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OGE ENERGY CORP. | Energy Transfer Interstate Holdings, LLC | Energy Transfer Partners, LP | Enogex LLC | ETC Canyon Pipeline, LLC | ETC Midcontinent Express Pipeline LLC | LE GP, LLC | Transwestern Pipeline Company, LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 2.01
CONTRIBUTION AGREEMENT
dated as of
September 22, 2008
by and among
ENERGY TRANSFER PARTNERS, L.P.
and
OGE ENERGY CORP.
TABLE OF CONTENTS
Page
ARTICLE II
ARTICLE III
ARTICLE IV
ARTICLE V
ii
ARTICLE VI
iii ANNEXES
EXHIBITS
iv
CONTRIBUTION AGREEMENT THIS CONTRIBUTION AGREEMENT (this “ Agreement ”) dated as of September 22, 2008 (the “ Execution Date ”), is entered into by and between Energy Transfer Partners, L.P., a Delaware limited partnership (“ ETP ”), and OGE Energy Corp., an Oklahoma corporation (“ OGE ”). WITNESSETH: WHEREAS, ETP owns, directly or indirectly, 100% of the outstanding limited liability company interests of Energy Transfer Interstate Holdings, LLC, a Delaware limited liability company (“ ETIH ”), and, directly or indirectly, 100% of the outstanding limited liability company interests of ETC Canyon Pipeline, LLC, a Delaware limited liability company (“ Canyon ”). WHEREAS, ETIH owns 100% of the outstanding limited liability company interests of Transwestern Pipeline Company, LLC, a Delaware limited liability company (“ Transwestern ”), and 100% of the outstanding limited liability company interests of ETC Midcontinent Express Pipeline L.L.C., a Delaware limited liability company (“ ETC MEP ”). WHEREAS, ETC MEP owns 50% of the outstanding limited liability company interests of Midcontinent Express Pipeline LLC, a Delaware limited liability company (“ MEP ”). WHEREAS, OGE owns 100% of the outstanding limited liability company interests of Enogex LLC, a Delaware limited liability company (“ Enogex ”). WHEREAS, OGE and ETP desire to combine their interests in Enogex, ETIH and Canyon, respectively, in a single entity. WHEREAS, ETP and OGE desire to enter into a series of transactions, on the terms and conditions set forth in this Agreement, whereby: (i) Wholly-owned subsidiaries of OGE and ETP will form ETP Enogex Partners LLC, a Delaware limited liability company (the “ Company ”); (ii) OGE will indirectly contribute all of its ownership interests in Enogex to the Company as a capital contribution in exchange for a 50% limited liability company interest in the Company and a cash payment;
(v) ETP will indirectly contribute all of its ownership interests in ETIH to the Company as a capital contribution in exchange for a 50% limited liability company interest in the Company. WHEREAS, ETP and OGE have entered into an Employee Transition Agreement dated as of the date of this Agreement (the “ Employee Transition Agreement ”).
NOW, THEREFORE, in consideration of the premises set forth above and the respective representations, warranties, covenants, agreements and conditions contained in this Agreement, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS 1.1 Definitions . In this Agreement, unless the context otherwise requires, the following terms shall have the following respective meanings: “ Accounting Referee ” has the meaning set forth in Section 2.3(b) . “ Actual Capital Expenditure Amount ” has the meaning set forth in Section 2.3(b) . “ Affiliate ” has the meaning set forth in Rule 405 of the rules and regulations under the Securities Act, unless otherwise expressly stated herein. “ Agreement ” has the meaning set forth in the Preamble. “ Business ” means, (a) with respect to any of the Enogex Group Entities, the business of the Enogex Group Entities or (b) with respect to any of the ETIH Group Entities, the business of the ETIH Group Entities. “ Business Day ” means any day on which commercial banks are generally open for business in New York, New York other than a Saturday, a Sunday or a day observed as a holiday in New York, New York under the Laws of the State of New York or the federal Laws of the United States of America. “ Canyon ” has the meaning set forth in the Recitals. “ Canyon Financial Statements ” has the meaning set forth in Section 3.4(c) . “ Closing ” has the meaning set forth in Section 2.2 . “ Closing Date ” has the meaning set forth in Section 2.2 . “ Code ” means the Internal Revenue Code of 1986, as amended. “ Collective Bargaining Agreement ” shall mean any agreement between one of the Parties and a labor organization that represents any of the Enogex Related Employees or the ETIH Related Employees. “ Company Membership Interest ” has the meaning set forth in Section 3.24 . “ Company Senior Financing ” has the meaning set forth in Section 5.4(d) .
“ Confidentiality Agreement ” means that certain Confidentiality Agreement dated as of August 30, 2007 between ETP and Enogex Inc., the predecessor in interest to Enogex, as the same may be amended from time to time. “ Confidential Evaluation Material ” has the meaning set forth in Section 5.2(b) . “ Consolidated Group ” means (a) with respect to ETP, the ETIH Group Entities and (b) with respect to OGE, the Enogex Group Entities. A reference to a Consolidated Group is a collective reference to the members of such Consolidated Group. “ Delaware Courts ” has the meaning set forth in Section 10.2 . “ Employee Benefit Plan ” means any “employee benefit plan” (within the meaning of Section 3(3) of ERISA), any plans that would be “employee benefit plans” if they were subject to ERISA (such as foreign plans and plans for directors), and any equity-based compensation, purchase, option, change-in-control, incentive, employee loan, deferred compensation, pension, profit-sharing, retirement, bonus, retention bonus, severance and other employee benefit, compensation or fringe benefit plan, agreement, program, policy, practice, understanding or other arrangement, regardless of whether subject to ERISA (including any funding mechanism now in effect or required in the future), whether formal or informal, oral or written, legally binding or not, maintained by, sponsored by or contributed to by or obligated to be contributed to by the entity in question or with respect to which the entity in question has any obligation or liability, whether secondary, contingent or otherwise. “ Employee Transition Agreement ” has the meaning set forth in the Recitals. “ Employment Agreement ” means any agreement to which any entity is a party with a natural person (whether as an employee, director or consultant), which provides for compensation for such person’s services, other than (i) standard offer letters providing only for at-will employment or (ii) any agreement that is terminable upon 30 days or less notice without liability to the employer entity or any of its Affiliates. “ Encumbrances ” means pledges, restrictions on transfer, proxies and voting or other agreements, liens, claims, charges, mortgages, security interests or other legal or equitable encumbrances, limitations or restrictions of any nature whatsoever. “ End Date ” has the meaning set forth in Section 9.1(e) . “ Enogex ” has the meaning set forth in the Recitals. “ Enogex Credit Facility ” means that certain Credit Agreement dated as of April 1, 2008 among Enogex, Wachovia Bank, National Association, as Administrative Agent, and the Lenders party thereto. “ Enogex Financial Statements ” has the meaning set forth in Section 4.4 . “ Enogex Group Entities ” means Enogex and the Enogex Subsidiaries.
“ Enogex Independent Contractor ” means an individual, not a business organization, who primarily provides services for the benefit of Enogex Group Entities. “ Enogex Insurance Policy ” has the meaning set forth in Section 4.13 . “ Enogex Material Adverse Effect ” means a Material Adverse Effect with respect to the Enogex Group Entities, taken as a whole, or a material adverse effect on the ability of OGE to consummate the transactions contemplated hereby or to perform its material obligations hereunder. “ Enogex Material Agreements ” has the meaning set forth in Section 4.8(a) . “ Enogex Permits ” has the meaning set forth in Section 4.7(b) . “ Enogex Plan ” has the meaning set forth in Section 4.15(b) . “ Enogex Related Employees ” means employees of OGE or the Enogex Group Entities that work primarily for the benefit of the Enogex Group Entities. “ Enogex Subsidiaries ” means the Subsidiaries of Enogex. “ Environmental Laws ” means any applicable law (including common law) regulating or prohibiting Releases of Hazardous Materials into any part of the workplace or the environment, relating to the generation, manufacture, processing, distribution, use, treatment, storage, transport, or use of Hazardous Materials, or pertaining to the prevention of pollution or remediation of contamination or the protection of natural resources, wildlife, the environment, or public or employee health and safety including the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) (42 U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et seq.), the Atomic Energy Act of 1954 (42 U.S.C. Section 2014 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), and the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) (“OSHA”) and the regulations promulgated pursuant thereto, and any analogous international treaties, national, provincial, state or local statutes, and the regulations promulgated pursuant thereto, as such laws have been amended as of the Closing Date. “ ERISA Affiliate ” of an entity means a corporation, trade, business, or entity under common control with such entity, within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA. “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended. “ Estimated Capital Expenditure Amount ” has the meaning set forth in Section 2.3(b) . “ ETC MEP ” has the meaning set forth in the Recitals.
“ ETIH ” has the meaning set forth in the Recitals. “ ETIH Group Entities ” means ETIH and the ETIH Subsidiaries and Canyon. “ ETIH Independent Contractor ” means an individual, not a business organization, who primarily provides services for the benefit of the ETIH Group Entities. “ ETIH Insurance Policy ” has the meaning set forth in Section 3.13 . “ ETIH Material Adverse Effect ” means a Material Adverse Effect with respect to ETIH Group Entities, taken as a whole, or a material adverse effect on the ability of ETP to consummate the transactions contemplated hereby or to perform its material obligations hereunder. “ ETIH Material Agreements ” has the meaning set forth in Section 3.8(a) . “ ETIH Permits ” has the meaning set forth in Section 3.7(b) . “ ETIH Plan ” has the meaning set forth in Section 3.15(b) . “ ETIH Related Employees ” means employees of ETP, ETIH, the ETIH Subsidiaries or La Grange Acquisition, L.P. that work primarily for the benefit of the ETIH Group Entities. “ ETIH Subsidiaries ” means the Subsidiaries of ETIH. “ ETP ” has the meaning set forth in the Preamble. “ ETP Board ” has the meaning set forth in Section 3.21 . “ ETP Contribution ” has the meaning set forth in Section 2.1(c) . “ ETP Disclosure Schedule ” means the disclosure schedule prepared and delivered by ETP to OGE as of the Execution Date. “ ETP Galaxy ” has the meaning set forth in Section 2.1(a)(vi) . “ ETP Indemnified Taxes ” means all federal, state and local income tax liabilities attributable to the ownership, management and operation of the ETIH Group Entities or the ownership and operation of the assets or Business of the ETIH Group Entities on or prior to the Closing, including (1) any such income tax liabilities of ETP and its Affiliates (including any ETIH Group Entity) that may result from the consummation of the transactions contemplated by this Agreement and (2) any income tax liabilities arising under Treasury Regulation Section 1.1502-6 and any similar provisions from state, local or foreign applicable law, by contract, as successor, transferee or otherwise, or which income tax is attributable to having been a member of a consolidated, combined or unitary group. “ ETP SEC Reports ” shall mean all reports, including the Annual Reports on Form 10-K, the Quarterly Reports on Form 10-Q and the Current Reports on Form 8-K, forms, schedules,
statements and other documents ETP is required to file with or furnish to the SEC, as applicable, pursuant to the Exchange Act or the Securities Act. “ ETP Services Agreement ” has the meaning set forth in Section 6.2(d) . “ ETP Transitional Seconding Agreement ” means the Transitional Seconding Agreement between ETP and the Company substantially in the form of Exhibit 1 to the Employee Transition Agreement. “ Exchange Act ” means the Securities Exchange Act of 1934, as amended. “ Execution Date ” has the meaning set forth in the Preamble. “ FCC ” means the Federal Communications Commission. “ FERC ” means the Federal Energy Regulatory Commission. “ Financing ” has the meaning set forth in Section 5.4(a) . “ GAAP ” has the meaning set forth in Section 1.2 . “ Governing Documents ” means the following (in each case, as such documents may be amended from time to time): (a) with respect to ETP or any of the ETIH Group Entities, the documents listed in Section 1.1(a) of the ETP Disclosure Schedule; and (b) with respect to OGE or any of the Enogex Group Entities, the documents listed in Section 1.1(a) of the OGE Disclosure Schedule. “ Governmental Entity ” means any (a) multinational, federal, national, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, administrative agency, board, bureau or agency, domestic or foreign, (b) subdivision, agent, commission, board, or authority of any of the foregoing, or (c) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under, or for the account of, any of the foregoing, in each case, that has jurisdiction or authority with respect to the applicable party. “ Hazardous Material ” means and includes any substance defined, designated or classified as a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or toxic substance under any Environmental Law, including any petroleum or petroleum products that have been Released into the environment. “ Heritage ” has the meaning set forth in Section 2.1(a)(ii) . “ Heritage GP ” has the meaning set forth in Section 3.3(a) . “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“ HSR Clearance ” means the expiration or termination of the applicable waiting period under the HSR Act (including any extended waiting period arising as a result of a request for additional information). “ Indemnification Agreement ” has the meaning set forth in Section 5.4(h) . “ Knowledge ” means (a) with respect to ETP, the actual knowledge of each person listed in Section 1.1(a) of the ETP Disclosure Schedule and (b) with respect to OGE, the actual knowledge of each person listed in Section 1.1(a) of the OGE Disclosure Schedule, in each case after due inquiry. “ Laws ” means all statutes, regulations, statutory rules, orders, judgments, decrees and terms and conditions of any grant of approval, permission, authority, permit or license of any court, Governmental Entity, statutory body or self-regulatory authority (including the NYSE), but does not include Environmental Laws or ERISA. “ LLC Agreement ” has the meaning set forth in Section 6.1(c) . “ Material Adverse Effect ” means, with respect to any given Person, a material and adverse effect, on the condition (financial or otherwise), properties, assets, liabilities, obligations (whether absolute, accrued, conditional or otherwise), businesses, operations or results of operations of such Person; provided, however, that a Material Adverse Effect shall not include any effect on the condition (financial or otherwise), properties, assets, liabilities, obligations (whether absolute, accrued, conditional or otherwise), businesses, operations or results of operations of such Person directly or indirectly arising out of or attributable to (a) any decrease in the market price of such Person’s publicly-traded equity securities (but not any change or effect underlying such decrease to the extent such change or effect would otherwise contribute to a Material Adverse Effect), (b) changes in the general state of the industries in which such Person operates to the extent that such changes would have the same general effect on companies engaged in such industries, (c) changes in general economic conditions (including changes in commodity prices or interest rates) that would have the same general effect on companies engaged in the same lines of business as those conducted by such Person, (d) the announcement or proposed consummation of the transactions contemplated by this Agreement ( provided that the exceptions in this clause (d) shall not apply to that portion of any representation or warranty contained in this Agreement to the extent that the purpose of such portion of such representation or warranty is to address the consequences resulting from the execution and delivery of this Agreement, the public announcement or pendency of the transactions contemplated by this Agreement or the performance of obligations or satisfaction of conditions under this Agreement), (e) changes in GAAP, (f) acts of terrorism, war, sabotage or insurrection not directly damaging or impacting such Person, to the extent that such acts have the same general effect on companies engaged in the same lines of business as those conducted by such Person or (g) any delays in the construction or completion of, any delays in the receipt of any regulatory approval relating to, or any cost overruns in connection with the construction of, any expansion projects, including (see rules of interpretation) the Midcontinent Express Pipeline and Transwestern’s Phoenix expansion project.
