EXHIBIT B-2
FORMATION AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of the 12th
day of October, 1995 by and among MCN CORPORATION ("MCN"), a
Michigan corporation, TARTAN ENERGY COMPANY OF MISSOURI, L.C.
("Tartan"), a Missouri limited liability company, TARTAN
MANAGEMENT COMPANY OF MISSOURI, L.C. ("Tartan Management"), a
Missouri limited liability company, TARTAN LIMITED PARTNERSHIP OF
MISSOURI (the "Missouri Interim Entity"), a Missouri limited
partnership, TORCH ENERGY MARKETING, INC. ("Torch"), a Delaware
corporation, and Xxx X. Xxxxxx and Xxxxxxx X. Xxxxxx (the
"Individuals").
R E C I T A L S:
MCN is a public utility holding company, with subsidiaries
engaged in the distribution and sale of natural gas at retail in
Michigan. Tartan, which is owned by the Individuals and Tartan
Management, is the surviving company of a merger with and into it
of Tartan Energy Company, L.C. ("Old Tartan"), an Oklahoma
limited liability company. As a result of the merger, Tartan
holds 15 local franchise agreements with cities and
unincorporated areas in Missouri which have been approved by the
Missouri Public Service Commission ("MPSC") and a certificate of
public convenience and necessity issued by the MPSC for the
construction and operation of a gas pipeline and distribution
system. Tartan, Old Tartan and their owners expended significant
efforts in causing Old Tartan to acquire the franchise agreements
and the certificate of public convenience and necessity for the
construction and operation of the System hereinafter defined, all
of which represents intangible property of Tartan (the
"Intangibles"). Torch has expertise in gas gathering. Old
Tartan and Tartan, with the support of MCN and Torch have
initiated on behalf of the Partnership hereinafter referred to,
the construction of the System. MCN, Tartan Management, Torch
and the Individuals propose to form Southern Missouri Gas
Company, L.P., a Missouri limited partnership (the
"Partnership"), to own the System, and to cause the Partnership
to issue limited partnership interests and general partnership
interests which will be owned by MCN, limited partnership
interests and general partnership interests which will be owned
by Tartan Management, limited partnership interests which will be
owned by Torch and limited partnership interests which will be
owned by the Individuals. The Parties have agreed that they will
participate in the ownership of the Partnership and in the
System, all to the extent set forth in this Agreement and in
accordance with and in the manner contemplated hereby.
In consideration of the premises and the mutual covenants
herein contained, the Parties agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Affiliate" means, as to any Party, any Person
that, directly or indirectly, controls, is controlled by, or is
under common control with such Party. The terms "controls",
"controlled by", and "under common control with" refer to the
possession (to the exclusion of others) of the power effectively
to direct or cause the direction of, the management and policies
of a Person, whether through ownership of not less than a
majority of voting securities, by contract or otherwise.
(b) "Chemical Note" means the promissory note from
Tartan to Chemical Bank pursuant to the Credit Agreement.
(c) "Credit Agreement" means the Credit Agreement
between Tartan and Chemical Bank, to be dated as of the First
Closing Date and to be substantially in the form of Exhibit E.
(d) "Environmental Claim" means any and all
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violations, noticed investigations or proceedings relating in any
way to any Environmental Law (for purposes of this definition,
"Claims") or any permit issued under any such Environmental Law,
including without limitation (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup,
removal, remedial or other actions for damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any
third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
(e) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code, published
policy or rule of common law now in effect and in each case as
amended and any published judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to Hazardous
Materials, the environment or health relating to or arising from
environmental conditions, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended 42 U.S.C. Sec. 9601 et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Sec. 1801 et
seq.; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Sec. 6901 et seq.; the Federal Water Pollution Control Act,
as amended, 33 U.S.C. Sec. 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Sec. 2601 et seq.; the Clean Air Act, 42
U.S.C. Sec. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Sec.
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Sec. 2701
et seq.; and relevant state and local laws.
(f) "First Closing" means the date and time set for
closing the Credit Agreement and effecting the first draw under
the Chemical Note, or such other time and date as may be agreed
to in writing by the Parties for the closing of the transactions
contemplated hereby for the First Closing, and "First Closing
Date" means the date of the First Closing.
(g) "Hazardous Materials" means (i) any petroleum or
petroleum products (other than natural gas), radioactive
materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (ii) any chemicals,
materials or substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants"
or "pollutants," or words of similar import under any applicable
Environmental Law; and (iii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated
by any governmental authority.
(h) "Intercreditor Agreement" means the Intercreditor
Agreement in the form of Exhibit D hereto, among Tartan, MCN,
Torch and Torch as collateral agent for MCN and Torch, dated the
date of the Pledge Agreement and entered into in connection
therewith.
(i) "Material Adverse Effect" means a material adverse
effect on the assets, liabilities, business, condition (financial
or otherwise), prospects or results of operations of Tartan taken
as a whole.
(j) "MPSC" means the Missouri Public Service
Commission.
(k) "Parties" means the parties to the Agreement.
(l) "Person" means any individual, corporation,
limited liability company, limited or general partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
(m) "Pledge Agreement" means the Pledge Agreement from
the Missouri Interim Entity in favor of MCN and Torch referred to
in Section 3 hereof.
(n) "PUHCA" means the Public Utility Holding Company
Act of 1935, as amended.
(o) "Related Documents" means, as of the First
Closing, all documents attached hereto as Exhibits and all
necessary supporting documents, and, as of the Second Closing,
all those documents plus such of those documents attached hereto
as Annexes which are to be executed at the Second Closing and all
necessary supporting documents.
(p) "Release" means discharging, disposing, dumping,
emitting, emptying, escaping, injecting, leaking, leaching,
placing, seeping, spilling and the like, into or upon any land or
water or air, or otherwise entering into the environment.
(q) "Second Closing" means 9:00 a.m. Houston time on
the second business day after the effective date of the MPSC
order approving the merger of Tartan with and into the
Partnership and the satisfaction of the conditions set forth in
Section 16 hereof, and "Second Closing Date" means the date of
the Second Closing.
(r) "System" means the rights-of-way and easements,
fee properties, equipment, vehicles, permits, leases (for realty
or personalty), pipelines and appurtenant facilities, including
any future compressor station, referred to in the Plan attached
hereto as Annex I.
(s) "Tartan Group" means Tartan and Tartan Management
in its individual capacity and in its capacity as general partner
acting on behalf of the Missouri Interim Entity.
(t) "Tartan Notes" means the promissory notes from
Tartan to MCN and to Torch referred to in Section 3 hereof.
