EX-10.1 2 d354497dex101.htm MEMBERSHIP INTEREST PURCHASE AGREEMENT MEMBERSHIP INTEREST PURCHASE AGREEMENT
Exhibit 10.1
MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (“Agreement”) is dated as of the 14th day of May, 2012, and entered into by and between Inergy, L.P., a Delaware limited partnership (“Seller”), and Inergy Midstream, L.P., a Delaware limited partnership (“Buyer”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”
R E C I T A L S:
“1060 Forms” has the meaning set forth in Section 2.3.
“Action” has the meaning set forth in Section 3.7.
“Affiliate” has the meaning assigned to such term in Rule 405 of the Securities Act and the rules and regulations of the SEC promulgated thereunder.
“Agreement” has the meaning set forth in the Preamble.
“Amendment to the Omnibus Agreement” means that certain amendment to the Omnibus Agreement, in the form attached hereto as Exhibit A.
“Assignment and Transfer of Membership Interest” means that certain Assignment and Transfer of Membership Interest, in the form attached hereto as Exhibit B, transferring the Interest to Buyer.
“Associated Employees” has the meaning set forth in Section 3.15(b).
“Balance Sheet Date” has the meaning set forth in Section 3.8(a).
“Basket” has the meaning set forth in Section 6.5(a).
“Business” means the actual lines of business conducted by the Company.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Units” means common units representing limited partnership interests in Buyer.
“Capital Lease” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, property by such Person as lessee that would be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.
“Cash Price” has the meaning set forth in Section 2.1.
“Claim Notice” has the meaning set forth in Section 6.3(a).
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
“Company” has the meaning set forth in the Recitals.
“Consideration Units” means the Buyer Common Units constituting the Equity Consideration.
“Contracts” means any agreement of any kind or nature whatsoever by which any Person is legally bound, including all contracts, agreements, notes, bonds, instruments, leases, subleases, mortgages, Capital Leases, or other binding commitments or arrangements, express or implied, oral or written, and all amendments thereto.
“Cutoff Date” has the meaning set forth in the Preamble.
“Damages” has the meaning set forth in Section 6.1.
“Encumbrance” means any hypothecation, security interest, pledge, mortgage, lien, charge, defect of title, claim, community property interest, easement, equitable interest, option, right of first refusal, order, other encumbrance or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
“Environment” means any water or water vapor, any land, including land surface or subsurface, air, fish, storm water, wildlife, flora, fauna, biota, and all other natural resources.
“Environmental Laws” means all federal, state and local environmental, chemical use, safety and sanitation Laws governing the use, presence, recycling, transfer, distribution, storage, treatment, generation, transportation, processing, handling, management, production, spill control, remediation, removal, discharge, Release, threatened Release or disposal of Hazardous Substances and the rules, regulations, policies, decisions, orders and directives of Governmental Authorities with respect thereto, but excluding Laws pertaining to the health and safety of the Company’s employees including, without limitation, the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et. seq.) and New York Labor Law Sections 27 and 27A.
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“Environmental Permits” means all permits, licenses, approvals, authorizations, consents or registrations required by any applicable Environmental Law for the operation of the Business or occupation of the Real Property.
“Equity Consideration” has the meaning set forth in Section 2.1.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“Financial Statements” has the meaning set forth in Section 3.8(a).
“GAAP” means United States generally accepted accounting principles consistently applied.
“Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States or any state, county, city or other political subdivision or similar governing entity, and including any governmental or quasi- governmental body administering, regulating or having general oversight over the Business of the Company or any of the assets associated with the Business of the Company.
“Hazardous Substance” means, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, chlorinated solvents, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, hazardous wastes, hazardous or toxic substances or related materials as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.), Articles 17, 27 and 37 of the New York State Environmental Conservation Law or any other applicable Environmental Law and the regulations promulgated thereunder.
“Indebtedness” means, with respect to a Person, all indebtedness, liabilities and obligations (including interest accrued on such indebtedness, liabilities and obligations), for money borrowed (including any Capital Lease) by the Person, or any contingent liability for any guaranty by the Person of any obligation of any other Person for money borrowed (including the pledge of any collateral or grant of any security interest by a Person and any property as security for any such liability, guaranty or obligation) whether or not any of the foregoing is evidenced by any note, indenture, guaranty or agreement. Indebtedness does not include trade accounts payable, accrued liabilities or expenses (except for interest accrued on indebtedness, liabilities or obligations (including make-whole, prepayment and other similar obligations) relating to money borrowed) or customer deposits.
“Indemnified Party” has the meaning set forth in Section 6.3.
“Indemnifying Party” has the meaning set forth in Section 6.3.
“Interest” has the meaning set forth in the Recitals.
“IRS” means the United States Internal Revenue Service.
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“Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any Governmental Authority.
“March 31 Financials” has the meaning set forth in Section 3.8(a).
“Material Adverse Effect” means with respect to the consequences of any event, fact or circumstance (including the occurrence or non-occurrence of any event, fact or circumstance) applicable to the Business, that such event, fact or circumstance has caused or is reasonably likely to cause, directly, indirectly or consequentially, singularly or in the aggregate with all such events, facts and circumstances, a material adverse effect on the assets, liabilities, financial condition, operating results or operations of the Business, all taken as a whole; provided, however, to the extent such effect results from any of the following, such effect will not be considered a Material Adverse Effect: (a) changes in general business or economic conditions, including such conditions related to the Business; (b) changes in industry conditions that do not disproportionately affect the Company; (c) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States; (d) general economic conditions or events affecting the financial, banking, or securities markets generally; (e) changes in United States generally accepted accounting principles; or (f) changes in law, rules, regulations, orders and other binding directives issued by any Governmental Authority.