“ Materiality Requirement ” means any requirement in a representation or warranty that a condition, event or state of fact be “material,” correct or true in “all material respects,” have an “Enogex Material Adverse Effect” or an “ETIH Material Adverse Effect” or be or not be “reasonably expected to have an Enogex Material Adverse Effect” or “reasonably expected to have an ETIH Material Adverse Effect” (or other words or phrases of similar effect or impact) in order for such condition, event or state of facts to cause such representation or warranty to be inaccurate. “ MEP ” has the meaning set forth in the Recitals. “ MEP Board ” means the Board as defined in the MEP LLC Agreements. “ MEP Credit Facility ” means the $1.4 billion credit facility of MEP established pursuant to the Credit Agreement, dated as of February 29, 2008, among MEP, the Royal Bank of Scotland plc, as Administrative Agent, and the lenders party thereto. “ MEP Financial Statements ” has the meaning set forth in Section 3.4(b) . “ MEP Guaranty Agreement ” means that certain Guaranty Agreement dated as of February 29, 2008 between ETP, as guarantor, and The Royal Bank of Scotland plc, as administrative agent. “ MEP LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of Midcontinent Express Pipeline LLC as of March 1, 2007 by and between Kinder Morgan Operating Limited Partnership “A” and ETC Midcontinent Express Pipeline, L.L.C. “ Natural Gas Act ” has the meaning set forth in Section 3.19(a) . “ NGPA ” has the meaning set forth in Section 3.19(a) . “ Notice ” has the meaning set forth in Section 10.1 . “ Notice of Disagreement ” has the meaning set forth in Section 2.3(b) . “ NYSE ” means the New York Stock Exchange. “ OGE ” has the meaning set forth in the Preamble. “ OGE Board ” has the meaning set forth in Section 4.21 . “ OGE Contribution ” has the meaning set forth in Section 2.1(b) . “ OGE Disclosure Schedule ” means the disclosure schedule prepared and delivered by OGE to ETP as of the Execution Date. “ OGE Holdings ” has the meaning set forth in Section 2.1(b) . “ OGE Indemnified Taxes ” means all federal, state and local income tax liabilities attributable to the ownership, management and operation of the Enogex Group Entities or the
ownership and operation of the assets or Business of the Enogex Group Entities on or prior to the Closing, including (1) any such income tax liabilities of OGE and its Affiliates (including any Enogex Group Entity) that may result from the consummation of the transactions contemplated by this Agreement and (2) any income tax liabilities arising under Treasury Regulation Section 1.1502-6 and any similar provisions from state, local or foreign applicable law, by contract, as successor, transferee or otherwise, or which income tax is attributable to having been a member of a consolidated, combined or unitary group. “ OGE SEC Reports ” shall mean all reports, including the Annual Reports on Form 10-K, the Quarterly Reports on Form 10-Q and the Current Reports on Form 8-K, forms, schedules, statements and other documents OGE is required to file with or furnish to the SEC, including the Registration Statement on Form S-1 (File No. 333-144089) filed by OGE Enogex Partners L.P., as applicable, pursuant to the Exchange Act or the Securities Act. “ OGE Services Agreement ” has the meaning set forth in Section 6.3(d) . “ OGE Transitional Seconding Agreement ” means the Transitional Seconding Agreement between OGE and the Company substantially in the form of Exhibit 2 to the Employee Transition Agreement. “ Party ” or “ Parties ” means each of (a) OGE and (b) ETP. “ PBGC ” means the Pension Benefit Guaranty Corporation. “ Permitted Encumbrances ” means (a) Encumbrances for Taxes not yet delinquent or being contested in good faith by appropriate proceedings, (b) statutory Encumbrances (including materialmen’s, warehousemen’s, mechanic’s, repairmen’s, landlord’s, and other similar liens) arising in the ordinary course of business and securing payments not yet delinquent or being contested in good faith by appropriate proceedings, (c) Encumbrances of public record (other than for indebtedness for borrowed money), (d) the rights of lessors and lessees under leases, and the rights of third parties under any agreement, executed in the ordinary course of business, (e) the rights of licensors and licensees under licenses executed in the ordinary course of business, (f) restrictive covenants, easements, rights of way, defects, imperfections or irregularities of title and other similar encumbrances, which (i) do not materially detract from the value of the property, (ii) do not materially interfere with either the present or intended use of such property and (iii) do not individually or in the aggregate interfere with the conduct of the business of such Person, (g) purchase money Encumbrances and Encumbrances securing rental payments under capital lease arrangements, (h) any Encumbrances created pursuant to construction, operating, maintenance or similar agreements, (i) Encumbrances referenced in any real property document provided or made available in either Party’s electronic or physical data room, in the ETP Disclosure Schedule or the OGE Disclosure Schedule, as applicable, (j) Encumbrances contained in the Governing Documents of an ETIH Group Entity or an Enogex Group Entity and (k) Encumbrances listed in Section 1.1(b) of the ETP Disclosure Schedule or Section 1.1(b) of the OGE Disclosure Schedule, but excluding any Encumbrances arising out of or relating to, directly or indirectly, any Employee Benefit Plan of such Person.
“ Person ” includes any individual, firm, partnership, joint venture, venture capital fund, limited liability company, association, trust, estate, group, body corporate, corporation, unincorporated association or organization, Governmental Entity, syndicate or other entity, regardless of whether having legal status. “ Proposed Change of Control Prepayment Date ” has the meaning set forth in Section 5.4(c) . “ Release ” means any depositing, spilling, leaking, pumping, pouring, placing, burying, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or disposing into the environment. “ Rights-of-Way ” has the meaning set forth in Section 3.11(b) . “ SEC ” means the United States Securities and Exchange Commission. “ Securities Act ” means the Securities Act of 1933, as amended. “ Shortfall Amount ” has the meaning set forth in Section 2.3(b) . “ State Regulatory Authority ” means any state agency or authority having jurisdiction over the rates or facilities of Canyon or any Enogex Group Entity, as applicable. “ Subsidiary ” means, with respect to a specified Person, any other Person (a) that is a subsidiary as defined in Rule 405 of the Rules and Regulations under the Securities Act of such specified Person and (b) of which such specified Person or another of its Subsidiaries owns beneficially 50% or more of the equity interests. “ Target Capital Expenditure Amount ” has the meaning set forth in Section 2.3(b) . “ Tax ” or “ Taxes ” means any taxes, assessments, charges, duties, fees, levies, imposts or other similar charges imposed by any Governmental Entity, including income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value added, goods and services, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, deficiency or other charge of any kind whatsoever, including interest, penalty, or addition thereto, whether disputed or not. “ Tax Return ” means any return, declaration, report, election, designation, notice, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. “ Transitional Seconding Agreements ” means collectively the ETP Transitional Seconding Agreement and the OGE Transitional Seconding Agreement. “ Transwestern ” has the meaning set forth in the Recitals.
“ Transwestern Financial Statements ” has the meaning set forth in Section 3.4(a) . “ Transwestern Intercompany Loans ” has the meaning set forth in Section 5.4(d) . “ Transwestern Notes ” means, collectively, the 5.39% Senior Unsecured Notes due November 17, 2014, the 5.54% Senior Unsecured Notes due November 17, 2016, the 5.64% Senior Unsecured Notes due May 24, 2017, the 5.89% Senior Unsecured Notes due May 24, 2022 and the 6.16% Senior Unsecured Notes due May 24, 2037. “ Transwestern Notes Agreements ” means, collectively, the Note Purchase Agreement between Transwestern and the initial purchasers thereto, dated November 17, 2004, and the Note Purchase Agreement between Transwestern and the initial purchasers thereto, dated May 24, 2007. “ Transwestern Notes Offer ” has the meaning set forth in Section 5.4(c) . “ Transwestern Senior Notes Offering ” has the meaning set forth in Section 5.4(c) .
(a) The division of this Agreement into articles, sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references to an “Article” or “Section” followed by a number or a letter refer to the specified Article or Section of this Agreement. The Exhibits and Annexes attached to this Agreement are hereby incorporated by reference into this Agreement and form part hereof. Unless otherwise indicated, all references to an “Exhibit” or an “Annex” followed by a number or a letter refer to the specified Exhibit or Annex to this Agreement. The terms “this Agreement,” “hereof,” “herein” and “hereunder” and similar expressions refer to this Agreement (including the ETP Disclosure Schedule, the OGE Disclosure Schedule, the Exhibits and Annexes) and not to any particular Article, Section or other portion hereof. (b) The ETP Disclosure Schedule and the OGE Disclosure Schedule, as well as all other schedules and all exhibits hereto, will be deemed part of this Agreement and included in any reference to this Agreement. The ETP Disclosure Schedule and the OGE Disclosure Schedule set forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the ETP Disclosure Schedule or OGE Disclosure Schedule, as the case may be, relates; provided, however, that any fact or item that is disclosed in any section of the ETP Disclosure Schedule or the OGE Disclosure Schedule that is reasonably apparent on its face to qualify another representation or warranty of ETP or OGE, as applicable, shall be deemed to be disclosed in such other sections of the ETP Disclosure Schedule or the OGE Disclosure Schedule, notwithstanding the omission of any appropriate cross-reference thereto. Notwithstanding anything in this Agreement to the contrary, the inclusion of an item in either such disclosure schedule as an exception to a representation or warranty will not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or could reasonably be expected to have an ETIH Material Adverse Effect or an Enogex Material Adverse Effect, as the case may be.
(c) Unless otherwise specifically indicated or the context otherwise requires, (i) all references to “dollars” or “$” mean United States dollars, (ii) words importing the singular shall include the plural and vice versa, and words importing any gender shall include all genders, (iii) “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation,” and (iv) all words used as accounting terms shall have the meanings assigned to them under United States generally accepted accounting principles applied on a consistent basis and as amended from time to time (“ GAAP ”). If any date on which any action is required to be taken hereunder by any of the parties hereto is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day. Reference to any party hereto is also a reference to such party’s permitted successors and assigns. (d) The parties hereto have participated jointly in the negotiation and drafting of this Agreement. No provision of this Agreement will be interpreted in favor of, or against, any of the parties to this Agreement by reason of the extent to which any such party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft of this Agreement, and no rule of strict construction will be applied against any party hereto. ARTICLE II CONTRIBUTION AND EXCHANGE; CLOSING 2.1 Contribution and Exchange. On the terms and subject to the conditions set forth in this Agreement: (a) immediately prior to the transactions described in Sections 2.1(c) and 2.1(d) , at the Closing and in the following sequence ETP will cause the following to occur: (i) La Grange Acquisition, L.P. will distribute 0.1% of the issued and outstanding membership interests in Canyon to LA GP, LLC; (ii) LA GP, LLC will distribute 0.1% of the issued and outstanding membership interests in Canyon to Heritage ETC, L.P. (“ Heritage ”); (iii) La Grange Acquisition, L.P. will distribute 99.9% of the issued and outstanding membership interests in Canyon to Heritage; (iv) Heritage will transfer, assign and contribute to ETIH 100% of the issued and outstanding membership interests in Canyon as a capital contribution; (v) Heritage will contribute 0.1% of the issued and outstanding membership interest in ETIH to Heritage LP, Inc.; (vi) Heritage LP, Inc. will contribute 0.1% of the issued and outstanding membership interests in ETIH to a limited liability company that will be formed by Heritage LP, Inc. and Heritage prior to the Closing and in which Heritage LP, Inc. will own a 0.1% membership interest and Heritage will own a 99.9% membership interest (“ ETP Galaxy ”); and
(viii) Heritage will contribute 99.9% of the issued and outstanding membership interests in ETIH to ETP Galaxy. (b) immediately prior to the transactions described in Sections 2.1(c) and 2.1(d) , at the Closing OGE will contribute 100% of the issued and outstanding membership interests in Enogex to OGE Enogex Holdings LLC (“ OGE Holdings ”). (c) at the Closing, OGE will cause OGE Holdings to transfer, assign and contribute to the Company 100% of the issued and outstanding membership interests of Enogex as a capital contribution (the “ OGE Contribution ”) in exchange for (i) a 50% membership interest in the Company and (ii) a payment of $266 million in cash by wire transfer of immediately available funds, of which amount (A) $4.3 million shall be treated as a reimbursement to OGE for certain costs incurred by OGE in connection with a predecessor initial public offering transaction with respect to Enogex that was not consummated and (B) $261.7 million shall be treated as a distribution from the Company to OGE described in Treasury Regulation Section 1.707-4(d). (d) at the Closing and simultaneously with the transactions described in Section 2.1(c) , ETP will cause ETP Galaxy to transfer, assign and contribute to the Company 100% of the issued and outstanding membership interests of ETIH as a capital contribution (the “ ETP Contribution ”) in exchange for a 50% membership interest in the Company. (e) at the Closing and simultaneously with the transactions described in Sections 2.1(c) and 2.1(d) , ETP and OGE shall cause the Company to make the payments specified in Sections 5.4(d) and 5.4(e) . 2.2 Closing . Subject to the satisfaction or waiver of the conditions to closing set forth in Article VI , the closing (the “ Closing ”) of the transactions contemplated by this Article II shall be held at the offices of Jones Day at 717 Texas Avenue, Suite 3300, Houston, Texas 77002 on the third Business Day following the satisfaction or waiver of all of the conditions set forth in Article VI (other than conditions that would normally be satisfied on the Closing Date) commencing at 9:00 a.m., Houston time, or such other place, date and time as may be mutually agreed upon in writing by the parties hereto. The “ Closing Date ,” as referred to herein, shall mean the date of the Closing.
