EXHIBIT 2
EXECUTION COPY
PURCHASE AGREEMENT
BY AND AMONG
FIRST RESERVE PACIFIC HOLDINGS AIV, L.P.,
XXXXXX SIDECAR I, LLC
AND
LB I GROUP INC.
Dated as of March 21, 2005
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II PURCHASE AND SALE OF UNITS AND SHARES..................................................................4
Section 2.1 Purchase and Sale of Units of LB Pacific....................................................4
Section 2.2 Purchase and Sale of Shares of LB Pacific GP................................................4
Section 2.3 Closing.....................................................................................4
Section 2.4 Closing Date Deliveries.....................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER..............................................................5
Section 3.1 Organization of Seller......................................................................5
Section 3.2 Authorization...............................................................................5
Section 3.3 Due Execution and Validity..................................................................5
Section 3.4 Organization of LB Pacific..................................................................5
Section 3.5 Organization of LB Pacific GP...............................................................5
Section 3.6 Title to the Units and Shares...............................................................6
Section 3.7 No Other Agreement To Sell..................................................................6
Section 3.8 No Other Business; Acquisition; Capitalization..............................................6
Section 3.9 No Distributions............................................................................6
Section 3.10 Compliance with Organizational Documents....................................................6
Section 3.11 Indebtedness................................................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH BUYER...........................................................6
Section 4.1 Organization of Buyer.......................................................................6
Section 4.2 Authorization...............................................................................7
Section 4.3 Due Execution and Validity..................................................................7
Section 4.4 No Conflicts................................................................................7
Section 4.5 Purchase Entirely for Own Account...........................................................7
Section 4.6 Disclosure of Information...................................................................7
Section 4.7 Accredited Investor.........................................................................7
ARTICLE V COVENANTS...............................................................................................8
Section 5.1 Incentive Compensation Plan.................................................................8
Section 5.2 Restricted Securities.......................................................................8
Section 5.3 Legends.....................................................................................8
ARTICLE VI CERTAIN POST-CLOSING MATTERS...........................................................................8
Section 6.1 Further Assurances..........................................................................8
Section 6.2 Strategic Group Investment..................................................................8
ARTICLE VII CONDITIONS TO EACH BUYER'S OBLIGATION.................................................................9
Section 7.1 Representations and Warranties..............................................................9
Section 7.2 Performance.................................................................................9
Section 7.3 Closing Documents...........................................................................9
Section 7.4 No Illegality...............................................................................9
Section 7.5 Execution of Restated LB Pacific LP Agreement...............................................9
i
Page
----
Section 7.6 Execution of Restated LB Pacific GP LLC Agreement...........................................9
ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATION...................................................................10
Section 8.1 Representations and Warranties.............................................................10
Section 8.2 Performance................................................................................10
Section 8.3 Closing Documents..........................................................................10
Section 8.4 No Illegality..............................................................................10
Section 8.5 Execution of Restated LB Pacific LP Agreement..............................................10
Section 8.6 Execution of Restated LB Pacific GP LLC Agreement..........................................10
ARTICLE IX SURVIVAL; INDEMNIFICATION.............................................................................10
Section 9.1 Survival of Representations and Warranties.................................................10
Section 9.2 Indemnification by Seller..................................................................10
Section 9.3 Indemnification by each Buyer..............................................................11
Section 9.4 Procedures for Indemnification.............................................................11
Section 9.5 Exclusive Remedies.........................................................................12
ARTICLE X MISCELLANEOUS..........................................................................................12
Section 10.1 Expenses...................................................................................12
Section 10.2 Publicity..................................................................................13
Section 10.3 Notices....................................................................................13
Section 10.4 Interpretation.............................................................................15
Section 10.5 Assignment.................................................................................15
Section 10.6 Parties in Interest; No Third Party Beneficiaries..........................................15
Section 10.7 Entire Agreement...........................................................................15
Section 10.8 Amendment..................................................................................15
Section 10.9 Counterparts...............................................................................15
Section 10.10 Severability...............................................................................15
Section 10.11 Governing Law; Submission to Jurisdiction; Selection of Forum; Service of Process..........15
ii
SCHEDULES
Schedule A Schedule of Purchases and Sales
Schedule 3.8 Capitalization
EXHIBITS
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Incentive Compensation Plan
Exhibit C Form of Restated LB Pacific LP Agreement
Exhibit D Form of Restated LB Pacific GP LLC Agreement
iii
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), dated as of March 21, 2005, is
by and among FIRST RESERVE PACIFIC HOLDINGS AIV, L.P., a Delaware limited
partnership ("FRC"), XXXXXX SIDECAR I, LLC, a Delaware limited liability company
("Sidecar"; each of Sidecar and FRC being sometimes referred to individually as
"Buyer" and collectively as "Buyers"), and LB I Group Inc., a Delaware
corporation ("Seller").