“Material Contract” has the meaning set forth in Section 3.4.
“Notice Period” has the meaning set forth in Section 6.3(a).
“Omnibus Agreement” means the Omnibus Agreement dated effective as of December 15, 2011, among Inergy GP, LLC, Seller, NRGM GP, LLC and Buyer.
“Party” and “Parties” have the meaning set forth in the Preamble.
“Permits” has the meaning set forth in Section 3.5(b).
“Permitted Encumbrances” means: (i) liens for Taxes not yet due, or that are being contested in good faith by appropriate proceedings; (ii) statutory liens of mechanics, materialmen, warehousemen and other similar statutory liens for labor, materials or supplies, and which individually or in aggregate, do not materially detract from the value of the assets subject thereto or materially impair the operation of such assets as currently conducted or as proposed to be conducted; and (iii) with respect to the Real Property, (a) zoning, entitlement, restriction, and other land use and environmental regulations by Governmental Authorities that do not in any material respect interfere with the present use by the Company of the Real Property and as to which there is no material default on the part of the Company, (b) all Encumbrances set forth in the Title Policy (other than any security interests or mortgages set forth therein in favor of Xxxxxxx Xxxxx Business Financial Services, Inc. or its assignees), (c) other Encumbrances arising in the ordinary course of business that do not have a materially adversely impact on the Company’s operations, and (d) landlord liens.
“Person” has the meaning set forth in Section 3.1(b).
“Plans” has the meaning set forth in Section 3.15(d).
“Purchase Price” has the meaning set forth in Section 2.1.
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“Real Property” has the meaning set forth in Section 3.11(a).
“Refinery” means the Company’s Xxxxxxx Xxxx salt refinery located on the shore of Seneca Lake in the State of New York.
“Release” has the meaning given to that term in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601, et seq.), and the regulations promulgated thereunder.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Seller” has the meaning set forth in the Preamble.
“Steelworkers Agreement” means the Agreement, dated November 1, 2009 between the Company and the Steelworkers Union on behalf of Local Union 12460-4.
“Steelworkers Union” means, collectively, the United Steelworkers Union, AFL-CIO, CLC and United Steelworkers Union Local 12460-4.
“Taxes” means all taxes, levies or other similar governmental charges including all federal, state, local and foreign income, corporation, gross receipts, value-added, goods and services, license, franchise, profits, capital gains, capital stock, transfer, sales, use, occupation, property, ad valorem, excise, severance, unclaimed property (escheat) liability, windfall profits, stamp, license, payroll, withholding, social security and other taxes (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), and all estimated taxes, additions to tax, and penalties and interest imposed thereon or with respect thereto.
“Tax Partnership” has the meaning set forth in Section 3.10(k).
“Tax Return” means any return, declaration, report, claim for refund, information return or other document (including any related or supporting estimates, elections, schedules, statements or information) filed in connection with the determination, assessment or collection of any Tax or the administration of any Laws or administrative requirements relating to any Tax.
“Title Policy” shall mean that certain Owner’s Policy of Title Insurance No. 5608-25021, dated August 22, 2008, in the amount of $15,000,000.00, insuring fee simple title to the Real Property (and certain other interests) in and to the Company, together with all endorsements, schedules and exhibits appended thereto.
“Transaction Documents” has the meaning set forth in Section 3.3.
2. Sale and Purchase of Interest.
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2.2 Deliveries; Closing Obligations. Contemporaneously herewith:
(a) Buyer is: (i) delivering to Seller by wire transfer an amount equal to the Cash Price to the order of Seller, and (ii) causing the Equity Consideration to be issued to Seller.
(b) Seller is: (i) delivering to Buyer (A) a fully executed copy of the Assignment and Transfer of Membership Interest, and (B) a “Certificate of Non-Foreign Status” with regards to Section 1445 of the Code, in the form attached hereto as Exhibit C; and (ii) causing any Encumbrances (other than Permitted Encumbrances) on the assets of the Company not released prior to the date hereof to be released.
(c) The Amendment to the Omnibus Agreement was signed by all parties thereto.
3.1 Organization; Capitalization.
(a) Seller is a limited partnership duly formed, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority to own, operate and lease its assets and to conduct its business as and where such business is now conducted. Seller is the only member of the Company and is record and beneficial owner of all of the Interest.
(b) The Company is a limited liability company validly existing and in good standing under the Laws of Delaware, and has all requisite limited liability company power and authority to own, operate and lease its assets and to conduct its business as and where such business is now conducted. The Company has no subsidiaries and does not hold any equity or other ownership interest in any partnership, limited partnership, joint venture, corporation, limited liability company, trust, Governmental Authority and any other legal entity (together with an individual, a “Person”).
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(c) Other than the Interest, there are no outstanding options, preemptive or other rights, warrants, agreements, voting trusts, proxies, contracts, calls, commitments or demands of any character relating to any limited liability company interests or other equity interests in the Company. Other than the Interest, there are no other securities of the Company, whether or not issued, including any securities convertible into or evidencing the right to purchase any limited liability company interest or other equity securities of the Company.
(d) Sections 3.1(a)-(c) accurately and completely describe the capitalization and ownership of the Company.
(e) All right, title and interest in and to the Interest is owned by Seller beneficially and of record free and clear of all Encumbrances and without any condition or restriction on transferability, except for restrictions under federal and state securities Laws, and, except for such restrictions, is being transferred to Buyer free and clear of all Encumbrances and without any condition or restriction on transferability.
