Exhibit 10.a
PURCHASE AGREEMENT
BETWEEN
CCE HOLDINGS, LLC
AND
ONEOK, INC.
Dated as of September 16, 2004
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of September 16, 2004 (this
"AGREEMENT"), between CCE Holdings, LLC, a Delaware limited liability company
("SELLER"), and ONEOK, Inc., an Oklahoma corporation ("PURCHASER").
WITNESSETH:
WHEREAS, Enron Operations Services, LLC, a Delaware limited
liability company, Enron Transportation Services, LLC, a Delaware limited
liability company, EOC Preferred, L.L.C., a Delaware limited liability company,
and Enron Corp., an Oregon corporation (collectively, the "ENRON SELLERS") and
Seller entered into a Purchase Agreement, dated as of June 24, 2004, as amended
by that certain Amendment No. 1 to Purchase Agreement dated September 1, 2004
(the "ENRON PURCHASE AGREEMENT"), whereby Seller agreed to purchase 100% of the
membership interests of CrossCountry Energy, LLC ("CROSSCOUNTRY"); and
WHEREAS, CrossCountry owns, among other things, (i) four
hundred (400) shares of common stock, par value $10.00 per share, of Northern
Plains Natural Gas Company, a Delaware corporation ("NORTHERN PLAINS"), which
constitutes 100% of the issued and outstanding shares of capital stock of
Northern Plains and (ii) one thousand (1,000) shares of common stock, par value
$1.00 per share, of NBP Services Corporation, a Delaware corporation ("NBP
SERVICES"), which constitutes 100% of the issued and outstanding shares of
capital stock of NBP Services (the common stock referred to in the preceding
clauses (i) and (ii) or the ownership interests in limited liability companies
or limited partnerships into which such common stock may be converted pursuant
to the Conversion Transactions (as defined in the Enron Purchase Agreement) will
be referred to in this Agreement as, collectively, the "EQUITY INTEREST"); and
WHEREAS, CrossCountry is, and upon the closing of the
transactions contemplated by the Enron Purchase Agreement will be, the holder of
the Equity Interest; and
WHEREAS, pursuant to the terms of this Agreement, Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the
Equity Interest; and
WHEREAS, concurrently with the closing of the transactions
contemplated by the Enron Purchase Agreement, Seller will cause CrossCountry to
transfer the Equity Interest to Purchaser pursuant to the terms of this
Agreement; and
WHEREAS, certain terms used in this Agreement are defined in
Section 11.1.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties agree
as follows:
ARTICLE I
SALE AND PURCHASE OF EQUITY INTEREST
1.1 SALE AND PURCHASE OF EQUITY INTEREST. Upon the terms and
subject to the conditions contained herein, on the Closing Date, Seller shall
sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall
purchase from Seller, the Equity Interest, free and clear of all Liens.
ARTICLE II
PURCHASE PRICE AND PAYMENT
2.1 PURCHASE PRICE. The purchase price for the Equity
Interest shall be an amount equal to (i) $175,000,000 (the "PRELIMINARY PURCHASE
PRICE"), plus (ii) an amount, which may be positive or negative, calculated
pursuant to SCHEDULE 2.1 (the Preliminary Purchase Price, after giving effect to
all adjustments contemplated pursuant to SCHEDULE 2.1, is referred to herein as
the "PURCHASE PRICE").
2.2 DEPOSIT.
(a) On or prior to September 20, 2004, Purchaser shall deposit
with JPMorgan Chase Bank, in its capacity as Deposit Escrow Agent (the "DEPOSIT
ESCROW AGENT"), pursuant to that certain Deposit Escrow Agreement, dated as of
the date hereof, among Purchaser, Seller and the Deposit Escrow Agent (the
"DEPOSIT ESCROW AGREEMENT"), (i) one or more original irrevocable letters of
credit (the "LETTERS OF CREDIT"), each in the form of APPENDIX A to the Deposit
Escrow Agreement, for an aggregate amount equal to $3,600,000 (the "DEPOSIT
AMOUNT") or (ii) cash in the amount of the Deposit Amount (the "CASH DEPOSIT").
The Letters of Credit will be drawn upon by the Deposit Escrow Agent, or the
Cash Deposit will be disbursed by the Deposit Escrow Agent, as applicable, only
in the circumstances described in, and to the extent permitted by, Section
2.2(c) and the Deposit Escrow Agreement. The Letters of Credit and any funds
drawn thereunder, or the Cash Deposit, as applicable, shall be held by the
Deposit Escrow Agent and applied, or returned to Purchaser, in accordance with
the provisions of this Section 2.2 and the Deposit Escrow Agreement. Upon
Closing and as provided in Section 2.2(b), the Letters of Credit and any funds
drawn thereunder, or the Cash Deposit, as applicable, shall be released to
Purchaser.
(b) Pursuant to the Deposit Escrow Agreement, the Letters of
Credit shall be released and returned to Purchaser, or the Cash Deposit shall be
released and returned to Purchaser, as applicable, in the event that this
Agreement is validly terminated by (i) Purchaser (A) pursuant to Sections
3.2(a), 3.2(c) or 3.2(d) or (B) pursuant to Section 3.2(b) in the event that the
Closing does not occur on or prior to the Outside Date due to the failure to
satisfy the closing conditions set forth in Sections 7.1(a), 7.1(b), 7.1(c),
7.1(d) or 7.2(a) - (d), or (ii) by Seller (A) pursuant to Sections 3.2(a) or
3.2(c), or (B) pursuant to Section 3.2(e) in the event that such termination by
Seller is solely based upon a breach of Purchaser's representations in Section
5.4 due to an Action or Order of which Purchaser is not aware as of the date of
this Agreement that seeks to restrain or prohibit or otherwise challenge the
consummation, legality and validity of the transactions contemplated hereby or
that directly results from and relates to the execution of this Agreement and in
any such case is filed or threatened to be filed after the date hereof by a
Person other than Purchaser or any of its Affiliates or Representatives or any
other Person acting, directly or indirectly, on behalf of or at the behest of or
with the encouragement of any of them; provided, that the Letters of Credit or
the Cash Deposit, as applicable, shall not be released or returned to Purchaser
in the event that any termination referred to in this paragraph (b) relates to
or arises from a failure to satisfy the closing condition set forth in (i)
Section 7.1(b) (with respect to the HSR Act); or
(c) Except as specified in Section 2.2(b), upon the valid
termination of this Agreement, the Letters of Credit shall be drawn upon for the
Deposit Amount, if applicable, and the Deposit Amount or the Cash Deposit, as
applicable, shall be paid to Seller as liquidated damages. For the avoidance of
doubt and, except as provided in Section 2.2(b), if all of the conditions set
forth in Sections 7.1 and 7.2 have been satisfied (assuming for such purposes
that the Closing would have occurred on the date of termination of this
Agreement), and Purchaser fails to pay the Purchase Price in accordance with the
terms of this Agreement, Seller shall be entitled to the Deposit Amount. Upon
the payment to Seller of the Deposit Amount pursuant to this Section 2.2(c), the
parties hereto and their Affiliates and Representatives shall, subject to
Section 3.3, be fully released and discharged from all liabilities and
obligations under or resulting from this Agreement, and no party shall have any
other remedy or cause of action against any other party under or relating to
this Agreement.
2.3 PAYMENT OF PURCHASE PRICE. At the Closing, Purchaser
shall pay (i) the Preliminary Purchase Price plus (ii) the Estimated Purchase
Price Adjustment to Seller by wire transfer of immediately available funds into
an account or accounts designated in writing by Seller. The parties agree to
pay, if applicable, the True-up Amount in accordance with SCHEDULE 2.1.
ARTICLE III
CLOSING AND TERMINATION
3.1 TIME AND PLACE OF CLOSING. The closing of the sale and
purchase provided for in Article I (the "Closing") shall take place at the New
York City offices of Weil, Gotshal & Xxxxxx LLP contemporaneously with the
closing under the Enron Purchase Agreement (the "ENRON CLOSING"), or at such
other place, date and time as the parties may agree (the actual date on which
the Closing is to occur pursuant to this Section 3.1 shall be referred to as the
"CLOSING DATE"); PROVIDED, HOWEVER, that neither Seller nor Purchaser shall be
required to close the transactions contemplated by this Agreement until all
conditions to the obligations of Seller or Purchaser, as the case may be, shall
have been satisfied or waived in accordance with the provisions of Article VII.
Seller shall advise Purchaser as soon as reasonably practicable as to the date
of the Closing.
3.2 TERMINATION OF AGREEMENT. This Agreement may be
terminated prior to the Closing as follows:
(a) At any time prior to the Closing Date by the mutual
written consent duly authorized by the Board of Directors or Board of Managers,
as applicable, of Seller and Purchaser;
(b) By either Seller or Purchaser, if the Closing has not
occurred on or before the later of (i) December 17, 2004 or (ii) such date as is
the Outside Date under the Enron Purchase Agreement (as may be extended from
time to time pursuant to the terms of the Enron Purchase Agreement) (the
"OUTSIDE DATE"); PROVIDED, HOWEVER, that the terminating party is not in default
of its obligations under this Agreement in any material respect;
(c) By either Seller or Purchaser, if there shall be any
Applicable Law that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited (and such Law is not overturned or otherwise
made inapplicable to the transactions contemplated hereby within a period of one
hundred and twenty (120) days) or if any Order is entered by a Governmental
Authority of competent jurisdiction having valid enforcement authority
permanently restraining, prohibiting or enjoining Seller or Purchaser from
consummating the transactions contemplated hereby and such Order shall become
final and non-appealable;
(d) By Purchaser, so long as Purchaser is not then in breach
of its obligations under this Agreement in any material respect, upon a breach
of any covenant or agreement of Seller set forth in this Agreement, or if any
representation or warranty of Seller shall have been or becomes untrue, in each
case such that the conditions set forth in Section 7.2(a) or Section 7.2(b), as
the case may be, would not be satisfied and such breach or untruth (i) cannot be
cured by the Outside Date or (ii) has not been cured within thirty (30) Business
Days of the date on which Seller receives written notice thereof from Purchaser
(describing with reasonable specificity the purported breach or untruth);
PROVIDED, HOWEVER, that Purchaser shall not be entitled to terminate this
Agreement pursuant to the foregoing clause (ii) so long as Seller is using its
commercially reasonable efforts to cure such breach or untruth and such breach
or untruth is capable of cure on or before the Outside Date;
(e) By Seller, so long as Seller is not then in breach of its
obligations under this Agreement in any material respect, upon a breach of any
covenant or agreement of Purchaser set forth in this Agreement, or if any
representation or warranty of Purchaser shall have been or becomes untrue, in
each case such that the conditions set forth in Section 7.3(a) or Section
7.3(b), as the case may be, would not be satisfied and such breach or untruth
(i) cannot be cured by the Outside Date or (ii) has not been cured within thirty
(30) Business Days of the date on which Purchaser receives written notice
thereof from Seller (describing with reasonable specificity the purported breach
or untruth); PROVIDED, HOWEVER, that Seller shall not be entitled to terminate
this Agreement pursuant to the foregoing clause (ii) so long as Purchaser is
using its commercially reasonable efforts to cure such breach or untruth and
such breach or untruth is capable of cure on or before the Outside Date;
(f) By Seller, upon notice to Purchaser, if (i) Purchaser has
provided notice to Seller pursuant to Section 6.9 or (ii) Seller requests
Purchaser to deliver to Seller an officer's certificate stating that the
representation set forth in Section 5.6 is true and complete and Purchaser does
not within ten (10) days of the receipt of such request deliver such certificate
to Seller; PROVIDED, HOWEVER, that the right to terminate this Agreement under
this Section 3.2(f) shall not be available to Seller if within thirty (30) days
of receiving notice by Seller of its intention to terminate this Agreement under
this Section 3.2(f), Purchaser secures a financing commitment for alternate or
additional financing under terms and from a financing source that is reasonably
acceptable to Seller. Notwithstanding the foregoing, Seller shall not have the
right to terminate this Agreement pursuant to this Section 3.2(f) if Purchaser's
inability to deliver the certificate referenced in this Section 3.2(f) was
caused by a material breach by Seller of its obligations under this Agreement or
any representation or warranty of Seller having been or having become untrue in
any material respect;
(g) By Seller, if Purchaser fails to close the transactions
contemplated hereunder on the Closing Date as determined in accordance with
Section 3.1; or
(h) By Seller, if Purchaser fails to deposit with the Deposit
Escrow Agent the Letters of Credit or the Cash Deposit on or prior to September
20, 2004.
3.3 EFFECT OF TERMINATION. No termination of this Agreement
pursuant to Section 3.2 shall be effective until notice thereof shall be given
to the non-terminating party specifying the provision hereof pursuant to which
such termination is made. If validly terminated pursuant to Section 3.2, this
Agreement shall become wholly void and of no further force and effect without
liability to Purchaser, Seller or any of the Transfer Group Companies or the
Northern Border Companies or any of their respective Subsidiaries, Affiliates,
officers, directors, employees, agents, advisors or other representatives,
except that the obligations of the parties under the Deposit Escrow Agreement,
this Section 3.3, Sections 2.2, 6.5, 6.6, Article XII and, to the extent
necessary to effectuate the foregoing enumerated provisions, Article XI of this
Agreement shall remain in full force and effect (it being understood that in no
event shall Seller be obligated to make any payment to Purchaser upon
termination of this Agreement, and in no event shall Purchaser be obligated to
make any payments to Seller upon termination of this Agreement other than the
forfeiture of the Deposit Amount to Seller in accordance with Section 2.2(c)).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
4.1 ORGANIZATION AND GOOD STANDING. Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and Seller has the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now conducted.
4.2 AUTHORIZATION OF AGREEMENT.
Seller has the requisite power and authority to execute this Agreement and the
Transaction Documents to which it is a party and, upon the occurrence of the
Enron Closing, to consummate the transactions contemplated by this Agreement and
the Transaction Documents to which it is a party. The execution and delivery of
this Agreement and the Transaction Documents to which it is a party by Seller
and the consummation by Seller of the transactions contemplated by this
Agreement and the Transaction Documents to which it is a party have been duly
authorized by all necessary action on the part of Seller. This Agreement and the
Transaction Documents to which it is a party have been duly executed and
delivered by Seller and, assuming due execution and delivery by Purchaser,
constitute valid and binding obligations of Seller, enforceable against Seller
in accordance with their respective terms.
4.3 NO VIOLATION; CONSENTS.
(a) Subject to receiving the consents or waivers referred to
on SCHEDULE 4.3(A) and the consents referred to in Section 4.3(b) and the
occurrence of the Enron Closing, the execution and delivery by Seller of this
Agreement and the Transaction Documents to which Seller is a party and the
consummation of the transactions contemplated hereby and thereby do not and will
not (i) violate any provision of the certificate of incorporation, bylaws,
limited liability company agreement or other similar organizational documents of
Seller or any Transfer Group Company, (ii) conflict with, require the consent of
a third party under, violate, require or accelerate the time of any payment by
any Transfer Group Company to any Person under, result in the breach of,
constitute a default under, or give rise to any right of acceleration,
cancellation or termination of any material right or obligation of Seller or any
Transfer Group Company under, any material agreement or other instrument to
which Seller or any Transfer Group Company is a party or by which Seller or any
Transfer Group Company or any of their respective properties or assets are
bound, (iii) violate any Order of any Governmental Authority to which Seller or
any Transfer Group Company is bound or subject, (iv) violate any Applicable Law
or (v) except as provided in this Agreement, result in the imposition or
creation of any Lien upon the Equity Interest, other than, in the case of
clauses (ii) through (v), any conflict, violation, breach, default, requirement
for consents, rights of acceleration, cancellation, termination or Lien that
would not reasonably be expected to have, individually or in the aggregate, a
Seller Material Adverse Effect or a Transfer Xxxxx Xxxxxxxx Adverse Effect.
(b) Except as set forth on SCHEDULE 4.3(B) and except for (i)
any filings required under the HSR Act and (ii) such filings with, and Orders
of, the FCC as may be required under the Communications Act, no Order or Permit
issued by, or declaration or filing with, or notification to, or waiver from or
consent from, any Governmental Authority is required on the part of Seller in
connection with the execution and delivery of this Agreement, or the compliance
or performance by Seller with any provision contained in this Agreement or the
consummation of the transactions contemplated hereby, except for any such
requirements, the failure of which to be obtained or made would not reasonably
be expected to have, individually or in the aggregate, a Seller Material Adverse
Effect or a Transfer Xxxxx Xxxxxxxx Adverse Effect.
4.4 OWNERSHIP AND TRANSFER OF EQUITY INTEREST. Upon the
Occurrence of the Enron Closing, Seller will be the record and beneficial owner
of all of the outstanding equity securities of CrossCountry. CrossCountry is the
record and beneficial owner of the Equity Interest. The Equity Interest
constitutes 100% of the outstanding equity securities of Northern Plains and NBP
Services. Upon the occurrence of the Enron Closing, Seller will have the
requisite power and authority to cause CrossCountry to sell and transfer the
Equity Interest to Purchaser, and such delivery will convey to Purchaser good
and marketable title to the Equity Interest, free and clear of any and all Liens
except as set forth on SCHEDULE 4.4.
4.5 TRANSFER GROUP COMPANIES.
(a) SCHEDULE 4.5(A) sets forth the name of each Transfer Group
Company and, with respect to each such Transfer Group Company, the jurisdiction
in which it is incorporated or organized, the number of shares of its authorized
capital stock or other equity interests, the number and class of shares or
equity interests thereof duly issued and outstanding, the names of all
stockholders or other equity owners and the number of shares of stock or other
equity interests owned by each equity owner thereof. The outstanding shares of
capital stock or other equity interests of each Transfer Group Company are
validly issued, fully paid and non-assessable, and all such shares or other
equity interests represented as being owned by the relevant Transfer Group
Company are owned by it free and clear of any and all Liens except as set forth
on SCHEDULE 4.5(A).
(b) Except as set forth on SCHEDULE 4.5(B), (i) there is no
existing option, warrant, right, call, commitment or other agreement to which
any Transfer Group Company is a party requiring, and there are no securities of
any Transfer Group Company outstanding which, upon conversion, would require,
the issuance, sale or transfer of any additional shares of capital stock or
other equity interests of any Transfer Group Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for or
purchase shares of capital stock or other equity interests of any Transfer Group
Company and (ii) no Transfer Group Company has any obligation to repurchase,
acquire or redeem any capital stock or other equity securities of any Transfer
Group Company.
(c) Each Transfer Group Company is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is formed and has the requisite power and authority to own, lease and
operate its properties and to carry on its business as now conducted, with such
exceptions that would not reasonably be expected to have, individually or in the
aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect. Each Transfer Group Company
is duly qualified to transact business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, except where the failure to
be so qualified would not reasonably be expected to have, individually or in the
aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect.
(d) Northern Plains holds a 0.500% general partnership
interest in Northern Border Partners, L.P., a publicly-traded master limited
partnership ("NORTHERN BORDER") and a 0.505% general partnership interest in
Northern Border's Affiliate, Northern Border Intermediate Limited Partnership
("NBI"). Northern Plain's wholly-owned subsidiary, Pan Border Gas Company, holds
a 0.325% general partnership interest in Northern Border and a 0.3283% general
partnership interest in NBI. Northern Plains holds 500,000 common units of
limited partnership interest in Northern Border.
(e) None of the Transfer Group Companies has any Subsidiary,
or holds an equity interest in any other Person, that is not a Transfer Group
Company other than the Northern Border Companies and Persons in which the
Northern Border Companies hold a minority equity interest.
4.6 FINANCIAL STATEMENTS; NORTHERN BORDER SEC REPORTS.
(a) Seller has made available to Purchaser copies of the
unaudited consolidated balance sheet of the Northern Plains Group Companies as
at December 31, 2003, and the related consolidated unaudited statements of
income, stockholders' equity and cash flows of the Northern Plains Group
Companies for the twelve (12) month period then ended (collectively, the
"FINANCIAL STATEMENTS"). The Financial Statements have been prepared in
accordance with the books and records of the Northern Plains Group Companies as
at the date and for the period indicated, and, except as set forth in SCHEDULE
4.6, in accordance with GAAP and present fairly in all material respects the
consolidated financial position, results of operations and cash flows of each of
the Northern Plains Group Companies as at the date and for the period indicated
(in each case subject, as to unaudited Financial Statements, to year-end audit
adjustments and full footnote disclosure). For the purposes hereof, the
unaudited consolidated balance sheet of the Northern Plains Group Companies as
at December 31, 2003 shall be referred to as the "BALANCE SHEETS" and December
31, 2003 shall be referred to as the "BALANCE SHEET Date".
(b) Northern Border has filed all required forms, reports and
documents with the Securities and Exchange Commission (the "SEC") since January
1, 2002 (the "NORTHERN BORDER SEC REPORTS"), each of which has complied in all
material respects with all applicable requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), and the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), each as in effect on the dates such
forms, reports and documents were filed. To the Knowledge of Seller, none of the
Northern Border SEC Reports, including without limitation, any financial
statements or schedules included or incorporated by reference therein,
contained, when filed, any untrue statements of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Northern Border included in the Northern Border SEC
Reports complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as in effect on the dates such Northern Border SEC Reports were filed,
and fairly present, in all material respects and in conformity with GAAP applied
on a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Northern Border and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then ended
(subject, in the case of the unaudited interim financial statements, to normal
year-end adjustments).
4.7 NO UNDISCLOSED LIABILITIES.
(a) Except as set forth on SCHEDULE 4.7(A), or as would not
reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect or a Transfer Xxxxx Xxxxxxxx Adverse Effect, the
Northern Plains Group Companies have no indebtedness, 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 consolidated balance sheet of the Northern
Plains Group Companies or in the notes thereto in accordance with GAAP,
respectively, which (i) is not shown on the Balance Sheets or the notes thereto
or (ii) was not incurred in the Ordinary Course of Business since the Balance
Sheet Date, except for any indebtedness, obligation or liability arising after
the date of the Enron Purchase Agreement which is permitted pursuant to Section
6.2.
(b) Except as disclosed or reflected in the Northern Border
SEC Reports, or as would not reasonably be expected to have, individually or in
the aggregate, a Seller Material Adverse Effect or a Transfer Xxxxx Xxxxxxxx
Adverse Effect, the Northern Border Companies have no indebtedness, obligation
or liability of any kind (whether accrued, absolute, contingent or otherwise,
and whether due or to become due) that would have been required, based on
information known to Seller or any of the Northern Border Companies as of the
date of the Enron Purchase Agreement, to be reflected in, reserved against or
otherwise described on the consolidated balance sheet of Northern Border and its
subsidiaries included in the most recent Northern Border SEC Reports or in the
notes thereto in accordance with GAAP, which (i) is not shown on a balance sheet
of the Northern Border Companies or the notes thereto or (ii) was not incurred
in the ordinary course of business since the Balance Sheet Date.
(c) NBP Services does not have any indebtedness, obligations
or liabilities of any kind (whether accrued, absolute, contingent or otherwise)
except for (i) liabilities incurred at any time in the Ordinary Course of
Business, (ii) liabilities that do not exceed $1,000,000 in the aggregate or
(iii) as set forth in SCHEDULE 4.7(C).
4.8 ABSENCE OF CERTAIN DEVELOPMENTS.
(a) Except as expressly contemplated by this Agreement or the
Contribution Agreement and the schedules thereto (including the agreements
entered into, and actions taken, in connection with the Contribution Agreement)
or as set forth on SCHEDULE 4.8(A), since the Balance Sheet Date, (i) the
business of the Transfer Group Companies has been conducted in the Ordinary
Course of Business in all material respects or, from and after the date of the
Enron Purchase Agreement, otherwise in accordance with Section 6.2, (ii) no
event has occurred that would reasonably be expected to have, individually or in
the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect or a Seller Material
Adverse Effect or (iii) through the date of the Enron Purchase Agreement, there
has not been any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any Transfer
Group Company's capital stock to a Person who is not a Transfer Group Company.
(b) Except as expressly contemplated by this Agreement, set
forth on SCHEDULE 4.8(B) or disclosed or reflected in the Northern Border SEC
Reports, since the Balance Sheet Date, the business of the Northern Border
Companies has been conducted in the ordinary course of business and, to Seller's
Knowledge, no event has occurred that would reasonably be expected to have,
individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect.
4.9 TITLE TO PROPERTIES.
(a) Except as set forth on SCHEDULE 4.9(A), each of the
Transfer Group Companies has good and valid title to or holds a valid leasehold,
license or other interest in, or right-of-way easement through (collectively,
the "RIGHTS OF WAY"), all real property used by it in the Ordinary Course of
Business, with such exceptions as would not reasonably be expected to have,
individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect, in
each case free and clear of all Liens, except for (i) Liens set forth on
SCHEDULE 4.9(A) and (ii) Permitted Exceptions.
(b) With respect to each material parcel of real property that
is leased by a Transfer Group Company as tenant (the "LEASED REAL PROPERTY"), to
the Knowledge of Seller, (i) none of the Transfer Group Companies has received
any notice of default under any lease pertaining to any of the Leased Real
Property in the twelve (12) month period prior to the date of the Enron Purchase
Agreement and (ii) there are no uncured defaults under any lease without regard
to when notice may have been given that would give the counterparty the right to
terminate such lease, in each case with such exceptions as would not reasonably
be expected to have, individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx
Adverse Effect.
(c) Each of the Transfer Group Companies has good and
marketable title to all personal property reflected in the Financial Statements
or acquired after the Balance Sheet Date, but not including any personal
property disposed of in the Ordinary Course of Business since the Balance Sheet
Date, and with such exceptions as would not reasonably be expected to have,
individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect, in
each case free and clear of all Liens, except for (i) Liens set forth on
SCHEDULE 4.9(C) and (ii) Permitted Exceptions.
4.10 INTANGIBLE PROPERTY. Except as set forth on SCHEDULE
4.10, none of the Transfer Group Companies has any interest in any material
patents, patent licenses, trade names, trademarks, service marks or copyrights.
Except as set forth on SCHEDULE 4.10, to Seller's Knowledge, the use of any
intellectual property set forth on SCHEDULE 4.10 by the Transfer Group Companies
does not conflict with the asserted rights of others, with such exceptions as
would not reasonably be expected to have, individually or in the aggregate, a
Transfer Xxxxx Xxxxxxxx Adverse Effect.
4.11 MATERIAL CONTRACTS.
(a) Set forth on SCHEDULE 4.11(A) is a list of the following
Contracts to which a Transfer Group Company is a party or by which any Transfer
Group Company is bound as of the date of the Enron Purchase Agreement
(collectively, the "MATERIAL CONTRACTS"):
(i) any Contract relating to indebtedness for
borrowed money, letter of credit or guarantee of the indebtedness
for borrowed money of Persons other than the Transfer Group
Companies (excluding renewals and extensions of credit) that Seller
reasonably anticipates will, in accordance with its terms, involve
aggregate payments by a Transfer Group Company of more than
$2,000,000 within its remaining term;
(ii) any lease under which any Transfer Group
Company is the lessor or lessee of real or personal property, which
lease (A) cannot be terminated by such Transfer Group Company
without payment penalty upon not more than one hundred and eighty
(180) days' notice and (B) involves an annual base rental in excess
of $2,000,000;
(iii) any Contract that expressly limits in any
material respect the ability of a Transfer Group Company to (A)
engage in any of its existing lines of business or to conduct any
such business in any particular geographic area or (B) compete with
any other Person in any such business;
(iv) any employment or consulting Contract for
employees, officers, directors or consultants of a Transfer Group
Company whose guaranteed annual compensation thereunder is in excess
of $200,000 annually for either of the calendar years 2003 or 2004
and that cannot be terminated on thirty (30) days' notice without
penalty or other future obligation;
(v) any Contract for the pending purchase by or
sale of real or personal property of a Transfer Group Company (other
than ordinary course sales of natural gas, natural gas liquids or
other items of inventory) for an amount in excess of $2,000,000;
(vi) any Contract relating to gas purchase, gas
sale, gas processing, gas storage, natural gas liquids sale or
gathering that Seller reasonably anticipates will, in accordance
with its terms, require payments by a Transfer Group Company in
excess of $5,000,000 within the twelve (12) month period ending
December 31, 2004;
(vii) any firm transportation Contract that
requires, in accordance with its terms, payments to a Transfer Group
Company in excess of $5,000,000 within the twelve (12) month period
ending December 31, 2004, and any interruptible transportation
Contract that Seller reasonably anticipates will, in accordance with
its terms, involve payments to a Transfer Group Company in excess of
$5,000,000 within the twelve (12) month period ending December 31,
2004 (collectively, the "TRANSPORTATION CONTRACTS");
(viii) any Contract requiring a capital expenditure
or a commitment for a capital expenditure by a Transfer Group
Company not contemplated by the capital forecast information
previously provided to Purchaser and in excess of $2,000,000;
(ix) any Contract not in the Ordinary Course of
Business and requiring expenditures by a Transfer Group Company in
excess of $2,000,000 annually;
(x) any hedging Contract, forward sale Contract and
derivative Contract in excess of a notional amount of $2,000,000 and
a term longer than one (1) year;
(xi) any partnership or joint venture Contract
between a Transfer Group Company and any other Person (other than a
Transfer Group Company) containing a commitment to fund, loan or pay
amounts in excess of $2,000,000; and
(xii) any Contract for the purchase or sale of any
assets of any of the Transfer Group Companies for consideration in
excess of $2,000,000.
(b) Set forth on SCHEDULE 4.11(B) is a list of each Contract
that a Transfer Group Company has with any Enron Seller or any Affiliate of any
Enron Seller (other than a Transfer Group Company), as of the date of the Enron
Purchase Agreement (collectively, the "AFFILIATE CONTRACTS").
(c) Except as set forth on SCHEDULE 4.11(C), all of the
Material Contracts are in full force and effect and are the legal, valid and
binding obligations of the Transfer Group Company party thereto, and, to the
Knowledge of Seller, each of the other parties thereto, except (i) to the extent
that such enforceability may be limited by bankruptcy, insolvency
reorganization, moratorium or other similar laws relating to creditors' rights
generally, subject to general principles of equity, (ii) to the extent such
Contract has expired by its terms and (iii) for such exceptions that would not
reasonably be expected to have, individually or in the aggregate, a Transfer
Xxxxx Xxxxxxxx Adverse Effect. In addition, (x) none of the Transfer Group
Companies is in default under any Material Contract, which default has not been
waived, and (y) to the Knowledge of Seller, no other party to any Material
Contract is in default under any Material Contract, except, in the case of (x)
and (y), for any default that would not reasonably be expected to have,
individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect.
4.12 FIRM AND INTERRUPTIBLE TRANSPORTATION CONTRACTS. Except
as set forth on SCHEDULE 4.12, (a) none of the Transfer Group Companies has
received notice that it is subject to any pending dispute with any of the
counterparties under any Transportation Contract (the "PRINCIPAL SHIPPERS"), (b)
no Principal Shipper has notified any of the Transfer Group Companies in writing
of any adverse modification or change in such Transportation Contract and (c)
none of the Transfer Group Companies has received formal written notice from any
Principal Shipper expressing its intention to terminate any Transportation
Contract except for those exceptions to (a), (b) and (c) that would not
reasonably be expected to have, individually or in the aggregate, a Transfer
Xxxxx Xxxxxxxx Adverse Effect.
4.13 EMPLOYEE BENEFITS.
(a) SCHEDULE 4.13(A) sets forth a list of all material
"EMPLOYEE BENEFIT PLANS", as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), sponsored or maintained by
any Transfer Group Company or to which any Transfer Group Company contributes or
is obligated to contribute thereunder with respect to current or former
officers, directors or employees of the Transfer Group Companies or with respect
to which any Transfer Group Company may have material liability (the "EMPLOYEE
BENEFIT PLANS").
(b) Except as already listed on SCHEDULE 4.13(A), SCHEDULE
4.13(B) sets forth a list of all material bonus plans, employment, change in
control, consulting or other compensation agreements, incentive, equity or
equity-based compensation, deferred compensation arrangements, stock purchase,
fringe benefit, severance pay, sabbatical or paid time off, sick leave, vacation
pay, salary continuation, disability, hospitalization, medical insurance, life,
dental, vision, accidental death and dismemberment or other insurance benefits,
scholarship programs or any other employee benefit plan, program or arrangement
sponsored or maintained by any Transfer Group Company or to which any Transfer
Group Company contributes or is required to contribute thereunder with respect
to current or former officers, directors or employees of the Transfer Group
Companies or with respect to which any Transfer Group Company may have material
liability (together with the Employee Benefit Plans, the "BENEFIT
ARRANGEMENTS").
(c) True and correct copies of the following documents, to the
extent applicable and in Seller's possession, with respect to each of the
Benefit Arrangements, have been made available or delivered to Purchaser: (i)
any plans and related trust documents, and all amendments thereto and, with
respect to any Benefit Arrangements sponsored or maintained by the Transfer
Group Companies, all material contracts or material agreements related to such
plans, (ii) the Forms 5500 for the most recent three (3) years and schedules
thereto, (iii) financial statements and actuarial valuations for the current
year, to the extent available, and for the most recent three (3) years, (iv) the
most recent IRS determination letter, (v) the most recent summary plan
descriptions and material modifications and (vi) written descriptions of all
non-written Benefit Arrangements.
(d) Except as set forth on SCHEDULE 4.13(D), each of the
Benefit Arrangements has been maintained in accordance with its terms and all
provisions of Applicable Law, except where the failure to do so would not
reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect or a Transfer Xxxxx Xxxxxxxx Adverse Effect.
(e) Except as set forth on SCHEDULE 4.13(E), no Benefit
Arrangement (i) is a "MULTIEMPLOYER PLAN" as defined in Section 3(37) of ERISA,
or (ii) is a "MULTIPLE EMPLOYER WELFARE ARRANGEMENT" as defined in Section
3(40)(A) of ERISA. During the six (6) years immediately prior to the Closing, no
Transfer Group Company has incurred or experienced an event that has given rise,
or could reasonably be expected to give rise, to a withdrawal liability under
Section 4201, 4063 or 4064 of ERISA or any actual or contingent liability under
Section 4201 of ERISA except for any such liability that does not have and would
not reasonably be expected to have a Seller Material Adverse Effect or a
Transfer Xxxxx Xxxxxxxx Adverse Effect.
(f) No Benefit Arrangement is a foreign plan governed by the
laws of a foreign jurisdiction.
(g) Except as set forth on SCHEDULE 4.13(G), the consummation
of the transactions contemplated by this Agreement (either alone or together
with another event) will not entitle any Person to any material benefit under
any Benefit Arrangement or materially accelerate vesting, payment or materially
increase the amount of compensation due to any Person.
(h) Except as set forth on SCHEDULE 4.13(H), no Transfer Group
Company has any obligation with respect to the Enron Corp. Cash Balance Plan
(the "CASH BALANCE PLAN") to directly or indirectly indemnify any individual
fiduciary with respect to such plan in his or her capacity as a fiduciary of the
plan.
(i) With respect to each Benefit Arrangement which is
sponsored by a Transfer Group Company or any such plan or arrangement or portion
thereof which after the Closing Date will be sponsored or maintained by a
Transfer Group Company, there are no material claims pending (other than routine
claims for benefits), no prohibited transaction involving the assets of any such
plan or arrangement and all contributions required to have been made have been
made or properly accrued.
(j) As of June 24, 2004, the Cash Balance Plan has not
received an unfavorable ruling on a determination letter request from the IRS.
4.14 TAXES.
(a) Except as set forth on SCHEDULE 4.14(A), all income and
franchise Tax Returns and all other material Tax Returns required to be filed
by, or with respect to, the Transfer Group Companies (i) have been filed and
(ii) all Taxes that were shown to be due on such Tax Returns have been paid,
except where the failure to file such Tax Returns or to pay such Taxes would not
reasonably be expected to have, individually or in the aggregate, a Transfer
Xxxxx Xxxxxxxx Adverse Effect.
(b) Except as set forth on SCHEDULE 4.14(B), (i) there are no
outstanding agreements extending or waiving the statutory period of limitation
applicable to any claim for, or the period for the collection or assessment or
reassessment of, Taxes due from the Transfer Group Companies for any taxable
period that would reasonably be expected to have, individually or in the
aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect, and (ii) no power of
attorney is currently in force with respect to any matter relating to Taxes of
any of the Transfer Group Companies. The period for assessment for federal
income Taxes of the Enron Sellers and the Transfer Group Companies is closed for
Tax periods beginning before January 1, 1996.
(c) Except as set forth on SCHEDULE 4.14(C), none of the
Transfer Group Companies has been a member of a group which files a consolidated
federal income tax return other than a group in which Enron is the parent.
(d) Seller is not a foreign person within the meaning of
Section 1445 of the Code.
(e) Except as set forth on SCHEDULE 4.14(E), none of the
Transfer Group Companies has any liability for the Taxes of any Person as
defined in Section 7701 (a)(1) of the Code (other than another Transfer Group
Company) under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise, in each case where such liability for Taxes would reasonably be
expected to have, individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx
Adverse Effect.
4.15 LABOR.
(a) None of the Transfer Group Companies is a party to any
labor or collective bargaining agreement, and there are no labor or collective
bargaining agreements that pertain to employees of the Transfer Group Companies.
(b) There are no pending strikes, work stoppages, slowdowns,
lockouts or arbitrations against any Transfer Group Company that would
reasonably be expected to have, individually or in the aggregate, a Transfer
Xxxxx Xxxxxxxx Adverse Effect. There are no pending unfair labor practice
charges, grievances or complaints filed with any Governmental Authority based on
the employment or termination by any Transfer Group Company of any individual
that would reasonably be expected to have, individually or in the aggregate, a
Transfer Xxxxx Xxxxxxxx Adverse Effect.
4.16 LITIGATION. Except as set forth on SCHEDULE 4.16, there
are no Actions or Orders pending or, to Seller's Knowledge, overtly threatened
against Seller or any Transfer Group Company that seek to restrain or prohibit
or otherwise challenge the consummation, legality or validity of the
transactions contemplated hereby or that would reasonably be expected to have,
individually or in the aggregate, a Seller Material Adverse Effect or a Transfer
Xxxxx Xxxxxxxx Adverse Effect.
4.17 COMPLIANCE WITH LAWS; PERMITS.
(a) Except with respect to Environmental Laws (which are
addressed in Section 4.18) and Employee Benefits (which are addressed in Section
4.13(e)), and except as set forth on SCHEDULE 4.17(A), each of the Transfer
Group Companies is in compliance with all Applicable Laws, except for such
non-compliances as would not reasonably be expected to have, individually or in
the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect. Each of the Transfer
Group Companies has all Permits from any Governmental Authority that are
required to operate its respective business, except for those the absence of
which would not reasonably be expected to have, individually or in the
aggregate, a Seller Material Adverse Effect or a Transfer Xxxxx Xxxxxxxx Adverse
Effect.
(b) Except as disclosed in the Northern Border SEC Reports,
the Northern Border Companies (i) are in compliance with all Applicable Laws,
except for such non-compliances as would not reasonably be expected to have,
individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse Effect and
(ii) have all Permits from any Governmental Authority that are required to
operate their respective businesses, except for those the absence of which would
not reasonably be expected to have, individually or in the aggregate, a Transfer
Xxxxx Xxxxxxxx Adverse Effect.
4.18 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
4.18 and except for facts, circumstances or conditions that would not reasonably
be expected to have, individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx
Adverse Effect:
(a) The operations of the Transfer Group Companies are in
compliance with all Environmental Laws, which compliance includes the possession
and maintenance of, and compliance with, all Permits required under all
applicable Environmental Laws;
(b) None of the Transfer Group Companies is the subject of any
outstanding Order with any Governmental Authority under any Environmental Laws;
(c) There are no investigations of the business, operations,
or currently or previously owned, operated or leased property of the Transfer
Group Companies pending or, to the Knowledge of Seller, threatened, that could
reasonably be expected to result in the Transfer Group Companies incurring any
liability pursuant to any Environmental Law; and
(d) None of the Transfer Group Companies is subject to any
pending, or, to the Knowledge of Seller, threatened Action, whether judicial or
administrative, alleging noncompliance with or potential liability under any
Environmental Law.
4.19 INSURANCE. Set forth on SCHEDULE 4.19 is a list of all
material policies of insurance by which the Transfer Group Companies' assets or
business activities are covered as of the date of the Enron Purchase Agreement.
Except as set forth on SCHEDULE 4.19, to the Knowledge of Seller, all such
policies are in full force and effect and there are no claims pending as of the
date of the Enron Purchase Agreement under any of such policies where
underwriters have reserved their rights or disclaimed coverage under such
policies with such exceptions in each case that would not reasonably be expected
to have, individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx Adverse
Effect. To Seller's Knowledge, such insurance is maintained with amounts and
deductibles and/or self-insured retentions as are customarily maintained by
entities engaged in business of the same type and size as such Transfer Group
Company with such exceptions that, in the event of a loss, would not reasonably
be expected to have, individually or in the aggregate, a Transfer Xxxxx Xxxxxxxx
Adverse Effect.
4.20 FINANCIAL ADVISORS. Except as set forth on SCHEDULE
4.20, no Person has acted, directly or indirectly, as a broker, finder or
financial advisor for Seller or its Affiliates in connection with the
transactions contemplated by this Agreement. Neither Purchaser nor any Transfer
Group Company or Northern Border Company is or will become obligated to pay any
fee or commission or like payment to any broker, finder or financial advisor as
a result of the consummation of the transactions contemplated by this Agreement
based upon any arrangement made by or on behalf of Seller or any of its
Affiliates.
4.21 NO KNOWLEDGE OF BREACH. To the actual knowledge of
Seller without inquiry, the Enron Sellers have not breached any of their
representations and warranties or covenants set forth in the Enron Purchase
Agreement.
4.22 LIMITATION OF REPRESENTATIONS AND WARRANTIES. EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE IV OF THIS
AGREEMENT, SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN
OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE EQUITY INTEREST, OR THE
BUSINESS, ASSETS OR LIABILITIES OF THE TRANSFER GROUP COMPANIES OR THE NORTHERN
BORDER COMPANIES. PURCHASER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND
NEGATES, AND PURCHASER HEREBY EXPRESSLY WAIVES, ANY REPRESENTATION OR WARRANTY,
EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO, AND
PURCHASER HEREBY EXPRESSLY WAIVES AND RELINQUISHES ANY AND ALL RIGHTS, CLAIMS
AND CAUSES OF ACTION AGAINST SELLER AND ITS REPRESENTATIVES IN CONNECTION WITH
THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR OTHER
MATERIALS (WRITTEN OR ORAL) HERETOFORE FURNISHED TO PURCHASER AND ITS
REPRESENTATIVES BY OR ON BEHALF OF SELLER. WITHOUT LIMITING THE FOREGOING,
SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT TO
(A) THE INFORMATION SET FORTH IN THE NORTHERN PLAINS NATURAL GAS COMPANY
CONFIDENTIAL INFORMATION MEMORANDUM DATED AS OF JULY 2002 OR (B) ANY FINANCIAL
PROJECTION OR FORECAST RELATING TO THE BUSINESS, ASSETS OR LIABILITIES OF ANY OF
THE TRANSFER GROUP COMPANIES OR THE NORTHERN BORDER COMPANIES. WITH RESPECT TO
ANY PROJECTION OR FORECAST DELIVERED ON BEHALF OF SELLER TO PURCHASER OR ITS
REPRESENTATIVES, PURCHASER ACKNOWLEDGES THAT (W) THERE ARE UNCERTAINTIES
INHERENT IN ATTEMPTING TO MAKE SUCH PROJECTIONS AND FORECASTS, (X) IT IS
FAMILIAR WITH SUCH UNCERTAINTIES, (Y) IT IS TAKING FULL RESPONSIBILITY FOR
MAKING ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL SUCH PROJECTIONS
AND FORECASTS FURNISHED TO IT AND (Z) IT SHALL HAVE NO CLAIM AGAINST SELLER OR
ITS AFFILIATES WITH RESPECT THERETO. Notwithstanding any provision hereof to the
contrary, to the extent that the Conversion Transactions (as defined in the
Enron Purchase Agreement) cause Seller to breach any representation, warranty,
covenant or other agreement of Seller contained in this Agreement, such breach
shall be given no effect, and Purchaser shall have no right to (i) terminate
this Agreement due to such breach by Seller or the failure of Seller to meet any
of the conditions set forth in Sections 7.1 or 7.2 by the Outside Date as a
result of the Conversion Transactions (as defined in the Enron Purchase
Agreement) (for the avoidance of doubt, such breach shall in no way relieve
Purchaser of its obligations to close the transactions contemplated by this
Agreement), or (ii) to seek indemnification from Seller for such breach.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
5.1 ORGANIZATION AND GOOD STANDING. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oklahoma.
5.2 AUTHORIZATION OF AGREEMENT. Purchaser has the requisite
power and authority to execute this Agreement and the Transaction Documents to
which it is a party and to consummate the transactions contemplated by this
Agreement and the Transaction Documents to which it is a party. The execution
and delivery of this Agreement and the Transaction Documents to which Purchaser
is a party by Purchaser and the consummation by Purchaser of the transactions
contemplated by this Agreement and the Transaction Documents to which it is a
party have been duly authorized by all necessary action on the part of
Purchaser. This Agreement and the Transaction Documents to which Purchaser is a
party have been duly executed and delivered by Purchaser and, assuming due
execution and delivery by Seller, constitute the valid and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their respective
terms.
5.3 NO VIOLATION; CONSENTS.
(a) Except as set forth on SCHEDULE 5.3(A), the execution and
delivery by Purchaser of this Agreement and the Transaction Documents to which
Purchaser is a party and the consummation of the transactions contemplated
hereby and thereby do not and will not (i) violate any provision of the bylaws,
certificate of incorporation or other similar organizational documents of
Purchaser, (ii) conflict with, require the consent of a third party under,
violate, result in the breach of, constitute a default under, or give rise to
any right of acceleration, cancellation or termination of any material right or
obligation of Purchaser under any material agreement or other instrument to
which Purchaser is a party or by which Purchaser or any of its properties or
assets are bound, (iii) violate any Order of any Governmental Authority to which
Purchaser is bound or subject or (iv) violate any Applicable Law, other than, in
the case of clauses (ii) through (iv), any conflict, violation, breach, default,
requirement for consents, rights of acceleration, cancellation, termination or
Lien that would not reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect.
(b) Except as set forth on SCHEDULE 5.3(B) and except for (i)
filings as may be required under the HSR Act and (ii) such filings with, and
orders of, the FCC as may be required under the Communications Act, no Order or
Permit issued by, or declaration or filing with, or notification to, or waiver
from or consent from, any Governmental Authority is required on the part of
Purchaser in connection with the execution and delivery of this Agreement, or
the compliance or performance by Purchaser with any of the provisions contained
in this Agreement or the consummation of the transactions contemplated hereby,
except for any such requirements, the failure of which to be obtained or made
would not reasonably be expected to have, individually or in the aggregate, a
Purchaser Material Adverse Effect.
5.4 LITIGATION. There is no Action or Order pending or, to
the knowledge of Purchaser, threatened against Purchaser or any of its
Affiliates or Subsidiaries that seeks to restrain or prohibit or otherwise
challenge the consummation, legality or validity of the transactions
contemplated hereby or which would reasonably be expected to have, individually
or in the aggregate, a Purchaser Material Adverse Effect.
5.5 INVESTMENT INTENTION. Purchaser is acquiring the Equity
Interest for its own account, for investment purposes only and not with a view
to the distribution (as such term is used in Section 2(a)(11) of the Securities
Act) thereof Purchaser understands that the Equity Interest has not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.
5.6 FINANCIAL CAPABILITY. Purchaser has, and will have at
all times on and prior to the Closing Date, sufficient cash and cash equivalents
and/or credit facilities in immediately available funds (and has provided Seller
with evidence thereof) to purchase the Equity Interest at the Purchase Price and
to consummate the transactions contemplated by this Agreement, including,
without limitation, payments of fees and expenses contemplated hereunder.
5.7 FINANCIAL ADVISORS. Except as set forth on SCHEDULE 5.7,
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof.
ARTICLE VI
COVENANTS
6.1 ACCESS TO INFORMATION. Prior to Closing, pursuant to the
Enron Purchase Agreement, Seller shall request, and use commercially reasonable
efforts to have such request honored, that the Transfer Group Companies permit
Purchaser and its Representatives (including its legal advisors and accountants)
to have reasonable access, during normal business hours and upon reasonable
advance notice, to the properties, books, records and personnel of the Transfer
Group Companies; provided, that in no event shall Seller or any Transfer Group
Company be obligated to provide (i) access or information in violation of
Applicable Law, (ii) bids, letters of intent, expressions of interest or other
proposals received from others in connection with the transactions contemplated
by this Agreement and information and analysis relating to such communications
or (iii) any information, the disclosure of which would jeopardize any privilege
available to Seller, any of the Transfer Group Companies or any of their
respective Affiliates relating to such information or would cause Seller, any of
the Transfer Group Companies or any of their respective Affiliates to breach a
confidentiality obligation to which it is bound. If Purchaser cannot obtain such
access, Seller shall obtain and deliver to the Purchaser such documents and
information as Purchaser may reasonably request, to the extent that Seller has
access to such documents and information under the Enron Purchase Agreement. In
connection with such access, Purchaser's Representatives shall cooperate with
Seller and the Transfer Group Companies' Representatives and shall use their
commercially reasonable efforts to minimize any disruption of the business of
Seller and the Transfer Group Companies. Purchaser agrees to abide by the terms
of the Confidentiality Agreement and any safety rules or rules of conduct
reasonably imposed by the relevant Seller or Transfer Group Company with respect
to such access and any information furnished to them or their Representatives
pursuant to this Section 6.1. Purchaser shall indemnify, defend and hold
harmless the Seller Indemnified Parties and the Transfer Group Companies from
and against any and all Losses asserted against or suffered by them relating to,
resulting from, or arising out of, examinations or inspections made by Purchaser
or its Representatives pursuant to this Section 6.1. If Seller becomes aware
prior to Closing of any breach by any of the Enron Sellers of any of their
representations and warranties or covenants set forth in the Enron Purchase
Agreement, Seller shall notify Purchaser in writing within five (5) Business
Days after becoming actually aware of such breach. Seller shall promptly forward
to Purchaser any documents and other information provided to Seller under the
Enron Purchase Agreement relating to the transactions contemplated hereunder.
6.2 CONDUCT OF THE BUSINESS PENDING THE CLOSING.
(a) Except as otherwise expressly contemplated by this
Agreement and the schedules attached hereto or with the prior written consent of
Purchaser (which consent shall not be unreasonably withheld, delayed or
conditioned), during the period from the date of this Agreement to and through
the Closing Date, pursuant to the Enron Purchase Agreement, Seller shall
request, and use commercially reasonable efforts to have such request honored,
that the Transfer Group Companies (A) conduct their respective businesses in all
material respects in the Ordinary Course of Business, and (B) preserve in all
material respects the present business operations, organization and goodwill of
the Transfer Group Companies. For the avoidance of doubt, the foregoing shall
not require Seller or any of the Transfer Group Companies to make any payments,
incur any costs or enter into or amend any contractual arrangements, agreements
or understandings, unless such payment, incurrence or other action is required
by Applicable Law, by contractual obligation with such third parties or to
operate in the Ordinary Course of Business.
(b) Except as otherwise expressly contemplated by this
Agreement or with the prior written consent of Purchaser (which consent shall
not be unreasonably withheld, delayed or conditioned), pursuant to the Enron
Purchase Agreement, Seller shall request, and shall use commercially reasonable
efforts to have such request honored, that none of the Transfer Group Companies
shall:
(i) except as set forth on SCHEDULE 6.2(B)(I) or as
contemplated by the Contribution Agreement or in the schedules
thereto, declare, set aside, make or pay any non-cash dividend or
other non-cash distribution in respect of the capital stock of any
Transfer Group Company or repurchase, redeem or otherwise acquire
for non-cash consideration any outstanding shares of the capital
stock or other securities of, or other ownership interests in, any
Transfer Group Company;
(ii) except as set forth on SCHEDULE 6.2(B)(II),
transfer, issue, sell or dispose of any shares of capital stock or
other securities of any of the Transfer Group Companies or the
500,000 common units of Northern Border beneficially owned by
Northern Plains as of the date of this Agreement or grant options,
warrants, calls or other rights to purchase or otherwise acquire
shares of the capital stock or other securities of the Transfer
Group Companies or the 500,000 common units of Northern Border
beneficially owned by Northern Plains as of the date of this
Agreement;
(iii) effect any recapitalization, reclassification,
stock split, or like change in the capitalization of any Transfer
Group Company;
(iv) except as set forth on SCHEDULE 6.2(B)(IV),
amend the certificate of incorporation, bylaws or other
organizational documents of any of the Transfer Group Companies;
(v) except as provided under the severance and
retention plans and other employment arrangements listed on SCHEDULE
6.2(B)(V) and except as would not create or increase any liability
of any Northern Plains Group Company beyond any amount reflected on
the Balance Sheets, (A) materially increase the annual level of
compensation of any employee of the Transfer Group Companies (other
than increases in the Ordinary Course of Business and that in the
aggregate will not result in a material increase in the benefits or
compensation expense of the Transfer Group Companies taken as a
whole), (B) grant any unusual or extraordinary bonus, benefit or
other direct or indirect compensation to any employee, director or
consultant of the Transfer Group Companies, other than in the
Ordinary Course of Business, (C) materially increase the coverage or
benefits available under any (or, except as permitted under clause
(D) or as provided on SCHEDULE 6.2(B)(V), create or adopt any new)
Benefit Arrangement, Employee Benefit Plan or arrangement made to,
for, or with any of the directors, officers, employees, agents or
representatives of the Transfer Group Companies or otherwise
materially modify or amend or terminate any such arrangement or plan
or (D) other than in the Ordinary Course of Business, hire any
person or enter into any employment, deferred compensation,
severance, consulting, or similar agreement (or amend any such
agreement) to which any Transfer Group Company is a party or
involving a director, officer or employee of the Transfer Group
Companies in his or her capacity as a director, officer or employee
of the Transfer Group Companies, other than (1) with respect to any
Person who fills a vacant position or (2) with respect to a
technical consulting engagement; PROVIDED that any such agreement or
amendment (x) has a term of one year or less, and in the case of
(1), provides for no increase in compensation other than in the
Ordinary Course of Business and, (y) in the case of (2), will not
provide the technical consultant with more than $200,000 of base
annual salary, or (z) in the case of hirings, agreements and
amendments that do not meet the requirements of subclauses (x) or
(y) will not, when aggregated with all other such hirings,
agreements and amendments that do not meet the requirements of
subclauses (x) or (y), require total payments of base annual salary
in excess of $2,000,000 or payments to any individual in excess of
$350,000.
(vi) except as set forth on SCHEDULE 6.2(B)(VI) and
except for (A) trade payables, (B) indebtedness under existing lines
of credit, (C) any extension, renewal or refinancing of existing
indebtedness, (D) indebtedness for borrowed money incurred or
guarantees issued in the Ordinary Course of Business and (E)
indebtedness in an amount sufficient to allow the Transfer Group
Companies to make any required capital contributions in accordance
with the terms of the Northern Border Partnership Agreement, borrow
monies for any reason, draw down on any line of credit or debt
obligation, or become the guarantor, surety, endorser or otherwise
liable for any debt, obligation or liability (contingent or
otherwise) of any other Person (other than another Transfer Group
Company or any Northern Border Company);
(vii) subject any of the material properties or
assets (whether tangible or intangible) of the Transfer Group
Companies to any Lien, except for (A) Permitted Exceptions or (B)
Liens arising in the Ordinary Course of Business or by operation of
Law, or subject the Equity Interest to any Lien;
(viii) except as set forth on SCHEDULE 6.2(B)(VIII),
(A) acquire any properties or assets other than in the Ordinary
Course of Business, except for any such acquisitions of properties
or assets with a fair market value of up to $5,000,000 in the
aggregate or (B) sell, assign, transfer, convey, lease or otherwise
dispose of any of the material properties or assets of the Transfer
Group Companies other than in the Ordinary Course of Business,
except for any such dispositions of properties or assets with a fair
market value of up to $5,000,000 in the aggregate;
(ix) until written notice is provided to Purchaser,
enter into any labor or collective bargaining agreement of the
Transfer Group Companies, through negotiation or otherwise, or make
any material commitment or incur any material liability to any labor
organization with respect to the Transfer Group Companies;
(x) except as set forth on SCHEDULE 6.2(B)(X),
repurchase, discharge or satisfy any claim, debt or obligation of
any of the Transfer Group Companies in an amount in excess of
$2,000,000 in the aggregate, other than (A) in the Ordinary Course
of Business, (B) pursuant to the terms of any Contract as in effect
on the date of this Agreement or permitted to be entered into
hereafter or (C) in the pursuit, prosecution or resolution of any
pending FERC proceedings;
(xi) permit any of the Transfer Group Companies to
enter into, or agree to enter into, any merger or consolidation
with, any corporation or other entity;
(xii) pursuant to or within the meaning of the
Bankruptcy Code or any similar federal, state or foreign law for the
relief of debtors, commence a voluntary case, consent to the entry
of an Order for relief against any of them in an involuntary case,
consent to the appointment of a receiver, trustee, assignee,
liquidator or similar official of them or for all or substantially
all of its property or assets, or make a general assignment for the
benefit of its creditors;
(xiii) fail to maintain, in full force and effect,
to the extent commercially reasonably available, insurance coverage
that is equivalent in all material respects to the insurance
coverage currently in effect for the Transfer Group Companies under
the Insurance Policies or comparable insurance; PROVIDED, HOWEVER,
that Seller shall not be in breach of this Section 6.2(b)(xiii) if
any current insurer refuses to renew or continue to extend insurance
coverage to the Transfer Group Companies so long as Seller uses
commercially reasonable efforts to obtain equivalent insurance
coverage from another reputable insurer and nothing herein shall
prevent Seller from replacing any existing insurance from a current
insurer with substantially equivalent insurance from another
reputable insurer;
(xiv) amend, modify or change the Principal
Contribution Transaction Documents ( other than with respect to the
Sublease and Tax Sharing Agreement and amendments contemplated
in the Enron Purchase Agreement, including as provided in Section
8.1(g)of the Enron Purchase Agreement);
(xv) except as set forth on SCHEDULE 6.2(B) (XV)
make any single loan, advance or capital contribution to, or
investment in, any Person who is not a Transfer Group Company or
Northern Border Company (or any entity in which a Northern Border
Company has an ownership interest) in excess of $5,000,000 or a
series of such loans, advances and capital contributions to, or
investments in, any such Person in excess of $15,000,000 in the
aggregate, except for loans, advances, capital contributions and
investments (A) pursuant to and in accordance with the terms
of any Material Contract, in each case existing as of the date of
this Agreement, or (B) in the Ordinary Course of Business;
(xvi) except as set forth on SCHEDULE 6.2(B)(XVI),
make or commit to make any single capital expenditure in excess of
$5,000,000 or commit to make a series of capital expenditures in
excess of $15,000,000 in the aggregate (in each case, other than
capital expenditures included in the capital forecast previously
provided to Purchaser); or
(xvii) authorize, or commit or agree to take, any of
the actions referred to in paragraphs (i) through (xvi) above.
6.3 APPROPRIATE ACTION; FILINGS.
(a) Through the Closing Date, Seller and Purchaser will each
cooperate with each other and use (and will cause their respective Subsidiaries
and Affiliates to use) commercially reasonable efforts (i) to take, or to cause
to be taken, all actions, and to do, or to cause to be done, all things
reasonably necessary, proper or advisable on its part under this Agreement,
Applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) to obtain promptly from any Governmental
Authority any Orders or Permits required to be obtained by Seller or Purchaser
or any of their respective Subsidiaries in connection with the authorization,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, (iii) to promptly make all necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement and prompt consummation of the transactions contemplated hereby
required under (A) the HSR Act, (B) the Communications Act and (C) any other
Applicable Law, and (iv) to enforce the provisions of the Enron Purchase
Agreement relating to the transactions contemplated hereunder in Seller's
reasonable discretion. For the avoidance of doubt, Seller shall not be obligated
to pay any consideration or incur any additional costs to obtain any consents
from third parties that may be necessary, proper or advisable to consummate the
transactions contemplated by this Agreement. In addition, each party will
provide prompt notification to the other party when any such Action, Order,
Permit, filing, application, petition or notice referred to in the foregoing
clause (iii) is obtained, taken or made, as applicable.
(b) As promptly as practicable, but in any event no later than
eleven (11) days after the date hereof, Seller and Purchaser shall each file or
cause to be filed with the Federal Trade Commission ("FTC") and the Department
of Justice ("DOJ") any notifications and report forms, together with all
required supplemental information, required to be filed under the HSR Act and
the regulations promulgated thereunder with respect to the transactions
contemplated by this Agreement, and request early termination of the waiting
period with respect to the transactions contemplated by this Agreement. Seller
and Purchaser shall consult with each other as to the appropriate time of filing
such notifications and shall use commercially reasonable efforts to make such
filings at the agreed upon time, to respond promptly to any requests for
additional information made by either of such agencies, to cooperate with each
other in connection with resolving any investigation or other inquiry concerning
the transactions contemplated by this Agreement commenced by either of such
agencies and to cause the waiting periods under the HSR Act to terminate or
expire at the earliest possible date after the date of filing; provided, that
neither Seller nor Purchaser shall be required to continue to pursue approval to
the extent either agency or staff of either agency has indicated, in the
good-faith belief of both Purchaser's and Seller's legal counsel, that it will
invoke judicial process to enjoin consummation of the transactions contemplated
by this Agreement prior to the expiration of the waiting period. Purchaser will
promptly take all actions within its control and necessary to comply with any
requests made, or conditions set, by the FTC and the DOJ to consummate the
transactions contemplated by this Agreement, including the divestiture of assets
of any Transfer Group Company or Northern Border Company; PROVIDED, HOWEVER,
that in no event shall Purchaser be required (i) to divest any asset or modify
any arrangement with respect to any of the operations of the Transfer Group
Companies (other than any of their equity interests in, or assets of, any or all
of the Northern Border Companies) if such divestiture or modification would have
a Transfer Xxxxx Xxxxxxxx Adverse Effect or (ii) to take or refrain from taking
any action if such action or refraining would have a Transfer Xxxxx Xxxxxxxx
Adverse Effect. Notwithstanding the foregoing, in no event shall Purchaser be
required to take any action to obtain the consent or approval of the FTC or the
DOJ to the transactions contemplated hereby if the FTC or the DOJ imposes as a
condition to obtaining any such consent or approval any limitations or
conditions materially adverse to the business of Purchaser and its Subsidiaries,
taken as a whole.
(c) As promptly as practicable, but in any event no later than
two (2) Business Days after the date hereof, Seller and Purchaser shall each
file or cause to be filed with the FCC any necessary transfer applications with
respect to any FCC radio stations as required under the Communications Act of
1934 and the regulations promulgated thereunder with respect to the transactions
contemplated by this Agreement. Seller and Purchaser shall consult with each
other as to the appropriate time of filing such applications and shall use
commercially reasonable efforts to make such filings at the agreed upon time.
After the filing of such applications with the FCC, Seller and Purchaser shall
continue to monitor the processing status of such applications, will respond
promptly to any requests for additional information made by the FCC, and will
file any necessary application amendments as soon as commercially practicable.
Notwithstanding the foregoing, in no event shall Purchaser be required to take
any action to obtain the consent or approval of the FCC to the transactions
contemplated hereby if the FCC imposes as a condition to obtaining any such
consent or approval any limitations or conditions materially adverse to the
business of Purchaser and its Subsidiaries, taken as a whole.
6.4 PRESERVATION OF RECORDS; COOPERATION. Subject to Section
9.2(d) hereof (relating to the preservation of Tax records), pursuant to the
Enron Purchase Agreement, Seller shall request, and shall use commercially
reasonable efforts to have such request honored, that the Enron Sellers and
their Affiliates shall cause the Transfer Group Companies to, and, after the
Closing Date, Purchaser shall cause the Transfer Group Companies to, preserve
and keep in their possession all records held by them on and after the date of
this Agreement relating to the business of the Transfer Group Companies, until
the earlier of (x) seven (7) years from the Closing Date or such longer period
as may be required by Applicable Law and (y) the closing of the Enron Bankruptcy
Cases, and shall make such records and then existing personnel available to the
other party as may reasonably be required by such party in connection with,
among other things, any insurance claims involving, legal proceedings involving,
or governmental investigations of, Seller or Purchaser or any of their
respective Affiliates or in order to enable Seller or Purchaser to comply with
their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby; PROVIDED, HOWEVER, that
in no event shall Seller, Purchaser or any of their respective Affiliates be
obligated to provide any information the disclosure of which would (i)
jeopardize any privilege available to such party relating to such information or
(ii) cause such party to breach a confidentiality obligation to which it is
bound. After the expiration of any applicable retention period, before Purchaser
shall dispose of any of such records, at least ninety (90) days prior notice to
such effect shall be given by Purchaser to Seller (or a Person designated by
Seller) and Seller shall have the opportunity (but not the obligation), at its
sole cost and expense, to remove and retain all or any part of such records as
it may in its sole discretion select.
6.5 CONFIDENTIALITY.
(a) The parties acknowledge that Seller and Purchaser
previously executed a confidentiality agreement dated August 27, 2004, (as may
be amended and supplemented, the "CONFIDENTIALITY AGREEMENT"), which
Confidentiality Agreement shall continue in full force and effect until
completion of the Closing, at which time the obligations of Seller and Purchaser
thereunder with respect to the Evaluation Material (as defined in the
Confidentiality Agreement) relating solely to the Transfer Group Companies shall
terminate.
(b) The parties agree that the terms and conditions of the
transactions contemplated by this Agreement and information provided to
Purchaser and its Affiliates and Representatives and the Purchaser Related
Parties in connection with the execution hereof shall be subject to the same
standard of confidentiality as set forth in the Confidentiality Agreement.
6.6 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, neither
Seller nor Purchaser, or any of their respective Affiliates or Representatives,
shall (except as may otherwise be permitted under the terms of this Agreement)
issue any press release or public statement concerning this Agreement or the
transactions contemplated by this Agreement without obtaining the prior written
approval of the other parties hereto, unless such disclosure is required by
Applicable Law, or by obligations pursuant to any agreement with any national
securities exchange; provided, that the party intending to make such release
shall give the other parties prior notice and shall use its commercially
reasonable efforts consistent with such Applicable Law, Order or obligation to
consult with the other parties with respect to the text thereof.
6.7 DIRECTORS' AND OFFICERS' INDEMNIFICATION. For a period of
not less than six (6) years after the Closing Date, Purchaser shall cause the
certificate of incorporation and bylaws or other organizational documents of
each Transfer Group Company 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 Transfer Group Company 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 Purchaser shall cause each Transfer Group
Company to, jointly and severally honor all such provisions, including making
any indemnification payments and expense advancements thereunder. In the event
that any indemnifiable claim is asserted or made within such six (6) year
period, all rights to indemnification and advancement of expenses in respect of
such claim shall continue to the extent currently permitted under the relevant
Transfer Group Company's certificate of incorporation and bylaws or other
organizational documents until such claim is disposed of or all Orders in
connection with such claim are fully satisfied.
6.8 FURTHER ASSURANCES. Seller and Purchaser agree that from
and after the Closing Date, each of them will, and will cause their respective
Affiliates to, execute and deliver such further instruments of conveyance and
transfer and take such other action as may reasonably be requested by any party
hereto to carry out the purposes and intents of this Agreement.
6.9 FINANCING.
Purchaser shall from time to time provide such information to Seller as Seller
may reasonably request regarding Purchaser's financial capability as set forth
in Section 5.6. Purchaser agrees to notify Seller immediately if, at any time
prior to the Closing Date, for any reason Purchaser no longer believes in good
faith that the representation set forth in Section 5.6 is true and correct.
Purchaser shall not, or permit any of its Subsidiaries or Affiliates to, without
the prior written consent of Seller, take any action or enter into any
transaction, without limitation, any merger, acquisition, joint venture,
disposition, lease, contract, or debt or equity financing that would reasonably
be expected to cause the representation in Section 5.6 to not be true and
correct.
6.10 PAYMENT OF PRO RATA DISTRIBUTIONS. Purchaser agrees
that within one (1) Business Days after the Northern Plains Group Companies
receive any quarterly distribution (the "NORTHERN BORDER DISTRIBUTION") from
Northern Border in respect of their general partner interests and common units
paid after the Closing which relates to a quarter that ends prior to the Closing
Date, it will cause all of the applicable Northern Plains Group Companies to pay
to Seller the amount of such distribution; provided that to the extent that any
Northern Border Distribution relates to a quarter that begins prior to but ends
after the Closing Date, Purchaser shall cause the applicable Northern Plains
Group Companies to pay to Seller for such quarter an amount equal to the product
of (a) the aggregate amount of such Northern Border Distribution and (b) a
fraction, the numerator of which is the number of days from the first day of the
applicable quarter through the Closing Date and the denominator of which is
ninety (90). Purchaser shall provide Seller with a reasonably detailed
calculation of any pro rata Northern Border Distribution paid to Seller pursuant
to this Section 6.10. Any dispute regarding such calculation shall be resolved
by an independent accounting firm chosen in the manner provided in SCHEDULE 2.1;
PROVIDED, HOWEVER, that in the event that an Accounting Referee has been
appointed under the Enron Purchase Agreement to resolve a bona fide dispute
thereunder, such Accounting Referee shall serve as the Accounting Referee
hereunder. Amounts paid pursuant to this Section 6.10 shall be treated as an
adjustment to the Purchase Price for Tax purposes. Each of Purchaser and its
Affiliates shall (a) take all actions necessary (including voting its equity
interest on behalf of the Northern Plains Group Companies) to effect, or cause
to be effected, any distribution to which the Northern Plains Group Companies
are entitled pursuant to the Northern Border Partnership Agreement and (b) not
take or fail to take, or cause to be taken, any action that would impair the
ability of the Northern Plains Group Companies to receive any distribution to
which it is entitled pursuant to the terms of the Northern Border Partnership
Agreement.
6.11 GUARANTEES. Enron and its Affiliates are guarantors
with respect to certain indebtedness of the Transfer Group Companies, as set
forth on SCHEDULE 6.11 (collectively, the "GUARANTEED INDEBTEDNESS").
6.12 Severance Agreements, Plans and Policies.
(a) For a period of twelve (12) months after the Closing Date,
Purchaser shall not, and shall cause the Transfer Group Companies not to
terminate, revoke, suspend, amend, modify or otherwise change (or take any
action that would cause any of the foregoing, or fail to take any action that
would avoid the foregoing) any agreement, plan, program or policy described on
SCHEDULE 4.13(A) or SCHEDULE 4.13(B) and relating to severance or termination
obligations for employees of the Transfer Group Companies in any manner that
would have an adverse impact on the employees of the Transfer Group Companies.
Purchaser shall promptly reimburse Seller for any "SEVERANCE PAYMENT COSTS", as
defined in the following sentence. The term "Severance Payment Costs," means the
sum of the individual severance payments made to any of those thirty-eight (38)
current employees of CrossCountry Energy Services, LLC who 1) are deemed to be
primarily providing services to the Transfer Group Companies or the Northern
Border Companies, as described in the following sentence, and 2) are entitled to
benefits under the CrossCountry Energy Services, LLC Severance Pay Plan as a
result of involuntary termination of employment within twelve (12) months after
the Closing Date, calculated with respect to each such individual using his or
her actual years of service and his or her actual base pay; PROVIDED, HOWEVER,
that in no event shall Purchaser be obligated for Severance Payment Costs for
any employees who are offered employment by the Transfer Group Companies, and
not entitled to severance benefits under the CrossCountry Energy Services, LLC
Severance Pay Plan. Purchaser and Seller shall negotiate in good faith to
determine which thirty-eight (38) employees shall be deemed to be primarily
providing services to the Transfer Group Companies or the Northern Border
Companies.
(b) With respect to the partition and distribution of assets
and liabilities associated with the Enron Gas Pipelines Employee Benefit Trust
(the "VEBA") as disclosed on item 7 to SCHEDULE 4.7(A), the amount of assets and
liabilities to be transferred to, or assumed by, any Transfer Group Company
shall be with respect to the current and former employees of the Transfer Group
Companies and shall be calculated in a manner consistent with the motion of the
debtors filed in the Enron Bankruptcy Cases dated July 22, 2003, as may be
amended, seeking approval therefore and shall be effectuated in a manner
consistent with the motion and any order of the Bankruptcy Court approving the
relief requested therein.
(c) Following the date hereof, no Transfer Group Company or
Northern Border Company will be required to contribute to or otherwise be liable
for any contributions in connection with the Cash Balance Plan including but not
limited to, any payments or contributions pursuant to any Order of the
Bankruptcy Court, the Contribution Agreement, the Transition Services Agreement
or any other agreement, including without limitation, the agreement set forth in
Section 5.6(b) of the Contribution Agreement, between any of the Enron Sellers,
on one hand, and the Transfer Group Companies, on the other hand, relating to
the allocation of costs of providing employee benefits to the employees of the
Transfer Group Companies. For the avoidance of doubt, the Purchase Price shall
be deemed to include all contributions which otherwise would have been allocable
to any Transfer Group Company and any Northern Border Company. Following receipt
of the Purchase Price in accordance with the terms of this Agreement, the
Transfer Group Companies and the Northern Border Companies shall be deemed to
have fully satisfied the contribution obligations that they would have been
required to contribute to the Cash Balance Plan, including, without limitation,
any such obligation arising pursuant to any Order of the Bankruptcy Court or any
agreement referenced in this Section 6.12(c).
6.13 TRANSITION SERVICES.
(a) Pursuant to the Transition Services Agreement and the
Transition Services Supplemental Agreement, Enron has agreed to provide certain
transition services to CrossCountry and CrossCountry has agreed to provide
certain transition services to Enron. On and after the Closing Date, the parties
will undertake commercially reasonable efforts to implement the following
transition arrangements: (i) Purchaser will cause the Transfer Group Companies
to provide certain transition services to Enron as required by the Transition
Services Agreement and the Transition Services Supplemental Agreement on behalf
of CrossCountry; (ii) Purchaser will provide, or cause the provision of, certain
transition services to Seller; (iii) Seller will provide, or cause the provision
of, certain transition services to the Transfer Group Companies and/or the
Northern Border Companies; and (iv) Seller will request, and use commercially
reasonable efforts to have such request honored, that Enron provide any and all
transition services to be performed for the Transfer Group Companies and /or the
Northern Border Companies as required by the Transition Services Agreement and
the Transition Services Supplemental Agreement. Purchaser and Seller agree to
cooperate in identifying the transition services contemplated in items (i)
through (iv) above and in determining how such transition services will be
provided. The parties will use commercially reasonable efforts to memorialize
these understandings at Closing in agreements, reasonably acceptable to both
parties, titled "NORTHERN BORDER TRANSITION SERVICES AGREEMENT" and "NORTHERN
BORDER TRANSITION SERVICES SUPPLEMENTAL AGREEMENT". Such agreements will follow
the format of, and encompass the concepts (including term and price of services)
and types of transition services found in, the Transition Services Agreement and
the Transition Services Supplemental Agreement.
(b) If the parties do not enter into the Northern Border
Transition Services Agreement or the Northern Border Transition Services
Supplemental Agreement at Closing, then for a period ending six (6) months after
the Closing Date (or upon the execution of such agreements, if earlier): (i)
Purchaser will cause the Transfer Group Companies to provide transition services
to Enron on substantially the same basis as provided prior to Closing; (ii)
Purchaser will provide, or cause the provision of, transition services to Seller
on substantially the same basis as provided prior to Closing; (iii) Seller will
provide, or the cause the provision of, transition services to the Transfer
Group Companies and/or the Northern Border Companies on substantially the same
basis as provided prior to Closing; and (iv) Seller will request, and use
commercially reasonable efforts to have such request honored, that Enron provide
any and all transition services to be performed for the Transfer Group Companies
and/or the Northern Border Companies on substantially the same basis as provided
prior to Closing.
6.14 PURCHASER EMPLOYEE BENEFIT PLANS.
Without in any way being obligated or bound by this Agreement to do so, and
without any intent to create any third-party beneficiaries to this Agreement,
Purchaser may provide for a Transfer Group Company employee's employment with
such Transfer Group Company prior to the Closing Date to be deemed to be
employment with the Purchaser or an Affiliate of the Purchaser for purposes of
eligibility of benefits under any employee benefit plan of the Purchaser, to the
extent the Purchaser determines, in its sole discretion, that such deemed
employment is appropriate and consistent with the transactions contemplated by
this Agreement and such employee benefit plan of Purchaser.
6.15 FINANCIAL INFORMATION.
(a) To the extent received from the Enron Sellers, Seller
shall provide to Purchaser not later than forty (40) days following the end of
each calendar quarter ending after the date hereof copies of the unaudited
consolidated balance sheet of the Northern Plains Group Companies as at the end
of such quarter and the related statements of income, stockholders' equity and
cash flows of the Northern Plains Group Companies for the three (3) month period
then ended. Seller shall also provide to Purchaser any other financial
information that Seller receives from the Enron Sellers under the Enron Purchase
Agreement relating to the transactions contemplated hereunder.
(b) To the extent Purchaser reasonably requires audited or
reviewed financial statements with respect to each of the Transfer Group
Companies and the Northern Border Companies in order to comply with the
reporting requirements of the Securities and Exchange Commission set forth in
Regulations S-K and S-X, Seller will request that the Enron Sellers reasonably
cooperate with Purchaser (at Purchaser's cost), to deliver such financial
statements including any reasonable request that the Enron Sellers: (i) request
their independent auditors to prepare and deliver to Purchaser a comfort
letter(s), customary in scope and substance for comfort letters delivered in
similar circumstances and (ii) request such members of management of the
Transfer Group Companies and the Northern Border Companies that would
customarily sign a management representation letter for the benefit of the
independent auditors in producing such comfort letter(s) to make themselves
available. The failure of any independent auditor to provide the documentation
referred to in the preceding clause (i) and the failure of any members of
management to make themselves available as provided in the preceding clause (ii)
shall not constitute a default by Seller of its obligations hereunder.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The
respective obligations of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, on or prior to the Closing Date, of each of the following
conditions:
(a) No Order issued by any court of competent jurisdiction
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect, nor shall any material proceeding initiated by any
Governmental Authority of competent jurisdiction having valid enforcement
authority seeking such an Order be pending, nor shall there be any action taken,
or any Law or Order enacted, entered or enforced that has not been subsequently
overturned or otherwise made inapplicable to this Agreement, that makes the
consummation of the transactions contemplated by this Agreement illegal;
(b) Any waiting period (including any extension thereof)
applicable to the purchase and sale of the Equity Interest to Purchaser under
the HSR Act shall have terminated or expired and an Order of the FCC approving
the transactions contemplated by this Agreement shall have been obtained;
(c) Seller shall have obtained the consents and releases set
forth on SCHEDULE 7.1(C); and
(d) the Enron Closing shall have occurred.
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by
Purchaser, in whole or in part, subject to Applicable Law):
(a) All of the representations and warranties of Seller
contained herein shall be true and correct on and as of the Closing Date, except
those representations and warranties of Seller that speak of a certain date,
which representations and warranties shall have been true and correct as of such
date; PROVIDED, HOWEVER, that this condition shall be deemed to have been
satisfied so long as any failure of such representations and warranties to be
true and correct, individually or in the aggregate, would not reasonably be
expected to result in a Transfer Xxxxx Xxxxxxxx Adverse Effect or a Seller
Material Adverse Effect;
(b) Seller shall have performed and complied with its
obligations and covenants required by this Agreement (other than Section 8.1(d)
hereof) to be performed or complied with by Seller on or prior to the Closing
Date, in all material respects;
(c) None of the Transfer Group Companies or the Northern
Border Companies shall have filed a petition for relief under the Bankruptcy
Code or taken any other action specified in Section 6.2(b)(xii); and
(d) Purchaser shall have been furnished with the documents
referred to in Section 8.1 (other than Section 8.1(d) hereof), including
originally executed versions of this Agreement and the Transaction Documents
executed by all parties thereto other than Purchaser.
7.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any or all of which may be waived by Seller,
in whole or in part, subject to Applicable Law):
(a) All of the representations and warranties of Purchaser
contained herein shall be true and correct on and as of the Closing Date, except
those representations and warranties of Purchaser that speak of a certain date,
which representations and warranties shall have been true and correct as of such
date; PROVIDED, HOWEVER, that this condition shall be deemed to have been
satisfied so long as any failure of such representations and warranties to be
true and correct, individually or in the aggregate, would not reasonably be
expected to result in a Purchaser Material Adverse Effect;
(b) Purchaser shall have performed and complied with all
obligations and covenants required by this Agreement (other than Section 8.2(d)
hereof) to be performed or complied with by Purchaser on or prior to the Closing
Date, in all material respects; and
(c) Seller shall have been furnished with the documents
referred to in Section 8.2 (other than Section 8.2(d) hereof), including
originally executed versions of this Agreement and the Transaction Documents
executed by all parties thereto other than Seller.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED
8.1 DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing,
Seller shall deliver, or cause to be delivered, to Purchaser the following:
(a) stock certificates (or membership certificates (if
available) in the event that the Conversion Transactions, as defined in the
Enron Purchase Agreement, are consummated) representing the Equity Interest,
duly endorsed in blank or accompanied by transfer powers and with all requisite
transfer tax stamps attached and stock certificates or membership certificates
(if available) representing ownership interests in the Transfer Group Companies;
(b) a certificate of an officer of Seller certifying that the
closing conditions set forth in Section 7.2(a) (with respect to Seller's
representations and warranties) and Section 7.2(b) (with respect to Seller's
obligations and covenants) have been satisfied;
(c) originally executed versions of this Agreement and the
Transaction Documents executed by all parties thereto other than Purchaser;
(d) in accordance with Section 6.13, the Northern Border
Transition Services Agreement and the Northern Border Transition Services
Supplemental Agreement executed by all parties thereto other than Purchaser; and
(e) a certified copy of the Approval Order, as defined in the
Enron Purchase Agreement.
8.2 DOCUMENTS TO BE DELIVERED BY PURCHASER. At the Closing,
Purchaser shall deliver to Seller the following:
(a) evidence-of the wire transfer[s] referred to in Section
2.3 hereof;
(b) a certificate of an officer of Purchaser certifying that
the closing conditions set forth in Section 7.3(a) and Section 7.3(b) have been
satisfied;
(c) originally executed versions of this Agreement and the
Transaction Documents executed by all parties thereto other than Seller; and
(d) in accordance with Section 6.13, the Northern Border
Transition Services Agreement and the Northern Border Transition Services
Supplemental Agreement executed by all parties thereto other than Seller.
ARTICLE IX
TAX AND ERISA MATTERS
9.1 TAX SHARING AGREEMENTS.
Prior to Closing, pursuant to the Enron Purchase Agreement, Seller shall
request, and use commercially reasonable efforts to have such request honored,
that any Tax sharing agreement between the Enron Sellers and any Transfer Group
Company and all obligations or liabilities arising under any such agreements,
shall be terminated immediately prior to the Closing and shall have no further
effect for any taxable year (whether the current year, a future year, or a past
year).
9.2 PREPARATION OF TAX RETURNS; PAYMENT OF TAXES.
(a) (i) Where required by Applicable Law, Seller shall,
pursuant to the Enron Purchase Agreement, request, and use commercially
reasonable efforts to have each request honored, that the Transfer Group
Companies be included in, and shall, pursuant to the Enron Purchase Agreement,
request, and use commercially reasonable efforts to have such request honored,
that the Enron Sellers file or cause to be filed, (A) the United States
consolidated federal income Tax Returns of Enron for all taxable periods of the
Transfer Group Companies ending on or prior to the Closing Date; and (B) where
applicable, all other consolidated, combined or unitary Tax Returns of, or which
include, one or more of the Transfer Group Companies for all taxable periods
ending on or prior to the Closing Date. Seller shall, pursuant to the Enron
Purchase Agreement, request, and use commercially reasonable efforts to have
such request honored, that the Enron Sellers remit (or cause to be remitted) all
Taxes shown due with respect to the Tax Returns referred to in clauses (A) and
(B) of this Section 9.2(a)(i). Within 100 days after the Closing Date (or sooner
if necessary to enable Seller to cause the timely filing of a Tax Return),
Purchaser shall cause each of the Transfer Group Companies to prepare and
provide to Seller a package of Tax information materials, including schedules
and work papers (the "TAX PACKAGE") required by Seller to enable Seller to cause
to be prepared and filed all Tax Returns (which have not been filed on or before
the Closing Date) required to be prepared and filed pursuant to this Section
9.2(a)(i).
(ii) Pursuant to the Enron Purchase Agreement,
Seller shall request, and use commercially reasonable efforts to
have such request honored, that the Enron Sellers prepare and file,
or cause to be prepared and filed, all Tax Returns of or which
include any of the Transfer Group Companies, other than Tax Returns
described in Section 9.2(a)(i), that are required to be filed (after
giving effect to any valid extension of time in which to make such
filing) on or prior to the Closing Date. Pursuant to the Enron
Purchase Agreement, Seller shall request, and use commercially
reasonable efforts to have such request honored, that the Enron
Sellers cause the Transfer Group Companies to pay all Taxes shown
due on Tax Returns described in this Section 9.2(a)(ii). If Seller's
requests as described above in this Section 9.2(a)(ii) are not
honored, then Seller shall cause the Enron Sellers to take such
action as Purchaser may reasonably request, to the extent that
Seller has the right to cause the Enron Sellers to take such action
under the Enron Purchase Agreement.
(iii) Purchaser shall prepare and file, or cause
to be prepared and filed, on behalf of the Transfer Group Companies
all other Tax Returns of, or which include, the Transfer Group
Companies (other than those Tax Returns described in Section
9.2(a)(i) and Section 9.2(a)(ii) above). Purchaser, or the Transfer
Group Companies, shall remit (or cause to be remitted) all Taxes
shown due on Tax Returns referred to in this Section 9.2(a)(iii).
(b) (i) All Tax Returns described in clauses (i), (ii) and
(iii) of Section 9.2(a) (including the Tax Package) for taxable periods ending
on or before or which include the Closing Date shall be prepared in a manner
consistent with past practice unless a past practice has been finally determined
to be incorrect by the applicable Taxing Authority or a contrary treatment is
required by applicable Tax Laws (or the judicial or administrative
interpretations thereof).
(ii) Purchaser will provide Seller with copies of
all Tax Returns described in clause (iii) of Section 9.2(a) at least
thirty (30) Business Days prior to the filing date; PROVIDED,
HOWEVER, that Purchaser shall have no obligation to furnish any Tax
Returns referred to in Section 9.2(a)(iii) for which neither Seller
nor any of the Enron Sellers have liability for Taxes pursuant to
clause (i) or (ii) of Section 9.10(a). Seller shall be provided an
opportunity to review such returns and all supporting workpapers,
schedules and information, and to propose changes, not later than
five (5) Business Days prior to the filing date of such Tax Returns.
The failure of Seller to propose any changes to any such Tax Returns
prior to the expiration of such five (5) Business Day period shall
be deemed to be an indication of their approval thereof
(iii) Seller and Purchaser shall attempt in good
faith mutually to resolve any disagreements regarding Tax Returns
described in Section 9.2(b)(ii) prior to the due date for filing
thereof. Any disagreements regarding such Tax Returns which are not
resolved prior to the filing thereof shall be promptly resolved
pursuant to Section 9.5.
(c) Allocating Taxable Income:
(i) To the extent permitted by Applicable Law or
administrative practice of any Taxing Authority, (A) the taxable
year of the Transfer Group Companies shall close as of the close of
business on the Closing Date and (B) any transactions (other than
the transactions contemplated by this Agreement and the Enron
Purchase Agreement) involving any of the Transfer Group Companies
that are not in the Ordinary Course of Business occurring on the
Closing Date but after the Closing shall be reported on Purchaser's
Tax Returns to the extent permitted by Applicable Law or on the
post-Closing separate company returns of the applicable Transfer
Group Company (if the applicable Transfer Group Company does not
file a Tax Return with Purchaser), and shall be similarly reported
on all other Tax Returns of Purchaser or its Affiliates to the
extent permitted. Seller shall be responsible for all Taxes shown
due on Tax Returns described in clause (A) of this Section 9.2(c)
except to the extent such Tax is an Excluded Tax. Purchaser shall be
responsible for all Taxes related to transactions required to be
reported on Tax Returns described in clause (B) of this Section
9.2(c) and for all Excluded Taxes. Seller, Purchaser and the
Transfer Group Companies shall not take any position inconsistent
with the provisions contained in Section 9.2(c) on any Tax Return.
(ii) If Applicable Law does not permit the
Transfer Group Companies to close their taxable years as of the
close of business on the Closing Date, or where Taxes are assessed
with respect to a taxable period which includes the Closing Date but
does not end on that day (a "STRADDLE PERIOD"), then Taxes, if any,
attributable to the taxable period of the Transfer Group Companies
beginning on or before and ending after the Closing Date shall be
allocated (A) to Seller for the period up to and including the
Closing Date, except to the extent any such Taxes are Excluded Taxes
and (B) to Purchaser with respect to all other Taxes attributable to
the Straddle Period. For purposes of allocating Taxes attributable
to a Straddle Period of the Transfer Group Companies, (x) real,
personal and intangible property Taxes and any other Taxes levied on
a per diem basis ("PER DIEM TAXES") shall be equal to the amount of
such Per Diem Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of days during the
Straddle Period prior to and including the Closing Date and the
denominator of which is the total number of days in the Straddle
Period, and (y) the Taxes of the Transfer Group Companies (other
than Per Diem Taxes) for any taxable period ending on or prior to
the Closing Date shall be computed as if such taxable period ended
as of the close of business on the Closing Date. Any allocation of
income or deductions required to determine any Taxes attributable to
any Straddle Period shall be made by means of a closing of the books
and records of the Transfer Group Companies as of the close of
business on the Closing Date; provided, that exemptions, allowances
or deductions that are calculated on an annual basis (including, but
not limited to, depreciation and amortization deductions) shall be
allocated between the period ending on the Closing Date and the
period after the Closing Date in proportion to the number of days in
each such period.
(d) Notwithstanding anything to the contrary herein, if
Seller, on the one hand, or Purchaser, on the other hand, is responsible for all
or a portion of the Taxes pursuant to Section 9.10 (after taking into account
any applicable Tax Baskets) with respect to a Tax Return (the "PAYING PARTY")
that the other party is responsible for filing (or causing to be filed) pursuant
to Section 9.2(a) (the "PREPARING PARTY"), the Paying Party shall pay or cause
to be paid the amount of such Taxes for which the Paying Party is responsible to
the Preparing Party no later than five (5) days prior to the filing of the
underlying Tax Return. If a dispute arises (and is not resolved five (5) days
prior to the filing of the Tax Return) between the Preparing Party and the
Paying Party as to the Tax Return or the amount that the Paying Party owes to
the Preparing Party, the Paying Party shall pay or cause to be paid to the
Preparing Party the amount that the Paying Party believes is owing to the
Preparing Party, and Seller and Purchaser shall resolve their dispute in
accordance with Section 9.5. Within five (5) days following resolution of the
dispute, the appropriate party shall pay or cause to be paid to the other party
any amount determined to be due upon final resolution of the dispute.
(e) Purchaser agrees to furnish or cause to be furnished to
Seller, and Seller agrees to use commercially reasonable efforts to furnish or
cause to be furnished to Purchaser, and each at their own expense, as promptly
as practicable, such information (including access to books and records) and
assistance, including making employees available on a mutually convenient basis
to provide additional information and explanations of any material provided,
relating to the Transfer Group Companies as is reasonably necessary for the
filing of any Tax Returns, for the preparation for any audit, and for the
prosecution or defense in any Tax Proceeding relating to any adjustment or
proposed adjustment with respect to Taxes. Purchaser shall retain in its
possession or cause the Transfer Group Companies to retain in their possession,
and shall provide Seller (and the Enron Sellers under the Enron Purchase
Agreement) reasonable access to (including the right to make copies of), such
supporting books and records and any other materials that Seller (or such Enron
Sellers) may specify with respect to matters relating to Taxes for any taxable
period ending on or prior to or which includes the Closing Date until the
relevant statute of limitations has expired. After such time, Purchaser may
dispose of such material; PROVIDED, that prior to such disposition Purchaser
shall give Seller and the Enron Sellers a reasonable opportunity to take
possession of such materials.
(f) Neither Purchaser nor any Affiliate or successor of
Purchaser shall (or shall cause or permit any of the Transfer Group Companies
to) amend, refile or otherwise modify any Tax Return relating in whole or in
part to any Transfer Group Company with respect to any taxable year or period
ending on or before the Closing Date, or which includes the Closing Date,
without the prior written consent of Seller.
9.3 CERTAIN OTHER TAXES.
All transfer, documentary, sales, use, stamp, registration and other such Taxes
and fees (including any penalties and interest) incurred in connection with this
Agreement, if any, shall be paid by Purchaser when due, and Purchaser shall file
all necessary Tax Returns and other documentation with respect to any such
transfer, documentary, sales, use, stamp, registration and other Taxes and fees,
and, if required by Applicable Law, Seller will, and will cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation and
will cooperate with Purchaser to take such commercially reasonable actions as
will minimize or reduce the amount of such Taxes.
9.4 TAX AUDITS.
(a) Seller and/or the Enron Sellers at the sole option of
Seller, shall have the sole right (but not the obligation) to represent the
interests of the Transfer Group Companies in any audit or administrative or
court proceeding (a "TAX PROCEEDING") relating to Taxes for taxable periods of
the Transfer Group Companies which end on or before the Closing Date and to
employ counsel of its choice at its expense, provided that Purchaser shall have
the right to jointly represent the interests of the Transfer Group Companies
with Seller (and/or the Enron Sellers) in any such Tax Proceeding to the extent
that Seller's indemnification obligations have terminated pursuant to Section
9.10(d). Purchaser agrees that it will cooperate fully, and shall cause the
Transfer Group Companies to cooperate fully, with Seller (and/or the Enron
Sellers under the Enron Purchase Agreement) and their counsel in the defense
against or compromise of any claim in any said proceeding.
(b) Seller, and/or the Enron Sellers at the sole option of
Seller, have the right, but not the obligation, to jointly represent the
interests of the Transfer Group Companies with the Purchaser in any Tax
Proceeding relating to Taxes for any Straddle Period of the Transfer Group
Companies. Any disputes regarding the conduct or resolution of any such audit or
proceeding shall be resolved pursuant to Section 9.5.
(c) Purchaser shall have the sole right to represent the
interests of the Transfer Group Companies in all Tax Proceedings other than Tax
Proceedings described in clauses (a), (b) and (d) of this Section 9.4.
(d) Notwithstanding anything to the contrary herein, Seller
shall not be required to consult with Purchaser or seek Purchaser's consent to
settle any Tax Proceeding which relates to items reported on a Tax Return of the
type described in Section 9.2(a)(i).
(e) If any Taxing Authority asserts a claim, makes an
assessment or otherwise disputes or affects any Taxes for which Seller and/or
the Enron Sellers are responsible hereunder, Purchaser shall, promptly upon
receipt by Purchaser and/or the Transfer Group Companies of notice thereof,
inform Seller thereof. The failure of Purchaser or the Transfer Group Companies
to timely forward such notification in accordance with the immediately preceding
sentence shall not relieve Seller of its obligation to pay such liability for
Taxes except and to the extent that the failure to timely forward such
notification actually prejudices the ability of Seller (or the Enron Sellers
under the Enron Purchase Agreement) to contest such liability for Taxes or
increases the amount of such Taxes.
9.5 DISPUTE RESOLUTION. In the event that Seller or
Purchaser dispute the application or interpretation of any provision of Sections
9.2, 9.4 and 9.9 hereof, or the amount or calculation of Taxes, if any, owed by
such party thereunder, such party shall deliver to the other a statement setting
forth, in reasonable detail, the nature of and/or the dollar amount of any
disagreement so asserted. The parties shall attempt in good faith to resolve
such dispute within twenty (20) days following the commencement of such dispute.
If the parties are unable to resolve such dispute within such twenty (20) day
period, the dispute shall be resolved by an Accounting Referee appointed in
accordance with the procedures set forth in SCHEDULE 2.1; PROVIDED, HOWEVER,
that in the event that an Accounting Referee has been appointed under the Enron
Purchase Agreement to resolve a bona fide dispute thereunder, such Accounting
Referee shall serve as the Accounting Referee hereunder. The Accounting Referee
shall determine, only with respect to the specific disagreements submitted in
writing by Seller and Purchaser, the manner in which such item or items in
dispute should be resolved; PROVIDED, HOWEVER, that the dollar amount of any
such item or items shall be determined within the range of dollar amounts
proposed by Seller, on the one hand, and Purchaser, on the other hand. The
Accounting Referee shall be directed to make such determination promptly, but in
no event later than thirty (30) days after acceptance of its appointment. Any
finding by the Accounting Referee shall be a reasoned award stating the findings
of fact and conclusions of law (if any) on which it is based, shall be final and
binding upon the parties and shall be the sole and exclusive remedy between the
parties regarding the disputed items so presented. The fees and expenses of the
Accounting Referee shall be shared by Seller and Purchaser (A) in proportion to
each party's respective liability for Taxes which are the subject of the dispute
as determined by the Accounting Referee or (B) in equal proportions if the
subject of the dispute involves Tax Returns for which no Taxes are due. The
parties shall otherwise bear their own expenses incurred in any dispute
resolution pursuant to this Section 9.5.
9.6 REFUNDS AND TAX BENEFITS. Any refunds of Taxes (together
with any interest with respect thereto) paid to or in respect of the Transfer
Group Companies (including any amounts credited against income tax to which
Purchaser, its Affiliates or any of the Transfer Group Companies becomes
entitled) and that relate to Tax periods or portions thereof ending on or before
the Closing Date shall be for the account of Seller. Purchaser shall pay over to
Seller any such refund or the amount of any such credit (in each case, together
with any interest with respect thereto) within five (5) days after receipt or
entitlement thereto. Any refunds or credits of Taxes (together with any interest
with respect thereto) of the Transfer Group Companies for any Straddle Period
shall be equitably apportioned between Seller and Purchaser. Purchaser shall, if
Seller so requests and at Seller's expense, prepare, execute and file any claims
for refunds or credits, or cause the Transfer Group Companies to prepare,
execute and file any claims for refunds or credits, to which Seller or the Enron
Sellers is entitled under this Section 9.6. Purchaser shall permit Seller,
and/or the Enron Sellers at the sole option of Seller, to control the
prosecution of any such refund.
9.7 CERTAIN ELECTIONS.
(a) After the Closing Date, at Seller's request, Purchaser
shall cause the Transfer Group Companies to make and/or join with Seller and/or
the Enron Sellers in making any election after the Closing Date; PROVIDED, that
the making of such election does not have an adverse impact on Purchaser (or any
of the Transfer Group Companies) for any post-acquisition Tax period.
(b) To the extent permitted by Law, Purchaser shall not
permit the Transfer Group Companies to carry back any loss, deduction or credit
to any taxable period that ends on, prior to or which includes the Closing Date.
9.8 FIRPTA. Seller shall furnish to Purchaser on or before the
Closing Date a certification of its non-foreign status consistent with the
requirements set forth in Section 1445 of the Code and the Treasury Regulations.
9.9 INTENTIONALLY OMITTED. 9.10 TAX INDEMNIFICATION.
(a) Seller hereby agrees to indemnify and hold Purchaser
Indemnified Parties harmless (without duplication) from and against any and all
Covered Taxes that (x) are imposed upon or assessed against the Transfer Group
Companies or the assets or the properties thereof and (y) are not barred from
recovery under the applicable statute of limitations. For purposes of this
Section 9.10(a), "COVERED TAXES" shall mean (without duplication):
(i) Taxes of Seller or any Affiliate (other than a
Transfer Group Company) with which Seller or such Affiliate files a
consolidated, combined or similar Tax Return imposed upon any of the
Transfer Group Companies by reason of any of the Transfer Group
Companies being severally liable for any Taxes of any other Person
pursuant to Section 1.1502-6(a) of the Treasury Regulations or any
analogous provisions of state, local or foreign law;
(ii) Taxes for which a Transfer Group Company is
liable with respect to all taxable periods ending on or prior to the
Closing Date (including, without limitation, such Taxes imposed upon
such Transfer Group Companies by reason of the Transfer Group
Companies being severally liable for any Taxes of any other Person
pursuant to Section 1.1502-6(a) of the Treasury Regulations or any
analogous provisions of state, local or foreign law or arising under
the principles of successor or transferee liability); and
(iii) Taxes of the Transfer Group Companies for the
period allocated to Seller pursuant to Section 9.2(c).
PROVIDED, HOWEVER, Covered Taxes shall not include (and, for avoidance of doubt,
Seller shall not be liable for and shall not indemnify or hold harmless
Purchaser Indemnified Parties from or against) any Excluded Taxes.
Notwithstanding the foregoing, Seller shall not be required to indemnify the
Purchaser Indemnified Parties pursuant to Section 9.10(a)(ii) or (iii) for Taxes
described in Section 9.10(a)(ii) or (iii) for which any Northern Plains Group
Company is liable until such Taxes exceed $1.8 million (the "NP TAX BASKET"),
and then Seller shall only be required to indemnify Purchaser Indemnified
Parties for any such Taxes in excess of the NP Tax Basket.
(b) Purchaser hereby agrees to indemnify and hold harmless
Seller Indemnified Parties from and against (i) any and all Taxes of the
Transfer Group Companies with respect to any taxable period of the Transfer
Group Companies beginning after the Closing Date (including any portion of such
Taxes allocable to Purchaser pursuant to Section 9.2(c)) and (ii) any and all
Excluded Taxes.
(c) Without duplication, Seller shall indemnify and hold
harmless Purchaser Indemnified Parties from and against any and all Losses (i)
incurred in connection with the Taxes for which Seller is responsible to
indemnify Purchaser Indemnified Parties pursuant to Section 9.10(a) or the
enforcement of Section 9.10(a) and this Section 9.10(c) and/or (ii) incurred as
a result of a breach by Seller of any covenant contained in this Article IX.
Without duplication, Purchaser shall indemnify and hold harmless Seller
Indemnified Parties from and against any and all Losses (i) incurred in
connection with the Taxes for which Purchaser is responsible to indemnify Seller
Indemnified Parties pursuant to Section 9.10(b) or the enforcement of Section
9.10(b) and this Section 9.10(c) and/or (ii) incurred as a result of a breach by
Purchaser of any of the covenants contained in this Article IX.
(d) Notwithstanding anything contained herein to the contrary,
Seller's obligation to indemnify Purchaser Indemnified Parties for any Taxes and
Losses pursuant to this Section 9.10 shall terminate upon the earlier of (i) the
expiration of the applicable statute of limitations with respect to the
underlying Tax and (ii) the closing of the Enron Bankruptcy Cases.
9.11 EMPLOYEE BENEFITS INDEMNIFICATION. Seller hereby agrees
to indemnify and hold the Purchaser Indemnified Parties harmless from and
against any and all Losses that are imposed upon or assessed against a Transfer
Group Company or the assets thereof (i) arising under Title IV of ERISA and
relating to the Cash Balance Plan, the EFS Pension Plan, the San Xxxx Gas
Pension Plan, the Garden State Paper Pension Plan, the Portland General Electric
Company Pension Plan or any "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA sponsored by the Enron Sellers or their ERISA
Affiliates, (ii) due to "PARTICIPATING EMPLOYER" or "PARTICIPATING COMPANY"
status in the Enron Corp. Savings Plan, the Enron Corp. Employee Stock Ownership
Plan, or the Cash Balance Plan or due to the participation of the Transfer Group
Company employees or former employees in such plans (other than claims that,
after the Closing Date, any Transfer Group Company failed to make normal and
customary contributions required under the express terms of the foregoing plans,
other than the Cash Balance Plan); or (iii) relating to any group health or
insurance plans sponsored or maintained by the Enron Sellers or any of their
ERISA Affiliates other than any Transfer Group Company with respect to any
termination of any such plans arising under Section 4980B of the Code; provided,
that such Losses are not barred from recovery from any of the Transfer Group
Companies under the relevant statute of limitations; and provided, further,
except with respect to the Cash Balance Plan (as provided in Section 6.12(c)),
that the indemnity set forth in this Section 9.11 shall not affect the
obligation of the Transfer Group Companies to make payments pursuant to any
Order of the Bankruptcy Court, the Contribution Agreement, the Transition
Services Agreement or any other agreement, including without limitation, the
agreement set forth in Section 5.6(b) of the Contribution Agreement, between any
of the Enron Sellers, on one hand, and the Transfer Group Companies, on the
other hand, relating to the allocation of costs of providing employee benefits
to the employees of the Transfer Group Companies.
9.12 COORDINATION OF PROVISIONS. In the case of any
inconsistency between Articles IX and X, Article IX shall control with respect
to Tax and employee benefits provided, that Sections 10.2(b), 10.2(c), 10.2(f),
10.2(g), 10.3(b), 10.3(c), 10.3(f), 10.4, 10.5 and 10.6 shall apply to Article
IX; PROVIDED, FURTHER, that, with respect to any Tax matters, in the case of any
conflict between Sections 9.4 or 9.5 on the one hand and Section 10.4 on the
other hand, Sections 9.4 and 9.5 shall control.
ARTICLE X
INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS.
Subject to the limitations and other provisions of this Agreement:
(a) The representations and warranties of Seller and Purchaser
contained in this Agreement, and the covenants and agreements of Seller and
Purchaser contained in this Agreement which by their terms are required to be
performed on or before the Closing (the "PRE-CLOSING COVENANTS"), shall survive
the Closing and shall remain in full force and effect until the later of (i)
June 25, 2005 and (ii) the date that is 175 days after the Closing Date;
PROVIDED, HOWEVER, that the representations and warranties contained in Section
4.14 shall not survive the Closing (it being agreed that all indemnification for
Tax matters shall be governed solely by Article IX, except to the extent
otherwise provided in Section 9.12).
(b) Each covenant and agreement of Seller and Purchaser
contained in this Agreement which by its terms requires performance after the
Closing Date (a "POST-CLOSING COVENANT") shall survive the Closing and shall
remain in full force and effect until such covenant or agreement is fully
performed.
10.2 SELLER INDEMNIFICATION.
(a) Subject to the provisions of this Article X, and except as
otherwise provided in Article IX, from and after the Closing Date, Seller agrees
to indemnify the Purchaser Indemnified Parties against and hold them harmless
from any and all Losses actually suffered or incurred by them arising out of the
following:
(i) the breach of any representation or warranty of
Seller contained in this Agreement; PROVIDED, HOWEVER, that in
determining whether Seller is liable pursuant to this Section
10.2(a)(i) for any breach of any representation or warranty
contained in Section 4.7 of this Agreement, the qualification of any
such representation or warranty by reference to materiality,
including any reference to the qualification "SELLER MATERIAL
ADVERSE EFFECT" or "TRANSFER XXXXX XXXXXXXX ADVERSE EFFECT" shall be
disregarded and the determination of whether any such representation
or warranty has been breached shall be made without regard to any
such qualification or whether such breach is material or constitutes
a Seller Material Adverse Effect or Transfer Xxxxx Xxxxxxxx Adverse
Effect. Notwithstanding the foregoing, for the purposes of this
Section 10.2(a)(i), no representation or warranty in Section 4.7
containing a qualification by reference to materiality, including
any reference to "SELLER MATERIAL ADVERSE EFFECT" or "TRANSFER XXXXX
XXXXXXXX ADVERSE EFFECT," shall be considered to have been breached
unless the Losses to the Purchaser Indemnified Parties resulting
from such breach exceed $500,000 (the "INDIVIDUAL BASKET AMOUNT")
per individual breach (or series of related breaches arising out of
the same event) of such representation or warranty; PROVIDED, that,
once such Losses for such individual breach (or series of related
breaches arising out of the same event) of such representation or
warranty equal or exceed the Individual Basket Amount, subject to
the other limitations in this Article X (including, without
limitation, satisfaction of the Basket Amount set forth in Section
10.2(d)), Seller shall be liable to the Purchaser Indemnified
Parties for the entire amount of such Losses in excess of the Basket
Amount (for the avoidance of doubt, each individual breach, or
series of related breaches arising out of the same event, of a
representation or warranty shall be separately applied towards the
Individual Basket Amount and such individual breaches, or series of
related breaches arising out of the same event, shall not be
aggregated with other breaches for purposes of determining whether
the Individual Basket Amount has been reached);
(ii) the breach of any Pre-Closing Covenant by Seller; or
(iii) the breach of any Post-Closing Covenant by Seller;
(b) Seller shall not be required to indemnify any Purchaser
Indemnified Party pursuant to this Section 10.2 or Sections 9.10 or 9.11 to the
extent otherwise indemnifiable Losses or claims pursuant to this Section 10.2 or
Sections 9.10 or 9.11 (i) resulted from fraud, gross negligence, bad faith or
willful misconduct of Purchaser or (ii) have resulted in a reduction in the
Purchase Price pursuant to the purchase price adjustment provisions in this
Agreement.
(c) No claim may be asserted nor may any action be commenced
against Seller pursuant to this Section 10.2(a) or Sections 9.10 or 9.11 for
breach of any representation or warranty, Pre-Closing Covenant or Post-Closing
Covenant or a claim pursuant to Sections 9.10 or 9.11, unless written notice of
such claim or action (satisfying the requirements of Section 10.4) is received
by Seller on or prior to the date on which the representation or warranty,
Pre-Closing Covenant or Post-Closing Covenant on which such claim or action, or
claim pursuant to Sections 9.10 or 9.11, is based ceases to survive as set forth
in, as applicable, Sections 9.10, 9.11 or 10.1.
(d) No claim may be made against Seller for indemnification
pursuant to Sections 10.2(a)(i) and 10.2(a)(ii) unless the aggregate amount of
all Losses of the Purchaser Indemnified Parties upon which valid claims are
based pursuant to such sections shall exceed an amount equal to $1,000,000 (the
"BASKET AMOUNT"), and then Seller shall only be responsible for indemnification
of Losses in excess of the Basket Amount.
(e) The amounts paid by Seller for indemnification of Losses
under this Agreement pursuant to Sections 10.2(a)(i) and 10.2(a)(ii) shall be
limited to, in the aggregate, an amount equal to $3,500,000 (the
"INDEMNIFICATION CAP").
(f) No claim may be asserted nor may any action be commenced
against Seller pursuant to this Section 10.2 or Sections 9.10 or 9.11 for breach
of any representation or warranty, Pre-Closing Covenant or Post-Closing Covenant
or claim pursuant to Sections 9.10 or 9.11 to the extent that (i) Purchaser had
a reasonable opportunity, but failed, in good faith to mitigate the Loss
including, but not limited to, the failure to use commercially reasonable
efforts to recover under a policy of insurance or under a contractual right of
set-off or indemnity, or (ii) such Loss arises from or was caused by actions
taken or failed to be taken by Purchaser or any of its Affiliates after the
Closing.
(g) Notwithstanding anything to the contrary contained herein
or in any Transaction Document, the amounts paid by Seller for indemnification
under this Agreement and the Transaction Documents shall in no event exceed, in
the aggregate, the Purchase Price.
10.3 PURCHASER INDEMNIFICATION.
(a) Subject to the provisions of this Article X, and except as
otherwise provided in Article IX, Purchaser agrees from and after the Closing
Date to indemnify the Seller Indemnified Parties against and hold them harmless
from any and all Losses actually suffered or incurred by them arising out of:
(i) the breach of any representation or warranty of
Purchaser contained in this Agreement;
(ii) the breach of any Pre-Closing Covenant by
Purchaser; or
(iii) the breach of any Post-Closing Covenant by
Purchaser.
(b) Purchaser shall not be required to indemnify any Seller
Indemnified Party pursuant to this Section 10.3 or Section 9.10 to the extent
any such Losses or claims pursuant to Section 9.10 resulted from fraud, gross
negligence, bad faith or willful misconduct of Seller.
(c) No claim may be asserted nor may any action be commenced
against Purchaser pursuant to clause (i) or (ii) of Section 10.3(a) or Section
9.10 for breach of any representation or warranty, Pre-Closing Covenant or
Post-Closing Covenant or claim pursuant to Section 9.10, unless written notice
of such claim or action (satisfying the requirements of Section 10.4) is
received by Purchaser on or prior to the date on which the representation or
warranty, Pre-Closing Covenant or Post-Closing Covenant on which such claim or
action, or claims pursuant to Section 9.10, is based ceases to survive as set
forth in, as applicable, Section 9.10 or 10.1.
(d) No claim may be made against Purchaser for indemnification
pursuant to Sections 10.3(a)(i) and 10.3(a)(ii) (except with respect to
indemnification for breaches of Section 6.1 unless the aggregate amount of all
Losses of the Seller Indemnified Parties upon which valid claims are based
pursuant to such sections shall exceed an amount equal to the Basket Amount, and
then Purchaser shall only be responsible for indemnification of Losses in excess
of the Basket Amount.
(e) The amounts paid by Purchaser for indemnification of
Losses under this Agreement pursuant to Sections 10.3(a)(i) and l0.3(a)(ii)
(except with respect to indemnification for breaches of Section 6.1) shall be
limited to, in the aggregate, an amount equal to the Indemnification Cap.
(f) The amounts paid by Purchaser for indemnification of
Losses under this Agreement and the Transaction Documents shall in no event
exceed, in the aggregate, the Purchase Price.
10.4 PROCEDURES.
(a) A Purchaser Indemnified Party or a Seller Indemnified
Party, as the case may be (for purposes of this Section 10.4, an "INDEMNIFIED
PARTY"), shall give the indemnifying party under Sections 9.10, 9.11, 10.2 or
10.3, as applicable (for purposes of this Section 10.4, an "INDEMNIFYING
PARTY"), prompt written notice of any matter which it has in good faith
determined has given rise to a right of indemnification under this Agreement
(the "INDEMNITY NOTICE"), stating the amount of the Loss, if known, and method
of computation thereof, if practicable, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises; provided that the Indemnified Party's failure to provide
timely notice as provided herein shall not reduce the indemnification
obligations of the Indemnifying Party except to the extent that the Indemnifying
Party is materially harmed by such failure to provide notice. If an Indemnifying
Party notifies an Indemnified Party within the Dispute Period that it disputes
its liability with respect to the claim described in the Indemnity Notice, an
Indemnifying Party and an Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved in accordance with
the provisions of Section 12.3.
(b) An Indemnified Party shall also give prompt written notice
of any pending claim or demand by a third party (the "THIRD PARTY CLAIM NOTICE")
to the Indemnifying Party that the Indemnified Party has in good faith
determined will likely give rise to a right of indemnification under this
Agreement (a "THIRD PARTY CLAIM"), describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or demand. If an
Indemnified Party fails to provide the Third Party Claim Notice with reasonable
promptness after an Indemnified Party receives notice of such Third Party Claim,
an Indemnifying Party shall still be obligated to indemnify an Indemnified Party
with respect to such Third Party Claim, except to the extent that an
Indemnifying Party's ability to defend the relevant claim has been materially
prejudiced by such failure of an Indemnified Party. The Indemnifying Party shall
have the right, at its sole option and expense, to be represented by counsel of
its choice and to defend against, negotiate, settle or otherwise deal with any
Third Party Claim which relates to any Losses indemnified against hereunder. If
the Indemnifying Party elects to defend against, negotiate, settle or otherwise
deal with any Third Party Claim which relates to any Losses indemnified against
hereunder, it shall within the Dispute Period, or if there is a dispute, then
within the Resolution Period, notify the Indemnified Party of its intent to do
so. If the Indemnifying Party elects not to defend against, negotiate, settle or
otherwise deal with any Third Party Claim which relates to any Losses
indemnified against hereunder, the Indemnified Party may defend against,
negotiate, settle or otherwise deal with such Third Party Claim. If the
Indemnifying Party shall assume the defense of any Third Party Claim, the
Indemnified Party may participate in, at his or its own expense, but not
control, the defense of such Third Party Claim; PROVIDED, HOWEVER, that such
Indemnified Party shall be entitled to participate in any such defense with
separate counsel at the expense of the Indemnifying Party if (i) so requested by
the Indemnifying Party to participate or (ii) in the reasonable opinion of
counsel to the Indemnified Party, a conflict or potential conflict exists
between the Indemnified Party and the Indemnifying Party that would make such
separate representation advisable; PROVIDED, FURTHER, that the Indemnifying
Party shall not be required to pay for more than one such counsel for all
Indemnified Parties in connection with any Third Party Claim. The parties hereto
agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Third Party Claim. Notwithstanding
anything in this Section 10.4 to the contrary, neither the Indemnifying Party
nor the Indemnified Party shall, without the written consent of the other party,
which consent shall not be unreasonably withheld, delayed or conditioned, settle
or compromise any Third Party Claim or permit a default judgment or consent to
entry of any judgment unless the claimant and such party provide to such other
party an unqualified release from all liability in respect of the Third Party
Claim. Notwithstanding the foregoing, if a settlement offer solely for money
damages is made by the applicable third party claimant, and the Indemnifying
Party notifies the Indemnified Party in writing of the Indemnifying Party's
willingness to accept the settlement offer and, subject to the applicable
limitations of Sections 9.10, 9.11, 10.2 and 10.3, pay the amount called for by
such offer, and the Indemnified Party declines to accept such offer, the
Indemnified Party may, at its own expense, continue to contest such Third Party
Claim, free of any participation by the Indemnifying Party, and the amount of
any ultimate liability with respect to such Third Party Claim that the
Indemnifying Party has an obligation to pay hereunder shall, subject to the
Indemnification Cap and other limits set forth in Sections 9.10, 9.11, 10.2 and
10.3, be limited to the lesser of (A) the amount of the settlement offer that
the Indemnified Party declined to accept or (B) the aggregate Losses of the
Indemnified Party with respect to such Third Party Claim, subject, in each case,
to the limitations set forth in Sections 9.10, 9.11, 10.2 and 10.3. If the
Indemnifying Party makes any payment on any Third Party Claim or other claim
hereunder, the Indemnifying Party shall be subrogated, to the extent of such
payment, to all rights and remedies of the Indemnified Party to any insurance
benefits or other claims of the Indemnified Party with respect to such Third
Party Claim or other claim hereunder.
(c) After any final decision, judgment or award shall have
been rendered in accordance with Section 12.3 and the expiration of the time in
which to appeal therefrom, or a settlement shall have been consummated, or the
Indemnified Party and the Indemnifying Party shall have arrived at a mutually
binding agreement with respect to a Third Party Claim or other claim hereunder,
the Indemnified Party shall forward to the Indemnifying Party notice of any sums
due and owing by the Indemnifying Party pursuant to this Agreement with respect
to such matter.
10.5 TAX TREATMENT OF INDEMNITY PAYMENTS.
To the extent permitted by Applicable Law, Seller and Purchaser agree to treat
any indemnity payment made pursuant to Article IX or this Article X as an
adjustment to the Purchase Price for federal, state, local and foreign income
Tax purposes.
10.6 REMEDIES. From and after the Closing, the provisions of
Article IX, this Article X and Sections 6.1, and 6.5 shall be the sole and
exclusive remedy of each party hereto for any breach of the other party's
representations or warranties, covenants or agreements contained in this
Agreement, including any breach of the other party's Pre-Closing Covenants or
Post-Closing Covenants.
ARTICLE XI
DEFINITIONS
11.1 CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings specified in this Section
11.1:
"ACCOUNTING REFEREE" shall have the meaning set forth on
SCHEDULE 2.1.
"ACTION" means any action, suit, arbitration, claim, inquiry,
proceeding or investigation by or before any Governmental Authority of any
nature, civil, criminal, regulatory or otherwise, in law or in equity.
"AFFILIATE" (and, with a correlative meaning "AFFILIATED")
means, with respect to any Person, any direct or indirect subsidiary of such
Person, and any other Person that directly, or through one or more
intermediaries, controls or is controlled by or is under common control with
such first Person. As used in this definition, "CONTROL" (including with
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by Contract or otherwise).
"AFFILIATE CONTRACTS" shall have the meaning set forth in
Section 4.11(b).
"AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"APPLICABLE LAW" means, with respect to any Person, any Law
applicable to such Person or its business, properties or assets.
"BALANCE SHEET DATE" shall have the meaning set forth in
Section 4.6(a).
"BALANCE SHEETS" shall have the meaning set forth in Section
4.6(a).
"BANKRUPTCY CODE" means title 11 of the United State Code, as
amended.
"BANKRUPTCY COURT" means the United States Bankruptcy Court
for the Southern District of New York or any other court having jurisdiction
over the Enron Bankruptcy Cases from time to time.
"BASKET AMOUNT" shall have the meaning set forth in Section
10.2(d).
"BENEFIT ARRANGEMENT" shall have the meaning set forth in
Section 4.13(b).
"BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by Law to close. Any event the scheduled occurrence of which would fall on a day
that is not a Business Day shall be deferred until the next succeeding Business
Day.
"CASH BALANCE PLAN" shall have the meaning set forth in
Section 4.13(h).
"CASH DEPOSIT" shall have the meaning set forth in Section
2.2(a).
"CLOSING" shall have the meaning set forth in Section 3.1.
"CLOSING DATE" shall have the meaning set forth in Section
3.1.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth
in Section 6.5(a).
"CONTRACT" means any written contract, indenture, note, bond,
loan, instrument, lease, commitment or other agreement.
"CONTRIBUTION AGREEMENT" means the Amended and Restated
Contribution and Separation Agreement, dated as of March 31, 2004, among Enron,
CrossCountry, CrossCountry Citrus Corp. and CrossCountry Energy Corp.
"COVERED TAXES" shall have the meaning set forth in Section
9.10(a).
"CROSSCOUNTRY" shall have the meaning set forth in the
recitals.
"DEPOSIT AMOUNT" shall have the meaning set forth in Section
2.2(a).
"DEPOSIT ESCROW AGENT" shall have the meaning set forth in
Section 2.2(a).
"DEPOSIT ESCROW AGREEMENT" shall have the meaning set forth in
Section 2.2(a).
"DISPUTE PERIOD" shall mean the period ending twenty (20) days
following receipt by an Indemnifying Party of either a Third Party Claim Notice
or an Indemnity Notice.
"DISPUTED ITEM" shall have the meaning set forth on SCHEDULE
2.1.
"DOJ" shall have the meaning set forth in Section 6.3(b).
"EMPLOYEE BENEFIT PLANS" shall have the meaning set forth in
Section 4.13(a).
"ENRON" means Enron Corp., an Oregon corporation.
"ENRON BANKRUPTCY CASES" means the chapter 11 cases commenced
by Enron and certain of its direct and indirect subsidiaries on or after
December 2, 2001 (including any case commenced after the date of the Enron
Purchase Agreement), jointly administered under Case No. 01-16034-(AJG).
"ENRON PURCHASE AGREEMENT" shall have the meaning set forth in
the recitals.
"ENRON SELLERS" shall have the meaning set forth in the
recitals.
"ENVIRONMENTAL LAW" means all Applicable Laws in effect on
the date of this Agreement relating to the environment, natural resources or the
protection thereof, including but not limited to any applicable provisions of
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
ss. 5101 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901
et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Clean Air Act, 42
U.S.C. ss. 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. ss. 136
et seq., and the Oil Pollution Act of 1990, 33 U.S.C. ss.2701 et seq., and the
regulations promulgated pursuant thereto, and all analogous state or local
statutes.
"EQUITY INTEREST" shall have the meaning set forth in the
recitals hereto.
"ERISA" shall have the meaning set forth in Section 4.13(a).
"ERISA AFFILIATE" means, with respect to any entity, any
trades or businesses (whether or not incorporated) that are under control of, or
that are treated as a single employer with, such entity under Sections 414(b),
(c), (m) or (o) of the Code or Sections 400l(a)(14)(A) or (B) of ERISA.
"ESTIMATED CLOSING STATEMENT" shall have the meaning set forth
on SCHEDULE 2.1.
"ESTIMATED PURCHASE PRICE ADJUSTMENT" shall have the meaning
set forth on SCHEDULE 2.1.
"EXCHANGE ACT" shall have the meaning set forth in Section
4.6(b).
"EXCLUDED TAXES" means (i) any liability for Taxes resulting
from transactions or actions (other than the transactions contemplated by this
Agreement) out of the ordinary course of business taken by Purchaser or any
Affiliate (including the Transfer Group Companies) or any transferee of
Purchaser or any of its Affiliates on the Closing Date but after the Closing;
(ii) any interest or penalties attributable to the untimely filing of a Tax
Return described in SECTION 9.2(A)(III); (iii) any liability for Taxes that are
taken into account in determining the Final Purchase Price Adjustment in
accordance with SCHEDULE 2.1; and (iv) any liability for Taxes described in
Section 9.3.
"FCC" means the Federal Communications Commission.
"FERC" means the Federal Energy Regulatory Commission.
----
"FINAL CLOSING STATEMENT" shall have the meaning set forth on
SCHEDULE 2.1.
"FINAL NORTHERN CAPITAL CONTRIBUTION AMOUNT" shall have the
meaning set forth on SCHEDULE 2.1.
"FINAL PURCHASE PRICE ADJUSTMENT" shall have the meaning set
forth on SCHEDULE 2.1.
"FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 4.6(a).
"FTC" shall have the meaning set forth in Section 6.3(b).
"GAAP" means United States generally accepted accounting
principles as in effect during the time period of the relevant financial
statement.
"GOVERNMENTAL AUTHORITY" means any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to United States federal, state or local government, including any
governmental authority, agency, department, board, commission or instrumentality
or any political subdivision thereof, and any tribunal, court or arbitrator(s)
of competent jurisdiction.
"GUARANTEED INDEBTEDNESS" shall have the meaning set forth in
Section 6.11.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"INDEMNIFICATION CAP" shall have the meaning set forth in
Section 10.2(e).
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 10.4(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 10.4(a).
"INDEMNITY NOTICE" shall have the meaning set forth in Section
10.4(a).
"INDIVIDUAL BASKET AMOUNT" shall have the meaning set forth in
Section 10.2(a).
"IRS" means the United States Internal Revenue Service.
"LAW" means any federal, state or local law (including common
law), statute, code, ordinance, rule, regulation or other requirement enacted,
promulgated, issued or entered by a Governmental Authority.
"LEASED REAL PROPERTY" shall have the meaning set forth in
Section 4.9(b).
"LETTERS OF CREDIT" shall have the meaning set forth in
Section 2.2(a).
"LIEN" means any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any shareholder or similar
agreement or encumbrance.
"LOSSES" means any and all liabilities, losses, damages,
claims, reasonable and documented out-of-pocket costs and expenses (including
reasonable attorneys', accountants' or other fees and expenses incurred in
defending any Action or in investigating any of the same or in asserting any
rights hereunder) actually suffered or incurred by a Person, but not including
consequential, exemplary, special and punitive damages and lost profits.
"MATERIAL CONTRACTS" shall have the meaning set forth in
Section 4.11(a).
"NBI" shall have the meaning set forth in Section 4.5(d).
"NBP SERVICES" shall have the meaning set forth in the
recitals hereto.
"NORTHERN BORDER" shall have the meaning set forth in Section
4.5(d).
"NORTHERN BORDER COMPANIES" means Northern Border, NBI,
Northern Border Pipeline Company, a Texas general partnership, Crestone Energy
Ventures, L.L.C., a Delaware limited liability company, Bear Paw Investments,
LLC, a Delaware limited liability company, Bear Paw Energy, LLC, a Delaware
limited liability company, Border Midwestern Company, a Delaware corporation,
Midwestern Gas Transmission Company, a Delaware corporation, Border Viking
Company, a Delaware corporation, and Viking Gas Transmission Company, a Delaware
corporation.
"NORTHERN BORDER DISTRIBUTION" shall have the meaning set
forth in Section 6.10.
"NORTHERN BORDER PARTNERSHIP AGREEMENT" means the Amended and
Restated Agreement of Limited Partnership of Northern Border Partners, L.P.,
dated as of October 1, 1993, by and among NBI, Pan Border Gas Company and
Northwest Border Pipeline Company.
"NORTHERN BORDER TRANSITION SERVICES AGREEMENT" shall have
the meaning set forth in Section 6.13.
"NORTHERN BORDER TRANSITION SERVICES SUPPLEMENTAL AGREEMENT"
shall have the meaning set forth in Section 6.13.
"NORTHERN BORDER SEC REPORTS" shall have the meaning set forth
in Section 4.6(b).
"NORTHERN CAPITAL CONTRIBUTION" shall have the meaning set
forth on SCHEDULE 2.1.
"NORTHERN CAPITAL CONTRIBUTION AMOUNT" shall have the meaning
set forth on SCHEDULE 2.1.
"NORTHERN PLAINS" shall have the meaning set forth in the
recitals hereto.
"NORTHERN PLAINS GROUP COMPANIES" means Northern Plains, Pan
Border Gas Company, Northern Border Pipeline Corporation and any of their
respective subsidiaries, and any successors thereof formed pursuant to the
Conversion Transactions in accordance with Section 6.16 of the Enron Purchase
Agreement. For the avoidance of doubt, any reference to the term "NORTHERN
PLAINS GROUP COMPANIES" shall include only the entities specified in the
previous sentence and shall not be construed to cover the conduct or operations
of the Northern Border Companies or Persons in which the Northern Border
Companies hold a minority interest.
"NP TAX BASKET" shall have the meaning set forth in Section
9.10(a).
"OBJECTION" shall have the meaning set forth on SCHEDULE 2.1.
"OBJECTION DATE" shall have the meaning set forth on SCHEDULE
2.1.
"OBJECTION PERIOD" shall have the meaning set forth on
SCHEDULE 2.1.
"ORDER" means any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award.
"ORDINARY COURSE OF BUSINESS" shall refer to the conduct of
business of the Transfer Group Companies from and after December 2, 2001.
"OUTSIDE DATE" shall have the meaning set forth in Section
3.2(b).
"PAYING PARTY" shall have the meaning set forth in Section
9.2(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PER DIEM TAXES" shall have the meaning set forth in Section
9.2(c)(ii).
"PERMITS" means any approvals, authorizations, consents,
licenses, permits or certificates.
"PERMITTED EXCEPTIONS" means (i) all Liens and exceptions
disclosed in policies of title insurance set forth on SCHEDULE 4.9; (ii)
statutory Liens for current Taxes, assessments or other governmental charges not
yet delinquent or the amount or validity of which is being contested in good
faith by appropriate proceedings; (iii) mechanics', carriers', workers',
repairers' and similar Liens; (iv) zoning, entitlement and other land use and
environmental regulations by any Governmental Authority; (v) with respect to any
asset, right or interest, Liens that would be released pursuant to the Approval
Order (as such term is defined in the Enron Purchase Agreement) from such asset,
right or interest and attach to the sales proceeds received by the Enron Sellers
under the Enron Purchase Agreement upon the closing of the transactions
contemplated by the Enron Purchase Agreement, and (vi) such other Liens that
would not reasonably be expected to have, individually or in the aggregate, a
Transfer Xxxxx Xxxxxxxx Adverse Effect.
"PERSON" means and includes natural persons, corporations,
limited partnerships, limited liability companies, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and all Governmental Authorities.
"PLAN" means the Fifth Amended Joint Plan of Affiliated
Debtors pursuant to chapter 11 of the Bankruptcy Code, dated January 9, 2004, as
proposed by Enron and its debtor affiliates, including, without limitation, the
exhibits and schedules attached thereto, as the same may be modified and
supplemented from time to time.
"POST-CLOSING COVENANT" shall have the meaning set forth in
Section 10.1(b).
"PRE-CLOSING COVENANT" shall have the meaning set forth in
Section 10.1(a).
"PRELIMINARY PURCHASE PRICE" shall have the meaning set forth
in Section 2.1.
"PREPARING PARTY" shall have the meaning set forth in Section
9.2(d).
"PRIME RATE" means the prime lending rate as reported in The
Wall Street Journal (under the heading "MONEY RATES") on the Closing Date.
"PRINCIPAL CONTRIBUTION TRANSACTION DOCUMENTS" means the (i)
Transition Services Agreement, (ii) Transition Services Supplemental Agreement,
(iii) Cross License Agreement, dated as of March 31, 2004, by and among Enron,
NBI, Transwestern Pipeline Company, Florida Gas Transmission Company, Northern
Border Pipeline Company, Enron Operations Services, LLC and Northern Plains,
(iv) Sublease, (v) Release Agreement, dated as of March 31, 2004, by and among
the Enron Sellers, CrossCountry, CrossCountry Energy Corp., CrossCountry Energy
Services, LLC, CrossCountry Alaska, LLC, CrossCountry Citrus Corp., NBP
Services, Pan Border Gas Company, Northern Plains, Transwestern Holding Company,
Inc. and Transwestern Pipeline Company and (vi) Tax Sharing Agreement.
"PRINCIPAL SHIPPERS" shall have the meaning set forth in
Section 4.12.
"PURCHASE PRICE" shall have the meaning set forth in Section
2.1.
"PURCHASER" shall have the meaning set forth in the recitals
hereto.
"PURCHASER INDEMNIFIED PARTIES" means Purchaser and its
directors, officers, employees, any Person that becomes a Subsidiary of
Purchaser upon the transfer of the Equity Interest at Closing, Affiliates (but
only in their capacity as Affiliates of Purchaser or in connection with the sale
of the Equity Interest under this Agreement), agents (but only in their capacity
as agents of Purchaser or in connection with the sale of the Equity Interest
under this Agreement), successors and assigns; PROVIDED, HOWEVER, that the term
"PURCHASER INDEMNIFIED PARTIES" shall not include any Northern Border Company or
any third party partner of any such company.
"PURCHASER MATERIAL ADVERSE EFFECT" means any change,
circumstance or event that would materially hinder or delay Purchaser's ability
to consummate the transactions contemplated by this Agreement, other than any
such change, circumstance or event which results from any of the events
described in clauses (i), (ii) and (iii) of Section 3.2(d) or from any material
breach by Seller of any covenant or agreement in this Agreement or from any
representation or warranty of Seller having been or having become untrue in any
material respect.
"PURCHASER RELATED PARTIES" shall mean any potential
investors, partners, members, lenders and financing sources of Purchaser and its
respective Affiliates and Representatives.
"REPRESENTATIVES" means a party's Affiliates, and its
officers, directors, employees, attorneys, investment bankers, accountants and
other agents and representatives.
"RESOLUTION PERIOD" means the period ending thirty (30) days
following receipt by an Indemnified Party of a written notice from an
Indemnifying Party stating that it disputes all or any portion of a claim set
forth in an Indemnity Notice or a Third Party Claim Notice.
"RIGHTS OF WAY" shall have the meaning set forth in Section
4.9(a).
"SEC" shall have the meaning set forth in Section 4.6(b).
"SECURITIES ACT" shall have the meaning set forth in Section
4.6(b).
"SELLER INDEMNIFIED PARTIES" means Seller, its Affiliates and
their respective Representatives, successors and assigns.
"SELLER MATERIAL ADVERSE EFFECT" means any change,
circumstance or event that would materially hinder or delay Seller's ability to
consummate the transactions contemplated by this Agreement, excluding any such
change, circumstance or event to the extent resulting from any material breach
by Purchaser of any covenant or agreement in this Agreement or from any
representation or warranty of Purchaser having been or having become untrue in
any material respect.
"SELLER" shall have the meaning set forth in the recitals
hereto.
"SEVERANCE PAYMENT COSTS" shall have the meaning set forth in
Section 6.12(a).
"STRADDLE PERIOD" shall have the meaning set forth in Section
9.2(c)(ii).
"SUBLEASE" means the Sublease, dated as of March 31, 2004,
between Enron and CrossCountry.
"SUBSIDIARY or SUBSIDIARY" means, with respect to any Person,
any corporation, limited liability company, joint venture or partnership of
which such Person (a) beneficially owns, either directly or indirectly, more
than fifty percent (50%) of (i) the total combined voting power of all classes
of voting securities of such entity, (ii) the total combined equity interests,
or (iii) the capital or profit interests, in the case of a partnership; or (b)
otherwise has the power to vote or to direct the voting of sufficient securities
to elect a majority of the board of directors or similar governing body.
"TAX" means all federal, state, provincial, territorial,
municipal, local or foreign income, profits, franchise, gross receipts,
environmental (including taxes under Code Section 59A), customs, duties, net
worth, sales, use, goods and services, withholding, value added, ad valorem,
employment, social security, disability, occupation, pension, real property,
personal property (tangible and intangible), stamp, transfer, conveyance,
severance, production, excise and other taxes, withholdings, duties, levies,
imposts and other similar charges and assessments (including any and all fines,
penalties and additions attributable to or otherwise imposed on or with respect
to any such taxes, charges, fees, levies or other assessments, and interest
thereon) imposed by or on behalf of any Taxing Authority.
"TAX BASKET" shall mean the NP Tax Basket.
"TAX PACKAGE" shall have the meaning set forth in Section
9.2(a)(i).
"TAX PROCEEDING" shall have the meaning set forth in Section
9.4(a).
"TAX RETURNS" means any report, return, declaration, claim for
refund, information report or return or statement required to be supplied to a
Taxing Authority in connection with Taxes, including any schedule or attachment
thereto or amendment thereof.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement, dated
as of March 31, 2004, between Enron, Enron Transportation Services, LLC, EOC
Preferred, L.L.C., Northern Plains, Pan Border Gas Company, NBP Services,
Transwestern Pipeline Company, Transwestern Holding Company, Inc. and
CrossCountry Citrus Corp.
"TAXING AUTHORITY" means any Governmental Authority exercising
any authority to impose, regulate, levy, assess or administer the imposition of
any Tax.
"THIRD PARTY CLAIM" shall have the meaning set forth in
Section 10.4(b).
"THIRD PARTY CLAIM NOTICE" shall have the meaning set forth in
Section 10.4(b).
"TRANSACTION DOCUMENTS" means the Deposit Escrow Agreement.
"TRANSFER GROUP COMPANIES" means the Northern Plains Group
Companies and NBP Services. For the avoidance of doubt, any reference to the
term "TRANSFER GROUP COMPANIES" shall include only the entities specified in the
previous sentence and shall not be construed to cover the conduct or operations
of the Northern Border Companies or Persons in which the Northern Border
Companies hold a minority interest.
"TRANSFER XXXXX XXXXXXXX ADVERSE EFFECT" means any change,
circumstance or event that is materially adverse to the business, financial
condition or assets of the Transfer Group Companies, taken as a whole, excluding
any such change, circumstance or event to the extent resulting from (i) the
economy or securities markets in general, or any outbreak of hostility,
terrorist activities or war, (ii) the announcement, pendency or consummation of
the sale of the Equity Interest or any other action by Seller or any Transfer
Group Company contemplated by or required by this Agreement, (iii) the filing of
the Enron Bankruptcy Cases, (iv) the confirmation of the effectiveness of the
Plan, (v) the conversion or dismissal of any Enron Bankruptcy Case, (vi) the
appointment of a chapter 11 trustee or examiner in any Enron Bankruptcy Case, or
(vii) any changes in general economic, political or regulatory conditions in
industries or countries in which any of the Transfer Group Companies operates,
including changes applicable to (A) the international, national, regional, or
local wholesale markets for natural gas, capacity or throughput, (B)
international, national, regional or local interstate natural gas pipeline
systems, and (C) rules, regulations or decisions affecting the interstate
natural gas transmission industry as a whole.
"TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement, dated as of March 31, 2004, between Enron and CrossCountry, as it may
be amended pursuant to the Enron Purchase Agreement.
"TRANSITION SERVICES SUPPLEMENTAL AGREEMENT" means the
Transition Services Supplemental Agreement, dated as of March 31, 2004, between
Enron and CrossCountry, as it may be amended pursuant to the Enron Purchase
Agreement.
"TRANSPORTATION CONTRACTS" shall have the meaning set forth in
Section 4.11(a)(vii).
"TREASURY REGULATIONS" means the regulations promulgated
under the Code.
"TRUE-UP AMOUNT" shall have the meaning set forth on SCHEDULE
2.1.
11.2 OTHER TERMS.
Other terms may be defined elsewhere in this Agreement and, unless otherwise
indicated, shall have such meaning throughout this Agreement.
11.3 KNOWLEDGE QUALIFIERS. References to "Seller's Knowledge"
or "to the Knowledge of Seller" and similar terms shall refer to the actual
knowledge, without any requirement of inquiry or investigation, of any of the
individuals listed on SCHEDULE 11.3.
11.4 INTERPRETATION. Whenever the words "include","includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES.
Except as otherwise set forth in this Agreement, each of Seller and Purchaser
shall each bear its own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby, it being understood that in no event shall any
of the Transfer Group Companies bear any of such costs and expenses.
12.2 INCORPORATION OF EXHIBITS AND SCHEDULES.
The exhibits and schedules identified in this Agreement are incorporated herein
by reference and made a part hereof. Any information disclosed on any schedule
hereto shall be deemed disclosed for all schedules hereto. Any matter disclosed
in any section of a schedule shall be deemed disclosed in each section of such
schedule.
12.3 SUBMISSION TO JURISDICTION:CONSENT TO SERVICE OF PROCESS.
(a) Any claims or disputes which may arise or result from, or
be connected with, this Agreement, any breach or default hereunder, or the
transactions contemplated by this Agreement, and any and all Actions related to
the foregoing shall be filed and maintained exclusively in the United States
District Court for the Southern District of New York sitting in New York County
or the Commercial Division, Civil Branch of the Supreme Court of the State of
New York sitting in New York County and any appellate court from any thereof.
(b) The parties hereby unconditionally and irrevocably waive,
to the fullest extent permitted by Applicable Law, any objection which they may
now or hereafter have to the laying of venue of any dispute arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement brought in any court specified in paragraph (a) above, or any defense
of inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, Action or proceeding by
the mailing of a copy thereof in accordance with the provisions of Section
12.11.
12.4 WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION,
OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED
ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTIES HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.4.
12.5 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. No party hereto
(or its Affiliates) shall, under any circumstance, be liable to any other party
(or its Affiliates) for any consequential, exemplary, special, incidental or
punitive damages claimed by such other party under the terms of or due to any
breach of this Agreement, including, but not limited to, loss of revenue or
income, cost of capital, or loss of business reputation or opportunity.
12.6 NO RIGHT OF SET-OFF. Purchaser for itself and for its
Subsidiaries, Affiliates, successors and assigns hereby unconditionally and
irrevocably waives any rights of set-off, netting, offset, recoupment, or
similar rights that Purchaser or any of its Subsidiaries, Affiliates, successors
and assigns has or may have with respect to the payment of the Purchase Price or
any other payments to be made by the Purchaser pursuant to this Agreement or any
other document or instrument delivered by Purchaser in connection herewith.
12.7 TIME OF ESSENCE. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.
12.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement (including the schedules and exhibits hereto), the Confidentiality
Agreement and the Transaction Documents represent the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and can be amended, supplemented or changed, and any provision hereof can be
waived, only by written instrument making specific reference to this Agreement
signed by the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure on the
part of any party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
Except as otherwise provided herein, all remedies hereunder are cumulative and
are not exclusive of any other remedies provided by Law.
12.9 GOVERNING LAW. THIS AGREEMENT, THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY
DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR
ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED,
AND DETERMINED IN ACCORDANCE WITH, THE APPLICABLE PROVISIONS OF THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION
THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
12.10 TABLE OF CONTENTS AND HEADINGS. The table of contents
and Section headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this Agreement.
12.11 NOTICES. All notices and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) when
delivered personally or by prepaid overnight courier, with a record of receipt,
(ii) the fourth day after mailing if mailed by certified mail, return receipt
requested, or (iii) the day of transmission, if sent by facsimile or telecopy
during regular business hours, or the day after transmission, if sent after
regular business hours (with a copy promptly sent by prepaid overnight courier
with record of receipt or by certified mail, return receipt requested), to the
parties at the following addresses or telecopy numbers (or to such other address
or telecopy number as a party may have specified by notice given to the other
parties pursuant to this provision):
If to Seller, to:
CCE Holdings, LLC
c/o Southern Union Company
Xxx XXX Xxxxxx, Xxxxxx Xxxxx
Xxxxxx-Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, President and COO
Facsimile: (000) 000-0000
And to:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Manager of Operations
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxxx & Xxxxx, LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxxxx
Facsimile: (000) 000-0000
And a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
If to Purchaser, to:
ONEOK, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxx Xxxx, Chairman, President and
Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
12.12 SEVERABILITY. If any provision of this Agreement is
invalid or unenforceable, the balance of this Agreement shall remain in effect.
12.13 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. Except as set forth in Sections 6.1, 6.7,
Article IX and Article X, nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any Person not a party to this
Agreement. No assignment of this Agreement or of any rights or obligations
hereunder may be made by any of Seller or Purchaser (by operation of Law or
otherwise) without the prior written consent of the other parties hereto and any
attempted assignment without the required consents shall be void, except that
Purchaser shall have the right to assign this Agreement to a direct or indirect
wholly-owned subsidiary of Purchaser. Upon receipt of notice by Seller from
Purchaser of any such assignment to a direct or indirect wholly-owned
subsidiary, such assignee will be deemed to have assumed, ratified, agreed to be
bound by and perform all such obligations, in each case without the necessity
for further act or evidence by the parties hereto or such assignee; provided,
however, that no such assignment shall relieve or discharge Purchaser from any
of its obligations hereunder.
12.14 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
12.15 SPECIFIC PERFORMANCE. Seller hereby agrees that, from
and after the consummation of the Enron Purchase Agreement, in the event of any
breach by Seller of any material covenant, obligation or other term or provision
set forth in this Agreement for the benefit of Purchaser, Purchaser shall be
entitled to a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other term or
provision; PROVIDED, however, that Purchaser's right under this Section 12.15
shall terminate upon Closing; PROVIDED FURTHER, that this Section 12.15 shall
not apply to enforcement of the parties' respective obligations under Sections
6.13(a), 8.1(d) or 8.2(d).
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
CCE HOLDINGS, LLC
By:
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
ONEOK, INC.
By:
---------------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board,
President and Chief Executive
Officer
TABLE OF CONTENTS
ARTICLE I SALE AND PURCHASE OF EQUITY INTEREST................................2
1.1 SALE AND PURCHASE OF EQUITY INTEREST..................................2
ARTICLE II PURCHASE PRICE AND PAYMENT........................................ 2
2.1 PURCHASE PRICE....................................................... 2
2.2 DEPOSIT.............................................................. 2
2.3 PAYMENT OF PURCHASE PRICE............................................ 3
ARTICLE III CLOSING AND TERMINATION...........................................4
3.1 TIME AND PLACE OF CLOSING.............................................4
3.2 TERMINATION OF AGREEMENT..............................................4
3.3 EFFECT OF TERMINATION.................................................5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER...........................6
4.1 ORGANIZATION AND GOOD STANDING........................................6
4.2 AUTHORIZATION OF AGREEMENT............................................6
4.3 NO VIOLATION; CONSENTS................................................6
4.4 OWNERSHIP AND TRANSFER OF EQUITY INTEREST.............................7
4.5 TRANSFER GROUP COMPANIES..............................................7
4.6 FINANCIAL STATEMENTS; NORTHERN BORDER SEC REPORTS.....................9
4.7 NO UNDISCLOSED LIABILITIES............................................9
4.8 ABSENCE OF CERTAIN DEVELOPMENTS......................................10
4.9 TITLE TO PROPERTIES..................................................11
4.10 INTANGIBLE PROPERTY..................................................11
4.11 MATERIAL CONTRACTS...................................................11
4.12 FIRM AND INTERRUPTIBLE TRANSPORTATION CONTRACTS......................13
4.13 EMPLOYEE BENEFITS....................................................14
4.14 TAXES................................................................15
4.15 LABOR................................................................16
4.16 LITIGATION...........................................................16
4.17 COMPLIANCE WITH LAWS; PERMITS........................................17
4.18 ENVIRONMENTAL MATTERS................................................17
4.19 INSURANCE............................................................18
4.20 FINANCIAL ADVISORS...................................................18
4.21 NO KNOWLEDGE OF BREACH...............................................18
4.22 LIMITATION OF REPRESENTATIONS AND WARRANTIES.........................18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER........................19
5.1 ORGANIZATION AND GOOD STANDING.......................................19
5.2 AUTHORIZATION OF AGREEMENT...........................................19
5.3 NO VIOLATION; CONSENTS...............................................20
5.4 LITIGATION...........................................................20
5.5 INVESTMENT INTENTION.................................................20
5.6 FINANCIAL CAPABILITY.................................................21
5.7 FINANCIAL ADVISORS. EXCEPT AS SET FORTH ON SCHEDULE 5.7, N..........21
ARTICLE VI COVENANTS.........................................................21
6.1 ACCESS TO INFORMATION................................................21
6.2 CONDUCT OF THE BUSINESS PENDING THE CLOSING..........................22
6.3 APPROPRIATE ACTION; FILINGS..........................................25
6.4 PRESERVATION OF RECORDS; COOPERATION.................................27
6.5 CONFIDENTIALITY......................................................28
6.6 PUBLIC ANNOUNCEMENTS.................................................28
6.7 DIRECTORS' AND OFFICERS' INDEMNIFICATION.............................28
6.8 FURTHER ASSURANCES...................................................29
6.9 FINANCING............................................................29
6.10 PAYMENT OF PRO RATA DISTRIBUTIONS....................................29
6.11 GUARANTEES...........................................................30
6.12 SEVERANCE AGREEMENTS, PLANS AND POLICIES.............................30
6.13 TRANSITION SERVICES..................................................31
6.14 PURCHASER EMPLOYEE BENEFIT PLANS.....................................32
6.15 FINANCIAL INFORMATION................................................32
ARTICLE VII CONDITIONS TO CLOSING............................................33
7.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY....................33
7.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.....................33
7.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER........................34
ARTICLE VIII DOCUMENTS TO BE DELIVERED.......................................35
8.1 DOCUMENTS TO BE DELIVERED BY SELLER.................................35
8.2 DOCUMENTS TO BE DELIVERED BY PURCHASER..............................35
ARTICLE IX TAX AND ERISA MATTERS.............................................36
9.1 TAX SHARING AGREEMENTS..............................................36
9.2 PREPARATION OF TAX RETURNS; PAYMENT OF TAXES........................36
9.3 CERTAIN OTHER TAXES.................................................39
9.4 TAX AUDITS..........................................................40
9.5 DISPUTE RESOLUTION..................................................40
9.6 REFUNDS AND TAX BENEFITS............................................41
9.7 CERTAIN ELECTIONS...................................................41
9.8 FIRPTA..............................................................42
9.9 INTENTIONALLY OMITTED...............................................42
9.10 TAX INDEMNIFICATION.................................................42
9.11 EMPLOYEE BENEFITS INDEMNIFICATION...................................43
9.12 COORDINATION OF PROVISIONS..........................................44
ARTICLE X INDEMNIFICATION....................................................44
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS..44
10.2 SELLER INDEMNIFICATION..............................................44
10.3 PURCHASER INDEMNIFICATION...........................................46
10.4 PROCEDURES..........................................................47
10.5 TAX TREATMENT OF INDEMNITY PAYMENTS.................................49
10.6 REMEDIES............................................................49
ARTICLE XI DEFINITIONS.......................................................49
11.1 CERTAIN DEFINITIONS.................................................49
11.2 OTHER TERMS.........................................................60
11.3 KNOWLEDGE QUALIFIERS................................................60
11.4 INTERPRETATION......................................................60
ARTICLE XII MISCELLANEOUS....................................................61
12.1 EXPENSES............................................................61
12.2 INCORPORATION OF EXHIBITS AND SCHEDULES.............................61
12.3 SUBMISSION TO JURISDICTION: CONSENT TO SERVICE OF PROCESS...........61
12.4 WAIVER OF JURY TRIAL................................................61
12.5 NO CONSEQUENTIAL OR PUNITIVE DAMAGES................................62
12.6 NO RIGHT OF SET-OFF.................................................62
12.7 TIME OF ESSENCE.....................................................62
12.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS............................62
12.9 GOVERNING LAW.......................................................63
12.10 TABLE OF CONTENTS AND HEADINGS......................................63
12.11 NOTICES.............................................................63
12.12 SEVERABILITY........................................................64
12.13 BINDING EFFECT; ASSIGNMENT..........................................64
12.14 COUNTERPARTS........................................................65
12.15 SPECIFIC PERFORMANCE................................................65
