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EXHIBIT 10.10
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PARENT COMPANY AGREEMENT
by and among
XXXXXXXX PETROLEUM COMPANY
DUKE ENERGY CORPORATION
DUKE ENERGY FIELD SERVICES, LLC
and
DUKE ENERGY FIELD SERVICES CORPORATION
Dated as of March 31, 2000
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TABLE OF CONTENTS
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions......................................................1
Section 1.2 Construction.....................................................6
ARTICLE II
THE IPO
Section 2.1 Efforts..........................................................6
Section 2.2 Formation of the Corporation.....................................7
Section 2.3 Post-IPO Ownership...............................................8
Section 2.4 Certificate of Incorporation and Bylaws..........................8
ARTICLE III
EXECUTION OF AGREEMENTS; PRIMARY VEHICLE
Section 3.1 Execution of Agreements..........................................8
Section 3.2 Market Shares....................................................9
Section 3.3 Primary Vehicle..................................................9
ARTICLE IV
TAX MATTERS
Section 4.1 Distributions to PGC.............................................9
Section 4.2 Tax Status......................................................10
Section 4.3 Tax Proceedings; Cooperation and Exchange of Information........10
Section 4.3 Debt Repayment..................................................12
ARTICLE V
TRANSFER RESTRICTIONS
Section 5.1 Structure; Transfers............................................13
Section 5.2 Change of Control...............................................13
ARTICLE VI
TERMINATION OF AGREEMENTS
Section 6.1 Termination of Agreements.......................................13
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ARTICLE VII
EMPLOYEE MATTERS
Section 7.1 Termination of Agreements.......................................13
Section 7.2 Transfer of Employees...........................................14
Section 7.3 TEPPCO Employees................................................14
Section 7.4 Welfare Benefits................................................14
Section 7.5 Severance Benefits..............................................15
Section 7.6 Miscellaneous...................................................16
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Counterparts....................................................16
Section 8.2 Governing Law; Jurisdiction and Forum; Waiver of Jury Trial.....16
Section 8.3 Entire Agreement................................................17
Section 8.4 Expenses........................................................17
Section 8.5 Notices.........................................................17
Section 8.6 Successors and Assigns..........................................19
Section 8.7 Headings; Definitions...........................................19
Section 8.8 Amendments and Waivers..........................................19
Section 8.9 Severability....................................................19
Section 8.10 Interpretation..................................................19
Section 8.11 Specific Performance............................................19
Section 8.12 Actions by Affiliates of Xxxxxxxx and Xxxx......................19
Exhibits:
Exhibit A Agreement of Merger
Exhibit B Shareholders Agreement
Exhibit C Registration Rights Agreement
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PARENT COMPANY AGREEMENT, dated as of March 31, 2000 (this
"Agreement"), by and among XXXXXXXX PETROLEUM COMPANY, a Delaware corporation
("Xxxxxxxx"), XXXX ENERGY CORPORATION, a North Carolina corporation ("Duke"),
DUKE ENERGY FIELD SERVICES, LLC, a Delaware limited liability company (the
"Company") and solely for purposes of Section 4.3(c) of this Agreement, DUKE
ENERGY FIELD SERVICES CORPORATION, a Delaware corporation ("DEFS Holding").
RECITALS:
1. Duke, Xxxxxxxx and the Company are parties to a Governance Agreement,
dated as of December 16, 1999 (the "Governance Agreement") and a Contribution
Agreement, dated as of December 16, 1999 (the "Contribution Agreement").
2. Xxxxxxxx Gas Company, a Delaware corporation and an indirect
wholly-owned subsidiary of Xxxxxxxx ("PGC"), and DEFS Holding, an indirect
wholly-owned subsidiary of Duke, have simultaneously herewith entered into an
Amended and Restated Limited Liability Company Agreement of Duke Energy Field
Services, LLC, dated as of the date hereof (the "LLC Agreement").
3. In connection with the closing of the transactions contemplated by the
Contribution Agreement, Duke, Xxxxxxxx and the Company desire to terminate the
Governance Agreement and to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the respective meanings set forth below:
"Affiliate" shall mean, with respect to any Person, a Person directly
or indirectly Controlling, Controlled by or under common Control with such
Person.
"Agreement" shall have the meaning set forth in the Preamble.
"Agreement of Merger" shall have the meaning set forth in Section
2.2(a).
"Average Market Price" shall mean, with respect to the Corporation
Common Stock to be sold by the Corporation to the public in the IPO, the average
of the closing prices, as reported on the NYSE Composite Tape, on each of the
first five days of trading on the NYSE (exclusive of the pricing day).
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"Business Day" shall mean any day on which banks are generally open to
conduct business in the State of New York.
"Change of Control" shall mean an event (such as a Transfer of voting
securities) that causes a Person that holds a Company Interest to cease to be
Controlled by such Person's Parent; provided, however, that an event that causes
Duke or Xxxxxxxx to be Controlled by another Person shall not constitute a
Change of Control.
"Closing Date" shall have the meaning set forth in Section 3.1 of the
Contribution Agreement.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Company" shall have the meaning set forth in the Preamble.
"Company Interest" shall mean, with respect to any Person, such
Person's equity interest in the Company.
"Contribution Agreement" shall have the meaning set forth in the
Recitals.
"Control" shall mean the possession, directly or indirectly, through
one or more intermediaries, by any Person or group (within the meaning of
Section 13(d)(3) under the Securities Exchange Act of 1934, as amended) of both
of the following:
(a) (i) in the case of a corporation, more than 25% of the direct or
indirect economic interests in the outstanding equity securities thereof;
(ii) in the case of a limited liability company, partnership, limited
partnership or venture, the right to more than 25% of the distributions
therefrom (including liquidating distributions); (iii) in the case of a
trust or estate, including a business trust, more than 25% of the
beneficial interest therein; and (iv) in the case of any other entity, more
than 25% of the economic or beneficial interest therein; and
(b) in the case of any entity, the power or authority, through
ownership of voting securities, by contract or otherwise, to control or
direct the management and policies of the entity.
"Corporation" shall have the meaning set forth in Section 2.2(a).
"Corporation Common Stock" shall have the meaning set forth in Section
2.2(e).
"Corporation Interest" shall mean, with respect to any Person, such
Person's percentage ownership (direct and indirect), exclusive of any Market
Shares owned (directly or indirectly) by such Person, of the outstanding
Corporation Common Stock at the time of measurement.
"DEFS Holding" shall have the meaning set forth in the Preamble.
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"DEFS Subsidiary" shall have the meaning set forth in the Contribution
Agreement for purposes of Annex B thereof.