3.4 No Creation of Violation, Default, Breach or Encumbrance. The execution, delivery and performance of this Agreement by Seller, and the execution, delivery and performance of the Transaction Documents by Seller, do not (i) violate (A) any applicable Law in any material respect or (B) any applicable order, writ, injunction, decree, judgment or ruling of any Governmental Authority, (ii) conflict with or violate any provision of the certificate of limited partnership or the agreement of limited partnership of Seller, (iii) conflict with or violate any provision of the certificate of organization or the limited liability company agreement of the
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Company, or (iv) require the consent of any Person or result in the material breach of or constitute a material default (or an event that, with notice or lapse of time or both, would constitute a material default) under, violate, conflict with, materially breach or give rise to any right of termination, cancellation, modification or acceleration, or to a loss of material benefit to which the Company is entitled, under (A) any contract to which the Company is a party and that (I) involves, or may reasonably be expected to involve, the payment or receipt of $100,000 or more (whether in cash or in goods or services of an equivalent value) over its term, including extension and renewal rights that are at the option of the counterparty (i.e., not the Company) to such Contract, or $50,000 during any one year; (II) imposes any restriction on the conduct of the Business (including noncompetition and similar restrictions); (III) was not made in the ordinary course of business of the Company consistent with past practice; (IV) burdens, benefits, or imposes liabilities upon, or otherwise with respect to, any Real Property; (V) the continued conduct of the Business is dependent upon; (VI) is a partnership, joint venture or other similar contract; or (VII) is a collective bargaining or other labor union contract (each, a “Material Contract”), or (B) any licenses, authorizations, permits, consents or approvals of any Governmental Authority required for the Company to own, license or lease and operate its properties or to conduct the Business in substantially the same manner as conducted by the Company on the date hereof.
3.5 Approvals, Licenses, Permits and Authorizations.
(a) To the knowledge of Seller, no (i) order, license, consent, waiver, authorization or approval of, or (ii) giving of notice to, or (iii) filing, recording, publication, registration or other action with or by, any Governmental Authority is necessary on behalf of Seller or the Company (y) to authorize Seller’s execution, delivery and performance of this Agreement or any other Transaction Document, or (z) for the legality, validity, binding effect or enforceability with respect to Seller or the Company of this Agreement or any other Transaction Document.
(b) The Company has all permits, licenses, approvals, authorizations, consents or registrations (collectively, “Permits”) issued or granted by Governmental Authorities that are necessary for the conduct of the Business as currently conducted, except as would not, individually or in the aggregate, have a Material Adverse Effect. All such Permits are validly held by the Company and are in all material respects in full force and effect. The Company has complied in all material respects with the terms and conditions of such Permits and such Permits will not be subject to suspension, modification, revocation or non-renewal as a result of the execution, delivery and performance by Seller of this Agreement or any other Transaction Document or the consummation by Seller of the transactions contemplated hereby or thereby, except as would not, individually or in the aggregate, have a Material Adverse Effect. No proceeding is pending or, to the knowledge of Seller, threatened with respect to any alleged failure by the Company to have any material Permit necessary for the operation of any of the Company’s assets or the conduct of the Business or to be in compliance therewith. This Section 3.5(b) does not include any matters with respect to Environmental Permits or Environmental Laws; such matters are being addressed exclusively by Section 3.13.
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(a) Attached as Schedule 3.8(a) are accurate and complete copies of: (i) the unaudited balance sheet of the Company as of September 30, 2011 and the related unaudited statements of operations and cash flows of the Company for the fiscal year ending September 30, 2011 (the “Balance Sheet Date”) (collectively, the “Financial Statements “), and (ii) the unaudited balance sheet of the Company as of March 31, 2012 and unaudited statements of operations and cash flows for the six months ended March 31, 2012 (the “March 31 Financials”); all of which have been previously delivered to Buyer. The Financial Statements fairly present the financial position of the Company as of the Balance Sheet Date and the March 31 Financials fairly present the financial position of the Company as of March 31, 2012, in all material respects, and the results of the Company’s operations as of the dates and for the periods indicated above, and have been prepared in conformity with GAAP (with the exception that the Financial Statements and March 31 Financials do not include both a statement of stockholders equity and footnotes), applied on a consistent basis throughout the periods covered thereby, and no event has occurred after the Balance Sheet Date that would be required to be set forth in the Financial Statements under GAAP (or in footnotes thereto, if footnotes were prepared).
(b) The Company has no liabilities or obligations, whether accrued, absolute, contingent or otherwise, that are required to be reflected or reserved against on its balance sheet under GAAP that is part of the Financial Statements other than (i) those which are fully and adequately reflected or reserved against in the Company’s balance sheet included in the Financial Statements, and (ii) liabilities (other than non-current liabilities and Indebtedness for borrowed money) incurred since the Balance Sheet Date in the ordinary course of business consistent with past practice.
