ASSET PURCHASE AGREEMENT BY AND AMONG TEPPCO MARINE SERVICES, LLC TEPPCO PARTNERS, L.P. CENAC TOWING CO., INC. CENAC OFFSHORE, L.L.C. AND MR. ARLEN B. CENAC, JR. Dated February 1, 2008
Exhibit 2
Execution version
BY
AND
AMONG
TEPPCO MARINE SERVICES, LLC
TEPPCO PARTNERS, X.X.
XXXXX TOWING CO., INC.
CENAC OFFSHORE, L.L.C.
AND
XX. XXXXX X. XXXXX, XX.
Dated February 1, 2008
TABLE OF CONTENTS
Page | ||||||||
ARTICLE I PURCHASE, SALE AND DELIVERY | 1 | |||||||
Section 1.1 | Purchased Assets |
1 | ||||||
Section 1.2 | Excluded Assets |
3 | ||||||
Section 1.3 | Purchase Price |
4 | ||||||
Section 1.4 | Closing |
5 | ||||||
Section 1.5 | Purchase Price Adjustments |
5 | ||||||
Section 1.6 | Closing Limited Partner Units |
6 | ||||||
Section 1.7 | Purchase Price Allocation |
7 | ||||||
ARTICLE II LIABILITIES AND OBLIGATIONS | 7 | |||||||
Section 2.1 | Obligations Assumed |
7 | ||||||
Section 2.2 | Liabilities and Obligations Not Assumed |
8 | ||||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES | 9 | |||||||
Section 3.1 | Status and Good Standing; Ownership; Citizenship |
9 | ||||||
Section 3.2 | Authorization |
9 | ||||||
Section 3.3 | Non-Contravention |
10 | ||||||
Section 3.4 | Validity |
11 | ||||||
Section 3.5 | Broker Involvement |
11 | ||||||
Section 3.6 | Litigation |
11 | ||||||
Section 3.7 | Title |
11 | ||||||
Section 3.8 | Continuity Prior to the Closing Date |
11 | ||||||
Section 3.9 | Contracts and Commitments |
13 | ||||||
Section 3.10 | Intellectual Property Rights |
13 | ||||||
Section 3.11 | Sufficiency of Assets; Customer Products |
14 | ||||||
Section 3.12 | Financial Statements |
15 | ||||||
Section 3.13 | Condition of Assets; Eligibility for Coastwise Trade |
15 | ||||||
Section 3.14 | Absence of Undisclosed Liabilities |
16 | ||||||
Section 3.15 | Employee Benefits |
16 | ||||||
Section 3.16 | Compliance With Law |
16 | ||||||
Section 3.17 | Environmental |
17 | ||||||
Section 3.18 | Insurance |
18 | ||||||
Section 3.19 | Government Licenses, Permits and Related Approvals |
18 | ||||||
Section 3.20 | Responsible Carriers Plan |
19 | ||||||
Section 3.21 | Taxes |
19 | ||||||
Section 3.22 | Books and Records |
20 | ||||||
Section 3.23 | Safety Reports |
20 | ||||||
Section 3.24 | Transactions with Certain Persons |
20 | ||||||
Section 3.25 | Investment Representations |
20 | ||||||
Section 3.26 | Disclosure |
22 | ||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER | 22 | |||||||
Section 4.1 | Status and Good Standing |
22 | ||||||
Section 4.2 | Authorization |
22 |
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Page | ||||||||
Section 4.3 | Non-Contravention |
23 | ||||||
Section 4.4 | Validity |
23 | ||||||
Section 4.5 | Broker Involvement |
23 | ||||||
Section 4.6 | Valid Issuance |
23 | ||||||
Section 4.7 | Exchange Act Reports |
23 | ||||||
Section 4.8 | Partnership Material Adverse Change |
24 | ||||||
Section 4.9 | Securityholder Agreements |
24 | ||||||
ARTICLE V COVENANTS | 24 | |||||||
Section 5.1 | Other Offers |
24 | ||||||
Section 5.2 | Conduct of Operations Pending Closing |
24 | ||||||
Section 5.3 | Notification |
25 | ||||||
Section 5.4 | Employees |
26 | ||||||
Section 5.5 | Buyer’s Access |
26 | ||||||
Section 5.6 | Covenant Against Competition |
26 | ||||||
Section 5.7 | Further Assistance |
28 | ||||||
Section 5.8 | Governmental Filings |
28 | ||||||
Section 5.9 | Consents |
28 | ||||||
Section 5.10 | Public Announcements |
29 | ||||||
Section 5.11 | Income Tax Matters |
29 | ||||||
Section 5.12 | Taxes Upon Conveyance and Transfer |
30 | ||||||
Section 5.13 | Other Taxes and Charges |
30 | ||||||
Section 5.14 | Condition to Transfer of Contracts |
30 | ||||||
Section 5.15 | Cooperation with Financings and Financial Reporting; Additional Financial Statements
|
31 | ||||||
Section 5.16 | Restrictions on Transfer; Legends |
31 | ||||||
Section 5.17 | Compliance with Rule 144 |
33 | ||||||
Section 5.18 | Damage to Vessels |
33 | ||||||
Section 5.19 | Sellers’ Access |
34 | ||||||
Section 5.20 | Completion of Xxxxxxxx Xxxxx |
34 | ||||||
ARTICLE VI USE OF THE CENAC NAME AFTER CLOSING | 34 | |||||||
Section 6.1 | Use of the Cenac Name |
34 | ||||||
Section 6.2 | Grant of Trademark Consent |
34 | ||||||
ARTICLE VII INDEMNIFICATION | 34 | |||||||
Section 7.1 | Seller Parties’ Indemnity Obligations |
35 | ||||||
Section 7.2 | Buyer’s Indemnity Obligations |
35 | ||||||
Section 7.3 | S Corporation Built-In Gain Indemnity |
36 | ||||||
Section 7.4 | Survival |
36 | ||||||
Section 7.5 | Indemnification Procedures |
36 | ||||||
Section 7.6 | General |
38 | ||||||
ARTICLE VIII CONDITIONS TO CLOSING | 38 | |||||||
Section 8.1 | Conditions to Obligations of Buyer |
38 | ||||||
Section 8.2 | Conditions to Obligations of Seller Parties |
41 | ||||||
ARTICLE IX TERMINATION | 42 | |||||||
Section 9.1 | Grounds for Termination |
42 |
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Page | ||||||||
Section 9.2 | Effect of Termination |
43 | ||||||
ARTICLE X GENERAL PROVISIONS | 43 | |||||||
Section 10.1 | Confidentiality |
43 | ||||||
Section 10.2 | Dispute Resolution |
44 | ||||||
Section 10.3 | Seller Parties to Enforce Certain Agreements |
45 | ||||||
Section 10.4 | Expenses |
45 | ||||||
Section 10.5 | Entire Agreement; Amendment |
45 | ||||||
Section 10.6 | Waivers and Consents |
45 | ||||||
Section 10.7 | Notices |
46 | ||||||
Section 10.8 | Assignments, Successors and No Third-Party Rights |
47 | ||||||
Section 10.9 | Compliance with Bulk Sales Laws |
47 | ||||||
Section 10.10 | Performance |
47 | ||||||
Section 10.11 | Title and Risk of Loss |
47 | ||||||
Section 10.12 | Choice of Law |
47 | ||||||
Section 10.13 | Jurisdiction and Venue |
47 | ||||||
Section 10.14 | Construction; Section Headings; Table of Contents |
47 | ||||||
Section 10.15 | Severability |
47 | ||||||
Section 10.16 | Counterparts |
48 | ||||||
Section 10.17 | Time of Essence |
48 | ||||||
Section 10.18 | Interpretation |
48 | ||||||
Section 10.19 | Definitions |
48 |
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EXHIBITS | ||
Exhibit A
|
Form of Legal Opinion to Buyer | |
Exhibit B
|
Form of U.S. Coast Guard Bills of Sale | |
Exhibit C
|
Form of Transitional Operating Agreement | |
Exhibit D
|
Form of Legal Opinion to the Seller Parties | |
Exhibit E
|
States and Parishes in Restricted Territory | |
Exhibit F
|
Example Built-In Gain Indemnity Calculation | |
SCHEDULES |
||
Schedule 1.1(a)(i)
|
List of Vessels | |
Schedule 1.1(a)(ii)
|
Onshore Vessel Equipment | |
Schedule 1.1(a)(iii)
|
Vehicles and Other Equipment | |
Schedule 1.1(d)(i)
|
Contracts | |
Schedule 1.1(d)(ii)
|
Assumed Equipment Leases | |
Schedule 1.1(f)
|
IT Contracts | |
Schedule 1.1(g)
|
Permits | |
Schedule 1.5(a)(v)
|
Fuel and Lube Oil Capacity | |
Schedule 1.7
|
Purchase Price Allocation | |
Schedule 2.1(a)
|
Indebtedness | |
Schedule 3.2(a)
|
Resolutions—Cenac Towing | |
Schedule 3.2(b)
|
Resolutions—Cenac Offshore | |
Schedule 3.3
|
Non-Contravention | |
Schedule 3.6
|
Litigation | |
Schedule 3.9
|
Other Agreements | |
Schedule 3.10(a)
|
Intellectual Property Rights | |
Schedule 3.10(b)
|
Intellectual Property Rights | |
Schedule 3.10(c)
|
Intellectual Property Rights | |
Schedule 3.12(c)
|
Secured Liabilities | |
Schedule 3.13(c)
|
Trading Restrictions | |
Schedule 3.13(d)
|
Vessel Authorizations | |
Schedule 3.13(e)
|
Vessels Specifications | |
Schedule 3.13(f)
|
Charters in Other Vessels | |
Schedule 3.17
|
Environmental | |
Schedule 3.19
|
Government Licenses | |
Schedule 3.20
|
Responsible Carriers Plan | |
Schedule 3.21(e)
|
Taxes | |
Schedule 3.23
|
Safety Reports | |
Schedule 3.25
|
Accredited Investor | |
Schedule 10.19
|
Persons with Knowledge |
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This Asset Purchase Agreement (“Agreement”), dated February 1, 2008, is among TEPPCO Marine
Services, LLC, a Delaware limited liability company (“Buyer”), TEPPCO Partners, L.P., a Delaware
limited partnership (the “Partnership”), Cenac Towing Co., Inc., a Louisiana corporation (“Cenac
Towing”), Cenac Offshore, L.L.C., a Louisiana limited liability company (“Cenac Offshore” and,
together with Cenac Towing, the “Sellers”), and Xx. Xxxxx X. Xxxxx, Xx., a resident of Houma,
Louisiana and the sole owner of all the stock and equity interests of the Sellers (the
“Stockholder” and, together with Sellers, the “Seller Parties”).
WHEREAS, the Sellers (i) own and operate marine vessels engaged in the inland and offshore
marine transportation of (A) hydrocarbons and hydrocarbon-based products and (B) waste water,
sediment and drilling or disposal fluids resulting from the exploration or production of
hydrocarbons and (ii) engage in activities related to the foregoing (collectively, the
“Operations”); and
WHEREAS, Buyer wishes to purchase from each Seller, and each Seller wishes to sell, transfer,
convey, assign and deliver to Buyer, substantially all of the business operations and assets of
each Seller relating to the Operations, except as otherwise set forth herein;
NOW, THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements stated herein, the parties agree as follows:
ARTICLE I
PURCHASE, SALE AND DELIVERY
PURCHASE, SALE AND DELIVERY
Section 1.1 Purchased Assets. Upon the terms and subject to the conditions of this Agreement, and
on the basis of the representations and warranties hereinafter set forth, at the Closing, Sellers
shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall acquire and purchase
from Sellers, the following, in each case free and clear of any Liens, except for Permitted Liens
(the “Company Purchased Assets”):
(a) the boats, barges and other vessels listed on Schedule 1.1(a)(i), together with
(i) all of their appurtenant Vessel Equipment and (ii) the Vessel Equipment not onboard such boats,
barges and other vessels listed on Schedule 1.1(a)(ii) (collectively, the “Vessels”); and
the vehicles and other equipment listed on Schedule 1.1(a)(iii);
(b) all stores, fuel oil and lube oil on board any of the Vessels;
(c) all financial, accounting and operating data and records, including all books, schedules,
work papers, records, notes, correspondence, files, vendor lists, customer lists, customer account
information, sales and service records, credit data, sales and promotional brochures, advertising
materials, cost and pricing information, equipment maintenance data, research and development
reports and records, production reports and records, service and warranty records, vessel drawings
and diagrams, vessel logs, equipment logs, preventive maintenance manuals, operating guides and
manuals, class certifications, loadline certificates,
radio licenses, xxxxxxx certificates, vessel registry documentation, documentation of foreign
registry, vessel response plans and vessel security plans, purchasing records and information,
1
business plans, reference catalogues, stationery, purchase orders, sales forms and other data used
in or relating to the Operations;
(d) subject to the provisions of Section 5.14, (i) all written executory contracts and
agreements relating to the provision of services or products to non-Affiliates in connection with
the Operations, including customer contracts (and customer prepayments thereon), purchase orders,
purchase and sale agreements, supply agreements, distribution or distributor agreements, vessel
charters, towing agreements and contracts of affreightment, a listing of which is attached as
Schedule 1.1(d)(i) (collectively, the “Contracts”) and (ii) all equipment leases, including
vessel charters, with non-Affiliates set forth on Schedule 1.1(d)(ii) (the “Assumed
Equipment Leases”);
(e) all intellectual property used in or relating to the Operations, however denominated,
throughout the world, whether or not registered, including all patent applications, patents,
trademarks, service marks, corporate names, business names, brand names, trade names, all other
names and slogans embodying business or product goodwill (but explicitly excluding the names “Cenac
Towing,” “Cenac Offshore” and any variants of the “Cenac” name), trade styles or dress, mask works,
copyrights, works of authorship, moral rights of authorship, rights in designs, trade secrets,
technology, inventions, invention disclosures, discoveries, improvements, know-how, program
materials, processes, methods, confidential and proprietary information, technical information, and
all rights in internet web sites, internet domain names, telephone, telecopy and e-mail addresses
and listings of any Seller, and all other intellectual and industrial property rights, whether or
not subject to statutory registration or protection and, with respect to each of the foregoing, all
registrations and applications for registration, renewals, extensions, continuations, reissues,
divisionals, improvements, modifications, derivative works, goodwill, and common law rights, and
causes of action relating to any of the foregoing (collectively, the “Intellectual Property
Rights”) and all tangible embodiments of the Intellectual Property Rights, including engineering,
production and other designs, plans, blue prints, drawings, specifications, formulas, technology,
computer and electronic data processing programs, and computer software owned or licensed by any
Seller;
(f) subject to the provisions of Section 5.14, all license, maintenance, development and
support agreements to which any Seller is a party related to such Seller’s computer hardware and
software (owned, leased or licensed) used in connection with the Operations, a listing of which
(excluding shrink wrap or other similar licenses with respect to off-the-shelf software) is
attached as Schedule 1.1(f) (the “IT Contracts”);
(g) all licenses, permits, consents, franchises, certificates, approvals, authorizations,
registrations, qualifications and orders of or with Governmental Bodies relating to the Operations,
to the extent that any of the foregoing may be transferred (upon any filing, application or other
action by any Seller or other Person), a listing of which is attached as Schedule 1.1(g);
(h) all goodwill and going-concern value of each Seller related to the Operations;
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(i) all transferable rights of each Seller under express or implied warranties, if any, from
the suppliers of such Seller, manufacturers or others relating to the Operations;
(j) all insurance proceeds and claims to receive insurance proceeds relating to the Operations
and, to the extent transferable, the benefit of and the right to enforce the covenants and
warranties, if any, that any Seller is entitled to enforce against any insurer under those policies
with respect to the Operations;
(k) all claims of any Seller against third parties relating to the Operations, whether xxxxxx
or inchoate, known or unknown, contingent or noncontingent; and
(l) all deposits, claims for refund, rights to offset and other similar assets or rights of
Sellers relating to the Operations.
In addition, upon the terms and subject to the conditions of this Agreement, and on the basis of
the representations and warranties hereinafter set forth, at the Closing, Stockholder shall sell,
transfer, convey, assign and deliver to Buyer, and Buyer shall acquire and purchase from
Stockholder, free and clear of any Liens, all personal goodwill of Stockholder related to the
Operations of Cenac Towing (the “Stockholder Purchased Assets” and, collectively with the Company
Purchased Assets, the “Purchased Assets”). Notwithstanding the foregoing, the transfer of the
Purchased Assets pursuant to this Agreement shall not include the assumption of any liability of
any type whatsoever related to the Purchased Assets, unless Buyer expressly assumes such liability
pursuant to Section 2.1.
Section 1.2 Excluded Assets. Notwithstanding Section 1.1, the Purchased Assets shall not include,
and Buyer shall not acquire or purchase, any of the following (collectively, the “Excluded
Assets”):
(a) all of Sellers’ interests in shipyards, buildings, real property leases and other real
property, together with any fixtures and leasehold improvements to any such property;
(b) all office furniture, supplies, computer systems, telephone systems, copy machines, fax
machines, machinery, tools, supplies, materials handling and other equipment and fixed assets
located at the offices of each Seller in Houma, Louisiana or other real property owned or leased by
Sellers, excluding any such equipment or other asset that constitute part of a Vessel;
(c) all cash, cash equivalents, short-term investments and inventory of Sellers;
(d) all accounts receivable of Sellers with respect to Excluded Assets and all accounts
receivable of Sellers from sales or services rendered by Sellers prior to the Closing with respect
to the Purchased Assets;
(e) all minute books, stock records, corporate seals and Tax Returns of any Seller;
(f) all agreements, contracts, receivables or other arrangements between or among any Seller
and any Affiliate thereof;
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(g) all rights in connection with and assets of the Sellers’ Plans;
(h) the names “Cenac Towing,” “Cenac Offshore” and any variants of the “Cenac” name;
(i) subject to Section 1.1(i), all rights of each Seller under express or implied warranties,
if any, from the suppliers of such Seller, manufacturers or others relating to the Excluded Assets;
(j) subject to Section 1.1(j), all insurance proceeds and claims to receive insurance proceeds
relating to the Excluded Assets and the benefit of and the right to enforce the covenants and
warranties, if any, that any Seller is entitled to enforce against any insurer under those policies
with respect to the Excluded Assets;
(k) subject to Section 1.1(k), all claims of any Seller against third parties relating to the
Excluded Assets, whether xxxxxx or inchoate, known or unknown, contingent or noncontingent;
(l) subject to Section 1.1(l), all deposits, claims for refund, rights to offset and other
similar assets or rights of Sellers relating to the Excluded Assets;
(m) all rights of Seller Parties under the Transaction Documents; and
(n) any other assets not specifically identified as Purchased Assets.
Section 1.3 Purchase Price. The aggregate purchase price payable to the Seller Parties for the
Purchased Assets, adjusted as provided for in Section 1.5 and Section 1.6(c) (the “Purchase
Price”), shall consist of:
(a) $92,260,192.63 in cash to be paid at the Closing by wire transfer to the account or
accounts designated in writing by Cenac Offshore;
(b) (i) $150,085,528.59 in cash to be paid at the Closing by wire transfer to the account or
accounts designated in writing by Cenac Towing, and (ii) the issuance and delivery of Limited
Partner Units at the Closing to Cenac Towing having an aggregate Market Value of $165,955,939.14,
with the value of any fractional Limited Partner Unit in respect thereof to be paid in cash (such
Limited Partner Units, the “Towing Limited Partner Units”);
(c) (i) $14,246,779.37 in cash to be paid at the Closing by wire transfer to the account or
accounts designated in writing by Stockholder, and (ii) the issuance and delivery of Limited
Partner Units at the Closing to Stockholder having an aggregate Market Value of $15,753,220.63,
with the value of any fractional Limited Partner Unit in respect thereof to be paid in cash (such
Limited Partner Units, together with the Towing Limited Partner Units, the “Closing Limited Partner
Units”); and
(d) the assumption of the Assumed Liabilities as provided in Section 2.1.
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Section 1.4 Closing. Subject to Section 9.1, the closing of the transactions contemplated hereby
(the “Closing”) shall take place at the offices of Xxxxx Xxxxx L.L.P., One Shell Plaza, 000
Xxxxxxxxx Xx., Xxxxxxx, Xxxxx 00000 at 9:00 a.m., Houston time, on the later of (a) February 1,
2008 and (b) the first day of a calendar month that is at least three business days following the
first day on which all of the conditions set forth in Article VIII have been satisfied or waived
(other than conditions that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), or at such other time and place as the parties may
agree. The date on which the Closing is held is referred to in this Agreement as the “Closing
Date.”
Section 1.5 Purchase Price Adjustments.
(a) The Purchase Price shall be adjusted:
(i) downward by the amount of any loss or damage provided for in Section 5.18;
(ii) downward by the amount of property Taxes and other Taxes and charges
allocated to Sellers in Section 5.13;
(iii) upward by the amount of documented, ordinary course costs or expenses
incurred and paid by Sellers to non-Affiliated parties prior to the Effective Time
(and without violation of this Agreement) in respect of ownership or operation of
the Purchased Assets after the Effective Time;
(iv) downward by the amount of documented payments, proceeds or other income
received by Sellers prior to the Effective Time in respect of ownership or operation
of the Purchased Assets after the Effective Time; and
(v) upward by the cost of 50% of the aggregate fuel and lube oil capacity of
the Vessels on the Closing Date, based on the capacities set forth on Schedule
1.5(a)(v) and a price to be determined by the Seller Parties and Buyer prior to
the Closing Date.
(b) For a period of 180 days following the Closing, Buyer agrees to pay to Sellers any amounts
received by Buyer after the Effective Time based upon sales or services rendered by Sellers prior
to the Effective Time, and Sellers agree to pay to Buyer any amounts received by them after the
Effective Time based upon sales or services rendered by Buyer after the Effective Time.
(c) Not later than 3 days prior to Closing, Buyer may deliver to Sellers a schedule prepared
in good faith by Buyer setting forth the amounts of the purchase price adjustments provided for in
paragraph (a) above (the “Preliminary Adjustment Schedule”), and the Purchase Price paid by Buyer
at Closing shall be adjusted as provided therein.
(d) Not later than 100 days after Closing, Buyer shall deliver to Sellers a schedule prepared
in good faith by Buyer setting forth the final purchase price adjustment amounts provided for in
paragraphs (a) and (b) above (the “Final Adjustment Schedule”). If
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Sellers object to the Final
Adjustment Schedule and the parties fail to resolve such objection within 30 days of Buyer’s
receipt of Sellers’ objection notice, the issues remaining in dispute shall be submitted to a
nationally recognized accounting firm selected by the Sellers from a list of three such firms
provided by Buyer (the “Accounting Firm”), along with all work papers, schedules and calculations
related to the matter in dispute. Within 30 days after such submission, the Accounting Firm shall
issue a letter report determining the amount in dispute, which shall be conclusive for purposes of
this Section 1.5. Buyer shall pay to Sellers, or Sellers shall pay to Buyer, as the case may be,
the adjustment amount shown on the conclusive Final Adjustment Schedule, in either case not later
than 3 days after such schedule becomes conclusive. Each party shall bear its own expenses in
connection with resolving any such dispute, and Sellers and Buyer will each bear half of the fees
and costs of the Accounting Firm.
(e) The parties agree and acknowledge that the provisions of this Section 1.5 shall not affect
in any way the transfer, exclusion, assumption or allocation of any assets, rights, liabilities or
obligations otherwise provided for in this Agreement or indemnification related thereto.
Section 1.6 Closing Limited Partner Units.
(a) As more fully described in Sections 3.25 and 5.16, neither the Partnership nor Buyer shall
be obligated to take any steps to register or otherwise qualify the Closing Limited Partner Units
under any federal or state securities laws and consequently there are transfer restrictions on such
Closing Limited Partner Units.
(b) In the event that the Limited Partner Units are changed or converted into another security
in connection with any merger, reclassification or similar transaction, which other security is
publicly traded, at any time prior to the Closing, then Buyer shall substitute said security for
Limited Partner Units. In any event, in the event of any transaction in which the Limited Partner
Units are converted into the right to receive cash, securities or other property, Buyer may, at its
option, tender cash in lieu of the Closing Limited Partner Units required hereunder. The aggregate
amount of cash so payable in lieu of the Closing Limited Partner Units shall be $181,709,159.77.
(c) During the 30-day period immediately following the First Permitted Transfer Date (the
“Window Period”), prior to selling or otherwise disposing of any Closing Limited Partner Units, the
Seller Parties (or Permitted Transferees) shall provide the Partnership advance written notice of
any such proposed disposition setting forth the number of Closing Limited Partner Units proposed to
be disposed of (the “Subject Units”). The Partnership shall have the right (but not the
obligation), exercisable for five days after receipt of the notice (“Option Period”), to acquire
the Subject Units from the Seller Parties (or Permitted Transferees) at the greater of (i) the
Market Value thereof and (ii) the average closing price of the Limited Partner Units on the New
York Stock Exchange for the five-day trading period ending on the date the Partnership received the
notice (the “Average Trading Price”). If the Partnership does not exercise such right and the
Seller Parties (or Permitted Transferees) sell the Subject Units
during the Window Period (the “Sold Units”) in a Brokers’ Transaction at an aggregate
execution price (without giving effect to brokerage commissions or other fees) (the “Sale Price”)
that is less than the Market Value of the Sold Units, then the Partnership shall pay to the Seller
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Parties (or Permitted Transferees), within ten (10) days following the expiration of the Window
Period, an amount in cash equal to the Market Value of the Sold Units minus the Sale Price of the
Sold Units. If the Seller Parties (or Permitted Transferees) provide proper notice of a proposed
sale of Closing Limited Partner Units to occur during the Window Period and such proposed sale is
not capable of being effected in accordance with the provisions of Rule 144 as a result of the
Partnership’s failure to file timely Exchange Act reports, the Partnership shall be obligated to
purchase the Subject Units for the greater of the Market Value thereof and the Average Trading
Price.
(d) From the date hereof until the tenth anniversary of the Closing, other than during the
Window Period, which shall be governed by paragraph (c) above, prior to selling or otherwise
disposing of any Closing Limited Partner Units, the Seller Parties (or Permitted Transferees) shall
provide the Partnership advance written notice of any such proposed disposition setting forth the
Subject Units and the price offered therefor (the “Offer Price”). The Partnership shall have the
right (but not the obligation), exercisable until the close of business on the trading day
immediately following receipt of such notice to acquire the Subject Units from the Seller Parties
(or Permitted Transferees) at the lower of the Offer Price and the closing price of the Limited
Partner Units on the New York Stock Exchange on such trading day.
(e) The Seller Parties (or Permitted Transferees) shall be required to provide the Partnership
with a new notice and repeat the procedures required by paragraphs (c) or (d) above, as the case
may be, with respect to any Subject Units (for which the Partnership did not exercise its right to
purchase) not sold within 60 days after delivery of the notice relating thereto. Settlement of any
purchases by the Partnership of Closing Limited Partner Units pursuant to paragraph (c) or (d)
above shall occur on a T+5 basis or other basis mutually agreed by the Partnership and the Seller
Party (or Permitted Transferee) selling such units.
Section 1.7 Purchase Price Allocation. The Purchase Price, and the cash, Closing Limited Partner
Units and assumption of Assumed Liabilities that comprise the Purchase Price, shall be allocated
among Cenac Towing, Cenac Offshore and the Stockholder as set forth in Schedule 1.7.
ARTICLE II
LIABILITIES AND OBLIGATIONS
LIABILITIES AND OBLIGATIONS
Section 2.1 Obligations Assumed. As part of the consideration for the Purchased Assets, and
subject to Section 2.2, Buyer shall assume only the following (collectively, the “Assumed
Liabilities”):
(a) the indebtedness of the Sellers set forth on Schedule 2.1(a);
(b) each Seller’s obligations that accrue after the Closing under Contracts and Assumed
Equipment Leases listed on Schedules 1.1(d)(i) and 1.1(d)(ii) and the IT Contracts
listed on Schedule 1.1(f), in each case if and only if they are assigned or
transferred to Buyer; and
(c) all prorated amounts described in Section 5.13 from and after the Closing.
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Section 2.2 Liabilities and Obligations Not Assumed. Other than as specifically set forth in
Section 2.1 above, Buyer shall not assume or be obligated by this Agreement to pay, perform,
discharge or otherwise be responsible for, any debts, liabilities or obligations whatsoever of any
Seller Party or the Operations, whether accrued, absolute, contingent or otherwise, oral or
written, disclosed or undisclosed, and all those debts, liabilities and obligations will remain the
responsibilities and obligations of the Seller Parties (the “Excluded Liabilities”). Buyer
expressly disclaims the assumption of any other debt, liability or obligation of any type
whatsoever of any Seller Party or in connection with any Seller Party’s assets or business
operations, including the following:
(a) any insurance liabilities or obligations with respect to claims, premiums and outstanding
or additional supplemental or release calls related to the Operations prior to the Closing;
(b) any Tax liabilities accruing prior to the Closing in connection with any Purchased Asset
or otherwise;
(c) any accounts payable or other current liabilities;
(d) any liabilities arising from or under any Environmental Laws or any Remedial Actions
related to any acts or omissions of any Seller or any condition or circumstance existing prior to
the Closing, even if such liability does not accrue until after the Closing, including liabilities
for exposure to Hazardous Materials and fines, penalties or assessments, whether civil or criminal
in nature;
(e) any employment, employee benefit or personnel-related liabilities whatsoever of any Seller
or ERISA Affiliate, including any liability with regard to the Sellers’ Plans;
(f) any liability or obligation (whether absolute, accrued, contingent or otherwise) of any
Seller arising out of any claim, litigation or proceeding to the extent based on or caused by any
act or omission occurring, or condition or circumstances existing, prior to the Closing;
(g) any liability or obligation (whether absolute, accrued, contingent or otherwise) of any
Seller arising out of any service provided by such Seller;
(h) any liabilities or obligations of any Seller Party arising from or incurred in connection
with the negotiation, preparation or execution of the Transaction Documents or the transactions
contemplated thereby, including fees and expenses of the Sellers’ counsel;
(i) any liabilities or obligations of any Seller Party based on acts or omissions occurring
after the Closing;
(j) any liabilities or obligations, whether accruing before or after Closing, under Contracts
and Assumed Equipment Leases listed on Schedules 1.1(d)(i) and 1.1(d)(ii) and the
IT Contracts listed on Schedule 1.1(f) that are not assigned to and assumed by Buyer; and
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(k) any liabilities or obligations associated with the Excluded Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES
REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES
The Seller Parties, jointly and severally, represent and warrant to Buyer that the following
representations and warranties in this Article III are, as of the date of this Agreement, and will
be, as of the Closing Date, true and correct:
Section 3.1 Status and Good Standing; Ownership; Citizenship.