(a) Immediately prior to the transactions described in Section 2.1(c) , at the Closing ETP (i) will cause Canyon to distribute all of its and its Subsidiaries’ cash and cash equivalents to ETIH, which will then in turn distribute such cash and cash equivalents to Heritage and (ii) will use its own cash to repay all outstanding indebtedness for borrowed money of Canyon and its Subsidiaries on behalf of Canyon and its Subsidiaries. (b) To the extent that between June 30, 2008 and the Closing Date, Canyon and its Subsidiaries shall have not made capital expenditures (as determined in accordance with GAAP) of at least $27,806,000 (the “ Target Capital Expenditure Amount ”), immediately prior to the transactions described in Section 2.1(c) , ETP shall cause Heritage to contribute to ETIH an amount in cash (the “ Shortfall Amount ”) equal to the difference between $27,806,000 and the
amount of capital expenditures (as determined in accordance with GAAP) actually made by Canyon and its Subsidiaries between June 30, 2008 and the Closing Date (the “ Actual Capital Expenditure Amount ”). Within three Business Days prior to the anticipated Closing Date, ETP shall deliver ETP’s good faith estimate of the Actual Capital Expenditure Amount (the “ Estimated Capital Expenditure Amount ”) together with such documentation to support such calculation as may be reasonably requested by OGE. The Estimated Capital Expenditure Amount shall be used to determine the Shortfall Amount, if any, that will be paid by ETP at Closing, but will be subject to post-Closing adjustments as described in the remaining provisions of this Section 2.3(b) . If OGE disagrees with the Estimated Capital Expenditure Amount, OGE may, within 30 days after Closing, deliver a notice to ETP disagreeing with the Estimated Capital Expenditure Amount and setting forth OGE’s calculation of the Actual Capital Expenditure Amount (a “ Notice of Disagreement ”). Any such Notice of Disagreement shall specify those items or amounts as to which OGE disagrees, and OGE shall be deemed to have agreed with all other items and amounts contained in the Estimated Capital Expenditure Amount. If a Notice of Disagreement shall be duly delivered pursuant to the immediately preceding sentence, ETP and OGE shall, during the 30 days following such delivery, use reasonable efforts to reach agreement on the disputed items or amounts in order to determine the Actual Capital Expenditure Amount. If, during such period, ETP and OGE are unable to reach such agreement, they shall promptly thereafter jointly retain a nationally recognized accounting firm (the “ Accounting Referee ”) other than Grant Thornton LLP or Ernst & Young LLP to promptly review this Agreement and the disputed items or amounts for the purpose of calculating the Actual Capital Expenditure Amount. In making any such calculation, the Accounting Referee shall consider only those items or amounts in ETP’s calculation of the Estimated Capital Expenditure Amount as to which OGE has disagreed. The Accounting Referee shall deliver to ETP and OGE, as promptly as practicable, a report setting forth each such calculation. Such report shall be final and binding upon ETP and OGE. The cost of such review and report shall be borne equally by ETP and OGE. If such Actual Capital Expenditure Amount, as finally determined pursuant to this Section 2.3(b) , increases the Shortfall Amount from the amount determined using the Estimated Capital Expenditure Amount, ETP shall, within 10 Business Days following such final determination, make a cash payment in immediately available funds to ETIH equal to the amount by which the Shortfall Amount so increased. ARTICLE III REPRESENTATIONS AND WARRANTIES OF ETP Except as disclosed in the ETP Disclosure Schedule delivered by ETP to OGE on or prior to the execution of this Agreement (which letter sets forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the ETP Disclosure Schedule relates), ETP hereby represents and warrants to OGE as follows:
(a) Each of ETP and the ETIH Group Entities has been duly formed and is validly existing and in good standing as a limited partnership or limited liability company, as applicable, under the law of its jurisdiction of formation with all requisite partnership or limited liability company, as applicable, power and authority to own, lease or otherwise hold and operate its properties and assets and to carry on its business as presently conducted, except in each case
where the failure to have such power or authority could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. Each of ETP and each of the ETIH Group Entities is duly qualified and in good standing to do business as a foreign limited partnership or foreign limited liability company, as the case may be, in each jurisdiction in which the conduct or nature of its business or the ownership, leasing, holding or operating of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. (b) Section 3.1(b) of the ETP Disclosure Schedule sets forth a true and complete list of each of the ETIH Group Entities, together with (i) the nature of the legal organization of such Person, (ii) the jurisdiction of formation of such Person, (iii) the name of each ETIH Group Entity that owns beneficially or of record any equity or similar interest in such Person and (iv) the percentage interest owned by ETP or each such ETIH Group Entity in such Person. (c) Each of ETP and ETIH has heretofore made available to OGE complete and correct copies of its Governing Documents. (d) ETP Galaxy will be formed prior to the Closing solely for the purpose of engaging in the transactions contemplated hereby. Prior to the Closing, ETP Galaxy will have engaged in no other business activities and will have incurred no liabilities or obligations other than as contemplated herein, as well as other liabilities or obligations incidental to this Agreement or the transactions contemplated by this Agreement. 3.2 Authority; No Violation; Consents and Approvals . ETP has all requisite limited partnership power and authority to enter into this Agreement and to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by ETP of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite partnership action on the part of ETP, and no other partnership or other organizational proceeding on the part of ETP or any affiliate thereof is necessary to consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by ETP and, assuming the due authorization, execution and delivery hereof by OGE, constitutes a legal, valid and binding agreement of ETP, enforceable against ETP in accordance with its terms (except insofar as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law)). Except as disclosed in Section 3.2 of the ETP Disclosure Schedule and for matters expressly contemplated by this Agreement and matters described in clauses (b), (c), (d) or (e) below that could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect, neither the execution and delivery by ETP of this Agreement, nor the consummation by ETP or any of the ETIH Group Entities of the transactions contemplated hereby, including the execution and delivery of the LLC Agreement, the ETP Services Agreement, the Omnibus Agreement, Employee Transition Agreement, and the ETP Transitional Seconding Agreement on or prior to the Closing Date, and the performance by ETP of this Agreement will (a) violate or conflict with any provision of the Governing Documents of ETP or
any of the ETIH Group Entities; (b) require any consent, approval, authorization or permit of, registration, declaration or filing with, or notification to, any Governmental Entity; (c) require any consent or approval of any counterparty to, or result in any breach of or constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, cancellation, amendment or acceleration of any obligation or the loss of any benefit under, any agreement or instrument to which ETP or any of its Subsidiaries, including any of the ETIH Group Entities, is a party or by or to which any of their properties are bound; (d) result in the creation of an Encumbrance upon or require the sale or give any person the right to acquire any of the assets of ETP or any of its Subsidiaries, including any of the ETIH Group Entities, or restrict, hinder, impair or limit the ability of ETP or any of its Subsidiaries, including any of the ETIH Group Entities, to carry on their businesses as and where they are now being carried on; or (e) violate or conflict with any Law applicable to ETP or any of its Subsidiaries, including any of the ETIH Group Entities.
(a) ETP is the sole owner of 100% of the outstanding membership interests of Heritage ETC GP, LLC (“ Heritage GP ”), the sole general partner of Heritage, and 100% of the outstanding limited partnership interests of Heritage, and all of the outstanding membership interests of Heritage GP and the outstanding limited partnership interests of Heritage have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of Heritage GP and Heritage, respectively, and are fully paid. Heritage is the sole owner of 100% of the outstanding membership interests of ETIH, which membership interests have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of ETIH and are fully paid. Such membership interests of ETIH are owned by Heritage free and clear of any Encumbrances. Except for the membership interests owned by Heritage, there are no other outstanding equity interests in ETIH. (b) ETIH is the sole owner of 100% of the outstanding membership interests of each of Transwestern and ETC MEP, and all of the outstanding membership interests of each of Transwestern and ETC MEP have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of Transwestern and ETC MEP, respectively, and are fully paid. ETIH owns such membership interests of each of Transwestern and ETC MEP free and clear of any Encumbrances, excluding Permitted Encumbrances. Except for the membership interests owned by ETIH, there are no other outstanding equity interests in either Transwestern or ETC MEP. (c) ETC MEP is the sole owner of 50% of the outstanding membership interests of MEP, which membership interests have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of MEP and are fully paid and non-assessable. ETC MEP owns such membership interests of MEP free and clear of any Encumbrances. Except for the membership interests owned by ETC MEP and except as disclosed in Section 3.3(c) of the ETP Disclosure Schedule, there are no other outstanding equity interests in MEP. (d) Heritage is the sole owner of 100% of the outstanding membership interests of LA GP, LLC, the sole general partner of La Grange Acquisition, L.P. and 100% of
the limited partnership interests of La Grange Acquisition, L.P. All outstanding membership interests of LA GP, LLC and all outstanding limited partnership interests and general partner interests of La Grange Acquisition, L.P., have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of LA GP, LLC and La Grange Acquisition, L.P., respectively, and are fully paid and non-assessable. La Grange Acquisition, L.P. is the sole owner of 100% of the outstanding membership interests of Canyon, which membership interests of Canyon have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of Canyon and are fully paid. Such membership interests of Canyon are owned by La Grange Acquisition, L.P. free and clear of any Encumbrances. Except for the membership interests owned by La Grange Acquisition, L.P., there are no other outstanding equity interests in Canyon. (e) Heritage is the sole owner of 100% of the outstanding capital stock of Heritage LP, Inc. Immediately prior to the Closing, Heritage LP, Inc. will own a 0.1% membership interest in ETP Galaxy and Heritage will own a 99.9% membership interest in ETP Galaxy. All shares of the outstanding capital stock of Heritage LP, Inc. have been and, immediately prior to the Closing, all of the outstanding membership interests in ETP Galaxy will have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of Heritage LP, Inc. and ETP Galaxy, respectively, and are (or in the case of ETP Galaxy, will be) fully paid and, if applicable, non-assessable. Such shares of outstanding capital stock of Heritage LP, Inc. and membership interests of ETP Galaxy are, or will be, owned free and clear of any Encumbrances. (f) Except as set forth in Section 3.3(f) of the ETP Disclosure Schedule, (i) there are no outstanding options, warrants, subscriptions, puts, calls or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the ETIH Group Entities, to offer, issue, sell, redeem, repurchase, otherwise acquire or transfer, pledge or encumber any equity interest in any of the ETIH Group Entities; (ii) there are no outstanding securities or obligations of any kind of any of the ETIH Group Entities that are convertible into or exercisable or exchangeable for any equity interest in any of the ETIH Group Entities, and none of the ETIH Group Entities has any obligation of any kind to issue any additional securities or to pay for or repurchase any securities; (iii) there are not outstanding any equity appreciation rights, phantom equity, profit sharing or similar rights, agreements, arrangements or commitments based on the value of the equity, book value, income or any other attribute of any of the ETIH Group Entities; (iv) there are no outstanding bonds, debentures or other evidence of indebtedness of any of ETP or any of its Subsidiaries, including the ETIH Group Entities, having the right to vote (or that are exchangeable for or convertible or exercisable into securities having the right to vote) with the holders of equity interests in any of the ETIH Group Entities on any matter; and (v) there are no unitholder agreements, proxies, voting trusts, rights to require registration under securities Laws or other arrangements or commitments to which ETP or any of its Subsidiaries, including the ETIH Group Entities, is a party or by which any of their securities are bound with respect to the voting, disposition or registration of any outstanding securities of any of the ETIH Group Entities. (g) Except as set forth in Section 3.3(g) of the ETP Disclosure Schedule, all of the outstanding equity interests of each ETIH Subsidiary (1) have been duly authorized and validly issued and (2) are owned 100% directly or indirectly by ETIH, free and clear of any
Encumbrances. As of the Execution Date, there are no ETIH Subsidiaries other than those set forth in Section 3.1(b) of the ETP Disclosure Schedule. (h) Except with respect to the ownership of any equity or long-term debt securities between or among the ETIH Group Entities, none of the ETIH Group Entities owns, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
(a) The financial statements of Transwestern (the “ Transwestern Financial Statements ”), including all related notes and schedules, listed in Section 3.4(a) of the ETP Disclosure Schedule, fairly present in all material respects the consolidated financial position of Transwestern, as of the respective dates thereof, and the consolidated results of operations, cash flows and changes in members’ equity of Transwestern for the periods indicated, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and in accordance with Regulation S-X promulgated by the SEC (except as may be indicated in the notes thereto) and subject, in the case of interim financial statements, to customary year-end adjustments, consistent with past practice. (b) The financial statements of MEP (the “ MEP Financial Statements ”), including all related notes and schedules, listed in Section 3.4(b) of the ETP Disclosure Schedule, fairly present in all material respects the consolidated financial position of MEP, as of the respective dates thereof, and the consolidated results of operations, cash flows and changes in members’ equity of MEP for the periods indicated, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and in accordance with Regulation S-X promulgated by the SEC (except as may be indicated in the notes thereto) and subject, in the case of interim financial statements, to customary year-end adjustments, consistent with past practice. (c) The financial statements of Canyon (the “ Canyon Financial Statements ”), including all related notes and schedules, listed in Section 3.4(c) of the ETP Disclosure Schedule, fairly present in all material respects the consolidated financial position of Canyon, as of the respective dates thereof, and the consolidated results of operations, cash flows and changes in members’ equity of Canyon for the periods indicated, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and in accordance with Regulation S-X promulgated by the SEC (except as may be indicated in the notes thereto) and subject, in the case of interim financial statements, to customary year-end adjustments, consistent with past practice. 3.5 Undisclosed Liabilities . None of the ETIH Group Entities has any indebtedness or liability, absolute or contingent, that is of a nature required to be reflected on the consolidated balance sheet of Transwestern, MEP or Canyon or in the footnotes thereto, in each case prepared in conformity with GAAP, and that is not shown on or provided for in the Transwestern Financial Statements, the MEP Financial Statements or the Canyon Financial Statements, other than (1) liabilities incurred or accrued in the ordinary course of business consistent with past practice since June 30, 2008, including liens for current Taxes and assessments not in default or
(2) liabilities of the ETIH Group Entities that, individually or in the aggregate, are not material to the ETIH Group Entities, taken as a whole.
