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EXHIBIT 10.19
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PURCHASE AND SALE AGREEMENT
BETWEEN
LEVIATHAN DEEPWATER, L.L.C.
AS SELLER
AND
ANR WESTERN GULF HOLDINGS, L.L.C.
AS BUYER
DATED AS OF SEPTEMBER 30, 1999
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PURCHASE AND SALE AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................................1
1.1 Definitions..............................................................................................1
1.2 Terminology..............................................................................................3
ARTICLE II PURCHASE AND SALE......................................................................................4
2.1 The Transactions.........................................................................................4
2.2 Closing..................................................................................................4
2.3 Actions at Closing.......................................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER............................................................4
3.1 Organization and Good Standing...........................................................................4
3.2 Authority of Seller......................................................................................4
3.3 No Violations............................................................................................5
3.4 Title to Purchased Interest..............................................................................5
3.5 Governmental and Third Party Approvals...................................................................5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER................................................................6
4.1 Organization and Good Standing...........................................................................6
4.2 Authority of Buyer.......................................................................................6
4.3 No Violations............................................................................................6
4.4 Acquisition as Investment................................................................................6
4.5 Brokerage or Finders Fees................................................................................7
ARTICLE V ADDITIONAL AGREEMENTS AND COVENANTS....................................................................7
5.1 Covenants of Seller......................................................................................7
5.2 Covenants of Buyer.......................................................................................7
5.3 Mutual Covenants.........................................................................................7
ARTICLE VI CONDITIONS TO CLOSING..................................................................................8
6.1 Buyer's Obligation to Close..............................................................................8
6.2 Seller's Obligation to Close.............................................................................9
ARTICLE VII INDEMNIFICATION.....................................................................................10
7.1 Indemnification of Buyer................................................................................10
7.2 Indemnification of Seller...............................................................................11
7.3 Indemnification Procedures..............................................................................11
7.4 Negligence..............................................................................................13
7.5 Limitation on Liabilities...............................................................................13
7.6 Survival................................................................................................13
ARTICLE VIII TERMINATION RIGHTS.................................................................................14
8.1 Termination.............................................................................................14
8.2 Effect of Termination...................................................................................14
ARTICLE IX ARBITRATION...........................................................................................14
9.1 Arbitration.............................................................................................14
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ARTICLE X GENERAL...............................................................................................16
10.1 Exclusive Agreement.....................................................................................16
10.2 Successors and Assigns..................................................................................16
10.3 Amendments..............................................................................................16
10.4 Further Assurances......................................................................................16
10.5 Notices.................................................................................................17
10.6 Governing Law...........................................................................................17
10.7 Severability............................................................................................17
10.8 Counterparts............................................................................................17
10.9 Expenses................................................................................................17
Exhibits to Purchase and Sale Agreement:
Exhibit A Form of Assignment
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made and entered into as of the
30th day of September, 1999 between Leviathan Deepwater, L.L.C., a Delaware
limited liability company ("Seller") and ANR Western Gulf Holdings, L.L.C., a
Delaware limited liability company ("Buyer").
WHEREAS, Seller owns a 59.66% membership interest in Deepwater
Holdings, L.L.C., a Delaware limited liability company ("Holdings"), and Buyer
(together with its affiliates) owns a 40.34% membership interest in Holdings;
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller a 9.66% membership interest in Holdings (the "Purchased Interest"),
subject to and in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises made herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and subject to the conditions hereinafter set forth,
the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms set forth below shall have the meanings
ascribed to them in this Article I or in the part of this Agreement referred to
below:
Affiliate: with respect to an entity, any other entity controlling,
controlled by or under common control with such entity. As used in this
definition, the term "control," including the correlative terms "controlling,"
"controlled by" and "under common control with" shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management or policies of an entity, whether through ownership of voting
securities, by contract or otherwise.
Agreement: this Purchase and Sale Agreement, as amended, restated,
supplemented, or otherwise modified from time to time.
Business Day: any day other than a Saturday, a Sunday or a day on
which banks in Houston, Texas are authorized or required by law to be closed.
Buyer: as defined in the preamble.
Buyer Indemnified Party: as defined in Section 7.1.
Claim: any demand, claim, action, investigation, cause of action,
legal proceeding or arbitration, whether or not ultimately determined to be
valid.
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Claim Notice: as defined in Section 7.3.1.
Closing: as defined in Section 2.2.
Closing Date: as defined in Section 2.2.
Code: the Internal Revenue Code of 1986, as amended.
Election Period: as defined in Section 7.3.1.
Encumbrance: any lien, pledge, condemnation proceeding, claim,
restriction, security interest, mortgage, preferential right, option, defect in
title or similar encumbrance.
Environmental Laws: any and all federal, state and local laws,
statutes, regulations, rules, orders, ordinances or permits of any governmental
authority pertaining to health, the environment, wildlife or natural resources
in effect in any and all jurisdictions in which the assets of Stingray or WCDC
are located, including, without limitation, the Clean Air Act, as amended, and
the Federal Water Pollution Control Act, as amended, the Rivers and Harbors Act
of 1899, as amended, the Safe Drinking Water Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act, as amended, the Hazardous and Solid Waste
Amendments Act of 1984, as amended, the Toxic Substances Control Act, as
amended, the Occupational Safety and Health Act, as amended, the Oil Pollution
Act, as amended, the Pipeline Safety Act, as amended, the Natural Gas Pipeline
Safety Act, as amended, the Hazardous Liquid Pipeline Safety Act, as amended,
and the Hazardous Materials Transportation Act, as amended.
