Exhibit 10.3
Asset Purchase and Sale Agreement
ASSET PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
ONEOK Propane Distribution Company,
a division of ONEOK Propane Company,
a Delaware corporation
(AS "SELLER")
AND
SONTERRA ENERGY CORPORATION
a Texas Corporation
(AS "BUYER")
October ,2004
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ASSET PURCHASE AND SALE AGREEMENT
TABLE OF CONTENTS
1.DEFINITIONS..........................................................................1
0.XXXX OF ASSETS.......................................................................6
2.1 Assets to be Sold and Purchased......................................6
2.2 Consents to Assignment...............................................7
3.PURCHASE PRICE AND TERMS OF PAYMENT..................................................7
3.1 Base Purchase Price..................................................7
3.2 Upward Price Adjustment for Prepaid Expenses.........................7
3.3 Downward Price Adjustment............................................7
3.4 Adjusted Purchase Price..............................................8
3.5 Statement of Adjustments.............................................8
3.6 Recordation Fees and Sales Taxes.....................................8
3.7 Liabilities & Obligations Related to Third Party Claims..............9
3.8 Assumption of Liabilities............................................9
4.REPRESENTATIONS AND WARRANTIES OF SELLER.............................................9
4.1 Organization, Good Standing, and Authority...........................9
4.2 Valid and Binding Agreement; No Violation...........................10
4.3 Compliance with Laws................................................10
4.4 Absence of Claims...................................................10
4.5 Title to Assets.....................................................10
4.6 Taxes...............................................................11
4.7 No Conflicting Orders...............................................11
4.8 Contracts...........................................................11
4.9 Condemnation........................................................11
4.10 Liabilities.........................................................12
4.11 Brokerage Arrangements..............................................12
5.REPRESENTATIONS AND WARRANTIES OF BUYER.............................................12
5.1 Organization, Good Standing, and Authority..........................12
5.2 Valid and Binding Agreement; No Violation...........................12
5.3 Litigation..........................................................13
5.4 No Conflicting Orders...............................................13
5.5 Funds...............................................................13
5.6 Bankruptcy..........................................................13
5.7 Brokerage Arrangements..............................................13
5.8 Insurance...........................................................13
5.9 Net Worth...........................................................14
6.PRE-CLOSING CONDUCT AND COVENANTS...................................................14
6.1 Conduct of Business.................................................14
6.2 Operations..........................................................14
6.3 Confidentiality.....................................................15
6.4 Litigation..........................................................15
6.5 Execution of Settlement Documents...................................17
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7.CLOSING AND CONDITIONS TO CLOSING...................................................17
7.1 Conditions to Closing...............................................17
7.2 Time and Place of Closing...........................................19
7.3 Effective Date......................................................19
7.4 Assumption of Risk of Loss, Liabilities and Operations..............19
7.5 Termination At or Prior to Closing..................................19
7.6 Effect of Termination...............................................20
8.DISCLAIMERS.........................................................................20
8.1 Disclaimer Regarding Assets.........................................20
9.INDEMNIFICATIONS....................................................................21
9.1 Indemnification by Buyer............................................21
9.2 Indemnification by Seller...........................................21
9.3 Limitations on Liability............................................22
9.4 Survival of Representations and Warranties..........................23
9.5 Notice of Asserted Liability; Opportunity to Defend and/or Cure.....24
9.6 Exclusive Remedy....................................................26
9.7 Survival of Covenants...............................................26
10.POST-CLOSING ACCOUNTING AND CONTINUING OBLIGATIONS.................................26
10.1 Ad Valorem Taxes....................................................26
10.2 Apportionment of Revenues and Expenses..............................27
10.3 Obligations and Credits.............................................27
10.4 Final Accounting Statement..........................................28
10.5 Records/Audit.......................................................28
10.6 Transfer of Records.................................................28
10.7 Commissions.........................................................29
10.8 Further Assurances..................................................29
10.9 Other Taxes.........................................................29
10.10 Costa Bella Meter and Yard Line Installation........................29
11.MISCELLANEOUS PROVISIONS...........................................................29
11.1 Quit Claim of Interests.............................................29
11.2 Removal of signage..................................................30
11.3 Assignments.........................................................30
11.4 Entire Agreement; Amendments........................................30
11.5 Severability........................................................30
11.6 Counterparts........................................................31
11.7 Governing Law.......................................................31
11.8 Waiver of Trade Practices Acts......................................31
11.9 Notice and Addresses................................................32
11.10 Public Announcements................................................32
11.11 No Partnership......................................................33
11.12 Headings, Articles and Sections.....................................33
11.13 Exhibits............................................................33
11.14 No Third-Party Beneficiaries........................................33
11.15 Principles of Construction and Interpretation.......................33
11.16 Not to be Construed Against Drafter.................................34
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EXHIBITS AND SCHEDULES
TO
ASSET PURCHASE AND SALE AGREEMENT
---------------------------------
EXHIBITS:
---------
A Description of Assets
B Contracts
C Real Property
D Disclosure Schedule
4.1 Consents
4.2 Violations
4.3 Governmental Notices of Violation
4.4 Asserted Claims
4.5 Title to Assets
4.6 Taxes
4.7 No Conflicting Orders
4.8 Contracts
4.9 Condemnation
4.10 Liabilities
SCHEDULES:
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Schedule 3.2 - Capital Expenditures
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ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT (this "Agreement") is made and
entered into as of this day of October, 2004, by and between Sonterra Energy
Corporation, a Texas corporation (referred to as "Buyer"), and ONEOK Propane
Distribution Company, a division of ONEOK Propane Company, a Delaware
corporation (referred to as "Seller").
WHEREAS, Seller is the owner and operator of propane distribution systems
that serve certain residential subdivisions in the Austin, Texas area as well as
the related assets all as described herein; and:
WHEREAS, Seller desires to sell and Buyer desires to purchase the Assets
(as hereinafter defined) of Seller on terms and subject to the conditions set
forth in this Agreement.
FOR AND IN CONSIDERATION of the premises and of the mutual covenants
contained herein, the parties executing below agree as follows:
1. DEFINITIONS
The following terms shall have the following meanings when used in this
Agreement:
"Adjusted Purchase Price" shall have the meaning ascribed to such term as
set forth in Section 3.4 hereinafter.
"Affiliate" of any Party (hereinafter defined) hereto means any person or
other legal entity who controls, is controlled by, or is under common control
with, such Party. For purposes hereof, "control" means the ownership, directly
or indirectly, of the power (by ownership of an equity interest, contract or
otherwise) to direct the management of an entity by virtue of ownership or
voting control of 50% or more of the then outstanding voting ownership interests
in such entity.
"Applicable Laws" means all laws, statutes, ordinances, permits, decrees,
orders, rules or regulations (excluding Environmental Laws) which are
promulgated, issued or enacted by a Governmental Authority or tribal authority
having appropriate jurisdiction.
"Assets" means all real and personal property and appurtenances thereto
directly related to the ownership and solely for the operation and maintenance
of Seller's propane distribution systems located wholly within the State of
Texas (excluding all real and personal property of Seller, if any, located in
and related to the Arbolago Subdivision, the Hills of Lakeway Subdivision and
the Northshore on Lake Xxxxxx Phase II Subdivision), as same are described in
more detail in Exhibit "A", together with all of the following assets:
(i) The Contracts;
(ii) The Equipment;
(iii) The Incidental Rights;
(iv) The Plans;
(v) The Real Property; and
(vi) The Propane.
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Provided, however, that the following shall not be included in the definition of
Assets: any interests of Seller in and to rights or property relating to propane
distribution systems located in the Subdivisions of Arbolago, Hills of Lakeway
and Northshore on Lake Xxxxxx Phase II.
"Assigned Instruments" shall have the meaning ascribed to such term as set
forth in Section 2.2 hereinafter.
"Base Purchase Price" shall have the meaning ascribed to such term as set
forth in Section 3.1 hereinafter.
"BNC" shall have the meaning ascribed to such term as set forth in Section
6.3 hereinafter.
"Business Days" means the days of Monday through Friday, excluding Federal
Bank holidays.
"Claim" or "Claims" means any and all claims, demands, suits, actions,
causes of action, losses, damages, liabilities, judgments, fines, penalties,
costs (including reasonable attorneys' fees and costs of investigations,
mediation, arbitration or litigation), investigations or orders which are
brought, undertaken, issued or asserted by a Third Party, excluding
Environmental Claims.
"Claim Notice" shall have the meaning ascribed to such term as set forth in
Section 9.5 hereinafter.
"Closing" shall have the meaning ascribed to such term as set forth in
Section 7.2 hereinafter.
"Closing Date" shall have the meaning ascribed to such term as set forth in
Section 7.2.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations thereunder.
"Contracts" means all contracts and agreements, as same are listed in
Exhibit "B" attached hereto and made a part hereof for all purposes, pertaining
to the servicing, handling and distribution of propane through the Assets.
"Disclosure Schedule" means Exhibit "D" of this Agreement attached hereto
and incorporated herein by reference.
"Effective Date" shall have the meaning ascribed to such term as set forth
in Section 7.3 hereinafter.
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"Environmental Claim" means any and all written administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens,
investigations, proceedings or notices of noncompliance or violation by any
Third Party (including any Governmental Authority) alleging potential Liability
(including, without limitation, potential Liability for enforcement,
investigatory costs, damages, Loss, contribution, indemnification, cost
recovery, compensation, injunctive relief, cleanup costs, governmental resource
costs, removal costs, remedial costs, natural resources damages, property
damages, personal injuries or penalties) arising out of, based on or resulting
from (i) the presence, or Release or threatened Release into the environment, of
any Hazardous Materials at any location operated, leased or managed by Seller;
(ii) any violation of any Environmental Law; or (iii) one or more Releases of
the same or substantially the same Hazardous Material, from or at the same
location regardless of whether such Releases resulted from the same event or
from multiple events over time.
"Environmental Defect" means any condition present in or on the Assets or
arising in connection with the operation of the Assets (i) that violates any
Environmental Law; (ii) that results in any Liability to any person or
Governmental Authority (federal, state or local), contingent or otherwise, under
any Environmental Law; or (iii) that results from a spill of any Hazardous
Substance.
"Environmental Laws" means any and all applicable laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Authority pertaining to the protection of human health or safety or the
environment, in effect in any or all jurisdictions in which the Assets are
operated, including, without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), the Federal Water Pollution Control Act, as amended, the Resource
Conservation and Recovery Act, as amended ("RCRA"), the Safe Drinking Water Act,
as amended, the Toxic Substances Control Act, as amended, and comparable state
and local environmental laws.
"Equipment" means all items of personal property and equipment which are
located at and attached to the Assets and used solely in connection with the
ownership, operation, repair, use, or maintenance of the Assets, including, but
not limited to all vehicles, pipe, connections, fittings, meters and metering
facilities, measuring equipment and devices, cathodic protection, compressors,
pumps, gauges, valves, laterals, tanks, and dehydration units described on
Exhibit "A".
"Final Accounting Statement" shall have the meaning ascribed to such term
as set forth in Section 10.4 hereinafter.
"Final Settlement Date" shall have the meaning ascribed to such term as set
forth in Section 10.4 hereinafter.
"GAAP" means generally accepted United States accounting principles,
consistently applied. As applied, GAAP means those accounting principles and
practices (i) which are recognized as such by the Financial Accounting Standards
Board, (ii) which are applied for all periods in a manner consistent with the
manner in which such principles and practices were applied to the most recent
audited financial statements of Seller, and (iii) which are consistently applied
for all periods so as to reflect properly the financial condition, and results
of operations and cash flows, of Seller.
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"Governmental Authority" means any foreign governmental authority, the
United States of America, any State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental or private body
exercising, or purporting to exercise, any executive, legislative, judicial,
administrative, police, regulatory or taxing authority or power of any nature.
"Hazardous Material" means (i) any petroleum or petroleum products,
radioactive materials, friable asbestos, urea formaldehyde foam insulation, and
transformers or other equipment that contained dielectric fluid containing
polychlorinated biphenyls ("PCBs"); (ii) any chemicals, materials or substances
which are now defined as or included in the definition of hazardous substances,
hazardous wastes, hazardous materials, extremely hazardous wastes, restricted
hazardous wastes, toxic substances, toxic pollutants, or words of similar import
under any Environmental Law; and (iii) any other chemical material, substances
or waste, exposure to which is now prohibited, limited or regulated under
Environmental Law in the jurisdiction in which the Assets are located.
"Hazardous Substance" means a substance, chemical, pollutant, waste, or
other material that constitutes any "hazardous substance" under CERCLA or any
"hazardous waste" or "regulated substance" under RCRA, or any other material,
waste, or substance that may serve as the basis of obligations to sample, test,
investigate, cleanup, remove, monitor, or otherwise respond under Environmental
Laws.
"Incidental Rights" means (i) all books and records primarily relating to
the Assets, (ii) all governmental filings, permits, approvals or licenses
relating primarily to the ownership, use, occupancy or operation of the Assets,
and (iii) all contract files, right-of-way files, and engineering files relating
primarily to the Assets.