(a) Cenac Towing is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, with full corporate power and authority under its
certificate or articles of incorporation and bylaws to own and lease its properties and to conduct
its business as now conducted. Cenac Towing has satisfied all legal requirements to do business as
a foreign corporation in all jurisdictions in which the nature of its properties (whether owned or
leased), assets or businesses so requires.
(b) Cenac Offshore is a limited liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, with full limited liability company power
and authority under its organizational documents to own and lease its properties and to conduct its
business as now conducted. Cenac Offshore has satisfied all legal requirements to do business as a
foreign limited liability company in all jurisdictions in which the nature of its properties
(whether owned or leased), assets or businesses so requires.
(c) The Purchased Assets do not include any capital stock, limited liability company or other
equity interests in any Person. The Stockholder owns, beneficially and of record, all of the
issued and outstanding capital stock or membership or other equity interests, as the case may be,
of each of the Sellers.
(d) Each of the Sellers is a citizen of the United States within the meaning of Section 50501
of Title 46 of the United States Code for the purpose of operating the Vessels in the coastwise
trade of the United States.
Section 3.2 Authorization.
(a) Cenac Towing has full corporate power and authority under its certificate or articles of
incorporation and bylaws, and its board of directors and the Stockholder, in his capacity as sole
stockholder, have taken all necessary action to authorize it to execute and deliver the Transaction
Documents to which it is a party, to consummate the transactions contemplated therein and to take
all actions required to be taken by it pursuant to the provisions thereof. A
certified copy of resolutions duly adopted by the board of directors and the Stockholder, in
his capacity as sole stockholder, of Cenac Towing and authorizing and approving the execution and
delivery of the Transaction Documents to which it is a party and the consummation of the
transactions contemplated therein, is attached as Schedule 3.2(a).
(b) Cenac Offshore has full limited liability company power and authority under its
organizational documents, and its managers and the Stockholder, in his capacity as sole
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member,
have taken all necessary action to authorize it to execute and deliver the Transaction Documents to
which it is a party, to consummate the transactions contemplated therein and to take all actions
required to be taken by it pursuant to the provisions thereof. A certified copy of resolutions
duly adopted by the managers and the Stockholder, in his capacity as sole member, of Cenac Offshore
authorizing and approving the execution and delivery of the Transaction Documents to which it is a
party and the consummation of the transactions contemplated therein, is attached as Schedule
3.2(b).
(c) Each of the Transaction Documents constitutes or, when executed and delivered will
constitute, the valid and binding obligation of each Seller Party that is a party thereto,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ rights generally and to the
principles of equity (whether enforcement is sought in a proceeding in equity or at law).
Section 3.3 Non-Contravention. Except as set forth on Schedule 3.3, neither the execution
and delivery of any of the Transaction Documents nor the consummation of the transactions
contemplated therein, does or shall (with or without notice or lapse of time):
(a) violate, conflict with, result in a breach of or require notice or consent or decrease the
rights of any Seller Party or increase the rights of any third party under (i) any Law, (ii) the
certificate or articles of incorporation or organization, bylaws, limited liability company
agreement or other constituent documents or board, manager, stockholder or member resolutions of
any Seller Party, (iii) any provision of any agreement or instrument to which any Seller Party is a
party or (iv) any legal duty owed by any officer, director, manager, shareholder, member or agent
of any Seller Party;
(b) contravene, conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of such transactions or to exercise any remedy or obtain
any relief under, any Law to which any Seller Party, or any of the assets owned or used by any
Seller Party, may be subject; provided that the Seller Parties make no representation in this
Section 3.3(b) with respect to the Partnership’s compliance or noncompliance under any such Law in
issuing the Closing Limited Partner Units.
(c) contravene, conflict with, or result in a violation of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or
modify, any license, permit, consent, approval, authorization, qualification, certificate,
registration or order of any Governmental Body that is held by any Seller Party or that otherwise
relates to the business of any Seller Party or to the Purchased Assets;
(d) except as required by the HSR Act, require notice to or consent of any Governmental Body;
(e) result in the imposition or creation of any Lien upon or with respect to the Purchased
Assets; or
(f) result in the acceleration or mandatory prepayment of any indebtedness, or any guaranty of
any Seller Party or afford any holder of any indebtedness, or any beneficiary of
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any guaranty the
right to require any Seller Party to redeem, purchase or otherwise acquire, reacquire or repay any
indebtedness, or to perform any guaranty.
Section 3.4 Validity. There is no investigation, claim, proceeding or litigation of any type
pending or, to the knowledge of the Seller Parties, commenced without notice or threatened to which
any Seller is a party that (i) questions or involves the validity or enforceability of any of a
Seller Party’s obligations under any of the Transaction Documents or (ii) seeks (or reasonably
might be expected to seek) (A) to prevent or delay the consummation by any Seller Party of the
transactions contemplated by this Agreement or (B) damages in connection with any such
consummation.
Section 3.5 Broker Involvement. No Seller Party has hired, retained or dealt with any broker or
finder in connection with the transactions contemplated by this Agreement.
Section 3.6 Litigation. There is no investigation, claim, proceeding or litigation of any type
pending or, to the knowledge of the Seller Parties, commenced without notice or threatened (a)
involving any Purchased Asset or the Operations, except as set forth on Schedule 3.6, or
(b) that could reasonably be expected to have an adverse effect on any Seller or Buyer as the owner
of the Purchased Assets. There is no judgment, order, writ, injunction or decree of any
Governmental Body or arbitral tribunal against or involving any Seller or any Purchased Asset or
that could reasonably be expected to have an adverse effect on any Seller or Buyer as the owner of
the Purchased Assets.
Section 3.7 Title. Except for Permitted Liens, the Seller Parties have good and marketable title
to the Purchased Assets, free and clear of any and all Liens, restrictions, liabilities and
assignments of any kind, and the Seller Parties have the full right to sell and transfer to Buyer
good and marketable title to the Purchased Assets, free and clear of any and all Liens,
restrictions, liabilities and assignments of any kind. The delivery to Buyer of the instruments of
transfer of ownership contemplated by this Agreement shall vest good and marketable title to the
Purchased Assets in Buyer, free and clear of any and all Liens, restrictions, liabilities and
assignments of any kind, except for Permitted Liens.
Section 3.8 Continuity Prior to the Closing Date. From June 30, 2007, to and including the Closing
Date, no Seller has conducted the Operations other than in the usual and customary manner and in
the ordinary course of business, consistent with recent past practice for the Operations, and there
has not been:
(a) any sale, lease, assignment, distribution, transfer, mortgage, pledge or subjection to
Lien of any owned or leased assets, except for Permitted Liens, or any commitment or agreement with
respect to any of the foregoing, except sales of inventory and obsolete or surplus equipment in the
ordinary and usual course of business;
(b) any damage to or destruction, loss or equipment failure related to any Purchased Asset or
any other assets used in the Operations, whether or not covered by insurance;
(c) any development with respect to any existing contract with a customer of any of the
Sellers involving, or which reasonably could be expected to involve, significant cost
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overruns, a
claim under a performance bond or cancellation or threatened cancellation by that customer;
(d) a material modification to the terms of any agreement of any Seller with its vendors or
suppliers or the termination or threatened termination of any material contract or relationship of
any Seller with any vendor or supplier;
(e) any plan, agreement or arrangement granting any preferential rights to purchase or acquire
any interest in any of the Purchased Assets, or requiring the consent of any Person to the transfer
and assignment of any of the Purchased Assets;
(f) any merger, consolidation, share exchange or acquisition of substantially all the assets
of any Person by or with any Seller, or any commitment or agreement with respect to any of the
foregoing;
(g) any purchase or acquisition of, or agreement, plan or arrangement to purchase or acquire,
any property, rights, securities or other assets outside of the ordinary course of business of the
Operations consistent with recent past practice;
(h) any change in accounting methods or principles or the application thereof or any change in
any Seller’s policies or practices with respect to items affecting working capital;
(i) any delay or reduction in capital expenditures, or any failure to continue to make capital
expenditures in the ordinary course of business consistent with recent past practice;
(j) any acceleration of shipments, sales or orders or other similar action not in the ordinary
course of business of the Operations consistent with recent past practice;
(k) any change in the practices of any of the Sellers with respect to timely payment of
accounts payable or other obligations payable to vendors, suppliers or other third parties;
(l) any waiver of any rights that, singly or in the aggregate, are material to the Operations,
the Purchased Assets or the financial condition or results of operation of any Seller, except
adjustments to customer bills in the course of good faith disputes in a manner consistent with
recent past practice;
(m) any labor strikes or disruptions, union organizational activities or other similar
occurrences;
(n) any making of Tax elections or any change in Tax elections, practices, methods or
principles with respect to the Purchased Assets or the Operations, except (i) as required by
applicable Law, (ii) as will not adversely impact Buyer or any of its Affiliates at or after the
Closing or (iii) an election under Section 1362 of the Code (and any similar election under state
income tax law) with respect to Cenac Towing;
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(o) any contract or agreement to which a Seller is a party or to which any of the Purchased
Assets may be subject and to which the other Seller or any of its Affiliates or the Stockholder or
any family member of the Stockholder is also a party;
(p) any agreement, plan or arrangement to construct any boats, barges or other vessels for any
non-Affiliated third party that would violate or conflict with any of the terms of any of the
Transaction Documents;
(q) any transaction by any Seller not in the ordinary course of business consistent with
recent past practice;
(r) any Material Adverse Change; or
(s) any contract or commitment to do or cause to be done any of the foregoing.
Section 3.9 Contracts and Commitments. Schedule 3.9 lists all agreements, commitments,
contracts, undertakings or understandings not listed on Schedule 1.1(d)(i),
1.1(d)(ii) or 1.1(f) to which any Seller is a party as of the date hereof and which
relate to the Purchased Assets, which are either material to any Seller or involve consideration
with a value of $100,000 or more. No Seller is in breach of or default under any agreement, lease,
contract or commitment listed or of a type required to be listed on Schedule 1.1(d)(i),
1.1(d)(ii), 1.1(f) or 3.9 (collectively, the “Seller Agreements”). Each
Seller Agreement is valid, binding, in full force and effect and is an enforceable agreement of
each such Seller and, to the knowledge of the Seller Parties, the other parties thereto, except to
the extent that enforceability may be limited by bankruptcy, insolvency or other laws pertaining to
creditor rights or by equitable principles. There has not occurred any breach or default under any
Seller Agreement on the part of the other parties thereto, and no event has occurred which, with
the giving of notice or the lapse of time, or both, would constitute a default under any Seller
Agreement. Except as set forth on Schedule 3.9, there is no dispute between the parties to
any Seller Agreement as to the interpretation thereof or as to whether any party is in breach or
default thereunder, and no party to any Seller Agreement has indicated its intention to, or
suggested it may evaluate whether to, terminate any Seller Agreement. No Seller Party is a party
to any
covenant or obligation of any nature limiting the freedom of such Seller Party to compete in any
line of business and binding on Buyer after the Closing. Complete and correct copies of all Seller
Agreements listed or referred to in Schedules 1.1(d)(i), 1.1(d)(ii), 1.1(f)
and 3.9 have been made available to Buyer.
Section 3.10 Intellectual Property Rights.
(a) Schedule 3.10(a) contains an accurate and complete list of (i) all United States
and foreign patents, published patent applications, trademark and service xxxx applications and
registrations, and copyright registrations which are part of the Intellectual Property Rights (the
“Registered IP Rights”) (ii) all agreements (excluding shrink wrap or other similar licenses with
respect to off-the-shelf software) whereby any Seller has the legal right to use any Intellectual
Property Rights it does not own and (iii) all agreements whereby any Seller grants to any Person
the right to use any Intellectual Property Rights that any Seller owns.
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(b) Except as Schedule 3.10(b) sets forth: (i) the Purchased Assets include the
ownership of or the legal right to use, free and clear of all Liens, all the Intellectual Property
Rights, in each case free of any claims or infringements to the knowledge of the Seller Parties;
(ii) the Sellers have the right to transfer or assign to Buyer, and following the Closing, Buyer
and any Affiliate of Buyer will be entitled to the uninterrupted use of each of the Intellectual
Property Rights in the Operations as currently conducted or as currently proposed to be conducted
by the Sellers, subject to the expiration of any of those Intellectual Property Rights pursuant to
applicable Law, without payment of any royalty or license or other fees; (iii) no consent of any
Person will be required for the use of any of the Intellectual Property Rights by Buyer or any
Affiliate of Buyer in connection with the conduct of the Operations following the Closing; (iv) no
governmental registration of any of the Registered IP Rights has lapsed or expired or been
canceled, abandoned, opposed or the subject of any reexamination request; (v) each Seller has
diligently protected its legal rights to the Intellectual Property Rights, including paying all
fees and meeting all deadlines reasonably necessary to maintain the Registered IP Rights; and (vii)
the Intellectual Property Rights are sufficient to enable Buyer or any Affiliate of Buyer,
following the Closing, to operate the Operations as currently conducted and as currently proposed
to be conducted.
(c) Except as Schedule 3.10(c) sets forth: (i) there is no prohibition or restriction
imposed by any Governmental Body on the use of any of the Intellectual Property Rights, except for
any prohibitions or restrictions imposed by any governmental requirement pursuant to which those
Intellectual Property Rights have been established; (ii) no infringement claim against any of the
Sellers or other claim or litigation involving any of the Sellers regarding any Intellectual
Property Rights is pending or threatened; (iii) no Person is infringing or misappropriating the
Intellectual Property Rights; (iv) no product or service of the Operations infringes or
misappropriates the intellectual property rights of any Person; (v) no Seller has received any
charge, complaint, claim or notice alleging any infringement, misappropriation or violation by any
Seller of the intellectual property rights of any Person or alleging that the Operations as
currently conducted require a license to the intellectual property rights of any Person; and (vi)
no Seller has received any charge, complaint, claim or notice that any of the Registered IP Rights
are unenforceable or invalid.
(d) The execution, delivery and performance of the Transaction Documents and the consummation
of the transactions contemplated thereby will not: (i) constitute a breach of any instrument or
agreement governing any Intellectual Property Rights; (ii) cause the forfeiture or termination or
give rise to a right of forfeiture or termination of any Intellectual Property Rights; or (iii)
otherwise impair the right of the Buyer, following the Closing, to use or otherwise exploit, assert
or enforce any Intellectual Property Rights.
Section 3.11 Sufficiency of Assets; Customer Products.
(a) The Purchased Assets, together with the assets described in Section 1.2(b), constitute all
assets necessary to conduct the Operations in the manner presently conducted by the Sellers. All
the Purchased Assets shall be delivered to Buyer on the Closing Date.
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(b) All customer products in the custody of the Sellers are sufficient to meet the delivery
obligations under the applicable Contracts or otherwise and such products meet the qualitative
requirements provided for in the applicable Contracts or otherwise.
Section 3.12 Financial Statements.
(a) The audited consolidated financial statements of Sellers as of and for the years ended
June 30, 2007 and June 30, 2006 (including the related schedules and notes) (the “Audited Financial
Statements”) present fairly, in all material respects, the consolidated financial position of
Sellers at the respective dates of the balance sheets included therein and the results of
operations, cash flows and stockholder’s and member’s equity of Sellers for the respective periods
set forth therein and have been prepared in accordance with GAAP.
(b) The unaudited consolidated financial statements of Sellers as of and for the three months
ended December 31, 2007 (including the related schedules and notes) (the “Unaudited Financial
Statements” and, together with the Audited Financial Statements, the “Financial Statements”)
present fairly, in all material respects, the consolidated financial position of Sellers at the
respective dates of the balance sheets included therein and the results of operations and
stockholder’s and member’s equity of Sellers for the respective periods set forth therein and have
been prepared in accordance with GAAP, subject to normal recurring fiscal year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially adverse). Any financial
statements furnished pursuant to Section 5.15 will present fairly, in all material respects, the
consolidated financial position of Sellers at the respective dates of the balance sheets included
therein and the results of operations and stockholder’s and member’s equity of Sellers for the
respective periods set forth therein and will have been prepared in accordance with GAAP, subject
to normal recurring fiscal year-end adjustments (the effect of which will not, individually or in
the aggregate, be materially adverse).
(c) Schedule 3.12(c) contains a schedule of any liabilities of any Seller secured by a
Lien upon the Purchased Assets.
Section 3.13 Condition of Assets; Eligibility for Coastwise Trade.
(a) All the Purchased Assets are in good, serviceable condition and fit for the particular
purposes for which they are used in the Operations, subject only to normal maintenance requirements
and normal wear and tear reasonably expected in the ordinary course of business.
(b) Each of the Vessels is equipped with the machinery, engines, instruments, rigging,
anchors, chains, cables, tackle, apparel, accessories, equipment, radio installation and
navigational equipment and all other appurtenances necessary for the operation of such Vessel in
the ordinary course of business consistent with recent past practice.
(c) Each of the Vessels is duly documented in the applicable Seller’s name under the laws and
flag of the United States of America and satisfies the requirements for coastwise documentation,
has not been “sold foreign” within the meaning of Section 12132 of Title 46 of the United States
Code and all necessary coastwise licenses, permits, certificates,
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registrations, approvals and
other authorizations are valid and current, subject to the trading restrictions set forth on
Schedule 3.13(c).
(d) Except as set forth on Schedule 3.13(d), each Vessel has a valid, current and
unextended U.S. Coast Guard Inspection Certificate, where applicable, and all other licenses,
permits, certificates, registrations, approvals and other authorizations (including Certificates of
Financial Responsibility (Water Pollution)) that are required by applicable Law. There are no
outstanding CG-835 certificates or Captain of the Port orders with respect to the Vessels or the
operation thereof. No Vessel is restricted to operate in ports or geographic areas specified in
Approved Captain of the Port Zones.
(e) Schedule 3.13(e) sets forth a list of each Vessel, with an indication (as
applicable) of vessel type, year built, American Bureau of Shipping Classification, which
classification is the highest class available for such Vessel, whether such Vessel is free from
recommendations, flag, capacity (or horsepower as applicable), associated Liens, gross tonnage and
OPA 90 phase-out dates and date of last drydocking.
(f) Except as set forth on Schedule 3.13(f), the Sellers do not charter in vessels,
whether on a bareboat charter or time charter basis.
(g) No Vessel is (i) identified as a qualified agreement (Schedule B) vessel in any capital
construction fund agreement with the United States of America, represented by the Secretary of
Transportation, acting by and through the Maritime Administrator pursuant to Chapter 535 of Title
46 of the United States Code or (ii) subject to any trading or other restrictions under any such
agreement.
(h) Schedule 1.1(a)(ii) sets forth a listing of all Vessel Equipment associated with
but not onboard the boats, barges and other vessels listed on Schedule 1.1(a)(i).
Section 3.14 Absence of Undisclosed Liabilities. Except as set forth in the Financial Statements,
there is no existing, contingent or threatened
liability, obligation, Lien or claim of any nature (absolute, accrued, contingent or otherwise)
that relates to or has been or may be asserted against the Purchased Assets, other than liabilities
arising after the date of the Financial Statements in the ordinary course of business consistent
with past practice.
Section 3.15 Employee Benefits.
(a) Since January 1, 1998, no Seller nor any ERISA Affiliate has ever sponsored, maintained,
contributed to or incurred any liability with respect to, an “employee pension benefit plan”
subject to Title IV of ERISA or the minimum funding requirements of Section 412 of the Code or any
“multiemployer plan” (as defined in Section 3(37) of ERISA). No Seller has any employees covered
by a collective bargaining agreement.
Section 3.16 Compliance With Law. No Seller is in material violation of any provision of any Law,
consent, authorization, qualification, or any legally recognizable duty to any Person, including
those governing the registration, ownership and operation of vessels documented to engage in the
coastwise trade of the United States, and Sellers have received no notice of or raising the
possibility of any alleged violation of any such Law, consent, approval,
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authorization,
qualification or order. Without limiting the generality of the foregoing, (a) no Seller Party or
any of their respective officers or directors (or persons performing equivalent functions) has made
any offer, payment, promise to pay or authorization of the payment of any money, or any offer,
gift, promise to give or authorization of the giving of anything of value, directly or indirectly,
to or for the use or benefit of any official or employee of any Governmental Body or to or for the
use or benefit of any political party, official or candidate unless such offer, payment, gift,
promise or authorization is authorized by the written laws or regulations of the Governmental Body
and (b) each Seller Party and each of their respective officers and directors (or persons
performing equivalent functions) is familiar with and has complied with the United States Foreign
Corrupt Practices Act, 15 U.S.C. Sections 78dd-1 and 78dd-2.
Section 3.17 Environmental.
(a) Each Seller (with respect to the Operations) and each Purchased Asset has been and is in
material compliance with all Environmental Laws.
(b) Each Seller has obtained all licenses, permits, approvals, consents, certificates,
registrations and other authorizations under Environmental Laws (the “Environmental Permits”)
required for the operation of the Purchased Assets, all of which are listed in Schedule
3.17. Each Environmental Permit is valid and in good standing, and any renewal application
required to keep each Environmental Permit in effect has been timely filed, and no Seller is in
material default or breach of any Environmental Permit, and no proceeding is pending or, to the
knowledge of the Seller Parties, threatened to revoke, deny, condition or limit the renewal of any
Environmental Permit.
(c) No Seller has used or permitted to be used, except in material compliance with all
Environmental Laws, any of the Purchased Assets to generate, manufacture, process, distribute, use,
treat, store, dispose of, transport or handle any Hazardous Material.
(d) No Seller has received any notice of, nor been prosecuted for an offense alleging,
non-compliance with any Environmental Law relating or otherwise attributable to the Purchased
Assets. There are no outstanding orders requiring Remedial Actions with respect to the Purchased
Assets, nor is any Seller Party aware of any condition or circumstance that could reasonably be
expected to require Remedial Actions.
(e) To the knowledge of the Seller Parties, there are no pending or proposed changes to any
Environmental Law that would render illegal or restrict any service provided by Sellers with
respect to the Purchased Assets, or require significant capital expenditures by the owner or
operator of the Purchased Assets to achieve or maintain compliance.
(f) Except in material compliance with all Environmental Laws, there has been no Release of
any Hazardous Material on, into, under, or from any of the Purchased Assets that could reasonably
be expected to require Remedial Actions. All Hazardous Materials used in whole or in part by any
Seller with respect to the Purchased Assets or resulting from the Operations have been disposed of,
treated, transported and stored in compliance with all Environmental Laws. Schedule 3.17
identifies all of the locations where Hazardous Materials
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used in whole or in part by Sellers with
respect to the Purchased Assets have been or are being stored or disposed of.
(g) With respect to the Purchased Assets, no Seller has received any notice that any of them
is potentially responsible for a federal, provincial, municipal, local or other clean-up site or
other corrective action under any Environmental Laws. No Seller has received any request for
information in connection with an inquiry from any Governmental Body with respect to its use of any
disposal sites.
(h) Each Seller has delivered to Buyer true and complete copies of all environmental audits,
evaluations, assessments, studies or tests of which it is aware relating to the Purchased Assets.
(i) Each Seller has timely made all filings and timely submitted all reports required under
any Environmental Laws with respect to the Purchased Assets.
(j) No Hazardous Material is required to be removed, encapsulated or abated, and no Remedial
Action is otherwise required under any Environmental Laws, with respect to any of the Purchased
Assets.
(k) No Seller is required under any Environmental Laws by virtue of the transactions
contemplated by the Transaction Documents, or as a condition to the effectiveness of any
transactions contemplated thereby, (i) to perform a site assessment of Hazardous Materials, (ii) to
remove or remediate any Hazardous Materials, (iii) to give notice to or receive approval from any
Governmental Body (other than as necessary to transfer, or to allow Buyer to operate under,
Environmental Permits required under Environmental Laws), or (iv) to record or deliver to any
person or entity (other than Buyer) any disclosure document or statement pertaining to
environmental matters.
Section 3.18 Insurance. Each Seller has heretofore delivered to Buyer a list and copies of all
insurance policies of each Seller or relating to the Purchased Assets or the Operations, all of
which (a) have been issued by insurers of recognized responsibility and (b) currently are, and will
remain without interruption through the Closing, in full force and effect. No Seller is in default
under any of its insurance policies; there have been no lapses of insurance coverage on any
Purchased Asset; there are no supplemental or release calls from a protection and indemnity club;
and there are no unpaid claims or disputed claims relating to any Purchased Asset or the
Operations. No insurance carried by any Seller with respect to the Purchased Assets has been
canceled by the insurer during the past five years, and no Seller has been denied coverage during
that period with respect to the Purchased Assets. None of the Seller Parties has received any
notice or other communication from any issuer of any such insurance policy of any material increase
in any deductibles, retained amounts or the premiums payable thereunder with respect to the
Purchased Assets and, to the knowledge of the Seller Parties, no such increase in deductibles,
retainages or premiums is threatened.
Section 3.19 Government Licenses, Permits and Related Approvals. Schedule 3.19 hereto sets
forth a list of all licenses, permits, consents, approvals, authorizations, qualifications, plans
(including vessel response plans) and orders of Governmental Bodies
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required for the operation of
the Purchased Assets or the Operations by any Seller, all of which are in full force and effect.
Section 3.20 Responsible Carriers Plan. Each Seller has adopted an American Waterways Operators
Responsible Carriers Plan, which is attached hereto as Schedule 3.20, and is in compliance
with its respective Responsible Carriers Plan requirements.
Section 3.21 Taxes.
(a) Each Seller has caused to be timely filed with appropriate Governmental Bodies all Tax
Returns required to be filed with respect to the Purchased Assets, the operations of each Seller
and their respective subsidiaries and the Operations, and has paid or caused to be paid all Taxes
due with respect thereto.
(b) No Seller Party has either received or has knowledge of any notice of deficiency or
assessment or proposed deficiency or assessment with respect to any of the Purchased Assets, the
operations of any Seller or the Operations from any taxing authority, and there are no outstanding
agreements or waivers that extend any statutory period of limitations applicable to any federal,
state or local income or franchise Tax Returns that include or reflect the use and operation of the
Purchased Assets, the operations of any Seller or the Operations. To the knowledge of the Seller
Parties, there are no threatened audits of, or assessments against, any Seller with respect to
Taxes that may be asserted against any Seller. No Seller Party is a party to any action or
proceeding by any Governmental Body for the collection or assessment of Taxes.
(c) All amounts required in connection with the conduct of the Operations to be withheld by
each Seller and paid to governmental agencies for Taxes, including income, social security,
unemployment insurance, sales, excise, use and other Taxes, have been collected or withheld and
paid to the proper Governmental Body. Each Seller has made all deposits applicable Law requires it
to make in connection with the conduct of the Operations with respect to employees’ withholding and
other employment taxes.
(d) None of the Sellers is a “foreign person” within the meaning of Section 1445(f)(3) of the
Code.
(e) Schedule 3.21(e) sets forth with respect to each Seller (i) the tax basis to such
Seller of each asset of Seller that is included in the Purchased Assets, (ii) the depreciation
method, conventions and history applicable to each such asset in the hands of such Seller and (iii)
which of the liabilities identified in Schedule 2.1(a) is a “qualified liability” within
the meaning of Treas. Reg. 1.707-5(a)(6), and, for each such liability, (x) the identity of any
Purchased Assets that were acquired with the proceeds of the liability and (y) the identity of any
Purchased Assets that have been continuously secured by the liability for more than two years as of
the date of this Agreement. None of the Purchased Assets is subject to any provision of applicable
Law which eliminates or reduces the allowance for depreciation or amortization in respect of that
asset below the allowance generally available to an asset of its type.
(f) None of the Purchased Assets is an interest in any entity.
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(g) No Seller has regularly, systematically, or in the normal course of business, sold assets
of the type described in Sections 1.1(a) or 1.1(b) of this Agreement. The Seller’s use of the
Vessels has been limited to the transportation of property for hire principally in interstate or
foreign commerce.
Section 3.22 Books and Records. The books of account, minutes books, stock and membership interest
record books, and other records of each Seller, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business practices. Each
Seller has devised and maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with management’s general or
specific authorization, (b) transactions are recorded as necessary (i) to permit preparation of
financial statements in conformity with GAAP or any other criteria applicable to such statements
and (ii) to maintain accountability for assets, (c) access to assets is permitted only in
accordance with management’s general or specific authorization and (d) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The books, records and accounts of each Seller accurately
and fairly reflect in reasonable detail the transactions and dispositions of the assets of such
Seller.
Section 3.23 Safety Reports. Schedule 3.23 sets forth a complete listing of all injury
reports, workers’ compensation reports and claims, safety citations and reports and OSHA reports
relating to the Operations and all documents relating to any of the foregoing since January 1,
2004, excluding de minimis reports,
claims and citations.
Section 3.24 Transactions with Certain Persons. The notes to the Financial Statements disclose all
related party transactions required by GAAP to be disclosed therein. Neither the Purchased Assets
nor the Assumed Liabilities include any rights or obligations under any Related Party Agreement.
Section 3.25 Investment Representations.
(a) Experience; Status.
(i) Each Seller Party has substantial experience in analyzing and investing in
companies like the Partnership and is capable of evaluating the merits and risks of
its investment in the Partnership and has the capacity to protect its own interests.
To the extent necessary, each Seller Party has retained, at its own expense, and
relied upon, appropriate professional advice regarding the investment, tax and legal
merits and consequences of the transfer to the Seller Parties from the Partnership,
and owning the Closing Limited Partner Units that the Seller Parties will or may
receive pursuant to this Agreement.
(ii) Each Seller Party is an Accredited Investor (as such term is used in Rule
501 under the Securities Act by reason of the criteria specified for that Seller
Party in Schedule 3.25, is able to bear the economic risk of its investment
in the Closing Limited Partner Units indefinitely and has sufficient net worth to
sustain
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a loss of its entire investment in the Partnership without economic hardship
if such loss should occur.
(b) Access to Information.
(i) Each Seller Party has had an opportunity to discuss the Partnership’s
business, management and financial affairs with the members of the Partnership’s
management and has had the opportunity to review the Partnership’s operations and
facilities. Each Seller Party has also had an opportunity to ask questions of the
officers of the Partnership, which questions were answered to its satisfaction. Each
Seller Party acknowledges that it is familiar with the nature of the Partnership’s
business. Each Seller Party has received and read the material described in Section
4.7.