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(a) there has not been any Material Adverse Effect;
(b) except in the ordinary course of business consistent with past practice, there has not been (i) any damage, destruction or loss, whether covered by insurance or not, adversely affecting the Company’s assets or the Business or (ii) any cancellation, modification or settlement for less than the full amount thereof of any debt or claim by or owing to the Company;
(c) the Company has not (i) incurred any non-current obligation or liability (including any Capital Lease) or assumed, guaranteed, endorsed or otherwise become responsible for any non-current liabilities or obligations of any other Person (including any Capital Lease) (whether absolute, accrued, contingent or otherwise), (ii) transferred or granted any rights under any Material Contract other than in the ordinary course of business consistent with past practice, (iii) modified or changed any Material Contract other than in the ordinary course of business consistent with past practice, (iv) entered into any transaction, contract or commitment that by reason of its size or otherwise was material to the Business or financial condition of the Company or that was not in the ordinary course of business consistent with past practice, (v) declared or paid any dividend or made any distribution or payment, (vi) delayed or postponed the payment of any non-current liabilities, or (vii) made any capital investments in, any loan to or any acquisition of the securities or assets of any other Person that was material to the Business or financial condition of the Company or other than in the ordinary course of business consistent with past practice;
(d) except for the replacement of obsolete materials or in the ordinary course of business, the Company has not terminated, discontinued, closed or disposed of any plant, facility or any other portion of its assets;
(e) except for the Omnibus Agreement and the Contracts disclosed in the Financial Statements, the Company is not currently a party to any Contract between the Company, on the one hand, and Seller or any of its Affiliates (other than the Company, the Buyer and the Buyer’s subsidiaries), on the other hand; and
(f) the Company has not entered into a Contract to do any of the foregoing.
3.10 Tax Returns and Tax Audits.
(a) Seller and the Company have timely filed with all appropriate Governmental Authorities all Tax Returns required to be filed by or with respect to the Company or its assets for all years and periods starting with the Cutoff Date for which such Tax Returns have become due. All such Tax Returns are correct and complete in all material respects. All such Tax Returns that are based on income have been prepared on the same basis as those of previous years; and, since the Cutoff Date, all Taxes of Seller and the Company (whether or not shown to be due on any Tax Returns) have been fully paid prior to the date on which such Taxes would otherwise be delinquent.
(b) Seller and the Company have made adequate accruals for the payment of all Taxes payable in respect of the periods starting with the Cutoff Date and ending prior to the date hereof and any period subsequent to the last period for which such Taxes were paid, and, to the knowledge of Seller, the Company has no liability for such Taxes in excess of the amounts so paid or accruals so made.
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(c) There are no Liens for Taxes with respect to the assets of the Company (except for statutory Encumbrances for current Taxes not yet due).
(d) Neither Seller nor the Company is a party to any pending Action by any Governmental Authority nor, to the knowledge of Seller, is any Action threatened or contemplated by any Governmental Authority, for assessment or collection of Taxes or any other governmental charges with respect to the Company or its assets, and no claim for assessment or collection of Taxes or any other governmental charges has been asserted against either Seller or the Company with respect to the Company or its assets, nor, to the knowledge of Seller, is the assertion of any such Action pending or contemplated nor, to the knowledge of Seller, is there any basis for any such Action with respect to the period beginning as of the Cutoff Date. To the knowledge of Seller, since the Cutoff Date, there has been no adverse reports prepared by any agent of the IRS with respect to any Tax matter involving with respect to the Company or its assets.
(e) Each of Seller and the Company is not and, since the Cutoff Date, has not been required to file any Tax Returns with, or pay any Taxes to, any foreign countries or political subdivisions thereof with respect to the Company or its assets. Neither Seller nor the Company has in effect any powers of attorney with respect to any Tax matters involving the Company or its assets. Since the Cutoff Date, no consent been filed by Seller or the Company to have the provisions of Section 341(f)(2) of the Code apply to the Company or its assets, nor has any agreement under Section 341(f)(3) of the Code been filed following the Cutoff Date by Seller or the Company with respect to the Company or its assets.
(f) The Company has, since the Cutoff Date, been treated as a partnership or a disregarded entity for federal income tax purposes and no election has been made that is inconsistent with such treatment,
(g) The Company is not, and since the Cutoff Date has never been, a party to any Tax sharing or allocation Contracts, arrangements or understandings, whether written or oral.
(h) Since the Cutoff Date, the Company has complied with all applicable Laws relating to the withholding of Taxes (including withholding of Taxes pursuant to Sections 1441 and 1442 of the Code) and has, since the Cutoff Date and within the time and within the manner prescribed by Law, withheld and paid over to the proper taxing authorities all amounts required to be withheld and paid over under all applicable Laws in connection with amounts paid or owing to any employee, independent contractor, creditor, member and other third party.
(i) No written notice has been received, nor to the knowledge of Seller has any oral notice been received, by the Company from any Governmental Authority, since the Cutoff Date, in a jurisdiction where the Company does not file Tax Returns stating that the Company is required to file Tax Returns with that jurisdiction,
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(j) Seller has no knowledge of any fact or circumstance that arose following the Cutoff Date that would give rise to a claim by a state in which Seller or the Company is not currently filing income tax returns that either Seller or the Company has such an income tax filing responsibility with respect to the operations or assets of the Company.
(k) The Company has not been at any time since the Cutoff Date a member of any partnership, joint venture or other arrangement or Contract that is treated as a partnership for federal, state, local or foreign tax purposes (a “Tax Partnership”) or the holder of a beneficial interest in any trust for any period for which the statute of limitations for any Tax has not expired.
(a) The Title Policy lists all of the real property in which the Company has any ownership and other interests and which is necessary for the conduct of the Business as currently conducted (except as would not, individually or in the aggregate, have a Material Adverse Effect) (collectively, the “Real Property”). The Company does not lease, as lessee, landlord, sublandlord, licensor or otherwise, or otherwise make available, any interest in real or mixed property including, without limitation, the Real Property. The Company has good and indefeasible fee simple title to all real property in which the Company has any ownership free and clear of all Encumbrances except for Permitted Encumbrances.