"Indemnified Party" shall have the meaning ascribed to such term as set
forth in Section 9.5 hereinafter.
"Indemnifying Party" shall have the meaning ascribed to such term as set
forth in Section 9.5 hereinafter.
"Liability" or "Liabilities" means any debt, obligation, duty or liability
of any nature (including unknown, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with GAAP.
"Loss" or "Losses" shall mean with respect to a specific Claim or
Environmental Claim the sum of all actual and reasonable out-of-pocket costs and
expenses incurred in connection with the investigation and defense thereof, any
judgments, fines or amounts paid in settlement thereof, and additional losses,
costs or expenses reasonably incurred to comply with any settlement, judgment or
order imposed thereby, or otherwise resulting from such Third Party Claim or
Environmental Claim which has been finally adjudicated or settled.
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"Material Adverse Effect" means a matter which imposes, or which would be
reasonably expected to impose in the future, on the Assets a material adverse
effect in an aggregate amount greater than One Hundred Thousand Dollars
($100,000.00).
"Notice Period" shall have the meaning ascribed to such term as set forth
in Section 9.5 hereinafter.
"Party" means either Seller or Buyer.
"Permitted Encumbrances" means:
(i) Consents to assignment encumbering the Assets as provided for in
Section 2.2;
(ii) All rights to consent by, required notices to, filings with, or
other actions by Governmental Authorities or tribal authorities
in connection with the transfer of the Assets to the Buyer and
the consummation of this Agreement, if the same are customarily
obtained subsequent to the transfer of title;
(iii) Rights reserved to or vested in any Governmental Authority or
tribal authority having appropriate jurisdiction to control or
regulate the Assets in any manner whatsoever, and all Applicable
Laws of any such Governmental Authority or tribal authority;
(iv) Third Party easements, rights-of-way, servitudes, surface leases,
sub-surface leases, grazing rights and logging rights to the
extent same are evidenced in a document recorded in the public
land records of the county, as of the date hereof, wherein the
encumbered property is located or same is provided by Seller; as
well as canals, ditches, reservoirs, pipelines, utility lines,
telephone lines, power lines, railways, streets, roads, alleys,
highways and structures on, over and through the Assets, but in
all cases only to the extent such rights, interests or structures
do not materially interfere with the Assets in their current use
or to the extent such right, interests or structures are evident
from a surface inspection of the Assets;
(v) Liens for taxes or assessments not yet due or not yet delinquent
or, if delinquent, that are being contested by Seller in good
faith in the normal course of business;
(vi) Mechanics' and materialmen's liens relating to obligations not
yet due or not yet delinquent or, if delinquent, that are being
contested by Seller in good faith in the normal course of
business and otherwise disclosed in the Disclosure Schedule;
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(vii) Preferential purchase rights and similar contractual provisions
encumbering the Assets with respect to which, prior to Closing,
(A) waivers or consents are obtained from the appropriate
parties, or (B) the applicable time period for asserting such
rights has expired without an exercise of such rights; and
(viii) Any matters disclosed in the Disclosure Schedule as being
exceptions to Seller's representations in Article 4.
"Plans" means all plans, drawings, maps, plats, or similar reports or data
and any other technical descriptions primarily relating to the Assets.
"Primarily used," "used primarily," and/or "relating primarily to" means
used at least 75% of the time in the ordinary course of business with respect to
the applicable Assets.
"Propane" means any hydrocarbons, minerals and materials of every kind and
description that are present, as of the Effective Date, in the distribution
lines and bulk storage tanks that are a part of the Assets.
"Real Property" means all parcels of real property, fixtures, easements,
rights-of-way, leases, permits, tenements, rights of egress and ingress and all
other rights in real property relating to, and used primarily in connection with
the operation of the Assets, including, without limitation, those items listed
in Exhibit "C" attached hereto and made a part hereof for all purposes.
"Release" means any release, spill, emission, leaking, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the atmosphere, soil,
surface water, groundwater or property or into any vessel or container from
which any of the foregoing may occur.
"Taxes" means all taxes, charges, imposts, tariffs, fees, levies or other
similar assessments or charges of any kind whatsoever, including, employment
related taxes, ad valorem taxes, excise taxes or other taxes of or with respect
to real property, personal property, sales, use, transfers, licensing and
franchises imposed by or under any law, and such terms shall include any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any such tax or any contest or
dispute thereof.
"Third Party" or "Third Parties" mean any Governmental Authority, tribal
authority or person other than Seller or Buyer or Affiliates of Seller or Buyer.
2. SALE OF ASSETS
2.1 Assets to be Sold and Purchased
Subject to the terms and conditions of this Agreement, Seller agrees to
sell and Buyer agrees to purchase all of Seller's right, title, and interest in
the Assets and those rights and properties described in Section 11.1.
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2.2 Consents to Assignment
Notwithstanding any other provision herein, the Assets shall not include,
and this Agreement does not constitute an agreement by Seller to obtain an
assignment of any Contract, fee title, real property lease, equipment lease,
right of way, easement, license, permit, approval or authorization constituting
any portion of the Assets ("Assigned Instruments") or any claim or right or any
benefit arising thereunder or resulting therefrom if an attempted assignment
thereof at or prior to Closing would: (A) cause Seller either to be in violation
of any licensing or other law, or (B) be in violation of any prohibition on
assignment or prohibition on change in control contained in any Assigned
Instrument. In the event any Assigned Instrument cannot be assigned to Buyer at
the Closing, Seller will, effective as of the Effective Date, and without
adjustment to the Base Purchase Price, appoint the Buyer as agent with respect
to any such Assigned Instrument, and the Parties shall cooperate as otherwise
may be necessary in any manner reasonably designed, such that: (A) from and
after the Effective Date, the Buyer will receive the revenues and other benefits
from and pay the costs and expenses required to be paid under the Assigned
Instrument (the "Beneficial Ownership Arrangement"); (B) Buyer will indemnify
and hold Seller harmless with respect to obligations arising under such Assigned
Instruments from and after the Effective Date; and (C) Seller will use
commercially reasonable efforts for ninety (90) days from the Effective Date to
obtain any consents with respect to any Assigned Instrument that requires
consent to assignment (and which consents have not been obtained prior to the
Closing) and Seller shall pay all costs of seeking to obtain such consent or
approval. Seller will be responsible for the reasonable costs of complying with
this Section 2.2.
3. PURCHASE PRICE AND TERMS OF PAYMENT
3.1 Base Purchase Price
The purchase price for the Assets and those rights and properties described
in Section 11.1 shall be Two Million Dollars ($2,000,000.00) (the "Base Purchase
Price").
3.2 Upward Price Adjustment for Prepaid Expenses
The Base Purchase Price shall be adjusted upward by an amount equal to the
prepaid expenses pertaining to the Assets and those rights and properties
described in Section 11.1 that were actually paid by Seller, prior to Closing to
the extent such expenses are, in accordance with GAAP, attributable to the
period after the Effective Date, including, without limitation, (i) prepaid
rent, insurance, utilities, lease, license or right of way payments, (ii)
prepaid renewal fees, (iii) prepaid ad valorem and property taxes, and (iv)
prepaid emission fees. The Base Purchase Price shall also be adjusted upward by
an amount equal to the total amount of capital expenditures incurred by Seller
pertaining to the Assets and those rights and properties described in Section
11.1 during the period from May 1, 2004 to the Closing Date, as said capital
expenditures are listed on the attached Schedule 3.2.
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3.3 Downward Price Adjustment
The Base Purchase Price shall be adjusted downward by an amount equal to
the expenses paid in arrears pertaining to the Assets and those rights and
properties described in Section 11.1 that were actually paid by Buyer after the
Closing to the extent such expenses are, in accordance with GAAP, attributable
to the period before the Effective Date, including, without limitation, (i)
rent, insurance, utilities, lease, license or right of way payments paid in
arrears, and (ii) renewal fees paid in arrears, (iii) ad valorem and property
taxes paid in arrears. The Base Purchase Price shall be adjusted downward by an
amount equal to all unpaid ad valorem and property taxes, based upon or measured
by the ownership of the Assets and those rights and properties described in
Section 11.1 to the extent such taxes and assessments are, in accordance with
GAAP, attributable to the period prior to the Effective Date; provided, if the
amount of any such taxes shall not have been actually assessed on or before
Closing, the amount of such taxes shall be computed based upon such taxes and
assessments for the preceding calendar year (or the current calendar year if
such information is available) or, if such taxes or assessments are assessed on
other than a calendar year basis, for the tax related year last ended; provided,
however, that adjustment will be made in the Final Accounting Statement prepared
pursuant to Section 10.4 based upon the amount of taxes actually assessed as
provided for in Section 10.1.
3.4 Adjusted Purchase Price
The Base Purchase Price, adjusted as provided for in Sections 3.2 and 3.3,
shall be referred to herein as the "Adjusted Purchase Price." Subject to the
terms and conditions of this Agreement, in reliance on the representations,
warranties and agreements of Seller contained herein, and completion by Seller
of the covenants contained herein, Buyer shall pay Seller the Adjusted Purchase
Price (based on the interim statement of adjustments described in Section 3.5
below) by wire transfer directly to Seller in immediately available funds at the
time of Closing, to Seller's credit into the bank account designated by Seller
at or prior to Closing.
3.5 Statement of Adjustments
At or prior to Closing, Seller and Buyer shall agree upon an interim
statement of adjustments setting out, to the extent reasonably practicable, the
adjustments to the Base Purchase Price pursuant to Sections 3.2 and 3.3 above. A
final statement of adjustments to the Purchase Price shall be determined by
Buyer and Seller within ninety (90) days of the Closing Date.
3.6 Recordation Fees and Sales Taxes
Buyer shall pay the cost of recording or similar payments due on or arising
from the recording of any assignment instrument(s), bills of sale, deed(s), or
other instruments in connection with the assignment of Assets from Seller and
the quit-claim of rights described in Section 11.1. Buyer shall pay to the
proper taxing authorities the cost of any sales, use, documentary stamps or
other transfer tax, or similar payment due on or arising from the sale and
assignment of Assets and the quit-claim of rights described in Section 11.1 from
Seller to Buyer. Buyer shall promptly report and remit payment to the proper
taxing authorities for any sales tax, use tax, transfer tax, documentary stamps,
or such similar taxes and any penalties and interest thereon, and shall remit
8
payment to Seller for the cost of any such taxes, penalties and interest
required by any taxing authority to be paid by Seller for the account of Buyer
arising in connection with the sale or conveyance of the Assets and the
quit-claim of rights described in Section 11.1 as contemplated by this
Agreement. Buyer shall pay, and shall defend, indemnify and hold Seller harmless
from, the cost of recording all assignment instrument(s), deed(s), or other
instruments, or similar payments due on or arising from the recording of any
assignment instrument(s), deed(s), or other instruments in connection with such
assignments, transfers or sales and any other transactions contemplated in this
Agreement.
3.7 Liabilities & Obligations Related to Third Party Claims
Subject to the indemnification provisions set forth in Article 9, Buyer
shall pay and be responsible for all Liabilities and perform obligations
relating to Claims and Environmental Claims that arise or relate to ownership,
possession or operation of the Assets on or after the Effective Date. In no
event shall Seller have any liability for any Liabilities or obligations
relating to Claims or Environmental Claims that arise or relate to ownership,
possession or operation of the Assets on or after the Effective Date.
3.8 Assumption of Liabilities
On the Closing Date, but effective as of the Effective Date, Buyer shall
assume and become responsible for, on the terms and subject to the conditions
set forth in this Agreement, all obligations and liabilities arising after the
Effective Date under applicable law and the Contracts, developer agreements,
tank site leases and other agreements of Seller with respect to the Assets and
the interests described in Section 11.1.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the Closing Date and
as of the date of this Agreement as follows:
4.1 Organization, Good Standing, and Authority
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Seller has the full power and
authority to enter into and perform this Agreement and to carry out the
transactions contemplated herein and to own and hold the properties and assets
it now owns where such properties are now owned or held. Seller is properly
qualified, as required by applicable law, to conduct business in the State of
Texas and has all the requisite power and authority to own the Assets and to
carry on its business as now conducted in regard to the Assets. Seller has the
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform all the terms and conditions
hereof to be performed by Seller. The officers of Seller executing and
delivering this Agreement are duly authorized and fully empowered to enter into
this Agreement on behalf of Seller. The execution and delivery of this Agreement
and the consummation by Seller of the transactions contemplated herein have been
duly and validly authorized by all necessary action by Seller, and no further
approval therefor is required by law or otherwise. Except as set forth in
Schedule 4.1 of the Disclosure Schedule, no consent of any Third Party is
required for Seller to enter into this Agreement and to consummate the
transactions contemplated herein, except as to consents customarily obtained
following Closing.
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4.2 Valid and Binding Agreement; No Violation
This Agreement constitutes a valid and binding obligation of Seller
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and by general principles
of equity (whether applied in a proceeding at law or in equity). Except as set
forth in Schedule 4.2 of the Disclosure Schedule, this Agreement and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not (i) constitute a
violation of, or conflict with, or be a default under any order, judgment,
decree, or any law or regulation of any Governmental Authority or under any
material commitment, agreement, understanding, arrangement or restriction of any
kind to which Seller is a party or by which Seller is bound; or (ii) conflict
with any of or require the consent of any person or entity under the terms,
conditions or provisions of the charter documents, bylaws or equivalent
governing instruments of Seller; or (iii) conflict with, result in a breach of,
constitute a default under (whether with notice or the lapse of time or both),
or accelerate or permit the acceleration of the performance required by or
require any consent, authorization or approval under any indenture, mortgage,
lien or any material agreement, permit, lease or other instrument to which
Seller is a party or by which it is bound or to which any property of the Seller
is subject or any contracts, permits or leases that are included in the Assets;
or (iv) result in the creation of any material lien, charge or encumbrance on
the Assets under any indenture, mortgage, lien, lease or contract.
4.3 Compliance with Laws
Except as set forth in Schedule 4.3 of the Disclosure Schedule, to Seller's
knowledge, the Seller is not in violation of or in default under any Applicable
Law related to the Assets or in violation of or in default under any order of
any Governmental Authority applicable to it that would have a Material Adverse
Effect on the Assets.
4.4 Absence of Claims
Except as described in Schedule 4.4 of the Disclosure Schedule, to Seller's
knowledge, there are no Claims or Environmental Claims being asserted, or to
Seller's knowledge, threatened, against the Assets that would, if determined
adversely to Seller or Buyer, prevent or interfere with the consummation of the
transactions contemplated by this Agreement.
4.5 Title to Assets
The Seller has or at Closing will have good and valid title to the vehicles
listed on Exhibit "A" and good and valid leasehold interests in all propane
storage tank sites listed in Exhibit "C", in each case free and clear of all
liens, encumbrances or security interests (collectively, "Liens"), except for
Permitted Encumbrances and except for matters disclosed on Schedule 4.5 of the
Disclosure Schedule (including, without limitation, defects in title, rights to
purchase, or liens described on Schedule 4.5). With respect to the distribution
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system easements, rights-of-way, licenses and land use permits included as part
of the Assets (collectively, the "Easements"), the Seller has or at Closing will
have (i) title to or interest in the Easements listed on Exhibit "C" free and
clear of all liens and Claims of those claiming by, through, or under Seller,
(ii) title to or interest in the Easements sufficient to use and operate the
Assets in the manner operated by Seller immediately prior to Closing, without
interference by Third Parties arising from defects in title, and (iii) use of
public utility easements in the various subdivisions related to the Assets
sufficient to operate the Assets in the manner operated by Seller immediately
prior to Closing.
4.6 Taxes
Except as set forth in Schedule 4.6 of the Disclosure Schedule: (i) all tax
returns related to or affecting the Assets have been filed by or on behalf of
the Seller through calendar year 2002 and such returns are true, complete and
correct; (ii) with respect to items or periods covered by such returns, all
Taxes shown payable on such returns have been paid in full on a timely basis and
no other Taxes are payable by the Seller; (iii) the Seller has withheld and paid
all Taxes required to have been withheld and paid, and complied with all
information reporting and backup withholding requirements, in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party; (iv) there are no liens on any of the Assets of the Seller
with respect to Taxes, other than liens for Taxes not yet due and payable or for
Taxes that the Seller is contesting in good faith through appropriate
proceedings; (v) there are no outstanding agreements or waivers by or with
respect to the Seller extending the period for assessment or collection of any
Taxes; and (vi) there is no pending action, proceeding or investigation for
assessment or collection of Taxes with respect to the Assets.
4.7 No Conflicting Orders
Except as described in Schedule 4.7 of the Disclosure Schedule, to Seller's
knowledge, Seller is not a party to, subject to, or bound by any judgment,
order, writ, injunction, or decree of any court or Governmental Authority which
would prevent or interfere with the execution, delivery, or performance of this
Agreement or the consummation of the transactions herein contemplated.
4.8 Contracts
Except as described in Schedule 4.8 of the Disclosure Schedule, to Seller's
knowledge, Seller is not in default under or in breach or violation of and no
event has occurred which, with notice or the lapse of time or both would
constitute a default under, or a breach or a violation of any term, condition or
provision of any material Contract. To Seller's knowledge, Exhibit B contains a
true and complete list of all material Contracts. Except as set forth in
Schedule 4.8: (i) the Seller has not received any prepayment, advance payment,
deposits or similar payments, and has no refund obligation, with respect to any
propane serviced, handled or distributed by or on behalf of the Seller related
to the Assets; and (ii) the Seller has not received any compensation for
handling or distribution services related to the Assets which would be subject
to any refund or create any repayment obligation either by or to the Buyer and
to the knowledge of Seller, there is no basis for a claim that a refund is due.
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4.9 Condemnation
Except as described in Schedule 4.9 of the Disclosure Schedule, to Seller's
knowledge, there are no pending or threatened or proposed condemnation or
eminent domain proceedings, decrees or orders by Governmental Authorities, or
contemplated sales in lieu thereof, involving partial or total taking of any of
the Assets.
4.10 Liabilities
Except as set forth on Schedule 4.10 of the Disclosure Schedule, to
Seller's knowledge, the Assets are not subject to any obligations or Liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether due
or to become due), other than contractual obligations and liabilities incurred
in the ordinary course of business, and other than normal and ordinary
Liabilities which have arisen in the ordinary course of business that, in the
aggregate, would not have a Material Adverse Effect.
4.11 Brokerage Arrangements
The Seller has not entered (directly or indirectly) into any agreement with
any person, firm or corporation that would obligate the Buyer, to pay any
commission, broker's fee or finder's fee or other fee in connection with this
Agreement or the transactions contemplated herein.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the Closing Date and
as of the date of this Agreement as follows:
5.1 Organization, Good Standing, and Authority
Buyer has the full power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated herein. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. Buyer is properly qualified, as required by law, to
conduct business in the State of Texas. The execution and delivery of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated herein have been duly authorized, and no further approval therefor
is required by law or otherwise. The officers of Buyer executing and delivering
this Agreement are duly authorized and fully empowered to enter into this
Agreement on behalf of Buyer. Buyer is aware of no authorizations or approvals
other than those contemplated herein which are required by law or otherwise to
enable Buyer to perform its obligations under this Agreement. No consent of any
Third Party is required for Buyer to enter into this Agreement and to consummate
the transactions contemplated herein, except as to consents customarily obtained
following Closing. Buyer's ability to consummate the transactions contemplated
in this Agreement is not contingent on its ability to complete any financing
prior to or upon the Closing.
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5.2 Valid and Binding Agreement; No Violation
This Agreement constitutes a valid and binding agreement of Buyer and is
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and by general principals
of equity (whether applied in a proceeding at law or in equity). This Agreement
and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement will not (i)
constitute a violation of, or conflict with, or be a default under any order,
judgment, decree, or any law or regulation of any Governmental Authority or
under any material commitment, agreement, understanding, arrangement or
restriction of any kind to which Buyer is a party or by which Buyer is bound;
(ii) conflict with any of or require the consent of any person or entity under
the terms, conditions or provisions of the charter documents, bylaws or
equivalent governing instruments of Buyer; or (iii) conflict with, result in a
breach of, constitute a default under (whether with notice or the lapse of time
or both), or accelerate or permit the acceleration of the performance required
by or require any consent, authorization or approval under any indenture,
mortgage, lien or any material agreement, permit, lease or other instrument to
which Buyer is a party or by which it is bound or to which any property of the
Buyer is subject.
5.3 Litigation
There is no injunction or restraining order or legal, administrative, or
arbitration proceeding pending or threatened against Buyer which restrains or
prohibits the consummation of the transactions contemplated by this Agreement.
5.4 No Conflicting Orders
Buyer is not a party to, subject to, or bound by any judgment, order, writ,
injunction, or decree of any court or Governmental Authority which would prevent
or interfere with the execution, delivery, or performance of this Agreement or
the consummation of the transactions herein contemplated.
5.5 Funds
Buyer has, at the date of this Agreement, and will have, at the Closing
Date, sufficient unencumbered funds to pay the Adjusted Purchase Price at the
Closing.
5.6 Bankruptcy
There are no pending or, to the best knowledge of Buyer, threatened
proceedings in bankruptcy, for protection or suspension of debts, or involving
assignment of assets for the benefit and protection of creditors involving the
Buyer.
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5.7 Brokerage Arrangements
The Buyer has not entered (directly or indirectly) into any agreement with
any person, firm or corporation that would obligate the Seller, to pay any
commission, broker's fee or finder's fee or other fee in connection with this
Agreement or the transactions contemplated herein.
5.8 Insurance
Buyer currently maintains comprehensive general liability insurance with an
amount of coverage that is equal to or greater than contractual liability of
$1,000,000 per occurrence and $2,000,000 annually.
5.9 Net Worth
Buyer has a net worth that is greater than five million dollars
($5,000,000.00).
6. PRE-CLOSING CONDUCT AND COVENANTS
6.1 Conduct of Business
Without first obtaining the written consent of the Buyer, from the date
hereof until the Closing Date, the Seller covenants that it will not as to
Seller's operation of the Assets:
(i) operate the Assets other than in the usual, regular and ordinary
course in all material respects consistent with past practices or
make any material change in the conduct of such businesses and
operations or financial reporting and accounting methods
affecting the Assets;
(ii) enter into any renewal of a Contract on terms and conditions,
including economic terms, not substantially the same as currently
exist in such Contract;
(iii)sell, lease or otherwise dispose of any of the Assets other than
(A) the sale of Assets in the ordinary course of business
pursuant to existing Contracts, or (B) Assets that are sold
pursuant to any preferential right to purchase;
(iv) other than in the ordinary course of business consistent with
past practices (A) terminate or amend any Contract, or any
material permit or other material right, (B) waive, release or
assign any material rights or claims, (C) create any liens on the
Assets; or
(v) implement or adopt any change in its tax methods, principles or
elections relating to the Assets.
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6.2 Operations
Except as otherwise expressly provided in this Agreement, from the date
hereof until Closing, Seller shall:
(i) maintain the Assets in as good working order and condition as of
the date hereof, ordinary wear and tear excepted;
(ii) use its reasonable efforts to maintain and preserve the operation
of the Assets;
(iii)advise the Buyer promptly in writing of any material change in
any schedule delivered pursuant to this Agreement;
(iv) file on a timely basis all notices, reports or other filings
necessary or required for the continuing operation of the Assets
to be filed with or reported to any Governmental Authority
wherever located; and
(v) file on a timely basis all complete and correct applications or
other documents necessary to maintain, renew or extend any
permit, variance or any other approval required by any
Governmental Authority necessary or required for the continuing
operation of the Assets, whether or not such approval would
expire before or after the Closing Date.
6.3 Confidentiality
The terms of that certain Confidentiality Agreement by and between Seller
and BNC Engineering, LLC ("BNC"), dated September 19, 2003 are incorporated
herein by reference and the Parties hereto agree to be bound to same with regard
to the information disclosed by Seller, and their representatives in connection
with the transactions contemplated by this Agreement.
6.4 Litigation
(i) Austin Colony and Senna Hills. From and after Closing, Seller
shall maintain the responsibility and liability for the matters
described as "HBH Development Company, LLC v. Southern Union
Company and ONEOK Propane Company, District Court of Xxxxxx
County, Texas, Cause No. GN 402427" (the "Austin's Colony
Matter") and "Senna Hills, Ltd. v. Southern Union Company and
ONEOK Propane Company, District Court of Xxxxxx County, Texas,
Cause No. GN 402428" (the "Senna Hills Matter"), as further
described in Schedule 4.4 of the Disclosure Schedule (but only to
the extent that the claims asserted in such matters relate to
acts or omissions occurring prior to the Effective Date). In
connection with the final adjudication or settlement of these
matters:
(A) Seller shall be entitled to any recoveries, collections of
money, judgments or other benefits relating to these matters;
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(B) Seller and Buyer agree that in order to settle the Austin's
Colony Matter or the Senna Hills Matter, Seller may negotiate for
Buyer and Buyer will execute a new tank site lease or enter into
another similar arrangement involving royalty payments or other
payments for each subdivision with customary terms and
conditions, including without limitation, a term of not more than
fifteen (15) years and a rental payment (or royalty payment or
other payment) not to exceed $10,000 annually. Seller shall
indemnify and hold Buyer harmless from the rental payments and
any Losses suffered by Buyer related to settling these lawsuits
to the extent that both (a) such Losses relate to acts or
omissions occurring prior to the Effective Date, including,
without limitation, use fees that may have accrued during the
period January 1, 2003 to the Effective Date, and (b) Buyer is
not able to recover for the rental payments and such Losses
through rate recovery mechanisms;
(C) In the event final adjudication or settlement of either or
both of the Austin's Colony Matter and the Senna Hills Matter
results in the easement use fee obligation continuing under
either or both of the developer agreements at issue in these
matters, Buyer agrees to enter into any amendment to the
developer agreements or new developer agreements as necessary
that requires Buyer to pay easement use fees subsequent to the
Effective Date on the same terms and conditions as the existing
developer agreements;
(D) In the event (a) no settlement is reached in either or both
of the Austin's Colony Matter and the Senna Hills Matter and (b)
final adjudication results in a repudiation of the developer
agreement at issue in the respective matter and forfeiture of the
distribution system, Seller shall refund to Buyer the amount of
the Base Purchase Price allocated to the respective distribution
system, which for the Austin's Colony Matter shall be three
hundred thousand dollars ($300,000.00), and for the Senna Hills
Matter shall be two hundred fifty thousand dollars ($250,000.00),
with the refund payment constituting full and complete
satisfaction on the part of Seller for any damages to Buyer
resulting from the repudiation of the developer agreement and
forfeiture of the distribution system.
(ii) The Preserve at Xxxxxx Creek and Lake Pointe. Seller and Buyer
agree that in connection with the final adjudication or
settlement of The Preserve at Cedar Creek Canyon, Inc. v.
Southern Union Company and ONEOK, Inc., d/b/a Texas Gas Service
Company, Cause No. 278305, in the County Court at Law No. 2,
Xxxxxx County, Texas (the "Preserve Matter"), and XXXX, X.X. x.
ONEOK, Inc., Case No. A04CA602LY, in the United States District
Court for the Western District of Texas, Austin Division (the
"Lake Pointe Matter"), as further described in Schedule 4.4 of
the Disclosure Schedule, Seller shall indemnify and hold Buyer
harmless from any Losses suffered by Buyer related to these
matters but only to the extent that the claims asserted in such
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matters relate to acts or omissions occurring prior to the
Effective Date. In the event (A) no settlement is reached in
either or both of the Preserve Matter and the Lake Pointe Matter
and (B) final adjudication results in a repudiation of the
developer agreement at issue in the respective matter and
forfeiture of the distribution system, Seller shall refund to
Buyer the amount of the Base Purchase Price allocated to the
respective distribution system, which for the Preserve Matter
shall be eighty-four thousand dollars ($84,000.00), and for the
Lake Pointe Matter shall be four hundred ninety-five thousand
dollars ($495,000.00), with the refund payment constituting full
and complete satisfaction on the part of Seller for any damages
to Buyer resulting from the repudiation of the developer
agreement and forfeiture of the distribution system.
(iii)Cooperation. From and after the Closing, Seller and Buyer shall
cooperate in connection with the foregoing proceedings,
including, without limitation, providing access to information,
documents and personnel reasonably necessary in connection with
these matters.
6.5 Execution of Settlement Documents
Buyer agrees to cooperate in executing any new tank site lease and any
release (and related settlement documents) as may be necessary or appropriate to
document the settlement of any claims or disputes arising under the developer
agreements and other Contracts for the various subdivisions relating to the
Assets and the interests described in Section 11.1.
7. CLOSING AND CONDITIONS TO CLOSING
7.1 Conditions to Closing
(i) Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement are
subject, at the option of Seller, to the following conditions:
(A) Representations. The representations and warranties of Buyer
contained herein shall be true and correct on the date hereof and
the Closing Date.
(B) Performance. Buyer shall have complied in all material
respects with all obligations, covenants, and agreements
contained in this Agreement to be performed or complied with by
it at or prior to the Closing.
(C) Pending Matters. No suit, action or other proceeding by a
Third Party shall be pending or threatened which seeks damages
from Buyer or Seller in connection with the proposed sale of
Assets and interests described in Section 11.1, or seeks to
restrain, enjoin or otherwise prohibit the consummation of the
transactions contemplated by this Agreement. The Closing shall
not violate any order or decree of any court or Governmental
Authority having competent jurisdiction.
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(D) Delivery. Buyer shall have delivered to Seller the Adjusted
Purchase Price as contemplated by Section 3.4.
(E) Filings. All necessary filings with and consents of any
Governmental Authority required by Buyer for the consummation of
the transactions contemplated by this Agreement shall have been
made and obtained, and all waiting periods with respect to
filings made with Governmental Authorities in connection with the
consummation of the transactions described herein shall have
expired or been terminated.
(ii) Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are
subject, at the option of Buyer, to the following conditions:
(A) Representations. The representations and warranties of Seller
contained herein shall be true and correct on the date hereof and
the Closing Date.
(B) Performance. Seller shall have complied in all material
respects with all obligations, covenants, and agreements
contained in this Agreement to be performed or complied with by
it at or prior to the Closing.
(C) Pending Matters. No suit, action or other proceeding by a
Third Party shall be pending or threatened which seeks damages
from Seller or Buyer in connection with the proposed sale of the
Assets and interests described in Section 11.1, or seeks to
restrain, enjoin or otherwise prohibit the consummation of the
transactions contemplated by this Agreement. The Closing shall
not violate any order or decree of any court or Governmental
Authority having competent jurisdiction.
(D) Preferential Purchase Rights. All preferential purchase
rights and similar contractual provisions encumbering the Assets
shall have (a) been waived or consents obtained from the
appropriate parties, (b) expired with respect to the applicable
time period for asserting such rights without an exercise of such
right, or (c) been exercised, the purchase of Assets pursuant to
such exercises has been completed.
(E) Delivery. Seller shall have delivered to Buyer deeds,
assignments, bills of sale and all other transfer documents in
the forms reasonably acceptable to Buyer and Seller transferring
the Assets and interests described in Section 11.1 from Seller to
Buyer free and clear of all security interests, liens, adverse
claims or other encumbrances except as otherwise provided in this
Agreement, and Exhibits updated to the Closing Date, and any
other agreements, documents, certificates, or other instruments
reasonably necessary to consummate the transactions contemplated
by this Agreement.
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(F) Filings. All necessary filings with and consents of any
Governmental Authority required by Seller for the consummation of
the transactions contemplated by this Agreement shall have been
made and obtained, and all waiting periods with respect to
filings made with Governmental Authorities in connection with the
consummation of the transactions described herein shall have
expired or been terminated. Buyer shall support Seller's filings
as may be required.
(G) Due Diligence Review. Completion by Buyer of its due
diligence review of the Assets without the discovery by Buyer of
any fact, circumstance, Claim, Environmental Claim or Liability
not disclosed by Seller to Buyer in the Disclosure Schedule, the
effect of which such fact, circumstance, Claim or Liability has a
Material Adverse Effect on the Assets or Buyer's ability to own
and operate the Assets.
7.2 Time and Place of Closing
Closing shall occur on or before October 29, 2004 at 11:00 a.m. CDT
(provided that all conditions to Closing contained within Section 7.1 above have
been met), unless a later date is mutually agreed to in writing by both Parties.
The Closing shall take place at Seller's offices in Tulsa, Oklahoma (provided,
however, that the Closing may be achieved by transmitting documents between the
Parties without the physical presence of the officers and representatives of
Seller and Buyer). The "Closing Date" under this Agreement shall be the date on
which the actual Closing occurs as may be documented in a closing memorandum to
be mutually agreed upon by the Parties and executed at Closing. The "Closing"
shall consist of Seller making the deliveries described in Section 7.1(ii)(E)
and Buyer making the deliveries described in Section 7.1(i)(D).
7.3 Effective Date
The "Effective Date" of the transfer from Seller to Buyer hereunder shall
be the first calendar day of the month in which the Closing Date occurs under
this Agreement. The phrase "on or after the Effective Date" as used herein means
at or after 9:00 a.m., Central Standard Time, on the Effective Date, and
"before" or "prior to" the Effective Date means before that time.
7.4 Assumption of Risk of Loss, Liabilities and Operations
Buyer shall assume possession, risk of loss, ownership, responsibility for,
and operation of the Assets from and after 9:00 a.m., Central Standard Time, on
the Effective Date.
7.5 Termination At or Prior to Closing
This Agreement may be terminated at any time on or prior to the Closing
Date:
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(i) by mutual written consent of the Parties;
(ii) by Seller if the conditions set forth in Section 7.1(i) have not
been satisfied in all material respects by Buyer on or before
Closing, unless Buyer's failure to satisfy the conditions set
forth in Section 7.1(i) are the result of Seller's breach of this
Agreement, in which case Seller may not terminate this Agreement
pursuant to this Section 7.5(ii);
(iii)by Buyer if the conditions set forth in Section 7.1(ii) have not
been satisfied in all material respects by Seller on or before
Closing, unless Seller's failure to satisfy the conditions set
forth in Section 7.1(ii) are the result of Buyer's breach of this
Agreement, in which case Buyer may not terminate this Agreement
pursuant to this Section 7.5(iii);
(iv) by any Party on or before the Closing Date if any Governmental
Authority shall have issued a final order, judgment, or decree
permanently restraining, enjoining, prohibiting or invalidating
the consummation of any of the transactions contemplated herein;
or
(v) by Buyer or Seller in accordance with any other applicable
termination provision in this Agreement.
7.6 Effect of Termination
In the event that Closing does not occur as a result of any Party
exercising its right to terminate this Agreement pursuant to Section 7.5 or
any other applicable termination provision in this Agreement, then this
Agreement shall be null and void and no Party shall have any rights or
obligations under this Agreement, except that (i) nothing herein shall
relieve any Party from any Liability for any breach hereof and (ii) the
confidentiality obligations under Section 6.3 shall survive any such
termination.
8. DISCLAIMERS
8.1 Disclaimer Regarding Assets
BUYER ACKNOWLEDGES THAT EXCEPT FOR THE PROVISIONS REGARDING TITLE
EXPRESSLY SET FORTH IN SECTION 4.5 HEREOF AND IN THE ASSIGNMENT
INSTRUMENTS, AND THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT,
SELLER HAS NOT MADE, AND SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE CONDITION
OF ANY PART OF THE ASSETS (INCLUDING, WITHOUT LIMITATION, (i) ANY IMPLIED
OR EXPRESS WARRANTY OF MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND (iii) ANY IMPLIED OR
EXPRESS WARRANTY REGARDING THE CONDITION OF THE ASSETS), IT BEING THE
EXPRESS INTENTION OF BUYER AND SELLER THAT, EXCEPT FOR THOSE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET OUT HEREIN OR IN THE
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ASSIGNMENT INSTRUMENTS, THE ASSETS SHALL BE ACCEPTED BY BUYER "AS IS,"
"WHERE IS," AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND WITH ALL
DEFECTS AND WITH ALL FAULTS, BOTH PATENT AND LATENT; AND BUYER AGREES THAT
PRIOR TO CLOSING, BUYER SHALL MAKE OR CAUSE TO BE MADE SUCH INSPECTIONS
WITH RESPECT TO THE ASSETS AS BUYER DEEMS APPROPRIATE. BUYER HEREBY
RELEASES SELLER FROM ANY AND ALL LIABILITY FOR FAULTS OR DEFECTS (WHETHER
PATENT OR LATENT), EXCEPT INSOFAR AS SUCH LIABILITY RELATES TO THOSE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET OUT HEREIN OR IN THE
ASSIGNMENT INSTRUMENTS. THE PARTIES AGREE THAT THE TEXT OF THIS SECTION
CONSTITUTES A CONSPICUOUS LEGEND, WRITING, AND NOTICE.
9. INDEMNIFICATIONS
9.1 Indemnification by Buyer
(i) Buyer's General Indemnity. Buyer shall defend, release,
indemnify, and hold harmless the Seller, its officers, directors,
employees, agents, representatives, Affiliates, successors and
assigns to whom Seller's rights hereunder are allowed to be
assigned pursuant to the terms of Section 11.3 (with the Seller
and such persons being collectively referred to in this Agreement
as the "Seller Indemnitees") from and against any and all Claims
asserted against Seller Indemnitees as a result of, caused by,
arising out of, or in any way relating to (A) any
misrepresentation or breach of warranty by Buyer expressed in
this Agreement, (B) any nonfulfillment of any agreement or
covenant on the part of the Buyer under this Agreement, (C) any
Liability or obligation (other than those for which the Buyer
Indemnitees are being indemnified by the Seller) that arises
based on or relating to any action taken, omission by or inaction
of any employee of Buyer or its Affiliates on or after the
Effective Date, (D) any Liability or obligation that pertains to
the ownership operation of the Assets or the properties or rights
described in Section 11.1 arising from any acts, omissions,
events, conditions or circumstances occurring on or after the
Effective Date, and (E) any Liability or obligation arising with
respect to performance on or after the Effective Date of the
Contracts, leases, agreements or other arrangements of Buyer,
including, without limitation, any developer agreements or tank
site leases that are in effect on or after the Effective Date.
(ii) Buyer's Environmental Indemnity. Buyer shall defend, release,
indemnify, and hold harmless the Seller Indemnitees from and
against any and all Environmental Claims asserted against the
Seller Indemnitees as a result of or arising out of any and all
Environmental Defects attributable to acts, events, or omissions
occurring on or after the Effective Date.
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9.2 Indemnification by Seller
(i) Seller's General Indemnity. Seller shall defend, release,
indemnify and hold harmless the Buyer, its officers, directors,
employees, agents, representatives, Affiliates, successors and
assigns to whom Buyer's right hereunder are allowed to be
assigned pursuant to the terms of Section 11.3 (with the Buyer
and such persons being collectively referred to as the "Buyer
Indemnitees") from and against any and all Claims asserted
against Buyer Indemnitees as a result of, caused by, arising out
of, or in any way relating to (A) any misrepresentation or breach
of warranty by Seller expressed in this Agreement as of the
Closing Date, (B) any nonfulfillment of any agreement or covenant
on the part of the Seller under this Agreement, (C) any Liability
or obligation (other than those for which the Seller Indemnitees
are being indemnified by the Buyer hereunder) that arises based
on or relating to any action taken, omission by or inaction of
any employee or agent (other than Buyer or its Affiliates and
employees) of Seller prior to the Effective Date, (D) subject to
Section 6.4, any Liability or obligation that pertains to the
ownership of the Assets or operation of the Assets arising from
any acts, omissions, events, conditions, or circumstances
occurring prior to the Effective Date, and (E) subject to Section
6.4, any Liability or obligation arising with respect to
performance before the Effective Date of the Contracts, leases
and other agreements of Seller.
(ii) Seller's Environmental Indemnity. Seller shall defend, release,
indemnify and hold harmless the Buyer Indemnities from and
against any and all Environmental Claims asserted against the
Buyer Indemnitees as a result or arising out of any and all
Environmental Defects attributable to acts, events, or omissions
occurring prior to the Effective Date.
9.3 Limitations on Liability
(i) Limitations on Seller's Liability. Notwithstanding anything to
the contrary in this Agreement, the liability of Seller under any
provision of this Agreement shall be limited as follows, except
that the following limitation shall not apply to a breach by
Seller of its covenant contained in Section 6.4:
(A) Seller shall have no liability for Losses unless a written
Claim Notice meeting the requirements of Section 9.5 has been
delivered to Seller within one year after the Closing Date.
(B) Seller shall not be obligated to indemnify the Buyer under
Section 9.2 hereof unless and until the cumulative amount of all
Losses incurred, suffered or paid by Buyer equal or exceed
Fifteen Thousand Dollars ($15,000.00) in the aggregate (the
"Indemnity Aggregate Threshold"), and then only for the Losses of
Buyer under Section 9.2 that exceed such amount, subject to the
requirements of Section 9.3(i)(C).
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(C) After the Indemnity Aggregate Threshold has been met, Seller
shall not be obligated to indemnify the Buyer for a particular
Claim or Environmental Claim under Section 9.2 unless the
collective Losses incurred, suffered or paid by the Buyer with
respect to such individual Claim or Environmental Claim exceed
two thousand five hundred dollars ($2,500.00), in which event
Seller will be liable for all such Losses relating to such
individual Claim or Environmental Claim (subject to subsection
(D) immediately below).
(D) Seller shall not, in any case, be required to make payments
to Buyer for Losses hereunder in an aggregate amount in excess of
one hundred thousand dollars ($100,000.00).
(ii) Indemnity Under Master Agreement. Notwithstanding anything in
this Article 9 to the contrary, Seller shall have no indemnity
obligation under this Agreement for any Claim or Environmental
Claim arising under that certain Master Agreement for Services by
and between Seller (successor in interest to SUPro Energy, dba
SUCO - Propane) and BNC dated January 1, 2003 (the "Master
Agreement"). Any Claim or Environmental Claim arising under the
Master Agreement shall be governed by and subject to the
indemnity rights and obligations under the Master Agreement.
(iii)Excluded Damages. Notwithstanding anything to the contrary in
this Agreement, in no event shall either Party be liable to the
other or to the other's indemnitees under this Agreement for any
consequential, exemplary, punitive, remote, or speculative
damages; provided, however, that if any indemnitee is held liable
to a Third Party for any such damages and Buyer or Seller is
obligated to indemnify such indemnitee for the matter that gave
rise to such damages, Buyer or Seller shall be liable for, and
obligated to reimburse such indemnitee for such damages.
9.4 Survival of Representations and Warranties
(i) Survival of Buyer's Representations and Warranties. Except as
otherwise specifically provided in this Agreement, Seller
Indemnitees shall be entitled to rely upon the warranties and
representations of Buyer set forth herein as of the Closing Date,
and the obligations of Buyer to Seller with respect thereto shall
survive the Closing and continue in full force and effect until
one year after the Closing Date, at which time Buyer's warranties
and representations to Seller and all liabilities of Buyer to
Seller with respect thereto shall terminate except for Claims or
Environmental Claims relating to any warranties or
representations as to which timely Claim Notices meeting the
requirements of Section 9.5 have been delivered to Buyer within
the one year period. The liabilities of Buyer to Seller with
respect to the matters addressed in all warranties and
representations as to which timely Claim Notices meeting the
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requirements of Section 9.5 have been delivered to Buyer shall
continue until such Claims or Environmental Claims have been
finally decided, settled or adjudicated.
(ii) Survival of Seller's Representations and Warranties. Except as
otherwise specifically provided in this Agreement, Buyer
Indemnitees shall only be entitled to rely upon the warranties
and representations of Seller set forth herein as of the Closing
Date, and the obligations of Seller to Buyer with respect thereto
shall survive the Closing and continue in full force and effect
until one year after the Closing Date, at which xxxx Xxxxxx'x
warranties and representations to Buyer set forth in this
Agreement and all liabilities of Seller to Buyer with respect
thereto shall terminate except for Claims or Environmental Claims
relating to any warranties or representations as to which timely
Claim Notices meeting the requirements of Section 9.5 have been
delivered to Seller within the one year period. The liabilities
of Seller with respect to the matters addressed in all warranties
and representations as to which timely Claim Notices meeting the
requirements of Section 9.5 have been delivered to Seller shall
continue until such Claims or Environmental Claims have been
finally decided, settled or adjudicated.
9.5 Notice of Asserted Liability; Opportunity to Defend and/or Cure
(i) Claims Procedures.
(A) All claims for indemnification under any indemnities given in
this Agreement (an "Indemnity Claim") shall be asserted and
resolved pursuant to this Section 9.5. Any person claiming
indemnification hereunder is hereinafter referred to as the
"Indemnified Party" and any person against whom such Claims are
asserted hereunder is hereinafter referred to as the
"Indemnifying Party."
(B) In the event that any Claims or Environmental Claims are
asserted against or sought to be collected from an Indemnified
Party by a Third Party, the Indemnified Party shall with
reasonable promptness provide to the Indemnifying Party a written
notice of an Indemnity Claim hereunder (the "Claim Notice"),
which notice must include details describing the factual and
legal basis of the Indemnity Claim, sufficient to allow the
Indemnifying Party to investigate and respond to same. If the
Indemnified Party fails to provide the Indemnifying Party with a
Claim Notice complying with the above requirements with regard to
any Indemnity Claim, following the Indemnified Party's receipt of
a notice of same, in accordance with the provisions of this
Agreement in reasonably sufficient time so that the Indemnifying
Party's ability to defend against the Indemnity Claim is
prejudiced, the Indemnifying Party's indemnity obligations
hereunder shall be reduced to the extent of such prejudice.
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(C) The Indemnifying Party shall have thirty (30) days from the
personal delivery or receipt of the Claim Notice (the "Notice
Period") to notify the Indemnified Party (i) whether or not it
disputes the Liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such Indemnity Claim
and/or (ii) whether or not it desires, at the sole cost and
expense of the Indemnifying Party (subject to the indemnification
limits agreed to herein), to defend the Indemnified Party against
such Indemnity Claim and/or cure any defect included in such
notice; provided, however, that any Indemnified Party is hereby
authorized prior to and during the Notice Period to request an
extension of time to file responsive pleadings, file any motion,
answer or other pleading that it shall deem necessary or
appropriate to protect its interests or those of the Indemnifying
Party (and of which it shall have given notice and opportunity to
comment to the Indemnifying Party) and not prejudicial to the
Indemnifying Party.
(D) In the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such Indemnity Claim and/or
cure any defect included in such notice, the Indemnifying Party
shall have the right, subject to the last sentence of this
Section 9.5(i)(D), to defend all appropriate proceedings, and
with counsel of its own choosing, which proceedings shall be
promptly settled or prosecuted by them to a final conclusion
and/or shall have the right to cure any defect included in the
Indemnified Party's notice. If the Indemnified Party desires to
participate in, but not control, any such defense, settlement or
cure it must do so at its sole cost and expense.
(E) If the Indemnifying Party fails to respond to the Indemnified
Party within the Notice Period or after electing to defend fails
to commence or diligently pursue such defense, then the
Indemnified Party shall have the right, but not the obligation,
to undertake or continue the defense of and to compromise or
settle (exercising reasonable business judgment) the Indemnity
Claim, all as the agent of, and with commensurate fiduciary
obligations to, the Indemnifying Party subject to the right of
the Indemnifying Party to assume the defense of such Indemnity
Claim at any time prior to the settlement, compromise, or prior
determination thereof. Each Party will keep the other Party
reasonably informed of the progress of any such defense,
compromise, or settlement of an Indemnity Claim or activities
being undertaken to cure a defect under this Section 9.5.
(F) If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel
in contesting any Indemnity Claim which the Indemnifying Party
wishes to defend or, if appropriate and related to the Indemnity
Claim in question, in making any counterclaim against the Third
Party asserting the Indemnity Claim, or any cross-claim against
any person.
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(G) In the event the Indemnifying Party is not disputing its
liability to the Indemnified Party with respect to an Indemnity
Claim, no such Indemnity Claim may be settled or otherwise
compromised without the prior written consent of the Indemnifying
Party. Anything in this Article to the contrary notwithstanding,
the Indemnifying Party shall not, without the Indemnified Party's
prior written consent, settle or compromise any proceeding or
consent to the entry of any judgment with respect to any
Indemnity Claim for anything other than money damages paid by the
Indemnifying Party. The Indemnifying Party may, without the
Indemnified Party's prior written consent, settle or compromise
any such Indemnity Claim or consent to entry of any judgment with
respect to any such Indemnity Claim that requires solely the
payment of money damages by the Indemnifying Party and that
includes as an unconditional term thereof the release by claimant
or the plaintiff of the Indemnified Party from all liability in
respect of such Indemnity Claim.
(ii) Access to Records, Assets and Employees. Buyer and Seller each
agree to give the other and its representatives reasonable access
during regular business hours and upon five (5) days' prior
written notice to all of its books and records (to the extent
same are not subject to the attorney work product or
attorney-client privilege), to the extent such reasonably relate
to the matters to which the Claim Notice relates; and in the
event of an emergency a Party will use all reasonable efforts to
provide such access to the other Party without delay.
9.6 Exclusive Remedy
As between Buyer and Seller, the indemnifications from Buyer to Seller and
from Seller to Buyer contained within this Article 9 are the exclusive remedies
available to either Buyer or Seller under this Agreement, including the
indemnification obligations contained within this Article 9, except that Buyer
or Seller may obtain specific performance of such indemnification obligations.
9.7 Survival of Covenants
Except as otherwise set forth in this Agreement, the indemnities and other
covenants set forth in the Agreement shall survive Closing and continue in full
force and effect.
10. POST-CLOSING ACCOUNTING AND CONTINUING OBLIGATIONS
10.1 Ad Valorem Taxes
(i) Ad Valorem Taxes. Buyer assumes all liability for, and agrees to
pay, all ad valorem taxes for the 2004 tax year and beyond. Buyer
assumes full responsibility for filing all ad valorem renditions
and tax returns in all applicable tax jurisdictions for the 2004
tax year and beyond; provided, however, Seller shall reimburse
Buyer for the portion of the 2004 ad valorem taxes relating to
26
the period from January 1, 2004 to the Effective Date, said
reimbursement to be reflected as a downward adjustment to the
Base Purchase Price pursuant to Section 3.3 based on estimated
taxes for the 2004 tax year. Seller will, upon request from
Buyer, provide historical documentation of prior year filings
related to ad valorem taxes to help facilitate the Buyer's
correct filing of ad valorem renditions and tax returns for the
2004 tax year. As soon as reasonably practicable, but in no event
later than thirty (30) days after the Closing Date, Buyer shall
provide proper written notice to the taxing authorities in all
applicable jurisdictions indicating that Buyer is the owner of
record of the Assets and the properties described in Section 11.1
as of the Closing Date, and the party responsible for filing all
ad valorem renditions and tax returns for the 2004 tax year and
beyond. Upon Seller's receipt of any tax statements after Closing
for ad valorem taxes (or taxes imposed in lieu thereof) assessed
against the Assets for the 2004 tax year, it shall forward such
statements to Buyer.
(ii) Settlement of 2004 Tax Variance. To the extent the estimated
taxes credited to Buyer at Closing pursuant to Section 3.3 vary
from the actual taxes assessed, due and payable for the period
relating to January 1, 2004 to the Effective Date, the Party
owing the difference shall remit same to the other Party within
thirty (30) days of Buyer's mailing of a statement reflecting
such difference (the "Tax Variance Statement"). Buyer shall
calculate the variance and mail the Tax Variance Statement within
thirty (30) days of receiving the tax statements from the taxing
authorities for the actual taxes for 2004.
10.2 Apportionment of Revenues and Expenses
Seller shall be entitled to all operating revenues, related accounts
receivable and other amounts arising in the ordinary course of business
attributable to Assets and shall be responsible for all operating expenses and
related accounts payable arising in the ordinary course of business attributable
to the Assets and the interests described in Section 11.1, in each case to the
extent they relate to the time on or prior to the Effective Date. Buyer shall be
entitled to all operating revenues and related accounts receivable arising in
the ordinary course of business attributable to the Assets and the interests
described in Section 11.1 and shall be responsible for the payment of all
operating expenses and related accounts payable arising in the ordinary course
of business attributable to the Assets and the interests described in Section
11.1, in each case to the extent they relate to the time after the Effective
Date. The actual amounts or values associated with the above shall be accounted
for in the Final Accounting Statement.
10.3 Obligations and Credits
All pre-paid expenses pertaining to the Assets and the interests described
in Section 11.1, including, without limitation, (i) prepaid rent, insurance,
utilities, lease, license or right of way payments, (ii) prepaid renewal fees,
(iii) prepaid ad valorem and property taxes, (iv) prepaid emission fees, and (v)
deposits attributable to the period after the Effective Date, if any, shall be
27
reimbursed to Seller by Buyer; and accrued payables applicable to periods of
time prior to the Effective Date, if any, and attributable to the Assets and the
interests described in Section 11.1 shall be the responsibility of Seller. All
amounts equal to the expenses paid in arrears pertaining to the Assets and the
interests described in Section 11.1 that were actually paid by Buyer after the
Closing Date to the extent such expenses are, in accordance with GAAP,
attributable to the period before the Effective Date, including, without
limitation, (i) rent, insurance, utilities, lease, license or right of way
payments paid in arrears, (ii) renewal fees paid in arrears, (iii) ad valorem
and property taxes paid in arrears, and (iv) emission fees paid in arrears,
shall be the responsibility of Seller. The actual amounts or values associated
with the above shall be accounted for in the Final Accounting Settlement.
10.4 Final Accounting Statement
As soon as reasonably practicable, but in no event later than ninety (90)
days after the Closing Date, Seller shall deliver to Buyer a post-Closing
statement setting forth a detailed final calculation of all post-Closing
adjustments attributable to the Assets and the interests described in Section
11.1 ("Final Accounting Statement"). To the extent reasonably required by
Seller, Buyer shall assist in the preparation of the Final Accounting Statement.
As soon as reasonably practicable, but in no event later than thirty (30) days
after Buyer receives the Final Accounting Statement, Buyer shall deliver to
Seller a written exception report containing any and all changes Buyer proposes
to be made to the Final Accounting Statement. Buyer's proposed changes to the
Final Accounting Statement contained in the written exception report shall be
final and Buyer shall not be allowed to make any amendments or modifications
thereto. If Buyer fails to deliver such an exception report to Seller within
that period, the Final Accounting Statement delivered by Seller shall be deemed
to be true and correct and binding on and non-appealable by all Parties. As soon
as reasonably practicable, but in no event later than fifteen (15) days after
Seller receives Buyer's exception report, the Parties shall meet and undertake
to agree on the final post-Closing adjustments. If the Parties fail to agree on
the final post-Closing adjustments within such fifteen (15) day period, the
disputed items shall be resolved by submitting the same to the accounting firm
KPMG LLP (the "Accounting Referee"). The Accounting Referee shall resolve the
dispute(s) regarding the Final Accounting Settlement within thirty (30) days
after having the relevant materials submitted for review. The decision of the
Accounting Referee shall be binding and non-appealable by the Parties. The fees
and expenses associated with the Accounting Referee shall be borne equally by
Buyer and Seller. The date upon which all amounts associated with the Final
Accounting Statement are established, whether by agreement of the Parties or by
decision of the Accounting Referee, shall be herein called the "Final Settlement
Date." Any amounts owed by either Party to the other as a result of such final
post-Closing adjustments shall be paid within five (5) Business Days after the
Final Settlement Date.
10.5 Records/Audit
The Parties shall maintain a true and correct set of records pertaining to
their performance of this Agreement and all transactions related thereto and
shall retain all such records for a period of not less than two (2) years from
the Effective Date. Any representatives authorized by either Party may audit any
and all such records, excluding any that are attorney/client or attorney work
product privileged, of the other Party during normal business hours for a time
period not to exceed two (2) years from the Effective Date. For a period of two
(2) years from the Effective Date, after Closing and upon fifteen (15) days
written notice, the Seller will afford to Buyer and its authorized
representatives reasonable access during Seller's normal business hours to all
accounting records and charts relating to the Assets.
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10.6 Transfer of Records
Within a reasonable time following Closing, Seller will gather and make
available to Buyer all its original files relating primarily to the Assets and
copies of the original files that Seller will retain, including, without
limitation, contract files, division order files and contract administration
files, maps, engineering reports, operating reports and data, and maintenance
records dealing with the operation and maintenance of the Assets. Buyer, at
Buyer's expense, will remove the records gathered by Seller and transport same
from Seller's office within ten (10) days after notice from Seller that the
records are ready to be removed.
10.7 Commissions
Seller and Buyer will respectively pay or discharge, and will indemnify the
other for, brokerage commissions or finders' fees incurred by reason of any
action taken by such indemnifying Party.
10.8 Further Assurances
From time to time and without further consideration each Party will execute
and deliver, or cause its Affiliates to execute and deliver to the other Party
such documents and take such actions as the other Party may reasonably request
in order to consummate more effectively the transactions contemplated hereby.
10.9 Other Taxes
Except as otherwise provided herein, all Taxes imposed with respect to
periods prior to the Effective Date shall be the responsibility of Seller and
all such Taxes imposed with respect to periods on and after the Effective Date
shall be the responsibility of Buyer. If any Party pays any such Taxes which are
properly due and are the responsibility of the other Party, then the paying
Party shall be entitled to prompt reimbursement upon evidence of such payment.
10.10 Costa Bella Meter and Yard Line Installation.
Buyer shall, subsequent to Closing, without further consideration, install
or cause to be installed individual customer meters and yard lines on no more
than fifteen (15) lots in the Costa Bella subdivision when necessary to provide
propane service to those homes constructed or to be constructed on the
identified lots. The installation shall be in a good and xxxxxxx like manner and
in accordance with all Applicable Laws. Buyer shall indemnify and hold harmless
Seller against any Liability or obligation arising with respect to the
performance of the installations described in this Section 10.10.
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11. MISCELLANEOUS PROVISIONS
11.1 Quit Claim of Interests
Notwithstanding anything in this Agreement to the contrary, at Closing,
Seller shall quit claim all of its rights and interests, if any, in any assets,
including without limitation any partial or complete propane distribution system
and related personal and real property rights, related to the Arbolago
subdivision, the Hills of Lakeway subdivision, and the Northshore on Lake Xxxxxx
Phase II subdivision, without any representation or warranty as to any property
rights Seller may have in such assets. Any of the property rights Seller may
have in the foregoing assets will not be deemed to be an Asset as defined under
this Agreement or covered by any of the representations or warranties of Seller
in this Agreement.
11.2 Removal of signage
By no later than sixty (60) days after Closing, Buyer shall, to the best of
its abilities, have removed or caused to have been removed the names and markers
used by Seller and its Affiliates and all variations and derivations thereof and
logos relating thereto from the Assets and the properties described in Section
11.1.
11.3 Assignments
The terms, provisions and conditions of this Agreement shall extend to, be
binding upon, and inure to the benefit of the Parties, their respective
successors, permitted assigns and legal representatives. Except as otherwise
provided in this Section 11.3, neither Party will make any assignment of this
Agreement without the advance written consent of the other. Any assignment by
either Party hereunder, whether to an Affiliate or otherwise, shall not relieve
the original assigning Party from its obligations hereunder and it shall
continue to be liable therefor unless the other Party executes a release in the
assigning Party's favor. The terms, covenants and conditions contained in this
Agreement shall be binding upon and shall inure to the benefit of Seller and
Buyer and their respective successors and assigns, and such terms, covenants and
conditions shall be covenants running with the land and with each subsequent
transfer or assignment of the Assets. Notwithstanding anything contained herein
to the contrary, the representations, warranties, and indemnities given herein
by Seller may not be assigned by Buyer to a Third Party. Seller and Buyer will
reasonably cooperate with each other in connection with an assignment permitted
hereunder to effectuate the intention of this Agreement.
11.4 Entire Agreement; Amendments
This Agreement, including the Exhibits and Schedules attached to this
Agreement contain the entire understanding of the Parties with respect to the
subject matter of this Agreement. There are no restrictions, agreements,
promises, warranties, covenants, or undertakings other than those expressly set
forth in this Agreement. This Agreement supersedes all prior agreements and
understandings between the Parties with respect to the subject matter of this
Agreement except for the Confidentiality Agreement between Seller and BNC dated
September 19, 2003, which shall continue in full force and effect in accordance
with its terms. This Agreement may be amended only by a written instrument duly
30
executed by the Parties. Any condition to a Party's obligations hereunder may be
waived only in writing by that Party. No waiver by either Party of any one or
more defaults by the other in performance of any of the provisions of this
Agreement shall operate or be construed as a waiver of any future default or
defaults, whether of a like or different character.
11.5 Severability
Except as provided in the following sentence, the invalidity of any one or
more covenants or provisions of this Agreement shall not affect the validity of
any other provisions hereof or this Agreement as a whole, and in case of any
such invalidity, this Agreement shall be construed to the maximum extent
possible as if such invalid provision had not been included herein. In no event
shall partial or incomplete invalidity, illegality or unenforceability affect
the validity of this Agreement. Upon the complete invalidity or termination of
this Agreement pursuant to this Section after the Closing under such terminated
or invalid Agreement, the Parties will reasonably cooperate to return the
Parties to the same economic situation they were in prior to such Closing to the
maximum extent reasonably possible.
11.6 Counterparts
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, provided that identical
counterparts of same are executed by Seller and Buyer.
11.7 Governing Law
THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES ARISING OUT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED, AND PERFORMED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION
OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER
THAN THE STATE OF TEXAS VENUE FOR ANY ACTION RELATING TO THIS AGREEMENT SHALL BE
XXXXXX COUNTY, TEXAS.
11.8 Waiver of Trade Practices Acts
(i) It is the intention of the parties that Buyer's rights and
remedies with respect to this transaction and with respect to all acts or
practices of Seller, past, present or future, in connection with this
transaction shall be governed by legal principles other than the Texas
Deceptive Trade Practices - Consumer Protection Act, Tex. Bus. & Com. Code
Xxx. ss.17.41 et seq. (the "DTPA"). AS SUCH, BUYER HEREBY WAIVES THE
APPLICABILITY OF THE DTPA TO THIS TRANSACTION AND ANY AND ALL DUTIES,
RIGHTS OR REMEDIES THAT MIGHT BE IMPOSED BY THE DTPA, WHETHER SUCH DUTIES,
RIGHTS AND REMEDIES ARE APPLIED DIRECTLY BY THE DTPA ITSELF OR INDIRECTLY
IN CONNECTION WITH OTHER STATUTES.
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(ii) TO THE MAXIMUM EXTENT PERMITTED BY LAW, BUYER HEREBY WAIVES ALL
PROVISIONS OF CONSUMER PROTECTION ACTS, DECEPTIVE TRADE PRACTICE ACTS AND
OTHER ACTS SIMILAR TO THE DTPA IN ALL JURISDICTIONS IN WHICH ANY OF THE
ASSETS ARE LOCATED (SUCH ACTS, TOGETHER WITH THE DPTA, ARE HEREINAFTER
COLLECTIVELY REFERRED TO AS THE "TRADE PRACTICES ACTS")
(iii) BUYER EXPRESSLY RECOGNIZES THAT THE PRICE FOR WHICH SELLER HAS
AGREED TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT HAS BEEN PREDICATED
UPON THE INAPPLICABILITY OF THE TRADE PRACTICES ACTS AND THIS WAIVER OF THE
TRADE PRACTICES ACTS. BUYER FURTHER RECOGNIZES THAT SELLER, IN DETERMINING
TO PROCEED WITH THE ENTERING INTO OF THIS AGREEMENT, HAS EXPRESSLY RELIED
ON THIS WAIVER AND THE INAPPLICABILITY OF THE TRADE PRACTICES ACTS.
11.9 Notice and Addresses
Any notice, request, instruction, waiver or other communication to be given
hereunder by any Party shall be in writing and shall be considered duly
delivered if personally delivered, mailed by certified mail with the postage
prepaid or sent by facsimile to the addresses of the Parties as follows:
Seller: ONEOK Propane Distribution Company
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: D. Xxxxx Xxxxxx
ONEOK Propane Distribution Company
000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
Buyer: Sonterra Energy Corporation
0000 Xxxx Xxxxxxx, Xxxx. #0
Xxx Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
With copies to:
BNC Engineering, LLC
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
32
and Xxxx & Xxxxx L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxxxx X. (Liza) Xxxxxxxxx
or at such other address as either Party may designate by written notice.
11.10 Public Announcements
No press release, public announcement, confirmation or other information
regarding this Agreement or the contents hereof shall be made by Buyer or Seller
without prior consultation with the other, except as may be necessary in the
opinion of legal counsel to any Party to meet the requirements of any Applicable
Law or regulations, the determination of any court, or the requirements of any
stock exchange on which the securities of such Party or its ultimate parent
company may be listed. If the transactions contemplated herein are not
consummated, neither Buyer nor Seller shall disclose to any Third Party or
publicly announce the proposed transaction contemplated hereby, except as
otherwise permitted hereinabove and except as agreed in advance, in writing, by
the Parties or otherwise required by Applicable Law, in which case the Party so
compelled will give reasonable written notice in advance to the other Party.
11.11 No Partnership
Nothing in this Agreement shall be deemed to create a joint venture,
partnership, tax partnership, or agency relationship between the Parties.
11.12 Headings, Articles and Sections
All references to "Articles" and "Sections" herein pertain to the Articles
and Sections of this Agreement and all references to "Exhibits" are references
to the Exhibits attached to this Agreement, unless expressly stated otherwise.
All titles and headings set forth in this Agreement are solely for ease of
reference and shall not be used to construe the meaning of this Agreement.
11.13 Exhibits
All Exhibits attached hereto are incorporated herein by reference as
fully as though contained in the body hereof.
11.14 No Third-Party Beneficiaries
Except as otherwise provided in this Agreement, nothing contained in this
Agreement shall entitle anyone other than Seller or Buyer or their authorized
successors and assigns to any claim, cause of action, remedy or right of any
kind whatsoever.
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11.15 Principles of Construction and Interpretation
In construing this Agreement, the following principles shall be followed:
(i) no consideration shall be given to the fact or presumption that
one Party had a greater or lesser hand in drafting this
Agreement;
(ii) examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;
(iii)the word "includes" and its syntactical variants mean "includes,
but is not limited to" and corresponding syntactical variant
expressions; and
(iv) the plural shall be deemed to include the singular and vice
versa, as applicable.
11.16 Not to be Construed Against Drafter
THE PARTIES ACKNOWLEDGE THAT THEY EACH HAVE HAD AN ADEQUATE OPPORTUNITY TO
REVIEW EACH AND EVERY PROVISION CONTAINED IN THIS AGREEMENT AND TO SUBMIT THE
SAME TO LEGAL COUNSEL FOR REVIEW AND COMMENT, INCLUDING EXPRESSLY BUT WITHOUT
LIMITATION THE WAIVERS AND INDEMNITIES CONTAINED IN THIS AGREEMENT. BASED ON
SAID REVIEW AND CONSULTATION, THE PARTIES AGREE WITH EACH AND EVERY TERM
CONTAINED IN THIS AGREEMENT AND THAT EACH AND EVERY TERM IS CONSPICUOUS. BASED
ON THE FOREGOING, THE PARTIES AGREE THAT THE RULE OF CONSTRUCTION THAT A
CONTRACT BE CONSTRUED AGAINST THE DRAFTER, IF ANY, SHALL NOT BE APPLIED IN THE
INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Parties have set their hands by their duly
authorized officials as of the date(s) set forth below.
BUYER:
Sonterra Energy Corporation, a Texas
corporation
By: ____________________________
Xxxxxxx X. Xxxx, President
Date: October , 2004
SELLER:
ONEOK Propane Distribution Company,
a division of ONEOK Propane Company,
a Delaware corporation
By: ____________________________
D. Xxxxx Xxxxxx,
Senior Vice President -
Financial Services
Date: October , 2004
34
Exhibit "A"
Description of Assets
The propane distribution systems, including the gas mains, yard lines, meters
and storage tanks, serving the following subdivisions in the Austin, Texas area:
Austin's Colony Phase II
Costa Bella
Jacarandas
Lake Pointe
La Ventana
Lakewinds Estates
Northshore on Lake Xxxxxx Phase I
Riverbend
Xxx Xxx Rim
Senna Hills
Sterling Acres
The Point The
Preserve at Xxxxxx Creek
NOTE: For informational purposes only, without any representation as to
accuracy, the propane distribution systems include approximately 25 miles of gas
mains pipe, 75,000 feet of yard lines, 850 meters and storage tanks with a
combined capacity of 156,500 gallons.
Vehicles
--------
Year Make and Model VIN #
---- -------------- -----
1991 Ford Econoline Van 0XXXX00X0XXX00000
1987 Ford 4700 Pickup 0XXXX00XXXXX00000
1992 GMC 2500 Combo 0XXXX00X0XX000000
A-1
Exhibit "B"
Contracts
---------
Lease Agreement dated October 2, 1998, between RTNT, Inc. (predecessor in
interest to Xxxxxxx Bend Utility Company, Inc.), as Landlord, and SuPro
Energy Company (predecessor in interest to Seller), as Tenant - Austin's
Colony Phase II Subdivision
Propane Service Agreement, dated September 10, 1998, between Southern Union
Company (predecessor in interest to Seller) and HBH Development - Austin's
Colony Phase II Subdivision
Lease Agreement, dated September 30, 2004, between Seller and Falcon of Lake
Xxxxxx, Inc.- Costa Bella Subdivision
Propane System Agreement, dated March 23, 1999, between Southern Union Company
(predecessor in interest to Seller) and Falcon of Lake Xxxxxx, Inc. - Costa
Bella Subdivision
Lease Agreement, dated as of October 1, 2004, between Seller and Jacarandas at
the Creek Owners' Association, Inc. - Jacarandas Subdivision
Master Installation Agreement, dated December 12, 2000, between Southern Union
Company (predecessor in interest to Seller) and Jacarandas at the Creek -
Xxxxx Milan Property - Jacarandas Subdivision
Master Installation Agreement, dated December 31, 2001, between Southern Union
Company (predecessor in interest to Seller) and XXXX, X.X. - Lake Pointe
Subdivision
Propane System Installation Agreement, dated July 2, 1999, between Southern
Union Company (predecessor in interest to Seller) and La Ventana Driftwood,
L.P. - La Ventana Subdivision
Agreement for Installation of Subdivision Propane System, dated September 27,
1999, between Southern Union Company (predecessor in interest to Seller)
and Toll Bros., Inc. - Lakewinds Estates Sections 1, 2 and 3 Subdivision
Agreement for Installation of Subdivision Propane System, dated July 9, 1999,
between Southern Union Company (predecessor in interest to Seller) and
Silvercreek Partners I, Ltd. - Northshore on Lake Xxxxxx Phase I
Subdivision
Tank Site Lease Agreement, dated December 10, 2003, between Mini-Me Management,
Ltd., as Landlord, and Seller, as Tenant - Riverbend Subdivision
Agreement for Installation of Subdivision Propane System, dated August 19, 1999,
between Southern Union Company (predecessor in interest to Seller) and Lake
Austin Land and Cattle, Ltd. - Riverbend Subdivision
B-1
Agreement for Installation of Subdivision Propane System, dated November 17,
1998, between Southern Union Company (predecessor in interest to Seller)
and Xxxxxx Ridge LTD - Xxx Xxx Rim Subdivision
Propane Service Agreement, dated January 30, 1997, between Southern Union
Company (predecessor in interest to Seller) and Senna Hills Limited - Senna
Hills Subdivision
Agreement for Installation of Subdivision Propane System, dated August 19, 1999,
between Southern Union Company (predecessor in interest to Seller) and X.X.
XxXxxx, Xx. and Xxxxx Xxxxxxxxxx - Xxxxxxxx Acres Subdivision
Agreement for Installation of Subdivision Propane System, dated September 27,
1999, between Southern Union Company (predecessor in interest to Seller)
and The Volente Group of Texas LTD - The Point Subdivision
Agreement for Installation of Subdivision Propane System, dated August 4, 1999,
between Southern Union Company (predecessor in interest to Seller) and The
Preserve at Cedar Creek Canyon, Inc. - The Preserve at Xxxxxx Creek
Subdivision
Master Agreement for Services, dated January 1, 2003, between SUPro Energy dba
SUCOPropane (predecessor in interest to Seller) and BNC
Self-Service Storage Rental Agreement, dated on or about March 1, 2004, between
Seller and Xxxxx Xxx, dba Xxxxxxx'x Botels
Note:For purposes of full disclosure only, there exists that certain Agreement
for Installation of Subdivision Propane System, dated February 21, 2000,
between Southern Union Company (predecessor in interest to Seller) and
Lakeway 74, Ltd. - Arbolago Subdivision, and that certain Agreement for
Installation of Subdivision Propane System, dated July 9, 2001 between
Southern Union Company (predecessor in interest to Seller) and Silvercreek
Partners I, Ltd. - Northshore on Lake Xxxxxx Phase II Subdivision; however,
these two agreements are not executed, are not in full force and effect and
do not constitute Contracts as defined under the Agreement.
B-2
Exhibit "C"
Real Property
-------------
Leases
------
Lease Agreement, dated October 2, 1998, between RTNT, Inc. (predecessor in
interest to Xxxxxxx Bend Utility Company, Inc.), as Landlord, and SuPro
Energy Company (predecessor in interest to Seller), as Tenant - Austin's
Colony Phase II Subdivision
Leasehold interest under that certain Propane Service Agreement, dated September
10, 1998, between Southern Union Company (predecessor in interest to
Seller) and HBH Development - Austin's Colony Phase II Subdivision
Lease Agreement, dated September 30, 2004, between Seller and Falcon of Lake
Xxxxxx, Inc.- Costa Bella Subdivision
Leasehold interest under that certain Propane System Agreement, dated March 23,
1999, between Southern Union Company (predecessor in interest to Seller)
and Falcon of Lake Xxxxxx, Inc. - Costa Bella Subdivision
Lease Agreement, dated as of October 1, 2004, between Seller and Jacarandas at
the Creek Owners' Association, Inc. - Jacarandas Subdivision
Leasehold interest under that certain Master Installation Agreement, dated
December 12, 2000, between Southern Union Company (predecessor in interest
to Seller) and Jacarandas at the Creek - Xxxxx Milan Property - Jacarandas
Subdivision
Leasehold interest under that certain Master Installation Agreement, dated
December 31, 2001, between Southern Union Company (predecessor in interest
to Seller) and XXXX, X.X. - Lake Pointe Subdivision
Leasehold interest under that certain Propane System Installation Agreement,
dated July 2, 1999, between Southern Union Company (predecessor in interest
to Seller) and La Ventana Driftwood, L.P. - La Ventana Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated September 27, 1999, between Southern Union Company
(predecessor in interest to Seller) and Toll Bros., Inc. - Lakewinds
Estates Sections 1, 2 and 3 Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated July 9, 1999, between Southern Union Company
(predecessor in interest to Seller) and Silvercreek Partners I, Ltd. -
Northshore on Lake Xxxxxx Phase I Subdivision
Tank Site Lease Agreement, dated December 10, 2003, between Mini-Me Management,
Ltd., as Landlord, and Seller, as Tenant - Riverbend Subdivision
C-1
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated August 19, 1999, between Southern Union Company
(predecessor in interest to Seller) and Lake Austin Land and Cattle Ltd. -
Riverbend Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated November 17, 1998, between Southern Union Company
(predecessor in interest to Seller) and Xxxxxx Ridge LTD - Xxx Xxx Rim
Subdivision
Leasehold interest under that certain Propane Service Agreement, dated January
30, 1997, between Southern Union Company (predecessor in interest to
Seller) and Senna Hills Limited - Senna Hills Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated August 19, 1999, between Southern Union Company
(predecessor in interest to Seller) and X.X. XxXxxx, Xx. and Xxxxx
Xxxxxxxxxx - Xxxxxxxx Acres Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated September 27, 1999, between Southern Union Company
(predecessor in interest to Seller) and The Volente Group of Texas LTD -
The Point Subdivision
Leasehold interest under that certain Agreement for Installation of Subdivision
Propane System, dated August 4, 1999, between Southern Union Company
(predecessor in interest to Seller) and The Preserve at Cedar Creek Canyon,
Inc. - The Preserve at Xxxxxx Creek Subdivision
C-2
Easements
---------
Grantor Grantee Date Recording Data Subdivision
------- ------- ---- -------------- -----------
1. Falcon of Lake SuPro Energy Company January 4, 2000 Doc #2000010794 Costa Xxxxx
Xxxxxx, Inc. (predecessor in
interest to Seller)
2. Toll Bros., Inc. SuPro Energy Company January 25, 2000 -- Lakewinds
(predecessor in Estates
interest to Seller)
C-3
Exhibit "D"
Disclosure Schedule
-------------------
4.1 Consents
4.2 Violations
4.3 Governmental Notices of Violation
4.4 Asserted Claims
4.5 Title to Assets
4.6 Taxes
4.7 No Conflicting Orders
4.8 Contracts
4.9 Condemnation
4.10Liabilities
Capitalized terms used but not defined in this Disclosure Schedule have the
meanings assigned to such terms in the Agreement. This Disclosure Schedule is
qualified in its entirety by reference to specific provisions of the Agreement
and are not intended to constitute, and shall not be construed as constituting,
representations or warranties of Seller except as and to the extent provided in
the Agreement.
The inclusion of any matter in this Disclosure Schedule in connection with
any representation, warranty, covenant or agreement that may be qualified as to
materiality, is not an admission by Seller that such matter is material or would
result in a Material Adverse Effect. No disclosure in this Disclosure Schedule
relating to any possible breach or violation of any agreement, law or regulation
shall be construed as an admission or indication that any such breach or
violation exists or has actually occurred.
Section headings and numbers used in this Disclosure Schedule refer to the
corresponding sections of the Agreement, and these headings and numbers are for
convenience only and are not to be used to interpret any provision of the
Agreement or this Disclosure Schedule. This Disclosure Schedule does not purport
to disclose any agreements, contracts or instruments that may be entered into
pursuant to the terms of the Agreement.
Any information disclosed on any schedule hereto shall be deemed disclosed
for all schedules hereto to the extent that it is reasonably apparent on the
face of such schedule that such matter is applicable to such other schedule.
Schedule 4.1
Consents
--------
1. Consent to Assign that certain Lease Agreement, dated October 2, 1998,
between RTNT, Inc. (predecessor in interest to Xxxxxxx Bend Utility
Company, Inc.), as Landlord, and SuPro Energy Company (predecessor in
interest to Seller), as Tenant, Austin's Colony Phase II Subdivision
2. Consent to Assign that certain Agreement for Installation of Subdivision
Propane System, dated September 27, 1999, between Southern Union Company
(predecessor in interest to Seller) and Toll Bros., Inc. - Lakewinds
Estates Sections 1, 2 and 3 Subdivision
3. Consent to Assign that certain Self-Service Storage Rental Agreement, dated
on or about March 1, 2004 between Seller and Xxxxx Xxx, dba Baronie's
Botels
Schedule 4.2
Violations
----------
All information disclosed on Schedules 4.1, 4.4 and 4.5 of this Disclosure
Schedule is incorporated by reference into this Schedule 4.2.
Schedule 4.3
Governmental Notices of Violation
---------------------------------
None.
Schedule 4.4
Asserted Claims
---------------
1. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated February 21, 2000, between Southern
Union Company (predecessor in interest to Seller) and Lakeway 74, Ltd. -
Arbolago Subdivision
2. HBH Development Company, LLC v. Southern Union Company and ONEOK Propane
Company; Cause GN402427, in the District Court of Xxxxxx County, Texas,
126th Judicial District, involving, among other things, Propane Service
Agreement, dated September 10, 1998, between Southern Union Company
(predecessor in interest to Seller) and HBH Development - Austin's Colony
Phase II Subdivision
3. Falcon of Lake Xxxxxx, Inc. v. Southern Union Company, Cause No. GN-304809,
in the District Court of Xxxxxx County, Texas, 98th Judicial District,
involving, among other things, Propane System Agreement, dated March 23,
1999, between Southern Union Company (predecessor in interest to Seller)
and Falcon of Lake Xxxxxx, Inc. - Costa Bella Subdivision
4. Pending dispute involving, among other things, Master Installation
Agreement dated December 12, 2000, between Southern Union Company
(predecessor in interest to Seller) and Jacarandas at the Creek - Xxxxx
Milan Property - Jacarandas Subdivision,
5. XXXX, X.X. x. ONEOK, Inc., Case No. A04CA602 LY, in the United States
District Court for the Western District of Texas, Austin Division,
involving, among other things, Master Installation Agreement, dated
December 31, 2001, between Southern Union Company (predecessor in interest
to Seller) and XXXX, X.X. - Lake Pointe Subdivision
6. Pending dispute involving, among other things, Propane System Installation
Agreement, dated July 2, 1999, between Southern Union Company (predecessor
in interest to Seller) and La Ventana Driftwood, L.P. - La Ventana
Subdivision
7. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated September 27, 1999, between Southern
Union Company (predecessor in interest to Seller) and Toll Bros., Inc. -
Lakewinds Estates Sections 1, 2 and 3 Subdivision
8. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated July 9, 1999, between Southern Union
Company (predecessor in interest to Seller) and Silvercreek Partners I,
Ltd. - Northshore on Lake Xxxxxx Phase I Subdivision
9. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated July 9, 2001, between Southern Union
Company (predecessor in interest to Seller) and Silvercreek Partners I,
Ltd. - Northshore on Lake Xxxxxx Phase II Subdivision
10. Pending dispute involving, among other things, Tank Site Lease Agreement,
dated December 10, 2003, between Mini-Me Management, Ltd., as Landlord, and
Seller, as Tenant - Riverbend Subdivision
11. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated August 19, 1999, between Southern
Union Company (predecessor in interest to Seller) and Lake Austin Land and
Cattle, Ltd. - Riverbend Subdivision
12. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated November 17, 1998, between Southern
Union Company (predecessor in interest to Seller) and Xxxxxx Ridge LTD -
Xxx Xxx Rim Subdivision
13. Senna Hills, Ltd. v. Southern Union Company and ONEOK Propane Company;
Cause GN402428, In the District Court of Xxxxxx County, Texas, 200th
Judicial District, involving, among other things, Propane Service
Agreement, dated January 30, 1997, between Southern Union Company
(predecessor in interest to Seller) and Senna Hills Limited - Senna Hills
Subdivision
14. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated August 19, 1999, between Southern
Union Company (predecessor in interest to Seller) and X.X. XxXxxx, Xx. and
Xxxxx Xxxxxxxxxx - Xxxxxxxx Acres Subdivision
15. Pending dispute involving, among other things, Agreement for Installation
of Subdivision Propane System, dated September 27, 1999, between Southern
Union Company (predecessor in interest to Seller) and The Volente Group of
Texas LTD - The Point Subdivision
16. The Preserve at Cedar Creek Canyon, Inc. v. Southern Union Company and
ONEOK, Inc., d/b/a Texas Gas Service Company, Cause No. 278305, In the
County Court at Law No. 2, Xxxxxx County, Texas, involving, among other
things, Agreement for Installation of Subdivision Propane System, dated
August 4, 1999, between Southern Union Company (predecessor in interest to
Seller) and The Preserve at Cedar Creek Canyon, Inc. - The Preserve at
Xxxxxx Creek Subdivision
17. All information disclosed in Schedule 4.1 of this Disclosure Schedule is
incorporated by reference into this Schedule 4.4.
Schedule 4.5
Title to Assets
---------------
1. Leasehold interest under that certain Propane Service Agreement, dated
September 10, 1998, between Southern Union Company (predecessor in interest
to Seller) and HBH Development - Austin's Colony Phase II Subdivision,
encumbered by lawsuit HBH Development Company, LLC v. Southern Union
Company and ONEOK Propane Company; Cause GN402427, In the District Court of
Xxxxxx County, Texas, 126th Judicial District
2. Leasehold interest under that certain Propane System Agreement, dated March
23, 1999, between Southern Union Company (predecessor in interest to
Seller) and Falcon of Lake Xxxxxx, Inc. - Costa Bella Subdivision,
encumbered by lawsuit Falcon of Lake Xxxxxx, Inc. v. Southern Union
Company, Cause No. GN-304809, in the District Court of Xxxxxx County,
Texas, 98th Judicial District
3. Leasehold interest under that certain Master Installation Agreement, dated
December 12, 2000, between Southern Union Company (predecessor in interest
to Seller) and Jacarandas at the Creek - Xxxxx Milan Property - Jacarandas
Subdivision, encumbered by pending dispute
4. Leasehold interest under that certain Master Installation Agreement, dated
December 31, 2001 between Southern Union Company (predessor in interest to
Seller) and XXXX, X.X. - Lake Pointe Subdivision, encumbered by lawsuit
XXXX, X.X. x. ONEOK, Inc., Case No. A04CA602 LY, in the United States
District Court for the Western District of Texas, Austin Division
5. Leasehold interest under that certain Propane System Installation
Agreement, dated July 2, 1999, between Southern Union Company (predecessor
in interest to Seller) and La Ventana Driftwood, L.P. - La Ventana
Subdivision, encumbered by pending dispute
6. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated September 27, 1999, between Southern
Union Company (predecessor in interest to Seller) and Toll Bros., Inc. -
Lakewinds Estates Sections 1, 2 and 3 Subdivision, encumbered by pending
dispute
7. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated July 9, 1999, between Southern Union
Company (predecessor in interest to Seller) and Silvercreek Partners I,
Ltd. - Northshore on Lake Xxxxxx Phase I Subdivision, encumbered by pending
dispute
8. Leasehold interest under that certain Tank Site Lease Agreement, dated
December 10, 2003, between Mini-Me Management, Ltd., as Landlord, and
Seller, as Tenant - Riverbend Subdivision, encumbered by pending dispute
9. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated August 19, 1999, between Southern Union
Company (predecessor in interest to Seller) and Lake Austin Land and Cattle
Ltd. - Riverbend Subdivision, encumbered by pending dispute
10. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated November 13, 1998, between Southern Union
Company (predecessor in interest to Seller) and Xxxxxx Ridge LTD - Xxx Xxx
Rim Subdivision, encumbered by pending dispute
11. Leasehold interest under that certain Propane Service Agreement, dated
January 30, 1997, between Southern Union Company (predecessor in interest
to Seller) and Senna Hills Limited - Senna Hills Subdivision, encumbered by
lawsuit Senna Hills, Ltd. v. Southern Union Company and ONEOK Propane
Company; Cause GN402428, In the District Court of Xxxxxx County, Texas,
200th Judicial District
12. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated August 19, 1999, between Southern Union
Company (predecessor in interest to Seller) and X.X. XxXxxx, Xx. and Xxxxx
Xxxxxxxxxx - Xxxxxxxx Acres Subdivision, encumbered by pending dispute
13. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated September 27, 1999, between Southern
Union Company (predecessor in interest to Seller) and The Volente Group of
Texas LTD - The Point Subdivision, encumbered by pending dispute
14. Leasehold interest under that certain Agreement for Installation of
Subdivision Propane System, dated August 4, 1999, between Southern
Union Company (predecessor in interest to Seller) and The Preserve at
Cedar Creek Canyon, Inc. - The Preserve at Xxxxxx Creek Subdivision,
encumbered by lawsuit The Preserve at Cedar Creek Canyon, Inc. v.
Southern Union Company and ONEOK, Inc., d/b/a Texas Gas Service
Company, Cause No. 278305, In the Xxxxxx Xxxxx xx Xxx Xx. 0, Xxxxxx
Xxxxxx, Xxxxx
15. All information disclosed in Schedules 4.1 and 4.4 of this Disclosure
Schedule is incorporated by reference into this Schedule 4.5.
Schedule 4.6
Taxes
-----
None.
Schedule 4.7
Conflicting Orders
------------------
None.
Schedule 4.8
Contracts
---------
1. Prepaid credit balance of $3,830.97 for Xxxxxx and Xxxxxxxxx Xxxxx, 000
Xxxx Xxxxx, Xxxxxx, Xxxxx 00000 - Hills of Lakeway Subdivision
2. All information disclosed in Schedules 4.1, 4.4 and 4.5 of this Disclosure
Schedule is incorporated by reference into this Schedule 4.8.
Schedule 4.9
Condemnation
------------
None.
Schedule 4.10
Liabilities
-----------
All information disclosed in Schedules 4.1, 4.4 and 4.5 of this Disclosure
Schedule is incorporated by reference into this Schedule 4.10.
Account Number Description Vendor Date in Service Capitalized Balance
------------------------------------------------------------------------------------------------------------------------------------
Mains:
054.4628.4628.1010000 La Ventana (Phases 6 & 7) XxXxxxx Equipment Co. 07/01/04 $ 44,879.49
054.4628.4628.1010000 La Ventana (Phases 6 & 7) BNC Engineering 07/01/04 $ 5,720.00
-------------
Mains Subtotal $ 50,599.49
Tank Sites:
054.4630.4630.1010000 Lakewinds BNC Engineering 07/01/04 $ 20,177.75
Design / Engineering:
054.0000.0000.1070000 Northshore extended mains design BNC Engineering 07/01/04 $ 2,910.00
054.0000.0000.1070000 Northshore extended mains design BNC Engineering` 07/28/04 $ 1,746.00
-------------
Design / Engineering Subtotal $ 4,656.00
Total Capital Expenditures (To Increase Base Purchase Price) $ 75,433.24
=============