WITNESSETH:
WHEREAS, LB Pacific, LP, a Delaware limited partnership ("LB Pacific"),
was formed in October 2004 by LB Pacific GP, LLC, a Delaware limited liability
company ("LB Pacific GP"), as general partner of LB Pacific;
WHEREAS, LB Pacific was formed for the purpose of acquiring (the
"Acquisition") from PPS Holding Company, a Delaware corporation ("PPS"), all of
the equity interests in the general partner (the "MLP GP") of Pacific Energy
Partners, L.P., a publicly-traded master limited partnership formed under the
laws of Delaware ("PPX") engaged principally in the business of owning and
operating crude oil transportation, marine terminal and storage assets, pursuant
to the terms and conditions of the Purchase and Sale Agreement, dated October
29, 2004, as amended, by and among PPS, The Anschutz Corporation and LB Pacific;
WHEREAS, the Acquisition was consummated on March 3, 2005, resulting in
LB Pacific owning, directly or indirectly, all of the equity of the MLP GP;
WHEREAS, Seller owns all of the outstanding limited partnership
interests ("Units") in LB Pacific pursuant to the terms of the First Amended and
Restated Limited Partnership Agreement of LB Pacific, LP, as amended (the "LB
Pacific Agreement");
WHEREAS, Seller owns all of the outstanding membership interests
("Shares") in LB Pacific GP, pursuant to the terms of the First Amended and
Restated Limited Liability Company Agreement of LB Pacific GP, LLC, as amended
(the "LB Pacific GP Agreement"); and
WHEREAS, each Buyer desires to purchase from Seller, and Seller desires
to sell to each Buyer, a certain number of Units of LB Pacific and Shares of LB
Pacific GP, respectively, and Buyers and Seller desire to enter into amendments
to the LB Pacific Agreement and the LB Pacific GP Agreement, all upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms will have the respective
meanings set forth below:
"Acquisition" has the meaning set forth in the Recitals.
"Affiliate" means, as to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such specified Person. For the purposes of this
Agreement, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Xxxx of Sale" means a xxxx of sale in the form attached hereto as
Exhibit A.
"Buyer Indemnitee" has the meaning set forth in Section 9.2 hereof.
"Citicorp Lien" means the Lien on the Subordinated Units granted to
Citicorp North America, Inc., as collateral agent, pursuant to that certain
Pledge and Security Agreement, dated as of March 3, 2005, between LB Pacific and
Citicorp North America, Inc., as collateral agent.
"Claims" means any litigation, proceeding (arbitral or otherwise),
claim, action, suit, audit, judgment, decree, settlement, rule or order or
investigation of any nature.
"Closing" has the meaning set forth in Section 2.3 hereof.
"Closing Date" has the meaning set forth in Section 2.3 hereof.
"Credit Agreement" means the Credit and Guaranty Agreement, dated as of
March 3, 2005, among LB Pacific, various lenders and Citicorp North America,
Inc., as Administrative Agent and Collateral Agent, Xxxxxx Commercial Paper
Inc., as Syndication Agent, and Citigroup Global Markets Inc., as Sole Lead
Arranger and Sole Bookrunner.
"Governmental Authority" means any federal, state, local, foreign or
other governmental or administrative body, instrumentality, department or agency
or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Incentive Compensation Plan" means the plan reflected in Exhibit B
attached hereto, which is hereby incorporated by reference.
"Indemnified Party" has the meaning set forth in Section 9.4(a) hereof.
"Indemnifying Party" has the meaning set forth in Section 9.4(a)
hereof.
"Laws" means any law (including common law), statute, rule, regulation,
ordinance, code, directive, writ, injunction, settlement, permit, license,
decree, judgment or order of any Governmental Authority.
"LB Pacific" has the meaning set forth in the Recitals.
"LB Pacific Agreement" has the meaning set forth in the Recitals.
"LB Pacific GP" has the meaning set forth in the Recitals.
2
"LB Pacific GP Agreement" has the meaning set forth in the Recitals.
"Liens" means all mortgages, deeds of trust, collateral assignments,
security interests, charges, options, rights of refusal, preemptive rights,
claims, restrictions (whether on voting, sale, transfer, disposition, or
otherwise), easements, UCC financing statements, conditional or other sales
agreements, liens, pledges, hypothecations, and other encumbrances on the Units
or Shares, as applicable, whether imposed by Law, agreement, understanding or
otherwise.
"Losses" means damages, losses, diminution in value, deficiencies,
liabilities (including strict liability), obligations, fines, costs and
expenses.
"MLP GP" has the meaning set forth in the Recitals.
"Notices" has the meaning set forth in Section 10.3 hereof.
"Offered Interests" has the meaning set forth in Section 6.2 hereof.
"Offered Interests Notice" has the meaning set forth in Section 6.2
hereof.
"Offer Period" has the meaning set forth in Section 6.2 hereof.
"PPS" has the meaning set forth in the Recitals.
"PPX" has the meaning set forth in the Recitals.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, a limited
liability company, a group, a Governmental Authority, and any other person or
entity.
"Restated LB Pacific LP Agreement" means the Second Amended and
Restated Limited Partnership Agreement of LB Pacific, LP in the form attached as
Exhibit C hereto.