(b) Neither Seller nor the Company has received notice of any threatened or pending actions, orders, or forbearances in effect as to the Real Property, and to the knowledge of Seller and the Company, no action, order or forbearance is currently in effect or threatened with respect to the Real Property including, without limitation, any condemnation or similar proceeding, special assessment or change in zoning.
3.12 Other Property and Inventory.
(a) The Company has good and indefeasible title to all tangible personal property (other than construction in process) of the Company necessary for the conduct of the Business as currently conducted (except as would not, individually or in the aggregate, have a Material Adverse Effect), free and clear of all Encumbrances except Permitted Encumbrances. The Company has good and indefeasible title to all of the tangible personal property reflected in the balance sheets included in the Financial Statements.
(b) The material machinery and equipment (including automobiles, trucks and heavy machinery) regularly used by the Company in the Business are in an operating condition and repair as of the date of this Agreement that is adequate for such uses.
(c) All product inventories of the Company are of a quality and quantity usable in the ordinary course of its business. The values at which product inventories of the Company are carried on its books of account reflect the normal inventory valuation policy of the Company on a first-in-first-out basis at the lower of cost or market.
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(d) The trade accounts receivable of the Company as shown on its books and records have arisen in the ordinary course of business, represent valid obligations owed to the Company and are recorded as accounts receivable on the books of the Company in accordance with GAAP.
(e) The Company has (and, after the consummation of the transactions contemplated hereby, will have) a level of working capital that is adequate for the continuing operation of the Business, consistent with past practice.
(a) Except as provided in Schedule 3.13(a), as of the Cutoff Date and through the date hereof, the Company has complied and is in compliance with all Environmental Laws.
(b) All Environmental Permits necessary for the construction, equipping, ownership, use or operation of the Business as currently conducted or occupation of the Real Property has been obtained and Seller has, in all material respects, complied and is in material compliance with such Environmental Permits. The Environmental Permits are in full force and effect, and the transactions will not materially adversely affect them.
(c) Except as provided in Schedule 3.13(a), there are no actions pending or, to the knowledge of Seller, threatened, that could reasonably be expected to cause the incurrence of material expenses or costs or that seek material money damages, injunctive relief, investigatory, corrective or remedial action or remedy that arise out of, relate to or result from (i) conditions of the Environment on the Real Property, (ii) a violation or alleged violation of any applicable Environmental Law or non-compliance or alleged non-compliance with any Environmental Permit, (iii) the presence of any Hazardous Substances or a Release or the threat of a Release of any Hazardous Substances, (iv) arrangement for treatment or disposal of any Hazardous Substances at any location other than the Real Property, or (v) human exposure to any Hazardous Substance (excluding exposure by Company employees, which is governed by Section 3.15) to the extent the same arise from the condition of the Real Property since the Cutoff Date.
(d) As of the Cutoff Date and through the date hereof, Seller has not received any form of notice or inquiry, notice of violation or enforcement notice from any Governmental Authority, any operator, tenant, subtenant, licensee or occupant of the Real Property or any property adjacent to or within one half mile of the Real Property or any other Person with regard to a Release or the threat of a Release of any Hazardous Substances on, under, at or from the Real Property, or any property adjacent to or within the immediate vicinity of the Real Property in violation of any applicable Law; and to Seller’s actual knowledge there has been no Release or threat of Release of any Hazardous Substances by the Company on, under, at, from or in the vicinity of the Real Property that requires or may require reporting, investigation, assessment, cleanup or remediation by the Company pursuant to any Environmental Law.
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3.14 Contracts and Commitments.
(a) Each Material Contract is in full force and effect as to the Company and embodies the Company’s complete understanding of the parties agreement with respect to the subject matter thereof. There exists no material default or claim thereof by the Company, or, to the knowledge of Seller, any other party to any Material Contract. There are no facts or conditions that, if continued or noticed, would result in a material default by the Company under any Material Contract. The Company has not received any notice that any other Person intends to cancel, modify or terminate any Material Contract, or to exercise or not to exercise any options thereunder. The Company has not given any notice of cancellation, modification or termination of any Material Contract or of exercise or non-exercise of any options thereunder. Each Material Contract is a valid and binding agreement with respect to the Company and enforceable against the Company in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar Laws relating to or affecting creditors’ rights generally and to general equity principles (whether such enforceability is considered in a proceeding at Law or in equity). No consent or approval of the other parties to any Material Contract or any Person pursuant to any Material Contract is required for the consummation of the transactions contemplated herein.
(b) The Company is not a party to any contract for goods or services or any lease with Seller, or any officer, director, manager or other senior employee of Seller or the Company or any Affiliate of any such Person nor are there any loans or advances to any such Persons from the Company that are presently outstanding.
(c) After the date hereof, none of Seller or its Affiliates (excluding Buyer, its subsidiaries and its general partner) will have any legal rights with respect to the use, operation or maintenance of the Business or its assets.
(a) The Company employs employees, some of which are covered by the Steelworkers Agreement. Except for the Steelworkers Union: (i) the Company has not agreed to recognize any union or other collective bargaining representative; and (ii) no union or other collective bargaining representative has been certified as the exclusive bargaining representative of any of the Company’s employees. None of the Company’s employees are covered by any collective bargaining agreement, other than the Steelworkers Agreement. The Steelworkers Agreement has been duly ratified, certified and approved by the parties having authority to ratify, certify or approve it.