(a) Since December 1, 2006, all ETP SEC Reports have been filed with or furnished to the SEC. To the extent related to any ETIH Group Entity, all ETP SEC Reports filed since December 1, 2006 (1) complied in all material respects with the requirements of the Exchange Act and the Securities Act and the rules and regulations thereunder, as applicable, and (2) as of its filing date in the case of any Exchange Act report or as of its effective date in the case of any Securities Act filing, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) There are no material outstanding comments from, or material unresolved issues raised by, the SEC with respect to the ETP SEC Reports relating to any ETIH Group Entity. No enforcement action has been initiated against ETP relating to disclosures contained in any ETP SEC Report relating to any ETIH Group Entity. (c) To the extent related to any ETIH Group Entity, since December 1, 2006, (1) neither ETP nor any of the ETIH Group Entities has received any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of ETP or any of the ETIH Group Entities or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that ETP or any of the ETIH Group Entities has engaged in questionable accounting or auditing practices and (2) to the Knowledge of ETP, no officer or director of ETP or any ETIH Group Entity has received any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of ETP or any of the ETIH Group Entities or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that ETP or any of the ETIH Group Entities has engaged in questionable accounting or auditing practices, and (3) no attorney representing ETP or any of the ETIH Group Entities, regardless of whether employed thereby, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by ETP or any of the ETIH Group Entities or any of their respective officers, directors, employees or agents, to the board of directors of ETP or ETIH or any committee thereof or to any director or officer of ETP or ETIH.
(a) Except as set forth in Section 3.7(a) of the ETP Disclosure Schedule, each of the ETIH Group Entities is in compliance with all applicable Laws, other than any noncompliance that could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. Neither ETP, nor any of its Subsidiaries, including any ETIH Group Entity, has received any written communication since December 1, 2006 from a Governmental Entity that alleges that any ETIH Group Entity is not in compliance in any material respect with any applicable Laws that has not been satisfactorily resolved. Notwithstanding the foregoing, the representations made by the ETIH Group Entities in this
Section 3.7(a) shall not apply to any matters addressed in other representations contained in this Article III , including representations with respect to environmental matters (which are provided for in Section 3.10 ), Tax matters (which are provided for in Section 3.14 ) and employment and benefits matters (which are provided for in Section 3.15 ). (b) Except as set forth in Section 3.7(b) of the ETP Disclosure Schedule, the ETIH Group Entities are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate their properties and to lawfully carry on their businesses as they are now being conducted (collectively, the “ ETIH Permits ”), except where the failure to be in possession of such ETIH Permits could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect and except for ETIH Permits required to be obtained in connection with the operation of the Midcontinent Express Pipeline. None of the ETIH Group Entities is in conflict with, or in default or violation of any of the ETIH Permits, except for any such conflicts, defaults or violations that could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect.
(a) Section 3.8(a) of the ETP Disclosure Schedule sets forth a true and complete list, as of the date hereof, of the following contracts, agreements or commitments (including currently effective amendments and modifications thereto) to which any of the ETIH Group Entities is a party, whether written or oral (collectively, the “ ETIH Material Agreements ”): (1) transportation agreements and gathering agreements involving payments to or from any ETIH Group Entity of at least $20,000,000 per year; (2) processing agreements and natural gas purchase agreements involving net payments ( i.e., after taking into account directly-associated cost of goods or directly-associated revenues from the sale of goods) to or from any ETIH Group Entity of at least $20,000,000 per year; (3) construction, interconnect, and other services agreements in each case involving payments to or from any ETIH Group Entity in excess of $20,000,000 per year; (4) contracts, loan agreements, letters of credit, repurchase agreements, mortgages, security agreements, guarantees, pledge agreements, trust indentures, promissory notes, lines of credit and similar documents in each case relating to the borrowing of money or for lines of credit, in any case for amounts in excess of $20,000,000 (other than contracts solely between or among the ETIH Group Entities and interest rate swap agreements); (5) all master agreements, confirmations, schedules, cover sheets, master netting agreements and similar agreements relating to any swap transactions, derivative transactions, options, warrants, forward purchase or sale transactions, futures transactions, cap transactions, floor transactions or collar transactions relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transactions (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any credit support, collateral (including master collateral agreements) or other similar arrangements related to such transactions, including a listing of each outstanding commodity or financial hedging position and the outstanding amount of the associated credit support or collateral; (6) real property leases calling for payments by any of the ETIH Group Entities of amounts greater than $20,000,000 per year (other than rights-of-
way and leases solely between or among the ETIH Group Entities); (7) partnership or joint venture agreements (which do not include joint tariff or joint operating agreements); (8) contracts limiting the ability of any of the ETIH Group Entities to compete in any line of business or with any Person or in any geographic area; (9) contracts relating to any outstanding commitment for capital expenditures in excess of $50,000,000; (10) contracts with any labor union or organization; (11) contracts not entered into in the ordinary course of the Business of the ETIH Group Entities other than those that are not material to the Business of the ETIH Group Entities; and (12) contracts, agreements or documents not otherwise disclosed in (1) – (11) above that are currently in effect and to which any of the ETIH Group Entities or their properties are bound that are material to the Business or operations of the ETIH Group Entities taken as a whole. (b) Except to the extent that enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and provided that any indemnity, contribution and exoneration provisions contained in any such ETIH Material Agreement may be limited by applicable Laws and public policy, each of the ETIH Material Agreements (1) constitutes the legal, valid and binding obligation of the applicable ETIH Group Entity and constitutes the legal, valid and binding obligation of the other parties thereto, (2) is in full force and effect as of the Execution Date, and (3) will be in full force and effect upon the consummation of the transactions contemplated by this Agreement, in each case unless the failure to be so could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. (c) There is not, to the Knowledge of ETP, under any ETIH Material Agreement, any default or event that, with notice or lapse of time or both, could reasonably be expected to constitute a default on the part of any of the parties thereto, except such events of default and other events as to which requisite waivers or consents have been obtained or that could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. (d) True and complete copies of all ETIH Material Agreements have been delivered or made available to OGE by ETP to the extent permitted by applicable Law and the provisions of such agreements. To the extent permitted by applicable Law, all ETIH Material Agreements not so delivered or made available are listed and described on Section 3.8(d) of the ETP Disclosure Schedule. 3.9 Legal Proceedings . Except as disclosed in Section 3.9 of the ETP Disclosure Schedule, there are no pending, or, to the Knowledge of ETP, threatened, lawsuits or claims, with respect to which ETP or any of its Subsidiaries, including any of the ETIH Group Entities, has been contacted in writing by counsel for the plaintiff or claimant, against or affecting ETP or any of its Subsidiaries, including any of the ETIH Group Entities, or any of their properties, assets, operations or Business and that could, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect. Except as could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect, none of ETP or any of its Subsidiaries, including any of the ETIH Group Entities, is a party or subject to or in default
under any judgment, order, injunction or decree of any Governmental Entity or arbitration tribunal applicable to it or any of its properties, assets, operations or Business. Except as could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect, there is no pending or, to the Knowledge of ETP, threatened investigation of or affecting ETP or any of its Subsidiaries, including any of the ETIH Group Entities, or any of its properties, assets, operations or Business by any Governmental Entity. 3.10 Environmental Matters . Except as reflected in the Transwestern Financial Statements, the MEP Financial Statements or the Canyon Financial Statements, and except for any such matter that could not, individually or in the aggregate, reasonably be expected to have an ETIH Material Adverse Effect: (a) The operations of each of the ETIH Group Entities have been and, as of the Closing Date, will be, in compliance with all Environmental Laws; (b) Each of the ETIH Group Entities has obtained and will, as of the Closing Date, maintain in full force and effect all permits, licenses and registrations, and has timely made and will, as of the Closing Date, timely make all filings, permit renewal applications, reports and notices required under applicable Environmental Law in connection with the operations of its business; (c) None of the ETIH Group Entities is the subject of any outstanding written agreements (including consent orders and settlement agreements) with any Governmental Entity or other Person imposing liability or obligations with respect to any environmental matter; (d) None of ETP or its Subsidiaries, including any ETIH Group Entities, has received any written communication from any Governmental Entity or other Person alleging, with respect to any such party, the violation of or liability under any Environmental Law by or of the ETIH Group Entities or requesting, with respect to the ETIH Group Entities, information with respect to an investigation pursuant to any Environmental Law; and (e) There has been no Release of any Hazardous Material from or in connection with the properties or operations of the ETIH Group Entities that has not been adequately reserved for in the Transwestern Financial Statements, the MEP Financial Statements or the Canyon Financial Statements and that has resulted or could reasonably be expected to result in liability under Environmental Laws or a claim for damages or compensation by any Person.
(a) Each of the ETIH Group Entities has defensible title to all material real property and good title to all material tangible personal property owned by the ETIH Group Entities and that is sufficient for the operation of their respective Businesses as presently conducted, free and clear of all Encumbrances except Permitted Encumbrances. (b) Each of the ETIH Group Entities has such consents, easements, rights-of-way, permits or licenses from each Person (collectively, “ Rights-of-Way ”) as are sufficient to conduct its Business in the manner described, and subject to the limitations contained, in Section
3.11(b) of the ETP Disclosure Schedule, except for (1) qualifications, reservations and encumbrances as may be set forth in Section 3.11(b) of the ETP Disclosure Schedule and (2) such Rights-of-Way the absence of which could not, individually or in the aggregate, reasonably be expected to result in an ETIH Material Adverse Effect. Other than as set forth in Section 3.11(b) of the ETP Disclosure Schedule, and subject to the limitations contained, in Section 3.11(b) of the ETP Disclosure Schedule, each of the ETIH Group Entities has fulfilled and performed all its material obligations with respect to such Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that could not, individually or in the aggregate, reasonably be expected to result in an ETIH Material Adverse Effect; and, except as described in Section 3.11(b) of the ETP Disclosure Schedule, none of such Rights-of-Way contains any restriction that is materially burdensome to the ETIH Group Entities, taken as a whole. 3.12 Sufficiency of Assets. The assets of the ETIH Group Entities constitute all the assets, the use or benefit of which are reasonably necessary for the operation of the Business of the ETIH Group Entities as currently conducted. As of the Closing, all tangible and intangible assets of the ETIH Group Entities will be in the possession, or under the control, of the ETIH Group Entities. 3.13 Financial Statements. Insurance . None of ETP or any of its Subsidiaries, including any of the ETIH Group Entities, has received any notice from any insurer or agent of such insurer that (i) substantial capital improvements or other expenditures will have to be made in order to continue any insurance policy or instrument pursuant to which any ETIH Group Entity is insured (an “ ETIH Insurance Policy ”) or (ii) such insurer has cancelled or terminated or has initiated procedures to cancel or terminate any ETIH Insurance Policy. All such ETIH Insurance Policies are outstanding and duly in force on the Execution Date and will be outstanding and duly in force on the Closing Date in all material respects. The ETIH Group Entities are in compliance with the terms of all ETIH Insurance Policies in all material respects; and there are no material claims by ETP or any of its Subsidiaries, including any of the ETIH Group Entities, under any such ETIH Insurance Policy as to which any insurance company is denying liability or defending under a reservation of rights clause.
