EXHIBIT 10.34
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into
this 17th day of November, 2003, by and among Xxxx Alaska Pipeline Company, LLC,
an Alaska limited liability company ("Buyer"), Xxxxxxxx Energy Services, LLC, a
Delaware limited liability company ("Seller"), and The Xxxxxxxx Companies, Inc.,
a Delaware corporation ("Xxxxxxxx Guarantor").
RECITALS
A. Seller owns all of the outstanding membership interests (the "WAPCO
Interests") in Xxxxxxxx Alaska Pipeline Company, L.L.C., a Delaware limited
liability company ("WAPCO"), and WAPCO owns: (i) an undivided 3.0845% interest
in the Trans Alaska Pipeline System ("TAPS") and in all TAPS inventory (not
including line fill) attributable to the 3.0845% undivided interest in TAPS and
(ii) 308 shares of Alyeska Pipeline Service Company ("Alyeska") ((i) and (ii)
together, the "TAPS Interests");
B. WAPCO is a party to the Trans Alaska Pipeline System Agreement dated
August 27, 1970 (as amended from time to time) (the "TAPS Agreement");
C. TAPS consists of two components: (a) the "Pipeline" component,
consisting of all TAPS real and personal property of every nature and kind,
other than the "Terminal Tankage" component, and (b) the "Terminal Tankage"
component, consisting of all TAPS real and personal property of every nature and
kind at Valdez, Alaska which real and personal property is associated with the
holding of crude petroleum pending its delivery out of TAPS. The TAPS property
includes, without limitation, petroleum tanks, tank farm manifolds, tank vent
lines, vapor recovery system, power generation facilities and other related
facilities, equipment and appurtenances;
D. As a condition to entering into this Agreement, (i) an Affiliate of
Buyer and an Affiliate of Seller have entered into that certain Asset Sale and
Purchase Agreement of even date herewith by and among Xxxxxxxx Alaska Petroleum,
Inc., as seller, The Xxxxxxxx Companies, Inc., as guarantor, and Flint Hills
Resources, LLC, as buyer, relating to the acquisition of the North Pole refinery
(the "Refinery ASPA") and (ii) Holiday Alaska, Inc. and an Affiliate of Seller
have entered into that certain Asset Sale and Purchase Agreement of even date
herewith by and among Xxxxxxxx Express, Inc., as seller, The Xxxxxxxx Companies,
Inc., as seller's guarantor, Holiday Alaska, Inc., as buyer, and Holiday
Stationstores, Inc., as buyer's guarantor, relating to the acquisition of
certain convenience stores located in Alaska (the "C Stores ASPA"); and
E. Buyer desires to purchase and acquire all of the WAPCO Interests
from Seller and Seller desires to sell and assign the WAPCO Interests to Buyer,
all on the terms and conditions hereinafter set forth.
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IN CONSIDERATION of the foregoing and of the mutual covenants and
agreements set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereinafter
set forth, at the Effective Time (as hereinafter defined):
(a) Seller shall sell, grant, convey, assign, transfer and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, all
right, title and interest in and to the WAPCO Interests, free and clear
of all Liens and Indebtedness, other than the Liens set forth on
Schedule 1(a) (the "WAPCO Permitted Liens").
(b) Buyer agrees to take the WAPCO Interests subject to the
WAPCO Contracts, including the Amended and Restated Agreement for the
Operation and Maintenance of the Trans Alaska Pipeline System, as
amended, (the "TAPS Operation Agreement") and the TAPS Agreement.
2. Purchase Price; Closing Payment; Adjustment to Purchase Price.
(a) Purchase Price; Closing Payment. The purchase price for
the WAPCO Interests shall be the sum of (i) One Hundred Million Dollars
and No Cents ($100,000,000), plus or minus (ii) the Final Direct Net
Working Capital, as calculated in accordance with Sections 2(c) and
2(d) of this Agreement, plus (iii) the value of the Valdez Inventory
Transportation Revenue, as calculated in accordance with Section 2(e)
of this Agreement, plus or minus (iv) an adjustment (if any) pursuant
to Section 2(f) of this Agreement, plus or minus (v) an adjustment (if
necessary) for delayed closing pursuant to Section 2(g) of this
Agreement (items (i) through (v) together, the "Purchase Price"). The
amount to be paid to Seller by Buyer at Closing shall be One Hundred
Million Dollars and No Cents ($100,000,000), plus the Estimated Direct
Net Working Capital as calculated in accordance with Section 2(b) of
this Agreement plus the Valdez Inventory Transportation Revenue (the
"Closing Payment").
(b) Estimated Direct Net Working Capital. Not later than five
(5) days prior to the anticipated Closing Date, Seller shall prepare
and deliver to Buyer: (i) a certificate setting forth Seller's good
faith estimate of the Direct Net Working Capital in accordance with the
form as set forth on Schedule 2(b) (the "Estimated Direct Net Working
Capital"), which form shall be used solely to prepare such estimate,
and not for any other calculation and (ii) documentation supporting the
calculation of the Estimated Direct Net Working Capital. This estimate
shall be based on the WAPCO month end balance sheet for the most recent
full calendar month prior to Closing.
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(c) Direct Net Working Capital.
(i) As promptly as practicable, but no later than 45
days, after the Effective Time, Buyer will cause to be
prepared and delivered to Seller: (A) a certificate and
statement of the Direct Net Working Capital, which shall be
calculated in accordance with GAAP applied on a consistent
basis with those used in the preparation of the Estimated
Direct Net Working Capital as described in Section 2(b) above
and (B) account information for a bank account of Buyer.
(ii) If Seller agrees with Buyer's calculation of the
Direct Net Working Capital delivered pursuant to Section
2(c)(i), then such Direct Net Working Capital shall be deemed
the "Final Direct Net Working Capital." If Seller disagrees
with Buyer's calculation of the Direct Net Working Capital
delivered pursuant to Section 2(c)(i) and Seller elects to
take action with respect to such disagreement, Seller must,
within twenty (20) days after delivery of the certificate and
statement referred to in Section 2(c)(i), deliver a notice to
Buyer disagreeing with such calculation and setting forth
Seller's calculation of such amount. Any such notice of
disagreement shall specify those items or amounts as to which
Seller disagrees and shall set forth in reasonable detail the
reasons for such disagreement, and Seller shall be deemed to
have agreed with all other items and amounts contained in the
calculation of the Direct Net Working Capital delivered
pursuant to Section 2(c)(i).
(iii) If a notice of disagreement shall be duly
delivered pursuant to Section 2(c)(ii), Buyer and Seller
shall, during the ten (10) days following such delivery, use
their good faith efforts to reach agreement on the disputed
items or amounts in order to determine, as may be required,
the amount of the Direct Net Working Capital, which amount
shall not be less than the amount thereof shown in Buyer's
calculation delivered pursuant to Section 2(c)(i) nor more
than the amount thereof shown in Seller's notice delivered
pursuant to Section 2(c)(ii). If, during such period, Buyer
and Seller reach an agreement as to the amount of the Direct
Net Working Capital then such amount shall be deemed the
"Final Direct Net Working Capital." If Buyer and Seller are
unable to reach agreement within such period, they shall
thereafter cause KPMG LLP promptly to review this Agreement
and the disputed items or amounts for the purpose of
calculating the Final Direct Net Working Capital. In making
such calculation, KPMG LLP shall consider only those items or
amounts in Buyer's calculation of the Direct Net Working
Capital as to which Seller has disagreed and shall make its
decision in accordance with the terms of this Agreement and
GAAP as consistently applied by Seller in the preparation of
the Balance Sheet. KPMG LLP shall deliver to Buyer and Seller,
as promptly as practicable, a report setting forth its
judgment as to the correct calculations of the items or
amounts in dispute and such report shall be considered the
"Final Direct Net Working Capital." Such Final Direct Net
Working Capital shall be final and binding upon Buyer, Seller
and Xxxxxxxx Guarantor and judgment may be entered upon the
determination of such independent accountants in any court
having jurisdiction over the party against
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which such determination is to be enforced. The cost of such
review and report shall be borne (A) by Buyer if the
difference between the Final Direct Net Working Capital and
Buyer's calculation of the Direct Net Working Capital
delivered pursuant to Section 2(c)(i) is greater than the
difference between the Final Direct Net Working Capital and
Seller's calculation of the Direct Net Working Capital
delivered pursuant to Section 2(c)(ii), (B) by Seller if the
first such difference is less than the second such difference
and (C) otherwise equally by Seller and Buyer.
(iv) Seller and Buyer shall, and shall cause their
respective independent accountants, WAPCO and each Subsidiary
(to the extent controlled) to, cooperate and assist in the
calculation of the Final Direct Net Working Capital, including
the making available to the extent necessary of books,
records, reports, ledgers, data, systems, work papers and
personnel.
(d) Post Effective Time Adjustment Relating to Direct Net
Working Capital.
(i) If Seller has delivered a notice of disagreement
in accordance with Section 2(c)(ii) and the amount of the
Direct Net Working Capital, as calculated by Seller, is less
than the amount of the Estimated Direct Net Working Capital,
then Seller shall pay to Buyer, as an adjustment to the
Purchase Price, the amount of such difference (the
"Preliminary Effective Time Deficit") with Interest as
provided in Section 2(d)(v) in immediately available funds by
wire transfer to an account of Buyer as specified by Buyer
pursuant to Section 2(c)(i) within three (3) Business Days
after Seller has delivered its notice of disagreement.
(ii) If Seller has delivered a notice of disagreement
in accordance with Section 2(c)(ii) and the amount of the
Direct Net Working Capital, as calculated by Buyer, is greater
than the amount of the Estimated Direct Net Working Capital,
then Buyer shall pay to Seller, as an adjustment to the
Purchase Price, the amount of such difference (the
"Preliminary Effective Time Surplus") with Interest as
provided in Section 2(d)(v) in immediately available funds by
wire transfer to an account of Seller as specified by Seller
pursuant to Section 11(c) within three (3) Business Days after
Seller has delivered its notice of disagreement.
(iii) If the Final Direct Net Working Capital is less
than the Estimated Direct Net Working Capital (such
difference, the "Effective Time Deficit"), then Seller shall
pay to Buyer, as an adjustment to the Purchase Price, the
amount of such Effective Time Deficit with Interest as
provided in Section 2(d)(v), net of any prior payments made
pursuant to Section 2(d)(i), in immediately available funds by
wire transfer to an account of Buyer as specified by Buyer
pursuant to Section 2(c)(i) within three (3) Business Days
after any Effective Time Deficit has been finally determined.
(iv) If the Final Direct Net Working Capital exceeds
the Estimated Direct Net Working Capital (such excess, the
"Effective Time Surplus"), then Buyer shall
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pay to Seller, as an adjustment to the Purchase Price, the
amount of such Effective Time Surplus with Interest as
provided in Section 2(d)(v), net of any prior payments made
pursuant to Section 2(d)(ii), in immediately available funds
by wire transfer to an account of Seller as specified by
Seller pursuant to Section 11(c) within three (3) Business
Days after any Effective Time Surplus has been finally
determined.
(v) The amount of any payment to be made pursuant to
this Section 2(d) shall bear Interest from and including the
day immediately following the Effective Time.
(e) Valdez Inventory Transportation Revenue. Buyer shall pay
Seller the value of the net transportation revenue in connection with
any shipper barrels held in WAPCO inventory at the Xxxxxx Terminal as
of the Effective Time (the "Valdez Inventory Transportation Revenue").
The value of the Valdez Inventory Transportation Revenue to be paid by
Buyer to Seller shall equal the WAPCO interstate tariff in effect at
the Effective Time multiplied times the number of shipper barrels in
WAPCO inventory at the Xxxxxx Terminal minus a per barrel operating
cost of $1.87, which reflects the Alyeska fixed and variable operating
costs applicable to such shipper barrels. The Parties shall rely on
Alyeska Report Number ALOA P006-1 to determine the number of shipper
barrels in WAPCO inventory at the Xxxxxx Terminal at the Effective
Time.
(f) Stockholder's Equity Purchase Price Adjustment.
(i) The Base Stockholder's Equity, as calculated at
June 30, 2003 and set forth on Schedule 2(f), is equal to zero
(the "Base Stockholder's Equity").
(ii) Buyer will, as promptly as practicable, but no
later than 45 days after the Effective Time, cause to be
prepared and delivered to Seller the Effective Time Balance
Sheet, together with a certificate based on such Effective
Time Balance Sheet setting forth Buyer's calculation of the
Stockholder's Equity.
(iii) If Seller agrees with Buyer's calculation of
the Stockholder's Equity delivered pursuant to Section
2(f)(ii), then such Stockholder's Equity shall be deemed the
"Final Stockholder's Equity." If Seller disagrees with Buyer's
calculation of the Stockholder's Equity delivered pursuant to
Section 2(f)(ii) and Seller elects to take action with respect
to such disagreement, then Seller must within twenty (20) days
deliver a notice to Buyer disagreeing with such calculation
and setting forth Seller's calculation of such amount. Any
such notice of disagreement shall specify those items or
amounts as to which Seller disagrees and shall set forth in
reasonable detail the reasons for such disagreement, and
Seller shall be deemed to have agreed with all other items and
amounts contained in the Effective Time Balance Sheet and the
calculation of the Stockholder's Equity delivered pursuant to
Section 2(f)(ii).
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(iv) If a notice of disagreement shall be duly
delivered pursuant to Section 2(f)(iii), then Buyer and Seller
shall, during the ten (10) days following such delivery, use
their good faith efforts to reach agreement on the disputed
items or amounts in order to determine the amount of the
Stockholder's Equity, which amount shall not be less than the
amount thereof shown in Buyer's calculation delivered pursuant
to Section 2(f)(ii) nor more than the amount thereof shown in
Seller's notice delivered pursuant to Section 2(f)(iii). If
during such period, Buyer and Seller reach agreement as to the
amount of the Stockholder's Equity, then such amount shall be
deemed the "Final Stockholder's Equity." If Buyer and Seller
are unable to reach agreement within such time period, then
they will promptly retain KPMG LLP to review this Agreement
and the disputed items or amounts for the purpose of
calculating the Final Stockholder's Equity. In making such
calculation, KPMG LLP shall consider only those ITEMS or
amounts in Buyer's calculation of the Stockholder's Equity as
to which Seller has disagreed and shall make its decision in
accordance with the terms of this Agreement and GAAP as
consistently applied by Seller in the preparation of the
Balance Sheet. KPMG LLP shall deliver to Buyer and Seller, as
promptly as practicable, a report setting forth its judgment
as to the correct calculations of the items or amounts in
dispute and the amount set forth in such report shall be
considered the "Final Stockholder's Equity." Such Final
Stockholder's Equity shall be final and binding upon Buyer,
Seller and Xxxxxxxx Guarantor. The cost of such review and
report shall be borne (A) by Buyer if the difference between
the Final Stockholder's Equity and Buyer's calculation of the
Stockholder's Equity delivered pursuant to Section 2(f)(ii) is
greater than the difference between the Final Stockholder's
Equity and Seller's calculation of the Stockholder's Equity
delivered pursuant to Section 2(f)(iii), (B) by Seller if the
first such difference is less than the second such difference
and (C) otherwise equally by Seller and Buyer.
(v) Seller and Buyer shall, and shall cause their
respective independent accountants, WAPCO and each Subsidiary
(to the extent controlled), to cooperate and assist in the
calculation of the Final Stockholder's Equity, including the
making available to the extent necessary of books, records,
reports, ledgers, data, systems, work papers and personnel.
(vi) If the Final Stockholder's Equity is less than
the Base Stockholder's Equity, then Seller shall pay such
amount to Buyer, as an adjustment to the Purchase Price, in
the manner and with Interest as provided in Section 2(f)(vii).
If the Final Stockholder's Equity exceeds the Base
Stockholder's Equity, then Buyer shall pay such amount to
Seller, as an adjustment to the Purchase Price, in the manner
and with Interest as provided in Section 2(f)(vii).
(vii) Any payment pursuant to this Section 2(f) shall
be made within three (3) Business Days after the Final
Stockholder's Equity has been determined, in immediately
available funds by wire transfer to an account of Buyer or
Seller, as specified by Buyer pursuant to Section 2(c)(i), or
Seller pursuant to 11(c), as the case
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may be. The amount of any payment to be made pursuant to this
Section 2(f) shall bear Interest from and including the day
immediately following the Effective Time.
(g) Delayed Closing Potential Adjustment to Purchase Price. In
the event that the transactions contemplated herein do not close within
106 days after the execution hereof, the Purchase Price shall be
adjusted by (i) adding to the Purchase Price an amount equal to the
Purchase Price times the Interest Rate divided by 365 and then
multiplied by the number of days from the 106th day after the date
hereof until the day immediately following the Effective Time, and (ii)
subtracting from such amount the Net Cash Flow realized during the
period from the 106th day after the date hereof to the Effective Time.
Buyer will be permitted to review Seller's calculation of any
adjustment pursuant to this Section 2(g) in connection with its review
of the Stockholder's Equity to confirm the accuracy thereof, and if
Buyer and Seller are not able to reach agreement on these amounts
pursuant to the procedures set forth above, then KPMG LLP shall
determine such amounts and such determination shall be final and
binding on Buyer, Seller and Xxxxxxxx Guarantor. In making any
determination pursuant to this Section 2(g), KPMG LLP shall consider
only those items or amounts in Seller's calculation to which Buyer has
disagreed and KPMG LLP shall make its decision in accordance with the
terms of this Agreement and GAAP as consistently applied by Seller
during its ownership of the WAPCO Interests.