(ii) No Seller Party has received representations or warranties from the
Partnership or Buyer, or their employees, affiliates, attorneys, accountants or
agents, except as set forth in this Agreement.
(iii) Each Seller Party understands that the ownership of the Closing Limited
Partner Units involves numerous risks, including those described under the heading
“Risk Factors” in the Partnership’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2006 and in the Partnership’s other filings with the Commission.
(c) Investment Purposes.
(i) Each Seller Party that is acquiring Closing Limited Partner Units is
acquiring them solely for investment for its own account, not as a nominee or agent,
and not with the view to, or for resale in connection with, any distribution
thereof. Each Seller Party understands that the Closing Limited Partner Units have
not been registered under the Securities Act or applicable state securities laws by
reason of a specific exemption from the registration provisions of the Securities
Act and applicable state securities laws, the availability of which depends upon,
among other things, the bona fide nature of the investment intent and the accuracy
of each Seller Party’s representations as expressed herein. Each Seller Party
understands that the Partnership and Buyer are relying, in part, upon the
representations and warranties contained in this Section 3.25(c) for the purpose of
determining whether this transaction meets the requirements for such exemptions.
(ii) Each Seller Party acknowledges and understands that it must bear the
economic risk of its investment in the Closing Limited Partner Units for an
indefinite period of time because the Closing Limited Partner Units must be held
indefinitely unless subsequently registered under the Securities Act and applicable
state securities laws or unless an exemption from such registration is available.
Each Seller Party understands that the Closing Limited Partner Units are subject to
the restrictions on transfer in Section 1.6 and Section 5.16.
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(iii) Each Seller Party understands that any transfer agent of the Partnership
will be issued stop transfer instructions with respect to the transfer of any
Closing Limited Partner Units unless such transfer is subsequently registered under
the Securities Act and applicable state securities laws or unless an exemption from
such registration is available.
Section 3.26 Disclosure. All schedules to this Agreement are materially complete and accurate. No
representation or warranty by any Seller Party in this Agreement or in any schedule hereto, or in
any statement or certificate or other document furnished to Buyer by any Seller Party or any
representative of any Seller Party, contains or, as of the Closing Date, shall contain any untrue
statement of a material fact or omits or shall omit a material fact necessary to make the
statements therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller Party that the following representations and
warranties in this Article IV are, as of the date of this Agreement, and will be, as of the Closing
Date, true and correct:
Section 4.1 Status and Good Standing.
(a) Buyer is a limited liability company duly organized, validly existing and in good standing
under the laws of Delaware, with full limited liability company power and authority under its
certificate of organization and limited liability company agreement to conduct its business as the
same exists on the date hereof and on the Closing Date.
(b) The Partnership is a limited partnership duly organized, validly existing and in good
standing under the laws of Delaware, with full partnership power and authority under its
certificate and agreement of limited partnership to conduct its business as the same exists on the
date hereof and on the Closing Date.
Section 4.2 Authorization.
(a) Buyer has full limited liability company power and authority under its certificate of
organization and limited liability company agreement, and its board of directors has taken all
necessary action to authorize it to execute and deliver the Transaction Documents to which it is a
party, to consummate the transactions contemplated therein and to take all actions required to be
taken by it pursuant to the provisions thereof, and each of the Transaction Documents to which
Buyer is a party constitutes or, when executed and delivered will constitute, the valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’
rights generally and to the principles of equity (whether enforcement is sought in a proceeding in
equity or at law).
(b) The Partnership has full partnership power and authority under its certificate and
agreement of limited partnership, and its general partner has taken all necessary partnership
action to authorize it to execute and deliver this Agreement, to consummate the
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transactions
contemplated herein and to take all actions required to be taken by it pursuant to the provisions
hereof, and this Agreement constitutes the valid and binding obligation of the Partnership,
enforceable against the Partnership in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally
and to the principles of equity (whether enforcement is sought in a proceeding in equity or at
law).
Section 4.3 Non-Contravention. Neither the execution and delivery of any of the Transaction
Documents nor the consummation of the transactions contemplated therein, does or shall violate,
conflict with or result in a breach of or require notice or consent under any Law, the certificate
of organization or limited liability company agreement of Buyer or the certificate or agreement of
limited partnership of the
Partnership or any provision of any agreement or instrument to which Buyer or the Partnership is a
party.
Section 4.4 Validity. There is no investigation, claim, proceeding or litigation of any type
pending or, to the knowledge of Buyer, threatened to which Buyer is a party that (i) questions or
involves the validity or enforceability of any of Buyer’s obligations under any of the Transaction
Documents or (ii) seeks (or reasonably might be expected to seek) (A) to prevent or delay the
consummation by Buyer of the transactions contemplated by this Agreement or (B) damages in
connection with any such consummation.
Section 4.5 Broker Involvement. Neither Buyer nor the Partnership has hired, retained or dealt
with any broker or finder in connection with the transactions contemplated by this Agreement.
Section 4.6 Valid Issuance. At the Closing Date, the Closing Limited Partner Units and the limited
partner interests represented thereby will be duly and validly authorized by the Partnership and,
when issued and delivered in accordance with the terms of this Agreement, will be duly and validly
issued, fully paid (to the extent required under the Partnership Agreement) and non-assessable
(except as such nonassessability may be affected by matters described in the Form 8-A/A under the
caption “Our Partnership Agreement—Limited Liability”) and, when and as delivered to the Seller
Parties, will be free of any lien or security interest of any character, other than those (i)
arising out of the transactions contemplated by the Transaction Documents or created by any of the
Seller Parties, (ii) arising under applicable securities Laws or the Delaware Revised Uniform
Limited Partnership Act, as amended, or (iii) arising under the Partnership Agreement.
Section 4.7 Exchange Act Reports. The Partnership has timely filed with the Commission all forms,
reports, schedules and statements required to be filed by it under the Securities Exchange Act of
1934, as amended since January 1, 2007 (collectively, the “Partnership SEC Documents”). The
information concerning the Partnership in the Partnership SEC Documents, including the financial
statements included therein, did not, as of their respective filing dates, contain any untrue
statement of a material fact or omit a material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Notwithstanding the foregoing,
the Partnership makes no representation or warranty pursuant to this Section 4.7 with respect to
any information of the Partnership that was “furnished” rather than “filed” with the Commission or
any statements in or omissions from
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the Partnership SEC Documents relating to the transactions
contemplated by the Transaction Documents.
Section 4.8 Partnership Material Adverse Change. Since September 30, 2007, there has not been any
Partnership Material Adverse Change.
Section 4.9 Securityholder Agreements. Except for such documents as are described in or filed as
an exhibit to any of the Partnership SEC Documents, including the Partnership Agreement, there are
no agreements between the Partnership and any holders of its securities containing rights of first
refusal, antidilution provisions or pre-emptive rights or relating to registration under the
Securities Act or voting of the Limited Partner Units.
ARTICLE V
COVENANTS
COVENANTS
Section 5.1 Other Offers. From and after the date hereof and until the Closing, the Seller Parties
shall not, and shall cause each of their respective officers, directors, managers, shareholders,
members, employees, Affiliates, representatives and agents not to, directly or indirectly, (a)
solicit, enter into or conduct discussions relating to, initiate or knowingly encourage any offer
or proposal for, or any indication of interest in, a merger or business combination involving any
Seller or the acquisition of an equity interest in, or a substantial portion of the assets of, any
Seller, or (b) engage in negotiations with or disclose any nonpublic information relating to the
Sellers or their respective businesses, or afford access to the properties, books or records of the
Sellers, to any Person other than Buyer, the Partnership or their respective representatives. The
Seller Parties shall notify Buyer of any such inquiry or proposal within twenty-four hours of
receipt or awareness of the same by any Seller Party.
Section 5.2 Conduct of Operations Pending Closing.
(a) Between the date of this Agreement and the Closing Date, the Sellers will, and the
Stockholder will cause the Sellers to do the following with respect to the Operations and the
Purchased Assets, as applicable:
(i) conduct the Operations in the usual and ordinary course thereof, including
the making of proposals, quotations, bids and solicitations, and the entering into
of contracts for the purchase and sale of products and services;
(ii) communicate regularly with Buyer and keep Buyer closely advised of any
material developments relating to the Operations;
(iii) maintain and preserve the Purchased Assets in customary repair, order and
condition, reasonable wear and tear excepted;
(iv) perform in all material respects their respective obligations under
agreements relating to or affecting the Operations;
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(v) keep in full force and effect without interruption all present insurance
policies or other comparable insurance coverage with respect to the Operations;
(vi) use reasonable efforts to preserve Sellers’ business organization intact,
to retain the services of Sellers’ officers, employees and agents and to preserve
Seller Parties’ relationships and goodwill with their suppliers, customers,
landlords, creditors, employees, agents and others having business dealings with
Seller Parties in connection with the Operations;
(vii) confer with Buyer concerning operational matters of a material nature
with respect to the Operations;
(viii) with respect to the Operations, maintain the instruments and agreements
governing their outstanding indebtedness and leases on their present terms and not
enter into any new or amended instruments or agreements relating to indebtedness or
leases without the prior written consent of Buyer;
(ix) use reasonable efforts to cause all of the representations and warranties
in Article III hereof to continue to be true and correct; and
(x) otherwise report periodically to Buyer concerning the status of the
Operations.
(b) Except as otherwise expressly permitted by this Agreement, between the date of this
Agreement and the Closing Date, no Seller will, and the Stockholder will cause each Seller not to,
without the prior written consent of Buyer, take any affirmative action, or fail to take any
reasonable action within their or its control, as a result of which any of the changes or events
listed in Section 3.8 is likely to occur.
Section 5.3 Notification. Between the date hereof and the Closing, the Seller Parties shall
promptly notify Buyer in writing if any Seller Party becomes aware of (a) any fact or condition
that causes or constitutes a breach of any of the Seller Parties’ representations or warranties
made as of the date hereof or (b) the occurrence of any fact or condition that would, or be
reasonably likely to, cause or constitute a breach of any of the Seller Parties’ representations or
warranties contained in Article III, had such representation or warranty been made as of the time
of the occurrence of, or such Seller Party’s discovery of, such fact or condition. Should any such
fact or condition require any change to Seller Parties’ disclosure schedules hereto, the Seller
Parties shall promptly deliver to Buyer a supplement to the applicable schedules specifying such
change. The Seller Parties shall also promptly notify Buyer of the occurrence of any breach of any
covenant of any of the Seller Parties contained in this Article V or of the occurrence of any event
that may make the satisfaction of the conditions in Section 8.1 impossible or unlikely. Between
the date hereof and the Closing, Buyer shall promptly notify the Stockholder in writing if Buyer
becomes aware of (a) any fact or condition that causes or constitutes a breach or any of its
representations or warranties made as of the date hereof (b) the occurrence of any fact or
condition that would, or be reasonably likely to, cause or constitute a breach of any of Buyer’s
representations or warranties contained in Article IV, had
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such representation or warranty been
made as of the time of the occurrence of, or Buyer’s discovery of, such fact or condition or (c)
the occurrence of any breach of any covenant of Buyer or the Partnership contained in this Article
V or of the
occurrence of any event that may make the satisfaction of the conditions in Section 8.2 impossible
or unlikely. This Section 5.3 shall not modify or limit in any way the rights of the Parties to
this Agreement under Article VII, VIII or IX or any other provision hereof.
Section 5.4 Employees. No Seller Party shall make any representation or warranty or any other
statement or communication regarding any right, ability, plan or intention of Buyer or its
Affiliates to employ any employee of Sellers or the terms and conditions upon which any such
employee may be employed by Buyer or its Affiliates. Buyer and its Affiliates shall not assume
responsibility for any Sellers’ Plan, and the Seller Parties shall take any and all steps necessary
to ensure that any and all liabilities with respect to Sellers’ employees and Sellers’ Plans have
been or will be satisfied.
Section 5.5 Buyer’s Access. Each Seller will afford Buyer’s officers, attorneys, accountants and
other representatives reasonable access during normal business hours to the offices, personnel,
Vessels (including the opportunity to board or conduct drydock inspections of such Vessels),
vehicles, properties, equipment and records of such Seller for the purpose of conducting an
investigation thereof. Each Seller will furnish to Buyer such additional financial and operating
data and other information as Buyer may reasonably request, including quantities and locations of
customer products in the custody of each Seller at or prior to the Closing.
Section 5.6 Covenant Against Competition.
(a) As an essential consideration for the obligations of Buyer under this Agreement, each
Seller Party hereby agrees and covenants that:
(i) for a period of two years following the Closing Date within the Restricted
Territory, each Seller Party shall not, directly or indirectly, whether as
principal, agent, employee, shareholder or other equity holder (other than a holding
of shares listed on a United States stock exchange or automated quotation system
that does not exceed five percent of the outstanding shares so listed), owner,
investor, partner or otherwise, individually or in association with any other
Person: (A) carry on or engage in any manner in the Restricted Business,
(B) solicit customers of the Restricted Business, (C) become the employee of, or
otherwise render services on behalf of, any Person that carries on or engages in a
business similar to the Restricted Business or (D) induce or attempt to induce any
customer, supplier, licensee or business relation of Buyer or any of its Affiliates
to cease doing business with Buyer or any of its Affiliates, or in any way interfere
with the relationship between any customer, supplier, licensee or business relation
of Buyer or any of its Affiliates with Buyer or any of its Affiliates, provided that
this Section 5.6(a)(i) shall not prohibit Stockholder’s equity ownership in Horizon
Maritime for so long as the Asphalt Business Limitation is satisfied; and
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(ii) for a period of four years following the Closing Date, each Seller Party
shall not, directly or indirectly, either for himself or any other Person, (A)
solicit or induce or attempt to solicit or induce any employee of or
independent contractor providing services to Buyer or any of its Affiliates to leave
the employ of or to cease providing services to Buyer or any of its Affiliates, (B)
in any way interfere with the relationship between Buyer or any of its Affiliates
and any employee of or independent contractor providing services to Buyer or any of
its Affiliates or (C) employ, or otherwise engage as an employee, independent
contractor or otherwise, any employee of Buyer or any of its Affiliates or any
independent contractor of Buyer of any of its Affiliates who had been an employee of
any Seller Party or its Affiliates.
(b) Any dispute, controversy or claim arising out of or in connection with this Section 5.6,
including the alleged breach of this Section 5.6 or a challenge to its validity or enforceability,
shall be settled exclusively by final and binding arbitration in Tarrant County, Texas,
administered by the American Arbitration Association (“AAA”) in accordance with the Commercial
Arbitration Rules of the AAA; provided, however, that nothing herein is or shall be deemed to
preclude Buyer’s resort to the interim relief prescribed in Section 5.6(c), below. The
arbitrator(s) shall be selected by mutual agreement of the parties, if possible. If the parties
fail to reach agreement upon appointment of arbitrator(s) within thirty days following receipt by
one party of the other party’s notice of desire to arbitrate, the arbitrator(s) shall be selected
from a panel or panels of persons submitted by the AAA. The selection process shall be that which
is set forth in the AAA Commercial Arbitration Rules then prevailing, except that, if the parties
fail to select arbitrator(s) from one or more panels, AAA shall not have the power to make
appointment(s) but shall continue to submit additional panels until arbitrator(s) have been
selected. The jurisdiction of the arbitrator(s) and the arbitrability of any claim, defense, issue
or objection raised by any party shall be decided by the arbitrator(s) in the first instance.
Judgment on the award entered by the arbitrator(s) may be entered by any court having jurisdiction
thereof. All aspects of the arbitration and matters subject thereto shall remain confidential.
The parties will each bear their own attorneys’ fees and costs in connection with any dispute or
controversy, except as provided in Section 5.6(c), below.
(c) In the event of a breach or threatened breach by any Seller Party of any of the provisions
of this Section 5.6, Buyer shall have the right to seek interim relief from AAA pursuant to the
Optional Rules for Emergency Measures of Protection contained in the Commercial Arbitration Rules
of the AAA (including the arbitrator selection procedures provided for in such Optional Rules for
Emergency Measures of Protection, which shall govern the selection of arbitrator(s) for purposes of
this paragraph (c)) or from a court of competent jurisdiction. Seller Parties acknowledge that
Buyer will suffer irreparable damage or injury not fully compensable by money damages, or the exact
amount of which may be impossible to ascertain, and therefore will not have an adequate legal
remedy. Accordingly, Buyer will be entitled to obtain any interim relief necessary or appropriate
to prevent or curtail any such breach, threatened or actual, without the necessity of posting
security or showing any actual damages or irreparable injury. Such interim relief may include, but
is not limited to, (i) temporary or permanent injunctive relief for the enforcement of this Section
5.6, (ii) a decree for the specific performance of this Section 5.6 or (iii) Buyer’s reasonable
attorneys’ fees, costs and expenses related to such interim relief; provided, however, that Buyer
agrees to pay for any
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Sellers Party’s reasonable attorneys’ fees, costs and expenses related to
interim relief sought by Buyer in the event that the Seller Parties prevail and no such interim
relief is granted. Such
interim relief is in addition to any other rights Buyer may have, including the right to seek
damages.
(d) Buyer and each Seller Party hereby agree that this Section 5.6 is a material and
substantial part of the transactions contemplated by this Agreement. Each Seller Party further
agrees and acknowledges that the covenants in this Section 5.6 are reasonable with respect to their
duration, scope and geographical area.
(e) The covenants in this Section 5.6 are severable and separate, including within provisions,
subparts or portions thereof, and the unenforceability of any specific covenant, provision or
subpart thereof in this Section 5.6 is not intended by any party hereto to, and shall not, affect
the provisions of any other covenant in this Section 5.6. If any arbitrator or panel of
arbitrators, or any court pursuant to paragraph (c) above, determines that the terms, scope, time
or territorial restrictions set forth in Section 5.6(a) are unreasonable as applied to a Seller
Party, the parties hereto acknowledge their mutual intention and agreement that the offending
provisions, subparts or portions thereof be severed and the remaining provisions and restrictions
be enforced to the fullest extent permitted by law as the arbitrator(s) or court (pursuant to
paragraph (c) above) deems reasonable, and thereby shall be reformed to that extent. All the
covenants, provisions and subparts thereof in this Section 5.6 are intended by each party hereto
to, and shall, be construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of any Seller Party against Buyer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by
Buyer of any covenant, provision or subpart in this Section 5.6. The covenants contained in this
Section 5.6 shall not be affected by any breach of any other provision hereof by any party hereto
and shall not prevent any Seller Parties from rendering services to Buyer in accordance with the
Transitional Operating Agreement.
Section 5.7 Further Assistance. The Seller Parties shall execute, acknowledge and deliver or cause
to be executed, acknowledged and delivered to Buyer or its Affiliates such assignments or other
instruments of transfer, assignment and conveyance, in form and substance reasonably satisfactory
to Buyer, as shall be necessary to vest in Buyer (or its permitted assignees) all of the right,
title and interest in and to the Purchased Assets, free and clear of all Liens except for Permitted
Liens, or to better enable Buyer to complete, perform or discharge any of the Assumed Liabilities
and any other document reasonably requested by Buyer in connection with this Agreement.
Section 5.8 Governmental Filings. As promptly as practicable after the execution of this
Agreement, and in any event within ten (10) days after the execution of this Agreement, each party
shall, in cooperation with the other, file any reports or notifications that may be required to be
filed by it under applicable Law, including any filings or notifications required under the HSR
Act.
Section 5.9 Consents. The Seller Parties shall use reasonable efforts to (i) secure, as soon as
practicable after the date hereof, all approvals or consents of third Persons as may be necessary
to enable them to
consummate the transactions contemplated by the
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Transaction Documents (ii) satisfy, on or before
the Closing Date, the conditions Section 8.1 sets forth. Buyer shall use reasonable efforts to (i)
secure, as soon as practicable after the date hereof, all approvals or consents of third Persons as
may be necessary to enable Buyer to consummate the transactions contemplated by the Transaction
Documents and (ii) satisfy, on or before the Closing Date, the conditions Section 8.2 sets forth.
After the Closing, the Seller Parties shall use reasonable efforts to obtain any approvals or
consents or assist in any filings required in connection with the transactions contemplated by the
Transaction Documents that are requested by Buyer and that have not been previously obtained or
made.
Section 5.10 Public Announcements. Neither (a) the Seller Parties nor (b) Buyer or the Partnership
shall, without the prior approval (which may not be unreasonably withheld, delayed or conditioned)
of Buyer or the Stockholder, as the case may be, issue, or permit any of their partners,
stockholders, members, directors, managers, officers, employees, agents or Affiliates to issue, any
press release or other public announcement with respect to this Agreement or the transactions
contemplated hereby; provided that Buyer and the Partnership may issue any press release or make
any other public announcement required by Law or by obligations pursuant to any listing agreement
with any national securities exchange without obtaining any such approval.
Section 5.11 Income Tax Matters. As to the federal income tax (and related state income tax)
matters identified in this Section 5.11, including the manner in which the transactions
contemplated by this Agreement will be reported by the Seller Parties and the Buyer for income tax
purposes (on Tax Returns or otherwise), the Seller Parties and Buyer agree as follows:
(a) The transactions pursuant to this Agreement shall be reported as (x) purchases and sales
of assets for federal income tax purposes to the extent attributable to the cash portion of the
Purchase Price and any allocable liabilities and adjustments (the “Taxable Sales”) and (y) as
contributions of assets in exchange for partnership interests governed by Section 721 of the Code
to the extent attributable to the portion of the Purchase Price paid in Limited Partner Units and
any allocable adjustments (the “Contributions”). The Buyer or the Partnership shall, in
consultation with the Seller Parties, determine how the parties shall report (i) which portions of
the Purchased Assets are allocable to the Taxable Sales and which are allocable to the
Contributions, (ii) how each Seller Party’s tax bases in the Purchased Assets is allocated among
the transactions contemplated by this Agreement, (iii) which liabilities and adjustments are
allocable to the Taxable Sales, (iv) the allocation of the cash, liabilities and adjustments
allocable to the Taxable Sales among the Purchased Assets and the covenant not to compete contained
in Section 5.6 and (v) the tax consequences of the liabilities that are not allocable to the
Taxable Sales. All such determinations shall be made in a manner consistent with Schedule
1.7 and shall be binding on the parties. The Seller Parties shall provide the Buyer such
information and assistance as it reasonably requests in making such determinations. Each party
agrees not to assert, in connection with any Tax Return, tax audit or similar proceeding, any
position inconsistent with the allocations and determinations described in this Section 5.11(a).
(b) Within 180 days after the Closing Date, the Seller Parties and Buyer shall jointly prepare
IRS Forms 8594 to report the allocations of the Purchase Price attributable to the Taxable Sales in
a manner consistent with Section 5.11(a).
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(c) Differences between the fair market value and the tax basis of the Purchased Assets
allocable to the Contributions shall be taken into account in the manner required by Section 704(c)
of the Code. The Partnership will elect the remedial allocation method of Treas. Reg. § 1.704-3(d)
as to all such assets. All other determinations regarding the application of Section 704(c), the
determination and maintenance of capital accounts and other tax matters relating to the
Contributions and the assets allocable thereto shall be made in the discretion of the Partnership
in a manner consistent with the Partnership Agreement. The Seller Parties will be bound by the
terms of the Partnership Agreement; among other things, Buyer may, but is not required to, make
special allocations to one or more Seller Parties under the Partnership Agreement to cause Limited
Partner Units held by any Seller Party to have the same economic characteristics as other
outstanding Limited Partner Units.
Section 5.12 Taxes Upon Conveyance and Transfer. The Sellers shall be responsible for all sales,
use, transfer or similar Taxes payable in connection with the sale, transfer and assignment of the
Purchased Assets to Buyer; provided, however, that, within 30 days of payment by Sellers, Buyer
shall reimburse the Sellers for 100% of any such Taxes remitted by the Sellers (i) in connection
with a final assessment of such Taxes by a state or local taxing authority or (ii) with the written
consent of Buyer. Buyer shall be entitled to any refunds of such Taxes remitted by the Sellers for
which Buyer has reimbursed the Sellers, and the Sellers shall make any required assignments or take
any other necessary steps to ensure that Buyer has the right to pursue any refunds of such Taxes.
The determination as to whether any position taken by a taxing authority with respect to the Taxes
referenced in this Section 5.12 should be contested shall be made by Buyer, who shall control any
such contest, proceeding or defense at its own expense. Sellers agree to provide, at Buyer’s
request, documentation evidencing the locations of the Vessels as of the Closing Date and to
cooperate with Buyer with respect to any procedural steps required by the sales, use, transfer or
similar Tax laws of any state or locality having taxing jurisdiction over the Vessels as of the
Closing Date to document any exemptions from or reductions of such Taxes for which the transfer of
the Vessels or other Purchased Assets may be eligible, including the execution of exemption
certificates or affidavits or the filing of any required returns or other forms with state or local
taxing authorities.
Section 5.13 Other Taxes and Charges. Sellers shall be responsible for any Taxes arising out of or
relating to the use and operation of the Purchased Assets, the operations of any Seller, or the
Operations with respect to periods prior to the Closing. Any (i) property Taxes on the Purchased
Assets and (ii) other Taxes, fees, costs or charges assessed on a similar periodic basis in respect
of ownership or operation of the Purchased Assets shall be prorated through the Closing (based on
estimates of the most recent amounts paid), with Sellers being responsible for all of such prorated
charges attributable to the period prior to the Closing and Buyer being responsible for
post-closing prorations. To the extent any bills for the items referred to in this Section 5.13
arise after the purchase price adjustments have been made under Section 1.5, promptly upon receipt
of any such xxxx, Buyer or
Sellers, as appropriate, shall provide the other with copies thereof for such items for which the
other party is responsible pursuant to this Section, and the resulting amount payable by Buyer or
Sellers shall be paid promptly upon demand by the party hereto to whom such payment is owed.
Section 5.14 Condition to Transfer of Contracts. Notwithstanding anything herein to the contrary,
the parties hereto acknowledge and agree that at the Closing, Sellers are
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not assigning to Buyer
any Contract, Assumed Equipment Lease or IT Contract or other right constituting a Purchased Asset
which by its terms requires the consent of any other party unless such consent has been obtained
prior to the Closing. With respect to each such unassigned Contract, Assumed Equipment Lease or IT
Contract or right (collectively, “Purchased Rights”), after the Closing, Sellers shall continue as
the prime contracting party and shall use all reasonable efforts to obtain the consent of all
required parties to the assignment of each such Purchased Right, but Buyer shall be entitled to the
benefits of each such Purchased Right accruing after the Closing to the extent that Sellers are
entitled to such benefits and may provide Buyer with such benefits without violating the terms of
such Purchased Right; provided that this Section 5.14 shall not be construed as a guarantee by any
of the Seller Parties of payment by any third party under any such Purchased Right.
Section 5.15 Cooperation with Financings and Financial Reporting; Additional Financial
Statements.
(a) The Seller Parties acknowledge and understand that Buyer or its Affiliates may be required
to obtain certain information relating to the Operations, including audited or unaudited financial
statements of Sellers, and disclose such information in registration statements and other documents
filed with the Commission under the federal securities laws or in disclosure documents given
investors or lenders in certain securities offerings or other financings. The Seller Parties agree
promptly to prepare and provide to Buyer any such information and to cooperate fully and promptly,
and shall cause their Affiliates, accountants, counsel and other agents and representatives to
cooperate fully and promptly, with Buyer in connection therewith.
(b) The Seller Parties will furnish to Buyer as soon as available and in any event within 20
days after the end of each of the Sellers’ fiscal quarters which ends prior to the Closing Date, an
unaudited balance sheet of the Sellers as of the end of that fiscal quarter and the related
statements of income or operations and stockholders’ or other owners’ equity for that fiscal
quarter and for the period of the Sellers’ fiscal year ended with that quarter, in each case (i)
setting forth in comparative form the figures for the corresponding portion of the Sellers’
previous fiscal year, (ii) prepared on the same combined, consolidated or other basis on which the
Financial Statements were prepared in accordance with GAAP applied on a basis consistent (A)
throughout the periods indicated (excepting footnotes) and (B) with the basis on which the
Financial Statements were prepared and (iii) certified by the Sellers’ chief accounting officer as
to compliance with Section 3.12 of this Agreement.
Section 5.16 Restrictions on Transfer; Legends.
(a) The Closing Limited Partner Units may not be transferred (whether by sale, assignment,
pledge or otherwise) by the Seller Parties or any Permitted Transferee (i) unless
such transfer is registered under the Securities Act or is made pursuant to the exemption from
registration under Section 4(1) of the Securities Act or Rule 144 under the Securities Act, (ii)
without affording the Partnership the Right of First Refusal and (iii)(A) in a non-Brokers’
Transaction, to any Person that is not a citizen of the United States within the meaning of Section
50501 of Title 46 of the United States Code for the purpose of operating vessels in the coastwise
trade of the United States (a “Non-Citizen”) or (B) in a Brokers’ Transaction, knowingly to a
Non-Citizen.
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(b) Notwithstanding anything in this Agreement to the contrary, the Stockholder may give as a
gift or bequeath Closing Limited Partner Units to any relative of the Stockholder or donate such
Closing Limited Partner Units to any trust established by the Stockholder for estate planning
purposes, at any time without compliance with the Right of First Refusal or the provisions of
Section 5.16(c), such transferee in each case to be hereinafter referred to as a “Permitted
Transferee;” provided that (i) the Permitted Transferee in each case agrees in writing to take such
Closing Limited Partner Units subject to the transfer restrictions set forth in Section 5.16(a),
(ii) such transfer is effected in a transaction registered under the Securities Act or in
compliance with an exemption thereunder and (iii) such transfer does not call into question the
exemption from registration under which the Closing Limited Partner Units were initially issued by
the Partnership to Cenac Towing and the Stockholder.
(c) Except as permitted by Section 5.16(b), prior to any proposed transfer (whether by sale,
assignment, pledge or otherwise) of the Closing Limited Partner Units by a Seller Party or a
Permitted Transferee, the proposed transferor (the “Transferor”) will give written notice to the
Partnership of its intention to effect such transfer. Each such notice shall describe the manner
and circumstances of the proposed transfer in sufficient detail, contain evidence of citizenship of
the proposed transferee (for a non-Brokers’ Transaction) and shall be accompanied by a written
opinion of legal counsel who shall be reasonably satisfactory to the Partnership, addressed to the
Partnership, to the effect that (i) the proposed transfer of the securities in question may be
effected without registration under the Securities Act, (ii) such proposed transfer does not call
into question the exemption from registration under which such Closing Limited Partner Units were
initially issued by the Partnership to any Seller Party and (iii) if a non-Brokers’ Transaction,
the proposed transferee is a citizen of the United States within the meaning of Section 50501 of
Title 46 of the United States Code for the purpose of operating vessels in the coastwise trade of
the United States. Any such legal opinion must be reasonably satisfactory to the Partnership and
must state that it may also be relied upon by any applicable transfer agent or stock exchange or
counsel to the Partnership. The Partnership may also require a certificate of the Transferor that
certifies as to matters that assist the Partnership in establishing compliance with securities laws
as at the time of the proposed transfer (including representations relating to the proposed
transfer and the transferee of the type set forth in Section 3.25 hereto).
