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EXHIBIT 10.16
AGREEMENT AND PLAN OF MERGER
By and Among
EL PASO ENERGY PARTNERS, L. P.,
EL PASO PARTNERS ACQUISITION, L.L.C.,
CRYSTAL GAS STORAGE, INC.
and
CRYSTAL HOLDING, INC.
AUGUST 28, 2000
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TABLE OF CONTENTS
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ARTICLE I THE MERGER..............................................................................................2
SECTION 1.1 The Merger...................................................................................2
SECTION 1.2 Effective Time...............................................................................2
SECTION 1.3 Effects of the Merger........................................................................2
SECTION 1.4 Certificate of Formation and Limited Liability Company Agreement.............................2
SECTION 1.5 Managing Member..............................................................................2
SECTION 1.6 Officers.....................................................................................3
SECTION 1.7 Effect on Membership Interests in Sub........................................................3
(a) Membership Interests in Sub..............................................................3
(b) Cancellation of Treasury Stock and Parent Owned Shares...................................3
(c) Conversion of Shares.....................................................................3
ARTICLE II EXCHANGE PROCEDURE.....................................................................................3
SECTION 2.1 Exchange of Certificates.....................................................................3
(a) Exchange Procedure.......................................................................3
(b) No Further Ownership Rights in Shares....................................................4
(c) No Fractional Units......................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................4
SECTION 3.1 Representations and Warranties of the Company................................................4
(a) Organization, Standing and Power.........................................................4
(b) Subsidiaries.............................................................................4
(c) Capital Structure........................................................................5
(d) Authority; Noncontravention..............................................................5
(e) SEC Documents............................................................................6
(f) Information Supplied.....................................................................7
(g) Absence of Certain Changes or Events.....................................................7
(h) State Takeover Statutes; Absence of Supermajority Provision..............................8
(i) Brokers..................................................................................8
(j) Litigation...............................................................................8
(k) Employees; Employee Benefit Matters......................................................8
(l) Taxes....................................................................................9
(m) [INTENTIONALLY OMITTED.]................................................................10
(n) Environmental Matters...................................................................10
(o) Compliance with Laws....................................................................10
(p) Material Contracts and Agreements.......................................................11
(q) Title to Properties.....................................................................11
(r) Intellectual Property...................................................................12
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(s) [INTENTIONALLY OMITTED.]................................................................12
(t) Undisclosed Liabilities.................................................................12
(u) Pipeline Imbalances.....................................................................12
(v) [INTENTIONALLY OMITTED].................................................................12
(w) [INTENTIONALLY OMITTED].................................................................12
(x) Board Recommendation and Stockholder Approval...........................................12
(y) Bankruptcy..............................................................................13
SECTION 3.2 Representations and Warranties of Parent and Sub............................................13
(a) Organization; Standing and Power........................................................13
(b) Authority; Noncontravention.............................................................13
(c) [INTENTIONALLY OMITTED].................................................................14
(d) Brokers.................................................................................14
(e) Litigation..............................................................................14
(f) Subsidiaries............................................................................14
(g) Capital Structure.......................................................................15
(h) SEC Documents...........................................................................15
(i) Absence of Certain Changes or Events....................................................16
(j) Environmental Matters...................................................................16
(k) Compliance with Laws....................................................................16
(l) Material Contracts and Agreements.......................................................16
(m) Title to Properties.....................................................................16
(n) Intellectual Property...................................................................17
(o) Undisclosed Liabilities.................................................................18
(p) Issuance of the Units...................................................................18
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS.............................................................18
SECTION 4.1 Conduct of Business of the Company..........................................................18
(a) Ordinary Course.........................................................................18
(b) [INTENTIONALLY OMITTED].................................................................20
(c) Employees...............................................................................20
(d) Other Actions...........................................................................20
(e) Conversion of the Company...............................................................21
(f) Base Gas................................................................................21
ARTICLE V ADDITIONAL AGREEMENTS..................................................................................21
SECTION 5.1 [INTENTIONALLY OMITTED].....................................................................21
SECTION 5.2 Access to Information.......................................................................21
SECTION 5.3 Reasonable Efforts; Notification............................................................22
SECTION 5.4 [Intentionally omitted].....................................................................24
SECTION 5.5 Indemnification.............................................................................24
SECTION 5.6 Fees and Expenses...........................................................................26
SECTION 5.7 Public Announcements........................................................................26
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SECTION 5.8 [INTENTIONALLY OMITTED].....................................................................26
SECTION 5.9 [INTENTIONALLY OMITTED].....................................................................26
SECTION 5.10 Partnership Agreement......................................................................26
SECTION 5.11 Issuance Instructions and Registrations Rights Agreement...................................27
SECTION 5.12 Assignment of Natural Gas Storage Operating Agreements.....................................27
ARTICLE VI CONDITIONS PRECEDENT..................................................................................27
SECTION 6.1 Conditions to Each Party's Obligation to Effect the Merger..................................27
(a) [INTENTIONALLY OMITTED].................................................................27
(b) Other Approvals.........................................................................27
(c) No Injunctions or Restraints............................................................27
SECTION 6.2 Conditions to Obligations of Parent and Sub.................................................27
SECTION 6.3 Condition to Obligations of the Company.....................................................28
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER....................................................................28
SECTION 7.1 Termination.................................................................................28
SECTION 7.2 Procedure for Termination, Amendment, Extension or Waiver...................................29
SECTION 7.3 Effect of Termination.......................................................................29
SECTION 7.4 Amendment...................................................................................29
SECTION 7.5 Extension; Waiver...........................................................................29
ARTICLE VIII SPECIAL PROVISIONS AS TO CERTAIN MATTERS............................................................29
SECTION 8.1 [INTENTIONALLY OMITTED].....................................................................29
SECTION 8.2 No Solicitation.............................................................................29
SECTION 8.3 [INTENTIONALLY OMITTED].....................................................................31
ARTICLE IX GENERAL PROVISIONS....................................................................................31
SECTION 9.1 Survival of Representations, Warranties and Covenants; Indemnification......................31
(a) Survival................................................................................31
(b) Indemnification of Parent and Sub.......................................................31
(c) Indemnification of Company Parent and the Company.......................................31
(d) Limitation on Indemnities...............................................................31
(e) Indemnification Claim Procedures........................................................32
(f) Third Party Recoveries..................................................................32
(g) Definition of "Losses.".................................................................32
SECTION 9.2 Notices.....................................................................................32
SECTION 9.3 Definitions.................................................................................33
SECTION 9.4 Interpretation..............................................................................35
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SECTION 9.5 Counterparts................................................................................35
SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries..............................................35
SECTION 9.7 Governing Law...............................................................................35
SECTION 9.8 Assignment..................................................................................35
SECTION 9.9 Enforcement of the Agreement................................................................36
SECTION 9.10 Performance by Sub.........................................................................36
SECTION 9.11 Restrictions on Subsequent Transfers of Units..............................................36
SECTION 9.12 Severability...............................................................................36
SECTION 9.13 Joint and Several Obligations..............................................................36
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EXHIBITS
Exhibit A: Unit Terms
Exhibit B: Form of Registration Rights Agreement
SCHEDULES
Schedule 1: Company Disclosure Document
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LIST OF DEFINED TERMS
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TERM SECTION
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affiliate 9.3
Agreement recitals
Applicable Acts 1.1
CERCLA 9.3
Certificates 2.1(a)
Certificate of Merger 1.2
Code 3.1(l)(vi)
Company preamble
Company Charter 3.1(d)
Company HSR Documents 5.2(b)(ii)
Company Permits 3.1(o)
Delaware LP Act 3.2(p)
DGCL 1.1
Effective Time of the Merger 1.2
El Paso Corporation recitals
environmental laws 9.3
Exchange Act 3.1(e)
Financial Statements 3.1(e)
Gas Storage Expansion Project 4.1(a)
General Partner recitals
Governmental Entity 3.1(d)
HSR Act 3.1(d)
include, includes or including 9.4
Indemnified Parties 5.4(a)
Internal Reorganization 9.3
IRS 3.1(m)
knowledge 9.3
Liens 3.1(b)
LLC Act 1.1
loss or losses 9.3
material adverse change or material adverse effect 9.3
Merger recitals
Merger Consideration 1.7(c)
Parent preamble
Parent Benefit Plan 5.3(a)
Parent Permits 3.2(i)
Parent HSR Documents 5.2(b)(ii)
Parent SEC Documents 3.2(e)
Partnership Agreement 5.10
person 9.3
Prior Merger recitals
Recent Financial Statements 3.1(e)
Registration Rights Agreement 5.10
SEC 3.1(e)
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SEC Documents 3.1(e)
SEC Financial Statements 3.1(e)
Securities Act 3.1(e)
Share or Shares recitals
Shareholder Agreement recitals
Sub preamble
subsidiary 9.3
Surviving Company 1.1
Tax or Taxes 3.1(l)(viii)
Tax Return 3.1(l)(viii)
Units 9.3
Unit Certificates 2.1(a)
Unit Terms 5.10
Year-End Financial Statements 3.1(e)
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AGREEMENT AND PLAN OF MERGER dated as of August 28, 2000, among EL PASO
ENERGY PARTNERS, L.P., a Delaware limited partnership ("Parent"), EL PASO
PARTNERS ACQUISITION, L.L.C., a Delaware limited liability company ("Sub"),
CRYSTAL HOLDING, INC., a Delaware corporation (the "Company"), and CRYSTAL GAS
STORAGE, INC., a Delaware corporation ("Company Parent").