Governmental Authority: any court, governmental department,
commission, council, board, agency or other instrumentality of the United
States of America or any state, county, municipality or local government.
LLC Agreement: the limited liability company agreement of Holdings, as
amended, restated, supplemented or otherwise modified to the date hereof.
Holdings: as defined in the preamble.
HSR Act: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
Indemnified Party: as defined in Section 7.3.1.
Indemnifying Party: as defined in Section 7.3.1.
Indemnity Notice: as defined in Section 7.3.4.
Legal Requirement: all applicable laws, rules, regulations, codes,
ordinances, permits, bylaws, variances, orders, conditions, and licenses of a
Governmental Authority.
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Loss: any loss, damage, cost, liability or expense (including
reasonable costs of defense and investigations, settlements, and reasonable
attorneys' and experts' fees) or penalties or fines.
Membership Interest: as defined in the LLC Agreement.
Notices: as defined in Section 10.5.
Parties: Seller and Buyer.
Party: Seller or Buyer.
Person: an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
Purchased Interest: as defined in the preamble.
Purchase Price: as defined in Section 2.1.
Reasonable Efforts: the efforts that a prudent person or entity
desirous of achieving a result would use in similar circumstances to ensure
that such result is achieved expeditiously; provided, however, that an
obligation to use Reasonable Efforts under this Agreement does not require the
person or entity subject to that obligation to take actions that would incur
any unreasonable out-of-pocket cost or expense in connection therewith.
Seller: as defined in the preamble.
Seller Indemnified Parties: as defined in Section 7.2.
Taxes: all federal, state, local or foreign taxes, assessments or
other Governmental Authority charges, excluding income taxes, together with any
interest or penalties and other assessments thereon or related thereto.
Third Party Claim: as defined in Section 7.3.1.
1.2 Terminology. All article, section, subsection, schedule and
exhibit references used in this Agreement are to this Agreement unless
otherwise specified. All schedules and exhibits attached to this Agreement
constitute a part of this Agreement and are incorporated herein. Unless the
context of this Agreement clearly requires otherwise (a) the singular shall
include the plural and the plural shall include the singular wherever and as
often as may be appropriate, (b) the words "includes" or "including" shall mean
"including without limitation," and (c) the words "hereof," "herein,"
"hereunder," and similar terms in this Agreement shall refer to this Agreement
as a whole and not any particular section or article in which such words
appear. Currency amounts referenced herein are in United States Dollars.
References to
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"generally accepted accounting principles" herein shall refer to such
principles in effect in the United States of America as of the date of the
statement to which such phrase refers.
ARTICLE II
PURCHASE AND SALE
2.1 The Transactions. Subject to and in accordance with the terms and
conditions of this Agreement, Seller agrees to sell, assign, convey and
transfer to Buyer, and Buyer agrees to purchase and accept from Seller, at the
Closing the Purchased Interest for an aggregate amount equal to $26,122,000
(the "Purchase Price").
2.2 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P., 0000 Xxxxxxxx Xxxxx, Xxxxx Tower, 000 Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000 commencing at 10:00 a.m., local time, on (i)
September 30, 1999, unless the conditions set forth in Sections 6.1 and 6.2
have not been fulfilled or waived by the applicable Party or (ii) such other
date as the Parties shall agree in writing. The date on which the Closing
actually occurs is referred to herein as the "Closing Date."
2.3 Actions at Closing. At the Closing the following shall occur:
2.3.1 Seller will deliver Membership Interest certificates
representing all of the Purchased Interest endorsed in blank and/or
duly executed assignments of Membership Interest (in the form set
forth in Exhibit "A") to Buyer, and
2.3.2 Buyer shall pay, or cause to be paid, to Seller an
amount equal to the Purchase Price as set forth in Section 2.1. The
amount payable by Buyer to Seller shall be payable by Buyer by wire
transfer or delivery of other immediately available funds pursuant to
Seller's instructions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that:
3.1 Organization and Good Standing. Seller is a limited liability
company duly formed, validly existing and in good standing under the laws of
the State of Delaware. Seller is qualified to do business as a foreign
corporation in all other jurisdictions where failure to be so qualified would
have an adverse effect on the transactions contemplated hereby.
3.2 Authority of Seller. Seller has all requisite limited liability
company power and authority to enter into this Agreement and the other
agreements contemplated herein to which it is a party, to consummate the
transactions contemplated hereby and to perform all the terms and conditions
hereof and thereof to be performed by it. The execution, delivery and
performance of
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this Agreement and the other agreements contemplated herein by Seller and the
transactions contemplated hereby to be consummated by Seller have been duly
authorized by all requisite limited liability company action by Seller. This
Agreement and the other agreements contemplated herein have been duly executed
and delivered by Seller and constitute a valid and binding agreement of Seller
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency and other similar laws relating to or affecting the
enforcement of creditors' rights generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law).