"Disguised Sale Amount" shall mean the excess of (x) $1,200,000,000
over (y) the product of the Percentage Interest of PGC in the Company as of the
Closing Date and $2,400,000,000.
"Distribution" shall have the meaning set forth in the LLC Agreement.
"Duke" shall have the meaning set forth in the Preamble.
"Duke Group" shall mean Duke and its Subsidiaries (other than the
Company, any DEFS Subsidiary, any PGC Subsidiary or any other Subsidiary of the
Company).
"Duke Shareholder" shall mean the holder of any Corporation Common
Stock (other than Market Shares) that is Duke or a Subsidiary of Duke or, if at
any time there is more than one such holder, each of such holders.
"Enterprise Value" shall mean the sum of (x) the Parties' Equity Value
and (y) $2,400,000,000; provided, that if the Merger becomes effective on or
after the date two years after the Closing Date, "Enterprise Value" shall mean
$5,500,000,000.
"Financing" shall have the meaning set forth in the Contribution
Agreement.
"Flow Through Subsidiaries" shall have the meaning set forth in the
LLC Agreement.
"Governance Agreement" shall have the meaning set forth in the
Recitals.
"Governmental Entity" shall mean any federal, state, political
subdivision or other governmental agency or instrumentality, foreign or
domestic.
"Income Tax" shall mean any federal, state, local or foreign Tax
measured by net income or capital gain.
"IPO" shall mean the initial offering of shares of Corporation Common
Stock to the public in a transaction registered under the Securities Act.
"LLC Agreement" shall have the meaning set forth in the Recitals.
"Market Shares" shall mean shares purchased by a Person through
open-market purchases, other than those shares purchased to prevent dilution in
accordance with Article X of the Certificate of Incorporation of the
Corporation.
"Member" shall have the meaning set forth in the LLC Agreement.
"Merger" shall have the meaning set forth in Section 2.2(a).
"Neutral Firm" shall mean Xxxxxx Xxxxxxxx L.L.P.
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"NYSE" shall mean the New York Stock Exchange, Inc.
"Parent" shall mean, with respect to a particular Person, the Person
that Controls such particular Person and that is not itself Controlled by any
other Person.
"Parties' Corporation Interest" shall mean the difference between (x)
100% and (y) the Public's Corporation Interest.
"Parties' Equity Value" shall mean the product of (i) the quotient of
(x) the Parties' Corporation Interest divided by (y) the Public's Actual
Corporation Interest multiplied by (ii) the Public's Equity Value.
"Percentage Interest" shall mean, with respect to the Company Interest
issued to DEFS Holding pursuant to Section 2.1(j)(i) of the Contribution
Agreement, 69.7 percent, and with respect to the Company Interest issued to PGC
pursuant to Section 2.1(k)(i) of the Contribution Agreement, 30.3 percent.
"Person" shall mean any individual, partnership, limited liability
company, firm, corporation, association, joint venture, trust or other entity or
any Governmental Entity.
"PGC" shall have the meaning set forth in the Recitals.
"PGC Contribution" shall have the meaning set forth in Section 4.2.
"PGC Distribution" shall have the meaning set forth in Section 4.2.
"PGC Subsidiary" shall have the meaning set forth in the Contribution
Agreement for purposes of Annex B thereof.
"PGCSI" or "Xxxxxxxx Member Parent" shall mean Xxxxxxxx Gas Company
Shareholder, Inc., a Delaware corporation and a wholly-owned Subsidiary of
Xxxxxxxx.
"Xxxxxxxx" shall have the meaning set forth in the Preamble.
"Xxxxxxxx Enterprise Value" shall mean the product of (x) the
Enterprise Value and (y) .389.
"Xxxxxxxx Equity Value" shall mean the difference between (x) Xxxxxxxx
Enterprise Value and (y) $1,200,000,000.
"Xxxxxxxx Group" shall mean Xxxxxxxx and its Subsidiaries (other than
the Company, any DEFS Subsidiary, any PGC Subsidiary or any other Subsidiary of
the Company).
"Xxxxxxxx Shareholder" shall mean the holder of any Corporation Common
Stock (other than Market Shares) that is Xxxxxxxx or a Subsidiary of Xxxxxxxx
or, if at any time there is more than one such holder, each of such holders.
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"Post-Closing Period" for any Person means any taxable period
beginning, with respect to such Person, after the Closing Date, and the portion,
beginning after the Closing Date, of any taxable period that includes, with
respect to such Person, but does not end on, the Closing Date.
"Public's Actual Corporation Interest" shall mean the quotient,
expressed as a percentage, of (x) the number of shares of the Corporation Common
Stock sold by the Corporation in the IPO (which excludes shares issued to
officers and employees of the Corporation or the Company concurrently with the
IPO pursuant to compensation or benefit plans), but excluding any shares sold
pursuant to the underwriters' over-allotment option, divided by (y) the number
of shares of Corporation Common Stock outstanding immediately after the Merger
(including shares to be issued pursuant to rights received in the Merger) and
the IPO, plus shares issued to officers and employees of the Corporation or the
Company concurrently with the IPO pursuant to compensation or benefit plans, but
excluding any shares sold pursuant to the underwriters' over-allotment option.
"Public's Corporation Interest" shall mean the quotient, expressed as
a percentage, of (x) the number of shares of the Corporation Common Stock sold
by the Corporation in the IPO, plus shares issued to officers and employees of
the Corporation or the Company concurrently with the IPO pursuant to
compensation or benefit plans, but excluding any shares sold pursuant to the
underwriters' over-allotment option, divided by (y) the number of shares of
Corporation Common Stock outstanding immediately after the Merger (including
shares to be issued pursuant to rights received in the Merger) and the IPO, plus
shares issued to officers and employees of the Corporation or the Company
concurrently with the IPO pursuant to compensation or benefit plans, but
excluding any shares sold pursuant to the underwriters' over-allotment option.
"Public's Equity Value" shall mean the product of (i) the Average
Market Price multiplied by (ii) the number of shares sold by the Corporation in
the IPO (which excludes shares issued to officers and employees of the
Corporation or the Company concurrently with the IPO pursuant to compensation or
benefit plans), but excluding any shares sold pursuant to the underwriters'
over-allotment option.
"Registration Rights Agreement" shall have the meaning set forth in
Section 3.1(a).
"Regulation" shall mean the income tax regulations promulgated under
the Code by the U.S. Department of the Treasury (whether final or temporary).
"Returns" or "Tax Returns" means returns, declarations, statements,
reports, forms, property tax renditions or other documents or information
required to be filed with or supplied to any Taxing Authority.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shareholders Agreement" shall have the meaning set forth in Section
3.1(a).
"Subsidiary" shall mean, when used with respect to any Person, any
Affiliate of such Person that is Controlled by such Person.