(u) "Taxes" means (i) all federal, foreign, state or
local net or gross income, gross receipts, sales, use, real
property gains or transfer, ad valorem, property, value-added,
franchise, production, severance, windfall profit, withholding,
payroll, employment, excise or similar taxes, assessments,
duties, fees, documentary, stamp, levies or other governmental
charges, together with any interest thereon, any penalties,
additions to tax or additional amounts with respect thereto and
any interest in respect of such penalties, additions or
additional amounts, and (ii) liability for the payment of any
consolidated or combined tax (including, without limitation, any
liability imposed pursuant to Treasury Regulations Section
1.1502-6), together with any interest thereon, any penalties,
additions to tax or additional amounts with respect thereto and
any interest in respect of such penalties, additions or
additional amounts, of the type described in clause (i) above.
(v) When used in Section 10 hereof, "knowledge" means
best knowledge of the entity making the representation or
warranty, and "Owner" means the applicable entity in the Tartan
Group that owns the business, property and assets of Old Tartan
relative to the System at the time the relevant representation or
warranty is made.
2. Nature of the System.
(a) Use of the System. The System will be used solely
for the purchasing, treating, transportation, distribution and
sale of gas (i) for the benefit of the Partnership prior to the
Second Closing, and (ii) by the Partnership thereafter.
(b) Effect of this Agreement on Other Businesses of
the Parties. The Parties and their Affiliates shall not, by
reason of this Agreement or of any related agreements or by
reason of their participation as Unitholders of the Partnership,
be restricted in any way in the conduct and expansion of their
respective businesses and undertakings except as expressly
provided herein or in the agreements attached as Annexes hereto.
(c) Conduct of the System. The Parties agree that the
System will be initiated and conducted in the manner specified
herein and in the documents and agreements, as such documents and
agreements are permitted to be supplemented or amended from time
to time, set forth as follows:
(i) Plan, a copy of which is attached hereto as
Annex I;
(ii) Agreement of Limited Partnership of the
Partnership, to be dated as of the Second Closing Date and
to be substantially in the form of Annex II;
(iii) Construction, Operation, and Maintenance
Management Agreement between Tartan Management and Tartan,
to be dated as of the First Closing Date and to be
substantially in the form of Annex III;
(iv) Plan and Agreement of Merger between Tartan
and the Partnership, to be dated as of the Second Closing
Date and to be substantially in the form of Annex IV;
(v) Gas Service Transportation Agreement between
Xxxxxxxx Natural Gas Company ("WNG") and Tartan, dated as of
July 25, 1994, and Facility Construction, Ownership and
Operating Agreement between WNG and Tartan, dated as of
July 15, 1994, as amended September 28, 1994, and March 16,
1995, to be transferred by operation of law pursuant to the
merger provided for by (iv) above, copies of which are
attached hereto collectively as Annex V; and
(vi) Contribution Agreements between Torch and
MCN, to be dated the First Closing Date and to be
substantially in the forms of Annexes VI and VII.
3. First Closing and Interim Financing. The First Closing
of the transactions contemplated by this Agreement shall take
place at the offices of Torch, 0000 Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx or at such other place as may be agreed to by the Parties.
Subject to the terms and conditions hereof, the following events
will take place at the First Closing:
(a) The Tartan Notes. MCN and Torch have advanced
their own funds, first to Old Tartan and then to Tartan, for
initial expenditures in furtherance of the System. Such advances
have been evidenced by promissory notes from Old Tartan to MCN
and Torch and are now evidenced by the Tartan Notes in the forms
of Exhibits A and B. The Tartan Notes are secured by a pledge
agreement pledging 98.5% of Tartan Management's and the
Individuals' ownership interest in Tartan.
(b) Interim Financing. The Credit Agreement will be
signed, the closing contemplated by the Credit Agreement will
occur and the first draw under the Chemical Note will be
effected. The funds from the first drawing will be used at least
in part to prepay the Tartan Notes in an amount equal to the
difference between the amounts outstanding under the Tartan Notes
and $8 million.
(c) First Closing Actions. Tartan Management and the
Individuals will transfer 98.5% of their collective ownership
interest in Tartan to the Missouri Interim Entity. The
Individuals will own the remaining 1.5% of Tartan, and with
Tartan Management as general partner, will own limited
partnership interests in the Missouri Interim Entity. The
Missouri Interim Entity will assume the Tartan Notes by endorsing
its guarantee and assumption thereon. The pledge agreement
referred to in Section 3(a) securing the Tartan Notes will be
replaced by the Pledge Agreement to be dated as of the First
Closing Date and to be substantially in the form of Exhibit C,
pledging all of the Missouri Interim Entity's ownership interests
in Tartan. The Intercreditor Agreement will be executed by the
parties thereto.
(d) Payment of Tartan Notes. Remaining amounts due on
the Tartan Notes will be repaid by the Missouri Interim Entity at
the Second Closing.
(e) Document Execution and Delivery. Each of the
Parties will execute and deliver those documents contemplated by
this Section 3 to which it is a party, and the Individuals and
Tartan Management will cause the Missouri Interim Entity to
execute and deliver those documents listed in Section 2(c) and
contemplated by this Section 3 to which it is a party, in each
case including those documents required in connection with the
closing of the transactions contemplated by the Credit Agreement.
4. Credit Support Payments. Tartan and Tartan
Management acknowledge that MCN and Torch have been instrumental
in Tartan obtaining the financing provided by the Credit
Agreement and the Chemical Note. Specifically, without the
credit support of MCN and Torch provided pursuant to the Credit
Agreement (and the resulting financial risks assumed by MCN and
Torch in this regard), Tartan would have been unable to obtain
financing on the terms set forth in the Credit Agreement and the
Chemical Note, which terms include a much more favorable interest
rate than Tartan could have received on its own. Accordingly, in
order to compensate MCN and Torch for the credit support they
have provided to enable Tartan to obtain the financing provided
by the Credit Agreement (including such favorable interest rate)
Tartan shall pay, within ten days after the last day of each
calendar quarter and on the date the Chemical Note shall be paid
in full and extinguished, (i) directly to MCN an amount equal to
(A) the average outstanding daily balance of the Chemical Note
during the applicable period, multiplied by (B) an amount equal
to 1.21875% per annum based on a 365-day year, and (ii) directly
to Torch an amount equal to (A) the average outstanding daily
balance of the Chemical Note during the applicable period,
multiplied by (B) an amount equal to .40625% per annum based on a
365-day year.
5. Revised Capital Structure.
(a) If Tartan exhausts funding under the Chemical
Note, and additional funds are required to complete construction
of the System and to provide adequate working capital, additional
equity funds will be provided to Tartan by capital contributions
from the Missouri Interim Entity, which funds will be obtained by
draws from Torch under the Tartan Note assumed by the Missouri
Interim Entity until such amounts equal the amount of the draws
made from MCN under the Tartan Note assumed by the Missouri
Interim Entity, and thereafter by equal draws from Torch and MCN
under such Tartan Notes. In no event, however, shall the total
draws from Torch under the applicable Tartan Note exceed
$8 million and the total draws from MCN under the applicable
Tartan Note exceed $8 million, unless mutually agreed in writing
by MCN, Torch, Tartan and the Missouri Interim Entity.