"Restated LB Pacific GP LLC Agreement" means the Second Amended and
Restated Limited Liability Company Agreement of LB Pacific GP, LLC in the form
attached as Exhibit D hereto.
"SEC" has the meaning set forth in Section 4.6 hereof.
"Securities Act" has the meaning set forth in Section 5.2 hereof.
"Seller Indemnitee" has the meaning set forth in Section 9.3 hereof.
"Shares" has the meaning set forth in the Recitals.
"Strategic Group" has the meaning set forth in Section 6.2 hereof.
"Strategic Group Investment" has the meaning set forth in Section 6.2
hereof.
3
"Subordinated Units" means the 10,465,000 subordinated limited
partnership units owned as of the date hereof by LB Pacific and representing
subordinated limited partner interests in PPX.
"Transaction Documents" shall mean this Agreement and each agreement,
instrument or document, other than the Incentive Compensation Plan, attached
hereto as an Exhibit or otherwise to be delivered at Closing as contemplated by
this Agreement.
"Transactions" means the transactions contemplated by this Agreement
and the other Transaction Documents.
"Transaction Expenses" has the meaning set forth in Section 10.1
hereof.
"Units" has the meaning set forth in the Recitals.
ARTICLE II
PURCHASE AND SALE OF UNITS AND SHARES
Section 2.1 Purchase and Sale of Units of LB Pacific. Upon the terms
and provisions of this Agreement, each Buyer agrees to purchase and accept
delivery from Seller of, and Seller agrees to sell, assign, transfer and deliver
to each Buyer, at the Closing provided for in Section 2.3, the number of Units
of LB Pacific set forth in Schedule A hereto opposite each Buyer's name and for
the cash consideration set forth opposite each Buyer's name in Schedule A, free
and clear of all Liens, claims, charges, restrictions or encumbrances of any
kind.
Section 2.2 Purchase and Sale of Shares of LB Pacific GP. Upon the
terms and provisions of this Agreement, each Buyer agrees to purchase and accept
delivery from Seller of, and Seller agrees to sell, assign, transfer and deliver
to each Buyer, at the Closing provided for in Section 2.3, the number of Shares
of LB Pacific GP set forth in Schedule A hereto opposite each Buyer's name and
for the cash consideration set forth opposite each Buyer's name in Schedule A,
free and clear of all Liens, claims, charges, restrictions or encumbrances of
any kind.
Section 2.3 Closing. The closing of the purchase and sale of the Units
and Shares (the "Closing") shall take place at the offices of Pillsbury Winthrop
LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such other place as the
parties may mutually agree) at 10:00 a.m., local time, on the date hereof (the
"Closing Date"). The Closing Date may be postponed to a later time and date by
mutual agreement of the parties. If the Closing is postponed, all references to
the Closing Date in this Agreement shall refer to the postponed date.
Section 2.4 Closing Date Deliveries.
(a) At the Closing, each Buyer shall deliver, or cause to be
delivered, with respect to itself only, to Seller the following:
(i) a Xxxx of Sale; and
(ii) the cash consideration required to be delivered by such
Buyer pursuant to Sections 2.1 and 2.2.
4
(b) At the Closing, Seller shall deliver, or cause to be
delivered, to each Buyer the following:
(i) a Xxxx of Sale; and
(ii) Certificates of Units and Shares as provided in Section
9.7 of the Restated LB Pacific LP Agreement and Section 9.05 of the
Restated LB Pacific GP LLC Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to each Buyer the following matters:
Section 3.1 Organization of Seller. Seller is duly formed, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified or registered to do business in each jurisdiction
in which the nature of its business or operations requires such qualification or
registration.
Section 3.2 Authorization. Seller has full corporate power to execute
and deliver this Agreement and the other Transaction Documents to which it is a
party, to perform its obligations hereunder and thereunder, and to consummate
the Transactions. The execution, delivery and performance by Seller of this
Agreement and the other Transaction Documents to which it is a party, and
Seller's consummation of the Transactions to which it is a party, have been duly
authorized by all requisite action of or on the part of Seller, and no other
proceedings or actions on the part of Seller are necessary to authorize this
Agreement or any other Transaction Document to which Seller is a party.
Section 3.3 Due Execution and Validity. This Agreement has been duly
and validly executed by Seller and delivered to each Buyer, and constitutes the
legal, valid and binding agreement of Seller, enforceable against Seller in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws affecting creditors' rights generally. Upon execution and delivery
at the Closing by Seller, each other Transaction Document to which Seller is, or
is specified to be, a party, will be duly and validly executed and delivered by
Seller, and will constitute (assuming, in each case, the due authorization,
execution and delivery by each other party thereto) Seller's legal, valid and
binding obligation, enforceable against Seller in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws affecting creditors' rights
generally.
Section 3.4 Organization of LB Pacific. LB Pacific is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware.
Section 3.5 Organization of LB Pacific GP. LB Pacific GP is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware.