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"Tax" or "Taxes" shall mean all taxes (whether federal, state, local
or foreign) based upon or measured by income and any other tax whatsoever,
including gross receipts, profits, windfall profits, sales, use, occupation,
value added, ad valorem, transfer, franchise, withholding, payroll, employment,
excise, stamp, premium, capital stock, production, business and occupation,
disability, severance, or real or personal property taxes, fees, or assessments
of any kind whatsoever imposed by any Governmental Entity, together with any
interest or penalties imposed with respect thereto.
"Tax Proceeding" means any Tax audit, contest, litigation or other
proceeding with or against a Governmental Entity.
"Taxing Authority" shall mean any Governmental Entity having
jurisdiction over the assessment, determination, collection or other imposition
of any Tax.
"Transfer" shall mean any sale, assignment or other transfer, whether
by operation of law or otherwise (but not any deemed transfer pursuant to
Section 338 of the Code of the assets of a corporation or its Subsidiary in
connection with the purchase of the stock of such corporation). "Transferred"
and "Transferring" shall have correlative meanings.
"Total Equity Value" shall mean the quotient of (x) the Public's
Equity Value divided by (y) the Public's Actual Corporation Interest.
"Two Year Period" shall mean the period beginning on (and including)
the Closing Date and ending on (and including) the later of (a) the second
anniversary of the Closing Date and (b) the date of consummation of the IPO.
Section 1.2 Construction. Unless the context requires otherwise: (a)
the gender (or lack of gender) of all words used in this Agreement includes the
masculine, feminine and neuter; (b) references to Articles and Sections refer to
Articles and Sections of this Agreement; (c) references to Exhibits refer to the
Exhibits attached to this Agreement; (d) references to laws refer to such laws
as they may be amended from time to time, and references to particular
provisions of a law include any corresponding provisions of any succeeding law;
(e) references to money refer to legal currency of the United States of America;
(f) the word "including" means "including, without limitation"; and (g) all
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
ARTICLE II
THE IPO
Section 2.1 Efforts. (a) The Company agrees to use its reasonable best
efforts to prepare for, effect and consummate the IPO (market conditions
permitting) as soon as practicable following the date hereof, including
selecting underwriters, preparing and filing with the SEC a registration
statement and filings under applicable state securities or "blue sky" laws or
similar securities laws and determining the terms of the IPO; provided that,
notwithstanding anything to the contrary in this Agreement, the Company shall
not consummate any IPO on or before the date two years after the date of this
Agreement without the prior written consent of Xxxxxxxx if the consummation of
the IPO (including the potential effect of any underwriters' over-allotment) in
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accordance with the provisions of this Agreement would result in (i) Xxxxxxxx'
Corporation Interest being less than 20% upon consummation of the IPO or (ii) an
Enterprise Value immediately following the IPO of less than $4,400,000,000;
provided, further, that for purposes of the calculations contemplated in (i) and
(ii) in the preceding proviso only, the "Average Market Price" shall be the
proposed public offering price of the Corporation Common Stock in the IPO.
(b) Each of Duke and Xxxxxxxx agrees to (i) provide reasonable
assistance to the Company in effecting the IPO and (ii) cause any Duke
Shareholder or Xxxxxxxx Shareholder, respectively, not to Transfer any or all of
their shares of Corporation Common Stock for a period of six months following
the consummation of the IPO and to agree to such other customary terms as are
reasonably requested by the underwriters in connection with the IPO.
(c) Duke agrees that, prior to the consummation of the Merger, it will
cause the board of directors of DEFS Holding to be comprised solely of three
directors designated by Xxxxxxxx (or four if Xxxxxxxx designates an Independent
Director (as defined in the Certificate of Incorporation)) and five directors
designated by Duke (or six or seven if Duke designates one or two Independent
Directors, respectively).
Section 2.2 Formation of the Corporation. (a) Each of Duke and
Xxxxxxxx agrees to take such corporate action as is necessary and desirable to
cause (i) PGCSI to be merged with and into DEFS Holding, with DEFS Holding
surviving (such surviving corporation, the "Corporation", and such merger, the
"Merger"), immediately prior to the consummation of the IPO and (ii) an
Agreement of Merger substantially in the form of Exhibit A (the "Agreement of
Merger") to be filed in accordance with the Delaware General Corporation Law.
(b) Each of Duke and Xxxxxxxx presently intends that, if the IPO
occurs, approximately 20% of the Corporation Common Stock shall be sold by the
Corporation pursuant to the IPO (including shares to be issued to officers and
employees of the Corporation or the Company concurrently with the IPO);
provided, however, that this percentage may vary depending on market conditions
and other factors.
(c) Xxxxxxxx represents, warrants and agrees that at the time of such
Merger, (i) PGCSI shall have no assets or liabilities, contingent or otherwise,
other than through its ownership of its interest in PGC and (ii) PGC shall have
no assets or liabilities, contingent or otherwise, other than through its
ownership of its interest in the Company.
(d) Duke represents, warrants and agrees that at the time of the
Merger, DEFS Holding shall have no assets or liabilities, contingent or
otherwise, other than through its ownership of its interest in the Company.
(e) Duke agrees to cause the Duke Shareholder and Xxxxxxxx agrees to
cause the Xxxxxxxx Shareholder, respectively, to vote its shares to cause the
Corporation upon consummation of the IPO to have a single class of common stock
(the "Corporation Common Stock") outstanding and no other classes of capital
stock or other securities (except for options to purchase shares of the
Corporation Common Stock issued to officers, directors and employees of the
Corporation or the Company or its Subsidiaries).
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Section 2.3 Post-IPO Ownership. (a) Each of Duke and Xxxxxxxx
presently intends that, if the IPO occurs, approximately 20% of the Corporation
Common Stock (including shares to be issued to officers and employees of the
Corporation or the Company concurrently with the IPO) shall be sold by the
Corporation pursuant to the IPO; provided, however, that this percentage may
vary depending on market conditions and other factors.
(b) Each of Duke and Xxxxxxxx agrees to take, or cause to be taken,
such action (including the Merger and any adjustments by the Corporation to the
number of shares of Corporation Common Stock owned by Duke and Xxxxxxxx) as is
necessary and desirable to provide that upon the end of the seventh day of
trading on the NYSE (excluding the pricing day and without regard to the
exercise of any underwriters' over-allotment), each of Duke and Xxxxxxxx shall
own, directly or indirectly, a percentage of the outstanding Corporation Common
Stock determined as follows:
(1) Xxxxxxxx' Corporation Interest shall equal the quotient,
expressed as a percentage, of (x) Xxxxxxxx Equity Value divided by (y) Total
Equity Value.