(b) Following complete construction of the System, the
Parties will seek on behalf of the Partnership permanent
financing to pay in full and extinguish the Chemical Note,
together with such additional debt capital to complete any agreed
upon expansions of the System and to provide working capital.
Such debt capital shall be derived from one or more short-term or
long-term borrowings through either public or private placement,
which may be taxable or tax exempt, as the partners deem most
appropriate and economical. Any such permanent financing, and
such additional debt capital, shall be obtained in full
compliance with any requirements of the MPSC, including orders of
the MPSC regarding debt/equity ratios for Tartan.
6. Construction and Operation of the System Prior to the
Second Closing. Prior to the Second Closing, Tartan will
continue to construct and operate the System for the benefit of
the Partnership. To the fullest extent permitted by law, any
profits or losses attributable to this interval will be
segregated for the benefit of the Partnership and distributed
thereto at the Second Closing.
7. Second Closing. The Second Closing of the transactions
contemplated by this Agreement shall take place at the offices of
Torch, 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx or at such other
place as may be agreed to by the Parties. Subject to the terms
and conditions hereof, the following events will take place at
the Second Closing:
(a) Organizational Steps. MCN and Torch will make
capital contributions in those amounts required to reflect their
respective equity interests in the Missouri Interim Entity so
that when such interests are subsequently distributed to Torch
and MCN as provided below, such interests will reflect their
respective Partnership Percentages, as that term is defined in
the Agreement of Limited Partnership (but in no event shall those
amounts be less than $1.4 million for Torch and $6.6 million for
MCN). Thereafter, MCN, Tartan Management, Torch and the
Individuals will cause the formation of the Partnership by
executing the Agreement of Limited Partnership in their capacity
first as partners of the Missouri Interim Entity and then in
their capacity as direct partners in the Partnership, to be dated
as of the Second Closing Date and to be substantially in the form
of Annex II. The Certificate of Limited Partnership, to be dated
as of the Second Closing Date and to be substantially in the form
of Exhibit F, will be filed with the Secretary of State of
Missouri. Tartan will merge with and into the Partnership, and
the Plan and Agreement of Merger reflected in Annex IV will be
filed with the Secretary of State of Missouri. The Partnership
will issue limited partnership interests and general partnership
interests to the Missouri Interim Entity and limited partnership
interests to the Individuals. The Individuals will contribute
their equity interests in the Missouri Interim Entity to Tartan
Management. The Missouri Interim Entity will distribute limited
partnership interests and general partnership interests to Tartan
Management, limited partnership interests and general partnership
interests to MCN and limited partnership interests to Torch so as
to evidence their respective Partnership interests.
Contemporaneously, the Individuals will sell their limited
partnership interests to Torch for approximately $130,000. The
Missouri Interim Entity will be dissolved and liquidated.
(b) Document Execution and Delivery. Each of the
Parties will execute and deliver those documents listed in
Section 2(c) and contemplated by this Section 7 to which it is a
party and which were not executed at the First Closing, MCN and
Tartan Management will cause the Partnership to execute and
deliver those documents listed in Section 2(c) and contemplated
by this Section 7 to which the Partnership is a party and the
Individuals and Tartan Management will cause the Missouri Interim
Entity to execute and deliver those documents listed in Section
2(c) and contemplated by this Section 7 to which it is a party.
8. Columbus Air Force Base Contract. The parties
acknowledge that Tartan is bound by a contract (the "Contract")
for the design and construction of a fuel conversion distribution
facility at Columbus Air Force Base, Columbus, Mississippi (the
"Project"). Tartan is also responsible for a promissory note
dated October 14, 1994, in the amount of $600,000 from Old Tartan
to Liberty Bank and Trust Company, which evidences a revolving
line of credit (the "Loan"), for use in the Project. All of the
rights and obligations of Old Tartan and Tartan under the
Contract, the Project and the Loan by letter agreement dated
January 1, 1995, between Old Tartan and Tartan Energy Resources,
L.C. ("Tartan Resources"), are now the rights and obligations of
Tartan Resources and Tartan Management. Under that agreement,
Tartan Resources has agreed to indemnify Old Tartan and hold it
harmless against all liabilities, claims, etc. arising out of the
Contract, the Project and the Loan, and any agreements or
activities relating thereto. As such, notwithstanding any
provision of this Agreement to the contrary, the terms and
provisions of this Agreement shall not be applicable to the
Project, the Contract, the Loan, and any and all agreements and
activities relating thereto. Tartan Resources shall indemnify
and hold harmless Old Tartan, Tartan, the Partnership, MCN,
Torch, Tartan Management and the Individuals against any and all
loss, liability, claim, damage and expense whatsoever, as
incurred (including fees and expenses reasonably incurred in
investigating or defending any such claim), based upon or arising
out of the foregoing contracts, instruments and arrangements.
9. Representations and Warranties of MCN. MCN hereby
represents and warrants as follows:
(a) Organization. MCN is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Michigan with full corporate power to carry
on its business as now being conducted.
(b) Power and Authority; Enforceability. MCN has all
requisite corporate power and authority to enter into this
Agreement and the Related Documents to which it is a party and to
perform its obligations hereunder and thereunder. This Agreement
and the Related Documents to which it is a party have been duly
authorized, executed and delivered on behalf of MCN and, assuming
due authorization, execution and delivery of the other parties
thereto, constitutes a legal, valid and binding obligation of MCN
enforceable in accordance with its terms, except that (i) such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and (ii) the remedy of
specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(c) No Conflict with Other Instruments or Consents.
Except as otherwise set forth in this Subsection (c), neither the
execution and delivery of this Agreement or the Related Documents
nor the consummation of the transactions contemplated hereby or
thereby (i) will conflict with or result in (or with giving of
notice or passage of time or both would result in) a breach,
default or violation of (A) any of the terms, provisions or
conditions of the charter, as amended, or bylaws, as amended, of
MCN or (B) any material agreement, document, instrument,
judgment, decree, order, governmental permit, certificate or
license to which MCN is a party or to which it is subject or by
which its property is bound, (ii) will result in the creation of
any lien, charge or other encumbrance on any material property or
asset of MCN, or (iii) will require MCN to obtain the consent of
any private nongovernmental third party. No consent, action,
approval or authorization of, or registration, declaration or
filing with, any governmental department, commission, agency or
other instrumentality having jurisdiction over MCN is required by
MCN to authorize the execution and delivery of this Agreement or
the Related Documents by MCN or, except for (i) approvals by the
Securities and Exchange Commission pursuant to PUHCA, (ii) filing
each Plan and Agreement of Merger with the Secretary of State of
Missouri, and (iii) approval of the MPSC, the consummation of the
transactions contemplated hereby and thereby.
(d) Accuracy of Representations and Warranties. All
representations and warranties of MCN contained in this Agreement
(except as affected by transactions contemplated by this
Agreement) shall be true in all material respects at and as of
the relevant Closing as if such representations and warranties
were made at and as of the relevant Closing, and MCN shall
perform, at or prior to the relevant Closing, all agreements and
covenants required by this Agreement to be performed by MCN at or
prior to the relevant Closing.