WHEREAS, El Paso Energy Corporation ("El Paso Corporation") acquired
the gas storage facilities and related assets now held by subsidiaries of the
Company pursuant to a merger of Crystal Gas Storage, Inc., a Louisiana
corporation into Company Parent (the "Prior Merger"), and Parent and El Paso
Corporation now desire for Parent, through a subsidiary, to acquire such assets
on substantially the same terms and conditions as El Paso Corporation acquired
them;
WHEREAS, (i) El Paso Energy Partners Company, a Delaware corporation
(the "General Partner"), is the sole general partner of Parent and holds a
1.0101% membership interest in Sub, and (ii) Parent is the sole managing member
of, and holds a 98.9899% membership interest in, Sub;
WHEREAS, Parent, as the sole managing member of Sub, and the respective
Boards of Directors of the Company, the General Partner, Company Parent, as the
sole stockholder of the Company, and El Paso Corporation, as the sole
stockholder of Company Parent, have approved the acquisition of the Company by
Parent on the terms and subject to the conditions of this Agreement and Plan of
Merger (this "Agreement");
WHEREAS, the parties hereto intend that, for tax purposes, the merger
of the Company with and into Sub contemplated hereby (the "Merger"), be treated
as a contribution of assets to Parent by Company Parent in exchange for Units
(herein defined), followed by a contribution of the assets received by the
Parent to Sub, and, to effect this intent, the parties are providing that the
Company be merged directly with and into Sub;
WHEREAS, in order to effectuate such contribution to Parent, and
acquisition of the Company, Parent, as the sole managing member of Sub, and the
respective Boards of Directors of Company Parent, the Company, the General
Partner and El Paso Corporation have approved the Merger, upon the terms and
subject to the conditions of this Agreement, whereby each issued and outstanding
share of common stock, $1.00 par value, of the Company (singularly, "Share" and
plurally, "Shares") will be converted into the right to receive a proportionate
share of the aggregate merger consideration described in Section 1.7(c);
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Company Parent has executed and delivered a Shareholder Agreement of
even date herewith (the "Shareholder Agreement") pursuant to which it has, inter
alia, (i) approved the merger of the Company with and into Sub, upon the terms
and subject to the conditions of this Agreement, and (ii) entered into certain
agreements with Parent and Sub regarding the Shares beneficially owned by it;
and
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WHEREAS, Parent, Sub, the Company and Company Parent desire to make
certain representations, warranties and agreements in connection with the Merger
and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
hereof and in accordance with the Delaware General Corporation Law (the "DGCL")
and the Delaware Limited Liability Company Act (the "LLC Act" and together with
the DGCL, the "Applicable Acts"), the Company shall be merged with and into Sub
at the Effective Time of the Merger. Following the Merger, the separate
corporate existence of the Company shall cease and Sub shall continue as the
surviving company (the "Surviving Company") and shall succeed to and assume all
the rights and obligations of the Company in accordance with the Applicable
Acts.
SECTION 1.2 Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall file a certificate of merger (the "Certificate of Merger") executed
in accordance with the relevant provisions of the Applicable Acts. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with the Delaware Secretary of State (the time the Merger becomes effective
being the "Effective Time of the Merger").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Section 18-209 of the LLC Act and Section 259 of the DGCL.
SECTION 1.4 Certificate of Formation and Limited Liability Company
Agreement
(a) The Certificate of Formation of Sub, as in effect at the
Effective Time of the Merger, shall be the Certificate of Formation of
the Surviving Company until thereafter changed or amended as provided
therein or by applicable law; provided that such Certificate of
Formation shall be amended immediately subsequent to the Effective Time
of the Merger to change the name of Sub to Crystal Holding, L.L.C.
(b) The Limited Liability Company Agreement of Sub as in
effect at the Effective Time of the Merger shall be the Limited
Liability Company Agreement of the Surviving Company until thereafter
changed or amended as provided therein or by applicable law.
SECTION 1.5 Managing Member. The sole managing member of Sub at the
Effective Time of the Merger shall be the sole managing member of the Surviving
Company and shall remain the sole managing member until the earlier of its
resignation or removal or until its successor is duly appointed. The Surviving
Company shall not have any directors or managers unless, and except to the
extent, Sub has any directors or managers at the Effective Time of the Merger.
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SECTION 1.6 Officers. The officers of Sub at the Effective Time of the
Merger shall be the officers of the Surviving Company and shall hold office
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.7 Effect on Membership Interests in Sub. As of the Effective
Time of the Merger, by virtue of the Merger and without any action on the part
of the Company:
(a) Membership Interests in Sub. Any membership interest in
Sub shall be converted into and become fully paid and nonassessable
membership interests in the Surviving Company, such that at the
Effective Time of the Merger, (i) Parent shall own 98.9899% of the
outstanding membership interests in, and, in accordance with Section
1.5, shall be the sole managing member of, the Surviving Company, and
(ii) the General Partner shall own 1.0101% of the outstanding
membership interests in the Surviving Company.
(b) Cancellation of Treasury Stock and Parent Owned Shares.
All Shares that are owned directly or indirectly by the Company as
treasury stock or by any wholly owned subsidiary of the Company, and
any Shares owned by Parent, Sub or any other wholly-owned subsidiary of
Parent, shall be canceled, and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Shares. Each issued and outstanding Share
(other than Shares to be canceled in accordance with Section 1.7(b))
shall be converted into the right to receive from Parent 170,000 Units
(without interest) (all such Units, in the aggregate, shall hereinafter
be referred to as the "Merger Consideration").
ARTICLE II
EXCHANGE PROCEDURE
SECTION 2.1 Exchange of Certificates
(a) Exchange Procedure. Upon surrender of a certificate, that
immediately prior to the Effective Time of the Merger represented
outstanding Shares (each, a "Certificate"), for cancellation to Parent,
and such other documents as may reasonably be requested by Parent, the
holder of such Certificate shall be entitled to receive in exchange
therefor a certificate (the "Unit Certificate") representing the number
of Units into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 1.7(c), and
the Certificate so surrendered shall forthwith be canceled. No interest
will be paid or will accrue on the Units deliverable upon the surrender
of any Certificate. Until surrendered as contemplated by this Section
2.1, each Certificate shall be deemed at any time after the Effective
Time of the Merger to represent only the right to receive upon such
surrender the number of Units, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted
pursuant to Section 1.7(c). If any Certificates shall not have been
surrendered prior to seven years after the Effective Time of the Merger
(or immediately prior to such earlier date on which any delivery
pursuant to this Section 2.1 would otherwise escheat to or become the
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property of any governmental body or agency), the delivery in respect
of such Certificate shall, to the extent permitted by applicable law,
become the property of the Surviving Company, free and clear of all
claims or interest of any person previously entitled thereto. Any Units
that remain unclaimed by holders of Certificates for six months after
the Effective Time of the Merger shall be delivered to the Surviving
Company upon demand, and any holder of Certificates who has not
theretofore complied with this Section 2.1(a) shall thereafter look
only to Parent for payment on their claim for Merger Consideration.
(b) No Further Ownership Rights in Shares. All Unit
Certificates delivered upon the surrender of Certificates in accordance
with the terms of this Article II shall be deemed to have been
delivered in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates, and there shall be no
further registration of transfers on the transfer books of the
Surviving Company of Shares that were outstanding immediately prior to
the Effective Time of the Merger. If, after the Effective Time of the
Merger, Certificates are presented to the Surviving Company for any
reason, they shall be canceled and exchanged as provided in this
Article II.
(c) No Fractional Units. No fractional Units shall be issued
in connection with the Merger. Each holder of a Certificate which
surrenders a Certificate in accordance with this Article II and would
be entitled to receive fractional Units based on the conversion
pursuant to Section 1.7(c), will instead receive cash in the amount of
$1,000 per Unit in lieu of any fractional Units.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Company. Company
Parent and the Company, jointly and severally, represent and warrant to, and
agree with, Parent and Sub as follows, subject to any exceptions specified in
the Company Disclosure Document attached hereto as Schedule I to the extent such
exceptions reference a specific Section of this Article III:
(a) Organization, Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the requisite corporate power
and authority to carry on its business as now being conducted. The
Company is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification necessary, other
than in such jurisdictions where the failure to be so qualified to do
business or in good standing (individually or in the aggregate) would
not have, or be reasonably likely to have, a material adverse effect on
the Company.
(b) Subsidiaries. The Company's subsidiaries are corporations,
limited liability companies or general partnerships that are duly
organized, validly existing and in good standing under the laws of
their respective jurisdictions of organization and have the requisite
corporate power and authority (or comparable power and authority in the
case of limited liability companies or general partnerships) to carry
on their respective
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businesses as they are now being conducted and to own, operate and
lease the assets they now own, operate or hold under lease. The
Company's subsidiaries are duly qualified to do business and are in
good standing in each jurisdiction in which the nature of their
respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or in good standing
would not have, or be reasonably likely to have, a material adverse
effect on the Company. All the outstanding shares of capital stock of
the Company's subsidiaries that are corporations, and all the ownership
interests of the Company in its other subsidiaries, have been duly
authorized and validly issued and are, except in the case of any
subsidiary that is a general partnership, fully paid and nonassessable
and were not issued in violation of any preemptive rights or other
preferential rights of subscription or purchase of any person. All such
stock and ownership interests are owned of record and beneficially by
the Company or by a wholly owned subsidiary of the Company, free and
clear of all liens, pledges, security interests, charges, claims and
other encumbrances of any kind or nature ("Liens"). Except for the
capital stock of, or ownership interests in, its subsidiaries, the
Company does not own, directly or indirectly, any capital stock, equity
interest or other ownership interest in any corporation, partnership,
association, joint venture, limited liability company or other entity.
Section 3.1(b) of the Company Disclosure Document sets forth each
subsidiary of the Company, the stockholders or other owners of such
subsidiary, the equity interest of each such owner and the jurisdiction
of formation of such subsidiary.
(c) Capital Structure. The authorized capital stock of the
Company consists of 1,000 shares of common stock, $1.00 par value,
1,000 shares of which are issued and outstanding. Except as set forth
above, no shares of capital stock or other equity or voting securities
of the Company are reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are owned by Company
Parent, and are validly issued, fully paid and nonassessable and not
subject to preemptive rights. No capital stock has been issued by the
Company since its formation. There are no outstanding or authorized
securities, options, warrants, calls, rights, commitments, preemptive
rights, agreements, arrangements or undertakings of any kind to which
the Company or any of its subsidiaries is a party, or by which any of
them is bound, obligating the Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, any
shares of capital stock or other equity or voting securities of, or
other ownership interests in, the Company or of any of its subsidiaries
or obligating the Company or any of its subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
(d) Authority; Noncontravention. Each of Company Parent and
the Company has the requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby and to take such actions, if any, as shall have been taken with
respect to the matters referred to in Section 3.1(h). The execution and
delivery of this Agreement by Company Parent and the Company and the
consummation by Company Parent and the Company of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Company Parent and the Company. This
Agreement has been duly and validly executed
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and delivered by Company Parent and the Company, and constitutes a
valid and binding obligation of Company Parent and the Company,
enforceable against Company Parent and the Company in accordance with
its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws or judicial decisions now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance
and injunctive relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. The execution and delivery of this Agreement by Company Parent
and the Company do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not,
conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of or "put" right
with respect to any obligation or to loss of a material benefit under,
or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company or any
of its subsidiaries under, any provision of (i) the Certificate of
Incorporation, as amended (the "Company Charter"), or By-laws of the
Company or any provision of the comparable organizational documents of
its subsidiaries or Company Parent, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease, or other agreement, instrument,
permit, concession, franchise or license applicable to the Company, any
of its subsidiaries or Company Parent or their respective properties or
assets or (iii) subject to governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation or arbitration award
applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clause
(ii), any such conflicts, violations, defaults, rights or liens,
security interests, charges or encumbrances that individually or in the
aggregate would not have, or be reasonably likely to have, a material
adverse effect on the Company and would not, or be reasonably likely
to, materially impair the ability of the Company or Company Parent to
perform their obligations hereunder or prevent the consummation of any
of the transactions contemplated hereby. To the Company's knowledge, no
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or agency, domestic or
foreign, including local authorities (a "Governmental Entity"), is
required by or with respect to the Company, any of its subsidiaries or
Company Parent in connection with the execution and delivery of this
Agreement by Company Parent and the Company or the consummation by
Company Parent and the Company of the transactions contemplated hereby,
except for (i) the filing of a premerger notification and report form
by the Company under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and (ii) the filing of the
Certificate of Merger with the Delaware Secretary of State with respect
to the Merger, as provided in the Applicable Acts, and appropriate
documents with the relevant authorities of other jurisdictions in which
the Company is qualified to do business and such other consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not have, or
be reasonably likely to have, a material adverse effect on the Company.
