EXHIBIT 99.1
PURCHASE AGREEMENT
BY AND AMONG
XXXXXXXX ENERGY SERVICES, LLC,
XXXXXXXX NATURAL GAS LIQUIDS, INC. AND
XXXXXXXX XX LLC
COLLECTIVELY, AS SELLING PARTIES,
AND
WEG ACQUISITIONS, L.P.
A DELAWARE LIMITED PARTNERSHIP,
AS BUYER,
FOR THE PURCHASE AND SALE OF
(i) ALL THE MEMBERSHIP INTERESTS OF
WEG GP LLC
A DELAWARE LIMITED LIABILITY COMPANY,
(ii) ALL OF THE COMMON UNITS AND SUBORDINATED UNITS OF
XXXXXXXX ENERGY PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
OWNED BY XXXXXXXX ENERGY SERVICES, LLC AND XXXXXXXX NATURAL GAS LIQUIDS, INC.
AND
(iii) ALL THE CLASS B COMMON UNITS OF
XXXXXXXX ENERGY PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
DATED AS OF APRIL 18, 2003
TABLE OF CONTENTS
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ARTICLE I. SALE AND PURCHASE......................................................................................2
SECTION 1.1. Agreement to Sell and to Purchase...........................................................2
SECTION 1.2. Deliveries at Closing.......................................................................3
SECTION 1.3. Purchase Price..............................................................................5
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES.....................................................7
SECTION 2.1. Organization................................................................................7
SECTION 2.2. Capitalization of the New Company; Title....................................................8
SECTION 2.3. Partnership Capitalization; Title...........................................................8
SECTION 2.4. Subsidiaries; Equity Interests; Business of GP Companies...................................10
SECTION 2.5. Validity of Agreement; Authorization.......................................................10
SECTION 2.6. No Conflict or Violation...................................................................11
SECTION 2.7. Consents and Approvals.....................................................................11
SECTION 2.8. New Company Financial Statements; SEC Reports; Operating Surplus...........................12
SECTION 2.9. Absence of Certain Changes or Events.......................................................12
SECTION 2.10. Tax Matters...............................................................................13
SECTION 2.11. Absence of Undisclosed Liabilities........................................................14
SECTION 2.12. Real and Personal Property................................................................14
SECTION 2.13. Intellectual Property and Computer Hardware...............................................15
SECTION 2.14. Licenses, Permits and Governmental Approvals..............................................16
SECTION 2.15. Compliance with Law.......................................................................16
SECTION 2.16. Litigation................................................................................17
SECTION 2.17. Contracts.................................................................................17
SECTION 2.18. Brokers...................................................................................18
SECTION 2.19. Employees; Employee Plans.................................................................18
SECTION 2.20. Insurance.................................................................................19
SECTION 2.21. Environmental; Health and Safety Matters..................................................20
SECTION 2.22. Regulatory Matters........................................................................22
SECTION 2.23. Books and Records; Other Information......................................................22
SECTION 2.24. WPL Contribution Agreement................................................................22
SECTION 2.25. Customers and Suppliers...................................................................22
SECTION 2.26. Adequacy of Assets........................................................................22
SECTION 2.27. Excluded Assets...........................................................................22
SECTION 2.28. Solvency..................................................................................23
SECTION 2.29. Auction Process...........................................................................23
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................23
SECTION 3.1. Limited Partnership Organization...........................................................23
SECTION 3.2. Validity of Agreement; Authorization.......................................................23
SECTION 3.3. No Conflict or Violation...................................................................24
SECTION 3.4. Consents and Approvals.....................................................................24
SECTION 3.5. Financial Ability..........................................................................24
SECTION 3.6. Buyer Status...............................................................................24
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SECTION 3.7. Brokers....................................................................................25
SECTION 3.8. Independent Investigation..................................................................25
SECTION 3.9. Investment Intent; Investment Experience; Restricted Securities............................25
ARTICLE IV. COVENANTS............................................................................................25
SECTION 4.1. Certain Changes and Conduct of Business....................................................25
SECTION 4.2. Access to Properties and Records...........................................................27
SECTION 4.3. Employee Matters...........................................................................29
SECTION 4.4. Consents and Approvals.....................................................................34
SECTION 4.5. Further Assurances.........................................................................35
SECTION 4.6. Commercially Reasonable Efforts............................................................36
SECTION 4.7. Notice of Breach...........................................................................36
SECTION 4.8. Confidential Information...................................................................36
SECTION 4.9. Tax Covenants..............................................................................37
SECTION 4.10. Insurance, Bonds and Collateral...........................................................38
SECTION 4.11. Information Technology....................................................................39
SECTION 4.12. Software License..........................................................................41
SECTION 4.13. Non-software Copyright License............................................................42
SECTION 4.14. Transitional Trademark License; Legal Names...............................................42
SECTION 4.15. Maximum Amount of Certain of Buyer's Costs and Expenses...................................43
SECTION 4.16. Office Lease; Office Furniture and Equipment; Office Supplies.............................44
SECTION 4.17. No Solicitation; Termination of Discussions...............................................44
SECTION 4.18. Confirmation of Termination of Old Omnibus Agreement......................................45
SECTION 4.19. New Company Intercompany Accounts.........................................................45
SECTION 4.20. Certain Costs and Expenses of Board of Directors of New Company...........................46
SECTION 4.21. New Company Audited Financial Statements..................................................46
ARTICLE V. CONDITIONS TO OBLIGATIONS OF BUYER....................................................................46
SECTION 5.1. Receipt of Documents.......................................................................46
SECTION 5.2. Representations and Warranties of the Selling Parties......................................46
SECTION 5.3. Performance of Selling Parties' Obligations................................................47
SECTION 5.4. Consents and Approvals.....................................................................47
SECTION 5.5. No Violation of Orders.....................................................................47
SECTION 5.6. Director Resignations......................................................................48
SECTION 5.7. Employment.................................................................................48
SECTION 5.8. Legal Opinion..............................................................................48
SECTION 5.9. Debt Financing.............................................................................48
SECTION 5.10. Absence of Specified Events...............................................................48
SECTION 5.11. Material Adverse Effect...................................................................48
SECTION 5.12. Financial Advisor's Opinion...............................................................48
SECTION 5.13. Waivers of Existing Debt Agreements.......................................................49
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF SELLING PARTIES.........................................................49
SECTION 6.1. Receipt of Documents.......................................................................49
SECTION 6.2. Representations and Warranties of Buyer....................................................49
SECTION 6.3. Performance of Buyer's Obligations.........................................................49
SECTION 6.4. Consents and Approvals.....................................................................49
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SECTION 6.5. No Violation of Orders.....................................................................50
SECTION 6.6. Legal Opinion..............................................................................50
SECTION 6.7. Assumption of Consent Decree...............................................................50
ARTICLE VII. TERMINATION AND ABANDONMENT.........................................................................50
SECTION 7.1. Methods of Termination; Upset Date.........................................................50
SECTION 7.2. Effect of Termination......................................................................51
ARTICLE VIII. SURVIVAL; INDEMNIFICATION..........................................................................51
SECTION 8.1. Survival...................................................................................51
SECTION 8.2. Indemnification Coverage...................................................................52
SECTION 8.3. Procedures.................................................................................56
SECTION 8.4. Waiver of Consequential, Etc. Damages......................................................57
SECTION 8.5. Compliance with Express Negligence Rule....................................................57
SECTION 8.6. Liquidated Damages.........................................................................57
SECTION 8.7. Remedy.....................................................................................58
SECTION 8.8. Tax Treatment of Indemnity Payments........................................................58
ARTICLE IX. MISCELLANEOUS PROVISIONS.............................................................................58
SECTION 9.1. Publicity..................................................................................58
SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries..........................................59
SECTION 9.3. Investment Bankers, Financial Advisors, Brokers and Finders................................59
SECTION 9.4. Fees and Expenses..........................................................................60
SECTION 9.5. Off-Set Right..............................................................................60
SECTION 9.6. Notices....................................................................................60
SECTION 9.7. Entire Agreement...........................................................................61
SECTION 9.8. Waivers and Amendments.....................................................................62
SECTION 9.9. Severability...............................................................................62
SECTION 9.10. Titles and Headings.......................................................................62
SECTION 9.11. Signatures and Counterparts...............................................................62
SECTION 9.12. Enforcement of the Agreement; Damages.....................................................63
SECTION 9.13. Governing Law.............................................................................63
SECTION 9.14. Disclosure................................................................................63
SECTION 9.15. Consent to Jurisdiction...................................................................63
SECTION 9.16. Certain Definitions.......................................................................64
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Exhibits
Exhibit 1.2(a)(i) XXX Xxxx of Sale
Exhibit 1.2(a)(ii) WNGL Xxxx of Sale
Exhibit 1.2(a)(iv)(1) New Omnibus Agreement
Exhibit 1.2(a)(iv)(2) Transition Services Agreement
Exhibit 1.2(a)(iv)(3) ATLAS Assignment, Contribution and License
Agreement
Exhibit 1.2(a)(iv)(4) Services Agreement
Exhibit 5.8 Opinion of Counsel(s) for the Selling Parties
Exhibit 6.6 Opinion of Counsel for the Buyer
Disclosure Schedules
Schedule 1.3 Purchase Price Allocation
Schedule 2.1 Qualification Jurisdictions
Schedule 2.3(d)(i) Preemptive Purchase Rights
Schedule 2.3(d)(ii) Outstanding Options
Schedule 2.4 Subsidiaries; Equity Interests; Encumbrances
Schedule 2.6 Conflict or Violation; Encumbrances
Schedule 2.7 Seller Parties' Consents and Approvals
Schedule 2.8 New Company Financial Statements
Schedule 2.9 Certain Changes or Events
Schedule 2.10(b)(i) Tax Matters
Schedule 2.10(b)(ii) Contested Taxes Exceeding $100,000
Schedule 2.11 Absence of Undisclosed Liabilities
Schedule 2.12(a) Real and Personal Property
Schedule 2.12(b) Permitted Encumbrances
Schedule 2.13(a) Intellectual Property
Schedule 2.13(b) Licensed Software
Schedule 2.14 Licenses, Permits and Governmental Approvals
Schedule 2.15 Compliance with Laws
Schedule 2.16 Litigation
Schedule 2.17 Material Contracts
Schedule 2.18 Seller Parties' Brokers
Schedule 2.19(b)(i) Employee Plans
Schedule 2.19(b)(ii) Seller Plans
Schedule 2.19(f)(i) Business Employees
Schedule 2.19(f)(ii) Change of Control Agreements
Schedule 2.19(g)(i) Represented Employees
Schedule 2.19(g)(ii) Union Organizing Activities
Schedule 2.20(a)(i) Parent Policies
Schedule 2.20(a)(ii) Partnership Policies
Schedule 2.20(b) Additional Policies
Schedule 2.21 Environmental; Health and Safety Matters
Schedule 2.25 Termination Notices
Schedule 2.26 Adequacy of Assets
Schedule 3.4 Buyer's Consents and Approvals
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Schedule 3.7 Buyer's Brokers
Schedule 4.1 Certain Changes and Conduct of Business
Schedule 4.10(a) Bonds, Letters of Credit and Cash Collateral
Schedule 4.14 Legal Names
Schedule 5.13 Forms of Waivers Under Existing Debt Agreements
Schedule 8.2(c) Environmental Matters Subject to Special
Indemnification
Schedule 8.3(b) Environmental Remediation Procedures
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PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of this 18th day of April, 2003, by and among XXXXXXXX ENERGY SERVICES,
LLC, a Delaware limited liability company ("XXX"), XXXXXXXX NATURAL GAS LIQUIDS,
INC., a Delaware corporation ("WNGL"), and Xxxxxxxx XX LLC, a Delaware limited
liability company (the "OLD COMPANY," and collectively with XXX and WNGL, the
"SELLING PARTIES") and WEG Acquisitions, L.P., a Delaware limited partnership
("BUYER").
WITNESSETH:
WHEREAS, XXX and WNGL are the sole members of both (i) WEG GP
LLC, a Delaware limited liability company (the "NEW COMPANY," and with the Old
Company, the "GP COMPANIES") and (ii) the Old Company;
WHEREAS, (i) XXX owns a 99.81% membership interest in the New
Company (the "XXX NEW LLC INTERESTS"), and WNGL owns a 0.19% membership interest
in the New Company (the "WNGL NEW LLC INTERESTS," and with the XXX New LLC
Interest, the "NEW LLC INTERESTS"); and (ii) XXX owns a 99.80% membership
interest in the Old Company and WNGL owns a 0.20% membership interest in the Old
Company;
WHEREAS, the New Company is the sole general partner of
Xxxxxxxx Energy Partners, L.P., a Delaware limited partnership (the
"PARTNERSHIP"), and the New Company owns (i) a 2.0% general partner interest in
the Partnership (the "GP INTEREST") and (ii) all of the incentive distribution
rights with respect to the Partnership (the "IDRS");
WHEREAS, other than the GP Interest and the IDRs, the
Partnership also has outstanding common units representing limited partner
interests in the Partnership (the "COMMON UNITS"), Class B common units
representing limited partner interests in the Partnership (the "CLASS B COMMON
UNITS") and subordinated units representing limited partner interests in the
Partnership (the "SUBORDINATED UNITS");
WHEREAS, XXX owns 757,193 Common Units (the "XXX COMMON
UNITS") and 4,589,193 subordinated units (the "XXX SUBORDINATED UNITS," and with
the XXX Common Units, the "XXX UNITS"), which, in the aggregate, represent a
19.3% limited partner interest in the Partnership;
WHEREAS, WNGL owns 322,501 Common Units (the "WNGL COMMON
UNITS") and 1,090,501 Subordinated Units (the "WNGL SUBORDINATED UNITS," and
with the WNGL Common Units, the "WNGL UNITS"), which, in the aggregate,
represent a 5.1% limited partner interest in the Partnership;
WHEREAS, the Old Company owns 7,830,924 Class B Common Units,
which, in the aggregate, represent a 28.2% limited partner interest in the
Partnership;
WHEREAS, the general public holds 12,600,000 Common Units,
which, in the aggregate, represent a 45.4% limited partner interest in the
Partnership;
WHEREAS, Buyer desires to purchase the New LLC Interests, the
XXX Units, the WNGL Units and the Class B Common Units (collectively, the
"SECURITIES") from the respective Selling Parties, and each Selling Party
desires to sell the Securities owned by it to the Buyer, in each case upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, as of the date hereof, The Xxxxxxxx Companies, Inc.
("PARENT") has entered into a Guaranty and Covenant Agreement ("PARENT
GUARANTY") in favor of Buyer and the other Buyer Indemnified Parties, pursuant
to which, among other things, Parent has guaranteed the payment and performance
by the Selling Parties of all of their liabilities and obligations under this
Agreement and the Transaction Documents (as defined herein);
WHEREAS, the Board of Directors of Parent has received an
opinion from Xxxxxx Brothers, Inc., dated as of the date hereof, to the effect
that the consideration (as defined therein) to be received by Parent pursuant to
this Agreement is fair, from a financial point of view, to Parent; and
NOW, THEREFORE, in consideration of the mutual terms,
conditions and other agreements set forth herein, the parties hereto hereby
agree as follows:
ARTICLE I.
SALE AND PURCHASE
SECTION 1.1. AGREEMENT TO SELL AND TO PURCHASE.
(a) On the Closing Date (as hereinafter defined) and upon the
terms and subject to the conditions set forth in this Agreement:
(i) XXX shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase and accept from XXX, the XXX New LLC
Interests and the XXX Units, in each case, free and clear of any
pledges, restrictions on transfer, proxies and voting or other
agreements, liens, claims, charges, mortgages, security interests or
other legal or equitable encumbrances, limitations or restrictions of
any nature whatsoever ("ENCUMBRANCES"), except, in the case of the XXX
New LLC Interests, as may be set forth in the New LLC Agreement (as
defined in Section 2.2) or, in the case of the XXX Units, as may be set
forth in the Partnership Agreement (as defined in Section 2.3);
(ii) WNGL shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase and accept from WNGL, the WNGL New LLC
Interests and the WNGL Units, in each case, free and clear of any
Encumbrances, except, in the case of the WNGL New LLC Interests, as may
be set forth in the New LLC Agreement or, in the case of the WNGL
Units, as may be set forth in the Partnership Agreement; and
(iii) The Old Company shall sell, assign, transfer, convey and
deliver to Buyer, and Buyer shall purchase and accept from the Old
Company, the Class B Common Units, free and clear of any Encumbrances,
except as may be set forth in the Partnership Agreement.
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(b) The closing of such sale and purchase (the "CLOSING")
shall take place at 10:00 a.m. (
New York time), on the third business day after
the satisfaction of the conditions contained in Articles V and VI (other than
those conditions that by their nature are to be fulfilled at Closing), or at
such other time and date as the parties hereto shall agree in writing (the
"CLOSING DATE"), at the offices of Xxxxxx & Xxxxxx L.L.P. in
New York,
New York
or at such other place as the parties hereto shall agree in writing.
SECTION 1.2. DELIVERIES AT CLOSING.
(a) At the Closing, the Selling Parties shall make the
following deliveries to Buyer:
(i) XXX shall deliver to Buyer:
(1) a duly executed xxxx of sale, in
substantially the form attached hereto as
Exhibit 1.2(a)(i), transferring the XXX New
LLC Interests (the "XXX XXXX OF SALE");
(2) (i) a duly executed certificate,
countersigned by the Transfer Agent (as
defined below), representing 757,193 Common
Units in the name of the Buyer (or an
Affiliate designated in writing), (ii) a
copy of a letter from XXX, addressed to and
acknowledged by the Bank of
New York, as the
transfer agent and registrar with respect to
the Common Units (the "TRANSFER AGENT"),
instructing such Transfer Agent to cancel
the certificate(s) representing the XXX
Common Units and to reissue a new
certificate representing 757,193 Common
Units in the name of the Buyer (or an
Affiliate designated in writing) and (iii) a
copy of the cancelled certificate(s)
representing the XXX Common Units;
(3) (i) a duly executed certificate,
countersigned by the transfer agent
therefor, representing 4,589,193
Subordinated Units in the name of the Buyer
(or an Affiliate designated in writing),
(ii) a copy of a letter from XXX, addressed
to and acknowledged by the New Company, as
the general partner of the Partnership and
the transfer agent and registrar with
respect to the Subordinated Units,
instructing the New Company to cancel the
certificate(s) representing the XXX
Subordinated Units and to reissue a new
certificate representing 4,589,193
Subordinated Units in the name of the Buyer
(or an Affiliate designated in writing) and
(iii) a copy of the cancelled certificate(s)
representing the XXX Subordinated Units;
(ii) WNGL shall deliver to Buyer:
(1) a duly executed xxxx of sale, in
substantially the form attached hereto as
Exhibit 1.2(a)(ii), transferring the WNGL
New LLC
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Interests (the "WNGL XXXX OF SALE," and with
the XXX Xxxx of Sale, the "BILLS OF SALE");
(2) (i) a duly executed certificate,
countersigned by the Transfer Agent,
representing 322,501 Common Units in the
name of the Buyer (or an Affiliate
designated in writing), (ii) a copy of a
letter from WNGL, addressed to and
acknowledged by the Transfer Agent,
instructing the Transfer Agent to cancel the
certificate(s) representing the WNGL Common
Units and to reissue a new certificate
representing 322,501 Common Units in the
name of the Buyer (or an Affiliate
designated in writing) and (iii) a copy of
the cancelled certificate(s) representing
the WNGL Common Units;
(3) (i) a duly executed certificate,
countersigned by the transfer agent
therefor, representing 1,090,501
Subordinated Units in the name of the Buyer
(or an Affiliate designated in writing),
(ii) a copy of a letter from WNGL, addressed
to and acknowledged by the New Company, as
the general partner of the Partnership and
the transfer agent and registrar with
respect to the Subordinated Units,
instructing the New Company to cancel the
certificate(s) representing the WNGL
Subordinated Units and to reissue a new
certificate representing 1,090,501
Subordinated Units in the name of the Buyer
(or an Affiliate designated in writing) and
(iii) a copy of the cancelled certificate(s)
representing the WNGL Subordinated Units;
(iii) the Old Company shall deliver to Buyer: (1) a duly
executed certificate, countersigned by the transfer agent therefor,
representing 7,830,924 Class B Common Units in the name of the Buyer
(or an Affiliate designated in writing), (2) a copy of a letter from
the Old Company, addressed to and acknowledged by the New Company, as
the general partner of the Partnership and the transfer agent and
registrar with respect to the Class B Common Units, instructing the New
Company to cancel the certificate(s) representing 7,830,924 Class B
Common Units in the name of the Old Company and to reissue a new
certificate representing 7,830,924 Class B Common Units in the name of
the Buyer (or an Affiliate designated in writing) and (3) a copy of the
cancelled certificate(s) in the name of the Old Company;
(iv) XXX and WNGL shall together deliver to Buyer:
(1) a duly executed copy of the New Omnibus
Agreement, in substantially the form
attached hereto as Exhibit 1.2(a)(iv)(1);
(2) a duly executed copy of the Transition
Services Agreement, in substantially the
form attached hereto as Exhibit
1.2(a)(iv)(2);
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(3) a duly executed copy of the ATLAS
Assignment, Contribution and License
Agreement, in substantially the form
attached hereto as Exhibit 1.2(a)(iv)(3);
and
(4) a duly executed copy of a Services Agreement
between Buyer and the Selling Parties, in
form and substance to be mutually agreed on
by the parties, reflecting the terms on the
term sheet attached as Exhibit
1.2(a)(iv)(4).
(b) At the Closing, Buyer shall make the following deliveries
to the Selling Parties (or the New Company as specified in clause (ii) below):
(i) payment of the First Payment of the Purchase Price, as
provided in Section 1.3 below;
(ii) one or more transfer applications in respect of the
Common Units, Class B Common Units and Subordinated Units to be
acquired by it, in the form specified in the Partnership Agreement,
seeking admission to the Partnership as a substitute limited partner
(the "UNIT TRANSFER APPLICATION(s)");
(iii) a duly executed copy of the New Omnibus Agreement, in
substantially the form attached hereto as Exhibit 1.2(a)(iv)(1);
(iv) a duly executed copy of the Transition Services
Agreement, in substantially the form attached hereto as Exhibit
1.2(a)(iv)(2);
(v) a duly executed copy of the ATLAS Assignment, Contribution
and License Agreement, in substantially the form attached hereto as
Exhibit 1.2(a)(iv)(3); and
(vi) a duly executed copy of a Services Agreement between
Buyer and the Selling Parties, in form and substance to be mutually
agreed on by the parties, reflecting the terms on the term sheet
attached as Exhibit 1.2(a)(iv)(4).
SECTION 1.3. PURCHASE PRICE
(a) The aggregate purchase price for the Securities (the
"PURCHASE PRICE"), subject to adjustment, if applicable, only pursuant to
Section 1.3(f) and Section 8.8, shall be paid to the Selling Parties in up to
four payments, of which:
(i) the first payment of the Purchase Price shall be
$509,868,000.00 (the "FIRST PAYMENT") and shall be paid as provided in
Section 1.3(b);
(ii) the Second Payment (defined below) shall be
calculated and paid as specified in Sections 1.3(b) and (c) below;
(iii) the Third Payment (defined below) shall be
calculated and paid as specified in Sections 1.3(b) and (d) below; and
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(iv) the Fourth Payment (defined below) shall be paid as
specified in Sections 1.3(b) and (e) below.
(b) Each of the First Payment, the Second Payment and the
Third Payment shall be paid by wire transfer to the Selling Parties of
immediately available funds made to not more than three bank accounts in the
United States of America, as designated in writing by the Selling Parties not
less than three business days in advance of the applicable payment, (i) on the
Closing Date (in the case of the First Payment), (ii) on the date specified in
Section 1.3(c) (in the case of the Second Payment) and (iii) from time to time
as provided in Section 1.3(d) hereof (in the case of the Third Payment). The
Buyer shall pay the Fourth Payment from time to time in accordance with Section
8.2(c) hereof. The Purchase Price shall be allocated between the Selling Parties
and among the Securities in accordance with Schedule 1.3, which schedule shall
be completed prior to Closing.