3. Revenues and Expenses. To the extent any of the following have not
been accounted for pursuant to Section 2 or Section 4 of this Agreement:
(a) Seller shall be: (i) entitled to all operating revenues
(and related accounts receivable) realized by or attributable to WAPCO,
and (ii) responsible for the payment of all liabilities, costs and
expenses (and related accounts payable), including the payment of Taxes
when due and owing, incurred by or attributable to WAPCO, in each case
to the extent the foregoing are earned or incurred prior to the
Effective Time. WAPCO shall, either before or after the Effective Time,
make such distributions and assignments as may be necessary or
appropriate to give real economic effect to allocations of operating
revenues and accounts receivable, net of the allocation of liabilities,
costs and expenses contemplated by the first sentence of this Section
3(a). Buyer shall be: (y) entitled to all operating revenues (and
related accounts receivable) realized by or attributable to WAPCO, and
(z) responsible for the payment of all liabilities, costs and expenses
(and related accounts payable), including the payment of Taxes,
incurred by or attributable to WAPCO, in each case to the extent the
foregoing are earned or incurred after the Effective Time.
(b) Notwithstanding the generality of Section 3(a), the
following provisions shall be applicable to expenses relating to TAPS
settlement methodology adjustments. In accordance with Section II-2
(f)(ii) of the Tariff Settlement Methodology ("TSM") Agreement, Alyeska
will reallocate actual operating costs among all TAPS Owners on a
barrel-mile basis and distribute during the first quarter of a year any
overpayments or underpayments collected for the prior year to the
appropriate carrier. For the time period from January 1, 2003 through
the Effective Time, Seller will be responsible for any underpayments
due to Alyeska, and Buyer will pay to Seller the disbursement collected
for
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any overpayment for the same time period. The amounts due to or payable
by Seller shall be determined as the difference between WAPCO's
percentage barrel-mile share of the total TAPS barrel-mile throughputs
and WAPCO's composite TAPS ownership percentage of 3.0845% in the
Pipeline and Terminal Tankage for the time period of January 1, 2003 to
the Effective Time, times the total TSM costs and allowances for the
year as defined by the above TSM Section II-2 (f)(ii).
(c) Any payments to be made to Seller by Buyer in connection
with Section 3 shall be made within ten (10) days of Buyer's receipt of
the revenues described therein. Except as otherwise provided in Section
3(b), to the extent that a Party receives any funds to which the other
Party is entitled, the Party receiving such funds shall deliver the
funds to the other Party within five (5) Business Days after actual
receipt of such funds. If any Party pays any cost or expense (or
related account payable) that is properly borne by the other Party, the
Party responsible for such cost or expense (or related account payable)
shall promptly reimburse the Party who made such payment. The
obligations of the parties under this Section 3(c) shall be performed
without any right of setoff, except as specifically described in
Section 3(b).
4. Post Effective Time Tariff Adjustments and Indemnities.
(a) Seller Obligations. Seller, for itself, its Affiliates,
successors and assigns, shall pay, indemnify, and hold harmless Buyer,
its Affiliates, successors and assigns, from and against any and all
liability for refund payments arising out of the matter denoted as
Docket Number P-03-4, currently pending before the Regulatory
Commission of Alaska, or any other retroactive tariff reduction
payments required by any final, non-appealable ruling of any regulatory
or judicial authorities in connection with amounts collected for the
tariff rates in effect with respect to WAPCO's TAPS Interest for the
period beginning January 1, 2003 and ending at the Effective Time. This
obligation shall not be subject to the Minimum Indemnifiable Amount or
WAPCO Threshold or included in the calculation of the maximum amount of
indemnifiable Damages under Section 15 of this Agreement.
(b) Buyer Obligations. Buyer, for itself, its Affiliates,
successors and assigns, shall pay, indemnify and hold harmless Seller
its Affiliates, successors and assigns, for any under collections by
Seller, including the amounts held in escrow pursuant to the Interim
Temporary Rates, as determined by any final, non-appealable ruling of
any regulatory or judicial authorities in connection with the tariff
rates in effect with respect to WAPCO's TAPS Interest for the period
beginning January 1, 2003 through the Effective Time, together with
interest earned on such escrowed amounts; provided, however, Buyer
shall only be obligated to the extent it has actually collected any
such amounts. The obligations of this Section 4(b) shall not be subject
to the Minimum Indemnifiable Amount or WAPCO Threshold or included in
the calculation of the maximum amount of indemnifiable Damages under
Section 15 of this Agreement.
5. Seller's Representations and Warranties. Seller represents and
warrants to Buyer as of the date hereof, as of the Closing Date and as of the
Effective Time as follows:
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(a) Organization and Power. Seller and WAPCO are limited
liability companies, duly organized, validly existing, and in good
standing under the laws of the State of Delaware. Each of Seller and
WAPCO has all requisite power and authority to own, lease and operate
its properties and assets and to conduct its business as now conducted.
A true, complete and correct copy of the limited liability company
agreement of each of Seller and WAPCO, as in effect on the date hereof,
including all amendments thereto, has heretofore been delivered to
Buyer.
(b) Membership Interests of WAPCO. Except as disclosed on
Schedule 5(b), Seller owns all right, title and interest in and to the
WAPCO Interests free and clear of all Liens, except for the WAPCO
Permitted Liens, and upon delivery of the WAPCO Interests by Seller and
payment therefor by Buyer at the Closing, good title to the WAPCO
Interests, free and clear of all Liens (other than the WAPCO Permitted
Liens and those that arise by action or with respect to Buyer) will
pass to Buyer. There are no membership interests or other equity
interests in WAPCO outstanding, other than the WAPCO Interests. There
are no outstanding options, warrants, calls, preemptive or other
rights, commitments or agreements of any kind to which Seller, WAPCO or
their respective Affiliates is a party or by which Seller, WAPCO or
their respective Affiliates is bound relating to the sale, issuance, or
voting of, or the granting of rights to acquire, all or a portion of
the membership interests of WAPCO or any securities convertible or
exchangeable into or evidencing the right to purchase all or a portion
of the membership interests or other equity interests in WAPCO, or
obligating Seller, WAPCO, or their respective Affiliates to grant,
extend or enter into any such option, warrant, call, right, commitment
or agreement. There are no outstanding contractual obligations of any
of Seller, WAPCO or their respective Affiliates to repurchase, redeem
or otherwise acquire the membership interests of WAPCO. There are no
voting trusts or other agreements or understandings to which Seller,
WAPCO, or their respective Affiliates is a party with respect to voting
of the membership interests of WAPCO. WAPCO owns all right, title and
interest in and to the TAPS Interests free and clear of all Liens,
other than the TAPS Permitted Liens.
(c) Authorization. Seller has the requisite power and
authority to execute and deliver, and has taken all requisite action
required for the execution and delivery of this Agreement and the other
agreements, documents and instruments to be executed and delivered by
Seller in connection with this Agreement and the consummation of the
transactions contemplated hereby and thereby, and no other action is
necessary by Seller, its board of directors, or its members, to
authorize the execution and delivery by Seller of this Agreement and
such other agreements, documents and instruments and the consummation
of the transactions contemplated hereby and thereby. This Agreement has
been duly executed and delivered by Seller and constitutes, and when
executed and delivered, each of the other agreements, documents and
instruments to be executed and delivered by Seller in connection with
this Agreement will constitute, the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency and other laws affecting the rights of creditors
and except in respect of equitable remedies.
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(d) Governmental Consents. The execution, delivery and
performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of,
or filing with, any governmental body, agency or official, other than
compliance with (i) any applicable requirements of the HSR Act, (ii)
any applicable requirements of the 1934 Act, (iii) any applicable
requirements of the Federal Energy Regulatory Commission, (iv) any
applicable requirements of the Regulatory Commission of Alaska, (v) any
applicable requirements of the Secretary of the Interior, (vi) any
applicable requirements of the Alaska Department of Natural Resources,
and (vii) the matters disclosed on Schedule 5(d).
(e) No Consent Required; Noncontravention. Subject to
compliance by Seller with the requirements in the TAPS Agreement
regarding the preferential purchase right of the equity owners of TAPS
with respect to WAPCO's equity interest in TAPS or as otherwise
disclosed on Schedule 5(e), the execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions
contemplated hereby do not and will not, directly or indirectly, with
or without notice or lapse of time: (i) result in a violation of any
provision of the governing documents of Seller, WAPCO or, to the
Knowledge of Seller, Alyeska; (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree (assuming compliance
with the matters referred to in Section 5(d)); (iii) require any
consent, approval or other action by any Person under, or constitute a
default under any provision of any agreement or other instrument
binding upon Seller, WAPCO or, to the knowledge of Seller, Alyeska;
(iv) give rise to any right of termination, cancellation or
acceleration of any right or obligation of Seller, WAPCO or, to the
Knowledge of Seller, Alyeska or to a loss of any benefit to which
Seller, WAPCO or, to the Knowledge of Seller, Alyeska is entitled under
any provision of any agreement or other instrument binding upon Seller,
WAPCO or Alyeska; (v) result in the creation or imposition of any Lien
on the WAPCO Interests, other than the WAPCO Permitted Liens or, to the
Knowledge of Seller, the TAPS Interests; or (vi) result in a violation
of, or give any Governmental Authority or other person the right to
challenge the transactions contemplated hereby or to exercise any
remedy or obtain any relief under, any Legal Requirement to which
Seller, or any of the WAPCO Interests or, to Seller's Knowledge, the
TAPS Interests, may be subject in a manner that would adversely affect
Seller's ability to perform its obligations under this Agreement.
(f) Operations of WAPCO; No Subsidiaries. Seller formed WAPCO
solely for the purpose of owning the TAPS Interests and since its
formation WAPCO has not engaged in any other business activities other
than owning the TAPS Interests. WAPCO does not have any subsidiaries,
and except for the TAPS Interests, WAPCO does not own any securities or
other ownership interests of any entity.
(g) Financial Statements. The unaudited balance sheet as of
December 31, 2002 and the related unaudited statements of income and
cash flows for the year ended December 31, 2002 and the unaudited
interim balance sheet as of June 30, 2003 and the related unaudited
interim statements of income and cash flows for the six months ended
June 30, 2003 of WAPCO fairly present, in conformity with GAAP applied
on a consistent basis, the
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financial position of WAPCO as of the dates thereof and its results of
operations and cash flows for the periods then ended (subject to normal
adjustments in the case of any unaudited interim financial statements).
Schedule 5(g) attached hereto includes: WAPCO's unaudited interim
balance sheet as of June 30, 2003 and the related unaudited interim
statements of income and cash flows for the six months ended June 30,
2003 of WAPCO. Certain adjustments have been made to the June 30, 2003
WAPCO unaudited interim balance sheet. These adjustments appear on the
Balance Sheet, which is also included in Schedule 5(g).
(h) Absence of Certain Changes. Except as set forth in
Schedule 5(h) or as specifically contemplated by this Agreement, since
March 31, 2003, WAPCO's business has been operated only in the Ordinary
Course of Business, and there has not been any of the following:
(i) any event, occurrence, development or state of
circumstances or facts which individually or in the aggregate
has had or could reasonably be expected to have a Material
Adverse Effect on WAPCO;
(ii) other than contemplated by Section 3(a) above,
any declaration, setting aside or payment of any dividend or
other distribution with respect to any membership interests of
WAPCO, or any repurchase, redemption or other acquisition by
WAPCO of any outstanding membership interests of WAPCO;
(iii) any amendment of any material term of the
membership interests of WAPCO;
(iv) any incurrence, assumption or guarantee by WAPCO
of any Indebtedness;
(v) to Seller's Knowledge, any material loss, damage,
destruction, condemnation or other casualty (whether or not
covered by insurance) affecting the TAPS Interests;
(vi) any change in any of the accounting principles
followed by WAPCO;
(vii) any making of any loan, advance or capital
contributions to or investment in any Person, other than
loans, advances or capital contributions to or investments in
Alyeska or TAPS made pursuant to and in accordance with the
WAPCO Contracts;
(viii) any transaction or commitment made, or any
contract or agreement entered into, by WAPCO relating to its
assets or business (including the acquisition or disposition
of any assets) or any relinquishment by WAPCO of any contract
or other right, in either case, material to WAPCO, other than
transactions and commitments contemplated by this Agreement;
11
(ix) any (A) employment, compensation, consulting,
severance, retirement or other similar agreement entered into
with any Person, including any director or officer of WAPCO
(or any amendment to any such existing agreement), (B) grant
of any severance or termination pay to any Person, including
any director or officer of WAPCO, or (C) change in
compensation or other benefits payable to any Person,
including any director or officer of WAPCO pursuant to any
severance or retirement plans or policies thereof;
(x) any capital expenditure, or commitment for a
capital expenditure, for additions or improvements to
property, plant and equipment related to TAPS brought to the
TAPS owners' committee, other than in the Ordinary Course of
Business;
(xi) a grant of, or the existence of, any Lien on any
of the WAPCO Interests, other than the WAPCO Permitted Liens;
or
(xii) an agreement, whether in writing or otherwise,
to do any of the foregoing.
(i) No Undisclosed Material Liabilities. There are no
liabilities of WAPCO of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:
(i) liabilities provided for in the Balance Sheet or
disclosed in the notes thereto;
(ii) liabilities disclosed in Schedule 5(i); and
(iii) other undisclosed liabilities which,
individually or in the aggregate, are not material to WAPCO.
(j) Litigation.
(i) There is no pending Action or other Proceeding
before any court, arbitrator or any Governmental Authority by,
against or affecting Seller or WAPCO or any of their
respective assets that challenges the validity or
enforceability of this Agreement or any other document,
instrument or agreement to be executed and delivered by Seller
in connection with the transactions contemplated hereby, or
that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, the transactions
contemplated hereby. No such proceeding has been Threatened
and, to the Knowledge of Seller, no event has occurred or
circumstance exists that may give rise to or serve as a basis
for the commencement of any such proceeding.
(ii) Except as set forth in Schedule 5(j)(ii), no
Action or Proceeding is pending or Threatened against WAPCO
and, to Seller's Knowledge, there are not any
12
matters which are reasonably likely to result in any such
Action or Proceeding against WAPCO. WAPCO has not been served
any notice of an Action or Proceeding relating to its TAPS
Interests, except as set forth on Schedule 5(j)(ii) or
Schedule 5(y)(iv).
(k) Intercompany Accounts. Schedule 5(k) contains a complete
list of all intercompany balances as of June 30, 2003 between WAPCO and
its Affiliates. Since June 30, 2003, there has not been any accrual of
liability by WAPCO to any of its Affiliates or other transaction
between WAPCO and any of its Affiliates, except with respect to the
period prior to the date of this Agreement, in the Ordinary Course of
Business of WAPCO, and thereafter, as provided in Schedule 5(k).
(l) Material Contracts.
(i) Except for the agreements disclosed in Schedule
5(l) (such agreements, the "WAPCO Contracts"), WAPCO is not
bound by or through any financial or performance guaranties
and is neither a party to nor in contractual privity under:
(A) any material lease (whether of real or
personal property);
(B) any material agreement for the purchase
of materials, supplies, goods, services, equipment or
other assets;
(C) any material agreement providing for the
sale by WAPCO of materials, supplies, goods,
services, equipment or other assets;
(D) any partnership, joint venture or other
similar agreement or arrangement;
(E) any agreement relating to the
acquisition or disposition of any business (whether
by merger, sale of stock, sale of assets or
otherwise);
(F) any agreement relating to Indebtedness
(whether incurred, assumed, guaranteed or secured by
any asset);
(G) any material option, license, franchise
or similar agreement;
(H) any material agency, dealer, sales
representative, marketing or other similar agreement;
(I) any agreement that limits the freedom of
WAPCO to compete in any line of business or with any
Person or in any area or which would so limit the
freedom of WAPCO after the Effective Time;
13
(J) any agreement with (1) Seller or any of
its Affiliates, (2) any Person directly or indirectly
owning, controlling or holding with power to vote, 5%
or more of the outstanding voting securities of
Seller or any of its Affiliates, (3) any Person 5% or
more of whose outstanding voting securities are
directly or indirectly owned, controlled or held with
power to vote by Seller or any of its Affiliates or
(4) any director or officer of Seller or any of its
Affiliates or any "associates" or members of the
"immediate family" (as such terms are respectively
defined in Rules 12b-2 and 16a-1 of the 0000 Xxx) of
any such director or officer;
(K) any agreement with any director or
officer of WAPCO or with any "associates" or members
of the "immediate family" (as such terms are
respectively defined in Rules 12b-2 and 16a-1 of the
0000 Xxx) of any such director or officer; or
(L) any other agreement, commitment,
arrangement or plan not made in the Ordinary Course
of Business that is material to WAPCO.
(ii) Except as set forth on Schedule 5(l), (A) WAPCO,
and to Seller's Knowledge, each other Person that has any
obligation or liability under any WAPCO Contract is in
compliance with all applicable material terms and requirements
of each such WAPCO Contract, (B) no event has occurred or
circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with, or result in a violation
or breach of, or give WAPCO or any other Person, the right to
declare a default under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify, any WAPCO
Contract, (C) there has not been any amendment or modification
to any WAPCO Contracts, and (D) the WAPCO Contracts have not
been assigned in any manner. WAPCO has not given or received
from any other Person any notice or other communication
(whether oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, or default
under, any WAPCO Contract. Each WAPCO Contract is in full
force and effect, and is valid, binding and enforceable in
accordance with its terms. True and complete copies of each
WAPCO Contract have been delivered or made available to Buyer.