(b) None of the following are pending or, to the knowledge of Seller, threatened against or affecting the Company or the Refinery:
(i) labor strikes, slowdowns, lockouts, representation or certification campaigns, or work stoppages with respect to the Company’s employees or any of the Seller’s employees who provide exclusive or shared services to the Company (the “Associated Employees”);
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(ii) material claims, grievances or arbitration proceedings, written decisions, letter agreements or settlement agreements arising out of collective bargaining agreements, including the Steelworkers Agreement, to which any of the Company, Seller or Affiliates of Seller is a party;
(iii) unfair labor practices or unfair labor practice charges or complaints before the National Labor Relations Board or other Governmental Authority responsible for regulating labor relations; or
(iv) charges, complaints or proceedings before the Equal Employment Opportunity Commission, Department of Labor or any other Governmental Authority responsible for regulating employment practices.
(c) Since the Cutoff Date, there have not been any plant closings, mass layoffs or other terminations of the Company’s employees or of the Associated Employees that would create any liabilities for the Company under the Worker Adjustment and Retraining Notification Act or similar Laws.
(d) The Company does not sponsor, maintain or contribute to or have or could reasonably be expected, directly or indirectly, to have any actual or contingent liability with respect to, nor does it have any legal or equitable obligation to establish, maintain or contribute to any compensation or benefit plan, agreement, program or policy (whether written or oral, formal or informal) for the benefit of any present or former directors, officers, employees, agents, consultants or other similar representatives, including, but not limited to, any “employee benefit plan” as defined in Section 3(3) of ERISA (any of the foregoing arrangements for the benefit of such persons are hereinafter collectively referred to as “Plans”). All Plans in which Associated Employees participate are sponsored or maintained by Seller or an Affiliate (other than the Company).
3.16 Investment Representations.
(a) Seller is an “accredited investor” (as such term is used in Rule 501 under the Securities Act, as amended by the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act) and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in Buyer Units, and it is able to bear the economic risk of such an investment for an indefinite period of time. Seller was not formed for the specific purpose of acquiring Buyer Units.
(b) The Consideration Units are being acquired (i) solely for investment for the account of Seller and not as nominee or agent or otherwise on behalf of any other Person, and (ii) not with a view to or with any present intention to reoffer, resell, fractionalize, assign, grant any participating interest in, transfer or otherwise distribute the Consideration Units in violation of the Securities Act.
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(c) Seller understands that the transfer of the Consideration Units to Seller has not been registered under the Securities Act or any applicable state securities Laws by reason of a specified exemption from the registration provisions of the Securities Act and applicable state securities Laws, which depends upon, among other things, the bona fide nature of Seller’s investment intent as expressed herein.
(d) Seller understands that Buyer is under no obligation to register the Consideration Units for sale on Seller’s behalf or to assist Seller in complying with any exemption from registration under the Securities Act or under applicable state securities Laws.
(e) Seller agrees that the certificates evidencing the Consideration Units will be stamped or otherwise imprinted with a conspicuous legend in substantially the following form:
The Units represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”) or any state securities laws. These Units have been acquired for investment and not with a view to distribution or resale, and may not be sold, pledged, hypothecated, donated or otherwise transferred, whether or not for consideration, without an effective registration statement under the Act and any applicable state securities laws, or an opinion of counsel satisfactory to Inergy Midstream, L.P. that such registration is not required with respect to the proposed disposition thereof and that such disposition will not cause the loss of the exemption(s) upon which Inergy Midstream, L.P. relied in issuing these Units to the original purchaser thereof.
(f) Seller agrees that a stop transfer order that gives effect to the foregoing restrictive legend will be placed on the transfer books maintained with respect to the Consideration Units for so long as transfers are restricted under the Securities Act.
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4.4 No Creation of Violation, Default, Breach or Encumbrance. The execution, delivery and performance by Buyer of this Agreement and the Transaction Documents do not, (i) violate (A) any applicable Law in any material respect, or (B) any order, writ, injunction, decree, judgment or ruling of any Governmental Authority, or (ii) conflict with or violate any provision of the certificate of limited partnership or the agreement of limited partnership of Buyer.
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5. Covenants and Acknowledgements.
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(a) any representation or warranty made by Seller in this Agreement or in any Transaction Document not having been accurate and complete;
(b) any breach by Seller of any covenant or obligation made or undertaken in this Agreement or in any Transaction Document; and
(c) any Action incident to any of the foregoing.
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(a) any representation or warranty made by Buyer in this Agreement or in any Transaction Document not having been accurate and complete;
(b) any breach by Buyer of any covenant or obligation made or undertaken in this Agreement or in any Transaction Document; and
(c) any Action incident to any of the foregoing.