5
Section 3.6 Title to the Units and Shares. Seller has good and valid
title to, is the holder of record of and owns beneficially the Units being sold
hereunder as set forth on Schedule A, free and clear of any and all Liens and,
upon delivery to each Buyer of those Units purchased by such Buyer on the
Closing Date in accordance with this Agreement, good and valid title to such
Units, free and clear of all Liens, will pass to such Buyer. Seller has good and
valid title to, is the holder of record of and owns beneficially the Shares
being sold hereunder set forth on Schedule A, free and clear of any and all
Liens and, upon delivery to each Buyer of those Shares purchased by such Buyer
on the Closing Date in accordance with this Agreement, good and valid title to
such Shares, free and clear of all Liens, will pass to such Buyer.
Section 3.7 No Other Agreement To Sell. Seller does not have any
obligation, absolute or contingent, to any other Person to sell, encumber or
otherwise transfer the Units or Shares being sold hereunder, or to enter into
any agreement with respect thereto.
Section 3.8 No Other Business; Acquisition; Capitalization. Each of LB
Pacific and LB Pacific GP was formed for the purposes of the Transactions and
the Acquisition and has not engaged in any business unrelated to the
Transactions and the Acquisition. LB Pacific completed the Acquisition on March
3, 2005 and has not subsequently disposed of any of the assets acquired,
directly or indirectly, in the Acquisition (including, without limitation, any
of the Subordinated Units). Immediately following the Closing, the
capitalization of each of LB Pacific and LB Pacific GP shall be as set forth on
Schedule 3.8, which identifies each partner or member, as the case may be, and
the total number of Units or Shares, as the case may be, held by each of them.
Section 3.9 No Conflicts. The execution and delivery of this Agreement
and each Transaction Document to which Seller is a party by Seller and the
consummation of the transactions contemplated hereby and thereby by Seller do
not and shall not violate any organizational document of Seller, LB Pacific or
LB Pacific GP.
Section 3.10 No Distributions. Neither LB Pacific nor LB Pacific GP has
made any distributions with respect to its outstanding equity securities since
formation.
Section 3.11 Compliance with Organizational Documents. Seller (and any
predecessors in interest) has complied in all material respects with the terms
and condition of the LB Pacific Agreement and the LB Pacific GP Agreement,
including, without limitation, with respect to its obligation to make capital
contributions to LB Pacific and LB Pacific GP respectively.
Section 3.12 Indebtedness. Neither LB Pacific nor LB Pacific GP has any
indebtedness for borrowed money other than pursuant to the Credit Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH BUYER
Each Buyer represents and warrants to Seller, severally and not
jointly, the following matters with respect to itself only:
Section 4.1 Organization of Buyer. Such Buyer is duly formed or
organized, validly existing and in good standing under the laws of its
jurisdiction of formation or organization and
6
is qualified or registered to do business in each jurisdiction in which the
nature of its business or operation would require such qualification or
registration.
Section 4.2 Authorization. Such Buyer has full partnership or limited
liability company power, as the case may be, to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, to perform
its obligations hereunder and thereunder, and to consummate the Transactions.
The execution, delivery and performance by such Buyer of this Agreement and the
other Transaction Documents to which it is a party, and such Buyer's
consummation of the Transactions to which it is a party, have been duly
authorized by all requisite partnership or limited liability company action, as
the case may be, of or on the part of such Buyer.
Section 4.3 Due Execution and Validity. This Agreement has been duly
and validly executed by such Buyer and delivered to Seller and constitutes the
legal, valid and binding obligation of such Buyer, enforceable against such
Buyer in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws affecting creditors' rights generally. Upon execution and delivery
at the Closing by such Buyer, each other Transaction Document to which such
Buyer is, or is specified to be, a party, will be duly and validly executed and
delivered by such Buyer, and will constitute (assuming, in each case, the due
authorization, execution and delivery by each other party thereto) such Buyer's
legal, valid and binding obligation, enforceable against it in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws affecting
creditors' rights generally.
Section 4.4 No Conflicts. The execution and delivery of this Agreement
and each Transaction Document to which such Buyer is a party by such Buyer do
not and shall not violate any organizational document of such Buyer.
Section 4.5 Purchase Entirely for Own Account. This Agreement is made
with such Buyer in reliance upon such Buyer's representation to Seller, which by
such Buyer's execution of this Agreement such Buyer hereby confirms, that the
Units and Shares will be acquired for investment for such Buyer's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Buyer has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing
this Agreement, such Buyer further represents that such Buyer does not have any
contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to such Person or to any third Person, with
respect to any of the Units or Shares.
Section 4.6 Disclosure of Information. Such Buyer believes it has
received all the information it has requested and such information it considers
necessary or appropriate for deciding whether to purchase the Units or Shares.
Section 4.7 Accredited Investor. Such Buyer is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
7
ARTICLE V
COVENANTS
Section 5.1 Incentive Compensation Plan. Each Buyer and Seller hereby
covenants and agrees to use its respective commercially reasonable efforts to
cause LB Pacific to implement the Incentive Compensation Plan.