(e) SEC Documents. Company Parent has filed all required
reports, schedules, forms, statements and other documents with the
Securities and Exchange
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Commission ("SEC") since January 1, 1998 (such documents, together with
all exhibits and schedules thereto and documents incorporated by
reference therein, collectively referred to herein as the "SEC
Documents"). To the Company's knowledge, as of their respective dates,
the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations of
the SEC promulgated thereunder applicable to such SEC Documents, and
none of the SEC Documents 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 therein, in light of the
circumstances under which they were made, not misleading. Section
3.1(e) of the Company Disclosure Document contains complete and
accurate copies of (i) the audited financial statements of Company
Parent and its consolidated subsidiaries for the fiscal year ended
December 31, 1999 (the "Year-End Financial Statements"), and (ii) the
unaudited financial statements of Company Parent and its consolidated
subsidiaries for the three months ended March 31, 2000 (the "Interim
Financial Statements" and, together with the Year-End Financial
Statements, the "Recent Financial Statements"). The Recent Financial
Statements and the consolidated financial statements of Company Parent
included in the SEC Documents (the "SEC Financial Statements" and,
together with the Recent Financial Statements, the "Financial
Statements") comply in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
financial position of the Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and other
adjustments described therein).
(f) Information Supplied. None of the information supplied by
the Company Parent to El Paso Corporation, prior to the date hereof for
the purpose of obtaining approval of the Prior Merger by Company
Parent, contained any untrue statement of a material fact or omitted 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 were made, not misleading.
(g) Absence of Certain Changes or Events. Except as disclosed
in the SEC Documents and Section 3.1(g) of the Company Disclosure
Document, since December 31, 1998, Company Parent and the Company have
conducted their business only in the ordinary course consistent with
past practice, and there has not been (i) any event or circumstance
that has had or been reasonably likely to have a material adverse
effect with respect to the Company or its subsidiaries; (ii) any
declaration, setting aside or payment of any dividend (whether in cash,
stock or property) with respect to any of the Company's capital stock;
(iii) (A) any granting by the Company, Company Parent or any of their
respective subsidiaries to any executive officer of the Company,
Company Parent or any of their respective subsidiaries of any increase
in compensation, except in the
7
<PAGE> 15
ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of December 31, 1998,
(B) any granting by the Company, Company Parent or any of its
subsidiaries to any such executive officer of any increase in severance
or termination pay, except as was required under employment, severance
or termination agreements in effect as of December 31, 1998, or (C)
except in accordance with past practice as to executive officers, any
entry by the Company or any of its subsidiaries into any employment,
severance or termination agreement with any such executive officer;
(iv) any damage, destruction or loss, whether or not covered by
insurance, that has or reasonably could be expected to have a material
adverse effect on the Company or its subsidiaries; (v) any change in
accounting methods, principles or practices by the Company or Company
Parent materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in generally accepted
accounting principles; or (vi) any event which, if it had taken place
following the execution of this Agreement, would not have been
permitted by Section 4.1.
(h) State Takeover Statutes; Absence of Supermajority
Provision. The Company has taken all action to assure that no state
takeover statute or similar statute or regulation, shall apply to the
Merger, the Shareholder Agreement, or any of the other transactions
contemplated hereby or by the Shareholder Agreement. Except for the
approval of the Merger by Company Parent as the sole stockholder of the
Company that was obtained contemporaneously with the execution of this
Agreement, no other stockholder action on the part of the Company is
required for approval of the Merger and the transactions contemplated
hereby.
(i) Brokers. No broker, investment banker or other person is
entitled to receive from the Company or any of its subsidiaries any
investment banking, brokerage or finder's fees in connection with this
Agreement or the transactions contemplated hereby, including any fee
for any opinion rendered by any investment banker.
(j) Litigation. Except as disclosed in the SEC Documents, and
Section 3.1(j) of the Company Disclosure Schedule, there is no suit,
action, proceeding or investigation pending or, to the Company's
knowledge, threatened against or affecting the Company or any of its
subsidiaries that has had or could reasonably be expected to have a
material adverse effect on the Company or its subsidiaries or prevent,
hinder or materially delay the ability of the Company or Company Parent
to consummate the transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company,
Company Parent or any of their respective subsidiaries which has had,
or which, insofar as reasonably can be foreseen, in the future could
have, any such effect.
(k) Employees; Employee Benefit Matters. The Company and its
subsidiaries (i) have no employees, (ii) do not sponsor any employee
benefit plans or arrangements and (iii) have no liability or
responsibility with respect to any employee benefit plan or arrangement
maintained by any other entity, but excluding, in the case of each of
(i) through (iii), exceptions which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on
the Company or its subsidiaries.
8
<PAGE> 16
(l) Taxes.
(i) Each of the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax purposes of
which the Company or any of its subsidiaries is or has been a member,
has timely filed (taking into account any extensions) all Tax Returns
required to be filed by it on or before the Effective Time of the
Merger and has timely paid or deposited (or the Company has paid or
deposited on its behalf) all Taxes and estimated Taxes which are
required to be paid or deposited before the Effective Time of the
Merger. Each of the Tax Returns filed by the Company or any of its
subsidiaries is accurate and complete in all material respects. The
Company has delivered or made available to Parent accurate and complete
copies of all Tax Returns of the Company and its subsidiaries that have
been requested by Parent. The Company shall give Parent an opportunity
to review and comment upon any Tax Returns of the Company and its
subsidiaries to be filed after the date of this Agreement. No extension
or waiver of the limitation period applicable to any of the Tax Returns
of the Company or its subsidiaries has been granted, and no such
extension or waiver has been requested from any of the Company or its
subsidiaries. The Financial Statements reflect an adequate reserve for
all Taxes payable by the Company and its subsidiaries for all taxable
periods and portions thereof through the date of such financial
statements;
(ii) No material deficiencies for any Taxes have been
proposed, asserted or assessed against the Company or any of its
subsidiaries, no requests for waivers of the time to assess any such
Taxes have been granted or are pending, and there are no tax liens upon
any assets of the Company or any of its subsidiaries (except for liens
for ad valorem Taxes not yet delinquent and other Taxes not yet due and
payable) and no claim has been made by any authority in a jurisdiction
where any of the Company and its subsidiaries does not file Tax Returns
that it is or may be subject to taxation in that jurisdiction. There
are no current examinations of any Tax Return of the Company or any of
its subsidiaries being conducted and there are no settlements of any
prior examinations which could reasonably be expected to materially
adversely affect any taxable period for which the statute of
limitations has not run.
(iii) None of the Company or its subsidiaries is, or has been,
a party to or bound by any tax indemnity agreement, tax sharing
agreement, tax allocation agreement or similar contract.
(iv) [INTENTIONALLY OMITTED]
(v) The limited liability company subsidiaries of the Company
are, or will be at the Effective Time of the Merger, treated as
disregarded entities for federal income Tax purposes and the assets of
such subsidiaries are, or will be at the Effective Time of the Merger,
treated as owned directly by the Company for federal income Tax
purposes.
9
<PAGE> 17
(vi) No person is required to withhold any amounts pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Code"), from any delivery of Merger Consideration to holders of Shares
pursuant to the Merger. The Company has delivered or made available to
Parent accurate and complete copies of all audit reports and similar
documents relating to Tax Returns of the Company and its subsidiaries;
(vii) As used herein, "Tax" or "Taxes" shall mean all taxes of
any kind, including, without limitation, those on or measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, value added,
property or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts
imposed by any Governmental Entity, domestic or foreign. As used
herein, "Tax Return" shall mean any return, report, statement or
information required to be filed with any Governmental Entity with
respect to Taxes.
(m) [INTENTIONALLY OMITTED.]
(n) Environmental Matters. Except as would not have, or be
reasonably likely to have, a material adverse effect on the Company,
(i) the business operations of the Company and its subsidiaries are
being conducted, and to the Company's knowledge have at all times been
conducted, in compliance with all limitations, restrictions, standards
and requirements established under environmental laws, (ii) no facts or
circumstances exist that impose on the Company or any of its
subsidiaries an obligation under environmental laws to conduct any
removal, remediation, or similar response action, or that would form
the basis of any claim, action, lawsuit, proceeding or investigation
against, or any liability of, the Company or any of its subsidiaries
under any environmental law, (iii) there is no obligation, undertaking
or liability arising out of or relating to environmental laws that the
Company or any of its subsidiaries has agreed to, assumed or retained,
by contract or otherwise, or that has been imposed on the Company or
any of its subsidiaries by any writ, injunction, decree, order or
judgment, (iv) neither the Company nor any of its subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party, under CERCLA or any similar state
law, and (v) there are no lawsuits, claims, actions, investigations or
proceedings pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries that arise out of or
relate to environmental laws.
(o) Compliance with Laws. The Company and its subsidiaries
hold all required, necessary or applicable permits, licenses,
variances, exemptions, orders, franchises and approvals of all
Governmental Entities, except where the failure to so hold would not
have, or be reasonably likely to have, a material adverse effect on the
Company (the "Company Permits"). The Company and its subsidiaries are
in compliance with the terms of the Company Permits except where the
failure to so comply would not have, or be reasonably likely to have, a
material adverse effect on the Company. Neither the Company nor any of
its subsidiaries has violated or failed to
10
<PAGE> 18
comply with any statute, law, ordinance, regulation, rule, permit or
order of any Federal, state or local government, domestic or foreign,
or any Governmental Entity, any arbitration award or any judgment,
decree or order of any court or other Governmental Entity, applicable
to the Company or any of its subsidiaries or their respective business,
assets or operations, except for violations and failures to comply that
have not had, individually or in the aggregate, or could not
individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Company.
(p) Material Contracts and Agreements. All material contracts
of the Company or its subsidiaries have been included in the SEC
Documents or in Section 3.1(p) of the Company Disclosure Document,
except for those contracts not required to be filed pursuant to the
rules and regulations of the SEC. Set forth on Section 3.1(p) of the
Company Disclosure Document is a complete and accurate listing of all
hedging and forward sale arrangements (i) to which the Company or any
of its subsidiaries is party or (ii) by which any of the Company's or
any of its subsidiaries' assets are bound.
(q) Title to Properties.