(e) Litigation. There are no suits, actions, claims,
proceedings or investigations pending or to the knowledge of MCN,
threatened, seeking to prevent or challenge the transactions
contemplated by this Agreement.
10. Representations and Warranties of Tartan, and Tartan
Management. Each entity in the Tartan Group, hereby represents
and warrants as follows:
(a) Organization. Tartan and Tartan Management are
both limited liability companies duly organized, validly existing
and in good standing under the laws of the State of Missouri.
The Missouri Interim Entity is a limited partnership duly
organized, validly existing and in good standing under the laws
of the State of Missouri.
(b) Power and Authority; Enforceability. Each entity
in the Tartan Group has all requisite company or partnership (as
applicable) power and authority to enter into this Agreement and
the Related Documents to which each is a party and to perform its
obligations hereunder and thereunder. This Agreement and the
Related Documents to which each is a party have been duly
authorized, executed and delivered on its behalf and, assuming
due authorization, execution and delivery of the other parties
thereto, constitutes a legal, valid and binding obligation of
each enforceable in accordance with its terms, except that (i)
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and (ii) the remedy of
specific performance and injunction and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(c) No Conflict with Other Instruments or Consents.
Except as otherwise set forth in this Subsection (c), neither the
execution and delivery of this Agreement or the Related Documents
nor the consummation of the transactions contemplated hereby or
thereby (i) will conflict with or result in (or with giving of
notice or passage of time or both would result in) a breach,
default or violation of (A) any of the terms, provisions or
conditions of the applicable limited liability company agreement
or the agreement of limited partnership, each as amended, of any
entity in the Tartan Group or (B) any material agreement,
document, instrument, judgment, decree, order, governmental
permit, certificate or license to which any such entity is a
party or to which any such entity is subject or by which the
property of any such entity is bound, (ii) will result in the
creation of any lien, charge or other encumbrance on any material
property or asset of any such entity in the Tartan Group, or
(iii) will require any such entity in the Tartan Group to obtain
the consent of any private nongovernmental third party. No
consent, action, approval or authorization of, or registration,
declaration or filing with, any governmental department,
commission, agency or other instrumentality having jurisdiction
over any such entity in the Tartan Group is required by any such
entity in the Tartan Group to authorize the execution and
delivery of this Agreement or the Related Documents by any such
entity in the Tartan Group or, except for (i) filing each Plan
and Agreement of Merger with the Secretary of State of Missouri,
(ii) approval of the MPSC, and (iii) filing of Form U-3A-2 with
the Securities and Exchange Commission prior to commencement of
commercial operation of the System, the consummation of the
transactions contemplated hereby and thereby.
(d) Title to Properties. Owner has good and
indefeasible title to all of its real properties purported to be
owned in fee, has good and merchantable title to all of its
personal properties and is the owner of all of its other
properties and assets (other than natural gas), which are
material to the business of Owner (provided that no title
warranty is made with respect to permits, rights-of-way,
easements or leases) excepting, however, property and other
assets, not material to Owner, acquired or sold or otherwise
disposed of in the ordinary course of business, free of any
mortgage, pledge, lien, charge, security interest or other
encumbrance, subordination or adverse claim, except such
imperfections of title and encumbrances as are not substantial in
amount and do not in the aggregate materially detract from the
value of Owner's property or materially impair the business or
property of Owner. All buildings, plants and offices and all
machinery, fixtures and equipment are in satisfactory operating
condition and repair, normal wear and tear excepted. Owner
enjoys peaceful and undisturbed possession under all material
permits or leases under which it is operating, and to the best of
any member of the Tartan Group's knowledge all such permits and
leases are valid, subsisting and in full force and effect. Owner
does not own or lease any assets, nor does Owner have any
liabilities, other than assets and liabilities described in or
contemplated by the Plan.
(e) Material Contracts. Except as contemplated by
this Agreement, including orders and regulations of the MPSC,
Owner has no and is not bound by any of the following: (i) any
agreement, contract or commitment relating to the employment of
any person, (ii) any agreement, indenture or other instrument
that contains restrictions with respect to mergers or other
business combinations, or payment of profits, dividends or any
other distributions, (iii) any agreement, contract or commitment
relating to capital expenditures, (iv) any loan or advance to, or
investment in, any other Person or any agreement, contract or
commitment relating to the making of any such loan, advance or
investment, (v) any guarantee or other contingent liability in
respect of any indebtedness or obligation of any Person (other
than the endorsement of negotiable instruments for collection in
the ordinary course of business), (vi) any management service,
consulting or any other similar type of contract, (vii) any
agreement, contract or commitment limiting the freedom of Tartan
to engage in any line of business or to compete with any Person,
or (viii) any other agreement, contract or commitment that would
have a Material Adverse Effect.
(f) Permits. The Plan lists all of the material
governmental and other third party permits (including, without
limitation, environmental permits and occupancy permits),
licenses, consents and authorizations ("Permits") required, to
the knowledge of any member of the Tartan Group, in connection
with the use, operation or ownership of the System. Owner holds
all of the Permits, and all of the Permits are valid and in full
force and effect. Owner is in substantial compliance with all of
the Permits and has received no notice of default with respect
thereto.
(g) Litigation. Except for proceedings before the
MPSC as contemplated by this Agreement, no member of the Tartan
Group has received notice of any action, suit, proceeding at law
or in equity, arbitration or administrative or other proceeding
by or before (or any investigation by) any governmental or other
instrumentality or agency, which is pending, or, to the knowledge
of any member of the Tartan Group, threatened, against or
affecting the properties or rights of Owner, relating to the
System, and no member of the Tartan Group knows of a valid basis
for any such action, proceeding or investigation. No member of
the Tartan Group has received notice of any such suits, actions,
claims, proceedings or investigations which are pending or to the
knowledge of any member of the Tartan Group, threatened, seeking
to prevent or challenge the transactions contemplated by this
Agreement.
(h) Intellectual Properties. No member of the Tartan
Group is aware of any actual or claimed infringement or violation
of any patents, patent applications, registered and unregistered
trademarks, service marks, trade names and logos, registered and
unregistered copyrights, computer programs, data bases, trade
secrets or proprietary information.