(i) each of the ETIH Group Entities has filed (or joined in the filing of) when due all material Tax Returns required by applicable Law to be filed by or with respect to it, has obtained all required Tax permits and licenses and has satisfied all registration requirements relating to Taxes; (ii) all such Tax Returns were true correct and complete in all material respects as of the time of such filing;
(iii) except for Taxes being contested in good faith in appropriate proceedings for which adequate reserves have been provided, all material Taxes relating to periods ending on or before the Closing Date owed by any of the ETIH Group Entities (regardless of whether shown on any Tax Return) have been paid or will be timely paid; (iv) there is no action, suit, proceeding, investigation, audit or claim now pending against, or with respect to, any of the ETIH Group Entities in respect of any material Tax or material Tax assessment, nor has any claim for additional material Tax or material Tax assessment been asserted in writing or been proposed by any Tax authority; (v) no written claim has been made by any Tax authority in a jurisdiction where any of the ETIH Group Entities does not currently file a Tax Return that it is or may be subject to any material Tax in such jurisdiction, nor has any such assertion been threatened or proposed in writing; (vi) none of the ETIH Group Entities has any outstanding request for any extension of time within which to pay any material Taxes or file any Tax Returns with respect to any material Taxes; (vii) there has been no waiver or extension of any applicable statute of limitations for the assessment or collection of any material Taxes of any of the ETIH Group Entities; (viii) none of the ETIH Group Entities has entered into any agreement or arrangement with any Tax authority that requires any ETIH Group Entity to take any action or refrain from taking any action; (ix) none of the ETIH Group Entities is a party to any agreement, whether written or unwritten, providing for the payment of Taxes, Tax losses, entitlements to Tax refunds or similar Tax matters; (x) each of the ETIH Group Entities has withheld and paid all material Taxes required to be withheld in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party; (xi) ETP is not a “foreign person” within the meaning of Section 1445 of the Code; (xii) each of the ETIH Group Entities that is classified as a partnership for U.S. federal tax purposes has in effect an election under Section 754 of the Code; (xiii) none of the ETIH Group Entities has been a member of an affiliated group filing a consolidated federal income Tax Return or has any liability for the Taxes of any Person (other than an ETIH Group Entity) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee or successor, by contract, or otherwise; and
(xiv) there are no Tax liens on any of the assets of the ETIH Group Entities, except for liens for Taxes not yet due. (b) Section 3.14(b) of the ETP Disclosure Schedule sets forth, with respect to each of the ETIH Group Entities, (i) the Tax basis to ETP of each of the assets of the ETIH Group Entities, (ii) the depreciation life, method, conventions and history applicable to each such asset in the hands of ETP, as tax owner, (iii) which of the liabilities of the ETIH Group Entities is a “qualified liability” within the meaning of Treasury Regulation Section 1.707-5(a)(6), and, for each ETIH Group Entity, (x) the identity of any assets that were acquired with the proceeds of the liability and (y) the identity of any assets that have been continuously secured by the liability for more than two years as of the date of this Agreement. (c) None of the ETIH Group Entities is classified as a corporation for U.S. federal tax purposes.
(a) ETP has delivered to OGE a letter dated the Execution Date and delivered from ETP to OGE on the Execution Date sets forth complete and accurate lists of all the ETIH Related Employees and all the ETIH Independent Contractors, specifying whether they are ETIH Related Employees or ETIH Independent Contractors, their position, the entity by which they are employed or to which they provide services, annual salary, hourly wages or consulting or other independent contractor fees, as applicable, and bonus opportunities, date of hire (or entry into an independent contractor agreement), work location, length of service, together with a notation next to the name of any employee or independent contractor on such lists who is subject to any Employment Agreement or Collective Bargaining Agreement. (b) Section 3.15(b) of the ETP Disclosure Schedule sets forth a complete and accurate list of each Employee Benefit Plan (i) that is sponsored, maintained or contributed to by any ETIH Group Entity, or (ii) that any Affiliate or ERISA Affiliate of any ETIH Group Entity has sponsored, maintained or contributed to, or to which any such entity is obligated to contribute since December 1, 2006 (but October 5, 2007 with respect to any Employee Benefits Plans of Canyon) that covers or benefits any current or former ETIH Related Employees or ETIH Independent Contractors (each an “ ETIH Plan ”). True, correct and complete copies of each ETIH Plan that has been sponsored, maintained or contributed to, or to which there is an obligation to contribute, by any ETIH Group Entity or Affiliate or ERISA Affiliate since December 1, 2006 (but October 5, 2007 with respect to any Employee Benefits Plans of Canyon) and any related documents, including all amendments thereto, and any trust, insurance or other funding arrangement, have been furnished or made available to OGE. There has also been furnished or made available to OGE, with respect to each such ETIH Plan, if applicable, the most recent favorable determination letters issued by the Internal Revenue Service, the three most recently filed reports on Form 5500 (including all schedules and attachments), the most recent actuarial report or valuation and the most recent summary plan description and summaries of material modifications thereto. (c) Section 3.15(c) of the ETP Disclosure Schedule sets forth a true and complete list of all Employment Agreements of the ETIH Group Entities. As of the Execution
Date, there are no other agreements (other than enrollment or similar forms to commence participation or initiate or continue coverage in an Employee Benefit Plan or standard employment offer letters providing only for at-will employment issued by ETIH Group Entities) between any ETIH Group Entity and any natural person that provide for (i) participation in, coverage under or benefits from an Employee Benefit Plan, (ii) annual compensation in excess of $150,000 to such person or (iii) change of control, termination or severance payments in excess of $150,000 to such person. No ETIH Group Entity is subject to any legal, contractual, equitable, or other obligation or commitment (whether legally binding or not) to enter into an Employment Agreement, establish or contribute to an Employee Benefit Plan or modify (except to the extent required by applicable Law) any existing Employee Benefit Plan or Employment Agreement. (d) Except as set forth in Section 3.15(d) of the ETP Disclosure Schedule, no ETIH Group Entity and no ERISA Affiliate of an ETIH Group Entity maintains or has an obligation to contribute to, or has any obligation or liability (contingent, secondary or otherwise) to, based upon or arising out of, an Employee Benefit Plan that is (1) subject to Title IV of ERISA or the minimum funding requirements of Section 412 of the Code or Section 302 of ERISA, (2) a plan of the type described in Section 4063 of ERISA or Section 413(c) of the Code, (3) a “multiemployer plan” (as defined in Section 3(37) of ERISA) or (4) a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA). (e) Except as set forth in Section 3.15(e) of the ETP Disclosure Schedule, the ETIH Plans (A) are and have been maintained (in form and in operation) in all material respects in accordance with their terms and with the applicable provisions of ERISA, the Code and all other applicable Laws, (B) if intended to be qualified under Section 401(a) of the Code, (i) satisfy in form the requirements of such Section except to the extent amendments are not required by Law to be made until a date after the Closing Date, (ii) have received a favorable determination letter from the Internal Revenue Service regarding such qualified status, (iii) have not, since receipt of the most recent favorable determination letter, been amended in a way that would adversely affect their qualified status, and (iv) have not been operated in a way that would adversely affect their qualified status, (C) do not provide, and have not provided, any post-termination of employment welfare benefits or coverage, except as required under Part 6 of Subtitle B of Title I of ERISA and Code Section 4980B (or similar state or local Law), and (D) if they could be deemed “nonqualified deferred compensation arrangements” under Section 409A of the Code, are in good faith compliance with such section and the applicable regulations and authoritative guidance issued thereunder or are exempt from the requirements of such section and have not been materially modified at any time after October 3, 2004. (f) The ETIH Group Entities are, and have been, in compliance in all material respects with all applicable Laws relating to the employment of labor, including all such applicable Laws relating to wages, hours, collective bargaining, discrimination, civil rights, safety and health and workers’ compensation. ETIH Group Entities are not subject to a current unresolved judicial administrative determination that it has engaged in an unfair labor practice in connection with the ETIH Related Employees and ETIH Group Entities have not received notice of any pending NLRB proceeding with respect to any ETIH Related Employees. No pending grievance or arbitration demand or proceeding, whether or not filed pursuant to a collective bargaining agreement, has been received by ETIH Group Entities with respect to the ETIH
Related Employees. To the Knowledge of ETP, all ETIH Related Employees are lawfully authorized to work in the United States according to federal immigration laws. (g) Each ETIH Plan sponsored or maintained by an ETIH Group Entity can be unilaterally amended or terminated at any time by a ETIH Group Entity without liability other than liability for benefits accrued to the date of such amendment or termination pursuant to the terms of the plan. (h) No ETIH Group Entity is a party to a collective bargaining agreement. No ETIH Group Entity has agreed to recognize any union or other collective bargaining representative. No union or other collective bargaining representative has been certified as the exclusive bargaining representative of any of the ETIH Related Employees. To the Knowledge of ETP, no union or other collective bargaining representative claims to be the exclusive collective bargaining representative of any of the ETIH Related Employees. To the Knowledge of ETP, no union organizational campaign or representation petition is currently pending with respect to any of the ETIH Related Employees. (i) All contributions or payments required to be made by an ETIH Group Entity to or with respect to an ETIH Plan have been timely made and all liabilities of each ETIH Group Entity with respect to any ETIH Plan are properly reflected in the Transwestern Financial Statements, the MEP Financial Statements or the Canyon Financial Statements, as the case may be, in accordance with GAAP. (j) There are no material actions, suits, or claims pending (other than routine claims for benefits) or, to the Knowledge of ETP, threatened against, or with respect to, any of the ETIH Plans or their assets or Employment Agreements of the ETIH Group Entities, nor is any such ETIH Plan or Employment Agreement under investigation or audit by any Governmental Entity. There are no material claims, lawsuits, petitions, charges, investigations, complaints, proceedings, suits, demands, actions or other matters (other than routine qualification determination filings) that are pending against the ETIH Group Entities before any Governmental Entity or arbitrator, or that have been asserted or threatened against the ETIH Group Entities, including those for: (i) wages, salaries, commissions, bonuses, vacation pay, severance or termination pay, sick pay or other compensation; (ii) employee benefits; (iii) any alleged unlawful, unfair, wrongful or discriminatory employment or labor practices; (iv) any alleged breach of contract or other claim arising under a collective bargaining or individual agreement or any other employment covenant whether express or implied; (v) any alleged violation of any statute, ordinance, contract or regulation relating to minimum wages or maximum hours of work; (vi) any alleged violation of occupation safety and health standards; or (vii) any alleged violation of plant closing and mass layoff, immigration, workers’ compensation, disability, unemployment compensation, whistleblower laws, or other employment or labor relations laws; and to the Knowledge of ETP, no basis therefor exists. To the extent that any ETIH Group Entity is obligated to develop and maintain an affirmative action plan, no discrimination claim, show cause notice, conciliation proceeding, sanction or debarment proceeding is pending with the Office of Federal Contract Compliance Programs or any other federal agency or any comparable state agency and no desk audit or onsite review is in progress with respect to any ETIH Related Employee. Within the past 90 days, ETIH Group Entities have not taken an action that constitutes a “mass layoff,” “mass termination” or “plant closing” at any
ETIH Group Entity facility where ETIH Related Employees work within the meaning of the Workers Adjustment and Retraining Notification Act (WARN) or any comparable state law. (k) No act, omission or transaction has occurred that would result, directly or indirectly, in imposition on any ETIH Group Entity of (A) breach of fiduciary duty liability damages under Section 409 of ERISA, (B) a civil penalty assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA, or (C) a tax imposed pursuant to Chapter 43 of Subtitle D of the Code, in each case which would reasonably be expected to have an ETIH Material Adverse Effect. (l) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall require any payments of money or other property or provision of benefits or other rights to any employee, officer or director of any ETIH Group Entity to be either subject to an excise tax or an additional tax under Section 4999 or 409A of the Code, regardless of whether some other subsequent action or event would be required to cause such payment or benefit to be triggered. The execution of, and performance of the transactions contemplated by, this Agreement will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any ETIH Plan or Employment Agreement of the ETIH Group Entities that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, grant of additional service credits, distribution or increase in benefits or obligations to fund benefits with respect to any such ETIH Plan or Employment Agreement. There is no agreement, plan, contract or arrangement by which any ETIH Group Entity is bound to compensate or otherwise “gross up” any person for any state, local or federal taxes due or imposed on such person for any reason in respect of any ETIH Plan or Employment Agreement of the ETIH Group Entities or the benefits payable thereunder, including taxes, penalties or interest imposed, or otherwise, due, pursuant to Sections 409A or 4999 of the Code. (m) There is no labor strike or labor dispute, slow-down, lockout or stoppage pending or, to the Knowledge of ETP, threatened with respect to any of the ETIH Related Employees. (n) As to any ETIH Plan that is subject to Title IV of ERISA, there has been no event or condition which presents the material risk of plan termination, no accumulated funding deficiency, whether or not waived, within the meaning of Section 302 of ERISA or Section 412 of the Code (as each was in effect prior to 2008) has been incurred, no reportable event within the meaning of Section 4043 of ERISA (for which the disclosure requirements of Regulation section 4043.1 et seq., promulgated by the PBGC, have not been waived) has occurred and no failure to satisfy the minimum funding standards (as required by Section 302 of ERISA or Section 412 of the Code, as each is in effect after 2007), has occurred, whether or not waived, no notice of intent to terminate the plan has been given under Section 4041 of ERISA, no proceeding has been instituted under Section 4042 of ERISA to terminate the plan, no liability to the PBGC has been incurred (other than for premium payments paid on a timely basis), and the actuarial present value of the benefit liabilities under Section 4001(a)(16) of ERISA does not exceed the current value of plan assets by more than $500,000, determined, as of the beginning of the most recent plan year for which such liabilities have been determined, in accordance with
the assumptions used for funding the plan pursuant to Section 412 or 430, as applicable, of the Code. (o) As to any ETIH Plan intended to be qualified under Section 401(a) of the Code, there has been no termination or partial termination of such plan within the meaning of Section 411(d)(3) of the Code. (p) Each trust funding an ETIH Plan that is intended to be exempt from federal income taxation pursuant to Section 501(c)(9) of the Code satisfies the requirements of such section and has received a favorable determination letter from the Internal Revenue Service regarding such exempt status and has not, since receipt of the most recent favorable determination letter, been amended or operated in a way which would adversely affect such exempt status. (q) With respect to any Employee Benefit Plan that is not listed in Section 3.15(b) of the ETP Disclosure Schedule but that is sponsored, maintained, or contributed to, or has been sponsored, maintained, or contributed to by ETP, any ERISA Affiliate of ETP, any ETIH Group Entity or any ERISA Affiliate of any ETIH Group Entity, (A) no withdrawal liability, within the meaning of Section 4201 of ERISA, has been incurred, which withdrawal liability has not been satisfied, (B) no liability to the PBGC has been incurred by ETP or any such ERISA Affiliate, which liability has not been satisfied, (C) no accumulated funding deficiency, whether or not waived, within the meaning of Section 302 of ERISA or Section 412 of the Code (as each was in effect prior to 2008) has been incurred and no failure to satisfy the minimum funding standards (as required by Section 302 of ERISA or Section 412 of the Code, as each is in effect after 2007) has occurred, whether or not waived, (D) all contributions (including installments) to such plan required by Sections 302 or 303 of ERISA and Sections 412 or 430 of the Code have been timely made and (E) no circumstances exist or in the future could exist that could subject any ETIH Group Entity or, after the consummation of the transactions contemplated by this Agreement, the Company or any of its Subsidiaries or ERISA Affiliates, to any liability, including without limitation, any Tax or penalty under ERISA or the Code. (r) No circumstance exists or future circumstance could arise that would lead any ETIH Group Entity or, after the transaction contemplated by this Agreement, the Company, to incur any ERISA Title IV liability or suffer the imposition of any Encumbrance on any of their assets with respect to liabilities relating to any ETIH Plan or any employee benefit plan subject to Title IV of ERISA that was sponsored, maintained or contributed to by (A) ETP, (B) an ERISA Affiliate of ETP, or (C) any ERISA Affiliate of any ETIH Group Entity or to which any of them had an obligation to contribute. 3.16 Books and Records . The minute books of each of the ETIH Group Entities contain true and correct copies of all actions taken at all meetings of the boards of directors, members or managers, as the case may be, of each of the ETIH Group Entities, as applicable, and all written consents executed in lieu of such meetings. Complete copies of all such minute books for 2007 and 2008 and other records have been made available to outside counsel and other advisors to OGE.