(2) Duke's Corporation Interest shall equal the difference
between (x) the Parties' Corporation Interest and (y) Xxxxxxxx' Corporation
Interest.
Annex A sets forth examples of determinations of Xxxxxxxx' Corporation
Interest and Duke's Corporation Interest at various Public's Equity Values
(assuming that no shares are issued to officers or employees of the Corporation
or the Company concurrently with the IPO pursuant to compensation or benefit
plans). The percentages and calculations set forth in this Section 2.3 do not
give effect to any underwriters' over-allotment. In the event that there is an
underwriters' over-allotment and such over-allotment is exercised, each of
Duke's and Xxxxxxxx' Corporation Interest and the interest of the public in the
Corporation (prior to such exercise) shall all be reduced pro rata.
Section 2.4 Certificate of Incorporation and Bylaws. Each of Duke and
Xxxxxxxx agrees to take such corporate action as is necessary to cause the
Corporation to adopt a Certificate of Incorporation and Bylaws of the
Corporation substantially in the forms attached to the Agreement of Merger.
ARTICLE III
EXECUTION OF AGREEMENTS; PRIMARY VEHICLE
Section 3.1 Execution of Agreements. (a) Duke agrees to take all
corporate action to cause each Duke Shareholder (including Duke, if applicable)
to execute, and Xxxxxxxx agrees to take all corporate action to cause each
Xxxxxxxx Shareholder (including Xxxxxxxx, if applicable) to execute, a
Shareholders Agreement substantially in the form of Exhibit B (the "Shareholders
Agreement"). Each of Duke and Xxxxxxxx agrees to execute, and agrees that it
will take all corporate action to cause the Corporation to execute, a
Registration Rights Agreement substantially in the form of Exhibit C (the
"Registration Rights Agreement").
(b) Duke agrees to cause each Duke Shareholder to comply with the
obligations of a Duke Shareholder under the Shareholders Agreement, and Xxxxxxxx
agrees to cause each Xxxxxxxx
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Shareholder to comply with the obligations of a Xxxxxxxx Shareholder under the
Shareholders Agreement.
(c) The parties hereto agree that, from time to time, whether before,
at or after the Closing Date, each of them will execute and deliver, or cause to
be executed and delivered, such further agreements and instruments and take such
other action as may be necessary to effectuate the provisions, purposes and
intents of this Agreement.
Section 3.2 Market Shares. Duke agrees to, and to cause its Affiliates
to, make nominations and vote any and all of their Market Shares in accordance
with the requirements applicable to Duke's Total Corporation Interest (as
defined in the Shareholders Agreement) and take all other actions required of a
Duke Shareholder (as defined in the Shareholders Agreement) under Sections 2.1
and 2.2 of the Shareholders Agreement. Xxxxxxxx agrees to, and to cause its
Affiliates to, make nominations and vote any and all of their Market Shares in
accordance with the requirements applicable to Xxxxxxxx'x Total Corporation
Interest (as defined in the Shareholders Agreement) and take all other actions
required of a Xxxxxxxx Shareholder (as defined in the Shareholders Agreement)
under Sections 2.1 and 2.2 of the Shareholders Agreement.
Section 3.3 Primary Vehicle. Each of Duke and Xxxxxxxx presently
intends that the Corporation shall be the primary vehicle by which it conducts
the midstream gas gathering and processing business in the United States and
Canada.
ARTICLE IV
TAX MATTERS
Section 4.1 Distributions to PGC. For the period, if any, beginning at
the time of consummation of the IPO and ending on the second anniversary of the
Closing Date, without the prior written consent of Duke and Xxxxxxxx: (i) the
Company shall not make (or enter into a plan or arrangement to make) any
Distribution of cash or other property to PGC in excess of the product of the
aggregate Distribution to all Members and PGC's Percentage Interest as of the
Closing Date, (ii) the Company shall not make (or enter into a plan or
arrangement to make) any Distribution to PGC of cash or other property other
than Distributions to fund dividends by the Corporation to its shareholders and
Distributions pursuant to Section 7.6(a)(i) of the LLC Agreement and (iii) PGC
shall not be liquidated, shall not be merged into the Corporation, shall not
distribute to any shareholder of PGC the Company Interest issued to PGC pursuant
to Section 2.1(k) of the Contribution Agreement and shall not be converted into,
or merged into or otherwise caused to become, a partnership or disregarded
entity for federal income tax purposes (nor shall there be any plan or
arrangement to do so). Without the prior written consent of each of Duke and
Xxxxxxxx: (a) no amendment shall be made to Section 6.3, Article VII or Article
VIII (other than Section 8.2(b)) of the LLC Agreement, or any reference thereto
in the LLC Agreement or any defined term used therein, prior to the second
anniversary of the Closing Date, and any amendment made after such second
anniversary to any such provision shall not apply to any taxable period, or
portion thereof, ending on or before the second anniversary of the Closing Date
and (b) no amendment shall be made to Section 8.2(b) of the LLC Agreement or any
reference thereto in the LLC Agreement or any defined term used therein.
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Section 4.2 Tax Status. Each of Duke, Xxxxxxxx and the Company shall
take no action or position inconsistent with (or that could reasonably be
expected to be viewed by the Internal Revenue Service as inconsistent with), and
shall make or cause to be made all applicable elections with respect to: (a) the
treatment of the Company (or any successor thereto), with respect to all times
during the Two Year Period, as a partnership for U.S. Federal income tax
purposes and the treatment of each of the Flow Through Subsidiaries (or any
successor thereto), with respect to all times during the Two Year Period, as a
partnership or disregarded entity for U.S. Federal income tax purposes; (b) the
treatment of the Company, with respect to all times during the Two Year Period,
as not being a publicly traded partnership for United States Federal income tax
purposes; (c) the allocation of the Financing under Regulation Section
1.752-3(a)(3) among the Members in proportion to their Percentage Interests as
of the Closing Date; (d) the treatment of the contribution to the Company by
DEFS Holding pursuant to Section 2.2 of the Contribution Agreement as a
contribution pursuant to Code Section 721, the treatment of the distribution to
DEFS Holding pursuant to Section 3.2(c)(2) of the Contribution Agreement (as
adjusted pursuant to Section 3.3 thereof) as a distribution pursuant to Code
Section 731 and the treatment that, for purposes of the Code, neither such
contribution nor such distribution is a transfer that constitutes a sale or
exchange (or portion thereof) of property in whole or in part to the Company by
a Member in the Company acting in a capacity other than as a Member of the
Company; (e) the treatment of the contribution to the Company by PGC pursuant to
Section 2.3 of the Contribution Agreement (the "PGC Contribution") as a
contribution pursuant to Code Section 721, the treatment of the distribution to
PGC pursuant to Section 3.2(c)(1) of the Contribution Agreement (as adjusted
pursuant to Section 3.3) (the "PGC Distribution") as a distribution pursuant to
Code Section 731 and the treatment that, for purposes of the Code, neither the
PGC Contribution nor the PGC Distribution is a transfer that constitutes a sale
or exchange (or portion thereof) of property in whole or in part to the Company
by a Member in the Company acting in a capacity other than as a Member of the
Company (except in the case of this clause (e) that Duke, Xxxxxxxx and the
Company shall treat (except to the extent Duke, Phillips, the Members and the
Company agree in writing or are required by the Neutral Firm to treat otherwise)
an amount of the PGC Distribution equal to the Disguised Sale Amount as proceeds
of a sale by PGC to the Company under Code Section 707(a) and an amount of the
PGC Contribution equal in fair market value to the Disguised Sale Amount as
property that is sold by PGC to the Company under Code Section 707(a) (such
property treated as having been sold having regular federal income tax basis
equal to the aggregate regular Federal income tax basis of the property
contributed in the PGC Contribution multiplied by a fraction the numerator of
which is the Disguised Sale Amount and the denominator of which is the value of
the property contributed in the PGC Contribution, such value being for this
purpose $2,139,500,000)); and (f) the treatment of the merger of PGCSI into DEFS
Holding pursuant to Section 2.2(a) hereof as a "reorganization" within the
meaning of Code Section 368(a) in which no gain or loss is recognized to Duke,
Phillips, PGC, DEFS Holding, the Company, or any other Person.
