EXHIBIT 10.O
Execution Version
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CONTRIBUTION AGREEMENT
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By and Between
EL PASO FIELD SERVICES HOLDING COMPANY
(Contributor)
and
EL PASO ENERGY PARTNERS, L.P.
(Issuer)
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Covering the Contribution of
ALL OF THE EQUITY INTERESTS IN
EL PASO INDIAN BASIN L.P., and
EL PASO INDIAN BASIN GP HOLDING L.L.C.
(Acquired Companies)
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April 1, 2002
TABLE OF CONTENTS
PAGE
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1. Definitions..............................................................................................1
2. The Transactions.........................................................................................9
(a) Contribution.......................................................................................9
(b) The Closing........................................................................................9
(c) Deliveries at the Closing..........................................................................9
(d) Proposed Closing Statement and Post-Closing Adjustment.............................................9
3. Representations and Warranties Concerning the Transaction...............................................11
(a) Representations and Warranties of the Contributor.................................................11
(b) Representations and Warranties of the Issuer......................................................12
4. Representations and Warranties Concerning the Acquired Company Equity
Interests, Acquired Companies and Relevant Assets.......................................................14
(a) Organization, Qualification, and Company Power....................................................14
(b) Noncontravention..................................................................................15
(c) Title to and Condition of Assets..................................................................15
(d) Material Change...................................................................................17
(e) Legal Compliance..................................................................................18
(f) Tax Matters.......................................................................................18
(g) Contracts and Commitments.........................................................................18
(h) Litigation........................................................................................18
(i) Environmental Matters.............................................................................19
(j) Preferential Purchase Rights......................................................................20
(k) [Intentionally omitted]...........................................................................20
(l) Employee Matters..................................................................................20
(m) Prohibited Events.................................................................................20
(n) Regulatory Matters................................................................................20
(o) Intercompany Transactions.........................................................................20
(p) Disclaimer of Representations and Warranties Concerning Personal Property,
Equipment, and Fixtures...........................................................................21
5. Pre-Closing Covenants...................................................................................21
(a) General...........................................................................................21
(b) Notices and Consents..............................................................................21
(c) Operation of Business.............................................................................21
(d) Intercompany Transactions.........................................................................23
(e) Full Access.......................................................................................23
(f) Liens and Encumbrances............................................................................23
6. Post-Closing Covenants..................................................................................23
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(a) General...........................................................................................23
(b) Litigation Support................................................................................23
(c) Surety Bonds; Guarantees..........................................................................24
(d) Delivery and Retention of Records.................................................................24
(e) Assignment of Rights..............................................................................24
7. Conditions to Obligation to Close.......................................................................25
(a) Conditions to Obligation of the Issuer............................................................25
(b) Conditions to Obligation of the Contributor.......................................................26
8. Remedies for Breaches of this Agreement.................................................................27
(a) Survival of Representations and Warranties........................................................27
(b) Indemnification Provisions for Benefit of the Issuer..............................................27
(c) Indemnification Provisions for Benefit of the Contributor.........................................30
(d) Matters Involving Third Parties...................................................................30
(e) Determination of Amount of Adverse Consequences...................................................31
(f) Tax Treatment of Indemnity Payments...............................................................31
9. Tax Matters.............................................................................................31
(a) Post-Closing Tax Returns..........................................................................31
(b) Pre-Closing Tax Returns...........................................................................32
(c) Straddle Periods..................................................................................32
(d) Straddle Returns..................................................................................32
(e) Claims for Refund.................................................................................33
(f) Indemnification...................................................................................33
(g) Cooperation on Tax Matters........................................................................33
(h) Certain Taxes.....................................................................................33
(i) Confidentiality...................................................................................33
(j) Audits............................................................................................34
(k) Control of Proceedings............................................................................34
(l) Powers of Attorney................................................................................34
(m) Remittance of Refunds.............................................................................34
(n) [Intentionally omitted]...........................................................................35
(o) Closing Tax Certificate...........................................................................35
10. Termination.............................................................................................35
(a) Termination of Agreement..........................................................................35
(b) Effect of Termination.............................................................................36
11. Miscellaneous...........................................................................................36
(a) Public Announcements..............................................................................36
(b) Insurance.........................................................................................36
(c) No Third Party Beneficiaries......................................................................36
(d) Succession and Assignment.........................................................................36
(e) Counterparts......................................................................................37
(f) Headings..........................................................................................37
(g) Notices...........................................................................................37
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(h) Governing Law and Venue...........................................................................38
(i) Amendments and Waivers............................................................................38
(j) Severability......................................................................................38
(k) Transaction Expenses..............................................................................38
(l) Construction......................................................................................38
(m) Incorporation of Exhibits and Schedules...........................................................39
(n) Entire Agreement..................................................................................39
EXHIBITS AND SCHEDULES
Exhibit A: Indian Basin
Exhibit B: Subject Indebtedness
Exhibit C: Form of Assigned Equity Interests Contribution and Assignment
Exhibit D: Form of Parent Guaranty
Exhibit E: Form of Certification of Non-Foreign Status
Schedule 1(a): Subject Insurance Policies
Schedule 1(b): Permitted Encumbrances
Schedule 1(c): Reorganization Transactions
Schedule 3(a)(ii): Consents (Contributor)
Schedule 3(a)(iii): Noncontravention (Contributor)
Schedule 3(b)(ii): Consents (Issuer)
Schedule 3(b)(iii): Noncontravention (Issuer)
Schedule 4(b): Noncontravention (Acquired Companies)
Schedule 4(c)(i): Encumbrances
Schedule 4(c)(ii): Condition of Relevant Assets
Schedule 4(c)(v): Encumbrances for Borrowed Money
Schedule 4(d): Material Changes
Schedule 4(f): Tax Matters
Schedule 4(g)(i): Acquired Company Contracts
Schedule 4(g)(ii): Rights of Way
Schedule 4(h): Litigation
Schedule 4(i): Environmental Matters
Schedule 4(i)(ii): Environmental Permits
Schedule 4(j): Preferential Purchase Rights
Schedule 4(n): Regulatory Matters
Schedule 4(o): Intercompany Transactions
Schedule 5(c): Operation of Business
Schedule 5(c)(v): Capital Expenditures Budget
Schedule 6(c): Surety Bonds
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CONTRIBUTION AGREEMENT
THIS
CONTRIBUTION AGREEMENT (this "Agreement") dated as of April 1,
2002 is by and between El Paso Field Services Holding Company, a Delaware
corporation (the "Contributor"), and El Paso Energy Partners, L.P., a Delaware
limited partnership (the "Issuer"). The Contributor and the Issuer are sometimes
referred to collectively herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Contributor owns directly (i) a 99% limited partner
interest (the "El Paso Indian Basin LP Interest") in El Paso Indian Basin L.P.,
a Delaware limited partnership ("El Paso Indian Basin"), which owns a 42.38653%
undivided interest (the "Indian Basin Cotenancy Interest") in the Indian Basin
Gas Plant and related assets and facilities ("Indian Basin") located in Eddy
County, New Mexico, as evidenced by the Agreement for Construction and Operation
of Indian Basin Gas Plant, Eddy County, New Mexico dated March 30, 1965 (as
amended, restated, supplemented and otherwise modified from time to time) and
(ii) all of the issued and outstanding membership interest (the "Holding LLC
Interest" and, together with the El Paso Indian Basin LP Interest, the "Assigned
Equity Interests") in El Paso Indian Basin GP Holding L.L.C., a Delaware limited
liability company ("Holding LLC" and, together with El Paso Indian Basin, the
"Acquired Companies"), which owns a 1% general partner interest (the "El Paso
Indian Basin GP Interest" and, together with the Assigned Equity Interests, the
"Acquired Company Equity Interests") in El Paso Indian Basin; and
WHEREAS, the Contributor desires to contribute the Assigned Equity
Interests to the Issuer in exchange for the issuance by the Issuer of common
units representing limited partner interests in the Issuer ("Common Units") to
the Contributor.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. Definitions.
"Acquired Companies " has the meaning set forth in the Recitals.
"Acquired Company Assets" means the Indian Basin Cotenancy Interest and
the El Paso Indian Basin GP Interest.
"Acquired Company Contracts" has the meaning set forth in Section 4(g).
"Acquired Company Equity Interests" has the meaning set forth in the
Recitals.
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"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
administrative agent under the credit agreement to be entered into among a
subsidiary of the Issuer, the Administrative Agent and the lenders party
thereto.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses, but excluding
punitive (except as provided in Section 8), exemplary, special or consequential
damages.
"Adverse
Contribution Agreement Event" means any breach of any
representation or warranty (without giving effect to any supplement to the
Schedules, any qualification as to materiality, Material Adverse Effect,
knowledge, awareness or concepts of similar import, or any qualification or
limitation as to monetary amount or value) of the Contributor contained in this
Agreement (other than a representation or warranty contained in Section 4(c)(i)
or 4(c)(iii).
"Adverse Event" means any Adverse PSA Event and any Adverse
Contribution Agreement Event.
"Adverse PSA Event" has the meaning given such term in the Purchase and
Sale Agreement.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act; provided, however, that (i) with
respect to the Issuer, the term "Affiliate" shall exclude each member of the El
Paso Group, (ii) with respect to the Contributor, the term "Affiliate" shall
exclude each member of the Issuer Group, and (iii) the Acquired Companies shall
be deemed to be Affiliates (x) prior to the Closing, of the Contributor and (y)
on and after the Closing, of the Issuer.
"Agreement" has the meaning set forth in the preface.
"Assigned Equity Interests" has the meaning set forth in the Recitals.
"Assigned Equity Interests Assignment" means the contribution and
assignment agreement in the form of Exhibit C.
"Basis" means any past or current fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction about which the relevant Person has
Knowledge that forms or could form the basis for any specified consequence.
"Best Efforts" means the efforts, time, and costs that a prudent Person
desirous of achieving a result would use, expend, or incur in similar
circumstances to ensure that such result is achieved as expeditiously as
possible; provided, however, that no such use, expenditure, or incurrence shall
be required if it could reasonably be expected to have an adverse effect on such
Person and would require an expense of such Person in excess of $1,000,000.
"CERCLA" is defined in Section 4(i).
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"Closing" has the meaning set forth in Section 2(b).
"Closing Date" has the meaning set forth in Section 2(b).
"Closing Statement" has the meaning set forth in Section 2(d).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Law.
"Combined Value" means the sum of (i) the Issue Price plus (ii) the
purchase price paid by the buyer under the Purchase and Sale Agreement plus
(iii) $119 million.
"Commitment" means (a) options, warrants, convertible securities,
exchangeable securities, subscription rights, conversion rights, exchange rights
or other contracts that could require a Person to issue any of its Equity
Interests or to sell any Equity Interest it owns in another Person; (b) any
other securities convertible into, exchangeable or exercisable for, or
representing the right to subscribe for any Equity Interest of a Person or owned
by a Person; (c) statutory pre-emptive rights or pre-emptive rights granted
under a Person's Organizational Documents; and (d) stock appreciation rights,
phantom stock, profit participation, or other similar rights with respect to a
Person.
"Common Units" has the meaning set forth in the Recitals.
"Contributor" has the meaning set forth in the preface.
"Contributor Indemnitees" means, collectively, the Contributor and its
Affiliates and each of their respective officers (or Persons performing similar
functions), directors (or Persons performing similar functions), employees,
agents, and representatives.
"Contributor Party" means each of (i) the Contributor, (ii) El Paso
Corporation, (iii) each Affiliate of the Contributor in which the Contributor
owns (directly or indirectly) an Equity Interest and which is a party to any
Transaction Agreement and (iv) up to and through the Closing, each of the
Acquired Companies.