(i) To the Company's knowledge, Section 3.1(q) of the
Company Disclosure Document and the SEC Documents list all
real property and personal property assets required to be
disclosed in periodic reports under the Securities and
Exchange Act of 1934, as amended. Each of the Company and each
of its subsidiaries has good and defensible title to, or valid
leasehold interests in, all its material assets and properties
purported to be owned by it in the SEC Documents or in Section
3.1(q) of the Company Disclosure Document, except for such
assets and properties as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the
ordinary course of business and except for defects in title,
easements, restrictive covenants and similar encumbrances or
impediments that, in the aggregate, do not and will not
materially interfere with its ability to conduct its business
as currently conducted or as reasonably expected to be
conducted. All such assets and properties, other than assets
and properties in which the Company or any of the subsidiaries
has leasehold interests, are free and clear of all Liens,
other than (i) those set forth in the SEC Documents or in
Section 3.1(q) of the Company Disclosure Document as not being
free and clear of all Liens and (ii) Liens, that, in the
aggregate, do not and will not materially interfere with the
ability of the Company or any of its subsidiaries to conduct
its business as currently conducted or as reasonably expected
to be conducted.
(ii) Except as would not have, or be reasonably
likely to have, a material adverse effect on the Company, each
of the Company and each of its subsidiaries has complied in
all material respects with the terms of all leases to which it
is a party and under which it is in occupancy, and all such
leases are in full force and effect. Each of the Company and
each of its subsidiaries enjoys peaceful and undisturbed
possession under all such leases.
11
<PAGE> 19
(r) Intellectual Property. The Company and its subsidiaries
own, or are licensed or otherwise have the right to use, all patents,
patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights, technology,
know-how, processes and other proprietary intellectual property rights
and computer programs which are material to the condition (financial or
otherwise) or conduct of the business and operations of the Company and
its subsidiaries taken as a whole. To the Company's knowledge, (i) the
use of such patents, patent rights, trademarks, trademark rights,
service marks, service mark rights, trade names, copyrights,
technology, know-how, processes and other proprietary intellectual
property rights and computer programs by the Company and its
subsidiaries does not infringe on the rights of any person, subject to
such claims and infringements as do not, in the aggregate, give rise to
any liability on the part of the Company and its subsidiaries which has
had or could have a material adverse effect on the Company, and (ii) no
person is, in any manner that has had or could have a material adverse
effect on the Company, infringing on any right of the Company or any of
its subsidiaries with respect to any such patents, patent rights,
trademarks, trademark rights, service marks, service mark rights, trade
names, copyrights, technology, know-how, processes and other
proprietary intellectual property rights and computer programs. No
claims are pending or, to the Company's knowledge, threatened that the
Company or any of its subsidiaries is infringing or otherwise adversely
affecting the rights of any person with regard to any patent, license,
trademark, trade name, service mark, copyright or other intellectual
property right.
(s) [INTENTIONALLY OMITTED.]
(t) Undisclosed Liabilities. Except as set forth in the SEC
Documents or in Section 3.1(t) of Company Disclosure Document, since
the Year-End Financial Statements, neither the Company nor any of its
respective subsidiaries had, and since such date neither the Company
nor any of such subsidiaries has incurred (except in the ordinary
course of business), any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), which,
individually or in the aggregate, have had or could reasonably be
expected to have a material adverse effect on the Company or its
subsidiaries.
(u) Pipeline Imbalances. There are no physical natural gas
cumulative imbalances with respect to the Company's or any of its
subsidiaries' properties which, individually or in the aggregate, have
had or could reasonably be expected to have a material adverse effect
on the Company.
(v) [INTENTIONALLY OMITTED]
(w) [INTENTIONALLY OMITTED]
(x) Board Recommendation and Stockholder Approval. The Board
of Directors of both the Company and Company Parent have, by unanimous
vote, (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger and the transactions
contemplated thereby, are fair to and in the best interests of their
respective stockholders, and (ii) resolved to recommend to their
respective
12
<PAGE> 20
stockholders that they approve the Merger and the transactions
contemplated thereby. Company Parent, the holder of all the outstanding
Shares, and El Paso Corporation, the holder of all the outstanding
capital stock of Company Parent, acting on such recommendations, have
by unanimous vote approved the Merger and the transactions contemplated
thereby.
(y) Bankruptcy. The case of Company Parent under Chapter 11 of
the Bankruptcy Code has been closed under Section 350 of the Bankruptcy
Code.
SECTION 3.2 Representations and Warranties of Parent and Sub. Parent
and Sub, jointly and severally, represent and warrant to, and agree with,
Company Parent and the Company as follows:
(a) Organization; Standing and Power. Parent and Sub are duly
organized, validly existing and in good standing under laws of their
states of formation and have the requisite company power and authority
to carry on their business as now being conducted. Parent and Sub are
duly qualified to do business and in good standing in each jurisdiction
in which the nature of their business or the ownership or leasing of
their properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified to do business
(individually or in the aggregate) would not have, or be reasonably
likely to have, a material adverse effect on Parent.
(b) Authority; Noncontravention. Parent and Sub have the
requisite company power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Parent and Sub and the consummation by
Parent and Sub of the transactions contemplated hereby have been duly
authorized by all necessary company action on the part of Parent and
Sub. This Agreement has been duly executed and delivered by Parent and
Sub and constitutes a valid and binding obligation of Parent and Sub,
enforceable against Parent and Sub in accordance with its terms, except
that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws or judicial decisions
now or hereafter in effect relating to creditors' rights generally and
(ii) the remedy of specific performance and injunctive relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. The execution and
delivery of this Agreement by Parent and Sub do not, and the
consummation of the transactions contemplated hereby and compliance
with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to
loss of a material benefit under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of Parent or Sub or any of their subsidiaries
under, any provision of (i) the organizational documents of Parent or
Sub, each as amended, or any comparable organizational documents of
their respective subsidiaries, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Parent or Sub or
any of their subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to
in the following sentence, any
13
<PAGE> 21
judgment, order, decree, statute, law, ordinance, rule or regulation or
arbitration award applicable to Parent or Sub or any of their
subsidiaries or their respective properties or assets, other than, in
the case of clause (ii), any such conflicts, violations or defaults
that individually or in the aggregate would not materially impair the
ability of Parent and Sub to perform their respective obligations
hereunder or prevent the consummation of any of the transactions
contemplated hereby. To Parent's knowledge, no consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Parent or Sub or
any of their subsidiaries in connection with the execution and delivery
of this Agreement by Parent and Sub or the consummation by Parent and
Sub of the transactions contemplated hereby, except for (i) the filing
by Parent of a premerger notification and report form under the HSR
Act, (ii) the filing with the SEC of such reports under Sections 13 of
the Exchange Act as may be required in connection with this Agreement
and the transactions contemplated hereby, (iii) filings in Delaware by
Sub in connection with the Merger.
(c) [INTENTIONALLY OMITTED]
(d) Brokers. No broker, investment banker or other person,
other than Goldman Sachs & Co., is entitled to any broker's, finder's
or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on
behalf of Parent or Sub, including any fee for any opinion rendered by
any investment banker. Parent is solely responsible for payment of a
fee owed to Goldman Sachs & Co. in connection with the transactions
contemplated by this Agreement.
(e) Litigation. Except as disclosed in the Parent SEC
Documents, there is no suit, action, proceeding or investigation
pending or, to the knowledge of Parent, threatened against or affecting
Parent or any of its subsidiaries that could reasonably be expected to
prevent, hinder or materially delay the ability of Parent to consummate
the transactions contemplated by this Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator outstanding against Parent or any of its subsidiaries
having, or which, insofar as reasonably can be foreseen, in the future
could have, any such effect.
(f) Subsidiaries. Parent's subsidiaries are corporations,
limited liability companies or general partnerships that are duly
organized, validly existing and in good standing under the laws of
their respective jurisdictions of organization and have the requisite
company power and authority (or comparable power and authority in the
case of limited liability companies or general partnerships) to carry
on their respective businesses as they are now being conducted and to
own, operate and lease the assets they now own, operate or hold under
lease. Parent's subsidiaries are duly qualified to do business and are
in good standing in each jurisdiction in which the nature of their
respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or in good standing
would not have, or be reasonably likely to have, a material adverse
effect on Parent. All the outstanding shares of capital stock of
Parent's subsidiaries that are corporations, and all the ownership
interests of Parent in its other subsidiaries, have been
14
<PAGE> 22
duly authorized and validly issued and are, except in the case of any
subsidiary that is a general partnership, fully paid and nonassessable
and were not issued in violation of any preemptive rights or other
preferential rights of subscription or purchase of any person. All such
stock and ownership interests are owned of record and beneficially by
Parent or by a wholly owned subsidiary of Parent, free and clear of all
Liens. Except for the capital stock of, or ownership interests in, its
subsidiaries, Parent does not own, directly or indirectly, any capital
stock, equity interest or other ownership interest in any corporation,
partnership, association, joint venture, limited liability company or
other entity. The Parent SEC Documents set forth each subsidiary of the
Parent and the stockholders or other owners of such subsidiary.
(g) Capital Structure. The capital structure of Sub consists
of membership units owned in the proportions described in the recitals
to this Agreement. There are no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights,
agreements, arrangements or undertakings of any kind to which Sub is a
party, or by which any of them is bound, obligating Sub to issue,
deliver or sell, or cause to be issued, delivered or sold, any equity
or voting securities of, or other ownership interests in, Sub or of any
of its subsidiaries or obligating Sub to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of December 31, 1999, Parent
had (i) 26,739,065 common units, 289,699 preference units, and no Units
issued and outstanding, representing 99.0% of the equity interest in
Parent, and (ii) a general partner interest, representing 1.0% of the
equity interest in Parent. Parent has the authority, without obtaining
unitholder consent, to issue any type and number of equity interest so
long as such interest is not senior in rights to distribution or
liquidation to the outstanding preference units.
(h) SEC Documents. Parent has filed all SEC Documents (the
"Parent SEC Documents") with the SEC since January 1, 1998. To Parent's
knowledge, as of their respective dates, the Parent SEC Documents
complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
Parent SEC Documents, 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 in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements of Parent
included in the Parent SEC Documents comply in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the
consolidated financial position of Parent and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments
and other adjustments described therein).
15
<PAGE> 23
(i) Absence of Certain Changes or Events. Except as disclosed
in the Parent SEC Documents, since Parent's most recent audited
financial statements, there has not been any transaction, commitment,
dispute or other event or condition (financial or otherwise) of any
character (whether or not in the ordinary course of business) which
alone or in the aggregate, has had, or would reasonably be expected to
have, a material adverse effect on Parent.
