outstanding bonds,
debentures, notes or other indebtedness that entitles the holders to vote
(or
convertible or exercisable for or exchangeable into securities that entitle
the
holders to vote) with holders of shares, units or interests of EAPC on any
matter (the items in clauses (i), (ii), (iii) and (iv) being referred
to collectively as the “Company
Securities”).
There
are no outstanding obligations of EAPC to repurchase, redeem or otherwise
acquire any Company Securities.
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14 -
(c)
Except for the Partnership Interests described in Section 4.4
and
except for any indirect interest in any NOARK Subsidiary, EAPC does not own,
directly or indirectly, any capital stock, equity interests or other securities
of any Person. EAPC does not have any Subsidiaries except for NOARK and the
NOARK Subsidiaries.
4.4
Ownership
of Partnership Interests.
EAPC
has good title to, holds of record and owns beneficially 75% of the partnership
interests in NOARK comprised of a 74% general partner interest and a 1% limited
partner interest (collectively, the “Partnership
Interests”).
Except as set forth in the Partnership Agreement, EAPC owns the Partnership
Interests free and clear of any Liens or other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose
of
such interests, subject only to applicable securities Laws). The Partnership
Interests are duly authorized, validly issued, fully paid and nonassessable
and
were not issued in violation of any preemptive or other similar right. There
are
no (i) outstanding partnership interests, equity interests or other
securities of NOARK other than the Partnership Interests and the 25% general
partner interest owned by Southwestern Energy Pipeline Company,
(ii) outstanding securities of NOARK convertible into, exchangeable or
exercisable for partnership interests, equity interests or other securities
of
NOARK, (iii) authorized or outstanding options, warrants or other rights to
purchase or acquire from NOARK, or obligations of NOARK to issue, any
partnership interests, equity interests or other securities, including
securities convertible into or exchangeable for partnership interests or
other
securities of NOARK or (iv) authorized or outstanding bonds, debentures,
notes or other indebtedness that entitles the holders to vote (or convertible
or
exercisable for or exchangeable into securities that entitle the holders
to
vote) with holders of interests of NOARK on any matter. There are no outstanding
obligations of NOARK to repurchase, redeem or otherwise acquire any partnership
interests in NOARK.
4.5
Litigation.
As of
the date of this Agreement (a) there are no lawsuits or actions before any
Governmental Authority pending or, to the Knowledge of Seller, threatened
in
writing against EAPC that would reasonably be expected to have a Material
Adverse Effect on EAPC or on the ability of Seller to perform its obligations
under this Agreement and (b) there are no orders or unsatisfied judgments
from any Governmental Authority binding upon EAPC that would reasonably be
expected to have a Material Adverse Effect on EAPC or on the ability of Seller
to perform its obligations under this Agreement.
4.6
EAPC
Financial Statements.
Schedule 4.6
sets
forth true and complete copies of the unaudited balance sheets of EAPC as
of
December 31, 2004 and the Balance Sheet Date (collectively, the
“EAPC
Financial Statements”).
The
EAPC Financial Statements have been prepared in accordance with GAAP and
present
fairly in accordance with GAAP, in all material respects, the financial position
of EAPC as of such dates, except for normal year-end adjustments and the
absence
of footnotes.
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15 -
4.7
EAPC
Taxes.
Except
as set forth on Schedule 4.7,
or as
would not reasonably be expected to have a Material Adverse Effect on EAPC,
(a) all Tax Returns required to be filed by EAPC have been filed,
(b) all Taxes shown as due on such Tax Returns have been paid,
(c) there are no Liens on any of the assets of EAPC that arose in
connection with any failure to pay any Tax, (d) there is no claim pending
by any Governmental Authority in connection with any Tax, (e) no Tax
Returns are under audit or examination by any Governmental Authority,
(f) there are no agreements or waivers currently in effect that provide for
an extension of time with respect to the filing of any Tax Return or the
assessment or collection of any Tax, (g) to the Knowledge of Seller, no
written claim has been made by any Governmental Authority in a jurisdiction
where EAPC does not file a Tax Return that it is or may be subject to taxation
in that jurisdiction and (h) EAPC is not a party to any Tax allocation or
sharing arrangement.
4.8
No
Other Business.
Except
as disclosed on Schedule 4.8,
since
November 6, 1997, EAPC has not engaged in any business or other activity
other than in connection with its ownership of the Partnership
Interests.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES RELATING TO NOARK
Except
as
disclosed in the Disclosure Schedule, Seller hereby represents and warrants
to
Buyer as follows:
5.1
Organization
of NOARK.
NOARK
is duly formed, validly existing and in good standing under the laws of Arkansas
and has the requisite limited partnership power and authority to own or lease
its assets and to conduct its business as it is now being conducted. NOARK
is
duly licensed or qualified in each jurisdiction in which the ownership or
operation of its assets or the character of its activities is such as to
require
it to be so licensed or qualified, except where the failure to be so licensed
or
qualified would not reasonably be expected to have a Material Adverse Effect
on
the NOARK Group, taken as a whole. Seller has made available to Buyer true
copies of all existing Organizational Documents of NOARK and each of its
Subsidiaries.
5.2
No
Conflict; Consents.
Except
as set forth on Schedule 5.2
and
except as would not reasonably be expected to have a Material Adverse Effect
on
the NOARK Group, taken as a whole, the execution and delivery of this Agreement
by Seller and the consummation of the transactions contemplated hereby by
Seller
do not and shall not:
(a)
violate any Law applicable to NOARK or any NOARK Subsidiary or require any
filing with, consent, approval or authorization of, or notice to, any
Governmental Authority;
(b)
violate any Organizational Document of NOARK or any NOARK
Subsidiary;
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(c)
require any filing with or permit, consent or approval of, or the giving
of any
notice to, any Person; or
(d)
(i) breach any Material Contract, (ii) result in the termination of
any such Material Contract, (iii) result in the creation of any Lien under
any Material Contract, or (iv) constitute an event which, after notice or
lapse of time or both, would result in any such breach, termination or creation
of a Lien.
For
purposes of this Section 5.2,
Material Adverse Effect shall be determined without giving effect to clause
(v) of the exclusions to the definition of Material Adverse
Effect.
5.3
NOARK
Subsidiaries.
NOARK
does not have any Subsidiaries except for the NOARK Subsidiaries. Each NOARK
Subsidiary is duly formed, validly existing and in good standing as a limited
liability company under the laws of Oklahoma and has the requisite limited
liability company power and authority to own or lease its assets and to conduct
its business as it is now being conducted. Schedule 5.3
sets
forth the jurisdictions in which each NOARK Subsidiary is duly licensed or
qualified. NOARK has good and valid title to, holds of record and owns
beneficially 100% of the membership interests in each NOARK Subsidiary, free
and
clear of any Liens or other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of such interests, subject
only
to applicable securities Laws) and is the sole member of each NOARK Subsidiary.
Such membership interests are duly authorized, validly issued, fully paid
and
nonassessable and were not issued in violation of any preemptive or other
similar right.
5.4
NOARK
Financial Statements.
Schedule 5.4
sets
forth true and complete copies of the following financial statements
(collectively, the “NOARK
Financial Statements”):
(a)
the audited consolidated balance sheet of NOARK and the NOARK Subsidiaries
as
of, and for the year ended, December 31, 2004, together with the related
audited consolidated statements of income, changes in partners’ capital and cash
flow for the period then ended prepared in accordance with RAP; and (b) the
unaudited consolidated balance sheet of NOARK and the NOARK Subsidiaries
as of,
and for the year-to-date ended on, the Balance Sheet Date, together with
the
related unaudited consolidated statements of income, changes in partners’
capital and cash flow for the period then ended prepared in accordance with
GAAP. The NOARK Financial Statements present fairly in accordance with RAP
and
GAAP, in all material respects, the financial position and the results of
operations of NOARK and the consolidated NOARK Subsidiaries as of, and for
the
periods ended on, such dates, except for normal year-end adjustments and
the
absence of footnotes with respect to the NOARK Financial Statements described
in
clause (b) of this Section 5.4.
5.5
No
Undisclosed Liabilities.
Except
as disclosed on Schedule 5.5,
or as
would not reasonably be expected to have a Material Adverse Effect on the
NOARK
Group, taken as a whole, neither NOARK nor any NOARK Subsidiary has any
Indebtedness for Borrowed Money, obligation or liability of any kind (whether
accrued, absolute, contingent or otherwise, and whether due or to become
due)
that would have been required to be reflected in, reserved against or otherwise
described on the EAPC Financial Statements or the NOARK Financial Statements
or
in the notes thereto in accordance with RAP, that (a) is not shown on the
EAPC Financial Statements or the NOARK Financial Statements or the notes
thereto
or (b) in the case of any obligation or liability other than Indebtedness
for Borrowed Money, was not incurred in the ordinary course of business since
the Balance Sheet Date.
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5.6
Absence
of Certain Changes.
Except
as disclosed on Schedule 5.6,
since
the Balance Sheet Date, (a) there has not been any Material Adverse Effect
on the NOARK Group, taken as a whole, and (b) the business of NOARK and the
NOARK Subsidiaries has been conducted, in all material respects, only in
the
ordinary course of business consistent with past practice.
5.7
Contracts.
(a)
Schedule 5.7
contains
a true and complete listing of (x) all Company Guaranties that have a face
amount or secure obligations in excess of $50,000 and (y) the following
Contracts in effect on the date of this Agreement and to which any member
of the
NOARK Group is a party (each Contract that is required to be listed on
Schedule 5.7
being
“Material
Contracts”):
(i)
except for any intercompany indebtedness that will be cancelled prior to
Closing, each Contract for Indebtedness for Borrowed Money, involving an
obligation in excess of $250,000;
(ii)
each
natural gas transportation and gathering services Contract that individually
involves revenues to any member of the NOARK Group in excess of $250,000
for the
year-to-date period ended on the Balance Sheet Date, other than Contracts
required to be disclosed pursuant to clause (vi) below;
(iii)
each Contract involving a remaining commitment by any member of the NOARK
Group
to undertake capital expenditures with respect to its business in excess
of
$250,000;
(iv)
each
Contract for lease of personal property or real property involving aggregate
payments in excess of $50,000 in any calendar year ending after the date
hereof;
(v)
each
employment Contract involving aggregate payments in excess of $50,000 in
any
calendar year ending after the date hereof, and each Contract providing
retention, severance or project bonus payments in excess of $50,000 individually
or $100,000 in the aggregate, in each case that have not been paid in full
as of
the date of this Agreement;
(vi)
except for Contracts of the nature described in clause (ii) above, each
Material Contract between Seller or a Seller Affiliate (other than EAPC or
NOARK) on the one hand, and any member of the NOARK Group, on the other hand,
that will survive the Closing;
(vii)
each Contract that provides for a limit on the ability of any member of the
NOARK Group to compete in any line of business or with any Person or in any
geographic area during any period of time after the Closing;
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(viii)
each material swap, option, hedge, futures or similar instrument or Contract
involving natural gas or other commodity trading;
(ix)
each
Contract (A) that includes an indemnity or other obligation (contingent or
otherwise) of any member of the NOARK Group that has not by its terms expired,
(B) that grants a an option or preferential purchase right to purchase any
material assets, properties or rights, (C) that creates a partnership,
joint venture or other arrangement that involves the sharing of profits or
expenses (other than the sharing of expenses in connection with natural gas
pipeline interconnection agreements) or (D) that is a natural gas pipeline
interconnection agreement; and
(x)
except for Contracts of the nature described in clauses (i) through (ix)
above, each Contract involving aggregate payments by or to any member of
the
NOARK Group in excess of $250,000 in any calendar year ending after the date
hereof that cannot be terminated by any member of the NOARK Group party thereto
upon 60 days or less notice without payment penalty in excess of
$50,000.