(d) Upon compliance with the terms hereof to the reasonable satisfaction of the Partnership,
the Transferor shall be entitled to transfer such Limited Partner Units in accordance with the
terms of the notice delivered by the Transferor to the Partnership.
(e) The Partnership may issue stop transfer instructions to any transfer agent for the Limited
Partner Units in order to implement any restriction on transfer described in this Section 5.16.
The Closing Limited Partner Units shall contain the following legend:
THE UNITS REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. SUCH UNITS MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE PARTNERSHIP AS TO THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION. |
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THE UNITS WERE ISSUED PURSUANT TO AN AGREEMENT WHICH INCLUDES ADDITIONAL RESTRICTIONS ON TRANSFER AND COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE PARTNERSHIP AT THE PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP. |
On or after the later of (i) the date immediately following the date that is twelve months after
the Closing Date and (ii) the date on which there exists no applicable conditions to resale under
the Securities Act and the rules and regulations promulgated thereunder, including Rule 144, upon
the request of any holder of Closing Limited Partner Units and receipt of opinions or other
documents reasonably satisfactory to the Partnership and its transfer agent, the Partnership shall
authorize and direct its transfer agent to remove the first paragraph of the foregoing legend from
the certificates representing (or other evidence of) any Closing Limited Partner Units. Upon the
request of any holder of Closing Limited Partner Units and receipt of opinions or other documents
reasonably satisfactory to the Partnership and its transfer agent, the Partnership shall authorize
and direct its transfer agent to remove the second paragraph of the foregoing legend, from the
certificates representing (or other evidence of) such Closing Limited Partner Units on or after the
expiration of such restrictions in accordance with the provisions of this Section 5.16.
(f) The Partnership shall have no obligation to effect any transfer on its books and records
(and no such attempted transfer shall be effective) unless such transfer is made in accordance with
the terms of this Section 5.16 and, to the extent applicable, Section 1.6. The Partnership agrees
to cooperate with its transfer agent with respect to reasonable requests by a Seller Party in
connection with transfers to be made in accordance with the terms of this Section 5.16 or Section
1.6.
Section 5.17 Compliance with Rule 144. With a view to making available to Seller Parties the
benefits of certain rules and regulations of the Commission that may permit the sale of Closing
Limited Partner Units to the public without registration, the Partnership agrees to use its
reasonable efforts, from and after the date of this Agreement until the date that is twelve months
after the Closing Date, to file with the Commission in a timely manner all reports and other
documents required of the Partnership under the Exchange Act.
Section 5.18 Damage to Vessels
(a) If, prior to the Closing, any Vessel shall become an actual or constructive total loss,
Buyer shall have no obligation to purchase such Vessel and may elect to exclude such Vessel from
the Purchased Assets (such that the Vessel becomes Excluded Assets) and reduce the Purchase Price
by the amount for which such Vessel would be insurable, such amount to be mutually determined by
the Sellers and Buyer. Sellers shall provide notice to Buyer of any such loss no later than 2 days
after the occurrence thereof or the Closing Date, if earlier.
(b) If, prior to the Closing, any Vessel or Vessels sustain damage not amounting to an actual
or constructive total loss but in excess of $25,000, the Sellers may elect to repair or cause to be
repaired the damage to any such Vessels at their expense prior to Closing. Sellers shall provide
notice to Buyer of any such damage no later than 3 days after the
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occurrence thereof or 2 days
prior to the Closing Date, if earlier. If Sellers elect to repair or cause to be repaired such
Vessels at their expense, such notice to Buyer shall include an irrevocable undertaking to such
effect. If Sellers do not elect to repair or cause to be repaired such Vessels at their expense in
such notice, Buyer may elect (i) to reduce the Purchase Price by the amount necessary to restore
any such damaged Vessels to their prior condition or (ii) to exclude such Vessels from the
Purchased Assets (such that they become Excluded Assets) and reduce the Purchase Price by the
amount for which such Vessels would be insurable, such amount to be mutually determined by the
Sellers and Buyer.
(c) If Buyer and Sellers are unable to mutually determine the amount of any damage or the cost
to restore any such damage under this Section 5.18 within 10 days of Buyer’s receipt of notice
thereof, the issues remaining in dispute shall be submitted to a nationally recognized marine
appraisal firm selected by Sellers from a list of three such firms provided by Buyer
(the “Appraisal Firm”), along with all work papers, schedules and calculations related to the
matter in dispute. Within 30 days after such submission, the Appraisal Firm shall issue a letter
report determining the amount in dispute, which shall be final and binding. Each party shall bear
its own expenses in connection with resolving any such dispute, and Sellers and Buyer will each
bear half of the fees and costs of the Appraisal Firm.
(d) This Section 5.18 shall in no way modify or limit Buyer’s rights under Articles VII, VIII
or IX or other provisions of this Agreement.
Section 5.19 Sellers’ Access. From and after the Closing, Buyer shall, after reasonable advance
notice, afford Sellers and their officers, attorneys, accountants and other representatives
reasonable access to the Purchased Assets during normal business hours necessary for the adequate
defense matters described on Schedule 3.6.
Section 5.20 Completion of Xxxxxxxx Xxxxx. Xxxxx Towing agrees, at no additional cost to Buyer, to
complete the construction of the Xxxxxxxx Xxxxx in a safe, skillful and workmanlike manner, in
accordance with applicable Laws and good engineering and industry practices and without undue
delays or interruptions and, in connection therewith, to provide all labor, including all
maintenance, supervision and engineering support, and all equipment and materials, including all
supplies, parts, tools,
instruments, vehicles and facilities, needed to so complete such construction.
ARTICLE VI
USE OF THE CENAC NAME AFTER CLOSING
USE OF THE CENAC NAME AFTER CLOSING
Section 6.1 Use of the Cenac Name. Buyer shall not change the name of any Vessel that bears the
“Cenac” name or the designation “CTCO” for two years after the Closing, after which time Buyer
shall be free to rename any such Vessel at any time and in its discretion.
Section 6.2 Grant of Trademark Consent. Subject to the terms and conditions herein, the Seller
Parties hereby consent to Buyer’s and the Partnership’s use of the xxxx Xxxxx following the Closing
in the names of the Buyer’s Vessels as provided for in Section 6.1.
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ARTICLE VII
INDEMNIFICATION
INDEMNIFICATION
Section 7.1 Seller Parties’ Indemnity Obligations. Each Seller Party, jointly and severally,
agrees to indemnify each Buyer Indemnified Party against, and hold each Buyer Indemnified Party
harmless from and against, any and all claims, actions, causes of action, proceedings,
arbitrations, losses, damages, liabilities, judgments, fines, amounts, penalties, assessments and
expenses (including reasonable attorneys’ fees and costs of investigation and defense) (the
“Indemnified Amounts”) that arise from, are based on or relate or otherwise are attributable to
(i) any breach of any representation or warranty made by or on behalf of any Seller Party in this
Agreement or in any certificate delivered in connection herewith (without giving effect to any
supplement to Seller Parties’ disclosure schedules), (ii) any breach or nonfulfillment by any
Seller Party of or default by any Seller Party under any covenant in this Agreement, (iii) any Lien
on any of the Purchased Assets, other than Permitted Liens, arising from or relating to events
occurring or circumstances existing prior to the Closing, (iv) the Excluded Liabilities or (v)
without limiting the generality of any of the foregoing, the ownership or operation of the Vessels
and the other Purchased Assets by any Seller Party prior to the Closing Date. Notwithstanding the
foregoing, the Seller Parties shall not be required to indemnify or hold harmless the Buyer
Indemnified Parties on account of any Indemnified Amounts arising under Section 7.1(i) above (other
than with respect to breaches of representations and warranties contained in Sections 3.1, 3.2,
3.5, 3.7, 3.13(c), 3.14, 3.21, 3.24 and 3.25 (the “Identified Representations”), as to which the
Deductible Amount shall not apply) unless the aggregate liability of the Seller Parties in respect
of all Indemnified Amounts exceeds the Deductible Amount, and then only for the amount by which the
Indemnified Amounts exceed the Deductible Amount; provided, however, that in the case of a breach
of the representations and warranties contained in Section 3.13(a) as applicable to Vessels, the
Seller Parties shall indemnify and hold harmless the Buyer Indemnified Parties for 50% of the
amount by which the Indemnified Amounts exceed the Deductible Amount. In no event shall the Seller
Parties’ aggregate liability to the Buyer Indemnified Parties under Section 7.1(i) above exceed the
Ceiling Amount (other than with respect to breaches of the Identified Representations, as to which
the Ceiling Amount shall not apply).
Section 7.2 Buyer’s Indemnity Obligations. Buyer shall indemnify each Seller Indemnified Party
against, and hold each Seller Indemnified Party harmless from and against, any and all Indemnified
Amounts that arise from, are based on or relate or otherwise are attributable to (i) any breach of
any representation or warranty made by or on behalf of Buyer in this Agreement or in any
certificate delivered in connection herewith, (ii) any breach or nonfulfillment by Buyer of or
default by Buyer under any covenant in this Agreement or (iii) the Assumed Liabilities, in each
case except to the extent such Indemnified Amount relates to a matter for which indemnification
would be provided under Section 7.1. Notwithstanding the foregoing, Buyer shall not be required to
indemnify or hold harmless the Seller Indemnified Parties on account of any Indemnified Amounts
arising under Section 7.2(i) above unless the aggregate liability of Buyer in respect of all
Indemnified Amounts exceeds the Deductible Amount, and then only for the amount by which the
Indemnified Amounts exceed the Deductible Amount. In no event shall the Buyer’s aggregate
liability to the Seller Indemnified Parties under Section 7.2(i) above exceed the Ceiling Amount
(other than with respect to breaches of representations and warranties contained in Sections 4.1,
4.2 and 4.6, as to which the Ceiling Amount shall not apply).
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Section 7.3 S Corporation Built-In Gain Indemnity. If, after the Closing, Buyer or any of its Affiliates sell or otherwise dispose of any
Towing Asset in a transaction in which gain or loss is recognized for federal income tax purposes,
Buyer will pay to Cenac Towing the Built-In Gain Indemnity Amount with respect to the calendar year
in which such sale or disposition occurs on or before March 1 of the following year; provided that
no such indemnity obligation will arise with respect to (a) any such sale or disposition that
occurs after June 30, 2018, (b) any such sale or disposition that occurs at a time when Cenac
Towing is not an S corporation within the meaning of Section 1361 of the Code or (c) gain or loss
recognized with respect to the Taxable Sales. The reasonable determinations made by Buyer and its
Affiliates of the amounts of the Asset Gain Amount, Built-In Gain Indemnity Amount, Recognized
Built-In Gain Amount and Recognized Built-In Gain Limitation will be binding on the Seller Parties.
A sample calculation is set forth on Exhibit F hereto.
Section 7.4 Survival. Subject to the limitations set forth in this Agreement, all the provisions of this Agreement
shall survive the Closing indefinitely, notwithstanding any investigation at any time made by or on
behalf of any party hereto, provided that the representations and warranties set forth in Articles
III and IV and in any certificate delivered in connection herewith with respect to any of those
representations and warranties shall terminate and expire on the third anniversary of the date
hereof, except (a) the representations and warranties of the Seller Parties in Sections 3.15, 3.21
and 3.25 shall survive until the expiration of the applicable statutes of limitations (including
all periods of extension and tolling), (b) the representations and warranties of the Seller Parties
set forth in Sections 3.1, 3.2, 3.7 and 3.13(c) shall survive indefinitely, (c) the representations
and warranties of the Seller Parties set forth in the Identified Representations (other than
Sections 3.1, 3.2, 3.7, 3.13(c), 3.21 and 3.25, which are provided for above) and Sections 3.6,
3.16 and 3.17 shall expire on the fifth anniversary of the date hereof and (d) the representations
and warranties of the Seller Parties in Section 3.13(a) shall expire on the second anniversary of
the date hereof. After a representation and warranty has terminated and expired, no
indemnification shall or may be sought pursuant to this Article VII on the basis of that
representation and warranty, provided that no claim presented in writing for indemnification
pursuant to this Article VII on the basis of that representation and warranty prior to its
termination and expiration shall be affected in any way by that termination and expiration.
Section 7.5 Indemnification Procedures. All claims for indemnification under this Agreement shall be asserted and resolved as follows:
(a) Promptly after receipt by a Person entitled to indemnity under Section 7.1, Section 7.2,
or Section 7.3 (an “Indemnified Party”) of notice of the assertion of a claim against an
Indemnified Party by a Person that is not a party to this Agreement (a “Third-Party Claim”), such
Indemnified Party shall give notice to the Person obligated to indemnify under such Section (an
“Indemnifying Party”) of the assertion of such Third-Party Claim, provided that the failure to
notify the Indemnifying Party will 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
the defense of such Third-Party Claim is materially prejudiced by the Indemnified Party’s failure
to give such notice.
If an Indemnified Party gives notice to the Indemnifying Party pursuant to the
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preceding paragraph of the assertion of a Third-Party Claim, the Indemnifying Party shall be
entitled to participate in the defense of such Third-Party Claim and, to the extent that it wishes
(unless (i) the Indemnifying Party is also a Person against whom the Third-Party Claim is made and
the Indemnified Party determines in good faith that joint representation would be inappropriate or
(ii) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party of its
financial capacity to defend such Third-Party Claim and provide indemnification with respect to
such Third-Party Claim), to assume the defense of such Third-Party Claim with counsel satisfactory
to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such Third-Party Claim, the Indemnifying Party shall not, so long
as it diligently conducts such defense, be liable to the Indemnified Party under this Article VII
for any fees of other counsel or any other expenses with respect to the defense of such Third-Party
Claim, in each case subsequently incurred by the Indemnified Party in connection with the defense
of such Third-Party Claim, other than reasonable costs of investigation. If the Indemnifying Party
assumes the defense of a Third-Party Claim, (i) such assumption will conclusively establish for
purposes of this Agreement that the claims made in that Third-Party Claim are within the scope of
and subject to indemnification, and (ii) no compromise or settlement of such Third-Party Claims may
be effected by the Indemnifying Party without the Indemnified Party’s consent unless (A) there is
no finding or admission of any violation of Law or any violation of the rights of any Person; (B)
the sole relief provided is monetary damages that are paid in full by the Indemnifying Party; and
(C) the Indemnified Party shall have no liability with respect to any compromise or settlement of
such Third-Party Claims effected without its consent. If notice is given to an Indemnifying Party
of the assertion of any Third-Party Claim and the Indemnifying Party does not, within ten days
after the Indemnified Party’s notice is given, give notice to the Indemnified Party of its election
to assume the defense of such Third-Party Claim, the Indemnifying Party will be bound by any
determination made in such Third-Party Claim or any compromise or settlement effected by the
Indemnified Party.
Notwithstanding the foregoing, if an Indemnified Party determines in good faith that there is
a reasonable probability that a Third-Party Claim may adversely affect it or its Affiliates other
than as a result of monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Party may, by notice to the Indemnifying Party, assume the exclusive
right to defend, compromise or settle such Third-Party Claim, but the Indemnifying Party will not
be bound by any determination of any Third-Party Claim so defended for the purposes of this
Agreement or any compromise or settlement effected without its consent (which may not be
unreasonably withheld).
Notwithstanding the provisions of Section 10.13, each Seller Party hereby consents to the
nonexclusive jurisdiction of any court in which a proceeding in respect of a Third-Party Claim is
brought against any Buyer Indemnified Party for purposes of any claim that a Buyer Indemnified
Party may have under this Agreement with respect to such proceeding or the matters alleged therein
and agrees that process may be served on each Seller Party with respect to such a claim.
With respect to any Third-Party Claim subject to indemnification under this Article VII: (i)
both the Indemnified Party and the Indemnifying Party, as the case may be, shall keep the other
Person fully informed of the status of such Third-Party Claim and any related
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proceedings at all stages thereof where such Person is not represented by its own counsel, and
(ii) the parties agree (each at its own expense) to render to each other such assistance as they
may reasonably require of each other and to cooperate in good faith with each other in order to
ensure the proper and adequate defense of any Third-Party Claim.
(b) If any Indemnified Party should have a claim against any Indemnifying Party hereunder that
does not involve a Third Party Claim, the Indemnified Party shall transmit to the Indemnifying
Party a written notice (the “Indemnity Notice”) describing in reasonable detail the nature of the
claim, an estimate of the amount of damages attributable to such claim to the extent feasible
(which estimate shall not be conclusive of the final amount of such claim) and the basis of the
Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party
does not notify the Indemnified Party within fifteen days from its receipt of the Indemnity Notice
that the Indemnifying Party disputes such claim, the claim specified by the Indemnified Party in
the Indemnity Notice shall be deemed a liability of the Indemnifying Party hereunder and shall be
paid promptly.
Section 7.6
General. THE INDEMNIFICATION PROVISIONS IN THIS
ARTICLE VII SHALL BE ENFORCEABLE REGARDLESS OF
WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE CLAIMS OR LAWS (INCLUDING ANY PAST,
PRESENT OR FUTURE BULK SALES LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY
AND HEALTH LAW OR PRODUCT LIABILITY, SECURITIES OR OTHER LAW) AND REGARDLESS OF WHETHER ANY PERSON
(INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT,
CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR
CONCURRENT STRICT LIABILITY IMPOSED UPON THE PERSON SEEKING INDEMNIFICATION. The rights of the
parties to indemnification under this Article VII shall not be limited due to any investigations
heretofore or hereafter made by such parties or their representatives, regardless of negligence in
the conduct of any such investigations. All representations, warranties, covenants and agreements
made by the parties shall not be deemed merged into any instruments or agreements delivered in
connection with the Closing or otherwise in connection with the transactions contemplated hereby.
The remedies provided in this Agreement shall not be exclusive of any other rights or remedies
available to any party either at law or in equity.
ARTICLE VIII
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
Section 8.1 Conditions to Obligations of Buyer. The obligations of Buyer to purchase the Purchased Assets and to take the other actions
required hereunder to be taken by Buyer at the Closing are subject to satisfaction of each of the
following conditions (any of which may be waived by Buyer, in whole or in part):
(a) Compliance. Each Seller Party shall have complied with its covenants and agreements
contained herein, and the representations and warranties contained in Article III hereof shall have
been on the date hereof and shall be as of the Closing Date (without giving effect to any
supplement to Seller Parties’ disclosure schedules) true and correct in all material respects
(except those representations and warranties qualified by materiality, which shall be true and
correct in all respects).
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(b) Officers’ Certificate. Buyer shall have received a certificate, dated as of the Closing
Date, of each Seller Party (signed on behalf of each Seller by an executive officer thereof)
certifying as to the matters specified in Sections 8.1(a) hereof.
(c) Sellers’ Resolutions. Each Seller shall deliver to Buyer a certified copy of resolutions
duly adopted by the board of directors, managers, stockholder or member, as applicable, of such
Seller and authorizing and approving the execution and delivery of the Transaction Documents and
the consummation of the transactions contemplated therein.
(d) Legal Opinion. Buyer shall have received from Duval, Funderburk, Sundbery, Xxxxxx &
Xxxxxxx, P.C., counsel to the Seller Parties, on the Closing Date, an opinion substantially in the
form attached hereto as Exhibit A and dated as of the Closing Date.
(e) HSR Act. Any waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have expired or been terminated.
(f) Completion of Due Diligence. Buyer shall have reasonably satisfactorily completed its due
diligence, in Buyer’s sole discretion.
(g) No Material Adverse Change. No Material Adverse Change shall have occurred since the date
hereof, and no event shall have occurred since the date hereof that could be expected to lead to or
cause a Material Adverse Change.
(h) Transfer Documents. The Seller Parties shall deliver to Buyer such bills of sale and
other instruments of sale, transfer, conveyance, assignment and delivery covering the Purchased
Assets or any part thereof, executed by the appropriate Seller Parties or other appropriate
parties, as Buyer may reasonably require to assure the full and effective sale, transfer,
conveyance, assignment and delivery to Buyer of the Purchased Assets, including the following:
(i) a general conveyance by each Seller Party transferring to Buyer good and
marketable title to all of the Purchased Assets;
(ii) all documents reasonably required for the assignment of Sellers’ rights
under all registrations, permits and licenses (to the extent permitted by Law),
equipment leasing agreements, rights under sales or purchase orders and of Sellers’
rights under all other Contracts, IT Contracts and Equipment Leases constituting a
part of the Purchased Assets;
(iii) copies of all of the contracts, agreements, commitments, books, records,
files and other data that (A) are included in the Purchased Assets or (B) relate to
or affect the Purchased Assets and are reasonably necessary for the continued
conduct of the Operations;
(iv) original notarized U.S. Coast Guard Bills of Sale in the form of
Exhibit B to this Agreement signed by an officer of each Seller, with
respect to the Vessels to be conveyed to Buyer at the Closing;
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(v) certified abstracts of title for the Vessels to be conveyed to Buyer at the
Closing issued by the U.S. Coast Guard at the National Vessel Documentation Center
dated no earlier than seven days prior to the date of the Closing showing that one
or more of the Sellers is the owner of such Vessels and that such Vessels are free
and clear of all Liens except for Permitted Liens;
(vi) confirmation of class certificates free from recommendations issued by the
American Bureau of Shipping issued no earlier than seven days prior to the date of
the Closing with respect to the Vessels to be conveyed to Buyer at the Closing that
are classed by the American Bureau of Shipping;
(vii) all technical documentation (including classification certificates, U.S.
Coast Guard certificates of inspection, plans, specifications and log books) with
respect to the Vessels to be conveyed to Buyer at the Closing which may be in
Sellers’ possession whether or not on board such Vessels;
(viii) originals of the Protocol of Delivery and Acceptance confirming the date
and time of delivery from the respective Seller to Buyer of each Vessel to be
conveyed to Buyer at the Closing and the location thereof;
(ix) xxxx(s) of sale and appropriate motor vehicle registration documentation
relating to each of the vehicles set forth on Schedule 1.1(a)(iii); and
(x) such other instruments of transfer and assignment in respect of the
Purchased Assets as Buyer shall reasonably require and as shall be consistent with
the terms and provisions of this Agreement.
Prior to the Closing Date, Seller Parties will take such reasonable steps as may be required or
appropriate so that no later than the close of business on the Closing Date, Buyer will be in
actual ownership and control of all of the Purchased Assets.
(i) Transitional Operating Agreement. Seller Parties designated therein shall execute and
deliver the Transitional Operating Agreement in substantially the form attached hereto as
Exhibit C.
(j) Orders, Etc. No action, suit or proceeding shall have been commenced or shall be pending
or threatened, and no statute, rule, regulation or order shall have been enacted, promulgated,
issued or deemed applicable to the transactions contemplated by this Agreement, by any Governmental
Body or court that reasonably may be expected to (i) prohibit, restrain or otherwise interfere with
Buyer’s ownership or operation of all or a material portion of the Purchased Assets, or compel
Buyer to dispose of or hold separate all or a material portion of Buyer’s or any Seller’s business
or assets, as a result of the transactions contemplated by this Agreement, (ii) prohibit
consummation of the transactions contemplated by this Agreement or (iii) result in the imposition
of material damages or other relief from Buyer.
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(k) Removal of Liens. Each Seller Party shall have caused any and all Liens on the Purchased
Assets other than the Permitted Liens to be released and shall have provided Buyer with documentary
evidence to such effect.
(l) Consents of Mortgagees. Each Seller shall have duly executed and delivered, and shall
have obtained from the mortgagee of each Vessel that is subject to a Permitted Lien, a duly
executed and delivered consent of mortgagee on Coast Guard Form CG-4593, consenting to the sale of
such Vessel to Buyer.
(m) FIRPTA Affidavit. Each Seller Party shall deliver a non-foreign affidavit, as such
affidavit is referred to in Section 1445(b)(2) of the Code, substantially in the form set forth in
Treas. Reg. § 1.1445-2(b)(2)(iv), dated as of the Closing Date.
(n) Insurance Documents. Sellers shall deliver to Buyer evidence from Sellers’ insurers that
Buyer is a named insured under any policies relating to the Operations and that such policies are
in full force and effect as of and following the Closing, in each case in such form as is
reasonably acceptable to Buyer.
(o) Other Documents. Each Seller Party shall deliver to Buyer such other documents,
instruments and certificates as may be reasonably requested by Buyer.
(p) Consents. All consents and approvals required in connection with the execution, delivery
and performance of the Transaction Documents shall have been obtained and be in full force and
effect.
Section 8.2 Conditions to Obligations of Seller Parties. The obligations of Seller Parties to sell the Purchased Assets and to take the other
actions required hereby to be taken by the Seller Parties at the Closing are subject to
satisfaction of each of the following conditions (any of which may be waived by the Seller Parties,
in whole or in part):
(a) Compliance. Buyer shall have complied with its covenants and agreements contained herein,
and the representations and warranties contained in Article IV hereof shall have been on the date
hereof and shall be as of the Closing Date true and correct in all material respects (except those
representations and warranties qualified by materiality, which shall be true and correct in all
respects).
(b) Officers’ Certificate. The Seller Parties shall have received a certificate, dated as of
the Closing Date, of an executive officer of Buyer certifying as to the matters specified in
Section 8.2(a) hereof.
(c) Buyer and Partnership Resolutions. Buyer and the Partnership shall deliver to the Seller
Parties a certified copy of resolutions duly adopted by the board of directors of the Buyer and a
certified copy of resolutions duly adopted by the board of directors of the general partner of the
Partnership, in each case authorizing and approving the execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated therein.
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(d) Legal Opinion. The Seller Parties shall have received from Xxxxx Xxxxx L.L.P., counsel to
Buyer, on the Closing Date, an opinion substantially in the form attached hereto as Exhibit
D and dated as of the Closing Date.
(e) HSR Act. Any waiting period applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have expired or been terminated.
(f) Transfer Documents. Buyer shall execute and deliver to Sellers two originals of the
Protocol of Delivery and Acceptance confirming the date and time of delivery from the respective
Seller to Buyer of each Vessel to be conveyed to Buyer at the Closing and the location thereof.
(g) Transitional Operating Agreement. Buyer or an Affiliate of Buyer shall execute and
deliver the Transitional Operating Agreement in substantially the form attached hereto as
Exhibit C.
(h) Orders, Etc. No action, suit or proceeding shall have been commenced or shall be pending
or threatened, and no statute, rule, regulation or order shall have been enacted, promulgated,
issued or deemed applicable to the transactions contemplated by the Transaction Documents, by any
Governmental Body or court that reasonably may be expected to prohibit consummation of the
transactions contemplated by this Agreement.
(i) Release. Cenac Towing shall be released from its obligations relating to any indebtedness
for borrowed money under that certain Credit Agreement, dated as of January 14, 2008, described on
Schedule 2.1(a).
(j) No Partnership Material Adverse Change. There shall have been no Partnership Material
Adverse Change since the date hereof.
ARTICLE IX
TERMINATION
TERMINATION
Section 9.1 Grounds for Termination. This Agreement may be terminated at any time prior to the Closing Date:
(a) by the mutual written agreement of Buyer and the Seller Parties;
(b) by Buyer if any of the conditions set forth in Section 8.1 hereof shall have become
incapable of fulfillment by March 1, 2008 (the “Outside Date”) and shall not have been waived by
Buyer;
(c) by the Seller Parties if any of the conditions set forth in Section 8.2 hereof shall have
become incapable of fulfillment by the Outside Date and shall not have been waived by the Seller
Parties;
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(d) by Buyer or the Seller Parties by written notice thereof to the other party if the
transactions contemplated hereby shall not have been consummated on or before the Outside Date or
such other date, if any, as Buyer and the Seller Parties shall agree upon in writing; or
(e) by Buyer or the Seller Parties if the consummation of the transactions contemplated hereby
would violate any nonappealable final order, decree or judgment of any Governmental Body or court
having competent jurisdiction prohibiting consummation of the transactions contemplated by this
Agreement;
provided, however, that neither Buyer nor Seller Parties shall be allowed to exercise any right of
termination pursuant to (i) Section 9.1(b) or (c) if Buyer or the Partnership (if Buyer is seeking
to terminate) or any Seller Party (if the Seller Parties are seeking to terminate) is then in
material breach or has materially failed to perform any of its representations, warranties or
covenants in this Agreement or (ii) Section 9.1(d) or (e) if a material breach or failure to
perform the representations, warranties or covenants in this Agreement by Buyer or the Partnership
(if Buyer is seeking to terminate) or any Seller Party (if the Seller Parties are seeking to
terminate) proximately caused the Closing not to have been consummated on or before the Outside
Date or the issuance of such order, decree or judgment, as the case may be.
Section 9.2 Effect of Termination. The following provisions shall apply in the event of a termination of this Agreement:
(a) Each party’s right of termination pursuant to Section 9.1 hereof is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies. If this Agreement is terminated pursuant to
Section 9.1, all obligations of the parties under this Agreement will terminate except as set forth
in Section 9.2(b) hereof; provided, however, that (i) if this Agreement is terminated by Buyer
because of the breach of this Agreement by a Seller Party or because one or more of the conditions
to Buyer’s obligations under this Agreement is not satisfied as a result of a Seller Party’s
failure to comply with its obligations under this Agreement, Buyer’s right to pursue all legal
remedies will survive such termination unimpaired, and (ii) if this Agreement is terminated by the
Seller Parties because of the breach of this Agreement by Buyer or because one or more of the
conditions to the Seller Parties’ obligations under this Agreement is not satisfied as a result of
Buyer’s failure to comply with its obligations under this Agreement, Seller Parties’ right to
pursue all legal remedies will survive such termination unimpaired.
(b) The parties hereto hereby agree that the provisions of this Section 9.2 and Article X
hereof shall survive any termination of this Agreement.
ARTICLE X
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 10.1 Confidentiality.