(iii) Pursuant to Section 4.03 of that certain
Agreement of Sale and Purchase of an Undivided Interest in
TAPS, dated March 24, 2000, by and among Mobil Alaska Pipeline
Company ("MAPL") and WAPCO, WAPCO maintains an obligation to
collect and timely remit to MAPL monies associated with the
Dismantlement, Removal and Restoration ("DR&R") of TAPS
related to a DR&R indemnity from MAPL. Throughout its
ownership of the TAPS Interests, WAPCO has fulfilled its
obligations with respect to the collection and timely
remittance of the DR&R monies. There exists no claim, pending
or Threatened, by MAPL or the successors or affiliates of
MAPL, that WAPCO's DR&R collection and remittance obligations
are deficient. Further, to the Knowledge of Seller, there
exists no material breach of any of the provisions of the
March 24, 2000, Agreement of Sale
14
and Purchase of an Undivided Interest in TAPS on the part of
either party to that agreement, except as set forth on
Schedule 5(l)(ii).
(m) Finders' Fees. Except with respect to the fee owed to
Xxxxxx Brothers Inc., which fee shall be the sole obligation of, and be
paid by, Seller or its Affiliates (other than WAPCO), there is no
liability, contingent or otherwise, for investment bankers', brokers'
or finders' fees relating to the transactions contemplated by this
Agreement.
(n) Compliance with Laws and Court Orders. Except as set forth
on Schedule 5(n), and except with respect to Environmental Matters
(which is subject of separate representations in Section 5(u)) and
Taxes (which is subject of separate representations in Section 5(v)),
neither WAPCO nor, to the Knowledge of Seller, Alyeska is in violation
of, and since June 30, 2000, neither WAPCO nor, to the Knowledge of
Seller, Alyeska has violated, and neither WAPCO nor, to the Knowledge
of Seller, Alyeska is under investigation with respect to, or has been
Threatened to be charged with or given notice of any violation of, any
applicable law, rule, regulation, judgment, injunction, order or decree
that would have a Material Adverse Effect on WAPCO.
(o) Properties.
(i) WAPCO has good, valid and marketable title to, or
in the case of leased property and assets, has valid leasehold
interests in, all property and assets (whether real, personal,
tangible or intangible) reflected on the Balance Sheet or
acquired after June 30, 2003, except for properties and assets
sold since June 30, 2003 in the Ordinary Course of Business.
None of such property or assets is subject to any Lien, except
the WAPCO Permitted Liens and the TAPS Permitted Liens.
(ii) There are no developments affecting any such
property or assets pending or Threatened, which might
materially detract from the value, materially interfere with
any present use or materially adversely affect the
marketability of any such property or assets.
(iii) All leases of such real property and personal
property are in good standing and are valid, binding and
enforceable in accordance with their respective terms and
there does not exist under any such lease any default or any
event which with notice or lapse of time or both would
constitute a default.
(iv) The property and assets owned or leased by
WAPCO, or which they otherwise have the right to use,
constitute all of the property and assets used or held for use
in connection with the businesses of WAPCO and are adequate to
conduct such businesses as currently conducted.
(p) Intellectual Property.
15
(i) The Intellectual Property listed on Schedule 5(p)
constitutes all the Intellectual Property necessary for, or
used or held for use in, the conduct of the business of WAPCO
during the previous twelve (12) months and as currently
conducted. Except with regards to the Intellectual Property
that is included in the Excluded Items, there exist no
restrictions on the disclosure, use or transfer of the
Intellectual Property and the consummation of the transactions
contemplated by this Agreement will not alter, impair or
extinguish any such Intellectual Property.
(ii) WAPCO has not infringed, misappropriated or
otherwise violated any Intellectual Property of any third
person. There is no Action or Proceeding pending against, or,
to the Knowledge of Seller, Threatened against or affecting,
WAPCO or any present or former officer or director of WAPCO
(A) based upon, or challenging or seeking to deny or restrict,
the rights of WAPCO in any of the Intellectual Property, (B)
alleging that the use of the Intellectual Property or any
services provided, processes used or products manufactured,
used, imported or sold by WAPCO do or may conflict with,
misappropriate, infringe or otherwise violate any intellectual
property of any third party or (C) alleging that WAPCO has
infringed, misappropriated or otherwise violated any
intellectual property of any third party.
(iii) None of the Intellectual Property material to
the operation of the business of WAPCO has been adjudged
invalid or unenforceable in whole or part, and, to the
Knowledge of Seller, all such Intellectual Property is valid
and enforceable.
(q) Insurance Coverage. Schedule 5(q) contains a summary
schedule of all insurance policies and surety bonds relating to the
assets, business, operations, officers or directors of WAPCO. At the
Effective Time, all such insurance policies shall remain with Xxxxxxxx
Guarantor and coverage for WAPCO shall terminate under such insurance
policies. There is no claim by WAPCO pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds or in respect of which
such underwriters have reserved their rights. All premiums payable
under all such policies and bonds have been timely paid and WAPCO has
otherwise complied fully with the terms and conditions of all such
policies and bonds. Such policies of insurance and bonds (or other
policies and bonds providing substantially similar insurance coverage)
have been in effect since July 1, 2000 and remain in full force and
effect. Such policies and bonds are of the type and in amounts
customarily carried by Persons conducting businesses similar to those
of WAPCO. There is not any Threatened termination of, premium increase
with respect to, or material alteration of coverage under, any of such
policies or bonds.
(r) Permits. Schedule 5(r) correctly describes each Permit
together with the name of the Governmental Authority issuing such
Permit. Except as set forth on Schedule 5(r), (i) the Permits are valid
and in full force and effect, (ii) WAPCO is not in default under, and
no condition exists that with notice or lapse of time or both would
constitute a default under, the Permits and (iii) none of the Permits
will be terminated or impaired or become terminable, in
16
whole or in part, as a result of the transactions contemplated hereby.
(s) No Employees. WAPCO does not have and has never had any
employees.
(t) No Employee Benefit Plans. WAPCO has never maintained,
administered or contributed to an "employee benefit plan," as defined
in Section 3(3) of ERISA and neither WAPCO nor any ERISA Affiliate has
any liability under any "employee benefit plan." None of WAPCO, any
ERISA Affiliate and any predecessor thereof sponsors, maintains or
contributes to, or has in the past sponsored, maintained or contributed
to, any employee benefit plan subject to Title IV of ERISA. None of
WAPCO, any ERISA Affiliate of WAPCO and any predecessor thereof
contributes to, or has in the past contributed to, any multiemployer
plan, as defined in Section 3(37) of ERISA.
(u) Environmental Matters. Except as disclosed on Schedule
5(u):
(i) no notice, notification, demand, request for
information, citation, summons or order has been received, no
complaint has been filed, no penalty has been assessed and no
Action is pending or Threatened by any Governmental Authority
or other Person naming WAPCO or, to Seller's Knowledge,
Alyeska and relating to or arising out of any Environmental
Law;
(ii) to the Knowledge of Seller, there are no
liabilities of or relating to WAPCO or Alyeska of any kind
whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or
relating to any Environmental Law, and there are no facts,
conditions, situations or set of circumstances which could
reasonably be expected to result in or be the basis for any
such liability;
(iii) to the Knowledge of Seller, no incinerator,
sump, surface impoundment, lagoon, landfill, septic,
wastewater treatment or other disposal system or underground
storage tank (active or inactive) is or has been present at,
on or under any property now or previously owned, leased or
operated by WAPCO or Alyeska;
(iv) to the Knowledge of Seller, no Hazardous
Substance has been discharged, disposed of, dumped, injected,
pumped, deposited, spilled, leaked, emitted or released at,
on or under any property now or previously owned, leased or
operated by WAPCO or Alyeska;
(v) to the Knowledge of Seller, no property now or
previously owned, leased or operated by WAPCO or Alyeska or
any property to which WAPCO or Alyeska has, directly or
indirectly, transported or arranged for the transportation of
any Hazardous Substances is listed or proposed for listing,
on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar
federal, state or foreign list of sites requiring
investigation or clean-up;
17
(vi) to the Knowledge of Seller, each of WAPCO and
Alyeska is in compliance with all Environmental Laws and has
obtained and is in compliance with all environmental Permits;
such environmental Permits are valid and in full force and
effect and will not be terminated or impaired or become
terminable, in whole or in part, as a result of the
transactions contemplated hereby;
(vii) to the Knowledge of Seller, there has been no
environmental investigation, study, audit, test, review or
other analysis conducted in relation to the current or prior
business of WAPCO or Alyeska or any property or facility now
or previously owned, leased or operated by WAPCO or Alyeska
which has not been delivered to Buyer at least ten days prior
to the date hereof; and
(viii) WAPCO does not own, lease or operate and has
not owned, leased or operated any property or conducted any
operations in any state other than Alaska.
(v) Tax Matters. Except as set forth in Schedule 5(v):
(i) WAPCO has timely filed (or has had filed on its
behalf) all Tax Returns required to be filed that relate in
any way to WAPCO's assets and has timely paid all Taxes due,
whether reflected on such Tax Returns or under any assessment,
as applicable, before the date of this Agreement, and all such
Tax Returns are true, complete, and accurate;
(ii) there is no Action, audit, written claim or
assessment pending or Threatened, with respect to such Tax
Returns or Taxes the non-payment of which could give rise to a
Lien upon, or otherwise could adversely affect, any of WAPCO's
assets or the use thereof or could cause Buyer to incur any
liability or obligation;
(iii) WAPCO has not received written notice of any
assessment of any Taxes;
(iv) there is not in force any waiver of any statute
of limitations in respect to Tax Returns or Taxes, or any
outstanding request for such a waiver;
(v) there is not in force any extension of time for
the assessment or payment of any Taxes or the filing of any
Tax Return;
(vi) there are no Liens with respect to Taxes upon
WAPCO's assets, except for Liens for Taxes not yet due;
(vii) WAPCO has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor,
stockholder, or other third party and all Forms W-2
18
and 1099 required with respect thereto have been properly
completed and timely filed;
(viii) WAPCO is not a party to any Tax allocation or
sharing agreement;
(ix) Seller formed WAPCO as a single member limited
liability company and WAPCO since its formation has been a
single member limited liability company;
(x) WAPCO has not made an election to be treated as a
corporation for federal or state income tax purposes;
(xi) WAPCO has not received any assets pursuant to
any transaction that would be treated as anything other than a
conveyance of assets for cash consideration for United States
federal income tax purposes or other state law purposes;
(xii) WAPCO is not liable for, and has not had
asserted against it, any liability or obligation for the Taxes
of any Person under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign Legal
Requirements), as a transferee or successor, by contract or
otherwise;
(xiii) WAPCO has not distributed the stock of another
Person, nor has WAPCO had its stock distributed by another
Person, in a transaction that was purported or intended to be
governed in whole or in part by Code section 355 or 361; and
(xiv) WAPCO is not a non-resident, alien, foreign
corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and the rules
and regulations promulgated thereunder).
(w) Representations. To Seller's Knowledge, no representation,
warranty or other statement made by Seller to Buyer in this Agreement
or any statement, certificate or schedule furnished to Buyer pursuant
to this Agreement contains any untrue statement of a material fact or
omits to state a material fact that would make the statements contained
therein misleading. Seller has no Knowledge of any fact that has
specific application to Seller that may have a Material Adverse Effect
that has not been set forth in this Agreement.
(x) No Bankruptcy Proceedings. There are no bankruptcy,
reorganization or receivership proceedings pending or planned by
Seller, WAPCO or any of their direct or indirect parents (including
Xxxxxxxx Guarantor). Seller is not entering into this Agreement with
the intent (whether actual or constructive) to hinder, delay, or
defraud its present or future creditors.
(y) Alyeska. To Seller's Knowledge, (i) Alyeska is a
corporation duly organized, validly existing and in good standing under
the law of the State of Delaware; (ii) the authorized capital stock of
Alyeska consists of 10,000 shares of common stock, par value
19
$1.00 per share and all of the outstanding shares of capital stock of
Alyeska have been duly authorized and validly issued and are fully paid
and non-assessable and free of pre-emptive rights; (iii) Schedule
5(y)(iii) contains a copy of the audited balance sheet of Alyeska
(including the notes thereto) included as the 2002 Accounting to the
Owners of TAPS (the "Alyeska Balance Sheet") and the Alyeska Balance
Sheet presents fairly the financial condition of Alyeska as of the date
thereof in accordance with GAAP; (iv) except as set forth in Schedule
5(y)(iv) and except with regards to worker compensation Actions,
Proceedings and claims, there are no Actions or Proceedings pending or
Threatened against Alyeska or against TAPS, at law or in equity, or
before any arbitrator of any kind, or before or by any Governmental
Authority; nor is there any existing ground in which any such Action or
Proceeding could be commenced with any reasonable likelihood of
success; (v) except as disclosed in the Alyeska Balance Sheet, and
except for current liabilities incurred in the Ordinary Course of
Business since the date of the Alyeska Balance Sheet, Alyeska does not
have any liabilities or obligations of any nature that would have a
Material Adverse Effect on Alyeska or its business; (vi) Alyeska has
filed all tax returns that it was required to file with respect to TAPS
or any of the TAPS Owners, and has paid all taxes shown thereon as
owing; and (vii) Alyeska has maintained, repaired and operated TAPS and
the TAPS Interests in substantial compliance with all TAPS-related
Federal and state rights of way, leases and easements and with all
applicable laws and regulations applicable to TAPS and its business
(including, without limitation, any Environmental Laws).
(z) DISCLAIMER. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS
AGREEMENT AND THE OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS EXECUTED
AND DELIVERED IN CONNECTION WITH THIS AGREEMENT, SELLER DOES NOT MAKE
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ALL LIABILITY
AND RESPONSIBILITY FOR ANY SUCH OTHER REPRESENTATION, WARRANTY,
STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO
BUYER.
6. Xxxxxxxx Guarantor's Representations and Warranties. Xxxxxxxx
Guarantor represents and warrants to Buyer as of the date hereof, as of the
Closing Date and as of the Effective Time as follows:
(a) Organization and Good Standing. Xxxxxxxx Guarantor is a
corporation duly organized, validly existing in good standing under the
laws of the State of Delaware and is in good standing as a corporation
in all jurisdictions where the nature of its properties or business
requires it.
(b) Authority and Binding Obligation. Xxxxxxxx Guarantor has
full corporate power and authority to execute and deliver this
Agreement and the Xxxxxxxx Guaranty, to perform its obligations under
this Agreement and the Xxxxxxxx Guaranty and to consummate the
transactions contemplated in this Agreement and the Xxxxxxxx Guaranty.
The execution, delivery, and performance of this Agreement and the
Xxxxxxxx Guaranty by Xxxxxxxx Guarantor have been duly and validly
authorized by all necessary corporate, shareholder and other action and
no further corporate, shareholder or other action is necessary on the
part of Xxxxxxxx Guarantor to execute and deliver this Agreement and
the Xxxxxxxx Guaranty and to perform its obligations hereunder and
thereunder and to consummate the transactions
20
contemplated by this Agreement and the Xxxxxxxx Guaranty. This
Agreement and the Xxxxxxxx Guaranty constitute legal, valid and binding
obligations of Xxxxxxxx Guarantor enforceable against Xxxxxxxx
Guarantor in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or equity).
(c) No Consent Required; Noncontravention. Except as specified
on Schedule 6(c):
(i) no consent, approval or other action
with, or to, any Governmental Authority or other Person is
required in connection with the execution, delivery and
performance by Xxxxxxxx Guarantor of this Agreement or the
Xxxxxxxx Guaranty; and
(ii) neither the execution and delivery of
this Agreement or the Xxxxxxxx Guaranty by Xxxxxxxx Guarantor,
nor the consummation of the transactions contemplated hereby
or thereby will (A) violate, conflict with or result in the
breach of any provision of the certificate of incorporation or
by-laws of Xxxxxxxx Guarantor; (B) result in a violation of or
conflict with any Legal Requirement or Governmental Action
applicable to or affecting Xxxxxxxx Guarantor or any of its
assets or properties; (C) result in any breach of, or a
maturity under, or constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a
default) under, require any consent, approval or other action
under, or result in, or give to others any rights of,
termination, amendment or acceleration of any material
contract, right or obligation of Xxxxxxxx Guarantor or to a
loss of any benefit to which Xxxxxxxx Guarantor is entitled
under any provision of any agreement or other instrument
binding on Xxxxxxxx Guarantor; (D) give any Person the right
or option to purchase the WAPCO Interests or any of the equity
of, or interest in, WAPCO; or (E) result in the creation of
any Lien on the WAPCO Interests or any of the equity of, or
interest in, WAPCO, other than the WAPCO Permitted Liens.
(d) Litigation. Except as specified on Schedule 6(d), there
are no Actions pending or, to the knowledge of Xxxxxxxx Guarantor,
threatened or anticipated by any Person against or affecting Xxxxxxxx
Guarantor by or before any arbitrator or Governmental Authority that
(i) questions the validity or enforceability of the Xxxxxxxx Guaranty
or this Agreement or (ii) which could prohibit, limit, or delay the
consummation of the transactions contemplated by this Agreement and the
Xxxxxxxx Guaranty.
(e) Actions and Proceedings. Except as specified on Schedule
6(e), no Action is pending or, to the knowledge of Xxxxxxxx Guarantor,
threatened before any arbitrator or administrator or Governmental
Authority to delay, impair, restrain, limit, enjoin or prohibit, or to
obtain damages, a discovery order or other relief in connection with
this Agreement, or the Xxxxxxxx Guaranty or any of the transactions
contemplated hereby or thereby.
21
(f) Financial Capacity; Future Performance. Xxxxxxxx Guarantor
has and will have the financial capacity to guaranty Seller's payments
and performance under the Agreement. Except as described in its filings
with the Securities Exchange Commission pursuant to the Securities
Exchange Act of 1934, Xxxxxxxx Guarantor is not aware of any facts or
circumstances that now or in the future would have a Material Adverse
Effect on its financial condition, results of operations, business,
properties, assets, or liabilities. Xxxxxxxx Guarantor is solvent, is
not in the hands of a receiver, nor is any receivership pending, and no
proceedings are planned or pending by or against it for bankruptcy or
reorganization in any state or federal court.