(c) If the Closing occurs at any time on or after May 1, 2003
(or if the Closing shall occur during the quarterly period ending September 30,
2003, August 1, 2003), the Buyer will pay to the Selling Parties an amount equal
to the product of the Per Day Rate (as defined below) times the number of
calendar days in the period that commences on May 1, 2003 (or if the Closing
shall occur during the quarterly period ending September 30, 2003, August 1,
2003) and ends on the Closing Date; provided, however, in no event shall the
amount payable pursuant to this Section 1.3(c) exceed the product of the Per Day
Rate times fifteen (15) (the amount, if any, calculated pursuant to this Section
1.3(c), the "SECOND PAYMENT"). As used herein, the term "PER DAY RATE" means a
fraction, of which (i) the numerator is equal to the product of (A) the
quarterly cash distribution per Common Unit for the quarterly period ending June
30, 2003 (or, in the event that the Closing occurs subsequent to the record date
for the cash distribution for the quarterly period ending June 30, 2003 and
prior to the record date for the cash distribution for the quarterly period
ending September 30, 2003, the quarterly cash distribution per Common Unit for
the quarterly period ending September 30, 2003) times (B) 14,590,312, and (ii)
of which the denominator is 91. Buyer shall pay the Second Payment to the
Selling Parties within one business day following the date of receipt from the
Partnership by Buyer of the cash distribution to the holders of Common Units for
the quarterly period ending June 30, 2003 (or, in the event that the Closing
occurs subsequent to the record date for the cash distribution for the quarterly
period ending June 30, 2003 and prior to the record date for the cash
distribution for the quarterly period ending September 30, 2003, within one
business day following the date of receipt from the Partnership by Buyer of the
cash distribution to the holders of Common Units for the quarterly period ending
September 30, 2003), or as soon thereafter as Buyer is permitted to make payment
of the Second Payment under the definitive debt financing documents pursuant to
the debt financing commitment letter described in Section 3.5.
(d) From and after the Closing Date, upon any sale by Buyer or
any of its Affiliates (excluding the Partnership Group) of any Common Units
(including, without limitation, Common Units issued to Buyer or its Affiliates
upon conversion of the Class B Common Units or the Subordinated Units) or of any
Class B Common Units or upon the redemption by any of the Partnership Entities
of any of the Common Units or Class B Common Units held by Buyer or its
Affiliates (excluding the Partnership Group), Buyer shall pay to the Selling
Parties an amount for each such Common Unit or Class B Common Unit sold or
redeemed equal to 85% of the amount, if any, by which the proceeds received by
the Buyer or its
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Affiliates (net of any underwriting commissions, placement fees or other
offering expenses payable by the Buyer or its Affiliates) exceeds $37.50 per
Common Unit or Class B Common Unit (the aggregate amounts, if any, payable to
the Selling Parties pursuant to this Section 1.3(d), the "THIRD PAYMENT");
provided, however, that this Section 1.3(d) shall apply only with respect to the
first 5,000,000 units (whether Common Units or Class B Common Units or any
combination thereof) held by Buyer or its Affiliates (excluding the Partnership
Group) which are sold or redeemed; provided, further, that the maximum amount
payable to the Selling Parties pursuant to this Section 1.3(d) shall in no event
exceed $20 million. Buyer undertakes and agrees to notify the Selling Parties in
writing promptly after each such sale or redemption of Common Units or Class B
Common Units (which notice shall include the price(s) at which such Common Units
or Class B Common Units were sold or redeemed). Buyer shall pay any amounts due
to the Selling Parties pursuant to this Section 1.3(d) no later than the third
business day following the closing date of any such sale or redemption. For so
long as the Selling Parties are entitled to receive payments pursuant to this
Section 1.3(d), Buyer agrees that it shall not, and shall not permit its
Affiliates (excluding the Partnership Group) to, sell, convey, assign or
otherwise dispose of any Common Units or Class B Common Units for consideration
other than cash. Notwithstanding the foregoing, this Section 1.3(d) shall not in
any way obligate Buyer or any of its Affiliates (i) to sell any Common Units or
Class B Common Units or give rise to any optional or mandatory redemption rights
or obligations with respect to the Common Units or the Class B Common Units or
(ii) to make any payments to the Selling Parties to the extent not permitted
under any definitive debt financing documents entered into pursuant to the debt
financing commitment letter described in Section 3.5.
(e) Buyer shall assume at the Closing the obligations, and
make the applicable payments from time to time, as specified in accordance with
Section 8.2(c) hereof (the "FOURTH PAYMENT").
(f) If the Closing Price (as defined in Section 9.16) of the
Common Units as of three business days prior to Closing is less than $32.00 per
unit, then the First Payment shall be reduced by an amount equal to the
difference between $32.00 and such Closing Price multiplied by 14,590,312.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
As of the date hereof, each of the Selling Parties hereby
represents and warrants, jointly and severally, to Buyer as follows:
SECTION 2.1. ORGANIZATION.
(a) XXX is a limited liability company duly formed, validly
existing and in good standing under the laws of Delaware, and WNGL is a
corporation duly formed, validly existing and in good standing under the laws of
Delaware.
(b) Each of the GP Companies is a limited liability company,
duly formed, validly existing and in good standing under the laws of Delaware,
and the Partnership is a limited partnership duly formed, validly existing and
in good standing under the laws of Delaware. Each
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of the Partnership Entities (as defined in Section 2.4) is a corporation,
limited partnership or limited liability company, as the case may be, duly
formed, validly existing and in good standing under the laws of Delaware and has
all requisite corporate, limited partnership or limited liability company power
and authority, as the case may be, and all governmental licenses,
authorizations, permits, consents and approvals to own its respective properties
and assets and to conduct its business as now conducted, except where the
failure to have such governmental licenses, authorizations, permits, consents
and approvals would not have a Material Adverse Effect (as defined in Section
9.16). Each of the Partnership Entities is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction where the character
of the properties owned or leased by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure to be so
qualified or in good standing would not individually or in the aggregate have a
Material Adverse Effect. Schedule 2.1 sets forth for each Partnership Entity all
of the jurisdictions in which such Partnership Entity is qualified to do
business.
SECTION 2.2. CAPITALIZATION OF THE NEW COMPANY; TITLE.
XXX and WNGL are the sole members of the New Company in the
proportions set forth in the Recitals to this Agreement. The XXX New LLC
Interests are owned of record and beneficially solely by XXX, and the WNGL New
LLC Interests are owned of record and beneficially solely by WNGL. All of such
New LLC Interests have been duly authorized and validly issued in accordance
with the Limited Liability Company Agreement of the New Company, dated as of
November 15, 2002 (the "NEW LLC AGREEMENT"), are fully paid (to the extent
required by the New LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware Limited
Liability Company Act). Except for the New LLC Interests, there are no
outstanding securities of the New Company. There are no preemptive or other
rights to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any interest in the New Company pursuant to any agreement to which
any of the New Company or the Selling Parties is a party or to which any of them
may be bound. There are no outstanding options, warrants or similar rights to
purchase or acquire any equity interests in the New Company. Each of the Selling
Parties has valid and marketable title to the New LLC Interest owned by it, free
and clear of any Encumbrances (other than the Parent Credit Facility Liens (as
defined in Section 9.16), which shall be released at or prior to Closing). A
true and correct copy of the New LLC Agreement, with any and all amendments
thereto to the date hereof, has been made available by the Selling Parties to
the Buyer or its representatives.
SECTION 2.3. PARTNERSHIP CAPITALIZATION; TITLE.
(a) The New Company is the sole general partner of the
Partnership. The New Company is the sole record and beneficial owner of the GP
Interest, which represents a 2.0% general partner interest in the Partnership,
and the GP Interest has been duly authorized and validly issued in accordance
with the Partnership Agreement. Except for any Encumbrances provided in the
Partnership Agreement, the New Company owns such GP Interest, free and clear of
any Encumbrances.
(b) As of the date hereof, the Partnership has no limited
partner interests issued and outstanding other than the following:
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(i) 12,600,000 Common Units issued to the general public;
(ii) the XXX Common Units and the WNGL Common Units issued to
XXX and WNGL, respectively, and with respect to which XXX and WNGL, as
applicable, are the sole record and beneficial owners and have valid
and marketable title (subject to restrictions on transfer that may be
imposed thereon under the Securities Act and state "blue sky"
securities laws);
(iii) the XXX Subordinated Units and the WNGL Subordinated
Units issued to XXX and WNGL, respectively, and with respect to which
XXX and WNGL, as applicable, are the sole record and beneficial owners
and have valid and marketable title (subject to restrictions on
transfer that may be imposed thereon under the Securities Act and state
"blue sky" securities laws);
(iv) the Class B Common Units issued to the Old Company and
with respect to which the Old Company is the sole record and beneficial
owner and has valid and marketable title (subject to restrictions on
transfer that may be imposed thereon under the Securities Act and state
"blue sky" securities laws); and
(v) the IDRs held by the New Company and with respect to which
the New Company is the sole record and beneficial owner and has valid
and marketable title (subject to restrictions on transfer that may be
imposed thereon under the Securities Act and state "blue sky"
securities laws).
Each of such Common Units, Subordinated Units, Class B Common
Units and IDRs and the limited partner interests represented thereby have been
duly authorized and validly issued in accordance with the Second Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
September 27, 2002, as amended by Amendments Nos. 1 and 2 thereto, each dated as
of November 15, 2002 (as amended, the "PARTNERSHIP AGREEMENT"); and are fully
paid (to the extent required under the Partnership Agreement) and nonassessable
(except to the extent such nonassessability may be affected by Section 17-607 of
the Delaware Revised Uniform Limited Partnership Act (the "DELAWARE LP ACT")).
(c) Except for any Encumbrances provided in the Partnership
Agreement, (i) the New Company owns all of the IDRs, free and clear of any
Encumbrances, (ii) the Old Company owns all of the Class B Common Units, free
and clear of any Encumbrances (other than the Parent Credit Facility Liens,
which shall be released at or prior to Closing), (iii) XXX owns all of the XXX
Units, free and clear of any Encumbrances (other than the Parent Credit Facility
Liens, which shall be released at or prior to Closing), and (iv) WNGL owns all
of the WNGL Units, free and clear of any Encumbrances (other than the Parent
Credit Facility Liens, which shall be released at or prior to Closing).
(d) Except as described in the Partnership Agreement or in
Schedule 2.3(d)(i) hereto, there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of any
interest in the Partnership (provided that the foregoing shall not apply to any
such restriction on voting or transfer that any holder of Common Units (other
than the Selling Parties) may have imposed upon such Common Units). Except as
described in
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the Partnership Agreement and for "phantom" units ("PHANTOM UNITS") granted
under the Xxxxxxxx Energy Partners Long-Term Incentive Plan as described in
Schedule 2.3(d)(ii), there are no outstanding options, warrants or similar
rights to purchase or acquire from any of the Partnership Entities, Parent or
the Selling Parties any equity interests in the Partnership.
SECTION 2.4. SUBSIDIARIES; EQUITY INTERESTS; BUSINESS OF GP
COMPANIES.
(a) Except as set forth on Schedule 2.4, neither of the GP
Companies nor the Partnership has any subsidiaries, and does not own, directly
or indirectly, any shares of capital stock, voting rights or other equity
interests or investments in any other Person. Except as set forth in the
Partnership Agreement or on Schedule 2.4, neither of the GP Companies nor the
Partnership has any obligation or rights to acquire by any means, directly or
indirectly, any capital stock, voting rights, equity interests or investments in
another Person. Except for Encumbrances set forth on Schedule 2.4, the
Partnership owns, directly or indirectly, all of the issued and outstanding
partnership, membership or other equity interests of each of the subsidiaries
set forth on Schedule 2.4 free and clear of any Encumbrances. The New Company,
the Partnership and each of the subsidiaries of the Partnership set forth on
Schedule 2.4 are collectively referred to herein as the "PARTNERSHIP ENTITIES."
(b) Old Company was formed as a limited liability company
under the laws of Delaware on August 30, 2000 and, from its date of formation
until November 15, 2002, did not (i) engage in or conduct, directly or
indirectly, any business or other activities other than serving as the general
partner of the Partnership, owning the GP Interest, IDRs and Class B Common
Units and owning all of the outstanding membership interests of Xxxxxxxx Energy
Management LLC, a Delaware limited liability company ("OLD COMPANY SUBSIDIARY"),
(ii) have any employees, (iii) incur any indebtedness, liability or obligations,
absolute or contingent, other than any joint and several liability under
Delaware law for indebtedness, liabilities and obligations of the Partnership
Group that are reflected in the consolidated financial statements of the
Partnership included in the SEC Reports (other than Affiliate intercompany
obligations incurred in the ordinary course of business), or (iv) own or hold
any ownership or other interests in any real or personal property other than as
provided in clause (i) above. Old Company Subsidiary was formed as a limited
liability company under the laws of Delaware on April 10, 2002 and, from its
date of formation until November 15, 2002, did not (1) engage in or conduct,
directly or indirectly, any business or other activities, (2) have any
employees, (3) incur any indebtedness, liability or obligation, absolute or
contingent (other than Affiliate intercompany obligations incurred in the
ordinary course of business), or (4) own or hold any ownership or other
interests in any real or personal property. New Company was formed as a limited
liability company under the laws of Delaware on November 12, 2002 and, since its
date of formation, has not engaged in or conducted, directly or indirectly, any
business or other activities other than serving as the general partner of the
Partnership and owning the GP Interest and the IDRs.
SECTION 2.5. VALIDITY OF AGREEMENT; AUTHORIZATION.
Each of the Selling Parties and Parent has the power and authority to
enter into this Agreement and the Transaction Documents to which it is party and
to carry out its obligations hereunder and thereunder. The execution and
delivery of this Agreement and such Transaction Documents and the performance of
the Selling Parties' and Parent's obligations hereunder and
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thereunder have been duly authorized by the Board of Directors of XXX, the Board
of Directors of WNGL, the members of the Old Company and the Board of Directors
of Parent, as applicable, and no other proceedings on the part of any of the
Selling Parties or Parent are necessary to authorize such execution, delivery
and performance. This Agreement and the Transaction Documents to which any of
the Selling Parties or Parent is party have been (in the case of this Agreement
and the Parent Guaranty), or will be at the Closing (in the case of such other
Transaction Documents), duly executed and delivered by each of the Selling
Parties or Parent, as applicable, and constitute, or will constitute at the
Closing, as applicable, each such party's valid and binding obligation
enforceable against each such party in accordance with its terms (except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar law affecting the enforcement of
creditors' rights generally or by general equitable principles).
SECTION 2.6. NO CONFLICT OR VIOLATION.
The execution, delivery and performance of this Agreement and the
Transaction Documents by any of the Selling Parties or Parent does not and will
not: (a) violate or conflict with any provision of the Organizational Documents
(as defined in Section 9.16) of Parent, any Selling Party or any of the
Partnership Entities; (b) violate any applicable provision of law, statute,
judgment, order, writ, injunction, decree, award, rule, or regulation of any
foreign, federal, tribal, state or local government, court, arbitrator, agency
or commission or other governmental or regulatory body or authority
("GOVERNMENTAL AUTHORITY"); (c) violate, result in a breach of, constitute (with
due notice or lapse of time or both) a default or cause any obligation, penalty
or premium to arise or accrue under any material contract, lease, loan
agreement, mortgage, security agreement, trust indenture or other agreement or
instrument to which Parent or any of the Selling Parties or Partnership Entities
is a party or by which any of them is bound or to which any of their respective
properties or assets is subject; (d) result in the creation or imposition of any
Encumbrance upon any of the properties or assets of any of the Partnership
Entities; or (e) result in the cancellation, modification, revocation or
suspension of any License (as defined in Section 2.14) of any of the Partnership
Entities, except in the cases of clauses (b), (d) and (e) above, as would not
have a Material Adverse Effect and, in the case of clauses (c) and (d) above, as
set forth on Schedule 2.6.
SECTION 2.7. CONSENTS AND APPROVALS.
Except as disclosed on Schedule 2.7, no material consent, approval,
waiver or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person (on the part of Parent or any of the
Selling Parties or Partnership Entities) is required for any such party to
execute and deliver this Agreement or the Transaction Documents to which Parent
or any of the Selling Parties is party or to perform its respective obligations
hereunder or thereunder (except under (i) the Parent Credit Facility and (ii)
the Parent Credit Facility Security Documents (as defined in Section 9.16),
which consents or approvals will be obtained prior to or at Closing).
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SECTION 2.8. NEW COMPANY FINANCIAL STATEMENTS; SEC REPORTS;
OPERATING SURPLUS.
(a) Attached as Schedule 2.8 are copies of the unaudited
balance sheet, as of December 31, 2002, and the unaudited income statements and
statements of cash flows for the 12-month period, or portion thereof, ended
December 31, 2002, of the New Company and the unaudited balance sheet, income
statement and statements of cash flows for the three-month period ended March
31, 2003, of the New Company (collectively, the "NEW COMPANY FINANCIAL
STATEMENTS"). The New Company Financial Statements were prepared in accordance
with U.S. generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved and fairly present in all
material respects the financial condition of the New Company as of their
respective dates and the results of its operations for the periods covered
thereby.
(b) Since October 30, 2000, (i) the Partnership has timely
made all filings (the "SEC REPORTS") required to be made under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), and the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), (ii) all SEC Reports filed by the
Partnership, at the time filed (in the case of documents filed pursuant to the
Exchange Act) or when declared effective by the Securities and Exchange
Commission (the "SEC") (in the case of registration statements filed under the
Securities Act) complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC thereunder, (iii) no such SEC Report, at the time
described above, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein in order to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading, (iv) all financial statements contained or
incorporated by reference in such SEC Reports complied as to form when filed in
all material respects with the rules and regulations of the SEC with respect
thereto, were prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the financial condition of
the Partnership and its consolidated subsidiaries at and as of the respective
dates thereof and the consolidated results of operations and changes in cash
flows for the periods indicated (subject, in the case of unaudited financial
statements, to normal year-end audit adjustments consistent with prior periods).
(c) The Operating Surplus (as defined in the Partnership
Agreement) of the Partnership as of March 31, 2003 was not less than $150
million.
SECTION 2.9. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth on Schedule 2.9, since December 31, 2002, the
business of each of the Partnership Entities has been conducted in the ordinary
course of business consistent with past practices and none of the Partnership
Entities has taken any of the actions described in Section 4.1(a) through (n),
except in connection with entering into this Agreement. Since December 31, 2002,
there has not been any event or condition that has had, or is reasonably
expected to have, a Material Adverse Effect.
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SECTION 2.10. TAX MATTERS.
(a) For purposes of this Agreement, "TAX RETURNS" shall mean
returns, reports, exhibits, schedules, information statements and other
documentation (including any additional or supporting material) filed or
maintained, or required to be filed or maintained, in connection with the
calculation, determination, assessment or collection of any Tax and shall
include any amended returns required as a result of examination adjustments made
by the Internal Revenue Service or other Tax authority. For purposes of this
Agreement, "TAX" or "TAXES" shall mean any and all federal, state, local,
foreign and other taxes, levies, fees, imposts and duties of whatever kind
(including any interest, penalties or additions to the tax imposed in connection
therewith or with respect thereto), including, without limitation, taxes imposed
on, or measured by, income, franchise, profits or gross receipts, and also ad
valorem, value added, sales, use, service, real or personal property, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production, excise,
stamp, occupation, premium, windfall profits, transfer and gains taxes and
customs duties.
(b) Except as disclosed on Schedule 2.10(b)(i), (i) each of
the Partnership Entities has filed (or joined in the filing of) when due all Tax
Returns required by applicable law to be filed with respect to each of the
Partnership Entities other than those Tax Returns the failure of which to file
would not have a Material Adverse Effect; (ii) all such Tax Returns were true,
correct and complete in all material respects as of the time of such filing;
(iii) all Taxes relating to periods ending on or before the Closing Date owed by
the any of the Partnership Entities (whether or not shown on any Tax Return) at
any time on or prior to the Closing Date, if required to have been paid, have
been or will be timely paid (except for Taxes that are being contested in good
faith in appropriate proceedings and, to the extent the amount being contested
exceeds $100,000, that are set forth on Schedule 2.10(b)(ii)); (iv) any material
liability of any of the Partnership Entities for Taxes not yet due and payable,
or that is being contested in good faith in appropriate proceedings, has been
provided for on the financial statements of the applicable Partnership Entity or
Entities, as the case may be, in accordance with GAAP; (v) there is no action,
suit, proceeding, investigation, audit or claim now pending against, or with
respect to, any of the Partnership Entities in respect of any material Tax or
Tax assessment, nor has any claim for additional material Tax or Tax assessment
been asserted in writing or, to the Knowledge of the Selling Parties (as defined
in Section 9.16), been proposed by any Tax authority; (vi) since August 13,
2000, no written claim has been made by any Tax authority in a jurisdiction
where any of the Partnership Entities does not currently file a Tax Return that
it is or may be subject to Tax by such jurisdiction, nor to the Knowledge of the
Selling Parties has any such assertion been threatened or proposed in writing;
(vii) none of the Partnership Entities has any outstanding request for any
extension of time within which to pay its Taxes or file its Tax Returns; (viii)
there has been no waiver or extension of any applicable statute of limitations
for the assessment or collection of any Taxes of any of the Partnership
Entities; (ix) none of the Partnership Entities has entered into any agreement
or arrangement with any Tax authority that requires any of the Partnership
Entities to take any action or to refrain from taking any action; (x) none of
the Selling Parties is a "foreign person" within the meaning of Section 1445 of
the United States Internal Revenue Code of 1986, as amended (the "CODE"); (xi)
none of the Partnership Entities is a party to any agreement, whether written or
unwritten, providing for the payment of Taxes, payment for Tax losses,
entitlements to refunds or similar Tax matters; (xii) the New Company
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has made, or shall be eligible to make, an election pursuant to Section 754 of
the Code ; and (xiii) each of the Partnership Entities has withheld and paid all
material Taxes required to be withheld by such Partnership Entity in connection
with any amounts paid or owing to any employee, creditor, independent contractor
or other third party.
(c) In each tax year since the formation of the Partnership up
to and including the current tax year, at least 90% of the Partnership's gross
income has been income which is "qualifying income" within the meaning of
Section 7704(d) of the Code.
(d) Except for Xxxxxxxx XX, Inc., none of the Partnership
Entities has elected to be treated as a corporation.
(e) The only representations and warranties given in respect
of Tax matters are those contained in this Section 2.10 and none of the other
representations and warranties shall be deemed to constitute, directly or
indirectly, a representation and warranty in respect of Tax matters.
SECTION 2.11. ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as disclosed on Schedule 2.11, none of the
Partnership Entities has any indebtedness or liability, absolute or contingent,
which is not shown or provided for in the New Company Financial Statements or in
the consolidated financial statements of the Partnership included in the SEC
Reports, other than (i) liabilities incurred or accrued in the ordinary course
of business consistent with past practice, including liens for current taxes and
assessments not in default, since December 31, 2002, (ii) liabilities of the New
Company that individually or in the aggregate are not material to the New
Company and that are not required by GAAP to be included in the New Company
Financial Statements or (iii) liabilities of the Partnership or any of its
subsidiaries that individually or in the aggregate are not material to the
Partnership and its subsidiaries, taken as a whole, and that are not required by
GAAP to be included in the consolidated financial statements of the Partnership.
(b) As of the Closing Date, New Company will not have any
indebtedness, liabilities or obligations, absolute or contingent, other than
indebtedness, liabilities and obligations (i) that have been incurred on behalf
of the Partnership in the ordinary course of business that are properly
reimbursable by the Partnership or (ii) the responsibility for which is
specifically allocated under this Agreement.
SECTION 2.12. REAL AND PERSONAL PROPERTY.