3.3 No Violations. The execution and delivery of this Agreement by
Seller and the consummation of the transactions and agreements contemplated
herein to be consummated by Seller do not and will not:
3.3.1 violate any provision of its certificate of formation,
limited liability company agreement, or any equivalent governing
instruments of Seller, or the LLC Agreement;
3.3.2 violate any provision of or require any filing,
consent, authorization or approval under any Legal Requirement binding
upon Seller;
3.3.3 result in a breach of, constitute a default under, or
require any consent, authorization or approval under (i) any mortgage,
indenture, loan or credit agreement or any other agreement or
instrument evidencing indebtedness for money borrowed, or any
financing lease to which Seller is a party or by which it is bound or
to which any of its assets is subject, or (ii) in any material
respect, any other agreement or instrument to which either Seller is a
party or by which it is bound or to which any of its assets is
subject; or
3.3.4 result in the creation or imposition of any Encumbrance
on any asset of Holdings.
3.4 Title to Purchased Interest. Seller owns beneficially and of
record the Purchased Interest, free and clear of all Encumbrances. Seller has
full legal right to sell, assign and transfer the Purchased Interest to Buyer
and will, upon delivery of the assignment of Membership Interest in the form of
Exhibit "A", as well as the delivery of any appropriate certificates
representing the Purchased Interest to Buyer pursuant to the terms hereof,
transfer to Buyer good and valid title to the Purchased Interest free and clear
of any and all Encumbrances.
3.5 Governmental and Third Party Approvals. No consent, approval,
waiver, order or authorization of, or registration, declaration or filing with,
any Governmental Authority or any other third party is required to be obtained
or made in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions contemplated herein.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller:
4.1 Organization and Good Standing. Buyer is a Delaware limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. Buyer is qualified to do business as a foreign
entity in all other jurisdictions where the properties now owned or leased by
Buyer or the nature of the business now conducted by it requires it to be so
qualified.
4.2 Authority of Buyer. Buyer has all requisite limited liability
company power and authority to enter into this Agreement and the other
agreements contemplated herein to which it is a party, to consummate the
transactions contemplated hereby and to perform all the terms and conditions
hereof and thereof to be performed by it. The execution, delivery and
performance of this Agreement and the other agreements contemplated herein by
Buyer and the transactions contemplated hereby and thereby to be consummated by
Buyer have been duly authorized by all requisite limited liability company
action by Buyer. This Agreement and the other agreements contemplated herein
have been duly executed and delivered by Buyer and constitutes a valid and
binding agreement of Buyer enforceable against it in accordance with its terms
subject to applicable bankruptcy, insolvency and other similar laws relating to
or affecting the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
4.3 No Violations. The execution and delivery of this Agreement by
Buyer and the consummation of the transactions and agreements contemplated
herein to be consummated by Buyer do not and will not:
4.3.1 violate any provision of its certificate of formation,
limited liability company agreement, or any equivalent governing
instruments of Buyer;
4.3.2 violate any provision of or require any filing,
consent, authorization or approval under any Legal Requirement binding
upon Buyer;
4.3.3 conflict with, result in a breach of, constitute a
default under, or require any consent, authorization or approval under
(i) any mortgage, indenture, loan or credit agreement or any other
agreement or instrument evidencing indebtedness for money borrowed, or
any financing lease to which Buyer is a party or by which it is bound
or to which any of its properties is subject or (ii) in any material
respect, any other agreement or instrument to which Buyer is a party
or by which it is bound or to which any of its properties is subject.
4.4 Acquisition as Investment. Buyer or its designee, as appropriate,
is acquiring the Purchased Interest for its own account as an investment
without the present intent to sell, transfer or otherwise distribute the
Purchased Interest to any other person or entity.
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4.5 Brokerage or Finders Fees. Buyer and its Affiliates have no
liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
5.1 Covenants of Seller. Seller covenants and agree with Buyer as
follows:
5.1.1 Transaction Costs. Seller shall bear and pay all of the
costs, fees and expenses incurred by or on behalf of it in connection
with the transactions contemplated by this Agreement.
5.1.2 Tax Election. Seller agrees, and Seller will cause its
affiliated member(s) of Holdings, if any, to agree, to timely make, in
the 1999 Holdings' tax return, the election under Internal Revenue
Code Section 754 to adjust the basis of partnership property in
conjunction with the transfer of the Purchased Interest contemplated
herein. In addition, Seller agrees to cause its affiliated members of
Stingray Pipeline Company, L.L.C. and West Cameron Dehydration
Company, L.L.C. to timely make, in the appropriate Stingray and WCDC
tax returns, the election under Internal Revenue Code Section 754 to
adjust the basis of partnership property in conjunction with the
transfers of the purchased interests described in the Purchase and
Sale Agreement dated of even date herewith by and between NGPL
Offshore Company and MidCon Dehydration Corp as Sellers and Leviathan
Gas Pipeline Partners, L.P., as Buyer.
5.2 Covenants of Buyer. Buyer covenants and agrees with Seller as
follows:
5.2.1 Transaction Costs. Buyer shall bear and pay all of the
costs, fees and expenses incurred by or on behalf of it in connection
with the transactions contemplated by this Agreement.
5.2.2 Tax Election. Buyer agrees, and Buyer will cause its
affiliated member(s) of Holdings, if any, to agree, to timely make, in
the 1999 Holdings' tax return, the election under Internal Revenue
Code Section 754 to adjust the basis of partnership property in
conjunction with the transfer of the Purchased Interest contemplated
herein.
5.3 Mutual Covenants. Buyer and Seller each covenant and agree as
follows:
5.3.1 Transfer Taxes. Buyer and Seller shall be equally
responsible for the payment of all state and local transfer, sales,
use or other similar Taxes resulting from the transactions
contemplated by this Agreement.