(xi)
each
natural gas transportation and gathering services Contract that individually
involves revenues in excess of $100,000 that is with a customer that accounts
for an aggregate of at least $250,000 for the year-to-date period ended on
the
Balance Sheet Date, excluding Contracts required to be disclosed pursuant
to
clause (vi) above, but including in addition such other natural gas
transportation and gathering services Contracts necessary to cause the revenues
attributable to the natural gas transportation and gathering services Contracts
listed on Schedule
5.7
to
account for at least 80% of the NOARK Group’s transportation and gathering
revenue for such period.
(b)
True
and complete copies of all Material Contracts and Company Guaranties have
been
made available to Buyer.
(c)
Except as set forth on Schedule 5.7(c),
(i) each Material Contract (other than such Material Contracts with respect
to which all performance and payment obligations have been fully performed
or
otherwise discharged by all parties thereto prior to the Closing), (A) is
in full force and effect and (B) represents the legal, valid and binding
obligation of each member of NOARK Group signatory thereto (a “Signatory
Member”)
and,
to the Knowledge of Seller, represents the legal, valid and binding obligation
of the other parties thereto, in each case enforceable in accordance with
its
terms and (ii) no Signatory Member nor, to the Knowledge of Seller, any
other party is in material breach of any Material Contract, and no Signatory
Member has received any written or, to the Knowledge of Seller, oral notice
of
termination or breach of any Material Contract.
5.8
Intellectual
Property.
Except
as would not reasonably be expected to have a Material Adverse Effect on
the
NOARK Group, taken as a whole, to the Knowledge of Seller, (a) the NOARK
Group owns or has the right to use pursuant to license, sublicense, agreement
or
otherwise all items of Intellectual Property required in the operation of
the
business of the NOARK Group as presently conducted, (b) no third party has
asserted in writing against the NOARK Group a claim that the NOARK Group
is
infringing on the Intellectual Property of such third party and (c) no
third party is infringing on the Intellectual Property owned by the NOARK
Group.
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5.9
Litigation.
Except
as set forth on Schedule 5.9,
(a) there are no lawsuits, claims, proceedings, investigations, reviews,
audits or actions before any Governmental Authority pending or, to the Knowledge
of Seller, threatened in writing by any Person against NOARK or any NOARK
Subsidiary that would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the NOARK Group, taken as a whole,
(b) there are no orders, consent agreements or unsatisfied judgments from
any Governmental Authority binding upon NOARK that would, individually or
in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
ability of Seller to perform its obligations under this Agreement, and
(c) with respect to the NOARK Workforce, no claims, lawsuits, petitions,
charges, investigations, complaints, proceedings, suits, demands or actions
before any Governmental Authority or arbitrator are pending or, to the Knowledge
of Seller, threatened against any of Seller and Seller’s Affiliates with respect
to employment and employment practices, terms and conditions of employment
and
wages and hours.
5.10
Employee
Benefit Plans
(a)
Schedule 5.10(a)
sets
forth a list of all material employee benefit plans (as defined in
Section 3(3) of ERISA), and all other material compensation or benefit
plans, programs, arrangements, contracts or schemes, written, oral, statutory
or
contractual (including equity-based programs, bonus arrangements, employment
contracts and vacation policies), that are maintained, contributed to or
sponsored by Seller or Seller’s Affiliates (other than any member of the NOARK
Group) for the benefit of any individual who is included in the NOARK Workforce,
but excluding, however, any plan or arrangement established and maintained
by a
Governmental Authority to which any of Seller or Seller’s Affiliates is required
to contribute pursuant to applicable Law (collectively, the “Plans”).
With
respect to each Plan, Seller has delivered or made available to Buyer a true
and
complete copy of each such Plan (including all amendments thereto) and any
related trust agreement or insurance contract, and (to the extent applicable)
a
copy of the most recent IRS determination letter issued in respect of each
Plan
that is intended to meet the requirements of Section 401(a) of the Code,
each
Plan’s current summary plan description, the most recent actuarial report or
valuation relating to each Plan subject to Title IV of ERISA and the most
recent
annual report on Form 5500 series filed in respect of each
Plan.
(b)
Except as set forth on Schedule 5.10(b),
none of
the Plans (i) is a plan that is or has ever been subject to Title IV of
ERISA, Section 302 of ERISA or Section 412 of the Code, (ii) is a
“multiemployer plan” as defined in Section 3(37) of ERISA, (iii) is a
plan maintained in connection with a trust described in Section 501(c)(9)
of the Code, (iv) is an employment agreement, (v) provides for the payment
of separation, severance, change of control, termination or similar-type
benefits to any person or (vi) provides for or promises retiree medical or
life insurance benefits to any individual included in the NOARK Workforce
except
to the extent required by Law. Each of the Plans is subject only to the federal
or state Laws of the United States or a political subdivision thereof.
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(c)
Each
Plan is in compliance in all material respects with, and has always been
operated in all material respects in accordance with, its terms and the
requirements of all applicable Laws. No action, suit, claim or proceeding
is
pending or, to the Knowledge of Seller, threatened with respect to any Plan
(other than claims for benefits in the ordinary course). To the Knowledge
of
Seller, there is no matter pending (other than routine qualification
determination filings) with respect to any Plan before any Governmental
Authority.
(d)
Each
Plan intended to meet the requirements of Section 401(a) of the Code has
received a favorable determination letter from the IRS and, to the Knowledge
of
Seller, nothing has occurred since the issuance of each such letter that
could
reasonably affect its qualification.
(e)
No
member of the NOARK Group sponsors, maintains, contributes to or is obligated
to
contribute to, or has ever sponsored, maintained, contributed to or been
obligated to contribute to, any employee benefit plan (as defined in
Section 3(3) of ERISA) or any other compensation or benefit plan, program,
arrangement, contract or scheme, written, oral, statutory or contractual
(including equity-based programs, bonus arrangements, employment contracts
and
vacation policies). No member of the NOARK Group has any liability or obligation
(whether accrued, contingent, secondary or otherwise and whether arising
under
Title IV of ERISA or otherwise) to, based upon or arising out of any employee
benefit plan (as defined in Section 3(3) of ERISA) or any other
compensation or benefit plan, program, arrangement, contract or scheme, written,
oral, statutory or contractual (including equity-based programs, bonus
arrangements, employment contracts and vacation policies) or the employment
relationship of any employee (past or present) with Seller and Seller’s
Affiliates.
5.11
NOARK
Taxes.
Except
as set forth on Schedule 5.11
or as
would not reasonably be expected to have a Material Adverse Effect on the
NOARK
Group, taken as a whole, (a) all Tax Returns required to be filed by NOARK
or
any NOARK Subsidiary have been filed, (b) all Taxes shown as due on such
Tax Returns have been paid, (c) there are no Liens on any of the assets of
NOARK or any NOARK Subsidiary that arose in connection with any failure to
pay
any Tax, (d) there is no claim pending by any Governmental Authority in
connection with any Tax, (e) no Tax Returns are under audit or examination
by any Governmental Authority, (f) there are no agreements or waivers
currently in effect that provide for an extension of time with respect to
the
filing of any Tax Return or the assessment or collection of any Tax, (g) to
the Knowledge of Seller, no written claim has been made by any Governmental
Authority in a jurisdiction where NOARK or any NOARK Subsidiary does not
file a
Tax Return that it is or may be subject to taxation in that jurisdiction,
(h) NOARK is a partnership and each NOARK Subsidiary is a disregarded
entity for federal income tax purposes and (i) NOARK and the NOARK
Subsidiaries have collected or withheld and paid over to the appropriate
Tax
Authority all Taxes that they were required to collect or
withhold.
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5.12
Environmental
Matters.
Except
as set forth on Schedule 5.12
or as
would not reasonably be expected to have a Material Adverse Effect on the
NOARK
Group, taken as a whole:
(a)
To
the Knowledge of Seller, the operations of NOARK and the NOARK Subsidiaries
have
been and are in compliance with all Environmental Laws, which compliance
includes the possession and maintenance in full force and effect of, and
compliance with, all material Environmental Permits;
(b)
Neither NOARK nor any NOARK Subsidiary is subject to any outstanding order,
judgment or arbitration award from, or settlement with, any Governmental
Authority under any Environmental Laws requiring investigation or remediation
of
any Constituents of Concern or the payment of a fine or penalty or has received
any notice of alleged violation of or potential liability under any
Environmental Laws, and the operations of NOARK and the NOARK Subsidiaries
are
not subject to any remedial obligations under Environmental Laws;
(c)
Neither NOARK nor any NOARK Subsidiary is subject to any action (or, to Seller’s
Knowledge, an investigation or inquiry) pending or, to Seller’s Knowledge,
threatened in writing, whether judicial or administrative, alleging
noncompliance with or potential liability under any Environmental
Law;
(d)
All
environmental reports relating to the business or operations of NOARK and
the
NOARK Subsidiaries prepared by or at the direction of Seller or its Affiliates
(including NOARK and its Subsidiaries), and all correspondence outside the
ordinary course of business between NOARK or any NOARK Subsidiary and any
Governmental Authority addressing potentially material environmental matters,
as
well as any other material environmental documents and records maintained
in the
ordinary course of business or otherwise required to be maintained by applicable
Environmental Laws, have been made available to Buyer; and
(e)
To
the Knowledge of Seller, there has been no exposure of any Person or property
to
Constituents of Concern in connection with the properties and operations
of
NOARK and the NOARK Subsidiaries that would be reasonably expected to result
in
a claim for damages or compensation.
5.13
Compliance
with Laws; Permits.
(a)
NOARK
and the NOARK Subsidiaries are (and, to Seller’s Knowledge have been) in
compliance with all applicable Laws, except as otherwise disclosed in this
Agreement and for noncompliance that would not reasonably be expected to
have a
Material Adverse Effect on the NOARK Group, taken as a whole. Notwithstanding
any provision in this Section 5.13
(or any
other provision of this Agreement) to the contrary, Section 5.10,
Section 5.11
or
Section 5.12,
shall
be the exclusive representations and warranties with respect to employee
benefits, Tax and environmental issues, as well as related matters, and no
other
representations or warranties are made with respect to such matters, including
without limitation pursuant to this Section 5.13.
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22 -
(b)
Each
of NOARK and each of the NOARK Subsidiaries possesses all Permits necessary
for
it to own, lease and operate its assets and to lawfully operate and carry
on its
business as currently conducted, including the licenses from the United States
Federal Communications Commission listed on Schedule 5.13(b)
(collectively, the “NOARK
Permits”)
except
where the failure to possess any such NOARK Permit would not reasonably be
expected to have a Material Adverse Effect on the NOARK Group, taken as a
whole.