(a) Each Seller Party acknowledges that it has or may have had in the past, currently has and
in the future may have access, including in connection with the performance of the Transaction
Documents, to Confidential Information (as defined below) relating to the Operations and Buyer and
its Affiliates. Each Seller Party agrees that it shall keep, and shall
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cause its Representatives to keep, confidential all such Confidential Information and, except
with the specific prior written consent of Buyer, shall not disclose, and shall cause its
Representatives not to disclose, such Confidential Information to any person except (i) the
directors, managers, officers, employees, Affiliates, accountants (including independent certified
public accountants), advisors, attorneys, consultants or other agents (collectively,
“Representatives”) of Buyer and (ii) its own Representatives, provided that those Representatives
agree to the confidentiality provisions of this Section 10.1; provided, however, that Confidential
Information shall not include such information as (A) becomes known to the public generally through
no fault of any Seller Party or its Representatives or (B) is required to be disclosed by law or
the order of any Governmental Body under color of law, provided, that prior to disclosing any
information pursuant to this clause (B), the Seller Parties shall give prior written notice thereof
to Buyer and provide Buyer or the Partnership with the opportunity to contest that disclosure.
“Confidential Information” means, with respect to any Person, all trade secrets, know how and other
confidential, nonpublic or proprietary information of that Person, including any such information
derived from reports, investigations, research, studies, work in progress, codes, marketing, sales
or service programs, customer lists, records relating to past service provided to customers,
capital expenditure projects, cost summaries, equipment or production system designs or drawings,
pricing formulae, contract analyses, financial information, projections, present and future
business plans, agreements with vendors, joint venture agreements, confidential filings with any
Governmental Body and all other confidential, nonpublic concepts, methods, techniques or processes
of doing business, ideas, materials or information prepared or performed for, by or on behalf of
that Person.
(b) Because of (i) the difficulty of measuring economic losses as a result of the breach of
the covenants in Section 10.1(a) and (ii) the immediate and irreparable damage that would be caused
to Buyer or its Affiliates for which it would have no other adequate remedy, in the event of a
breach or threatened breach by any Seller Party or its Representatives of the provisions of Section
10.1(a) with respect to any Confidential Information, Buyer or the Partnership shall be entitled to
an injunction restraining such Seller Party or its Representatives from disclosing, in whole or in
part, that Confidential Information. Nothing herein shall be construed as prohibiting Buyer or the
Partnership from pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
Section 10.2
Dispute Resolution.
(a) If a dispute, controversy or claim arises between the parties relating to the
interpretation or performance of this Agreement or the grounds for the termination hereof
(“Dispute”), appropriate senior executives of each party who shall have the authority to resolve
the matter shall meet to attempt in good faith to negotiate a resolution of the Dispute prior to
pursuing other available remedies. The initial meeting between the appropriate senior executives,
which shall be held within 10 business days of notice to the other party of the Dispute in Houston,
Texas or such other place as the parties may mutually agree, shall be referred to herein as the
“Dispute Resolution Commencement Date.” Discussions and correspondence relating to attempted
resolution of such Dispute shall be treated as confidential information developed for the purpose
of settlement and shall be exempt from discovery or production and shall not be admissible. If the
senior executives are unable to resolve the Dispute within 30 days from the Dispute Resolution
Commencement Date, and any of the parties wishes
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to pursue such Dispute, then the Dispute shall be mediated by a mutually acceptable mediator
within 30 days after written notice by one party to the other demanding non- binding mediation. No
party may unreasonably withhold consent to the selection of a mediator. The mediation shall be
held in Houston, Texas or at such other place as the parties may mutually agree. Buyer and the
Partnership, on one hand, and the Seller Parties, on the other hand, shall share the costs of the
mediation equally, except that each party shall bear its own costs and expenses, including
attorneys’ fees, witness fees, travel expenses, and preparation costs.
(b) A party may seek relief from a court of competent jurisdiction with respect to a Dispute
if the parties are unable to resolve such Dispute pursuant to the provisions of Section 10.2(a)
above, provided that any Dispute regarding any obligation of confidentiality or any other claim
where interim relief from a court of competent jurisdiction is sought to prevent serious and
irreparable injury to one of the parties or to others is not required to be negotiated or mediated
prior to seeking relief from such a court, and provided further that Disputes arising out of or in
connection with Section 5.6 are not subject to this Section 10.2 and shall be resolved pursuant to
the provisions of Section 5.6.
Section 10.3 Seller Parties to Enforce Certain Agreements. Each Seller Party shall enforce any agreement, arrangement or other legal right it may have
with or relating to any employee (or former employee) or other party (a) with respect to the
confidentiality of any information relating to Sellers, the Operations or the Purchased Assets or
(b) limiting such employee or other party from competing in any line of business currently engaged
in by Sellers.
Section 10.4 Expenses. Except as otherwise provided in this Agreement, the Seller Parties, on the one hand, and
Buyer, on the other hand, shall pay their own respective fees and expenses incurred in connection
with the negotiation, preparation and execution of this Agreement (including the exhibits and
schedules hereto) and the other Transaction Documents and the consummation of the transactions
contemplated herein and therein, including all legal, accounting, tax, brokers’ and other advisors’
fees and expenses. Buyer will pay the filing fee under the HSR Act.
Section 10.5 Entire Agreement; Amendment. This Agreement, including all schedules and exhibits hereto, constitutes the entire
agreement of the parties with respect to the subject matter hereof and supersedes all prior
negotiations, understandings and agreements of the parties hereto (excluding that certain
Confidentiality Agreement dated July 2, 2007 between the Partnership and the Stockholder, which the
parties hereby agree shall terminate upon the Closing, except that the letter agreement dated
January 24, 2008 between the Partnership and Cenac Towing relating to such Confidentiality
Agreement shall survive the Closing) of any nature, whether oral or written, relating thereto.
This Agreement may not be modified, amended or terminated except by a written instrument
specifically referring to this Agreement signed by all the parties hereto.
Section 10.6 Waivers and Consents. All waivers and consents given hereunder shall be in writing. No waiver by any party
hereto of any breach or anticipated breach of any provision hereof by any other party shall be
deemed a waiver of any other contemporaneous, preceding or succeeding breach or anticipated breach,
whether or not similar. Except as provided in this Agreement, no action taken pursuant to this
Agreement, including any
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investigation by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement.
Section 10.7 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to
have been received only if and when (a) personally delivered, (b) on the third day after mailing,
by United States mail, first class, postage prepaid or by certified mail return receipt requested,
addressed in each case as follows (or to such other address as may be specified by like notice) or
(c) received by facsimile at the facsimile number listed below:
(a) | If to Buyer or the Partnership, to: | ||
TEPPCO Partners, L.P. 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 Attn: President Fax: (000) 000-0000 |
|||
with a copy to: | |||
TEPPCO Partners, L.P. 0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxx, Xxxxx 00000 Attn: General Counsel Fax: (000) 000-0000 |
|||
If to any Seller Party, to: | |||
Cenac Towing Co., Inc. 000 Xxxxx Xxxxxxx Xxxx Xxxxx, XX 00000 -or- X.X. Xxx 0000 Xxxxx, XX 00000 Attn: Xxxxx X. Xxxxx, Xx. Fax: (000) 000-0000 |
|||
with a copy to: | |||
Duval, Funderburk, Sundbery, Xxxxxx & Xxxxxxx P.C. 000 Xxxxxx Xxxxxx Xxxxx, XX 00000-0000 Attn: X. Xxxxxxx Xxxxx, II Fax: (000) 000-0000 |
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Section 10.8 Assignments, Successors and No Third-Party Rights. No party may assign any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of the other parties, except that Buyer may assign any of its
rights and delegate any of its obligations under this Agreement to a subsidiary of the Partnership
and may collaterally assign its rights hereunder to any financial institution providing financing
in connection with the transactions contemplated by this Agreement. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon and inure to the benefit of
the heirs, executors, administrators, successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person other than the
parties to this Agreement any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement, except such rights as shall inure to a successor
or permitted assignee pursuant to this Section 10.8.
Section 10.9 Compliance with Bulk Sales Laws. Buyer and the Seller Parties waive compliance with the requirements of any applicable bulk
sales laws of any jurisdiction. Each Seller Party shall indemnify Buyer against any and all
liabilities or expenses Buyer may incur as a result of any noncompliance by Buyer or Seller Parties
with any bulk sales laws or fraudulent transfer law as they relate to this transaction.
Section 10.10 Performance. The Stockholder agrees to cause Sellers to perform all their obligations and agreements
under this Agreement and hereby guarantees the payment and performance by Sellers of all such
obligations and agreements.
Section 10.11 Title and Risk of Loss. Title to, liability for and in connection with, and risk of loss of the Purchased Assets
shall remain with Seller Parties in every instance until said assets are delivered to Buyer in
accordance with this Agreement.
Section 10.12 Choice of Law. This Agreement shall be governed by the internal laws of the State of Texas (without regard
to the choice of law provisions thereof).
Section 10.13 Jurisdiction and Venue. Without limiting the provisions of Section 7.5, and subject to the provisions of Section
5.6 and Section 10.2, the parties hereby agree that any action brought with respect to this
Agreement and the transactions contemplated hereunder may be brought in federal or state court in
Tarrant County, Texas, consent to personal jurisdiction in any such action brought in any such
court and further agree that service of process may be accomplished pursuant to Section 10.7 above.
Each party hereto hereby waives its right to trial by jury in connection with any suit, action
or proceeding relating to this Agreement.
Section 10.14 Construction; Section Headings; Table of Contents. The language used in this Agreement shall be deemed to be the language the parties hereto
have chosen to express their mutual intent, and no rule of strict construction will be applied
against any party hereto. The section headings and any table of contents contained in this
Agreement are for reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
Section 10.15 Severability. Any term or provision (or subpart or portion thereof) of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that
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jurisdiction, be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision (or subpart or portion thereof) of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
Section 10.16 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which together shall be deemed to be one and the same instrument.
Section 10.17 Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time
is of the essence.
Section 10.18 Interpretation.
(a) Except as this Agreement otherwise specifies, all references herein to any Law defined or
referred to herein are references to that Law or any successor Law, as the same may have been
amended or supplemented from time to time through the Closing and any rules or regulations
promulgated thereunder.
(b) This Agreement uses the words “herein,” “hereof” and “hereunder” and words of similar
import to refer to this Agreement as a whole and not to any provision of this Agreement, and the
words “Article,” “Section,” “Schedule” and “Exhibit” refer to Articles and Sections of and the
Schedules and Exhibits to, this Agreement unless it otherwise specifies.
(c) Whenever the context so requires, the singular number includes the plural and vice versa,
and a reference to one gender includes the other gender and the neuter.
(d) As used in this Agreement, the word “including” (and, with correlative meaning, the word
“include”) means including, without limiting the generality of any description preceding that word;
the words “shall” and “will” are used interchangeably and have the same meaning; and “or” is used
in the inclusive sense of “and/or” unless the context requires otherwise.
(e) As used in this Agreement, the term “business day” means any day other than a day on which
commercial banks are authorized or required to close in Houston, Texas.
(f) As used in this Agreement, all references to “dollars” or “$” mean United States dollars.
Section 10.19 Definitions. For purposes of this Agreement, the term:
AAA shall have the meaning set forth in Section 5.6(b).
Accounting Firm shall have the meaning set forth in Section 1.5(d).
Affiliate, with respect to any Person, means any Person that directly or indirectly
controls, is controlled by or is under common control with such Persons. As used in this
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definition, control means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person (whether though ownership of the
capital stock of or other equity interests in that Person, by contract or otherwise).
Agreement shall have the meaning set forth in the Preamble.
Agreements shall have the meaning set forth in Section 3.9.
Appraisal Firm shall have the meaning set forth in Section 5.18(c).
Asphalt Business Limitation means that (a) the marine transportation of hydrocarbons
and hydrocarbon-based products by Horizon Maritime is limited to the inland marine transportation
or offshore marine transportation of asphalt, No. 6 oil or vacuum gas oil and (b) Horizon Maritime
does not engage in the inland marine transportation or offshore marine transportation of waste
water, sediment or drilling or disposal fluids resulting from the exploration or production of
hydrocarbons.
Asset Gain Amount, with respect to any calendar year, means the excess of (a) all
gains recognized for federal income tax purposes by the Partnership during the calendar year that
are (i) attributable to the disposition of a Towing Asset by Buyer or its Affiliates during the
calendar year and (ii) allocated to Cenac Towing as a result of the application of Section 704(c)
of the Code to the Contributions and adjusted in accordance with Treas. Reg. § 1.1374-4(i)(6) over
(b) all losses recognized for federal income tax purposes by the Partnership during the calendar
year that are (i) attributable to the disposition of a Towing Asset by Buyer or its Affiliates
during the calendar year and (ii) allocated to Cenac Towing as a result of the application of
Section 704(c) of the Code to the Contributions and adjusted in accordance with
Treas. Reg. § 1.1374-4(i)(6).
Assumed Equipment Leases shall have the meaning set forth in Section 1.1(d).
Assumed Liabilities shall have the meaning set forth in Section 2.1.
Audited Financial Statements shall have the meaning set forth in Section 3.12(a).
Average Trading Price shall have the meaning set forth in Section 1.6(c).
Brokers’ Transaction means a “brokers’ transaction” within the meaning of section 4(4)
of the Securities Act in which the Person selling the securities does not (a) solicit or arrange
for the solicitation of orders to buy the securities in anticipation of or in connection with such
transaction or (b) make any payment in connection with the offer or sale of the securities to any
Person other than the broker who executes the order to sell the securities.
Built-In Gain Indemnity Amount, with respect to any calendar year, means (a) the
product of (i) the highest rate specified in Section 11(b) of the Code and (ii) the Recognized
Built-In Gain Amount for such year plus (b) an amount that when paid to Cenac Towing would cause
Cenac Towing to have received the amount described in clause (a), after the payment of all federal,
state and local income tax by Cenac Towing, by assuming that the payment of the amounts in clauses
(a) and (b) is subject to a tax rate equal to the highest rate specified in
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Section 11(b) of the Code.
Buyer shall have the meaning set forth in the Preamble.
Buyer Indemnified Party means Buyer and its Affiliates and each of their respective
officers, directors (or persons performing equivalent functions), employees, agents and counsel;
provided, for the avoidance of doubt, that the Stockholder and any other Person Affiliated with or
related to the Stockholder that may otherwise be deemed to be a Buyer Indemnified Party as a result
of the transactions contemplated hereby shall not be a Buyer Indemnified Party for purposes of this
Agreement.
Ceiling Amount means $150,000,000.
Cenac Towing shall have the meaning set forth in the Preamble.
Cenac Offshore shall have the meaning set forth in the Preamble.
Closing shall have the meaning set forth in Section 1.4
Closing Date shall have the meaning set forth in Section 1.4.
Closing Limited Partner Units shall have the meaning set forth in Section 1.3(c).
Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations
promulgated thereunder. A reference to a particular section of the Code shall include a reference
to any subsequent amendments to the sections of the Code referred to in this Agreement.
Commission means the United States Securities and Exchange Commission.
Company Purchased Assets shall have the meaning set forth in Section 1.1.
Confidential Information shall have the meaning set forth in Section 10.1(a).
Contracts shall have the meaning set forth in Section 1.1(d).
Contributions shall have the meaning set forth in Section 5.11(a).
Deductible Amount means $1,000,000, without giving effect to any materiality or
similar qualification contained in the applicable representation or warranty; provided, however,
that, with respect to breaches of representations and warranties contained in Section 3.13(a) as
applicable to Vessels, the term Deductible Amount means $1,000,000 per Vessel.
Dispute shall have the meaning set forth in Section 10.2(a).
Dispute Resolution Commencement Date shall have the meaning set forth in Section
10.2(a).
Effective Time means 12:01 a.m. on the Closing Date.
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Environmental Laws means any federal, state, local, foreign or international Law
regulating or protecting the public health and safety (including in the workplace) or regulating or
protecting the environment and natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Sections 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Sections 5101 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Sections 6901 et seq.), the Clean Water Act (33 U.S.C. Sections 1251 et
seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Sections 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Sections 136 et seq.), OSHA, and the Oil Pollution Act of 1990 (33 U.S.C. Sections 2701 et seq.)
and the regulations promulgated pursuant thereto.
Environmental Permits shall have the meaning set forth in Section 3.17(b).
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate means each entity (whether or not incorporated) that, together with
any Seller, is or has been considered to be under common control and treated as a single employer
for purposes of Section 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) of ERISA.
Excluded Assets shall have the meaning set forth in Section 1.2.
Excluded Liabilities shall have the meaning set forth in Section 2.2.
Final Adjustment Schedule shall have the meaning set forth in Section 1.5(d).
Financial Statements shall have the meaning set forth in Section 3.12(b).
First Permitted Transfer Date means the date immediately following the date that is
six months after the Closing Date.
Form 8-A/A means the Form 8-A/A (Amendment No. 1) filed by the Partnership with the
Commission on March 30, 2007, as amended or supplemented.
GAAP means generally accepted accounting principles for financial reporting in the
United States.
Governmental Body means any (a) national, state, provincial, county, municipal or
other government, domestic or foreign, or any agency, board, branch, bureau, commission, court,
department or other instrumentality or subdivision of such government or (b) any other body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
Hazardous Material means any substance, material or waste which is regulated pursuant
to any Environmental Law, including (a) petroleum (including crude oil or any fraction thereof) or
petroleum products, polychlorinated biphenyls, asbestos or asbestos-containing materials, lead or
lead-based paints or materials, toxic mold, and (b) any material or substance
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which is defined or regulated as a “hazardous waste,” “hazardous material,” “hazardous
substance,” “extremely hazardous waste,” “restricted hazardous waste,” “contaminant,” “pollutant,”
“toxic waste,” or “toxic substance,” under any Environmental Law.
Horizon Maritime means Horizon Maritime, L.L.C., a Louisiana limited liability
company.
HSR Act means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act.
Identified Representations shall have the meaning set forth in Section 7.1.
Indemnified Amounts shall have the meaning set forth in Section 7.1.
Indemnified Party shall have the meaning set forth in Section 7.5(a).
Indemnifying Party shall have the meaning set forth in Section 7.5(a).
Indemnity Notice shall have the meaning set forth in Section 7.5(b).
Intellectual Property Rights shall have the meaning set forth in Section 1.1(e).
IT Contracts shall have the meaning set forth in Section 1.1(f).
Laws means all statutes, treaties, codes, ordinances, decrees, rules, regulations,
municipal bylaws, judicial or arbitral or administrative or ministerial or departmental or
regulatory judgments, orders, decisions, rulings or awards, injunctions, policies, certificates,
codes, approvals, guidelines, voluntary restraints, inspection reports, any obligations included in
any certificate, certification, franchise, permit, authorization or license issued by any
Governmental Body or resulting from binding arbitration, or any provisions of any of the foregoing,
including general principles of common law and equity and the requirements of all Governmental
Bodies, binding or affecting the Person referred to in the context in which such word is used; and
Law means any one of them.
Lien means any lien, pledge, claim, charge, security interest, mortgage, charter,
option, title retention agreement, security interest of any nature, adverse claim, exception,
reservation, easement, right of occupation, any matter capable of registration against title,
option, right of pre-emption, privilege or other encumbrance, or any contract to create any of the
foregoing or other rights of any third Person of any nature whatsoever, whether recorded, secret,
state, maritime or otherwise.
Limited Partner Units means units representing limited partner interests in the
Partnership.
Xxxxxxxx Xxxxx means that certain marine vessel under construction identified in
Schedule 1.1(a)(iii).
Market Value means, with respect to the Limited Partner Units, the average closing
price of the Limited Partner Units on the New York Stock Exchange for the 10-day
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trading period ending on the third business day prior to the Closing Date.
Material Adverse Change means any material adverse change in the Purchased Assets or
their value or in the business, prospects, results of operations, assets or financial condition of
any Seller or any event that could be expected to lead to or cause such a material adverse change,
and shall include any reduction or limitation of the Stockholder’s participation in the day-to-day
management and operation of the Operations on a full-time basis, for any reason.
Non-Citizen shall have the meaning set forth in Section 5.16(a).
Offer Price shall have the meaning set forth in Section 1.6(d).
Operations shall have the meaning set forth in the Recitals.
Option Period shall have the meaning set forth in Section 1.6(c).
OSHA means the Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.).
Outside Date shall have the meaning set forth in Section 9.1(b).
Partnership shall have the meaning set forth in the Preamble.
Partnership Agreement means the Fourth Amended and Restated Agreement of Limited
Partnership of the Partnership dated December 8, 2006.
Partnership Material Adverse Change means any material adverse change in the business,
properties, financial condition or results of operations of the Partnership and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary course of business;
provided, however, that none of the following shall constitute a Partnership Material Adverse
Change: (a) any event disclosed in the Partnership SEC Documents; (b) any change in the trading
prices or trading volume of the Limited Partner Units or (c) any failure by the Partnership to meet
estimates of revenues or earnings.
Partnership SEC Documents shall have the meaning set forth in Section 4.7.
Permitted Liens means Liens on any of the Vessels in effect on the Closing Date which
secure indebtedness assumed by Buyer pursuant to Section 2.1(a) pursuant to the terms of the notes
or other documents evidencing such indebtedness.
Permitted Transferee shall have the meaning set forth in Section 5.16(b).
Person means any individual, firm, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization, government or agency or
subdivision thereof or any other entity.
Preliminary
Adjustment Schedule shall have the meaning set forth in Section 1.5(c).
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Purchase Price shall have the meaning set forth in Section 1.3.
Purchased Assets shall have the meaning set forth in Section 1.1.
Purchased Right shall have the meaning set forth in Section 5.14.
reasonable efforts means a party’s efforts in accordance with reasonable commercial
practice and without incurrence of unreasonable expense.
Recognized Built-In Gain Amount means, with respect to any calendar year, the product
of (a) the lesser of (i) the Asset Gain Amount for such year and (ii) the excess of (A) the
Recognized Built-in Gain Limitation over (B) the sum of the Asset Gain Amounts determined for all
prior years and (b) a fraction, the numerator of which is the number of Towing Limited Partner
Units held by Cenac Towing as of the close of such year and the denominator of which is the total
number of Towing Limited Partner Units issued at Closing (adjusting both numerator and denominator
for any reclassification, recapitalization, unit split, split-up, combination, exchange of units or
any other similar transactions with respect to the Limited Partner Units after the Closing).
Recognized Built-In Gain Limitation means the amount of gain that would have been
recognized by the Partnership for federal income tax purposes and allocated to Cenac Towing
pursuant to Section 704(c) of the Code if Buyer or its Affiliates disposed of all of the Towing
Assets allocable to the Contributions on the day following the Closing Date for an aggregate amount
realized equal to the sum of (a) the product of (i) the closing price of Limited Partner Units on
the New York Stock Exchange on the Closing Date and (ii) the number of Towing Limited Partner Units
issued on the Closing Date and (b) the liabilities of the Partnership allocable to the Towing
Limited Partner Units under Section 752 of the Code as of the day following the Closing Date that
were treated as part of the Contributions pursuant to Section 5.11(a)(iii).
Registered IP Rights shall have the meaning set forth in Section 3.10(a).
Related Party Agreement means any contract or other agreement, whether written or
oral, (a) by which any of the Purchased Assets or Assumed Liabilities is bound or may be subject
and (b) (i) to which a Seller and the Stockholder or any of his Affiliates (other than the Sellers)
or family members are parties, (ii) of which the Stockholder or any of his Affiliates (other than
the Sellers) or family members are beneficiaries or (iii) as to which any transaction contemplated
thereby properly would be characterized (without regard to the amount involved) as a related party
transaction for purposes of applying the disclosure requirements of GAAP as if they were applicable
to financial statements of the Purchased Assets and Assumed Liabilities.
Release means any spill, effluent, emission, leaking, pumping, pouring, emptying,
escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching, abandoning,
adding, or migration into the indoor or outdoor environment, or into or out of any property,
facility or vessel.
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Remedial Action means all actions, including any capital expenditures required by any
Governmental Body or required under or taken pursuant to any Environmental Law or voluntarily taken
to (a) clean up, remove, treat, contain, assess, monitor or evaluate, or in any other way,
ameliorate or address any Release or threat of Release of any Hazardous Material; (b) minimize the
further Release of any Hazardous Material so it does not endanger or threaten to endanger the
public or employee health or welfare or the indoor or outdoor environment; (c) perform pre-remedial
studies and investigations or post-remedial monitoring and care pertaining to or relating to a
Release or threatened Release of any Hazardous Material; or (d) bring any party, property, facility
or vessel into compliance with any Environmental Law.
Representatives shall have the meaning set forth in Section 10.1(a).
Restricted Business means the business sold by the Seller Parties to the Buyer
hereunder, including the inland marine transportation and offshore marine transportation of (a)
hydrocarbons and hydrocarbon-based products, including kerosene, gasoline, feedstocks, lube oils,
lube oil base stocks, refined petroleum products and heavy olefins and (b) waste water, sediment
and drilling or disposal fluids resulting from the exploration or production of hydrocarbons.
Restricted Territory means: (a) the commercially navigable inland waterways of the
continental United States located east of the 105° meridian, including the Mississippi River System
and connecting waterways, (b) the Gulf of Mexico, including the Gulf Intracoastal Waterway and (c)
the jurisdictions set forth on Exhibit E.
Right of First Refusal means the Partnership’s rights to repurchase Closing Limited
Partner Units pursuant to Section 1.6(c) or 1.6(d).
Rule 144 means rule 144 promulgated under the Securities Act, as such rule may be
amended from time to time.
Sale Price shall have the meaning set forth in Section 1.6(c).
Securities Act means the Securities Act of 1933, as amended.
Seller Indemnified Party means each Seller Party and its Affiliates and each of their
respective officers, directors (or persons performing equivalent functions), employees, agents and
counsel.
Seller Parties shall have the meaning set forth in the Preamble.
Sellers shall have the meaning set forth in the Preamble.
Sellers’ Plans means each pension, profit sharing, retirement, life, health,
unemployment, accident, disability, stock option, stock bonus, stock ownership, severance,
employment, change-in-control, deferred compensation, fringe benefit, bonus or incentive
compensation plan, agreement, program or policy (whether written or oral, formal or informal) that
is currently or has previously been sponsored, maintained or contributed to by any Seller or any
ERISA Affiliate for the benefit of any of their present or former directors, officers,
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employees, agents, consultants or other similar representatives, including any “employee benefit
plan” as defined in section 3(3) of ERISA.
Sold Units shall have the meaning set forth in Section 1.6(c).
Stockholder shall have the meaning set forth in the Preamble.
Stockholder Purchased Assets shall have the meaning set forth in Section 1.1.
Subject Units shall have the meaning set forth in Section 1.6(c).
Tax Returns means all returns, declarations, reports, statements and other documents
of, relating to, or required to be filed in respect of, any and all Taxes.
Taxable Sales shall have the meaning set forth in Section 5.11(a).
Taxes means any and all federal, state, local, foreign and other taxes or other
assessments, including all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, profit share, license, lease, service, service use, value added,
withholding, payroll, employment, excise, estimated severance, stamp, occupation, premium,
property, windfall profits, or other taxes of any kind whatsoever, together with any interests,
penalties, additions to tax, fines or other additional amounts imposed thereon or related thereto,
and the term Tax means any one of the foregoing Taxes.
Third-Party Claim shall have the meaning set forth in Section 7.5(a).
to the knowledge of the Seller Parties and phrases with similar wording means the
collective knowledge, after reasonable investigation, of each Person listed on Schedule 10.19.
Towing Assets means the portion of the Purchased Assets transferred by Cenac Towing to
Buyer pursuant to Section 1.1 of this Agreement.
Towing Limited Partner Units shall have the meaning set forth in Section 1.3(b).
Transaction Documents means this Agreement, the Transitional Operating Agreement and
the other written agreements and instruments executed under or in connection with this Agreement.
Transferor shall have the meaning set forth in Section 5.16(c).
Transitional Operating Agreement means that certain Transitional Operating Agreement
by and among Buyer and the Seller Parties in substantially the form attached hereto as
Exhibit C.
Unaudited Financial Statements shall have the meaning set forth in Section 3.12(b).
Vessel Equipment means boilers, generators, machinery, boats, lifeboats, masts,
towers, cranes, engines, instruments, anchors and anchor handling equipment, chains, cables,
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apparel, accessories, tackle, rigging, electronic, radar, communication, radio installation
and navigational equipment, and all other associated equipment, furnishings, appliances and
consumables.
Vessels shall have the meaning set forth in Section 1.1(a) .
Window Period shall have the meaning set forth in Section 1.6(c).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above
written.
TEPPCO MARINE SERVICES, LLC | ||||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||||
Xxxxxxx X. Xxxxxx | ||||||
Vice President and Chief Financial Officer | ||||||
TEPPCO PARTNERS, L.P. | ||||||
By: Texas Eastern Products Pipeline Company, LLC, | ||||||
its general partner | ||||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||||
Xxxxxxx X. Xxxxxx | ||||||
Vice President and Chief Financial Officer | ||||||
CENAC TOWING CO., INC. | ||||||
By: | /s/ Xxxxx X. Xxxxx, Xx. | |||||
Xxxxx X. Xxxxx, Xx. | ||||||
President | ||||||
CENAC OFFSHORE, L.L.C. | ||||||
By: | /s/ Xxxxx X. Xxxxx, Xx. | |||||
Xxxxx X. Xxxxx, Xx. | ||||||
Managing Member | ||||||
/s/ Xxxxx X. Xxxxx, Xx. | ||||||
Xxxxx X. Xxxxx, Xx. |
Signature page to TEPPCO-Cenac Asset Purchase Agreement
58
EXHIBIT A
Form of Legal Opinion to Buyer
Form of Legal Opinion to Buyer
1. Cenac Towing is validly existing as a corporation in good standing under the laws of the
State of Louisiana, with corporate power and authority to execute, deliver and perform its
obligations pursuant to the Agreement and the Transitional Operating Agreement. The Stockholder
owns beneficially and of record all of the issued and outstanding capital stock of Cenac Towing.
2. Cenac Offshore is validly existing as a limited liability company in good standing under
the laws of the State of Louisiana, with limited liability company power and authority to execute,
deliver and perform its obligations pursuant to the Agreement and the Transitional Operating
Agreement. The Stockholder owns beneficially and of record all of the limited liability company
interests of Cenac Offshore.
3. Each of the Agreement, the Transitional Operating Agreement, the Construction and Lease
Agreement and each of the other Transaction Documents has been duly authorized, executed and
delivered by Cenac Towing and/or Cenac Offshore, as the case may be. Each of The Agreement, the
Transitional Operating Agreement and each of the other Transaction Documents to which the
Stockholder is a party has been duly executed and delivered by the Stockholder.