(g) Other Indebtedness. Schedule 6(g) contains a complete list
of bonds, letters of credit and guaranties issued by Xxxxxxxx Guarantor
affecting WAPCO's assets.
(h) DISCLAIMER. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS
AGREEMENT, XXXXXXXX GUARANTY AND THE OTHER DOCUMENTS AND INSTRUMENTS
DELIVERED IN CONNECTION WITH THIS AGREEMENT, XXXXXXXX GUARANTOR MAKES
NO OTHER REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ALL LIABILITY AND
RESPONSIBILITY FOR ANY SUCH OTHER REPRESENTATION, WARRANTY, STATEMENT
OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO BUYER.
7. Buyer's Representations and Warranties. Buyer represents and
warrants to Seller and Xxxxxxxx Guarantor as of the date hereof, as of the
Closing Date and as of the Effective Time as follows:
(a) Organization and Power. Buyer is a limited liability
company, duly organized, validly existing, and in good standing under
the laws of the State of Alaska. Buyer has all requisite power and
authority to own, lease and operate its properties and assets and to
conduct its business as now conducted. A true, complete and correct
copy of the limited liability company agreement of Buyer, as in effect
on the date hereof, including all amendments thereto, has heretofore
been delivered to Seller.
(b) Authorization. Buyer has the requisite power and authority
to execute and deliver, and has taken all requisite action required for
the execution and delivery of this Agreement and the other agreements,
documents and instruments to be executed and delivered by Buyer in
connection with this Agreement and the consummation of the transactions
contemplated hereby and thereby, and no other action is necessary by
Buyer, its board of directors, or its members, to authorize the
execution and delivery by Buyer of this Agreement and such other
agreements, documents and instruments and the consummation of the
transactions contemplated hereby and thereby. This Agreement has been
duly executed and delivered by Buyer and constitutes, and when executed
and delivered, each of the other agreements, documents and instruments
to be executed and delivered by Buyer in connection with this Agreement
will constitute, the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency and
other laws affecting the rights of creditors and except in respect of
equitable remedies.
22
(c) Governmental Consents. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of,
or filing with, any governmental body, agency or official other than
compliance with (i) any applicable requirements of the HSR Act, (ii)
any applicable requirements of the Federal Energy Regulatory
Commission, (iii) any applicable requirements of the Regulatory
Commission of Alaska, (iv) any applicable requirements of the Secretary
of the Interior, (v) any applicable requirements of the Alaska
Department of Natural Resources, and (vi) the matters disclosed on
Schedule 7(c).
(d) No Consent Required; Noncontravention. The execution,
delivery and performance by Buyer of this Agreement and the
consummation of the transactions contemplated hereby do not and will
not, directly or indirectly, with or without notice or lapse of time:
(i) result in a violation of any provision of the governing documents
of Buyer; (ii) assuming compliance with the matters referred to in
Section 7(c), violate any applicable law, rule, regulation, judgment,
injunction, order or decree; or (iii) result in a violation of, or give
any Governmental Authority or other person the right to challenge the
transactions contemplated hereby or to exercise any remedy or obtain
any relief under, any legal requirement or any order to which Buyer, or
any assets owned or used by Buyer, may be subject in a manner that
would adversely affect Buyer's ability to perform its obligations under
this Agreement
(e) Litigation. There is no pending action, suit,
investigation, arbitration or other proceeding before any court,
arbitrator or any Governmental Authority, agency or official by,
against or affecting Buyer that challenges the validity or
enforceability of this Agreement or any other document, instrument or
agreement to be executed and delivered by Buyer in connection with the
transactions contemplated hereby, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with,
the transactions contemplated hereby. To the knowledge of Buyer, (i) no
such proceeding has been threatened, and (ii) no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such proceeding.
(f) Finders' Fees. There is no investment banker, broker,
finder or other intermediary who has been retained by or is authorized
to act on behalf of Buyer who might be entitled to any fee or
commission from Seller or any of its Affiliates upon consummation of
the transactions contemplated by this Agreement.
(g) Purchase for Investment. Buyer is acquiring the WAPCO
Interests for Buyer's own account, for investment purposes and not with
a view to, or for sale in connection with, any distribution of such
securities or any part thereof in violation of federal or state
securities laws. Buyer acknowledges that the WAPCO Interests constitute
"restricted securities" within the meaning of the Securities Act of
1933, as amended (the "Securities Act") by reason of their issuance in
a transaction exempt from registration under the Securities Act, and
that the WAPCO Interests may only be transferred pursuant to an
effective registration statement under the Securities Act and
qualification or registration
23
under applicable state securities laws, or an exemption therefrom.
Buyer acknowledges that there is no public market for the WAPCO
Interests and has not been given and is not relying on any assurances
that such a public market will ever exist, and thus Buyer may be
required to hold the WAPCO Interests indefinitely.
(h) Accredited Investor. Buyer is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D promulgated under
the Securities Act, is capable of evaluating the merits and risks of an
investment in securities of privately held companies such as WAPCO and
can bear to lose its entire investment in the WAPCO Interests.
(i) NO OTHER REPRESENTATIONS. EXCEPT AS AND TO THE EXTENT SET
FORTH IN THIS AGREEMENT AND THE OTHER AGREEMENTS, DOCUMENTS AND
INSTRUMENTS DELIVERED IN CONNECTION WITH THIS AGREEMENT, BUYER DOES NOT
MAKE ANY OTHER REPRESENTATIONS AND WARRANTIES.
8A. Covenants of Seller.
Seller agrees that:
(a) Conduct of the Company. Except as specifically
contemplated in this Agreement or upon obtaining Buyer's prior written
consent, from the date of this Agreement until the Effective Time:
(i) Seller shall cause WAPCO to conduct its business,
and own and maintain the TAPS Interests, only in the Ordinary
Course of Business;
(ii) Seller shall not cause or allow WAPCO to (A)
amend its operating agreement; (B) issue, sell or agree to
issue or sell any securities or any rights, options or
warrants to acquire its interests, or securities convertible
into or exchangeable or exercisable for securities; (D) merge
or consolidate with, or transfer all or substantially all of
its assets to, another business entity; or (E) liquidate, wind
up or dissolve (or suffer any liquidation or dissolution);
(iii) Seller shall not cause or allow WAPCO to (A)
acquire any corporation, partnership or other business entity
or any interest therein or acquire a material amount of
assets; (B) sell, lease or sublease, transfer or otherwise
dispose of any of any of its assets (other than in the
Ordinary Course of Business); (C) make any loan, advance or
capital contribution to, or investment in, any Person; or (D)
mortgage, pledge, or otherwise encumber any of its assets;
(iv) Seller shall not cause or allow WAPCO to (A)
incur any indebtedness for borrowed money; (B) incur any other
material obligation or liability; or (C) assume, endorse,
guarantee or otherwise become liable or responsible for the
liabilities or obligations of any Person or its Affiliates;
24
(v) Seller shall cause WAPCO to keep and maintain
accurate books, records and accounts in accordance with GAAP,
and will not change the accounting principles used by it
unless required by Legal Requirement or GAAP;
(vi) Seller shall not and shall not cause or allow
WAPCO to create, incur or assume any Lien on the WAPCO
Interests, except for the WAPCO Permitted Liens incurred in
the Ordinary Course of Business;
(vii) Seller shall cause WAPCO to (A) pay or accrue
all Taxes and other governmental charges imposed upon any of
its assets or with respect to its franchises, business, income
or assets before any penalty or interest accrues thereon; (B)
pay all claims (including claims for labor, services,
materials and supplies) that have become due and payable and
which by Legal Requirements have or may become a Lien upon any
of its assets prior to the time when any penalty or fine shall
be incurred with respect thereto or any such Lien shall be
imposed thereon; and (C) comply in all material respects with
the requirements of all applicable Legal Requirements, rules,
regulations and orders of any Governmental Authority, and
comply with and enforce the provisions of all material
contracts to which it is a party, including paying when due
all rentals, royalties, expenses and other liabilities
relating to its business or assets; provided, however, that
WAPCO may contest the imposition of any such Taxes,
assessments and other governmental charges, any such claim, or
the requirements of any applicable Legal Requirement, rule,
regulation or order or any material contract if done so in
good faith by appropriate proceedings and if adequate reserves
are established in accordance with GAAP and as may be
determined as sufficient by WAPCO;
(viii) Seller shall cause WAPCO to preserve and keep
in full force and effect its legal existence and material
rights and franchises and to preserve intact its relationships
with third parties and to keep available the services of its
present officers and directors;
(ix) Seller shall not and shall not cause or allow
WAPCO to enter into any additional contracts, agreements,
leases, licenses, commitments, sale or purchase orders that
affect WAPCO's assets and are performable after the Effective
Time (other than in the Ordinary Course of Business);
(x) Seller shall not and shall not cause or allow
WAPCO to modify, change, amend, waive, release, grant, close
out, or transfer any rights under any contract (collectively,
"Modifications"), except non-material Modifications in the
Ordinary Course of Business;
(xi) Seller shall not and shall not cause or allow
WAPCO to settle or compromise any material claims or
litigation, without the express written consent of Buyer;
25
(xii) Seller shall not and shall not cause or allow
WAPCO to enter into an agreement, contract, commitment or
arrangement to do any of the foregoing; and
(xiii) Seller will not, and will not permit WAPCO to
(i) take or agree or commit to take any action that would make
any representation or warranty of Seller hereunder inaccurate
in any respect at, or as of any time prior to, the Effective
Time or (ii) omit or agree or commit to omit to take any
action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such
time.
(b) Interim Access to Information. From the date hereof until
the Effective Time, Seller will (i) give, and will cause WAPCO to give,
Buyer, its counsel, advisors, auditors and other authorized
representatives full access to the offices, properties, books and
records of WAPCO and to the books and records of Seller relating to
WAPCO, (ii) furnish, and will cause WAPCO to furnish, to Buyer, its
counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information
relating to WAPCO as such Persons may reasonably request and (iii)
instruct the counsel and financial advisors of Seller and WAPCO to
cooperate with Buyer in its investigation of WAPCO. Any investigation
pursuant to this Section shall be conducted in such manner as not to
interfere unreasonably with the conduct of the business of Seller or
WAPCO. No investigation by Buyer or other information received by Buyer
shall operate as a waiver or otherwise affect any representation,
warranty or agreement given or made by Seller hereunder. Seller shall
have the right to have a representative present at all times of any
such inspections, interviews and examinations conducted at or on the
offices or other facilities or properties of Seller. Buyer shall be
responsible for its own costs and expenses in connection with these
activities. Additionally, the information, reports, records and all
other information provided to Buyer pursuant to this Section will be
deemed to be "Confidential Information" for purposes of the
Confidentiality Agreement and as appropriate Highly Sensitive
Information as provided in the confidentiality acknowledgement between
WAPCO and Xxxx Pipeline Company, L.P. dated October 8, 2003. Buyer,
however, shall not be entitled to access to any materials containing
privileged communications. Buyer expressly acknowledges that nothing in
this Section is intended to give rise to any contingency to Buyer's
obligations to proceed with the transactions contemplated herein. Buyer
shall defend, indemnify and hold harmless Seller, its Affiliates and
their officers, directors, employees and agents from and against all
losses, claims, demands, lawsuits, judgments, costs, expenses
(including reasonable attorney's fees) and other liabilities arising
out of personal injury or death suffered by Buyer's or Seller's or its
Affiliates' employees or contractors to the extent caused by Buyer or
its employees or agents during inspection of WAPCO's assets under this
Section.
(c) Confidentiality. After the Effective Time, Seller and its
Affiliates will hold, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information
concerning WAPCO, except to the extent that such information can be
shown to have been (i) previously known on a nonconfidential basis
26
by Seller, (ii) in the public domain through no fault of Seller or its
Affiliates or (iii) later lawfully acquired or developed by Seller from
sources other than those related to its prior ownership of WAPCO. The
obligation of Seller and its Affiliates to hold any such information in
confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to preserve the
confidentiality of their own similar information.
(d) Notices of Certain Events. Seller shall promptly notify
Buyer of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this
Agreement;
(ii) any notice or other communication from any
Governmental Authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or Threatened against, relating to or
involving or otherwise affecting Seller or WAPCO that, if
pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 5(j)(ii)
or that relate to the consummation of the transactions
contemplated by this Agreement.
(e) Resignations. Seller will deliver to Buyer the
resignations of all officers and directors of WAPCO from their
positions with WAPCO at or prior to the Effective Time.
(f) WAPCO Books and Records. Seller will at or prior to the
Effective Time deliver to Buyer all books and records relating
primarily to WAPCO's and the TAPS Interests' business accounting and
legal matters. To the extent that any such books and records are in
electronic form, or otherwise stored on a computer system or
information network, Seller will cause such information to be delivered
to Buyer in a format that is readable and searchable.
(g) Excluded Items. Prior to the Effective Time, Seller shall
cause the Excluded Items to be assigned to or assumed by, as the case
may be, one or more of Seller's Affiliates and, in connection with such
assignment or assumption, all Liabilities of Seller with respect to
such Excluded Items shall be assumed by an Affiliate of Seller.
8B. Covenants of Buyer and Seller.
(a) Commercially Reasonable Efforts; HSR Filing. Subject to
the terms and conditions of this Agreement, Buyer and Seller will use
their commercially reasonable efforts to take or cause to be taken, all
actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, Buyer and Seller agree, within fourteen
(14) days of the date of this Agreement, to appropriately compile and
27
file (or cause their respective "ultimate parent entity" to
appropriately file) a Notification and Report Form pursuant to the HSR
Act and any other applicable antitrust law with respect to the
transactions contemplated hereby; provided, however, no party's
obligations in connection with the foregoing shall require such party
to take any action which is reasonably likely to result in a Material
Adverse Effect with respect to such party, provided, further, under no
circumstances shall Buyer or any of its Affiliates be required to hold
separate (including in trust or otherwise) or divest or dispose of any
of its businesses or assets (categories of assets) or waive any
conditions to this Agreement or the other transactions contemplated by
this Agreement, nor shall Buyer or any of its Affiliates be required to
hold separate (including by trust or otherwise) or divest any assets.
All HSR Act filing fees (excluding any attorneys' fees) shall be split
equally by Buyer and Seller. Further, Buyer and Seller agree that
except as required by the HSR Act, neither Buyer nor its Affiliates
shall be required to disclose any information (financial or otherwise)
not otherwise in the public domain to any third party.
(b) Public Announcements. Buyer and Seller agree that neither
they nor any of their respective Affiliates shall issue any press
release, respond to any press inquiry, or make any other public
statement with respect to this Agreement or the transactions
contemplated hereby without the prior approval of the other Party
(which approval will not be unreasonably withheld, conditioned or
delayed), except as may be required by applicable law; provided,
however, that prior notice shall be required but prior approval shall
not be required where such release or announcement is required by
applicable law, securities regulations or stock exchange rules.
(c) Certain Filings. Prior to the Effective Time, Seller and
Buyer shall cooperate with one another (i) in determining whether any
action by or in respect of, or filing with, any Governmental Authority
is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions; contemplated by
this Agreement and (ii) in taking such actions or making any such
filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or
waivers. Prior to the Effective Time, and after the Effective Time, to
the extent necessary, Seller and Buyer shall cooperate with each other
and use their reasonable best efforts to make such filings with the
Federal Energy Regulatory Commission as are necessary to enable Buyer
to adopt, as of the Effective Time, WAPCO's standard interstate tariff
applicable to the TAPS Interests with respect to Buyer's ownership of
the TAPS Interests. Prior to the Effective Time, Seller and Buyer shall
also cooperate with one another and use their reasonable best efforts
to transfer WAPCO's Certificate of Public Convenience to Buyer and to
make any other filings with the Regulatory Commission of Alaska as are
necessary to enable Buyer to adopt WAPCO's intrastate tariff applicable
to the TAPS Interests and to own and hold such TAPS Interest. Seller
and Buyer recognize that the transfers of the Federal and State
Rights-of-Way associated with the TAPS Interests are subject to the
prior written consent, respectively, of the Secretary of the Interior
and Alaska Department of Natural Resources. Seller and Buyer agree to
expeditiously file the necessary application and any requested
supporting information and shall cooperate with each other and use
commercially reasonable efforts to
28
transfer to Buyer WAPCO's interests in the Federal and State
Rights-of-Way associated with the TAPS interest.
(d) Control of Litigation. At the Effective Time, Buyer shall
assume control of the litigation listed on Schedule 5(j)(ii) and shall
have complete discretion and control over such litigation at Buyer's
sole cost and expense. Seller shall cooperate with Buyer and its
Affiliates in connection with the prosecution or defense of the matters
set forth on Schedule 5(j)(ii) and shall take any actions reasonably
requested by Buyer and its Affiliates relating to such prosecution or
defense. Seller shall be entitled to be reimbursed for any reasonable
out-of-pocket costs and expenses authorized in advance by and incurred
in connection with assisting Buyer and its Affiliates in connection
with this Section 8(d).
(e) Intercompany Accounts. All intercompany accounts between
Seller or its Affiliates, on the one hand, and WAPCO, on the other
hand, shall be zeroed at the Effective Time, irrespective of the terms
of payment of such intercompany accounts.