(a) Between January 1, 2008 and the Execution Date, the Business of the ETIH Group Entities, taken as a whole, has been conducted in the ordinary course consistent with past practice, and none of the ETIH Group Entities has taken any of the actions prohibited by Section 5.1(b) , except in connection with entering into this Agreement. (b) Subsequent to January 1, 2008, there has not been any change, event or occurrence that has had or could reasonably be expected to have an ETIH Material Adverse Effect. 3.18 Regulation . Neither ETP nor any of the ETIH Group Entities is, nor will ETP or any of the ETIH Group Entities be following the consummation of the transactions contemplated by this Agreement, an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(a) Transwestern is a “natural gas company” as that term is defined in Section 2 of the Natural Gas Act of 1938 (the “ Natural Gas Act ”) and MEP, once certificated and constructed, will likewise be a “natural gas company.” Each of the ETIH Group Entities, as applicable, is in compliance in all material respects with the provisions of the Natural Gas Act, the Natural Gas Policy Act of 1978 (“ NGPA ”), the Pipeline Safety Improvement Act of 2002, and the rules and regulations promulgated by FERC pursuant thereto. Each of the ETIH Group Entities, as applicable, is in compliance in all material respects with the terms and conditions of all tariff provisions, FERC rate and certificate orders, and other orders and authorizations issued by FERC, in each case as applicable to any of the ETIH Group Entities. No approval by FERC under the Natural Gas Act or the Federal Power Act is required in connection with the execution and delivery of this Agreement by ETP or the consummation of the transactions contemplated hereby. Except as disclosed in Section 3.19(a) of the ETP Disclosure Schedule, the Form No. 2 Annual Reports filed by any of the ETIH Group Entities with FERC for the years ended December 31, 2006 and December 31, 2007 were true and correct in all material respects as of the dates thereof, and since December 1, 2006, no ETIH Group Entity has become subject to any proceeding under Section 5 of the Natural Gas Act or any general rate case proceeding commenced under Section 4 of the Natural Gas Act by reason of a filing made with the FERC after December 1, 2006. (b) Except as disclosed in Section 3.19(b) of the ETP Disclosure Schedule and except for general industry proceedings, including audits or reviews of individual companies arising from general industry proceedings, there are no pending or, to ETP’s Knowledge, threatened FERC administrative or regulatory proceedings, including without limitation any rate proceeding under Section 4 or Section 5 of the Natural Gas Act or any Natural Gas Act Section 7 certificate proceedings, investigations, complaints, audits or show cause proceedings to which any of the ETIH Group Entities is a party. (c) No approval by any State Regulatory Authority is required in connection with the execution and delivery of this agreement by ETP or the consummation of the transactions contemplated herein. Except as indicated in Section 4.19 of the ETP Disclosure
Schedule, Canyon has not become subject to any proceeding before any State Regulatory Authorities related to their rates or facilities. 3.20 State Takeover Laws . No approvals are required under state takeover or similar laws in connection with the performance by ETP of its obligations under this Agreement. 3.21 Brokers’ Fees . Neither ETP nor any of the ETIH Group Entities, nor any of their respective officers or directors has employed any broker, finder or other person or incurred any liability on behalf of any ETIH Group Entity, OGE or any Enogex Group Entity or itself for any advisory, brokerage, finder, success, deal completion or similar fees or commissions in connection with the transactions contemplated by this Agreement, other than fees to be paid to Credit Suisse Securities (USA) LLC. 3.22 Investment Intent . ETP is acquiring a 50% membership interest in the Company (“ Company Membership Interest ”) pursuant to Article II for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof. ETP (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in such Company Membership Interest and is capable of bearing the economic risks of such investment. ETP is aware that the Company Membership Interest has not been registered, and will not be registered after the Closing, under the Securities Act or under any state or foreign securities Laws. 3.23 Certain Business Relationships between ETIH and its Affiliates . Except as set forth on Section 3.23 of the ETP Disclosure Schedule, (a) neither ETP nor any of its Subsidiaries (excluding ETIH and its Subsidiaries) has been involved in any business arrangement or relationship with ETIH and its Subsidiaries within the past two years, (b) neither ETP nor any of its Subsidiaries (excluding ETIH and its Subsidiaries) owns any asset, tangible or intangible, that is used in ETIH’s or any of its Subsidiaries’ business and (c) neither ETP nor any of its Subsidiaries (excluding ETIH and its Subsidiaries) is a party to any contract, commitment or agreement (whether written or oral) with ETIH or any of its Subsidiaries or relating to the business of ETIH or its Subsidiaries. 3.24 Limitation of Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III , ETP IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE MEMBERSHIP INTERESTS OF ETIH, TRANSWESTERN, ETC MEP, MEP OR CANYON, OR THE BUSINESS, ASSETS, OR LIABILITIES OF ANY ETIH GROUP ENTITY, INCLUDING, IN PARTICULAR, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF OGE Except as disclosed in the OGE Disclosure Schedule delivered by OGE to ETP on or prior to the execution of this Agreement (which letter sets forth items of disclosure with specific
reference to the particular Section or subsection of this Agreement to which the information in the OGE Disclosure Schedule relates), OGE hereby represents and warrants to ETP as follows:
(a) Each of OGE and the Enogex Group Entities has been duly formed and is validly existing and in good standing as a corporation or limited liability company, as applicable, under the law of its jurisdiction of formation with all requisite corporate or limited liability company, as applicable, power and authority to own, lease or otherwise hold and operate its properties and assets and to carry on its business as presently conducted, except in each case where the failure to have such power or authority could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. Each of OGE and each of the Enogex Group Entities is duly qualified and in good standing to do business as a foreign limited partnership, limited liability company, corporation, unlimited liability company or otherwise, as the case may be, in each jurisdiction in which the conduct or nature of its business or the ownership, leasing, holding or operating of its properties makes such qualification necessary, except such jurisdictions where the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. (b) Section 4.1(b) of the OGE Disclosure Schedule sets forth a true and complete list of each of the Enogex Group Entities, together with (i) the nature of the legal organization of such Person, (ii) the jurisdiction of organization or formation of such Person, (iii) the name of each Enogex Group Entity that owns beneficially or of record any equity or similar interest in such Person and (iv) the percentage interest owned by OGE or each such Enogex Group Entity in such Person. (c) Each of OGE and Enogex has heretofore made available to ETP complete and correct copies of its Governing Documents. (d) OGE Holdings was formed solely for the purpose of engaging in the transactions contemplated hereby (or a similar predecessor transaction that was not consummated) and prior to the Closing will have engaged in no other business activities and will have incurred no liabilities or obligations other than as contemplated herein, as well as other liabilities or obligations incidental to this Agreement or the transactions contemplated by this Agreement. 4.2 Authority; No Violation; Consents and Approvals . OGE has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by OGE of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of OGE, and no other corporate or other organizational proceeding on the part of OGE or any affiliate thereof is necessary to consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by OGE and, assuming the due authorization, execution and delivery hereof by ETP, constitutes a legal, valid and binding agreement of OGE, enforceable against OGE in accordance with its terms (except insofar as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law)). Except as disclosed in Section 4.2 of the OGE Disclosure Schedule and for matters expressly contemplated by this Agreement and matters described in clauses (b), (c), (d) or (e) below that could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect, neither the execution and delivery by OGE of this Agreement, nor the consummation by OGE or any of the Enogex Group Entities of the transactions contemplated hereby, including the execution and delivery of the LLC Agreement, the OGE Services Agreement, the Omnibus Agreement, Employee Transition Agreement and the OGE Transitional Seconding Agreement on or prior to the Closing Date and the performance by OGE of this Agreement will (a) violate or conflict with any provision of the Governing Documents of OGE or the Enogex Group Entities; (b) require any consent, approval, authorization or permit of, registration, declaration or filing with, or notification to, any Governmental Entity; (c) require any consent or approval of any counterparty to, or result in any breach of or constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, cancellation, amendment or acceleration of any obligation or the loss of any benefit under, any agreement or instrument to which OGE or any of its Subsidiaries, including any of the Enogex Group Entities, is a party or by or to which any of their properties are bound; (d) result in the creation of an Encumbrance upon or require the sale or give any person the right to acquire any of the assets of OGE or any of its Subsidiaries, including any of the Enogex Group Entities, or restrict, hinder, impair or limit the ability of OGE or any of its Subsidiaries, including any of the Enogex Group Entities, to carry on their businesses as and where they are now being carried on; or (e) violate or conflict with any Law applicable to OGE or any of its Subsidiaries, including the Enogex Group Entities.
(a) OGE is the sole owner of 100% of the outstanding membership interests of OGE Holdings, which membership interests have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of OGE Holdings and are fully paid. OGE is the sole owner of 100% of the outstanding membership interests of Enogex, and all of the outstanding membership interests of Enogex have been duly authorized and validly issued in accordance with applicable Laws and the Governing Documents of Enogex and are fully paid. OGE owns such membership interests of each of OGE Holdings and Enogex free and clear of any Encumbrances. Except for the membership interests owned by OGE, there are no other outstanding equity interests in OGE Holdings or Enogex. (b) Except as set forth in Section 4.3(b) of the OGE Disclosure Schedule, (i) there are no outstanding options, warrants, subscriptions, puts, calls or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Enogex Group Entities, to offer, issue, sell, redeem, repurchase, otherwise acquire or transfer, pledge or encumber any equity interest in any of the Enogex Group Entities; (ii) there are no outstanding securities or obligations of any kind of the Enogex Group Entities, that are convertible into or exercisable or exchangeable for any equity interest in any of the Enogex Group Entities, and none of the Enogex Group Entities has any obligation of any kind to issue any additional securities or to pay for or repurchase any securities; (iii) there are not outstanding any equity
appreciation rights, phantom equity, profit sharing or similar rights, agreements, arrangements or commitments based on the value of the equity, book value, income or any other attribute of any of the Enogex Group Entities; (iv) there are no outstanding bonds, debentures or other evidence of indebtedness of any of OGE or any of its Subsidiaries, including the Enogex Group Entities, having the right to vote (or that are exchangeable for or convertible or exercisable into securities having the right to vote) with the holders of equity interests in any of the Enogex Group Entities on any matter; and (v) there are no unitholder agreements, proxies, voting trusts, rights to require registration under securities Laws or other arrangements or commitments to which OGE or any of its Subsidiaries, including the Enogex Group Entities, is a party or by which any of their securities are bound, with respect to the voting, disposition or registration of any outstanding securities of any of the Enogex Group Entities. (c) Except as set forth in Section 4.3(c) of the OGE Disclosure Schedule, all of the outstanding equity interests of each Enogex Subsidiary (1) have been duly authorized and validly issued and (2) are owned 100% directly or indirectly by Enogex, free and clear of any Encumbrances. As of the Execution Date, there are no Enogex Subsidiaries other than those set forth in Section 4.1(b) of the OGE Disclosure Schedule. (d) Except as set forth in Section 4.3(d) of the OGE Disclosure Schedule and except with respect to the ownership of any equity or long-term debt securities between or among the Enogex Group Entities, none of the Enogex Group Entities owns, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. (e) As of the Execution Date, except in connection with the transactions contemplated hereby (or a similar predecessor transaction that was not consummated), OGE Holdings have not engaged in any business activities, acquired any assets, incurred any liabilities, or entered into any contracts or binding obligations. 4.4 Financial Statements . The financial statements of Enogex (the “ Enogex Financial Statements ”), including all related notes and schedules, listed in Section 4.4 of the OGE Disclosure Schedule, fairly present in all material respects the consolidated financial position of Enogex, as of the respective dates thereof, and the consolidated results of operations, cash flows and changes in members’ equity of Enogex for the periods indicated, have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and in accordance Regulation S-X promulgated by the SEC (except as may be indicated in the notes thereto), and subject, in the case of interim financial statements, to customary year-end adjustments, consistent with past practice. 4.5 Undisclosed Liabilities . None of the Enogex Group Entities has any indebtedness or liability, absolute or contingent, that is of a nature required to be reflected on the consolidated balance sheet of Enogex or in the footnotes thereto, in each case prepared in conformity with GAAP, and that is not shown on or provided for in the Enogex Financial Statements, other than (1) liabilities incurred or accrued in the ordinary course of business consistent with past practice since June 30, 2008, including liens for current Taxes and assessments not in default, or (2) liabilities of the Enogex Group Entities that, individually or in the aggregate, are not material to the Enogex Group Entities, taken as a whole.