5.3.2 Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each Party will use its Reasonable Efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper, or advisable under
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applicable Legal Requirements to consummate the transactions
contemplated by this Agreement, including satisfying the conditions to
closing.
5.3.3 Certain Filings. Buyer and Sellers shall cooperate with
one another (i) in determining whether any action by or in respect of,
or filing with, any Governmental Authority is required, or any
actions, consents, approvals, or waivers are required to be obtained
from parties to any material agreements, in connection with the
consummation of the transactions contemplated by this Agreement, and
(ii) in taking such actions or making such filings, furnishing
information required in connection therewith and seeking timely to
obtain such actions, consents, approvals, or waivers.
5.3.4 Notices of Certain Events. Each of the Buyer and Seller
shall promptly notify the other Party hereto of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this
Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to, or
involving or otherwise affecting such Party that, if pending on the
date of this Agreement, would have been required to have been
disclosed pursuant to any provision of this Agreement or that relate
to the consummation of the transactions contemplated by this
Agreement; and
(d) (i) the discovery by such party that any representation
or warranty contained in this Agreement is untrue or inaccurate in any
material respect, (ii) the occurrence or failure to occur of any event
which occurrence or failure to occur would be likely to cause any of
the representations or warranties in this Agreement to be untrue or
incorrect in any material respect at the Closing Date, except for
representations and warranties that speak as of a specified date,
which need only be true and correct as of the specified date and (iii)
any material failure on its part to comply with or satisfy any
covenant, conditions or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.3.4 shall not limit or otherwise affect the
remedies available hereunder to the Party receiving such notice.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Buyer's Obligation to Close. Buyer's obligation to close under
this Agreement is subject to the fulfillment, on the Closing Date, of each of
the following conditions (except to the extent that Buyer shall have hereafter
agreed in writing to waive one or more of such conditions):
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6.1.1 Litigation. There shall not be pending or threatened
any litigation or proceeding (filed by a person or entity other than
Buyer or its Affiliates) to restrain or prohibit any material portion
of the transactions contemplated by this Agreement or to obtain
material damages or other material relief in connection with the
consummation of such transactions.
6.1.2 Compliance with Agreement. Seller shall have performed
and complied in all material respects with all covenants required by
this Agreement to be performed or complied with by Seller on or prior
to the Closing.
6.1.3 Representations and Warranties. The representations and
warranties of Seller contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, except
that those representations and warranties which address matters only
as of a particular date shall remain true and correct as of such date.
6.1.4 HSR. Buyer and Seller shall have made all necessary
filings under the HSR Act with respect to the consummation of the
transactions contemplated by this Agreement and have received early
termination of the waiting period under the HSR Act with respect
thereto.
6.1.5 Regulatory Approval. Prior to or simultaneously with
the Closing hereunder, Buyer and Seller shall have received all
required regulatory approvals and authorizations in form and substance
acceptable to each Party.
6.1.6 Third Party Consents. Prior to or simultaneously with
the Closing hereunder, Buyer and Seller shall have received all
required third party consents and approvals to the transactions
contemplated under this Agreement and the other agreements
contemplated herein.
6.1.7 Closings. The closing of the transactions contemplated
in the Contribution and Assignment Agreement dated of even date
herewith between Affiliates of Buyer and Affiliates of Seller and
other agreements contemplated therein shall occur immediately prior to
the Closing hereunder.
6.2 Seller's Obligation to Close. The obligation of Seller to close
under this Agreement is subject to the fulfillment on the Closing Date of each
of the following conditions (except to the extent that Seller shall have
hereafter agreed in writing to waive one or more of such conditions):
6.2.1 Litigation. There shall not be pending or threatened
any litigation or proceeding (filed by a person or entity other than
Seller or its Affiliates) to restrain or prohibit any material portion
of the transactions contemplated by this Agreement or to obtain
material damages or other material relief in connection with the
consummation of such transactions.
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6.2.2 Compliance with Agreement. Buyer shall have performed
and complied in all material respects with all covenants required by
this Agreement to be performed or complied with by Buyer on or prior
to the Closing.
6.2.3 Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, except
that those representations and warranties which address matters only
as of a particular date shall remain true and correct as of such date.
6.2.4 HSR. Buyer and Seller shall have made all necessary
filings under the HSR Act with respect to the consummation of the
transactions contemplated by this Agreement and have received early
termination of the waiting period under the HSR Act with respect
thereto.
6.2.5 Regulatory Approval. Prior to or simultaneously with
the Closing hereunder, Buyer and Seller shall have received all
required regulatory approvals and authorizations in form and substance
acceptable to each Party.
6.2.6 Third Party Consents. Prior to or simultaneously with
the Closing hereunder, Buyer and Seller shall have received all
required third party consents and approvals to the transactions
contemplated under this Agreement and the other agreements
contemplated herein.