Except as disclosed on Schedule 2.12(a), each of the Partnership
Entities owns valid and defensible fee title to, or holds a valid leasehold
interest in, or a right-of-way or easement (collectively, the "RIGHTS-OF-WAY")
through, all real property used or necessary for the conduct of the business of
each such Partnership Entity as it is presently conducted ("REAL PROPERTY"), and
each of the Partnership Entities has good and valid title to all of the material
tangible personal property and assets which it owns and which are reflected in
the New Company Financial Statements or in the consolidated financial statements
of the Partnership included in the SEC Reports or which are thereafter acquired
to the date hereof (except for assets and properties sold, consumed or otherwise
disposed of in the ordinary course of business consistent
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with past practices since December 31, 2002), and all such Real Property, assets
and properties are owned or leased free and clear of all Encumbrances, except
for (i) Encumbrances set forth on Schedule 2.12(b), (ii) liens for current Taxes
not yet due and payable or for Taxes the validity of which is being contested in
good faith (and to the extent the amount being contested exceeds $100,000, that
are set forth on Schedule 2.10(b)(ii)), (iii) Encumbrances to secure
indebtedness reflected in the consolidated financial statements of the
Partnership included in the SEC Reports, (iv) Encumbrances that will be
discharged on or prior to the Closing Date, (v) laws, ordinances and regulations
affecting building use and occupancy or reservations of interest in title
(collectively, "PROPERTY RESTRICTIONS") imposed or promulgated by law or any
Governmental Authority with respect to Real Property, including zoning
regulations, provided they do not materially interfere with the present use of
the applicable Real Property, (vi) Encumbrances, Property Restrictions,
Rights-of-Way and written agreements of record or copies of which have been
furnished to Buyer, provided they do not materially interfere with the present
use of the applicable Real Property, (vii) mechanics', carriers', workmen's,
repairmen's or similar types of liens, if any, which do not materially detract
from the value of or materially interfere with the present use of any Real
Property subject thereto or affected thereby and which have arisen or been
incurred in the ordinary course of business, (viii) Parent Credit Facility Liens
(which shall be released prior to or at Closing) and (ix) Encumbrances and minor
title defects that do not materially detract from the value or materially
interfere with the present use of the asset subject thereto (clauses (i) through
(ix) above referred to collectively as "PERMITTED ENCUMBRANCES").
Notwithstanding the foregoing, with respect to Rights-of-Way, the Selling
Parties represent only that each of the Partnership Entities has sufficient
title thereto to enable it to conduct its business as presently conducted.
SECTION 2.13. INTELLECTUAL PROPERTY AND COMPUTER HARDWARE.
(a) (x) Except as set forth on Schedule 2.13(a) and for the
Automated Transportation Logistics Activity System (the "ATLAS 2000 SYSTEM") and
(y) except as may be identified during development of the IT Migration Plan (as
defined in Section 4.11 below), contemplated under the Transition Services
Agreement and for such other matters that also would not have a Material Adverse
Effect, (i) one or more of the Partnership Entities owns all right, title and
interest in and to, or has a valid and enforceable license or other right to use
lawfully, all the Intellectual Property (as defined in Section 9.16) used by any
Partnership Entity in connection with its business free and clear of all liens
(other than the Parent Credit Facility Liens, which shall be released at or
prior to Closing, and the terms of any such license), and Schedule 2.13(a) sets
forth a list of such Intellectual Property so used by the Partnership Entities;
(ii) none of the Partnership Entities has infringed or otherwise violated the
Intellectual Property of any Person, (iii) to the Knowledge of the Selling
Parties, no Person has infringed or otherwise violated the Intellectual Property
of any of the Partnership Entities or any Intellectual Property associated with
software indicated as owned on Schedule 2.13(b), (iv) the consummation of the
transactions contemplated in this Agreement and the Transaction Documents will
not alter, impair or extinguish any Intellectual Property of any of the
Partnership Entities or any Intellectual Property associated with software
indicated as owned on Schedule 2.13(b)) and (v) to the Knowledge of the Selling
Parties, there are no agreements, judicial orders or settlement agreements which
limit or restrict any of the Partnership Entities' rights to use any
Intellectual Property or any Intellectual Property associated with software
indicated as owned on Schedule 2.13(b).
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(b) Other than the ATLAS 2000 System, a listing of all
material computer software owned by or licensed to the Selling Parties and/or
its Affiliates which is used in connection with the business of the Partnership
Entities as presently conducted is identified in Schedule 2.13(b). None of such
owned or licensed software infringes or otherwise violates the Intellectual
Property of any Person. Such licensed software is referred to herein as the
"LICENSED SOFTWARE."
(c) The Selling Parties or their Affiliates own all right,
title and interest to the ATLAS 2000 System and own all right, title and
interest to or have a valid and enforceable lease, license or other right to use
lawfully any software listed on Schedule 2.13(b) or computer hardware associated
with the ATLAS 2000 System that will be transferred to the Partnership Entities
in accordance with Section 4.11 or the ATLAS Assignment, Contribution and
License Agreement.
(d) The only representations and warranties given in respect
of Intellectual Property and matters and agreements relating thereto are those
contained in this Section 2.13, and none of the other representations and
warranties shall be deemed to constitute, directly or indirectly, a
representation and warranty in respect of Intellectual Property and matters or
agreements relating thereto.
SECTION 2.14. LICENSES, PERMITS AND GOVERNMENTAL APPROVALS.
Except as set forth on Schedule 2.14, (a) each of the Partnership
Entities has all material consents, licenses, permits, certificates, franchises,
authorizations and approvals issued or granted to any such Partnership Entity
by, and has made all material registrations and filings with, any Governmental
Authority as are necessary for the conduct of its business as currently
conducted (each a "LICENSE" and, collectively, the "LICENSES"); (b) each License
has been issued to, and duly obtained and fully paid for by, the holder thereof
and is valid, in full force and effect, except where such invalidity or failure
to be in full force and effect would not have a Material Adverse Effect, and (c)
none of such Licenses will terminate or become terminable as a result of the
transactions contemplated by this Agreement or the Transaction Documents.
Notwithstanding anything to the contrary in this Section 2.14, the
representations and warranties in this Section 2.14 shall not apply to (x) any
right to Intellectual Property (which shall be subject to the representations in
Section 2.13) or (y) any License required under applicable Environmental Law
(which shall be subject to the representations in Section 2.21(a)(v)).
SECTION 2.15. COMPLIANCE WITH LAW.
Except with respect to Tax matters (which are provided for in Section
2.10), Intellectual Property matters (which are provided for in Section 2.13) or
environmental, health and safety matters (which are provided for in Section
2.21) and except as set forth on Schedule 2.15 or in the SEC Reports, since
February 9, 2001, the operations of each of the Partnership Entities have been
conducted in material compliance with all applicable laws, regulations, orders
and other requirements of all Governmental Authorities having jurisdiction over
each such Partnership Entity and its respective assets, properties and
operations. Without limiting the generality of the foregoing, Parent, the
Selling Parties and the Partnership Entities have been at all times, and are, in
compliance with the Consent Decree (as defined in Section 4.4).
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SECTION 2.16. LITIGATION.
Except as set forth on Schedule 2.16, there are no Legal Proceedings
pending or, to the Knowledge of the Selling Parties, threatened against or
involving Parent or any Affiliate thereof, including the Selling Parties and the
Partnership Entities that, individually or in the aggregate, are reasonably
likely to (a) have a Material Adverse Effect or (b) materially impair or delay
the ability of any of the Parent or Selling Parties to perform its obligations
under this Agreement or the Transaction Documents or consummate the transactions
contemplated hereby or thereby. Except as set forth on Schedule 2.16 or as set
forth in the Partnership's Annual Report on Form 10-K for the year ended
December 31, 2002 (the "2002 10-K") under the caption "Item 3: Legal
Proceedings" or in Note 16 "Commitments and Contingencies" of the Notes to
Consolidated Financial Statements included under the caption "Item 8: Financial
Statements and Supplementary Data," there is no order, judgment, injunction or
decree of any Governmental Authority outstanding against Parent or any of the
Selling Parties or Partnership Entities that, individually or in the aggregate,
would have any effect referred to in the foregoing clauses (a) and (b). "LEGAL
PROCEEDING" shall mean any judicial, administrative or arbitral actions, suits,
proceedings (public or private), investigations or governmental proceedings
before any Governmental Authority. Notwithstanding the foregoing, the
representations and warranties in this Section 2.16 shall not include Legal
Proceedings in respect of any Environmental Law (which shall instead be subject
to the representations in Section 2.21(a)(iv)).
SECTION 2.17. CONTRACTS.
Schedule 2.17 sets forth (other than those contracts filed as exhibits
to the 2002 10-K and subject to the dollar amount limitations of clauses (i) or
(ii) below) a true and complete list of the following contracts, agreements,
instruments and commitments to which any of the Partnership Entities is a party
or otherwise relating to or affecting any of its assets, properties or
operations, whether written or oral: (i) contracts calling for, or that the
Selling Parties expect to result in, payments by or to any of the Partnership
Entities of amounts greater than $1,000,000 per year; (ii) contracts, loan
agreements, letters of credit, re
purchase agreements, mortgages, security
agreements, guarantees, pledge agreements, trust indentures and promissory notes
and similar documents relating to the borrowing of money or for lines of credit
in any case for amounts in excess of $1,000,000; (iii) partnership or joint
venture agreements; and (iv) contracts limiting or purporting to limit the
ability of any of the Partnership Entities to compete in any line of business or
with any Person or in any geographic area (collectively with those contracts
filed as exhibits to the 2002 10-K, "MATERIAL CONTRACTS"). Each Material
Contract is valid, binding and enforceable against such Partnership Entity or
Partnership Entities party thereto and, to the Knowledge of the Selling Parties,
each of the other parties thereto in accordance with its terms, and in full
force and effect on the date hereof (and each such Material Contract will be in
full force and effect on the Closing Date, except for any Material Contract that
terminates in accordance with its terms) except where a failure to be so valid,
binding or enforceable or in full force and effect would not have a Material
Adverse Effect. With respect to each Material Contract, no Partnership Entity
party thereto and, to the Knowledge of the Selling Parties, no other party
thereto is in breach or default, and to the Knowledge of the Selling Parties, no
event has occurred which with notice or lapse of time or both would constitute a
breach or default, or permit termination, modification or acceleration,
thereunder.
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SECTION 2.18. BROKERS.
Except as disclosed on Schedule 2.18, neither the Parent nor any of the
Selling Parties has employed the services of an investment banker, financial
advisor, broker or finder in connection with this Agreement or any of the
transactions contemplated hereby.
SECTION 2.19. EMPLOYEES; EMPLOYEE PLANS.
(a) None of the Partnership Entities has, nor since February
9, 2001 has had, any employees.
(b) Except as disclosed on Schedule 2.19(b)(i), none of the
Partnership Entities sponsors, maintains or contributes to or has an obligation
(secondary, contingent or otherwise) to contribute to and at any time during the
past five years has sponsored, maintained or contributed to or has had an
obligation to contribute to, any "employee benefit plan," as defined under
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any other bonus, pension, stock option, stock purchase, benefit,
welfare, profit-sharing, retirement, disability, vacation, severance,
hospitalization, insurance, incentive, deferred compensation and other similar
fringe or employee benefit plans, funds, programs or arrangements, whether
written or oral ("EMPLOYEE PLANS") (such Employee Plans listed on Schedule
2.19(b)(i) being the "PARTNERSHIP PLANS"). Each of the Partnership Plans is
maintained or sponsored solely by one or more of the Partnership Entities.
Schedule 2.19(b)(ii) sets forth a true and complete list of all Employee Plans,
other than Partnership Plans, which cover, are maintained for the benefit of, or
relate to any or all Business Employees (as defined below) (the "SELLER PLANS").
(c) Each Partnership Plan and Seller Plan has been maintained
and operated in material compliance with its terms, the requirements of
applicable law, including the Code and ERISA, and each Seller Plan intended to
be "qualified" within the meaning of Section 401(a) of the Code is qualified and
has received a favorable determination letter from the IRS that covers all
amendments required by applicable law to have been made to such plan as of the
Closing Date or has timely filed an application to receive a favorable
determination letter as to such qualified status.
(d) No Partnership Plan is subject to ERISA and no Seller Plan
covering Business Employees is a multiemployer plan, as defined in Section 3(37)
of ERISA.
(e) As of the date hereof, the Partnership Entities do not
have any liability, including secondary liability, under Title IV of ERISA with
respect to any plan, including, without limitation, any Seller Plan nor any
liability under Section 302 of ERISA or Section 412 of the Code.
(f) Schedule 2.19(f)(i) sets forth a list showing the names of
the active employees of the Selling Parties or their Affiliates who spend fifty
percent (50%) or more of their business time engaged in, or in activities
related to, the business and/or affairs of any of the Partnership Entities (the
"BUSINESS EMPLOYEES") and showing which of such employees regularly devote
substantially all of their business time to the business and/or affairs of the
Partnership Entities. Except as set forth on Schedule 2.19(f)(ii), there are no
contracts,
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agreements, plans or arrangements covering any Business Employee with "change of
control" or similar provisions that would be triggered as a result of the
consummation of any of the transactions contemplated by this Agreement. None of
the Business Employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement with any Selling
Party, any Partnership Entity, Parent or any other subsidiary of Parent, or to
the Knowledge of the Selling Parties, subject to any judgment, decree or order
of any court or administrative agency, that would interfere with the use of such
employee's efforts to promote the interests of the Partnership Entities or Buyer
or that would conflict with the business of any of the Partnership Entities as
presently conducted. None of Parent, the Selling Parties nor any of the
Partnership Entities has received notice from any officer or key Business
Employee or group of Business Employees, that such person(s) intends to
terminate their employment.
(g) An Affiliate of the Selling Parties is a party to an
amended collective bargaining agreement with the Paper, Allied-Industrial,
Chemical, and Energy Workers International Union ("PACE") and with PACE Local
5-348 with respect to certain Business Employees as set forth on Schedule
2.19(g)(i), including all existing memorandums of agreement related thereto
(collectively, the "PACE COLLECTIVE BARGAINING AGREEMENT"), a copy of which has
been furnished to the Buyer. Except as disclosed on Schedule 2.19(g)(i), none of
the Business Employees is covered by any collective bargaining agreement with
respect to services performed in connection with the business or operations of
any of the Partnership Entities and, except as disclosed in Schedule
2.19(g)(ii), to the Knowledge of the Selling Parties, there are not any union
organizing efforts underway with respect to any such employees.
(h) Each Partnership Plan may be unilaterally terminated by a
Partnership Entity at any time without liability to any Person, except as
provided under the terms of the affected plan.
SECTION 2.20. INSURANCE.
(a) Schedule 2.20(a)(i) sets forth a summary listing of all
current liability and property insurance policies covering the properties,
assets, employees, directors and/or operations of the Partnership Entities that
are provided by the Parent or its Affiliates (other than the Partnership
Entities) (collectively, the "PARENT POLICIES"). Schedule 2.20(a)(ii) sets forth
a summary listing of all current liability and property insurance policies
covering the properties, assets, employees, directors and/or operations of all
of the Partnership Entities that are provided by the Partnership Entities
(collectively, the "PARTNERSHIP POLICIES" and together with the Parent Policies,
the "POLICIES"). All premiums payable under the Policies have been paid in a
timely manner and Parent (and each of its Affiliates and the Partnership
Entities covered thereunder) has complied fully with the terms and conditions of
all such Policies.
(b) Except as set forth in Schedule 2.20(b) hereto, all
Policies are in full force and effect. None of Parent or the Selling Parties
will cancel any of the Partnership Policies or cause any of the Partnership
Policies to be canceled, and each of the Partnership Policies will continue to
be in full force and effect in accordance with their terms upon the consummation
of the transactions contemplated hereby. Subject to Section 4.10(b), coverage
for the each of the Partnership Entities under the Parent Policies shall
terminate on the Closing Date, except that
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coverage for the Partnership Entities under the excess liability policies of the
Parent Policies shall terminate on May 1, 2003 at 12:01 a.m. Central Time, and
the additional insurance policies to be provided by the Partnership Entities in
Schedule 2.20(b) shall be procured by the Selling Parties or Parent, as of May
1, 2003, at the cost of the Partnership. Parent is not (nor is any Affiliate or
Partnership Entity covered under any Policy) in default under any provisions of
the Policies, and there is no claim by any of the Partnership Entities or any
other Person pending under any of the Policies as to which coverage with respect
to any of the Partnership Entities has been questioned, denied or disputed by
the underwriters or issuers of such Policies.
SECTION 2.21. ENVIRONMENTAL; HEALTH AND SAFETY MATTERS.
(a) Except as set forth on Schedule 2.21:
(i) Each of the Partnership Entities and its operations,
activities, Real Property and assets are in material compliance with
all applicable Environmental Laws (as defined in paragraph (b) below);
(ii) There are no Hazardous Materials present in, or being
released to, the air, surface or sub-surface soils or in the
groundwater at, on, in, under, beneath, or in the vicinity of the
activities, operations, Real Property or assets of the Partnership
Entities in amounts or concentrations that are reasonably likely to
result in a material liability under any Environmental Laws;
(iii) None of Parent, the Selling Parties nor any of the
Partnership Entities has received any written request for information,
or has received written notification that it has any liability, or is a
potentially responsible party, under any Environmental Law that is
material in nature with respect to any on-site or off-site location for
which liability is currently being asserted against them with respect
to the activities, operations, Real Property or assets of any of the
Partnership Entities;
(iv) There are no material writs, injunctions, decrees, orders
or judgments outstanding, or any Legal Proceedings pending or, to the
Knowledge of the Selling Parties, threatened involving any of the
Partnership Entities or the activities, operations, Real Property or
assets of the Partnership Entities relating to (A) its compliance with
any Environmental Law, or (B) the release, disposal, discharge, spill,
treatment, storage or recycling of Hazardous Materials (as defined in
paragraph (b) below) into the environment at any on-site or off-site
location;
(v) Each of the Partnership Entities has obtained, currently
maintains and is in material compliance with all Licenses which are
required under Environmental Laws for its operations, activities, Real
Property and assets (collectively, "ENVIRONMENTAL PERMITS"), and all
such Environmental Permits are in effect. No appeal nor any other Legal
Proceeding is pending to revoke any such Environmental Permit, nor, to
the Knowledge of the Selling Parties, threatened, and to the Knowledge
of the Selling Parties, no facts or circumstances exist that if
unabated would be reasonably expected to result in any Environmental
Permit being revoked, rescinded or withdrawn, or not being renewed or
reissued on substantially the same terms;
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(vi) The Selling Parties and Parent have made available to
Buyer all internal and external audits, studies and reports on
environmental matters relevant to the Partnership Entities that (A)
have been retained in the files of any Selling Party or their
Affiliates or the Partnership Entities and (B) were prepared or
received at any time after January 1, 1998 (including such documents
that may relate to the Excluded Assets, as defined in the WPL
Contribution Agreement, and any real property of the type described in
Section 2.21(a)(vii) below); and
(vii) The representations in Sections 2.21(a)(ii), (a)(iii)
and (a)(iv) above, also apply to with respect to real property or
assets that were owned, leased or operated by the Partnership Entities
subsequent to January 1, 1998 but that are no longer owned, leased or
operated by the Partnership Entities on the date hereof, but only with
respect to the periods such real property or assets were owned, leased
or operated by the Partnership Entities; provided, however, that such
representation with respect to Section 2.21(a)(iv) is made only to the
Knowledge of the Selling Parties.
(b) The following terms shall have the following meanings:
"ENVIRONMENTAL LAW" shall mean current local, county, state,
federal, and/or foreign law (including common law), statute, code, ordinance,
rule, order, judgment, decree, regulation or other legal obligation relating to
the protection of health, safety or the environment or natural resources and in
effect on the date hereof, including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act (42 U.S.C. section 9601 et
seq.), as amended ("CERCLA"), the Resource Conservation and Recovery Act (42
U.S.C. section 6901 et seq.), as amended ("RCRA"), the Federal Water Pollution
Control Act (33 U.S.C. section 1251 et seq.), as amended, the Clean Air Act (42
U.S.C. section 7401 et seq.), as amended, the Toxic Substances Control Act (15
U.S.C. section 2601 et seq.), as amended, the Occupational Safety and Health Act
(29 U.S.C. section 651 et seq.), as amended, the Safe Drinking Water Act (42
U.S.C. section 300(f) et seq.), as amended, analogous state, tribal or local
laws, and any similar, implementing or successor law, and any amendment, rule,
regulation, or directive issued thereunder, including any determination by, or
interpretation of any of the foregoing by any Governmental Authority that has
the force of law.
"HAZARDOUS MATERIAL" shall mean any substance, material or
waste which is regulated by any Environmental Law as hazardous, toxic, a
pollutant, contaminant or words of similar meaning including, without
limitation, petroleum, petroleum products, petroleum hydrocarbons, petroleum
by-products, crude oil, and any components, fractions or derivatives thereof,
methyl tertiary butyl ether ("MTBE"), ammonia, asbestos, urea, formaldehyde and
polychlorinated biphenyls.
(c) The only representations and warranties given in respect
of environmental, health and safety matters and compliance with and liability
under Environmental Laws are those contained in this Section 2.21 and none of
the other representations and warranties shall be deemed to constitute, directly
or indirectly, a representation and warranty in respect of environmental, health
and safety matters or compliance with and liability under Environmental Laws.
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SECTION 2.22. REGULATORY MATTERS.
(a) None of the Partnership Entities is a "public utility
company," "holding company" or "subsidiary" or "affiliate" of a holding company
as such terms are defined in the Public Utility Holding Company Act of 1935, as
amended.
(b) None of the Partnership Entities is an "investment
company" or a company "controlled by" an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 2.23. BOOKS AND RECORDS; OTHER INFORMATION.
The minute books and other similar records of the Partnership Entities
contain true and correct copies of all actions taken at all meetings of the
Partnership's limited partners, the Boards of Directors of the Old Company and
the New Company or any committee thereof and all written consents executed in
lieu of any such meetings. Complete copies of all such minute books and other
similar records have been made available to Buyer.
SECTION 2.24. WPL CONTRIBUTION AGREEMENT.
None of the rights, benefits or privileges of any of the Partnership
Entities under the (i) WPL Contribution Agreement or (ii) the Corporate
Guarantee, dated as of March 14, 2003, of Parent in favor of the New Company
will be impaired by the consummation of the transactions contemplated by this
Agreement or the Transaction Documents.
SECTION 2.25. CUSTOMERS AND SUPPLIERS.
Except as set forth on Schedule 2.25, since January 1, 2003, none of
the Partnership Entities, the Selling Parties or Parent has received any written
notice that any shipper or customer will discontinue its business relationship
with any of the Partnership Entities, and to the Knowledge of the Selling
Parties, no such action has been threatened by any material shipper or customer.
SECTION 2.26. ADEQUACY OF ASSETS.
Except as set forth on Schedule 2.26 or as contemplated in the
Transition Services Agreement, the tangible assets to be owned by the
Partnership Entities immediately after the Closing will be adequate to permit
such Partnership Entities to conduct their respective business in substantially
the same manner as conducted immediately prior to the Closing.
SECTION 2.27. EXCLUDED ASSETS.
All properties that are part of the Excluded Assets (as defined in
Section 1.1 of the WPL Contribution Agreement) ("EXCLUDED ASSETS") have been
transferred from the applicable Partnership Entity to another entity that is not
a Partnership Entity.
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SECTION 2.28. SOLVENCY.
Each of the Selling Parties and Parent is, and immediately after giving
effect to the transactions contemplated by this Agreement and the Transaction
Documents will be Solvent. For purposes of this Section 2.28, "SOLVENT" means,
with respect to the applicable party on any date of determination, that on such
date (a) the fair value of the property of such party is greater than the total
amount of liabilities, including, without limitation, contingent liabilities of
such party that would constitute liabilities under GAAP, (b) the present fair
saleable value of the assets of such party is not less than the amount that will
be required to pay its debts as they become absolute and matured, taking into
account the possibility of refinancing such obligations and selling assets, (c)
such party does not intend to, and does not believe that it will, incur debts or
liabilities beyond such party's ability to pay such debts as they mature taking
into account the possibility of refinancing such obligations and selling assets
and (d) such party is not engaged in business or a transaction, and does not
intend to engage in business or a transaction, for which such party's property
remaining after such transaction would constitute unreasonably small capital.
SECTION 2.29. AUCTION PROCESS.
The Selling Parties and Parent acknowledge that (i) this Agreement and
the other Transaction Documents are the culmination of an extensive auction
process, fair in substance and procedure, undertaken by the Selling Parties and
Parent to identify and negotiate a transaction with a bidder who was prepared to
give the best offer for the Securities, (ii) they have selected Buyer as the
successful bidder in accordance with the bidding procedures established for such
auction and (iii) this Agreement constitutes the best offer for the Securities.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
As of the date hereof, Buyer hereby represents and warrants to
each of the Selling Parties as follows:
SECTION 3.1. LIMITED PARTNERSHIP ORGANIZATION.
Buyer is a limited partnership duly organized, validly existing and in
good standing under the laws of the state of Delaware and has all requisite
limited partnership power and authority to own its properties and assets and to
conduct its business as now conducted. Buyer is duly qualified to do business as
a foreign entity in every jurisdiction where the character of the properties
owned or leased by it or the nature of the business conducted by it makes such
qualifications necessary.
SECTION 3.2. VALIDITY OF AGREEMENT; AUTHORIZATION.