Section 5.2 Restricted Securities. Each Buyer understands that the
Units and Shares which it is purchasing are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired in a transaction not involving a public offering and that under such
laws and applicable regulations such Units and Shares may be resold without
registration under the Securities Act of 1933, as amended (the "Securities Act")
only in certain limited circumstances. In the absence of an effective
registration statement covering the Units and Shares or an available exemption
from registration under the Securities Act, the Units and Shares must be held
indefinitely. In this connection, each Buyer represents that it is familiar with
SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act, including, without limitation, the
Rule 144 condition that current information about LB Pacific and LB Pacific GP
be available to the public. Such information is not now available and there are
no present plans by LB Pacific and LB Pacific GP to make such information
available.
Section 5.3 Legends. It is understood that the certificates evidencing
the Units and Shares may bear one or all of the following legends:
(a) any legend required by the Restated LB Pacific LP
Agreement or Restated LB Pacific GP LLC Agreement, as the case may be; and
(b) any legend required by the federal securities laws or the
securities laws of applicable states within the United States.
ARTICLE VI
CERTAIN POST-CLOSING MATTERS
Section 6.1 Further Assurances. From time to time at or after the
Closing Date, at the request of another party hereto, each party hereto will
execute and deliver such other instruments of conveyance, assignment, transfer
and delivery and take such actions as another party reasonably may request in
order to consummate, complete and carry out the Transactions, including the
execution and delivery of such instruments and agreements as may be reasonably
necessary or advisable to fully effect the Transactions.
Section 6.2 Strategic Group Investment. At any time on or before March
3, 2007 (the "Offer Period"), Seller may, in its sole discretion, sell up to
19,480,500 Units and 19,500 Shares (collectively the "Offered Interests") to one
or more Persons (or entities controlled by such Persons) who are not Affiliates
of Seller and are currently known to Seller and FRC (the "Strategic Group"; the
purchase of all or any portion of the Offered Interests by the Strategic Group
is herein referred to as the "Strategic Group Investment"). Upon the earlier to
occur of (a) the expiration of the Offer Period or (b) the final determination
by Seller not to consummate the Strategic Group Investment, Seller shall, no
later than 30 days thereafter, offer in writing (the
8
"Offered Interests Notice") to sell the Offered Interests (or such lesser
portion as may still be available following the consummation of the Strategic
Group Investment) to FRC on such terms and conditions as Seller and FRC shall
agree, provided that if the Strategic Group has purchased only a portion of the
Offered Interests, Seller shall offer the remaining portion of the Offered
Interests to FRC on the same terms and conditions as were consummated in the
Strategic Group Investment. FRC shall have 30 days following the date Seller
provided the Offered Interests Notice to notify Seller if it will purchase some
or all of the Offered Interests. If FRC agrees to purchase all or any portion of
the Offered Interests, FRC and Seller shall arrange a mutually convenient time
(not later than 60 days after the date Seller provided the Offered Interests
Notice) to consummate such purchase and sale and, at that time, FRC shall pay to
Seller cash consideration for the Offered Interests subject to such purchase and
sale by delivering a certified bank check or checks or by wiring same day funds
upon the instructions of Seller in the amount of the purchase price for such
Offered Interests. The transfer of all or any portion of the Offered Interests
to the Strategic Group or FRC, as the case may be, shall be exempt from any
transfer restrictions contemplated by the Transaction Documents.
ARTICLE VII
CONDITIONS TO EACH BUYER'S OBLIGATION
Each Buyer's obligation to consummate this Agreement and the
transactions contemplated hereunder is subject to the satisfaction of each of
the following conditions on or prior to the Closing Date:
Section 7.1 Representations and Warranties. The representations and
warranties of Seller set forth in Article III shall be true and correct in all
material respects as of the Closing Date, and Seller shall deliver to such Buyer
a certificate attesting to the same.
Section 7.2 Performance. Seller shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
Seller shall have delivered to such Buyer a certificate attesting to the same.
Section 7.3 Closing Documents. On the Closing Date, Seller shall have
delivered to such Buyer the duly executed closing documents as specified in
Section 2.4(b) hereof.
Section 7.4 No Illegality. As of the Closing, no Law shall have been
adopted, promulgated, entered, enforced or issued by any Governmental Authority
having the effect of making illegal or otherwise prohibiting the Transactions,
and no Claim instituted by a Governmental Authority seeking to enjoin, restrain,
or prohibit the consummation of this Agreement shall be pending before any court
or any other Governmental Authority.
Section 7.5 Execution of Restated LB Pacific LP Agreement. Seller shall
have entered into the Restated LB Pacific LP Agreement.
Section 7.6 Execution of Restated LB Pacific GP LLC Agreement. Seller
shall have entered into the Restated LB Pacific GP LLC Agreement.