(a) If any claim or demand for which an Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against or sought to be collected from such Indemnified Party by a third party, such Indemnified Party will with reasonable promptness give notice (the “Claim Notice”) to the Indemnifying Party of such claim or demand, specifying the nature of and specific basis for such claim or demand and the amount or the estimated amount thereof to the extent then feasible (which estimate will not be conclusive of the final amount of such claim and demand). The Indemnifying Party will not be obligated to indemnify the Indemnified Party under this Agreement with respect to any such claim or demand if the Indemnified Party fails to notify the Indemnifying Party thereof in accordance with the provisions of this Agreement, and, as a result of such failure, the Indemnifying Party’s ability to defend against the claim or demand is materially prejudiced. The Indemnifying Party will have ten days from the delivery or mailing of the Claim Notice (the “Notice Period”) to notify the Indemnified Party (i) whether or not it disputes the liability of the Indemnifying Party to the Indemnified Party hereunder with respect to such claim or demand, and (ii) whether or not it desires, at the cost and expense of the Indemnifying Party, to defend the Indemnified Party against such claim or demand; provided, however, that any Indemnified Party is hereby authorized, but is not obligated, prior to and during the Notice Period, to file any motion, answer or other pleading that it deems necessary or appropriate to protect its interests or those of the Indemnifying Party, subject to providing reasonable advance notice to the Indemnifying Party of such action and a copy of any documentation to be provided or submitted in connection therewith; provided, that failure to deliver any such notice shall not be deemed a breach hereunder except to the extent the Indemnifying Party’s ability to defend against the claim or demand is materially prejudiced. If the Indemnifying Party notifies the Indemnified Party within the Notice Period that it desires to defend the Indemnified Party against such claim or demand, the Indemnifying Party will, subject to the last sentence of this paragraph, have the right to control the defense against the claim by all appropriate proceedings and any settlement negotiations and the Indemnified Party shall not compromise or settle the claim without the Indemnifying Party’s prior written consent. If the Indemnified Party desires to participate in, but not control, any such defense or settlement, it may do so at its sole cost
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and expense. If the Indemnifying Party fails to respond to the Indemnified Party within the Notice Period, elects not to defend the Indemnified Party, or after electing to defend fails to commence or reasonably pursue such defense, then the Indemnified Party may, but is not required to, undertake or continue the defense of, and compromise or settle (exercising reasonable business judgment), the claim or other matter all on behalf, for the account and at the risk of the Indemnifying Party.
(b) If requested by the Indemnifying Party, the Indemnified Party agrees, at the Indemnifying Party’s expense, to cooperate with the Indemnifying Party and its counsel in contesting any claim or demand that the Indemnifying Party elects to contest.
(c) If any Indemnified Party has a claim against the Indemnifying Party hereunder that does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the Indemnified Party will send a Claim Notice with respect to such claim to the Indemnifying Party. If the Indemnifying Party disputes such claim, such dispute will be resolved by litigation in an appropriate court of competent jurisdiction.
6.4 Time Limitations on Certain Obligations.
(a) Seller will have no liability for indemnification under this Agreement pursuant to Section 6.1(a), except for the representations and warranties set forth in Sections 3.1 (Organization; Capitalization), 3.2 (Due Qualification), 3.3 (Authority; Binding Effect), and 3.10 (Tax Returns and Tax Audits), unless on or before the end of the 12th month following the date hereof Buyer notifies Seller of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Buyer. A claim with respect to Sections 3.1 (Organization; Capitalization), 3.2 (Due Qualification), 3.3 (Authority; Binding Effect), and 3.10 (Tax Returns and Tax Audits), may be made at any time.
(b) Buyer will have no liability for indemnification under this Agreement pursuant to Section 6.2(a), except for the representations and warranties set forth in Sections 4.1 (Organization), 4.2 (Due Qualification) and 4.3 (Authority; Binding Effect), unless on or before the end of the 12th month following the date hereof Seller notifies Buyer of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by Seller. A claim with respect to Sections 4.1 (Organization), 4.2 (Due Qualification) and 4.3 (Authority; Binding Effect), may be made at any time.
(a) Subject to the last sentence of this Section 6.5(a), Seller will have no liability for indemnification under Section 6.1(a) until the total of all Damages with respect to such matters exceeds $1,750,000 (this amount, the “Basket”), and once such amount has been exceeded, Seller will be liable for indemnification for the total of all Damages in excess of the Basket. Subject to the last sentence of this Section 6.5(a), Seller’s aggregate liability under Section 6.1(a) (but excluding any liability for breach of any of Seller’s representations and warranties contained in Sections 3.1 (Organization;
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Capitalization), 3.2 (Due Qualification), 3.3 (Authority; Binding Effect), and 3.10 (Tax Returns and Tax Audits)) is limited to $15,750,000. Notwithstanding the foregoing, this Section 6.5(a) will not apply to any breach of any of Seller’s representations and warranties contained in Sections 3.1 (Organization; Capitalization), 3.2 (Due Qualification), 3.3 (Authority; Binding Effect), and 3.10 (Tax Returns and Tax Audits); provided that the first sentence of this Section 6.5(a) shall apply with respect to any breach of any of Seller’s representations and warranties contained in Section 3.10 (Tax Returns and Tax Audits).
(b) Subject to the last sentence of this Section 6.5(b), Buyer will have no liability for indemnification under Section 6.2(a) until the total of all Damages with respect to such matters exceeds the Basket, and once such amount has been exceeded, Buyer will be liable for indemnification for the total of all Damages in excess of the Basket. Subject to the last sentence of this Section 6.5(b), Buyer’s aggregate liability under Section 6.2(a) (but excluding any liability for breach of any of Buyer’s representations and warranties contained in Sections 4.1 (Organization), 4.2 (Due Qualification) and 4.3 (Authority; Binding Effect)) is limited to $15,750,000. Notwithstanding the foregoing, this Section 6.5(b) will not apply to any breach of any of Buyer’s representations and warranties contained in Sections 4.1 (Organization), 4.2 (Due Qualification) and 4.3 (Authority; Binding Effect).
(c) The Parties have agreed upon the amount of the Basket as a means of applying a materiality standard to the amount of any claim that Buyer may have against Seller, or that Seller may have against Buyer, resulting from a breach of Seller’s or Buyer’s representations and warranties, as the case may be. Therefore, for purposes of determining whether any breach of the representations or warranties of Seller or Buyer, as the case may be, has occurred and for purposes of calculating the dollar amount of Damages to which Buyer or Seller, as the case may be, is entitled to indemnification (including the amounts needed to reach the Basket), each of Seller’s and Buyer’s representations and warranties that contain any qualification as to materiality will be deemed and interpreted to be a representation or warranty as to such items made without such qualification.