Buyer has the power and authority to enter into this Agreement and the
Transaction Documents to which Buyer is a party and to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and such
Transaction Documents and the performance of Buyer's obligations hereunder and
thereunder have been duly authorized by the Board of Directors of the general
partner of Buyer and no other proceedings on the part of Buyer,
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its general partner or its owners are necessary to authorize such execution,
delivery and performance. This Agreement and the Transaction Documents to which
Buyer is a party each have been (in the case of this Agreement) or will be at
the Closing (in the case of such Transaction Documents) duly executed and
delivered by Buyer and constitute or will constitute at the Closing, as
applicable, the valid and binding obligation of Buyer enforceable against Buyer
in accordance with its terms (except to the extent that its enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
law affecting the enforcement of creditors' rights generally or by general
equitable principles).
SECTION 3.3. NO CONFLICT OR VIOLATION.
The execution, delivery and performance by Buyer of this Agreement and
the Transaction Documents to which Buyer is a party does not and will not: (a)
violate or conflict with any provision of its or its general partner's
Organizational Documents, (b) violate any applicable provision of law, or any
order, judgment or decree of any Governmental Authority, (c) violate or result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any contract, lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which Buyer is a party or by
which it is bound or to which any of its properties or assets is subject or (d)
result in the creation or imposition of any Encumbrance upon any of its
properties or assets where such violations, breaches, defaults or Encumbrances
in the aggregate would have a material adverse effect on the transactions
contemplated hereby or on the assets, properties, business, operations, net
income or financial condition of Buyer.
SECTION 3.4. CONSENTS AND APPROVALS.
Except as disclosed on Schedule 3.4, no material consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person (on the part of Buyer), is required
for Buyer to execute and deliver this Agreement or the Transaction Documents to
which Buyer is a party or to perform its obligations hereunder or thereunder.
SECTION 3.5. FINANCIAL ABILITY.
Buyer has (a) obtained commitments for debt financing, subject to the
satisfaction of the terms and conditions set forth in such commitment letter and
(b) obtained equity financing commitments, subject to the satisfaction of terms
and conditions set forth in this Agreement and in such commitment letter, copies
of which debt and equity financing commitment letters have been provided to the
Selling Parties, and which collectively will, if and when such debt and equity
financing is provided to Buyer pursuant to such commitment letters, provide
Buyer with sufficient immediately available funds at the Closing to pay the
First Payment of the Purchase Price and to effect the transactions contemplated
hereby.
SECTION 3.6. BUYER STATUS.
Buyer is not an employee benefit plan or other organization exempt from
taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign
corporation or other foreign Person, or a regulated investment company within
the meaning of Section 851 of the Code.
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SECTION 3.7. BROKERS.
Except as disclosed on Schedule 3.7, Buyer has not employed the
services of an investment banker, financial advisor, broker or finder in
connection with this Agreement or any of the transactions contemplated hereby.
SECTION 3.8. INDEPENDENT INVESTIGATION.
Buyer has conducted its own independent investigation, review and
analysis of the business, operations, assets, liabilities, results of
operations, financial condition and prospects of each of the Partnership
Entities, both individually and on a consolidated basis, which investigation,
review and analysis was done by Buyer and its Affiliates and, to the extent
Buyer deemed necessary or appropriate, by Buyer's representatives. Buyer
acknowledges that it and its representatives have been provided adequate access
to the personnel, properties, premises and records of each of the Partnership
Entities for such purpose.
SECTION 3.9. INVESTMENT INTENT; INVESTMENT EXPERIENCE;
RESTRICTED SECURITIES.
In acquiring the Securities, Buyer is not offering or selling, and will
not offer or sell the Securities, for the Selling Parties in connection with any
distribution of any of such Securities, and Buyer does not have a participation
and will not participate in any such undertaking or in any underwriting of such
an undertaking except in compliance with applicable federal and state securities
laws. Buyer acknowledges that it is able to fend for itself, can bear the
economic risk of its investment in the Securities, and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of an investment in all of such Securities. Buyer is an
"accredited investor" as such term is defined in Regulation D under the
Securities Act. Buyer understands that none of the Securities will have been
registered pursuant to the Securities Act or any applicable state securities
laws, that all of such Securities will be characterized as "restricted
securities" under federal securities laws and that under such laws and
applicable regulations none of such Securities can be sold or otherwise disposed
of without registration under the Securities Act or an exemption therefrom.
ARTICLE IV.
COVENANTS
SECTION 4.1. CERTAIN CHANGES AND CONDUCT OF BUSINESS.
From and after the date of this Agreement and until the Closing Date,
Selling Parties will use their commercially reasonable efforts to cause each of
the Partnership Entities to (except as required or permitted pursuant to the
terms hereof or as set forth on Schedule 4.1) conduct its business in the
ordinary course of business consistent with past practices and to use its
commercially reasonable efforts to preserve intact their business organization
and relationships of any Partnership Entity with third parties. Without limiting
the generality of the foregoing, without the prior written consent of Buyer
(which consent will not be unreasonably withheld or delayed), except as required
or permitted pursuant to the terms of this Agreement or as set forth on Schedule
4.1, the Selling Parties will use their commercially reasonable efforts to cause
each of the Partnership Entities not to:
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(a) make any material change in the conduct of its businesses
and operations;
(b) make any change in its Organizational Documents or issue
any additional equity securities or grant any option, warrant or right to
acquire any equity securities or issue any security convertible into or
exchangeable for its equity securities;
(c) other than Xxxxxxxx X.X., Inc., elect to be treated as a
corporation for tax purposes;
(d) (i) incur, assume or guarantee any indebtedness for
borrowed money, issue any notes, bonds, debentures (other than Affiliate
intercompany obligations incurred in the ordinary course of business or actions
taken to comply with the representation in Section 2.11(b) or the covenant in
Section 4.19) or other corporate securities or grant any option, warrant or
right to purchase any thereof or (ii) issue any securities convertible or
exchangeable for debt securities of any of the Partnership Entities;
(e) make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof except for dispositions of
inventory or of worn-out or obsolete equipment for fair or reasonable value in
the ordinary course of business consistent with past practices;
(f) subject any of its assets, or any part thereof, to any
Encumbrance except Permitted Encumbrances as may arise in the ordinary course of
business consistent with past practices by operation of law;
(g) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of its equity interests or declare, set aside or pay any
dividends or other distribution in respect of such Partnership Entity's equity
interests, other than (i) regular quarterly cash distributions by the
Partnership from Available Cash (as defined in the Partnership Agreement) at a
rate of no greater than $0.80 per unit (with a proportionate distribution to the
New Company in respect of the GP Interest and any distribution on the IDRs
provided for in the Partnership Agreement), (ii) dividends or other
distributions by the New Company to the Selling Parties of all or any portion of
any cash distributions that the New Company may have received pursuant to clause
(i), (iii) any dividends or other distributions made by any subsidiaries of the
Partnership to other direct or indirect wholly owned subsidiaries of the
Partnership, or to the Partnership itself, in the ordinary course of business
consistent with past practices and (iv) actions taken to comply with the
representation in Section 2.11(b) or the covenant in Section 4.19;
(h) (i) except as may be required by applicable law, enter
into, adopt or make any material amendments to or terminate any bonus, profit
sharing, compensation, severance, termination, stock option, stock appreciation
right, Phantom Units, restricted stock, performance unit, stock equivalent,
stock purchase, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any officer or director of any of the
Partnership Entities or any Business Employee, except to the extent (1) such
adoptions, terminations, amendments or modifications similarly affect employees
of the Selling Parties or their Affiliates who are similarly situated to the
Business Employees and (2) do not in the aggregate result in a material increase
in benefits
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or compensation expense to the Partnership Entities, taken as a whole; (ii)
except for normal increases in the ordinary course of business consistent with
past practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Partnership Entities, taken as a whole,
increase the benefits or compensation to any officer or director of any of the
Partnership Entities or any Business Employee; or (iii) pay to any officer or
director of any of the Partnership Entities or any Business Employee any benefit
not permitted by any employee benefit agreement, trust, plan, fund, or other
arrangement as in effect on the date hereof;
(i) acquire any material assets or properties, except for
inventory in the ordinary course of business consistent with past practices;
(j) loan or advance any amount to, or sell, transfer or lease
any properties or assets to, or enter into any agreement or arrangement with,
any of its Affiliates (other than intercompany receivables in the ordinary
course of business or actions taken to comply with the representation in Section
2.11(b) or the covenant in Section 4.19);
(k) fail to duly and timely file or cause to be filed all
reports and returns required to be filed with any Governmental Authority and
promptly pay or cause to be paid when due all Taxes, assessments and
governmental charges, unless contested in good faith in appropriate proceedings;
(l) permit any insurance policy naming any of the Partnership
Entities as a beneficiary to expire or be cancelled or terminated, unless a
comparable insurance policy is obtained and in effect in replacement thereof;
(m) (i) take or permit any action to be taken that would make
any representation or warranty of the Selling Parties under this Agreement
inaccurate in any material respect prior to the Closing Date or (ii) omit or
cause to omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any material respect at any such time;
(n) issue any units except for (i) issuances of Common Units
to directors of the New Company in the ordinary course of business and
consistent with past practices or (ii) issuances pursuant to commitments or
obligations in respect of Phantom Units outstanding on the date hereof pursuant
to the Xxxxxxxx Energy Partners Long-Term Incentive Plan, as described on
Schedule 2.3(d)(ii); or
(o) commit itself to do any of the foregoing.
SECTION 4.2. ACCESS TO PROPERTIES AND RECORDS.
(a) Each of the Selling Parties shall afford, and shall cause
each of the Partnership Entities (and to the extent reasonably necessary,
Parent) to afford, to Buyer and Buyer's accountants, counsel and representatives
(collectively "BUYER REPRESENTATIVES"), upon reasonable advance notice to the
Selling Parties or their financial adviser, reasonable access during normal
business hours throughout the period commencing on the date hereof and ending on
the Closing Date (or the earlier termination of this Agreement pursuant to
Article VII hereof) to all personnel, properties, books, contracts, and records
of each of the Partnership Entities and
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their agents, including legal representatives, accountants and environmental and
engineering consultants (provided that the Selling Parties or their designee(s)
may, in the sole discretion of the Selling Parties, accompany the person(s) to
whom such access is provided as contemplated herein) and, during such period,
shall furnish promptly to Buyer all information concerning the business,
properties, liabilities and personnel of any of the Partnership Entities as
Buyer may request, provided that no investigation or receipt of information
pursuant to this Section 4.2 shall affect any representation or warranty of the
Selling Parties or Buyer's reliance thereon. Additionally, Buyer shall hold in
confidence all such information on the terms and subject to the conditions
contained in the Confidentiality Agreement (as defined in Section 9.16). Buyer
shall have no right of access to, and the Selling Parties shall have no
obligation to provide to Buyer, (1) bids received from other Persons in
connection with the transactions contemplated by this Agreement and information
and analysis (including financial analysis) relating to such bids or (2) any
information the disclosure of which the Selling Parties have concluded may
jeopardize any privilege available to the Selling Parties or any of the
Partnership Entities relating to such information or would cause any of such
entities to breach a confidentiality obligation. Buyer agrees that if Buyer or
its authorized representatives receive, or if the information (whether in
electronic mail format, on computer hard drives or otherwise) held by any of the
Partnership Entities as of the Closing includes information that relates to the
business operations or other strategic matters of the Parent or any of the
Selling Parties or any of their Affiliates (other than the Partnership Entities)
such information shall be held in confidence on the terms and subject to the
conditions contained in the Confidentiality Agreement, but the term of the
restriction on the disclosure and use of such information shall continue in
effect as to such information for a period of two years from the Closing. Buyer
further agrees that if any of the Selling Parties or Partnership Entities
inadvertently furnishes to Buyer copies of or access to information that is
subject to clause (2) of the second preceding sentence, Buyer will, upon the
Selling Parties' request, promptly return the same to the Selling Parties
together with any and all extracts therefrom or notes pertaining thereto
(whether in electronic or other format). Buyer shall indemnify, defend, and hold
harmless the Selling Parties and their Affiliates from and against any "LOSSES"
(as defined in Section 8.2) asserted against or suffered by the Seller
Indemnified Parties (as defined in Section 8.2) relating to, resulting from, or
arising out of any personal injury to, or property damage directly caused by,
any Buyer Representative during any site visit, examination or investigation
conducted in accordance with this Section 4.2(a), except where such personal
injury or property damage results from the gross negligence or willful
misconduct of the Selling Parties, Parent, the Partnership Entities or any
employee or agent thereof.
(b) Buyer agrees that it shall preserve and keep all books and
records relating to the business or operations of the Partnership Entities on or
before the Closing Date in Buyer's possession for a period of at least six years
from the Closing Date. Notwithstanding the foregoing, Buyer agrees that it shall
preserve and keep all books and records of the Partnership Entities relating to
any audit or investigation instituted by a Governmental Authority or any
litigation (whether or not existing on the Closing Date) if it is reasonably
likely that such investigation or litigation may relate to matters occurring
prior to the Closing, without regard to the six-year period set forth in this
Section 4.2(b).
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SECTION 4.3. EMPLOYEE MATTERS.
(a) Buyer intends to offer, or cause an Affiliate to offer,
employment to substantially all Business Employees who are identified on
Schedule 2.19(f)(i) as full-time Business Employees and may offer employment to
such Business Employees who are identified as less than full-time as it may
choose, based on the recommendation of the key management of the Partnership
Entities, in either case, on terms and conditions for each Business Employee as
are substantially comparable, in the aggregate, to industry standards for
similarly situated employees located in the same geographic region, as
determined in good faith by Buyer, such employment to commence as contemplated
in accordance with the Transition Services Agreement. In addition, within
fifteen (15) days after the execution of this Agreement, representatives of
Buyer and the Selling Parties shall meet to identify employees of the Selling
Parties or any of their Affiliates who are not Business Employees and to whom
Buyer and the Selling Parties agree that Buyer may make offers of employment
(collectively, the "ADDITIONAL EMPLOYEES"). The Selling Parties agree that if
any of the Additional Employees are covered by employee benefit plans or
programs of Parent or any of its Affiliates other than Seller Plans, the Selling
Parties shall provide Buyer with copies of such plans or programs as promptly as
practicable after such Additional Employees are identified. Any such offers of
employment made by the Buyer to an Additional Employee shall be on at least the
same basis as the offers Buyer makes to Business Employees. Promptly following
such agreement regarding the Additional Employees, the Selling Parties shall
prepare and submit to Buyer a list of the Additional Employees. Buyer or one or
more of its Affiliates shall use commercially reasonable efforts to notify
Selling Parties of the names of those Business Employees and Additional
Employees that accept such employment offers from Buyer or any other Affiliate
of Buyer prior to the Closing Date and in no event more than fifteen (15) days
after the Closing Date. The Selling Parties and their Affiliates shall not
discourage any Business Employee or Additional Employee to whom an offer of
employment is made by Buyer or an Affiliate of Buyer from accepting such offer.
Business Employees and Additional Employees who accept employment from Buyer and
become employees of Buyer or an Affiliate thereof in accordance with the
Transition Services Agreement are referred to herein as "TRANSFERRED EMPLOYEES."
(b) Business Employees who are covered by the PACE Collective
Bargaining Agreement are identified on Schedule 2.19(g)(i) (the "REPRESENTED
EMPLOYEES"). At the time the first Represented Employee becomes a Transferred
Employee (the "REPRESENTED EMPLOYEE TRANSFER DATE"), Buyer agrees to (i) comply
with all legal requirements that may be applicable as a result of the
Transferred Employees who are Represented Employees being represented by any
labor organization, (ii) recognize PACE as the exclusive bargaining unit for the
Transferred Employees who are Represented Employees and (iii) assume (and
otherwise adopt) all rights and obligations of the Selling Parties under the
PACE Collective Bargaining Agreement with respect to Transferred Employees who
are Represented Employees. Notwithstanding anything herein to the contrary,
Buyer shall offer employment, commencing in accordance with the Transition
Services Agreement, to all Represented Employees.
(c) Effective as of the Represented Employee Transfer Date,
Buyer shall assume the Xxxxxxxx Pipe Line Company Pension Plan for Hourly
Employees (the "PENSION PLAN"). On or as soon as practicable thereafter, the
Selling Parties or their applicable Affiliate shall cause the assets of the
Pension Plan held under the current master trust to be transferred to a
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trust established or maintained by the Buyer or one of its Affiliates. Such
transfer shall be made within one business day after any valuation date of the
current master trust and shall be made in cash, marketable securities or other
property acceptable to Buyer. Prior to such transfer of assets, the Selling
Parties shall make a contribution to the Pension Plan in an amount necessary to
cause the accrued benefit obligations under FASB 87 with respect to the Pension
Plan to be fully funded as of the last day of the month immediately preceding
the month that includes the Represented Employee Transfer Date using actuarial
assumptions and factors used for FASB 87 reporting purposes in the year that
includes the Represented Employee Transfer Date, which contribution shall also
include the amount necessary to satisfy in full the minimum funding contribution
liability for the 2002 plan year and the estimated minimum funding contribution
liability for the 2003 plan year, as prorated for the partial 2003 plan year
through Represented Employee Transfer Date, whether or not such 2002 and 2003
plan year funding contributions are then due.
(d) The Selling Parties' shall retain the obligation for
providing retiree medical and retiree life benefits to all employees and former
employees (including their eligible dependents and beneficiaries) of the Selling
Parties and their Affiliates other than Transferred Employees. On or as soon as
practicable after the Represented Employee Transfer Date, the Selling Parties
shall transfer to Buyer sponsorship of the Voluntary Employee Beneficiary
Association ("VEBA") trust established or maintained for the Represented
Employees' retiree medical, including all assets of such trust.
(e) The Selling Parties' shall retain the obligation for
providing long-term disability benefits to (i) those Represented Employees who,
immediately prior to the Represented Employee Transfer Date, are receiving
benefits under The Xxxxxxxx Companies, Inc. Long-Term Disability Plan (but the
parties hereto agree that such retained obligation shall not include the
obligation under the Pension Plan in respect of such totally disabled persons to
continue to accrue benefits, which obligation is to be assumed by Buyer as of
the Represented Employee Transfer Date under Section 4.3(c) above) and (ii)
those Represented Employees who become totally disabled on or after the
Represented Employee Transfer Date as a result of an injury or illness occurring
prior to the Represented Employee Transfer Date.
(f) Transferred Employees shall participate in employee
benefit plans and programs of the Buyer, which shall provide benefits that are
substantially comparable, in the aggregate, to industry standards for similarly
situated employees located in the same geographic region, as determined in good
faith by Buyer, and that, subject to the terms of the PACE Collective Bargaining
Agreement and Section 4.3(r), shall cover each Transferred Employee effective as
of the date each such employee becomes a Transferred Employee (each such date,
an "EMPLOYEE TRANSFER DATE").
(g) Each Transferred Employee shall, without duplication of
benefits, be given credit for all service with Selling Parties or their
Affiliates prior to the Employee Transfer Date, using the same methodology used
by such parties as of immediately prior to such date for crediting service and
determining levels of benefits under the Seller Plans, (i) under all employee
benefit plans, programs and arrangements maintained by or contributed to by the
Buyer in which a Transferred Employee becomes a participant for purposes of
eligibility to participate, vesting and determination of level of benefits
(excluding, however, benefit accrual under any defined
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benefit plans), and (ii) for purposes of calculating the amount of each
Transferred Employee's severance benefits, if any.
(h) With respect to the plan year during which an Employee
Transfer Date occurs, Buyer will (i) waive all limitations as to preexisting
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Transferred Employees under any medical,
dental and life insurance benefit plans that such employees may be eligible to
participate in after his or her Employee Transfer Date, other than limitations
or waiting periods that are already in effect with respect to such employee and
that have not been satisfied as of his or her Employee Transfer Date under any
welfare plan maintained for the Transferred Employee immediately prior to his or
her Employee Transfer Date, and (ii) provide each Transferred Employee with
credit for any co-payments and deductibles paid prior to his or her Employee
Transfer Date in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employee is eligible to
participate in after his or her Employee Transfer Date.
(i) Effective as of each Employee Transfer Date, each
Transferred Employee shall become fully vested in his or her account balances in
any defined contribution or 401(k) Plan maintained by the Selling Parties or
their Affiliates on behalf of such Transferred Employee (the "SELLER SAVINGS
PLAN") and distributions of such account balances shall be made available to
each such Transferred Employee as soon as practicable following his or her
Employee Transfer Date, in accordance with the provisions of the Seller Savings
Plan and applicable law. Participants shall be permitted to elect rollovers of
such accounts (excluding after-tax amounts) in cash to a defined contribution or
401(k) Plan maintained by Buyer (the "BUYER SAVINGS PLAN"). Pending such
distribution or rollover, the Seller Savings Plan shall permit each Transferred
Employee with a loan outstanding under the Seller Savings Plan to continue to be
able to repay such loan. Notwithstanding the foregoing, if requested by Buyer
and at Buyer's sole cost, the Selling Parties shall cause a spinoff of the
accounts of the Transferred Employees to a Buyer 401(k) plan on such terms as
reasonably requested by Buyer.
(j) As of the occurrence of the first Employee Transfer Date,
Buyer shall have in effect flexible spending reimbursement accounts under a
cafeteria plan qualifying under Section 125 of the Code (the "BUYER 125 PLAN")
that provides benefits to the Transferred Employees that are substantially
identical in all material respects to those provided by the flexible spending
reimbursement accounts under the cafeteria plan in which the Transferred
Employees are eligible to participate immediately prior to such date (the
"SELLER 125 PLAN"). Buyer agrees to cause the Buyer 125 Plan to accept a
spin-off of the flexible spending reimbursement accounts from the Seller 125
Plan and to honor and continue through the end of the calendar year in which an
Employee Transfer Date occurs the elections made by each Transferred Employee
under the Seller 125 Plan in respect of the flexible spending reimbursement
accounts that are in effect immediately prior to the Employee Transfer Date. As
soon as practicable following an Employee Transfer Date, the Selling Parties
shall cause to be transferred to Buyer an amount in cash equal to the excess of
the aggregate accumulated contributions to the flexible spending reimbursement
accounts made during the year in which an Employee Transfer Date occurs by the
applicable Transferred Employee over the aggregate reimbursement payouts made
for such year from such accounts to such Transferred Employee. If the aggregate
reimbursement payouts from the flexible reimbursement accounts made during
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the year in which an Employee Transfer Date occurs made to the applicable
Transferred Employee exceed the aggregate accumulated contributions to such
accounts for such year by the applicable Transferred Employee, Buyer shall cause
such excess to be transferred to the Selling Parties as soon as practicable
following the applicable Employee Transfer Date. On and after an Employee
Transfer Date, Buyer shall assume and be solely responsible for all claims by
the applicable Transferred Employee under the Seller 125 Plan, whether incurred
prior to, on or after the applicable Employee Transfer Date, that have not been
paid in full as of the applicable Employee Transfer Date.
(k) Buyer and the Selling Parties agree to cooperate as
necessary to effectuate the provisions of this Section 4.3 and to ensure an
orderly transition of benefits coverage with respect to the Transferred
Employees from the Seller Plans to Buyer's plans.
(l) Buyer shall assume all paid-time-off obligations of the
Selling Parties and their Affiliates with respect to each Transferred Employee,
and each Transferred Employee shall, without duplication of benefits, be given
credit for all accrued but unused paid-time-off under Selling Parties or their
Affiliate's paid-time-off program as of such Transferred Employee's Employee
Transfer Date, using the same methodology used by the Selling Parties or their
Affiliates immediately prior to such Employee Transfer Date for crediting
service and determining the amount of such paid-time-off benefits. Buyer shall
also assume the full obligation to pay all or any portion of any bonus or
incentive plan benefit for the years 2002 and 2003, to the extent unpaid as of
an Employee Transfer Date, with respect to any Transferred Employee; provided,
however, the Selling Parties will promptly reimburse Buyer for (i) any portion
of any bonus paid after the applicable Employee Transfer Date for the year 2002,
to the extent that the bonus so paid does not exceed the unpaid portion of the
bonus declared for such period in respect of such Transferred Employee and (ii)
for the allocable portion of any bonus paid after the applicable Employee
Transfer Date for the year 2003 to the extent such bonus is included in general
and administrative expenses of the Partnership and not in operating and
maintenance expenses, such allocable portion to be equal to the product of (A) a
fraction, of which (I) the numerator is the number of days in the period from
and including January 1, 2003 to but excluding the Closing Date, and (II) the
denominator is 365, times (B) the amount of such bonus included in general and
administrative expenses of the Partnership that is so paid for the year 2003 to
such Transferred Employee, provided, that in no event shall the amount used in
this subclause (B) exceed the 2003 target bonus amount established by Parent for
such Transferred Employee.