9
ARTICLE VIII
CONDITIONS TO SELLER'S OBLIGATION
Seller's obligation to consummate this Agreement and the transactions
contemplated hereunder is subject to the satisfaction of each of the conditions
below on or prior to the Closing Date. Notwithstanding anything to the contrary
herein, the failure of any condition below, to the extent that such failure
relates solely to Sidecar, shall not excuse the performance of Seller's
obligations hereunder with respect to FRC.
Section 8.1 Representations and Warranties. The representations and
warranties of each Buyer set forth in Article IV shall be true and correct in
all material respects as of the Closing Date, and each Buyer shall have
delivered to Seller a certificate attesting to the same.
Section 8.2 Performance. Each Buyer shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
each Buyer shall have delivered to Seller a certificate attesting to the same.
Section 8.3 Closing Documents. On the Closing Date, each Buyer shall
have delivered to Seller duly executed closing documents, as specified in
Section 2.4(a) hereof.
Section 8.4 No Illegality. As of the Closing, no Law shall have been
adopted, promulgated, entered, enforced or issued by any Governmental Authority
having the effect of making illegal or otherwise prohibiting the Transactions,
and no Claim instituted by a Governmental Authority seeking to enjoin, restrain,
or prohibit the consummation of this Agreement shall be pending before any court
or any other Governmental Authority.
Section 8.5 Execution of Restated LB Pacific LP Agreement. Each Buyer
shall have entered into the Restated LB Pacific LP Agreement.
Section 8.6 Execution of Restated LB Pacific GP LLC Agreement. Each
Buyer shall have entered into the Restated LB Pacific GP LLC Agreement.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
Section 9.1 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall be deemed
continuing representations and warranties and shall survive the Closing Date.
Section 9.2 Indemnification by Seller. Seller shall indemnify and hold
harmless each Buyer, their respective Affiliates and their respective directors,
managers, officers, members, partners, employees, agents, representatives,
successors and assigns (each, a "Buyer Indemnitee" and collectively, the "Buyer
Indemnitees") against and with respect to any and all Losses incurred or
suffered by any Buyer Indemnitee that result from, relate to or arise out of,
any and all actions, suits, claims, proceedings, investigations, demands,
assessments, audits, fines, judgments, costs and other expenses (including
reasonable fees and expenses of attorneys,
10
accountants and other professional advisors) incident to any of the following
matters or to the enforcement of any rights under this Section 9.2:
(a) any untrue representation or breach of warranty by Seller
contained in Article III or in any agreement, document or certificate delivered
to any Buyer by Seller in respect hereof or under any other Transaction
Document; or
(b) any breach or nonfulfillment of any covenants of Seller
contained herein, in any other Transaction Document or in any agreement,
document or certificate delivered to any Buyer by Seller hereunder or
thereunder.
Section 9.3 Indemnification by each Buyer. Each Buyer, severally and
not jointly, shall indemnify and hold harmless Seller, its Affiliates, and their
respective directors, managers, officers, members, partners, employees, agents,
representatives, successors and assigns (each, a "Seller Indemnitee" and
collectively, the "Seller Indemnitees"), against and with respect to any and all
Losses incurred or suffered by any Seller Indemnitee that result from, relate to
or arise out of, any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable fees and expenses of attorneys, accountants and
other professional advisors) incident to any of the following matters or to
enforcement of any rights under this Section 9.3:
(a) any untrue representation or breach of warranty by such
Buyer contained in Article IV or in any agreement, document or certificate
delivered to Seller by such Buyer in respect thereof or under any other
Transaction Document; or
(b) any breach or nonfulfillment of any covenants of such
Buyer contained herein, in any other Transaction Document or in any agreement,
document or certificate delivered to Seller by such Buyer hereunder or
thereunder.
Section 9.4 Procedures for Indemnification. The procedures for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Indemnified
Party") shall promptly give notice to the party from whom the indemnification is
claimed (the "Indemnifying Party") of any claim, whether between the parties or
brought by a third party against the Indemnified Party, specifying (i) the
factual basis for such claim, and (ii) the amount of the claim, if known or
reasonably estimable. Failure to give prompt notice shall not affect the
indemnification obligations hereunder except to the extent of actual prejudice.
(b) Following receipt of notice from the Indemnified Party of
a claim, the Indemnifying Party shall have 30 days in which to make such
investigation of the claim as the Indemnifying Party shall deem necessary or
desirable. For the purposes of such investigation, the Indemnified Party agrees
to make available to the Indemnifying Party and/or its authorized
representative(s) the information relied upon by the Indemnified Party to
substantiate the claim. If the Indemnified Party and the Indemnifying Party
agree at or prior to the expiration of said 30-day period (or any agreed upon
extension thereof) to the validity and amount of such claim, or if the
Indemnifying Party does not respond to such notice, the Indemnifying Party shall
immediately pay to the Indemnified Party the full amount of the claim. If the
Indemnifying
11
Party affirmatively rejects such claim within such 30-day period, the
Indemnified Party will be free to seek judicial or other enforcement of its
rights to indemnification under this Agreement.