(a) Since January 1, 2005, all OGE SEC Reports have been filed with or furnished to the SEC. To the extent related to any Enogex Group Entity, all OGE SEC Reports filed since January 1, 2005 (1) complied in all material respects with the requirements of the Exchange Act and the Securities Act and the rules and regulations thereunder, as applicable, and (2) as of its filing date in the case of any Exchange Act report or as of its effective date in the case of any Securities Act filing, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) There are no material outstanding comments from, or material unresolved issues raised by, the SEC with respect to the OGE SEC Reports relating to any Enogex Group Entity. No enforcement action has been initiated against OGE relating to disclosures contained in any OGE SEC Report relating to any Enogex Group Entity. (c) To the extent related to any Enogex Group Entity, since December 1, 2006, (1) neither OGE nor any of the Enogex Group Entities has received any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of OGE or any of the Enogex Group Entities or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that OGE or any of the Enogex Group Entities has engaged in questionable accounting or auditing practices, (2) to the Knowledge of OGE, no officer or director of OGE or any Enogex Group Entity has received any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of OGE or any of the Enogex Group Entities or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that OGE or any of the Enogex Group Entities has engaged in questionable accounting or auditing practices, and (3) no attorney representing OGE or any of the Enogex Group Entities, regardless of whether employed thereby, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by OGE or any of the Enogex Group Entities or any of their respective officers, directors, employees or agents, to the board of directors of OGE or Enogex or any committee thereof or to any director or officer of OGE or Enogex.
(a) Except as set forth in Section 4.7(a) of the OGE Disclosure Schedule, each of the Enogex Group Entities is in compliance with all applicable Laws, other than any noncompliance that could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. Neither OGE, nor any of its Subsidiaries, including any Enogex Group Entity, has received any written communication since December 1, 2006 from a Governmental Entity that alleges that any Enogex Group Entity is not in compliance in any material respect with any applicable Laws that has not been satisfactorily resolved. Notwithstanding the foregoing, the representations made by the Enogex Group Entities in this Section 4.7(a) shall not apply to any matters addressed in other representations contained in this Article IV , including representations with respect to environmental matters (which are provided
for in Section 4.10 ), Tax matters (which are provided for in Section 4.14 ) and employment and benefits matters (which are provided for in Section 4.15 ). (b) Enogex Group Entities are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate their properties and to lawfully carry on their businesses as they are now being conducted (collectively, the “ Enogex Permits ”), except where the failure to be in possession of such Enogex Permits could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. None of the Enogex Group Entities is in conflict with, or in default or violation of any of the Enogex Permits, except for any such conflicts, defaults or violations that could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect.
(a) Section 4.8(a) of the OGE Disclosure Schedule sets forth a true and complete list, as of the date hereof, of the following contracts, agreements or commitments (including currently effective amendments and modifications thereto) to which any of the Enogex Group Entities is a party, whether written or oral (collectively, the “ Enogex Material Agreements ”): (1) transportation agreements and gathering agreements involving payments to or from any Enogex Group Entity of at least $20,000,000 per year; (2) processing agreements and natural gas purchase agreements involving net payments ( i.e., after taking into account directly-associated cost of goods or directly-associated revenues from the sale of goods) to or from any Enogex Group Entity of at least $20,000,000 per year; (3) construction, interconnect, and other services agreements in each case involving payments to or from any Enogex Group Entity in excess of $20,000,000 per year; (4) contracts, loan agreements, letters of credit, repurchase agreements, mortgages, security agreements, guarantees, pledge agreements, trust indentures, promissory notes, lines of credit and similar documents in each case relating to the borrowing of money or for lines of credit, in any case for amounts in excess of $20,000,000 (other than contracts solely between or among the Enogex Group Entities and interest rate swap agreements); (5) all master agreements, confirmations, schedules, cover sheets, master netting agreements and similar agreements relating to any swap transactions, derivative transactions, options, warrants, forward purchase or sale transactions, futures transactions, cap transactions, floor transactions or collar transactions relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transactions (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any credit support, collateral (including master collateral agreements) or other similar arrangements related to such transactions, including a listing of each outstanding commodity or financial hedging position and the outstanding amount of the associated credit support or collateral; (6) real property leases calling for payments by any of the Enogex Group Entities of amounts greater than $20,000,000 per year (other than rights-of-way and leases solely between or among the Enogex Group Entities); (7) partnership or joint venture agreements (which do not include joint tariff or joint operating agreements); (8) contracts limiting the ability of any of the Enogex Group Entities to compete in any line of business or with any Person or in any geographic area; (9) contracts relating to any outstanding
commitment for capital expenditures in excess of $50,000,000; (10) contracts with any labor union or organization; (11) contracts not entered into in the ordinary course of the Business of the Enogex Group Entities other than those that are not material to the Business of the Enogex Group Entities; and (12) contracts, agreements or documents not otherwise disclosed in (1) – (11) above that are currently in effect and to which any of the Enogex Group Entities or their properties are bound that are material to the Business or operations of the Enogex Group Entities, taken as a whole. (b) Except to the extent that enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and provided that any indemnity, contribution and exoneration provisions contained in any such Enogex Material Agreement may be limited by applicable Laws and public policy, each of the Enogex Material Agreements (1) constitutes the legal, valid and binding obligation of the applicable Enogex Group Entity and constitutes the legal, valid and binding obligation of the other parties thereto, (2) is in full force and effect as of the Execution Date, and (3) will be in full force and effect upon the consummation of the transactions contemplated by this Agreement, in each case unless the failure to be so could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. (c) There is not, to the Knowledge of OGE, under any Enogex Material Agreement, any default or event that, with notice or lapse of time or both, could reasonably be expected to constitute a default on the part of any of the parties thereto, except such events of default and other events as to which requisite waivers or consents have been obtained or that could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. (d) True and complete copies of all Enogex Material Agreements have been delivered or made available to ETP by OGE to the extent permitted by applicable Law and the provisions of such agreements. To the extent permitted by applicable Law, all Enogex Material Agreements not so delivered or made available are listed and described on Section 4.8(d) of the OGE Disclosure Schedule. 4.9 Legal Proceedings . Except as disclosed in Section 4.9 of the OGE Disclosure Schedule, there are no pending, or, to the Knowledge of OGE, threatened, lawsuits or claims, with respect to which OGE or any of its Subsidiaries, including any of the Enogex Group Entities, has been contacted in writing by counsel for the plaintiff or claimant, against or affecting OGE or any of its Subsidiaries, including any of the Enogex Group Entities, or any of their properties, assets, operations or Business and that could, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect. Except as could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect, none of OGE or any of its Subsidiaries, including any of the Enogex Group Entities, is a party or subject to or in default under any judgment, order, injunction or decree of any Governmental Entity or arbitration tribunal applicable to it or any of its properties, assets, operations or Business. Except as could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect, there is no pending or, to the Knowledge
of OGE, threatened investigation of or affecting OGE or any of its Subsidiaries, including any of the Enogex Group Entities, or any of their properties, assets, operations or Business by any Governmental Entity. 4.10 Environmental Matters . Except as reflected in the Enogex Financial Statements and except for any such matter that could not, individually or in the aggregate, reasonably be expected to have an Enogex Material Adverse Effect: (a) The operations of each of the Enogex Group Entities have been and, as of the Closing Date, will be, in compliance with all Environmental Laws; (b) Each of the Enogex Group Entities has obtained and will, as of the Closing Date, maintain in full force and effect all permits, licenses and registrations, and has timely made and will, as of the Closing Date, timely make all filings, permit renewal applications, reports and notices required under applicable Environmental Law in connection with the operations of its business; (c) None of the Enogex Group Entities is the subject of any outstanding written agreements (including consent orders and settlement agreements) with any Governmental Entity or other Person imposing liability or obligations with respect to any environmental matter; (d) None of OGE or its Subsidiaries, including any Enogex Group Entities, has received any written communication from any Governmental Entity or other Person alleging, with respect to any such party, the violation of or liability under any Environmental Law by or of the Enogex Group Entities or requesting, with respect to the Enogex Group Entities, information with respect to an investigation pursuant to any Environmental Law; and (e) There has been no Release of any Hazardous Material from or in connection with the properties or operations of the Enogex Group Entities that has not been adequately reserved for in the Enogex Financial Statements and that has resulted or could reasonably be expected to result in liability under Environmental Laws or a claim for damages or compensation by any Person.
(a) Each of the Enogex Group Entities has defensible title to all material real property and good title to all material tangible personal property owned by the Enogex Group Entities and that is sufficient for the operation of their respective Businesses as presently conducted, free and clear of all Encumbrances except Permitted Encumbrances. (b) Each of the Enogex Group Entities has Rights-of-Way as are sufficient to conduct its Business in the manner described, and subject to the limitations contained, in Section 4.11(b) of the OGE Disclosure Schedule, except for (1) qualifications, reservations and encumbrances as may be set forth in Section 4.11(b) of the OGE Disclosure Schedule and (2) such Rights-of-Way the absence of which could not, individually or in the aggregate, reasonably be expected to result in an Enogex Material Adverse Effect. Other than as set forth in Section 4.11(b) of the OGE Disclosure Schedule, and subject to the limitations contained, in Section 4.11(b) of the OGE Disclosure Schedule, each of the Enogex Group Entities has fulfilled
and performed all its material obligations with respect to such Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that could not, individually or in the aggregate, reasonably be expected to result in an Enogex Material Adverse Effect; and, except as described in Section 4.11(b) of the OGE Disclosure Schedule, none of such Rights-of-Way contains any restriction that is materially burdensome to the Enogex Group Entities, taken as a whole. 4.12 Sufficiency of Assets . The assets of the Enogex Group Entities constitute all the assets, the use or benefit of which are reasonably necessary for the operation of the Business of the Enogex Group Entities as currently conducted. As of the Closing, all tangible and intangible assets of the Enogex Group Entities will be in the possession, or under the control, of the Enogex Group Entities. 4.13 Insurance . None of OGE or any of its Subsidiaries, including any of the Enogex Group Entities, has received any notice from any insurer or agent of such insurer that (i) substantial capital improvements or other expenditures will have to be made in order to continue any insurance policy or instrument pursuant to which any Enogex Group Entity is insured (an “ Enogex Insurance Policy ”) or (ii) such insurer has cancelled or terminated or has initiated procedures to cancel or terminate any Enogex Insurance Policy. All such Enogex Insurance Policies are outstanding and duly in force on the Execution Date and will be outstanding and duly in force on the Closing Date in all material respects. The Enogex Group Entities are in compliance with the terms of all Enogex Insurance Policies in all material respects; and there are no material claims by OGE or any of its Subsidiaries, including any of the Enogex Group Entities, under any such Enogex Insurance Policy as to which any insurance company is denying liability or defending under a reservation of rights clause.
(i) each of the Enogex Group Entities has filed (or joined in the filing of) when due all material Tax Returns required by applicable Law to be filed by or with respect to it, has obtained all required Tax permits and licenses and has satisfied all registration requirements relating to Taxes; (ii) all such Tax Returns were true correct and complete in all material respects as of the time of such filing; (iii) except for Taxes being contested in good faith in appropriate proceedings for which adequate reserves have been provided, all material Taxes relating to periods ending on or before the Closing Date owed by any of the Enogex Group Entities (regardless of whether shown on any Tax Return) have been paid or will be timely paid; (iv) there is no action, suit, proceeding, investigation, audit or claim now pending against, or with respect to, any of the Enogex Group Entities in respect of
any material Tax or material Tax assessment, nor has any claim for additional material Tax or material Tax assessment been asserted in writing or been proposed by any Tax authority; (v) no written claim has been made by any Tax authority in a jurisdiction where any of the Enogex Group Entities does not currently file a Tax Return that it is or may be subject to any material Tax in such jurisdiction, nor has any such assertion been threatened or proposed in writing; (vi) none of the Enogex Group Entities has any outstanding request for any extension of time within which to pay any material Taxes or file any Tax Returns with respect to any material Taxes; (vii) there has been no waiver or extension of any applicable statute of limitations for the assessment or collection of any material Taxes of any of the Enogex Group Entities; (viii) none of the Enogex Group Entities has entered into any agreement or arrangement with any Tax authority that requires any Enogex Group Entity to take any action or refrain from taking any action; (ix) none of the Enogex Group Entities is a party to any agreement, whether written or unwritten, providing for the payment of Taxes, Tax losses, entitlements to Tax refunds or similar Tax matters; (x) each of the Enogex Group Entities has withheld and paid all material Taxes required to be withheld in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party; (xi) OGE is not a “foreign person” within the meaning of Section 1445 of the Code; (xii) each of the Enogex Group Entities that is classified as a partnership for U.S. federal tax purposes has in effect an election under Section 754 of the Code; (xiii) none of the Enogex Group Entities has been a member of an affiliated group filing a consolidated federal income Tax Return or has any liability for the Taxes of any Person (other than an Enogex Group Entity) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign Law), as a transferee or successor, by contract, or otherwise; and (xiv) there are no Tax liens on any of the assets of the Enogex Group Entities, except for liens for Taxes not yet due. (b) Section 4.14(b) of the OGE Disclosure Schedule sets forth with respect to each of the Enogex Group Entities, (i) the Tax basis to OGE of each of the assets of the Enogex Group Entities, (ii) the depreciation life, method, conventions and history applicable to each such
asset in the hands of OGE, as tax owner, (iii) which of the liabilities of the Enogex Group Entities is a “qualified liability” within the meaning of Treasury Regulation Section 1.707-5(a)(6), and, for each Enogex Group Entity, (x) the identity of any assets that were acquired with the proceeds of the liability and (y) the identity of any assets that have been continuously secured by the liability for more than two years as of the date of this Agreement. (c) None of the Enogex Group Entities is classified as a corporation for U.S. federal tax purposes.