(m) If Buyer terminates the employment of a Transferred
Employee at any time between his or her Employee Transfer Date and the first
anniversary of such date for a reason other than cause, but excluding any
termination in which such employee is offered substantially comparable continued
employment by another Person, Buyer shall provide such Transferred Employee who
is not a Represented Employee with a severance benefit equal to the greater of
(i) the benefit provided under Buyer's severance plan or program and (ii) a sum
equal to two weeks of pay for every year of service with a minimum of six weeks
and a maximum of fifty-two weeks total severance benefit.
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(n) For a period of one year after the Closing Date:
(i) except as contemplated by the Transition Services
Agreement, neither Buyer nor any of its Affiliates shall, directly or
indirectly, (A) induce any employee of any of the Selling Parties or
their Affiliates (other than the Transferred Employees) to leave the
employ of any such Selling Party or Affiliate thereof or (B) employ or
otherwise engage as an employee, independent contractor or otherwise
any such employee, except that Buyer and its Affiliates shall not be
precluded from hiring any such employee who (y) initiates discussions
regarding such employment without any direct or indirect solicitation
by Buyer or its Affiliates or (z) responds to any public advertisement
placed by Buyer or its Affiliates; and
(ii) neither the Selling Parties nor any of their
Affiliates shall, directly or indirectly, (A) induce any of the
Transferred Employees to leave the employ of any Partnership Entity or
Buyer or any of its Affiliates or (B) employ or otherwise engage as an
employee, independent contractor or otherwise any such Transferred
Employee, except that the Selling Parties and their Affiliates shall
not be precluded from hiring any such employee who (y) initiates
discussions regarding such employment without any direct or indirect
solicitation by the Selling Parties or their Affiliates or (z) responds
to any public advertisement placed by the Selling Parties or their
Affiliates.
(o) Effective as of each Employee Transfer Date, the
applicable Transferred Employee who is not a Represented Employee shall become
fully vested in his or her accrued benefits under The Xxxxxxxx Companies, Inc.
Pension Plan maintained by the Selling Parties or their Affiliates.
(p) The Selling Parties shall bear the full and sole
responsibility and liability for providing any notice to the Selling Parties' or
Parent's employees which may be required pursuant to the Federal Working
Adjustment and Retraining Notification Act of 1988 ("WARN") or any similar
applicable law for any employment loss which occurs in connection with this
transaction and shall hold Buyer and its Affiliates (including the Partnership
Entities) harmless from and against any and all losses associated with or
related to the Selling Parties failure to comply with WARN or any similar law
with respect to such employees. Notwithstanding the foregoing, to the extent
that WARN liability on the part of the Selling Parties or Parent is triggered
with respect to a Business Employee due to Buyer or one or more of its
Affiliates terminating the employment of one or more Transferred Employees after
the applicable Employee Transfer Date, then any WARN liability that otherwise
would be attributed to the Selling Parties or Parent with respect to a Business
Employee shall instead be the sole responsibility of the Buyer.
(q) Notwithstanding anything in this Agreement to the
contrary, Buyer and its Affiliates (including the Partnership Entities) are not
assuming any obligation or liability of the Selling Parties or any of their
Affiliates, including any Seller Plan, or any liability thereunder, to any
Transferred Employee or other Person except to the extent such liability or
obligation is specifically assumed pursuant to this Section 4.3.
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(r) Nothing in this Section 4.3 shall prevent Buyer or an
Affiliate thereof from amending or terminating, in its sole discretion, any
employee benefit plan of Buyer or an Affiliate thereof at any time following the
Closing, subject to the provisions of the PACE Collective Bargaining Agreement
and Section 4.3(m) above; provided, however, that Buyer agrees to indemnify and
protect the Seller Indemnified Parties for any liability they may have as a
result of amending or terminating any employee benefit plan of Buyer or an
Affiliate thereof following the Closing.
SECTION 4.4. CONSENTS AND APPROVALS.
(a) On or as promptly as practicable after the date hereof,
the Selling Parties shall cause Parent to deliver notice (a copy of which will
be furnished to Buyer) to the Federal Trade Commission, as required under that
certain order, dated June 17, 1998, to which Parent is subject (the "CONSENT
DECREE"). The Selling Parties and Buyer shall each use all commercially
reasonable efforts to obtain, and in the case of the Selling Parties, cause
Parent and the Partnership Entities to obtain, all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities and of all other
Persons required in connection with the execution, delivery and performance by
such party of this Agreement and will cooperate fully with the other party in
promptly seeking to obtain all such authorizations, consents, orders, and
approvals, giving such notices, and making such filings. If the parties agree
that a filing is required, each party shall (i) file or cause to be filed, as
promptly as practicable (and in any event within five (5) business days after
the execution and delivery of this Agreement), with the Federal Trade Commission
and the United States Department of Justice, all reports and other documents
required to be filed by such party under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX XXX") concerning the transactions
contemplated hereby and (ii) promptly comply with or cause to be complied with
any requests by the Federal Trade Commission or the United States Department of
Justice for additional information concerning such transactions, in each case so
that the waiting period applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall expire as soon as practicable after
the execution and delivery of this Agreement. Each party agrees to request, and
to cooperate with the other party in requesting, early termination of any
applicable waiting period under the HSR Act. The costs of any filing fees
required in connection with any HSR filing shall be borne equally between Buyer,
on the on hand, and the Selling Parties, on the other hand; provided, however,
that any and all costs and expenses otherwise incurred by any of the parties in
connection with obtaining any necessary consents, waivers, authorizations and
approvals hereunder shall be borne solely by the party required to obtain or
deliver such consents, waivers, authorizations and approvals; provided, further,
any and all costs and expenses incurred by any of the parties in connection with
obtaining the waivers, consents and amendments referred to in Section 5.13
hereunder shall be borne by the Selling Parties.
(b) Without limiting the generality of the parties'
undertakings pursuant to Section 4.6, the parties shall:
(i) use commercially reasonable efforts to prevent the entry
in a judicial or administrative proceeding brought under any antitrust
law by the Federal Trade Commission, the United States Department of
Justice or any other party of a permanent or preliminary injunction or
other order that would make consummation of the
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transactions contemplated by this Agreement unlawful or that would
prevent or delay such consummation;
(ii) take promptly, in the event that such an injunction or
order has been issued in such a proceeding, any and all reasonable
steps, including the appeal thereof and the posting of a bond necessary
to vacate, modify, or suspend such injunction or order, so as to permit
such consummation on a schedule as close as possible to that
contemplated by this Agreement; and
(iii) not take a position or agree to a settlement that will
or would reasonably be expected to have a material adverse effect on
the Buyer or a material adverse effect on the Selling Parties or
otherwise prejudice the Buyer's or the Selling Parties' intent with
respect to the transactions contemplated hereby.
(c) If the transfer of any instrument, contract, license,
lease, permit, or other document to Buyer hereunder shall require the consent of
any party thereto other than the Selling Parties, Parent or the Old Company,
then this Agreement shall not constitute an agreement to assign the same, and
such item shall not be assigned to or assumed by Buyer, if an actual or
attempted assignment thereof would constitute a breach thereof or default
thereunder. In such case, the parties shall cooperate and each shall use
commercially reasonable efforts to obtain such consents of such other parties to
the extent required and, if and when any such consents are obtained, to transfer
the applicable instrument, contract, license, lease, permit, or other document.
If any such consent cannot be obtained, the Selling Parties shall cooperate in
any reasonable arrangement designed to obtain for Buyer all benefits, privileges
and obligations of the applicable instrument, contract, license, lease, permit,
or document, including, without limitation, possession, use, risk of loss,
potential for gain and dominion, control and demand.
(d) During the term of this Agreement and prior to the
Closing, Buyer will negotiate in good faith and use its commercially reasonable
efforts to finalize the terms and conditions of the debt financing described in
Section 3.5, including without limitation, the execution and delivery of
definitive agreements for same containing terms and conditions to funding that
are consistent in all material respects with the commitment therefor referenced
in Section 3.5, so that Buyer will have the immediately available funds to pay
the First Payment of the Purchase Price at Closing; provided, however, Buyer (or
its Affiliates) shall not be required to make any representation in such
definitive agreements relating to the Partnership Entities that it is not true.
Buyer will notify the Selling Parties, upon request, of the status of the
negotiations for the debt financing described in Section 3.5.
SECTION 4.5. FURTHER ASSURANCES.
Upon the request of Buyer at any time on or after the Closing Date,
each of the Selling Parties will promptly execute and deliver, or cause Parent
to execute and deliver, such further instruments of assignment, transfer,
conveyance, endorsement, direction or authorization and other documents as Buyer
or its counsel may reasonably request in order to perfect title of Buyer and its
successors and assigns to the Securities or otherwise to effectuate the purposes
of this Agreement.
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SECTION 4.6. COMMERCIALLY REASONABLE EFFORTS.
Upon the terms and subject to the conditions of this Agreement, each of
the parties hereto will use all commercially reasonable efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable consistent with applicable law to consummate and
make effective in the most expeditious manner practicable the transactions
contemplated hereby. Without limiting the generality of the foregoing, upon the
reasonable request of Buyer from time to time, the Selling Parties shall use
their commercially reasonable efforts to assist Buyer in meeting the condition
referred to in Section 5.9.
SECTION 4.7. NOTICE OF BREACH.
Each party shall promptly give to the other parties written notice with
particularity upon having knowledge of any matter that would constitute a breach
by such party of any representation, warranty, agreement or covenant of such
party contained in this Agreement, including, without limitation, the Selling
Parties' representations in Article II. The Selling Parties shall have the
obligation prior to the Closing to supplement the Disclosure Schedule in a
prompt manner with respect to any matter that would have been required to be set
forth on or described in such Disclosure Schedule (a "DISCLOSURE SCHEDULE
UPDATE"). Any such supplemental disclosure (i) will not be deemed to have been
disclosed as of the date of this Agreement for purposes of determining whether
the conditions set forth in Article V have been satisfied (unless such
supplemental disclosure relates to an update made in response to Section
2.21(a)(vii)), and (ii) shall not be deemed to have cured any breach of
representation, warranty, covenant or agreement relating to the matters set
forth in such update for purposes of indemnification pursuant to Article VIII,
unless such supplemental disclosure relates to an update to Schedule 2.25 hereto
by reason of an action taken by a customer or shipper after the date hereof, in
which case a breach of the representation in Section 2.25 shall not be deemed to
have occurred for purposes of indemnification pursuant to Article VIII.
SECTION 4.8. CONFIDENTIAL INFORMATION.
(a) For two (2) years after the Closing, the Selling Parties
and their Affiliates shall not, directly or indirectly, disclose to any Person
any information not in the public domain or generally known in the industry, in
any form, whether acquired prior to or after the Closing Date, relating to the
business and operations of the Partnership Entities; provided, however, that any
such confidential information received, obtained or created in the course of
defending any claim or action under Article VIII hereof shall not be disclosed
for a period of two (2) years following the resolution of such claim or action.
Notwithstanding the foregoing, the Selling Parties may disclose any information
relating to the business and operations of the Partnership Entities (i) if
required by law or applicable stock exchange rule, and (ii) to such other
Persons if, at the time such information is provided, such Person is already in
the possession of such information.
(b) Except as consented to by Buyer in writing, none of the
Selling Parties and their Affiliates shall release any Person from any Bidder
Confidentiality Agreement (as defined below) now existing with respect to the
Securities or Partnership Entities or waive or amend any provision thereof.
After the Closing Date, the Selling Parties shall use commercially reasonable
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efforts to have all confidential information either returned to the Selling
Parties or destroyed. Furthermore, if any parties to the Bidder Confidentiality
Agreements breach the terms of their respective agreement, upon the request of
Buyer, the Selling Parties and Parent shall cooperate with Buyer to enforce the
terms of such Bidder Confidentiality Agreements at Buyer's cost and expense. The
term "BIDDER CONFIDENTIALITY AGREEMENTS" shall mean the confidentiality
agreements between any of Parent, the Selling Parties or any of their Affiliates
or advisors and prospective purchasers (other than Buyer or its Affiliates) of
the Securities.
SECTION 4.9. TAX COVENANTS.
(a) The Selling Parties shall cause the Partnership Entities
to prepare and file all Tax Returns relating to any of the Partnership Entities
with the appropriate federal, state, local and foreign governmental agencies and
cause the Partnership Entities to pay the Taxes shown to be due thereon, for
which Tax Returns are due and Taxes are payable prior to the Closing Date. For
periods ending on or prior to the Closing Date, but for which Tax Returns are
not due and Taxes are not payable as of the Closing Date, (i) the Selling
Parties shall prepare and submit to Buyer for review, signature, and filing all
such Tax Returns required to be filed by the New Company, and, at such time, the
Selling Parties shall pay to the Buyer the Taxes shown to be due thereon, and
(ii) the Buyer shall cause the Partnership Entities (other than the New Company)
to prepare and file all Tax Returns and cause the Partnership Entities to pay
the Taxes shown to be due thereon.
(b) Buyer shall cause the Partnership Entities to prepare all
Tax Returns relating to the Partnership Entities for periods beginning on or
before the Closing Date and ending after the Closing Date. With respect to any
such Tax Return relating to the New Company, Buyer shall determine (by an
interim closing of the books as of the Closing Date except for ad valorem and
property taxes owed or owing by the New Company, which shall be prorated on a
daily basis) the Tax that would have been due with respect to the period covered
by such Tax Return if such taxable period ended on and included the Closing Date
(the "PRE-CLOSING TAX"). Not later than 30 days prior to the due date of each
such Tax Return, Buyer shall deliver a copy of such Tax Return to the Selling
Parties together with a statement of the excess, if any, of the Pre-Closing Tax
over the amount set up as a liability for such Tax on the financial statements
of the New Company. Buyer shall make or cause to be made such changes in such
Tax Returns or the statement of excess, if any, as the Selling Parties may
reasonably request, which changes shall be subject to Buyer's approval, which
shall not be unreasonably withheld. Not later than five days prior to the due
date of such Tax Return, the Selling Parties shall pay to Buyer the amount of
such excess. Upon receipt thereof, Buyer shall file or cause to be filed such
Tax Return and shall pay all Taxes shown to be due thereon.
(c) The Selling Parties will cause any tax sharing agreement
or similar arrangement with respect to Taxes involving any of the Partnership
Entities to be terminated effective as of the Closing Date, to the extent any
such agreement or arrangement relates to any such entity, and after the Closing
Date none of the Partnership Entities shall have any obligation under any such
agreement or arrangement for any past, present or future period.
(d) All excise, sales, use, transfer (including real property
transfer or gains), stamp, documentary, filing, recordation and other similar
taxes, together with any interest,
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additions or penalties with respect thereto and any interest in respect of such
additions or penalties, resulting directly from the transactions contemplated by
this Agreement (the "TRANSFER TAXES"), shall be borne by the Selling Parties.
Notwithstanding anything to the contrary in this Section 4.9, any Tax Returns
that must be filed in connection with Transfer Taxes shall be prepared and filed
when due by the party primarily or customarily responsible under the applicable
local law for filing such Tax Returns, and such party will use commercially
reasonable efforts to provide such Tax Returns to the other party at least ten
days prior to the due date for such Tax Returns.
(e) Notwithstanding anything to the contrary contained herein,
any franchise Tax paid or payable with respect to any of the Partnership
Entities shall be allocated to the taxable period during which the right to do
business is obtained by the payment of the franchise Tax.
SECTION 4.10. INSURANCE, BONDS AND COLLATERAL.
(a) Buyer shall use its commercially reasonable efforts to
take, or cause the Partnership Entities to take, such actions as may be
necessary or appropriate so that all surety bonds, letters of credit, and cash
collateral issued in respect of any of the Partnership Entities and listed on
Schedule 4.10(a) (collectively, the "BONDS") are replaced as soon as practicable
and in no event later than 60 days after the Closing Date. Buyer shall
indemnify, defend and hold harmless the Selling Parties and their Affiliates for
any and all Losses (in each case without deduction or set off) incurred on
account of such Bonds after the Closing Date.
(b) Notwithstanding the termination of coverage on the Closing
Date (or May 1, 2003, in the case of excess liability policies of the Parent
Policies) for each of the Partnership Entities under the Parent Policies
described in Section 2.20(b), the Selling Parties shall take or cause the Parent
to take appropriate action to ensure that upon and after the Closing (i) each of
the Partnership Entities shall continue to be covered by such Parent Policies
for claims relating to or arising from events or occurrences happening prior to
such termination of coverage and, with respect to "claims made" policies, which
are reported prior to such termination of coverage, to the same extent as each
such entity was covered prior to Closing under each of such Parent Policies, and
(ii) each of the Partnership Entities is named as an insured or additional
insured party under such Parent Policies in respect of such claims. After the
Closing Date, the Selling Parties or Parent shall continue to manage the claims
described in the immediately preceding sentence and shall be responsible for all
costs on account of such claims, including but not limited to deductibles and
retention and third-party administration charges. For a period of five years
after the Closing Date, the Selling Parties shall provide or cause Parent to
provide the Buyer, as reasonably requested by the Buyer, historical insurance
carrier loss-runs and internally administered loss-runs in respect of the
Partnership Entities.
(c) Without limiting the generality of Section 4.10(b), after
the Closing Date, Parent or its Affiliates (other than the Partnership Entities)
shall continue to manage all workers' compensation claims of all Transferred
Employees that are known and reported on or prior to the Closing Date, or that
are covered under the workers compensation policy provided by the Parent. The
Selling Parties shall be responsible for all costs on account of such claims,
including but not limited to deductibles and third party administrator charges.
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SECTION 4.11. INFORMATION TECHNOLOGY.
(a) ATLAS Contribution and License Back Agreement. The Selling
Parties shall, or shall cause one or more of their Affiliates to, assign and
transfer, at or immediately prior to Closing, all right, title and interest to
the ATLAS 2000 System, any additional software related thereto and any computer
hardware associated therewith to the Partnership Entity or Partnership Entities,
as the case may be, designated by the Buyer pursuant to an Assignment,
Contribution and License Agreement, in substantially the form attached hereto as
Exhibit 1.2(a)(iv)(3) (the "ATLAS ASSIGNMENT, CONTRIBUTION AND LICENSE
AGREEMENT"). The ATLAS Assignment, Contribution and License Agreement shall
provide for, among other things, Buyer to cause the applicable Partnership
Entity or Entities to xxxxx XXX a license, which XXX may sublicense to Xxxxxxxx
Bio-Energy LLC, to use, copy, modify, enhance and upgrade the ATLAS 2000 System
to support any business owned or operated by Xxxxxxxx Bio-Energy LLC for so long
as Xxxxxxxx Bio-Energy LLC continues to use the ATLAS 2000 System.
(b) IT Migration Team and Migration Assets. The parties shall
each designate up to three (3) representatives to a migration team ("IT
MIGRATION TEAM") that shall be responsible for determining the software and
computer hardware ("IT ASSETS") that will be necessary for Buyer to continue
operations of the Partnership Entities in substantially as efficient a manner in
which such operations are conducted by the Partnership Entities as of the
Closing Date, taking into account, as appropriate, the impact on such items as
may be necessary in light of the reduced size and scale of Buyer and the
Partnership Entities immediately after the Closing as compared to the size and
scale (and corresponding needs) of Parent and its Affiliates (including the
Partnership Entities) immediately before the Closing. The IT Migration Team
shall identify (i) those certain IT Assets to be transferred or assigned to the
Partnership Entities by the Selling Parties or their Affiliates (which IT Assets
shall include, subject to the approval of the Partnership Entities, all computer
hardware that is not wholly owned by any of the Partnership Entities, but that
is owned by Parent or any of its Affiliates, and that is (A) not required for
the on-going business of Parent and its subsidiaries (other than the Partnership
Entities) and (B) is used more than 50% of the time or for the benefit of
Transferred Employees) (the "TRANSFERRED ASSETS") and (ii) those certain IT
Assets to be purchased, leased or licensed by or for the benefit of the
Partnership Entities as a substitute for IT Assets retained by the Selling
Parties or their Affiliates, subject to the parameters set forth in the
immediately preceding sentence (the "SUBSTITUTED ASSETS," and collectively with
Transferred Assets, the "MIGRATION ASSETS"); provided, however, the Selling
Parties shall retain the sole discretion as to whether any IT Asset owned,
licensed or leased by the Selling Parties or their Affiliates is transferred or
assigned to the Partnership Entities as a Transferred Asset, including without
limitation the IT Assets listed on Schedule 2.13(b).
(c) Dispute Resolution. If the Selling Parties and Buyer are
unable to agree as to whether one or more IT Assets are to be included among the
Substituted Assets (or the terms of the purchase, lease or license of such
assets), the parties will compile a list of such disputed IT Assets (the
"Dispute List"). The Dispute List will, in the case of each category of disputed
IT Asset, set forth the Selling Parties' choice and Buyer's choice of IT Asset
to be deemed a Substituted Asset and the terms of the purchase, lease or license
of such assets. The parties will refer the dispute to a technology consultant of
nationally recognized standing (the "TECHNOLOGY CONSULTANT") to be selected in
the following manner: the Selling Parties will select three (3)
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candidates and deliver a written notice containing the names of such candidates
to Buyer, and within five (5) days of receiving such notice, Buyer will select
one of such three candidates to serve as the Technology Consultant. The
Technology Consultant may not be otherwise engaged by the Selling Parties or
Buyer, or their respective Affiliates, in connection with the transactions
contemplated under this Agreement and the Transaction Documents and shall not
have performed any material services on behalf of the Selling Parties or Buyer,
or their respective Affiliates, during the five (5) years immediately preceding
the date of this Agreement. Upon selection, the Technology Consultant shall
immediately be engaged by the parties, with costs and expenses of the Technology
Consultant to be borne equally be the Selling Parties, on the one hand, and
Buyer, on the other hand. For a period of ten (10) days following the engagement
of the Technology Consultant, the Selling Parties and Buyer shall be entitled to
furnish the Technology Consultant with such supporting documentation as they
deem reasonable to support their respective positions with respect any or all of
the IT Assets on the Dispute List. The Technology Consultant shall resolve the
dispute, with respect to each category of disputed IT Asset on the Dispute List,
by choosing either the Selling Parties' or Buyer's choice of IT Asset (and
either Selling Parties' or Buyers' terms of the purchase, lease or license of
such assets), and the decision of the Technology Consultant shall be final and
binding on the Selling Parties and Buyer. The Technology Consultant shall
resolve the dispute with respect to each category of IT Asset on the Dispute
List within thirty (30) days after the engagement of the Technology Consultant.
(d) IT Migration Plan. The IT Migration Team shall also be
responsible for developing a detailed plan that will include timetables for and
estimated costs of the transfer, assignment, purchase, lease or license, as the
case may be, of the Migration Assets (the "IT MIGRATION PLAN"). The IT Migration
Plan shall provide, among other things, that if requested by Buyer, the Selling
Parties or their Affiliates will use commercially reasonable efforts to obtain
for Buyer, on commercially reasonable terms, such Substituted Assets as
requested, subject to Section 4.11(c) above. The Migration Team shall use
commercially reasonable efforts to complete the development of the IT Migration
Plan prior to the Closing Date and, in any event, shall complete the IT
Migration Plan by no later than fifteen (15) days after the Closing Date. The
time from such date through completion of the implementation of the IT Migration
Plan shall be stated therein and shall be referred to as the "IT MIGRATION
PERIOD." It is understood by the parties hereto that the IT Migration Plan will
be subject to mutual revision, agreement for which shall not be unreasonably
withheld by either party, during the IT Migration Period. Upon completion of the
IT Migration Plan, the Selling Parties shall promptly thereafter transfer the
Transferred Assets to Buyer, or the Partnership Entities designated by Buyer.
(e) Costs.
(i) Costs Relating to Preparation of IT Migration Plan. All
costs related to the Selling Parties' and their Affiliates' employees
and contractors involved in the preparation of the IT Migration Plan
shall be borne by the Selling Parties, and all costs related to Buyer's
employees and contractors involved in the preparation of the IT
Migration Plan shall be borne by Buyer. Costs incurred by Buyer
pursuant to this Section 4.11(e)(i) shall not be subject to the Expense
Limit (as defined in Section 4.15).