Section 4.3 Tax Proceedings; Cooperation and Exchange of Information.
(a) In the case of any Tax Proceeding relating to any Income Tax Return or any
Income Tax items of the Company or any Subsidiary of the Company for any
Post-Closing Period, the Company shall be entitled to control such Tax
Proceeding; provided, however, that (i) the Company shall promptly notify Duke
and Xxxxxxxx (describing the jurisdiction and year(s) at issue and including a
copy of any materials received from the applicable Governmental Entity in
connection therewith) upon receipt of notice of any such Tax Proceeding and
shall thereafter promptly forward to Duke and Xxxxxxxx copies of any
communications received from or sent to any Governmental Entity by the Company
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or any of its Subsidiaries in connection with any such Tax Proceeding; (ii) the
Company shall provide Duke and Xxxxxxxx with a timely and reasonably detailed
account of each stage of such Tax Proceeding and a copy of all documents
relating to such Tax Proceeding; (iii) the Company shall consult with Duke and
Xxxxxxxx before taking any significant action in connection with such Tax
Proceeding; (iv) the Company shall consult with Duke and Xxxxxxxx and offer Duke
and Xxxxxxxx an opportunity to comment before submitting any written materials
prepared or furnished in connection with such Tax Proceeding (including, to the
extent practicable, any documents furnished to the applicable Governmental
Entity in connection with any discovery request); (v) the Company shall defend
such Tax Proceeding diligently and in good faith as if the Company were the
taxpayer in interest in connection with such Tax Proceeding; and (vi) (A) in the
case of any proposed settlement of any such Tax Proceeding, which settlement
will result in aggregate Tax payments by Xxxxxxxx with respect to the period
beginning on the Closing Date and ending on the second anniversary of the
Closing Date (or, if the Tax Proceeding relates to a taxable period (or portion
thereof) after such second anniversary, then with respect to the two year period
beginning on the first day of the taxable period to which the Tax Proceeding
relates) of greater than $7,575,000, the Company shall not settle, compromise or
abandon any such Tax Proceeding without obtaining the prior written consent,
which consent shall not be unreasonably withheld, of Xxxxxxxx and (B) in the
case of any proposed settlement of any such Tax Proceeding, which settlement
will result in aggregate Tax payments by Duke with respect to the period
beginning on the Closing Date and ending on the second anniversary of the
Closing Date (or, if the Tax Proceeding relates to a taxable period (or portion
thereof) after such second anniversary, then with respect to the two year period
beginning on the first day of the taxable period to which the Tax Proceeding
relates) of greater than $17,425,000, the Company shall not settle, compromise
or abandon any such Tax Proceeding without obtaining the prior written consent,
which consent shall not be unreasonably withheld, of Duke. In the event that
Duke or Xxxxxxxx reasonably withholds such consent pursuant to the preceding
clause (vi)(A) or (B), the parties shall negotiate in good faith to resolve
their differences and, failing that, the Neutral Firm shall resolve such
disagreement. The above provisions of this Section 4.3(a) shall cease to apply
with respect to taxable periods beginning after the consummation of the IPO,
except to the extent that failure of such provisions to apply could reasonably
be expected to affect any member of the Xxxxxxxx Group or the Duke Group (other
than in its capacity as a direct or indirect shareholder, or affiliate of such a
shareholder, of the Corporation).
(b) The Company shall present (such presentation to be made (i) in the
case of a Tax Return for a Company taxable year ending on December 31st, no
later than July 1st in the year following the end of such Company taxable year
and (ii) in the case of a Tax Return for a Company taxable year ending on a date
other than December 31st, no later than the date that is six months following
the end of such Company taxable year) any Federal Income Tax Returns of the
Company to Xxxxxxxx for Xxxxxxxx' review and shall revise such Tax Returns prior
to filing to reflect any reasonable comments requested in good faith by Xxxxxxxx
in writing within 15 Business Days after such presentation of such Tax Returns
to Xxxxxxxx; provided, however, that in the event that the Company or Duke
disagrees with any such comments of Xxxxxxxx, then the Company, Duke and
Xxxxxxxx shall endeavor to resolve their disagreement over such comments and,
failing that, the Neutral Firm shall resolve such disagreement prior to the date
such Tax Returns are due (including extensions) and such Tax Returns shall be
filed in such manner as the Neutral Firm determines. The fees and expenses of
the Neutral Firm in connection with this Section 4.3(b) shall be allocated
between Xxxxxxxx and Duke by the Neutral Firm. At Duke's or Xxxxxxxx' request,
the Company shall make available to Duke and Xxxxxxxx, respectively, for their
review at least 15 Business Days prior
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to the due date (including extensions) any state, local or foreign Income Tax
Returns of the Company or its Subsidiaries. The above provisions of this Section
4.3(b) shall cease to apply with respect to taxable periods beginning after the
consummation of the IPO, except to the extent that failure of such provisions to
apply could reasonably be expected to affect any member of the Xxxxxxxx Group
(other than in its capacity as a direct or indirect shareholder, or affiliate of
such a shareholder, of the Corporation).