(j) Environmental Matters. Except as would not have, or be
reasonably likely to have, a material adverse effect on Parent, (i) the
business operations of Parent and its subsidiaries are being conducted,
and to Parent's knowledge have at all times been conducted, in
compliance with all limitations, restrictions, standards and
requirements established under environmental laws, (ii) no facts or
circumstances exist that impose on Parent or any of its subsidiaries an
obligation under environmental laws to conduct any removal,
remediation, or similar response action, or that would form the basis
of any claim, action, lawsuit, proceeding or investigation against, or
any liability of, Parent or any of its subsidiaries under any
environmental law, (iii) there is no obligation, undertaking or
liability arising out of or relating to environmental laws that Parent
or any of its subsidiaries has agreed to, assumed or retained, by
contract or otherwise, or that has been imposed on Parent or any of its
subsidiaries by any writ, injunction, decree, order or judgment, (iv)
neither Parent nor any of its subsidiaries has received any written
request for information, or been notified that it is a potentially
responsible party, under CERCLA or any similar state law, and (v) there
are no lawsuits, claims, actions, investigations or proceedings pending
or, to the knowledge of Parent, threatened against Parent or any of its
subsidiaries that arise out of or relate to environmental laws.
(k) Compliance with Laws. Parent and its subsidiaries hold all
required, necessary or applicable permits, licenses, variances,
exemptions, orders, franchises and approvals of all Governmental
Entities, except where the failure to so hold would not have, or be
reasonably likely to have, a material adverse effect on Parent (the
"Parent Permits"). Parent and its subsidiaries are in compliance with
the terms of the Parent Permits except where the failure to so comply
would not have, or be reasonably likely to have, a material adverse
effect on Parent. Neither Parent nor any of its subsidiaries has
violated or failed to comply with any statute, law, ordinance,
regulation, rule, permit or order of any Federal, state or local
government, domestic or foreign, or any Governmental Entity, any
arbitration award or any judgment, decree or order of any court or
other Governmental Entity, applicable to Parent or any of its
subsidiaries or their respective business, assets or operations, except
for violations and failures to comply that have not had, individually
or in the aggregate, or could not individually or in the aggregate,
reasonably be expected to have a material adverse effect on Parent.
(l) Material Contracts and Agreements. All material contracts
of Parent or its subsidiaries have been included in the Parent SEC
Documents except for those contracts not required to be filed pursuant
to the rules and regulations of the SEC.
16
<PAGE> 24
(m) Title to Properties.
(i) To Parent's knowledge, the Parent SEC Documents
list all real property and personal property assets required
to be disclosed in periodic reports under the Exchange Act.
Each of Parent and each of its subsidiaries has good and
defensible title to, or valid leasehold interests in, all its
material assets and properties purported to be owned by it in
the Parent SEC Documents, except for such assets and
properties as are no longer used or useful in the conduct of
its businesses or as have been disposed of in the ordinary
course of business and except for defects in title, easements,
restrictive covenants and similar encumbrances or impediments
that, in the aggregate, do not and will not materially
interfere with its ability to conduct its business as
currently conducted or as reasonably expected to be conducted.
All such assets and properties, other than assets and
properties in which Parent or any of the subsidiaries has
leasehold interests, are free and clear of all Liens, other
than (i) those set forth in the Parent SEC Documents as not
being free and clear of all Liens and (ii) Liens, that, in the
aggregate, do not and will not materially interfere with the
ability of Parent or any of its subsidiaries to conduct its
business as currently conducted or as reasonably expected to
be conducted.
(ii) Except as would not have, or be reasonably
likely to have, a material adverse effect on Parent, each of
Parent and each of its subsidiaries has complied in all
material respects with the terms of all leases to which it is
a party and under which it is in occupancy, and all such
leases are in full force and effect. Each of Parent and each
of its subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(n) Intellectual Property. Parent and its subsidiaries own, or
are licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights, technology, know-how,
processes and other proprietary intellectual property rights and
computer programs which are material to the condition (financial or
otherwise) or conduct of the business and operations of Parent and its
subsidiaries taken as a whole. To Parent's knowledge, (i) the use of
such patents, patent rights, trademarks, trademark rights, service
marks, service mark rights, trade names, copyrights, technology,
know-how, processes and other proprietary intellectual property rights
and computer programs by Parent and its subsidiaries does not infringe
on the rights of any person, subject to such claims and infringements
as do not, in the aggregate, give rise to any liability on the part of
Parent and its subsidiaries which has had or could have a material
adverse effect on Parent, and (ii) no person is, in any manner that has
had or could have a material adverse effect on Parent, infringing on
any right of Parent or any of its subsidiaries with respect to any such
patents, patent rights, trademarks, trademark rights, service marks,
service mark rights, trade names, copyrights, technology, know-how,
processes and other proprietary intellectual property rights and
computer programs. No claims are pending or, to Parent's knowledge,
threatened that Parent or any of its subsidiaries is infringing or
otherwise adversely affecting the rights of any person with regard to
any patent, license, trademark, trade name, service mark, copyright or
other intellectual property right.
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(o) Undisclosed Liabilities. Except as set forth in the Parent SEC
Documents, since Parent's most recent audited financial statements, neither
Parent nor any of its subsidiaries had, and since such date neither Parent nor
any of such subsidiaries has incurred (except in the ordinary course of
business), any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise), which, individually or in the aggregate,
have had or could reasonably be expected to have a material adverse effect on
Parent.
(p) Issuance of the Units. The issuance of the Units pursuant to
Section 1.7(c) by Parent in connection with the Merger has been duly authorized
and approved by all requisite partnership action, and such Units will, when
issued in consideration for the Shares pursuant to this Agreement, be validly
issued, fully paid and non-assessable; provided, however, that, any
representation or warranty with respect to the non-assessability of the Units is
subject to the qualifications under (i) Section 17-303(a) of the Delaware
Revised Uniform Limited Partnership Act (the "Delaware LP Act") and (ii) Section
17-607 of the Delaware LP Act. When issued, the Units will be free and clear of
all liens and other encumbrances except for those created by (i) the Partnership
Agreement; (ii) the Registration Rights Agreement; (iii) federal and state
securities laws, and (iv) the Delaware LP Act.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 Conduct of Business of the Company.
(a) Ordinary Course. During the period from the date of this Agreement
to the Effective Time of the Merger (except as otherwise specifically
contemplated by the terms of this Agreement), the Company shall and shall cause
its subsidiaries to carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as conducted at the date
hereof (including the on-going expansion project at the Company's Mississippi
gas storage operations (the "Gas Storage Expansion Project"), which is being
undertaken in the ordinary course of business) and, to the extent consistent
therewith, use all reasonable efforts to preserve intact their current business
organizations and preserve their relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with
them, in each case consistent with past practice, to the end that their goodwill
and ongoing businesses shall be unimpaired to the fullest extent possible at the
Effective Time of the Merger. Without limiting the generality of the foregoing,
and except as otherwise expressly contemplated by this Agreement, the Company
shall not, and shall not permit any of its subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock or
other equity interest, other than dividends and distributions by any
subsidiary of the Company to the Company or a wholly-owned subsidiary
of the Company, (B) split, combine or reclassify any of its capital
stock or other equity interest or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares
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of its capital stock or other equity interest or (C) purchase, redeem
or otherwise acquire any shares of capital stock or other equity
interest of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such interest or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock or other equity interest, any other voting
securities or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, voting securities or
convertible securities;
(iii) amend the Company Charter, By-laws or other comparable
charter or organizational document;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the stock
or other equity interest or assets of, or by any other manner, any
business or any corporation, partnership, association, joint venture,
limited liability company or other entity or division thereof or (B)
any assets that would be material, individually or in the aggregate, to
the Company and its subsidiaries taken as a whole, except purchases of
supplies and inventory in the ordinary course of business consistent
with past practice;
(v) sell, lease, mortgage, pledge, grant a Lien on or
otherwise encumber or dispose of any of its properties or assets,
except (A) sales of inventory in the ordinary course of business
consistent with past practice, (B) other transactions involving not in
excess of $500,000 in the aggregate and (C) the creation of Liens in
connection with working capital borrowings under revolving credit
facilities incurred in accordance with Section 3.1(a)(vi);
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its subsidiaries, guarantee any
debt securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter into any arrangement with respect to any of the
foregoing, except for working capital borrowings under revolving credit
facilities that are (1) incurred in the ordinary course of business,
(2) on terms customary for facilities of this type and (3) prepayable
without premium or penalty; provided the Company notifies Parent of the
entering into of any such facilities and of any drawdowns made
thereunder; or (B) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or
any subsidiary of the Company;
(vii) make or incur any new capital expenditure with respect
to 2000, which, singly or in the aggregate with all other expenditures,
would exceed $500,000 or enter into any material agreements or
commitments with respect to
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capital expenditures without the prior written consent of Parent (which
consent shall not be unreasonably withheld);
(viii) make any material election relating to Taxes or settle
or compromise any material Tax liability;
(ix) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company or incurred in the
ordinary course of business consistent with past practice;
(x) release any party from or waive the benefits of, or agree
to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any of its subsidiaries is a party;
(xi) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(xii) change any material accounting principle used by it,
except as required by regulations promulgated by the SEC or the
Financial Accounting Standards Board;
(xiii) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements
or compromises in consultation and cooperation with Parent, and, with
respect to any such settlement, with the prior written consent of
Parent, such consent not to be unreasonably withheld;
(xiv) enter into any forward sale or hedging arrangements with
respect to natural gas transportation or storage or any other products;
or
(xv) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) [INTENTIONALLY OMITTED]
(c) Employees. Neither the Company nor any of its subsidiaries shall
hire or otherwise directly or indirectly acquire any employees during the period
from the date of this Agreement to the Effective Time of the Merger.
(d) Other Actions. Neither Company Parent nor the Company shall, nor
shall they permit any of their subsidiaries to, take any action that would, or
that could reasonably be expected to, result in any of the representations and
warranties of Company Parent or the Company set forth in this Agreement become
untrue.
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(e) Conversion of the Company. Notwithstanding any provision of this
Agreement to the contrary, the Company agrees that, prior to the Effective Time
of the Merger, it shall take the actions necessary to be converted into, or
otherwise become by merger or otherwise (collectively "conversion"), a new
single member limited liability company organized under the Delaware Limited
Liability Company Act. Notwithstanding references in this agreement to the
Company as a corporation and having attributes associated therewith, at the
Effective Time of the Merger, the Parties hereby acknowledge and agree that the
Company shall be in the form of a Delaware limited liability company and that
all references to the Company herein with terms associated with a corporation
(i.e. shares, shareholders, etc.) shall be deemed to reference the corresponding
term with respect to a limited liability company (i.e. membership interests,
members, etc.), provided that the Merger Consideration shall be neither
decreased nor increased as a result of the operation of this paragraph.
(f) Base Gas. Subject to changes in fuel gas and gas used to settle
operational balancing accounts, the Company will maintain its current base gas
levels at its gas storage facilities, which levels the Company believes are
adequate to meet current contractual needs and to avoid damage to the storage
facilities.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 [INTENTIONALLY OMITTED]
SECTION 5.2 Access to Information.