(i) Taxes. Owner (I) has (or will have by the
relevant Closing) caused to be duly filed in a timely manner
(taking into account all extensions of due dates) with the
appropriate federal, state, local and other governmental
authorities all returns, information returns or statements, and
reports with respect to Taxes that are required to be filed by or
with respect to it, and (II) has (or will have by the relevant
Closing) caused to be paid or deposited or made adequate
provision in accordance with generally accepted accounting
principles consistently applied for the payment of all Taxes
(including estimated Taxes) required with respect to the periods
covered by such returns, statements or reports or by any taxing
authority. To the knowledge of each member of the Tartan Group,
adequate provision has (or will have by the relevant Closing)
been made for all Taxes due with respect to Owner for all periods
through the date hereof. Except for tax liens securing the
payment of Taxes not yet due and payable, (i) there are no tax
liens upon any assets of Owner, (ii) there are no outstanding
agreements or waivers by or with respect to Owner extending the
period for assessment or collection of any Taxes, (iii) there is
no pending action, proceeding or investigation, and no action,
proceeding or investigation has been threatened by any
governmental authority, for assessment or collection of Taxes
with respect to Owner and (iv) no claim for assessment or
collection of Taxes has been asserted and no actual or proposed
assessment has been made against Owner with respect to the Owner.
(j) Compliance with Laws. Each member of the Tartan
Group is, to the best of its knowledge, or Tartan Management,
pursuant to the Construction, Operation, and Maintenance
Management Agreement is, to the best of its knowledge, in
compliance with all applicable laws, regulations, orders,
judgments and decrees applicable to the System, except where any
noncompliance in the aggregate would not have a Material Adverse
Effect.
(k) Employee Benefits. Owner has made available to
MCN and Torch true and complete copies of all employee benefit
plans, policies, programs and arrangements and all related
contracts, agreements and other descriptions thereof with respect
to the employee benefits provided to the employees of Owner (the
"Benefit Plans"). Each of the Benefit Plans has, to the
knowledge of each member of the Tartan Group, been maintained in
compliance with its terms and the requirements of all applicable
laws. None of the Benefit Plans are subject to Title IV of the
Employee Retirement Income Security Act of 1974, as amended, and
the regulations promulgated and rulings issued thereunder
("ERISA"), or the minimum funding obligations of Section 412 of
the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder (the
"Code"), and Owner and any entity required to be aggregated
therewith pursuant to Section 414(b) or (c) of the Code have no
liability under Title IV of ERISA or under Section 412(f) or
412(n) of the Code.
(l) Financial Statements. Copies of Old Tartan's
(i) unaudited balance sheet (the "Balance Sheet") as at June 30,
1995 (the "Balance Sheet Date") and the related statement of
income, cash flows and shareholders' equity for the interim
periods then ended for the six months ended June 30, 1995, and
(ii) unaudited balance sheet as at December 31, 1994 and the
related unaudited statement of income, cash flows and owners'
equity for the fiscal year then ended (including in all cases the
notes thereto) (collectively, the "Financial Statements") have
been previously delivered to the Parties. The Financial
Statements have been prepared in accordance with generally
accepted accounting principles consistently applied except as
noted therein and except, in the case of unaudited interim
financial statements, for normal year-end adjustments, and fairly
present the financial position of Old Tartan as of the respective
dates set forth therein and the results of operations and cash
flows for Old Tartan for the respective fiscal periods set forth
therein.
(m) No Adverse Changes. Except as contemplated by
this Agreement, since the Balance Sheet Date Tartan has conducted
its business only in the ordinary course of business consistent
with past practice and there have been no changes that could have
a Material Adverse Effect.
(n) Environmental Laws and Regulations. Except as set
forth in the Plan and except where it would not have a Material
Adverse Effect (i) Hazardous Materials have not been generated,
used, treated or stored on, or transported to or from, any
property of Owner by Owner, or, to the knowledge of any member of
the Tartan Group, its authorized agents or its independent
contractors (including suppliers), (ii) Hazardous Materials have
not been Released or disposed of by Owner, or to the knowledge of
any member of the Tartan Group, by its authorized agents or its
independent contractors (including suppliers) on any property of
Owner except such Releases that do not violate any Environmental
Laws, (iii) Owner is, to the knowledge of the members of the
Tartan Group, in compliance with all applicable Environmental
Laws and the requirements of any permits issued under such
Environmental Laws with respect to any property of Owner, (iv) No
member of the Tartan Group has received notice of any
Environmental Claims against Owner or any property of Owner, (v)
there are no facts or circumstances, conditions, pre-existing
conditions or occurrences on any property of Owner known to any
member of the Tartan Group that could reasonably be anticipated
(A) to form the basis of an Environmental Claim against Owner or
any property of Owner, or (B) to cause any property of Owner to
be subject to any restrictions on the ownership, occupancy use or
transferability of any property of Owner under any Environmental
Law, (vi) to the knowledge of the members of the Tartan Group,
there are not now and there never have been any underground
storage tanks located on any property of Owner, and (vii) Owner
has not in the ordinary course of business transported or stored
Hazardous Materials (except for natural gas odorant materials).
(o) Solvency. No entity in the Tartan Group is
entering into this Agreement with actual intent to hinder, delay
or defraud creditors.
(p) Copies Complete. The copies of the charter
documents, bylaws and other governing documents, each as amended
to date, of Owner and the copies of all leases, instruments,
agreements, licenses, permits, certificates or other documents
which have been made available to MCN and Torch in connection
with the transactions contemplated hereby are complete and
accurate in all material respects and are true and correct copies
of the originals thereof.
(q) Effect of Prior Merger. Tartan possesses all of
the rights, privileges, immunities and franchises, of a public
nature as well as of a private nature, all property and assets
(real, personal or mixed, tangible or intangible), all claims and
choses in action, title to any real estate (or any interest
therein) and every other interest of or belonging to or due to
Old Tartan. Each representation and warranty herein made with
respect to an Owner would have been true with respect to Old
Tartan if made immediately prior to the effective time of the
merger of Old Tartan with and into Tartan.
(r) Accuracy of Representations and Warranties. All
representations and warranties of each entity in the Tartan Group
contained in this Agreement (except as affected by transactions
contemplated by this Agreement) shall be true in all material
respects at and as of the relevant Closing as if such
representations and warranties were made at and as of the
relevant Closing, and each entity in the Tartan Group shall
perform, at or prior to the relevant Closing, all agreements and
covenants required by this Agreement to be performed by it at or
prior to the relevant Closing.
Provided, however, the above representations and warranties
of Tartan Management shall only apply to the extent any
misrepresentation or inaccuracies could have an effect on the
System, the project contemplated hereby or the other Parties.
11. Representations and Warranties of Torch. Torch hereby
represents and warrants as follows:
(a) Organization. Torch is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware with full corporate power to carry
on its business as now being conducted.
(b) Power and Authority; Enforceability. Torch has
all requisite corporate power and authority to enter into this
Agreement and the Related Documents to which it is a party and to
perform its obligations hereunder and thereunder. This Agreement
and the Related Documents to which it is a party have been duly
authorized, executed and delivered on behalf of Torch and,
assuming due authorization, execution and delivery of the other
parties thereto, constitutes a legal, valid and binding
obligation of Torch enforceable in accordance with its terms,
except that (i) such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally and (ii) the remedy
of specific performance and injunction and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may
be brought.
(c) No Conflict with Other Instruments or Consents.