(c) Cooperation and Exchange of Information. Duke, Phillips, the
Company and DEFS Holding (and the Corporation, from and after the Merger) shall
(and shall cause their respective Subsidiaries to) cooperate with one another
with respect to Tax matters. As soon as practicable, but in any event within 30
days after the request of Duke or Xxxxxxxx, from and after the Closing Date, the
Company shall deliver to Duke or Xxxxxxxx, respectively, such information and
data concerning the Company and its Subsidiaries and make available such
employees of the Company and its Subsidiaries as Duke or Xxxxxxxx may reasonably
request (including providing the information and data reasonably required by
Duke's and Xxxxxxxx' customary Tax and accounting questionnaires) in order to
enable Duke and Xxxxxxxx to complete and file all Tax Returns which they each
may be required to file with respect to the Company and its Subsidiaries or to
respond to Tax audits or other inquiries relating to Taxes by any Governmental
Entities with respect to such operations and to otherwise enable Duke and
Xxxxxxxx each to satisfy their respective accounting, Tax and other legitimate
business requirements. Such cooperation and information shall include provision
of powers of attorney to Duke or Xxxxxxxx relating to Tax matters (e.g., for the
purpose of signing Returns and defending audits) and promptly forwarding copies
of appropriate notices and forms or other communications received from or sent
to any Governmental Entity that relate to the Company and its Subsidiaries, and
providing copies of all relevant Tax Returns, together with accompanying
schedules and related workpapers, documents relating to rulings or other
determinations by any Governmental Entities and records concerning the ownership
and tax basis of property, which the Company, the Corporation and their
Subsidiaries may possess. The Company and DEFS Holding (and the Corporation,
from and after the time of the Merger) shall (and shall cause their respective
Subsidiaries to) make their respective employees and facilities available on a
mutually convenient basis to provide explanation of any documents or information
provided hereunder. The above provisions of this Section 4.3(c) shall cease to
apply with respect to taxable periods beginning after the consummation of the
IPO, except to the extent that failure of such provisions to apply could
reasonably be expected to affect any member of the Xxxxxxxx Group or the Duke
Group (other than in its capacity as a direct or indirect shareholder or
affiliate of such a shareholder, of the Corporation). Notwithstanding any other
provision, (i) Duke shall not be required to provide any Person with any
consolidated, combined, affiliated or unitary Income Tax Return or copy thereof
that includes Duke or any other member of the Duke Group and (ii) Xxxxxxxx shall
not be required to provide any Person with any consolidated, combined,
affiliated or unitary Income Tax Return or copy thereof that includes Xxxxxxxx
or any other member of the Xxxxxxxx Group.
Section 4.4 Debt Repayment. From and after consummation of the IPO, to
the extent that proceeds from the IPO (or any other funds contributed to the
Company or any of its Subsidiaries) are used to repay debt owed by the Company
or any of its Subsidiaries (for so long as the Company or such Subsidiary is
treated as a partnership for federal income tax purposes), such funds shall be
contributed to the Company and its Subsidiaries by the limited liability company
interest holders or other equity interest holders in the Company or such
Subsidiaries in proportion to the allocation of debt to such holders provided in
Section 8.2(b)(iii) of the LLC Agreement.
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ARTICLE V
TRANSFER RESTRICTIONS
Section 5.1 Structure; Transfers. For the period from the date of this
Agreement until the consummation of the IPO, (i) Duke shall cause DEFS Holding
to own and hold all of Duke's Company Interest and no other assets or
liabilities, and (ii) Xxxxxxxx shall cause (A) PGC to own and hold all of
Xxxxxxxx' Company Interest and no other assets or liabilities and (B) PGCSI to
own and hold all of the capital stock of PGC and no other assets or liabilities.
Section 5.2 Change of Control. Each of Duke and Xxxxxxxx agrees that
prior to consummation of the IPO, as a condition to the consummation of any
transaction that will result in a Change of Control of DEFS Holding or PGC,
respectively, it will cause the new Parent of DEFS Holding or PGC, respectively,
to assume the obligations of Duke or Xxxxxxxx, as applicable, under this
Agreement.
ARTICLE VI
TERMINATION OF AGREEMENTS
Section 6.1 Termination of Agreements. The Governance Agreement is
hereby terminated in its entirety and shall be void and have no further force
and effect; provided, however, that such termination shall not relieve any party
thereto of any liability for any breach of the Governance Agreement that
occurred prior to the termination thereof. From and after the termination of the
Governance Agreement, any reference to the Governance Agreement in Annex B of
the Contribution Agreement (or in any definition of a defined term used in Annex
B) shall be deemed to be a reference to the corresponding provision or
provisions of this Agreement or the LLC Agreement.
ARTICLE VII
EMPLOYEE MATTERS
Section 7.1 Definitions; Controlling Provisions. As used in this
Article VII, (i) the terms "DEFS" and "TEPPCO" shall have the meanings assigned
to such terms in the Contribution Agreement, (ii) the terms "Bonuses," "Change
in Control Severance Plan," "Continued Employees," "DEFS Employee," "Duke FSP,"
"Eligible Expenses," "Employee," "New Welfare Plans," "Old Welfare Plans," "PGC
Employee," "Xxxxxxxx FSP," "Retained DEFS Employee" and "Transferred PGC
Employee" shall have the meanings assigned to such terms in Annex A to the
Contribution Agreement, (iii) the term "Continued Duke Welfare Plan" shall have
the meaning set forth in Section 7.4(a), (iv) the term "TEPPCO Employee" shall
mean any individual who is, immediately prior to the date hereof, an Employee of
TEPPCO, and (v) the term "DEFS Severance Plan" shall mean that certain 2000 Duke
Energy Field Services Severance Benefits Plan as in effect on April 1, 2000. The
terms of this Article VII shall govern and control to the extent they are
inconsistent or conflict with the terms of Annex A to the Contribution
Agreement, and the provisions of Sections 7.3, 7.4 and 7.5 shall be deemed to be
a part of Annex A to the Contribution Agreement
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for purposes of the indemnification provisions of Sections 9.1(iii), 9.2(a)(iv)
and 9.2(b)(iv) of the Contribution Agreement. The provisions of Section 5.1 of
Annex A to the Contribution Agreement shall apply with respect to the
compensation and benefit matters addressed in this Article VII.
Section 7.2 Transfer of Employees. If a DEFS Employee or a PGC
Employee is to be transferred to the Company pursuant to the terms of Annex A to
the Contribution Agreement, then the Company may direct Duke and Xxxxxxxx,
respectively, to cause the transfer of such employee to be made to the Company
or to a Subsidiary of the Company that is designated by the Company. Continued
Employees may be employed by the Company or any Affiliate of the Company as
determined by the Company from time to time in its sole discretion.