(a) During the period from the date hereof to the Effective Time of the
Merger, except to the extent otherwise required by United States regulatory
considerations:
(i) The Company shall, and shall cause each of its
subsidiaries, officers, counsel, financial advisors and other
representatives to, afford to Parent, and to Parent's accountants,
counsel, financial advisors and other representatives, reasonable
access to the Company's and its subsidiaries' respective properties,
books, contracts, commitments and records and, during such period, the
Company shall, and shall cause each of its subsidiaries, officers,
counsel, financial advisors and other representatives to, furnish
promptly to Parent,
(A) a copy of each report, schedule, registration statement and
other document filed by the Company during such period
pursuant to the requirements of Federal or state securities
laws, and
(B) all other information concerning its business, properties,
financial condition, operations and personnel as Parent may
from time to time reasonably request so as to afford Parent a
reasonable opportunity to make at its sole cost and expense
such review, examination and investigation of
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<PAGE> 29
the Company and its subsidiaries as Parent may reasonably
desire to make. The Company agrees to advise Parent of all
material developments with respect to the Company, its
subsidiaries and their respective assets and liabilities.
(ii) The Company shall promptly notify Parent of any notices
from or investigations by Governmental Entities that could materially
affect the Company's business or assets or the consummation of the
Merger. Parent will promptly notify the Company of any notices from or
investigations by Governmental Entities that could materially affect
Parent's consummation of the Merger.
(iii) Except as required by law each of the Company and Parent
shall, and shall cause its respective directors, officers, accountants,
counsel, financial advisors and representatives and affiliates to, (i)
hold in confidence, unless compelled to disclose by judicial or
administrative process, or, in the opinion of its counsel, by other
requirements of law, all nonpublic information concerning the other
party furnished in connection with the transactions contemplated by
this Agreement until such time as such information becomes publicly
available (otherwise than through the wrongful act of such person),
(ii) not release or disclose such information to any other person,
except in connection with this Agreement to its auditors, attorneys,
financial advisors, other consultants and advisors, and (iii) not use
such information for any competitive or other purpose other than with
respect to its consideration and evaluation of the transactions
contemplated by this Agreement. Any investigation by any party of the
assets and business of the other party and its subsidiaries shall not
affect any representations and warranties hereunder or either party's
right to terminate this Agreement as provided in Article VII.
(b) In the event of the termination of this Agreement, each party
promptly will deliver to the other party (and destroy all electronic data
reflecting the same) all documents, work papers and other material (and any
reproductions or extracts thereof and any notes or summaries thereto) obtained
by such party or on its behalf from such other party or its subsidiaries as a
result of this Agreement or in connection therewith so obtained before or after
the execution hereof.
SECTION 5.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, except to the extent otherwise required by United States regulatory
considerations and otherwise provided in this Section 5.3, each of the parties
agrees to use reasonable 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 parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger, and the other
transactions contemplated by this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with
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<PAGE> 30
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement. In connection with and without
limiting the foregoing, each of the Company (including its Board of Directors,
as applicable) and Parent (including the General Partner's Board of Directors,
as applicable) shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger, (ii) if any state takeover statute or similar statute or regulation
becomes applicable to the Merger, take all action necessary to ensure that the
Merger may be consummated as promptly as practicable on the terms contemplated
by this Agreement and otherwise to minimize the effect of such statute or
regulation on the Merger and (iii) cooperate with each other in the arrangements
for refinancing any indebtedness of, or obtaining any necessary new financing
for, the Company and the Surviving Company.
(b) The Company or Company Parent shall give prompt notice to Parent,
and Parent or Sub shall give prompt notice to Company Parent, of (i) any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate in any respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations or warranties or covenants
or agreements of the parties or the conditions to the obligations of the parties
hereunder.
(c) Each of the parties hereto (and, in the case of the Company, its
ultimate controlling person, as necessary) shall file a premerger notification
and report form under the HSR Act with respect to the Merger as promptly as
reasonably possible following execution and delivery of this Agreement. Each of
the parties hereto (and, in the case of the Company, its ultimate controlling
person, as necessary) agrees to use reasonable efforts to promptly respond to
any request for additional information pursuant to Section (e)(1) of the HSR
Act.
(d) Except as otherwise required by United States regulatory
considerations, the Company will furnish to Akin, Gump, Strauss, Hauer & Feld,
L.L.P., counsel to Parent and Sub, copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof (collectively,
"Company HSR Documents")) between the Company, or any of its respective
representatives, on the one hand, and any Governmental Entity, or members of the
staff of such agency or authority, on the other hand, with respect to this
Agreement or the Merger; provided, however, that (x) with respect to documents
and other materials filed by or on behalf of the Company with the Antitrust
Division of the Department of Justice, the Federal Trade Commission, or any
state attorneys general that are available for review by Parent and Sub, copies
will not be
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required to be provided to Akin, Gump, Strauss, Hauer & Feld, L.L.P. and (y)
with respect to any Company HSR Documents (1) that contain any information
which, in the reasonable judgment of Fried, Frank, Harris, Shriver & Jacobson,
special counsel to the Company, should not be furnished to Parent or Sub because
of antitrust considerations or (2) relating to a request for additional
information pursuant to Section (e)(1) of the HSR Act, the obligation of the
Company to furnish any such Company HSR Documents to Akin, Gump, Strauss, Hauer
& Feld, L.L.P. shall be satisfied by the delivery of such Company HSR Documents
on a confidential basis to Akin, Gump, Strauss, Hauer & Feld, L.L.P. pursuant to
a confidentiality agreement in form and substance reasonably satisfactory to
Parent. Except as otherwise required by United States regulatory considerations,
Parent and Sub will furnish to Fried, Frank, Harris, Shriver & Jacobson copies
of all correspondence, filings or communications (or memoranda setting forth the
substance thereof (collectively, "Parent HSR Documents")) between Parent, Sub or
any of their respective representatives, on the one hand, and any Governmental
Entity, or member of the staff of such agency or authority, on the other hand,
with respect to this Agreement or the Merger; provided, however, that (x) with
respect to documents and other materials filed by or on behalf of Parent or Sub
with the Antitrust Division of the Department of Justice, the Federal Trade
Commission, or any state attorneys general that are available for review by the
Company, copies will not be required to be provided to Fried, Frank, Harris,
Shriver & Jacobson and (y) with respect to any Parent HSR Documents (1) that
contain information which, in the reasonable judgment of Akin, Gump, Strauss,
Hauer & Feld, L.L.P., should not be furnished to the Company because of
antitrust considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of Parent and Sub to
furnish any such Parent HSR Documents to Fried, Frank, Harris, Shriver &
Jacobson shall be satisfied by the delivery of such Parent HSR Documents on a
confidential basis to Fried, Frank, Harris, Shriver & Jacobson pursuant to a
confidentiality agreement in form and substance reasonably satisfactory to the
Company.
(e) At the election of Parent, the Company and Parent shall use
reasonable efforts to defend all litigation under the Federal or state antitrust
laws of the United States which if adversely determined would, in the reasonable
opinion of Parent (based on the advice of outside counsel), be likely to result
in the failure of the condition set forth in Section 6.1(b) not being satisfied,
and to appeal any order, judgment or decree, which if not reversed, would result
in the failure of such condition. Notwithstanding the foregoing, nothing
contained in this Agreement shall be construed so as to require Parent, Sub or
the Company, or any of their respective subsidiaries or affiliates, to sell,
license, dispose of, or hold separate, or to operate in any specified manner,
any assets or businesses of Parent, Sub, the Company or the Surviving Company
(or to require Parent, Sub, the Company or any of their respective subsidiaries
or affiliates to agree to any of the foregoing). The obligations of each party
under Section 5.3(a) to use reasonable efforts with respect to antitrust matters
shall be limited to compliance with the reporting provisions of the HSR Act and
with its obligations under this Section 5.3(e).
SECTION 5.4 [Intentionally omitted]
SECTION 5.5 Indemnification.
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(a) The Company and Company Parent shall, and from and after the
Effective Time of the Merger, Parent and the Surviving Company shall, indemnify,
defend and hold harmless each person who is now, or has been at any time prior
to the date hereof or who becomes prior to the Effective Time of the Merger, an
officer or director of the Company or any of its subsidiaries or an employee of
the Company or any of its subsidiaries who acts as a fiduciary under the
employee benefit plans of any of them (but, with respect to such employees, only
to the extent (if any) indemnified by the Company as of the date hereof) (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses
(including attorneys' fees), liabilities or judgments or amounts that are paid
in settlement with the approval of the indemnifying party (which approval shall
not be unreasonably withheld) of or in connection with any threatened or actual
claim, action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of the fact that such person is or was a
director, officer or such employee of the Company or any subsidiary whether
pertaining to any matter existing or occurring at or prior to the Effective Time
of the Merger and whether asserted or claimed prior to, or at or after, the
Effective Time of the Merger (including arising out of or relating to the
Merger, the consummation of the transactions contemplated herein, and any action
taken in connection therewith). Any Indemnified Party wishing to claim
indemnification under this Section 5.5, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify the Company (or after
the Effective Time of the Merger, Parent and the Surviving Company), but the
failure so to notify shall not relieve a party from any liability that it may
have under this Section 5.5, except to the extent such failure materially
prejudices such party. Parent or the Surviving Company shall have the right to
assume the defense thereof. If Parent or the Surviving Company does not assume
the defense, the Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict between the positions
of any two or more Indemnified Parties. The Indemnified Party will cooperate in
the defense of any such matter. Parent shall not be liable for any settlement
effected without its prior written consent.
(b) Parent shall purchase and maintain in effect for the benefit of the
Indemnified Parties for a period of six years after the Effective Time of the
Merger, directors' and officers' liability insurance of at least the same
coverage and amounts containing terms and conditions that are no less
advantageous in any material respect to the Indemnified Parties than that
maintained by the Company and its subsidiaries as of the date of this Merger
Agreement with respect to matters arising before the Effective Time of the
Merger, provided that Parent shall not be required to pay an annual premium of
such insurance in excess of three times the last annual premium paid by the
Company prior to the date hereof, but in such case shall purchase as much
coverage as possible for such amount.
(c) All rights to indemnification for acts or omissions occurring prior
to the Effective Time of the Merger now existing in favor of the Indemnified
Parties as provided in the charter documents or by-laws of the Company or its
subsidiaries and in any indemnification agreements to which they are parties
shall survive the Merger, and the Surviving Company shall continue such
indemnification rights for acts or omissions
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<PAGE> 33
prior to the Effective Time of the Merger in full force and effect in accordance
with their terms and Parent shall be financially responsible therefor.
(d) If the Surviving Company or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then and in each such case, proper provisions shall be made, and Parent
shall cause them to be so made, so that the successors and assigns of the
Surviving Company, which, in the reasonable good faith opinion of the Surviving
Company, shall be financially responsible persons or entities, assume the
obligations set forth in this Section 5.6.