4. Neither the execution, delivery and performance of the Transaction Documents by the Seller
Parties party thereto nor the consummation by the Seller Parties of the transactions contemplated
thereby (a) constitutes or will constitute a violation of the certificate or articles of
incorporation, bylaws or other organizational documents of any of the Seller Parties,
(b) constitutes or will constitute a breach or violation of, or a default under (or an event that,
with notice or the lapse of time or both, would constitute such a default) any of the Contracts,
the Assumed Equipment Leases, the IP Contracts or any credit agreement, indenture, mortgage, note
or other debt instrument binding on any of the Seller Parties or any of the Purchased Assets except
to the extent specified in Schedule 3.3 or (c) results or will result in the creation or
imposition of any Lien (other than a Permitted Lien) upon any of the Purchased Assets pursuant to
any of the documents or instruments referenced in clause (a) or (b).
5. The instruments of conveyance, transfer and assignment to be delivered by the Seller
Parties to Buyer are in a form legally sufficient to convey to Buyer all right, title and interest
of the Seller Parties in and to the Purchased Assets. Such instruments are in a form sufficient
for recordation or filing where such is necessary in order to effect such conveyance, transfer and
assignment against third parties.
In rendering such opinions, such counsel may, (A) with respect to the opinions expressed in
paragraphs 1 and 2 above, state that they have relied solely upon certificates provided by the
Secretary of State of the State of Louisiana and (B) state that their opinion is limited to the
federal laws of the United States of America and the laws of the State of Louisiana.
EXHIBIT B
Form of U.S. Coast Guard Bills of Sale
![(FORM)](https://www.sec.gov/Archives/edgar/data/857644/000095012908000607/h53680h5368001.gif)
THIS SECTION FOR COAST U.S. DEPARTMENT OF GUARD USE ONLY HOMELAND SECURITY RECORDED: U.S. COAST GUARD BOOK PAGE: CG-1340 (REV. 06/04) XXXX OF SALE PORT (IF NOT FILING PORT) 1. VESSEL NAME 2. OFFICIAL NUMBER OR HULL ID NUMBER 3. NAME(S) AND ADDRESS(ES) OF SELLERS: 3A. TOTAL INTEREST OWNED (IF LESS THAN 100%) %. DOCUMENTATION OFFICER — 4. NAME(S) AND ADDRESS(ES) OF BUYER(S) AND INTEREST TRANSFERRED TO EACH: TEPPCO Marine Services, LLC 0000 Xxxxxxxxx 00xx Xxxxx Xxxxxxx, XX 00000 4A. TOTAL INTEREST TRANSFERRED (100% UNLESS OTHERWISE SPECIFIED) %. — 4B. MANNER OF OWNERSHIP, UNLESS OTHERWISE STATED HEREIN, THIS XXXX OF SALE CREATES A TENANCY IN COMMON, WITH EACH TENANT OWNING AN EQUAL UNDIVIDED INTEREST. CHECK ONLY ONE OF THE FOLLOWING BLOCKS TO SHOW ANOTHER FORM OF OWNERSHIP. JOINT TENANCY WITH RIGHT OF SURVIVORSHIP TENANCY BY THE ENTIRETIES COMMUNITY PROPERTY OTHER (DESCRIBE) 5. CONSIDERATION RECEIVED: (ONE DOLLAR AND OTHER VALUABLE CONSIDERATION UNLESS OTHERWISE STATED) |
6. I (WE) DO HEREBY SELL TO THE BUYER(S) NAMED ABOVE, THE RIGHT, TITLE AND INTEREST IDENTIFIED IN BLOCK 4 OF THIS XXXX OF SALE, IN THE PROPORTION SPECIFIED HEREIN. VESSEL IS SOLD FREE AND CLEAR OF ALL LIENS, MORTGAGES, AND OTHER ENCUMBRANCES OF ANY KIND AND NATURE, EXCEPT AS STATED ON THE REVERSE HEREOF. VESSEL IS SOLD TOGETHER WITH AN EQUAL INTEREST IN THE MASTS, BOWSPRIT, SAILS, BOATS, ANCHORS, CABLES, TACKLE, FURNITURE, AND ALL OTHER NECESSARIES THERETO APPERTAINING AND BELONGING, EXCEPT AS STATED ON THE REVERSE HEREOF. |
7. SIGNATURES OF SELLER(S) OR PERSON(S) SIGNING ON BEHALF OF SELLER(S). 8. DATE SIGNED |
9. NAME(S) OF PERSON(S) SIGNING ABOVE, AND LEGAL CAPACITY IN WHICH SIGNED (E.G., OWNER, AGENT, TRUSTEE, EXECUTOR) |
10. ACKNOWLEDGEMENT (TO BE COMPLETED BY NOTARY PUBLIC OR OTHER OFFICIAL AUTHORIZED BY A LAW OF A STATE OR THE UNITED STATES TO TAKE OATHS.) |
ON ___THE PERSON(S) NAMED IN SECTION 9 STATE: (DATE) COUNTY: ABOVE ACKNOWLEDGED EXECUTION OF THE FOREGOING INSTRUMENT IN THEIR STATED CAPACITY(IES) FOR THE PURPOSE THEREIN CONTAINED. |
NOTARY PUBLIC MY COMMISSION EXPIRES |
![(FORM)](https://www.sec.gov/Archives/edgar/data/857644/000095012908000607/h53680h5368002.gif)
(COMPLETE THIS SECTION ONLY IF VESSEL HAS NEVER BEEN DOCUMENTED AND DOES NOT HAVE A HULL IDENTIFICATION NUMBER.) VESSEL DATA A. BUILDER B. BUILDER’S HULL NUMBER C. FORMER NAME(S) D. FORMER MOTORBOAT NUMBERS E. FORMER ALIEN REGISTRATIONS — F. DIMENSIONS: L= B= D= G. PERSON FROM WHOM SELLER OBTAINED VESSEL — SIGNATURE OF SELLER — |
WARRANTIES/APPURTENANCES/LIMITATIONS/EXCEPTIONS The warranties, appurtenances, limitations and exceptions as set forth in the Asset Purchase Agreement dated February 1, 2008 by and among Buyer, TEPPCO Partners, L.P., Cenac Towing Co., Inc., Cenac Offshore, L.L.C. and Xx. Xxxxx X. Xxxxx, Xx. — |
INSTRUCTIONS 1. INDICATE CURRENT DOCUMENTED NAME. (IF VESSEL HAS NEVER BEEN DOCUMENTED SELLER MUST COMPLETE AND SIGN DATA SECTION ABOVE.) 2. INDICATE OFFICIAL NUMBER AWARDED TO VESSEL OR HULL IDENTIFICATION NUMBER ASSIGNED BY MANUFACTURER. (IF THE VESSEL HAS NO HULL IDENTIFICATION NUMBER AND HAS NEVER BEEN DOCUMENTED, SELLER MUST COMPLETE AND SIGN THE VESSEL DATA SECTION ABOVE.) 3. INSERT NAMES AND ADDRESSES OF ALL PERSONS SELLING VESSEL, ALONG WITH TOTAL INTEREST OWNED BY THOSE PERSONS. IF MORE ROOM IS NEEDED, AN ATTACHMENT MAY BE MADE SHOWING THE ADDRESSES OF THE SELLERS. 3A. SELF-EXPLANATORY. 4. INSERT NAMES AND ADDRESSES OF ALL BUYERS, ALONG WITH THE INTEREST TRANSFERRED TO EACH. IF THERE IS MORE THAN ONE BUYER AND NO DIVISION OF INTEREST IS SHOWN, THIS XXXX OF SALE WILL RESULT IN EACH BUYER HOLDING AN EQUAL INTEREST. (IF MORE ROOM IS NEEDED, AN ATTACHMENT MAY BE MADE SHOWING THE ADDRESSES OF THE BUYERS.) 4A. SELF-EXPLANATORY. 4B. CHECK ONE OF THE BLOCKS TO CREATE A FORM OF OWNERSHIP OTHER THAN A TENANCY IN COMMON. IF “OTHER” IS CHECKED, THE FORM OF OWNERSHIP MUST BE DESCRIBED. 5. OPTIONAL. IF THE AMOUNT PAID FOR THE VESSEL IS INSERTED, IT WILL BE NOTED ON THE VESSEL’S GENERAL INDEX. 6. SELF-EXPLANATORY. USE “REMARKS” SECTION ABOVE IF VESSEL IS NOT SOLD FREE AND CLEAR, OR TO LIST VESSEL APPURTENANCES WHICH ARE NOT SOLD WITH THE VESSEL. 7. SELF-EXPLANATORY. 8. SHOW THE DATE ON WHICH THE INSTRUMENT IS SIGNED. 9. IN ADDITION TO THE PRINTED OR TYPED NAME OF THE SIGNER, SHOW WHETHER THAT PERSON WAS ACTING AS AN OWNER, AS AN AGENT FOR AN OWNER, AS TRUSTEE, AS THE PERSONAL REPRESENTATIVE OR EXECUTOR OF AN ESTATE, OR OTHER CAPACITY WHICH ENTITLED THAT PERSON TO SIGN THE XXXX OF SALE. 10. ANY ACKNOWLEDGEMENT IN SUBSTANTIAL COMPLIANCE WITH THE LAW OF THE STATE WHERE TAKEN MAY BE ATTACHED TO THIS INSTRUMENT IN LIEU OF THE PREPRINTED ACKNOWLEDGEMENT. — |
PRIVACY ACT STATEMENT IN ACCORDANCE WITH 5 USC 552(A), THE FOLLOWING INFORMATION IS PROVIDED TO YOU WHEN SUPPLYING PERSONAL INFORMATION TO THE U.S. COAST GUARD. 1. AUTHORITY, SOLICITATION OF THIS INFORMATION IS AUTHORIZED BY 46 USC, CHAPTER 313 AND 46 CFR, PART 67. — 2. THE PRINCIPAL PURPOSES FOR WHICH THIS INSTRUMENT IS TO BE USED ARE: — (A) TO PROVIDE A RECORD, AVAILABLE FOR PUBLIC INSPECTION AND COPYING, OF THE SALE OR OTHER CHANGE IN OWNERSHIP OF A VESSEL WHICH IS DOCUMENTED, WILL BE DOCUMENTED, OR HAS BEEN DOCUMENTED PURSUANT TO 46 USC, CHAPTER 121. (B) PLACEMENT OF THIS INSTRUMENT IN A BOOK FOR EXAMINATION BY GOVERNMENTAL AUTHORITIES AND MEMBERS OF THE GENERAL PUBLIC. 3. THE ROUTINE USE WHICH MAY BE MADE OF THIS INFORMATION INCLUDES DEVELOPMENT OF STATISTICAL DATA CONCERNING DOCUMENTED VESSELS. — 4. DISCLOSURE OF THE INFORMATION REQUESTED ON THIS FORM IS VOLUNTARY. HOWEVER, FAILURE TO PROVIDE THE INFORMATION COULD PRECLUDE FILING OF A XXXX OF SALE AND DOCUMENTATION OF THE VESSEL NAMED HEREIN PURSUANT TO 46 USC, CHAPTER 121. MOREOVER, BILLS OF SALE WHICH ARE NOT FILED ARE NOT DEEMED TO BE VALID AGAINST ANY PERSON EXCEPT THE GRANTOR OR A PERSON HAVING ACTUAL KNOWLEDGE OF THE SALE. (46 USC 31321(A)). — |
AN AGENCY MAY NOT CONDUCT OR SPONSOR, AND A PERSON IS NOT REQUIRED TO RESPOND TO A COLLECTION OF INFORMATION UNLESS IT DISPLAYS A VALID OMB CONTROL NUMBER. THE COAST GUARD ESTIMATES THAT THE AVERAGE BURDEN FOR THIS FORM IS 20 MINUTES. YOU MAY SUBMIT ANY COMMENTS CONCERNING THE ACCURACY OF THIS BURDEN ESTIMATE OR MAKE SUGGESTIONS FOR REDUCING THE BURDEN TO: U.S. COAST GUARD, NATIONAL VESSEL DOCUMENTATION CENTER, 792 X X XXXXXXX DRIVE, FALLING WATERS, WEST VIRGINIA 25419, OR OFFICE OF MANAGEMENT AND BUDGET, PAPERWORK REDUCTION PROJECT (1625-0027), XXXXXXXXXX, XX 00000. — |
Execution Version
EXHIBIT C
Form of Transitional Operating Agreement
TRANSITIONAL OPERATING AGREEMENT
THIS TRANSITIONAL OPERATING AGREEMENT (this “Agreement”) is made and entered into as of
February 1, 2008, by and between Cenac Towing Co., Inc., a Louisiana corporation (“Cenac Towing”),
Cenac Offshore, L.L.C., a Louisiana limited liability company (“Cenac Offshore” and, together with
Cenac Towing, the “Cenac Companies”), Xx. Xxxxx X. Xxxxx, Xx., a resident of Houma, Louisiana and
the owner of all the stock and equity interests in the Cenac Companies (the “Stockholder” and,
together with the Cenac Companies, the “Operators”), and TEPPCO Marine Services, LLC, a Delaware
limited liability company (the “Owner”).
WHEREAS, the Owner, TEPPCO Partners, L.P., a Delaware limited partnership (the “Partnership”),
and the Operators have entered into that certain Asset Purchase Agreement dated as of the date
hereof (the “Purchase Agreement”), pursuant to which the Operators have sold to the Owner certain
marine assets and rights relating to the Operations, as specified and defined in the Purchase
Agreement;
WHEREAS, the Owner desires that the Operators provide it with certain services relating to the
Purchased Operations, as defined herein; and
WHEREAS, the Owner and the Operators desire to enter into this Agreement for the purpose of
evidencing the terms and conditions upon which the Owner agrees to purchase and pay for, and the
Operators agree to provide, such services;
NOW, THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements stated herein, and upon the terms and subject to the conditions
hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
1.1 Definitions. Any capitalized terms used herein and not defined herein shall have
the meaning defined in the Purchase Agreement. For purposes of this Agreement, the term:
“AAA” has the meaning set forth in Section 4.2.
“Accounting Procedures” shall mean the accounting procedures described in Exhibit
B.
“Agreement” has the meaning set forth in the Preamble.
“Asphalt Business Limitation” means that (a) the marine transportation of hydrocarbons
and hydrocarbon-based products by Horizon Maritime is limited to the inland marine transportation
or offshore marine transportation of asphalt, No. 6 oil or vacuum gas oil and (b) Horizon Maritime
does not engage in the inland marine transportation or offshore marine transportation of waste
water, sediment or drilling or disposal fluids resulting from the exploration or production of
hydrocarbons.
“Cenac Companies” has the meaning set forth in the Preamble.
“Cenac Company Plans” means each pension, profit sharing, retirement, life, health,
unemployment, accident, disability, stock option, stock bonus, stock ownership, severance,
employment, change-in-control, deferred compensation, fringe benefit, bonus or incentive
compensation plan, agreement, program or policy (whether written or oral, formal or informal) that
is currently or has previously been sponsored, maintained or contributed to by either of the Cenac
Companies or any ERISA Affiliate for the benefit of any of their present or former directors,
officers, employees, agents, consultants or other similar representatives, including any “employee
benefit plan” as defined in Section 3(3) of ERISA.
“Cenac Employer Policies” shall mean any workers’ compensation and employer’s
liability insurance held by either of the Cenac Companies immediately prior to the Closing,
including under policy nos. 25201 and CUL 15082.067.
“Cenac Marine Policies” shall mean (a) the following insurance policies held by either
of the Cenac Companies: (i) hull and machinery, marine liabilities, protection and indemnity and
marine general liability, along with five layers of associated “bumbershoot” coverage (policy nos.
CUL-15082.067 and 07L 1323-01 and associated fifth layer bumbershoot coverage carried by New York
Marine and General Insurance Company and Houston Casualty Company), (ii) pollution insurance
(policy no. 0236413), (iii) open cargo insurance (policy no. CUL-15082.067) and (iv) excess
protection and indemnity, collision, towers and pollution insurance (policy nos. UM0001454EL07A,
3H099006006, MMO-18101ML507, GCM21005, MAR 2852863-10, OMH2171618-10, 00945, CUL NY 10513-67) and
(b) any other insurance policies relating to the Purchase Operations held by either of the Cenac
Companies immediately prior to the Closing.
“Cenac Offshore” has the meaning set forth in the Preamble.
“Cenac Towing” has the meaning set forth in the Preamble.
“Direct Costs” has the meaning set forth in Exhibit B.
“Dispute” has the meaning set forth in Section 10.1(a).
“Dispute Resolution Commencement Date” has the meaning set forth in Section 10.1(a).
“Employee” means each employee of either of the Cenac Companies; provided, however,
that (i) in no event shall any Employee be considered to be an employee of the Owner and (ii)
nothing in this Agreement shall be construed as an offer of or contract for employment with any
such Employee.
“Existing Cenac Policies” means the Cenac Employer Policies and the Cenac Marine
Policies.
“Horizon Maritime” means Horizon Maritime, L.L.C., a Louisiana limited liability
company.
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“Indemnified Amounts” has the meaning set forth in Section 7.1.
“Indemnified Party” means a an Owner Indemnified Party or an Operator Indemnified
Party.
“Indemnifying Party” means the Person obligated to indemnify under Article VII.
“Insurance Cancellation Date” means the date on which an insurance policy provided for
in Section 8.2(a)(iv) is to be canceled pursuant to 30 days (or more) advance notice from the
applicable insurer in accordance with Section 8.2(c).
“Interim Period” means the period beginning the date hereof and ending on June 30,
2008 or the date on which the Owner places the insurance provided for in Section 8.2(a), if
earlier.
“Notice” or “Notices” means all notices, communications or approvals that are
required or may be given under this Agreement in accordance with Section 10.4.
“Operator Indemnified Party” means the Operators, the Affiliates of either of the
Cenac Companies and each of their respective officers, directors (or persons performing equivalent
functions), employees, agents and counsel.
“Operators” has the meaning set forth in the Preamble.
“Overhead Costs” has the meaning set forth in Exhibit B.
“Owner” has the meaning set forth in the Preamble.
“Owner Indemnified Party” means the Owner and its Affiliates and each of their
respective officers, directors (or persons performing equivalent functions), employees, agents and
counsel.
“Partnership” has the meaning set forth in the Recitals.
“Price Protection Payment” means the payment to be made by the Partnership pursuant to
the third sentence of Section 1.6(c) of the Purchase Agreement under the circumstances provided in
such section.
“Purchase Agreement” has the meaning set forth in the Recitals.
“Purchased Operations” means the Purchased Assets, the Assumed Liabilities, any other
marine vessels and related property, assets or rights acquired after the date hereof by the Owner
from the Operators or their Affiliates and any property, assets or rights acquired by the Operators
hereunder with Owner funds (or for which they were reimbursed by the Owner).
“reasonable efforts” means a party’s efforts in accordance with reasonable commercial
practice and without incurrence of unreasonable expense.
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“Restricted Business” means the business of the Owner, including the inland marine
transportation and offshore marine transportation of (A) hydrocarbons and hydrocarbon-based
products, including kerosene, gasoline, feedstocks, lube oils, lube oil base stocks, refined
petroleum products and heavy olefins and (B) waste water, sediment and drilling or disposal fluids
resulting from the exploration or production of hydrocarbons.
Restricted Territory means: (a) the commercially navigable inland waterways of the
continental United States located east of the 105° meridian, including the Mississippi River System
and connecting waterways, (b) the Gulf of Mexico, including the Gulf Intracoastal Waterway and (c)
the jurisdictions set forth on Exhibit C.
“Service Fee” has the meaning set forth in Exhibit B.
“Service Providers” means the Employees, consultants and professionals, service or
other organizations whom a Cenac Company employs or with whom a Cenac Company contracts in order to
provide Services under this Agreement.
“Services” has the meaning set forth in Section 2.1(a).
“Stockholder” has the meaning set forth in the Preamble.
“Third Party” means any Person that is not a party to this Agreement.
“WARN Act” has the meaning set forth in Section 2.2(e).
1.2 Interpretation.
(a) Except as this Agreement otherwise specifies, all references herein to any Law defined or
referred to herein are references to that Law or any successor Law, as the same may have been
amended or supplemented from time to time, and any rules or regulations promulgated thereunder.
(b) This Agreement uses the words “herein,” “hereof” and “hereunder” and words of similar
import to refer to this Agreement as a whole and not to any provision of this Agreement, and the
words “Article,” “Section” and “Exhibit” refer to Articles and Sections of and the Exhibits to this
Agreement unless it otherwise specifies.
(c) Whenever the context so requires, the singular number includes the plural and vice versa,
and a reference to one gender includes the other gender and the neuter.
(d) As used in this Agreement, the word “including” (and, with correlative meaning, the word
“include”) means including, without limiting the generality of any description preceding that word,
and the words “shall” and “will” are used interchangeably and have the same meaning; and “or” is
used in the inclusive sense of “and/or” unless the context requires otherwise.
4
(e) As used in this Agreement, the term “business day” means any day other than a day on which
commercial banks are authorized or required to close in Houston, Texas.
(f) As used in this Agreement, all references to “dollars” or “$” mean United States dollars.
ARTICLE II
RESPONSIBILITIES OF THE OPERATORS
RESPONSIBILITIES OF THE OPERATORS
2.1 Services to be Provided by the Operators.
(a) During the term of this Agreement and subject to and in accordance with the terms hereof
and the standards set forth herein, the Operators shall provide, at the Owner’s expense as provided
herein, or cause to be provided, all services, utilities, materials, facilities and access
necessary to operate the Purchased Operations, including the services described in more detail in
Exhibit A (together with any other obligations of the Operators hereunder, the “Services”).
(b) The Operators shall have day-to-day control over the operation and maintenance of the
Purchased Operations, subject to the limitations and requirements of this Agreement. As such, the
Operators shall, for the Owner’s account, in the Owner’s name and at the Owner’s expense, in each
case subject to the terms of and in accordance with this Agreement, perform all Services hereunder
(i) in accordance with applicable Laws, (ii) with at least the degree of care, skill and prudence
that they exercised in operating the Operations during the 12 months immediately preceding the date
of this Agreement, (iii) in accordance with the usual and customary practices in the industry in
which the Operations operate, including the American Waterways Operators Responsible Carrier
Program, (iv) keeping the Vessels, vehicles and equipment and other assets that are part of the
Purchased Operations or necessary or useful to the provision of Services seaworthy and in good
working condition and repair and (v) to the maximum extent reasonably possible, using those Service
Providers who are most familiar with such Purchased Operations.
(c) Notwithstanding any other provision of this Agreement to the contrary, the Operators shall
not, without the prior written consent of the Owner:
(i) enter into, amend, terminate, waive any term of, or otherwise taken any
action with respect to any customer contracts or agreements relating to the
Purchased Operations (other than performing under the terms of such contracts or
agreements), except in the ordinary course of business consistent with recent past
practice and where the aggregate consideration or liability (including contingent
liabilities) involved does not exceed $500,000;
(ii) enter into, amend or waive any term of any contract or agreement to which
an Operator is a party or to which any of the Purchased Operations may be subject
and to which any other Operator or any of its Affiliates or any family member of the
Stockholder is also a party;
5
(iii) enter into any instruments or agreements relating to indebtedness or
leases relating to the Purchased Operations;
(iv) enter into any collective bargaining agreement covering any Employee who
is a Service Provider;
(v) make any capital expenditures or financial commitments related to the
Purchased Operations in excess of $500,000 during any 12 month period;
(vi) incur any operating, maintenance or other cost or expense related to the
Purchased Operations (excluding those described in Sections 4(a), (b) and (d) of
Exhibit B) in excess of $500,000 individually;
(vii) sell, lease, assign, distribute, transfer, mortgage, pledge or subject to
any Lien any owned or leased assets constituting Purchased Operations, except sales
of inventory and obsolete or surplus equipment in the ordinary and usual course of
business, except where the value of such asset does not exceed $250,000;
(viii) pay damages occurring as a result of, or settle claims made in
connection with, the Purchased Operations, except as and to the extent permitted by
Section 4 of Exhibit A; or
(ix) enter into any contract or commitment to do or cause to be done any of the
foregoing.
(d) If the Operators fail to provide any of the Services in accordance with the standards set
forth in Section 2.1(b) in the Owner’s reasonable judgment, the Owner may elect to arrange for
alternative providers of such Services and will provide the Operators with reasonable Notice of
such election. Upon providing such Notice, the Owner may deduct any costs and expenses billed by
the Cenac Companies in accordance with Section 3.2 for any Services that the Operators failed to
provide in accordance with the standards set forth in Section 2.1(b) from any payment owed to the
Operators under this Agreement.
(e) Notwithstanding any other provision of this Agreement, in the event that an Operator
becomes aware of an emergency, including a release of materials requiring reporting to a
Governmental Body or requiring an immediate response in order to comply with applicable Laws or to
protect human health or the environment, affecting the Purchased Operations or any of the Owner’s
assets, properties or business associated therewith, the Operators shall first, in compliance with
the Comprehensive Environmental Response, Compensation and Liability Act and other applicable Laws,
provide any legally required notice to Governmental Bodies, including notice to the National
Response Center of any reportable release from a vessel as soon as any person in charge of such
vessel has knowledge of such release. The Operators shall perform all release response obligations
required by Law, including compliance with the U.S. Coast Guard tank vessel response plan
regulations for oil, 33 C.F.R. §§ 155.1050 and 155.1052, regarding equipment and response resource
requirements (containment booms, oil recovery devices and storage capacity for recovery), within
the response timeframes
6
required by Law and to protect human health or the environment. As soon as reasonably
possible, but in no event more than six (6) hours after the start of the emergency, the Operators
shall notify the Owner of the emergency and all information related to the emergency, including any
emergency response actions. Thereafter, the Operators shall provide periodic updates of information
related to the emergency and all emergency response actions, on at least a daily basis. As soon as
reasonably possible after receipt of the Operator’s Notice related to the emergency and from time
to time thereafter, the Owner shall instruct the Operators as to any additional actions that the
Owner desires the Operators to take in order to address the emergency. Within five (5) days of the
start of the emergency, the Operators shall provide the Owner with a cost estimate of emergency
response actions, and shall thereafter update monthly cost estimates to reflect any actual or
expected emergency expenditures. Within five (5) days after receipt of such cost estimate, the
Owner shall acknowledge receipt of such cost estimate from the Operators and, in such
acknowledgement, shall approve or disapprove such cost estimate update. The Owner’s
acknowledgement shall be effective when transmitted to the Operators in writing in the manner
specified in Section 10.4. Until the Owner’s acknowledgement becomes effective, the Operators may
incur any expenditure or take any other actions reasonably necessary under the circumstances to
comply with Law or safeguard lives or property in connection with the response to emergencies
affecting the Purchased Operations or the associated assets, properties or business of the Owner,
the cost of which will be borne by the Owner.
(f) The Operators shall meet with the Owner from time to time, at the Owner’s reasonable
request, in order to review the operation and maintenance of the Purchased Operations.
2.2 Personnel.
(a) The Stockholder agrees to make himself available to provide personal services to the Owner
as reasonably requested from time to time. In addition, each of the Cenac Companies shall employ,
retain and have supervision over such Service Providers as such Cenac Company deems reasonably
necessary and appropriate for its performance of Services in accordance with the standards set
forth in Section 2.1(b). All such Service Providers shall have received such training as is
required by applicable Laws. The Cenac Companies shall pay all expenses incurred in connection
with the retention of any Service Providers to perform the Services, including compensation,
consulting or other service fees, salaries, wages and overhead and administrative expenses charged
to or incurred by the Cenac Companies and, if applicable, social security taxes, workers’
compensation insurance, retirement and insurance benefits, incentives, bonuses and other similar
expenses. The Cenac Companies shall comply with all Laws relating to the employment or retention
of Service Providers, including Laws relating to withholding of Taxes, employment discrimination,
fair labor standards and the Cenac Company Plans. Each of the Cenac Companies represents and
warrants that (i) no Employee is covered by the terms of a collective bargaining agreement with any
union organization and (ii) each such Cenac Company has all necessary contractual rights to secure
the services of the individuals and entities reasonably necessary to perform the Services.
(b) The Cenac Companies shall provide as soon as reasonably practicable to the Owner a
complete list, as of the date hereof, of all Service Providers, listing the individual’s status,
title or position held, base salary, any commissions or other compensation
7
paid or payable, all employee benefits received by such Service Provider and any other terms
of any oral or written agreement (including a copy of any such written agreement) with either of
the Cenac Companies or any of their respective Affiliates. Such list shall be updated from time to
time as requested by the Owner on reasonable Notice. The Owner may direct that either of the Cenac
Companies terminate its use of any Service Provider to provide any of the Services by providing the
Operators with written Notice.
(c) This Agreement does not and shall not be construed to establish an employment relationship
between the Owner (or its Affiliates) and any Service Provider. Unless and until otherwise
determined by the Owner, the Employees shall not transfer to or otherwise be employed by the Owner
(or its Affiliates), but shall be retained in the employ of the applicable Cenac Company. No
Service Provider is a party to this Agreement, nor shall any Operator or such Service Provider be
entitled to assert that such Service Provider has become an employee of the Owner or its Affiliates
through or in connection with the rendering of Services in accordance with this Agreement.
(d) Notwithstanding the foregoing, the Owner, in its sole discretion, may hire any Person
(including any Service Provider) to serve as an employee of the Owner or its Affiliates or, if
applicable, an independent contractor of the Owner or its Affiliates. The Operators shall
cooperate with the Owner and its Affiliates in providing access to Service Providers, on reasonable
Notice, for purposes of interviewing and other pre-application screening as the Owner may
reasonably request. Each of the Operators shall not, directly or indirectly, either for itself or
any other Person, discourage any Service Provider from agreeing to a direct employment or
engagement with the Owner or its Affiliates or otherwise interfere with any efforts by the Owner or
its Affiliates to hire or engage any Service Provider directly.
(e) Any notice required under the Federal Workers Adjustment and Retraining Notification Act
(“WARN Act”) that is, has been or shall be required of the Cenac Companies to their Employees or
former employees by reason of its obligations under the WARN Act resulting from the transactions
contemplated by the Purchase Agreement (including this Agreement) or any subsequent mass layoff or
plant closing during the term of this Agreement has been or shall be given by the Cenac Companies.
The Cenac Companies shall be solely responsible for any severance or other costs associated with
the termination of the employment or engagement of any Service Provider.