(c) With respect to any claim by a third party as to which the
Indemnified Party is entitled to indemnification hereunder, the Indemnifying
Party shall have the right at its own expense to participate in or, if it so
elects, to assume control of the defense of such claim, and the Indemnified
Party shall cooperate fully with the Indemnifying Party, subject to
reimbursement for any reasonable cost or expense incurred by the Indemnified
Party as the result of a request by the Indemnifying Party to so cooperate. If
the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Indemnified Party shall have the right to participate in
the defense of such claim at its own expense; provided that if the Indemnified
Party reasonably determines in good faith that there exist actual or potential
conflicts of interest that make representation by the same counsel
inappropriate, the Indemnified Party shall be entitled to employ separate
counsel (but not more than one per jurisdiction) at the expense and cost of the
Indemnifying Party. The Indemnifying Party shall not, without the prior written
consent of the Indemnified Party, settle, compromise or offer to settle or
compromise any such claim or demand unless (i) the settlement agreement contains
a complete and unconditional general release by the third party asserting the
claim to all Indemnified Parties affected by the claim, (ii) the settlement
agreement does not contain any sanction or restriction upon the conduct of any
business by the Indemnified Party or its Affiliates and (iii) any amounts owing
from any Indemnified Party pursuant to such compromise or settlement are subject
to full indemnification by the Indemnifying Party (which has acknowledged in
writing its responsibility therefor and has demonstrated its financial ability
to satisfy such obligation).
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make all reasonable efforts
to reach a decision with respect thereto as expeditiously as possible.
(e) If the Indemnifying Party does not elect to assume control
or otherwise participate in the defense of any third-party claim, the
Indemnifying Party shall be bound by the results obtained in good faith by the
Indemnified Party with respect to such claim and shall be liable for all costs
and expenses of defending such claim incurred by Indemnified Party, including
fees and disbursements of counsel.
Section 9.5 Exclusive Remedies. Following the Closing, the remedies
provided for in this Article IX shall be the sole and exclusive remedies of the
parties and their respective directors, managers, officers, members, partners,
employees, Affiliates, agents, representatives, successors and assigns for any
breach of or inaccuracy in any representation or warranty contained in this
Agreement, provided, however, that nothing herein is intended to waive any
claims for fraud or waive any equitable remedies to which a party may be
entitled.
ARTICLE X
MISCELLANEOUS
Section 10.1 Expenses. Except as otherwise expressly set forth in this
Agreement, each party shall bear its own legal and other fees and expenses
incurred in connection with its negotiating, executing and performing this
Agreement, including, without limitation, any related
12
broker's or finder's fees; provided, however, that if the Closing occurs and all
the Transactions are consummated, all Transaction Expenses of FRC shall be paid
or reimbursed at the Closing by LB Pacific up to a maximum amount of $250,000
and all Transaction Expenses of Seller shall be paid or reimbursed at Closing by
LB Pacific up to a maximum amount of $250,000. As used herein, "Transaction
Expenses" shall mean all reasonable out-of-pocket costs, fees and expenses
incurred by such party in connection with the transactions contemplated by this
Agreement (as evidenced by a reasonably detailed listing of such costs, fees and
expenses), including all reasonable costs, fees and expenses of its advisors,
investment bankers, lawyers, financing sources and accountants arising out of,
relating to or incidental to the discussion, evaluation, financing, negotiation
and documentation of the transactions contemplated hereby, in each case subject
to reasonable documentation and verification by the other parties hereto.
Section 10.2 Publicity. Except as required by law or regulation, prior
to the Closing neither of the parties shall disclose to any person (other than
their respective advisors, accountants, consultants and attorneys) or make any
public announcement or issue any press release with respect to the Transactions,
the terms thereof, the terms contained in this Agreement or any written or oral
proposal made by the parties, the fact that discussions are taking place or the
identity of the parties (or their control persons) without the prior written
consent of the other. Any public announcement or press release associated with
the execution of this Agreement or the Closing shall be agreed upon by the
parties prior to being issued.
Section 10.3 Notices. All notices, demands and other communications
pertaining to this Agreement ("Notices") shall be in writing addressed as
follows:
If to Seller: LB I Group Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Telecopy: 000-000-0000
with a copy to: Xxxxxx Brothers Inc.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
Telecopy: 646-758-2176
with a copy to: Pillsbury Winthrop LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: 000-000-0000
13
If to FRC: First Reserve Corporation
000 Xxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx Xxx
Telecopy: 000- 000-0000
with a copy to: Xxxxx Liddell & Xxxx LLP
000 Xxxxxx Xx., 0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: H. Xxxxxxx Xxxxxxxxx, Esq.
Telecopy: 713-223-3717
With a copy to: First Reserve Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy: 000-000-0000
If to Sidecar: Xxxxxx Sidecar I, LLC
c/x Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
Telecopy: 000-000-0000
with a copy to: Xxxxxx Sidecar I, LLC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Compliance Department
Telecopy: 646-758-2176
With a copy to: Pillsbury Winthrop LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: 000-000-0000
Notices shall be deemed given five (5) business days after being mailed by
certified or registered United States mail, postage prepaid, return receipt
requested, or on the first business day after being sent, prepaid, by nationally
recognized overnight courier that issues a receipt or other confirmation of
delivery or by telecopy with receipt confirmed. Any party may change the address
to which Notices under this Agreement are to be sent to it by giving written
notice of a change of address in the manner provided in this Agreement for
giving Notice.