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For notice to Seller:
Inergy, L.P.
Xxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
For notice to Buyer:
Inergy Midstream, L.P.
Xxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
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[Signature Page Follows]
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INERGY, L.P. | ||
By: | Inergy GP, LLC, its general partner | |
By: | /s/ Xxxx X. Xxxxxxx | |
Name: | Xxxx X. Xxxxxxx | |
Title: | President and Chief Executive Officer |
INERGY MIDSTREAM, L.P. | ||
By: | NRGM GP, LLC, its general partner | |
By: | /s/ R. Xxxxxx Xxxxxxx, Xx. | |
Name: | R. Xxxxxx Xxxxxxx, Xx. | |
Title: | Executive Vice President and Chief Financial Officer |
[Signature Page to Membership Interest Purchase Agrrement]
EXHIBIT A
ASSIGNMENT AND TRANSFER OF MEMBERSHIP INTERESTS
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Inergy, L.P., a Delaware limited partnership (hereinafter referred to as “Assignor”), hereby assigns, sets over and transfers to Inergy Midstream, L.P., a Delaware limited partnership (hereinafter referred to as “Assignee”), effective as of the date hereof, all of Assignor’s membership interests in US Salt, LLC, a Delaware limited liability company, being a 100% membership interest, leaving Assignor without an interest in US Salt, LLC and Assignee hereby accepts such assignment and transfer.
TO HAVE AND TO HOLD the same unto Assignee, its respective successors and assigns forever.
ASSIGNOR | ASSIGNEE | |||||
INERGY, L.P. | INERGY MIDSTREAM, L.P. | |||||
By: | INERGY GP, LLC, its general partner | By: | NRGM GP, LLC, its general partner | |||
By: | /s/ Xxxx X. Xxxxxxx | By: | /s/ R. Xxxxxx Xxxxxxx, Xx. | |||
Name: Xxxx X. Xxxxxxx | Name: | R. Xxxxxx Xxxxxxx, Xx. | ||||
Title: President and Chief Executive Officer | Title: | Executive Vice President and Chief Financial Officer | ||||
EXHIBIT B
AMENDMENT TO OMNIBUS AGREEMENT
This AMENDMENT TO THE OMNIBUS AGREEMENT (“Amendment”) is entered into on, and effective as of May 14, 2012, among Inergy GP, LLC, a Delaware limited liability company (“NRGY GP”), Inergy, L.P., a Delaware limited partnership (“NRGY”), NRGM GP, LLC, a Delaware limited liability company (the “General Partner”), and Inergy Midstream, L.P., a Delaware limited partnership (the “Partnership”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”
1. | The provisions of Article III of the Agreement shall not apply, and no Party shall have any indemnity right or obligation towards any other Party under the Agreement with respect to US Salt, LLC and its operations. |
2. | The provisions of this Amendment shall not affect the rights of the Partnership or NRGY under that certain Membership Interest Purchase Agreement between them dated the date hereof. |
3. | This Amendment represents the complete and entire understanding of the Parties on the subject matter hereof and supersedes and replaces all prior understandings, agreements or commitments of the parties. Except as expressly modified herein, the Agreement shall remain in full force and effect in accordance with its terms. |
4. | The provisions of Article VI of the Agreement shall apply to this Amendment, mutatis mutandis. |
[remainder of page intentionally left blank]
INERGY GP, LLC | ||
By: | /s/ Xxxx X. Xxxxxxx | |
| ||
Name: | Xxxx X. Xxxxxxx | |
Title: | President and Chief Executive Officer |
INERGY, L.P. | ||
By: | Inergy GP, LLC, its general partner | |
By: | /s/ Xxxx X. Xxxxxxx | |
| ||
Name: | Xxxx X. Xxxxxxx | |
Title: | President and Chief Executive Officer |
NRGM GP, LLC | ||
By: | /s/ R. Xxxxxx Xxxxxxx, Xx. | |
| ||
Name: | R. Xxxxxx Xxxxxxx, Xx. | |
Title: | Executive Vice President and Chief Financial Officer |
INERGY MIDSTREAM, L.P. | ||
By: | NRGM GP, LLC, its general partner | |
By: | /s/ R. Xxxxxx Xxxxxxx, Xx. | |
| ||
Name: | R. Xxxxxx Xxxxxxx, Xx. | |
Title: | Executive Vice President and Chief Financial Officer |
EXHIBIT C
FORM OF CERTIFICATE OF NON-FOREIGN STATUS
MAY 14, 2012
Section 1445 of the Internal Revenue Code of 1986 provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Inergy, L.P., a Delaware limited partnership (“Transferor”), the undersigned hereby certifies the following on behalf of Transferor:
(i) | Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code of 1986 and Income Tax Regulations); |
(ii) | Transferor is not a disregarded entity as defined in Sec. 1.1445-2(b)(2)(iii); |
(iii) | Transferor’s U.S. Employer Identification Number is 00-0000000; and |
(iv) | Transferor’s office address is Xxx Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx 00000. |
Transferor understands that this certificate may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment or both.
Under penalties of perjury I declare that I have examined this certificate and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this certificate on behalf of Transferor.
INERGY, L.P. | ||||||
By: Inergy GP, LLC, its general partner | ||||||
By: | /s/ R. Xxxxxx Xxxxxxx, Xx. | |||||
Name: | R. Xxxxxx Xxxxxxx, Xx. | |||||
Title: | Executive Vice President and Chief Financial Officer |