Except as otherwise set forth in this Subsection (c), neither the
execution and delivery of this Agreement or the Related Documents
nor the consummation of the transactions contemplated hereby or
thereby (i) will conflict with or result in (or with giving of
notice or passage of time or both would result in) a breach,
default or violation of (A) any of the terms, provisions or
conditions of the charter, as amended, or bylaws, as amended, of
Torch or (B) any material agreement, document, instrument,
judgment, decree, order, governmental permit, certificate or
license to which Torch is a party or to which it is subject or by
which its property is bound, (ii) will result in the creation of
any lien, charge or other encumbrance on any material property or
asset of Torch, or (iii) will require Torch to obtain the consent
of any private nongovernmental third party. No consent, action,
approval or authorization of, or registration, declaration or
filing with, any governmental department, commission, agency or
other instrumentality having jurisdiction over Torch is required
by Torch to authorize the execution and delivery of this
Agreement or the Related Documents by Torch or, except for (i)
receipt of its requested no-action letter from the Securities and
Exchange Commission relative to PUHCA, (ii) filing each Plan and
Agreement of Merger with the Secretary of State of Missouri, and
(iii) approval of the MPSC, the consummation of the transactions
contemplated hereby and thereby.
(d) Accuracy of Representations and Warranties. All
representations and warranties of Torch contained in this
Agreement (except as affected by transactions contemplated by
this Agreement) shall be true in all material respects at and as
of the relevant Closing as if such representations and warranties
were made at and as of the relevant Closing, and Torch shall
perform, at or prior to the relevant Closing, all agreements and
covenants required by this Agreement to be performed by Torch at
or prior to the relevant Closing.
(e) Litigation. There are no suits, actions, claims,
proceedings or investigations pending or to the knowledge of
Torch, threatened, seeking to prevent or challenge the
transactions contemplated by this Agreement.
12. Certain Changes. Except as contemplated by this
Agreement (including the Annexes and Exhibits hereto), without
first obtaining the written consent of MCN and Torch, from the
date hereof until the Second Closing, each entity in the Tartan
Group covenants that it will not:
(a) make any material change in the conduct of its
businesses and operations, or its financial reporting and
accounting methods;
(b) other than as contemplated by the Plan, enter into
any material contract or agreement or terminate or amend in any
material respect, or be in default in any material respect under
any material contract or agreement to which it is a party;
(c) declare, set aside or pay any dividends, or make
any distributions, in respect of its equity securities, or
repurchase, redeem or otherwise acquire any such securities;
(d) merge into or with or consolidate with any other
corporation, person or other entity or acquire all or
substantially all of the business or assets of any corporation,
person or other entity;
(e) make any change in its charter documents or
bylaws;
(f) purchase any securities of any corporation, person
or entity, except short term debt securities of governmental
entities and banks, or make any investment in any corporation,
partnership, joint venture or other business enterprise;
(g) increase the indebtedness of, or incur any
obligation or liability, direct or indirect, for, it other than
the incurrence of liabilities pursuant to existing agreements or
in the ordinary course of business consistent with past
practices; provided, however, that in no event will it incur any
obligation or liability for indebtedness for borrowed money
maturing more than 12 months from the date of issue;
(h) sell, lease or otherwise dispose of any of its
assets other than the sale of its assets in the ordinary course
of business or pursuant to existing contracts;
(i) purchase, lease or otherwise acquire any property
of any kind whatsoever other than in the ordinary course of
business;
(j) allow or permit the expiration, termination or
cancellation at any time prior to the Second Closing of any of
its material insurance policies, unless it is replaced, with no
loss of coverage, by a comparable insurance policy;
(k) implement or adopt any change in its tax methods,
principles or elections;
(l) make any change in its authorized capital or out-
standing securities;
(m) issue, sell, or deliver, or agree to issue, sell
or deliver, any capital stock, bonds or other corporate
securities, or grant or agree to grant any options, warrants or
other rights calling for the issue, sale or delivery of its
securities;
(n) pay any obligation or liability other than current
liabilities reflected in the Balance Sheet and current
liabilities incurred since the date of the Balance Sheet, in the
ordinary course of business;
(o) cancel or otherwise terminate any material debts
or claims;
(p) enter into any agreement or arrangement granting
any preferential rights to purchase any of its assets, properties
or rights, or requiring the consent of any party to the transfer
or assignment of any of such assets, properties or rights;
(q) make or permit any material amendment or
termination of any material contract, agreement or license to
which it is a party or by which it or any of its assets or
properties are subject which would have a Material Adverse
Effect;
(r) make, directly or indirectly, any accrual or
arrangement for, or payment of bonuses or special compensation of
any kind or any severance or termination pay to, any present or
former officer or employee, except in the ordinary course of its
business;
(s) increase the rate of compensation payable by it to
any of its employees or agents or adopt any new, or make any
increase in any existing profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement or other
employee benefit plan for any of such employees or agents except
those for which Tartan has and is accruing funds for same not in
violation of the Plan;
(t) execute any collective bargaining agreement;
(u) make any capital expenditures which, in the aggre-
gate, exceed $25,000;
(v) take any action that would have required consent
of the limited partners if both the Agreement of Limited
Partnership and the Construction, Operation, and Maintenance
Management Agreement had been executed and in effect; or
(w) commit to do any of the foregoing.
Provided, however, the above covenants of Tartan Management shall
only apply to the extent the failure of Tartan Management to
comply with such covenants could have an effect on the System,
the project contemplated hereby, or the other Parties.
13. Operations. Subject to the necessary receipt of funds
from MCN and Torch and Chemical Bank pursuant to the Chemical
Note, from the date hereof until the Second Closing, each entity
in the Tartan Group will:
(a) with respect to the System, maintain its
properties and facilities in as good working order and condition
as at present, ordinary wear and tear excepted;
(b) with respect to the System, use its reasonable
business efforts to maintain and preserve its business
organization intact, retain its present employees and maintain
its relationship with suppliers, customers and others having
business relations with it;
(c) advise MCN and Torch promptly in writing of any
material adverse change in its business operations or in the
System;
(d) file on a timely basis all material notices,
reports or other filings required to be filed with or reported to
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or any instrumentality
(including without limitation the MPSC) of any of the foregoing
wherever located; and
(e) file on a timely basis all complete and correct
applications or other documents necessary to maintain, renew or
extend any material permit, license, variance or any other
approval required by any governmental authority necessary or
required for the continuing operation of its businesses, whether
or not such approval would expire before or after the Second
Closing.
14. Expenses and Provisions of Funds. The Parties
acknowledge that they each have incurred, and will continue to
incur prior to the Second Closing, certain out-of-pocket expenses
in connection with the organization of the Partnership, with the
preparation of this Agreement and the Related Documents and with
the consummation of the transactions contemplated hereby and
thereby, which may be properly allocated to the Partnership. The
Parties shall keep full and accurate records of all such
expenses, and agree to submit promptly to the other Parties a
statement of such expenses. The Parties agree that all expenses
reflected on the above-mentioned statements which, in the
unanimous judgment of the Parties, are properly allocable to the
Partnership shall be forwarded promptly to the Partnership and
shall be paid promptly to the Party that incurred such expenses.