"Delaware LP Act" means the Delaware Revised Uniform Limited
Partnership Act as in effect on the date of this Agreement and as amended,
restated or replaced from time to time thereafter.
"Disposed Obligations" means all Obligations of the Acquired Companies,
regardless of when such Obligations actually arise or arose, other than the
Subject Indebtedness, existing on the Closing Date and not directly related to
the Acquired Company Assets.
"El Paso Corporation" means El Paso Corporation, a Delaware
corporation.
"El Paso Group" means, other than members of the Issuer Group, (i) each
Affiliate of El Paso Corporation in which El Paso Corporation owns (directly or
indirectly) an Equity Interest and (ii) each natural person that is an Affiliate
of any Person described in (i) above solely because of such natural person's
position as an officer (or natural person performing similar
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functions), director (or natural person performing similar functions) or other
representative of any Person described in (i) above, but only to the extent that
such natural person is acting in such capacity.
"El Paso Indian Basin" has the meaning set forth in the Recitals.
"El Paso Indian Basin GP Interest" has the meaning set forth in the
Recitals.
"El Paso Indian Basin LP Interest" has the meaning set forth in the
Recitals.
"Encumbrance" means any mortgage, pledge, lien, encumbrance, charge,
security interest, purchase or preferential right, right of first refusal,
option, or other defect in title.
"Environmental Law" and "Environmental Laws" have the meanings set
forth in Section 4(i).
"Equity Interest" means (a) with respect to a corporation, any and all
shares of capital stock and any Commitments with respect thereto, (b) with
respect to a partnership, limited liability company, trust or similar Person,
any and all units, interests or other partnership, limited liability company,
trust or similar interests, and any Commitments with respect thereto, and (c)
any other direct equity ownership or participation in a Person.
"FTC" has the meaning set forth in Section 3(a)(ii).
"GAAP" means generally accepted accounting principles in the United
States consistently applied.
"General Partner" means El Paso Energy Partners Company, a Delaware
corporation and the general partner of the Issuer.
"Governmental Authority" means the United States or any agency thereof
and any state, county, city or other political subdivision, agency, court or
instrumentality.
"Hazardous Substances" means all materials, substances, chemicals, gas
and wastes which are regulated under any Environmental Law or which may form the
basis for liability under any Environmental Law.
"Holding LLC" has the meaning set forth in the Recitals.
"Holding LLC Interest" has the meaning set forth in the Recitals.
"Indebtedness" means, with respect to any Person, to the extent not
classified as a current liability, on a consolidated basis, all Obligations of
the Person to other Persons for (a) borrowed money, (b) any capital lease
Obligation, (c) any Obligation (whether fixed or contingent) to reimburse any
bank or other Person in respect of amounts paid or payable under a standby
letter of credit, (d) any guarantee with respect to indebtedness (of the kind
otherwise described in this definition) of any Person and (e) any liability,
indebtedness or other Obligation of the Person.
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"Indemnified Party" has the meaning set forth in Section 8(d).
"Indemnifying Party" has the meaning set forth in Section 8(d).
"Indian Basin" has the meaning set forth in the Recitals.
"Indian Basin Cotenancy Interest" has the meaning set forth in the
Recitals.
"Issue Price" means $6,000,000 plus (i) the amount, if any, by which
the total of the Issue Price Increases exceeds the total of the Issue Price
Decreases, or minus (ii) the amount, if any, by which the total of the Issue
Price Decreases exceeds the total of the Issue Price Increases.
"Issue Price Adjustment Date" means immediately after the close of
business on March 31, 2002.
"Issue Price Decreases" means, without duplication, the following: (i)
100% of the amount, if any, of negative Working Capital of the Acquired
Companies as of the Issue Price Adjustment Date, as determined and calculated in
accordance with GAAP; (ii) 100% of the amount, if any, of all of the
consolidated Indebtedness (other than (a) Subject Indebtedness and (b)
Indebtedness otherwise included in Working Capital) of the Acquired Companies as
of the Issue Price Adjustment Date; and (iii) 100% of the amount, if any, of all
dividends and/or distributions made by any Acquired Company (other than
dividends and/or distributions made by El Paso Indian Basin to Holding LLC), if
any, between the Issue Price Adjustment Date and the Closing Date.
"Issue Price Increases" means, without duplication, 100% of the amount,
if any, of positive Working Capital of the Acquired Companies as of the Issue
Price Adjustment Date, as determined and calculated in accordance with GAAP.
"Issuer" has the meaning set forth in the preface.
"Issuer Group" means (i) the General Partner, (ii) the Issuer, (iii)
each Affiliate of the Issuer in which the Issuer owns (directly or indirectly)
an Equity Interest and (iv) each natural person that is an Affiliate of any
Person described in (i) -- (iii) above solely because of such natural person's
position as an officer (or person performing similar functions), director (or
person performing similar functions) or other representative of any Person
described in (i) -- (iii) above, but only to the extent that such natural person
is acting in such capacity.
"Issuer Indemnitees" means, collectively, the Issuer and its Affiliates
and each of their respective officers (or persons performing similar functions),
directors (or persons performing similar functions), employees, agents and
representatives to the extent acting in such capacity.
"Issuer Party" means each of (i) the Issuer, (ii) each Affiliate of the
Issuer in which the Issuer owns (directly or indirectly) an Equity Interest and
which is a party to any Transaction Agreement, and (iii) immediately after the
Closing, each of the Acquired Companies.
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"Knowledge": an individual shall be deemed to have "Knowledge" of a
particular fact or other matter if such individual is consciously aware of such
fact or other matter at the time of determination. A Person other than a natural
person shall be deemed to have "Knowledge" of a particular fact or other matter
if (i) any natural person who is serving as a director, executive officer,
partner, member, executor, or trustee of such Person (or in any similar
capacity) or (ii) any employee (or any natural person serving in a similar
capacity) who is charged with the ultimate responsibility for a particular area
of such Person's operations (e.g., the manager of the environmental section with
respect to knowledge of environmental matters), at the time of determination
had, Knowledge of such fact or other matter.
"Law" means any statute, code, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any applicable
Governmental Authority.
"Legal Right" means the legal authority and right (without risk of
liability, criminal, civil or otherwise), such that the contemplated conduct
would not, to the extent arising from, related to or in any way connected with
any Acquired Company or Indian Basin (including under any Organizational
Documents thereof or any contract, agreement or arrangement related thereto)
constitute a violation, termination or breach of, or require any payment under
or cause or permit any termination under, any contract or agreement;
arrangement; applicable Law; fiduciary, quasi-fiduciary or similar duty; or any
other obligation of or by any Acquired Company or Indian Basin.
"Market Price" means the average of the closing sales prices of the
Common Units as reported on the New York Stock Exchange for the ten trading days
ending two business days before the Closing Date or, in the case of an
indemnification payment by the Issuer hereunder, the date the Issuer is notified
by the Contributor of such indemnification obligation.
"Material Adverse Effect" means any change or effect relating to the
Acquired Company Equity Interests, the Acquired Company Assets or the
businesses, operations (financial or otherwise) and properties of the Acquired
Companies or the Acquired Company Assets taken as a whole, that, individually or
in the aggregate with other changes or effects, materially and adversely effects
the value of the Acquired Company Equity Interests, provided that in determining
whether a Material Adverse Effect has occurred, changes or effects relating to
(i) the natural gas pipeline, treating and processing industry generally
(including the price of natural gas and the costs associated with the drilling
and/or production of natural gas), (ii) United States or global economic
conditions or financial markets in general, or (iii) the transactions
contemplated by this Agreement, shall not be considered.
"Obligations" means duties, liabilities and obligations, whether
vested, absolute or contingent, known or unknown, asserted or unasserted,
accrued or unaccrued, liquidated or unliquidated, due or to become due, and
whether contractual, statutory or otherwise.
"Ordinary Course of Business" means the ordinary course of business
consistent with the applicable Person's past custom and practice (including with
respect to quantity and frequency).
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"Organizational Documents" means the articles of incorporation,
certificate of incorporation, charter, bylaws, articles or certificate of
formation, regulations, operating agreement, certificate of limited partnership,
partnership agreement, and all other similar documents, instruments or
certificates executed, adopted, or filed in connection with the creation,
formation, or organization of a Person, including any amendments thereto.
"Parent Guaranty" means the performance guaranty in the form of
Exhibit D.
"Party" and "Parties" have the meanings set forth in the preface.
"Permitted Encumbrances" means any of the following: (i) any liens for
Taxes and assessments not yet delinquent or, if delinquent, that are being
contested in good faith in the Ordinary Course of Business, provided that
adequate reserve accounts have been established in accordance with GAAP; (ii)
inchoate, mechanic's, materialmen's, and similar liens; (iii) any inchoate liens
or other Encumbrances created pursuant to (1) any operating, farmout,
construction, operation and maintenance, co-owners, cotenancy, lease or similar
agreements listed on Schedule 1(b) for which amounts are not due or (2) the
Organizational Documents of any of the Acquired Companies or Indian Basin for
which amounts are not due; and (iv) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the Ordinary Course of Business which, in
the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto as it is
currently being used or materially interfere with the ordinary conduct of the
business.
"Person" means an individual or entity, including any partnership,
corporation, association, joint stock company, trust, joint venture, limited
liability company, unincorporated organization, or Governmental Authority (or
any department, agency or political subdivision thereof).
"Post-Closing Tax Period" means any Tax period beginning after the
Closing Date.
"Post-Closing Tax Return" means any Tax Return that is required to be
filed for any of the Acquired Companies with respect to a Post-Closing Tax
Period.
"Pre-Closing Tax Period" means any Tax periods or portions thereof
ending on or before the Closing Date.
"Pre-Closing Tax Return" means any Tax Return that is required to be
filed for any Acquired Company with respect to a Pre-Closing Tax Period.
"Preferential Rights" has the meaning set forth in Section 4(j).
"Prime Rate" means the prime rate reported in the Wall Street Journal
at the time such rate must be determined under the terms of this Agreement.
"Proposed Closing Statement" has the meaning set forth in Section 2(d).
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"Purchase and Sale Agreement" means the Purchase, Sale and Merger
Agreement dated the date of this Agreement between El Paso Tennessee Pipeline
Co. and El Paso Energy Partners, L.P.
"Records" has the meaning set forth in Section 6(d).
"Relevant Assets" means the Acquired Company Assets and Indian Basin.
"Reorganization Transactions" means the transactions described on
Schedule 1(c).
"Rights of Way" has the meaning set forth in Section 4(g).
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Straddle Period" means a Tax period or year commencing before and
ending after the Closing Date.
"Straddle Return" means a Tax Return for a Straddle Period.
"Subject Indebtedness" means the Obligations described on Exhibit B.
"Subject Insurance Policies" means those material policies of
insurance, the current policies of which are listed on Schedule 1(a), which the
Contributor or any of its Affiliates maintain covering any Acquired Company
Assets, any Acquired Company or Indian Basin with respect to its assets and
operations.
"Subject Units" means that number of Common Units to be issued to the
Contributor (or its designee) pursuant to the terms and conditions of this
Agreement, which number shall be determined by dividing (i) the Issue Price by
(ii) the Market Price.
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), custom duties, capital stock, franchise, profits, withholding,
social security (or similar excises), unemployment, disability, ad valorem, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not.
"Tax Records" means all Tax Returns and Tax-related work papers
relating to any Acquired Company.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
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"Third Party Claim" has the meaning set forth in Section 8(d).