6.2.7 Closings. The closing of the transactions contemplated
in the Contribution and Assignment Agreement dated of even date
herewith between Affiliates of Buyer and Affiliates of Seller and
other agreements contemplated therein shall occur immediately prior to
the Closing hereunder.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification of Buyer. Seller shall indemnify and defend Buyer,
its Affiliates (including any Affiliates designated by Buyer to purchase the
Purchased Interest if the Closing occurs) and their directors, officers,
employees, contractors, agents and other representatives (each a "Buyer
Indemnified Party") against, and hold each Buyer Indemnified Party harmless
from any Loss that such Buyer Indemnified Party incurs to the extent arising
out of or resulting from any of the following:
7.1.1 the failure of any of the representations and
warranties of Seller contained in this Agreement to be true and
correct as of the date made or the inaccuracy of any such
representation or warranty as of the date made; or
7.1.2 Seller's breach or the failure of Seller to perform or
satisfy in any material respect any covenant made by, or other
obligation of, Seller herein.
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7.2 Indemnification of Seller. Subject to Sections 7.4 and 7.5, Buyer
shall indemnify and defend Seller and its Affiliates and their directors,
officers, employees, contractors, agents and other representatives ("Seller
Indemnified Parties") against, and hold each Seller Indemnified Party harmless
from any Loss that such Seller Indemnified Party incurs, to the extent arising
out of or resulting from any of the following:
7.2.1 the failure of any of the representations and
warranties of Buyer contained in this Agreement to be true and correct
as of the date made or the inaccuracy of any such representation or
warranty as of the date made; or
7.2.2 Buyer's breach or the failure of Buyer to perform or
satisfy in any material respect any covenant made by, or other
obligation of, Buyer herein.
7.3 Indemnification Procedures. All claims for indemnification under
this Agreement shall be asserted and resolved as follows:
7.3.1 A party claiming indemnification under this Agreement
(an "Indemnified Party") with respect to any third-party Claim or
Claims asserted against the Indemnified Party ("Third Party Claim")
that could give rise to a right of indemnification under this
Agreement shall promptly (a) notify the party from whom
indemnification is sought (the "Indemnifying Party") of the Third
Party Claim and (b) 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 Third Party Claim (if any), the Indemnified Party's best estimate
of the amount of damages attributable to the Third Party Claim and the
basis of the Indemnified Party's request for indemnification under
this Agreement. Subject to Section 7.3.2, failure to 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 thereby. Within 30 days after receipt of any Claim
Notice (the "Election Period"), the Indemnifying Party shall notify
the Indemnified Party (x) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article VII
with respect to such Third Party Claim and (y) whether the
Indemnifying Party desires to defend the Indemnified Party against
such Third Party Claim; provided that if the Indemnifying Party fails
to so notify the Indemnified Party during the Election Period, the
Indemnifying Party shall be deemed to have elected to dispute such
liability.
7.3.2 If the Indemnifying Party notifies the Indemnified
Party within the Election Period that the Indemnifying Party does not
dispute its potential liability to the Indemnified Party under this
Article VII and that the Indemnifying Party elects to assume the
defense of the Third Party Claim, then the Indemnifying Party shall
have the right to defend, at its sole cost and expense, such Third
Party Claim by all appropriate proceedings, which proceedings shall be
prosecuted diligently by the Indemnifying Party to a final conclusion
or settled at the discretion of the Indemnifying Party in accordance
with this Section 7.3.2. 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 providing for a finding
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of responsibility or liability on the part of the Indemnified Party or
providing any material sanction or material restriction upon the
conduct of any business by the Indemnified Party without the
Indemnified Party's consent, which consent shall not unreasonably be
withheld. The Indemnified Party is hereby authorized, at the sole cost
and expense of the Indemnifying Party (but only if the Indemnified
Party is actually entitled to indemnification hereunder), to file,
during the Election Period, any motion, answer or other pleadings
which the Indemnified Party shall deem necessary or appropriate to
protect its interests or those of the Indemnifying Party and not
prejudicial to the Indemnifying Party (it being understood and agreed
that if an Indemnified Party takes any such action, the Indemnifying
Party shall be relieved of its obligations hereunder with respect to
such Third Party Claim to the extent that such action prejudiced the
Indemnifying Party). 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 or entity asserting the Third Party
Claim or any cross-complaint against any person or entity. The
Indemnified Party may participate in, but not control, any defense or
settlement or any Third Party Claim controlled by the Indemnifying
Party pursuant to this Section 7.3, and the Indemnified Party shall
bear its own costs and expenses with respect to such participation.
7.3.3 If the Indemnifying Party fails to notify the
Indemnified Party within the Election Period that the Indemnifying
Party elects to defend the Indemnified Party pursuant to Section
7.3.2, or if the Indemnifying Party elects to defend the Indemnified
Party pursuant to Section 7.3.2 but fails to diligently prosecute or
settle the Third Party Claim, then the Indemnified Party shall have
the right to defend, at the sole cost and expense of the Indemnifying
Party (but only if the Indemnified Party is actually entitled to
indemnification hereunder), the Third Party Claim by all appropriate
proceedings, which proceedings shall be promptly and vigorously
prosecuted by the Indemnified Party to a final conclusion or settled.
The Indemnified Party shall have full control of such defense and
proceedings; provided, however, that the Indemnified Party may not
enter into, without the Indemnifying Party's consent, which shall not
be unreasonably withheld, any compromise or settlement of such Third
Party Claim. The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party
pursuant to this Section 7.3.3, and the Indemnifying Party shall bear
its own costs and expenses with respect to such participation.