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(ii) Costs Relating to Implementation of IT Migration Plan.
All costs related to the implementation of the IT Migration Plan,
including without limitation the transfer and assignment of Transferred
Assets and purchase, lease or license of Substituted Assets, as the
case may be (and including the cost of time, labor and expenses of
employees of the Selling Parties and their Affiliates in connection
therewith) (collectively, "IMPLEMENTATION COSTS"), shall be borne by
the Buyer, subject in the case of this Section 4.11(e)(ii) to the
Expense Limit. The Implementation Costs also shall include, without
limitation, the following costs and expenses: (i) all cost associated
with the transfer of leases or licenses relating to Transferred Assets,
(ii) any excess costs or fees associated with any of the Selling
Parties or their Affiliates being deemed to be a service bureau by a
vendor of such Migration Assets, (iii) costs relating to the conversion
and loading of data, and (iv) costs relating to the integration of the
Migration Assets into the Partnership Entities' information technology
systems.
(iii) Costs Relating to Transition Services. All costs and
expenses associated with ongoing maintenance and support services
provided by the Selling Parties or their Affiliates with respect to the
Migration Assets, whether provided under the Transition Services
Agreement (other than Implementation Costs) or otherwise, shall not be
subject to the Expense Limit.
(f) Miscellaneous. In the case of Transferred Assets
(including software and computer hardware associated with the ATLAS 2000 System)
that are (i) leased by the Selling Parties or their Affiliates, such leases
shall be transferred to Buyer, and upon such transfer, Buyer shall assume full
responsibility for such leases, and (ii) assigned to any of the Partnership
Entities, including license and contract rights, the Selling Parties shall
secure any consents necessary for such assignments. If Buyer elects to obtain
its own leases or licenses for Substituted Assets without the assistance of the
Selling Parties, Buyer shall upon the request of the Selling Parties submit to
them documentation showing proper licensing prior to the end of the IT Migration
Period
SECTION 4.12. SOFTWARE LICENSE.
With respect to any Licensed Software that is included in the
Transferred Assets (the "TRANSFERRED LICENSED SOFTWARE"), the Selling Parties,
for themselves and on behalf of their Affiliates, shall, in accordance with
Section 4.11(d), grant to the Partnership Entities and the Buyer and its
Affiliates, a worldwide nonexclusive royalty-free, perpetual license, with the
right to assign and sublicense only to such Affiliates, to use, copy, modify,
enhance, and upgrade, solely for their internal business purposes and not as a
service bureau, the Transferred Licensed Software, except as not permitted
pursuant to any license relating thereto. Any copies of the Transferred Licensed
Software and any documentation related thereto must contain all copyright and
other intellectual property rights notices included thereon at the time of
Closing. The Partnership Entities and Buyer shall not be entitled to receive and
Selling Parties and their Affiliates shall have no obligation to provide any
modifications, enhancements, or upgrades made to the Transferred Licensed
Software developed subsequent to the date of transfer of such Licensed
Transferred Software to the Buyer or the Partnership Entities. To the extent
that they possess such, the Selling Parties and their Affiliates shall provide
copies to Buyer and the Partnership Entities of the source code for all
Transferred Licensed Software. Ownership of all
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intellectual property rights in the Transferred Licensed Software remains with
Selling Parties and their Affiliates; provided, following the date of transfer
to Buyer and the Partnership Entities, the intellectual property rights to any
modifications, enhancements and upgrades to the Transferred Licensed Software
will be owned by the party making such modifications, enhancements and upgrades
and there shall be no right for any party to disclose such to any other party.
The Partnership Entities and Buyer shall not take any action that is materially
inconsistent with the Selling Parties' and their Affiliates' rights in the
Transferred Licensed Software. Except as otherwise expressly provided in this
section, the Transferred Licensed Software and any related documentation are
provided on an "as is" basis, and the Selling Parties and their Affiliates
hereby expressly disclaim any implied warranty of merchantability or fitness for
a particular purpose. The Selling Parties and their Affiliates do not warrant
that the Transferred Licensed Software or documentation are error-free or that
the Partnership Entities' or Buyer's use thereof will be uninterrupted. Buyer
shall have the right to transfer its rights as granted herein to a third party
only upon the sale or transfer of all or substantially all of the Securities or
the assets of the Partnership Entities or a majority of the New LLC Interests to
such third party, except to the extent any such transfer is not permitted
pursuant to any license relating thereto. All rights with respect to Transferred
Licensed Software not expressly granted to Buyer in this Section 4.12 are
retained by the Selling Parties and their Affiliates.
SECTION 4.13. NON-SOFTWARE COPYRIGHT LICENSE.
Effective upon the Closing Date, the Selling Parties, for themselves
and on behalf of their Affiliates, hereby grant to the Partnership Entities,
Buyer and its Affiliates, a nonexclusive royalty-free, perpetual license,
without right to sublicense, to use, copy, modify, enhance, and upgrade, solely
for their internal business purposes and not as a service bureau, all manuals,
user guides, standards and operation procedures and similar documents owned by
the Selling Parties and/or their Affiliates and used by the Partnership
Entities. All copies of the foregoing must reproduce and include all copyright
and other intellectual property rights notices as such appear on such items at
the time of Closing or as specifically provided with respect to any such item by
the Selling Parties. All rights with respect to such items not expressly granted
to Buyer in this Section 4.13 are retained by the Selling Parties and their
Affiliates.
SECTION 4.14. TRANSITIONAL TRADEMARK LICENSE; LEGAL NAMES.
(a) Effective upon the Closing Date, the Selling Parties and
their Affiliates, hereby grant to the Partnership Entities, Buyer and its
Affiliates a nonexclusive, nontransferable, royalty-free license, without right
to sublicense, to use, solely in the Partnership Entities' businesses as they
have been conducted since February 9, 2001 and as they are presently conducted,
any and all trademarks, service marks, trade names, trade dress and domain names
owned by the Selling Parties and their Affiliates solely to the extent appearing
on existing inventory, advertising materials and property of the Partnership
Entities (such as signage, vehicles, and equipment) (collectively "SELLERS'
MARKS") for a period of nine (9) months from the Closing Date ("LICENSE
PERIOD"). The Buyer and the Partnership Entities may use such existing
inventory, advertising materials and property during the License Period, but
shall not create new inventory, advertising materials or property using Sellers'
Marks. Buyer and the Partnership Entities shall promptly replace or remove
Sellers' Marks on inventory, advertising materials and other property, provided
that all such use shall cease no later than the end of the
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License Period. The nature and quality of all uses of Sellers' Marks by Buyer
and the Partnership Entities shall conform to the nature and quality of the uses
of Sellers' Marks by the Selling Parties, Parent and the Partnership Entities as
of the date hereof. Immediately upon expiration of the License Period, the Buyer
and the Partnership Entities shall cease all further use of Sellers' Marks and
shall adopt new trademarks, service marks, and trade names that are not
confusingly similar to Sellers' Marks. All rights not expressly granted in this
Section 4.14 with respect to Sellers' Marks are hereby reserved. In the event
Buyer or any of the Partnership Entities breaches the provisions of this Section
4.14 and such breach is not cured (or reasonable steps taken to prevent its
reoccurrence for such breaches that cannot be cured) within fifteen (15)
business days after receipt by Buyer or such Partnership Entity of written
notice of such breach, the Selling Parties may immediately terminate the License
Period upon fifteen (15) days written notice.
(b) No later than ninety (90) days following the Closing Date,
Buyer shall have caused each of the Partnership Entities listed on Schedule 4.14
hereof to change its legal name so that there is no longer any reference therein
to the name "Xxxxxxxx" or any variation, derivation or abbreviation thereof, and
in connection therewith, Buyer shall cause each such Partnership Entity to make
all necessary filings of certificates with the Secretary of State of the State
of Delaware and to otherwise amend its Organizational Documents by such date.
SECTION 4.15. MAXIMUM AMOUNT OF CERTAIN OF BUYER'S COSTS AND
EXPENSES.
Notwithstanding any other provision of this Agreement, all (i)
Implementation Costs and (ii) one-time costs and capital expenditures related to
(A) the transition, transfer or conveyance of assets, operations or employees
from the Selling Parties or Parent to the Buyer or the Partnership Entities or
(B) the changing of the names of the Partnership Entities (up to a maximum
amount of $650,000 plus reasonable legal expenses and filing fees in the case of
this clause (B)), in excess in the aggregate of $5,000,000 (the "EXPENSE LIMIT")
incurred by Buyer or the Partnership Entities that would otherwise be borne by
Buyer or the Partnership Entities (without reimbursement) shall instead be borne
by the Selling Parties or promptly reimbursed by the Selling Parties to Buyer or
the Partnership Entities; provided, however, that the Expense Limit shall only
apply to costs, expenses and capital expenditures incurred by Buyer or the
Partnership Entities within twelve (12) months of the Closing Date. Other than
the costs, expenses and capital expenditures referred to in the immediately
preceding sentence, all costs, expenses and capital expenditures incurred by
Buyer or the Partnership Entities in connection with consummation of the
transactions contemplated in this Agreement and the Transaction Documents shall
not be included in the Expense Limit nor be subject of any obligation of the
Selling Parties or any of their Affiliates to pay or reimburse such costs,
expenses and capital expenditures, including if applicable the cost and expense
of relocating Transferred Employees, property or assets from the One Xxxxxxxx
Center building in Tulsa, Oklahoma, except pursuant to the Transition Services
Agreement or as otherwise agreed to by the parties.
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SECTION 4.16. OFFICE LEASE; OFFICE FURNITURE AND EQUIPMENT;
OFFICE SUPPLIES.
Buyer and the Selling Parties shall negotiate in good faith to enter
into a lease, as soon as reasonably practicable following the Closing Date,
between the Selling Parties or an Affiliate, as lessor, and Buyer or a
Partnership Entity, as lessee, for a term of not less than five (5) years and at
a rate comparable to that for similar unfurnished commercial space in Tulsa,
Oklahoma, subject to the immediately succeeding sentence, to provide the office
space at One Xxxxxxxx Center in Tulsa, Oklahoma, currently occupied by the
Transferred Employees and the IT Assets transferred to Buyer or the Partnership
Entities under the IT Migration Plan or such other or additional space in One
Xxxxxxxx Center as may be mutually agreed upon. The lease will also provide for
Xxxxxxxx to provide PBX services to Buyer and the Partnership Entities for the
term of such lease, at a cost that is agreed upon by the parties and will be
incorporated into such lease. At such time as Buyer and the Partnership Entities
relocate from the One Xxxxxxxx Center building in Tulsa, Oklahoma, Xxxxxxxx
agrees to purchase on behalf of Buyer and the Partnership Entities a system
sufficient to provide PBX services to Buyer and the Partnership Entities in
their new location. Upon the execution and delivery of such lease, the Selling
Parties will transfer, without additional consideration, to the Partnership
Entities (i) the material office furniture and equipment owned by the Selling
Parties or their Affiliates and currently used by the Transferred Employees (at
One Xxxxxxxx Center in Tulsa, Oklahoma) and (ii) office supplies of the type
currently used by such Transferred Employees in a quantity sufficient to last
for approximately ninety (90) days assuming customary usage in accordance with
past practices. Effective as of the Closing, regardless of the execution of such
lease, the Selling Parties hereby transfer, without additional consideration, to
the Partnership Entities all office furniture owned by the Selling Parties or
their Affiliates that is currently used by the Transferred Employees or the
Partnership Entities at locations other than One Xxxxxxxx Center in Tulsa,
Oklahoma.
SECTION 4.17. NO SOLICITATION; TERMINATION OF DISCUSSIONS.
(a) From and after the date hereof, none of the Selling
Parties nor their Affiliates (other than the Partnership Entities), officers,
directors, employees, affiliates, stockholders, representatives, agents, nor
anyone acting on behalf of them shall (and, subject to Section 4.17(b) hereof,
the Selling Parties shall use their reasonable best efforts to cause the
Partnership Entities not to), directly or indirectly, encourage, solicit, engage
in discussions or negotiations with, or provide any information to, any Person
(other than Buyer or its representatives) concerning any merger, sale of assets,
purchase or sale of Securities or similar transaction involving the Partnership
Entities unless this Agreement has been terminated pursuant to and in accordance
with Article VII hereof.
(b) Notwithstanding the provision of Section 4.17(a) above,
the board of directors of the New Company shall be entitled to take (and to
cause any of the other Partnership Entities to take) any action otherwise
prohibited by such Section 4.17(a) in response to any inquiry, contact or
proposal received by New Company, its board of directors or any of the other
Partnership Entities from a Person that is not an Affiliate of the Selling
Parties or the Partnership Entities, if: (i) any discussions and exchanges of
information between New Company (or the other Partnership Entities) and such
third party are subject to a customary confidentiality agreement that will allow
for the disclosure to Buyer provided in Section 4.17(c) below, (ii) such
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inquiry, contact or proposal includes a proposal to acquire at least a majority
of the outstanding Common Units held by Persons that are not Affiliates of the
Selling Parties or a majority in value of the consolidated assets of the
Partnership Entities, (iii) such inquiry, contact or proposal from any such
non-Affiliated Person was not received in violation of Section 4.17(a) and (iv)
the board of directors of the New Company shall have determined in its good
faith judgment, after consultation with legal counsel, that any failure to take
such action would be inconsistent with the fiduciary duties of the New Company,
as the general partner of the Partnership, to the holders of Common Units under
the Delaware LP Act. The Selling Parties agree that they will notify Buyer
immediately if any such inquiry, contact or proposal is received by New Company,
its board of directors or any of the other Partnership Entities or their
respective representatives, and, to the extent known by the Selling Parties,
thereafter shall keep Buyer informed, on a reasonably current basis, on the
status of any such inquiry, contact or proposal and a resulting negotiations or
discussions.
(c) In the event that the New Company enters into a definitive
agreement for a transaction ("DEFINITIVE TRANSACTION AGREEMENT") referred to in
clause (ii) of Section 4.17(b) above, Buyer will have a period of thirty (30)
days from the date the Selling Parties notify Buyer of same (which notice (x)
may be given orally, provided it is promptly confirmed in writing and (y) shall
include a description of the transaction and consideration to be paid by the
acquiring Person) to evaluate such proposed transaction (and the dates set forth
in Sections 7.1(f) and 7.1(g) hereof shall be extended as necessary to
accommodate such 30-day period), and after the expiration of such 30-day period,
Buyer may terminate this Agreement at any time while such Definitive Transaction
Agreement remains in effect; provided, however, that if Buyer terminates this
Agreement while such a Definitive Transaction Agreement is in effect, then the
Selling Parties shall reimburse the Buyer and its Affiliates for their
reasonable out-of-pocket expenses (supported by appropriate documentation
therefore) incurred in connection with the transactions contemplated hereby, but
in no event shall the amount payable by the Selling Parties pursuant to this
proviso exceed $5,000,000.
(d) In the event that the Partnership calls a meeting of
unitholders with a record date prior to the Closing Date (including a special
meeting to consider the approval of a Definitive Transaction Agreement) and the
Closing occurs prior to such meeting, the Selling Parties agree to grant to
Buyer, effective at Closing, an irrevocable proxy to vote the WES Units, WNGL
Units and the Class B Common Units with respect to any matter to be considered
at such meeting.
SECTION 4.18. CONFIRMATION OF TERMINATION OF OLD OMNIBUS
AGREEMENT.
Upon the receipt by Buyer from the Selling Parties or Parent of a
written request after the Closing, Buyer shall use its best efforts to cause the
applicable Partnership Entities to confirm the termination of the Old Omnibus
Agreement as promptly as practicable following receipt of such request.
SECTION 4.19. NEW COMPANY INTERCOMPANY ACCOUNTS.
At Closing, all cash on hand at the New Company will be distributed to
Xxxxxxxx. All intercompany accounts between the New Company, on the one hand,
and Parent, Selling Parties
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and their Affiliates (other than the Partnership Entities), on the other hand,
shall be zeroed at Closing (irrespective of the terms of payment or balances of
such intercompany accounts), with no obligation on the part of any party to make
any payment with respect to any such intercompany accounts.
SECTION 4.20. CERTAIN COSTS AND EXPENSES OF BOARD OF DIRECTORS
OF NEW COMPANY.
The Selling Parties and Parent shall promptly reimburse the Partnership
for costs and expenses of third parties borne by the Board of Directors of New
Company in consideration of the transactions contemplated by this Agreement and
the Transaction Documents that exceed $200,000.
SECTION 4.21. NEW COMPANY AUDITED FINANCIAL STATEMENTS.
As soon as practicable after the date of this Agreement, the Selling
Parties shall provide Buyer with audited balance sheets, as of December 31, 2002
and December 31, 2001, and audited income statements and statements of cash
flows for the 12-month period ended December 31, 2002 and the period from
February 10, 2001 through December 31, 2001, in each case of the New Company and
its predecessor in interest.
ARTICLE V.
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, at or before the Closing Date,
of the following conditions, any one or more of which may be waived by Buyer in
its sole discretion; provided, that Buyer cannot waive, without the consent of
the Selling Parties, the conditions specified in Section 5.4 relating to the
receipt of consents required under the Parent Credit Facility and the Parent
Credit Facility Security Documents and the receipt of a release under the Parent
Credit Facility Liens:
SECTION 5.1. RECEIPT OF DOCUMENTS.
The Selling Parties shall have delivered, or be standing ready to
deliver, to Buyer the items specified in Sections 1.2(a)(i), 1.2(a)(ii),
1.2(a)(iii) and 1.2(a)(iv), in each case duly executed and dated the Closing
Date.
SECTION 5.2. REPRESENTATIONS AND WARRANTIES OF THE SELLING
PARTIES.
All representations and warranties made by the Selling Parties in this
Agreement that are not qualified by materiality or Material Adverse Effect shall
be true and correct in all material respects on and as of the Closing Date as if
again made by the Selling Parties on and as of such date, and all
representations and warranties that are qualified by materiality or Material
Adverse Effect shall be true and correct on the Closing Date as if made by the
Selling Parties on and as of such date; and Buyer shall have received a
certificate dated the Closing Date and signed by a senior executive officer of
each of the Selling Parties to that effect. Any entitlement of the Partnership
Entities to indemnity under the Additional Partnership Indemnity Agreements or
any
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other agreement shall in no way influence the determination as to whether all
such representations and warranties are true and correct in all material
respects (or true and correct) on and as of the Closing Date. Notwithstanding
the foregoing, the representations and warranties made by the Selling Parties in
Section 2.25 shall be deemed to be true and correct in all material respects
unless written notices from customers or shippers that they will discontinue
their business relationship with any of the Partnership Entities (or, to the
Knowledge of the Selling Parties, threats of any such action from material
shippers or customers) have been received by the Parent, the Selling Parties or
the Partnership Entities which represent, in the aggregate, more than $22.0
million in the Partnership's consolidated annual earnings before interest
expenses, taxes, depreciation and amortization; provided, however, that Buyer
shall be entitled to consider any such discontinued business, together with
other adverse effects on the Partnership Entities, for purposes of Section 5.11.
SECTION 5.3. PERFORMANCE OF SELLING PARTIES' OBLIGATIONS.
The Selling Parties shall have performed in all material respects all
obligations required under this Agreement to be performed by them on or before
the Closing Date, and Buyer shall have received a certificate dated the Closing
Date and signed by a senior executive officer of each of the Selling Parties to
that effect.
SECTION 5.4. CONSENTS AND APPROVALS.
The Selling Parties and Parent shall have received all consents
required under the Parent Credit Facility and the Parent Credit Facility
Security Documents. The Selling Parties shall have received a full release of
all Parent Credit Facility Liens and of each of the Partnership Entities that is
party to any Parent Credit Facility Security Document from all liabilities,
obligations and commitments of any Partnership Entity thereunder, in form and
substance reasonably satisfactory to Buyer, and the Selling Parties and Parent
shall have delivered all documents in connection therewith as the Buyer may
reasonably request. All consents, waivers, authorizations and approvals set
forth on Schedule 2.7 shall have been duly obtained and shall be in full force
and effect on the Closing Date. The Selling Parties or Parent shall have
received all consents required in connection with the last matter listed on
Schedule 2.7 as of the date of this Agreement, or alternatively, Buyer shall
have received an opinion of counsel dated as of the Closing Date, in form and
substance reasonably satisfactory to Buyer, that no such consent is necessary.
SECTION 5.5. NO VIOLATION OF ORDERS.
No preliminary or permanent injunction or other order issued by any
Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the
consummation of the transactions contemplated hereby or thereby shall be in
effect; and no action or proceeding before any Governmental Authority shall have
been instituted by a Governmental Authority or threatened by any Government
Authority that seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that
challenges the validity or enforceability of this Agreement or any of the
Transaction Documents.
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SECTION 5.6. DIRECTOR RESIGNATIONS.
The Buyer shall have received the effective resignations of each of the
directors of the New Company, other than those directors who are not a director,
officer, employee or agent of Parent or its Affiliates, or as otherwise agreed
to in writing by the Buyer, and all actions shall have been taken so that
immediately upon the Closing designees or nominees of the Buyer shall constitute
a majority of the members of the Board of Directors of the New Company
(including designees or nominees that are independent directors within the
meaning of the Partnership Agreement).
SECTION 5.7. EMPLOYMENT
Buyer shall have arranged acceptable employment arrangements with each
of the Key Executives; provided, that no condition to Closing shall exist under
this Section 5.7 unless Buyer has made an offer of employment to each such Key
Executive on terms that in the aggregate are not materially less favorable than
the employment terms that each such Key Executive currently enjoys with the
Selling Parties or an Affiliate thereof.
SECTION 5.8. LEGAL OPINION.
Buyer shall have received an opinion(s) of Xxxxxxx & Xxxxx L.L.P.,
counsel to Parent and Selling Parties, and/or such other counsel reasonably
acceptable to Buyer, dated the Closing Date, substantially in the form of
Exhibit 5.8.
SECTION 5.9. DEBT FINANCING.
Buyer shall have obtained the funds necessary to pay the First Payment
of the Purchase Price.
SECTION 5.10. ABSENCE OF SPECIFIED EVENTS.
None of the actions referred to in Section 4.1(a) through Section
4.1(o) shall have occurred and be continuing, except to the extent permitted
under Section 4.1 hereof; provided, that if any such actions have occurred at
any time after August 31, 2003, the date specified in Section 7.1(g) hereof
shall, in Buyer's sole discretion, be extended to a date 30 days after the date
the Buyer first receives notice of such occurrence.
SECTION 5.11. MATERIAL ADVERSE EFFECT.
No Material Adverse Effect shall have occurred since the date of this
Agreement.
SECTION 5.12. FINANCIAL ADVISOR'S OPINION.
The Boards of Directors of the Selling Parties and Parent shall have
received an opinion (a copy of which shall have been furnished to the Buyer)
from a nationally recognized investment bank, dated as of the date of this
Agreement, to the effect that the consideration (as defined therein) to be paid
by Buyer to each of the Selling Parties pursuant to this Agreement constitutes
reasonably equivalent value for the Securities sold by each such Selling Party.
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SECTION 5.13. WAIVERS OF EXISTING DEBT AGREEMENTS.
The Selling Parties shall have received a written waiver from each of
(a) the noteholders under the Note
Purchase Agreement, dated as of October 1,
2002, among Xxxxxxxx Pipe Line Company, LLC and the noteholders party thereto
and (b) the lenders under the Credit Agreement, dated as of February 6, 2001,
among Xxxxxxxx OLP, L.P., Bank of America, N.A., as administrative agent, Xxxxxx
Commercial Paper, Inc., as syndication agent, Suntrust Bank, as documentation
agent, and the lenders party thereto, in each case in substantially the form set
forth on Schedule 5.13 (or such other form as may reasonably be agreed to by
Buyer) for the purpose, or in the manner, described on such schedule.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF SELLING PARTIES
The obligations of the Selling Parties to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Selling Parties in their sole discretion:
SECTION 6.1. RECEIPT OF DOCUMENTS.
Buyer shall have delivered, or be standing ready to deliver, to the
Selling Parties the items specified in Section 1.2(b), in each case duly
executed and dated the Closing Date.
SECTION 6.2. REPRESENTATIONS AND WARRANTIES OF BUYER.
All representations and warranties made by Buyer in this Agreement that
are not qualified by materiality or material adverse effect shall be true and
correct in all material respects on and as of the Closing Date as if again made
by Buyer on and as of such date, and all representations and warranties that are
qualified by materiality or material adverse effect shall be true and correct on
the Closing Date as if made by the Buyer on and as of such date; and the Selling
Parties shall have received a certificate dated the Closing Date and signed by a
senior executive officer of Buyer to that effect.