Section 7.3 TEPPCO Employees. For all purposes of Annex A to the
Contribution Agreement and this Article VII (except where specifically provided
otherwise), each TEPPCO Employee shall be considered a Retained DEFS Employee.
Duke shall have no obligation under Section 3.2 of Annex A to the Contribution
Agreement to reimburse the Company for a pro-rata portion of the Bonuses for
calendar year 2000 that are paid to Retained DEFS Employees who are TEPPCO
Employees. Schedule 7.3 to this Agreement sets forth a list of agreements
relating to TEPPCO Employees that shall be considered to be among the agreements
listed in Schedule 2.5(a)(i) or Schedule 2.5(a)(ii) to Annex A to the
Contribution Agreement (as indicated on Schedule 7.3 to this Agreement);
provided, however, that the Company shall have no reimbursement obligation to
Duke with respect to any such agreement that is considered to be among the
agreements listed in Schedule 2.5(a)(i) to Annex A to the Contribution
Agreement.
Section 7.4 Welfare Benefits. (a) In order to permit benefits
transition with respect to Retained DEFS Employees, for the period beginning on
the date hereof and ending on the earliest of (i) December 31, 2000, (ii) such
date as Duke shall cease to have a greater than 50%, direct or indirect,
ownership interest in the Company, or (iii) such date as the Company or Duke
shall designate with respect to any particular Old Welfare Plan (provided that
Duke or the Company shall provide reasonable notice under the circumstances to
the other party prior to any such date), the Company and/or its wholly-owned
Subsidiaries shall be participating employers on behalf of their employees
(including any Continued Employees) who meet the requirements for eligibility
under the following Old Welfare Plans maintained by Duke: the Duke Energy
Medical, Dental, Cafeteria (FSP), Basic Life Insurance, Supplemental and
Dependent Life Insurance, Basic, Supplemental and Dependent Accidental Death and
Dismemberment Insurance, Business Travel Accident Insurance and Long-Term Care
Insurance Plans (each such Old Welfare Plan is herein referred to as a
"Continued Duke Welfare Plan"); provided, however, that retiree medical, dental
and life insurance coverages under the applicable Continued Duke Welfare Plans
shall not become applicable to an individual who either is not a Retained DEFS
Employee or fails to meet such requirements as Duke shall impose for such
coverages. Duke may terminate the participation by the Company and its
wholly-owned Subsidiaries in a particular Continued Duke Welfare Plan prior to
December 31, 2000, pursuant to clause (iii) of the preceding sentence only if
(1) Duke will be terminating such plan in its entirety as of the date designated
by Duke pursuant to such clause or (2) Duke has determined that such continued
participation by the Company and/or any of its wholly-owned Subsidiaries could
subject Duke or such plan to fines, penalties, excise taxes, loss of tax
deductions or other liabilities (other than liabilities for the benefits to be
provided under such plan). Without limiting the generality of the preceding
provisions of this Section 7.4(a), it is understood
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and agreed that such provisions shall not override the provisions of Section
4.2(b) of Annex A to the Contribution Agreement. For purposes of applying
Section 4.5(c) of Annex A to the Contribution Agreement, the Continued Duke
Welfare Plans shall be deemed to be New Welfare Plans; provided, however, that
Eligible Expenses of a Retained DEFS Employee shall be determined without regard
to when such expenses are recorded by the applicable plan administrator or
reported to the Company.
(b) Notwithstanding the provisions of Section 4.5(d) of Annex A to the
Contribution Agreement, for the period specified in Section 7.4(a) as it applies
to the Duke FSP, the Retained DEFS Employees shall continue to be eligible, and
the Transferred PGC Employees shall be eligible, to participate in the Duke FSP.
In the case of the Retained DEFS Employees, such continued participation shall
be based on their elections under the Duke FSP that are in effect immediately
prior to the date hereof (as such elections may be adjusted from time to time in
accordance with the terms of the Duke FSP). In the case of the Transferred PGC
Employees, the provisions of Section 4.5(d) of Annex A to the Contribution
Agreement shall be applied as if the Duke FSP were the New FSP as defined
therein, except that references therein to the Company shall be deemed to refer
to Duke; provided, however, that if the aggregate amount of the transferred
account balances of Transferred PGC Employees from the Xxxxxxxx FSP to the Duke
FSP is negative, then the Company shall pay Xxxxxxxx the amount of such
aggregate negative balance promptly following such account balance transfer. The
parties hereto agree and acknowledge that it is their intention that the
economic risks and benefits associated with calendar year 2000 (or any portion
thereof) participation in the Duke FSP by Retained DEFS Employees (both before
and after the date hereof), Transferred PGC Employees, and any other employees
of the Company and its Subsidiaries be borne or enjoyed, as the case may be, by
the Company. Accordingly, Duke and the Company agree that, as soon as
administratively feasible after all claims under the Duke FSP have been
processed for calendar year 2000 with respect to the employees of the Company
and its Subsidiaries, one such party shall make a payment to the other (as
appropriate) to ensure such result to the greatest extent possible.
Section 7.5 Severance Benefits. (a) The Company or a Subsidiary of the
Company shall reimburse Xxxxxxxx for the cash severance benefit paid by Xxxxxxxx
or any Subsidiary of Xxxxxxxx to certain of their employees in accordance with
the terms of Article I of Exhibit A to that certain Transition Services
Agreement between Xxxxxxxx and the Company dated March 17, 2000.
(b) Section 4.2(b) of Annex A to the Contribution Agreement shall
apply to each Retained DEFS Employee who is a TEPPCO Employee and who was
covered by the Change in Control Severance Plan immediately prior to the date
hereof; provided, however, that (i) the Company shall not have any reimbursement
obligation to Duke under such Section 4.2(b) with respect to the cash severance
benefit paid to any such employee and (ii) Duke shall not have any reimbursement
obligation to the Company under such Section 4.2(b) for any extended coverage
under a welfare benefit plan.
(c) The provisions of this Section 7.5(c) shall not apply with respect
to any Retained DEFS Employee who is a TEPPCO Employee. Duke shall reimburse the
Company or a Subsidiary of the Company for the severance benefit paid under the
DEFS Severance Plan to any
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Retained DEFS Employee who receives notice from the Company or a Subsidiary of
the Company on or about the date hereof that such individual's employment will
be terminated in connection with (and in any event within 30 days after) the
closing of the transactions contemplated under the Contribution Agreement. On or
about the date hereof, the Company and its Subsidiaries shall also notify
certain Retained DEFS Employees selected by the Company in its sole discretion
that such individuals will be requested to perform services for the Company or a
Subsidiary of the Company on only a transitional basis. Duke shall reimburse the
Company or a Subsidiary of the Company for the severance benefit paid under the
DEFS Severance Plan to any Retained DEFS Employee who receives the notice
described in the preceding sentence provided that the termination of such
individual's employment from the Company and its Affiliates occurs within six
months of the date hereof (or within nine months of the date hereof in the case
of such a Retained DEFS Employee who is an accountant).