(f) Sales and Transfer Taxes. Buyer shall be responsible for
and agrees to pay when due all sales, use, value added, documentary,
stamp, gross receipts, transfer, conveyance, excise, real estate
recording and other similar Taxes and fees (collectively, "Transfer
Taxes") arising out of the transfer of the WAPCO Interests by Seller
and the other transactions contemplated herein. Buyer shall prepare and
timely file all Tax Returns required to be filed in respect of Transfer
Taxes, provided that Seller shall be permitted to prepare any such Tax
Returns that are the primary responsibility of Seller under applicable
law. Seller's preparation of any such Tax Returns shall be subject to
Buyer's approval, which approval shall not be withheld unreasonably.
(g) Cooperation on Tax Matters. After the Effective Time,
Seller will cooperate with Buyer, and Buyer will cooperate with Seller,
to the extent necessary in the preparation of all Tax Returns and will
provide (or cause to be provided) any records and other information the
other so reasonably requests and will provide the cooperation of its
employees and auditors. Seller will reasonably cooperate with Buyer and
Buyer will reasonably cooperate with Seller in connection with any Tax
investigation, audit or other Proceeding.
(h) Post Effective Time Access. On and after the Effective
Time, each Party will promptly afford to other Party and its agents
reasonable access to its books of account, financial and other records
(including, without limitation, accountant's work papers), information,
employees and auditors to the extent necessary or useful for such Party
in connection with any audit, investigation, dispute or litigation or
any other reasonable business purpose relating to WAPCO; provided that
any such access by such Party shall not unreasonably interfere with the
conduct of the business of the other Party. In addition, Xxxxxxxx
Guarantor will promptly afford Buyer access to financial information of
Xxxxxxxx Guarantor as reasonably requested by Buyer, provided that such
financial information has been publicly disclosed.
29
(i) Change of WAPCO Name. Buyer shall cause WAPCO to change
its name promptly after the Effective Time, but in no event later than
30 days after the Effective Time, so that WAPCO's name does not contain
the word "Xxxxxxxx."
(j) Letters of Credit and Guaranties. Within 30 days of the
Effective Time, Seller will terminate the letters of credit and
guaranties that are listed on Schedule 6(g) and Buyer shall assume all
obligations to post or replace such letters of credit, surety bonds and
guaranties as the counterparties thereto require and otherwise
cooperate and assist with the termination of such letters of credit and
guaranties.
(k) ExxonMobil Capacity Lease. Buyer, Seller and Xxxxxxxx
Guarantor acknowledge that the Capacity Lease entered into by and
between ExxonMobil Pipeline Company ("ExxonMobil"), as lessor, and
WAPCO, as lessee, as described on Schedule 5(l) (the "ExxonMobil
Capacity Lease"), is in dispute, and that WAPCO has claimed that
ExxonMobil has breached the ExxonMobil Capacity Lease. As a result of
such dispute, Seller, WAPCO and ExxonMobil are in settlement
negotiations to settle their differences relative to the claimed
breach. Buyer, Seller and Xxxxxxxx Guarantor make the following
covenants:
(i) The ExxonMobil Capacity Lease is a Material
Contract and any settlement agreement memorializing the
settlement of claims arising out of the ExxonMobil Capacity
Lease would be a Material Contract. To that end, Seller and
Xxxxxxxx Guarantor agree not to carry on further settlement
negotiations with ExxonMobil without the knowledge, consent
and participation of Buyer.
(ii) If settlement negotiations regarding the
ExxonMobil Capacity Lease do not result in final settlement
that is acceptable to ExxonMobil, WAPCO and Buyer prior to the
Effective Time, then the ExxonMobil Capacity Lease shall
remain a Material Contract of WAPCO at the Effective Time.
(iii) If, at any time after the Effective Time,
WAPCO, Buyer, or an Affiliate of Buyer are or become parties
to an Action, Proceeding, or Governmental Action wherein the
ExxonMobil Capacity Lease is adjudicated, held or found to be
invalid, or to violate any law, statute, regulation,
ordinance, decree, contract, or right of any party, or to be
unenforceable such that Buyer is unable to enjoy the rights
afforded to WAPCO under the ExxonMobil Capacity Lease, then
Seller and/or Xxxxxxxx Guarantor shall refund to Buyer that
portion of the Purchase Price allotted to the value placed on
the ExxonMobil Capacity Lease by Seller and Buyer for purposes
of the transactions contemplated by this Agreement, such
amount being Ten Million Dollars ($10,000,000) (but such
amount not representing the total amount of potential recovery
under the ExxonMobil Capacity Lease); provided, however, that
the refund obligation referred to in this paragraph shall not
arise until such adjudication, holding or finding becomes
final and non-appealable as against WAPCO, Buyer, or Buyer's
Affiliate; and, provided further, that Buyer shall maintain a
duty to attempt to mitigate its losses in respect to the
ExxonMobil
30
Capacity Lease through reasonable means; and, provided
further, that any amounts collected by WAPCO, Buyer or Buyer's
Affiliates in respect to the ExxonMobil Capacity Lease shall
serve to offset the refund amount paid by Seller to Buyer
pursuant to this Section 8B(k)(iii). Any such refund shall not
be subject to the Minimum Indemnifiable Amount or WAPCO
Threshold or included in the calculation of the maximum amount
of indemnifiable Damages under Section 15 of this Agreement.
(iv) If, at any time after the Effective Time, WAPCO,
Buyer, or an Affiliate of Buyer fully and finally settle their
differences with ExxonMobil regarding the claims as to the
validity or enforceability of the ExxonMobil Capacity Lease,
then Buyer shall forego its right to the partial refund of the
Purchase Price, as outlined in Section 8B(k)(iii) above, and
Buyer shall have no remedy with respect to such refund or the
ExxonMobil Capacity Lease against Seller or Seller's
Affiliates, successors or assigns.
9. Conditions to Closing.
(a) Buyer's Conditions. Buyer's obligation to effect the
transactions contemplated by this Agreement is subject to the
satisfaction, or waiver (by Buyer), at or prior to the Closing Date of
each of the following conditions:
(i) Each representation and warranty set forth in
Section 5 hereof must have been accurate and complete in all
material respects (except as to the representations and
warranties already qualified as to materiality, which must be
accurate and complete in all respects) on the date of this
Agreement and as of the Closing Date, as if made on the
Closing Date. Each representation and warranty set forth in
Section 6 hereof must have been accurate and complete in all
material respects (except as to the representations and
warranties already qualified as to materiality, which must be
accurate and complete in all respects) on the date of this
Agreement and as of the Closing Date, as if made on the
Closing Date.
(ii) Seller shall have performed and complied with
all covenants and agreements to be performed or complied with
at or prior to Closing (singularly or in the aggregate) in all
material respects. Xxxxxxxx Guarantor shall have performed and
complied with all of its covenants and agreements to be
performed or complied with at or prior to Closing (singularly
or in the aggregate) in all material respects.
(iii) Since the date of this Agreement there shall
have been no Material Adverse Change with respect to Seller,
Xxxxxxxx Guarantor or WAPCO.
(iv) The waiting period required by the HSR Act with
respect to the transactions contemplated hereby shall have
expired or been terminated.
31
(v) There shall have been no Governmental Action,
Action or Proceeding pending, Threatened, issued or in effect
(A) seeking to restrain or prohibit, or restraining or
prohibiting the transactions contemplated by this Agreement or
(B) seeking to cause or causing any of the transactions
contemplated by this Agreement to be rescinded following
consummation. There shall have been no Legal Requirement
enacted or promulgated, or proposed to be enacted or
promulgated, by any Governmental Authority of competent
jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement or makes such
transactions illegal or invalid.
(vi) Seller and Xxxxxxxx Guarantor shall have
delivered, or caused to be delivered to Buyer at the Closing,
each of the Closing deliveries described in Subsections 11(a)
and 11(b) hereof.
(vii) Buyer shall have received from Seller, in a
form reasonably satisfactory to Buyer, a statement satisfying
Buyer's obligations under Treasury Regulation Section
1.1445-2(b)(2).
(viii) There shall have been a waiver by all holders
of, or expiration of, the initial or any subsequent 45 day
period relating to the preferential purchase right in Section
7.2(a) of the TAPS Agreement. The parties agree that this
condition will be met upon: (A) receipt of notice from each of
the other owners of an interest in TAPS (the "TAPS Owners")
irrevocably stating that they will not exercise the right to
purchase the WAPCO Interests or any portion thereof, or
providing a waiver that would permit the transfer to occur
prior to any 45-day waiting period during which the TAPS
Owners have the right to exercise the preferential right to
purchase such interest, or (B) the passage of 45 days from the
date of notice to the TAPS Owners with no action by the TAPS
Owners.
(ix) Receipt of written approval of the transfers of
the Federal and State Rights-of-Way associated with the TAPS
Interests from the Secretary of the Interior and the Alaska
Department of Natural Resources; provided, however, that such
approval must be unconditional, except as to the closing of
the transactions contemplated by this Agreement and except as
to any requirement for the delivery of a performance or
financial guaranty from an Affiliate of Buyer up through Xxxx
Industries, Inc.; and, provided further, that the condition in
this Section 9(a)(ix) shall not be met if any such performance
or financial guaranty requirement also contains a requirement
that the guarantor of Buyer deliver, disclose or otherwise
provide to any Governmental Authority, or any other Person not
under strict terms of confidentiality, any non-public
financial records or information about any Affiliate of Buyer.
(x) The Regulatory Commission of Alaska shall have
issued an order approving the transfer of WAPCO's certificate
of authority and convenience to Buyer; provided, however, that
such approval must be unconditional, except as to the closing
of the transactions contemplated by this Agreement and except
as to any
32
requirement for the delivery of a performance or financial
guaranty from an Affiliate of Buyer up through Xxxx
Industries, Inc.; and, provided further, that the condition in
this Section 9(a)(x) shall not be met if any such performance
or financial guaranty requirement also contains a requirement
that the guarantor of Buyer deliver, disclose or otherwise
provide to any Governmental Authority, or any other Person not
under strict terms of confidentiality, any non-public
financial records or information about any Affiliate of Buyer.
(xi) The transactions contemplated by the Refinery
ASPA shall have been consummated by an Affiliate of Buyer or
Buyer in its sole discretion shall be satisfied that the
consummation of such transactions shall be taking place
simultaneously with the consummation of the transaction
contemplated by this Agreement.
(xii) Seller shall have delivered to Buyer agreements
between Seller and an Affiliate of Seller effective prior to
the Closing Date relating to the Excluded Items in
substantially the same form attached hereto as Exhibit A.
(xiii) Buyer's receipt of an opinion of outside
counsel chosen by Buyer (and reasonably acceptable to Seller)
that the DR&R indemnity provided to WAPCO by MAPL in the March
24, 2000 Agreement of Sale and Purchase of an Undivided
Interest in TAPS will continue to be in full force and effect
after the Effective Time.
(xiv) Buyer and Seller shall have entered into a
Transition Services Agreement in the form attached to this
Agreement as Exhibit B.
(b) Seller's Conditions. Seller's obligation to effect the
transactions contemplated by this Agreement is subject to the
satisfaction, or waiver (by Seller) at or prior to the Closing Date of
each of the following conditions:
(i) The transactions contemplated by the Refinery
ASPA shall have been consummated by an Affiliate of Seller or
Seller in its sole discretion shall be satisfied that the
consummation of such transactions shall be taking place
simultaneously with the consummation of the transaction
contemplated by this Agreement.
(ii) Each representation and warranty set forth in
Section 7 hereof must have been accurate and complete in all
material respects (except as to the representations and
warranties already qualified as to materiality, which must be
accurate and complete in all respects) on the date of this
Agreement and as of the Closing Date.
(iii) Buyer shall have performed and complied with
all of its covenants and agreements to be performed or
complied with at or prior to Closing (singularly or in the
aggregate) in all material respects.
33
(iv) There shall have been no Governmental Action,
Action or Proceeding issued and in effect restraining or
prohibiting any of the transactions contemplated by this
Agreement.
(v) There shall have been no Legal Requirement
enacted or promulgated by any Governmental Authority of
competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement or makes such
transactions illegal or invalid.
(vi) The waiting period required by the HSR Act with
respect to the transactions contemplated hereby shall have
expired or been terminated.
(vii) Buyer shall have an issuer credit rating of at
least "A" from Standard & Poors and Xxxxx'x Investor Services
on the Closing Date, or shall have delivered Seller a written
guaranty of Buyer's obligations under this Agreement through
the Closing Date from an Affiliate with such credit rating or
better.
(viii) Buyer shall have delivered, or caused to be
delivered, to Seller at the Closing, the Closing deliveries
described in Subsection 11(c) hereof.
(ix) There shall have been a waiver by all holders
of, or expiration of, the initial or any subsequent 45 day
period relating to the preferential purchase right in Section
7.2(a) of the TAPS Agreement. The parties agree that this
condition will be met upon: (i) receipt of notice from each of
the other owners of an interest in TAPS (the "TAPS Owners")
irrevocably stating that they will not exercise the right to
purchase the WAPCO Interests or any portion thereof, or
providing a waiver that would permit the transfer to occur
prior to any 45-day waiting period during which the TAPS
Owners have the right to exercise the preferential right to
purchase such interest, or (ii) the passage of 45 days from
the date of notice to the TAPS Owners with no action by the
TAPS Owners.
(x) Receipt of written approval of the transfers of
the Federal and State Rights-of-Way associated with the TAPS
Interests from the Secretary of the Interior and the Alaska
Department of Natural Resources; provided, however, that such
approval must be unconditional, except as to the closing of
the transactions contemplated by this Agreement; and, provided
further, that the guaranty currently posted by Xxxxxxxx
Guarantor for the purpose of holding such interests in the
Federal and State Rights-of-Way is released as of the
Effective Time.
(xi) The Regulatory Commission of Alaska shall have
issued an order approving the transfer of WAPCO's certificate
of authority and convenience to Buyer; provided, however, that
such approval must be unconditional, except as to the closing
of the transactions contemplated by this Agreement; and,
provided further, that all guaranties currently posted by
Xxxxxxxx Guarantor for the purpose of holding such certificate
is released as of the Effective Time.
34
10. Closing. Subject to the conditions stated in this Agreement, the
purchase and sale of the WAPCO Interests and the consummation of the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Seller on the last business day of the month in which all
conditions to Closing contained in Section 9 (other than those that by their
nature can only be satisfied at the Closing) have been satisfied or waived, or
at such other time and place as the Parties may mutually agree (the "Closing
Date").
11. Actions at Closing. At the Closing, the following actions shall be
taken, each being deemed to occur simultaneously with all others:
(a) Seller shall deliver to Buyer the certificate representing
the WAPCO Interests duly endorsed for transfer to Buyer effective as of
the Effective Time. In addition, Seller shall deliver to Buyer such
other documents as Buyer may reasonably require in form and substance
reasonably acceptable to Buyer and Seller, including:
(i) a certificate of the Secretary or other
appropriate officer of Seller dated as of the Closing Date, in
form and substance reasonably satisfactory to Buyer: (A)
attaching a true and complete copy of the Limited Liability
Agreement of WAPCO and certifying there have been no
amendments thereto; (B) certifying that resolutions of the
Board of Directors of Seller authorize the execution and
performance of this Agreement, the ancillary agreements and
the consummation of the transactions contemplated hereby and
thereby and certifying that such resolutions have not been
rescinded or amended, are true and complete and in full force
and effect; (C) certifying that resolutions of (and, if any,
consents of) the members of Seller authorize the execution and
performance of this Agreement, all other ancillary agreements
and the consummation of the transactions contemplated hereby
and thereby and certifying that such resolutions have not been
amended or rescinded, are true and complete and in full force
and effect; and (D) certifying as to the incumbency of the
officers of Seller executing this Agreement and/or any related
agreement, and including specimen signatures;
(ii) an Officer's Certificate, substantially in the
form of Exhibit C, duly executed by a Responsible Officer of
Seller, to the effect that each condition specified in
Subsections 9(a), except those contained in Sections 9(a)(xi)
and 9(a)(xiii), has been satisfied;
(iii) such other certificates, instruments and
documents as may be called for under this Agreement or as
Buyer shall reasonably request.
(b) Xxxxxxxx Guarantor shall deliver, or cause to be
delivered, unless waived by Buyer, the following to Buyer:
(i) a certificate of the Secretary or other
appropriate officer of Xxxxxxxx Guarantor, dated as of the
Closing Date, certifying: (A) that resolutions of the Board
35
of Directors of Xxxxxxxx Guarantor authorize execution and
performance of this Agreement and the Xxxxxxxx Guaranty and
certifying that such resolutions have not been rescinded or
amended, are true and complete and in full force and effect;
and (B) as to the incumbency of the officers of the Xxxxxxxx
Guarantor executing this Agreement and the Xxxxxxxx Guaranty
and any other related agreement, and including specimen
signatures;
(ii) a certificate of existence and good standing
issued by the State of Delaware issued as of a recent date by
the Secretary of the State of the State of Delaware, together
with a bring-down of such good standing as of the Closing
Date;
(iii) the performance guaranty in the form as
specified in Exhibit D (the "Xxxxxxxx Guaranty"); and
(iv) such other certificates and documents as may be
called for under this Agreement or as Buyer shall reasonably
request.