SECTION 6.3. PERFORMANCE OF BUYER'S OBLIGATIONS.
Buyer shall have performed in all material respects all obligations
required under this Agreement to be performed by it on or before the Closing
Date, and the Selling Parties shall have received a certificate dated the
Closing Date and signed by a senior executive officer of Buyer to that effect.
SECTION 6.4. CONSENTS AND APPROVALS.
All consents, waivers, authorizations and approvals set forth on
Schedule 3.4 shall have been duly obtained and shall be in full force and effect
on the Closing Date.
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SECTION 6.5. NO VIOLATION OF ORDERS.
No preliminary or permanent injunction or other order issued by any
Governmental Authority that declares this Agreement or any of the Transaction
Documents invalid or unenforceable in any respect or that prevents the
consummation of the transactions contemplated hereby or thereby shall be in
effect; and no action or proceeding before any Governmental Authority shall have
been instituted by a Governmental Authority or threatened by any Governmental
Authority that seeks to prevent or delay the consummation of the transactions
contemplated by this Agreement or any of the Transaction Documents or that
challenges the validity or enforceability of this Agreement or any of the
Transaction Documents.
SECTION 6.6. LEGAL OPINION.
The Selling Parties shall have received an opinion of Xxxxxx & Xxxxxx
L.L.P., counsel to Buyer, dated the Closing Date substantially in the form of
Exhibit 6.6.
SECTION 6.7. ASSUMPTION OF CONSENT DECREE
Buyer shall have agreed to be bound by the Consent Decree, only to the
extent (i) the Consent Decree is applicable to the properties, assets or
operations of the Partnership Entities and (ii) required by the Federal Trade
Commission after consultation therewith. Nothing herein shall prevent Buyer from
exercising any rights under the Consent Decree, including the right to petition
to the Federal Trade Commission to modify or terminate the Consent Decree as it
applies to Buyer or the Partnership Entities.
ARTICLE VII.
TERMINATION AND ABANDONMENT
SECTION 7.1. METHODS OF TERMINATION; UPSET DATE.
This Agreement may, or in the case of Section 7.1(g) will, be
terminated and the transactions contemplated hereby may be abandoned at any time
before the Closing:
(a) by the mutual written consent of the Selling Parties and
Buyer;
(b) by the Selling Parties, if Buyer fails to comply with any
of its covenants or agreements contained herein, or breaches their
representations and warranties contained herein, which failure to comply or
breach is not cured within 30 days after receipt by Buyer from the Selling
Parties of written notice specifying particularly such failure to comply or
breach, and such failure to comply or breach would result in a failure to
satisfy the conditions to Closing set forth in Sections 6.2 and/or 6.3;
(c) by Buyer, if the Selling Parties fail to comply with any
of their covenants or agreements contained herein, or breaches its
representations and warranties contained herein, which failure to comply or
breach is not cured within 30 days after receipt by the Selling Parties from
Buyer of written notice specifying particularly such failure to comply or
breach, and such failure to comply or breach would result in the failure to
satisfy the conditions to Closing set forth in Sections 5.2 and/or 5.3;
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(d) by Buyer in accordance with Section 4.17(c) hereof;
(e) by the Selling Parties or Buyer, if a Governmental
Authority shall have issued an order, decree or ruling or taken any other action
(which order, decree or ruling the parties hereto shall use their commercially
reasonable efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the transactions contemplated by this Agreement and which order,
decree, ruling or other action is not subject to appeal;
(f) by written notice of the Selling Parties by not later than
5:00 p.m.
New York time on July 3, 2003 if (i) the Closing has not occurred on
or before 11:59 p.m.
New York time on June 30, 2003, (ii) the Selling Parties
have satisfied, or are standing ready and able to satisfy, as of June 30, 2003,
all of the conditions precedent under Article V (other than the condition set
forth in Section 5.9, as to which the Selling Parties shall not be in breach of
their covenant contained in the second sentence of Section 4.6), and (iii) none
of the Selling Parties is in breach of any provision of this Agreement; or
(g) without any action required by the Selling Parties or
Buyer, if the Closing has not occurred by 11:59 p.m.
New York time on September
30, 2003.
SECTION 7.2. EFFECT OF TERMINATION.
In the event of termination of this Agreement pursuant to Section
7.1(a), (d), (e), (f) or (g) hereof, this Agreement shall forthwith become void
and there shall be no liability on the part of Buyer or the Selling Parties (or
their respective officers or directors), except based upon obligations set forth
in Sections 4.17(c), 9.3 and 9.4 hereof, and except that Buyer shall thereupon
promptly return or destroy (and cause its agents and representatives to return
or destroy) to the Selling Parties all documents (and copies thereof) furnished
to Buyer and the parties shall continue to adhere to the Confidentiality
Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, termination of this Agreement pursuant to Section 7.1(b) or Section
7.1(c) shall not in any way limit or restrict the rights and remedies of any
party hereto against any other party hereto that has violated or breached any of
the representations, warranties, agreements or other provisions of this
Agreement prior to termination hereof.
ARTICLE VIII.
SURVIVAL; INDEMNIFICATION
SECTION 8.1. SURVIVAL.
(a) The representations and warranties of the Selling Parties
contained herein or in any certificates or other documents delivered pursuant to
this Agreement on the Closing Date shall survive the Closing for a period of
eighteen (18) months following the Closing Date; provided however, that (i) the
representations and warranties set forth in Section 2.21 (Environmental; Health
and Safety Matters) shall survive for a period of five (5) years following the
Closing Date, (ii) the representations and warranties set forth in Sections 2.2
and 2.3 (Capitalization; Title), Section 2.5 (Validity of Agreement;
Authorization), Section 2.18 (Brokers) and Section 2.27 (Excluded Assets) shall
survive indefinitely and (iii) the representations and warranties set forth in
Section 2.10 (Taxes) shall survive for a period equal to thirty (30) days after
the expiration of the applicable statute of limitations (including extensions)
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for each Tax and taxable year. The covenants and agreements in this Article VIII
shall survive the Closing and shall remain in full force and effect for such
period as is necessary to resolve any claim made with respect to any
representation, warranty, covenant or agreement contained herein during the
survival period thereof, and the covenants and agreements of the Parties
contained in Articles IV and IX of this Agreement shall survive the Closing for
(x) the time period(s) set forth in the respective Sections contained in such
Articles, or (y) if no time period is so specified, without any contractual
limitation on the period of survival.
(b) The representations and warranties of Buyer contained
herein or in any certificates or documents delivered pursuant to this Agreement
or the Closing shall survive the Closing for a period of eighteen (18) months
following the Closing Date; provided, however, that the representations and
warranties set forth in Section 3.2 (Validity of Agreement) and Section 3.7
(Brokers) shall survive indefinitely.
SECTION 8.2. INDEMNIFICATION COVERAGE.
(a) From and after the Closing, the Selling Parties shall
indemnify and defend, save and hold Buyer, the Partnership Entities and their
Affiliates and each of their officers, directors, employees and agents
(collectively, the "BUYER INDEMNIFIED PARTIES") harmless if any such Buyer
Indemnified Party shall suffer any damage, judgment, fine, penalty, demand,
settlement, liability, loss, cost, Tax, expense (including reasonable
attorneys', consultants' and experts' fees), claim or cause of action (each, a
"LOSS," and collectively, "Losses") arising out of, relating to or resulting
from:
(i) any breach or inaccuracy in any representation by
the Selling Parties or the breach of any warranty by the Selling
Parties contained in this Agreement or any certificates or other
documents delivered pursuant to this Agreement at the Closing;
provided, that in determining whether any such representation or
warranty has been breached or is inaccurate, such representation or
warranty shall be construed as if Material Adverse Effect or
materiality is not a qualification thereto;
(ii) any failure by the Selling Parties to perform or
observe any term, provision, covenant, or agreement on the part of the
Selling Parties to be performed or observed under this Agreement;
(iii) the failure by the Selling Parties to comply
with any applicable statutory provisions relating to bulk sales and
transfers;
(iv) subject to Section 8.2(c) hereof, any of the
matters listed on Schedule 2.21 hereto; and
(v) any fines, penalties, or amounts paid to settle or
resolve the last matter listed on Schedule 2.7 as of the date of this
Agreement.
provided, however, that if any Loss for which Buyer would otherwise be entitled
to seek indemnity from the Selling Parties under this Section 8.2(a) is included
within the matters for which the Partnership Entities or any other Buyer
Indemnified Party would be entitled to indemnity under any of Section 3.1 of the
Old Omnibus Agreement, Article IV of the New
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Omnibus Agreement or Section 10.1(b) of the WPL Contribution Agreement (such
provisions are collectively referred to herein as the "ADDITIONAL PARTNERSHIP
INDEMNITY AGREEMENTS"), even if recovery under the Additional Partnership
Indemnity Agreements is not available due to the expiration of any applicable
survival period or any applicable deductible, threshold, maximum or "cap"
thereon, then none of the Buyer Indemnified Parties shall be entitled to
indemnification with respect to such matter or matters under this Section
8.2(a). The foregoing proviso shall not be deemed to amend, supplement or modify
in any way the Additional Partnership Indemnity Agreements.
(b) From and after the Closing, Buyer shall indemnify and
defend, save and hold the Selling Parties and their Affiliates and their
officers, directors, employees and agents (collectively, the "SELLER INDEMNIFIED
PARTIES") harmless if any such Seller Indemnified Party shall suffer any Loss
arising out of, relating to or resulting from:
(i) any breach or inaccuracy in any representation by
Buyer or the breach of any warranty by Buyer contained in this
Agreement or any certificates or other documents delivered pursuant to
this Agreement at the Closing;
(ii) any failure by Buyer to perform or observe any
term, provision, covenant, or agreement on the part of Buyer to be
performed or observed under this Agreement;
(iii) with respect to any of the Partnership Entities,
whether occurring before or after Closing to the extent such Losses are
not covered by Section 8.2(a), except in the case, and only to the
extent, of Losses that arise out of, or relate to or result from
matters covered under the Additional Partnership Indemnity Agreements
or otherwise covered under the Transaction Documents, the WPL
Contribution Agreement or the Old Omnibus Agreement; and
(iv) any Losses arising under the second paragraph of
Section 3.1 and Section 3.2, in each case, of the Assignment and
Assumption Agreement (as defined in Section 9.16), other than Affiliate
intercompany obligations.
(c) Buyer and the Selling Parties hereby acknowledge and agree
as follows:
(i) Buyer agrees, on the terms and subject to the
conditions specified in this Section 8.2(c), to assume at the Closing
the obligations of XXX under the Additional Partnership Indemnity
Agreements to indemnify the Partnership Entities for the environmental
remedial obligations specified in Schedule 8.2(c) hereto.
(ii) The Partnership and XXX have (A) identified
environmental remedial obligations in Schedule 8.2(c) hereto for which
XXX is, subject only to Section 8.2(c)(iii), required to indemnify the
Partnership pursuant to the Additional Partnership Indemnity Agreements
and (B) prepared estimates of the costs expected to be incurred by the
Partnership in connection with remediation activities to be undertaken
in connection with such matters, and the Partnership, in accordance
with GAAP, has recognized as a liability for such estimated costs and
expenses to be incurred a total of $21,870,000 (as of March 31, 2003),
consisting of both the current and long-term portions of such
liability.
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Included in Schedule 8.2(c) hereto is a schedule setting forth in
reasonable detail the projected schedule for the incurrence of such
costs and expenses.
(iii) Buyer hereby covenants and agrees that it will
pay on behalf of XXX when due to the Partnership Entities under the
Additional Partnership Indemnity Agreements all amounts that otherwise
would be required to be paid by XXX thereunder in respect of the
matters listed under the column entitled "Site Name" in Schedule 8.2(c)
hereto, such payments to be made by Buyer from time to time as and when
such amounts otherwise would become due and payable by XXX and whether
or not such amounts become due and payable before or after the time(s)
projected in Schedule 8.2(c) (and XXX agrees to notify Buyer promptly
upon the request of any Partnership Entity or other Person for any
payment subject to this clause (iii) of Section 8.2(c)).
(iv) If (A) the matters specified under the column
entitled "Site Name" in Schedule 8.2(c) hereto are determined to have
reached closure by the appropriate Governmental Authority or have
otherwise been finally resolved and all payments required to be made
under the Additional Partnership Indemnity Agreements with respect
thereto have been made by Buyer as provided in clause (iii) of this
Section 8.2(c), (B) the Maximum Obligation (as defined below) has not
been reached and (C) XXX or the other Selling Parties have continuing
indemnity obligations under the Additional Partnership Indemnity
Agreements, Section 8.2(a)(i) hereof (in respect of a breach of a
representation in Section 2.21 hereof) or Section 8.2(a)(iv) hereof,
then Buyer covenants and agrees that, only to the extent of the Maximum
Obligation, it shall pay any amounts that become payable by XXX or the
other Selling Parties under any of the continuing indemnity obligations
referred to in clause (C) of this Section 8.2(c)(iv) from time to time
as and when amounts would otherwise be payable by XXX or the other
Selling Parties.
(v) If (A) the conditions referenced in clauses
(iv)(A) and (iv)(B) of this Section 8.2(c) exist and the obligations of
XXX and the other Selling Parties under the provisions referenced in
clause (iv)(C) of this Section 8.2(c) have expired and no amounts
remain payable by XXX or the other Selling Parties thereunder and (B)
XXX and the other Selling Parties (or their respective successors) and
the Partnership furnish to Buyer a certificate from their respective
chief financial officers or chief legal officers to such effect, then
promptly upon receipt of such certificates in proper form Buyer shall
pay to the Selling Parties the remaining unpaid amount, if any, of the
Maximum Obligation.
(vi) Buyer agrees that it shall use commercially
reasonable efforts to cause the Partnership Entities to treat any
payments made by Buyer under clauses (iii) or (iv) of this Section
8.2(c) as a payment by XXX or the other Selling Parties under the
applicable Additional Partnership Indemnity Agreement in respect of
which such payment is made, and Buyer shall indemnify and hold harmless
XXX and the other Selling Parties from any and all Losses caused by the
failure or refusal of the Partnership Entities or any other Person to
treat any payment so made by Buyer in accordance with clause (iii) or
(iv) of this Section 8.2(c) as a payment made by or on behalf of XXX or
the other Selling Parties, as case may be, pursuant to the referenced
indemnity obligation of such Person(s).
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(vii) For purposes of this Section 8.2(c), Buyer shall
pay to the Partnership all amounts due under this Section 8.2(c)
following receipt of such amounts due from the General Partner on
behalf of the Partnership. The determination of amounts and when they
are due shall be made in good faith solely by the General Partner;
provided, however, that Buyer shall not be required to make any such
payments within less than twenty (20) days after receipt of the General
Partner's determination; provided, further, Buyer shall indemnify and
hold harmless the Selling Parties from any and all Losses caused by any
delay by Buyer in making any such payment to the Partnership under this
Section 8.2(c)(vii).
(viii) Notwithstanding the foregoing provisions of
this Section 8.2(c), in no event shall the aggregate amounts payable by
or on behalf of Buyer under this Section 8.2(c) exceed $21,870,000 (the
"MAXIMUM OBLIGATION").
(d) The foregoing indemnification obligations shall be subject
to the following limitations:
(i) the Selling Parties' aggregate liability under
Section 8.2(a) shall not exceed $175,000,000 (the "CAP"); provided,
however, that the Cap shall not be applicable with respect to Losses
otherwise indemnifiable under Section 8.2(a)(i) with respect to
breaches or inaccuracies of Section 2.27 or under 8.2(a)(v);
(ii) no indemnification for any Losses asserted
against the Selling Parties under Section 8.2(a)(i) shall be required
unless and until the cumulative aggregate amount of such Losses exceeds
$4,000,000 (the "DEDUCTIBLE"), at which point the Selling Parties shall
be obligated to indemnify the Buyer Indemnified Parties the amount of
such Losses in excess of the Deductible, subject to the Cap; provided
however, that the Deductible shall not be applicable to breaches under
Sections 2.2, 2.3, 2.5, 2.11(b), 2.18, 2.21 or 2.27 hereof or recovery
under Sections 8.2(a)(ii), 8.2(a)(iii), 8.2(a)(iv) or 8.2(a)(v) hereof;
(iii) the amount of any Losses suffered by a Seller
Indemnified Party or a Buyer Indemnified Party, as the case may be
(such party seeking indemnification pursuant to this Article VIII, the
"INDEMNIFIED PARTY," and the other party, the "INDEMNIFYING PARTY"),
shall be reduced by any third-party insurance or other indemnification
benefits which such party receives in respect of or as a result of such
Losses, less the reasonable costs incurred to recover those insurance
or indemnification benefits to the extent such costs are not otherwise
recovered. If any Losses for which indemnification is provided
hereunder is subsequently reduced by any third-party insurance or other
indemnification benefit or recovery, the amount of the reduction shall
be remitted to the Indemnifying Party. In the case of any
purchase
agreement between a Partnership Entity and a third-party relating to
the acquisition of assets, businesses or securities by such Partnership
Entity that contains unexpired and otherwise applicable indemnification
provisions, if any Loss for which Buyer is entitled to seek indemnity
from the Selling Parties under Section 8.2(a) is also included within
the matters for which the Partnership Entities are entitled to
indemnity under any such third-party agreement, Buyer agrees to use
commercially reasonable efforts to cause any such Partnership Entity
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first to pursue indemnification under such third-party agreement in
good faith for a reasonable period of time prior to enforcing any claim
against the Selling Parties for indemnification hereunder. Nothing in
the foregoing sentence shall (i) prejudice the rights of the Buyer
Indemnified Parties to make a claim for indemnification hereunder
within the applicable survival period, if any, or (ii) require any
Buyer Indemnified Party to file or institute any judicial proceeding or
action. In addition, to the extent the Selling Parties make any
payments to any Buyer Indemnified Party with respect to any claims
covered under the unexpired and otherwise applicable indemnification
provisions of such third-party agreements, Buyer agrees to use
commercially reasonable efforts to cause the applicable Partnership
Entity or Entities, at the sole cost and expense of the Selling
Parties, (A) to assign any rights to the Selling Parties under such
third-party agreement as may be necessary to allow the Selling Parties
to independently pursue a claim for indemnification against the
counterparty or counterparties to such third-party agreement and (B) to
be subrogated to the rights of the applicable Partnership Entity or
Entities in respect of such indemnification claims;
(iv) no claim may be asserted nor may any action be
commenced against any party for breach or inaccuracy of any
representation or breach of a warranty, unless written notice of such
claim or action is received by the other party describing in reasonable
detail the facts and circumstances with respect to the subject matter
of such claim or action on or prior to the date on which the
representation or warranty on which such claim or action is based
ceases to survive as set forth in Section 8.1;
(v) no Indemnified Party shall be entitled under this
Agreement to multiple recovery for the same Losses; and
(vi) the limitations on indemnification set forth in
clauses (i) and (ii) of this Section 8.2(d) shall not apply to any
Losses arising from the failure by the Selling Parties or Buyer to pay
any Taxes in accordance with Section 4.9 or for any amounts payable in
accordance with Section 9.3 hereof.
SECTION 8.3. PROCEDURES.
(a) Any Indemnified Party shall notify the Indemnifying Party
(with reasonable detail) promptly after it becomes aware of facts supporting a
claim or action for indemnification under this Article VIII, and shall provide
to the Indemnifying Party as soon as practicable thereafter all reasonable
available information and documentation necessary to support and verify any
Losses associated with such claim or action. Subject to Section 8.2(d)(iv), the
failure to so notify or provide information to the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that it may have to any
Indemnified Party, except to the extent that the Indemnifying Party demonstrates
that it has been materially prejudiced by the Indemnified Party's failure to
give such notice, in which case the Indemnifying Party shall be relieved from
its obligations hereunder to the extent of such material prejudice. The
Indemnifying Party shall participate in and defend, contest or otherwise protect
the Indemnified Party against any such claim or action by counsel of the
Indemnifying Party's choice at its sole cost and expense; provided, however,
that the Indemnifying Party shall not make any settlement or compromise without
the prior written consent of the Indemnified Party (which consent shall
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not be unreasonably withheld or delayed) unless the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party, there is no
admission or statement of fault or culpability on the part of the Indemnified
Party and there is an unconditional release of the Indemnified Party from all
liability on any claims that are the subject of such claim or action. The
Indemnified Party shall have the right, but not the obligation, to participate
at its own expense in the defense thereof by counsel of the Indemnified Party's
choice and shall in any event use its commercially reasonable efforts to
cooperate with and assist the Indemnifying Party; provided, however, that the
Indemnifying Party shall pay the fees and expenses of separate counsel for the
Indemnified Party if (i) the Indemnifying Party has agreed to pay such fees and
expenses or (ii) counsel for the Indemnifying Party reasonably determines that
representation of both the Indemnifying Party and the Indemnified Party by the
same counsel would create a conflict of interest. If the Indemnifying Party
fails timely to defend, contest or otherwise protect against such suit, action,
investigation, claim or proceeding, the Indemnified Party shall have the right
to do so, including, without limitation, the right to make any compromise or
settlement thereof, and the Indemnified Party shall be entitled to recover the
entire cost thereof from the Indemnifying Party, including, without limitation,
reasonable attorneys' fees, disbursements and amounts paid as the result of such
suit, action, investigation, claim or proceeding.
(b) Any claim or action for indemnification under Section
8.2(a)(i) (for Losses arising from, or relating to a breach of a representation
or warranty set forth in Section 2.21) or Section 8.2(a)(iv), that requires
remediation shall be administered in accordance with the procedures set forth on
Schedule 8.3(b) hereto.
SECTION 8.4. WAIVER OF CONSEQUENTIAL, ETC. DAMAGES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, BUYER SHALL
NOT BE LIABLE TO ANY OF THE SELLER INDEMNIFIED PARTIES, NOR SHALL ANY OF THE
SELLING PARTIES BE LIABLE TO ANY OF THE BUYER INDEMNIFIED PARTIES, FOR ANY
EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE, OR SPECULATIVE
DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST PROFITS
OR OPPORTUNITIES) RESULTING FROM OR ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.5. COMPLIANCE WITH EXPRESS NEGLIGENCE RULE.
ALL RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY, AND INDEMNITIES IN
THIS AGREEMENT, INCLUDING THOSE IN THIS ARTICLE VIII, SHALL APPLY EVEN IN THE
EVENT OF THE SOLE, JOINT, AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR
OTHER FAULT OF THE PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED, OR
INDEMNIFIED.
SECTION 8.6. LIQUIDATED DAMAGES.
If Buyer breaches its obligations to close as contemplated by Article
V, then Buyer shall pay to the Selling Parties $25,000,000 by wire transfer of
immediately available funds to a bank
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account in the United States of America designated in writing by the Selling
Parties not later than three days following receipt of such designation. BUYER
AND THE SELLING PARTIES HEREBY ACKNOWLEDGE THAT (I) THE EXTENT OF DAMAGES TO THE
SELLING PARTIES CAUSED BY THE FAILURE OF THIS TRANSACTION TO BE CONSUMMATED DUE
TO THE CIRCUMSTANCES SPECIFIED IN THE IMMEDIATELY PRECEDING SENTENCE WOULD BE
IMPOSSIBLE OR EXTREMELY DIFFICULT TO ASCERTAIN, (II) THE AMOUNT OF THE
LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION 8.6 IS A FAIR AND REASONABLE
ESTIMATE OF SUCH DAMAGES UNDER SUCH CIRCUMSTANCES AND (III) RECEIPT OF SUCH
AMOUNT BY THE SELLING PARTIES DOES NOT CONSTITUTE A PENALTY AND WILL BE THE
SELLING PARTIES' SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO THE CIRCUMSTANCES
SPECIFIED IN THE IMMEDIATELY PRECEDING SENTENCE.
SECTION 8.7. REMEDY.
Except for seeking equitable relief under Section 9.12 or otherwise or
actions involving fraud or as set forth in Section 9.5, from and after the
Closing the sole remedy of a party in connection with (i) a breach or inaccuracy
of the representations, or breach of warranties, in this Agreement or any
certificates or other documents delivered pursuant to this Agreement on Closing,
or (ii) any failure by a party to perform or observe any term, provision,
covenant, or agreement on the part of such party to be performed or observed
under this Agreement, shall, in each case, be as set forth in this Article VIII.
SECTION 8.8. TAX TREATMENT OF INDEMNITY PAYMENTS.