14
Section 10.4 Interpretation. When reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
Section 10.5 Assignment. No party to this Agreement may assign any of
its rights or obligations under this Agreement without the prior written consent
of the other parties hereto; provided, however, that without the consent of any
other party, any party shall be permitted to assign its rights and obligations
under this Agreement to any other Affiliate of such party, which assignment
shall not release the assigning party from its obligations hereunder.
Section 10.6 Parties in Interest; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Except for the rights of
the Indemnified Parties as provided in Article IX, nothing in this Agreement,
express or implied, is intended to confer upon any Person other than the parties
hereto or their respective successors, any rights or remedies under or by reason
of this Agreement.
Section 10.7 Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto, which are incorporated by reference herein) constitutes
the entire agreement between the parties with respect to the subject matter
hereof and referenced herein, and supersede and terminate any prior agreements
between the parties (written or oral) with respect to the subject matter hereof.
Section 10.8 Amendment. This Agreement shall not be amended except by a
written instrument executed by each of the parties hereto.
Section 10.9 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument. Delivery of an executed signature page
to this Agreement by facsimile transmission shall be as effective as delivery of
a manually signed counterpart of this Agreement.
Section 10.10 Severability. In case any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality, and enforceability of the remaining
provisions will not in any way be affected or impaired. Any illegal or
unenforceable term shall be deemed to be void and of no force and effect only to
the minimum extent necessary to bring such term within the provisions of
applicable Law and such term, as so modified, and the balance of this Agreement
shall then be fully enforceable.
Section 10.11 Governing Law; Submission to Jurisdiction; Selection of
Forum; Service of Process. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. EACH PARTY TO THIS AGREEMENT
AGREES THAT IT WILL BRING ANY ACTION OR PROCEEDING IN
15
RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR
CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE FEDERAL OR STATE COURTS
LOCATED IN
NEW YORK,
NEW YORK (THE "CHOSEN COURT"). IN ADDITION, EACH PARTY
HEREBY (A) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN
COURT, (B) WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION TO LAYING VENUE IN THE CHOSEN COURT AND AGREES THAT IT WILL NOT
ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST
FOR LEAVE FROM ANY SUCH COURT, AND (C) WAIVES ANY OBJECTION OR DEFENSE THAT THE
CHOSEN COURT IS AN INCONVENIENT FORUM OR DOES NOT HAVE PERSONAL JURISDICTION
OVER ANY PARTY TO THIS AGREEMENT. EACH PARTY HERETO FURTHER AGREES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT.
16
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of
the parties hereto as of the date first written above.
BUYERS:
FIRST RESERVE PACIFIC HOLDINGS AIV,
L.P.
By: FIRST RESERVE GP X, L.P.,
its general partner
By: FIRST RESERVE GP X, Inc.,
its general partner
By: /s/ Xxx Xxx
--------------------------------------------
Xxx Xxx
Vice President
XXXXXX SIDECAR I, LLC
By: Xxxxxx Brothers Merchant Banking Associates
III L.L.C.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
SELLER:
LB I GROUP INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
17
SCHEDULE A
PURCHASE AND SALE OF UNITS OF LB PACIFIC, LP
Buyer Number of Units Principal Amount
----- --------------- ----------------
First Reserve Pacific Holdings AIV, L.P. 53,696,250 $53,799,390.93
Xxxxxx Sidecar I, LLC 15,484,500 $15,514,242.97
PURCHASE AND SALE OF SHARES OF LB PACIFIC GP, LLC
Buyer Number of Shares Principal Amount
----- ---------------- ----------------
First Reserve Pacific Holdings AIV, L.P. 53,750 $53,853.25
Xxxxxx Sidecar I, LLC 15,500 $15,529.77
SCHEDULE 3.8
CAPITALIZATION OF LB PACIFIC
NUMBER CAPITAL
NAME OF PARTNER OF UNITS CONTRIBUTION
----------------------- ------------ ---------------
General Partner:
LB Pacific GP, LLC 178,750 $178,750.00
Limited Partners:
LB I Group Inc. 109,3 90,500 $109,390,500.00
Xxxxxx Sidecar I, LLC 15,484,500 $15,484,500.00
First Reserve Pacific 53,696,250 $53,696,250.00
Holdings AIV, L.P.
CAPITALIZATION OF LB PACIFIC GP
NUMBER CAPITAL
NAME OF MEMBER OF SHARES CONTRIBUTION
----------------------- ------------ ---------------
LB I Group Inc. 109,500 $109,500
Xxxxxx Sidecar I, LLC 15,500 $15,500
First Reserve Pacific 53,750 $53,750
Holdings AIV, L.P.
2