(f) The Owner and the Operators agree that the Owner is a statutory employer of the Employees
solely for purposes of La. Rev. Stat. 23:1061 and not for any other purpose whatsoever.
Irrespective of the Owner’s status as a statutory employer or special employer (as defined in La.
Rev. Stat. 23:1031(C)) of the Employees, the Cenac Companies shall remain primarily responsible for
the payment of Louisiana Workers’ Compensation benefits to the Employees and shall not be entitled
to seek contribution for any such payments from the Owner or any of its Affiliates. Further, the
Cenac Companies agree to protect, defend, indemnify and hold harmless the Owner Indemnified Parties
from any and all claims for compensation benefits by the Employees against any of the Owner
Indemnified Parties and hereby waives any right of the Cenac Companies’ insurers to seek
reimbursement of any compensation benefits owed or paid.
8
2.3 Employee benefit plans.
(a) Schedule 2.3 contains a complete list of each Cenac Company Plan.
(b) The Cenac Companies have made available to the Owner a true and correct copy (or, with
respect to any unwritten arrangement, an accurate written description) of each Cenac Company Plan
and, to the extent applicable, copies of any related trusts, insurance policies, amendments,
third-party administration contracts, the most recent summary plan description, summary of material
modifications, favorable determination letters, actuarial reports, FAS-106 reports and the three
most recently filed Form 5500 annual reports filed with the Internal Revenue Service and the United
States Department of Labor.
(c) Each Cenac Company Plan intended to be qualified under Section 401(a) of the Code is and
has been so qualified. Each Cenac Company Plan is and has been operated and administered in
material compliance with its terms and the provisions of all applicable laws, rules and
regulations, including ERISA and the Code. There are no pending actions, suits or claims against
any Cenac Company Plan other than routine claims for benefits, qualified domestic relations orders
and medical child support orders. The Cenac Companies and each ERISA Affiliate have made any and
all required contributions to the Cenac Company Plans and have satisfied any and all taxes or other
obligations related to employees of the Cenac Companies and the Cenac Company Plans as of the date
of this Agreement and the transactions contemplated by this Agreement will not, either alone or in
combination with any other event, result in the Owner having any liability under or related to any
Cenac Company Plan. There have been no “prohibited transactions” (as described in Section 406 of
ERISA or Section 4975 of the Code) with respect to any of the relevant Cenac Company Plans.
(d) Each Cenac Company Plan or compensation arrangement that is a nonqualified deferred
compensation plan subject to Section 409A of the Code has been operated and administered in
compliance with Section 409A of the Code from the period beginning January 1, 2005 to the date
hereof.
(e) Neither the execution nor the delivery of the Purchase Agreement or this Agreement nor the
consummation of the transactions contemplated thereby or hereby will (either alone or in
conjunction with any other event): (i) result in any payment (including severance, unemployment
compensation, parachute payments or otherwise) becoming due to any employee of either of the Cenac
Companies or any ERISA Affiliate; (ii) significantly increase any benefits otherwise payable under
any Cenac Company Plan; or (iii) result in any acceleration of the time of payment, funding or
vesting of any material benefit to the employees of either of the Cenac Companies or any ERISA
Affiliate.
(f) The Cenac Companies have provided for and will provide for the full and complete
satisfaction of any and all liabilities of any kind whatsoever that the Cenac Companies may have or
may hereafter incur with respect to any Service Provider, including all liabilities under any Cenac
Company Plan.
9
2.4 Property. All property (including intangible and intellectual property),
equipment, material and technology acquired by an Operator hereunder with Owner funds shall be the
property of the Owner; provided, however, that, during the term of this Agreement, the Operators
shall have access to and right of use of such Owner-owned property in order to provide Services
hereunder; and provided, further, that all evidences of title, books, records, manuals and other
similar information respecting such property (including the Purchased Operations) shall be
delivered to the Owner upon termination of this Agreement. Any property provided by the Operators
or acquired with the Operators’ funds shall remain the property of the Operators.
2.5 Citizenship. Each of the Cenac Companies is a citizen of the United States within
the meaning of Section 50501 of Title 46 of the United States Code for the purpose of operating
vessels in the coastwise trade of the United States and shall remain such a citizen during the term
of this Agreement.
2.6 Effective Date. The obligation of the Operators to provide the Services, and the
obligation of the Owner to pay the Operators for the costs of providing the Services, shall
commence on the Closing Date.
ARTICLE III
COMPENSATION
COMPENSATION
3.1 Payment of Fees and Costs. The Cenac Companies shall be paid the Service Fee by
the Owner and shall be reimbursed or paid by the Owner for all Direct Costs and Overhead Costs
incurred by the Operators in connection with the performance of the Services at the rates and in
the manner set forth in the Accounting Procedures. The Cenac Companies shall keep a full and
complete account of all costs and expenses incurred in connection with the performance of the
Services in the manner set forth in the Accounting Procedures. The Owner shall have no
responsibility for, and shall not reimburse or pay: (i) any Direct Costs or Overhead Costs related
to services performed by a Service Provider for any period prior to the Closing Date, including
bonuses paid to Service Providers during the term of this Agreement that relate all or in part to
services provided prior to the Closing Date; or (ii) any costs, expenses, liabilities, obligations,
expenditures or other amounts incurred or made in violation of this Agreement or for which any
Operator is liable or responsible pursuant to this Agreement or the Purchase Agreement.
3.2 Billing and Payment. The Cenac Companies shall submit monthly invoices to the
Owner including itemized statements setting forth, in reasonable detail, the Service Fee and the
Direct Costs and related Overhead Costs incurred or paid by the Operators in providing the Services
for the preceding calendar month. The Cenac Companies shall provide to the Owner, at the Owner’s
reasonable request, appropriate documentation supporting the incurrence of Direct Costs and related
Overhead Costs, including receipts, time sheets and similar documentation. The Owner agrees to pay
the Cenac Companies such Service Fee, Direct Costs and Overhead Costs within ten (10) days of its
receipt of each such monthly invoice. The Cenac Companies and the Owner may arrange on mutually
acceptable terms for the payment by the Owner of Direct Costs on an “as incurred” basis, and the
invoice for any month in which such payments have been made need not include such payments (or, if
included, shall reflect
10
such payments as credits to the Direct Costs otherwise due). In no event shall the Owner
directly pay or be deemed to have directly paid any Direct Costs provided for in Section 4(a), 4(b)
or 4(d) of Exhibit B, it being agreed and acknowledged that the Owner’s sole responsibility
hereunder with respect to any such costs is to reimburse the Cenac Companies for such costs
incurred by them, to the extent provided herein.
3.3 Billing Disputes. Should there be a dispute as to the propriety or accuracy of
any invoiced amounts, the Owner shall pay all undisputed amounts shown on each invoice, but shall
be entitled to withhold payment of any amount in dispute and shall promptly notify the Operators of
such disputed amount. The Operators shall provide the Owner with records relating to the disputed
amounts so as to enable the parties to resolve the dispute.
ARTICLE IV
COVENANT AGAINST COMPETITION
COVENANT AGAINST COMPETITION
4.1 As an essential consideration for the obligations of the Owner under this Agreement, each
of the Operators hereby agrees and covenants that, for a period commencing on the date of this
Agreement and ending on the second anniversary of the respective dates of the last work performed
hereunder:
(a) within the Restricted Territory, each of the Operators shall not, directly or indirectly,
whether as principal, agent, employee, shareholder or other equity holder (other than a holding of
shares listed on a United States stock exchange or automated quotation system that does not exceed
five percent of the outstanding shares so listed), owner, investor, partner or otherwise,
individually or in association with any other Person: (A) carry on or engage in any manner in the
Restricted Business, (B) solicit customers of the Restricted Business, (C) become the employee of,
or otherwise render services on behalf of, any Person that carries on or engages in a business
similar to the Restricted Business or (D) induce or attempt to induce any customer, supplier,
licensee or business relation of the Owner or any of its Affiliates to cease doing business with
the Owner or any of its Affiliates, or in any way interfere with the relationship between any
customer, supplier, licensee or business relation of the Owner or any of its Affiliates with the
Owner or any of its Affiliates, provided that this Section 4.1(a) shall not prohibit Stockholder’s
equity ownership in Horizon Maritime for so long as the Asphalt Business Limitation is satisfied;
and
(b) each of the Operators shall not, directly or indirectly, either for himself or any other
Person, (A) solicit or induce or attempt to solicit or induce any employee of or independent
contractor providing services to the Owner or any of its Affiliates to leave the employ of or to
cease providing services to the Owner or any of its Affiliates, (B) in any way interfere with the
relationship between the Owner or any of its Affiliates and any employee of or independent
contractor providing services to the Owner or any of its Affiliates or (C) employ, or otherwise
engage as an employee, independent contractor or otherwise, any employee of the Owner or any of its
Affiliates or any independent contractor of Owner or any of its Affiliates who had been an employee
of any Operator or its Affiliates.
4.2 Any dispute, controversy or claim arising out of or in connection with this Article IV,
including the alleged breach of Section 4.1 or a challenge to its validity or
11
enforceability, shall be settled exclusively by final and binding arbitration in Tarrant
County, Texas, administered by the American Arbitration Association (“AAA”) in accordance with the
Commercial Arbitration Rules of the AAA; provided, however, that nothing herein is or shall be
deemed to preclude Buyer’s resort to the interim relief prescribed in Section 4.3, below. The
arbitrator(s) shall be selected by mutual agreement of the parties, if possible. If the parties
fail to reach agreement upon appointment of arbitrator(s) within thirty days following receipt by
one party of the other party’s Notice of desire to arbitrate, the arbitrator(s) shall be selected
from a panel or panels of persons submitted by the AAA. The selection process shall be that which
is set forth in the AAA Commercial Arbitration Rules then prevailing, except that, if the parties
fail to select arbitrator(s) from one or more panels, AAA shall not have the power to make
appointment(s) but shall continue to submit additional panels until arbitrator(s) have been
selected. The jurisdiction of the arbitrator(s) and the arbitrability of any claim, defense, issue
or objection raised by any party shall be decided by the arbitrator(s) in the first instance.
Judgment on the award entered by the arbitrator(s) may be entered by any court having jurisdiction
thereof. All aspects of the arbitration and matters subject thereto shall remain confidential.
The parties will each bear their own attorneys’ fees and costs in connection with any dispute or
controversy, except as provided in Section 4.3, below.
4.3 In the event of a breach or threatened breach by any of the Operators of any of the
provisions of this Article IV, the Owner shall have the right to seek interim relief from AAA
pursuant to the Optional Rules for Emergency Measures of Protection contained in the Commercial
Arbitration Rules of the AAA (including the arbitrator selection procedures provided for in such
Optional Rules for Emergency Measures of Protection, which shall govern the selection of
arbitrator(s) for purposes of this Section 4.3) or from a court of competent jurisdiction. The
Operators acknowledge that the Owner will suffer irreparable damage or injury not fully compensable
by money damages, or the exact amount of which may be impossible to ascertain, and therefore will
not have an adequate legal remedy. Accordingly, the Owner will be entitled to obtain any interim
relief necessary or appropriate to prevent or curtail any such breach, threatened or actual,
without the necessity of posting security or showing any actual damages or irreparable injury.
Such interim relief may include, but is not limited to, (i) temporary or permanent injunctive
relief for the enforcement of this Article IV, (ii) a decree for the specific performance of this
Article IV or (iii) the Owner’s reasonable attorneys’ fees, costs and expenses related to such
interim relief; provided, however, that the Owner agrees to pay for any Operator’s reasonable
attorneys’ fees, costs and expenses related to interim relief sought by the Owner in the event that
the Operators prevail and no such interim relief is granted. Such interim relief is in addition to
any other rights the Owner may have, including the right to seek damages.
4.4 The Owner and each of the Operators hereby agree that this Article IV is a material and
substantial part of the transactions contemplated by this Agreement. Each of the Operators further
agrees and acknowledges that the covenants in Section 4.1 are reasonable with respect to their
duration, scope and geographical area.
4.5 The covenants in this Article IV are severable and separate, including within provisions,
subparts or portions thereof, and the unenforceability of any specific covenant, provision or
subpart thereof in this Article IV is not intended by any party hereto to, and shall not, affect
the provisions of any other covenant in this Article IV. If any arbitrator or panel of
12
arbitrators, or any court pursuant to Section 4.3 above, determines that the terms, scope,
time or territorial restrictions set forth in Section 4.1 are unreasonable as applied to an
Operator, the parties hereto acknowledge their mutual intention and agreement that the offending
provisions, subparts or portions thereof be severed and the remaining provisions and restrictions
be enforced to the fullest extent permitted by law as the arbitrator(s) or court (pursuant to
Section 4.3 above) deems reasonable, and thereby shall be reformed to that extent. All the
covenants, provisions and subparts thereof in this Article IV are intended by each party hereto to,
and shall, be construed as an agreement independent of any other provision in this Agreement, and
the existence of any claim or cause of action of any of the Operators against the Owner, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the
Owner of any covenant, provision or subpart in this Article IV. The covenants contained in this
Article IV shall not be affected by any breach of any other provision hereof by any party hereto
and shall not prevent any Operator from rendering the Services to the Owner in accordance with this
Agreement.
ARTICLE V
AUDITS
AUDITS
On not less than thirty (30) days’ advance written Notice to the Operators, the Owner or its
authorized representative(s) shall have the right during regular business hours to audit all books
and records of the Operators relating to the performance by the Operators of the obligations
hereunder. The Operators acknowledge and agree to cooperate with the Owner’s audit of such books
and records for any reason relating to any Operator’s performance under this Agreement, including
the Owner’s investigation of the accuracy of amounts billed, demanded or paid hereunder for
Services and the Operator’s compliance with all Environmental Laws, other applicable Laws, safety
policies and practices. All audits shall be completed in a reasonable time frame not to exceed
ninety (90) days per audit. The Owner shall have two (2) years after the termination of this
Agreement during which to conduct an audit of the Operators’ books and records relating to the
performance by the Operators of the obligations hereunder, and any claim arising out of or based in
whole or in part on the information produced or obtained by the performance of any such audit must
be made, if at all, within such two-year period. The audit rights set forth herein shall survive
termination of this Agreement. In addition, the Operators shall promptly provide information from
or access to its books and records that the Owner or any of its Affiliates request in connection
with the preparation, audit or performance of any procedures with respect to the financial
statements of the Owner or its Affiliates and shall cooperate with the Owner in the implementation
of internal controls, recordkeeping and other systems, practices or policies required by Law
(including the Xxxxxxxx-Xxxxx Act of 2002) and GAAP with respect to the Purchased Operations.
ARTICLE VI
RELATIONSHIP OF THE PARTIES
RELATIONSHIP OF THE PARTIES
6.1 General Principles Regarding Relationship of the Parties.
(a) The Owner shall have the right (but shall not have any obligation hereunder) to monitor,
consult with and make suggestions to the Operators in connection with the performance of their
obligations under this Agreement, provided that in no event shall the
13
Owner direct or control the Operators or the Service Providers in connection therewith. The
parties agree that the Operators shall be independent contractors with respect to their
relationship to the Owner under this Agreement. By virtue of entering into this Agreement and/or
performing the Services (including performance by use of Service Providers), the Operators shall
not be deemed to be, nor shall the Operators or the Service Providers represent or hold themselves
out as, agents or attorneys-in-fact of the Owner or any of its Affiliates except as expressly
provided for in this Agreement. This Agreement does not create a partnership or joint venture
between any of the parties hereto.
(b) Neither this Agreement nor the performance by any of the parties of their respective
obligations hereunder shall operate to convey, license or otherwise transfer from one party to
another any (i) trade secrets or, (ii) except as expressly provided otherwise, patent, know-how or
other intellectual property rights.
ARTICLE VII
INDEMNIFICATION
INDEMNIFICATION
7.1 Indemnity by the Cenac Companies. Each of the Cenac Companies, jointly and
severally, agrees to indemnify each Owner Indemnified Party against, and hold each Owner
Indemnified Party harmless from and against, any and all claims, actions, causes of action,
proceedings, arbitrations, losses, damages, liabilities, judgments, fines, amounts, penalties,
assessments and expenses (including reasonable attorneys’ fees and costs of investigation and
defense) (the “Indemnified Amounts”) asserted by a Third Party or sustained or incurred by such
Owner Indemnified Party with respect to a Third Party that arise from, are based on or relate or
otherwise are attributable to (i) the gross negligence or willful misconduct of any Operator (or
any Service Provider, agent of any Operator or other Person performing obligations of an Operator
hereunder) in the performance or nonperformance of the Services or (ii) any alleged violation or
violation by any Operator (or any Service Provider, agent of an Operator or other Person performing
obligations of an Operator hereunder) of (A) any Laws related to the employment of labor, including
Laws relating to withholding of Taxes, employee benefits, employment discrimination, harassment and
retaliation or wages, hours or other fair labor standards or (B) the terms of the Cenac Company
Plans; provided that the Cenac Companies shall not be obligated to indemnify the Owner Indemnified
Parties to the extent that such Indemnified Amounts relate to a breach by Owner of this Agreement.
7.2 Indemnity by the Owner. The Owner shall indemnify each Operator Indemnified Party
against, and hold each Operator Indemnified Party harmless from and against, any and all
Indemnified Amounts asserted by a Third Party or sustained or incurred by such Operator Indemnified
Party with respect to a Third Party that arise from, are based on or relate or otherwise are
attributable to the performance or nonperformance of the Services, in each case except to the
extent such Indemnified Amount relates to (i) a matter for which indemnification would be provided
under Section 7.1 or (ii) a breach by any Operator of this Agreement.
7.3 General Provisions.
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(a) All claims for indemnification hereunder shall be asserted and resolved subject to and in
accordance with the provisions of Section 7.5 of the Purchase Agreement.
(b) In no event shall the Owner or any Operator be liable under this Article VII or
otherwise in respect of this Agreement for exemplary, special, punitive, indirect, remote,
speculative or consequential damages except to the extent an Owner Indemnified Party (in the case
of liabilities of an Operator hereunder) or an Operator Indemnified Party (in the case of
liabilities of the Owner hereunder) suffer such damages to a Third Party. The indemnification
provisions in this Article VII shall be enforceable regardless of whether any Person (including the
Person from whom indemnification is sought) alleges or proves the sole, concurrent, contributory or
comparative negligence of the Person seeking indemnification or the sole or concurrent strict
liability imposed upon the Person seeking indemnification.
(c) Any indemnification payment hereunder shall be net of any third party insurance proceeds
received by the Indemnified Party and the amount of indemnification payable under this Agreement
shall not include the amount of any third party insurance proceeds actually recovered by the
Indemnified Party with respect to a liability. If the amount to be netted hereunder from any
payment by the Indemnifying Party is determined after the Indemnifying Party has already paid any
amount required to be paid pursuant to this Agreement, the Indemnified Party shall repay to the
Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would
not have had to pay pursuant to this Agreement had such determination been made at the time of such
payment.
(d) Nothing in this Agreement shall be construed to supersede or limit the indemnification
rights and obligations in the Purchase Agreement.
ARTICLE VIII
INSURANCE
INSURANCE
8.1 Interim Insurance. Each Cenac Company represents, warrants and agrees that (i) no
insurance policy relating to the Purchased Operations or any Service Provider has, within the past
six months, terminated or otherwise experienced any lapse in coverage, (ii) the Owner and its
Affiliates are, as of the date hereof, named insureds under the Cenac Marine Policies, (iii) the
Cenac Employer Policies include, as of the date hereof, “Alternate Employer” and “Borrowed Servant”
endorsements in favor of the Owner and its Affiliates and (iv) that the Cenac Companies have and
will waive and require the insurers under the Existing Cenac Policies to waive any right of
subrogation or recovery against the Owner and its Affiliates. The Cenac Companies agree to carry
or maintain or cause to be carried or maintained the Existing Cenac Policies (naming Owner and its
Affiliates as insureds or alternate employer(s) or borrowed servant(s) and waiving subrogation as
provided in the preceding sentence) until the expiration of the Interim Period. Material changes
or cancellations of any Existing Cenac Policies during the Interim Period will be effective only
after notice is received by the Cenac Companies from the applicable insurance company at least
thirty (30) days in advance of any such change or cancellation, and the Cenac Companies agree to
notify the Owner of any such change or
15
cancellation within three (3) business days of the Cenac Companies’ receipt of notice from the
applicable insurer. The insurance provided for in this Section 8.1 shall be primary insurance, and
any other insurance maintained or caused to be maintained by the Owner or its Affiliates shall be
excess and not contributory with such insurance. This Section 8.1 shall not be construed as a
limitation on Owner’s ability to carry or maintain or cause to be carried or maintained during the
Interim Period automobile liability or other insurance covering liabilities arising out of its
ownership of the Purchased Operations or the Services performed by the Operators for the Owner
under this Agreement.
8.2 The Owner’s Insurance Requirements.
(a) From the expiration of and after the Interim Period, throughout the remainder of the term
of this Agreement, the Owner will carry or maintain or cause to be carried or maintained, at a
minimum, the following insurance coverages:
(i) general liability insurance with limits of $1,000,000 combined single limit
per occurrence covering liabilities arising out of the Services performed by the
Operators for the Owner under this Agreement;
(ii) automobile liability insurance with limits of $1,000,000 combined single
limit per accident/occurrence for bodily/personal injury and property damage,
including coverage for all owned, hired and non-owned vehicles or automotive
equipment covering liabilities arising out of the Services performed by the
Operators for the Owner under this Agreement;
(iii) excess liability limits in the amount of $10,000,000 per occurrence in
excess of the primary liability limits above;
(iv) protection and indemnity insurance (Form SP 23 or equivalent) on the
Vessels and general liability insurance for the Purchased Operations with an overall
limit of $200,000,000 per occurrence, including coverage for marine crew, pollution
liability, removal of wreck, collision and tower’s liability, cargo legal liability,
third-party bodily injury and property damage liability, including contractual
liability coverage; and
(v) hull and machinery insurance (Form American Institute Hull Clauses or
American Institute Tug Form where applicable or equivalent) on the Vessels for
values and amounts as deemed prudent by the Owner.
The insurance provided for in this Section 8.2(a) shall be primary insurance and any other
insurance maintained or caused to be maintained by the Operators or their respective Affiliates
shall be excess and not contributory with such insurance. All such insurance policies shall be
placed with insurers maintaining a minimum rating of A– by the A.M. Best Company or equivalent.
The Owner may elect any level of retention, co-insurance or self-insurance deemed prudent and
reasonable by the Owner.
(b) With respect to each of the policies described in Section 8.2(a) above, the Owner shall
waive and require its insurers to waive any right of subrogation or
16
recovery against each Operator. With respect to each of the policies described (x) in
Sections 8.2(a)(i), (ii) and (iii) above, each Operator shall be named as an additional insured in
respect of the Services and the other rights and obligations provided for hereunder and (y) in
Sections 8.2(a)(iv) and (v) above, each Operator shall be named as an insured in respect of the
Services and the other rights and obligations provided for hereunder.
(c) Non-renewal, material change or cancellation of policies described in Section 8.2(a) above
will be effective only after written notice is received by the Owner from the applicable insurance
company at least thirty (30) days in advance of any such non-renewal, change or cancellation, and
the Owner shall notify Cenac Towing of any such non-renewal, change or cancellation within three
(3) business days of the Owner’s receipt of such notice from the applicable insurer.
(d) The Owner will deliver to the Operators certificates of insurance upon request.
8.3 The Cenac Companies’ Insurance Requirements.
(a) From the expiration of and after the Interim Period, throughout the remainder of the term
of this Agreement, the Cenac Companies will carry or maintain or cause to be carried or maintained,
at a minimum, workers’ compensation insurance with statutory limits in accordance with all
applicable state and federal Laws, and employer’s liability insurance of $1,000,000 per
accident/occurrence, including Maritime Employer’s Liability on non-marine crew personnel,
including U.S. Longshoremen’s and Harbor Worker’s Compensation Act Liability (including the Outer
Continental Shelf Lands Act) for statutory limits, and including “Alternate Employer” and “Borrowed
Servant” endorsements in favor of the Owner and its Affiliates, covering all employees of the Cenac
Companies and their respective Affiliates performing work in connection with the Services for the
Owner under this Agreement. The insurance provided for in this Section 8.3(a) shall be primary
insurance, and any other insurance maintained or caused to be maintained by the Owner or its
Affiliates shall be excess and not contributory with such insurance. All such insurance policies
shall be placed with insurers maintaining a minimum rating of A– by the A.M. Best Company or
equivalent.
(b) With respect to each of the policies described in Section 8.3(a) above, the Cenac
Companies shall waive and require their insurers to waive any right of subrogation or recovery
against the Owner and its Affiliates.
(c) Non-renewal, material change or cancellation of policies described in Section 8.3(a) above
will be effective only after written notice is received by the Cenac Companies from the applicable
insurance company thirty (30) days in advance of any such non-renewal, change or cancellation, and
the Cenac Companies shall notify the Owner of any such non-renewal, change or cancellation within
three (3) business days of the Cenac Companies’ receipt of such notice from the applicable insurer.
(d) The Cenac Companies will deliver to the Owner certificates of insurance upon request.
17
8.4 Contractors. The Cenac Companies shall use reasonable efforts to require
reasonable indemnification and insurance protection from contractors performing Services for the
Owner to protect the Owner and its Affiliates and the Cenac Companies. All policies of insurance
carried or maintained by any contractor or subcontractor performing Services shall name the Owner
and its Affiliates and the Cenac Companies as additional insureds and such policies shall be
required to be primary to and non-contributory with any other insurance carried or maintained by
the Owner or its Affiliates or the Cenac Companies.
8.5 Liability. The limits set forth in Sections 8.2(a) and 8.3(a) shall not be
construed to limit the Owner’s or the Cenac Companies’ liability, respectively. The Operators
acknowledge that the Excluded Liabilities include any liability or obligation arising out of or
relating to the Existing Cenac Policies prior to the Closing.
8.6 Costs and Reimbursement; Handling of Claims. All of the Owner’s costs with
respect to insurance required by Section 8.2, including deductible amounts and premiums, will be
borne by the Owner. The Cenac Companies’ costs with respect to insurance required by Sections 8.1
and 8.3, including deductible amounts and premiums, shall be reimbursed or paid by the Owner in
accordance with and to the extent provided in the Accounting
Procedures. The Operators and the Owner agree promptly to perform all necessary functions to assert claims pursuant to the respective
policies provided for in this Article VIII, including providing all necessary documentation to the
applicable insurers during the claims process and informing the other party of the status of any
claims involving such other party upon the reasonable request of such other party.
ARTICLE IX
TERM AND TERMINATION
TERM AND TERMINATION
9.1 Term. This Agreement shall be in effect from the Closing Date and shall
thereafter continue until termination as of the second anniversary of the Closing Date unless
sooner terminated in accordance with Section 9.2 or Section 9.3 below.
9.2 Termination or Reduction of Services by the Owner.
(a) The Owner shall have the right to terminate this Agreement in its entirety upon the
delivery of not less than ninety (90) days prior Notice to the Operators, which Notice may be given
for any reason.
(b) Notwithstanding the termination set forth in Section 9.2(a) above, the Owner shall have
the right to notify the Operators at any time, and from time to time, of its desire to discontinue
some (but less than all) of the Services (including Services respecting particular Purchased
Operations) and, in such event, the parties shall take those steps necessary to effect such
discontinuance at the earliest practicable date consistent with the standard set forth in Section
2.1(b) hereof, it being further agreed that the right of the Cenac Companies to any Direct Costs
relating to the provision of such Services shall terminate effective on the date that the Operators
cease to be required to perform such Services.
9.3 Termination by the Operators. The Operators shall have the right to terminate
this Agreement (i) should the Owner fail to pay any amounts owing to the Operators
18
hereunder (unless such amounts are the subject of a Notice of dispute in accordance with
Section 3.3, pending which no such failure shall be deemed to have occurred for purposes of this
Section 9.3) or otherwise materially fail to fulfill its obligations hereunder, in either case if
the Owner has not cured such failure within 90 days after Notice from the Operators thereof, (ii)
should the Partnership fail to make the Price Protection Payment to the extent required by Section
1.6 of the Purchase Agreement (unless such payment is the subject of a good faith dispute by the
Partnership, pending which no such failure shall be deemed to have occurred for purposes of this
Section 9.3), if such failure has not been cured within 30 days after Notice from the Operators
thereof or (iii) on or after the applicable Insurance Cancellation Date, if (A) the Owner has
failed to provide the insurance coverage required by Section 8.2(a)(iv), (B) such failure has not
been cured (either by reinstatement of comparable insurance or placement of a bond or other similar
form of assurance for loss) prior to the Insurance Cancellation Date and (C) such failure did not
result from the action or inaction of any Operator or Service Provider.
9.4 Effect of Termination. The termination of this Agreement shall not relieve any
party of its indemnity obligations under Article VII or its obligations to pay any amounts of money
due and accrued hereunder prior to such termination. Upon termination, the Operators shall
promptly deliver to the Owner possession and control of the Purchased Operations (including books
and records) and any assets of the Owner related thereto or to the Owner’s businesses that are in
the possession or under the control of the Operators in such manner and at such locations as the
Owner may reasonably specify. In connection with the termination of this Agreement or any Services
hereunder, the Operators shall use reasonable efforts to obtain any approvals or consents from or
assist in any filings with Governmental Bodies or other Persons that may be required by Law or
necessary or appropriate in the reasonable discretion of the Owner for the operation of the
Purchased Operation by the Owner.
ARTICLE X
MISCELLANEOUS
MISCELLANEOUS
10.1 Dispute Resolution.
(a) If a dispute, controversy or claim arises between the parties relating to the
interpretation or performance of this Agreement or the grounds for the termination hereof
(“Dispute”), appropriate senior executives of the Owner and the Operators who shall have the
authority to resolve the matter shall meet to attempt in good faith to negotiate a resolution of
the Dispute prior to pursuing other available remedies. The initial meeting between the
appropriate senior executives, which shall be held within 10 business days of Notice to the other
party of the Dispute in Houston, Texas or such other place as the parties may mutually agree, shall
be referred to herein as the “Dispute Resolution Commencement Date.” Discussions and
correspondence relating to attempted resolution of such Dispute shall be treated as confidential
information developed for the purpose of settlement and shall be exempt from discovery or
production and shall not be admissible. If the senior executives are unable to resolve the Dispute
within 30 days from the Dispute Resolution Commencement Date, and any of the parties wishes to
pursue such Dispute, then the Dispute shall be mediated by a mutually acceptable mediator within 30
days after written notice by one party to the other demanding non-binding mediation. No party may
unreasonably withhold consent to the selection of a mediator. The mediation shall be held in
Houston, Texas or at such other place as the parties may mutually agree. The Owner,
19
on one hand, and the Operators, on the other hand, shall share the costs of the mediation
equally, except that each party shall bear its own costs and expenses, including attorney’s fees,
witness fees, travel expenses, and preparation costs.