(e) The provisions of this Section 5.5 are intended to be for the
benefit of, and shall be enforceable by, the parties hereto and each Indemnified
Party, his heirs and representatives.
SECTION 5.6 Fees and Expenses. Except as provided in Article VIII, all
fees and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated.
SECTION 5.7 Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation, except
that each party may respond to questions from stockholders and other equity
owners, and Parent may respond to inquiries from financial analysts and media
representatives in a manner consistent with its past practice and each party may
make such disclosure as may be required by applicable law or by obligations
pursuant to any listing agreement with any national securities exchange without
prior consultation to the extent such consultation is not reasonably
practicable. The parties agree that the initial press release or releases to be
issued in connection with the execution of this Agreement shall be mutually
agreed upon prior to the issuance thereof.
SECTION 5.8 [INTENTIONALLY OMITTED]
SECTION 5.9 [INTENTIONALLY OMITTED]
SECTION 5.10 Partnership Agreement. As soon as reasonably practicable
after the Effective Time of the Merger, Parent will execute and deliver, or
cause to be executed and delivered, an amendment to the Amended and Restated
Agreement of Limited Partnership of Parent dated as of February 19, 1993 (as
amended from time to time, the "Partnership Agreement"), or, at Parent's sole
discretion, an amendment and restatement of the Partnership Agreement, creating
the Units, which amendment or amendment and restatement will include the
provisions contained in Exhibit A hereto or substantially equivalent provisions
(the "Unit Terms").
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SECTION 5.11 Issuance Instructions and Registrations Rights Agreement.
Unless otherwise instructed by Company, Parent will issue the Units to Company
Parent. At or prior to the Effective Time of the Merger, Parent and Company
Parent will execute and deliver a Registration Rights Agreement (the
"Registration Rights Agreement"), which will be substantially in the form of
Exhibit B hereto.
SECTION 5.12 Assignment of Natural Gas Storage Operating Agreements.
Prior to the Effective Time of the Merger, Company Parent has assigned or will
assign to the Company its rights and obligations under (i) the Natural Gas
Storage Agreement dated January 5, 2000, among Tennessee Gas Pipeline Company,
Company Parent and Petal Gas Storage, L.L.C., and (ii) the Natural Gas Storage
Agreement dated January 5, 2000, among Tennessee Gas Pipeline Company, Company
Parent and Hattiesburg Gas Storage Company.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction prior to the Effective Time of the Merger of the following
conditions:
(a) [INTENTIONALLY OMITTED]
(b) Other Approvals. All authorizations, consents, orders or
approvals of, or declarations or filings with, or terminations or
expirations of waiting periods imposed by, any Governmental Entity
necessary for the consummation of the transactions contemplated by this
Agreement shall have been filed, shall have occurred or shall have been
obtained.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided,
however, that each of the parties shall have used reasonable efforts,
subject to the limitations set forth in Section 5.4 hereof, to prevent
the entry of any such injunction or other order and to appeal as
promptly as possible any injunction or other order that may be entered.
SECTION 6.2 Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the following
conditions:
(a) that Company shall have performed in all material respects
all obligations to be performed by it under this Agreement prior to the
Effective Time of the Merger;
(b) each of the representations and warranties of the Company
and Company Parent contained in Section 3.1 shall be true and correct
in all material respects (disregarding for these purposes any
materiality qualifications contained therein) when made and as of the
Effective Time of the Merger as if made on and as of such date
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<PAGE> 35
(provided that such representations and warranties which are by their
express provisions made as of a specific date need be true and correct
only as of such specific date); and
SECTION 6.3 Condition to Obligations of the Company. The obligation of
the Company to effect the Merger is subject to the conditions that (a) Parent
and Sub shall have performed in all material respects all obligations to be
performed by them under this Agreement prior to the Effective Time of the
Merger, and (b) each of the representations and warranties of Parent and Sub
contained in Section 3.2 shall be true and correct in all material respects
(disregarding for these purposes any materiality qualifications contained
therein) when made and as of the Effective Time of the Merger as if made on and
as of such date (provided that such representations and warranties which are by
their express provisions made as of a specific date need be true and correct
only as of such specific date).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated on or before
September 29, 2000, unless the failure to consummate the Merger is the
result of a material breach of this Agreement by the party seeking to
terminate this Agreement; provided, however, that the passage of such
period shall be tolled for any part thereof during which any party
shall be subject to a nonfinal order, decree or ruling or action
restraining, enjoining or otherwise prohibiting the consummation of the
Merger and the other matters contemplated hereby; or
(ii) if any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body
shall have issued an order, decree or ruling or shall have taken any
other action permanently enjoining, restraining or otherwise
prohibiting the purchase of Shares pursuant to the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable;
(c) by the Company or Parent in accordance with the provisions of
Section 8.2;
(d) Parent, if the Company or Company Parent breaches any of its
representations or warranties herein or fails to perform in any material respect
any of its covenants, agreements or obligations under this Agreement which
breach or failure (x) would give rise to the failure of a condition set forth in
Section 6.2(a) or 6.2(b) and (y)
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cannot be or has not been cured within 30 days following receipt of written
notice of such breach; or
(e) by the Company or Company Parent, if Parent or Sub breaches any of
its representations or warranties herein or fails to perform in any material
respect any of its covenants, agreements or obligations under this Agreement
which breach or failure (x) would give rise to the failure of a condition set
forth in Section 6.3(a) or 6.3(b) and (y) cannot be or has not been cured within
30 days following receipt of written notice of such breach.
SECTION 7.2 Procedure for Termination, Amendment, Extension or Waiver.
A termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.4 or an extension or waiver pursuant to Section
7.5 shall, in order to be effective, require in the case of (i) the Company,
action by its Board of Directors or the duly authorized designee of its Board of
Directors, (ii) Parent, acting by the General Partner's Board of Directors or
the duly authorized designee or its Board of Directors; (iii) Sub, action by its
sole managing member or the duly authorized designee of its sole managing
member.
SECTION 7.3 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any further
liability or obligation on the part of Parent, Sub or the Company, or any
director, officer, or stockholder thereof, other than the confidentiality
provisions of Sections 5.1 and the provisions of Sections 3.1(i), 3.2(c), 5.5,
7.3, 8.2, 8.3 and Article IX.
SECTION 7.4 Amendment. This Agreement may be amended by the Parties at
any time upon their mutual agreement. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
SECTION 7.5 Extension; Waiver. At any time prior to the Effective Time
of the Merger, the parties may, to the extent legally allowed, (a) extend the
time for the performance of any of the obligations or the other acts of the
other parties, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
SECTION 8.1 [INTENTIONALLY OMITTED]
SECTION 8.2 No Solicitation.
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(a) The Company shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any officer or
director of, or any investment banker, attorney or other advisor, agent
or representative of, the Company or any of its subsidiaries to,
directly or indirectly, (i) solicit or initiate the submission of any
takeover proposal, (ii) enter into any agreement (other than
confidentiality and standstill agreements in accordance with the
immediately following proviso) with respect to any takeover proposal,
or (iii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
takeover proposal. Without limiting the foregoing, it is understood
that any violation of the restrictions set forth in the preceding
sentence by any officer or director of the Company or any of its
subsidiaries or any investment banker, attorney or other advisor, agent
or representative of the Company, whether or not such person is
purporting to act on behalf of the Company or otherwise, shall be
deemed to be a material breach of this Agreement by the Company. For
purposes of this Agreement, "takeover proposal" means (i) any proposal,
other than a proposal by Parent or any of its subsidiaries, for a
merger or other business combination involving the Company, (ii) any
proposal or offer, other than a proposal or offer by Parent or any of
its subsidiaries, to acquire from the Company or any of its
subsidiaries in any manner, directly or indirectly, an equity interest
in the Company or any subsidiary, any voting securities of the Company
or any subsidiary or a material amount of the assets of the Company and
its subsidiaries, taken as a whole, or (iii) any proposal or offer,
other than a proposal or offer by Parent or any of its subsidiaries, to
acquire from the stockholders of the Company by tender offer, exchange
offer or otherwise more than 20% of the outstanding Shares.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall, except in connection with the termination of
this Agreement pursuant to Sections 7.1 (a), (b) or (d), (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Sub, the approval or recommendation by the Board of Directors
of the Company or any such committee of this Agreement or the Merger or
take any action having such effect or (ii) approve or recommend, or
propose to approve or recommend, any takeover proposal.
(c) In the event that the Board of Directors of the Company or
any committee thereof shall (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Sub the approval
or recommendation by the Board of Directors of the Company or any such
committee of this Agreement or the Merger or take any action having
such effect, or (ii) approve or recommend, or propose to approve or
recommend, any takeover proposal, or (iii) fail to reaffirm its
approval or recommendation of this Agreement and the Merger within two
days after a request by Parent, Parent may terminate this Agreement.
(d) [INTENTIONALLY OMITTED]
(e) The Company promptly shall advise Parent orally and in
writing of any takeover proposal or any inquiry with respect to or that
could reasonably be expected to lead to any takeover proposal, the
identity of the person making any such takeover
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<PAGE> 38
proposal or inquiry and the material terms of any such takeover
proposal or inquiry. The Company shall provide Parent with copies of
all written materials received in connection with any such takeover
proposal and shall keep Parent fully informed of the status and
material terms of any such takeover proposal or inquiry.
(f) The Company shall each immediately cease and cause to be
terminated all existing discussions and negotiations, if any, with any
other persons conducted heretofore with respect to any takeover
proposal.
SECTION 8.3 [INTENTIONALLY OMITTED]
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Survival of Representations, Warranties and Covenants;
Indemnification.
(a) Survival. Each representation, warranty, covenant and
other obligation of Parent, Sub, Company Parent and the Company contained herein
will survive the Effective Time of the Merger and continue in full force and
effect for one (1) year thereafter.
(b) Indemnification of Parent and Sub. Subject to the
limitations set forth in this Section 9.1, Company Parent hereby agrees to
release, indemnify, protect, defend and hold harmless Parent and Sub from and
against any and all losses of any kind or character, to the extent the same
arise out of any material inaccuracy, violation or breach by Company Parent or
the Company of any representation, warranty, covenant or other obligation set
forth in this Agreement.
(c) Indemnification of Company Parent and the Company. Subject
to the limitations set forth in this Section 9.1, Parent and Sub hereby agree to
release, indemnify, protect, defend and hold harmless Company Parent and the
Company from and against any and all losses of any kind or character, to the
extent the same arise out of any material inaccuracy, violation or breach by
Buyer of any representation, warranty, covenant or other obligation set forth in
this Agreement.