Section 7.6 Miscellaneous. The reference in Section 2.3 of Annex A to
the Contribution Agreement to Section 6.1 of the Governance Agreement shall be
deemed to refer to Section 6.1 of the Governance Agreement as in effect
immediately before the termination of the Governance Agreement. All references
in Sections 3.1, 4.1, 4.5(a), 4.5(b)(i)(A), 4.5(b)(ii)(I), 4.5(b)(iii)(x) and
the last sentence of Section 4.5(b) of Annex A to the Contribution Agreement to
the "Closing Date" shall be deemed to refer to the day after the Closing Date.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties hereto and delivered (including by facsimile) to the other
parties.
Section 8.2 Governing Law; Jurisdiction and Forum; Waiver of Jury
Trial. (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without reference to the choice of law
principles thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any
Delaware state court or any federal court sitting in the State of Delaware in
any action arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of such action may be heard and determined in
such Delaware state or federal court. Each party hereto hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. The parties
hereto further agree, to the extent permitted by law, that final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment.
(c) To the extent that any party hereto has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice,
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attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, each party hereto hereby
irrevocably waives such immunity in respect of its obligations with respect to
this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
action, suit or proceeding arising out of or relating to this Agreement. Each
party hereto certifies that it has been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications set forth above in
this Section 8.2.
Section 8.3 Entire Agreement. The parties hereto acknowledge that the
Contribution Agreement, the Confidentiality Agreements dated August 11, 1999 and
August 26, 1999 between Duke and Xxxxxxxx, the LLC Agreement and this Agreement,
together with the exhibits hereto and the exhibits to such exhibits, including
the Certificate of Incorporation and the Bylaws of the Corporation, have been
executed or adopted as part of the same transaction. This Agreement, together
with the Contribution Agreement and the exhibits hereto and thereto, constitutes
the entire agreement of the parties with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the parties other than those set forth or referred to herein. This
Agreement is not intended to confer upon any person not a party hereto (and
their successors and assigns) any rights, remedies or obligations hereunder.
Section 8.4 Expenses. Except as set forth in this Agreement, whether
or not the transactions contemplated by this Agreement or the Contribution
Agreement are consummated, all legal and other costs and expenses incurred in
connection with this Agreement and the Contribution Agreement and the
transactions contemplated by this Agreement and the Contribution Agreement shall
be paid by the party incurring such costs and expenses; provided, however, that
third party costs incurred by each party after December 16, 1999 for planning
and information purposes relating to the transactions contemplated by this
Agreement and the Contribution Agreement (including costs of consultants and
contractors hired for such purposes, prepayments for services required by the
Company, rating agency fees and outside attorneys' fees for Xxxx-Xxxxx-Xxxxxx
and regulatory matters, but excluding wages and expenses of employees of Duke or
Xxxxxxxx, costs incurred in performing due diligence on Duke or Xxxxxxxx, as
applicable) shall be paid or reimbursed by the Company or the Corporation, as
applicable.
Section 8.5 Notices. All notices and other communications to be given
to any party hereunder shall be sufficiently given for all purposes hereunder if
in writing and delivered by hand, courier or overnight delivery service or three
days after being mailed by certified or registered mail, return receipt
requested, with appropriate postage prepaid, or when received in the form of a
telegram or facsimile and shall be directed, if to a party hereunder, to the
address or facsimile number set forth below (or at such other address or
facsimile number as such party shall designate by like notice):
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(a) If to Xxxxxxxx:
Xxxxxxxx Petroleum Company
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxx
Fax No.: (000) 000-0000
With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax No.: (000) 000-0000
(b) If to Duke:
Duke Energy Corporation
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. XxXxx
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax No.: (000) 000-0000
(c) If to the Company:
Duke Energy Field Services, LLC
00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
With a copy to:
Duke Energy Corporation
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. XxXxx
Fax No.: (000) 000-0000
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and
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax No.: (000) 000-0000
Section 8.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that no party hereto will
assign its rights or delegate any or all of its obligations under this Agreement
without the express prior written consent of each other party hereto.
Section 8.7 Headings; Definitions. The section and article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement.
Section 8.8 Amendments and Waivers. This Agreement may not be modified
or amended except by an instrument or instruments in writing signed by all
parties hereto. Either party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision of this
Agreement on the part of such other party hereto to be performed or complied
with. The waiver by any party hereto of a breach of any term or provision of
this Agreement shall not be construed as a waiver of any subsequent breach.
Except as otherwise expressly provided herein, no failure to exercise, delay in
exercising or single or partial exercise of any right, power or remedy by any
party, and no course of dealing between the parties, shall constitute a waiver
of any such right, power or remedy.
Section 8.9 Severability. If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or enforceability
of the other provisions of this Agreement shall not be affected thereby, and
there shall be deemed substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at issue.
Section 8.10 Interpretation. In the event an ambiguity or question of
intent or interpretation arises with respect to this Agreement, this Agreement
shall be construed as if it were drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
Section 8.11 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any party fails to consummate
the transactions contemplated by this Agreement in accordance with the terms of
this Agreement and that the parties shall be entitled to specific performance in
such event, in addition to any other remedy at law or in equity, including
temporary restraining orders or temporary or permanent injunctions.
Section 8.12 Actions by Affiliates of Xxxxxxxx and Duke. In addition
to, and not in limitation of, any other provisions of this Agreement, each of
Xxxxxxxx and Xxxx shall ensure that each of their respective Affiliates (other
than the Company and the Corporation) takes all actions necessary to be taken by
such Affiliate in order to fulfill the obligations of Xxxxxxxx or Duke, as the
case may be, under this Agreement.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed and delivered on the date first set forth above.
XXXXXXXX PETROLEUM COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Treasurer
DUKE ENERGY CORPORATION
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Group President - Energy Transmission
DUKE ENERGY FIELD SERVICES, LLC
By: /s/ X. X. Xxxx
--------------------------------------------
Name: X. X. Xxxx
Title: Chairman, President & CEO
DUKE ENERGY FIELD SERVICES
CORPORATION (solely for purposes of Section
4.3(c) of this Agreement)
By: /s/ X. X. Xxxx
--------------------------------------------
Name: X. X. Xxxx
Title: Chairman, President & CEO
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