(b) A party may seek relief from a court of competent jurisdiction with respect to a Dispute
if the parties are unable to resolve such Dispute pursuant to the provisions of Section 10.1(a)
above, provided that any Dispute regarding any claim where interim relief from a court of competent
jurisdiction is sought to prevent serious and irreparable injury to one of the parties or to others
is not required to be negotiated or mediated prior to seeking relief from such a court, and
provided further that Disputes arising out of or in connection with Article IV are not subject to
this Section 10.1 and shall be resolved pursuant to the provisions of Article IV.
10.2 Entire Agreement. This Agreement, including all schedules and exhibits hereto,
constitutes the entire agreement of the parties with respect to the subject matter hereof. This
Agreement may not be modified, amended or terminated except by a written instrument specifically
referring to this Agreement signed by all the parties hereto.
10.3 Waivers and Consents. All waivers and consents given hereunder shall be in
writing. No waiver by any party hereto of any breach or anticipated breach of any provision hereof
by any other party shall be deemed a waiver of any other contemporaneous, preceding or succeeding
breach or anticipated breach, whether or not similar. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of compliance with any
provisions of this Agreement.
10.4 Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been received only if and when (a) personally delivered, (b) on the third
day after mailing, by United States mail, first class, postage prepaid or by certified mail return
receipt requested, addressed in each case as follows (or to such other address as may be specified
by like notice) or (c) received by facsimile at the facsimile number listed below:
If to the Owner, to:
TEPPCO Marine Services, LLC
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
TEPPCO Partners, L.P.
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
TEPPCO Partners, L.P.
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
20
If to any of the Operators, to:
Cenac Towing Co., Inc.
000 Xxxxx Xxxxxxx Xxxx
Xxxxx, XX 00000
-or-
X.X. Xxx 0000
Xxxxx, XX 00000
000 Xxxxx Xxxxxxx Xxxx
Xxxxx, XX 00000
-or-
X.X. Xxx 0000
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Duval, Funderburk, Sundbery, Xxxxxx & Xxxxxxx P.C.
000 Xxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Attn: X. Xxxxxxx Xxxxx, II
Fax: (000) 000-0000
000 Xxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Attn: X. Xxxxxxx Xxxxx, II
Fax: (000) 000-0000
10.5 Assignments, Successors and No Third-Party Rights. No party may assign any of
its rights or delegate any of its obligations under this Agreement without the prior written
consent of the other parties, except that the Owner may assign any of its rights and delegate any
of its obligations under this Agreement to another subsidiary of the Partnership. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects upon and inure to the
benefit of the heirs, executors, administrators, successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right, remedy or claim under or with respect
to this Agreement or any provision of this Agreement, except such rights as shall inure to a
successor or permitted assignee pursuant to this Section 10.5.
10.6 Limitation of Liability. Nothing in this Agreement shall be construed to deprive
any of the Operators, the Owner or any other entity that satisfies the requirements of 46 U.S.C.
Chapter 305 from claiming the right to limitation of liability against third parties provided by
any applicable Law.
10.7 Choice of Law. This Agreement shall be governed by the general maritime laws of
the United States, to the extent applicable, and otherwise by the internal laws of the State of
Texas (without regard to the choice of law provisions thereof).
10.8 Jurisdiction and Venue. Without limiting the provisions of Section 7.5 of the
Purchase Agreement, and subject to the provisions of Article IV and Section 10.1, the parties
hereby consent to personal jurisdiction in any action brought with respect to this Agreement and
the transactions contemplated hereunder in any federal or state court in Tarrant County, Texas, and
the parties agree that service of process may be accomplished pursuant to Section 10.4 above.
Each party hereto hereby waives its right to trial by jury in connection with any suit, action
or proceeding relating to this Agreement.
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10.9 Construction; Section Headings; Table of Contents. The language used in this
Agreement shall be deemed to be the language the parties hereto have chosen to express their mutual
intent, and no rule of strict construction will be applied against any party hereto. The Section
headings and any table of contents contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
10.10 Severability. Any term or provision (or subpart or portion thereof) of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision (or subpart or portion thereof) of this Agreement is so broad as to be unenforceable,
the provision shall be interpreted to be only so broad as is enforceable.
10.11 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be one
and the same instrument.
10.12 Time of Essence. With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
10.13 Specific Performance. The Operators acknowledge that money damages alone shall
not adequately compensate the Owner in the event of a breach of this Agreement. Therefore, the
Operators agree that, in addition to all remedies available at law, in equity or under this
Agreement, the Owner shall be entitled to injunctive relief for the enforcement of this Agreement.
10.14 Force Majeure.
(a) Neither party shall be liable to the other party for its failure or delay in performing
its obligations hereunder (other than its obligation to pay money) due to any contingency beyond
such party’s control including acts of God, fires, floods, wars, acts of war, sabotage, terrorism,
accidents, good faith compliance with applicable Laws or any other similar contingency.
(b) The party affected by force majeure will give prompt written Notice to the other party of
the nature and probable duration of the force majeure situation as well as of the termination of
such force majeure situation. The party affected by force majeure will diligently use all
reasonable efforts to remove the force majeure event as promptly as possible. A force majeure
affecting the performance hereunder by either party shall not relieve such party of liability in
the event of its concurring negligence or in the event that it fails to comply with the immediately
preceding sentence to remove such event.
* * * Remainder of page intentionally left blank * * *
22
IN WITNESS WHEREOF, this Agreement has been duly executed effective as of the date first
written above.
TEPPCO MARINE SERVICES, LLC |
||||
By: | ||||
Xxxxxxx X. Xxxxxx | ||||
Vice President and Chief Financial Officer | ||||
CENAC TOWING CO., INC. |
||||
By: | ||||
Xxxxx X. Xxxxx, Xx. | ||||
President | ||||
CENAC OFFSHORE, L.L.C. |
||||
By: | ||||
Xxxxx X. Xxxxx, Xx. | ||||
Managing Member | ||||
Xxxxx X. Xxxxx, Xx. | ||||
Signature page to TEPPCO-Cenac Transitional Operating Agreement
23
Exhibit A
Attached to and made part of
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
Services
1. Operating Services
(a) Supervising and conducting the day-to-day operation, maintenance (including preventative
maintenance), safety and general efficiency of the Purchased Operations to ensure the seaworthiness
and maintenance condition of the Purchased Operations in accordance with sound maritime and
operating practices and applicable Law.
(b) Arranging for, supervising and paying for general and routine repairs, alterations and
maintenance of the Purchased Operations, and periodically providing the Owner with a description of
such repairs, alterations and maintenance.
(c) Preparing and retaining appropriate records and logs associated with operations and
maintenance of the Purchased Operations as required by applicable Law or prudent operating
practices, which records and logs shall be made available to the Owner upon reasonable request.
(d) Purchasing the necessary stores, spares, lubricating oil, supplies and equipment, and
periodically providing the Owner with a description of such stores, spares, lubricating oil,
supplies and equipment.
(e) Appointing such surveyors, supervisors, technical consultants and other support for the
Purchased Operations as may be necessary from time to time.
(f) Providing technical and shoreside support for the Purchased Operations and attending to
all other technical matters necessary for the operation of the Purchased Operations.
(g) Handling of the Purchased Operations while in ports or transiting canals either directly
or by use of vessel agents.
(h) Procuring and arranging for port entrance and clearance, pilots, vessel agents, consular
approvals, and other services necessary or desirable for the management and safe operation of the
Purchased Operations.
(i) Performing all usual and customary duties concerned with the loading and discharging of
cargoes at all ports.
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(j) Arranging for the prompt dispatch of each of the Vessels from loading and discharging
ports and for transit through canals.
(k) Paying all ordinary charges incurred in connection with the management of the Purchased
Operations, including all canal tolls, port charges, any amounts due to any Governmental Body with
respect to the crew and all duties and taxes in respect of cargo or freight (whether levied against
a Vessel or the Owner).
(l) Assisting in maintaining contacts with Governmental Bodies and communities and their
representatives associated with the Purchased Operations on behalf of the Owner.
(m) In such form and on such terms as may be requested by the Owner, promptly reporting to the
Owner each Vessel’s movement, position, arrival and departure dates, material casualties and
damages received or caused by each Vessel.
(n) If the Owner requests, providing the Owner with a copy of any vessel inspection reports,
valuations, surveys, insurance claims and other similar reports prepared by ship brokers,
valuators, surveyors, classification societies and insurers.
(o) Arranging and paying for any licenses, permits, franchises, registrations and similar
authorizations of any Governmental Body which are necessary or used in the operation of the
Purchased Operations.
(p) Maintaining registration of the Purchased Operations under the relevant flag and in
accordance with applicable Laws and registration of the Purchased Operations with the relevant
classification society and other authorities as may be required for obtaining trading, canal, and
other marine certificates.
(q) Supervising and managing all operations centers relating to the Purchased Operations.
(r) Ensuring that the applicable Laws of the flag of the Vessels and all places where any
Vessels trade are satisfied in respect of xxxxxxx levels, rank, qualification and certification of
the crew.
(s) Ensuring that all members of the crew are physically and otherwise capable and fit for the
duties for which they are engaged.
(t) Arranging for all transportation (including repatriation), board and lodging for the crew
as and when required at rates and types of accommodations as customary in the industry.
(u) Keeping and maintaining all administrative and financial records relating to the crew as
required by applicable Law and rendering to the Owner any and all reports when, as and in such form
as requested by the Owner.
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(v) Providing technical services for purposes of trouble-shooting operational problems,
improving facilities and equipment performance, upgrading or repairing equipment and/or or meeting
applicable regulatory or safety requirements.
2. Environmental and other Compliance
(a) Maintaining compliance with all Environmental Laws, all other applicable Laws, and prudent
operating practices in respect of the Purchased Operations, including conducting environmental
investigations and remediation activities applicable to the Purchased Operations and their
operation.
(b) Implementing safety, health, environmental, training, emergency response, spill response
and other programs in connection with the operation, maintenance and repair of the Purchased
Operations, in each case as may be required by prudent operating practices or under applicable Law.
(c) Maintaining cleaning operations for the Purchased Operations, and undertaking of lawful
disposal of wastes generated by such cleanup.
(d) Making the required incident reports and notifications, performing release response
actions and otherwise maintaining compliance with the Oil Pollution Act, the Comprehensive
Environmental Response, Compensation and Liability Act and other relevant Environmental Laws.
(e) Maintaining Vessel Spill Response Plans pursuant to Section 1321(j) of the Clean Water
Act.
(f) Maintaining the requisite level of financial responsibility required under one of the
mechanisms established in 33 C.F.R. § 138.80, filing any and all required forms, financial
statements and affidavits and performing any and all audits or certifications that may be required
by such regulations.
(g) Not taking any action that would cause the financial responsibility mechanism referred to
in 2.(f) to fail or otherwise become invalid until such time that responsibility for handling the
certificates of financial responsibility for all of the Purchased Operations has been transferred
to the Owner.
(h) Transferring required environmental and other Permits from the Operators to the Owner and
vice versa in connection with the provision or termination of Services.
3. Administrative Services
(a) Providing day-to-day supervision, administrative and related services required in
connection with the business and affairs of the Owner in respect of the Purchased Operations.
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(b) Maintaining all pertinent books and records relating to the business and affairs of the
Owner in respect of the Purchased Operations.
(c) Processing accounts incurred by the Owner in connection with the provision of services
using the Purchased Operations.
4. Third Party Claims
Subject to Article VII of this Agreement, handling claims and paying damages up to $10,000
per occurrence occurring as a result of, or settling claims made in connection with, the Purchased
Operations. The Operators shall promptly notify the Owner in writing whenever it reasonably
believes that a claim may involve payment of more than $10,000 per occurrence, in which event, the
handling of such claims shall remain the responsibility of the Operators, unless otherwise notified
by the Owner; provided, however, that (i) the Operators shall not settle any such claims or pay any
damages in connection therewith without the prior written consent of the Owner and (ii) in no event
shall the Owner have any responsibility for the resolution of any claims made under any of the
Cenac Company Plans.
5. Marketing Services
(a) Engaging in such marketing and promotional activities for the benefit of the Owner with
respect to the Purchased Operations for the purpose of maintaining and expanding the utilization of
the Purchased Operations by existing and potential customers.
(b) Maintaining for marketing-related purposes for the benefit of the Owner such ongoing
communications with current and potential customers using the Purchased Operations, including
holding periodic meetings with customers.
6. Financial Reporting and General Accounting
(a) Assisting the Owner with year-end financial audits and quarterly financial reviews
performed by the Owner’s independent accountants with respect to the Purchased Operations.
(b) In coordination with the Owner, closing the books relating to the Services monthly,
including without limitation preparing manual and automatic journal entries, inputting journal
entries and/or vouchers, preparing, adjusting and reclassifying journal entries, reviewing and
reconciling account balances and maintaining accounting internal controls in accordance with GAAP
and the Owner’s policies.
(c) In coordination with the Owner, managing the accounting policy and procedures
documentation process, recommending and implementing accounting process improvements and assisting
the Owner with changes that affect accounting and financial reporting.
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(d) Maintaining and validating inventory costs, reconciling physical inventory to book
inventory monthly, processing inventory-related adjustments and updating posting of additions and
uses of inventory.
(e) Processing employee payroll (including tax filing and payments, reconciling payroll
register to general ledger monthly, and check distribution) and benefits transactions and expense
reports in coordination with the monthly close process.
(f) Preparing and delivering the following financial reports and information relating to the
Purchased Operations by the tenth (10th) business day of the following month along with
other information reasonably requested by the Owner:
(i) | balance sheet; | ||
(ii) | income statement; | ||
(iii) | trial balances in electronic format to be agreed upon with the Owner; | ||
(iv) | accounts receivable aging report; | ||
(v) | accounts payable detail; | ||
(vi) | capital expenditure detail in format to be agreed upon with the Owner; and | ||
(vii) | revenue by customer. |
Beginning 90 days after the date hereof, the Operators will prepare reasonable estimates of
the above-referenced financial information by the seventh (7th) business day of the
following month along with other information reasonably requested by the Owner.
7. Accounts Receivable and Billing
(a) Maintaining appropriate records for all customers, performing billing processes (preparing
sales invoices and monthly customer statements as appropriate), reporting related tax information,
processing and reconciling payments to xxxxxxxx, reconciling accounts to the general ledger monthly
and, in coordination with the Owner, responding to customer account inquiries.
(b) In cooperation with the Owner, establishing valuation reserves for bad debts and
conducting accounts receivable collection efforts and credit checks.
8. IT Services
Providing the use, support, maintenance (including general hardware/software troubleshooting,
training, license/copyright compliance and preventative system maintenance), system backup and
recoveries, database management, security administration (including systems procedures and controls
documentation) for any technical systems and services related to the operation of the Purchased
Operations.
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9. Audits
Making available all information required for any federal, state or local regulatory agency
audits relating to the Purchased Operations and cooperating with the Owner in responding to any
such audits.
10. Transition Services
Providing such services relating to legal, accounting, human resources, treasury, tax, audit,
information technology, finance and financial reporting, accounts receivable and billing and other
services as directed by the Owner, from time to time, to facilitate and support the transition of
the operation and maintenance of the Purchased Operations from the Operators to the Owner and the
Owner’s designee(s).
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Exhibit B
Attached to and made part of
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
Accounting Procedures
This Exhibit shall govern the accounting procedures with regard to the billing costs incurred
in connection with the performance by the Operators of the Services pursuant to this Agreement.
These Accounting Procedures shall be effective throughout the term of this Agreement.
1. General Provisions
(a) Adjustments: Except as otherwise provided in this Agreement, the Owner’s payment of any
invoices submitted by the Cenac Companies shall not prejudice the right of the Owner to protest or
question the correctness or appropriateness thereof; provided, however, all invoices and statements
rendered to the Owner under the Agreement shall conclusively be presumed to be true and correct
after twenty (24) months following termination of the Agreement, unless prior to the end of said
twenty-four month period the Owner takes written exception thereto and makes a claim against the
Cenac Companies for adjustment.
(b) Financial Records: The Cenac Companies shall maintain accurate books and records in
accordance with this Agreement, GAAP and the prescribed accounting requirements or system of
accounts mandated by any Governmental Body having jurisdiction over either of the Cenac Companies,
the Owner or their respective businesses.
(c) Accounts Receivable: The Owner or its Affiliate shall designate one or more bank or other
financial institution accounts as operating accounts for the receipt of payment of accounts and
other receivables payable to the Owner in respect of the Purchased Operations. The Owner or its
Affiliates shall own and control such accounts. The Operators shall cooperate with the Owner in
order to provide customers and other payees with payment instructions in connection with payments
of accounts and other receivables.
(d) Accounts Payable: The Owner or its Affiliate shall designate one or more bank or other
financial institution accounts as operating accounts for the payment of certain Direct Costs. The
Owner or its Affiliates shall own such accounts and shall provide the Operators with authority to
issue checks and otherwise make payments therefrom in respect of Direct Costs properly invoiced or
documented for payment or reimbursement, as the case may be.
2. Determination of Costs, Expenses and Expenditures. Subject to the limitations and
determinations hereinafter prescribed and the provisions of this
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Agreement, the Cenac Companies shall be paid by the Owner a monthly fee for services provided
and reimbursement for or payment of costs, expenses and expenditures incurred by or on behalf of
the Cenac Companies in connection with the provision of the Services. Such payment shall include
the Service Fee described below in Section 3, any necessary Direct Costs as described below in
Section 4 and any Overhead Costs as described below in Section 5. It is the intent of the parties
that services provided by Service Providers shall be billed by the Cenac Companies on a Direct Cost
basis pursuant to Section 4 of this Exhibit B to the extent that it is feasible to measure
and account for the services directly provided by such Service Providers to the Owner, by means of
the accounting and internal control systems of the Owner and its Affiliates or by other methods
approved by the Owner; and that Services not feasible to measure and account for on a Direct Cost
basis shall be billed by the Cenac Companies as part of the Overhead Costs.
3. Service Fee. The Owner shall pay the Cenac Companies a monthly fee for services performed
pursuant to this Agreement of $41,666.67, prorated for partial months (the “Service Fee”).
4. Direct Costs. The Owner shall reimburse or pay, as applicable, the following costs and
expenses to the extent incurred by the Operators in providing the Services (“Direct Costs”):
(a) Salaries, Wages and Other Labor Costs: The salaries, wages and other labor costs (as
specified below) of Employees (other than Stockholder) and other Service Providers directly engaged
in and attributable to the provision of Services on a full-time basis (including any amounts paid
as salaries, wages and labor costs of others temporarily employed in connection therewith). For
purposes of the preceding sentence, “labor costs” shall include the cost to the Cenac Companies of
fringe benefits, including group life insurance, hospitalization, disability, savings and
contributions to retirement and other benefit plans and the cost of holiday, vacation, sickness and
jury service benefits and other customary allowances for time not worked, for persons whose
salaries and wages are chargeable under this clause (a), but not including severance, pension or
early retirement benefits. Notwithstanding the foregoing, in no event shall the Owner be
responsible for or have any obligation to reimburse either of the Cenac Companies (i) for any costs
or liabilities incurred as a result of any violation of applicable Law or any error by either of
the Cenac Companies in the course of operating or maintaining its employee compensation benefit
plans and arrangements, including any excise taxes, penalties or similar liabilities incurred as a
result of a violation of the Code, ERISA or the FLSA or (ii) for any increases in such costs or
liabilities materially in excess of the increases experienced or implemented by similar companies
in the marine transportation business.
(b) Payroll Taxes: Expenditures or contributions made by the Cenac Companies pursuant to
assessments imposed by applicable Law, such as FICA taxes and federal or state unemployment taxes,
which are applicable to salaries and wages chargeable under clause (a) above; provided, however,
that in no event shall the Owner or any of its Affiliates be responsible for additional Taxes,
interest or penalties of any kind resulting from any failure of either of the Cenac Companies or
any of their respective
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Affiliates to (i) properly classify a Service Provider for purposes of any Law, (ii) timely
pay any applicable Taxes or (iii) otherwise comply with applicable Laws.
(c) Materials, Supplies, Tools and Miscellaneous Equipment: Any materials, supplies, tools
and miscellaneous equipment purchased or furnished by the Cenac Companies for the benefit of the
Owner shall be priced at cost. For equipment or materials that are transported to a location by the
Cenac Companies for the benefit of the Owner, any costs or expenses incurred by the Cenac Companies
in connection therewith shall be priced at cost.
(d) Reimbursable Expenses of Employees: The Cenac Companies shall xxxx the Owner for
reasonable out-of-pocket personal expenses of its (or its Affiliates’) employees in the performance
of the Services on behalf of the Owner and which are reimbursable under the terms of either of the
Cenac Companies’ official policy governing reimbursable employee expenses.
(e) Outside Services: The cost of outside services and expertise, including legal, accounting
and engineering fees, and fees from consultants, to the extent that the outside services rendered
were for the benefit of the Owner in connection with providing the Services.
(f) Damages and Losses: To the extent not covered by insurance, all costs or expenses
necessary for the repair or replacement of any Purchased Operations made necessary because of
damages or losses incurred by fire, flood, earthquake, storm, theft, oil spills, accident, or other
cause. The Cenac Companies shall furnish the Owner Notice of damages or losses incurred as soon as
practicable after a report thereof has been received by the Owner.
(g) Insurance: Subject to Section 8.5, all costs and expenses, including deductibles and
premiums, incurred by the Cenac Companies in connection with maintaining the Cenac Marine Policies
during the Interim Period. With respect to the Cenac Employer Policies (during the Interim Period)
and the policies provided for in Section 8.3, and subject in each case to Section 8.5, the costs
and expenses incurred in connection with maintaining such policies with respect to Service
Providers in their capacities as such, determined by pro rating such costs and expenses in the same
proportion as the number of Service Providers then providing Services bears to the total number of
persons to which such policies relate.
5. Overhead Costs: Overhead costs consist of costs and expenses incurred by the Operators in
providing the Services other than Direct Costs described in Section 4 above, including the
salaries, wages and other labor costs of Employees (other than Stockholder) and other Service
Providers engaged in and attributable to the provision of Services on less than a full-time basis,
mailing and stationary, computer and data processing, office administration and maintenance and the
use of office equipment. Such overhead costs will be charged as a lump sum, fixed monthly fee of
5% of the Direct Costs described in Sections 4(a), (b), (c) and (d) of this Exhibit B for
such month, excluding any capital expenditures (the “Overhead Costs”) and shall be paid in monthly
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installments by the Owner in accordance with the billing and payment provisions of Article III
of the Agreement.
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Exhibit C
Attached to and made part of
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
that certain Transitional Operating Agreement
dated February 1, 2008,
by and between the Owner and the Operators.
Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota,
Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina,
South Dakota, Tennessee, Texas, Virginia, West Virginia, Wisconsin and the following parishes in
the State of Louisiana:
Acadia | Iberia | St. Xxxxxxx | ||||
Xxxxx | Iberville | St. Helena | ||||
Ascension | Xxxxxxx | St. Xxxxx | ||||
Assumption | Jefferson | St. Xxxx the Baptist | ||||
Avoyelles | Xxxxxxxxx Xxxxx | St. Xxxxxx | ||||
Xxxxxxxxxx | La Salle | St. Xxxxxx | ||||
Bienville | Lafayette | St. Xxxx | ||||
Xxxxxxx | Lafourche | St. Tammany | ||||
Caddo | Lincoln | Tangipahoa | ||||
Calcasieu | Xxxxxxxxxx | Tensas | ||||
Xxxxxxxx | Madison | Terrebonne | ||||
Xxxxxxx | Xxxxxxxxx | Union | ||||
Catahoula | Natchitoches | Vermilion | ||||
Claiborne | Orleans | Xxxxxx | ||||
Concordia | Ouachita | Washington | ||||
De Xxxx | Plaquemines | Xxxxxxx | ||||
East Baton Rouge | Pointe Coupee | West Baton Rouge | ||||
East Xxxxxxx | Rapides | West Xxxxxxx | ||||
East Xxxxxxxxx | Red River | Xxxx Xxxxxxxxx | ||||
Xxxxxxxxxx | Richland | Xxxx | ||||
Xxxxxxxx | Xxxxxx | |||||
Xxxxx | St. Xxxxxxx |
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EXHIBIT D
Form of Legal Opinion to the Seller Parties
1. Buyer is validly existing as a limited liability company in good standing under the
Delaware Limited Liability Company Act (the “Delaware LLC Act”), with limited liability company
power and authority to execute, deliver and perform its obligations pursuant to the Agreement and
the Transitional Operating Agreement.
2. The Partnership is validly existing as a limited partnership in good standing under the
Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”), with limited partnership
power and authority to execute, deliver and perform its obligations pursuant to the Agreement and
to issue and deliver the Closing Limited Partner Units as contemplated by the Agreement.
3. The Agreement has been duly authorized, executed and delivered by the Partnership and the
Buyer, and the Transitional Operating Agreement has been duly authorized, executed and delivered by
Buyer.
4. The Closing Limited Partner Units and the limited partner interests represented thereby
have been duly authorized by the Partnership and, when issued and delivered to the Seller Parties
against receipt of the consideration therefor in accordance with the terms of the Agreement, will
be validly issued, fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by Sections 17-303 and 17-607 of the
Delaware LP Act and otherwise by matters described in the Form 8-A/A under the caption “Our
Partnership Agreement— Limited Liability”).
5. None of (a) the execution, delivery and performance of the Agreement by the Partnership or
the consummation by the Partnership of the transactions contemplated thereby or (b) the execution,
delivery and performance of the Agreement or the Transitional Operating Agreement by Buyer or the
consummation by Buyer of the transactions contemplated thereby constitutes or will constitute a
violation of the certificate of limited partnership or agreement of limited partnership of the
Partnership or the certificate of formation or limited liability company agreement of Buyer, as the
case may be.
In rendering such opinions, such counsel may, (A) with respect to the opinions expressed in
paragraphs 1 and 2 above, state that they have relied solely upon certificates provided by the
Secretary of State of the State of Delaware, (B) with respect to the opinions expressed in
paragraph 4 above, state that they have assumed that certificates for the Closing Limited Partner
Units have been duly countersigned by a transfer agent and duly registered by a registrar of the
Closing Limited Partner Units and (C) state that their opinion is limited to the Delaware LLC Act
and the Delaware LP Act.
EXHIBIT E
States and Parishes in the Restricted Territory
Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota,
Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina,
South Dakota, Tennessee, Texas, Virginia, West Virginia, Wisconsin and the following parishes in
the State of Louisiana:
Acadia | Iberia | St. Xxxxxxx | ||||
Xxxxx | Iberville | St. Helena | ||||
Ascension | Xxxxxxx | St. Xxxxx | ||||
Assumption | Jefferson | St. Xxxx the Baptist | ||||
Avoyelles | Xxxxxxxxx Xxxxx | St. Xxxxxx | ||||
Xxxxxxxxxx | La Salle | St. Xxxxxx | ||||
Bienville | Lafayette | St. Xxxx | ||||
Xxxxxxx | Lafourche | St. Tammany | ||||
Caddo | Lincoln | Tangipahoa | ||||
Calcasieu | Xxxxxxxxxx | Tensas | ||||
Xxxxxxxx | Madison | Terrebonne | ||||
Xxxxxxx | Xxxxxxxxx | Union | ||||
Catahoula | Natchitoches | Vermilion | ||||
Claiborne | Orleans | Xxxxxx | ||||
Concordia | Ouachita | Washington | ||||
De Xxxx | Plaquemines | Xxxxxxx | ||||
East Baton Rouge | Pointe Coupee | West Baton Rouge | ||||
East Xxxxxxx | Rapides | West Xxxxxxx | ||||
East Xxxxxxxxx | Red River | Xxxx Xxxxxxxxx | ||||
Xxxxxxxxxx | Richland | Xxxx | ||||
Xxxxxxxx | Xxxxxx | |||||
Xxxxx | St. Xxxxxxx |
EXHIBIT F
Example Built-In Gain Indemnity Calculation
Assumptions:
(1) Cenac Towing makes an S election, effective on or before July 1, 2008;
(2) Buyer purchases the Towing Assets from Cenac Towing on February 1, 2008 in exchange for
cash, the Towing Limited Partner Units and the assumption of certain liabilities of Cenac Towing;
(3) Pursuant to Section 5.11 of the Agreement, each Towing Asset acquired from Cenac Towing is
treated for federal income tax purposes as in part sold to the Partnership in a Taxable Sale and in
part contributed to the Partnership in a Contribution; the portions of the Towing Assets treated as
part of a Taxable Sale are referred to as the “Purchased Towing Assets” and the portions of the
Towing Assets treated as part of a Contribution are referred to as the “Contributed Towing Assets;”
(4) On the Closing Date, the aggregate fair market value of the portions of the Contributed
Towing Assets exceeds the aggregate tax basis of the Contributed Towing Assets by $100 million;
(5) In 2010, Cenac Towing sells 20% of the Towing Limited Partner Units;
(6) In 2013, the Partnership sells 100% of the Towing Assets; the portion of the Partnership’s
gain on that sale that is attributable to the Contributed Towing Assets exceeds $100 million; and
(7) In 2013, the maximum federal income tax rate on corporations is 35%.
Built-In Gain Indemnity calculation with respect to the Taxable Sale and Contribution in
2008: $0.
Built-In Gain Indemnity calculation with respect to the sale of Towing Limited Partner Units
in 2010: $0.
Built-In Gain Indemnity calculation with respect to the sale of Contributed Towing Assets in
2013: ($100,000,000 Asset Gain Amount x 80% retained Towing Limited Partner Units x 35%
maximum corporate tax rate)/(100% — 35% maximum corporate tax rate) = $43,076,923
The foregoing example is solely for illustrative purposes and is not intended to take into
account all factors that may be relevant to the calculation of the indemnity in a particular
situation. As of the date of the Agreement, no determination has been made of the allocation of
liabilities assumed, or other consideration paid, between Taxable Sales and Contributions under
Section 5.11 of the Agreement or of the amount of any gain that might be realized by Cenac Towing
under any circumstances. In the event of any inconsistency between this Exhibit and the Agreement
or any provision thereof, the Agreement shall control.