15. Conditions to Each Closing.
(a) MCN. The obligations of MCN to close the
transactions contemplated at the relevant Closing are, at the
option of MCN, subject to the conditions that:
(i) The representations and warranties of each
entity in the Tartan Group contained herein will be accurate
in all material respects at and as of the relevant Closing
as though such representations and warranties had been made
at and as of such Closing; all terms, covenants and
conditions of this Agreement to be complied with and
performed by an entity in the Tartan Group at or before the
relevant Closing will have been duly complied with and
performed; and each entity in the Tartan Group will have
delivered to MCN a certificate dated as of the relevant
Closing and signed by the President or any Vice President
thereof to the foregoing effect.
(ii) The representations and warranties of Torch
contained herein will be accurate in all material respects
at and as of the relevant Closing as though such
representations and warranties had been made at and as of
such Closing; all terms, covenants and conditions of this
Agreement to be complied with and performed by Torch at or
before the relevant Closing will have been duly complied
with and performed; and Torch will have delivered to MCN a
certificate dated as of the relevant Closing and signed by
the President or any Vice President thereof to the foregoing
effect.
(b) Tartan Group. The obligations of each entity in
the Tartan Group to close the transactions contemplated at the
relevant Closing are, at the option of each entity in the Tartan
Group, subject to the conditions that:
(i) The representations and warranties of MCN
contained herein will be accurate in all material respects
at and as of the relevant Closing as though such
representations and warranties had been made at and as of
such Closing; all terms, covenants and conditions of this
Agreement to be complied with and performed by MCN at or
before the relevant Closing will have been duly complied
with and performed; and MCN will have delivered to each
entity in the Tartan Group a certificate dated as of the
relevant Closing and signed by the President or any Vice
President thereof to the foregoing effect.
(ii) The representations and warranties of Torch
contained herein will be accurate in all material respects
at and as of the relevant Closing as though such
representations and warranties had been made at and as of
such Closing; all terms, covenants and conditions of this
Agreement to be complied with and performed by Torch at or
before the relevant Closing will have been duly complied
with and performed; and Torch will have delivered to each
entity in the Tartan Group a certificate dated as of the
relevant Closing and signed by the President or any Vice
President thereof to the foregoing effect.
(c) Torch. The obligations of Torch to close the
transactions contemplated at the relevant Closing are, at the
option of Torch, subject to the conditions that:
(i) The representations and warranties of MCN
contained herein will be accurate in all material respects
at and as of the relevant Closing as though such
representations and warranties had been made at and as of
such Closing; all terms, covenants and conditions of this
Agreement to be complied with and performed by MCN at or
before the relevant Closing will have been duly complied
with and performed; and MCN will have delivered to Torch a
certificate dated as of the relevant Closing and signed by
the President or any Vice President thereof to the foregoing
effect.
(ii) The representations and warranties of each
entity in the Tartan Group contained herein will be accurate
in all material respects at and as of the relevant Closing
as though such representations and warranties had been made
at and as of such Closing; all terms, covenants and
conditions of this Agreement to be complied with and
performed by an entity in the Tartan Group at or before the
relevant Closing will have been duly complied with and
performed; and each entity in the Tartan Group will have
delivered to Torch a certificate dated as of the relevant
Closing and signed by the President or any Vice President
thereof to the foregoing effect.
16. Additional Conditions to Second Closing. The
obligations of each Party to close the transactions contemplated
herein at the Second Closing are, at the option of each Party,
subject to the additional conditions that:
(a) The consummation of the transactions contemplated
herein and in the related documents will not violate any
applicable law, rule or regulation, and all consents, actions,
approvals or authorizations of governmental department,
commission, agency or other instrumentality (including without
limitation the Securities and Exchange Commission and the MPSC)
or courts or arbitrators and all filings, approvals or other
actions required to be taken, made or obtained by or on behalf of
any Party or the Partnership pursuant to any law, rule or
regulation shall have been obtained, made or taken, as
applicable.
(b) No action, suit or proceeding shall have been
commenced, pending or threatened, and no statute, rule,
regulation or order shall have been proposed, enacted,
promulgated or issued or deemed applicable to the transactions
contemplated by this Agreement, by any United States federal or
state government or governmental agency or instrumentality or
court or private non-governmental person or entity, which, in the
opinion of such Party, reasonably may be expected to (i) prohibit
such Party's ownership or operation of all or a material portion
of such party's interest in the Partnership or such Party's
business or assets, or compel such party to dispose of or hold
separate all or a material portion of such Party's or the
Partnership's business or assets, as a result of the transactions
contemplated by this Agreement or (ii) impose or confirm material
limitations on the ability of such Party effectively to exercise
full rights of ownership of its interest in the Partnership or
such Party's material business and properties which in such
party's judgment make it inadvisable or impracticable to
consummate the transaction contemplated hereby.
17. Termination; Survival of Representations, Warranties
and Covenants. This Agreement shall terminate on the date of the
Second Closing except that (i) the provisions of Sections 4, 8,
14, 18, 22, 24 and 25 hereof shall continue for a period of five
years following the Second Closing and (ii) all representations,
warranties and covenants in this Agreement and in any certificate
delivered by any of the Parties at any closing shall survive for
a period of one year after the Second Closing.
18. Brokers. Regardless of whether any closing shall
occur, each Party shall indemnify and hold harmless the other
Parties and the Partnership from and against any and all
liability for any brokers' or finders' fees arising with respect
to brokers or finders retained or engaged by such Party in
respect of the transactions contemplated by this Agreement.
19. Notices. Any notice, request, instruction, corre-
spondence or other document to be given hereunder by any Party to
the others (herein collectively called "Notice") shall be in
writing and delivered in person or by courier service requiring
acknowledgement of receipt of delivery or mailed by certified
mail, postage prepaid and return receipt requested, or by
telecopier, as follows:
If to MCN, addressed to:
MCN Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Citizens Gas and Fuel
000 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopier No.: (000) 000-0000
If to Tartan, addressed to:
Tartan Energy Company of Missouri, L.C.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to Tartan Management, addressed to:
Tartan Management Company of Missouri, L.C.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to an Individual, addressed to:
Tartan Energy Company of Missouri, L.C.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: [Name of Individual]
Telecopier No.: (000) 000-0000
If to Torch, addressed to:
Torch Energy Marketing, Inc.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Notice given by personal delivery or courier service shall be
effective upon actual receipt. Notice given by mail shall be
effective five days after deposit with the United States postal
service. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual
receipt if received during the recipient's normal business hours,
or at the beginning of the recipient's next business day after
receipt if not received during the recipient's normal business
hours. All Notices by telecopier shall be confirmed promptly
after transmission in writing by certified mail or personal
delivery. No Notice shall be given to or by the Partnership.