Each party, to the extent permitted by applicable law, agrees to treat
any payments made pursuant to this Article VIII as adjustments to the Purchase
Price for all federal and state income and franchise Tax purposes. To the extent
that any such payment is not permitted to be treated as an adjustment to the
Purchase Price, the amount of such payment shall be increased so that after
reduction for the amount of any actual additional Tax cost incurred as a result
of the receipt of such payment, the amount remaining will be equal to the amount
of the payment that is owed under this Article VIII.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
SECTION 9.1. PUBLICITY.
On or prior to the Closing Date, no party shall, nor shall it permit
its Affiliates to, issue or cause the publication of any press release or other
announcement with respect to this Agreement or the transactions contemplated
hereby without the consent of the other party hereto. Notwithstanding the
foregoing, in the event any such press release or announcement is required by
law or stock exchange rule to be made by the party proposing to issue the same,
such party shall use its commercially reasonable efforts to consult in good
faith with the other party prior to the issuance of any such press release or
announcement.
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SECTION 9.2. SUCCESSORS AND ASSIGNS; THIRD-PARTY
BENEFICIARIES.
This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and permitted assigns. Except as
contemplated by Article VIII, nothing in this Agreement shall confer upon any
Person not a party to this Agreement, or the legal representatives of such
Person, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement. No party shall sell, assign or otherwise transfer all
or any of its rights, benefits or obligations hereunder without the prior
written consent of the other party, such consent not to be unreasonably withheld
or delayed, provided, however, that (a) Buyer may, without the Selling Parties'
prior written consent, assign or transfer its rights and duties hereunder to the
Partnership (or an Affiliate of Buyer other than a Partnership Entity) and, if
so assigned or transferred, the Partnership (or such Affiliate of Buyer other
than a Partnership Entity) shall be entitled to enforce the rights, and shall
comply with the duties, hereunder so transferred or assigned as if it were a
named party hereto, but no such transfer or assignment shall relieve Buyer of
its obligations hereunder and no such assignee or transferee may further assign
any such rights, (b) for the purposes of any financing or refinancing
arrangement entered into by the Buyer in connection with the purchase of the
Securities the Buyer may, without the Selling Parties' prior written consent,
assign to or create a security interest in favor of any party providing any such
financing or refinancing to the Buyer, all of its rights, benefits, obligations
and interests hereunder, and the Selling Parties hereby consent to the exercise
by any such party of any rights, benefits, obligations or interests assigned to
or created in favor of such party pursuant to the foregoing and any remedies
arising in connection therewith and (c) each of the Selling Parties may, without
Buyer's prior written consent, assign or transfer its rights under Section
8.2(c) hereof to one or more of the Partnership Entities and, if so assigned or
transferred, any such Partnership Entity shall be entitled to enforce the rights
hereunder so transferred or assigned as if it were a named party hereto, but no
such transfer or assignment shall relieve the Selling Parties of their
obligations under Section 8.2(c) and no such assignee or transferee may further
assign any such rights.
SECTION 9.3. INVESTMENT BANKERS, FINANCIAL ADVISORS, BROKERS
AND FINDERS.
(a) The Selling Parties shall indemnify and agree to defend
and hold Buyer and the Partnership Entities harmless against and in respect of
all claims, losses, liabilities and expenses which may be asserted against Buyer
(or any Affiliate of Buyer) and the Partnership Entities by any broker or other
person who claims to be entitled to an investment banker's, financial advisor's,
broker's, finder's or similar fee or commission in respect of the execution of
this Agreement or the consummation of the transactions contemplated hereby, by
reason of his acting at the request of Parent, the Selling Parties or the
Partnership Entities.
(b) Buyer shall indemnify and agree to save and hold the
Selling Parties (and their Affiliates) harmless against and in respect of all
claims, losses, liabilities, fees, costs and expenses which may be asserted
against any of the Selling Parties (or any of their Affiliates) by any broker or
other person who claims to be entitled to an investment banker's, financial
advisor's, broker's, finder's or similar fee or commission in respect of the
execution of this Agreement or the consummation of the transactions contemplated
hereby, by reason of his acting at the request of Buyer.
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SECTION 9.4. FEES AND EXPENSES.
Except as otherwise expressly provided in this Agreement, all legal,
accounting and other fees, costs and expenses of a party hereto incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees, costs or expenses.
SECTION 9.5. OFF-SET RIGHT.
From and after the Closing, the Selling Parties agree and acknowledge
that Buyer and the Partnership Entities shall have a right to off-set any
payments to be made by Buyer or any of the Partnership Entities pursuant to this
Agreement or the Transition Services Agreement against any payments owed by the
Selling Parties, Parent or any direct or indirect wholly owned subsidiary of
Parent to Buyer or any of the Partnership Entities in respect of (i) the proviso
set forth in the final sentence of Section 4.3(l) hereof, (ii) undisputed trade
receivables, (iii) services provided by the Partnership Entities to the Selling
Parties or Parent (or any direct or indirect wholly owned subsidiary of Parent)
under the Services Agreement referred to in Section 1.2(a)(iv)(4) or (iv) any
other amounts determined by a final and non-appealable judgment to be owed by
any such parties; provided, however, that without the express prior written
consent of the Selling Parties or Parent, neither the Buyer nor any of the
Partnership Entities shall have a right hereunder to set-off against any other
amount that may become payable to the Buyer under this Agreement, any other
agreement or otherwise. The right of off-set provided for in this paragraph is
in addition to, and not in limitation of, any other right or remedy available to
Buyer or to the Partnership Entities under this Agreement, the Transaction
Documents, or any other agreement, under applicable law, in equity, or
otherwise.
SECTION 9.6. NOTICES.
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made if
delivered personally or sent by overnight courier or sent by facsimile (with
evidence of confirmation of receipt) to the parties at the following addresses:
(a) If to Buyer, to:
Madison Dearborn Partners, LLC
Three First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
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and to:
Carlyle/Riverstone Global Energy and Power Fund II,
LP
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxxxx
(b) If to the Selling Parties, to:
Xxxxxxxx Energy Services, LLC and
Xxxxxxxx Natural Gas Liquids, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: G. Xxxxxxx X'Xxxxx
or to such other Persons or at such other addresses as shall be furnished by any
party by like notice to the other, and such notice or communication shall be
deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 9.6 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 9.6.
SECTION 9.7. ENTIRE AGREEMENT.
This Agreement, together with the Disclosure Schedules and the Exhibits
hereto, the Confidentiality Agreement and the Transaction Documents represent
the entire agreement and understanding of the parties with reference to the
transactions set forth herein and therein and no
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representations or warranties have been made in connection herewith and
therewith other than those expressly set forth herein or therein. This
Agreement, together with the Disclosure Schedules and the Exhibits hereto, the
Confidentiality Agreement and the Transaction Documents supersede all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter hereof or thereof
and all prior drafts of such documents, all of which are merged into such
documents. No prior drafts of such documents and no words or phrases from any
such prior drafts shall be admissible into evidence in any action or suit
involving such documents.
SECTION 9.8. WAIVERS AND AMENDMENTS.
The Selling Parties or Buyer may, by written notice to the other party:
(a) extend the time for the performance of any of the obligations or other
actions of the other party; (b) waive any inaccuracies in the representations or
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement by the other party; (c) waive compliance
with any of the covenants of the other party contained in this Agreement; (d)
waive performance of any of the obligations of the other party created under
this Agreement; or (e) waive fulfillment of any of the conditions to its own
obligations under this Agreement or in any documents delivered pursuant to this
Agreement by the other party. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach, whether or not similar, unless such waiver specifically
states that it is to be construed as a continuing waiver. This Agreement may be
amended, modified or supplemented only by a written instrument executed by the
parties hereto.
SECTION 9.9. SEVERABILITY.
This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
SECTION 9.10. TITLES AND HEADINGS.
The Article and Section headings and any table of contents contained in
this Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision hereof.
SECTION 9.11. SIGNATURES AND COUNTERPARTS.
Facsimile transmission of any signed original document and/or
retransmission of any signed facsimile transmission shall be the same as
delivery of an original. At the request of Buyer or the Selling Parties, the
parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
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SECTION 9.12. ENFORCEMENT OF THE AGREEMENT; DAMAGES.
The parties hereto agree that irreparable damage would occur if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereto, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 9.13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the internal and substantive laws of
New York and without regard to any
conflicts of laws concepts that would apply the substantive law of some other
jurisdiction.
SECTION 9.14. DISCLOSURE.
Certain information set forth in the Disclosure Schedules is included
solely for informational purposes, is not an admission of liability with respect
to the matters covered by the information, and may not be required to be
disclosed pursuant to this Agreement. Disclosure of any item in any section of
the Disclosure Schedules only qualifies (i) the correspondingly numbered
representation and warranty or covenant in this Agreement to the extent
specified therein and (ii) such other representations and warranties or
covenants in this Agreement that are qualified by another Disclosure Schedule
(or section of a Disclosure Schedule), but only to the extent (a) there is an
explicit cross-reference in such other Disclosure Schedule (or section of a
Disclosure Schedule, as applicable) or (b) such item is disclosed in such a way
as to make its relevance to the information called for by such other Disclosure
Schedule (or section of a Disclosure Schedule, as applicable) readily apparent
on its face. The specification of any dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Disclosure Schedules is not intended to imply that such amounts (or higher
or lower amounts) are or are not material, and no party shall use the fact of
the setting of such amounts or the fact of the inclusion of any such item in the
Disclosure Schedules in any dispute or controversy between the parties as to
whether any obligation, item, or matter not described herein or included in a
Disclosure Schedule is or is not material for purposes of this Agreement.
SECTION 9.15. CONSENT TO JURISDICTION.
The parties hereby irrevocably submit to the jurisdiction of the courts
of the State of
New York and the federal courts of the United States of America
located in
New York, New York over any dispute arising out of or relating to
this Agreement or any of the transactions contemplated hereby, and each party
irrevocably agrees that all claims in respect of such dispute or proceeding
shall be heard and determined in such courts. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the venue of any dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each party agrees that a judgment in any dispute heard in the
venue specified by this section may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by applicable law.
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SECTION 9.16. CERTAIN DEFINITIONS.
For purposes of this Agreement, the term:
(a) "AFFILIATE" of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first- mentioned Person.
(b) "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the
Assignment, Assumption and Amendment Agreement, dated November 15, 2002, among
the Selling Parties, the New Company and the Partnership.
(c) "CLOSING PRICE" means the average of the daily closing
prices of the Common Units for the ten (10) consecutive days the Common Units
were trading on the New York Stock Exchange immediately prior to the applicable
date.
(d) "CONFIDENTIALITY AGREEMENT" means, collectively, the
Nondisclosure Agreement among XXX, WNGL and Madison Dearborn Partners, LLC,
dated September 3, 2002, and the Nondisclosure Agreement among XXX, WNGL and
Riverstone Holdings, LLC, dated October 29, 2002.
(e) "INTELLECTUAL PROPERTY" shall mean and include all
intellectual property of any kind, both foreign and domestic, including, without
limitation, all patents, trademarks, service marks, trade names, trade dress,
(and the goodwill associated with each), copyrights, confidential and
proprietary information (including trade secrets and know-how), and
registrations and applications for registration of any of the foregoing.
Intellectual Property does not include any software, whether owned or licensed,
or any copyrights associated with Licensed Software.
(f) "KEY EXECUTIVES" means those individuals as previously
provided in writing to Buyer from the Selling Parties.
(g) "KNOWLEDGE OF THE SELLING PARTIES" shall mean the actual
knowledge, after reasonable inquiry, of X. Xxxxxxxx, X. Xxxx, X. Xxxxx, X.
Xxxxxx, X. XxXxx, X. Xxxxx, X. Xxxxx, X. Xxxx, X. Xxxxxx, A Xxxxxxxx, X. Xxxxxx,
X. Xxxxxxxxxx, X. Xxxxx, X. Xxxxxx and X. Xxxxxx.
(h) "MATERIAL ADVERSE EFFECT" shall mean an adverse effect on
the assets, properties, business, operations, financial condition or ability to
maintain current levels of Operating Surplus (as defined in the Partnership
Agreement) of the Partnership Entities, taken as a whole, that would have a
material adverse effect on the value of the Securities, it being understood that
none of the following shall be deemed to constitute a Material Adverse Effect:
(i) any effect resulting from entering into this Agreement or the announcement
of the transactions contemplated by this Agreement, (ii) any effect resulting
from changes in general economic conditions in the industry in which any of the
Partnership Entities operates, and (iii) any effect resulting from changes in
the United States or global economy as a whole, unless in the case of clause
(ii) or (iii) above such change has a disproportionately adverse effect on the
Partnership Entities, taken as a whole.
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(i) "OLD OMNIBUS AGREEMENT" means the Omnibus Agreement, dated
February 9, 2001, by and among Parent, the Selling Parties, the Partnership and
the other parties named therein, as amended by Amendment I, dated as of January
28, 2002, and the Second and Third Amendments thereto, dated as of April 11,
2002 and September 30, 2002, respectively.
(j) "ORGANIZATIONAL DOCUMENTS" shall mean certificates of
incorporation, by-laws, certificates of formation, limited liability company
operating agreements, partnership or limited partnership agreements or other
formation or governing documents of a particular entity.
(k) "PARENT CREDIT FACILITY" means (i) the First Amended and
Restated Credit Agreement, dated as of October 31, 2002, among the Parent,
Northwest Pipeline Corporation, Transcontinental Gas Pipe Line Corporation and
Texas Gas Transmission Corporation, as Borrowers, the Banks named therein,
JPMorgan Chase Bank and Commerzbank AG, as Co-Syndication Agents, Credit
Lyonnais New York Branch, as Documentation Agent, Citicorp USA, Inc., as Agent
and Xxxxxxx Xxxxx Xxxxxx, Inc., as Arranger, and (ii) the Amended and Restated
Credit Agreement, dated as of October 31, 2002, among the Parent, as Borrower,
Citicorp USA, Inc., as Agent and Collateral Agent, Bank of America, N.A., as
Syndication Agent, Citibank, N.A., Bank of America N.A., and Bank of Nova
Scotia, as Issuing Banks and Solomon Xxxxx Xxxxxx, Inc., as Arranger, each as
amended from time to time.
(l) "PARENT CREDIT FACILITY LIENS" means any lien on the
Securities or any other security or interest in any of the Partnership Entities,
or on any asset or property of any of the Partnership Entities pursuant to, or
created in connection with, the Parent Credit Facility or any Parent Credit
Facility Security Document.
(m) "PARENT CREDIT FACILITY SECURITY DOCUMENTS" means (i) the
Security Agreement, dated as of July 31, 2002, among the Parent and certain
subsidiaries of the Parent party thereto, in favor of Citibank, N.A., as
Collateral Trustee, as amended from time to time, (ii) the Pledge Agreement,
dated as of July 31, 2002, among the Parent and certain subsidiaries of the
Parent party thereto, in favor of Citibank, N.A., as Collateral Trustee, as
amended from time to time, (iii) the Collateral Trust Agreement, dated as of
July 31, 2002, among the Parent and certain subsidiaries of the Parent party
thereto, and Citibank, N.A., as Collateral Trustee, as amended from time to
time, (iv) the Guaranty, dated as of July 31, 2002, made by each of the
subsidiaries of the Parent that is a signatory thereto, in favor of Citibank,
N.A., as Surety Administrative Agent and (v) any other contract, agreement or
other instrument relating to or entered into in connection with the Parent
Credit Facility and binding upon the any of the Partnership Entities or any of
their respective securities, interests (including the Securities), properties or
assets.
(n) "PARTNERSHIP GROUP" means the Partnership Entities, with
the exception of the New Company.
(o) "PERSON" shall mean an individual, corporation,
association, trust, limited liability company, limited partnership, limited
liability partnership, partnership, incorporated organization, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act).
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(p) "TRANSACTION DOCUMENTS" shall mean the agreements,
contracts, documents, instruments and certificates provided for in this
Agreement to be entered into by one or more of the parties hereto or any of
their Affiliates in connection with the transactions contemplated by this
Agreement, including without limitation the Transition Services Agreement, the
Services Agreement referred to in Sections 1.2(a)(iv)(4) and 1.2(b)(vi), the
ATLAS Assignment, Contribution and License Agreement, the New Omnibus Agreement,
the Bills of Sale, the Parent Guaranty and the written document referred to in
Section 9.16(f).
(q) "WPL CONTRIBUTION AGREEMENT" means the Contribution
Agreement, dated April 11, 2002, by and among XXX, the Old Company and the
Partnership.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLING PARTIES: XXXXXXXX ENERGY SERVICES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXXX NATURAL GAS LIQUIDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXXX XX LLC
By: XXXXXXXX ENERGY SERVICES, LLC and
XXXXXXXX NATURAL GAS LIQUIDS, INC.,
its Members
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
BUYER: WEG ACQUISITIONS, L.P.
By: WEG Acquisition Management, LLC
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Authorized Signatory
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Signatory
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DISCLOSURE SCHEDULES
DATED AS OF APRIL 18, 2003
FOR
PURCHASE AGREEMENT
BY AND AMONG
XXXXXXXX ENERGY SERVICES, LLC
XXXXXXXX NATURAL GAS LIQUIDS, INC., AND
XXXXXXXX XX LLC
COLLECTIVELY, AS SELLING PARTIES,
AND
WEG ACQUISITIONS, L.P.
Dated as of April 18, 2003 (the "AGREEMENT")
Unless otherwise defined in these Disclosure Schedules, all capitalized
terms used herein shall have the meanings ascribed to them in the Agreement.
These Disclosure Schedules shall be deemed to be part of the Agreement.
The inclusion of information in these Schedules shall not be construed
as an admission of liability to any third party with respect to the matters
covered by the information. Any matter or item disclosed on any Disclosure
Schedule shall not be deemed to be material (whether singularly or in the
aggregate) or deemed to give rise to circumstances which may result in a
Material Adverse Effect solely by reason of it being so disclosed herein.
Disclosure of any item in any section of these Schedules only qualifies (i) the
correspondingly numbered representation and warranty or covenant in the
Agreement to the extent specified therein and (ii) such other representations
and warranties or covenants in the Agreement that are qualified by another
Schedule (or section of a Schedule), but only to the extent (a) there is an
explicit cross-reference in such other Schedule (or section of a Schedule, as
applicable) or (b) such item is disclosed in such a way as to make its relevance
to the information called for by such other Schedule (or section of a Schedule,
as applicable) readily apparent on its face.
These Disclosure Schedules supersede and replace any other Disclosure
Schedules previously provided to Buyer prior to the date of this Agreement. Any
such earlier Disclosure Schedules have no force or effect.
-68-
INDEX OF DEFINED TERMS
Page
----
2002 10-K........................................................................................................16
Additional Employees.............................................................................................28
Additional Partnership Indemnity Agreements......................................................................51
Affiliate........................................................................................................63
Agreement.........................................................................................................1
Assignment and Assumption Agreement..............................................................................63
ATLAS 2000 System................................................................................................15
ATLAS Assignment, Contribution and License Agreement.............................................................38
Bidder Confidentiality Agreements................................................................................36
Bills of Sale.....................................................................................................4
Bonds............................................................................................................37
Business Employees...............................................................................................18
Buyer.............................................................................................................1
Buyer 125 Plan...................................................................................................31
Buyer Indemnified Parties........................................................................................51
Buyer Representatives............................................................................................27
Buyer Savings Plan...............................................................................................31
Cap..............................................................................................................54
CERCLA...........................................................................................................21
Class B Common Units..............................................................................................1
Closing...........................................................................................................3
Closing Date......................................................................................................3
Closing Price....................................................................................................63
Code.............................................................................................................13
Common Units......................................................................................................1
Confidentiality Agreement........................................................................................63
Consent Decree...................................................................................................33
Deductible.......................................................................................................54
Definitive Transaction Agreement.................................................................................44
Delaware LP Act...................................................................................................9
Disclosure Schedule Update.......................................................................................35
Dispute List.....................................................................................................39
Employee Plans...................................................................................................18
Employee Transfer Date...........................................................................................30
Encumbrances......................................................................................................2
Environmental Law................................................................................................21
Environmental Permits............................................................................................20
ERISA............................................................................................................17
Exchange Act.....................................................................................................12
Excluded Assets..................................................................................................22
Expense Limit....................................................................................................43
First Payment.....................................................................................................5
Fourth Payment....................................................................................................7
GAAP.............................................................................................................11
i
GP Companies......................................................................................................1
GP Interest.......................................................................................................1
Governmental Authority...........................................................................................11
Hazardous Material...............................................................................................21
HSR Act..........................................................................................................33
IDRs..............................................................................................................1
Implementation Costs.............................................................................................40
Indemnified Party................................................................................................54
Indemnifying Party...............................................................................................54
Intellectual Property............................................................................................63
IT Assets........................................................................................................38
IT Migration Period..............................................................................................40
IT Migration Plan................................................................................................40
IT Migration Team................................................................................................38
Key Executives...................................................................................................63
Knowledge of the Selling Parties.................................................................................63
Legal Proceeding.................................................................................................16
License..........................................................................................................16
License Period...................................................................................................42
Licensed Software................................................................................................15
Licenses.........................................................................................................16
Loss.............................................................................................................51
Losses...........................................................................................................51
Material Adverse Effect..........................................................................................63
Material Contracts...............................................................................................17
Maximum Obligation...............................................................................................54
Migration Assets.................................................................................................39
MTBE.............................................................................................................21
New Company.......................................................................................................1
New Company Financial Statements.................................................................................11
New LLC Interests.................................................................................................1
New LLC Agreement.................................................................................................8
Old Company.......................................................................................................1
Old Company Subsidiary...........................................................................................10
Old Omnibus Agreement............................................................................................64
Organizational Documents.........................................................................................64
PACE.............................................................................................................18
PACE Collective Bargaining Agreement.............................................................................19
Parent............................................................................................................2
Parent Credit Facility...........................................................................................64
Parent Credit Facility Liens.....................................................................................64
Parent Credit Facility Security Documents........................................................................60
Parent Guaranty...................................................................................................2
Parent Policies..................................................................................................19
Partnership.......................................................................................................1
Partnership Agreement.............................................................................................9
Partnership Entities.............................................................................................10
ii
Partnership Group................................................................................................64
Partnership Plans................................................................................................18
Partnership Policies.............................................................................................19
Pension Plan.....................................................................................................29
Per Day Rate......................................................................................................6
Permitted Encumbrances...........................................................................................15
Person...........................................................................................................64
Phantom Units.....................................................................................................9
Policies.........................................................................................................19
Pre-Closing Tax..................................................................................................36
Property Restrictions............................................................................................14
Purchase Price....................................................................................................5
RCRA.............................................................................................................21
Real Property....................................................................................................14
Represented Employee Transfer Date...............................................................................29
Represented Employees............................................................................................29
Rights-of-Way....................................................................................................14
SEC..............................................................................................................12
SEC Reports......................................................................................................12
Second Payment....................................................................................................6
Securities........................................................................................................2
Securities Act...................................................................................................12
Seller 125 Plan..................................................................................................31
Seller Indemnified Parties.......................................................................................52
Seller Plans.....................................................................................................18
Seller Savings Plan..............................................................................................31
Sellers' Marks...................................................................................................42
Selling Parties...................................................................................................1
Solvent..........................................................................................................22
Subordinated Units................................................................................................1
Substituted Assets...............................................................................................39
Tax..............................................................................................................12
Tax Returns......................................................................................................12
Taxes............................................................................................................12
Technology Consultant............................................................................................39
Third Payment.....................................................................................................6
Transaction Documents............................................................................................65
Transfer Agent....................................................................................................3
Transfer Taxes...................................................................................................37
Transferred Assets...............................................................................................39
Transferred Employees............................................................................................29
Transferred Licensed Software....................................................................................41
Transition Services Agreement....................................................................................35
Unit Transfer Application(s)......................................................................................5
VEBA.............................................................................................................30
WARN.............................................................................................................33
XXX...............................................................................................................1
iii
XXX Xxxx of Sale..................................................................................................3
XXX Common Units..................................................................................................1
XXX New LLC Interests.............................................................................................1
XXX Subordinated Units............................................................................................1
XXX Units.........................................................................................................1
WNGL..............................................................................................................1
WNGL Xxxx of Sale.................................................................................................4
WNGL Common Units.................................................................................................1
WNGL New LLC Interests............................................................................................1
WNGL Subordinated Units...........................................................................................1
WNGL Units........................................................................................................1
WPL Contribution Agreement.......................................................................................65
iv