(c) Buyer shall pay to Seller the Closing Payment by direct
bank or wire transfer to Seller's account as specified by Seller in
writing at least two business days prior to the Closing. In addition,
Buyer shall deliver to Seller such other documents as Seller may
reasonably require in form and substance reasonably acceptable to Buyer
and Seller, including:
(i) a certificate of the Secretary or other
appropriate officer of Buyer, dated the Closing Date, in form
and substance reasonably satisfactory to Seller certifying:
(A) that resolutions of the member of Buyer, or the Board of
Managers of the general partner of the member of Buyer
authorize the execution and performance of this Agreement and
the transactions contemplated hereby and certifying that they
have not been amended or rescinded, are true and complete and
in full force and effect; and (B) as to the incumbency of the
officers of Buyer executing this Agreement and/or any related
agreement and including specimen signatures;
(ii) an Officer's Certificate, substantially in the
form of Exhibit E, duly executed by a Responsible Officer of
Buyer, to the effect that each condition specified in
Subsection 9(b), except that contained in Section 9(b)(i), has
been satisfied;
(iii) if required by Subsection 9(b)(vii), a
performance guaranty of Flint Hills Resources, LLC in the form
specified in Exhibit F; and
(iv) such other certificates and documents as may be
called for under this Agreement or as Seller shall reasonably
request.
36
12. Termination Rights. This Agreement may be terminated at any time
prior to the Closing Date:
(a) By written consent of the Parties and Xxxxxxxx Guarantor;
(b) By either Party, (i) if any TAPS Owner has purchased the
WAPCO Interests or the TAPS Interests from Seller pursuant to such TAPS
Owner's exercise of its preferential purchase right; (ii) after the
termination of the Refinery ASPA; (iii) if the Closing has not occurred
within twelve (12) months after the date hereof; provided, however,
that the right to terminate this Agreement pursuant to this clause
shall not be available to any Party whose breach of any representation
or warranty or failure to perform any covenant or agreement under this
Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such date; or (iv) if any Governmental
Authority shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise
prohibiting the Closing and such order, decree, ruling or other action
shall have become final and nonappealable; provided, however, that the
right to terminate this Agreement pursuant to this clause shall not be
available to any Party until such Party has used all reasonable efforts
to remove such injunction, order, decree or ruling; or
(c) By either Buyer on the one hand, or Seller on the other
hand, if a material breach of any provision of this Agreement has been
committed by the other Party or any of its Affiliates and such breach
is not cured within a period of twenty (20) days following written
notice thereof.
13. Effect of Termination. If this Agreement is terminated by a Party
pursuant to the provisions of Section 12, this Agreement shall forthwith become
void except for, and there shall be no further obligation under this Agreement
on the part of any party except the obligations of Buyer relating to
"Confidential Information" in Section 8A(b) and except pursuant to the
provisions of Sections 5(m), 13, 17 and 21 (which shall continue pursuant to
their terms); provided, however, that a termination of this Agreement shall not
relieve any party from any liability for damages incurred as a result of a
breach by such party of its representations, warranties, covenants, agreements
or other obligations hereunder occurring prior to such termination (including
without limitation, Seller's and Buyer's rights to liquidated damages in certain
events as provided in Section 14).
14. Liquidated Damages for Unexcused Failure to Close. If either Seller
or Buyer fails to close the transactions contemplated by this Agreement
following the receipt of all authorizations, waivers, consents and approvals of
any governmental entity, for any reason except pursuant to an express right to
do so as provided in this Agreement, or fails to use its commercially reasonable
efforts to satisfy all conditions to Closing set forth herein, then the Party
failing to close or failing to use such commercially reasonable efforts shall
pay the other Five Million United States Dollars ($5,000,000) (the "Liquidated
Damages"). Such payment will be by wire transfer of immediately available funds
immediately upon demand from the other Party and without any right of setoff.
Upon payment of such amount, each party shall be fully released and discharged
from any and all liabilities, damages or obligations resulting from its failure
to close the transactions contemplated by this Agreement and for any breach of
the terms of this Agreement giving rise thereto. This Section shall in no way be
applicable to Seller in the event that any TAPS Owner purchases the WAPCO
37
Interests or the TAPS Interests from Seller pursuant to such TAPS Owner's
exercise of its preferential purchase right.
15. Indemnification.
(a) Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and obligations
of Seller, Xxxxxxxx Guarantor and Buyer contained in this Agreement
shall survive the Effective Time as set forth in this Section 15.
Covenants and obligations shall survive until fully performed. The
representations and warranties of Seller, Xxxxxxxx Guarantor and Buyer
shall survive for a period of three (3) years after the Effective Time;
except that:
(i) the representations and warranties of (A) Seller
contained in Sections 5(a) (Organization and Power), 5(b)
(Membership Interests of WAPCO), 5(c) (Authorization), 5(d)
(Governmental Consents), 5(e) (No Consent Required;
Noncontravention), and 5(f) (Operations of WAPCO; No
Subsidiaries), (B) Xxxxxxxx Guarantor contained in Sections
6(a) (Organization and Good Standing) and 6(b) (Authority and
Binding Obligation), and (C) Buyer contained in Sections 7(a)
(Organization and Power), 7(b) (Authorization), 7(c)
(Governmental Consents), and 7(d) (No Consent Required;
Noncontravention) shall survive for the statute of limitations
applicable to breach of written contracts;
(ii) the representations and warranties of Seller
contained in Section 5(u) (Environmental Matters) shall
survive for a period of ten (10) years after the Effective
Time; and
(iii) the representations and warranties of Seller
contained in Section 5(v) (Tax Matters) shall survive until
ninety (90) days following the expiration of the applicable
statute or similar period of limitations (after giving effect
to any extensions or waivers);
it being understood that in the event notice of any Claim for
indemnification under Section 15(b)(i)(A) or Section 15(b)(ii)(A) shall
have been given within the applicable survival period, the
representations and warranties that are the subject of such
indemnification Claim shall survive with respect to such Claim until
such time as such Claim is finally resolved.
(b) INDEMNIFICATION.
(i) INDEMNIFICATION BY SELLER. FROM AND AFTER THE
EFFECTIVE TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER
SHALL INDEMNIFY, DEFEND AND HOLD BUYER, ANY AFFILIATES OF
BUYER, AND THEIR RESPECTIVE SHAREHOLDERS, PARTNERS, OFFICERS,
DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS AND ASSIGNS
(EACH, A "BUYER INDEMNIFIED PARTY") HARMLESS, FROM AND AGAINST
ANY AND ALL DAMAGES INCURRED BY ANY BUYER INDEMNIFIED PARTY IN
CONNECTION WITH OR ARISING OR RESULTING FROM ANY ONE OR MORE
OF THE FOLLOWING:
38
(A) ANY MISREPRESENTATION OR BREACH OF ANY
REPRESENTATION OR WARRANTY OR NONFULFILLMENT OF ANY
COVENANT OR OBLIGATION OF SELLER OR XXXXXXXX
GUARANTOR UNDER THIS AGREEMENT OR ANY
MISREPRESENTATION IN ANY STATEMENT, DOCUMENT,
SCHEDULE, EXHIBIT OR CERTIFICATE FURNISHED OR TO BE
FURNISHED TO BUYER PURSUANT TO THIS AGREEMENT;
(B) THE POSSESSION OR OWNERSHIP OF THE
WAPCO INTERESTS FROM JUNE 30, 2000 TO THE EFFECTIVE
TIME, EXCEPT THAT SELLER SHALL HAVE NO DUTY TO
INDEMNIFY UNDER THIS SECTION 15(b)(i)(B) (1) TO THE
EXTENT THAT DAMAGES ARE CAUSED OR CONTRIBUTED TO BY
BUYER'S OPERATIONS, ACTIONS OR OMISSIONS AFTER THE
EFFECTIVE TIME AND/OR (2) WITH RESPECT TO ANY
ENVIRONMENTAL CLAIM (ENVIRONMENTAL CLAIMS, WITH THE
EXCEPTION OF BREACHES OF REPRESENTATIONS AND
WARRANTIES, ARE COVERED EXCLUSIVELY BY THE PROVISIONS
OF SECTION 15(b)(i)(C));
(C) EXCEPT TO THE EXTENT THAT DAMAGES ARE
CAUSED OR CONTRIBUTED TO BY BUYER'S OPERATIONS,
ACTIONS OR OMISSIONS AFTER THE EFFECTIVE TIME, THE
FOLLOWING ENVIRONMENTAL MATTERS (HEREIN
"ENVIRONMENTAL CLAIM(s)"):
(1) ANY ENVIRONMENTAL CONDITION
EXISTING FROM JUNE 30, 2000 TO THE EFFECTIVE
TIME, AT, ON OR UNDER OR ARISING, EMANATING,
OR FLOWING FROM ANY OF ASSETS OR PROPERTIES
OF WAPCO, WHETHER KNOWN OR UNKNOWN AS OF THE
EFFECTIVE TIME, INCLUDING ANY LOSS, PROPERTY
DAMAGE, NATURAL RESOURCE DAMAGE, INJURY TO,
OR DEATH OF ANY THIRD-PARTY ARISING
THEREFROM;
(2) LOSS, PROPERTY DAMAGE, NATURAL
RESOURCE DAMAGE, INJURY TO, OR DEATH OF ANY
THIRD-PARTY ARISING OUT OF OR RELATED TO ANY
ENVIRONMENTAL CONDITION TO THE EXTENT (a)
NOT LOCATED ON THE ASSETS OR THE PROPERTY OF
WAPCO AND (b) EXISTING FROM JUNE 30, 2000 TO
THE EFFECTIVE TIME;
(3) PAYMENT OF PENALTIES AND FINES
ASSESSED OR IMPOSED BY ANY GOVERNMENTAL
AUTHORITY ARISING OUT OF OR RELATED TO ANY
ENVIRONMENTAL CONDITION EXISTING FROM JUNE
30, 2000 TO THE EFFECTIVE TIME; AND
(4) ANY DAMAGES THAT ARISE, DIRECTLY
OR INDIRECTLY, FROM THE RELEASE, GENERATION,
USE, PRESENCE, STORAGE, TREATMENT AND/OR
RECYCLING OF ANY HAZARDOUS MATERIALS OR
PETROLEUM PRODUCTS BY SELLER OR WAPCO OR
FROM THE POSSESSION, USE, OWNERSHIP, OR
OPERATION OF WAPCO FROM JUNE 30, 2000 TO THE
EFFECTIVE TIME, OR BY A THIRD PARTY IF ANY
SUCH HAZARDOUS MATERIALS OR PETROLEUM
39
PRODUCTS WERE GENERATED OR USED BY SELLER OR
WAPCO, INCLUDING ANY DAMAGES ARISING FROM
HAZARDOUS MATERIALS OR PETROLEUM PRODUCTS
THAT HAVE BEEN TRANSPORTED OR OTHERWISE
REMOVED FROM WAPCO'S PREMISES TO AN OFFSITE
LOCATION FROM JUNE 30, 2000 TO THE EFFECTIVE
TIME AND/OR RELEASED FROM AN OFFSITE
LOCATION AT ANY TIME;
(D) ANY EXCLUDED ITEMS; AND
(E) THE ENFORCEMENT OF INDEMNIFICATION
RIGHTS UNDER THIS SECTION 15(b)(i).
NOTWITHSTANDING THE ABOVE INDEMNITY PROVISIONS, SELLER AND
XXXXXXXX GUARANTOR SHALL (x) HAVE NO OBLIGATION TO BUYER
ARISING OUT OF OR RELATED, DIRECTLY OR INDIRECTLY, TO DR&R,
OTHER THAN THE OBLIGATION TO MAKE AN ACCURATE REPRESENTATION
AS PROVIDED IN SECTION 5(l)(ii), AND (y) HAVE NO OBLIGATION TO
INDEMNIFY OR HOLD HARMLESS AS PROVIDED ABOVE IN CONNECTION
WITH ANY TARIFF PAYMENTS OR RETROACTIVE REDUCTION PAYMENTS,
EXCEPT AS PROVIDED IN 4(a) AND 4(b) OF THIS AGREEMENT.
(ii) INDEMNIFICATION BY BUYER. FROM AND AFTER THE
EFFECTIVE TIME, TO THE FULLEST EXTENT PERMITTED BY LAW, BUYER
SHALL INDEMNIFY, DEFEND AND HOLD SELLER, ANY AFFILIATES OF
SELLER, AND THEIR RESPECTIVE SHAREHOLDERS, PARTNERS, OFFICERS,
DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS AND ASSIGNS
(EACH, A "SELLER INDEMNIFIED PARTY") HARMLESS, FROM AND
AGAINST ANY AND ALL DAMAGES INCURRED BY ANY SELLER INDEMNIFIED
PARTY IN CONNECTION WITH OR ARISING OR RESULTING FROM ANY ONE
OR MORE OF THE FOLLOWING:
(A) ANY MISREPRESENTATION OR BREACH OF ANY
REPRESENTATION OR WARRANTY OR NONFULFILLMENT OF ANY
COVENANT OR OBLIGATION OF BUYER UNDER THIS AGREEMENT
OR ANY MISREPRESENTATION IN ANY STATEMENT, DOCUMENT
OR CERTIFICATE FURNISHED OR TO BE FURNISHED TO SELLER
PURSUANT TO THIS AGREEMENT;
(B) BUYER'S OBLIGATIONS UNDER SECTION 8B(f)
(TRANSFER TAXES);
(C) THE POSSESSION OR OWNERSHIP OF THE WAPCO
INTERESTS AFTER THE EFFECTIVE TIME, EXCEPT THAT BUYER
SHALL HAVE NO DUTY TO INDEMNIFY UNDER THIS SECTION
15(b)(ii)(C) (1) TO THE EXTENT THAT DAMAGES ARE
CAUSED OR CONTRIBUTED TO BY SELLER'S OPERATIONS,
ACTIONS OR OMISSIONS BEFORE THE EFFECTIVE TIME AND/OR
(2) WITH RESPECT TO ANY ENVIRONMENTAL CONDITION
(ENVIRONMENTAL CONDITIONS ARE COVERED EXCLUSIVELY BY
THE PROVISIONS OF SECTION 15(b)(ii)(D));
40
(D) EXCEPT TO THE EXTENT THAT DAMAGES ARE
CAUSED OR CONTRIBUTED TO BY SELLER'S OPERATIONS,
ACTIONS OR OMISSIONS BEFORE THE EFFECTIVE TIME, ANY
ENVIRONMENTAL CONDITION AT, ON OR UNDER OR ARISING OR
EMANATING FROM ANY ASSETS, OR PROPERTIES OF WAPCO,
ARISING FROM BUYER'S OWNERSHIP, USE OR OPERATION OF
SUCH ASSETS AFTER THE EFFECTIVE TIME, INCLUDING ANY
LOSS, PROPERTY DAMAGE, NATURAL RESOURCE DAMAGE,
INJURY TO, OR DEATH OF ANY THIRD-PARTY ARISING
THEREFROM ("ENVIRONMENTAL CLAIMS"); AND
(E) THE ENFORCEMENT OF INDEMNIFICATION
RIGHTS UNDER THIS SECTION 15(B)(ii).
(c) Indemnification Procedures.
(i) Indemnification Process. The Person making a
claim for indemnification under this Section 15 shall be, for
the purposes of this Agreement, referred to as the
"Indemnified Party" (provided that for the purpose of clause
(C) below such term shall refer to the party hereto to whom
such Person is related for purposes of obtaining the benefits
of this Section 15) and the party or parties against whom such
claims are asserted under this Section 15 shall be, for the
purposes of this Agreement, referred to as the "Indemnifying
Party." All claims by any Indemnified Party under this Section
15 shall be asserted and resolved as follows:
(A) Notice of Claims. In the event that (1)
any claim or Action is asserted or instituted against
any Indemnified Party by any Person other than the
Parties to this Agreement or their Affiliates which
could give rise to Damages for which an Indemnifying
Party could be liable to an Indemnified Party for
Damages under this Agreement (such claim, demand or
Proceeding, a "Third Party Claim") or (2) any
Indemnified Party under this Agreement shall have a
claim to be indemnified for Damages by any
Indemnifying Party under this Agreement which does
not involve a Third Party Claim (such claim, a
"Direct Claim" and, together with Third Party Claims,
"Claims"), the Indemnified Party shall with
reasonable promptness send to the Indemnifying Party
a written notice specifying the nature of such Claim,
the amount of Damages sought in such Claim, if known,
and the provisions of this Agreement in respect of
which such right of indemnification is claimed or
arises (a "Claim Notice"), provided that a delay or
defect in notifying the Indemnifying Party shall not
relieve the Indemnifying Party of its obligations
under this Agreement except to the extent that (and
only to the extent that) the Indemnifying Party
demonstrates such failure shall have caused the
Damages for which the Indemnifying Party is obligated
to be greater than such Damages would have been had
the Indemnified Party given the Indemnifying Party
timely notice.
41
(B) Third Party Claims. In the event of a
Third Party Claim, the Indemnifying Party shall be
entitled to assume and control the defense of such
Third Party Claim and to appoint counsel of the
Indemnifying Party's choice at the expense of the
Indemnifying Party to represent the Indemnified Party
and any others the Indemnifying Party may reasonably
designate in connection with such Third Party Claim
(in which case the Indemnifying Party shall not
thereafter be responsible for the fees and expenses
of any separate counsel retained by any Indemnified
Party except as set forth below); provided that such
counsel is reasonably acceptable to the Indemnified
Party, which approval shall not be unreasonably
withheld. The Indemnified Party shall cooperate with
the Indemnifying Party and its counsel in such
defense and make available to the Indemnifying Party
all witnesses, records, materials, and information in
the Indemnified Party's possession or under the
Indemnified Party's control relating thereto as may
be reasonably requested by the Indemnifying Party,
and in contesting any Action which the Indemnifying
Party defends, or, if appropriate and related to the
Action in question, in making any counterclaim
against the Person asserting the Third Party Claim,
or any cross-complaint against any Person. In the
event the Indemnifying Party fails to assume the
defense of such Third Party Claim within ten (10)
days after receipt of notice thereof in accordance
with the terms hereof, (1) the Indemnified Party
against which such Third Party Claim has been
asserted shall have the right to undertake the
defense, compromise or settlement of such Third Party
Claim on behalf of, at the expense of and for the
account and risk of the Indemnifying Party, and (2)
the Indemnifying Party agrees to cooperate with the
Indemnified Party in such defense and make available
to the Indemnified Party, all witnesses, records,
materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control
relating thereto as may be reasonably requested by
the Indemnified Party.
(C) Settlement of Third Party Claims. In
connection with the settlement or compromise of any
Third Party Claim, the Indemnifying Party shall not,
without the written consent of the Indemnified Party
(which consent shall not be unreasonably withheld),
(1) settle or compromise any Third Party Claims or
consent to the entry of any judgment which does not
include as an unconditional term thereof the delivery
by the claimant or plaintiff to the Indemnified Party
of a written release from all liability in respect of
such Third Party Claim of all Indemnified Parties
affected by such Third Party Claim or (2) settle or
compromise any Third Party Claim if the settlement or
compromise imposes equitable remedies or obligations
on the Indemnified Party other than financial
obligations for which such Indemnified Party will be
indemnified hereunder or (3) settle or compromise any
Third Party Claim if the Indemnified Party will be
required to make any payment with respect to such
compromise or settlement due to the application of
the limitations of Section 15(d). No Third Party
Claim which is being defended in good faith
42
by the Indemnifying Party or which is being defended
by the Indemnified Party in accordance with the terms
of this Agreement shall be settled or compromised by
the Indemnified Party without the written consent of
the Indemnifying Party (which consent shall not be
unreasonably withheld, conditioned or delayed);
provided, however, if a Third Party Claim is being
defended by an Indemnified Party pursuant to the last
sentence of clause (B) above (unless the Indemnifying
Party and Indemnified Party mutually agree that the
Indemnified Party shall defend such Third Party
Claim), the limitations on the Indemnified Party's
right to settle or compromise set forth in this
clause (C) shall not apply to such Indemnified Party,
unless the Indemnifying Party has been advancing (in
a timely manner) payment of such Indemnified Party's
costs and expenses associated with such defense upon
demand therefor by the Indemnified Party (subject to
the undertaking of the Indemnified Party to reimburse
such advances in the event such costs of defense are
not ultimately to be indemnifiable under this Section
15).
(ii) Reduction of Damages. To the extent any Damages
of an Indemnified Party are reduced by receipt of payment
under insurance policies, which payments are not subject to
retroactive adjustment or other reimbursement to the insurer
in respect of such payment, such payments (net of the expenses
of the recovery thereof) (such net payment, a "Reimbursement")
shall be credited against any such Damages; provided however,
the pendency of such payments shall not delay or reduce the
obligation of the Indemnifying Party to timely make payment to
the Indemnified Party in respect of such Damages. The
Indemnified Party shall use commercially reasonable efforts
(but in no event shall the Indemnified Party be required to
xxx the insurer or its agent, unless the Indemnifying Party
agrees to pay all reasonable costs and expenses in connection
therewith, including reasonable attorneys' fees) to pursue
payment under or from any insurer in respect of such Damages.
If any Reimbursement is obtained subsequent to payment by an
Indemnifying Party in respect of any Damages, such
Reimbursement shall be promptly paid over to the Indemnifying
Party.
(iii) Access. From and after the delivery of a Claim
Notice under this Agreement, at the reasonable request of the
Indemnifying Party, each Indemnified Party shall grant the
Indemnifying Party and its Representatives all reasonable
access to the books, records and properties of such
Indemnified Party to the extent reasonably related to the
matters to which the Claim Notice relates. All such access
shall be granted during normal business hours and shall be
granted under conditions, which will not unreasonably
interfere with the business and operations of such Indemnified
Party. The Indemnifying Party will not, and shall require that
its Representatives do not, use (except in connection with
such Claim Notice) or disclose to any third Person other than
the Indemnifying Party's Representatives (except as may be
required by applicable Legal Requirement) any information
obtained pursuant to this Section 15(c) which is designated as
confidential by an Indemnified Party, unless such disclosure
is required by the Indemnifying Party in
43
defense of a Claim and such disclosure is authorized by
Indemnified Party (which authorization shall not be
unreasonably withheld if there is in place or will be put in
place a protective order or agreement covering the use by the
third party of any such disclosed confidential information).
(iv) Definition of Damages. "Damages" means all
damages (including incidental and consequential damages and
lost profits), losses (including any diminution of value),
liabilities, payments, amounts paid in settlement,
obligations, remediation costs and expenses, natural resource
damages, fines, interests, assessments, penalties, costs of
burdens associated with performing injunctive relief, other
costs (including reasonable fees and expenses of attorneys and
consultants) of investigation, preparation, and litigation in
connection with any Action, threatened Action or settlement,
and other costs and expenses of any kind or nature whatsoever,
whether known or unknown, contingent or vested, matured or
unmatured, and whether or not resulting from third-party
claims, strict liability claims, including those under
Environmental Laws. Notwithstanding anything to the contrary
in this Agreement, Damages shall expressly exclude punitive
damages, exemplary damages and other penalty damages, unless
arising out of a Third-Party Claim.
(d) Limitations on Indemnification.
(i) Minimum; Threshold. Except with respect to claims
for breaches of the covenants and obligations stated in
Sections 1, 2, 3, 4, 8A, 8B, 12, 15(b)(i)(E), 15(b)(ii)(B) and
15(b)(ii)(E) and with respect to the Excluded Items, no amount
shall be payable by any Indemnifying Party pursuant to Section
15(b)(i) or Section 15(b)(ii):
(A) unless the amount of Damages for each
individual and unrelated Claim exceeds the Minimum
Indemnifiable Amount; and
(B) unless the aggregate amount of Damages
(including Damages excluded from indemnification
pursuant to clause (A) above) under Section 15(b)(i)
or Section 15(b)(ii), respectively, exceeds $500,000
(the "WAPCO Threshold") (at which point the
Indemnified Party shall be entitled to all
indemnification amounts in excess of such Threshold,
excluding Claims less than the Minimum Indemnifiable
Amount).
(ii) Cap. Notwithstanding anything to the contrary
contained in this Agreement, and except with respect to claims
for breaches of the covenants and obligations stated in
Sections 1, 2, 3, 4, 8A, 8B, 12, 15(b)(i)(E), 15(b)(ii)(B) and
15(b)(ii)(E) and with respect to the Excluded Items, the
maximum amount of indemnifiable Damages which may be recovered
by any Buyer Indemnified Parties from Seller or Xxxxxxxx
Guarantor and by any Seller Indemnified Parties from Buyer
arising out of, resulting from or incident to the matters
enumerated in Section 15(b)(i) or Section 15(b)(ii) shall be
$8,000,000 (the "WAPCO Environmental Cap") with respect to any
and all Environmental Claims and $4,000,000 (the "WAPCO
General Cap") with
44
respect to any and all claims for indemnity other than
Environmental Claims, but in no event shall the amount of all
indemnifiable Damages of any type which may be recovered by
any Buyer Indemnified Parties or any Seller Indemnified
Parties pursuant to this Section 15(d)(ii) exceed $10,000,000
(the "WAPCO Aggregate Cap").
(e) Exclusivity of Remedies. Except for (1) any equitable
relief, including injunctive relief or specific performance to which
any Party hereto or Xxxxxxxx Guarantor may be entitled, (2) remedies
available under the Xxxxxxxx Guaranty, and (3) fraud, the
indemnification provisions of this Section 15 shall be the sole and
exclusive remedy of each Party (including Buyer Indemnified Parties,
Seller Indemnified Parties and Xxxxxxxx Guarantor) with respect to any
and all Actions or Damages arising out of this Agreement from and after
the Effective Time.
16. Further Assurances.
(a) After the Effective Time, each of the parties hereto
shall, at the request and expense of the any other party, execute,
acknowledge and deliver or cause to be executed, acknowledged and
delivered such instruments and take such other action as may be
necessary or advisable to carry out their respective obligations under
this Agreement and under any document delivered pursuant hereto.
(b) In order to provide an orderly transition from Seller to
Buyer of the WAPCO Interests and the TAPS Interests, Seller and Buyer
agree to enter into a Transition Services Agreement in the form
attached to this Agreement as Exhibit B. Additionally, Seller shall, at
Buyer's request, and without further consideration, take all actions
necessary to obtain any contractual consents that were not obtained
prior to the Effective Time and to take all actions necessary to
provide Buyer with the benefits under any such contracts or agreements.
17. Expenses. Except as otherwise provided herein or in the Transition
Services Agreement provided for in Section 16 above, all fees, costs and
expenses incurred by a party hereto in negotiating this Agreement or in
consummating the transactions contemplated by this Agreement shall be paid by
such party.
18. Notices. All notices and communications required or permitted under
this Agreement shall be in writing and any such notice or communication shall be
deemed to have been duly given or made if personally delivered, or if mailed by
certified mail, postage and certification charges prepaid, or sent by a
nationally recognized commercial delivery service, charges prepaid, or by
facsimile telecopier, addressed as follows:
45
If to Buyer:
Xxxx Alaska Pipeline Company, LLC
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Attention: President
Fax: (000) 000-0000
With a copy to:
Xxxx Alaska Pipeline Company, LLC
0000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
If to Seller or Xxxxxxxx Guarantor:
The Xxxxxxxx Companies
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Corporate Development
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice) to:
The Xxxxxxxx Companies
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Assistant General Counsel, Corporate Shared
Services
Facsimile: (000) 000-0000
The effective date of notice shall be the date of receipt in case of personal
delivery. In all other cases, the effective date of notice shall be three
Business Days after the date such notice is mailed or sent. Any party may, by
written notice to the other hereunder, change the address or facsimile number to
which delivery shall thereafter be made.
19. Assignment; Binding Affect; No Third Party Beneficiaries. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the Parties (whether by operation of law or otherwise)
without the prior written consent of the other Parties, except, Buyer may,
without prior consent of Seller, transfer or assign by operation of law or
otherwise this Agreement to any Affiliate or subsidiary of Buyer, but Buyer
shall continue to be liable for the obligations, commitments, duties and
responsibilities of the Buyer hereunder notwithstanding any such transfer or
assignment. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the Parties and their
respective
46
successors and assigns. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon
any Person other than the Parties hereto, their successors and
assigns, any Indemnified Parties, and, under certain
circumstances, the Parties' Affiliates any right, remedy or
claim under or by reason of this Agreement.
20. Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original
instrument for all purposes and all of which together shall constitute one
Agreement.
21. Governing Law. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of Texas.
22. Miscellaneous. This Agreement may not be amended nor any rights
hereunder be waived except by an instrument in writing signed by the party to be
charged with such amendment or waiver. The headings of the sections of this
Agreement are for convenience and shall not limit or otherwise affect any of the
provisions of this Agreement. This Agreement (including the Exhibits hereto)
constitutes the entire understanding between the parties with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior
agreements and understandings relating to such subject matter. The parties
acknowledge that they and their respective counsel have negotiated and drafted
this Agreement jointly and agree that the rule of construction that ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation or construction of this Agreement. As used herein, the term
"person" shall include any natural person, corporation, partnership (general or
limited), limited liability company, trust or Governmental Authority.
23. Defined Terms; Other Definitional Provisions.
(a) Defined Terms. As used in this Agreement, each of the
following terms has the meaning specified below:
"1934 ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"ACTION" means any action, cause of action, appeal, petition,
plea, charge, complaint, claim, suit, demand, litigation, arbitration,
mediation, hearing, inquiry, investigation, or similar event,
occurrence, or proceeding.
"AFFILIATE" means, with respect to any Person, each other
Person that directly or indirectly (through one or more intermediaries
or otherwise) controls, is controlled by, or is under common control
with such Person. The term "CONTROL" (including the terms "CONTROLLED
BY" and "UNDER COMMON CONTROL with") means the possession, directly or
indirectly, of the actual power to direct or cause the direction of the
management policies of a Person, whether through the ownership of stock
or other equity, by contract, agreement, credit arrangement or
otherwise.
47
"AGREEMENT" means this Purchase Agreement, as amended,
supplemented or modified from time to time in accordance with the
express terms hereof, together with all schedules and exhibits attached
hereto.
"ALYESKA" has the meaning specified in the Recitals.
"BALANCE SHEET" means the unaudited proforma balance sheet of
WAPCO as of June 30, 2003 included in Schedule 5(g). The Balance Sheet
shall fairly present the financial position of WAPCO as at the close of
business on June 30, 2003 in accordance with GAAP.
"BASE STOCKHOLDER'S EQUITY" has the meaning set forth in
Section 2(f)(i).
"BUSINESS DAY" means any day other than Saturday, Sunday or
other day on which commercial banks located in New York, New York are
authorized or required by law to close.
"BUYER" has the meaning specified in the introductory
paragraph of this Agreement.
"BUYER INDEMNIFIED PARTY" shall have the meaning set forth in
Section 15(b)(i).
"C STORES ASPA" has the meaning specified in the Recitals.
"CLAIM NOTICE" shall have the meaning set forth in Section
15(c)(i).
"CLAIMS" shall have the meaning set forth in Section 15(c)(i).
"CLOSING" means the closing of the transactions contemplated
by this Agreement.
"CLOSING DATE" has the meaning assigned to that term in
Section 10.
"CLOSING PAYMENT" has the meaning set forth in Section 2(a).
"CODE" means the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENT" means the letter agreement dated
July 12, 2002, between Flint Hills Resources, L.P., an Affiliate of
Buyer, and Xxxxxxxx Guarantor relating to the furnishing of information
to Flint Hills Resources, L.P. and it Affiliates, including Buyer, in
connection with its evaluation of the transactions contemplated in this
Agreement.
"CURRENT ASSETS" means the value of all assets of WAPCO on a
consolidated basis as of the Effective Time that (A) would be
classified as current assets in accordance with GAAP, (B) have
demonstrable value to WAPCO and to Buyer, on a going forward basis
(e.g. prepaid property taxes, prepaid rent, prepaid supplies, cash
advances, and other prepaid expenses) and (C) directly relate to
WAPCO's proportionate share ownership of TAPS. For
48
the avoidance of doubt, the following current assets (which list is
illustrative and not exhaustive) are excluded from the definition of
Current Assets: (i) current income taxes receivable (State); (ii)
current income taxes receivable (Federal); (iii) deferred income taxes
(Federal); (iv) deferred income taxes (State); (v) trade notes and
accounts receivable - MAPL; (vi) escrowed tariff; (vii) intercompany
receivables and (viii) WAPCO's proportionate share of Alyeska's current
assets, with (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii)
collectively referred to as the ("EXCLUDED CURRENT ASSETS").
"CURRENT LIABILITIES" means the value of all liabilities of
WAPCO on a consolidated basis as of the Effective Time that (A) would
be classified as current liabilities in accordance with GAAP, (B)
directly offset current assets that have demonstrable value to WAPCO
and to Buyer, on a going forward basis and (C) directly relate to
WAPCO's proportionate share ownership of TAPS. For the avoidance of
doubt, the following current liabilities (which list is illustrative
and not exhaustive) are excluded from the definition of Current
Liabilities: all (i) current income taxes payable (State); (ii) current
income taxes payable (Federal); (iii) deferred income taxes (State);
(iv) deferred income taxes (Federal); (v) deferred revenue - T&D; (vi)
deferred revenue - tariff subject to refund; (vii) trade accounts
payable - MAPL; (viii) intercompany payables and (ix) WAPCO's
proportionate share of Alyeska's current liabilities, with (i), (ii),
(iii), (iv), (v), (vi), (vii), (viii) and (ix) collectively referred to
as the ("EXCLUDED CURRENT LIABILITIES").
"DAMAGES" has the meaning assigned to that term in Section
15(c)(iv).
"DIRECT CLAIM" has the meaning assigned to that term in
Section 15(c)(i).
"DIRECT NET WORKING CAPITAL" means the Current Assets less the
Current Liabilities as of the Effective Time.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached
hereto, containing the various exceptions to the representations,
warranties and covenants of Seller and Buyer contemplated by the
provisions of this Agreement.
"DR&R" has the meaning assigned to that term in Section
5(l)(ii).
"EFFECTIVE TIME" shall mean 11:59 p.m., Alaska time on the
last day of the month in which Closing occurs, unless the Parties
expressly agree to some other day or time.
"EFFECTIVE TIME BALANCE SHEET" means WAPCO's balance sheet at
the Effective Time. The Effective Time Balance Sheet shall (A) fairly
present the financial position of WAPCO as at the Effective Time in
accordance with GAAP applied on a basis consistent with those in the
preparation of the Balance Sheet, (B) include line items substantially
consistent with those in the Balance Sheet, and (C) be prepared in
accordance with accounting policies and practices consistent with those
used in the preparation of the Balance Sheet.
49
"EFFECTIVE TIME DEFICIT" has the meaning set forth in Section
2(d)(i).
"EFFECTIVE TIME SURPLUS" has the meaning set forth in Section
2(d)(i).
"ENVIRONMENTAL CLAIMS" has the meaning assigned to that term
in Section 15(b)(i)(c).
"ENVIRONMENTAL CONDITION" means any condition existing on, at
or originating from, each property included within WAPCO's assets which
constitutes, (A) a Release on, at or from such property of any
Hazardous Materials or (B) with regards to Seller, a violation of any
Environmental Laws applicable before or as of the Effective Time or any
Environmental Permits or, with regard to Buyer, a violation of any
Environmental Laws applicable as of or after the Effective Time or any
Environmental Permits.
"ENVIRONMENTAL LAWS" means any and all Legal Requirements,
rules, codes, policies, directives, standards, licenses or Permits of
any Governmental Authority relating to Hazardous Materials, the
abatement of pollution, protection or restoration of the environment,
or the ensuring of public health and safety from environmental,
occupational or workplace hazards, specifically including those
relating to the exposure to, use, Release, threatened Release,
emission, presence, storage, treatment, disposal, generation,
transportation, distribution, manufacture, processing, handling,
management or control of Hazardous Materials, previously, presently, or
hereafter in effect, including the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq.; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Federal Insecticide, Fungicide &
Rodenticide Act, 7 U.S.C. Section 136 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 et seq.; the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Section 9601 et seq.; the Emergency Planning and Community Right
to Know Act, 42 U.S.C. Section 11001 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq.; Endangered Species
Act, 16 U.S.C. Section 1531 et seq.; and the Pipeline Safety Act, 49
U.S.C. Section 60101, et seq., and all similar statutes and regulations
thereunder adopted by the U.S., the states, the counties, the boroughs
or the municipalities to which WAPCO assets are subject, or any other
Governmental Authority, as each may be amended from time to time.
50
"ENVIRONMENTAL LIABILITIES" means those liabilities, actions,
rights of action, contracts, Indebtedness, obligations, claims, causes
of action, suits, Damages, demands, costs, expenses and attorneys' fees
whatsoever, known or unknown, disclosed or undisclosed, accrued or
unaccrued, existing at any time, of every kind and nature arising
directly or indirectly out of or as a consequence of the actual or
suspected use, storage, handling, generation, transportation,
manufacture, production, release, discharge, disposal or presence of
Hazardous Materials on, in, under or about WAPCO's assets or the air,
soil or groundwater thereof, including, without limitation, any and all
costs incurred due to any investigation of WAPCO's assets or any
cleanup, remediation, removal or restoration mandated by or pursuant to
any applicable Environmental Laws or agencies enforcing such applicable
Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ESTIMATED DIRECT NET WORKING CAPITAL" shall have the meaning
set forth in Section 2(b).
"EXCLUDED CURRENT ASSETS" shall have the meaning set forth in
the definition of "Current Assets."
"EXCLUDED LIABILITIES" shall have the meaning set forth in the
definition of "Current Liabilities."
"EXCLUDED ITEMS" means all rights, liabilities and obligations
of Seller with respect or relating to (i) items 10 and 11 on Schedule
5(j)(ii),(ii) all of Seller's and its Affiliates' rights relating to
the Oracle financial system and ATLAS system used by Seller, and (iii)
any rights, liabilities and obligations not directly related to the
TAPS Interests.
"FERC" means the Federal Energy Regulatory Commission.
"FINAL DIRECT NET WORKING CAPITAL" shall have the meaning set
forth in Section 2(c).
"FINAL STOCKHOLDER'S EQUITY" shall have the meaning set forth
in Section 2(f).
"GAAP" means generally accepted accounting principles, as
recognized by the U.S. Financial Accounting Standards Board (or any
generally recognized successor), consistently applied.
"GOVERNMENTAL ACTION" means any authorization, application,
action, order, writ, injunction, decree, stipulation, approval,
consent, ruling, decision, verdict, mandate, subpoena, command,
directive, award, exemption, filing, judgment, license, notice,
registration, permit or other requirement, determination, finding by,
of, to or with any Governmental Authority.
51
"GOVERNMENTAL AUTHORITY" means any (A) nation, state, county,
city, xxxxxxx, xxxx, xxxxxxx, xxxxxxxx, xxxxxxxxx, or other
jurisdiction of any nature; (B) federal, state, local, municipal,
foreign, or other government; (C) governmental authority of any nature
(including any governmental agency, branch, department, official, or
entity and any court or other tribunal); or (D) body exercising, or
entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any
nature, in each case having jurisdiction over Seller, Buyer, WAPCO or
TAPS, as the applicable context requires.
"HAZARDOUS MATERIAL" means (A) any chemicals, materials or
substances defined as "hazardous waste," "hazardous substance,"
"hazardous constituent," "extremely hazardous substance," "toxic
chemical," "hazardous material," "hazardous chemical," "toxic
pollutant," "contaminant," "chemical," "chemical substance," "hazardous
air pollutant," "pollutant," "pesticide," "toxic" or "asbestos," as
such terms are defined in any of the Environmental Laws, and related
substances, and all other substances which are regulated by any
Environmental Laws or which may be declared to constitute a material
threat to human health or to the environment, (B) any radioactive
materials, asbestos-containing materials, urea formaldehyde foam
insulation, ethylene glycol, lead, silica, and radon and (C) any
Petroleum Products, except Petroleum Products that are produced,
stored, refined or otherwise handled lawfully in the normal course of
business and operation of the business.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"INDEBTEDNESS" means with respect to any Person without
duplication (A) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property payment, but excluding
obligations to trade creditors incurred in the Ordinary Course of
Business that are not overdue by six (6) months unless being contested
in good faith, (B) all reimbursement and other obligations with respect
to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (C) all obligations evidenced by notes, bonds, debentures
or similar instruments and (D) guaranties of indebtedness.
"INDEMNIFIED PARTY" has the meaning specified in Section
15(c).
"INDEMNIFYING PARTY" has the meaning specified in Section
15(c).
52
"INTELLECTUAL PROPERTY" means any and all patents, license
agreements, trade secrets, trademarks, copyrights, domain names,
in-house developed software, hardware information technology
applications, proprietary and technical information, supplier lists and
other supplier information, customer lists and other customer
information, price lists, advertising and promotional materials, field
performance data, research materials, other proprietary intangibles,
databases, processes, technical know-how, business and product
know-how, engineering and other drawings, designs, plans, methods,
engineering and manufacturing specifications, technology, inventions,
processes, methods, formulas, procedures, sales history, model numbers,
literature and phone numbers, and operating and quality control manuals
and data owned, licensed, sublicensed or otherwise used by WAPCO.
"INTEREST" means interest at the thirty day USD LIBOR rate
published by the British Bankers Association two Business Days prior to
the Effective Time.
"INTEREST RATE" means the thirty day USD LIBOR rate published
by the British Bankers Association on the 106th day after the date
hereof.
"INTERIM TEMPORARY RATES" shall mean the temporary rates
issued by the Regulatory Commission of Alaska in Order No. 10 in RCA
Docket P-03-4.
"KNOWLEDGE" means, with respect to Seller, the actual
knowledge of the following individuals: Xxxx Xxxxx, Xxxx Xxxxx, Xxxx
Xxxxxxx, Xxxx Xxxxx and Xxxxx Xxxxxx. Such individuals shall be deemed
to have actual knowledge of any information gained by or submitted to
the owners of TAPS by Alyeska by whatever means for the time period
between June 30, 2000 and the Effective Time.
"LEGAL REQUIREMENT" means any applicable order, constitution,
law, ordinance, regulation, statute, code or treaty issued by any
federal, state, local, municipal, foreign, international,
multinational, or other administrative body, including an arbitration
panel, any principle of common law or judicial or administrative
interpretation thereof.
"LIEN" means any lien, charge, mortgage, deed to secure debt,
security interest, title defect, pledge, option, deed of trust, claim,
easement, right of first refusal, production payment, restriction,
proxy and voting or other agreement, claim, easement, preemptive right,
option, right of first refusal, burden, encumbrance of any kind, rights
of a vendor under any title retention, or conditional sale or lease
agreement or other arrangement substantially equivalent thereto, in
each case whether imposed by law, agreement, understanding or
otherwise.
"MAPL" has the meaning specified in Section 5(l)(ii).
53
"MATERIAL ADVERSE CHANGE (OR EFFECT)" means (A) when used with
respect to Seller or WAPCO's assets, (i) a change (or effect) in the
condition (financial or otherwise), properties, WAPCO's assets,
liabilities, rights, obligations, operations or business of Seller,
which change (or effect), individually or in the aggregate, has had or
would reasonably be expected to have a materially adverse effect on the
condition, properties, assets, liabilities, rights, obligations,
operations or business of Seller as it relates to WAPCO's assets, (ii)
a result or consequence that would materially impair the ability of
Seller to own, hold, develop or operate WAPCO's assets, or (iii) a
result or consequence that would materially impair the ability of
Seller to perform its obligations hereunder or to consummate the
transaction contemplated hereunder; and (B) when used with respect to
Buyer, a result or consequence that would impair Buyer's ability to
perform its obligations hereunder or consummate the transactions
contemplated hereby. In determining whether any individual event would
result in a Material Adverse Effect, notwithstanding that such event
does not in and of itself have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event
and all other then existing events would result in a Material Adverse
Effect. Material Adverse Change or (Effect) shall not include an
adverse effect arising from matters that generally affect the economy
or industry in which the relevant Party or Xxxxxxxx Guarantor is
engaged and shall not include any settlement of the TAPS Intrastate
Rates Litigation approved by Buyer in writing or any post-Closing
decisions relating to the TAPS Intrastate Rates Litigation.
"MINIMUM INDEMNIFIABLE AMOUNT" means $100,000.
"NET AFTER TAX INCOME" is equal to WAPCO's revenues minus: (A)
cost of sales, (B) operating expenses, (C) depreciation, (D) sales,
general and administrative expenses, (E) interest and (F) federal and
state income taxes.
"NET CASH FLOW" means Net After Tax Income plus financial/book
depreciation plus interest expense or minus interest income, as the
case may be, plus financial/book federal and state income taxes minus
cash federal and state income taxes.
"ORDINARY COURSE OF BUSINESS" means action taken if (A)
consistent in nature, scope, and magnitude with past practices and is
taken in the ordinary course of the normal, day-to-day operations, (B)
does not require authorization by the board of directors or
shareholders of Seller and does not require any other separate or
special authorization of any nature, and (C) is in accordance with all
Legal Requirements.
"PARTY" and "PARTIES" means each of Seller and Buyer, but
shall not include the Xxxxxxxx Guarantor.
"PERMITS" means the permits, licenses, certificates, licenses,
variances, exemptions, orders, franchises, approvals, filings,
consents, accreditation, registrations and authorizations of all
Governmental Authorities necessary for the lawful conduct of the
business conducted by WAPCO.
54
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, but excludes Governmental Authorities and employees of
Governmental Authorities working in their capacity as employees of such
Governmental Authorities.
"PETROLEUM PRODUCTS" means any crude oil, condensate,
petroleum or petroleum products, natural or synthetic gas.
"PRELIMINARY EFFECTIVE TIME DEFICIT" has the meaning assigned
to that term in Section 2(d)(i).
"PRELIMINARY EFFECTIVE TIME SURPLUS" has the meaning assigned
to that term in Section 2(d)(ii).
"PROCEEDING" means any action, arbitration, audit, claim,
inspection, notice, review, hearing, investigation, litigation, or suit
(whether civil, criminal, administrative, investigative, or informal),
at law or in equity, commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or
arbitrator.
"PURCHASE PRICE" has the meaning assigned to that term in
Section 2(a).
"REFINERY ASPA" has the meaning specified in the Recitals.
"REIMBURSEMENT" shall have the meaning set forth in Section
15.
"RELEASE" or "RELEASED" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, migrating or disposing (including the abandoning or
discarding of barrels, containers and other closed receptacles
containing any Hazardous Material) of a substance into the environment,
including the movement or continued movement of any materials through
or it the air, soil, surface water, ground water or property.
"REPRESENTATIVE" means, with respect to any Person, any
director, officer, employee, agent, advisor (including legal,
accounting and financial advisors), Affiliate or other representative
or agent authorized to act on behalf of such Person.
"RESPONSIBLE OFFICER" means, with respect to Seller or Buyer,
the Chairman, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer or any Vice President of
such Party.
"SELLER" has the meaning specified in the introductory
paragraph of this Agreement.
"SELLER INDEMNIFIED PARTY" shall have the meaning set forth in
Section 15(b)(ii).
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"STOCKHOLDER'S EQUITY" will be derived from the Effective Time
Balance Sheet. The following items will be removed from the Effective
Time Balance Sheet for purposes of calculating Stockholder's Equity:(A)
fixed assets and depreciation; (B) Excluded Current Assets; (C)
Excluded Current Liabilities; (D) the Direct Net Working Capital; (E)
all Excluded Items; (F) all other items which represent WAPCO's
proportionate share of Alyeska's balance sheet; and (G) all noncurrent
intercompany payables and receivables.
"TAPS" has the meaning specified in the Recitals.
"TAPS AGREEMENT" has the meaning specified in the Recitals.
"TAPS INTERESTS" has the meaning specified in the Recitals.
"TAPS INTRASTATE RATES LITIGATION" means intrastate rate case
pending before the Regulatory Commission of Alaska, docket numbers
P-97-4/P-97-7, P-03-4 and P-86-2.
"TAPS PERMITTED LIENS" means:
(A) the terms, conditions, restrictions, obligations,
exceptions, reservations, limitations and other matters
contained in any rights of way or documents under which Seller
has obtained any rights of way or other property rights
associated with the TAPS Interests, in each case that do not,
and will not, interfere materially with the possession,
ownership, use, operation or value of the TAPS Interests;
(B) liens for property taxes and assessments that are
not yet due and payable as of the Effective Time (or if
delinquent, that are being contested in good faith by Seller
by appropriate proceedings);
(C) any obligations or duties affecting the TAPS
Interests to the extent created by any Governmental Authority
under any Permit or Legal Requirement;
(D) easements, restrictive covenants, defects in
title and irregularities, and other matters that do not and
will not interfere materially with the possession, ownership,
use, operation or value of the TAPS Interests;
(E) mechanic's, materialmen's, repairmen's and other
statutory liens that do not and will not interfere materially
with the possession, ownership, use, operation or value of the
TAPS Interests; and
(F) transfer restrictions and requirements arising
under applicable Federal and state securities laws.
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"TAXES" means taxes of any kind, levies or other like
assessments, customs, duties, or imposts, including income, gross
receipts, ad valorem, value added, excise, motor fuel, real or personal
property, asset, sales, use, license, payroll, transaction, capital,
net worth and franchise taxes, estimated taxes, withholding,
employment, social security, workers compensation, utility, severance,
production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed
or payable to the United States or any state, local or foreign
governmental subdivision or agency thereof, and in each instance such
term shall include any interest, penalties or additions to tax
attributable to any such Tax, including penalties for the failure to
file any Tax Return or report.
"TAX RETURN" means any return, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedules), including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Taxes.
"THREATENED" means as follows: a claim, Proceeding, dispute,
action, or other matter will be deemed to have been "Threatened" if any
demand or statement has been made (in writing or, to Seller's
Knowledge, verbally) or any notice has been given (in writing or, to
Seller's Knowledge, verbally).
"THIRD PARTY CLAIM" shall have the meaning set forth in
Section 15.
"TSM" shall have the meaning set forth in Section 3(b).
"XXXXXX INVENTORY TRANSPORTATION REVENUE" has the meaning set
forth in Section 2(e).
"WAPCO" has the meaning specified in the Recitals.
"WAPCO AGGREGATE CAP" has the meaning specified in Section
15(d)(ii).
"WAPCO CONTRACTS" has the meaning specified in Section 5(l).
"WAPCO ENVIRONMENTAL CAP" has the meaning specified in Section
15(d)(ii).
"WAPCO GENERAL CAP" has the meaning specified in Section
15(d)(ii).
"WAPCO INTERESTS" has the meaning specified in the Recitals.
"WAPCO PERMITTED LIENS" shall have the meaning specified in
Section 1(a).
"WAPCO THRESHOLD" has the meaning specified in Section
15(d)(i).
"XXXXXXXX GUARANTOR" has the meaning specified in the
introductory paragraph of this Agreement.
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"XXXXXXXX GUARANTY" has the meaning specified in Section
11(b)(iii).
(b) Other Definitional Provisions.
(i) All references in this Agreement to Exhibits,
Sections, subsections and other subdivisions refer to the
corresponding Exhibits, Sections, subsections and other
subdivisions of or to this Agreement unless expressly provided
otherwise. References in a Section of this Agreement to any
Disclosure Schedule shall refer to (A) that section or
schedule of the Disclosure Schedule which corresponds to the
number of such Section, and (B) any other Section or Schedule
that contains information or disclosures that reasonably
relate to the substance of such Section or Schedule. Titles
appearing at the beginning of any Sections, subsections or
other subdivisions of this Agreement are for convenience only,
do not constitute any part of this Agreement, and shall be
disregarded in construing the language hereof.
(ii) Any representations and warranties with regards
to WAPCO Interests are made solely with regards to the WAPCO
Interests and are not intended to imply a representation or
warranty with regards to the TAPS interests.
(iii) Exhibits and Schedules to this Agreement are
attached hereto and by this reference incorporated herein for
all purposes.
(iv) References to "days" in this Agreement shall
refer to calendar days, unless otherwise specified.
(v) The words "THIS AGREEMENT," "HEREIN," "HEREBY,"
"HEREUNDER" and "HEREOF," and words of similar import, refer
to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The words "THIS
SECTION" and "THIS SUBSECTION," and words of similar import,
refer only to the Section or subsection hereof in which such
words occur. The word "OR" is not exclusive, and the word
"INCLUDING" (in its various forms) means including without
limitation.
(vi) Pronouns in masculine, feminine or neuter
genders shall be construed to state and include any other
gender, and words, terms and titles (including terms defined
herein) in the singular form shall be construed to include the
plural and vice versa, unless the context otherwise requires.
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This Purchase Agreement is executed as of the date first above stated.
XXXX ALASKA PIPELINE COMPANY, LLC
By: /s/ Xxxxxxx X. XxXxxx
------------------------
Name: Xxxxxxx X. XxXxxx
------------------------
Title: President
------------------------
XXXXXXXX ENERGY SERVICES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
Title: Senior Vice President
------------------------
THE XXXXXXXX COMPANIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
Title: Senior Vice President
------------------------
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