"Transaction Agreements" means this Agreement, the Assigned Equity
Interests Assignment, the Parent Guaranty, the Purchase and Sale Agreement and
all other agreements, documents, certificates or instruments executed and
delivered in connection with the transactions contemplated herein.
"Working Capital" means current assets less current liabilities.
2. The Transactions.
(a) Contribution. Subject to the terms and conditions of this
Agreement, the Contributor agrees to contribute the Assigned Equity Interests to
the Issuer, and the Issuer agrees to issue the Subject Units to the Contributor
or its designee.
(b) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of the
Contributor, commencing at 10:00 a.m., local time, on the last business day of
the month in which the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
has occurred (other than conditions with respect to actions each Party shall
take at the Closing itself) or such other date as the Parties may mutually
determine (the "Closing Date").
(c) Deliveries at the Closing. At the Closing, (i) the
Contributor shall deliver to the Issuer the various certificates, instruments,
and documents referred to in Sections 7(a) and 9(o); (ii) the Issuer shall
deliver to the Contributor the various certificates, instruments, and documents
referred to in Section 7(b); (iii) the Contributor shall execute and deliver the
Assigned Equity Interests Assignment; (iv) the Contributor shall cause El Paso
Corporation to execute and deliver to the Issuer the Parent Guaranty; and (v)
the Parties shall execute and/or deliver, or cause to be executed and/or
delivered, each other Transaction Agreement. The Issuer shall deliver to the
Contributor, either on the Closing Date or as soon as practicable thereafter,
the Subject Units,
(d) Proposed Closing Statement and Post-Closing Adjustment
(i) At least three business days prior to the Closing
Date, the Contributor shall cause to be prepared and delivered
to the Issuer a statement (the "Proposed Closing Statement"),
as prepared and determined in accordance with GAAP to the
extent applicable, setting forth the Contributor's good faith
estimate, including reasonable detail, of the Issue Price. As
soon as practicable, but in any event no later than 60 days
following the Closing Date, the Contributor shall cause to be
prepared and delivered to the Issuer a statement, including
reasonable detail, of the actual Issue Price (such statement,
as it may be adjusted pursuant to Section 2(d)(ii), the
"Closing Statement").
(ii) Upon receipt of the Closing Statement, the
Issuer and the Issuer's independent accountants shall be
permitted during the succeeding 30-day period to examine the
work papers used or generated in connection with the
preparation of the Closing Statement and such other documents
as the Issuer may reasonably
9
request in connection with its review of the Closing
Statement. Within 30 days of receipt of the Closing Statement,
the Issuer shall deliver to the Contributor a written
statement describing in reasonable detail its objections (if
any) to any amounts or items set forth on the Closing
Statement. If the Issuer does not raise objections within such
period, then, the Closing Statement shall become final and
binding upon all Parties at the end of such period. If the
Issuer raises objections, the Parties shall negotiate in good
faith to resolve any such objections. If the Parties are
unable to resolve any disputed item within 60 days after the
Issuer's receipt of the Closing Statement, any such disputed
item shall be submitted to a nationally recognized independent
accounting firm mutually agreeable to the Parties who shall be
instructed to resolve such disputed item within 30 days. The
resolution of disputes by the accounting firm so selected
shall be set forth in writing and shall be conclusive, binding
and non-appealable upon the Parties and the Closing Statement
shall become final and binding upon the date of such
resolution. The fees and expenses of such accounting firm
shall be paid one-half by the Issuer and one-half by the
Contributor.
(iii) If the Issue Price as set forth on the Closing
Statement exceeds the estimated Issue Price as set forth on
the Proposed Closing Statement, the Issuer shall pay the
Contributor the amount of such excess in Common Units based on
the Market Price on the date of Closing. If the estimated
Issue Price as set forth on the Proposed Closing Statement
exceeds the Issue Price as set forth on the Closing Statement,
the Contributor shall pay to the Issuer (or its designee) the
amount of such excess in cash. After giving effect to the
foregoing adjustments, any amount to be paid by the Issuer to
the Contributor, or to be paid by the Contributor to the
Issuer, as the case may be, shall be paid in the manner and
with interest as provided in Section 2(d)(iv) at a mutually
convenient time and place within five business days after the
later of acceptance of the Closing Statement or the resolution
of the Issuer's objections thereto pursuant to Section
2(d)(ii).
(iv) Any cash payments pursuant to this Section 2(d)
shall be made by causing such payments to be credited in
immediately available funds to such account of the Issuer as
may be designated by the Issuer. If any cash payment is being
made after the fifth business day referred to in Section
2(d)(iii), the amount of the payment to be made pursuant to
this Section 2(d) shall bear interest from and including such
fifth business day to, but excluding, the date of payment at a
rate per annum equal to the Prime Rate plus two percent. Such
interest shall be payable at the same time as the payment to
which it relates and shall be calculated on the basis of a
year of 365 days and the actual number of days for which due.
(v) The Issuer shall cooperate in the preparation of
the Closing Statement, including providing customary
certifications to the Contributor, and, if requested, to the
Contributor's independent accountants or the accounting firm
selected by mutual agreement of the Parties pursuant to
Section 2(d)(ii).
10
(vi) Except as set forth in Section 2(d)(ii), each
Party shall bear its own expenses incurred in connection with
the preparation and review of the Closing Statement.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Contributor. The
Contributor hereby represents and warrants to the Issuer as follows (provided,
however, that any representation or warranty given in this Section 3(a) with
respect to Indian Basin shall be deemed to be made to the Seller's Knowledge):
(i) Organization and Good Standing. The Contributor
is an entity duly organized, validly existing, and in good
standing under the Laws of the state of Delaware. The
Contributor is in good standing under the Laws of the state of
Texas and each other jurisdiction which requires such
qualification, except where the lack of such qualification
would not have a Material Adverse Effect.
(ii) Authorization of Transaction. Each Contributor
Party has full power and authority (including full entity
power and authority) to execute and deliver each Transaction
Agreement to which such Contributor Party is a party and to
perform its obligations thereunder. Each Transaction Agreement
to which any Contributor Party is a party constitutes the
valid and legally binding obligation of such Contributor
Party, enforceable against such Contributor Party in
accordance with its terms and conditions, subject, however, to
the effects of bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors' rights
generally, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law). Except as set forth on Schedule 3(a)(ii),
no Contributor Party need give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
Governmental Authority or any other Person in order to
consummate the transactions contemplated by this Agreement or
any other Transaction Document to which such Contributor Party
is a party, except for the prior approval of the Federal Trade
Commission ("FTC"), if applicable.
(iii) Noncontravention. Except for prior approval of
the FTC (if applicable) and filings specified in Schedule
3(a)(ii) or as set forth in Schedule 3(a)(iii), neither the
execution and delivery of any Transaction Agreement, nor the
consummation of any of the transactions contemplated thereby,
shall (A) violate any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction
of any Governmental Authority to which any Contributor Party
is subject or any provision of its Organizational Documents or
(B) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any Person the
right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any Contributor
Party is a party or by which it is bound or to which any of
its assets or any of the Relevant Assets is subject, except
for such
11
violations, defaults, breaches, or other occurrences that do
not, individually or in the aggregate, have a material adverse
effect on the ability of the Contributor or any other
Contributor Party to consummate the transactions contemplated
by such Transaction Agreement.
(iv) Brokers' Fees. No Contributor Party has any
liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Issuer could
become liable or obligated.
(v) Investment. The Contributor is not acquiring the
Subject Units with a view to or for sale in connection with
any distribution thereof or any other security related thereto
within the meaning of the Securities Act. The Contributor is
familiar with investments of the nature of the Subject Units,
understands that this investment involves substantial risks,
has adequately investigated the Subject Units, and has
substantial knowledge and experience in financial and business
matters such that it is capable of evaluating, and has
evaluated, the merits and risks inherent in purchasing the
Subject Units, and is able to bear the economic risks of such
investment. The Contributor has had the opportunity to visit
with the Issuer and meet with its representative officers and
other representatives to discuss the Issuer's business,
assets, liabilities, financial condition, and operations, has
received all materials, documents and other information that
the Contributor deems necessary or advisable to evaluate the
Subject Units, and has made its own independent examination,
investigation, analysis and evaluation of the Issuer,
including its own estimate of the value of the Subject Units.
The Contributor has undertaken such due diligence (including a
review of the Issuer's assets, properties, liabilities, books,
records and contracts) as the Contributor deems adequate.
(b) Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants to the Contributor as follows:
(i) Organization of the Issuer. Each Issuer Party is
a limited liability company, limited partnership or
corporation duly organized, validly existing, and in good
standing under the Laws of the state of Delaware. Each Issuer
Party is in good standing under the Laws of the state of
Texas
and each other jurisdiction which requires such qualification,
except where the lack of such qualification would not have a
Material Adverse Effect.
(ii) Authorization of Transaction. Each Issuer Party
has full power and authority (including full entity power and
authority) to execute and deliver each Transaction Agreement
to which it is a party and to perform its obligations
thereunder. Each Transaction Agreement to which such Issuer
Party is a party constitutes the valid and legally binding
obligation of such Issuer Party, enforceable against such
Issuer Party in accordance with its terms and conditions,
subject, however, to the effects of bankruptcy, insolvency,
reorganization,
12
moratorium or similar Laws affecting creditors' rights
generally, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law). Except as set forth on Schedule 3(b)(ii),
no Issuer Party needs to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
Governmental Authority or any other Person in order to
consummate the transactions contemplated by this Agreement or
any other Transaction Document, except for the prior approval
of the FTC, if applicable.
(iii) Noncontravention. Except for the prior approval
of the FTC (if applicable) and filings specified in Schedule
3(b)(ii) or as set forth in Schedule 3(b)(iii), neither the
execution and delivery of any Transaction Agreement to which
any Issuer Party is a party, nor the consummation of any of
the transactions contemplated thereby, shall (A) violate any
statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any
Governmental Authority to which such Issuer Party is subject
or any provision of its Organizational Documents or (B)
conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any Person the
right to accelerate, terminate, modify, or cancel, or require
any notice, approval or consent under any agreement, contract,
lease, license, instrument, or other arrangement to which any
Issuer Party is a party or by which it is bound or to which
any of its assets is subject, except for such violations,
defaults, breaches, or other occurrences that do not,
individually or in the aggregate, have a material adverse
effect on the ability of any Issuer Party to consummate the
transactions contemplated by such Transaction Agreement.
(iv) Brokers' Fees. No Issuer Party has any liability
or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated
by this Agreement for which the Contributor could become
liable or obligated.
(v) Investment. The Issuer is not acquiring the
Acquired Company Equity Interests or the Acquired Company
Assets with a view to or for sale in connection with any
distribution thereof or any other security related thereto
within the meaning of the Securities Act. The Issuer is
familiar with investments of the nature of the Acquired
Company Equity Interests and the Acquired Company Assets,
understands that this investment involves substantial risks,
has adequately investigated the Acquired Company Equity
Interests and the Acquired Company Assets, and has substantial
knowledge and experience in financial and business matters
such that it is capable of evaluating, and has evaluated, the
merits and risks inherent in purchasing the Acquired Company
Equity Interests and the Acquired Company Assets, and is able
to bear the economic risks of such investment. The Issuer has
had the opportunity to visit with the Contributor and its
applicable Affiliates and meet with their representative
officers and other representatives to discuss the business,
assets, liabilities, financial condition, and operations of
the Acquired Companies and the Acquired Company Assets, has
13
received all materials, documents and other information that
the Issuer deems necessary or advisable to evaluate the
Acquired Company Equity Interests and the Acquired Company
Assets, and has made its own independent examination,
investigation, analysis and evaluation of the Acquired
Companies, including its own estimate of the value of the
Acquired Company Equity Interests and the Acquired Company
Assets. The Issuer has undertaken such due diligence
(including a review of the assets, properties, liabilities,
books, records and contracts of the Acquired Companies and the
Acquired Company Assets) as the Issuer deems adequate.
(vi) Subject Units. The issuance of the Subject Units
by the Issuer has been duly authorized and approved by all
requisite partnership action, and such Subject Units shall,
when issued in consideration for the contribution by the
Contributor of the Assigned Equity Interests pursuant to this
Agreement, be validly issued, fully paid and (except as set
forth in Sections 17-303(a) and 17-607 of the Delaware LP Act)
non-assessable.
(vii) Taxes. To the knowledge of each Issuer Party,
the Issuer has (i) duly filed all material Tax Returns
required to be filed by or with respect to the Issuer or its
assets or operations with the Internal Revenue Service or
other applicable taxing authority, (ii) paid, or adequately
reserved against, all Taxes due or claimed due by a taxing
authority from or with respect to the Issuer or its assets or
operations and (iii) made all material deposits required with
respect to Taxes. To the knowledge of each Issuer Party, there
has been no material issue raised or material adjustment
proposed (and none is pending) by the Internal Revenue Service
or any other taxing authority in connection with any Tax
Returns relating to the assets or operations of the Issuer,
and no waiver or extension of any statute of limitations as to
any federal, state, local or foreign tax matter relating to
the assets or operations of the Issuer has been given by or
requested from the Issuer with respect to any Tax year.
4. Representations and Warranties Concerning the Acquired Company
Equity Interests, Acquired Companies and Relevant Assets. The Contributor hereby
represents and warrants to the Issuer as follows (provided, however, that any
representation or warranty given in this Section 4 with respect to Indian Basin
shall be deemed to be made to the Seller's Knowledge):
(a) Organization, Qualification, and Company Power. (x) Each
of the Acquired Companies and the Contributor Parties is a limited liability
company, partnership (limited or general) or corporation duly organized, validly
existing, and in good standing under the Laws of the state of Delaware; (y) is
in good standing under the Laws of the state of
Texas and each other
jurisdiction which requires qualification, except where the lack of such
qualification would not have a Material Adverse Effect; and (z) has full power
and authority to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it.
14
(b) Noncontravention. Except for the need to obtain prior
approval of the FTC or as set forth in Schedule 4(b), neither the execution and
delivery of any Transaction Agreement to which any Contributor Party is a party,
nor the consummation of any of the transactions contemplated thereby, shall (i)
violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which any
Acquired Company or any of the Acquired Company Assets is subject or any
provision of the Organizational Documents of any Contributor Party or any
Acquired Company or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, require any notice or trigger any
rights to payment or other compensation, or result in the imposition of any
Encumbrance on any of the Acquired Company Equity Interests or the Acquired
Company Assets under, any agreement, contract, lease, license, instrument, or
other arrangement to which any Acquired Company or any of the Acquired Company
Assets is subject, except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
right to payment or other compensation, or Encumbrance would not have a Material
Adverse Effect, or would not materially adversely affect the ability of any
Contributor Party to consummate the transactions contemplated by such
Transaction Agreement.
(c) Title to and Condition of Assets.
(i) The Acquired Companies have good, marketable and
indefeasible title to all of the Acquired Company Assets in
each case free and clear of all Encumbrances, except for (a)
Permitted Encumbrances and (b) Encumbrances disclosed in
Schedule 4(c)(i). The principal assets constituting Indian
Basin are described on Exhibit A. The operations of the
Acquired Company Assets are the only operations of the
Acquired Companies.
(ii) To the Contributor's Knowledge, except as
disclosed in Schedule 4(c)(ii), the Relevant Assets are in
good operating condition and repair (normal wear and tear
excepted), are free from defects (patent and latent), are
suitable for the purposes for which they are currently used
and are not in need of maintenance or repairs except for
ordinary routine maintenance and repairs.
(iii) Capitalization of the Acquired Companies. The
capitalization of the Acquired Companies is as follows:
(A) The Holding LLC Interest constitutes all
of the Equity Interests of Holding LLC. The
Contributor owns (beneficially and of record) 100% of
the Holding LLC Interest.
(B) The El Paso Indian Basin GP Interest and
the El Paso Indian Basin LP Interest constitute all
of the Equity Interests of El Paso Indian Basin. The
Contributor owns (beneficially and of record) 100% of
the El Paso Indian Basin LP Interest. Holding LLC
owns (beneficially and of record) 100% of the El Paso
Indian Basin GP Interest.
15
(C) The Contributor beneficially owns
directly or indirectly 100% of the Contributor
Parties other than El Paso Corporation. The
Contributor beneficially owns directly or indirectly
100% of the Acquired Company Equity Interests, which
includes 100% of the Equity Interests in the Acquired
Companies. All of the Acquired Company Equity
Interests are uncertificated. The Acquired Company
Equity Interests constitute 100% of the issued and
outstanding Equity Interests of the Acquired
Companies and have been duly authorized, and are
validly issued and fully paid and (except (i) with
respect to general partnership interests and (ii) as
set forth in Sections 17-303(a) and 17-607 of the
Delaware LP Act with respect to limited partnership
interests) non-assessable. Except to the extent
created under the Securities Act, state securities
Laws, limited liability company Laws, limited
partnership Laws and general corporation Laws of the
Acquired Companies' jurisdiction of formation, and as
created by the Acquired Companies' Organizational
Documents, (x) the Acquired Company Equity Interests
are held as set forth above, free and clear of any
Encumbrances and (y) there are no Commitments with
respect to any Equity Interest of any Acquired
Company. No Contributor Party is party to any voting
trusts, proxies, or other agreements or
understandings with respect to voting any Equity
Interest of any Acquired Company.
(D) After the consummation of the
transactions contemplated in this Agreement, the
Issuer shall own, directly or indirectly, 100% of the
Acquired Company Equity Interests, which includes
100% of the Equity Interests in the Acquired
Companies and 100% of the Acquired Company Assets.
(iv) Acquired Company Ownership. No Acquired Company
owns an Equity Interest in any Person, except as set forth in
Section 4(c)(iii). There are no Commitments with respect to an
Equity Interest in any Acquired Company. The Acquired
Companies own no other assets other than the Acquired Company
Assets, and have no operations or Obligations other than the
Subject Indebtedness and those directly related to the
Acquired Company Assets.
(v) Encumbrances for Borrowed Money. Except as set
forth on Schedule 4(c)(v), there are no borrowings, loan
agreements, promissory notes, pledges, mortgages, guaranties,
liens and similar liabilities (direct or indirect), or
Encumbrances which are secured by or constitute an Encumbrance
on the Relevant Assets.
(vi) Ownership and Operation of Indian Basin.
(A) The Acquired Companies' ownership
interest in Indian Basin is the Indian Basin
Cotenancy Interest.
16
(B) [Intentionally omitted.]
(C) Except to the extent created under the
Securities Act, state securities Laws, limited
liability company Laws and general corporation Laws
of the Acquired Companies' jurisdiction of formation,
and as created by the Acquired Companies'
Organizational Documents, (x) the Indian Basin
Cotenancy Interest is held as set forth above, free
and clear of any Encumbrances and (y) there are no
Commitments with respect to the Indian Basin
Cotenancy Interest. No Contributor Party is party to
any voting trusts, proxies, or other agreements or
understandings with respect to voting the Indian
Basin Cotenancy Interest.
(d) Material Change. Except for the Reorganization
Transactions and as set forth in Schedule 4(d), since December 31, 2001:
(i) there has not been any Material Adverse Effect;
(ii) the Relevant Assets have been operated and
maintained in the Ordinary Course of Business;
(iii) to the Contributor's Knowledge, there has not
been any material damage, destruction or loss to any material
portion of the Relevant Assets, whether or not covered by
insurance;
(iv) there has been no purchase, sale or lease of any
material asset included in the Relevant Assets;
(v) there has been no actual, pending, or to the
Contributor's Knowledge, threatened change affecting the
Relevant Assets with any customers, licensors, suppliers,
distributors or sales representatives of any Contributor
Party, except for changes that do not have a Material Adverse
Effect;
(vi) there has been no (x) amendment or modification
in any material respect to any Acquired Company Contract or
any other contract or agreement material to the Relevant
Assets, or (y) termination of any Acquired Company Contract or
any other contract or agreement material to the Relevant
Assets before the expiration of the term thereof other than to
the extent any such material contract or agreement terminated
pursuant to its terms in the Ordinary Course of Business; and
(vii) there is no contract, commitment or agreement
to do any of the foregoing, except as expressly permitted
hereby.
17
(e) Legal Compliance. Each Contributor Party, with respect to
the Relevant Assets and the Acquired Companies, has complied with all applicable
Laws of all Governmental Authorities, except where the failure to comply would
not have a Material Adverse Effect. The Contributor makes no representations or
warranties in this Section 4(e) with respect to Taxes or Environmental Laws, for
which the sole representations and warranties of the Contributor are set forth
in Sections 4(f) and 4(i), respectively.
(f) Tax Matters. Except as set forth in Schedule 4(f) or as
would not have a Material Adverse Effect, the Contributor, its Affiliates and
the Acquired Companies have filed all Tax Returns with respect to the Relevant
Assets that they were required to file and such Tax Returns are accurate in all
material respects. All Taxes shown as due by any Acquired Company or with
respect to the Relevant Assets on any such Tax Returns have been paid.
(g) Contracts and Commitments. Schedule 4(g)(i) contains a
list of all the contracts, agreements, licenses, permits and other documents and
instruments to which any Acquired Company is a party or otherwise constituting
part of the Acquired Company Assets (the "Acquired Company Contracts"), and each
such Acquired Company Contract is in full force and effect, except where the
failure to be in full force and effect would not have a Material Adverse Effect.
Schedule 4(g)(ii) contains a list of all rights-of-way constituting part of the
Acquired Company Assets (the "Rights of Way"). The Acquired Company Contracts,
together with the Rights of Way, constitute all of the contracts, agreements,
rights of way, licenses, permits, and other documents and instruments necessary
for the operation and business of the Relevant Assets consistent with applicable
Laws and prior operation. The Contributor Parties have performed all material
obligations required to be performed by them to date under the Acquired Company
Contracts and the Rights of Way, and are not in default under any material
obligation of any such contract or right-of-way, except when such default would
not have a Material Adverse Effect. To the Contributor's Knowledge, no other
party to any Acquired Company Contract is in default thereunder.
(h) Litigation.
(i) Schedule 4(h) sets forth each instance in which
any Acquired Company or any of the Relevant Assets (A) is
subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (B) is the subject of any action,
suit, proceeding, hearing, or investigation of, in, or before
any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, or is the
subject of any pending or, to the Contributor's Knowledge,
threatened claim, demand, or notice of violation or liability
from any Person, except where any of the foregoing would not
have a Material Adverse Effect.
(ii) No Contributor Party has Knowledge of any Basis
for any present or future injunction, judgment, order, decree,
ruling, or charge or action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction, against any of them giving rise to any
Obligation to which any Acquired Company would be subject.
18
(i) Environmental Matters. Except as set forth in
Schedule 4(i):
(i) The Contributor, with respect to the Relevant
Assets, has been in compliance with all applicable local,
state, and federal laws, rules, regulations, and orders
regulating or otherwise pertaining to (a) the use, generation,
migration, storage, removal, treatment, remedy, discharge,
release, transportation, disposal, or cleanup of pollutants,
contamination, hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, (b)
surface waters, ground waters, ambient air and any other
environmental medium on or off any Lease or (c) the
environment or health and safety-related matters; including
the following as from time to time amended and all others
whether similar or dissimilar: the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986
("CERCLA"), the Resource Conservation and Recovery Act of
1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the Hazardous
and Solid Waste Amendments of 1984, the Hazardous Materials
Transportation Act, as amended, the Toxic Substance Control
Act, as amended, the Clean Air Act, as amended, the Clean
Water Act, as amended, and all regulations promulgated
pursuant thereto (collectively, the "Environmental Laws" and
individually an "Environmental Law"), except for such
instances of noncompliance that individually or in the
aggregate do not have a Material Adverse Effect.
(ii) The Contributor has obtained all permits,
licenses, franchises, authorities, consents, registrations,
orders, certificates, waivers, exceptions, variances and
approvals, and have made all filings, paid all fees, and
maintained all material information, documentation, and
records, as necessary under applicable Environmental Laws for
operating the Relevant Assets and their business as they are
presently operated, and all such permits, licenses,
franchises, authorities, consents, approvals, and filings
remain in full force and effect, except for such matters that
individually or in the aggregate do not have a Material
Adverse Effect. Schedule 4(i)(ii) sets forth a complete list
of all permits, licenses, franchises, authorities, consents,
and approvals, as necessary under applicable Environmental
Laws for operating the Relevant Assets and the Acquired
Companies' businesses as they are presently operated, each of
which is held in the name of the appropriate Contributor Party
as indicated on such schedule.
(iii) Except as would not have a Material Adverse
Effect, (x) there are no pending or threatened claims,
demands, actions, administrative proceedings or lawsuits
against the Contributor with respect to the Relevant Assets
and the Contributor has not received notice of any of the
foregoing and (y) no Acquired Company, and none of the
Relevant Assets, is subject to any outstanding injunction,
judgment, order, decree or ruling under any Environmental
Laws.
(iv) The Contributor has not received any written
notice that the Contributor, with respect to the Relevant
Assets, is or may be a potentially
19
responsible party under CERCLA or any analogous state law in
connection with any site actually or allegedly containing or
used for the treatment, storage or disposal of Hazardous
Substances.
(v) All Hazardous Substances or solid wastes
generated, transported, handled, stored, treated or disposed
by, in connection with or as a result of the operation or
possession of the Contributor or the conduct of the
Contributor, have been transported only by carriers
maintaining valid authorizations under applicable
Environmental Laws and treated, stored, disposed of or
otherwise handled only at facilities maintaining valid
authorizations under applicable Environmental Laws and such
carriers and facilities have been and are operating in
compliance with such authorizations and are not the subject of
any existing, pending or threatened action, investigation or
inquiry by any Governmental Authority or other Person in
connection with any of the Environmental Laws.
The Contributor makes no representation or warranty regarding any compliance or
failure to comply with, or any actual or contingent liability under, any
Environmental Law, except as expressly set forth in this Section 4(i). For
purposes of this Section 4(i), each reference to the Contributor or Contributor
Parties shall be deemed to include the Contributor Parties and their Affiliates.
(j) Preferential Purchase Rights. Except as set forth on
Schedule 4(j), there are no preferential purchase rights, options or other
rights held by any Person not a party to this Agreement to purchase or acquire
any or all of the Equity Interest in any Acquired Company, or any of the
Relevant Assets, in whole or in part, that would be triggered or otherwise
affected as a result of the transactions contemplated by this Agreement
("Preferential Rights").
(k) [Intentionally omitted].
(l) Employee Matters. No Acquired Company has any employees.
(m) Prohibited Events. Except for the Reorganization
Transactions, none of the matters described in Section 5(c) have occurred since
June 30, 2001.
(n) Regulatory Matters. No Contributor Party or Acquired
Company is (i) a "holding company," a "subsidiary company" of a "holding
company," an "affiliate" of a "holding company," or a "public utility," as each
such term is defined in the Public Utility Holding Company Act of 1935, as
amended, or (ii) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated thereunder. Except as set
forth on Schedule 4(n), none of the Relevant Assets are subject to regulation by
the Federal Energy Regulatory Commission or rate regulation or comprehensive
nondiscriminatory access regulation under any federal laws or the laws of any
state or other local jurisdiction.
(o) Intercompany Transactions. Each outstanding receivable,
payable and other intercompany transaction and arrangement between the
Contributor or any of its Affiliates,
20
on the one hand, and any Acquired Company, on the other hand, (including
hydrocarbon imbalances existing on the date of this Agreement) is listed on
Schedule 4(o).
(p) Disclaimer of Representations and Warranties Concerning
Personal Property, Equipment, and Fixtures. The Issuer acknowledges that (a) it
has had and pursuant to this Agreement shall have before Closing access to the
Acquired Companies and the Relevant Assets and the officers and employees of the
Contributor and (b) in making the decision to enter into this Agreement and
consummate the transactions contemplated hereby, the Issuer has relied solely on
the basis of its own independent investigation and upon the express
representations, warranties, covenants, and agreements set forth in this
Agreement and the other Transaction Agreements. Accordingly, the Issuer
acknowledges that, except as expressly set forth in this Agreement, the
Contributor has not made, and THE CONTRIBUTOR MAKES NO AND DISCLAIMS ANY,
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND WHETHER BY COMMON
LAW, STATUTE, OR OTHERWISE, REGARDING (i) THE QUALITY, CONDITION, OR OPERABILITY
OF ANY PERSONAL PROPERTY, EQUIPMENT, OR FIXTURES, (ii) THEIR MERCHANTABILITY,
(iii) THEIR FITNESS FOR ANY PARTICULAR PURPOSE, (iv) THEIR CONFORMITY TO MODELS,
SAMPLES OF MATERIALS OR MANUFACTURER DESIGN, OR (v) AS TO WHETHER ANY RELEVANT
ASSETS ARE YEAR 2000 COMPLIANT, AND ALL PERSONAL PROPERTY AND EQUIPMENT IS
DELIVERED "AS IS, WHERE IS" IN THE CONDITION IN WHICH THE SAME EXISTS.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the date of this Agreement and the Closing:
(a) General. The Issuer shall use its Best Efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement,
including the Contributor's conditions to closing in Section 7(b). The
Contributor shall use its Best Efforts to take all action and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement, including the Issuer's conditions
to closing in Section 7(a).
(b) Notices and Consents. Each of the Parties shall give any
notices to, make any filings with, and use its Best Efforts to obtain any
authorizations, consents, and approvals of Governmental Authorities and third
parties it is required to obtain in connection with the matters referred to in
Sections 3(a)(ii), 3(a)(iii), 3(b)(ii) and 3(b)(iii) including the corresponding
Schedules, so as to permit the Closing to occur not later than 9:00 a.m.
(Houston time) on April 1, 2002. Without limiting the generality of the
foregoing, the Parties agree to work in good faith with the FTC in order to
consummate the transactions contemplated hereby as soon as reasonably
practicable, but in no event later than 9:00 a.m. (Houston time) on April 1,
2002; provided, that, notwithstanding anything to the contrary contained herein,
this sentence shall not obligate the Issuer to divest or hold separate any
assets or enter into any agreement not contemplated by this Agreement or modify
this Agreement.
(c) Operation of Business. The Contributor shall not, without
the consent of the Issuer (which consent shall not be unreasonably withheld or
delayed), except as expressly
21
contemplated by this Agreement or as contemplated by Schedule 5(c), cause or (to
the extent any Contributor Party or its Affiliate has the Legal Right) permit
any Acquired Company or Indian Basin to engage in any practice, take any action,
or enter into any transaction outside the Ordinary Course of Business or, with
respect to the Relevant Assets, engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, without the consent of the Issuer
(which consent shall not be unreasonably withheld or delayed), except as
expressly contemplated by this Agreement or Schedule 5(c), the Contributor shall
not, and shall not cause or (to the extent any Contributor Party has the Legal
Right) permit any Acquired Company or Indian Basin to, do any of the following:
(i) issue, sell, pledge, dispose of, grant, encumber,
or authorize the issuance, sale, pledge, disposition, or grant
of any Equity Interest of any Acquired Company or any
Commitments with respect to any Equity Interest of any
Acquired Company;
(ii) cause or allow any part of the Acquired Company
Equity Interests or the Relevant Assets to become subject to
an Encumbrance, except for Permitted Encumbrances and other
Encumbrances identified in Section 4(d);
(iii) amend in any material respect any Acquired
Company Contract material to the Relevant Assets, any Acquired
Company or Indian Basin (including Indian Basin's or any
Acquired Company's Organizational Documents) or terminate any
such material contract or agreement before the expiration of
the term thereof other than to the extent any such material
contract or agreement expires in accordance with its terms in
the Ordinary Course of Business;
(iv) except as required by Law, make, change or
revoke any Tax election relevant to any Acquired Company or
Relevant Asset;
(v) (A) acquire (including by merger, consolidation
or acquisition of Equity Interest or assets) any corporation,
partnership, limited liability company or other business
organization or any division thereof or any material amount of
assets; (B) incur any Indebtedness for borrowed money or issue
any debt securities or assume, guarantee, endorse, or
otherwise as an accommodation become responsible for, the
obligations of any Person, or make any loans or advances
except for intercompany borrowing among the Acquired Companies
in the Ordinary Course of Business; (C) sell, lease or
otherwise dispose of any property or assets, other than sales
of goods or services in the Ordinary Course of Business; or
(D) enter into or amend a contract, agreement, commitment, or
arrangement with respect to any matter set forth in this
Section 5(c)(v) or (except for contracts with aggregate
Obligations of the applicable Acquired Company not in excess
of $10,000) otherwise not in the Ordinary Course of Business;
provided that notwithstanding any provision of this Agreement,
if the Issuer expressly consents in writing (x) each Acquired
Company shall be entitled to dividend and/or distribute to its
Equity Interest holders, at any time, and from time to time,
such
22
cash generated by such company's business to which such Equity
Interest holder would otherwise be entitled (other than cash
arising from borrowings by such company or sales of assets by
such company outside of the Ordinary Course of Business) so
long as such dividends and/or distributions are reflected as a
Issue Price Decrease, where appropriate, and (y) each Acquired
Company may make or incur capital expenditures in accordance
with the terms of its Organizational Documents and the capital
expenditures budget set forth on Schedule 5(c)(v);
(vi) change any Acquired Company's accounting
practices in any material respect with the exception of any
changes in accounting methodologies that have already been
agreed upon by its Equity Interest holders, consistent with
its Organizational Documents; or
(vii) initiate or settle any litigation, complaint,
rate filing or administrative proceeding.
(d) Intercompany Transactions. All outstanding receivables,
payables and other intercompany transactions and arrangements between the
Contributor or any of its Affiliates, on the one hand, and any Acquired Company,
on the other hand, shall remain in full force and effect through and after the
Closing.
(e) Full Access. To the extent it has the Legal Right, the
Contributor shall permit, and shall cause its Affiliates to permit,
representatives of the Issuer to have full access at all reasonable times, and
in a manner so as not to interfere with the normal business operations of the
Contributor and its Affiliates, to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or pertaining to
any Acquired Company or any of the Relevant Assets.
(f) Liens and Encumbrances. Prior to the Closing, the
Contributor shall obtain releases of all liens and other Encumbrances disclosed
in Schedule 4(c)(i), without any post-Closing liability or expense to any
Acquired Company or Acquired Company Asset or any Issuer Party, and shall
provide proof of such releases to the Issuer at the Closing.
6. Post-Closing Covenants. The Parties agree as follows:
(a) General. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties shall take such further action (including the execution and delivery of
such further instruments and documents) as the other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8).
(b) Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or before
the Closing Date
23
involving any Acquired Company or the Relevant Assets, the other Party shall
cooperate with the contesting or defending Party and its counsel in the defense
or contest, make available its personnel, and provide such testimony and access
to its books and records (other than books and records which are subject to
privilege or to confidentiality restrictions) as shall be necessary in
connection with the defense or contest, all at the sole cost and expense of the
contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Section 8).
(c) Surety Bonds; Guarantees. The Issuer agrees to be
substituted as the surety or guarantor of any surety bonds or guarantees issued
by the Contributor or any of its Affiliates in connection with the Acquired
Companies or the Relevant Assets, including the surety bonds and guarantees
listed on Schedule 6(c). The Issuer and the Contributor shall cooperate to
effect all such substitutions and the Issuer shall indemnify and hold the
Contributor harmless from and against any Adverse Consequences arising from the
failure of the Issuer to be so substituted. The Issuer shall use commercially
reasonable efforts to obtain a release of the Contributor from any surety or
guaranty obligations with respect to the Acquired Companies or the Relevant
Assets.
(d) Delivery and Retention of Records. On or promptly after
the Closing Date, the Contributor shall deliver or cause to be delivered to the
Issuer, copies of Tax Records which are relevant to Post-Closing Tax Periods and
all other files, books, records, information and data relating to the Acquired
Companies or the Relevant Assets (other than Tax Records) that are in the
possession or control of the Contributor (the "Records"). The Issuer agrees to
(i) hold the Records and not to destroy or dispose of any thereof for a period
of ten years from the Closing Date or such longer time as may be required by
Law, provided that, if it desires to destroy or dispose of such Records during
such period, it shall first offer in writing at least 60 days before such
destruction or disposition to surrender them to the Contributor and if the
Contributor does not accept such offer within 20 days after receipt of such
offer, the Issuer may take such action and (ii) following the Closing Date to
afford the Contributor, its accountants, and counsel, during normal business
hours, upon reasonable request, at any time, full access to the Records and to
the Issuer's employees to the extent that such access may be requested for any
legitimate purpose at no cost to the Contributor (other than for reasonable
out-of-pocket expenses); provided that such access shall not be construed to
require the disclosure of Records that would cause the waiver of any
attorney-client, work product, or like privilege; provided, further that in the
event of any litigation nothing herein shall limit any Party's rights of
discovery under applicable Law.
(e) Assignment of Rights. The Contributor will assign and will
cause its Affiliates to assign, upon the Issuer's request, any and all rights
(including claims) of the Contributor or its Affiliates relating to any of the
Relevant Assets under any agreement (including that certain Stock Purchase
Agreement dated as of January 27, 2000 between PG&E National Energy Group, Inc.
and El Paso Field Services Company) pursuant to which the Contributor or any of
its Affiliates purchased or otherwise acquired any of the Relevant Assets.
24
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Issuer. The obligation of
the Issuer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties of the
Contributor contained in Sections 3(a) and 4 must be true and
correct in all material respects (without giving effect to any
supplement to the Schedules, any qualification as to
materiality, Material Adverse Effect, Knowledge, awareness or
concepts of similar import, or any qualification or limitation
as to monetary amount or value, (except with respect to (A)
Indian Basin, (B) the representations and warranties in
Section 4(c)(ii) and (C) the representations and warranties in
Section 4(d)(iii) with respect to latent defects, for which in
each such case qualifications as to Knowledge shall be given
effect) as of the date of this Agreement and at Closing
(except for those which refer to a specific date, which must
be true and correct as of such date);
(ii) the Contributor must have performed and complied
in all material respects with its covenants hereunder through
the Closing (without giving effect to any supplement to the
Schedules, any qualification as to materiality, Material
Adverse Effect, Knowledge, awareness or concepts of similar
import, or any qualification or limitation as to monetary
amount or value);
(iii) there must not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement or any suit or action pending by a Governmental
Authority to enjoin the consummation of any of the
transactions, contemplated by this Agreement;
(iv) the Contributor must have obtained all material
Governmental Authority and third party consents, including any
material consents, specified in Sections 3(a)(ii), 3(a)(iii),
and 4(b), and including the corresponding Schedules;
(v) the Contributor must have delivered to the Issuer
a certificate to the effect that each of the conditions
specified in Sections 7(a)(i)-(iv) is satisfied in all
respects;
(vi) the FTC must have approved the transactions
contemplated hereunder;
(vii) the Closing Date shall be no earlier than March
28, 2002;
(viii) The Issuer shall have received financing for
the transactions contemplated herein satisfactory to the
Issuer;
25
(ix) the Board of Directors of the General Partner
shall have received a fairness opinion acceptable to such
Board (in its sole discretion) from UBS Warburg LLC or any
other financial advisor acceptable to such Board (in its sole
discretion) with respect to the transactions contemplated
herein;
(x) the transactions contemplated herein shall have
been approved by at least a majority of the members of each of
(1) of the Board of Directors of the General Partner, (2) the
independent members of the Board of Directors of the General
Partner and (3) the Special Committee of the Board of
Directors of the General Partner responsible for reviewing
such transactions; and
(xi) the Contributor must have executed and delivered
to the Issuer the Purchase and Sale Agreement, and the closing
of the transactions contemplated therein must have occurred.
The Issuer may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or before the Closing.
(b) Conditions to Obligation of the Contributor. The
obligation of the Contributor to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties of the Issuer
contained in Section 3(b) must be true and correct in all
material respects (without giving effect to any supplement to
the Schedules, any qualification as to materiality, Material
Adverse Effect, Knowledge, awareness or concepts of similar
import, or any qualification or limitation as to monetary
amount or value) as of the date of this Agreement and at
Closing (except for those which refer to a specific date,
which must be true and correct as of such date);
(ii) the Issuer must have performed and complied in
all material respects with each of its covenants hereunder
through the Closing (without giving effect to any supplement
to the Schedules, any qualification as to materiality,
Material Adverse Effect, Knowledge, awareness or concepts of
similar import, or any qualification or limitation as to
monetary amount or value);
(iii) there must not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement or any suit or action pending by a Governmental
Authority to enjoin the consummation of any of the
transactions, contemplated by this Agreement;
(iv) the Contributor must have obtained all material
Governmental Authority and third party consents, including
material consents, specified in Sections 3(a)(ii), 3(a)(iii),
and 4(b), and including the corresponding Schedules;
26
(v) the Issuer must have delivered to the Contributor
a certificate to the effect that each of the conditions
specified in Sections 7(b)(i)-(iv) is satisfied in all
respects;
(vi) the FTC must have approved the transactions
contemplated hereunder; and
(vii) the Issuer must have executed and delivered to
the Contributor the Purchase and Sale Agreement, and the
closing of the transactions contemplated therein must have
occurred.
The Contributor may waive any condition specified in this Section 7(b)
if it executes a writing so stating at or before the Closing.
8. Remedies for Breaches of this Agreement.
(a) Survival of Representations and Warranties. (i) All of the
representations and warranties of the Contributor contained in Sections 3(a) and
4 (other than Sections 4(c)(iii), 4(f) and 4(h)(ii)) shall survive the Closing
hereunder for a period of three years after the Closing Date; (ii) the
representations and warranties of the Contributor contained in Section 4(c)(iii)
shall survive the Closing forever; (iii) the representations and warranties of
the Contributor contained in Section 4(f) shall survive the Closing with respect
to any given claim that would constitute a breach of such representation or
warranty until 90 days after the expiration of the statute of limitations
applicable to the underlying Tax matter giving rise to that claim, and (iv) the
representations and warranties of the Contributor contained in Section 4(h)(ii)
shall survive the Closing for a period of one year after the Closing Date. The
representations and warranties of the Issuer contained in Section 3(b) shall
survive the Closing for a period of three years after the Closing Date. The
covenants and obligations contained in Sections 2 and 6 and all other covenants
and obligations contained in this Agreement (other than Section 8(b)(iv)) shall
survive the Closing forever. The covenants and obligations contained in Section
8(b)(iv) shall survive the Closing for a period of three years after the Closing
Date.
(b) Indemnification Provisions for Benefit of the Issuer.
(i) In the event: (x) the Contributor breaches any of
its representations or warranties (without giving effect to
any supplement to the Schedules, any qualification as to
materiality, Material Adverse Effect, Knowledge, awareness or
concepts of similar import, or any qualification or limitation
as to monetary amount or value, except with respect to (A)
Indian Basin, (B) the representations and warranties in
Section 4(c)(ii) and (C) the representations and warranties in
Section 4(d)(iii) with respect to latent defects, for which in
each such case qualifications as to Knowledge shall be given
effect) contained herein (other than a representation or
warranty contained in Section 4(c)(iii) or 4(f)); (y) there is
an applicable survival period pursuant to Section 8(a); and
(z) the Issuer makes a written claim for indemnification
against the Contributor pursuant to Section 11(g) within such
survival period, then the Contributor agrees to release and
indemnify the Issuer Indemnitees from and against any Adverse
Consequences by reason of all Adverse Events suffered by the
Issuer Indemnitees; provided, that the Contributor shall not
have any obligation to release and
27
indemnify the Issuer Indemnitees from and against any such
Adverse Consequences by reason of all Adverse Events (A) until
the Issuer Indemnitees, in the aggregate, have suffered
Adverse Consequences by reason of all Adverse Events in excess
of an aggregate deductible amount equal to 1% of the Combined
Value (after which point the Contributor shall be obligated
only to release and indemnify the Issuer Indemnitees from and
against further such Adverse Consequences) or thereafter (B)
to the extent the Adverse Consequences the Issuer Indemnitees,
in the aggregate, have suffered by reason of all Adverse
Events exceeds an aggregate ceiling amount equal to 50% of the
Combined Value (after which point the Contributor shall have
no obligation to release and indemnify the Issuer Indemnitees
from and against further such Adverse Consequences); provided,
however, that the deductible amount with respect to breaches
of Section 4(c)(i) shall be $750,000.
(ii) In the event: (x) the Contributor breaches any
of its covenants or obligations in Sections 2 or 6 or any
other covenants or obligations in this Agreement or any
representation or warranty contained in Section 4(c)(iii)or
4(f) (in each case above without giving effect to any
supplement to the Schedules, any qualification as to
materiality, Material Adverse Effect, Knowledge, awareness or
concepts of similar import, or any qualification or limitation
as to monetary amount or value); (y) there is an applicable
survival period pursuant to Section 8(a); and (z) the Issuer
makes a written claim for indemnification against the
Contributor pursuant to Section 11(g) within such survival
period, then the Contributor agrees to release and indemnify
the Issuer Indemnitees from and against the entirety of any
Adverse Consequences suffered by the Issuer Indemnitees.
(iii) The Contributor shall release, indemnify and
hold harmless the Issuer Indemnitees against any and all
Adverse Consequences resulting by reason of (a) joint and
several liability with the Contributor arising by reason of
having been required to be aggregated with the Contributor
under Section 414(o) of the Code, or having been under "common
control" with the Contributor, within the meaning of Section
4001(a)(14) of ERISA.
(iv) In the event: (x) there is an applicable
survival period pursuant to Section 8(a); and (y) the Issuer
makes a written claim for indemnification against the
Contributor pursuant to Section 11(g) within such survival
period, except to the extent the Issuer is obligated to
release and indemnify the Contributor under Section
8(c)(ii)(1), then the Contributor agrees to release and
indemnify the Issuer Indemnitees from and against the entirety
of any Adverse Consequences suffered by the Issuer Indemnitees
with respect to, any environmental condition, claim or loss
with respect to any Acquired Company or any of the Relevant
Assets arising
28
as a result of events occurring on or prior to the Issue Price
Adjustment Date, including the matters disclosed in Schedule
4(i).
(v) [Intentionally omitted.]
(vi) [Intentionally omitted.]
(vii) The Contributor shall release, indemnify and
hold harmless the Issuer Indemnitees against any and all
Adverse Consequences with respect to any Disposed Obligations,
including any Tax attributable thereto.
(viii) The Contributor shall release, indemnify and
hold harmless the Issuer Indemnitees against any and all
Adverse Consequences suffered by the Issuer Indemnitees with
respect to, any outstanding injunction, judgment, order,
decree, ruling, or charge, or any pending or threatened
action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction, relating
to any Acquired Company or any of the Relevant Assets on the
Closing Date, including the matters listed on Schedule 4(h).
(ix) The Contributor shall release, indemnify and
hold harmless the Issuer Indemnitees against any and all
Adverse Consequences arising as a result of the Reorganization
Transactions.
(x) Notwithstanding anything to the contrary
contained in Sections 8(b)(i) and (iii), the Seller shall not
have any obligation to indemnify any Buyer Indemnified Party
to the extent that the payment thereof would cause the
Seller's aggregate indemnity payments under all of Sections
8(b)(i) and (iii) (but excluding Sections 8(b)(ii), (iv),
(vii), (viii) and (ix)) to exceed 100% of the Combined Value.
(xi) To the extent any Issuer Indemnitee becomes
liable to, and is ordered to and does pay to any third party,
punitive, exemplary, special or consequential damages caused
by a breach by the Contributor of any representation, warranty
or covenant contained in this Agreement, then such punitive,
exemplary, special or consequential damages shall be deemed
actual damages to such Issuer Indemnitee and included within
the definition of Adverse Consequences for purposes of this
Section 8.
(xii) Except for the rights of indemnification
provided in this Section 8, the Issuer hereby waives any claim
or cause of action pursuant to common or statutory law or
otherwise against the Contributor arising from any breach by
the Contributor of any of its representations, warranties or
covenants under this Agreement or the transactions
contemplated hereby.
29
(c) Indemnification Provisions for Benefit of the Contributor.
(i) In the event: (x) the Issuer breaches any of its
representations, warranties or covenants contained herein
(without giving effect to any supplement to the Schedules, any
qualification as to materiality, Material Adverse Effect,
Knowledge, awareness or concepts of similar import, or any
qualification or limitation as to monetary amount or value);
(y) there is an applicable survival period pursuant to Section
8(a); and (z) the Contributor makes a written claim for
indemnification against the Issuer pursuant to Section 11(g)
within such survival period, then the Issuer agrees to release
and indemnify the Contributor Indemnitees from and against the
entirety of any Adverse Consequences suffered by such
Contributor Indemnitees.
(ii) The Issuer agrees to release and indemnify the
Contributor Indemnitees from and against the entirety of any
Adverse Consequences relating to any of (1) any environmental
condition, claim or loss with respect to any Acquired Company
or any of the Relevant Assets arising from or related to
mercury contamination emanating from mercury meters used in
connection therewith or (2) the ownership and operation of
each Acquired Company and each Relevant Asset (including those
arising during, related to or otherwise attributable to the
period commencing with the Issue Price Adjustment Date).
(iii) To the extent any Contributor Indemnitee
becomes liable to, and is ordered to and does pay to any third
party, punitive, exemplary, special or consequential damages
caused by a breach by the Issuer of any representation,
warranty or covenant contained in this Agreement, then such
punitive, exemplary, special or consequential damages shall be
deemed actual damages to such Contributor Indemnitee and
included within the definition of Adverse Consequences for
purposes of this Section 8.
(iv) Except for the rights of indemnification
provided in this Section 8, the Contributor hereby waives any
claim or cause of action pursuant to common or statutory law
or otherwise against the Issuer arising from any breach by the
Issuer of any of its representations, warranties or covenants
under this Agreement or the transactions contemplated hereby.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") that may give rise to a claim for
indemnification against any other Party (the "Indemnifying
Party") under this Section 8, then the Indemnified Party shall
promptly (and in any event within five business days after
receiving notice of the Third Party Claim) notify the
Indemnifying Party thereof in writing.
(ii) The Indemnifying Party shall have the right to
assume and thereafter conduct the defense of the Third Party
Claim with counsel of its choice reasonably satisfactory to
the Indemnified Party; provided, however, that the
30
Indemnifying Party shall not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless the
judgment or proposed settlement involves only the payment of
money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes
the defense of the Third Party Claim as provided in Section
8(d)(ii), the Indemnified Party may defend against the Third
Party Claim in any manner it reasonably may deem appropriate.
(iv) In no event shall the Indemnified Party consent
to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written
consent of the Indemnifying Party which consent shall not be
withheld unreasonably.
(e) Determination of Amount of Adverse Consequences. The
Adverse Consequences giving rise to any indemnification obligation hereunder
shall be limited to the actual loss suffered by the Indemnified Party (i.e.
reduced by any insurance proceeds or other payment or recoupment received,
realized or retained by the Indemnified Party as a result of the events giving
rise to the claim for indemnification net of any expenses related to the receipt
of such proceeds, payment or recoupment, including retrospective premium
adjustments, if any), but not any reduction in Taxes of the Indemnified Party
(or the affiliated group of which it is a member) occasioned by such loss or
damage. The amount of the actual loss and the amount of the indemnity payment
shall be computed by taking into account the timing of the loss or payment, as
applicable, using a Prime Rate plus 2% interest or discount rate, as
appropriate. Upon the request of the Indemnifying Party, the Indemnified Party
shall provide the Indemnifying Party with information sufficient to allow the
Indemnifying Party to calculate the amount of the indemnity payment in
accordance with this Section 8(e). An Indemnified Party shall take all
reasonable steps to mitigate damages in respect of any claim for which it is
seeking indemnification and shall use reasonable efforts to avoid any costs or
expenses associated with such claim and, if such costs and expenses cannot be
avoided, to minimize the amount thereof.
(f) Tax Treatment of Indemnity Payments. All indemnification
payments made under this Agreement, including any payment made under Section 9,
shall be treated as purchase price adjustments for Tax purposes. In addition,
all indemnification payments made to the Contributor under this Agreement shall
be satisfied by the issuance of a number of Common Units determined using the
Market Price on the date the Issuer is notified by the Contributor of such
indemnification obligation.
9. Tax Matters.
(a) Post-Closing Tax Returns. The Issuer shall prepare or
cause to be prepared and file or cause to be filed any Post-Closing Tax Returns
with respect to the Relevant Assets or the Acquired Companies. The Issuer shall
pay (or cause to be paid) any Taxes due with respect to such Tax Returns.
31
(b) Pre-Closing Tax Returns. The Contributor shall prepare or
cause to be prepared and file or cause to be filed all Pre-Closing Tax Returns
with respect to the Relevant Assets or Acquired Companies. The Contributor shall
pay or cause to be paid any Taxes due with respect to such Tax Returns.
(c) Straddle Periods. The Issuer shall be responsible for
Taxes of the Acquired Companies related to the portion of any Straddle Period
occurring after the Closing Date. The Contributor shall be responsible for Taxes
of the Relevant Assets and the Acquired Companies relating to the portion of any
Straddle Period occurring before and on the Closing Date. With respect to any
Straddle Period, to the extent permitted by applicable Law, the Contributor or
the Issuer shall elect to treat the Closing Date as the last day of the Tax
period. If applicable Law shall not permit the Closing Date to be the last day
of a period, then (i) real or personal property Taxes with respect to the
Relevant Assets and the Acquired Companies shall be allocated based on the
number of days in the partial period before and after the Closing Date, (ii) in
the case of all other Taxes based on or in respect of income, the Tax computed
on the basis of the taxable income or loss attributable to the Relevant Assets
and the Acquired Companies for each partial period as determined from their
books and records, and (iii) in the case of all other Taxes, on the basis of the
actual activities or attributes of the Relevant Assets and the Acquired
Companies for each partial period as determined from their books and records.
(d) Straddle Returns. The Issuer shall prepare any Straddle
Returns. The Issuer shall deliver, at least 45 days prior to the due date for
filing such Straddle Return (including any extension) to the Contributor a
statement setting forth the amount of Tax that the Contributor owes, including
the allocation of taxable income and Taxes under Section 9(c), and copies of
such Straddle Return. The Contributor shall have the right to review such
Straddle Returns and the allocation of taxable income and liability for Taxes
and to suggest to the Issuer any reasonable changes to such Straddle Returns no
later than 15 days prior to the date for the filing of such Straddle Returns.
The Contributor and the Issuer agree to consult and to attempt to resolve in
good faith any issue arising as a result of the review of such Straddle Returns
and allocation of taxable income and liability for Taxes and mutually to consent
to the filing as promptly as possible of such Straddle Returns. Not later than 5
days before the due date for the payment of Taxes with respect to such Straddle
Returns, the Contributor shall pay or cause to be paid to the Issuer an amount
equal to the Taxes as agreed to by the Issuer and the Contributor as being owed
by the Contributor. If the Issuer and the Contributor cannot agree on the amount
of Taxes owed by the Contributor with respect to a Straddle Return, the
Contributor shall pay or cause to be paid to the Issuer the amount of Taxes
reasonably determined by the Contributor to be owed by the Contributor. Within
10 days after such payment, the Contributor and the Issuer shall refer the
matter to an independent "Big-Five" accounting firm agreed to by the Issuer and
the Contributor to arbitrate the dispute. The Contributor and the Issuer shall
equally share the fees and expenses of such accounting firm and its
determination as to the amount owing by the Contributor with respect to a
Straddle Return shall be binding on the Contributor and the Issuer. Within five
days after the determination by such accounting firm, if necessary, the
appropriate Party shall pay the other Party any amount which is determined by
such accounting firm to be owed. The Contributor shall be entitled to reduce its
obligation to pay Taxes with respect to a Straddle Return by the amount of any
estimated Taxes paid with respect to such Taxes on or before the Closing Date.
32
(e) Claims for Refund. The Issuer shall not, and shall cause
the Acquired Companies and any of their Affiliates not to, file any claim for
refund of taxes with respect to the Relevant Assets and the Acquired Companies
for whole or partial taxable periods on or before the Closing Date.
(f) Indemnification. The Issuer agrees to indemnify the
Contributor against all Taxes of or with respect to the Relevant Assets and the
Acquired Companies for any Post-Closing Tax Period and the portion of any
Straddle Period occurring after the Closing Date. The Contributor agrees to
indemnify the Issuer against all Taxes of or with respect to the Relevant Assets
and the Acquired Companies for any Pre-Closing Tax Period and the portion of any
Straddle Period occurring on or before the Closing Date, and all Taxes arising
directly as a result of the Reorganization Transactions.
(g) Cooperation on Tax Matters.
(i) The Issuer and the Contributor shall cooperate
fully, as and to the extent reasonably requested by the other
Party, in connection with the filing of Tax Returns pursuant
to this Section 9(g) and any audit, litigation or other
proceeding and making employees available on a mutually
convenient basis to provide additional information and
explanation of any material provided hereunder.
(ii) The Issuer and the Contributor further agree,
upon request, to use their Best Efforts to obtain any
certificate or other document from any Governmental Authority
or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including with
respect to the transactions contemplated hereby).
(iii) The Issuer and the Contributor agree, upon
request, to provide the other Parties with all information
that such other Parties may be required to report pursuant to
Section 6043 of the Code and all Treasury Department
Regulations promulgated thereunder.
(h) Certain Taxes. The Contributor shall file all necessary
Tax Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by
applicable Law, the Issuer shall, and shall cause its Affiliates to, join in the
execution of any such Tax Returns and other documentation. Notwithstanding
anything set forth in this Agreement to the contrary, the Issuer shall pay to
the Contributor, on or before the date such payments are due from the
Contributor, any transfer, documentary, sales, use, stamp, registration and
other Taxes and fees incurred in connection with this Agreement and the
transactions contemplated hereby.
(i) Confidentiality. Any information shared in connection with
Taxes shall be kept confidential, except as may otherwise be necessary in
connection with the filing of Tax Returns or reports, refund claims, tax audits,
tax claims and tax litigation, or as required by Law.
33
(j) Audits. The Contributor or the Issuer, as applicable,
shall provide prompt written notice to the other Parties of any pending or
threatened tax audit, assessment or proceeding that it becomes aware of related
to the Relevant Assets or the Acquired Companies for whole or partial periods
for which it is indemnified by any other Party hereunder. Such notice shall
contain factual information (to the extent known) describing the asserted tax
liability in reasonable detail and shall be accompanied by copies of any notice
or other document received from or with any tax authority in respect of any such
matters. If an indemnified party has knowledge of an asserted tax liability with
respect to a matter for which it is to be indemnified hereunder and such party
fails to give the indemnifying party prompt notice of such asserted tax
liability, then (I) if the indemnifying party is precluded by the failure to
give prompt notice from contesting the asserted tax liability in any forum, the
indemnifying party shall have no obligation to indemnify the indemnified party
for any Taxes arising out of such asserted tax liability, and (II) if the
indemnifying party is not so precluded from contesting, but such failure to give
prompt notice results in a detriment to the indemnifying party, then any amount
which the indemnifying party is otherwise required to pay the indemnified party
pursuant to this Section 9(j) shall be reduced by the amount of such detriment,
provided, the indemnified party shall nevertheless be entitled to full
indemnification hereunder to the extent, and only to the extent, that such party
can establish that the indemnifying party was not prejudiced by such failure.
This Section 9(j) shall control the procedure for Tax indemnification matters to
the extent it is inconsistent with any other provision of this Agreement.
(k) Control of Proceedings. The party responsible for the Tax
under this Agreement shall control audits and disputes related to such Taxes
(including action taken to pay, compromise or settle such Taxes). The
Contributor and the Issuer shall jointly control, in good faith with each other,
audits and disputes relating to Straddle Periods. Reasonable out-of-pocket
expenses with respect to such contests shall be borne by the Contributor and the
Issuer in proportion to their responsibility for such Taxes as set forth in this
Agreement. Except as otherwise provided by this Agreement, the noncontrolling
party shall be afforded a reasonable opportunity to participate in such
proceedings at its own expense.
(l) Powers of Attorney. The Issuer, the Acquired Companies and
their respective Affiliates shall provide the Contributor and its Affiliates
with such powers of attorney or other authorizing documentation as are
reasonably necessary to empower them to execute and file returns they are
responsible for hereunder, file refund and equivalent claims for Taxes they are
responsible for, and contest, settle, and resolve any audits and disputes that
they have control over under Section 9(k) (including any refund claims which
turn into audits or disputes).
(m) Remittance of Refunds. If the Issuer or any Affiliate of
the Issuer receives a refund of any Taxes that the Contributor is responsible
for hereunder, or if the Contributor or any Affiliate of the Contributor
receives a refund of any Taxes that the Issuer is responsible for hereunder, the
party receiving such refund shall, within 30 days after receipt of such refund,
remit it to the party who has responsibility for such Taxes hereunder. For the
purpose of this Section 9(m), the term "refund" shall include a reduction in Tax
and the use of an overpayment as a credit or other tax offset, and receipt of a
refund shall occur upon the filing of a return or an adjustment thereto using
such reduction, overpayment or offset or upon the receipt of cash.
34
(n) [Intentionally omitted].
(o) Closing Tax Certificate. At the Closing, the Contributor
shall deliver to the Issuer a certificate in the form of Exhibit E signed under
penalties of perjury (i) stating it is not a foreign corporation, foreign
partnership, foreign trust or foreign estate, (ii) providing its U.S. Employer
Identification Number, and (iii) providing its address, all pursuant to Section
1445 of the Code.
10. Termination.
(a) Termination of Agreement. The Parties may terminate this
Agreement, as provided below:
(i) the Issuer and the Contributor may terminate this
Agreement by mutual written consent at any time before the
Closing;
(ii) the Issuer may terminate this Agreement by
giving written notice to the Contributor at any time before
Closing (A) in the event the Contributor has breached any
representation, warranty or covenant contained in this
Agreement in any material respect, the Issuer has notified the
Contributor of the breach, the breach has continued without
cure for a period of 10 days after the notice of breach and
such breach would result in a failure to satisfy a condition
to the Issuer's obligation to consummate the transactions
contemplated hereby; (B) if the Closing shall not have
occurred on or before 9:00 a.m. (Houston time) on April 1,
2002 (unless the failure results primarily from the Issuer
itself breaching any representation, warranty or covenant
contained in this Agreement); or (C) if the transactions
contemplated hereby do not receive all required approvals of
the FTC;
(iii) the Contributor may terminate this Agreement by
giving written notice to the Issuer at any time before the
Closing (A) in the event the Issuer has breached any
representation, warranty or covenant contained in this
Agreement in any material respect, the Contributor has
notified the Issuer of the breach, the breach has continued
without cure for a period of 10 days after the notice of
breach and such breach would result in a failure to satisfy a
condition to the Contributor's obligation to consummate the
transactions contemplated hereby; (B) if the Closing shall not
have occurred on or before 9:00 a.m. (Houston time) on April
1, 2002 (unless the failure results primarily from the
Contributor breaching any representation, warranty or covenant
contained in this Agreement); or (C) if the transactions
contemplated hereby do not receive all required approvals of
the FTC;
(iv) the Issuer or the Contributor may terminate this
Agreement if any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency
or body shall have issued an order, decree or ruling or shall
have taken any other action permanently enjoining, restraining
or otherwise prohibiting
35
the transactions contemplated hereby and such order, decree,
ruling or other action shall have become final and
nonappealable; and
(v) the Issuer or the Contributor may terminate this
Agreement if the Purchase and Sale Agreement is terminated for
any reason.
(b) Effect of Termination. Except for the obligations under
Sections 8, 10 and 11, if any Party terminates this Agreement pursuant to
Section 10(a), all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach).
11. Miscellaneous.
(a) Public Announcements. Any Party is permitted to issue a
press release or make a public announcement concerning this Agreement without
the other Parties' consents, in which case the disclosing Party shall provide an
advance copy of the proposed public disclosure to the non-disclosing Parties and
permit the non-disclosing Parties the opportunity to reasonably comment on such
proposed disclosure. The Parties agree to cooperate in good faith to issue
separate and simultaneous press releases within twenty-four (24) hours following
the execution of this Agreement by all Parties.
(b) Insurance. The Issuer acknowledges and agrees that,
following the Closing, any Subject Insurance Policies shall be terminated or
modified to exclude coverage of all or any portion of the Relevant Assets or
Acquired Companies by the Contributor or any of its Affiliates, and, as a
result, the Issuer shall be obligated at or before Closing to obtain at its sole
cost and expense replacement insurance, including insurance required by any
third party to be maintained for or by the Relevant Assets or the Acquired
Companies. The Issuer further acknowledges and agrees that the Issuer may need
to provide to certain Governmental Authorities and third parties evidence of
such replacement or substitute insurance coverage for the continued operations
or businesses of the Relevant Assets or the Acquired Companies. If any claims
are made or losses occur prior to the Closing Date that relate solely to the
Relevant Assets or the business activities of the Acquired Companies and such
claims, or the claims associated with such losses, properly may be made against
the policies retained by the Contributor or its Affiliates after the Closing,
then the Contributor shall use its Best Efforts so that the Issuer can file,
notice, and otherwise continue to pursue these claims pursuant to the terms of
such policies; provided, however, nothing in this Agreement shall require the
Contributor to maintain or to refrain from asserting claims against or
exhausting any retained policies.
(c) No Third Party Beneficiaries. Except for the
indemnification provisions, this Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns, except that the Administrative Agent is a third-party
beneficiary of Section 11(d), and such Section may not be amended or modified
without the Administrative Agent's written consent.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted
36
assigns. Prior to the Closing the Issuer may not assign this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of the Contributor; provided, however, without the prior written
approval of the Contributor, the Issuer and its permitted successors and assigns
may assign any or all of its rights, interests or obligations under this
Agreement (i) to an Affiliate of the Issuer, including designating one or more
Affiliates of the Issuer to be the assignee of some or any portion of the
Acquired Company Assets, (ii) in connection with granting a lien, pledge,
mortgage or other security interest pursuant to a bona fide lending transaction,
or (iii) pursuant to the foreclosure or settlement of any assignment made
pursuant to (ii) above; provided the Contributor is not released from any of its
obligations or liabilities hereunder. The Contributor acknowledges that the
Issuer has granted, and its Affiliate assignee(s) may grant, to the
Administrative Agent a lien on and security interest in all of its right, title
and interest in and to this Agreement.
(e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given two business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to the Contributor: El Paso Field Services Holding Company
Attn: President
El Paso Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Issuer: El Paso Energy Partners, L.P.
Attn: President
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the addresses set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
37
(h) Governing Law and Venue. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF
TEXAS
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF
TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
TEXAS. VENUE
FOR ANY ACTION ARISING UNDER THIS AGREEMENT SHALL LIE EXCLUSIVELY IN ANY STATE
OR FEDERAL COURT IN ▇▇▇▇▇▇ COUNTY,
TEXAS.
(i) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Issuer and the Contributor. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(k) Transaction Expenses. Each of the Issuer and the
Contributor shall bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. All personal pronouns
used in this Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall include the plural,
and vice versa. All references herein to Exhibits, Schedules, Articles, Sections
or subdivisions thereof shall refer to the corresponding Exhibits, Schedules,
Article, Section or subdivision thereof of this Agreement unless specific
reference is made to such exhibits, articles, sections or subdivisions of
another document or instrument. The terms "herein," "hereby," "hereunder,"
"hereof," "hereinafter," and other equivalent words refer to this Agreement in
its entirety and not solely to the particular portion of the Agreement in which
such word is used. Each certificate delivered pursuant to this Agreement shall
be deemed a part hereof, and any representation, warranty or covenant herein
referenced or affirmed in such certificate shall be treated as a representation,
warranty or covenant given in the correlated Section hereof on the date of such
certificate. Additionally, any representation, warranty or covenant made in any
such certificate shall be deemed to be made herein.
38
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(n) Entire Agreement. THIS AGREEMENT (INCLUDING THE DOCUMENTS
REFERRED TO HEREIN) CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES AND
SUPERSEDES ANY PRIOR UNDERSTANDINGS, AGREEMENTS, OR REPRESENTATIONS BY OR AMONG
THE PARTIES, WRITTEN OR ORAL, TO THE EXTENT THEY HAVE RELATED IN ANY WAY TO THE
SUBJECT MATTER HEREOF.
*****
39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date in the preamble.
EL PASO ENERGY PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Vice President and Chief Financial Officer
EL PASO FIELD SERVICES HOLDING COMPANY
By: /s/ D. ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Senior Vice President