7.3.4 In the event any Indemnified Party should have a claim
against any Indemnifying Party hereunder which does not involve a
Third Party Claim, the Indemnified Party shall promptly transmit to
the Indemnifying Party a written notice (the "Indemnity Notice")
describing in reasonable detail the nature of the claim, the
Indemnified Party's best estimate of the amount of damages
attributable to such claim and the basis of the Indemnified Party's
request for indemnification under this Agreement. If the Indemnifying
Party does not notify the Indemnified Party within 60 days from its
receipt of the Indemnity Notice that the Indemnifying Party disputes
such claim, the Indemnifying Party shall be deemed to have disputed
such claim. If the
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Indemnifying Party has disputed (or is deemed to have disputed) such
claim, such dispute shall be resolved by arbitration in accordance
with Section 9.1.
7.4 Negligence. SUBJECT TO SECTION 7.5, AN INDEMNIFIED PARTY SHALL BE
ENTITLED TO INDEMNIFICATION HEREUNDER IN ACCORDANCE WITH THE TERMS HEREOF,
REGARDLESS OF WHETHER THE LOSS OR CLAIM GIVING RISE TO SUCH INDEMNIFICATION
OBLIGATION IS THE RESULT OF THE SOLE, JOINT, CONCURRENT OR COMPARATIVE
NEGLIGENCE, STRICT LIABILITY OR VIOLATION OF ANY LAW OF OR BY SUCH INDEMNIFIED
PARTY. THE PARTIES AGREE THAT THIS PARAGRAPH CONSTITUTES A CONSPICUOUS LEGEND.
7.5 Limitation on Liabilities.
7.5.1 BUYER AND SELLER (I) AGREE THAT ONLY ACTUAL DAMAGES
SHALL BE RECOVERABLE UNDER THIS AGREEMENT AND (II) HEREBY WAIVE ANY
RIGHT TO RECOVER, AND AGREE THAT THE TERM LOSSES SHALL NOT COVER,
SPECIAL, PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR EXEMPLARY DAMAGES
(WHETHER BASED ON STATUTE, CONTRACT, TORT OR OTHERWISE, AND WHETHER OR
NOT ARISING FROM THE INDEMNIFYING PARTY'S SOLE, JOINT OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT) EXCEPT TO THE EXTENT ANY
SUCH PARTY SUFFERS SUCH DAMAGES TO AN UNAFFILIATED THIRD-PARTY IN
CONNECTION WITH A THIRD-PARTY CLAIM, IN WHICH EVENT SUCH DAMAGES SHALL
BE RECOVERABLE.
7.6 Survival. The representations and warranties in Article III shall
survive the Closing solely for purposes of this Article VII and shall terminate
four years and six months after the Closing Date. The representations and
warranties in Article IV shall survive the Closing solely for purposes of this
Article VII and shall terminate four years and six moths after the Closing
Date. No Claim can be brought with respect to any inaccuracy or failure of any
representation and warranty under this Agreement unless a Claim Notice or
Indemnity Notice specifying the inaccuracy or failure of the representation or
warranty forming the basis of such Claim has been delivered to the Party making
such representation or warranty prior to the termination date of such
representation or warranty as described in this Section 7.6. Notwithstanding
anything to the contrary in this Agreement, the indemnification provisions of
this Agreement shall be the exclusive remedies for any Claim based upon this
Agreement or the transactions described herein following Closing. In
furtherance of the foregoing, all other remedies available at law or in equity,
in tort, contract or otherwise are hereby waived, released and discharged by
Seller and Buyer.
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ARTICLE VIII
TERMINATION RIGHTS
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned as follows:
8.1.1 By the mutual written consent of Buyer and Seller at
any time prior to the Closing;
8.1.2 By Buyer or Seller if an order to restrain, enjoin or
otherwise prevent the consummation of the transactions contemplated
hereby shall have been entered;
8.1.3 By Seller at any time prior to the Closing if the
Closing shall not have occurred on or before September 30, 1999 by
reason of a failure of any condition precedent under Section 6.2
unless the failure results primarily from the breach by Seller of any
representation, warranty or covenant contained in this Agreement; or
8.1.4 By Buyer at any time prior to the Closing if the
Closing shall not have occurred on or before September 30, 1999 by
reason of a failure of any condition precedent under Section 6.1,
unless the failure results primarily from Buyer itself breaching any
representation, warranty or covenant contained in this Agreement.
8.2 Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 8.1, (a) Seller and Buyer shall have no
obligation or liability to each other except that the provisions of Article
VII, IX and X shall survive any such termination, and (b) nothing herein and no
termination pursuant hereto will relieve any party from liability for any
breach of this Agreement prior to such termination or, with respect to those
provisions that survive such termination, prior to or following termination.
ARTICLE IX
ARBITRATION
9.1 Arbitration.
9.1.1 Any and all claims, counterclaims, demands, cause of
action, disputes, controversies, and other matters in question arising
out of or relating to this Agreement, any provision hereof, the
alleged breach of any such provision, or in any way relating to the
subject matter of this Agreement or the relationship between the
Parties created by this Agreement, involving the Parties and/or their
respective representatives (all of which are referred to herein as
"Claims"), even though some or all of such Claims allegedly are
extra-contractual in nature, whether such Claims sound in contract,
tort, or otherwise, at law or in equity, under State or federal law,
whether provided by statute or the common law, for damages or any
other relief, shall be resolved by binding arbitration in accordance
with this Section 9.1.
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9.1.2 It is the intention of the Parties that the arbitration
shall be conducted pursuant to the Federal Arbitration Act, as such
Act is modified by this Agreement. The validity, construction, and
interpretation of this Section 9.1, and all procedural aspects of the
arbitration conducted pursuant to this Section 9.1, including the
determination of the issues that are subject to arbitration (i.e.,
arbitrability), the scope of the arbitrable issues, allegations of
"fraud in the inducement" to enter into this Agreement, or this
arbitration provision, allegations of waiver, laches, delay or other
defenses to arbitrability, and the rules governing the conduct of the
arbitration (including the time for filing an answer, the time for the
filing of counterclaims, the times for amending the pleadings, the
specificity of the pleadings, the extent and scope of discovery, the
issuance of subpoenas, the times for the designation of experts,
whether the arbitration is to be stayed pending resolution of related
litigation involved third parties not bound by this Agreement, the
receipt of evidence, and the like), shall be decided by the
arbitrators. The arbitration shall be administered by the American
Arbitration Association (the "AAA"), and shall be conducted pursuant
to the Commercial Arbitration Rules of the AAA, as modified by this
Agreement. In deciding the substance of the parties' Claims, the
arbitrators shall refer to the substantive laws of the State of Texas
for guidance (excluding Texas choice-of-law principles that might call
for the application of some other State's law). Notwithstanding any
other provision in this Section 9.1 to the contrary, the Parties
expressly agree that the arbitrators shall have absolutely no
authority to award incidental, special, treble, exemplary or punitive
damages of any type under any circumstances regardless of whether such
damages may be available under Texas law, the law of any other State,
or federal law, or under the Federal Arbitration Act, or under the
Commercial Arbitration Rules of the AAA, the parties hereby waiving
their right, if any, to recover incidental, special, treble, exemplary
or punitive damages in connection with any such Claims.
9.1.3 The arbitration proceeding shall be conducted in
Houston, Texas before a panel of three arbitrators appointed in
accordance with the Commercial Arbitration Rules of the AAA consisting
of persons from any of the following categories: (i) attorneys having
practiced in the area of natural gas transportation law for at least
ten (10) years, (ii) engineers with at least ten (10) years of
experience in the natural gas transportation industry, or (iii)
accountants with at least ten (10) years of experience in the natural
gas transportation industry. The arbitrators shall conduct a hearing
as soon as reasonably practicable after appointment of the third
arbitrator, and a final decision completely disposing of all Claims
that are the subject of the arbitration proceedings shall be rendered
by the arbitrators as soon as reasonably practicable after the
hearing. There shall be no transcript of the hearing before the
arbitrators. The arbitrators' ultimate decision after final hearing
shall be in writing, but shall be as brief as possible, and the
arbitrators shall not assign reasons for their ultimate decision. In
case the arbitrators award monetary damages to either Party, the
arbitrators shall certify in their award that they have not included
any incidental, special, treble, exemplary or punitive damages.
9.1.4 The fees and expenses of the arbitrators shall be borne
equally by the Parties, but the decision of the arbitrators may
include such award of the arbitrators' fees and expenses and of other
costs and attorneys' fees as the arbitrators determine appropriate.
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9.1.5 To the fullest extent permitted by law, the arbitration
proceeding and the arbitrators' award shall be maintained in
confidence by the Parties.
9.1.6 The award of the arbitrators shall be binding upon the
parties and final and nonappealable to the maximum extent permitted by
law, and judgment thereon may be entered in a court of competent
jurisdiction and enforced by any Party as a final judgment of such
court.
ARTICLE X
GENERAL
10.1 Exclusive Agreement. This Agreement and the attached exhibit set
forth the entire agreement and understanding of the Parties in respect of the
transactions contemplated hereby and supersede all prior agreements,
arrangements and undertakings (oral or written) relating to the subject matter
hereof. No representation, promise, inducement or statement of intention has
been made by any Party which is not embodied in or superseded by this Agreement
or in the agreements and documents to be executed pursuant hereto, and no Party
shall be bound by or liable for any alleged representation, promise, inducement
or statement of intention not so set forth.
10.2 Successors and Assigns. All of the terms, covenants,
representations, warranties and conditions of this Agreement shall be binding
upon, and inure to the benefit of, and be enforceable by, the Parties and their
respective permitted successors and assigns (and in the case of indemnities to
the benefit of all persons indemnified). This Agreement and the rights and
obligations hereunder shall not be assigned by any Party hereto without the
prior written consent of the other Party.
10.3 Amendments. This Agreement may be amended, modified, superseded
or canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
Parties, or, in the case of a waiver, by or on behalf of the Party waiving
compliance. The failure of any Party at any time or times to require
performance of any provisions hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by any Party of any condition, or of
any breach of any term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as
a further or continuing waiver of any such condition or breach or a waiver of
any other condition or of any breach of any other term, covenant,
representation or warranty.
10.4 Further Assurances. Each Party agrees to execute such further
instruments or documents as the other Party may from time to time reasonably
request in order to confirm or carry out the transactions contemplated in this
Agreement; provided that no such instrument or document shall expand a Party's
liability beyond that contemplated in this Agreement.
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10.5 Notices. All notices, requests, demands and other communications
(collectively, "Notices") required or permitted to be given hereunder shall be
in writing and delivered personally, or by facsimile transmission or mailed
first class, postage prepaid, registered or certified mail, as follows:
If to Buyer, to:
ANR Western Gulf Holdings, L.L.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
If to Seller, to:
Leviathan Deepwater, L.L.C.
El Paso Energy Building
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile Number: (000) 000-0000
All Notices shall be effective upon receipt. Any Party may change its Notice
address by giving written Notice to the other in the manner specified above.
10.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD
TO CONFLICT OF LAW PRINCIPLES.
10.7 Severability. In the event any of the provisions hereof are held
to be invalid or unenforceable under any Legal Requirement, the remaining
provisions hereof shall not be affected thereby. In such event, the Parties
agree and consent that such provisions and this Agreement shall be modified and
reformed so as to effect the original intent of the Parties as closely as
possible with respect to those provisions which were held to be invalid or
unenforceable.
10.8 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one agreement.
10.9 Expenses. Except as expressly provided in this Agreement, whether
or not the transactions contemplated hereby are consummated, each Party shall
pay its own expenses incident to the preparation of the Agreement and for
consummating the transaction.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have duly executed this instrument the
day and year first above written.
SELLER:
LEVIATHAN DEEPWATER, L.L.C.
By: /s/ T. XXXXX XXXXX
-----------------------------------
Name: T. Xxxxx Xxxxx
-----------------------------------
Title: Vice President
-----------------------------------
BUYER:
ANR WESTERN GULF HOLDINGS, L.L.C.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Senior Vice President
-----------------------------------
Exhibit A: Form of Assignment
22
EXHIBIT A
Assignment
This Assignment is made and entered into as of September ___, 1999 by
and between Leviathan Deepwater, a Delaware limited liability company
("Assignor") and ANR Western Gulf Holdings, L.L.C., a Delaware limited
liability company ("Assignee").
WHEREAS, in accordance with that certain Purchase and Sale Agreement
dated as of September __, 1999 (the "Purchase and Sale Agreement") between
Assignor and Assignee, Assignor desires to assign the Subject Interest (herein
defined) to Assignee;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein and other good and valuable
consideration (the receipt and sufficiency of which are hereby confirmed and
acknowledged), the parties hereto hereby stipulate and agree as follows:
1. Assignment. Assignor hereby assigns, conveys, transfers, and
contributes to Assignee, on the terms herein provided, all of its rights, title
and interest in and to the property described on Exhibit "A" attached hereto
(the "Subject Interest"). The Subject Interest is being assigned, along with
other contributions, assignments and commitments, to Assignor in exchange for
the execution and delivery of this Assignment and the other agreements executed
in connection with the Purchase and Sale Agreement.
2. Purchase and Sale Agreement. THIS ASSIGNMENT IS SUBJECT TO THE
TERMS AND CONDITIONS OF THE PURCHASE AND SALE AGREEMENT, INCLUDING WITHOUT
LIMITATION THE PROVISIONS THEREOF THAT LIMIT IN CERTAIN RESPECTS THE LIABILITY
OF ASSIGNOR IN CONNECTION HEREWITH AND SET FORTH THE EXCLUSIVE REMEDIES OF THE
PARTIES IN CONNECTION HEREWITH.
3. Entire Agreement. This Assignment, the Purchase and Sale Agreement
and the other agreements executed in connection and contemporaneously herewith
constitute the entire agreement and supersede all prior (oral or written) or
oral contemporaneous proposals or agreements, all previous negotiations and all
other communications or understandings between the parties hereto with respect
to the subject matter hereof.
4. Amendment and Modification. All amendments, supplements and
modifications to this Assignment shall be in writing and signed by each of the
parties hereto.
5. Counterparts. This Assignment may be executed in multiple
counterparts, each of which, when executed, shall be deemed an original, and
all of which shall constitute but one and the same instrument.
6. Parties Bound by Agreement. This Assignment shall be binding upon
and shall inure to the benefit of the Parties and their respective successors
and assigns.
EXHIBIT A
Page 1
23
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD
TO CONFLICT OF LAW PRINCIPLES.
8. Exhibits and Schedules. All exhibits, schedules and the like
contained herein or attached hereto are integrally related to this Assignment,
and are hereby made a part of this Assignment for all purposes.
9. Further Assurances. Subject to the terms and conditions set forth
in this Assignment, each of the parties hereto agrees to use all reasonable
efforts to take, or to cause to be taken, all actions, and to do, or to cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Assignment. In case, at any time after the execution of this Assignment,
any further action is necessary or desirable to carry out its purposes, the
proper officers or directors of the parties hereto shall take or cause to be
taken all such necessary action.
10. Severability. Any term or provision of this Assignment that is
invalid or unenforceable in any jurisdiction shall be ineffective as to such
jurisdiction, to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Assignment or affecting the validity or enforceability of any terms and
provisions of this Assignment in any other jurisdiction. If any provision of
this Assignment is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
[The remainder of this page is intentionally left blank.]
EXHIBIT A
Page 2
24
IN WITNESS WHEREOF, the undersigned have executed this Assignment as
of the date first above written.
ASSIGNOR:
LEVIATHAN DEEPWATER, L.L.C.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
ASSIGNEE
ANR WESTERN GULF HOLDINGS, L.L.C.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
AGREED TO AND ACCEPTED
THIS ___ DAY OF SEPTEMBER, 1999
DEEPWATER HOLDINGS, L.L.C.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
EXHIBIT A
Page 3
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Exhibit A to Assignment
A 9.66% membership interest in Deepwater Holdings, L.L.C., a Delaware limited
liability company.
EXHIBIT A
Page 4