To the Knowledge of Seller, (i) all such Permits are in full force and
effect, (ii) none of NOARK or any of the NOARK Subsidiaries is in material
violation or default of, or material conflict with, any material NOARK Permit
and (iii) there are no lawsuits or other proceedings pending or threatened
in writing before any Governmental Authority that seek the revocation,
cancellation, suspension or adverse modification thereof, except as would
not
reasonably be expected have a Material Adverse Effect on the NOARK Group,
taken
as a whole.
5.14
No
FERC Proceedings.
Except
as disclosed on Schedule 5.14,
as of
the date of this Agreement, there are no pending, or to the Knowledge of
Seller,
threatened FERC proceedings involving NOARK or any NOARK Subsidiary, except
for
such proceedings that would not reasonably be expected to have a Material
Adverse Effect on the NOARK Group, taken as a whole.
5.15
Insurance.
Schedule 5.15
contains
a summary description of all material policies of property, fire and casualty,
product liability, workers’ compensation and other insurance held by or for the
benefit of NOARK and the NOARK Subsidiaries as of the date of this Agreement.
Except as would not reasonably be expected to have a Material Adverse Effect
on
the NOARK Group, taken as a whole, (a) there is no claim by NOARK or any of
the NOARK Subsidiaries pending under any such policies or bonds to which
coverage has been denied by the underwriters or issuers of such policies
or
bonds nor has any denial of coverage or reservation of rights notice been
given
by any such underwriter and issuer with respect to a claim that is still
pending
and (b) all premiums due under such policies and bonds have been timely paid
and
NOARK and the NOARK Subsidiaries have otherwise complied in all material
respects with the terms and conditions of all such policies and bonds. To
Seller’s Knowledge, and except as would not reasonably be expected to have a
Material Adverse Effect on the NOARK Group, taken as a whole, (a) such
policies of insurance and bonds are in full force and effect and (b) there
is no threatened termination of, or material alteration of coverage under,
any
such policies and bonds.
5.16
Labor
Relations.
No
member of the NOARK Group has, or has ever had, any employees. Schedule 7.5(a)
sets
forth a complete and accurate list of the name, current base salary or hourly
wages, and date of hire of each Eligible Employee (collectively, the
“NOARK
Workforce”).
Except as set forth on Schedule 7.5(a),
(a) there is not any collective bargaining agreement or other labor union
contract applicable to persons included in the NOARK Workforce, and, to the
Knowledge of Seller, there are no organizational campaigns, petitions or
other
unionization activities focusing on persons included in the NOARK Workforce
that
seek recognition of a collective bargaining unit or (b) no strikes,
material slowdowns or material work stoppages are pending or, to the Knowledge
of Seller, threatened with respect to the NOARK Workforce.
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5.17
Throughput
Data and Information.
Attached hereto as Schedule 5.17
are
historical throughput data and information for the calendar years 2003 and
2004
relating to the business of NOARK and the NOARK Subsidiaries. To Seller’s
Knowledge, such throughput data and information are accurate and complete
in all
material respects with respect to the information for each calendar year
period,
without representation as to any specific monthly volume. To Seller’s Knowledge,
subsequent to such period, there have been no material adverse changes in
the
volumes of natural gas gathered and transported by NOARK and the NOARK
Subsidiaries, taken as a whole.
5.18
Title
to Assets; Sufficiency.
(a)
Schedule 5.18
lists
all of the material items of real property (including Easements) and material
pipelines, equipment and other tangible personal property used in the conduct
of
the business of NOARK and the NOARK Subsidiaries. NOARK or one of the NOARK
Subsidiaries owns good title to the property included on Schedule 5.18
(other
than Easements) free and clear of all Liens other than Permitted Liens. The
real
and tangible personal property listed on Schedule 5.18,
together with the other real and personal property owned or leased by NOARK
and
the NOARK Subsidiaries, include all real property and tangible personal property
that are necessary for NOARK and the NOARK Subsidiaries to conduct their
respective businesses in substantially the same manner as the Business currently
is being conducted.
(b)
The
business of NOARK and each of the NOARK Subsidiaries has and is being operated
in a manner that does not violate (in any manner that would, or that could
reasonably be expected to, have a Material Adverse Effect on the NOARK Group,
taken as a whole) the terms of any easements, rights of way, permits,
servitudes, licenses, leasehold estates and similar rights related to real
property (collectively, “Easements”)
used
by NOARK and the NOARK Subsidiaries in the ordinary operation of its business
as
currently conducted. All Easements are valid and enforceable, except as the
enforceability thereof may be affected by bankruptcy, insolvency or other
Laws
of general applicability affecting the rights of creditors generally or
principles of equity, and grant the rights purported to be granted thereby
and
all rights necessary thereunder for the current operation of such businesses,
except where the failure of any such Easement to be valid and enforceable
or to
grant the rights purported to be granted thereby or necessary thereunder
would
not have a Material Adverse Effect on the NOARK Group, taken as a whole.
There
are no gaps in the Easements, other than gaps that would not reasonably be
expected to materially impair the conduct of the business of NOARK or any
of the
NOARK Subsidiaries as currently conducted, and no part of the material tangible
assets of NOARK or the NOARK Subsidiaries is located on property that is
not
owned in fee by NOARK or one of the NOARK Subsidiaries or subject to an Easement
in favor of NOARK or one of the NOARK Subsidiaries.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES RELATING TO BUYER
Buyer
hereby represents and warrants to Seller as follows:
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6.1
Organization
of Buyer.
Buyer
is a limited partnership, formed, validly existing and in good standing under
the laws of Delaware.
6.2
Authorization;
Enforceability.
Buyer
has all requisite partnership power and authority to execute and deliver
this
Agreement and to perform all obligations to be performed by it hereunder.
The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by Buyer, and no other partnership proceeding on the part of Buyer
is
necessary to authorize this Agreement. This Agreement has been duly and validly
executed and delivered by Buyer, and this Agreement constitutes a valid and
binding obligation of Buyer, enforceable against Buyer in accordance with
its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar Laws affecting creditors’ rights
generally and subject, as to enforceability, to general principles of
equity.
6.3
No
Conflict; Consents.
Except
as disclosed on Schedule 6.3
or as
would not reasonably be expected to have a Material Adverse Effect on the
ability of Buyer to enter into and perform its obligations under this Agreement,
the execution and delivery of this Agreement by Buyer and the consummation
of
the transactions contemplated hereby by Buyer do not and shall not:
(a)
violate any Law applicable to Buyer or require any filing with, consent,
approval or authorization of, or, notice to, any Governmental
Authority;
(b)
violate any Organizational Document of Buyer; or
(c)
require any filing with or permit, consent or approval of, or the giving
of any
notice to, any Person.
6.4
Litigation.
As of
the date of this Agreement (a) there are no lawsuits or actions before any
Governmental Authority pending or threatened in writing against Buyer that
would
reasonably be expected to have a Material Adverse Effect on the ability of
Buyer
to perform its obligations under this Agreement and (b) there are no orders
or unsatisfied judgments from any Governmental Authority binding upon Buyer
that
would reasonably be expected to have a Material Adverse Effect on the ability
of
Buyer to perform its obligations under this Agreement.
6.5
Brokers’
Fees.
No
broker, finder, investment banker or other Person is entitled to any brokerage
fee, finders’ fee or other commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by Buyer or any
of
its Affiliates.
6.6
Financial
Ability.
Buyer
has, through a combination of cash on hand and funds readily and unconditionally
available under an irrevocable financing commitment from Bank of America,
N.A.,
Wachovia Bank, National Association and Wachovia Capital Markets, LLC (the
"Financing
Commitment”)
funds
sufficient to fund the consummation of the transactions contemplated by this
Agreement and satisfy all other costs and expenses arising in connection
therewith. A true, correct and complete copy of the Financing Commitment
is
attached hereto as Schedule
6.6.
The
Financing Commitment remains in full force and effect and has not been amended,
otherwise modified or terminated, nor has Buyer received any notice from
Bank of
America, N.A., Wachovia Bank, National Association or Wachovia Capital Markets,
LLC of any intention to take any such action.
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6.7
Securities
Law Compliance.
Buyer
(a) is acquiring the Shares for its own account and not with a view to
distribution, (b) has sufficient knowledge and experience in financial and
business matters so as to be able to evaluate the merits and risk of an
investment in the Shares and is able financially to bear the risks thereof,
and
(c) understands that the Shares will, upon purchase, be characterized as
“restricted securities” under state and federal securities laws and that under
such laws and applicable regulations the Shares may be resold without
registration under such laws only in certain limited circumstances.
ARTICLE
VII
COVENANTS
7.1
Conduct
of Business.
(a) From the date of this Agreement through the Closing, Seller shall cause
NOARK and the NOARK Subsidiaries to operate its business in the ordinary
course
and, without limiting the generality or effect of the foregoing, Seller will
use
its Reasonable Efforts to cause each other member of the NOARK Group to preserve
intact its business and its relationships with customers, suppliers and others
having business relationships with the NOARK Group, in each case in all material
respects.
(b)
Without limiting the generality or effect of Section 7.1(a),
prior
to the Closing, Seller shall cause EAPC not to, and none of Seller, EAPC
or any
Management Committee designee of Seller or EAPC shall take any action to
permit
NOARK or, in respect of Section 7.1(b)(iii),
themselves take any action or permit any Affiliate to take any action,
to:
(i)
amend
its or any of the NOARK Subsidiaries’ Organizational Documents;
(ii)
liquidate, dissolve, recapitalize or otherwise wind up its
business;
(iii)
except as required by Law or in the ordinary course of business, (A) grant
or
increase any bonus, salary, severance, termination or other compensation
or
benefits or other enhancement to the terms or conditions of employment to
any
Eligible Employees (other than bonuses granted at or prior to the Closing
in
connection with the transactions contemplated hereby that are paid prior
to the
Closing or otherwise taken into account in the calculation of Net Working
Capital) or (B) adopt, enter into or amend in any material respect any Plan
or collective bargaining agreement that would affect Eligible
Employees;
(iv)
change its accounting methods, policies or practices, except as required
by
applicable Law;
(v)
sell,
assign, transfer, lease or otherwise dispose of any material non-current
assets
except in the ordinary course of business or pursuant to the terms of a Material
Contract;
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(vi)
make
any capital expenditure in excess of $250,000, other than reasonable capital
expenditures in connection with any emergency or force majeure events affecting
NOARK or any NOARK Subsidiary;
(vii)
merge or consolidate with, or purchase substantially all of the assets or
business of, or equity interests in, or make an investment in any Person
(other
than extensions of credit to customers in the ordinary course of
business);
(viii)
issue or sell any equity interests, notes, bonds or other securities of any
member of the NOARK Group (except for intercompany loans from or to Seller
or
its Affiliates in the ordinary course of business that will be eliminated
at or
prior to Closing), or any option, warrant or right to acquire same, or declare,
set aside or pay any non-cash dividend or other non-cash
distribution;
(ix)
incur, create or assume or modify the terms of any Indebtedness for Borrowed
Money, make any loans, advances or capital contributions to, or investments
in,
any other Person (other than any member of the NOARK Group) or subject any
asset
of any member of the NOARK Group to any Lien other than a Permitted
Lien;
(x)
compromise, settle, grant any waiver or release any material claims relating
to
Litigation;
(xi)
materially modify the terms of any Material Contract or enter into any (A)
natural gas gathering or transportation services Contract or other
revenue-generating Contract that has a term longer than 30 days,
(B) Contract involving expenditures in excess of $20,000 or
(C) Contract that would constitute a Material Contract; provided,
however,
that in
no event shall this Section
7.1(b)(xi)
apply to
any Contract offered to Ozark Gas Transmission, L.L.C. that is required under
applicable Law to be accepted by Ozark Gas Transmission, L.L.C. without
modification (a “Required
Contract”),
with
respect to which Required Contracts Seller agrees to give notice to Buyer
thereof; or
(xii)
agree, whether in writing or otherwise, to do any of the foregoing.
7.2
Access.
(a)
From
the date hereof through the Closing, Seller shall afford to Buyer and its
authorized Representatives reasonable access, during normal business hours
and
in such manner as not to unreasonably interfere with normal operation of
the
business, to the properties, books, contracts, records and appropriate officers
and employees of EAPC and NOARK, and shall furnish such authorized
Representatives with all financial and operating data and other information
concerning the affairs of the NOARK Group as Buyer and such Representatives
may
reasonably request, provided that Buyer and its authorized Representatives
will
not request information, or otherwise contact, any officer, director or employee
of Seller or any member of the NOARK Group without arranging such contact
with
either Xxxxxxxx X. Xxxx or Xxx Xxxxx. Seller shall have the right to have
a
Representative present at all times during any such inspections, interviews
and
examinations. Additionally, Buyer shall hold in confidence all such information,
including any information disclosed to Buyer pursuant to Section 7.1(b)(xi),
on the
terms and subject to the conditions contained in the Confidentiality Agreement.
Notwithstanding the foregoing, Buyer shall have no right of access to, and
Seller shall have no obligation to provide to Buyer, information relating
to
(i) bids received from others in connection with the transactions
contemplated by this Agreement (or similar transactions) and information
and
analyses (including financial analyses) relating to such bids; (ii) any
information the disclosure of which would jeopardize any privilege available
to
EAPC, NOARK, Seller or any Seller Affiliate relating to such information
or
would cause EAPC, NOARK, Seller or any Seller Affiliate to breach a
confidentiality obligation; or (iii) any information the disclosure of
which would result in a violation of Law. To the extent reasonably practicable,
Seller and Buyer shall use Reasonable Efforts to make appropriate substitute
disclosure arrangements under circumstances in which the restriction of the
preceding sentence apply. Buyer and Seller shall cooperate to ensure that
the
provision of access hereunder to Buyer and its authorized Representatives
shall
comply in all respects with the FERC’s Standards of Conduct for Transmission
Providers set forth in 18 C.F.R. Part 358, et seq.
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27 -
(b)
Buyer
shall indemnify the Seller Indemnified Parties and their Representatives,
and
save them harmless, effective as and from the date hereof, from and against
any
claims, demands, actions, causes of action, damages, losses, costs, liabilities,
or expenses that they or any of them may suffer or incur, or that may be
made or
brought against any of them, as a result of, in respect of, or arising out
of
any injury to the person or property of Buyer or its Representatives as a
result
of, or in connection with any site visits or inspections of the assets or
properties of any Seller Indemnified Party. THE INDEMNIFICATION PROVISIONS
IN
THIS SECTION
7.2
SHALL BE
ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM
INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY
OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE
OR
CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING
INDEMNIFICATION.
(c)
From
and after the Closing Date, Seller shall, and shall cause its Affiliates
and its
and their respective Representatives to, keep confidential and not disclose
all
information relating to any member of the NOARK Group or any of their respective
businesses or assets (the “Restricted
Information”),
and
shall not directly or indirectly use such Restricted Information for any
purpose, except as and to the extent permitted by the terms of this Agreement
or
the Transition Services Agreement. The obligation to keep such Restricted
Information confidential shall continue indefinitely from the Closing Date
and
shall not apply to any information that (i) is in the public domain,
(ii) is published or otherwise becomes part of the public domain through no
fault of Seller, any of its Affiliates or any of their respective
Representatives or (iii) becomes available to Seller, any of its Affiliates
or any of their respective Representatives on a non-confidential basis from
a
source that did not acquire such information (directly or indirectly) from
Seller or Buyer or any of their respective Affiliates or Representatives
on a
confidential basis. Notwithstanding the foregoing, Seller may make disclosures
required by Law and in connection with disputes hereunder; provided,
however,
that
Seller, to the extent practicable, shall provide Buyer with prompt notice
thereof so that Buyer may seek a protective order or other appropriate remedy
or
waive compliance with the provisions of this Section 7.2(c).
In the
event that such protective order or other remedy is not obtained or Buyer
waives
compliance with the provisions of this Section
7.2(c),
Seller
shall or shall cause the Person required to disclose such Restricted Information
to furnish only that portion of the information that such Person is legally
required, and, to the extent practicable, Seller shall exercise its Reasonable
Efforts to obtain reliable assurance that confidential treatment is accorded
the
Restricted Information so furnished.
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28 -
(d)
As
soon as reasonably practicable following the Closing, Seller shall, in
accordance with the terms of the applicable confidentiality agreement, request
from each bidder that entered into a confidentiality agreement with Seller
regarding the possible acquisition by such bidder of the Shares, that such
bidder return to NOARK any and all Restricted Information furnished to such
bidder.
(e)
All
Restricted Information shall be subject to the terms and conditions of the
Confidentiality Agreement, and the Parties understand and agree that the
terms
of this Agreement shall be subject to the Confidentiality Agreement. Buyer
agrees to be bound by the Confidentiality Agreement as if it were an original
party thereto. Notwithstanding the foregoing, from and after the Closing,
any
restrictions contained herein or in the Confidentiality Agreement relating
to
Buyer’s use or disclosure of the Restricted Information shall be null and
void.
(f)
Commencing promptly after the execution of this Agreement, Seller will provide
representatives of Buyer during normal business hours, at no cost or expense
to
Seller and at the sole cost and expense of Buyer, with access to (and, in
the
case of clauses (ii) and (iii), reasonable assistance from) (i) data,
including accounting and other books and records, (ii) the accountants
responsible for the financial statements of the NOARK Group, and
(iii) appropriate personnel of Seller and Sellers’ Affiliates, in each case
as reasonably required by Buyer to enable Buyer to prepare with respect to
EAPC
and NOARK as soon as practicable (and in any event within 75 days)
following the execution of this Agreement: (A) GAAP audited balance sheets
and related statements of income and cash flows for each of its three most
recent fiscal years, and (B) any other financial statements reasonably
required by Buyer. Seller agrees to authorize the access to Buyer’s independent
auditors to the working papers associated with the financial statements of
the
NOARK Group. Without limiting the generality of the foregoing, Seller will
cause
EAPC to retain Ernst & Young to prepare any such financial statements at
Buyer’s sole cost and expense. Notwithstanding any provision in this
Section 7.2(f)
to the
contrary, under no circumstances shall Seller or any of its Affiliates have
any
liability or responsibility for any financial statements prepared in connection
with this Section 7.2(f),
and
Buyer shall indemnify and hold harmless Seller and its Affiliates from and
after
the Closing for any Losses arising out of or relating to such financial
statements. Notwithstanding the foregoing, nothing in the immediately preceding
sentence shall be deemed to be a limitation on the representations set forth
in
Section 4.6
or
Section 5.4.
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29 -
7.3
Third
Party Approvals.
Buyer
and Seller shall (and shall each cause their respective Affiliates to) use
Reasonable Efforts to obtain all material consents and approvals of third
parties that any of Buyer, Seller or their respective Affiliates are required
to
obtain in order to consummate the transactions contemplated hereby.
7.4
Regulatory
Filings.
From
the date of this Agreement until the Closing, each of Buyer and Seller shall,
and shall cause their respective Affiliates to (a) make or cause to be made
the filings required of such party or any of its Affiliates (and, in the
case of
Seller and any of its respective Affiliates) under any Laws with respect
to the
transactions contemplated by this Agreement and to pay any fees due of it
in
connection with such filings, as promptly as is reasonably practicable, and
in
any event within ten Business Days after the date hereof, (b) cooperate with
the
other Party and furnish all information in such Party’s possession that is
necessary in connection with such other Party’s filings, (c) use Reasonable
Efforts to cause the expiration of the notice or waiting periods under the
HSR
Act and, if applicable, any other Laws with respect to the transactions
contemplated by this Agreement as promptly as is reasonably practicable,
(d) promptly inform the other Party of any communication from or to, and
any proposed understanding or agreement with, any Governmental Authority
in
respect of such filings, (e) consult and cooperate with the other Party in
connection with any analyses, appearances, presentations, memoranda, briefs,
arguments and opinions made or submitted by or on behalf of any Party in
connection with all meetings, actions and proceedings with Governmental
Authorities relating to such filings, (f) comply, as promptly as is
reasonably practicable, with any requests received by such Party or any of
its
Affiliates under the HSR Act and any other Laws for additional information,
documents or other materials, (g) use Reasonable Efforts to resolve any
objections as may be asserted by any Governmental Authority with respect
to the
transactions contemplated by this Agreement, and (h) use Reasonable Efforts
to contest and resist any action or proceeding instituted (or threatened
in
writing to be instituted) by any Governmental Authority challenging the
transactions contemplated by this Agreement as in violation of any Law. If
a
Party intends to participate in any meeting with any Governmental Authority
with
respect to such filings, it shall give the other Party reasonable prior notice
of such meeting.
7.5
Employee
and Benefit Matters.
(a)
Schedule 7.5(a)
sets
forth a list of certain employees of Seller or its Affiliates (other than
any
member of the NOARK Group) who have provided services relating to NOARK’s
business that Seller and its Affiliates shall make available to Buyer to
discuss
potential employment with Buyer after the Closing (such employees being
collectively the “Eligible
Employees”).
Within 10 days after the date of this Agreement, Buyer shall offer
employment (which shall be contingent on the occurrence of the Closing) to
each
Eligible Employee that Buyer desires to employ, and Buyer shall notify Seller
in
writing of the identities of the Eligible Employees to whom Buyer has made
an
offer. Each offer of employment to a Eligible Employee shall be consistent
with
the provisions of this Section 7.5
and
shall remain open for a period of at least seven days. On or before the date
that is three Business Days prior to the Closing Date, Buyer shall notify
Seller
as to each Eligible Employee who has accepted employment with Buyer and each
Eligible Employee who has rejected an offer of such employment. Between the
date
hereof and the Closing Date, Seller and its Affiliates shall provide Buyer
with
reasonable access to the Eligible Employees. Seller and its Affiliates shall
not
take any action to discourage any Eligible Employee from accepting an offer
of
employment from Buyer. Notwithstanding the foregoing, Buyer acknowledges
that
Seller will provide information to Xxxx Xxxxx and Xxxxxx Xxxxx that would
outline for such Eligible Employees what their duties and compensation would
be
if they were to remain employees of Seller, and no such action shall be deemed
to violate the provisions of the immediately preceding sentence; provided,
however, that
if
such employees remain employees of Seller, then Seller will make such employees
available to Buyer to provide services for up to four months after the Closing
Date. Seller will provide to Buyer copies of any such information that is
provided to either Xxxx Xxxxx or Xxxxxx Xxxxx. Buyer shall indemnify and
hold
harmless Seller and its Affiliates with respect to all Losses relating to
or
arising out of the employee selection and employment offer process described
in
the preceding provisions of this Section
7.5(a)
(including any claim of discrimination or other illegality in such selection
and
offer process). The date of employment commencement with Buyer (the
“Hire
Date”)
of
each Eligible Employee who accepts such employment with Buyer shall be the
Closing Date; provided,
however that
with
respect to any Eligible Employee to whom an employment offer was made and
who
does not report for work on the Closing Date because of an illness or injury,
Buyer, in its sole discretion, may delay such Eligible Employee’s Hire Date to
the date upon which such individual is able to and does commence active duty
with Buyer.
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(b)
For a
period of at least one year beginning on the Closing Date and subject to
the
remaining paragraphs of this Section 7.5
and an
individual’s continued employment with EAPC, NOARK, Buyer or any of their
respective Affiliates, Buyer shall cause each Eligible Employee who accepts
an
offer of employment from Buyer as provided in Section
7.5(a)
(each, a “Continuing
Employee”)
to be
provided, commencing as of the date the Continuing Employee becomes an employee
of Buyer or its Affiliates, with (i) base salary or base wage rate (as
applicable) on a basis at least equal to 104% of the base salary or base
wage
rate paid to such Continuing Employee by Seller and its Affiliates to such
Continuing Employee immediately prior to Closing and (ii) benefits on a
basis substantially similar to those provided to similarly situated employees
of
Buyer and its Affiliates.
(c)
Buyer
shall cause each Continuing Employee and the Continuing Employee’s eligible
dependents (including all such Continuing Employee’s dependents covered
immediately prior to such Continuing Employee’s Hire Date by a Plan that is a
group health plan), to (i) be eligible for coverage under group health,
prescription drug, dental and similar type welfare benefit plans maintained
by
Buyer or an Affiliate thereof or that provide benefits to the Continuing
Employee and such eligible dependents, effective as of such Continuing
Employee’s Hire Date and (ii) for purposes of satisfying deductibles,
out-of-pocket maximums or other similar limitations, credit such Continuing
Employee, for the year during which such coverage under such plans begins,
with
any deductibles, co-insurance and co-payments already incurred during such
year
under Plans that provide similar benefits; provided,
however,
that
such Continuing Employee shall be responsible for providing the necessary
information to Buyer based on explanation of benefit forms received by the
Continuing Employee from the corresponding Plan.
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(d)
Buyer
shall cause the employee benefit plans and programs maintained after the
Closing
by the NOARK Group, Buyer, or Affiliates of Buyer, as the case may be, to
recognize each Continuing Employee’s years of service and level of seniority
prior to such Continuing Employee’s Hire Date with Seller and Seller’s
Affiliates, as the case may be (including service and seniority with any
other
employer that was recognized by Seller or Seller’s Affiliates, as the case may
be), for purposes of terms of employment and eligibility, vesting, benefit
accrual, retirement eligibility, and benefit determination under such plans
and
programs, including paid vacation, paid sick time, severance benefits and
employer contribution rates under retirement plans (but excluding accrual
of
benefits under any defined benefit pension plan), to the same extent as such
Continuing Employee was entitled immediately prior to his or her Hire Date
to
credit for such service for such purposes under any similar employee benefit
plan of Seller or its Affiliates. Promptly after each Continuing Employee’s Hire
Date, Seller shall provide written notice to Buyer of such prior service
credit.
Buyer shall cause each employee welfare benefit plan or program sponsored
by
Buyer or one of its Affiliates that a Continuing Employee may be eligible
to
participate in on or after the Closing Date to waive any preexisting condition
exclusion or any proof of insurability requirement with respect to participation
and coverage requirements applicable to such Continuing Employee or such
employee’s dependents, but only to the extent that such exclusions or
requirements were not imposed with respect to such Continuing Employee and/or
such employee’s dependents under a corresponding plan maintained by Seller or
one of its Affiliates.
(e)
Neither Seller nor any of its Affiliates will, unless acting in accordance
with
Buyer’s prior written consent, for the period beginning on the Closing Date and
ending on the date that is two years after the Closing Date, solicit, encourage
or induce any Continuing Employee to become an employee of the Seller or
any of
its Affiliates; provided,
however,
that
the foregoing restriction shall not apply to any general solicitations not
directed at any Continuing Employee.
(f)
Seller shall cause continuation coverage (within the meaning of
Section 4980B of the Code and the Treasury regulations thereunder) required
to be provided under any group health plan of Seller or its Affiliates to
all
employees of Seller or its Affiliates (and their dependents) who are M & A
qualified beneficiaries (within the meaning assigned to such term under
Q&A-4 of Treasury regulation Section 54.4980B-9) with respect to the
transactions contemplated by this Agreement and who elect such coverage,
to be
so provided, but only for the duration of the period to which such individuals
are entitled to such coverage.
(g)
Nothing in this Agreement shall require or be construed or interpreted as
requiring Buyer or any of its Affiliates to continue the employment of any
of
their employees (including the Continuing Employees) following the Closing
Date,
or, except as otherwise required by this Section 7.5,
to
prevent Buyer or any of its Affiliates from changing the terms and conditions
of
employment (including compensation and benefits) of any of their employees
(including the Continuing Employees) following the Closing
Date.
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32 -
(h)
If
the employment of any Continuing Employee terminates (for any reason other
than
death, disability, voluntary termination or a termination for cause) within
one
year of the Closing Date, then Buyer shall provide such Continuing Employee
with
the severance benefits described on Schedule 7.5(h).
Seller
shall promptly reimburse Buyer for any such severance benefit payments and
for
any reasonable costs and expenses (including employment taxes imposed on
the
employer) incurred by Buyer in connection with providing such severance
benefits.
7.6
Seller
Marks.
Buyer
shall obtain no right, title, interest, license or any other right whatsoever
to
use the word “OGE” or “Enogex” or any trademarks containing or comprising the
foregoing, or any trademark confusingly similar thereto or dilutive thereof
(collectively, the "Seller
Marks”).
From
and after the Closing, Buyer agrees that it shall (a) cause EAPC to change
its name, and will cease to use the name “Enogex Arkansas Pipeline Corporation”
or any other name used by EAPC or any derivative or abbreviation thereof
in any
manner, or any name similar to any of the foregoing names, (b) cause EAPC
and NOARK to cease using the Seller Marks in any manner, directly or indirectly,
except for such limited uses as cannot be promptly terminated (e.g., signage,
e-mail addresses, and as a referral or pointer to the acquired website),
and to
cease such limited usage of the Seller Marks as promptly as possible after
the
Closing and in any event within 90 days following the Closing Date and
(c) remove, strike over or otherwise obliterate all Seller Marks from all
assets and all other materials owned, possessed or used by the NOARK Group.
The
Parties agree, because damages would be an inadequate remedy, that a Party
seeking to enforce this Section 7.6
shall be
entitled to seek specific performance and injunctive relief as remedies for
any
breach thereof in addition to other remedies available at law or in equity.
This
covenant shall survive indefinitely without limitation as to time.
7.7
Books
and Records; Access.
From
and after the Closing:
(a)
Seller and its respective Affiliates may retain a copy of any or all of the
data
room materials and other books and records relating to the business or
operations of the NOARK Group on or before the Closing Date.
(b)
Buyer
shall preserve and keep a copy of the NOARK Group Documents that are or come
into Buyer’s possession for a period of at least seven years after the Closing
Date (the “Retention
Period”).
After
the expiration of the Retention Period, before Buyer shall dispose of any
NOARK
Group Documents, Buyer shall give Seller at least 90 days’ prior notice to
such effect, and Seller shall be given an opportunity, at its cost and expense,
to remove and retain all or any NOARK Group Documents as Seller may select.
Buyer shall provide to Seller, at no cost or expense to Seller, full access
to
the NOARK Group Documents as remain in Buyer’s possession and full access to the
properties and employees of Buyer, EAPC and NOARK in connection with matters
relating to the business or operations of EAPC or NOARK on or before the
Closing
Date and any disputes relating to this Agreement.
7.8
Notifications
and Permits; FERC Order 2004; Shared Frequencies.
(a)
Buyer
shall provide all notices and otherwise take all actions required to transfer
or
reissue any Permits, including those required under Environmental Laws, as
a
result of or in furtherance of the transactions contemplated by this Agreement.
Seller shall use Reasonable Efforts to cooperate with Buyer to provide
information necessary to apply for such Permits.
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33 -
(b)
As
between Buyer and Seller, from the Closing Date until Seller is no longer
providing services to Buyer under the Transition Services Agreement, Buyer
shall
cause Ozark Gas Transmission, L.L.C. to comply with, and to provide all notices
and otherwise take all actions required by the regulations promulgated by
FERC
under FERC Order No. 2004, as amended, for a Transmission Provider (as such
term is defined in such order), and, with respect to each Energy Affiliate
(as
such term is defined in such order) of Ozark Gas Transmission, L.L.C., Buyer
shall cause the Energy Affiliate to comply with such regulations, to the
extent
that the regulations apply to the Energy Affiliate; provided,
however, that
Buyer shall not be responsible for any actions or other non-compliance by
Seller
or any of its Affiliates (other than any member of the NOARK
Group).
(c)
From
and after the Closing Date, Seller and Buyer will use their respective
Reasonable Efforts (as defined in the Transition Services Agreement) to share
the Shared Frequencies. Seller will use its reasonable best efforts to obtain
substitute frequencies as soon as practicable, and upon Seller’s so obtaining
any such substitute frequency, Buyer will no longer be under any obligation
to
share the corresponding Shared Frequency with Seller (except as expressly
otherwise agreed pursuant to the Transition Services Agreement in order to
permit Seller to provide services under the Transition Service
Agreement).
7.9
Director
and Officer Indemnification.
For a
period of not less than six years after the Closing Date, Buyer shall cause
the
Organizational Documents of EAPC and NOARK 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
and
directors of such entity 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 Buyer shall cause EAPC and NOARK to jointly and severally
honor
all such provisions, including making any indemnification payments and expense
advancements thereunder. If any indemnifiable claim is asserted or made within
such six-year period, all rights to indemnification and advancement of expenses
in respect of such claim shall continue to the extent currently permitted
under
the relevant entity’s Organizational Documents until such claim is disposed of
or all orders in connection with such claim are fully satisfied.
7.10
Company
Guaranties.
(a)
Buyer
shall use Reasonable Efforts to obtain from the respective beneficiary, in
form
and substance reasonably satisfactory to Seller, on or before the Closing,
valid
and binding written releases of Seller and its Affiliates (other than NOARK
or
any NOARK Subsidiary), as applicable, from any liability or obligation, whether
arising before, on or after the Closing Date, under any Company Guaranty
in
effect as of the Closing, including by providing substitute guaranties with
terms that are at least as favorable to the counterparty as the terms of
the
applicable Company Guaranties and by furnishing letters of credit, instituting
escrow arrangements, posting surety or performance bonds or making other
arrangements as the counterparty may reasonably request.
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(b)
Notwithstanding anything to the contrary herein, the Parties acknowledge
and
agree that at any time on or after the Closing Date, any of Seller and its
Affiliates may, in its sole discretion, take any action to terminate, obtain
release of or otherwise limit its liability under any and all outstanding
Company Guaranties.
(c)
Buyer
shall indemnify and hold harmless Seller and its Affiliates from and after
the
Closing for any Losses arising out of or relating to any Company Guaranties,
whether or not such guaranties have been released.
7.11
Conversion
into Single-Member Limited Liability Company.
Prior
to the Closing, EAPC shall be converted into an Oklahoma single-member limited
liability company by state law conversion with all related documents and
instruments to be in form and substance mutually satisfactory to Seller and
Buyer in their respective reasonable judgments; provided,
however, that
such
conversion documents shall provide that EAPC’s name shall be changed to a name
designated by Buyer at least five Business Days prior to the Closing Date
that
is consistent with the provisions of Section 7.6;
provided
further that
if
Buyer fails to timely designate the new name for EAPC, then Seller may choose
a
new name that complies with the provisions of Section 7.6
and
change EAPC’s name to that new name. Upon the conversion of EAPC into a
single-member limited liability company and thereafter, neither Seller nor
any
of its Affiliates will make an election or take any action resulting in EAPC
being treated as anything other than an entity disregarded from its owner
for
federal income tax purposes, and Seller and its Affiliates will file all
federal
income Tax Returns in a manner consistent with such disregarded entity status.
All references in this Agreement to EAPC and the Shares shall thereafter
refer
to EAPC as a single-member limited liability company and to 100% of the
membership interests in EAPC, respectively.
7.12
Redemption
of NOARK Notes.
At the
Closing, Seller and Buyer shall execute and deliver such notices and documents
as shall be necessary to cause the Trustee to give all redemption notices
that
are required to redeem the Seller Portion of the NOARK Notes on the earliest
date practicable after the Closing Date in accordance with the terms of the
NOARK Indenture (such date to be referred to herein as the “Designated
Redemption Date”).
Seller agrees to deposit with the Trustee at the Closing funds in an amount
equal to the Aggregate Redemption Funding Amount (calculated as if the
Designated Redemption Date were to occur on the Closing Date, except that
the
accrued interest portion of the Aggregate Redemption Funding Amount shall
be
calculated through the Designated Redemption Date). Notwithstanding the
foregoing, Seller shall remain liable under the Seller Guaranty until the
Seller
Portion of the NOARK Notes has been redeemed in full in accordance with the
NOARK Indenture. If the actual Aggregate Redemption Funding Amount is less
than
the amount deposited pursuant to this Section 7.12,
then
Seller will promptly be repaid any excess funds that were deposited at Closing.
If the actual Aggregate Redemption Funding Amount is greater than the amount
deposited pursuant to this Section
7.12,
then
Seller will deposit the difference with the Trustee within one Business Day
after receiving notice of the determination of the actual Redemption Price
(but
in no event later than the Designated Redemption Date). If any sinking fund
or
other payments on the NOARK Notes are scheduled between the Closing Date
and the
Designated Redemption Date, then (i) if NOARK makes such a payment, then
the Trustee will pay to Buyer an amount from such deposited funds equal to
the
Seller Portion of such payment made by NOARK and (ii) if NOARK fails to
make any such payment and the Seller Guaranty is called upon, then the Trustee
will use the deposited funds to make the required payment on behalf of Seller
and such payment will be deemed to be in satisfaction of Seller’s obligations
with respect to such required payment under the Seller Guaranty. The calculation
of the Aggregate Redemption Funding Amount that is made as of the Closing
Date
shall take into account that all required sinking fund or other payments
will be
made in a timely manner between the Closing Date and the Designated Redemption
Date. Notwithstanding the foregoing provisions of this Section 7.12,
Seller
may (at its election), instead of depositing the funds directly with the
Trustee, deposit them into escrow with the financial institution that is
acting
as the Trustee (or if such financial institution is unwilling or unable to
act
as escrow agent, such other financial institution as shall be mutually agreeable
to Buyer and Seller). If Seller elects to deposit such funds into escrow,
then
Buyer, Seller and such escrow agent shall enter into an escrow agreement
at
Closing that is mutually acceptable to Buyer and Seller and that provides
for
the release of funds to the Trustee (and, if applicable, to Seller or NOARK)
in
a manner consistent with the foregoing provisions of this Section 7.12.
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7.13
Seller
Interconnection Points.
From
and after the Closing Date, Seller will not take any action to close any
Existing Interconnect and will not take any action to prevent any customer
on a
Seller System from being able to access an Existing Interconnect.
Notwithstanding any provision in this Section 7.13
to the
contrary, nothing herein shall require Seller or any of its Affiliates to
provide access to any customer on a Seller System or to give any such customer
preferential treatment.
ARTICLE
VIII
TAX
MATTERS
8.1
Responsibility
for Filing Tax Returns and Paying Taxes.
Seller
shall file all Tax Returns required to be filed by or with respect to EAPC
for a
Pre-Closing Tax Period. Seller shall pay all Taxes owed with respect to a
Pre-Closing Tax Period to the extent such Taxes are not taken into account
in
the calculation of Closing Net Working Capital. Buyer shall file all other
Tax
Returns required to be filed by or with respect to EAPC and shall pay all
other
Taxes owed. Without limiting the generality of the foregoing, Seller shall
cause
EAPC’s federal taxable income for all Pre-Closing Tax Periods to be included on
the consolidated federal income Tax Returns that include Seller and EAPC
and
Seller shall pay all Taxes attributable to such income. Liability for Taxes
for
any Tax period that includes but does not end on the Closing Date (a
“Straddle
Period”)
shall
be apportioned as follows: Property and similar ad valorem Taxes shall be
apportioned on a ratable daily basis. All other Taxes, including income Taxes,
shall be apportioned based on an interim closing of the books of each member
of
the NOARK Group as of the end of the Closing Date. Buyer and Seller shall
each
provide the other with all information reasonably necessary to prepare a
Tax
Return.
8.2
Responsibility
for Tax Audits and Contests.
Seller
shall control any audit or contest with respect to a Pre-Closing Tax Period
and
Buyer shall control any other audit or contest; provided,
however,
that
the Party with the greater potential Tax liability shall control any audit
or
contest with respect to a Straddle Period. Neither Buyer nor Seller shall
settle
any audit or contest in a way that would adversely affect the other Party
without the other Party’s written consent, which the other Party shall not
unreasonably withhold. Buyer and Seller shall each provide the other with
all
information reasonably necessary to conduct an audit or contest with respect
to
Taxes.
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8.3
Tax
Sharing Agreements.
Any Tax
sharing agreement between Seller and EAPC shall be terminated as of the Closing
Date and shall have no further effect with respect to any Pre-Closing Tax
Period
or Post-Closing Tax Period.
8.4
Tax
Refunds.
Seller
shall be entitled to any refund of Taxes paid with respect to a Pre-Closing
Tax
Period. Buyer shall be entitled to any refund of Taxes paid with respect
to a
Post-Closing Tax Period. Refunds for a Straddle Period shall be apportioned
based on the Taxes that were paid by or on behalf of Buyer and Seller. If
a
Party receives a refund to which the other Party is entitled, the Party
receiving the refund shall pay it to the Party entitled to the refund within
two
Business Days after receipt.
8.5
Transfer
Taxes.
Buyer
shall be responsible for and indemnify Seller against any state or local
transfer, sales, use, stamp, registration or other similar Taxes resulting
from
the transactions contemplated by this Agreement.
8.6
Disputes
over Tax Provisions.
The
Accountants shall resolve any dispute between Buyer and Seller over the
application of this Article VIII substantially in the manner described in
Section 2.3(b).
8.7
Indemnification
for Consolidated Group Tax Liability.
Seller
shall indemnify Buyer from and against any liability for Taxes of any person
(other than EAPC) that arises under Treasury Regulation § 1.1502-6 or any
comparable provision of state or local law.
8.8
Section 754
Election.
EAPC
shall cause a valid election under Section 754 of the Code to be in effect
as of the Closing Date with respect to NOARK.
ARTICLE
IX
CONDITIONS
TO CLOSING
9.1
Conditions
to Obligations of Buyer.
The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions, any
one or
more of which may be waived in writing by Buyer:
(a)
Representations,
Warranties and Covenants of Seller.
(i) Each of the representations and warranties of Seller made in this
Agreement will be true and correct as of the date of this Agreement and as
of
the Closing (as if made anew at and as of the Closing), except where the
breach
of a representation or warranty (individually or when aggregated with any
other
breaches of representations and warranties) would not reasonably be expected
to
have a Material Adverse Effect on the NOARK Group, taken as a whole; (ii)
Seller
shall have performed or complied in all material respects with all of the
covenants and agreements required by this Agreement to be performed or complied
with by Seller on or before the Closing; and (iii) Seller shall have
delivered to Buyer a certificate, dated the Closing Date, certifying that
the
conditions specified in this Section 9.1(a)
have
been fulfilled;
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(b)
Third
Party Consents; Governmental Approvals.
All
consents, approvals or waivers, if any, disclosed on any schedule to this
Agreement or otherwise required in connection with the consummation of the
transactions contemplated by this Agreement have been received. All of the
consents, approvals, authorizations, exemptions and waivers from Governmental
Authorities that will be required to enable Buyer to consummate the transactions
contemplated by this Agreement have been obtained;
(c)
No
Injunction, Etc.
No
provision of any applicable Law and no order will be in effect that will
prohibit or restrict the consummation of the Closing;
(d)
No
Proceedings.
No
proceeding challenging this Agreement or the transactions contemplated hereby
or
seeking to prohibit, alter, prevent or materially delay the Closing or seeking
Losses from Seller incident to this Agreement or the transactions contemplated
hereby, will have been instituted by any Person before any Governmental
Authority and be pending.
(e)
Certificates
for Shares.
Seller
shall have delivered to Buyer stock certificates representing the Shares,
duly
endorsed in blank or accompanied by stock powers with all requisite transfer
tax
stamps attached (or an assignment of membership interests reasonably acceptable
to Buyer and duly executed by Seller);
(f)
Transition
Services Agreement.
Seller
shall have delivered to Buyer an executed counterpart of the Transition Services
Agreement, dated as of the Closing Date, substantially in the form of
Exhibit A
attached
hereto (the “Transition
Services Agreement”);
(g)
Resignations
of Officers and Directors.
The
resignations (or evidence of removal) of each officer or director of EAPC,
each
member of the Management Committee of NOARK that is also an employee of Seller
and each officer of NOARK that is also an employee of Seller, in each case
effective as of the Closing; and
(h)
Other
Deliveries.
Seller
shall have delivered such other certificates, instruments of conveyance,
and
documents as may be reasonably requested by Buyer and agreed to by Seller
prior
to the Closing Date to carry out the intent and purposes of this
Agreement.
9.2
Conditions
to the Obligations of Seller.
The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions, any
one or
more of which may be waived in writing by Seller:
(a)
Representations,
Warranties and Covenants of Buyer.
(i) Each of the representations and warranties of Buyer made in this
Agreement will be true and correct in all respects as of the date of this
Agreement and as of the Closing (as if made anew at and as of the Closing),
except where the accuracy of a representation or warranty (individually or
when
aggregated with any other breaches of representations and warranties) would
not
reasonably be expected to have a Material Adverse Effect; (ii) Buyer shall
have performed or complied in all material respects with all of the covenants
and agreements required by this Agreement to be performed or complied with
by
Buyer on or before the Closing; and (iii) Buyer shall have delivered to
Seller a certificate, dated the Closing Date, certifying that the conditions
specified in this Section 9.2(a)
have
been fulfilled;
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(b)
Third
Party Consents; Governmental Approvals.
All
consents, approvals or waivers, if any, disclosed on any schedule to this
Agreement or otherwise required in connection with the consummation of the
transactions contemplated by this Agreement have been received. All of the
consents, approvals, authorizations, exemptions and waivers from Governmental
Authorities that will be required to enable Seller to consummate the
transactions contemplated by this Agreement have been obtained;
(c)
No
Injunction, Etc.
No
provision of any applicable Law and no order will be in effect that will
prohibit or restrict the consummation of the Closing;
(d)
No
Proceedings.
No
proceeding challenging this Agreement or the transactions contemplated hereby
or
seeking to prohibit, alter, prevent or materially delay the Closing or seeking
Losses from Seller incident to this Agreement or the transactions contemplated
hereby, will have been instituted by any Person before any Governmental
Authority and be pending;
(e)
Closing
Payment.
Buyer
shall have delivered the Closing Payment pursuant to Section 2.3(a);
(f)
Transition
Services Agreement.
Buyer
shall have delivered to Seller an executed counterpart of the Transition
Services Agreement; and
(g)
Other
Deliveries.
Buyer
shall have delivered such other certificates, instruments, and documents
as may
be reasonably requested by Seller and agreed to by Buyer prior to the Closing
Date to carry out the intent and purposes of this Agreement.
ARTICLE
X
INDEMNIFICATION
10.1
Survival.
The
representations and warranties in this Agreement and all covenants contained
in
this Agreement shall survive the Closing until 12 months after the Closing
Date, except that (a) the representations and warranties in Section 3.1
(Organization of Seller), Section 3.6
(Brokers’ Fees), Section 6.1
(Organization of Buyer) and Section
6.5
(Brokers’ Fees) shall survive until the fifth anniversary of the Closing Date;
(b) the representations and warranties in Section 3.2
(Authorization; Enforceability), Section
3.4
(Ownership of Shares), Section 4.1
(Organization of EAPC), Section 4.3
(Capitalization), Section 4.4
(Ownership of Partnership Interests), Section 5.1
(Organization of NOARK), Section 5.3
( NOARK
Subsidiaries) and Section 6.2
(Authorization; Enforceability) shall survive indefinitely; the representations
and warranties in Section 5.12
(Environmental Matters)
shall
survive until the second anniversary of the Closing Date, (d) the
representations and warranties in Section 4.7
(EAPC
Taxes), Section 5.10
(Employee Benefit Matters)
and
Section 5.11
(NOARK Taxes)
shall
survive until 30 days after the expiration of the applicable statute of
limitations, and (d) the representations and warranties and certifications
contained in the certificates delivered under Section 9.1(a)
and
Section 9.2(a)
will for
survive for the same duration that the representations and warranties to
which
they are applicable survive. Notwithstanding the preceding sentence, any
representation or warranty in respect of which indemnity may be sought under
this Agreement will survive the time at which it would otherwise terminate
pursuant to the preceding sentence if written notice of the inaccuracy or
breach
thereof giving rise to such right of indemnity has been given to the Party
against whom such indemnification may be sought prior to such time; provided
that
such
right of indemnity shall continue to survive and shall remain a basis for
indemnification hereunder only until the related claim for indemnification
is
resolved or disposed of in accordance with the terms of this Article X.
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10.2
Indemnification.
(a)
From
and after the Closing, Seller will indemnify, defend and hold harmless Buyer
and
its officers, members, directors, employees and Affiliates (the “Buyer
Indemnified Parties”)
against any and all liabilities, damages, losses, costs and expenses (including
reasonable attorneys’ and consultants’ fees and expenses) (“Losses”)
incurred or suffered as a result of, relating to or arising out of (i) any
failure of any representation or warranty made by Seller in this Agreement
or
any closing certificate delivered pursuant to Section 9.1(a)
to be
true and correct as of the Closing (as if made anew at and as of the Closing);
provided,
however,
that
for purposes of determining under this Section
10.2
whether
a representation or warranty is true and correct and the amount of Losses
incurred or suffered, any reference to “materiality” or “Material Adverse
Effect” in such representation or warranty shall be disregarded, (ii) the
breach of any covenant or agreement made or to be performed by Seller pursuant
to this Agreement, (iii) the Seller Portion of the NOARK Notes or the
redemption thereof and (iv) the indemnity by EAPC set forth in
Section 15.2 of the Omnibus Project Agreement dated as of January 12,
1998 by and among Seller, EAPC, Southwestern Energy Pipeline Company and
Southwestern Energy Company. Notwithstanding anything herein to the contrary,
Seller will not be liable under Section
10.2(a)(i)
(x) except to the extent the aggregate amount of Losses exceeds $3,500,000
or (y) for Losses in excess of 20% of the Purchase Price; provided,
however,
that
the limitation in clause (x) shall not apply to any breach of
representation or warranty set forth in Section 3.6, and the limitation in
clause (y) shall not apply to any breach of representation or warranty set
forth in Section 3.1,
3.2,
3.4,
3.6,
4.1,
4.3,
4.4,
4.7,
5.1,
5.3
or
5.10.
(b)
From
and after the Closing, Buyer will indemnify, defend and hold harmless Seller
and
its officers, members, directors, employees and Affiliates (the “Seller
Indemnified Parties”)
against any and all Losses incurred or suffered as a result of, relating
to or
arising out of (i) any failure of any representation or warranty made by
Buyer in this Agreement or any closing certificate delivered pursuant to
Section 9.2(a)
to be
true and correct as of the Closing (as if made anew at and as of the Closing),
(ii) the breach of any covenant or agreement made or to be performed by
Buyer pursuant to this Agreement and (iii) the operation of the business of
the NOARK Group after the Closing Date, including, without limitation, any
involvement whatsoever by NOARK or the NOARK Subsidiaries in any well-head
measurement cases arising after the Closing Date or with respect to which
any
member of the NOARK Group becomes subject after the Closing Date.
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(c)
THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE
X
SHALL BE
ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM
INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY
OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE
OR
CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING
INDEMNIFICATION.
10.3
Procedures.
Claims
for indemnification under this Agreement shall be asserted and resolved as
follows:
(a)
If
any Person who or which is entitled to seek indemnification under Section
10.2
(an
“Indemnified
Party”)
receives notice of the assertion or commencement of any claim asserted against
an Indemnified Party by a third party (“Third
Party Claim”)
in
respect of any matter that is subject to indemnification under Section 10.2,
the
Indemnified Party shall promptly (i) notify the party against whom
indemnification is sought (the “Indemnifying
Party”)
of the
Third Party Claim and (ii) transmit to the Indemnifying Party a written
notice (“Claim
Notice”)
describing in reasonable detail the nature of the Third Party Claim, a copy
of
all papers served with respect to such claim (if any), the Indemnified Party’s
best estimate of the amount of Losses attributable to the Third Party Claim
and
the basis of the Indemnified Party’s request for indemnification under this
Agreement. Failure to timely provide such Claim Notice shall not affect the
right of the Indemnified Party’s indemnification hereunder, except to the extent
the Indemnifying Party is prejudiced by such delay or omission.
(b)
The
Indemnifying Party shall have the right to defend the Indemnified Party against
such Third Party Claim. If the Indemnifying Party notifies the Indemnified
Party
that the Indemnifying Party elects to assume the defense of the Third Party
Claim (such election to be without prejudice to the right of the Indemnified
Party to dispute whether such claim is an identifiable Loss under this
Article X),
then
the Indemnifying Party shall have the right to defend such Third Party Claim
with counsel selected by the Indemnifying Party (who shall be reasonably
satisfactory to the Indemnified Party), by all appropriate proceedings, to
a
final conclusion or settlement at the discretion of the Indemnifying Party
in
accordance with this Section 10.3(b).
The
Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof; provided
that
the
Indemnifying Party shall not enter into any settlement agreement without
the
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld, conditioned or delayed); provided
further,
that
such consent shall not be required if (i) the settlement agreement contains
a complete and unconditional general release by the third party asserting
the
claim to all Indemnified Parties affected by the claim and (ii) the settlement
agreement does not contain any sanction or restriction upon the conduct of
any
business by the Indemnified Party or its Affiliates. If requested by the
Indemnifying Party, the Indemnified Party agrees, at the sole cost and expense
of the Indemnifying Party, to cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim which the Indemnifying Party
elects
to contest, including the making of any related counterclaim against the
Person
asserting the Third Party Claim or any cross complaint against any Person.
The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to
this
Section 10.3(b),
and the
Indemnified Party shall bear its own costs and expenses with respect to such
participation.
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(c)
If
the Indemnifying Party does not notify the Indemnified Party that the
Indemnifying Party elects to defend the Indemnified Party pursuant to
Section
10.3(b),
then
the Indemnified Party shall have the right to defend, and be reimbursed for
its
reasonable cost and expense (but only if the Indemnified Party is actually
entitled to indemnification hereunder) in regard to the Third Party Claim
with
counsel selected by the Indemnified Party (who shall be reasonably satisfactory
to the Indemnifying Party), by all appropriate proceedings, which proceedings
shall be prosecuted diligently by the Indemnified Party. In such circumstances,
the Indemnified Party shall defend any such Third Party Claim in good faith
and
have full control of such defense and proceedings; provided,
however,
that
the Indemnified Party may not enter into any compromise or settlement of
such
Third Party Claim if indemnification is to be sought hereunder, without the
Indemnifying Party’s consent (which consent shall not be unreasonably withheld,
conditioned or delayed). The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party pursuant
to this Section 10.3(c),
and the
Indemnifying Party shall bear its own costs and expenses with respect to
such
participation.
(d)
Any
claim by an Indemnified Party on account of Losses that does not result from
a
Third Party Claim (a “Direct
Claim”)
will
be asserted by giving the Indemnifying Party reasonably prompt written notice
thereof, but in any event not later than 30 days after the Indemnified
Party becomes aware of such Direct Claim. Such notice by the Indemnified
Party
will describe the Direct Claim in reasonable detail, will include copies
of all
available material written evidence thereof and will indicate the estimated
amount, if reasonably practicable, of Damages that has been or may be sustained
by the Indemnified Party. The Indemnifying Party will have a period of five
Business Days within which to respond in writing to such Direct Claim. If
the
Indemnifying Party does not so respond within such five Business Day period,
the
Indemnifying Party will be deemed to have rejected such claim, in which event
the Indemnified Party will be free to pursue such remedies as may be available
to the Indemnified Party on the terms and subject to the provisions of this
Agreement.
(e)
Any
indemnification payment made pursuant to this Agreement shall be net of any
insurance proceeds realized by and paid to the Indemnified Party in respect
of
such claim, and the amount of any Loss shall take into account any net Tax
benefits attributable to the circumstance or event giving rise to such
Loss.
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10.4
Waiver
of Other Representations
(a)
EXCEPT THOSE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT,
NEITHER
SELLER NOR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING
ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY,
IN RESPECT OF THE MEMBERS OF THE NOARK GROUP, THEIR RESPECTIVE BUSINESSES
OR ANY
OF THEIR ASSETS, LIABILITIES OR OPERATIONS, INCLUDING WITH RESPECT TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OR WITH RESPECT TO
ANY
FINANCIAL PROJECTIONS OR FORECASTS RELATING TO NOARK AND THE NOARK SUBSIDIARIES,
AND ANY SUCH OTHER REPRESENTATION AND WARRANTIES ARE HEREBY
DISCLAIMED.
(b)
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER’S DIRECT AND INDIRECT
INTERESTS IN THE MEMBERS OF THE NOARK GROUP AND THEIR RESPECTIVE ASSETS ARE
BEING TRANSFERRED THROUGH THE SALE OF THE SHARES “AS IS, WHERE IS, WITH ALL
FAULTS,” AND SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY
KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY
OF THE
MEMBERS OF THE NOARK GROUP AND THEIR RESPECTIVE ASSETS OR THE PROSPECTS
(FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF SUCH MEMBERS OF THE
NOARK
GROUP AND THEIR RESPECTIVE ASSETS.
10.5
Exclusive
Remedy and Release.
The
indemnification and remedies set forth in this Article X
shall,
from and after the Closing, constitute the sole and exclusive remedies of
the
Parties with respect to any breach of representation or warranty or
non-performance, partial or total, of any covenant or agreement contained
in
this Agreement: provided,
however, that
nothing in this Section 10.5
shall
prevent either Party from seeking injunctive or equitable relief in pursuit
of
its indemnification claims under this Article X.
Except
with respect to claims identified in the previous sentence, Buyer hereby
waives,
releases, acquits and forever discharges Seller, its officers, directors,
partners, employees or agents, or any other person acting on behalf of Seller,
of and from any and all claims, actions, causes of action, demands, rights,
damages, costs, expenses, Losses or compensation whatsoever, whether direct
or
indirect, known or unknown, foreseen or unforeseen, which Buyer now has or
may
have or which may arise in the future directly or indirectly, including without
limitation any of the foregoing that is from or relating to the possession,
use,
handling, management, disposal, investigation, remediation, cleanup or release
of any Constituents of Concern or any Environmental Law applicable
thereto.
ARTICLE
XI
TERMINATION
11.1
Termination.
At any
time prior to the Closing, this Agreement may be terminated and the transactions
contemplated hereby abandoned:
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(a)
by
the mutual consent of Buyer and Seller as evidenced in writing signed by
each of
Buyer and Seller;
(b)
by
Buyer, if there has been a material breach by Seller of any representation,
warranty or covenant contained in this Agreement that has prevented the
satisfaction of any condition to the obligations of Buyer at the Closing
and, if
such breach is of a character that it is capable of being cured, such breach
has
not been cured by Seller within 30 days after written notice thereof from
Buyer;
(c)
by
Seller, if there has been a material breach by Buyer of any representation,
warranty or covenant contained in this Agreement that has prevented the
satisfaction of any condition to the obligations of Seller at the Closing
and,
if such breach is of a character that it is capable of being cured, such
breach
has not been cured by Buyer within 30 days after written notice thereof
from Seller;
(d)
by
either Buyer or Seller if any Governmental Authority having competent
jurisdiction has issued a final, non-appealable order, decree, ruling or
injunction (other than a temporary restraining order) or taken any other
action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement; or
(e)
by
either Buyer or Seller, if the transactions contemplated hereby have not
been
consummated by December 31, 2005; provided,
however, that
neither Buyer nor Seller will be entitled to terminate this Agreement pursuant
to this Section 11.1(e)
if such
Person’s breach of this Agreement has prevented the consummation of the
transactions contemplated by this Agreement.
11.2
Effect
of Termination.
If this
Agreement is terminated under Section
11.1,
all
further obligations of the Parties under this Agreement will terminate without
further liability or obligation of either Party to the other Parties hereunder;
provided,
however,
that no
Party will be released from liability hereunder if this Agreement is terminated
and the transactions abandoned by reason of (a) failure of such Party to
have performed its material obligations under this Agreement or (b) any
material misrepresentation made by such Party of any matter set forth in
this
Agreement. Nothing in this Section 11.2
will
relieve any Party to this Agreement of liability for breach of this Agreement
occurring prior to any termination, or for breach of any provision of this
Agreement that specifically survives termination hereunder. The Confidentiality
Agreement shall not be affected by a termination of this Agreement.
ARTICLE
XII
MISCELLANEOUS
12.1
Notices.
All
notices and other communications between the Parties shall be in writing
and
shall be deemed to have been duly given when (i) delivered in person,
(ii) five days after posting in the United States mail having been sent
registered or certified mail return receipt requested or (iii) delivered by
telecopy and promptly confirmed by delivery in person or post as aforesaid
in
each case, with postage prepaid, addressed as follows:
(a)
If to
Buyer, to:
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Atlas
Pipeline Partners, L.P.
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxx Xxxxxxx
with
a
copy to:
Xxxxxx
& Xxxxxx L.L.P.
0000
Xxxxxx Xx., Xxxxx 0000
Xxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxx, Esq.
(b)
If to
Seller, to:
Enogex
Inc.
000
Xxxxxxx Xxxx Xx., Xxxxx 000
Xxxxxxxx
Xxxx, Xxxxxxxx 00000
Fax:
(000) 000-0000
Attention:
Xxx X. Xxxxx and Xxxxxxxx X. Xxxx
with
a
copy to:
Xxxxx
Day
000
Xxxxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Fax:
(000) 000-0000
Attention:
J. Xxxx Xxxxx, Esq.
or
to
such other address or addresses as the Parties may from time to time designate
in writing.
12.2
Assignment.
No
Party shall assign this Agreement or any part hereof without the prior written
consent of the other Party. Subject to the foregoing, this Agreement shall
be
binding upon and inure to the benefit of the Parties and their respective
permitted successors and assigns; provided,
however,
that
Buyer shall have the right to designate one or more Affiliates to take title
to
the Shares, but no such designation shall diminish or otherwise affect any
of
Buyer’s obligations under this Agreement.
12.3
Rights
of Third Parties.
Except
for the provisions of Section 7.2(b),
Section 7.2(f),
Section 7.5(a),
Section 7.10(c)
and
Article X,
which
are intended to be enforceable by the Persons respectively referred to therein,
nothing expressed or implied in this Agreement is intended or shall be construed
to confer upon or give any Person, other than the Parties, any right or remedies
under or by reason of this Agreement.
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12.4
Expenses.
Except
as otherwise expressly provided herein, each Party shall bear its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby whether or not such transactions shall be consummated, including all
fees
of its legal counsel, financial advisers and accountants.
12.5
Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. Any facsimile copies hereof or signature hereon shall, for all
purposes, be deemed originals.
12.6
Entire
Agreement.
This
Agreement (together with the Disclosure Schedule and exhibits to this Agreement)
and the Confidentiality Agreement constitute the entire agreement among the
Parties and supersede any other agreements, whether written or oral, that
may
have been made or entered into by or among any of the Parties or any of their
respective Affiliates relating to the transactions contemplated
hereby.
12.7
Disclosure
Schedule.
Unless
the context otherwise requires, all capitalized terms used in the Disclosure
Schedule shall have the respective meanings assigned in this Agreement. No
reference to or disclosure of any item or other matter in the Disclosure
Schedule shall be construed as an admission or indication that such item
or
other matter is material or that such item or other matter is required to
be
referred to or disclosed in the Disclosure Schedule. No disclosure in the
Disclosure Schedule relating to any possible breach or violation of any
agreement or Law shall be construed as an admission or indication that any
such
breach or violation exists or has actually occurred. The inclusion of any
information in the Disclosure Schedule shall not be deemed to be an admission
or
acknowledgment by Seller, in and of itself, that such information is material
to
or outside the ordinary course of the business of the NOARK Group or required
to
be disclosed on the Disclosure Schedule. Each disclosure in the Disclosure
Schedule shall be deemed to qualify all representations and warranties of
Seller
notwithstanding the lack of a specific cross-reference.
12.8
Acknowledgment
by Buyer.
BUYER
HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY FROM SELLER OR ANY OF ITS
RESPECTIVE AFFILIATES, EXCEPT AS SET FORTH IN THIS AGREEMENT.
12.9
Amendments.
This
Agreement may be amended or modified in whole or in part, and terms and
conditions may be waived, only by a duly authorized agreement in writing
which
makes reference to this Agreement executed by each Party.
12.10
Publicity.
All
press releases or other public communications of any nature whatsoever relating
to the transactions contemplated by this Agreement, and the method of the
release for publication thereof, shall be subject to the prior written consent
of Buyer and Seller, which consent shall not be unreasonably withheld,
conditioned or delayed by such Party; provided,
however,
that
nothing herein shall prevent a Party from publishing such press releases
or
other public communications as is necessary to satisfy such Party’s obligations
at Law or under the rules of any stock or commodities exchange after
consultation with the other Party.
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12.11
Severability.
If any
provision of this Agreement is held invalid or unenforceable by any court
of
competent jurisdiction, the other provisions of this Agreement shall remain
in
full force and effect. The Parties further agree that if any provision contained
herein is, to any extent, held invalid or unenforceable in any respect under
the
Laws governing this Agreement, they shall take any actions necessary to render
the remaining provisions of this Agreement valid and enforceable to the fullest
extent permitted by Law and, to the extent necessary, shall amend or otherwise
modify this Agreement to replace any provision contained herein that is held
invalid or unenforceable with a valid and enforceable provision giving effect
to
the intent of the Parties to the greatest extent legally
permissible.
12.12
Governing
Law; Jurisdiction.
(a)
This
Agreement shall be governed and construed in accordance with the Laws of
the
State of Oklahoma, without regard to the Laws that might be applicable under
conflicts of laws principles.
(b)
The
Parties agree that the appropriate, exclusive and convenient forum for any
disputes between any of the Parties hereto arising out of this Agreement
or the
transactions contemplated hereby shall be in any state or federal court in
Oklahoma County, Oklahoma and each of the Parties hereto irrevocably submits
to
the jurisdiction of such courts solely in respect of any legal proceeding
arising out of or related to this Agreement. The Parties further agree that
the
Parties shall not bring suit with respect to any disputes arising out of
this
Agreement or the transactions contemplated hereby in any court or jurisdiction
other than the above specified courts. The Parties further agree, to the
extent
permitted by Law, that a final and nonappealable judgment against a Party
in any
action or proceeding contemplated above shall be conclusive and may be enforced
in any other jurisdiction within or outside the United States by suit on
the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and amount of such judgment. Except to the extent that a different
determination or finding is mandated due to the applicable law being that
of a
different jurisdiction, the Parties agree that all judicial determinations
or
findings by a state or federal court in Oklahoma with respect to any matter
under this Agreement shall be binding.
(c)
To
the extent that any Party hereto has or hereafter may acquire any immunity
from
jurisdiction of any court or from any legal process (whether through service
or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such party hereby
irrevocably (i) waives such immunity in respect of its obligations with
respect to this Agreement and (ii) submits to the personal jurisdiction of
any court described in Section 12.12(b).
(d)
THE
PARTIES HERETO AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL
BY
JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS
AGREEMENT.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF this Agreement has been duly executed and delivered by each
Party as of the date first above written.
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SELLER:
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ENOGEX
INC.
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By:
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Name:
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Title:
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BUYER:
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ATLAS
PIPELINE PARTNERS, L.P.
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By:
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Name:
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Title:
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