(d) Limitation on Indemnities. Absent fraud perpetrated by an
indemnified party, notwithstanding anything to the contrary in this Agreement,
the indemnities for any inaccuracy in, violation of or breach of any
representation, warranty, covenant or other obligation in this Agreement (as
limited in this Section 9.1) are each party's sole and exclusive remedy for all
inaccuracies in, violations of or breaches of such representation, warranty,
covenant or other obligation, and for any independent common-law or statutory
rights or remedies that such party may have at any time now and in the future
with respect to any and all such inaccuracies, violations or breaches by the
other party with respect to any such representation or warranty. Company
Parent's and the Company's combined aggregate liability for losses under this
Section 9.1 related to breaches or violations of the representations,
warranties, covenants or other obligations contained in this Agreement will not
exceed 50% of $170 million. After the Effective Time of the Merger, none of
Parent, Sub, Company Parent or the Company will have any liability for losses
under this Section 9.1 related to inaccuracies,
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<PAGE> 39
violations or breaches of the representations, warranties, covenants or other
obligations contained in this Agreement unless and until the combined aggregate
losses claimed under this Section 9.1 exceeds $1,000,000 (the "Threshold
Amount"); provided that the Parent, Sub, Company Parent or the Company shall not
have any liability with respect to the first $1,000,000 of damages under any
circumstances. At the election of the Parent, indemnification payments made by
the Company or Company Parent under this Section 9.1(d) may be satisfied by
payments in cash or by redemption of Units in an aggregate liquidation value
equal to the amount of the loss being indemnified hereunder; provided, however,
that the cash indemnification payments made under this Agreement shall in no
event exceed $15,000,000 in the aggregate.
(e) Indemnification Claim Procedures. If any proceeding is
commenced in which any party hereto entitled to indemnification hereunder is a
party hereto which may give rise to a claim for indemnification against the
other party hereto, or if any party hereto entitled to payment hereunder from
the other party hereto for any losses incurred by such party, then the party to
be indemnified shall give notice thereof to the indemnifying party. Failure to
notify the indemnifying party will not relieve the indemnifying party of any
liability that it may have to the indemnified party except to the extent the
defense of such proceeding is materially and irrevocably prejudiced by the
indemnified party's failure to give such notice. Any such notice is valid and
entitles the party to be indemnified to indemnification if it is delivered no
later than sixty (60) days after this Agreement is terminated.
(f) Third Party Recoveries. There shall be netted from the
amount of any payment for losses required under Section 9.1: (i) the amount of
any indemnification actually paid to the indemnified party from an unrelated
party with respect of such loss, and (ii) the amount of any insurance proceeds
or other cash receipts actually paid to the indemnified party against such loss.
(g) Definition of "Losses." For purposes of subsections (b) or
(c) hereof, the term "losses" shall not include any consequential damages, lost
profits, expectation damages or similar losses.
SECTION 9.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile or sent by overnight courier to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to Parent, Sub or, after the Effective Time of the
Merger, the Company, to
El Paso Energy Partners, L.P.
1001 Louisiana Street
Houston, Texas 77002
Telephone: (713) 420-2131
Facsimile: (713) 420-6969
Confirm: (713) 420-2131
Attention: President
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with a copy to
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1900 Pennzoil Place - South Tower
711 Louisiana Street
Houston, Texas 77002
Telephone: (713) 220-5800
Facsimile: (713) 236-0822
Confirm: (713) 220-5800
Attention: J. Vincent Kendrick
(b) if to Company Parent and, prior to the Effective Time of
the Merger, the Company, to
Crystal Holding, Inc.
1001 Louisiana Street
Houston, Texas 77002
Telephone: (713) 420-2131
Facsimile: (713) 420-6969
Confirm: (713) 420-2131
Attention: President
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1 New York Plaza
New York, New York 10004
Telephone: (212) 859-8000
Facsimile: (212) 859-4000
Confirm: (212) 859-8362
Attention: Gary P. Cooperstein
Bryan H. Hall
SECTION 9.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "environmental laws" means, as applicable, the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Sections 9601 et seq. ("CERCLA"), the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et
seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
Sections 136 et seq., the Clean Air Act,
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42 U.S.C. Sections 7401 et. seq., the Clean Water Act (Federal Water
Pollution Control Act), 33 U.S.C. Sections 1251 et seq., the Safe
Drinking Water Act, 42 U.S.C. Sections 300f et seq., the Occupational
Safety and Health Act, 29 U.S.C. Sections 641 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 et seq.,
and the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701 et seq., all
rules and regulations promulgated pursuant to any of the above
statutes, and any other foreign, federal, state or local law, statute,
ordinance, rule or regulation in effect as of the date of this
Agreement, or any common law cause of action, contractual obligation,
or judicial or administrative decision, order or decree (all as have
been amended from time to time) regulating, governing or relating to
pollution, contamination and/or protection of the environment or human
health.
(c) "Internal Reorganization" means the actions taken in
connection with the Prior Merger by Company Parent (i) to convert each
and every subsidiary of the Company, other than any subsidiary which
was a general partnership or limited liability company, into a new
single member limited liability company organized under the LLC Act,
and (ii) to own or acquire ownership of, or cause a subsidiary to own
or acquire ownership of, all Investor Certificates issued under the
Hattiesburg Owner Trust Agreement.
(d) "knowledge" means, with respect to any matter stated
herein to be "to the Company's knowledge," or similar language, the
actual knowledge of (i) the Chairman of the Board, the Chief Executive
Officer, President, Chief Financial Officer, any Vice President of the
Company or Company Parent or any person that has responsibility for
managing a functional area of the Company and (ii) employees,
consultants, advisors and other representatives of El Paso Corporation
that comprise the working group responsible for the Prior Merger; and
with respect to any matter stated herein to be "to Parent's knowledge,"
or similar language, the actual knowledge of the Chairman of the Board,
the Chief Executive Officer, President, any Vice President, Chief
Financial Officer or General Counsel of the General Partner or Parent.
(e) "loss" or "losses" means any actions, claims, settlements,
judgments, demands, Liens, losses, damages, fines, Tax, penalties,
interest, costs, expenses (including, without limitation, expenses
attributable to the defense of any actions or claims), attorneys' fees
and liabilities.
(f) "material adverse effect" or "material adverse change"
means, when used in connection with the Company, any change or effect
(or any development that, insofar as can reasonably be foreseen, is
likely to result in any change or effect) that is materially adverse to
the business, properties, assets, liabilities, condition (financial or
otherwise), financial performance or results of operations of the
Company and its subsidiaries, taken as a whole, provided, however, that
no such change or effect shall be deemed to have occurred to the extent
such change or effect arises from conditions generally affecting the
oil and gas or electric power generation industries or from the United
States or global economies. The term "material adverse effect" means,
when used in respect of Parent or Sub, any material adverse effect on
the ability of Parent or Sub to consummate the transactions
contemplated by this Agreement.
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(g) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization or other entity;
(h) "Units" means the limited partnership interest represented
by 170,000 units of Series B 10% Cumulative Redeemable Units of Parent
issued pursuant to the Partnership Agreement in accordance with the
Unit Terms; and
(i) a "subsidiary" of any person means any corporation,
partnership, association, joint venture, limited liability company or
other entity in which such person directly or indirectly owns over 50%
of the stock or other equity interests, the holders of which are
generally entitled to vote for the election of directors or other
governing body of such other legal entity. Notwithstanding the
foregoing, Hattiesburg Gas Storage Company, a Delaware partnership, is
a subsidiary of the Company for purposes of this Agreement.
SECTION 9.4 Interpretation. When a reference is made in this Agreement
to a Section, Exhibit or Schedule, such reference shall be to a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
SECTION 9.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein and the
schedules attached hereto) (a) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and (b) except for the
provisions of Section 5.5, are not intended to confer upon any person other than
the parties any rights or remedies hereunder.
SECTION 9.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except that matters pertaining to the Merger shall be governed by
the Applicable Acts to the extent of their applicability.
SECTION 9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Company
Parent, Parent and/or Sub may assign all or any of their respective rights and
obligations hereunder (including without limitation the right to receive (i)
Units under Section 1.7(c), and (ii) Unit Certificates under Section 2.1(a)), to
any affiliate, provided that no such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
obligations. Subject to the preceding sentence, this
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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 Enforcement of the Agreement. The parties agree 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 accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any district court of
the United States located in the States of Texas (Southern District only), or
Delaware or in any Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
Federal district court sitting in the Southern District of Texas or any Federal
or state court sitting in the State of Delaware in the event any dispute between
the parties hereto arises out of this Agreement solely in connection with such a
suit between the parties, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court and (c) agrees that it will not bring any action relating to this
Agreement in any court other than such a Federal or state court.
SECTION 9.10 Performance by Sub. Parent hereby agrees to cause Sub to
comply with its obligations under this Agreement.
SECTION 9.11 Restrictions on Subsequent Transfers of Units. The parties
hereto acknowledge that, when issued, the Units will not be freely transferable
by the holders thereof. The rights of holders of Units to transfer the Units
will be subject to restrictions imposed by the Partnership Agreement, the
Registration Rights Agreement and federal and state securities laws. In
addition, the Units will have no established trading market and will not be
listed on any securities exchange. As a result, there is no expectation that an
active trading market will develop for the Units.
SECTION 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13 Joint and Several Obligations. Notwithstanding anything to
the contrary in this Agreement:
(i) the covenants and other obligations of, and the
representations and warranties made by or attributable to, either
Company Parent or the Company pursuant to this Agreement shall be
deemed to be covenants and other obligations of, and representations
and warranties made by and attributable to, both of Company Parent and
the Company, jointly and severally, and either Parent or Sub shall have
the right to pursue remedies against either or both of such parties
without any obligation to give notice to or pursue the other such
party.
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(ii) the covenants and other obligations of, and the
representations and warranties made by or attributable to, either
Parent or Sub pursuant to this Agreement shall be deemed to be
covenants and other obligations of, and representations and warranties
made by and attributable to, both of Parent and Sub, jointly and
severally, and either Company Parent or the Company shall have the
right to pursue remedies against either or both of such parties without
any obligation to give notice to or pursue the other party.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, Parent, Sub, Company Parent and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
EL PASO ENERGY PARTNERS, L.P.
By: /s/ KEITH FORMAN
--------------------------------------
Name: Keith Forman
------------------------------------
Title: Chief Financial Officer
-----------------------------------
EL PASO PARTNERS ACQUISITION, L.L.C.
By: /s/ KEITH FORMAN
--------------------------------------
Name: Keith Forman
------------------------------------
Title: Chief Financial Officer
-----------------------------------
CRYSTAL HOLDING, INC.
By: /s/ JEFFREY A. BALLEW
--------------------------------------
Name: Jeffrey A. Ballew
------------------------------------
Title: Executive Vice President
-----------------------------------
CRYSTAL GAS STORAGE, INC.
By: /s/ JEFFREY A. BALLEW
--------------------------------------
Name: Jeffrey A. Ballew
------------------------------------
Title: Executive Vice President
-----------------------------------
EXHIBITS
Exhibit A: Unit Terms
Exhibit B: Form of Registration Rights Agreement
SCHEDULES
Schedule 1: Company Disclosure Document