Any Party may change any address to which Notice is to be given
to it by giving Notice as provided above of such change of
address.
20. No Negotiations. The Individuals shall not permit any
entity in the Tartan Group to liquidate or to merge or
consolidate with, or to acquire a substantial portion of the
assets of, any other Person except for the mergers contemplated
by this Agreement. Neither any entity in the Tartan Group nor
the Individuals shall, directly or indirectly, alone or with
others, encourage, initiate or participate in discussions with
(for the purpose or with the intention of obtaining or soliciting
any proposal or offer relating to the matters hereinafter set
forth in this Section), or otherwise solicit from, any Person any
proposals or offers relating to the liquidation or the
disposition of material assets or business of any entity in the
Tartan Group, or the acquisition of any capital stock or interest
of any entity in the Tartan Group, or the merger or consolidation
of any entity in the Tartan Group with any other Person except
for the mergers contemplated by this Agreement. In the event,
however, that either Torch or MCN declines to participate in an
Equity Additional Project (as such term is defined in Section
13.7 of the Partnership Agreement), then the Individuals and
Tartan Management shall be permitted to engage in discussions
with any Person for the purpose of obtaining additional funding
(either debt or equity) for such Equity Additional Project,
including funding, to enable Tartan Management to participate in
that portion of the Equity Additional Project, including funding,
which Torch or MCN so declines to participate in under the
provisions of Section 13.7 of the Partnership Agreement.
21. Method of Payment. All payments hereunder shall be
made in United States dollars and, unless the Parties making and
receiving such payments shall agree otherwise or the provisions
hereof provide otherwise, shall be made by wire or intrabank
transfer of immediately available funds by 11:00 a.m. Houston
time on the date such payment is due to such account as the Party
receiving payment may designate at least three business days
prior to the proposed date of payment.
22. Further Assurances. Assignors, grantors and
transferors of documents listed in Section 2(c) and parties to
each Plan and Agreement of Merger referred to in Section 2(c)
will, from time to time after the relevant Closing and without
further consideration from the assignee, grantee or transferee
thereof, or the other party thereto, respectively, execute and
deliver such other instruments of conveyance and transfer and
take such other action as may reasonably be requested to more
effectively convey, transfer to, vest in, and put such assignee
or other party in possession of any property or rights to be
transferred pursuant hereto. The Individuals and Tartan
Management will ensure that the same steps are taken on the same
basis with respect to Old Tartan.
23. Governing Law. The provisions of this Agreement and,
unless specifically otherwise provided in the document delivered
pursuant hereto, the documents delivered pursuant hereto shall be
governed by and construed and enforced in accordance with the
laws of the State of Delaware (excluding any conflicts-of-law
rule or principle that might refer same to the laws of another
jurisdiction), except to the extent that same are mandatorily
subject to the laws of another jurisdiction pursuant to the laws
of such other jurisdiction.
24. Entire Agreement; Amendments and Waivers. This
Agreement, together with all Exhibits and Annexes attached
hereto, constitutes the entire agreement between the Parties
hereto pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, and there are no
warranties, representations or other agreements between the
Parties in connection with the subject matter hereof except as
set forth specifically herein or contemplated hereby. No
supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the Party to be bound
thereby. The failure of a Party to exercise any right or remedy
shall not be deemed or constitute a waiver of such right or
remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (regardless of whether similar), nor shall
any such waiver constitute a continuing waiver unless otherwise
expressly provided.
25. Binding Effect, Non-Assignability and Alienation of
Benefits. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective permitted successors
and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation
of law or otherwise, by any Party without the prior written
consent of the others. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the
Parties and their respective permitted successors and assigns,
any rights, benefits or obligations hereunder.
26. Special Covenant of the Tartan Group. Each entity in
the Tartan Group covenants with MCN and Torch that no part of the
System will commence commercial operation prior to the filing of
the Form U-3A-2.
27. Other Adjustment. If the Second Closing cannot occur
solely because the Securities and Exchange Commission has not,
and in the reasonable judgment of the Parties will not, issue a
favorable ruling on MCN's application under PUHCA or issue the
no-action letter of Torch relative to PUHCA, the Parties agree to
work together in good faith to develop an alternative structure
for the transaction that will preserve the economic benefits of
the transaction contemplated hereby. Such alternative structure
may include conversion of MCN's proposed general partnership
interest in the Partnership to a limited partnership interest,
conversion of the proposed partnership interest of MCN or Torch
in the Missouri Interim Entity to a debt instrument, locating a
new party to act as additional general partner or, if necessary,
the sale of one or more Party's interest in the Partnership to an
unaffiliated third party.
28. No Assurance of Return. Each Individual, Torch and MCN
acknowledge (a) that they are experienced and knowledgeable
investors in the natural gas industry and that they have
performed all due diligence investigations as they deem necessary
or appropriate for the entering into of this Agreement (including
the Exhibits and Annexes attached hereto), and (b) no Party
hereto has or is warranting that the transactions contemplated by
this Agreement (including the Exhibits and the Annexes attached
hereto) and the construction and operation of the System in
conjunction therewith, will result in any guaranteed return on,
or recovery of, any amounts which may be invested by another
Party hereto in conjunction with the foregoing.
29. Severability. If one or more of the provisions
contained in this Agreement or in any other document delivered
pursuant hereto shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this Agreement or any other such document.
30. Headings, Exhibits and Annexes. The headings of the
several Sections herein are inserted for convenience of reference
only and are not intended to be a part or to affect the meaning
or interpretation of this Agreement. The Exhibits and Annexes
referred to herein are attached hereto and incorporated herein by
this reference.
31. Construction. This Agreement was drafted jointly by
the Parties, and no presumption shall operate in favor of or
against any Party as a result of any responsibility that any
Party may have had for drafting this Agreement or any part
thereof.
32. Multiple Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, MCN, Tartan, Tartan Management, the
Missouri Interim Entity and Torch have caused this Agreement to
be signed by their respective officers thereunto duly authorized,
and the Individuals have signed this Agreement, all as of the
date first above written.
MCN CORPORATION
By:
_____________________________________
Name:
Title:
TARTAN ENERGY COMPANY OF MISSOURI, L.C.
By:
_____________________________________
Name:
Title:
TARTAN MANAGEMENT COMPANY OF
MISSOURI, L.C.
By:
_____________________________________
Name:
Title:
TARTAN LIMITED PARTNERSHIP OF MISSOURI
By Tartan Management Company of
Missouri, L.C., the General Partner
By:
_____________________________________
Name:
Title:
TORCH ENERGY MARKETING, INC.
By:
_____________________________________
Name:
Title:
________________________________________
Name: Xxx X. Xxxxxx
________________________________________
Name: Xxxxxxx X. Xxxxxx
Solely for purposes of the indemnification provision in
Section 8, Tartan Energy Resources, L.C. signs this Agreement.
TARTAN ENERGY RESOURCES, L.C.
By:
_____________________________________
Name:
Title:
