AGREEMENT AND PLAN OF MERGER DATED AS OF MARCH 13, 2011 BY AND AMONG KIRBY CORPORATION, KSP MERGER SUB, LLC, KSP HOLDING SUB, LLC, KSP LP SUB, LLC, K-SEA TRANSPORTATION PARTNERS L.P., K-SEA GENERAL PARTNER L.P., K-SEA IDR HOLDINGS LLC AND K-SEA...
Exhibit 2.1
EXECUTION
VERSION
DATED AS OF MARCH 13, 2011
BY AND AMONG
XXXXX CORPORATION,
KSP MERGER SUB, LLC,
KSP HOLDING SUB, LLC,
KSP LP SUB, LLC,
K-SEA TRANSPORTATION PARTNERS L.P.,
K-SEA GENERAL PARTNER L.P.,
K-SEA IDR HOLDINGS LLC
AND
K-SEA GENERAL PARTNER GP LLC
TABLE OF CONTENTS
Page | ||||
ARTICLE 1 THE MERGER |
1 | |||
Section 1.1 The Merger |
1 | |||
Section 1.2 Effective Time of the Merger |
2 | |||
Section 1.3 Effects of the Merger |
2 | |||
Section 1.4 Closing |
2 | |||
Section 1.5 Partnership Agreement |
2 | |||
ARTICLE 2 CONVERSION OF EQUITY INTERESTS; ELECTION PROCEDURES |
2 | |||
Section 2.1 Effect of the Merger on Equity Interests in the Company |
2 | |||
Section 2.2 Election Procedures |
4 | |||
Section 2.3 No Fractional Shares |
5 | |||
Section 2.4 Exchange of Certificates and Book Entry Interests |
5 | |||
Section 2.5 Termination of Fund |
8 | |||
Section 2.6 Lost, Stolen or Destroyed Certificate |
8 | |||
Section 2.7 Withholding |
8 | |||
Section 2.8 Further Assurances |
9 | |||
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES |
9 | |||
Section 3.1 Corporate Organization and Qualification, Subsidiaries |
9 | |||
Section 3.2 Organizational and Governing Documents |
9 | |||
Section 3.3 Capitalization |
10 | |||
Section 3.4 Authorization of Agreement; No Violation; Special Approval |
11 | |||
Section 3.5 Consents and Approvals |
12 | |||
Section 3.6 Regulatory Matters; Reports |
12 | |||
Section 3.7 Financial Statements |
14 | |||
Section 3.8 Undisclosed Liabilities |
15 | |||
Section 3.9 Absence of Certain Changes or Events |
15 | |||
Section 3.10 Property |
17 | |||
Section 3.11 Contracts |
18 | |||
Section 3.12 Compliance with Applicable Law; Permits |
19 | |||
Section 3.13 Legal Proceedings |
19 | |||
Section 3.14 Employee Benefit Plans |
20 | |||
Section 3.15 Taxes |
21 | |||
Section 3.16 Intellectual Property |
22 | |||
Section 3.17 Labor Matters |
23 | |||
Section 3.18 Environmental Matters |
24 | |||
Section 3.19 State Takeover Laws |
25 | |||
Section 3.20 Vessels |
25 | |||
Section 3.21 Xxxxx Act |
26 | |||
Section 3.22 Insurance |
26 | |||
Section 3.23 Customers |
26 | |||
Section 3.24 Interested Party Transactions |
27 | |||
Section 3.25 Compliance with Anti-Corruption Laws |
27 | |||
Section 3.26 Opinion of Financial Advisor; Brokers |
28 | |||
Section 3.27 No Discussions |
28 | |||
Section 3.28 Company Information |
29 |
i
Page | ||||
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES |
29 | |||
Section 4.1 Corporate Organization and Qualification |
29 | |||
Section 4.2 Organizational and Governing Documents |
29 | |||
Section 4.3 Capitalization |
29 | |||
Section 4.4 Authorization of Agreement; No Violation |
30 | |||
Section 4.5 Consents and Approvals |
31 | |||
Section 4.6 Parent SEC Documents; Parent Financial Statements |
31 | |||
Section 4.7 Undisclosed Liabilities |
32 | |||
Section 4.8 Absence of Certain Changes or Events |
32 | |||
Section 4.9 Compliance with Applicable Law |
32 | |||
Section 4.10 Legal Proceedings |
32 | |||
Section 4.11 Environmental Matters |
32 | |||
Section 4.12 Vessels |
32 | |||
Section 4.13 Xxxxx Act |
33 | |||
Section 4.14 Brokers |
33 | |||
Section 4.15 Parent Information |
33 | |||
Section 4.16 Availability of Funds |
33 | |||
Section 4.17 Tax |
33 | |||
ARTICLE 5 CONDUCT PRIOR TO THE EFFECTIVE TIME |
34 | |||
Section 5.1 Conduct of Business Prior to the Effective Time |
34 | |||
Section 5.2 Third Party Proposals |
37 | |||
Section 5.3 Control of Other Party’s Business |
41 | |||
ARTICLE 6 ADDITIONAL AGREEMENTS |
42 | |||
Section 6.1 Preparation of Proxy Statement/Prospectus; Unitholder Meeting |
42 | |||
Section 6.2 Access to Information; Confidentiality |
43 | |||
Section 6.3 Efforts; Regulatory Approvals |
44 | |||
Section 6.4 Public Disclosure |
46 | |||
Section 6.5 Equity Holder Litigation |
46 | |||
Section 6.6 State Takeover Laws |
46 | |||
Section 6.7 Notification |
46 | |||
Section 6.8 Resignation of Directors and Officers |
47 | |||
Section 6.9 NYSE Compliance |
47 | |||
Section 6.10 Listing of Parent Shares |
47 | |||
Section 6.11 Tax Matters |
47 | |||
Section 6.12 Accountants’ Letter |
48 | |||
Section 6.13 Directors and Officers Insurance and Indemnification |
48 | |||
Section 6.14 Employee Matters |
49 | |||
Section 6.15 Section 16 Matters |
50 | |||
ARTICLE 7 CONDITIONS PRECEDENT |
50 | |||
Section 7.1 Conditions to Obligation of Each Party to Effect the Merger |
50 | |||
Section 7.2 Conditions to Obligations of Parent and Merger Sub |
51 | |||
Section 7.3 Conditions to the Obligations of the Company Parties |
52 | |||
Section 7.4 Frustration of Closing Conditions |
52 | |||
ARTICLE 8 TERMINATION AND AMENDMENT |
53 | |||
Section 8.1 Termination |
53 | |||
Section 8.2 Effect of Termination |
54 |
ii
Page | ||||
Section 8.3 Expenses and Termination Fees |
54 | |||
ARTICLE 9 GENERAL PROVISIONS |
55 | |||
Section 9.1 Definitions |
55 | |||
Section 9.2 Non-Survival |
67 | |||
Section 9.3 Specific Performance |
67 | |||
Section 9.4 Notices |
67 | |||
Section 9.5 Amendments and Waivers |
68 | |||
Section 9.6 Severability |
68 | |||
Section 9.7 Entire Agreement |
69 | |||
Section 9.8 Assignment |
69 | |||
Section 9.9 No Third Party Beneficiaries |
69 | |||
Section 9.10 Governing Law; Exclusive Jurisdiction |
69 | |||
Section 9.11 Waiver of Jury Trial |
70 | |||
Section 9.12 Interpretation; Rules of Construction |
70 | |||
Section 9.13 Counterparts; Effectiveness |
71 | |||
Section 9.14 Disclosure Generally |
71 |
iii
Exhibits
Exhibit A
|
— Form of Support Agreement | |
Exhibit B
|
— Form of Fifth Amended and Restated Limited Partnership Agreement of the Company |
iv
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 13, 2011 (this “Agreement”), is
by and among Xxxxx Corporation, a Nevada corporation (“Parent”), KSP Holding Sub, LLC, a
Delaware limited liability company and direct wholly owned subsidiary of Parent (“Holding
Sub”), KSP LP Sub, LLC, a Delaware limited liability company and direct wholly owned subsidiary
of Parent (“LP Sub”), KSP Merger Sub, LLC, a Delaware limited liability company wholly
owned by Holding Sub and LP Sub (“Merger Sub,” and together with Parent, Holding Sub and LP
Sub, the “Parent Parties”), K-Sea Transportation Partners L.P., a Delaware limited
partnership (the “Company”), K-Sea General Partner L.P., a Delaware limited partnership
that is the sole general partner of the Company (“Company General Partner”), K-Sea IDR
Holdings LLC, a Delaware limited liability company (“IDR Holdings”), and K-Sea General
Partner GP LLC, a Delaware limited liability company that is the sole general partner of Company
General Partner (“Management General Partner,” and together with the Company and Company
General Partner, the “Company Parties”). Unless the context clearly indicates otherwise,
capitalized terms used in this Agreement are defined in Section 9.1.
RECITALS:
WHEREAS, the parties intend that Merger Sub be merged with and into the Company, with the
Company surviving the merger on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, simultaneously with, and as a condition to, the execution hereof, KA First Reserve,
LLC, EW Transportation LLC, EW Holding Corp. and EW Transportation Corp. (the “Covenanting
Unitholders”) are each executing a support agreement with the Parent Parties, dated as of the
date hereof, substantially in the form of Exhibit A hereto (collectively, the “Support
Agreements”), pursuant to which, among other things, the Covenanting Unitholders have agreed to
vote the Common Units and Preferred Units of which they are the record or beneficial owner in favor
of the approval of this Agreement and the Merger; and
WHEREAS, the board of directors of Management General Partner (the “Company Board”),
acting upon the unanimous recommendation of its Conflicts Committee, has (i) determined that this
Agreement and the transactions contemplated hereby are advisable, fair to and in the best interests
of the Company and the Limited Partners, (ii) approved the execution, delivery and performance of
this Agreement by the Company and the consummation of the transactions contemplated hereby,
including the Merger, and (iii) resolved to recommend approval of this Agreement and the Merger by
the Limited Partners (the “Company Board Recommendation”).
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions hereof and the provisions
of the LLC Act and the DRULPA, and in reliance upon the representations, warranties, covenants and
agreements contained herein, at the Effective Time, Merger Sub shall be merged with and into the
Company (the “Merger”) in accordance with the provisions of this Agreement and the separate
existence of Merger Sub shall thereupon cease. The Company shall be the surviving entity in the
Merger
(sometimes referred to as the “Surviving Company”) and shall continue to be governed
by the laws of the State of Delaware, and the separate existence of the Company, with all its
rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger.
Section 1.2 Effective Time of the Merger. The Merger shall become effective at the
time of filing (the “Effective Time”) of a properly executed certificate of merger, in
accordance with the DRULPA and the LLC Act, as applicable, duly filed with the Secretary of State
of the State of Delaware (the “Certificate of Merger”), which filing shall be made on the
Closing Date.
Section 1.3 Effects of the Merger. The Merger shall have the effects set forth in
this Agreement, the Company Partnership Agreement, and the applicable provisions of the DRULPA and
the LLC Act.
Section 1.4 Closing. Upon the terms and subject to the conditions set forth in
Article 7 and the termination rights set forth in Article 8, the closing of the
transactions contemplated by this Agreement (the “Closing”) will take place at the offices
of Fulbright & Xxxxxxxx L.L.P., Fulbright Tower, 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
at 10:00 a.m., local time, on a date to be specified by the parties, and in any event not later
than the third (3rd) Business Day following the satisfaction or waiver (subject to
applicable Law) of the conditions (excluding conditions that, by their nature, cannot be satisfied
until the Closing Date) set forth in Article 7, unless this Agreement has been theretofore
terminated pursuant to its terms or unless another place, time or date is agreed to in writing by
the parties hereto (the date of the Closing being referred to herein as the “Closing
Date”).
Section 1.5 Partnership Agreement. At the Effective Time, the Limited Partnership
Agreement of the Surviving Company shall be amended to be in the form attached hereto as
Exhibit B (the “Surviving Company Partnership Agreement”) until thereafter changed
or amended as provided therein or under applicable Law.
ARTICLE 2
CONVERSION OF EQUITY INTERESTS; ELECTION PROCEDURES
Section 2.1 Effect of the Merger on Equity Interests in the Company. At the Effective
Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub or the
holders of any equity interests of the Company or Merger Sub:
(a) Conversion of Common Units. Subject to Section 2.1(e), each Common
Unit issued and outstanding immediately prior to the Effective Time shall thereupon be
converted automatically into and shall thereafter represent the right to receive the
following consideration (the “Common Unit Consideration”):
(i) each Common Unit (including each Phantom Unit) with respect to which an
election to receive all cash (a “Cash Election”) has been effectively made
and not revoked pursuant to Section 2.2 and each Non-Electing Common Unit
shall be converted into the right to receive $8.15 in cash without interest; and
(ii) each Common Unit (including each Phantom Unit) with respect to which an
election to receive a combination of stock and cash (a “Mixed Election”) has
been effectively made and not revoked pursuant to Section 2.2 shall be
converted into the right to receive (A) $4.075 per Common Unit in cash without
interest, and (B) a fraction of a validly issued, fully paid and nonassessable
Parent Share equal to the quotient determined
2
by dividing $4.075 by the Parent Share Value and rounding to the nearest
ten-thousandth of a share.
Each Common Unit converted into the right to receive the Common Unit Consideration
pursuant to this Section 2.1(a) shall cease to be outstanding and shall be canceled
and retired and shall cease to exist, and each holder of a Common Unit immediately prior to
the Effective Time (whether certificated or non-certificated and represented in book-entry
form) shall thereafter cease to be a limited partner of the Company or have any rights with
respect to such Common Units, except the right to receive the Common Unit Consideration.
(b) Conversion of Preferred Units. Subject to Section 2.1(e), each
Preferred Unit issued and outstanding immediately prior to the Effective Time shall
thereupon be converted automatically into and shall thereafter represent the right to
receive the following consideration (the “Preferred Unit Consideration”) (i) $4.075
per Preferred Unit in cash without interest, and (ii) a fraction of a validly issued, fully
paid and nonassessable Parent Share equal to the quotient determined by dividing $4.075 by
the Parent Share Value and rounding to the nearest ten-thousandth of a share. Each
Preferred Unit converted into the right to receive the Preferred Unit Consideration pursuant
to this Section 2.1(b) shall cease to be outstanding and shall be canceled and
retired and shall cease to exist, and each holder of a Preferred Unit immediately prior to
the Effective Time (whether certificated or non-certificated and represented in book-entry
form) shall thereafter cease to be a limited partner of the Company or have any rights with
respect to such Preferred Units, except the right to receive the Preferred Unit
Consideration.
(c) General Partner Units; Incentive Distribution Rights. Subject to
Section 2.1(e), each General Partner Unit issued and outstanding immediately prior
to the Effective Time shall thereupon be converted automatically into and shall thereafter
represent the right to receive $8.15 in cash without interest per General Partner Unit (the
“GP Unit Consideration”). The Incentive Distribution Rights issued and outstanding
immediately prior to the Effective Time shall at the Effective Time be converted
automatically into and shall thereafter represent the right to receive consideration of
$18,000,000 in cash without interest (the “GP IDR Consideration,” and, together with
the GP Unit Consideration, the “GP Consideration”). The General Partner Units and
Incentive Distribution Rights converted into the right to receive the GP Consideration
pursuant to this Section 2.1(c) shall cease to be outstanding and shall be canceled
and retired and shall cease to exist. Immediately following the admission of Holding Sub as
the general partner of the Company pursuant to Section 2.1(d), Company General
Partner shall cease to be a general partner of the Company, IDR Holdings shall cease to be a
limited partner of the Company and neither Company General Partner nor IDR Holdings will
have any rights with respect to the General Partner Units or the Incentive Distribution
Rights (whether such interests are certificated or non-certificated and represented in
book-entry form), except the right to receive the GP Consideration and the obligations set
forth in Section 6.11.
(d) Conversion of Merger Sub Limited Liability Company Interests; Admission of
General Partner and Limited Partner. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent or any of its Subsidiaries (i) Holding Sub’s
limited liability company interest in Merger Sub shall be converted into and become a 1%
general partner interest in the Surviving Company and Holding Sub shall be admitted to the
Surviving Company as the sole general partner, (ii) LP Sub’s limited liability company
interest in Merger Sub shall be converted into and become a 99% limited partner interest in
the Surviving Company, and LP Sub shall be admitted to the Surviving Company as the sole
limited partner, and (iii) the Company shall continue without dissolution. Immediately
after the Effective Time, such general partner interest and limited partner interest
referred to in the preceding sentence will constitute the only
3
outstanding partnership interests in the Surviving Company. At the Effective Time,
Holding Sub and LP Sub shall be automatically bound by the Surviving Company Partnership
Agreement and the books and records of the Surviving Company shall be revised to reflect the
admission of Holding Sub and LP Sub as the sole general partner and sole limited partner,
respectively, of the Surviving Company and the withdrawal, immediately following such
admissions, of (y) Company General Partner as general partner of the Company, and (z) all
Limited Partners (other than LP Sub) as limited partners of the Company.
(e) Adjustments. If between the date of this Agreement and the Effective Time,
the outstanding Units or capital stock of Parent, including securities convertible or
exchangeable into or exercisable for Units or capital stock of Parent, shall be changed into
a different number of units, shares or other securities by reason of any split (including
reverse split), combination, merger, consolidation, reorganization, reclassification,
recapitalization or other similar transaction, or any distribution payable in any equity
interests in the Company or Parent shall be declared thereon with a record date within such
period, the Merger Consideration, the exchange ratios and any other similarly dependent
items described herein, as the case may be, shall be appropriately adjusted to provide the
holders of interests of the Company converted into Merger Consideration pursuant to this
Section 2.1 the same economic effect as contemplated by this Agreement prior to such
event, and as so adjusted shall, from and after the date of such event, be the Merger
Consideration, the applicable exchange ratio or other dependent item, as applicable, subject
to further adjustment in accordance with this sentence; provided, however,
that nothing herein shall be construed to permit the Company Entities to take any action
with respect to their securities that is expressly prohibited by Section 5.1.
Section 2.2 Election Procedures.
(a) At the time of mailing of the Proxy Statement/Prospectus to holders of record of
Common Units entitled to vote at the Unitholder Meeting (such date, the “Mailing
Date”), an election form and other appropriate and customary transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and title to the
Certificates theretofore representing Common Units, or Book-Entry Common Units, shall pass,
only upon proper delivery of such Certificates or Book-Entry Common Units, respectively, to
the Exchange Agent, upon adherence to the procedures set forth in the letter of transmittal)
in such form as Parent and the Company shall reasonably agree (the “Election Form”)
shall be mailed to each holder of record of Common Units as of the record date for the
Unitholder Meeting.
(b) Each Election Form shall permit the holder (or the beneficial owner through
appropriate and customary documentation and instructions) to specify (i) the number of such
holder’s Common Units with respect to which such holder makes a Cash Election, and (ii) the
number of such holder’s Common Units with respect to which such holder elects to make a
Mixed Election. Any Common Units with respect to which the Exchange Agent has not received
an effective, properly completed Election Form on or before 5:00 p.m., New York time, on the
Business Day that is three (3) Business Days prior to the Closing Date (which date shall be
publicly announced by Parent as soon as reasonably practicable) (or such other time and date
as the Company and Parent shall agree in writing) (the “Election Deadline”) shall be
deemed to be “Non-Electing Common Units.” If the Closing Date is delayed to a
subsequent date, the Election Deadline shall be similarly delayed to a subsequent date, and
Parent shall promptly announce any such delay and, when determined, the rescheduled Election
Deadline, if any.
(c) Parent shall make Election Forms available as may reasonably be requested from time
to time by all Persons who become holders (or beneficial owners) of Common Units
4
between the record date for the Unitholder Meeting and the Election Deadline, and the
Company shall provide to the Exchange Agent all information reasonably necessary for it to
perform as specified herein and as specified in any agreement with the Exchange Agent.
(d) Any election made pursuant to this Section 2.2 shall have been properly
made only if the Exchange Agent shall have actually received a properly completed Election
Form prior to the Election Deadline. An Election Form shall be deemed properly completed
only (i) if accompanied by one or more Certificates representing Common Units duly endorsed
in blank or otherwise in form acceptable for transfer on the books of the Company (or by an
appropriate guarantee of delivery of such Certificates as set forth in such Election Form
from a firm that is an “eligible guarantor institution” (as defined in Rule 17Ad-15 under
the Exchange Act), and/or (ii) upon receipt of an “agent’s message” by the Exchange Agent or
such other evidence of transfer of Book-Entry Common Units to the Exchange Agent as the
Exchange Agent may reasonably request, collectively representing all Common Units covered by
such Election Form, together with duly executed transmittal materials included with the
Election Form. Any Election Form may be revoked or changed by the Person submitting such
Election Form, by written notice received by the Exchange Agent prior to the Election
Deadline. In the event an Election Form is revoked prior to the Election Deadline, the
Common Units represented by such Election Form shall become Non-Electing Common Units and
Parent shall cause the Certificates representing such Common Units to be promptly returned
without charge to the Person submitting the Election Form upon such revocation or written
request to that effect from the holder who submitted the Election Form; provided,
however, that a subsequent election may be made with respect to any or all of such
Common Units pursuant to this Section 2.2. In addition, all Cash Elections and
Mixed Elections shall automatically be revoked and all Certificates representing Common
Units shall be promptly returned without charge if this Agreement is terminated in
accordance with Article 8 of this Agreement.
(e) Subject to the terms of this Agreement and of the Election Form, the Exchange
Agent, in consultation with both Parent and the Company, shall have reasonable discretion to
determine whether any election, revocation or change has been properly or timely made and to
disregard immaterial defects in the Election Forms, and any good faith decisions of the
Exchange Agent regarding such matters shall be binding and conclusive. None of Parent or
the Company or the Exchange Agent shall be under any obligation to notify any Person of any
defect in an Election Form.
Section 2.3 No Fractional Shares. No certificates or scrip representing fractional
Parent Shares or book-entry credit of the same shall be issued upon the surrender for exchange of
Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Interests, no
dividends or other distributions of Parent shall relate to such fractional share interests,
including any fractional share interests resulting pursuant to Section 2.1(a), (b)
or (c), and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a stockholder of Parent. In lieu of such fractional share interests, Parent
shall pay to each holder of a Certificate (upon surrender thereof as provided in this Article
2) or Book-Entry Interest an amount in cash equal to the product obtained by multiplying (y)
the fractional share interest to which such holder would otherwise be entitled (after taking into
account all Company Equity Interests formerly represented by Certificates or Book-Entry Interests),
by (z) the Parent Share Value.
Section 2.4 Exchange of Certificates and Book Entry Interests.
(a) Prior to the Mailing Date, Parent shall appoint a commercial bank or trust company
reasonably acceptable to the Company to act as agent (the “Exchange Agent”) for the
purpose of exchanging Certificates and Book-Entry Interests for the Merger Consideration.
5
Parent shall pay all costs, fees, and expenses incurred in connection with the
retention and engagement of the Exchange Agent. In connection with the foregoing, Parent
and Merger Sub shall enter into an exchange agent and nominee agreement with the Exchange
Agent, in a form reasonably acceptable to the Company, setting forth the procedures to be
used in accomplishing the deliveries and other actions contemplated by this Section
2.4 and by Section 2.2 and Section 2.3.
(b) As soon as reasonably practicable after the Effective Time, Parent shall cause to
be mailed to each record holder, as of the Effective Time, of Certificates or Book-Entry
Interests representing Company Equity Interests (other than any holder which has previously
and properly surrendered all of its Certificate(s) or Book-Entry Interests to the Exchange
Agent in accordance with Section 2.2), a form of letter of transmittal (which shall
be in customary form and shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent or, in the case of Book-Entry Interests, upon adherence to the procedures set
forth in the letter of transmittal) and instructions for use in effecting the surrender of
the Certificates or, in the case of Book-Entry Interests, the surrender of such interests in
exchange for the Merger Consideration.
(c) Immediately prior to the Effective Time, Parent shall (1) issue and deposit or
cause to be deposited with the Exchange Agent to be held in trust for the holders of Company
Equity Interests, evidence of shares in book-entry form, representing Parent Shares issuable
pursuant to Section 2.1 in exchange for (x) outstanding Common Units for which a
Mixed Election (to the extent such consideration is payable in Parent Shares) has been made,
(y) outstanding Preferred Units (to the extent such consideration is payable in Parent
Shares), and (z) outstanding General Partner Units (to the extent such consideration is
payable in Parent Shares) and an amount of cash representing the aggregate cash
consideration payable pursuant to Section 2.1, and (2) deposit with the Exchange
Agent, from time to time as needed, cash in amounts that are sufficient to pay cash in lieu
of fractional shares pursuant to Section 2.3, and to make any dividends or other
distributions pursuant to Section 2.4(g), in each case, to be paid in respect of the
Certificates and the Book-Entry Interests by holders thereof who have properly delivered to
the Exchange Agent their Common Units, Preferred Units, General Partner Units, or Incentive
Distribution Rights. Any cash and Parent Shares deposited with the Exchange Agent shall
hereinafter be referred to as the “Exchange Fund.” The Exchange Agent shall,
subject to the terms of the exchange agent and nominee agreement entered into with Parent,
deliver the Merger Consideration contemplated to be issued pursuant to Section 2.1,
Section 2.2, and Section 2.3 out of the Exchange Fund. Until used for that
purpose, the cash portion of the Exchange Fund shall be invested by the Exchange Agent in
short-term obligations of or guaranteed by the United States of America or short-term
obligations of an agency of the United States of America which are backed by the full faith
and credit of the United States of America, in commercial paper obligations rated A-1 or P-1
or better by Xxxxx’x Investors Services Inc. or Standard & Poor’s Corporation, or in deposit
accounts, short-term certificates of deposit or banker’s acceptances of, or repurchase or
reverse repurchase agreements with commercial banks which have capital surplus and undivided
profits aggregating more than $10 billion (based on the most recent financial statements of
the banks which are then publicly available at the SEC or otherwise); provided,
however, that no such investment or losses thereon shall affect the Merger
Consideration payable to former holders of Company Equity Interests entitled to receive such
consideration or cash in lieu of fractional interests, and Parent shall promptly provide, or
shall cause the Surviving Company to promptly provide, additional cash funds to the Exchange
Agent for the benefit of the former holders of Company Equity Interests in the amount of any
such losses. The Exchange Fund shall not be used for any purpose other than the foregoing.
6
(d) Each holder of Company Equity Interests that have been converted into a right to
receive the Merger Consideration, upon completion of the calculations required by
Section 2.1 and surrender of a Certificate or Book-Entry Interests to the Exchange
Agent together with the letter of transmittal, duly executed and completed in accordance
with the instructions thereto, and such other documents as may reasonably be required by the
Exchange Agent, will be entitled to receive in exchange therefor (A) one or more Parent
Shares which shall be in uncertificated book-entry form and which shall represent, in the
aggregate, the whole number of Parent Shares that such holder has the right to receive
pursuant to Section 2.1 (after taking into account all Company Equity Interests then
held by such holder) and/or (B) a check in the amount equal to any cash that such holder has
the right to receive pursuant to this Article 2, consisting of the cash
consideration pursuant to Section 2.1, cash in lieu of any fractional shares
pursuant to Section 2.3, and any dividends and other distributions pursuant to
Section 2.4(g), in each case, less any required withholding Taxes. The Merger
Consideration shall be paid as promptly as reasonably practicable after receipt by the
Exchange Agent of the Certificate or Book-Entry Interests and letter of transmittal in
accordance with the foregoing. No interest shall be paid or accrued on any Merger
Consideration, cash in lieu of fractional shares in accordance with Article 2 hereof
or on any unpaid dividends and distributions payable to holders of Certificates or
Book-Entry Interests. Until so surrendered, each such Certificate and Book-Entry Interest
shall, from and after the Effective Time, represent for all purposes only the right to
receive the Merger Consideration, the issuance or payment of which (including any cash in
lieu of fractional shares) shall be deemed to be the satisfaction in full of all rights
pertaining to Company Equity Interests converted in the Merger.
(e) If any cash payment is to be made to a Person other than the Person in whose name
the applicable surrendered Certificate or Book-Entry Interest is registered, it shall be a
condition of such payment that the Person requesting such payment shall pay any transfer or
other similar Taxes required by reason of the making of such cash payment to a Person other
than the registered holder of the surrendered Certificate or Book-Entry Interest or shall
establish to the reasonable satisfaction of the Exchange Agent that such Tax has been paid
or is not payable. If any portion of the Merger Consideration is to be registered in the
name of a Person other than the Person in whose name the applicable surrendered Certificate
or Book-Entry Interest is registered, it shall be a condition to the registration thereof
that the surrendered Certificate or Book-Entry Interest shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such delivery of the
Merger Consideration shall pay to the Exchange Agent any transfer or other similar Taxes
required as a result of such registration in the name of a Person other than the registered
holder of such Certificate or Book-Entry Interest or establish to the reasonable
satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
(f) Subject to Section 2.1(d), at the Effective Time, the equity transfer books
of the Company shall be closed and there shall be no further registration of transfers of
Company Equity Interests thereafter. If, after the Effective Time, any Certificates or
Book-Entry Interests representing such Company Equity Interests are presented for transfer
to the Exchange Agent, each such interest shall be cancelled and exchanged for the Merger
Consideration provided for in this Article 2 in accordance with the terms hereof.
In the event of a transfer of ownership of any Company Equity Interests prior to the
Effective Time that has not been registered in the transfer records of the Company, the
Merger Consideration payable in respect of such Company Equity Interests shall be paid to
the transferee of such interest if the Certificate or Book-Entry Interest that previously
represented such Company Equity Interest is presented to the Exchange Agent accompanied by
all documents required to evidence and effect such transfer and to evidence that any
applicable transfer Taxes have been paid. From and after the Effective Time, the holders of
Certificates and Book-Entry Interests representing Company Equity Interests outstanding
7
immediately prior to the Effective Time shall cease to have any rights with respect to
such Company Equity Interests except as otherwise provided in this Agreement or by
applicable Law.
(g) No dividends or other distributions with respect to Parent Shares issued in the
Merger shall be paid to the holder of any unsurrendered Certificates or Book-Entry Interests
until such Certificates or Book-Entry Interests are surrendered as provided in this
Article 2. Following such surrender, subject to the effect of escheat, Tax or other
applicable Law, there shall be paid, without interest, to the record holder of the Parent
Shares, if any, issued in exchange therefor (i) at the time of such surrender, all dividends
and other distributions payable in respect of any such Parent Shares with a record date
after the Effective Time and a payment date on or prior to the date of such surrender and
not previously paid, and (ii) at the appropriate payment date, the dividends or other
distributions payable with respect to such Parent Shares with a record date after the
Effective Time but with a payment date subsequent to such surrender. For purposes of
dividends or other distributions in respect of Parent Shares, all Parent Shares to be issued
pursuant to the Merger shall be entitled to dividends or other distributions pursuant to the
immediately preceding sentence as if issued and outstanding as of the Effective Time.
Section 2.5 Termination of Fund. Any portion of the Exchange Fund that remains
unclaimed by holders of Company Equity Interests for twelve (12) months after the Effective Time
shall be paid to the Surviving Company or, if so directed by the Surviving Company, to Parent. Any
holders of Company Equity Interests who have not theretofore complied with this Article 2
shall thereafter look only to Parent and the Surviving Company for payment of the Merger
Consideration deliverable in respect of each Company Equity Interest formerly held by such holder
as determined pursuant to this Agreement without any interest thereon, and Parent and the Surviving
Company shall be responsible with respect to such payment. Notwithstanding the foregoing, none of
the Company, Parent, the Exchange Agent or any other Person shall be liable to any former holder of
Company Equity Interests for any amount delivered in good faith to a public official pursuant to
applicable abandoned property, escheat or similar Laws. Any portion of the Exchange Fund that
remains unclaimed by holders of Company Equity Interests prior to the date on which such portion of
the Exchange Fund would otherwise escheat to or become the property of any Governmental Entity
shall, to the extent permitted by applicable Law and immediately prior to such date, become the
property of the Surviving Company, free and clear of all claims or interest of any person
previously entitled thereto.
Section 2.6 Lost, Stolen or Destroyed Certificate. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required, the posting by the
holder of a bond in customary amount as indemnity against any claim that may be made against it
with respect to the Certificate, the Exchange Agent shall issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration such holder has a right to receive pursuant to
this Article 2.
Section 2.7 Withholding. Parent, the Surviving Company and the Exchange Agent shall
be entitled to deduct and withhold from the Merger Consideration deliverable under this Agreement,
and from any other payments made pursuant to this Agreement (including pursuant to Section
2.3) such amounts as Parent, the Surviving Company and the Exchange Agent are required to
deduct and withhold with respect to such delivery and payment under the Code or any provision of
applicable Tax Law. To the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes of this Agreement as having been delivered and paid to the holder of
Company Equity Interests and such other Persons, as applicable, in respect of which such deduction
and withholding was made by Parent, the Surviving Company and the Exchange Agent.
8
Section 2.8 Further Assurances. At and after the Effective Time, the officers and
directors of the Surviving Company or the Surviving Company’s general partner shall be authorized
to execute and deliver, in the name and on behalf of the Surviving Company (or in the name and on
behalf of the Surviving Company’s general partner, on behalf of the Surviving Company, as the case
may be), any deeds, bills of sale, assignments or assurances and to take and do, in the name and on
behalf of the Surviving Company (or in the name and on behalf of the Surviving Company’s general
partner, on behalf of the Surviving Company, as the case may be), any other actions and things
necessary to vest, perfect or confirm of record or otherwise in the Surviving Company any and all
right, title and interest in, to and under any of the rights, properties or assets acquired or to
be acquired by the Surviving Company as a result of, or in connection with, the Merger.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES
Except as disclosed in the Company SEC Documents or in the disclosure letter, dated as of the
date of this Agreement and delivered to Parent in connection with the execution and delivery of
this Agreement (the “Company Disclosure Letter”), the Company Parties, jointly and
severally, represent and warrant to the Parent Parties as follows:
Section 3.1 Corporate Organization and Qualification, Subsidiaries.
(a) Each of the Company Entities has been duly organized or formed and is validly
existing and in active status under the Laws of its jurisdiction of organization or
formation. Each of the Company Entities has the requisite limited partnership, limited
liability company or corporate (as applicable) power and authority to own, lease or
otherwise hold, use and operate all of its properties, rights and assets and to carry on its
business as it is now being conducted, and is duly licensed and qualified to do business and
is in good standing in each jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned or leased by it makes such
licensing or qualification necessary or appropriate, except where the failure to have such
power and authority or to be so licensed and qualified would not result in a Company
Material Adverse Effect.
(b) Section 3.1(b) of the Company Disclosure Letter sets forth a complete and
correct list of each of the Company Entities, together with (i) the nature of the legal
organization of such Person, (ii) the jurisdiction of organization or formation of such
Person, (iii) the name of each Company Entity that owns beneficially or of record any equity
or similar interest in such Person, (iv) the percentage interest owned by such Company
Entity in such Person, and (v) the classification of each Company Entity for U.S. federal
income tax purposes. None of the Company Entities is subject to any obligation to make any
investment in or capital contribution to any Person.
Section 3.2 Organizational and Governing Documents. Prior to the date of this
Agreement, the Company has furnished to Parent complete and correct copies of the organizational
and governing documents for all Company Entities (the “Company Entity Charter Documents”).
The Company Entity Charter Documents are in full force and effect. No Company Entity is in
violation of any provision of its Company Entity Charter Documents, and there has been no event,
condition or occurrence which, after notice or lapse of time or both, would constitute such a
default or violation of, or permit the termination of, any Company Entity Charter Document. The
minute books of the Company Parties, and each other Company Entity, copies of which have been made
available to Parent prior to the date of this Agreement, contain true, complete and correct records
of all meetings and other entity actions held or taken since
9
January 1, 2008 of their respective partners, members, boards of directors (or equivalent
governing bodies) and each committee of their boards of directors (or equivalent governing bodies).
Section 3.3 Capitalization.
(a) Management General Partner is the sole general partner of Company General Partner.
Management General Partner is the sole beneficial owner and record owner of 100% of the
general partner interest in Company General Partner (the “Company General Partner GP
Interests”), and such general partner interest has been duly authorized and validly
issued in accordance with applicable Laws and the Company General Partner Partnership
Agreement. Management General Partner owns the Company General Partner GP Interests free
and clear of any Liens other than those arising pursuant to the Company Entity Charter
Documents and other than immaterial Liens.
(b) Company General Partner is the sole general partner of the Company. Company
General Partner is the sole beneficial owner and record owner of 100% of the General Partner
Interest and the Incentive Distribution Rights, and the General Partner Interest and
Incentive Distribution Rights have each been duly authorized and validly issued in
accordance with applicable Laws and the Company Partnership Agreement. Company General
Partner owns the General Partner Interest free and clear of any Liens other than those
arising pursuant to the Company Partnership Agreement and other than immaterial Liens.
(c) The Company has no limited partner interests or other partnership or equity
interests issued and outstanding other than (i) 19,160,394 Common Units, 99,683 of which are
owned beneficially and of record by Company General Partner, (ii) 202,447 General Partner
Units, all of which are owned beneficially and of record by the Company General Partner,
(iii) 19,178,120 Preferred Units, all of which are owned beneficially and of record by KA
First Reserve, LLC, (iv) the Incentive Distribution Rights, all of which are owned
beneficially and of record by IDR Holdings, and (v) other equity-based awards in the form of
389,471 aggregate Phantom Units issued under the Company LTIP. Except as set forth in the
preceding sentence, there are no outstanding (x) options, warrants, preemptive rights,
subscriptions, calls or other rights, convertible securities, exchangeable securities,
agreements or commitments of any character obligating Company General Partner, the Company
or any Company Subsidiary to issue, transfer or sell any partnership interest or other
equity interest in the Company, Company General Partner or any Company Subsidiary or
securities convertible into or exchangeable for such partnership interests or equity
interests or (y) contractual obligations of Company General Partner, the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any partnership interest or
other equity interest in the Company, Company General Partner or any Company Subsidiary or
any such securities or agreements listed in clause (x) of this sentence. The Company does
not have any Voting Debt. There are no obligations of any Company Entity to make any
investment (in the form of a loan, capital contribution or otherwise) in any Company Entity
or any other Person, or pursuant to which any Company Entity is or could be required to
register Company Equity Interests or other securities under the Securities Act. No Company
Entity owns, or has any contractual or other obligation to acquire, any equity securities or
other securities of any Person (other than another Company Entity) or any direct or indirect
equity or ownership interest in any other business. There are no voting trusts, proxies or
other agreements, commitments or understandings of any character to which any Company Entity
is a party or by which any of them is bound with respect to the holding, voting or
disposition of any Company Equity Interests or any equity interests of the Company
Subsidiaries, other than the Company Entity Charter Documents.
10
(d) Each of the Common Units and the Preferred Units and the limited partner interests
represented thereby have been duly authorized and validly issued in accordance with
applicable laws and the Company Partnership Agreement, and are fully paid (to the extent
required under the Company Partnership Agreement) and non-assessable (except for the general
partner interest and except as such non-assessability may be affected by Sections 17-607 and
17-804 of the DRULPA or similar provisions of Law). No Company Equity Interests were issued
in violation of pre-emptive or similar rights (whether statutory or otherwise) or any other
agreement or understanding. All of the outstanding equity interests of the Company
Subsidiaries have been duly authorized and are validly issued, fully paid (except to the
extent required under a Company Entity Charter Document) and non-assessable (except for any
general partner interest and except as such non-assessability may be affected by Sections
17-607 and 17-804 of the DRULPA or similar provisions of Law) and free of pre-emptive rights
(whether statutory or otherwise) and were not issued in violation of pre-emptive or similar
rights (whether statutory or otherwise); and all such units, shares and other equity
interests are owned, directly or indirectly, by the Company, free and clear of all Liens
other than those arising pursuant to the Company Entity Charter Documents, and other than
immaterial Liens.
Section 3.4 Authorization of Agreement; No Violation; Special Approval.
(a) Each of the Company Parties has, as applicable, all requisite limited partnership
or limited liability company power and authority to execute and deliver this Agreement and,
subject to the Company Unitholder Approvals, to consummate the transactions contemplated by
this Agreement. The execution and delivery by the Company Parties of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly, validly and
unanimously approved by the Company Board and by Company General Partner, as the general
partner of the Company. Company General Partner has approved the Merger and this Agreement
for all purposes under Article XIV of the Company Partnership Agreement (the “General
Partner Approval”) and has, acting through the Company Board, directed that this
Agreement be submitted, in accordance with the Company Partnership Agreement and applicable
Law, to (x) the Common Unitholders for approval at the Unitholder Meeting (the “Common
Unitholder Approval”), and (y) the Preferred Unitholders for approval at the Unitholder
Meeting (the “Preferred Unitholder Approval,” and together with the Common
Unitholder Approval, the “Company Unitholder Approvals”). Except for approvals that
have been previously obtained and the Company Unitholder Approvals, no other votes or
approvals on the part of the Company Entities are necessary to approve this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company Parties and, assuming due authorization, execution and
delivery hereof by the Parent Parties, constitutes a valid and binding obligation of the
Company Parties, enforceable against the Company Parties in accordance with its terms,
except as such enforcement may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other Laws
affecting or relating to creditors’ rights generally or (ii) the rules governing the
availability of specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered in a Proceeding in equity or
at law.
(b) Except as would not be reasonably expected to have a Company Material Adverse
Effect, none of (i) the execution, delivery or performance of this Agreement, (ii) the
compliance by the Company Entities with the provisions of this Agreement, or (iii) the
consummation of the Merger and the other transactions contemplated by this Agreement, will,
directly or indirectly, with or without notice or lapse of time, (A) contravene, conflict
with or result in any violation or breach of any provision of the Company Entity Charter
Documents
11
(subject to receiving the Company Unitholder Approvals), or (B) assuming that the
consents and approvals referred to in Section 3.5 are duly obtained, (1) give any
Governmental Entity or other Person the right to challenge the Merger or any of the
transactions contemplated by this Agreement, (2) violate any Law applicable to the Company
Entities or any of their respective properties or assets, or (3) violate, conflict with,
result in a breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the modification, cancellation, acceleration or termination of or
a right of modification, cancellation, acceleration or termination under, accelerate the
performance required by, or result in the creation of any Lien upon any of the respective
properties, rights or assets of any Company Entity under, any of the terms, conditions or
provisions of any Contract to which any Company Entity is a party, or by which any of the
Company Entities or any of their respective properties or assets is bound.
(c) At a meeting duly called and held, the Company Board determined, by unanimous vote,
that this Agreement, the Merger and the other transactions contemplated hereby are fair and
reasonable to the Company and the Limited Partners and approved this Agreement, the Merger
and the other transactions contemplated hereby.
(d) At a meeting duly called and held, the Conflicts Committee determined, by unanimous
vote, that this Agreement and the Merger are fair and reasonable to the Company and the
Limited Partners and approved this Agreement and the Merger, and such approval constituted a
Special Approval.
Section 3.5 Consents and Approvals. Except for (i) any notices or filings required by
the HSR Act or other Antitrust Law and the termination or expiration of the waiting period under
the HSR Act or other Antitrust Law, (ii) the filing of any other required applications or notices
with any state or foreign agencies of competent jurisdiction and approval of such applications and
notices (the “Other Approvals”), (iii) the filing with the SEC of (A) a proxy
statement/prospectus related to the transactions contemplated by this Agreement and the matters to
be submitted to the Unitholders at the Unitholder Meeting (as may be amended or supplemented from
time to time, the “Proxy Statement/Prospectus”), and (B) such other reports or filings
under the Exchange Act or the Securities Act as may be required in connection with this Agreement
and the transactions contemplated by this Agreement, (iv) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware pursuant to the DRULPA and the LLC Act, (v)
any consents, authorizations, approvals, filings or exemptions in connection with compliance with
the rules of the NYSE, (vi) such filings and approvals as may be required to be made or obtained
under the securities or “Blue Sky” laws of various states in connection with the issuance of the
Parent Shares pursuant to this Agreement, (vii) the filings, clearances, consents, notices and
approvals set forth in Section 3.5 of the Company Disclosure Letter and (viii) such
filings, clearances, consents, notices and approvals as would not reasonably be expected to have a
Company Material Adverse Effect (the consents referred to in clauses (i) through (viii), the
“Company Consents”), no consents or approvals of or filings or registrations with any
Governmental Entity or any Third Party are necessary in connection with the execution and delivery
by the Company Entities of this Agreement or the consummation by the Company Entities of the
transactions contemplated by this Agreement.
Section 3.6 Regulatory Matters; Reports.
(a) The Company Entities have each timely filed (i) all reports, schedules, forms,
registrations, statements and certifications, together with any amendments required or
requested to be made with respect thereto, that they were required to file since January 1,
2008 with (A) the SEC, (B) the NYSE, and (C) each other applicable Governmental Entity.
Except as set forth in Section 3.6(a) of the Company Disclosure Letter, to the
Knowledge of the Company, no
12
Governmental Entity has initiated since January 1, 2008 or has pending any Proceeding
with respect to the business, disclosures or operations of any Company Entity. Except as
set forth in Section 3.6(a) of the Company Disclosure Letter, to the Knowledge of
the Company, since January 1, 2008, no Governmental Entity has resolved any Proceeding into
the business, disclosures or operations of any Company Entity. Except as set forth in
Section 3.6(a) of the Company Disclosure Letter, Since January 1, 2008, to the
Knowledge of the Company, there is no unresolved or threatened, comment, exception or stop
order by any Governmental Entity with respect to any report or statement relating to any
examinations or inspections of any Company Entity. Since January 1, 2008, there have been
no civil investigative demands or other formal or informal inquiries by, or disagreements or
disputes with, any Governmental Entity with respect to the business, operations, policies or
procedures of any Company Entity.
(b) No Company Entity is subject to any cease-and-desist or other Order or formal or
informal enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any directive by, or has been ordered to pay any
civil money penalty or other amount by, or has adopted any policies, procedures or board
resolutions at the request or suggestion of, any Governmental Entity that currently
restricts or affects in any material respect the conduct of its business (or that, upon
consummation of the Merger, would restrict in any material respect the conduct of the
business of Parent or any of its Subsidiaries), or that in any material manner relates to
its ability to pay dividends or make distributions, its credit, risk management or
compliance policies, its internal controls, its management or its business, other than those
of general application that apply to companies engaged in the business of transporting
products by barge (each item in this sentence, a “Company Regulatory Agreement”),
nor has any Company Entity been advised since January 1, 2008 by any Governmental Entity
that it is considering issuing, initiating, ordering, or requesting any such Company
Regulatory Agreement.
(c) Prior to the date of this Agreement, the Company has furnished or made available to
Parent (including via XXXXX) an accurate, complete and correct copy of each (i) registration
statement, prospectus, schedule, proxy statement, form, document and report filed with or
furnished to the SEC by the Company since January 1, 2008 (together with the exhibits and
other information incorporated therein, as amended prior to the date of this Agreement since
the respective dates of filing, the “Company SEC Documents”), and (ii) communication
mailed or otherwise delivered by the Company to the Unitholders since January 1, 2008. No
such Company SEC Document or communication, at the time filed or communicated (and in the
case of registration statements and proxy statements, on the dates of effectiveness and the
dates of relevant meetings, respectively) contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they were made,
not misleading, except to the extent amended or superseded by a subsequently filed Company
SEC Document. As of their respective dates, all Company SEC Documents complied as to form
in all material respects with the Regulations of the SEC with respect thereto. No executive
officer of Management General Partner signing on behalf of the Company has failed in any
respect to make the certifications required of him or her under Section 302 or 906 of SOX
and, at the time of filing or submission of each such certification, such certification was
true and accurate and complied with SOX.
(d) The Company has made available to Parent copies of all comment letters received by
the Company from the SEC since January 1, 2008 relating to the Company SEC Documents,
together with all written responses of the Company thereto. There are no outstanding
13
or unresolved comments in any such comment letters received by the Company from the
SEC. Except as set forth in Section 3.6(d) of the Company Disclosure Letter, to the
Knowledge of the Company, none of the Company SEC Documents is the subject of any ongoing
review by the SEC.
Section 3.7 Financial Statements.
(a) Each of the financial statements of the Company and the Company Subsidiaries
included (or incorporated by reference) in the Company SEC Documents (including the related
notes, where applicable) (i) fairly presents in all material respects the consolidated
results of operations, cash flows, statements of partners’ capital and consolidated
financial position of the entities purported to be shown thereby for the respective fiscal
periods or as of the respective dates therein set forth (subject in the case of unaudited
statements to recurring year-end audit adjustments normal in nature and amount), (ii)
complied as to form, as of their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and with the published Regulations of the
SEC with respect thereto, and (iii) has been prepared in accordance with GAAP consistently
applied during the periods involved, except, in each case, as indicated in such statements
or in the notes thereto.
(b) The Company (x) has implemented and maintains disclosure controls and procedures
(as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information
relating to the Company is made known to the management of the Company and Company General
Partner by others within those entities, and (y) has disclosed, based on its most recent
evaluation prior to the date of this Agreement, to the Company’s outside auditors and the
audit committee of the Company Board (i) any significant deficiencies and material
weaknesses in the design or operation of internal controls over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal controls over financial reporting. These
disclosures were made in writing by management to the Company’s auditors and to the audit
committee of the Company Board, a copy of which has previously been made available to
Parent. There is no reason to believe that the Company’s outside auditors, chief executive
officer and chief financial officer will not be able to give the certifications and
attestations required pursuant to the Regulations adopted pursuant to Section 404 of SOX,
without qualification, when next due.
(c) Except as set forth in Section 3.7(c) of the Company Disclosure Letter,
since January 1, 2008, neither the principal executive officer nor the principal financial
officer of Management General Partner has become aware of any fact, circumstance or change
that is reasonably likely to result in a “significant deficiency” or a “material weakness”
in the Company’s internal controls over financial reporting.
(d) Management General Partner has adopted a code of ethics, as defined by Item 406(b)
of Regulation S-K, for senior financial officers, applicable to its principal financial
officer, comptroller or principal accounting officer, or persons performing similar
functions. The Company has promptly disclosed any change in or waiver of its code of ethics
with respect to any such persons, as required by Section 406(b) of SOX. To the Knowledge of
the Company, there have been no violations of provisions of such codes of ethics by any such
persons since January 1, 2008.
14
(e) Since January 1, 2008, (i) none of the Company Entities nor, to the Knowledge of
the Company, any Representative of any Company Entity, has received or otherwise had or
obtained Knowledge of any material complaint, allegation, assertion or claim, whether
written or oral, regarding the accounting or auditing practices, procedures, methodologies
or methods of any Company Entity or their respective internal accounting controls, including
any material complaint, allegation, assertion or claim that any Company Entity has engaged
in questionable accounting or auditing practices, and (ii) no attorney representing a
Company Entity, whether or not employed by a Company Entity, has reported evidence of a
material violation of securities Laws, breach of fiduciary duty or similar violation by any
Company Entity or any Company Entity’s officers, directors, employees or agents to the
Company Board or any committee thereof or to any officer of any Company Entity.
Section 3.8 Undisclosed Liabilities. Neither the Company nor any Company Subsidiary
has any liability or obligation of any nature whatsoever (whether absolute, accrued, contingent,
determined, determinable or otherwise and whether due or to become due), except for (a) those
liabilities that are reflected or reserved against on the consolidated balance sheet of the Company
included in its Quarterly Report on Form 10-Q filed with the SEC for the fiscal quarter ended
December 31, 2010 (the “Company Balance Sheet Date”) (including any notes thereto) (b)
liabilities incurred in the ordinary course of business consistent with past practice since
December 31, 2010, (c) liabilities, obligations or contingencies which are of a nature not required
to be reflected in the consolidated financial statements (including the notes thereto) of the
Company and the Company Subsidiaries, and (d) liabilities, obligations or contingencies that (i)
would not, individually or in the aggregate, have a Company Material Adverse Effect or (ii) have
been discharged or paid in full prior to the date of this Agreement. None of the Company Entities
is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar Contract or arrangement (including any Contract or arrangement relating
to any transaction or relationship between or among any Company Entity, on the one hand, and any
unconsolidated Affiliate, including any structured finance, special purpose or limited purpose
entity or Person, on the other hand, or any “off-balance sheet arrangement” (as defined in Item
303(a) of Regulation S-K)).
Section 3.9 Absence of Certain Changes or Events. Except as set forth in Section
3.9 of the Company Disclosure Letter, from June 30, 2010 to the date of this Agreement, each
Company Entity has conducted its business in the ordinary course consistent with past practice, and
during such period, there has not occurred:
(a) a Company Material Adverse Effect;
(b) any action or event of the type described in Section 5.1(b);
(c) any material loss, damage or destruction to, or any material interruption in the
use of, any of the assets of any Company Entity (whether or not covered by insurance);
(d) (i) any declaration, accrual, set aside or payment of any dividend or any other
distribution in respect of any Units or other Company Equity Interest other than 761,914
Preferred Units issued as “pay-in-kind” dividends on such Preferred Units, or (ii) any
repurchase, redemption or other acquisition by any Company Entity of any Units or other
Company Equity Interest;
(e) any sale, issuance or grant, or authorization of the issuance of, (i) any Company
Unit or other Company Equity Interest other than the Preferred Units and 761,914 Preferred
Units issued as “pay-in-kind” dividends on such Preferred Units, (ii) any option, warrant or
right to
15
acquire any Company Equity Interest or any other security of any Company Subsidiary, or
(iii) any instrument convertible into or exchangeable for any Company Equity Interests or
other security of a Company Entity;
(f) (i) any amendment to any Company Entity Charter Document (other than the amendment
of the Company Partnership Agreement on September 10, 2010 in connection with the initial
issuance of the Preferred Units), or (ii) any merger, consolidation, security exchange,
business combination, recapitalization, reclassification of equity securities, split or
reverse split of equity securities or similar transaction involving a Company Entity;
(g) any receipt by any Company Entity of any Acquisition Proposal (other than the
issuance of the Preferred Units and the transactions and proposals in connection therewith);
(h) any creation of any Subsidiary of any Company Entity or acquisition by any Company
Entity of any equity interest or other interest in any other Person;
(i) any capital expenditure (other than drydocking capital expenditures) by any Company
Entity which, when aggregated with all other capital expenditures made on behalf of the
Company Entities since the Company Balance Sheet Date, exceeds $3.0 million individually or
$6.0 million in the aggregate;
(j) any (i) acquisition, lease or license by any Company Entity of any material right
or other material asset from any other Person, (ii) sale or other disposal or lease or
license by any Company Entity of any material right or other material asset to any other
Person, or (iii) waiver or relinquishment by any Company Entity of any material right,
except for rights or other assets acquired, leased, licensed or disposed of in the ordinary
course of business and consistent with past practices;
(k) any material write-off as uncollectible, or establishment of any material
extraordinary reserve with respect to, any account receivable or other indebtedness of any
Company Entity;
(l) any pledge of any assets of or sufferance of any of the assets of any Company
Entity to become subject to any Lien, except for pledges of immaterial assets made in the
ordinary course of business and consistent with past practices;
(m) any (i) loan by any Company Entity to any Person, or (ii) incurrence or guarantee
by any Company Entity of any indebtedness for borrowed money;
(n) any (i) adoption, establishment, entry into or amendment by any Company Entity of
any Benefit Plan, or (ii) payment of any bonus or any profit sharing or similar payment to,
or material increase in the amount of the wages, salary, commissions, fringe benefits or
other compensation or remuneration payable to, any of the directors, officers or employees
of any Company Entity other than annual salary increases in the ordinary course of business
consistent with past practices;
(o) any change of the methods of accounting or accounting practices of any Company
Entity in any material respect;
(p) any material change in the Tax methods, principles or elections of any Company
Entity;
16
(q) any notice of audit or recoupment of amounts previously reimbursed by any
Governmental Entity or Third Party payor;
(r) any adjustment in excess of $1 million to balances reflected in the Company’s
consolidated financial statements that do not pertain to the period covered by such
consolidated financial statements;
(s) any amendment to any material Third Party payor Contract that would result in a
decrease in an amount to be received by any Company Entity; or
(t) any agreement or commitment to take any of the actions referred to in clauses (b)
through (v) above.
Section 3.10 Property.
(a) The Company and the Company Subsidiaries, individually or together, own, lease or
have the right to use all of their material properties and assets reflected in the Company’s
Form 10-Q filed with the SEC for the quarter ended December 31, 2010 or otherwise used by
them in connection with the conduct of their businesses, other than any properties or assets
that have been sold or otherwise disposed of since the date of the Company Balance Sheet
Date in the ordinary course of business consistent with past practice (all such material
properties and assets are referred to as the “Assets”). The Company and the Company
Subsidiaries each have marketable title to, or in the case of leased or subleased Assets,
valid and subsisting leasehold interests in, all of the Assets free and clear of Liens of
any nature whatsoever, other than Permitted Encumbrances.
(b) Section 3.10(b) of the Company Disclosure Letter identifies all real
property and interests in real property owned in fee by the Company or any Company
Subsidiary (the “Owned Real Property”). The Company or a Company Subsidiary, as
applicable, has good, valid and marketable title to the Owned Real Property, free and clear
of any Lien, other than Permitted Encumbrances. There are no outstanding options or rights
of first refusal to purchase the Owned Real Property or any portion of the Owned Real
Property or interest therein. To the Knowledge of the Company, the major structural
elements of the improvements comprising the Owned Real Property, including mechanical,
electrical, heating, ventilation, air conditioning or plumbing systems, elevators and
parking elements, are sufficient in all material respects to allow the business of the
Company and the Company Subsidiaries, as applicable, to be operated in the ordinary course
of business consistent with past practice.
(c) Section 3.10(c) of the Company Disclosure Letter sets forth, as of the date
of this Agreement, a true, correct and complete list of the material real property which is
leased, subleased or licensed to the Company or any Company Subsidiary (the “Leased Real
Property” and together with the Owned Real Property, the “Real Property”); the
lease, sublease or license for such property (each a “Lease”) is valid, legally
binding, enforceable and in full force and effect with respect to the Company or the Company
Subsidiary, as applicable, and, to the Knowledge of the Company, the applicable counterparty
thereto, except as such enforcement may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other
Laws affecting or relating to creditors’ rights generally or (ii) the rules governing the
availability of specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered in a Proceeding in equity or
at law. Except as would not have a Company Material Adverse Effect, neither the Company nor
any Company Subsidiary is in breach of or default under the terms of
17
any Lease (or has taken or failed to take any action which with notice or lapse of
time, or both, would constitute a default thereunder). Prior to the date hereof, the
Company has provided to Parent true and complete copies of each Lease as in effect on the
date of this Agreement.
(d) The Real Property is in material compliance with all applicable zoning Laws and
building codes, and the buildings and improvements located on the Real Property are
sufficient in all material respects to allow the business of the Company and the Company
Subsidiaries, as applicable, to be operated in the ordinary course of business, consistent
with past practice.. There are no pending or, to the Knowledge of the Company, threatened
Proceedings with respect to or otherwise affecting the Real Property, except as would not
have a Company Material Adverse Effect. The Company and the Company Subsidiaries are in
material compliance with all applicable health and safety related Laws for the Real
Property, including those under the Americans with Disabilities Act of 1990 and the
Occupational Health and Safety Act of 1970.
(e) There is no pending or, to the Knowledge of the Company, threatened condemnation of
any part of the Real Property used or necessary for the conduct of the businesses of the
Company or the Company Subsidiaries, as they are currently conducted, by any Governmental
Entity or other Person, which condemnation would result in an Company Material Adverse
Effect.
Section 3.11 Contracts.
(a) Except as set forth and described in Section 3.11(a) of the Company
Disclosure Letter, neither the Company nor any of the Company Subsidiaries is a party to,
bound by or subject to any Contract (whether written or oral) (i) that is a “material
contract” (within the meaning of Item 601(b)(10) of Regulation S-K) to be performed after
the date of this Agreement, (ii) that contains a non-compete or non-solicit requirement or
other provision that restricts in any material respect the conduct of, or the manner of
conducting, any line of business by the Company or any Company Subsidiary (including any
geographic limitations), or upon consummation of the Merger could restrict in any material
respect the ability of Parent, the Surviving Company or any of their respective Subsidiaries
to engage in any line of business (including any geographic limitations), (iii) that
obligates the Company or any Company Subsidiary to conduct business on an exclusive or
preferential basis with any Third Party or containing “most favored nation” rights or upon
consummation of the Merger will obligate Parent, the Surviving Company or any of their
respective Subsidiaries to conduct business with any Third Party on an exclusive or
preferential basis or pursuant to “most favored nation” rights, (iv) with a labor union or
guild (including any collective bargaining agreement), (v) that creates a partnership, joint
venture, strategic alliance or similar arrangement with respect to any business of the
Company or any Company Subsidiary, (vi) that is an indenture, credit agreement, loan
agreement, security agreement, guarantee, note, mortgage or other Contract providing for or
guaranteeing indebtedness in excess of $3.0 million, (vii) that, individually or together
with related Contracts, provides for the acquisition, disposition, license, use,
distribution or outsourcing, after the date of this Agreement, of assets, services, rights
or properties with a value or requiring annual fees in excess of $3.0 million, (viii) that
involves aggregate payments by or to the Company or the Company Subsidiaries in excess of
$3.0 million in any twelve (12) month period or more than $6.0 million through the remaining
term of the Contract, except for any Contract that may be cancelled without penalty by the
Company or the Company Subsidiary, as applicable, upon notice of 60 days or less, (ix)
containing provisions triggered by a change in control of any Company Entity, (x) in favor
of directors, officers, members, managers or partners relating to employment or compensation
or providing rights to indemnification, (xi) for or relating to the purchase, sale, or
construction of any Vessel, including an option with respect to
18
the purchase, sale, or construction of any Vessel, or (xii) the loss or breach of
which would reasonably be expected to have a Company Material Adverse Effect. Each Contract
of the type described in this Section 3.11(a) is referred to herein as a
“Material Contract.” True and complete copies of all Material Contracts in effect
on the date hereof, including all amendments, supplements, schedules and exhibits thereto,
have been provided to Parent prior to the date hereof.
(b) (i) Except as would not have a Company Material Adverse Effect, (i) each Material
Contract is valid and binding on the Company or the applicable Company Subsidiary,
enforceable against it in accordance with its terms and is in full force and effect, except
as such enforcement may be limited by (A) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium or other Laws
affecting or relating to creditors’ rights generally or (B) the rules governing the
availability of specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered in a Proceeding in equity or
at law, (ii) each of the Company or the applicable Company Subsidiary and, to the Knowledge
of the Company, each other party thereto has duly performed all obligations required to be
performed by it under each Material Contract, and (iii) no event or condition exists that
constitutes or, after notice or lapse of time or both, will constitute, a breach, violation
or default on the part of the Company or the applicable Company Subsidiary or, to the
Knowledge of the Company, any other party thereto, under any such Material Contract. There
are no disputes pending or, to the Knowledge of the Company, threatened with respect to any
Material Contract, except as would not have a Company Material Adverse Effect.
Section 3.12 Compliance with Applicable Law; Permits.
(a) Except with respect to employee benefit matters, Tax matters and environmental
matters, which are addressed exclusively in Section 3.14, Section 3.15 and
Section 3.18, respectively, or as set forth in Section 3.12 of the Company
Disclosure Letter, and except as would not have a Company Material Adverse Effect, the
Company Entities have complied in all respects with all applicable Laws, and are not in
default or violation of, and have not received any notices of violation with respect to, any
Laws in connection with the conduct of their respective businesses or the ownership or
operation of their respective businesses, assets (including the Vessels) and properties.
(b) Except as would not have a Company Material Adverse Effect, the Company Entities
have obtained and hold all Permits that are necessary to own, lease or otherwise hold, use
and operate their properties, rights and other assets (including the Vessels) and are
necessary for the lawful conduct of their respective businesses, and have complied in all
respects with, and are not in default or in violation in any respect of, any Laws or legal
requirements applicable to the Company Entities. Such Permits are in full force and effect
and there are no Proceedings pending or, to the Knowledge of the Company, threatened that
seek the revocation, cancellation, suspension or adverse modification thereof. The
consummation of the Merger, in and of itself, would not cause any revocation, modification
or cancellation of any such Permit.
Section 3.13 Legal Proceedings. Except with respect to employee benefit matters, Tax
matters and environmental matters, which are addressed exclusively in Section 3.14,
Section 3.15 and Section 3.18, or as set forth in Section 3.13 of the
Company Disclosure Letter, none of the Company Entities is a party to, and there are no pending or,
to the Knowledge of the Company, threatened, Proceedings of any nature against any Company Entity
or to which any of their assets are subject, except as would not have a Company Material Adverse
Effect. There is no Order or settlement agreement imposed upon any Company Entity or the assets of
any Company Entity (or that, upon consummation of the Merger, would
19
apply to Parent or any of its Subsidiaries) that is material to the operations and business
conducted by the Company and the Company Subsidiaries.
Section 3.14 Employee Benefit Plans.
(a) Section 3.14(a) of the Company Disclosure Letter lists all Benefit Plans
maintained, sponsored or contributed to by the Company Entities and any ERISA Affiliates
(the “Company Benefit Plans”). With respect to each Company Benefit Plan, the
Company Entities have made available to Parent true, correct and complete copies of (where
applicable) (i) any and all plan documents (including trust agreements), summary plan
descriptions, summaries of material modifications, amendments and resolutions related to
such Company Benefit Plan, (ii) the three (3) most recent audited financial statements and
actuarial valuation reports, if any, (iii) the three (3) most recent Internal Revenue
Service (“IRS”) Form 5500 Annual Reports, if any, (iv) the most recent IRS
determination letters or opinion letters, if any, and all material communications to or from
the IRS or any other Governmental Entity and (v) any and all insurance Contracts and other
Contracts related to such Company Benefit Plan. Each Company Benefit Plan may be amended or
terminated in accordance with its terms.
(b) There has been no non-exempt “prohibited transaction” (as such term is defined in
Section 406 of ERISA and Section 4975 of the Code) with respect to any Company Benefit Plan,
which could reasonably result in a material liability to any of the Company Entities.
(c) Each Company Benefit Plan has been maintained and administered in material
compliance with its terms and the provisions of applicable Laws. Except as set forth in
Section 3.14(c) of the Company Disclosure Letter, all equity compensation awards
issued by any Company Entity have been made, accounted for, reported and disclosed in
accordance with applicable Law, accounting rules and stock exchange requirements. Each
Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code, and
the trusts created thereunder intended to be exempt from tax under the provisions of Section
501(a) of the Code has received or is the subject of a favorable determination or opinion
letter from the IRS, and nothing has occurred which could adversely affect such
qualification.
(d) No Company Benefit Plan is an “employee benefit pension plan” (within the meaning
of Section 3(2) of ERISA) subject to Title IV of ERISA, and no Company Entity or any Company
Entity’s ERISA Affiliate has ever incurred any liability under Title IV of ERISA (that
remains unsatisfied), and no condition exists that presents a material risk to any Company
Entity or any Company Entity’s ERISA Affiliate of incurring any liability under such Title.
No Company Benefit Plan is a “multiemployer plan” (within the meaning of Section 4001(a)(3)
of ERISA), a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of
ERISA), and no Company Entity or any Company Entity’s ERISA Affiliate has an obligation to
contribute, or incurred any liability in respect of a contribution, to any multiemployer
plan or multiple employer welfare arrangement that remains unsatisfied.
(e) There are no pending or, to the Knowledge of the Company, threatened claims (other
than routine claims for benefits), and no pending or, to the Knowledge of the Company,
threatened Proceedings against any Company Benefit Plan, or against the assets of any
Company Benefit Plan, and no facts or circumstances exist that could reasonably be expected
to give rise to any such claims or Proceedings.
20
(f) Except as set forth in Section 3.14(f) of the Company Disclosure Letter, no
Company Benefit Plan subject to Title I or ERISA holds any “employer security” or “employer
real property” (each as defined in Section 407(d) of ERISA).
(g) Except as set forth in Section 3.14(g) of the Company Disclosure Letter,
each compensation arrangement between any Company Entity and a service provider and each
Company Benefit Plan that is subject to Section 409A of the Code complies with Section 409A
of the Code (and has so complied for the entire period during which Section 409A of the Code
has applied to such arrangement or Company Benefit Plan). None of the transactions
contemplated by this Agreement will constitute or result in a deferral of compensation in
violation of Section 409A of the Code.
(h) Except as set forth in Section 3.14(h) of the Company Disclosure Letter,
the execution and delivery of this Agreement, the consummation of any transaction
contemplated hereby or any termination of employment or service as a consequence thereof
will not, individually or together with the occurrence of some other event (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any Person, (ii) materially increase or otherwise enhance any
benefits otherwise payable by the Company Entities, (iii) result in the acceleration of the
time of payment or vesting of any such benefits, except as required under Section 411(d)(3)
of the Code, (iv) materially increase the amount of compensation due to any Person, (v)
require any Company Entity to place in trust or otherwise set aside any amount in respect of
severance pay or any other payment or benefit, or (vi) result in the forgiveness in whole or
in part of any material outstanding loans made by the Company Entities to any Person.
(i) Each Company Benefit Plan that is a “group health plan” (within the meaning of
Section 5000(b)(1) of the Code) has been operated in material compliance with the group
health plan continuation coverage requirements of Section 4980B of the Code and Sections 601
through 608 of ERISA (“COBRA Coverage”) or similar state Law, Section 4980D of the
Code and Sections 701 through 707 of ERISA, Title XXII of the U.S. Public Health Service Act
and the provisions of the U.S. Social Security Act, to the extent such requirements are
applicable. Except as set forth in Section 3.14(i) of the Company Disclosure
Letter, no Company Benefit Plan obligates any Company Entity to provide benefits (whether or
not insured) to any employee or former employee, consultant or other service provider of or
to any Company Entity following such individual’s termination of employment or consultancy,
other than COBRA Coverage or coverage mandated by state Law. No Company Benefit Plan is
funded through a “welfare benefit fund” as defined in Section 419 of the Code.
Section 3.15 Taxes.
(a) All material Tax Returns that were required to be filed by or with respect to the
Company Entities prior to the date hereof have been duly and timely filed. All material
items of income, gain, loss, deduction and credit or other items required to be included in
each such Tax Return have been so included. All material Taxes owed by the Company Entities
that are or have become due have been timely paid in full or an adequate reserve for the
payment of such Taxes has been established in the financial statements of the Company. All
material Tax withholding and deposit requirements imposed on or with respect to the Company
Entities have been satisfied in full in all respects.
21
(b) There are no Liens on any of the assets of the Company Entities that arose in
connection with any failure (or alleged failure) to pay any Tax other than Permitted
Encumbrances.
(c) There is no action, suit, proceeding, investigation, audit or written claim now
pending against, or with respect to, the Company Entities for any Taxes, and no assessment,
deficiency or adjustment has been asserted, proposed, or threatened in writing with respect
to any Tax Return of or with respect to the Company Entities.
(d) No written claim has been made by any Governmental Entity in a jurisdiction where a
Company Entity does not currently file a Tax Return that such Company Entity is or may be
subject to any material Tax in such jurisdiction, nor has such assertion been threatened or
proposed in writing.
(e) There is not in force any extension of time with respect to the due date for the
filing of any Tax Return of or with respect to any of the Company Entities or any waiver or
agreement for any extension of time for the assessment or payment of any Tax of or with
respect to any of the Company Entities.
(f) None of the Company Entities is a party to a Tax allocation or sharing agreement,
and no payments are due or will become due by any of the Company Entities pursuant to any
such agreement or arrangement or any Tax indemnification agreement.
(g) None of the Company Entities has been a member of an affiliated group filing a
consolidated federal income Tax Return or has any liability for the Taxes of any Person
under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
(h) The Company is a “publicly traded partnership” for U.S. federal income tax
purposes, and at least 90% of the gross income of the Company for each taxable year since
its formation up to and including the current taxable year has been income that is
“qualifying income” within the meaning of Section 7704(d) of the Code. With respect to each
private letter ruling obtained from the IRS by the Company, such private letter ruling has
not been revoked or modified, the facts and representations in the ruling request and other
documents submitted to the IRS in connection with obtaining such private letter ruling were
true and correct when given and have continued to be true and correct through the date
hereof. To the extent the Company has treated any of its gross income as “qualifying
income” within the meaning of Section 7704(d)(1) by relying on any such private letter
ruling, such gross income was derived by providing services substantially the same as those
described in such private letter ruling and pursuant to contracts having substantially the
same terms as those described in such private letter ruling.
(i) None of the Company Entities has elected to be classified as an association taxable
as a corporation for U.S. federal income tax purposes.
Section 3.16 Intellectual Property.
(a) Section 3.16(a) of the Company Disclosure Letter sets forth a complete and
accurate list of all material Intellectual Property registrations and applications owned by
the Company and the Company Subsidiaries. Except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company
and the Company Subsidiaries own or possess sufficient and legally enforceable licenses or
other rights
22
to use, any and all Intellectual Property necessary for the conduct of the business and
operations of the Company and the Company Subsidiaries as currently conducted, free and
clear of all Liens except for Permitted Encumbrances, and (ii) the Intellectual Property
owned by the Company and the Company Subsidiaries is subsisting and unexpired, has not been
abandoned or cancelled and is valid and enforceable.
(b) To the Knowledge of the Company, the conduct of the business of the Company and the
Company Subsidiaries does not infringe, conflict with or otherwise violate any Intellectual
Property of any Person. None of the Company or any of the Company Subsidiaries has received
written notice or has Knowledge of any such infringement, conflict or other violation except
as would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. To the Knowledge of the Company, no Person is infringing or
otherwise violating the Intellectual Property owned by the Company and the Company
Subsidiaries.
(c) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company and the Company Subsidiaries have
taken commercially reasonable steps to protect and maintain (i) their confidential
information and trade secrets and (ii) their sole ownership of material proprietary
Intellectual Property (including by entering into Intellectual Property assignment
agreements with all persons who have created or contributed to material proprietary
Intellectual Property).
Section 3.17 Labor Matters.
(a) There is not in existence, nor has there been within the five (5) years prior to
the date hereof, any pending or, to the Knowledge of the Company, threatened: (i) strike,
slowdown, stoppage, picketing, interruption of work, lockout or any other dispute or
controversy with or involving a labor organization or with respect to unionization or
collective bargaining, or (ii) labor-related organizational effort, election activity or
request or demand for recognition or representation.
(b) Except as set forth in Section 3.17(b) of the Company Disclosure Letter,
(i) none of the Company Entities is, or since January 1, 2008 has been, a party to or bound
by any collective bargaining agreement with any labor union or any other similar
organization, and (ii) none of the employees are subject to or covered by any such
collective bargaining agreement or are represented by any labor organization. Prior to the
date of this Agreement, the Company has delivered to Parent all collective bargaining and
similar agreements. Except as would not have a Company Material Adverse Effect or as set
forth in Section 3.17(b) of the Company Disclosure Letter, the Company Entities are
in compliance with (A) all Laws with respect to employment and employment practices, terms
and conditions of employment, collective bargaining, disability, immigration, health and
safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation,
longshoreman claims, and the collection and payment of withholding and/or payroll Taxes and
similar Taxes, and (B) obligations of the Company Entities under any employment agreement,
severance agreement, collective bargaining agreement or any similar employment or
labor-related agreement or understanding.
(c) During the preceding two (2) years, (i) none of the Company Entities have
effectuated a “plant closing” (as defined in the Worker Adjustment Retraining and
Notification Act of 1988, as amended (the “WARN Act”)) affecting any site of
employment or one or more facilities or operating units within any site of employment or
facility, (ii) there has not occurred a “mass layoff” (as defined in the WARN Act) in
connection with any of the Company Entities
23
affecting any site of employment or one or more facilities or operating units within
any site of employment or facility, and (iii) none of the Company Entities have been
affected by any transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state, local or foreign Law.
(d) Except as set forth in Section 3.17(d) of the Company Disclosure Letter, to
the Knowledge of the Company, no employee of the Company Entities is subject to any secrecy
or noncompetition agreement or any other agreement or restriction of any kind that would
impede the ability of such employee to carry out fully the activities currently performed by
such employee in furtherance of the business of the Company Entities.
Section 3.18 Environmental Matters. Except as set forth in Section 3.18 of
the Company Disclosure Letter and as would not have a Company Material Adverse Effect:
(a) The Company Entities are and have been in compliance with all Environmental Laws,
and are not in default or violation of, and have not received any notices of violation with
respect to, any Environmental Laws in connection with the conduct of their businesses or the
ownership or operation of their businesses, assets and properties.
(b) The Company Entities have obtained and hold all Environmental Permits that are
necessary to own, lease or operate their properties, rights and other assets and are
necessary for the lawful conduct of their businesses under and pursuant to such properties,
rights and other assets, and the Company Entities are and have been in compliance with all
Environmental Permits. The Environmental Permits are in full force and effect, and there
are no Proceedings pending or, to the Knowledge of the Company, threatened that seek the
revocation, cancellation, suspension or adverse modification thereof, nor is the revocation,
cancellation, suspension or adverse modification of the Environmental Permits otherwise
threatened. The consummation of the Merger, in and of itself, would not cause any
revocation, modification or cancellation of any Environmental Permit.
(c) The Company Entities have not received any notice, demand, request for information,
citation, summons or order, and there are no pending or, to the Knowledge of the Company,
threatened actions, suits, claims, investigations, inquiries or Proceedings by or before any
Court or any other Governmental Entity directed against the Company Entities or to which any
of the assets of the Company Entities are subject, that pertain or relate to (i) any
remedial obligations under any applicable Environmental Law, (ii) violations by any Company
Entity of any Environmental Law, (iii) personal injury or property damage claims relating to
a Release or threatened Release of Hazardous Materials, or (iv) response, removal, or
remedial costs under CERCLA or any similar state law. No Company Entity is subject to any
claim, action, obligation or liability arising under any Environmental Law as such relates
to human exposure to asbestos, including with respect to the presence or alleged presence of
asbestos or asbestos-containing materials in any product or at or upon any current or former
property or Vessel, and, to the Knowledge of the Company, no Company Entity has
manufactured, sold, marketed, installed, removed, transported or distributed any
asbestos-containing products in such a manner that would reasonably be expected to form the
basis of any such claim, action, obligation or liability.
(d) There has been no Release of any Hazardous Materials in, on, at, under, or from any
assets or property currently or formerly owned, leased or operated by the Company Entities,
except in compliance with Environmental Laws.
24
(e) The Company Entities are not currently operating or required to be operating their
businesses, assets or properties under any compliance order, schedule, decree or agreement,
any consent decree, order or agreement, or corrective action decree, order or agreement
issued or entered into pursuant to any Environmental Law.
(f) No portion of any property currently or formerly owned, leased or operated by the
Company is part of a site listed on the National Priorities List under CERCLA or any similar
ranking or listing under any state Law.
(g) The Company Entities have not transported or arranged for the transportation of any
Hazardous Materials to any location which, to the Knowledge of the Company, is listed on the
National Priorities List under CERCLA, or on any similar state list, or which is the subject
of any federal, state or local enforcement action or other investigation that may lead to
claims against any Company Entity for clean-up costs, remedial work, damages to natural
resources or personal injury claims, including, but not limited to, claims under CERCLA.
(h) The Company Entities have not generated, manufactured, stored, transported,
treated, recycled, disposed of, Released or otherwise handled in any way any Hazardous
Materials in, on, at, under, or about any assets or property currently or formerly owned,
leased or operated by any Company Entity, except in compliance with Environmental Laws.
(i) None of the following exists in, on, at, under, or about any assets or property
currently or formerly owned, leased or operated by any Company Entity: (i) underground
storage tanks, (ii) asbestos-containing material in any form or condition, (iii) materials
or equipment containing any polychlorinated biphenyls, or (iv) landfills, surface
impoundments, or disposal areas.
(j) Prior to the date of this Agreement, the Company has provided Parent with copies of
all environmental audits, evaluations, assessments, studies, tests or other evaluations of
any assets or property currently or formerly owned, leased or operated by any Company Entity
that are in the possession or subject to the control of any of the Company Entities, or any
of their Representatives.
(k) For purposes of this Section 3.18, the term “Company Entity” shall include
any entity that is, in whole or in part, a predecessor of any Company Entity.
(l) Notwithstanding anything to the contrary contained elsewhere in this Agreement, the
Company makes no representation in this Agreement regarding any compliance or failure to
comply with, or any actual or contingent liability under, or claims, demands, actions,
proceedings, lawsuits or investigations with respect to, any Environmental Law, except as
set forth in this Section 3.18.
Section 3.19 State Takeover Laws. No approvals are required under any Takeover
Statute in connection with transactions contemplated under this Agreement or the performance by the
Company Parties of their obligations under this Agreement.
Section 3.20 Vessels.
(a) Section 3.20(a) of the Company Disclosure Letter sets forth a true, correct
and complete list of each Company Vessel, including: (i) its name, (ii) its official number,
(iii) its flag, (iv) whether such Company Vessel is owned, leased or chartered, (v) if such
Company
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Vessel is a barge, its hull type and barrel capacity, and (vi) if such Company Vessel
is a tug, its horsepower. No Company Entity owns, operates, leases or charters any vessels
other than the Company Vessels set forth on Section 3.20(a) of the Company
Disclosure Letter.
(b) Except as set forth in Section 3.20(b) of the Company Disclosure Letter,
each of the Company Vessels is: (i) free and clear of all Liens, other than Permitted
Encumbrances, (ii) is adequate and suitable for use by the Company Entities in their
businesses as presently conducted, (iii) has been reasonably maintained consistent with
standards generally followed in the industry (ordinary wear and tear excepted), and (iv) is
properly documented and is in compliance with the requirements of its present class and
classification society.
(c) Except as set forth in Section 3.20(c) of the Company Disclosure Letter,
each of the Company Vessels owned by a Company Entity: (i) was built in the United States,
(ii) is eligible for U.S. Coastwise Trade, (iii) is documented as a U.S. flag vessel and has
a valid Certificate of Documentation with coastwise endorsements, and (iv) has never (x)
been owned by or sold to any Person, or chartered or leased to any Person, that did not
qualify as a “citizen of the United States” as such term is defined in Section 2 of the
Shipping Act of 1936, as amended (46 U.S.C. Section 802) (the “Xxxxx Act”), (y) been
registered under the laws of a foreign country, or (z) been rebuilt foreign (as defined in
46 C.F.R. § 67.177).
(d) The Company Entities maintain valid Certificates of Financial Responsibility (Oil
Pollution) issued by the U.S. Coast Guard pursuant to the Federal Water Pollution Control
Act for the Company Vessels (to the extent that such certificate may be required by
applicable Law) and such other similar certificates as may be required in the course of the
operation of any of the Company Vessels pursuant to applicable Law.
Section 3.21 Xxxxx Act. Except as set forth in Section 3.21 of the Company
Disclosure Letter, each Company Entity is a “citizen of the United States” as such term is defined
in the Xxxxx Act, and has been for as long as it has owned or operated any vessels in the United
States Coastwise Trade.
Section 3.22 Insurance. Section 3.22 of the Company Disclosure Letter lists
all insurance policies (including fidelity bonds) covering the assets (including the Vessels),
business, equipment, properties, operations, employees, officers and directors of the Company
Entities for the present fiscal year (collectively, the “Present Insurance Policies”) and
since January 1, 2008. All of the Present Insurance Policies or renewals thereof are in full force
and effect, except as would not have a Company Material Adverse Effect. There is no material claim
by any Company Entity pending under any of the Present Insurance Policies as to which any Company
Entity has been notified that coverage has been questioned, denied or disputed by the underwriters
of such Present Insurance Policy. All premiums due and payable under all such Present Insurance
Policies have been paid, and the Company Entities are otherwise in material compliance with the
terms of the Present Insurance Policies (or other policies and bonds providing substantially
similar insurance coverage). To the Knowledge of the Company, there is no threatened termination
of, or material premium increase with respect to, any Present Insurance Policy. Section
3.22 of the Company Disclosure Letter identifies each material insurance claim made by the
Company Entities since December 31, 2009 and each pending material insurance claim. The Company
Entities are in material compliance with all insurance coverage requirements with respect to the
operation of the Vessels.
Section 3.23 Customers. Section 3.23 of the Company Disclosure Letter sets
forth the Company’s top ten (10) customers (the “Customers”) and the approximate net
revenue associated with each Customer during (y) the fiscal year ended June 30, 2010 and (z) the
six (6) month period ended December 31, 2010. Except as set forth in Section 3.23 of the
Company Disclosure Letter, (a) all
26
amounts owing from the Customers, if not in dispute, have been paid in accordance with their
respective terms, (b) no Customer has notified a Company Entity in writing that it is canceling, or
otherwise terminating, the relationship of such Customer with any Company Entity or intends to do
so, and (c) no Customer has notified a Company Entity in writing that it intends to decrease or
limit the volume of business it transacts with the Company Entities.
Section 3.24 Interested Party Transactions. No Company Entity is a party to any
transaction or agreement with any Affiliate, beneficial holder of five percent (5%) or more of the
Units, or director or officer of any Company Entity or any Affiliate of any such owner, officer or
director. No event has occurred since January 1, 2008 that would be required to be reported by the
Company pursuant to Item 404 of Regulation S-K promulgated by the SEC that is not properly
described in the Company SEC Documents filed prior to the date of this Agreement.
Section 3.25 Compliance with Anti-Corruption Laws.
(a) Regulatory Laws. Except with respect to employee benefit matters, Tax
matters and environmental matters, which are addressed exclusively in Section 3.14,
Section 3.15 and Section 3.18, and except as would not have a Company
Material Adverse Effect, the Company Entities understand, and are and have been in
compliance with, all applicable Regulatory Laws. The Company Entities are not aware of any
allegation or evidence that any Company Entity, or any Person acting on behalf of any
Company Entity, whether authorized or unauthorized, has violated any applicable Regulatory
Law.
(b) Anticorruption Laws.
(i) The Company Entities are and have been in material compliance with, all
applicable Anticorruption Laws, including the FCPA.
(ii) The Company Entities understand that each Company Entity and each
Representative of a Company Entity acting on its behalf is prohibited from corruptly
offering, paying, giving, promising to pay, or authorizing the payment of money or
anything of value, directly or indirectly, to a Public Official, or to any person
while aware that there is a high probability that all or a portion of such thing of
value will be offered, paid, given or promised to a Public Official, for the purpose
of: (1) influencing any act or decision of the Public Official in her or his
official capacity, (2) inducing the Public Official to do or omit to do any act in
violation of her or his lawful duty; (3) securing any improper advantage; or (4)
inducing the Public Official to use her or his influence with a non-U.S.
Governmental Entity, state-owned or controlled enterprise, political party or public
international organization, to obtain or retain business for or with, or direct
business to, any Company Entity or any other Person.
(iii) To the Knowledge of the Company, neither a Company Entity nor any
Representative of a Company Entity acting on its behalf has, directly or indirectly,
corruptly offered, given, promised or authorized the payment of money or anything of
value, directly or indirectly, to a Public Official for the purpose of: (1)
influencing any act or decision of the Public Official in her or his official
capacity, (2) inducing the Public Official to do or omit to do any act in violation
of her or his lawful duty; (3) securing any improper advantage; or (4) inducing the
Public Official to use her or his influence with a non-U.S. Governmental Entity,
state-owned or controlled enterprise, political party or public international
organization, to obtain or retain business for or with, or direct business to, any
Company Entity or any other Person.
27
(iv) To the Knowledge of the Company, no Representative of a Company Entity is
a Public Official or has an immediate family member (parent, child, spouse, sibling
or parent’s, child’s, or sibling’s spouse) who is a Public Official.
(v) No Public Official will benefit, financially or otherwise, from the
transactions contemplated by this Agreement in violation of applicable Law.
(vi) The Company Entities have taken reasonable steps to ensure that they (1)
have maintained adequate internal controls designed to prevent and detect possible
violations of the Anticorruption Laws and accounts, books, and records that
properly, fairly and accurately record and report all transactions, (2) have not
maintained any off-the-book accounts or recorded any non-existent expenditures or
transactions with inaccurate identification of its object, (3) have not used false
documents, and (4) have not authorized any Person to take any action that would
result in inadequate or inaccurate recording or reporting of assets, liabilities, or
any other transaction that would violate or cause any other Person to violate the
Regulatory Laws.
(c) Antiboycott Laws. The Company Entities are and have been in material
compliance with all applicable Antiboycott Laws. To the Knowledge of the Company, no
Company Entity has (i) refused or agreed to refuse to do business with Israel or any other
nation or company subject to a boycott not endorsed by the United States or (ii) implemented
letters of credit containing terms or conditions prohibited by Antiboycott Laws.
(d) Export and Sanctions Laws. The Company Entities are and have been in
material compliance with all applicable Export and Sanctions Laws. To the Knowledge of the
Company, neither a Company Entity nor any Person Controlling a Company Entity is designated
on any Denied Party Lists or has engaged in any transaction with or for the benefit of any
Person that is designated on any Denied Party Lists or that is subject to any Regulatory Law
prohibitions including Export and Sanctions Laws targeting government entities or
individuals that support terrorism.
Section 3.26 Opinion of Financial Advisor; Brokers. The Conflicts Committee has
received a written opinion of Xxxxxx, Xxxxxxxx & Company, Incorporated (the “Company Financial
Advisor”), dated as of the date hereof, to the effect that, as of the date hereof, subject to
certain assumptions, qualifications, limitations and other matters set forth therein, (a) the
consideration to be paid to the holders of Common Units (other than Jefferies Capital Partners, KA
First Reserve, LLC and their respective affiliates) in connection with the Merger and (b) for those
holders of Common Units (other than Jefferies Capital Partners, KA First Reserve, LLC and their
respective Affiliates ) who will receive Parent Shares as a part of the Common Unit Consideration,
the exchange ratio used in determining the number of Parent Shares to be received by such holders
in exchange for each Common Unit is fair from a financial point of view to such holders. Such
opinion has not been amended or rescinded. The Company has furnished to Parent copies of all
Contracts to which any Company Entity and the Company Financial Advisor or UBS Securities LLC is a
party pursuant to which the Company Financial Advisor would be entitled to any payment relating to
the transactions contemplated by this Agreement. Other than the Company Financial Advisor and UBS
Securities LLC, no broker, finder, investment banker or other Person is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions contemplated by this
Agreement.
Section 3.27 No Discussions. None of the Company Entities nor any Company
Representative thereof is engaged, directly or indirectly, in any discussions or negotiations with
any other Third Party relating to any Acquisition Proposal. None of the Company Entities have,
directly or
28
indirectly, terminated or waived any rights under any confidentiality, “standstill,”
non-solicitation or similar agreement with any Third Party to which any such Company Entity is or
was a party or under which any such Company Entity has or had any rights.
Section 3.28 Company Information. None of the information supplied (or to be
supplied) by or on behalf of the Company or any of the Company Representatives in writing
specifically for inclusion or incorporation by reference in (a) the registration statement on Form
S-4 to be filed with the SEC by Parent in connection with the issuance of Parent Shares in the
Merger (as amended or supplemented from time to time, the “Form S-4”) will, at the time the
Form S-4 is declared effective under the Securities Act (or with respect to any post-effective
amendments or supplements thereto, at the time such post-effective amendments or supplements become
effective under the Securities Act), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not misleading, and (b) the
Proxy Statement/Prospectus will, on the date it is first mailed to holders of Common Units, and at
the time of the Unitholder Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading. The proxy
statement portions of the Proxy Statement/Prospectus will comply as to form in all material
respects with the applicable requirements of the Exchange Act. Notwithstanding the foregoing, the
Company makes no representation or warranty with respect to information supplied by or on behalf of
Parent or Merger Sub for inclusion or incorporation by reference in any of the foregoing documents.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARENT PARTIES
Except as disclosed in the Parent SEC Documents or the disclosure letter, dated as of the date
of this Agreement and delivered to the Company in connection with the execution and delivery of
this Agreement (the “Parent Disclosure Letter”), the Parent Parties jointly and severally
represent and warrant to the Company as follows:
Section 4.1 Corporate Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the Laws of the State of Nevada. Holding
Sub, Merger Sub, and LP Sub are limited liability companies duly formed, validly existing and in
good standing under the Laws of the State of Delaware. Each the Parent Parties has the corporate
or limited liability company power, as applicable, to own its properties and to carry on its
business as now being conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the failure to be so duly qualified and in good standing would reasonably be
expected to have a Parent Material Adverse Effect.
Section 4.2 Organizational and Governing Documents. Prior to the date of this
Agreement, Parent has furnished or made available to the Company complete and correct copies of the
organizational and governing documents for all Parent Parties (the “Parent Party Charter
Documents”). The Parent Party Charter Documents are in full force and effect and no other
organizational or governing documents are applicable to or binding upon any Parent Party. No
Parent Party is in violation of any provision of its Parent Party Charter Document.
Section 4.3 Capitalization. The authorized capital stock of Parent consists of
120,000,000 shares of common stock, par value $0.10 per share (“Parent Common Stock”) and
20,000,000 shares of preferred stock, par value $1.00 per share (“Parent Preferred Stock”).
At the close of business on March 11, 2011, (a) 53,667,648 shares of Parent Common Stock were
issued and outstanding, (b) 1,550,224
29
shares of Parent Common Stock were reserved and available for issuance pursuant to Parent’s
equity compensation plans and (c) no shares of Parent Preferred Stock were outstanding. All of the
outstanding shares of Parent Common Stock are, and all of the Parent Shares to be issued pursuant
to the Merger will be, when issued, duly and validly issued, fully paid and nonassessable. Except
as set forth above, as of the date of this Agreement, there are not outstanding or authorized any
(A) shares of capital stock or other voting securities of Parent, (B) securities of Parent
convertible into or exchangeable for shares of capital stock or voting securities of Parent, or (C)
options, warrants or other rights to acquire from Parent, and no obligation of Parent to issue, any
capital stock, voting securities or securities convertible into or exchangeable for capital stock
or voting securities of Parent. All of the issued and outstanding equity interests of Holding Sub
and LP Sub are owned, beneficially and of record, by Parent. All of the outstanding equity
interests of Merger Sub are owned, beneficially and of record, by Holding Sub and LP Sub.
Section 4.4 Authorization of Agreement; No Violation.
(a) Each of the Parent Parties has, as applicable, all requisite corporate or limited
liability company power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and delivery by
the Parent Parties of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized by the board of directors of Parent
and the sole members of Holding Sub, LP Sub and Merger Sub. No other corporate or limited
liability company proceedings on the part of the Parent Parties are necessary to approve
this Agreement and to consummate the transactions contemplated hereby other than the filing
of the Certificate of Merger. This Agreement has been duly and validly executed and
delivered by the Parent Parties and, assuming due authorization, execution and delivery
hereof by the Company Parties, constitutes a valid and binding obligation of the Parent
Parties, enforceable against the Parent Parties in accordance with its terms, except as such
enforcement may be limited by (i) the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium or other Laws affecting or relating
to creditors’ rights generally or (ii) the rules governing the availability of specific
performance, injunctive relief or other equitable remedies and general principles of equity,
regardless of whether considered in a Proceeding in equity or at law.
(b) Except as would not be reasonably expected to have a Parent Material Adverse
Effect, none of (i) the execution, delivery or performance of this Agreement or the Support
Agreements by the Parent Parties, (ii) the compliance by the Parent Parties with any
provision of this Agreement, or (iii) the consummation of the Merger and the other
transactions contemplated by this Agreement, will, directly or indirectly, with or without
notice or lapse of time, (A) contravene, conflict with or result in any violation or breach
of any provision of the articles of incorporation or bylaws or equivalent organizational
documents of the Parent Parties, or (B) assuming that the consents and approvals referred to
in Section 4.5 are duly obtained, (1) give any Governmental Entity or other Person
the right to challenge the Merger or any of the transactions contemplated by this Agreement,
(2) violate any Law applicable to the Parent Parties or any of their respective properties
or assets, or (3) violate, conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, result in the modification, cancellation,
acceleration or termination of or a right of modification, cancellation, acceleration or
termination under, accelerate the performance required by, or result in the creation of any
Lien upon any of the respective properties, rights or assets of any Parent Party under, any
of the terms, conditions or provisions of any material Contract to which any Parent Party is
a party, or by which any of the Parent Parties or any of their respective properties or
assets is bound.
30
Section 4.5 Consents and Approvals. Except for (i) any notices or filings required by
the HSR Act or other Antitrust Law and the termination or expiration of the waiting period under
the HSR Act or other Antitrust Law, (ii) the filing of any other required applications or notices
related to Other Approvals, (iii) the filing with the SEC of (A) the Form S-4, and (B) such other
reports or filings under the Exchange Act or the Securities Act as may be required in connection
with this Agreement and the transactions contemplated by this Agreement, (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware pursuant to the DRULPA
and the LLC Act, (v) any consents, authorizations, approvals, filings or exemptions in connection
with compliance with the rules of the NYSE, (vi) such filings and approvals as may be required to
be made or obtained under the securities or “Blue Sky” laws of various states in connection with
the issuance of the Parent Shares pursuant to this Agreement, (vii) the filings, clearances,
consents, notices and approvals set forth in Section 4.5 of the Parent Disclosure Letter,
and (viii) such additional filings, clearances, consents, notices and approvals, the failure of
which to make or obtain would not have a Parent Material Adverse Effect, no consents or approvals
of or filings or registrations with any Governmental Entity or any Third Party are necessary in
connection with the execution and delivery by the Parent Parties of this Agreement or the
consummation by the Parent Parties of the transactions contemplated by this Agreement.
Section 4.6 Parent SEC Documents; Parent Financial Statements.
(a) Parent has furnished or made available (including via XXXXX) to the Company
complete and correct copies of all forms, documents, statements and reports filed with or
furnished by Parent to the SEC since June 30, 2009 (such forms, documents, statements and
reports, including any supplements or amendments thereto, as amended since the respective
dates of filing the “Parent SEC Documents”). As of their respective filing dates,
the Parent SEC Documents complied as to form in all material respects with the requirements
of the Exchange Act and the Securities Act, and none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except to the extent amended or
superseded by a subsequently filed Parent SEC Document. As of their respective dates, all
Parent SEC Documents complied as to form in all material respects with the Regulations of
the SEC with respect thereto. No executive officer signing on behalf of Parent has failed
in any respect to make the certifications required of him or her under Section 302 or 906 of
SOX and, at the time of filing or submission of each such certification, such certification
was true and accurate and complied with SOX, in all material respects.
(b) Parent has made available to the Company copies of all comment letters received by
Parent from the SEC since December 31, 2009 relating to the Parent SEC Documents, together
with all written responses of Parent thereto. There are no outstanding or unresolved
comments in any comment letters received by Parent from the SEC. To the Knowledge of
Parent, none of the Parent SEC Documents is the subject of any ongoing review by the SEC.
(c) The consolidated financial statements of Parent, including the notes thereto,
included in the Parent SEC Documents (collectively, the “Parent Financial
Statements”) complied in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto as of their
respective dates, and have been prepared in accordance with GAAP on a basis consistent
throughout the periods indicated. The Parent Financial Statements fairly present in all
material respects the consolidated financial condition and operating results of Parent and
its Subsidiaries at the dates and during the periods indicated therein in accordance with
GAAP (subject, in the case of unaudited statements, to normal year-end adjustments and the
absence of footnotes).
31
(d) Parent is in compliance in all material respects with the provisions of SOX
applicable to it, including Section 404 thereof, and the certifications provided pursuant to
Sections 302 and 906 thereof were accurate when made.
Section 4.7 Undisclosed Liabilities. As of the date hereof, there exist no
liabilities or obligations of any nature whatsoever of Parent or its Subsidiaries that are material
to Parent, whether absolute, accrued, contingent, determined, determinable or otherwise and whether
due or to become due which would be required to be reflected, reserved for or disclosed under GAAP,
except for (a) liabilities or obligations that are adequately reflected, reserved for or disclosed
in the Parent Financial Statements set forth in Parent’s Form 10-K filed with the SEC for the
fiscal year ended December 31, 2010, (b) liabilities or obligations incurred in the ordinary course
of business of Parent and any of its Subsidiaries consistent with past practice since December 31,
2010, (c) liabilities incurred in connection with this Agreement or the transactions contemplated
by this Agreement, (d) liabilities, obligations or contingencies which are of a nature not required
to be reflected in the consolidated financial statements (including the notes thereto) of Parent
and Parent Subsidiaries and (e) liabilities or obligations that would not reasonably be expected to
constitute a Parent Material Adverse Effect.
Section 4.8 Absence of Certain Changes or Events. Since December 31, 2010 to the date
of this Agreement, there has not been a Parent Material Adverse Effect.
Section 4.9 Compliance with Applicable Law. Except with respect to Tax matters and
environmental matters, which are addressed exclusively in Section 4.11 and Section
4.17, respectively, and except as would not have a Parent Material Adverse Effect, Parent and
each of its Subsidiaries are in compliance with all applicable Laws, and are not in violation of,
and, since December 31, 2009 have not received any notices of violation with respect to, any Laws
in connection with the conduct of their respective businesses or the ownership or operation of
their respective businesses, assets and properties, except for such noncompliance and violations as
would not reasonably be expected to have a Parent Material Adverse Effect.
Section 4.10 Legal Proceedings. Neither Parent nor any of its Subsidiaries is a party
to any, and there are no pending or, to the knowledge of Parent, threatened, Proceedings of any
nature against Parent or any of its Subsidiaries that would reasonably be likely to constitute a
Parent Material Adverse Effect. There is no Order or settlement agreement imposed upon Parent, any
of its Subsidiaries, or the assets of Parent or any of its Subsidiaries that would reasonably be
expected to constitute a Parent Material Adverse Effect.
Section 4.11 Environmental Matters. Except as would not have a Parent Material
Adverse Effect, neither Parent nor any Parent Subsidiary is subject to any liability for (i) the
violation of any Environmental Law, (ii) the failure to obtain and hold an Environmental Permit, or
(iii) the Release of any Hazardous Materials. Notwithstanding anything to the contrary contained
elsewhere in this Agreement, Parent makes no representation in this Agreement regarding any
compliance or failure to comply with, or any actual or contingent liability under, or claims,
demands, actions, proceedings, lawsuits or investigations with respect to, any Environmental Law,
except as set forth in this Section 4.11.
Section 4.12 Vessels.
(a) Each of the Parent Vessels is: (i) free and clear of all Liens, other than
Permitted Encumbrances, (ii) has been reasonably maintained consistent with standards
generally followed in the industry (ordinary wear and tear excepted) and (iii) is properly
documented and is in compliance with the requirements of its present class and
classification society.
32
(b) Each of the Parent Vessels owned by a Parent Entity: (i) was built in the United
States, (ii) is eligible for U.S. Coastwise Trade, (iii) is documented as a U.S. flag vessel
and is qualified for coastwise documentation but not required to be documented, and (iv) has
never (x) been owned by or sold to any Person, or chartered or leased to any Person, that
did not qualify as a “citizen of the United States” as such term is defined in Section 2 of
the Xxxxx Act, (y) been registered under the laws of a foreign country, or (z) been rebuilt
foreign (as defined in 46 C.F.R § 67.177).
(c) The Parent Entities maintain valid Certificates of Financial Responsibility (Oil
Pollution) issued by the U.S. Coast Guard pursuant to the Federal Water Pollution Control
Act for the Parent Vessels (to the extent that such certificate may be required by
applicable Law).
Section 4.13 Xxxxx Act. Each Parent Entity is a “citizen of the United States” as
such term is defined in Section 2 of the Xxxxx Act, and has been for as long as it has owned or
operated any vessels in the United States Coastwise Trade.
Section 4.14 Brokers. Except for Xxxxx Fargo Securities, LLC, whose fees and expenses
will be paid by Parent, neither Parent nor any of its Subsidiaries has employed any broker, finder
or investment banker or incurred any liability for any broker’s fees, commissions or finder’s fees
in connection with the Merger or related transactions contemplated by this Agreement.
Section 4.15 Parent Information. Subject to the accuracy of the representations and
warranties of the Company set forth in Section 3.28, none of the information supplied (or
to be supplied) by or on behalf of Parent or any of its Subsidiaries in writing specifically for
inclusion or incorporation by reference in (a) the Form S-4 will, at the time the Form S-4 or any
amendments or supplements thereto are filed with the SEC or at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they are made, not misleading, and (b) the Proxy
Statement/Prospectus will, on the date it is first mailed to the Unitholders and at the time of the
Unitholder Meeting, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading. The Form S-4 and the Proxy
Statement/Prospectus will comply as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act. Notwithstanding the foregoing, none of
the Parent Parties makes any representation or warranty with respect to any information supplied by
or on behalf of the Company Entities for inclusion or incorporation by reference in any of the
foregoing documents.
Section 4.16 Availability of Funds. Parent and Merger Sub will have available at the
Closing all of the funds required for the consummation of the transactions contemplated by this
Agreement.
Section 4.17 Tax. All material Tax Returns that were required to be filed by or with
respect to Parent prior to the date hereof have been duly and timely filed. All material items of
income, gain, loss, deduction and credit or other items required to be included in each such Tax
Return have been so included. All material Taxes owed by Parent that are or have become due have
been timely paid in full or an adequate reserve for the payment of such Taxes has been established
in the financial statements of Parent. All material Tax withholding and deposit requirements
imposed on or with respect to Parent have been satisfied in full in all respects. Except for the
affiliated group of which Parent is the common parent corporation or any other affiliated,
combined, or unitary group comprised solely of Parent and one or more Parent Subsidiaries, Parent
has not been a member of an affiliated group filing a consolidated
33
federal income Tax Return and does not have any liability for the Taxes of any Person under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law).
ARTICLE 5
CONDUCT PRIOR TO THE EFFECTIVE TIME
Section 5.1 Conduct of Business Prior to the Effective Time.
(a) Except as expressly contemplated or permitted by this Agreement or with the prior
written consent of Parent, which consent shall not be unreasonably withheld, delayed or
conditioned, during the period from the date of this Agreement and continuing until the
Effective Time or the earlier termination of this Agreement, the Company Parties shall, and
shall cause the Company Subsidiaries to, (a) conduct their business in the ordinary course
consistent with past practice and in compliance with all applicable Laws, (b) use reasonable
best efforts to (i) maintain and preserve intact their business organizations and business
relationships, (ii) retain the services of their officers and employees, and (iii) maintain
their rights and Permits, and (c) take no action that would reasonably be expected to
adversely affect or delay the ability of the parties hereto to (i) obtain any necessary
approvals of any Governmental Entity required for the transactions contemplated hereby or
(ii) perform their covenants and agreements under this Agreement or to consummate the
transactions contemplated hereby.
(b) During the period from the date of this Agreement and continuing until the
Effective Time or the earlier termination of this Agreement, except (1) as set forth in
Section 5.1(b) of the Company Disclosure Letter, (2) as expressly permitted by this
Agreement, or (3) with the prior written consent of Parent, which consent shall not be
unreasonably withheld, delayed or conditioned, the Company Parties shall not, and shall not
permit any of the Company Subsidiaries to, directly or indirectly:
(i) cause or permit any amendment, modification, alteration or rescission of
any Company Entity Charter Document;
(ii) make, declare, set aside or pay any dividends or distributions (whether in
the form of cash, equity or property) in respect of any of their equity interests
(other than dividends or distributions by any wholly owned Subsidiary of the Company
to the Company or to another wholly owned Subsidiary of the Company and other than
the payment of the Series A Quarterly Distribution (as defined in the Company
Partnership Agreement) in cash in lieu of “pay-in-kind” distributions on the
Preferred Units as set forth in Section 5.1(b)(ii) of the Company Disclosure
Letter), or split, combine or reclassify any of their equity interests, or
repurchase, redeem or otherwise acquire, directly or indirectly, any of their equity
interests or any other securities thereof or any rights, warrants or options to
acquire any such equity interests or other securities;
(iii) grant any options, equity interest appreciation rights, restricted equity
interests, restricted equity interest units, deferred equity interests, awards based
on the value of equity interests or other equity-based award with respect to the
Units under any Company Benefit Plan or otherwise, or grant any Person any right to
acquire any equity interest in any Company Entity;
(iv) issue, deliver or sell or authorize or propose the issuance, delivery or
sale of, or purchase or propose the purchase of, any equity interests, Voting Debt
or other
34
securities, securities convertible into equity interests, Voting Debt or other
securities, or subscriptions, rights, warrants or options to acquire, or other
agreements or commitments of any character obligating it to issue, any such equity
interests, Voting Debt, convertible securities or other securities;
(v) sell, transfer, pledge, lease, license, mortgage, encumber or otherwise
dispose of any of its material properties or assets, or cancel, release or assign
any material amount of indebtedness to any Person or any material claims against any
Person;
(vi) incur any indebtedness for borrowed money or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any Third
Party (other than any Company Subsidiaries), except in the ordinary course of
business consistent with past practice if such indebtedness would not result in
total indebtedness of the Company and the Company Subsidiaries (on a consolidated
basis) as of the Closing Date exceeding the Target Debt Cap;
(vii) (1) amend or otherwise modify, except in the ordinary course of business,
or violate, in each case in any material respect, the terms of, any Material
Contract, or (2) create, renew or amend any Contract or, except as may be required
by applicable Law, other binding obligation of a Company Entity containing (A) any
restriction on the ability of a Company Entity to conduct its business as it is
presently being conducted, or (B) any restriction on the ability of a Company Entity
to engage in any type of activity or business;
(viii) make any capital expenditures, (other than drydocking capital
expenditures) capital additions or capital improvements except in the ordinary
course of business consistent with past practice in amounts that do not exceed $3.0
million individually or $6.0 million in the aggregate;
(ix) except as required by existing written Contracts or Company Benefit Plans
existing as of the date hereof, (i) increase in any manner the compensation or
benefits of any of the current or former directors or officers of the Company
Entities (together, the “Covered Employees”), (ii) pay any amounts to
Covered Employees not required by any current plan or agreement (other than base
salary in the ordinary course of business or in connection with reimbursement of
expenses in the ordinary course of business), (iii) become a party to, establish,
amend, commence participation in, make any adjustment to, terminate or commit itself
to the adoption of any equity-based compensation plan, compensation (including any
employee co-investment fund), severance, pension, retirement, profit-sharing,
welfare benefit or other employee benefit plan, or agreement or employment agreement
with or for the benefit of any Covered Employee (or newly hired employees), (iv)
accelerate the vesting of any equity-based compensation or other long-term incentive
compensation under any Company Benefit Plans, (v) (A) hire employees in the position
of Vice President or above, or (B) terminate the employment of any employee in the
position of Vice President or above (other than due to terminations for cause), (vi)
take any action which could reasonably be expected to give rise to a claim of
resignation for “good reason” (or any term of similar import) in any employment
agreement, or (vii) adopt, enter into or amend any collective bargaining agreement
or other arrangement relating to a labor union or organized labor;
(x) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or
35
any Person or otherwise acquire or agree to acquire any assets which are
material, individually or in the aggregate, to the Company or the Company Entities
(taken as a whole);
(xi) implement or adopt any material change in its Tax accounting or financial
accounting methods, principles or practices, except as may be required by applicable
Law, GAAP, Regulation S-X or other Regulation promulgated by the SEC;
(xii) enter into any new line of business or change in any material respect its
business as currently conducted;
(xiii) transfer ownership, or grant any license or other rights, to any Person
of or in respect of any material Intellectual Property, other than grants of
non-exclusive licenses pursuant to license agreements entered into in the ordinary
course of business consistent with past practice;
(xiv) make any material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any property or assets
of any other Person;
(xv) take any action to exempt any Third Party or any action taken by any Third
Party from any Takeover Statute or similarly restrictive provisions of its
organizational documents or terminate, amend or waive any provisions of any
confidentiality or standstill agreements in place with any Third Parties;
(xvi) make any material change in its Tax methods, principles or elections;
(xvii) file or amend any Tax Return, make or change any Tax election, or settle
or compromise any Tax liability, other than as required by Law; or
(xviii) propose, agree to take, or make any commitment to take any of the
actions prohibited by this Section 5.1(b).
(c) Except as set forth in Section 5.1(c) of the Parent Disclosure Letter, or
as expressly contemplated or permitted by this Agreement or with the prior written consent
of the Company, which shall not be unreasonably withheld, delayed or conditioned, during the
period from the date of this Agreement and continuing until the Effective Time or the
earlier termination of this Agreement, Parent shall, and shall cause its Subsidiaries to,
(a) conduct their business in the ordinary course consistent with past practice and in
compliance with all applicable Laws, (b) use reasonable best efforts to (i) maintain and
preserve intact their business organizations and business relationships, (ii) retain the
services of their officers and employees, and (iii) maintain their rights and Permits, and
(c) take no action that would reasonably be expected to adversely affect or delay the
ability of the parties hereto to (i) obtain any necessary approvals of any Governmental
Entity required for the transactions contemplated hereby or (ii) perform their covenants and
agreements under this Agreement (other than as such obligation may be limited or altered as
provided in Section 6.3) or to consummate the transactions contemplated hereby.
(d) During the period from the date of this Agreement and continuing until the
Effective Time or the earlier termination of this Agreement, except (1) as set forth in
Section 5.1(d) of the Parent Disclosure Letter, (2) as expressly contemplated by
this Agreement, or (3) with the prior written consent of the Company, which shall not be
unreasonably withheld,
36
delayed or conditioned, Parent shall not, nor shall it permit any of its Subsidiaries to,
directly or indirectly:
(i) cause or permit any amendment, modification, alteration or rescission of
any Parent Party Charter Documents in a manner that adversely affects the terms of
the Parent Common Stock;
(ii) make, declare, set aside or pay any dividends or distributions (whether in
the form of cash, equity or property) in respect of any of their equity interests
(other than dividends or distributions by any wholly owned Subsidiary of Parent to
Parent or to another wholly owned Subsidiary of Parent) or split, combine or
reclassify any of their equity interests, or repurchase, redeem or otherwise
acquire, directly or indirectly, any of their equity interests or any other
securities thereof or any rights, warrants or options to acquire any such equity
interests or other securities, other than the repurchase of no more than 1,685,725
shares of Parent Common Stock;
(iii) implement or adopt any material change in its Tax accounting or financial
accounting methods, principles or practices, except as may be required by applicable
Law, GAAP, Regulation S-X or other Regulation promulgated by the SEC;
(iv) adopt or enter into a plan of complete or partial liquidation or
dissolution;
(v) make any material change in its Tax methods, principles or elections; or
(vi) propose, agree to take, or make any commitment to take any of the actions
prohibited by this Section 5.1(d).
Section 5.2 Third Party Proposals.
(a) Except as expressly permitted by Section 5.2(b), from the date of this
Agreement until the Effective Time or, if earlier, the termination of this Agreement in
accordance with Article 8, none of the Company Parties shall, and each of the
Company Parties shall cause the Company Subsidiaries and the Company Parties’ and the
Company Subsidiaries’ respective officers, partners, managers, directors and employees (the
“Company Individuals”) not to, and shall use their reasonable best efforts to cause
the Company Parties’ and the Company Subsidiaries’ accountants, legal counsel, financial
advisors and other representatives (collectively with the Company Individuals, the
“Company Representatives”) not to, directly or indirectly through another Person,
(i) solicit or initiate, or knowingly encourage any Acquisition Proposal or any inquiries
regarding the submission of any Acquisition Proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any Third Party any confidential information with
respect to or in connection with, or knowingly facilitate or otherwise cooperate with, any
Acquisition Proposal or any inquiry that may reasonably be expected to lead to an
Acquisition Proposal, (iii) enter into any agreement with respect to any Acquisition
Proposal or approve or resolve to approve any Acquisition Proposal, or (iv) waive,
terminate, modify or fail to enforce any provision of any “standstill” or similar obligation
of any Third Party existing on the date hereof, other than to permit such Third Party to
make an Acquisition Proposal in accordance with Section 5.2(b). The Company Parties
shall, and shall cause the Company’s Subsidiaries and shall use their reasonable best
efforts to cause the Company Representatives to, immediately cease and cause to be
terminated all existing discussions or negotiations with any Third Party conducted prior to
the date of this Agreement with respect to any Acquisition Proposal and request the
37
prompt return or destruction of all confidential information previously furnished, and
enforce the provisions of any confidentiality or standstill agreements in place with any
Third Parties (including, for the avoidance of doubt, any provisions requiring the prompt
return or destruction of all confidential information previously furnished to such Third
Parties).
(b) Notwithstanding anything to the contrary in Section 5.2(a), at any time
from the date of this Agreement and prior to obtaining the Company Unitholder Approvals, if
the Company has received from any Third Party a bona fide written Acquisition Proposal made
after the date of this Agreement that was not solicited in violation of and did not
otherwise result from a breach of this Section 5.2, (i) the Company may negotiate
the terms of, and enter into, a confidentiality agreement with terms and conditions no less
restrictive on such Third Party than the Confidentiality Agreement is on Parent and its
Affiliates (an “Acceptable Confidentiality Agreement”), (ii) the Company may furnish
non-public information concerning its business, properties or assets to such Third Party
pursuant to an Acceptable Confidentiality Agreement, provided, however, that
all such information (to the extent not previously provided to Parent) is provided or made
available to Parent prior to or substantially concurrent with the time it is provided to
such Third Party and (iii) the Company may negotiate and participate in discussions and
negotiations with such Third Party concerning such Acquisition Proposal pursuant to an
Acceptable Confidentiality Agreement if, prior to taking any such action referred to in the
foregoing clauses (i), (ii) and (iii), (A) such Third Party has submitted a Superior
Proposal or an Acquisition Proposal that the Company Board or Conflicts Committee determines
in good faith (after consultation with its financial advisor and outside counsel) is
reasonably likely to constitute or lead to a Superior Proposal, and (B) the Company Board
determines in good faith (after consultation with its outside legal advisors) that the
failure to take such action constitutes or is reasonably likely to constitute a violation of
its fiduciary duties to the Unitholders under applicable Law.
(c) Neither Company General Partner, Management General Partner, the Company nor the
Company Board (nor any committee thereof, including the Conflicts Committee) shall (i)
withdraw or modify, in a manner adverse to Parent or Merger Sub, the Company Board
Recommendation or make or cause to be made through any Person any public statement proposing
or announcing an intention to withdraw or modify in any manner adverse to Parent or Merger
Sub the Company Board Recommendation (any such action, a “Change in
Recommendation”), (ii) withdraw or modify the General Partner Approval, or (iii)
approve, adopt or recommend, or publicly propose to approve, adopt or recommend, or allow
the Company General Partner, the Company or any of the Company Subsidiaries to execute or
enter into, any letter of intent, memorandum of understanding, agreement in principle, joint
venture agreement, acquisition or merger agreement or other similar agreement constituting
an Acquisition Proposal (other than an Acceptable Confidentiality Agreement permitted
pursuant to Section 5.2(b)). Notwithstanding the foregoing, the Company Board
(including the Conflicts Committee) may, at any time prior to obtaining the Company
Unitholder Approvals and subject to compliance with Section 5.2(d), effect a Change
in Recommendation in response to (A) a bona fide written Acquisition Proposal made after the
date of this Agreement that the Company Board (or the Conflicts Committee, as applicable)
reasonably determines in good faith (after consultation with its outside legal and financial
advisors) constitutes a Superior Proposal and that was not solicited in violation of this
Section 5.2 or (B) an Intervening Event if, in the case of any such Change in
Recommendation, the Company Board (or the Conflicts Committee, as applicable) shall have
determined in good faith, after consultation with outside counsel, that, in light of such
Superior Proposal or Intervening Event, the failure to take such action constitutes or is
reasonably likely to constitute a violation of its fiduciary duties to the Unitholders under
applicable Law. Any Change in Recommendation shall not change the approval of this
Agreement or any other
38
approval of the Company General Partner, the Company Board or the Conflicts Committee
in any respect, including any change that would have the effect of causing any Takeover
Statute or other similar statute to be applicable to the transactions contemplated hereby
(including the Merger).
(d) Notwithstanding anything herein to the contrary, the Company Board (including the
Conflicts Committee) shall not be entitled to effect a Change in Recommendation or terminate
this Agreement pursuant to Section 8.1(j) unless:
(i) the Company has provided to Parent three (3) Business Days’ prior written
notice (a “Notice”) advising Parent that the Company Board is prepared to
take such action and specifying the reasons therefor (it being understood and agreed
that any amendment to the financial terms or any material amendment to any other
material term of any such Acquisition Proposal or any change in any such Intervening
Event shall require a new Notice and a new three (3) Business Day period);
(ii) (A) with respect to an Acquisition Proposal that the Company Board has
determined constitutes a Superior Proposal, (x) the Company has provided or made
available to Parent all material information concerning its business, properties or
assets delivered or made available to the Third Party making such Acquisition
Proposal that the Company Board has determined constitutes a Superior Proposal and
(y) the Notice includes a description of the material terms and conditions of such
Acquisition Proposal and the proposed financing for such Acquisition Proposal
(including copies of any written requests, proposals, offers, and proposed
agreements) and the identity of the Third Party making the proposal or (B) with
respect to an Intervening Event, the Company has provided Parent with written
information describing such Intervening Event in reasonable detail; and
(iii) during such three (3) Business Day period, if requested by Parent, the
Company (A) provides an opportunity for Parent to propose amendments to this
Agreement in such a manner that the Acquisition Proposal that was determined to
constitute a Superior Proposal no longer is a Superior Proposal or the event or
circumstance that was determined to constitute an Intervening Event no longer is an
Intervening Event and (B) negotiates and uses its reasonable best efforts to cause
the Company Representatives to negotiate in good faith with Parent and its
representatives regarding any such amendments to this Agreement; and
(iv) at 11:59 p.m., Houston, Texas time, at the end of such three (3) Business
Day period, (A) with respect to an Acquisition Proposal that the Company Board has
determined constitutes a Superior Proposal, such Acquisition Proposal has not been
withdrawn and the Company Board has reasonably concluded in good faith (after
consultation with its outside legal and financial advisors) that such Acquisition
Proposal continues to constitute a Superior Proposal and (B) with respect to an
event or circumstance that the Company Board has determined constitutes an
Intervening Event, the Company Board has reasonably concluded that such event or
circumstance continues to constitute an Intervening Event; provided,
however, that in making the determinations contemplated by this clause (iv),
the Company Board shall take into account any changes to the financial and other
terms of this Agreement proposed by Parent following the Notice and as a result of
the negotiations between Parent and the Company pursuant to this Section
5.2(d).
39
(e) Nothing contained in this Section 5.2 or any other provision of this
Agreement shall prohibit the Company or the Company Board (either by the full Company Board
or through a committee thereof, including the Conflicts Committee) from (A) taking and
disclosing to Unitholders a position with respect to a tender or exchange offer by a Third
Party contemplated by Rule 14e-2(a) or making a statement required under Rule 14d-9 under
the Exchange Act or (B) making any disclosure to the Unitholders if either the full Company
Board or a committee thereof, including the Conflicts Committee, has determined, in good
faith, after consultation with outside counsel, that the failure to make such disclosure
constitutes or would be reasonably likely to constitute a violation of its fiduciary duties
to the Unitholders under applicable Law, provided, however, that (i)
compliance with such rules shall in no way limit Parent’s right to terminate this Agreement
pursuant to Section 8.1 hereof and receive payment of any Termination Fee and any
other amounts payable to it pursuant to Section 8.3, and (ii) in no event shall the
Company or the Company Board (or any committee thereof, including the Conflicts Committee)
(A) effect, or agree or resolve to effect, a Change in Recommendation except as permitted by
Section 5.2(c), or (B) withdraw or modify, in a manner adverse to Parent or Merger
Sub, the General Partner Approval.
(f) The Company will promptly (and in any event within 24 hours after receipt) advise
Parent in writing of the receipt by the Company of any Acquisition Proposal after the date
of this Agreement, the material terms and conditions of any such Acquisition Proposal and
the proposed financing for such Acquisition Proposal (including copies of any written
requests, proposals, offers, and proposed agreements) and the identity of the Person making
any such Acquisition Proposal. The Company will keep Parent promptly and reasonably
informed in all material respects of the status and details (including any material change
to the terms thereof) of any such Acquisition Proposal and the proposed financing for such
Acquisition Proposal.
(g) As used in this Agreement, the following terms have the meanings set forth below:
“Acquisition Proposal” means any proposal or offer (including any proposal or
offer from or to the Unitholders), whether in writing or otherwise, from a Third Party
related to a merger, reorganization, unit exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the Company,
Company General Partner, Management General Partner or any Significant Company Subsidiary,
or any purchase, sale or other transfer of 20% or more of the consolidated assets (including
stock or equity interests of any Company Subsidiary) of the Company, Company General
Partner, Management General Partner and the Company Subsidiaries, or any purchase or sale
of, or tender or exchange offer for, or other transfer of, their respective equity
securities that, if consummated, would result in any Person (or the equity holders of such
Person) beneficially owning securities representing 20% or more of the total voting power of
the Company, Company General Partner, or Management General Partner, or any portion of the
general partner interest in the Company (or 20% or more of the surviving parent entity in
such transaction) other than the Merger, whether pursuant to a single transaction or a
series of related transactions.
“Intervening Event” means an event or circumstance that was not known to the
Company Board (or the Conflicts Committee, as applicable) at the date hereof (or if known,
the material consequences of which were not known to or understood by the Company Board (or
the Conflicts Committee, as applicable) as of the date hereof), which event or circumstance,
or any material consequences thereof, becomes known to or understood by the Company Board
(or the Conflicts Committee, as applicable) prior to the Company Unitholder Approvals and
which causes the Company Board (or the Conflicts Committee, as applicable) to conclude in
good faith, after
40
consultation with its financial advisor and outside counsel, that a failure to make a
Change in Recommendation constitutes or would be reasonably likely to constitute a violation
of its fiduciary duties to the Unitholders under applicable Law; provided,
however, that in no event shall any of the following constitute an Intervening
Event: (i) the receipt, existence or terms of an Acquisition Proposal or any matter relating
thereto or consequence thereof, or (ii) any change in, or event or condition
generally affecting, the industry in which the Company and its Subsidiaries operate.
“Significant Company Subsidiary” means any Company Subsidiary that would be a
“significant subsidiary” as defined in Rule 12b-2 promulgated under the Exchange Act.
“Superior Proposal” means any bona fide, written proposal by a Third Party
that, if consummated, would result in such Third Party (or its equityholders) owning,
directly or indirectly, all of the Common Units, Preferred Units and General Partner Units
then outstanding (or of the shares, interests or units of the surviving entity in a merger
or the direct or indirect parent of the surviving entity in a merger) or all or
substantially all of the consolidated assets of the Company and its Subsidiaries, (i) which
the Company Board and the Conflicts Committee both determine in good faith (after
consultation with its outside legal and financial advisors) to be more favorable to the
Company and the Unitholders from a financial point of view than the transactions
contemplated by this Agreement (after giving effect to any changes to the financial terms of
this Agreement proposed by Parent in response to such offer or otherwise) and (ii) which is
not subject to a financing condition, and which, in the good faith judgment of the Company
Board and the Conflicts Committee, is otherwise reasonably likely to be consummated on the
terms set forth in the proposal, taking into consideration (with respect to both subsections
(i) and (ii) hereof) all financial, regulatory, legal, timing and other aspects of such
proposal (including any break-up fee and conditions to consummation).
“Third Party” means any Person or group other than Parent, Merger Sub or any
Affiliate thereof.
(h) Unless this Agreement is terminated pursuant to, and in accordance with,
Section 8.1 of this Agreement, the obligation of the Company pursuant to Section
6.1(c) to call, give notice of and hold the Unitholder Meeting and to hold a vote of the
Unitholders on the approval of this Agreement and the approval of the Merger at the
Unitholder Meeting shall not be limited or otherwise affected by any Change in
Recommendation or the commencement, disclosure, announcement or submission to any Company
Entity of any Acquisition Proposal (whether or not a Superior Proposal).
(i) The Company acknowledges that the agreements contained in this Section 5.2
are an integral part of the transactions contemplated by this Agreement, and that, without
these agreements, Parent would not have entered into this Agreement. Accordingly, if there
shall have been any permanent injunction, other Order issued by any Court of competent
jurisdiction or other legal restraint or prohibition, that (A) would require or permit the
Company, any Company Party or any Company Representative to act or fail to act in a manner
that would, in the absence of such order, injunction or other Order, legal restraint or
prohibition, constitute a material violation of Section 5.2(a)(i) or (B) limits the
rights of Parent in any material respect under this Section 5.2, Parent shall have
the right to terminate this Agreement pursuant to Section 8.1(i) hereof.
Section 5.3 Control of Other Party’s Business. Nothing contained in this Agreement
shall give the Company Entities, directly or indirectly, the right to control or direct Parent’s
operations or give
41
Parent, directly or indirectly, the right to control or direct the Company Entities’
operations prior to the Effective Time. Prior to the Effective Time, each of Parent, on one hand,
and the Company Entities, on the other hand, shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over their respective operations.
ARTICLE 6
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of Proxy Statement/Prospectus; Unitholder Meeting.
(a) As promptly as practicable following the date of this Agreement, Parent and the
Company shall cooperate in preparing the Proxy Statement/Prospectus and Parent shall prepare
(with the Company’s reasonable cooperation) and file with the SEC the Form S-4. Each of the
Company Parties and Parent shall use its reasonable best efforts to respond as promptly as
practicable to any written or oral comments from the SEC or its staff with respect to the
Proxy Statement/Prospectus, the Form S-4 or any related matters. The Proxy
Statement/Prospectus will be included within the Form S-4 filed with the SEC. Each of the
Company Parties and Parent shall use its reasonable best efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after such filing and
to maintain such effectiveness for as long as necessary to consummate the Merger and the
other transactions contemplated by this Agreement. Parent shall also take any action (other
than qualifying to do business in any jurisdiction in which it is not now so qualified)
required to be taken under any applicable state securities or “Blue Sky” Laws in connection
with the issuance of Parent Shares in the Merger as contemplated by this Agreement and the
Company shall furnish all information concerning the Company and the holders of the Units as
may be reasonably requested by Parent in connection with any such action and in connection
with the preparation, filing and distribution of the Form S-4. If at any time prior to the
Effective Time any event occurs or information relating to the Company or Parent, or any of
their respective Affiliates, directors or officers, should be discovered by the Company or
Parent that should be set forth in an amendment or supplement to either the Form S-4 or the
Proxy Statement/Prospectus, so that either such document would not include any misstatement
of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, the party
that discovers such information shall promptly notify the other party hereto and an
appropriate amendment or supplement describing such information shall be promptly filed with
the SEC and, to the extent required by applicable Law, disseminated to the Unitholders.
(b) In addition to their obligations pursuant to Section 6.1(a), Parent and the
Company Parties shall make all necessary filings with respect to the Merger and the other
transactions contemplated by this Agreement under the Securities Act, the Exchange Act and
applicable foreign or state securities or “Blue Sky” laws and Regulations thereunder and
provide each other with copies of any such filings. Parent and the Company shall advise the
other party, promptly after receipt of notice thereof, of (and provide copies of any notices
or communications with respect to) the time of the effectiveness of the Form S-4, the filing
of any supplement or amendment thereto, the issuance of any stop order relating thereto, the
suspension of the qualification of Parent Shares issuable in connection with the Merger for
offering or sale in any jurisdiction, or of any request by the SEC or its staff for
amendment to the Proxy Statement/Prospectus or the Form S-4, comments thereon from the SEC’s
staff and each party’s responses thereto or request of the SEC or its staff for additional
information. No amendment or supplement to the Proxy Statement/Prospectus or the Form S-4
shall be filed without the approval
42
of each of Parent and the Company, which approval shall not be unreasonably withheld,
delayed or conditioned.
(c) Each Company Party shall (i) take all action in accordance with the federal
securities laws, the DRULPA, the LLC Act, and the Company Entity Charter Documents necessary
to call, give notice of and hold a special meeting of the Unitholders (the “Unitholder
Meeting”) for the purpose of seeking the Company Unitholder Approvals (and any authority
needed to adjourn or postpone the Unitholder Meeting) as soon as reasonably practicable
following the date of this Agreement and following the date the Form S-4 is declared
effective under the Securities Act; provided, however, that (x) the Company
Parties shall use their reasonable best efforts to cause the Unitholder Meeting to be held
not later than thirty (30) Business Days after the Form S-4 is declared effective, and (y)
without the prior written consent of Parent, no Company Entity may adjourn or postpone the
Unitholder Meeting; (ii) use its reasonable best efforts to obtain the Company Unitholder
Approvals and (iii) subject to Section 5.2(c), include in the Proxy
Statement/Prospectus the Company Board Recommendation. Without the prior written consent of
Parent, the adoption of this Agreement and the transactions contemplated hereby (including
the Merger) shall be the only matter (other than procedural matters) which the Company shall
propose to be acted on by the Unitholders at the Unitholders Meeting. Each Company Party
shall use its commercially reasonable best efforts to cause the Proxy Statement/Prospectus
to be mailed in definitive form to the Unitholders as promptly as practicable after the Form
S-4 is declared effective under the Securities Act and to convene and hold the Unitholder
Meeting as promptly as practicable thereafter.
(d) Notwithstanding anything to the contrary contained in this Agreement, the Company
shall not be required to hold the Unitholder Meeting if this Agreement is terminated
pursuant to Article 8.
Section 6.2 Access to Information; Confidentiality.
(a) The Company Parties shall, and shall cause the Company Subsidiaries to, afford to
the Representatives of Parent (the “Parent Representatives”) (to the extent
permitted under applicable Law, including the HSR Act and the Law relating to exchange of
information) reasonable access, during normal business hours during the period prior to the
Effective Time, to all its assets, properties, books, Contracts, commitments and records,
and, during such period, the Company Parties shall, and shall cause the Company Subsidiaries
to, make available to Parent all information concerning their businesses, assets,
liabilities, properties and personnel as Parent may reasonably request. The Company Parties
shall, and shall cause the Company Representatives to, permit the Parent Representatives to
meet, upon reasonable notice and during normal business hours, with the chief financial
officer and other officers of the Company responsible for the Company’s financial statements
and the internal controls of the Company and the Company Subsidiaries to discuss such
matters as Parent may reasonably deem necessary or appropriate. Without limiting the
generality of any of the foregoing, the Company shall promptly provide Parent notice of any
inaccuracy of any representation or warranty or breach of any covenant or agreement
contained in this Agreement at any time during the term hereof that could reasonably be
expected to cause the conditions set forth in Article 7 not to be satisfied.
(b) The Parent Parties shall, and shall cause the Parent Subsidiaries to, afford the
Company Representatives (to the extent permitted under applicable Law, including the HSR Act
and the Law relating to exchange of information) reasonable access, during normal business
hours during the period prior to the Effective Time, to all its assets, properties, books,
Contracts, commitments and records, and, during such period, the Parent Parties shall, and
shall cause the
43
Parent Subsidiaries to, make available to the Company all information concerning their
businesses, assets, liabilities, properties and personnel as the Company may reasonably
request.
(c) All information and materials provided pursuant to this Agreement shall be subject
to the provisions of the Confidentiality Agreement entered into between the parties on June
27, 2008 (as amended by Addendum #1 thereto, dated February 4, 2011, the
“Confidentiality Agreement”).
(d) No investigation by the Parent or any Parent Representative shall affect the
representations and warranties of the Company Parties set forth in this Agreement.
Section 6.3 Efforts; Regulatory Approvals.
(a) Subject to the terms and conditions set forth in this Agreement, Parent and the
Company Parties shall, and shall cause their respective Subsidiaries to, use reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other party in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement, including (i) the satisfaction of the
conditions precedent to the obligations of the Company Parties (in the case of Parent) or
Parent and Merger Sub (in the case of the Company Parties) to the Merger, (ii) the obtaining
of all necessary consents or waivers from Third Parties, including the Company Consents,
(iii) the obtaining of all necessary actions or no-actions, expirations or terminations of
waiting periods under the HSR Act or other Antitrust Laws, waivers, consents,
authorizations, Permits, Orders and approvals from, or any exemption by, any Governmental
Entity and the taking of all commercially reasonable steps as may be necessary to obtain
expirations or terminations of waiting periods under the HSR Act or other Antitrust Laws, an
approval or waiver from, or to avoid an action or proceeding by any Governmental Entity, and
(iv) the execution and delivery of any additional instruments necessary to consummate the
Merger and to fully carry out the purposes of this Agreement. The parties agree to prepare
and file any notification and report form and related material required under the HSR Act
and any additional consents and filings under any Antitrust Laws as promptly as practicable
following the date of this Agreement (but in no event more than fifteen (15) Business Days
from the date hereof except by mutual consent confirmed in writing). The parties further
agree that they will consult with each other with respect to the obtaining of all Permits
and consents of all Third Parties and Governmental Entities, and the expiration or
termination of the applicable waiting period under the HSR Act and under any other Antitrust
Laws necessary or advisable to consummate the transactions contemplated by this Agreement.
Parent and the Company Parties shall use commercially reasonable efforts to resolve any
objections that may be asserted by any Governmental Entity with respect to this Agreement,
the Merger or the other transactions contemplated by this Agreement, and the Company Parties
and Parent shall keep each other apprised of the status of matters relating to completion of
the transactions contemplated hereby.
(b) Subject to applicable Law relating to the exchange of information, each of Parent,
on the one hand, and the Company Parties, on the other hand, shall, in connection with the
efforts referenced in Section 6.3(a) to obtain all requisite actions, no-actions,
waivers, consents, authorizations, Permits, Orders, approvals, exemptions, and expirations
or terminations of applicable waiting periods for the transactions contemplated by this
Agreement under the HSR Act or any other Antitrust Law, (i) cooperate in all respects with
each other in connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private party, (ii)
keep the other party and its counsel informed of any communication received by such party
from, or given by such party to, the FTC, the DOJ or any
44
other Governmental Entity and of any communication received or given in connection with
any proceeding by a private party, in each case regarding any of the transactions
contemplated by this Agreement, and (iii) permit the other party and its counsel to review
in advance any written communication intended to be given by it to, and consult with each
other in advance of any meeting, discussion, telephone call or conference with, the FTC, the
DOJ or any other Governmental Entity or, in connection with any proceeding by a private
party regarding any of the transactions contemplated by this Agreement, with such private
party, and to the extent not prohibited by the FTC, the DOJ or other Governmental Entity or
other Person, give the other party and its counsel the opportunity to attend and participate
in such meeting, discussion, telephone call or conference. Neither Parent nor the Company
Parties shall commit to or agree with any Governmental Entity to stay, hold or extend any
applicable waiting period under the HSR Act or other Antitrust Law without the prior written
consent of the other. Parent and the Company Parties may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided to the other
under this Section 6.3(b) as “Antitrust Counsel Only Material.” Such
materials and the information contained therein shall be given only to the outside antitrust
counsel of the recipient (including experts and consultants retained by outside antitrust
counsel in connection with the transactions contemplated by this Agreement) and will not be
disclosed by such outside counsel or experts or consultants to employees, officers or
directors of the recipient unless express written permission is obtained in advance from the
source of the materials (Parent or the Company as the case may be) or its legal counsel.
Notwithstanding anything to the contrary in this Section 6.3(b), materials provided
to the other party or its outside counsel may be redacted to remove references concerning
the valuation of the Company Equity Interests or the business of the Company Entities. For
purposes of this Agreement, “Antitrust Law” means the Xxxxxxx Act, as amended, the
Xxxxxxx Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
Laws, Orders and judicial doctrines of any Governmental Entity that are designed or intended
to prohibit, restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or acquisition.
(c) Except as otherwise provided in Section 6.3(b) with respect to Antitrust
Counsel Only Material, and subject to applicable Law relating to the exchange of
information, Parent and the Company Parties shall, upon request, furnish each other with all
information concerning themselves, their respective Subsidiaries, directors, officers,
employees and equity holders and such other matters as may be reasonably necessary or
advisable in connection with any statement, filing, notice or application made by or on
behalf of Parent, the Company Parties or any of their respective Subsidiaries to any
Governmental Entity in connection with the Merger and the other transactions contemplated by
this Agreement.
(d) Parent and the Company Parties shall promptly advise each other upon receiving any
communication from any Governmental Entity or private party in respect of any filing,
investigation, inquiry or proceeding concerning this Agreement or the transactions
contemplated by this Agreement.
(e) Each of the Company Parties and Parent shall give (or shall cause their respective
Subsidiaries to give) any notices to Third Parties, and use, and cause their respective
Subsidiaries to use, their commercially reasonable efforts to obtain any Third-Party
consents, including the Company Consents.
(f) Notwithstanding anything in this Agreement to the contrary, Parent and its
Subsidiaries shall investigate, initiate and defend any proceeding or litigation, make
reasonable offers of compromise, and make reasonable efforts to promptly remove or cause to
be removed
45
any direction, determination, requirement, injunction, order, condition or limitation
that prevents or would prevent, or that makes illegal, the timely consummation of the Merger
and the other transactions contemplated by this Agreement; provided,
however, and notwithstanding anything in this Agreement to the contrary, Parent and
its Subsidiaries shall have no obligation to (i) seek appellate review by any court or
appellate review by any administrative agency (including but not limited to plenary hearing
at the FTC) of any Order, decree, initial decision, or ruling pertaining to the Merger or
other transactions contemplated by this Agreement, or (ii) sell, hold separate or otherwise
dispose of any business or assets or conduct their business in a specified manner prior to
or following the Closing Date in connection with the receipt of any necessary governmental
approvals, clearances or agreements not to contest the transactions contemplated under this
Agreement.
Section 6.4 Public Disclosure. Parent and the Company Parties shall consult with each
other before issuing any press release or otherwise making any public statement regarding the terms
of this Agreement or any of the transactions contemplated by this Agreement, and neither shall
issue any such press release or make any such statement without the prior approval of the other
(which approval shall not be unreasonably withheld, conditioned or delayed), except as may be
required by applicable Law or by obligations pursuant to any listing agreement with any national
securities exchange, in which case the party proposing to issue such press release or make such
public statement or disclosure shall consult with the other party about, and allow the other party
reasonable time to comment on, such press release or announcement in advance of such disclosure,
and the party will consider such comments in good faith; provided, however, that
any subsequent public statement or disclosure that is consistent with a public statement or
disclosure previously approved by the other party shall not require a further prior approval of
such other party.
Section 6.5 Equity Holder Litigation. The Company Parties shall give Parent the
opportunity to participate in (but not control) the defense or settlement of any equity holder
litigation against the Company Entities, any officers of the Company Entities or the directors of
the Company Board relating to any of the transactions contemplated by this Agreement, and no such
settlement shall be agreed to without Parent’s prior written consent, which shall not be
unreasonably withheld, delayed or conditioned.
Section 6.6 State Takeover Laws. If any “control share acquisition,” “fair price,”
“moratorium” or other anti-takeover statute (each, a “Takeover Statute”) becomes or is
deemed to be applicable to the Company Entities, Parent or Merger Sub, with respect to the Merger,
the Support Agreements or any other transaction contemplated by this Agreement (other than any
Acquisition Proposal), then each of the Company Parties, Parent, Merger Sub and their respective
boards of directors (or other governing bodies) shall grant such approvals and take such actions as
are necessary so that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to render such statute inapplicable
to such transactions. The Company Parties and the Company Board shall not take any action to
approve any Acquisition Proposal made by a Third Party for purposes of any state anti-takeover Law
or to cause any state anti-takeover Law that would otherwise apply to any such Acquisition Proposal
to become inapplicable thereto.
Section 6.7 Notification. From and after the date hereof until the Closing Date, each
party hereto will promptly notify the other party hereto of (i) the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would be likely to cause any condition to the
Merger and the other transactions contemplated by this Agreement not to be satisfied, and (ii) the
failure of such party to comply with any covenant or agreement to be complied with by it pursuant
to this Agreement which would be likely to result in any condition to the Merger and the other
transactions contemplated by this Agreement not to be satisfied. No delivery of any notice
pursuant to this Section 6.7 will cure any breach of any representation or warranty of such
party contained in this Agreement or otherwise limit or affect
46
the remedies available hereunder to the party receiving such notice. Without limiting the
foregoing, the Company Parties and Parent shall promptly advise each other of any change or event
having a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable.
Section 6.8 Resignation of Directors and Officers. To the extent requested by Parent
in writing prior to the Closing Date, the Company Parties shall use their reasonable best efforts
to obtain and deliver to Parent at the Closing, to be effective as of the Closing, duly signed
resignations of each officer of the Company and its Subsidiaries.
Section 6.9 NYSE Compliance. From the date of this Agreement until the Effective
Time, the Company (a) shall remain in compliance with all applicable listing and corporate
governance rules and regulations of NYSE, and (b) agrees not to take or permit to be taken on its
behalf any action which would result in the Common Units no longer being listed on NYSE.
Section 6.10 Listing of Parent Shares. Parent shall use its commercially reasonable
efforts to cause the Parent Shares issuable under Article 2 to be approved for listing on
the NYSE, subject to official notice of issuance, on the Closing Date.
Section 6.11 Tax Matters.
(a) Company General Partner shall be responsible for causing the Company’s Form 1065,
U.S. Return of Partnership Income, for the Tax year ending on the Closing Date to be filed
in accordance with applicable Law, including the issuance of a Schedule K-1, Partner’s Share
of Income, Deductions, Credits. Etc., to each holder of Units during such Tax year.
(b) Within 30 days after the Closing Date, Parent shall provide Company General Partner
an allocation of the Merger Consideration (including for purposes of this Section
6.11, other capitalized costs and the aggregate amount of such liabilities that are
treated as amounts realized for Tax purposes), in accordance with Treasury Regulation
Sections 1.1060-1 and 1.751-1, among the assets of the Company and the Company Subsidiaries
(the “Purchase Price Allocation Schedule”). If Parent and Company General Partner
have agreed upon the Purchase Price Allocation Schedule as prepared by Parent or have agreed
upon a revised Purchase Price Allocation Schedule, then each of Parent Parties and Company
Parties agree to file all applicable Tax Returns and otherwise report their affairs for Tax
purposes consistent with the Purchase Price Allocation Schedule, except as otherwise
required by applicable Laws; provided, however, that if after negotiation
and cooperation in good faith, Parent and Company General Partner are unable to agree upon
the Purchase Price Allocation Schedule as prepared by Parent, then each of Parent and
Company General Partner may prepare its own Purchase Price Allocation Schedule, and there
shall be no further obligation of either party under this Section 6.11(b).
(c) Tax Treatment. The parties hereto intend that the transactions contemplated
by this Agreement, including the Merger, be treated for U.S. federal income tax purposes as
(i) a sale by the holders of the Company Equity Interests and (ii) a purchase by Parent of
the assets held by (and subject to the liabilities of) Company (and the assets held by (and
subject to the liabilities of) each Company Subsidiary that is disregarded as an entity
separate from Company for U.S. federal income tax purposes) at the time of the Closing,
pursuant to Situation 2 of Revenue Ruling 99-6, 1999-1 C.B. 432. Except as required by Law,
none of the parties hereto shall take any position for U.S. federal income tax purposes (and
state and local Tax purposes to the extent applicable) that is inconsistent with such
treatment.
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Section 6.12 Accountants’ Letter. The Company Parties shall use their
commercially reasonable efforts to cause to be delivered to Parent a letter from their independent
public accountants addressed to Parent, dated a date within two Business Days before the date on
which the Form S-4 shall become effective, in form and substance reasonably satisfactory to Parent
and customary in scope and substance for letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4. Parent shall use its commercially
reasonable efforts to cause to be delivered to the Company a letter from its independent public
accountants addressed to the Company, dated a date within two Business Days before the date on
which the Form S-4 shall become effective, in form and substance reasonably satisfactory to the
Company and customary in scope and substance for letters delivered by registered public accounting
firms in connection with registration statements similar to the Form S-4.
Section 6.13 Directors and Officers Insurance and Indemnification.
(a) Without limiting any rights that any Person may have under any employment agreement
or Company Benefit Plan, after the Effective Time, Parent and the Surviving Company shall,
jointly and severally, indemnify, defend and hold harmless the present and former officers
and directors of the Company Entities in such capacities (“Indemnified Parties”) to the
fullest extent permitted by Law, in each case against any losses, damages, fines, penalties,
expenses (including attorneys’ fees and expenses) or liabilities resulting from any claim,
liability, loss, damage, cost or expense (each a “Claim”), asserted against, or incurred by,
an Indemnified Party that is based on the fact that such Indemnified Party is or was a
director, officer, employee, fiduciary or agent of the Company or any of its Subsidiaries
and arising out of actions or omissions or alleged actions or omissions in their capacity as
a director, officer, employee, fiduciary or agent of any of the Company Entities occurring
at or prior to the Effective Time (including in connection with this Agreement and the
transactions contemplated hereby). Parent and the Surviving Company shall, jointly and
severally, pay expenses in advance of the final disposition of any pending or threatened
Proceeding to each Indemnified Party to the fullest extent permitted under applicable Law.
Each Indemnified Party will be entitled to receive such advances from Parent or the
Surviving Entity within ten (10) Business Days of receipt by Parent or the Surviving Entity
from the Indemnified Party of a request therefor; provided that any Person to whom expense
are advanced provides an undertaking, if and only to the extent required by law, to repay
such advances if it is ultimately determined that such Person is not entitled to
indemnification. Neither Parent nor the Surviving Company shall settle, compromise or
consent to the entry of any judgment in any Proceeding (and in which indemnification could
be sought by such Indemnified Party hereunder), unless such settlement, compromise or
consent includes any unconditional release of such Indemnified Party from all liability
arising out of such Claim or such Indemnified Party otherwise consents. Parent and the
Surviving Company shall, and shall cause their Subsidiaries to, cooperate in the defense of
any such matter. Parent and the Surviving Company agree that all rights to exculpation,
advancement of expenses and indemnification for acts or omissions occurring prior to the
Effective Time now existing in favor of current and former officers and directors of any of
the Company Entities as provided in any Contract listed in Section 6.13 of the
Company Disclosure Letter, any Company Benefit Plan, or any Company Entity Charter Document,
each as in effect as of the date hereof, shall survive the Merger and shall continue in full
force and effect in accordance with their terms and without regard to any subsequent
amendment thereof.
(b) Prior to Closing, the Company shall purchase (after obtaining the written approval
of Parent, which approval shall not be unreasonably withheld, delayed or conditioned), and
after the Effective Time, the Surviving Company shall maintain, or if the Company has not
already done so, purchase tail directors’ and officers’ liability insurance coverage, at no
expense
48
to the beneficiaries, with a claims period of six (6) years from the Effective Time,
with respect to the directors and officers of the Company Entities who are currently covered
by existing director’ and officers’ liability insurance with respect to claims arising from
facts or events that occurred before the Effective Time, from an insurance carrier with the
same or better credit rating as the Company’s current insurance carrier, in an amount and
scope and on terms and conditions no less favorable to such directors and officers than
those in effect on the date of this Agreement; provided, however, that the
annual premium for such insurance shall not exceed 300% of the per annum rate of premium
currently paid by the Company Entities for such insurance on the date of this Agreement. In
the event that the annual premium for such insurance exceeds such maximum amount, the Parent
shall purchase as much coverage per policy year as reasonably obtainable for such maximum
amount.
(c) This covenant is intended to be for the benefit of, and shall be enforceable by,
each of the Indemnified Parties and their respective heirs and legal representatives. The
indemnification provided for herein shall not be deemed exclusive of any other rights to
which an Indemnified Party is entitled, whether pursuant to law, contract or otherwise.
(d) In the event that the Surviving Company or Parent, or any of their respective
successors or assigns, (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving entity of such consolidation or merger, or (ii) transfers or
conveys all or substantially all of its properties and assets to any Person, then, and in
each such case, proper provision shall be made so that the successors and assigns of the
Surviving Company or Parent, as the case may be, shall succeed to the obligations set forth
in this Section 6.13.
Section 6.14 Employee Matters.
(a) Parent shall or shall cause the Company to maintain for shoreside employees who
continue in the employ of Parent, the Company or any of their Subsidiaries following the
Closing Date (“Continuing Employees”), for the one-year period following the Closing
Date or such shorter period during which a Continuing Employee remains an employee, the base
salary or wages and annual incentive bonus opportunities and other benefit plans and
arrangements provided by the Company on the date of this Agreement (“Compensation
Arrangements”).
(b) Prior to the Closing, the Company shall enter into, adopt or amend such Company
Benefit Plans or other agreements to provide that if the employment of a Continuing Employee
is terminated during the one (1) year period following the Effective Time, then Parent shall
or shall cause the Company to provide such employee with severance equal to the greater of
(i) the severance amount (and according to the terms) set forth in Section 6.14(b)
of the Company Disclosure Letter, or (ii) the severance applicable to the employee under any
Contract as in effect on the date hereof.
(c) From and after the Closing, Parent shall recognize each Continuing Employee’s
service with the Company or any of its Subsidiaries, and with any predecessor employer, in
each case, to the same extent recognized by the Company or any of its Subsidiaries on the
date of this Agreement for purposes of eligibility to participate and vesting but not
benefit accrual under any employee benefit plans or arrangements (including under any
applicable 401(k), savings, medical, dental, life insurance, vacation, severance or
separation pay plans) provided, sponsored, maintained or contributed to by Parent or any of
its Subsidiaries for such Continuing Employees, except to the extent such credit would
result in the duplication of benefits or compensation for the same period of service.
49
(d) Parent shall (i) use commercially reasonable efforts to waive, in the plan year in
which the Closing Date occurs, for each Continuing Employee and his or her dependents any
waiting period provision, payment requirement to avoid a waiting period, actively-at-work
requirement and any other restriction that would prevent immediate or full participation
under the welfare plans or pre-existing condition limitations of health benefit plans of
Parent or any of its Subsidiaries applicable to such Continuing Employee to the extent such
waiting period, pre-existing condition limitation, actively-at-work requirement or other
restriction would not have been applicable to such Continuing Employee under the terms of
the welfare benefit plans of the Company and its Subsidiaries on the date of this Agreement
and (ii) use commercially reasonable efforts to, in the plan year in which the Closing Date
occurs, give full credit under the health benefit plans of Parent and its Subsidiaries
applicable to each Continuing Employee and his or her dependents for all co-payments and
deductibles satisfied prior to the Closing in the same plan year in which the Closing
occurs, and for any lifetime maximums, as if there had been a single continuous employer.
(e) This Section 6.14 shall not limit the obligation of Parent to maintain any
compensation arrangement or benefit plan pursuant to an existing Contract set forth on the
Company Disclosure Schedule. No provision of this Agreement shall be construed as a
guarantee of continued employment of any Continuing Employee and this Agreement shall not be
construed so as to prohibit Parent or any of its Subsidiaries from having the right to
terminate the employment of any Continuing Employee or any other employee at any time and
for any or no reason; provided that any such termination is effected in accordance
with applicable Law.
(f) This Agreement is not intended by the parties to (i) constitute an amendment to any
Company Benefit Plan or (ii) obligate Parent, the Company or its Subsidiaries, or any of
their respective affiliates (including the Company) to maintain any particular compensation
or benefit plan, program, policy or arrangement. Nothing contained in this Section
6.14 or any other provision of this Agreement shall be construed to create any
third-party beneficiary right in any employee or other Person.
Section 6.15 Section 16 Matters. Prior to the Closing date, Parent, the Company and
the Management General Partner and their respective boards of directors, shall use their reasonable
best efforts to take all actions to cause any dispositions of Common Units (including derivative
securities with respect to Common Units), Preferred Units, General Partner Units and the Incentive
Distribution Rights, or acquisitions of Parent Shares (including derivative securities with respect
to Parent Shares) resulting from the transactions contemplated hereby by each individual who is
subject to the reporting requirements of Section 16(a) of the Exchange Act to be exempt from
Section 16(b) of the Exchange Act under Rule 16b-3 promulgated under the Exchange Act in accordance
with the terms and conditions set forth in that certain No-Action Letter, dated January 12, 1999,
issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
ARTICLE 7
CONDITIONS PRECEDENT
Section 7.1 Conditions to Obligation of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger is subject to the satisfaction or (to the
extent permitted by Law) waiver by each of Parent and the Company on or prior to the Closing Date
of the following conditions:
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(a) Company Unitholder Approvals. The Company Unitholder Approvals shall have
been obtained.
(b) No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction, other Order issued by any Court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation of the
Merger substantially on the terms contemplated in this Agreement shall be in effect; nor
shall there be any Law enacted, entered, or enforced which prevents or prohibits the
consummation of any of the transactions contemplated by this Agreement, including the
Merger; provided, however, that prior to invoking this condition, the
relevant party invoking this condition has complied with its obligations under Section
6.3.
(c) Governmental Approvals. Any applicable waiting period (and any extension
thereof) under the HSR Act or other Antitrust Law shall have expired or been terminated and
any approvals and consents required to be obtained under any other Antitrust Law or
otherwise required of Parent, the Company, the Company General Partner or any of their
Affiliates from any Governmental Entity to consummate the Merger, other than any such
approvals or consents the failure of which to obtain would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect or Parent
Material Adverse Effect, shall have been obtained.
(d) Form S-4. The Form S-4 shall have been declared effective under the
Securities Act and no stop order suspending the effectiveness of the Form S-4 shall have
been issued and no proceedings for that purpose shall be pending or threatened before the
SEC.
(e) Stock Listing. The Parent Shares deliverable to the holders of Company
Equity Interests as contemplated by this Agreement shall have been approved for listing on
the NYSE, subject to official notice of issuance.
Section 7.2 Conditions to Obligations of Parent and Merger Sub. The obligations of
Parent and Merger Sub to effect the Merger are further subject to the satisfaction on or prior to
the Closing Date of the following conditions, any or all of which may be waived by them, in whole
or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties of the Company Parties. (i) The
representations and warranties set forth in Section 3.3, Section 3.9(a),
Section 3.19 and Section 3.21 shall be true and correct in all respects as
of the date of this Agreement and as of the Closing Date as though made on the Closing Date,
(ii) the representations and warranties set forth in Section 3.1(a), and Section
3.4(a) shall be made as if none of such representations and warranties contained any
qualifications or limitations as to “materiality” or Company Material Adverse Effect and
shall be true and correct in all material respects, in each case, as of the date of this
Agreement and as of the Closing Date, as though made on and as of the Closing Date (except
to the extent such representations and warranties speak as of a specific date, in which case
as of such specific date), and (iii) all of the other representations and warranties set
forth in Article 3, made as if none of such representations and warranties contained
any qualifications or limitations as to “materiality” or Company Material Adverse Effect,
shall be true and correct, in each case, as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date (except to the extent such
representations and warranties speak as of a specific date, in which case as of such
specific date), except, in the case of this clause (iii), where the failure of such
representations and warranties to be true and correct as so made would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Parent shall have received
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a certificate signed on behalf of each of the Company and the Company General Partner
to such effect.
(b) Performance of Obligations of the Company Entities. The Company Entities
shall have performed in all material respects their obligations, and complied in all
material respects with the agreements and covenants, required to be performed, or complied
with, by them under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company and the Company General Partner to
such effect.
(c) Tax Matters. Parent shall be satisfied in its reasonable discretion that
(i) Company will be classified as a partnership for U.S. federal income tax purposes
immediately prior to the Closing and (ii) except with respect to any Company Subsidiary that
is a corporation under the jurisdiction of its formation or organization, each Company
Subsidiary will, immediately prior to the Closing, be classified for U.S. federal income tax
purposes as either a partnership or an entity that is disregarded as an entity separate from
its sole owner.
(d) Consents. The consents of the other parties to the Contracts listed in
Section 7.2(d) of the Company Disclosure Letter and the other transactions
contemplated by this Agreement shall have been obtained and shall be in full force and
effect.
(e) FIRPTA. Company General Partner shall have delivered to Parent prior to
the Closing a duly executed and acknowledged certificate (or other required documentation),
in compliance with the Code and Treasury regulations, certifying such facts as to establish
that the transactions contemplated by this Agreement are exempt from withholding pursuant to
Section 1445 of the Code.
Section 7.3 Conditions to the Obligations of the Company Parties. The obligations of
the Company Parties to effect the Merger are further subject to the satisfaction on or prior to the
Closing Date of the following conditions, any or all of which may be waived by the Company, in
whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. The representations and warranties set
forth in Article 4, made as if none of such representations and warranties contained
any qualifications or limitations as to “materiality” or Parent Material Adverse Effect,
shall be true and correct, in each case, as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date (except to the extent such
representations and warranties speak as of a specific date, in which case as of such
specific date), except for such failures to be true and correct that would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse Effect. The
Company shall have received a certificate signed on behalf of Parent and Merger Sub by an
executive officer of Parent to such effect.
(b) Performance of Obligations of Parent and Merger Sub. Parent and Merger Sub
shall have performed in all material respects their respective obligations, and complied in
all material respects with the agreements and covenants, required to be performed, or
complied with, by them under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent and Merger Sub by an executive
officer of Parent to such effect.
Section 7.4 Frustration of Closing Conditions. None of the Company Entities, Parent
or Merger Sub may rely on the failure of any condition set forth in Section 7.1,
Section 7.2 or Section 7.3, as the case may be, to be satisfied if such failure was
caused by such party’s failure to comply in any
52
material respect with its respective obligations under this Agreement to be performed at or
prior to the Closing Date.
ARTICLE 8
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the Merger may be
abandoned:
(a) by mutual written consent of Parent and the Company at any time prior to the
Effective Time;
(b) by either Parent or the Company, at any time prior to the Effective Time, if any
Governmental Entity shall have issued a final and non-appealable Order, decree or ruling or
takes any other action having the effect of (i) permanently enjoining, restraining or
otherwise prohibiting the consummation of the Merger, or (ii) making the consummation of the
Merger illegal; provided, however, that a party shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(b) if the issuance of such
Order, decree or ruling or the taking of such action is attributable to the failure of such
party to perform any covenant in this Agreement required to be performed by such party at or
prior to the Effective Time;
(c) by either Parent or the Company if the Effective Time has not occurred on or prior
to 11:59 p.m., Houston, Texas time on September 30, 2011 (the “Outside Date”),
provided, however, that: (i) if the condition set forth in Section
7.1(c) has not been satisfied by such date, then the Outside Date shall be November 29,
2011 and (ii) a party shall not be permitted to terminate this Agreement pursuant to this
Section 8.1(c) if the party has breached any provision of this Agreement and such
breach has been the cause of, or has resulted in, the Effective Time not occurring by such
time on the Outside Date;
(d) by the Company at any time prior to the Effective Time if Parent shall have
breached or failed to perform any of its representations, warranties, covenants or
agreements contained in this Agreement such that the conditions set forth in either
Section 7.3(a) or Section 7.3(b) are not capable of being satisfied on or
before the Outside Date;
(e) by Parent at any time prior to the Effective Time if a Company Party shall have
breached or failed to perform any of its representations, warranties, covenants or
agreements contained in this Agreement such that the conditions set forth in either
Section 7.2(a) or Section 7.2(b) are not capable of being satisfied on or
before the Outside Date;
(f) by Parent, following a vote at a duly held meeting (or any adjournment thereof) to
obtain the Company Unitholder Approvals, if the Company Unitholder Approvals are not
obtained;
(g) by Parent at any time prior to the Effective Time, if a Company Triggering Event
shall have occurred;
(h) by Parent at any time prior to the Effective Time, if a Company Material Adverse
Effect shall have occurred;
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(i) by Parent if there shall have been any permanent injunction, other Order issued by
any Court of competent jurisdiction or other legal restraint or prohibition, that (A) would
require or permit the Company, any Company Party or any Company Representative to act or
fail to act in a manner that would, in the absence of such order, injunction, other Order,
legal restraint or prohibition, constitute a material violation of Section 5.2(a)(i)
or (B) would reduce or otherwise limit the rights of Parent in any material respect under
Section 5.2 or Section 8.3;
(j) by the Company prior to obtaining the Company Unitholder Approvals, in order to
enter into an agreement relating to a Superior Proposal in accordance with Section
5.2; provided, however, that the Company has (i) not breached the
provisions of Section 5.2 and (ii) complied in all material respects with
Section 8.3 with respect to such Superior Proposal; or
(k) the Company at any time prior to the Effective Time, if a Parent Material Adverse
Effect shall have occurred.
The party desiring to terminate this Agreement pursuant to this Section 8.1 (other
than pursuant to Section 8.1(a)) shall give written notice of such termination to the other
parties.
Section 8.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 8.1, this Agreement shall become void and of no effect and there shall
be no liability or obligation on the part of any party hereto or their respective officers,
directors, equity holders, Affiliates or Representatives; provided, however, that
(a) the provisions of Section 6.2(c); this Section 8.2; Section 8.3 and
Article 9 shall remain in full force and effect and survive any termination of this
Agreement, and (b) nothing herein shall relieve any party hereto from any liability for damages
resulting from any fraud or willful and material breach of this Agreement.
Section 8.3 Expenses and Termination Fees.
(a) Subject to subsections (b), (c), (d), and (f) of this Section 8.3, whether
or not the Merger is consummated, all fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement (including the fees,
costs and expenses of its advisers, brokers, finders, agents, accountants, bankers and legal
counsel) shall be paid by the party incurring such fee, cost and expense.
(b) Each Party shall bear its own costs and expenses incurred in connection with (i)
the filing, printing and mailing of the Proxy Statement/Prospectus, and (ii) the retention
of any information agent or other service provider in connection with the Merger. Parent
and the Company shall each pay one-half of the filing fee under the HSR Act.
(c) In the event that this Agreement is terminated by Parent pursuant to, Section
8.1(e), Section 8.1(f), Section 8.1(g), or Section 8.1(i), or by
the Company pursuant to Section 8.1(j), then (without limiting any obligation of the
Company to pay any fee payable pursuant to Section 8.3(d)), the Company shall,
within two (2) Business Days of such termination, make a non-refundable cash payment to
Parent in an amount equal to the aggregate amount of all fees and expenses (including all
attorneys’ fees, accountants’ fees, financial advisory fees and filing fees) that have been
paid or that may become payable by or on behalf of Parent in connection with the preparation
and negotiation of this Agreement, the Support Agreements or any of the other transactions
contemplated by this Agreement and the Support Agreements) (collectively, the “Parent
Expenses”) (it being understood, however, that Parent’s other remedies, if any, shall
not be affected by any payments under this Section 8.3(c)) not to exceed $3.0
million in the aggregate.
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(d) In addition to any rights that Parent may have pursuant to Section 8.3(c),
in the event that this Agreement is terminated by Parent pursuant to Section 8.1(c),
Section 8.1(e) or Section 8.1(f) and (i) at or prior to the time of such
termination an Acquisition Proposal shall have been disclosed, announced, commenced,
submitted or made and not withdrawn prior to termination, and (ii) within twelve (12) months
after the date of any such termination, any Acquisition Proposal is consummated or a
definitive agreement contemplating an Acquisition Proposal is executed that is subsequently
consummated, then (without limiting any obligation of the Company to pay any fee payable
pursuant to Section 8.3(c)) the Company shall pay by wire transfer of same-day funds
to Parent a termination fee of $12.0 million (the “Termination Fee”) at the
applicable time set forth in the next sentence as well as reimburse the Parent the Parent
Expenses not to exceed $3.0 million in the aggregate to the extent not previously paid under
Section 8.3(c). Any Termination Fee payable to Parent pursuant to the preceding
sentence shall be made by the Company at the time such Acquisition Proposal is consummated.
In the event that Parent shall terminate this Agreement pursuant to Section 8.1(g)
or the Company shall terminate this Agreement pursuant to Section 8.1(j), then the
Company shall pay the Termination Fee to Parent within two (2) Business Days of such
termination.
(e) Each of the parties hereto acknowledges and agrees that the agreements contained in
this Section 8.3 are an integral part of the transactions contemplated by this
Agreement and that, without these agreements, Parent and Merger Sub would not enter into
this Agreement. Accordingly, if there shall have been any permanent injunction, other Order
issued by any Court of competent jurisdiction or other legal restraint or prohibition, that
would reduce or otherwise limit the rights of Parent in any material respect under this
Section 8.3, Parent shall have the right to terminate this Agreement pursuant to
Section 8.1(i) hereof.
(f) If the Company fails to promptly pay when due any amount payable pursuant to this
Section 8.3, then: (i) the Company shall reimburse Parent for all fees, costs and
expenses (including legal fees, costs and expenses) incurred in connection with any action
taken to collect payment and the enforcement by Parent of its rights under this Section
8.3, and (ii) the Company shall pay to Parent interest on such overdue amount (for the
period commencing as of the date such overdue amount was originally required to be paid and
ending on the date such overdue amount is actually paid to the party in full) at a rate per
annum equal to 300 basis points over the “prime rate” (as announced by Bank of America or
any successor thereto) in effect on the date such overdue amount was originally required to
be paid.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below:
“Acceptable Confidentiality Agreement” has the meaning set forth in Section
5.2(b).
“Acquisition Proposal” has the meaning set forth in Section 5.2(d).
“Affiliate” means with respect to any Person, a Person that directly or indirectly
through one or more intermediaries controls, is controlled by, or is under common control with,
such Person.
“Agreement” has the meaning set forth in the Preamble.
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“Antiboycott Laws” means all applicable Laws of the United States relating to the
boycott of certain countries including those promulgated by the U.S. Department of Commerce or the
U.S. Department of Treasury, and such laws of other applicable jurisdictions to the extent not
inconsistent with the Laws of the United States.
“Anticorruption Laws” means all applicable Laws of the United States and all other
applicable jurisdictions that relate to bribery, corruption, or improper or illegal payments,
gifts, or gratuities, including the FCPA and Laws enacted to implement the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions, signed in
Paris on December 17, 1977, which entered into force on February 15, 1999, and the Convention’s
Commentaries.
“Antitrust Counsel Only Material” has the meaning set forth in Section 6.3(b).
“Antitrust Law” has the meaning set forth in Section 6.3(b).
“Assets” has the meaning set forth in Section 3.10(a).
“beneficial ownership,” “beneficially own,” or any similar derivation thereof
has the meaning ascribed to such terms under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
“Benefit Plan” means, with respect to any entity, (a) any “employee benefit plan,” as
such term is defined in Section 3(3) of ERISA, (b) any “multiemployer plan” as defined in Section
3(37) of ERISA, (c) any plan that would be an employee benefit plan if it were subject to ERISA or
the Code, such as foreign plans and plans for directors, (d) any stock bonus, stock ownership,
stock option, stock purchase, stock appreciation rights, phantom stock or other stock plan (whether
qualified or nonqualified), (e) any bonus, deferred compensation, excess benefit, or incentive
compensation plan, (f) any severance or employment agreement, plan, program, policy or arrangement,
(g) any supplemental unemployment, sick leave, long-term disability, post-retirement medical or
life insurance, and (h) any other plan, program, policy, employment practice, pay practice or
arrangement providing benefits to employees.
“Book-Entry Common Units” means a Common Unit represented in book-entry form.
“Book-Entry Interest” means a Company Equity Interest represented in book-entry form.
“Business Day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the States of Texas or New York are
required or authorized by Law or other Governmental Entity to be closed.
“Cash Election” has the meaning set forth in Section 2.1(a)(i).
“CERCLA” has the meaning set forth in the definition of “Environmental Laws.”
“Certificate” means a certificated form evidencing a Company Equity Interest.
“Certificate of Merger” has the meaning set forth in Section 1.2.
“Change in Recommendation” has the meaning set forth in Section 5.2(c).
“Closing” has the meaning set forth in Section 1.4.
“Closing Date” has the meaning set forth in Section 1.4.
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“COBRA Coverage” has the meaning set forth in Section 3.14(k).
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Unit Consideration” has the meaning set forth in Section 2.1(a).
“Common Unitholder” means a holder of Common Units.
“Common Unitholder Approval” has the meaning set forth in Section 3.4(a).
“Common Units” has the meaning set forth in the Company Partnership Agreement and
shall, for all purposes other than with regard to any vote, consent or approval of the holders of
Common Units, include Phantom Units.
“Company” has the meaning set forth in the Preamble.
“Company Balance Sheet Date” has the meaning set forth in Section 3.8.
“Company Benefit Plans” has the meaning set forth in Section 3.14(a).
“Company Board” has the meaning set forth in the Recitals.
“Company Board Recommendation” has the meaning set forth in the Recitals.
“Company Consents” has the meaning set forth in Section 3.5(a).
“Company Debt Agreements” means (i) the Loan Agreement, dated as of June 28, 2005,
between K-Sea Operating Partnership L.P. and Citizens Asset Finance, d/b/a Citizens Leasing
Corporation, (ii) the Master Loan and Security Agreement dated as of April 3, 2006 by and among
K-Sea Operating Partnership L.P., as Borrower, Key Equipment Finance Inc., as Lender, and K-Sea
Transportation Partners L.P., K-Sea Transportation Inc. and Sea Coast Transportation LLC, as
Guarantors, (iii) the Loan Agreement dated as of May 12, 2006 among K-Sea Operating Partnership
L.P., as Borrower, Citizens Leasing Corporation, as Lender, and Citizens Leasing Corporation, as
agent and collateral trustee for the other lenders that may become parties to the loan agreement,
as amended August 14, 2007, June 30, 2008 and December 30, 2009, (iv) the Master Loan and Security
Agreement between Key Equipment Finance Inc., as Lender and K-Sea Operating Partnership L.P., as
Borrower and K-Sea Transportation Partners L.P., K-Sea Transportation Inc., K-Sea Transportation
LLC, Xxxxx Maritime LLC, and K-Sea Hawaii, Inc., as Guarantor, dated June 10, 2008, and (v) the
Amended and Restated Loan and Security Agreement, dated as of August 14, 2007, by and among K-Sea
Operating Partnership L.P., as Borrower, LaSalle Bank National Association and Citibank, N.A., as
co-syndication agents, Citizens Bank of Pennsylvania and HSBC Bank USA National Association, as
co-documentation agents, and KeyBank National Association, as administrative agent and collateral
trustee, and the lenders party thereto.
“Company Disclosure Letter” has the meaning set forth in the first paragraph of
Article 3.
“Company Entities” means collectively the Company, Company General Partner, Management
General Partner, and the Company Subsidiaries.
“Company Entity Charter Documents” has the meaning set forth in Section 3.2.
“Company Equity Interest” means any equity interest in the Company, including Common
Units, Incentive Distribution Rights, Preferred Units, and General Partner Units.
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“Company Financial Advisor” has the meaning set forth in Section 3.26.
“Company General Partner” has the meaning set forth in the Preamble.
“Company General Partner GP Interests” has the meaning set forth in Section
3.3(a).
“Company General Partner Partnership Agreement” means the First Amended and Restated
Agreement of Limited Partnership of Company General Partner, dated as of January 14, 2004.
“Company Individuals” has the meaning set forth in Section 5.2(a).
“Company LTIP” means the K-Sea Transportation Partners L.P. Long Term Incentive Plan.
“Company Material Adverse Effect” means any change, event, violation, development,
circumstance, effect or other matters that, individually or in the aggregate, have, or could
reasonably be expected to have, a material adverse effect on the business, condition,
capitalization, assets, liabilities, operations or financial performance of the Company and the
Company Subsidiaries taken as a whole; provided, however, that no change, event,
violation, development, circumstance, effect or other matter that results from the following, shall
constitute a Company Material Adverse Effect:
(i) changes in conditions in the United States or global economy that do not have a
materially disproportionate impact on the Company or any of its Subsidiaries relative to
other companies in the industry in which the Company and its Subsidiaries operate;
(ii) changes in GAAP or other accounting standards, or authoritative interpretations
thereof after the date hereof, which did not have a disproportionate impact on the Company;
(iii) the occurrence of natural disasters of any type, including, without limitation,
earthquakes and tsunamis but not including hurricanes;
(iv) the announcement or pendency of this Agreement and the transactions contemplated
by this Agreement;
(v) the existence or occurrence of war, acts of war, terrorism or similar hostilities;
and
(vi) a decrease in the market price of the Common Units; provided,
however, that the exception in this clause (vi) shall not prevent or otherwise
affect a determination that any change or effect underlying such a decrease on market price
has resulted in, or contributed to, a Company Material Adverse Effect;
provided, further, that the parties hereto agree that the following matters shall
be deemed to constitute a Company Material Adverse Effect: (1) repeal of the Xxxxx Act, and (2) any
suspension or debarment rendering the Company or any Company Subsidiary ineligible to enter into
contracts with the federal government or as a subcontractor to the federal government.
“Company Parties” has the meaning set forth in the Preamble.
“Company Partnership Agreement” means the Fourth Amended and Restated Agreement of
Limited Partnership of the Company, dated as of September 10, 2010.
“Company Representatives” has the meaning set forth in Section 5.2(a).
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“Company Regulatory Agreement” has the meaning set forth in Section 3.6(b).
“Company SEC Documents” has the meaning set forth in Section 3.6(c).
“Company Subsidiary” means any Subsidiary of the Company and “Company
Subsidiaries” means all of the Subsidiaries of the Company.
“Company Triggering Event” shall be deemed to have occurred if: (a) the Company Board
or any committee thereof shall have made a Change in Recommendation, (b) the Company shall have
failed to include in the Proxy Statement/Prospectus the Company Board Recommendation, or (c) any of
the Company Parties or any Company Representative shall have materially breached any of the
provisions set forth in Section 5.2.
“Company Unitholder Approvals” has the meaning set forth in Section 3.4(a).
“Company Vessel” means a vessel owned, leased or operated by a Company Entity,
including tugs, barges and tankers.
“Compensation Arrangements” has the meaning set forth in Section 6.14(a).
“Confidentiality Agreement” has the meaning set forth in Section 6.2(c).
“Conflicts Committee” has the meaning set forth in the Company Partnership Agreement.
“Continuing Employees” has the meaning set forth in Section 6.14(a).
“Contract” means a note, bond, mortgage, indenture, deed of trust, license, lease,
franchise, agreement, arrangement, commitment, understanding, bylaw, contract or other instrument
or obligation.
“control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise, or the power to elect more than 50% of the directors,
managers, general partners, or Persons exercising similar authority with respect to such Person.
The terms “controlling,” “controlled by,” or “under common control with” have meanings
corresponding to this definition.
“Court” means any court or arbitration tribunal of the United States or any domestic
state or any political subdivision thereof.
“Covenanting Unitholders” has the meaning set forth in the Recitals.
“Covered Employees” has the meaning set forth in Section 5.1(b)(ix).
“Customers” has the meaning set forth in Section 3.23.
“DDTC” has the meaning set forth in the definition of “Export and Sanctions Laws.”
“Denied Party Lists” means a Person (i) subject to any restrictions under the Export
and Sanctions Laws including those sanctions targeting government entities or individuals that
support terrorism, or (ii) included on any denied, prohibited, or restricted party list maintained
by the United States or any other applicable jurisdiction, including the U.S. Department of
Commerce, Bureau of Industry and Security Denied Persons List, Entity List, or Unverified List, the
OFAC Specially Designated Nationals and Blocked Persons List; or the DDTC Debarred Parties List.
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“DOJ” means the Antitrust Division of the U.S. Department of Justice.
“DRULPA” means the Delaware Revised Uniform Limited Partnership Act.
“Effective Time” has the meaning set forth in Section 1.2.
“Election Deadline” has the meaning set forth in Section 2.2(b).
“Election Form” has the meaning set forth in Section 2.2(a).
“Environmental Laws” means all laws, rules, regulations, statutes, ordinances, decrees
or orders of any Governmental Entity relating to (i) the control of any potential pollutant or
protection of human health or the environment (including air, water or land), (ii) solid, gaseous
or liquid waste generation, handling, treatment, storage, disposal or transportation, and (iii)
exposure to hazardous, toxic or other substances alleged to be harmful, and includes (A) the terms
and conditions of any license, permit, approval, or other authorization by any Governmental Entity,
and (B) judicial, administrative, or other regulatory decrees, judgments, and orders of any
Governmental Entity. The term “Environmental Law” shall include, but not be limited to the
following statutes and the regulations promulgated thereunder: the Clean Air Act, 42 U.S.C. § 7401
et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the Resource Conservation and Recovery Act,
42 U.S.C. § 6901 et seq., the Emergency Planning and Community Xxxxx-xx-Xxxx Xxx, 00 X.X.X. § 00000
et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Safe Drinking Water Act,
42 U.S.C. § 300f et seq., the Comprehensive Environmental Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., the Occupational Safety and Health Act, 29 U.S.C. §
651 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., and any state,
county, or local laws and regulations similar thereto.
“Environmental Permit” means any permit, license, approval, registration,
notification, exemption, consent or other authorization required by or from a Governmental Entity
under Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any Person (whether or not incorporated) that, within the
six-year period ending on the Closing Date, is or was treated as a single employer together with
any of the Company Entities, their Affiliates or any Subsidiary under Code Section 414.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
Regulations promulgated thereunder.
“Exchange Agent” has the meaning set forth in Section 2.4(a).
“Exchange Fund” has the meaning set forth in Section 2.4(c).
“Export and Sanctions Laws” means all Laws of the United States and all other
applicable jurisdictions relating to any economic sanction or export restriction including: (i) the
sanctions regulations administered by U.S. Department of Treasury’s Office of Foreign Assets
Control, (ii) export and trade controls and related sanctions administered by the U.S. Department
of Commerce, Bureau of Industry and Security, and (iii) the International Traffic in Arms
Regulations administered by the U.S. Department of State’s Directorate of Defense Trade Controls
(“DDTC”).
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“FCPA” means the United States Foreign Corrupt Practices Act of 1977, as amended from
time to time.
“Form S-4” has the meaning set forth in Section 3.28.
“FTC” means the U.S. Federal Trade Commission.
“GAAP” means accounting principles generally accepted in the United States
consistently applied by a specified Person.
“General Partner Approval” has the meaning set forth in Section 3.4(a).
“General Partner Interest” has the meaning set forth in the Company Partnership
Agreement.
“General Partner Unit” has the meaning set forth in the Company Partnership Agreement.
“Governmental Antitrust Authority” has the meaning set forth in Section
6.3(c).
“Governmental Entity” means any domestic, foreign or supranational government or
subdivision thereof, administrative, governmental, prosecutorial or regulatory authority, agency,
commission, Court, administrative contractor, tribunal or self-regulatory organization.
“GP Consideration” has the meaning set forth in Section 2.1(c).
“GP IDR Consideration” has the meaning set forth in Section 2.1(c).
“GP Unit Consideration” has the meaning set forth in Section 2.1(c).
“Growth CapEx” means those items outlined on Section 5.1 of the Company
Disclosure Letter.
“Hazardous Materials” means any (i) toxic or hazardous materials or substances, (ii)
solid wastes, including asbestos, polychlorinated biphenyls, mercury, flammable or explosive
materials, (iii) radioactive materials, (iv) petroleum or petroleum products (including crude oil),
and (v) any other chemical, pollutant, contaminant, substance or waste that is regulated or for
which liability or standards of care are imposed under any Environmental Law.
“Holding Sub” has the meaning set forth in the Preamble.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Incentive Distribution Right” has the meaning set forth in the Company Partnership
Agreement.
“IDR Holdings” means K-Sea IDR Holdings LLC, a Delaware limited liability company.
“Indemnified Parties” has the meaning set forth in Section 6.13.
“Intellectual Property” means all U.S. and foreign intellectual and industrial
property rights, including (i) patents, inventions and utility models, (ii) copyrights and
copyrightable works in any media (including software, website content, databases and
documentation), (iii) trademarks, service marks, trade names, trade dress, logos, slogans, domain
names and other source indicators, and the goodwill of the business associated therewith, (iv)
trade secrets, know-how and confidential or proprietary information,
61
and (iv) applications and registrations for any of the foregoing, and rights to obtain
renewals, extensions, continuations, continuations-in-part, divisions or similar proceedings.
“Intervening Event” has the meaning set forth in Section 5.2(g).
“IRS” has the meaning set forth in Section 3.14(a).
“Xxxxx Act” has the meaning set forth in Section 3.21.
“Knowledge” means, with respect to the Company, the actual knowledge (after due
inquiry and investigation) of any of the Company Parties’ Chairman, president, chief executive
officer, chief operating officer, chief financial officer, chief administrative officer, chief
accounting officer, controller, any vice president, general counsel, director of tax, director of
human resources or any other officer of the Company Parties subject to the reporting requirements
of Section 16(a) of the Exchange Act with respect to the Company.
“Law” or “Laws” means any statute, law (including common law), code (including
the Code) ordinance, Regulation, Maritime Guideline, rule, guidance, Order, writ, injunction or
decree of any state, commonwealth, federal, foreign, territorial or other court or Governmental
Entity, subdivision, agency, department, commission, board, bureau or instrumentality of a
Governmental Entity, including all decisions of Courts having the effect of Law in each such
jurisdiction.
“Lease” has the meaning set forth in Section 3.10(c).
“Leased Real Property” has the meaning set forth in Section 3.10(c).
“Lien” means any mortgage, pledge, security interest, deed of trust, encumbrance,
covenant, condition, restriction, option, lien or charge of any kind (including any agreement to
give any of the foregoing), any conditional sale or other title retention agreement, any lease in
the nature thereof or the filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction.
“Limited Partner” has the meaning set forth in the Company Partnership Agreement.
“LLC Act” means the Delaware Limited Liability Company Act.
“LP Sub” has the meaning set forth in the Preamble.
“Mailing Date” has the meaning set forth in Section 2.2(a).
“Management General Partner” has the meaning set forth in the Preamble.
“Maritime Guideline” means any U.S. or non-U.S. rule, code of practice, convention,
protocol, guideline, or similar requirement or restriction concerning or relating to a Vessel, and
to which a Vessel is subject, imposed or published by any Governmental Entity, the International
Maritime Organization, such Vessel’s classification society or the insurers of such Vessel.
“Material Contract” has the meaning set forth in Section 3.11(a).
“Merger” has the meaning set forth in Section 1.1.
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“Merger Consideration” means, collectively, the Common Unit Consideration, the
Preferred Unit Consideration, the GP Unit Consideration, and the GP IDR Consideration.
“Merger Sub” has the meaning set forth in the Preamble.
“Mixed Election” has the meaning set forth in Section 2.1(a)(ii).
“Non-Electing Common Units” has the meaning set forth in Section 2.2(b).
“Notice” has the meaning set forth in Section 5.2(f)(i).
“NYSE” means the New York Stock Exchange.
“Order” means any judgment, order, stipulation, arbitration, decision, award,
injunction or decree of any Court or Governmental Entity, federal, foreign, state or local.
“Other Approvals” has the meaning set forth in Section 3.5(a).
“Outside Date” has the meaning set forth in Section 8.1(c).
“Owned Real Property” has the meaning set forth in Section 3.10(b).
“Parent” has the meaning set forth in the Preamble.
“Parent Common Stock” has the meaning set forth in Section 4.3.
“Parent Disclosure Letter” has the meaning set forth in the first paragraph of
Article 4.
“Parent Expenses” has the meaning set forth in Section 8.3(c).
“Parent Financial Statements” has the meaning set forth in Section 4.6(b).
“Parent Material Adverse Effect” means any change, event, violation, development,
circumstance, effect or other matters that, individually or in the aggregate, have, or could
reasonably be expected to have, a material adverse effect on the business, condition,
capitalization, assets, liabilities, operations or financial performance of Parent and its
Subsidiaries taken as a whole; provided, however, that no change, event, violation,
development, circumstance, effect or other matter that results from the following, shall constitute
a Parent Material Adverse Effect:
(i) changes in conditions in the United States or global economy that do not have a
materially disproportionate impact on Parent or any of its Subsidiaries relative to other
companies in the industry in which Parent and its Subsidiaries operate;
(ii) changes in GAAP or other accounting standards, or authoritative interpretations
thereof after the date hereof, which did not have a disproportionate impact on Parent;
(iii) the occurrence of natural disasters of any type, including, without limitation,
earthquakes and tsunamis but not including hurricanes;
(iv) the announcement or pendency of this Agreement and the transactions contemplated
by this Agreement;
63
(v) the existence or occurrence of war, acts of war, terrorism or similar hostilities;
and
(vi) a decrease in the market price of Parent Common Stock; provided,
however, that the exception in this clause (vi) shall not prevent or otherwise
affect a determination that any change or effect underlying such a decrease on market price
has resulted in, or contributed to, a Parent Material Adverse Effect;
provided, further, that the parties hereto agree that the following matters shall be deemed
to constitute a Parent Material Adverse Effect: (1) repeal of the Xxxxx Act, and (2) any
suspension or debarment rendering Parent or any Parent Subsidiary ineligible to enter into
contracts with the federal government or as a subcontractor to the federal government.
“Parent Parties” has the meaning set forth in the Preamble.
“Parent Party Charter Documents” has the meaning set forth in Section 4.2.
“Parent Preferred Stock” has the meaning set forth in Section 4.3.
“Parent Representatives” has the meaning set forth in Section 6.2(a).
“Parent SEC Documents” has the meaning set forth in Section 4.6(a).
“Parent Share” means a share of Parent Common Stock.
“Parent Share Value” means $55.54.
“Parent Subsidiary” means a Subsidiary of Parent and “Parent Subsidiaries”
means all of the Subsidiaries of Parent.
“Parent Vessel” means a vessel owned, leased or operated by a Parent or any Parent
Subsidiary, including tugs, barges and tankers.
“Party” means a Parent Party or a Company Party.
“Permit” means any and all material permits, licenses, authorizations, certificates,
franchises, registrations or other approvals granted by any Governmental Entity or pursuant to a
Maritime Guideline.
“Permitted Encumbrances” means the following: (a) Liens for Taxes, assessments and
other governmental charges not delinquent or which are currently being contested in good faith by
appropriate proceedings; provided, however, that, in the latter case, the specified
Person or one of its Subsidiaries will have set aside on its books adequate reserves with respect
thereto; (b) mechanics’ and materialmen’s Liens not filed of record and similar charges incurred in
the ordinary course of business not delinquent or which are filed of record but are being contested
in good faith by appropriate proceedings; provided, however, that, in the latter
case, the specified Person or one of its Subsidiaries will have set aside on its books adequate
reserves with respect thereto; (c) easements, leases, reservations or other rights of others in, or
minor defects and irregularities in title to, property or assets of a specified Person or any of
its Subsidiaries; provided, however, that such easements, leases, reservations,
rights, defects or irregularities do not materially impair the use or value of such property or
assets for the purposes for which they are currently operated; (d) any Lien or privilege vested in
any lessor or licensor for rent or other obligations pursuant to the terms and provisions of the
Leases of a specified Person or any of its Subsidiaries thereunder so long as the payment of such
rent or the performance of such obligations is not delinquent;
64
(e) encumbrances which secure deposits of public funds as required by Law, (f) Liens existing
under any Company Debt Agreement; and (g) Liens which would not have a Company Material Adverse
Effect.
“Person” means an individual, partnership, limited liability company, corporation,
joint stock company, trust, estate, joint venture, association or unincorporated organization, or
any other form of business or professional entity, but does not include a Governmental Entity or
Court.
“Phantom Units” means phantom units of the Company granted pursuant to the Company
LTIP.
“Preferred Unit Consideration” has the meaning set forth in Section 2.1(b).
“Preferred Unitholder” means a Series A Unitholder as defined in the Company
Partnership Agreement.
“Preferred Unitholder Approval” has the meaning set forth in Section 3.4(a).
“Preferred Units” means “Series A Preferred Units” as defined in the Company
Partnership Agreement.
“Present Insurance Policies” has the meaning set forth in Section 3.22.
“Proceeding” means any demand, suit, claim, litigation, arbitration, action,
proceeding (including any civil, criminal, governmental, enforcement, administrative, investigative
or appellate proceeding), hearing, audit, examination or investigation commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Entity or any arbitrator
or arbitration panel.
“Proxy Statement/Prospectus” has the meaning set forth in Section 3.5(a).
“Public Official” means any (i) non-U.S. political party or official thereof, (ii)
candidate for non-U.S. political office, (iii) officer, employee or representative, regardless of
rank or title, of a non-U.S. Governmental Entity, non-U.S. political party, non-U.S.
government-owned or -controlled company or enterprise, or public international organization, or
(iv) a immediate family member (parent, child, spouse, or sibling or parent’s, child’s, or
sibling’s spouse) of any of the above.
“Purchase Price Allocation Schedule” has the meaning set forth in Section
6.11(b).
“Real Property” has the meaning set forth in Section 3.10(c).
“Regulation” means any rule or regulation of any Governmental Entity having the effect
of Law.
“Regulatory Laws” means all Anticorruption Laws, Antiboycott Laws, Export and
Sanctions Laws, anti-money laundering laws, antiterrorism laws, and all other similar Laws of
applicable jurisdictions.
“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping, or disposing into the environment.
“Representatives” means a party’s officers, directors, members, managers, partners,
employees, agents, accountants, consultants, legal counsel, financial advisors, investment bankers
and other representatives.
65
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the Regulations
promulgated thereunder.
“Significant Company Subsidiary” has the meaning set forth in Section 5.2(g).
“SOX” means the Xxxxxxxx-Xxxxx Act of 2002, and the Regulations promulgated
thereunder.
“Special Approval” has the meaning set forth in the Company Partnership Agreement.
“Subsidiary” means, with respect to a specified Person, any other Person (a) that is a
subsidiary of such specified Person as defined in Rule 405 of the Rules and Regulations under the
Securities Act, (b) of which such specified Person or any of its Subsidiaries (i) owns beneficially
more than 50% of the equity interests, or (ii) serves as general partner or manager.
“Superior Proposal” has the meaning set forth in Section 5.2(g).
“Support Agreements” has the meaning set forth in the Recitals.
“Surviving Company” has the meaning set forth in Section 1.1.
“Surviving Company Partnership Agreement” has the meaning set forth in Section
1.5.
“Takeover Statute” has the meaning set forth in Section 6.6.
“Target Debt Cap” means an amount of indebtedness equal to $263,515,000 plus (i)
actual expenditures for Growth CapEx since January 1, 2011 through the Closing Date, and (ii) any
borrowings made to collateralize letters of credit to secure release calls for West of England P&I
insurance.
“Tax” or “Taxes” means all taxes, however denominated, including any interest,
penalties or other additions to tax that may become payable in respect thereof, imposed by any
Governmental Entity, which taxes shall include, without limiting the generality of the foregoing,
all income or profits taxes (including, but not limited to, federal income taxes and state income
taxes), gross receipts taxes, net proceeds taxes, alternative or add-on minimum taxes, sales taxes,
use taxes, real property gains or transfer taxes, ad valorem taxes, property taxes, value-added
taxes, franchise taxes, production taxes, severance taxes, windfall profit taxes, withholding
taxes, payroll taxes, employment taxes, excise taxes and other obligations of the same or similar
nature to any of the foregoing.
“Tax Return” means all reports, estimates, declarations of estimated Tax, information
statements and returns relating to, or required to be filed in connection with, any Taxes,
including information returns or reports with respect to backup withholding and other payments to
third parties.
“Termination Fee” has the meaning set forth in Section 8.3(d).
“Third Party” has the meaning set forth in Section 5.2(g).
“U.S. Coastwise Trade” shall mean the carriage or transport of merchandise and/or
other materials and/or passengers in the coastwise trade of the United States of America within the
meaning of Chapter 551 of Title 46 of the United States Code.
“Unit” has the meaning set forth in the Company Partnership Agreement.
66
“Unitholder” has the meaning set forth in the Company Partnership Agreement.
“Unitholder Meeting” has the meaning set forth in Section 6.1(c).
“Voting Debt” means any bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which holders of capital stock or members or partners of the same
issuer may vote (or that are convertible into, or exchangeable for, securities having the right to
vote on such matters).
“WARN Act” has the meaning set forth in Section 3.17(d).
Section 9.2 Non-Survival. None of the representations, warranties, covenants and
other agreements in this Agreement shall survive the Effective Time, except for those covenants,
and agreements contained herein that by their terms apply or are to be performed in whole or in
part after the Effective Time and this Article 9.
Section 9.3 Specific Performance. The parties hereto agree that money damages would
not be a sufficient remedy for any breach of this Agreement and that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is hereby agreed that, prior to the
termination of this Agreement pursuant to Section 8.1, the parties hereto shall be entitled
to specific performance and injunctive or other equitable relief as a remedy for any such breach,
to prevent breaches of this Agreement, and to specifically enforce compliance with this Agreement.
In connection with any request for specific performance or equitable relief, each of the parties
hereto hereby waives any requirement for the security or posting of any bond in connection with
such remedy. Such remedy shall not be deemed to be the exclusive remedy for breach of this
Agreement but shall be in addition to all other remedies available at law or equity to such party.
The parties further agree that (a) by seeking the remedies provided for in this
Section 9.3, no party hereto shall in any respect waive their right to seek any other form of relief
that may be available to them under this Agreement, including monetary damages in the event that
this Agreement has been terminated or in the event that the remedies provided for in this
Section 9.3 are not available or otherwise are not granted, and (b) nothing contained in
this Section 9.3 shall require a party to institute any proceeding for (or limit such
party’s right to institute any proceeding for) specific performance under this Section 9.3
before exercising any termination right under Article 8 (and pursuing damages after such
termination) nor shall the commencement of any action pursuant to this Section 9.3 or
anything contained in this Section 9.3 restrict or limit a party’s right to terminate this
Agreement in accordance with the terms of Article 8 or pursue any other remedies under this
Agreement that may be available then or thereafter.
Section 9.4 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given when delivered personally
(including by courier or overnight courier with confirmation), telecopied (with confirmation), or
delivered by an overnight courier (with confirmation) to the parties at the following addresses or
sent by electronic transmission to the telecopier number specified below:
(a) | If to Parent or Merger Sub, to: | ||
Xxxxx Corporation
00 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
00 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
67
with a copy (which shall not constitute notice) to:
Fulbright & Xxxxxxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq. and Xxxx X. Xxxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq. and Xxxx X. Xxxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(b) | If to the Company or the General Partner, to: | ||
K-Sea Transportation Partners L.P.
Xxx Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Xxx Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq and Xxxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq and Xxxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
or to such other address or telecopier number as any party may, from time to time, designate in a
written notice given in a like manner.
Section 9.5 Amendments and Waivers. Any provision of this Agreement may be amended or
waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver,
by each party against whom the waiver is to be effective; provided, however, that
following receipt of the Company Unitholder Approval, there shall be no amendment or change to the
provisions hereof which by Law or the listing requirements of the NYSE would require further
approval by the Unitholders without such approval. No failure on the part of any party to exercise
any power, right, privilege or remedy under this Agreement, and no delay on the part of any party
in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver
of such power, right, privilege or remedy; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by applicable Law.
Section 9.6 Severability. Any term or provision of this Agreement, or the application
thereof, 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. If the final judgment of a Court of competent jurisdiction declares that any term or
provision hereof is illegal, void, invalid or unenforceable, the parties hereto agree that the
Court making such determination shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any illegal, void, invalid or unenforceable term or
provision with a term or provision that is legal, valid and enforceable and that comes closest to
expressing the intention of the illegal, void, invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified. Nothing contained in this Section 9.6 shall
be deemed to limit or restrict Parent’s right to terminate this Agreement pursuant to Section
8.1(i) hereof if
68
there shall have been any permanent injunction, other Order issued by any Court of competent
jurisdiction or other legal restraint or prohibition, that (A) would require or permit
the Company, any Company Party or any Company Representative to act or fail to act in a manner that
would, in the absence of such order, injunction, other Order, legal restraint or prohibition,
constitute a material violation of Section 5.2(a)(i) or (B) would reduce or otherwise
materially limit the rights of Parent in any material respect under Section 5.2 or
Section 8.3.
Section 9.7 Entire Agreement. This Agreement and the documents and instruments and
other agreements specifically referred to herein or delivered pursuant hereto, including the
Exhibits, the Company Disclosure Letter, the Parent Disclosure Letter, the Support Agreements, and
the Confidentiality Agreement, constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof, except for the Confidentiality
Agreement, which shall continue in full force and effect, and shall survive any termination of this
Agreement or the Closing, in accordance with its terms. EACH PARTY HERETO AGREES THAT, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NONE OF PARENT, MERGER SUB OR THE
COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
FINANCIAL AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY
OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR
DISCLOSURE TO ANY OTHER PARTY OR ANY OTHER PARTY’S REPRESENTATIVES OF ANY DOCUMENT OR OTHER
INFORMATION WITH RESPECT TO ONE OR MORE OF THE FOREGOING.
Section 9.8 Assignment. Neither this Agreement nor any of the rights, interests or
obligations shall be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties; provided,
however, that Parent and Merger Sub may transfer or assign its rights and obligations under
this Agreement, in whole or in part or from time to time in part, to one or more of their
Affiliates at any time, provided further, that such transfer or assignment shall
not relieve Parent or Merger Sub of any of its obligations hereunder. Any assignment in violation
of the foregoing shall be null and void. Subject to the preceding two (2) sentences, this
Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
Section 9.9 No Third Party Beneficiaries. This Agreement is not intended to and shall
not confer upon any Person (other than the parties hereto) any rights or remedies hereunder, except
for Indemnified Parties as set forth in Section 6.13.
Section 9.10 Governing Law; Exclusive Jurisdiction. THIS AGREEMENT AND THE
AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY AND ALL DISPUTES BETWEEN THE PARTIES
UNDER OR RELATING TO THIS AGREEMENT OR THE FACTS AND CIRCUMSTANCES LEADING TO ITS EXECUTION,
WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE (WITHOUT REFERENCE TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW).
THE DELAWARE COURT OF CHANCERY (AND IF THE DELAWARE COURT OF CHANCERY SHALL BE UNAVAILABLE, ANY
DELAWARE STATE COURT AND THE FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE STATE OF
DELAWARE) WILL HAVE EXCLUSIVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO,
WHETHER IN LAW OR EQUITY, BASED
69
UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND
DOCUMENTS CONTEMPLATED HEREBY OR THE FACTS AND CIRCUMSTANCES LEADING TO ITS EXECUTION, WHETHER IN
CONTRACT, TORT OR OTHERWISE. EACH OF THE PARTIES IRREVOCABLY CONSENTS TO AND AGREES TO SUBMIT TO
THE EXCLUSIVE JURISDICTION OF SUCH COURTS, IRREVOCABLY CONSENTS TO THE SERVICE OF THE SUMMONS AND
COMPLAINT AND ANY OTHER PROCESS IN ANY OTHER ACTION OR PROCEEDING RELATING TO THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, ON BEHALF OF ITSELF OR ITS PROPERTY, BY DELIVERY IN ANY METHOD
CONTEMPLATED BY SECTION 9.4 HEREOF OR IN ANY OTHER MANNER AUTHORIZED BY LAW, AND HEREBY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY CLAIM THAT (i) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS,
(ii) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR
(iii) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.
Section 9.11 Waiver of Jury Trial. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT WHICH ANY PARTY MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY
PROCEEDING, LITIGATION OR COUNTERCLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY. IF THE SUBJECT MATTER OF ANY LAWSUIT IS ONE IN WHICH THE WAIVER OF JURY
TRIAL IS PROHIBITED, NO PARTY TO THIS AGREEMENT SHALL PRESENT AS A NON-COMPULSORY COUNTERCLAIM IN
ANY SUCH LAWSUIT ANY CLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.
FURTHERMORE, NO PARTY TO THIS AGREEMENT SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY
TRIAL CANNOT BE WAIVED.
Section 9.12 Interpretation; Rules of Construction. When a reference is made in this
Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section
of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The phrase “the date
of this Agreement” and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to the date set forth in the first paragraph of this Agreement. The table of
contents and headings contained in this Agreement are for reference purposes only and do not affect
in any way the meaning or interpretation of this Agreement. As used in this Agreement, (a) the
words “include,” “includes” or “including” shall be deemed to be followed by the words “without
limitation,” (b) the word “or” shall not be exclusive, (c) the words “hereof,” “herein,”
“hereunder,” “hereto” and words of similar import refer to this Agreement as a whole (including any
Exhibits and Schedules hereto) and not to any particular provision of this Agreement, (d) all
references to any period of days shall be to the relevant number of calendar days unless otherwise
specified, (e) all references to dollars or $ shall be references to United States dollars,
and (f) all accounting terms shall have their respective meanings under GAAP. All terms defined in
this Agreement will have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes (provided, however, that,
in the case of Contracts that are the subject of representations and warranties set forth herein,
copies of all amendments, modifications, waivers, consents or supplements have been provided on or
prior to the date of this Agreement to the party to whom such
70
representations and warranties are being made). The parties hereto have participated jointly
in the negotiating and drafting of this Agreement and, in the event an ambiguity or question of
intent arises, this Agreement shall be construed as jointly drafted by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Agreement.
Section 9.13 Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by all of the other parties hereto.
Until and unless each party has received a counterpart hereof signed by each other party hereto,
this Agreement shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other communication). Signatures to
this Agreement transmitted by facsimile transmission, by electronic mail in PDF form, or by any
other electronic means designed to preserve the original graphic and pictorial appearance of a
document, will be deemed to have the same effect as physical delivery of the paper document bearing
the original signatures.
Section 9.14 Disclosure Generally. A matter set forth in one item of either the
Company Disclosure Letter or the Parent Disclosure Letter need not be set forth in any other item
in the Company Disclosure Letter or the Parent Disclosure Letter so long as its relevance to the
other sections or subsections therein or in this Agreement is reasonably apparent on the face of
the matter disclosed. The fact that any item of information is disclosed in either the Company
Disclosure Letter or the Parent Disclosure Letter shall not be construed to (a) mean that such
information is required to be disclosed by this Agreement; (b) represent a determination that (i)
such item is material or establishes a standard of materiality, (ii) such item did not arise in the
ordinary course of business or (iii) the Merger requires the consent of third parties; or (c)
constitute, or be deemed to be, an admission to any Person concerning such item. Such information
and the dollar thresholds set forth herein shall not be used as a basis for interpreting the terms
“material,” “Parent Material Adverse Effect” or “Company Material Adverse Effect” or other similar
terms in this Agreement.
71
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly authorized.
K-SEA TRANSPORTATION PARTNERS L.P. |
||||
By: | K-Sea General Partner L.P., its general partner |
|||
By: K-Sea General Partner GP LLC, its general partner |
By: | /s/ Xxxxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxx, President and Chief | ||||
Executive Officer | ||||
K-SEA GENERAL PARTNER L.P. By: K-Sea General Partner GP LLC, its general partner |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxx, President and Chief | ||||
Executive Officer | ||||
K-SEA GENERAL PARTNER GP LLC |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxx, President and Chief Executive | ||||
Officer | ||||
K-SEA IDR HOLDINGS LLC |
||||
By: | /s/ Xxxxxxx X. Xxxxx | |||
Xxxxxxx X. Xxxxx, President | ||||
[Signature page follows.]
[Signature Page 1 of 2 to Merger Agreement]
XXXXX CORPORATION |
||||
By: | /s/ Xxxxxx X. Xxxx | |||
Xxxxxx X. Xxxx, Chairman of the Board, President | ||||
and Chief Executive Officer | ||||
KSP MERGER SUB, LLC |
||||
By: | /s/ Xxxxxx X. Xxxx | |||
Xxxxxx X. Xxxx, President | ||||
KSP HOLDINGS SUB, LLC |
||||
By: | /s/ Xxxxxx X. Xxxx | |||
Xxxxxx X. Xxxx, President | ||||
KSP LP SUB, LLC |
||||
By: | /s/ Xxxxxx X. Xxxx | |||
Xxxxxx X. Xxxx, President | ||||
[Signature Page 2 of 2 to Merger Agreement]