(a) OGE has delivered to ETP a letter dated the Execution Date and delivered from OGE to ETP on the Execution Date sets forth complete and accurate lists of all the Enogex Related Employees and all the Enogex Independent Contractors, specifying whether they are Enogex Related Employees or Enogex Independent Contractors, their position, the entity by which they are employed or to which they provide services, annual salary, hourly wages or consulting or other independent contractor fees, as applicable, and bonus opportunities, date of hire (or entry into an independent contractor agreement), work location, length of service, together with a notation next to the name of any employee or independent contractor on such lists who is subject to any Employment Agreement or Collective Bargaining Agreement. (b) Section 4.15(b) of the OGE Disclosure Schedule sets forth a complete and accurate list of each Employee Benefit Plan (i) that is sponsored, maintained or contributed to by any Enogex Group Entity or (ii) that any Affiliate or ERISA Affiliate of any Enogex Group Entity has sponsored, maintained or contributed to, or to which any such entity is obligated to contribute within six years of the Closing Date, that covers or benefits any current or former Enogex Related Employees or Enogex Independent Contractors (each, an “ Enogex Plan ”). True, correct and complete copies of each such Enogex Plan and any related documents, including all amendments thereto, and any trust, insurance or other funding arrangement, have been furnished or made available to ETP. There has also been furnished or made available to ETP, with respect to each such Enogex Plan, if applicable, the most recent favorable determination letters issued by the Internal Revenue Service, the three most recently filed reports on Form 5500 (including all schedules and attachments), the most recent actuarial report or valuation and the most recent summary plan description and summaries of material modifications thereto. (c) Section 4.15(c) of the OGE Disclosure Schedule sets forth a true and complete list of all Employment Agreements of the Enogex Group Entities. As of the Execution Date, there are no other agreements (other than enrollment or similar forms to commence participation or initiate or continue coverage in an Employee Benefit Plan or standard employment offer letters providing only for at-will employment issued by Enogex Group Entities) between any Enogex Group Entity and any natural person that provide for (i) participation in, coverage under or benefits from an Employee Benefit Plan, (ii) annual compensation in excess of $150,000 to such person or (iii) change of control, termination or severance payments in excess of $150,000 to such person. No Enogex Group Entity is subject to any legal, contractual, equitable, or other obligation or commitment (whether legally binding or not) to enter into an Employment Agreement, establish or contribute to an Employee Benefit Plan or modify (except
to the extent required by applicable Law) any existing Employee Benefit Plan or Employment Agreement. (d) Except as set forth in Section 4.15(d) of the OGE Disclosure Schedule, no Enogex Group Entity and no ERISA Affiliate of an Enogex Group Entity maintains or has an obligation to contribute to, or has any obligation or liability (contingent, secondary or otherwise) to, based upon or arising out of, an Employee Benefit Plan that is (1) subject to Title IV of ERISA or the minimum funding requirements of Section 412 of the Code or Section 302 of ERISA, (2) a plan of the type described in Section 4063 of ERISA or Section 413(c) of the Code, (3) a “multiemployer plan” (as defined in Section 3(37) of ERISA) or (4) a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA). (e) Except as set forth in Section 4.15(e) of the OGE Disclosure Schedule, the Enogex Plans (A) are and have been maintained (in form and in operation) in all material respects in accordance with their terms and with the applicable provisions of ERISA, the Code and all other applicable Laws, (B) if intended to be qualified under Section 401(a) of the Code, (i) satisfy in form the requirements of such Section except to the extent amendments are not required by Law to be made until a date after the Closing Date, (ii) have received a favorable determination letter from the Internal Revenue Service regarding such qualified status, (iii) have not, since receipt of the most recent favorable determination letter, been amended in a way that would adversely affect their qualified status, and (iv) have not been operated in a way that would adversely affect their qualified status, (C) do not provide, and have not provided, any post-termination of employment welfare benefits or coverage, except as required under Part 6 of Subtitle B of Title I of ERISA and Code Section 4980B (or similar state or local Law), and (D) if they could be deemed “nonqualified deferred compensation arrangements” under Section 409A of the Code, are in good faith compliance with such section and the applicable regulations and authoritative guidance issued thereunder or are exempt from the requirements of such section and have not been materially modified at any time after October 3, 2004. (f) The Enogex Group Entities are, and have been, in compliance in all material respects with all applicable Laws relating to the employment of labor, including all such applicable Laws, relating to wages, hours, collective bargaining, discrimination, civil rights, safety and health and workers’ compensation. Enogex Group Entities are not subject to a current unresolved judicial administrative determination that it has engaged in an unfair labor practice in connection with the Enogex Related Employees and Enogex Group Entities have not received notice of any pending NLRB proceeding with respect to any Enogex Related Employees. Except as set forth in Section 4.15(f) of the OGE Disclosure Schedule, no pending grievance or arbitration demand or proceeding, whether or not filed pursuant to a collective bargaining agreement, has been received by Enogex Group Entities with respect to the Enogex Related Employees. To the Knowledge of OGE, all Enogex Related Employees are lawfully authorized to work in the United States according to federal immigration laws. (g) Each Enogex Plan sponsored or maintained by an Enogex Group Entity can be unilaterally amended or terminated at any time by an Enogex Group Entity without liability other than liability for benefits accrued to the date of such amendment or termination pursuant to the terms of the plan.
(h) No Enogex Group Entity is a party to a collective bargaining agreement. No Enogex Group Entity has agreed to recognize any union or other collective bargaining representative. No union or other collective bargaining representative has been certified as the exclusive collective bargaining representative of any of the Enogex Related Employees. To the Knowledge of OGE, no union or other collective bargaining representative claims to be the exclusive bargaining representative of any of the Enogex Related Employees. To the Knowledge of OGE, no union organizational campaign or representation petition is currently pending with respect to any of the Enogex Related Employees. (i) All contributions or payments required to be made by an Enogex Group Entity to or with respect to any Enogex Plan have been timely made and all liabilities of each Enogex Group Entity with respect to any Enogex Plan are properly reflected in the Enogex Financial Statements in accordance with GAAP. (j) There are no material actions, suits, claims pending (other than routine claims for benefits) or, to the Knowledge of OGE, threatened against, or with respect to, any of the Enogex Plans or their assets or Employment Agreements of the Enogex Group Entities, nor is any such Enogex Plan or Employment Agreement under investigation or audit by any Governmental Entity. Except as set forth in Section 4.15(j) of the OGE Disclosure Schedule, there are no material claims, lawsuits, petitions, charges, investigations, complaints, proceedings, suits, demands, actions or other matters (other than routine qualification determination filings) that are pending against the Enogex Group Entities before any Governmental Entity or arbitrator, or that have been asserted or threatened against the Enogex Group Entities, including those for: (i) wages, salaries, commissions, bonuses, vacation pay, severance or termination pay, sick pay or other compensation; (ii) employee benefits; (iii) any alleged unlawful, unfair, wrongful or discriminatory employment or labor practices; (iv) any alleged breach of contract or other claim arising under a collective bargaining or individual agreement or any other employment covenant whether express or implied; (v) any alleged violation of any statute, ordinance, contract or regulation relating to minimum wages or maximum hours of work; (vi) any alleged violation of occupation safety and health standards; or (vii) any alleged violation of plant closing and mass layoff, immigration, workers’ compensation, disability, unemployment compensation, whistleblower laws, or other employment or labor relations laws; and to the Knowledge of OGE, no basis therefor exists. To the extent that any Enogex Group Entity is obligated to develop and maintain an affirmative action plan, no discrimination claim, show cause notice, conciliation proceeding, sanction or debarment proceeding is pending with the Office of Federal Contract Compliance Programs or any other federal agency or any comparable state agency and no desk audit or onsite review is in progress with respect to any Enogex Related Employee. Within the past 90 days, Enogex Group Entities have not taken an action that constitutes a “mass layoff,” “mass termination” or “plant closing” at any Enogex Group Entity facility where Enogex Related Employees work within the meaning of the Workers Adjustment and Retraining Notification Act (WARN) or any comparable state law. (k) No act, omission or transaction has occurred that would result, directly or indirectly, in imposition on any Enogex Group Entity of (A) breach of fiduciary duty liability damages under Section 409 of ERISA, (B) a civil penalty assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA, or (C) a tax imposed pursuant to Chapter 43 of Subtitle D of the
Code, in each case which would reasonably be expected to have an Enogex Material Adverse Effect. (l) Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall require any payments of money or other property or provision of benefits or other rights to any employee, officer or director of any Enogex Group Entity to be either subject to an excise tax or an additional tax under Section 4999 or 409A of the Code, regardless of whether some other subsequent action or event would be required to cause such payment or benefit to be triggered. The execution of, and performance of the transactions contemplated by, this Agreement will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Enogex Plan or Employment Agreement of the Enogex Group Entities that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, grant of additional service credits, distribution or increase in benefits or obligations to fund benefits with respect to any such Enogex Plan or Employment Agreement. There is no agreement, plan, contract or arrangement by which any Enogex Group Entity is bound to compensate or otherwise “gross up” any person for any state, local or federal taxes due or imposed on such person for any reason in respect of any Enogex Plan or Employment Agreement of the Enogex Group Entities or the benefits payable thereunder, including taxes, penalties or interest imposed, or otherwise due, pursuant to Sections 409A or 4999 of the Code. (m) There is no labor strike or labor dispute, slow-down, lockout or stoppage pending or, to the Knowledge of OGE, threatened with respect to any of the Enogex Related Employees. (n) As to any Enogex Plan that is subject to Title IV of ERISA, there has been no event or condition which presents the material risk of plan termination, no accumulated funding deficiency, whether or not waived, within the meaning of Section 302 of ERISA or Section 412 of the Code (as each was in effect prior to 2008) has been incurred, no reportable event within the meaning of Section 4043 of ERISA (for which the disclosure requirements of Regulation section 4043.1 et seq., promulgated by the PBGC, have not been waived) has occurred and no failure to satisfy the minimum funding standards (as required by Section 302 of ERISA or Section 412 of the Code, as each is in effect after 2007), has occurred, whether or not waived, no notice of intent to terminate the plan has been given under Section 4041 of ERISA, no proceeding has been instituted under Section 4042 of ERISA to terminate the plan, no liability to the PBGC has been incurred (other than for premium payments paid on a timely basis), and the actuarial present value of the benefit liabilities under Section 4001(a)(16) of ERISA does not exceed the current value of plan assets by more than $500,000, determined, as of the beginning of the most recent plan year for which such liabilities have been determined, in accordance with the assumptions used for funding the plan pursuant to Section 412 or 430, as applicable, of the Code. (o) As to any Enogex Plan intended to be qualified under Section 401(a) of the Code, there has been no termination or partial termination of such plan within the meaning of Section 411(d)(3) of the Code.
(p) Each trust funding an Enogex Plan that is intended to be exempt from federal income taxation pursuant to Section 501(c)(9) of the Code satisfies the requirements of such section and has received a favorable determination letter from the Internal Revenue Service regarding such exempt status and has not, since receipt of the most recent favorable determination letter, been amended or operated in a way which would adversely affect such exempt status. (q) With respect to any Employee Benefit Plan that is not listed in Section 4.15(b) of the OGE Disclosure Schedule but that is sponsored, maintained, or contributed to, or has been sponsored, maintained, or contributed to by any ERISA Affiliate of any Enogex Group Entity, (A) no withdrawal liability, within the meaning of Section 4201 of ERISA, has been incurred, which withdrawal liability has not been satisfied, (B) no liability to the PBGC has been incurred by any such ERISA Affiliate, which liability has not been satisfied, (C) no accumulated funding deficiency, whether or not waived, within the meaning of Section 302 of ERISA or Section 412 of the Code (as each was in effect prior to 2008) has been incurred and no failure to satisfy the minimum funding standards (as required by Section 302 of ERISA or Section 412 of the Code, as each is in effect after 2007) has occurred, whether or not waived, (D) all contributions (including installments) to such plan required by Sections 302 or 303 of ERISA and Sections 412 or 430 of the Code have been timely made and (E) no circumstances exist or in the future could exist that could subject any Enogex Group Entity or, after the consummation of the transactions contemplated by this Agreement, the Company or any of its Subsidiaries or ERISA Affiliates, to any liability, including without limitation, any Tax or penalty under ERISA or the Code. (r) No circumstance exists or future circumstance could arise that would lead any Enogex Group Entity or, after the transaction contemplated by this Agreement, the Company, to incur any ERISA Title IV liability or suffer the imposition of any Encumbrance on any of their assets with respect to liabilities relating to any Enogex Plan or any employee benefit plan subject to Title IV of ERISA that was sponsored, maintained or contributed to by (A) OGE, (B) an ERISA Affiliate of OGE, or (C) any ERISA Affiliate of any Enogex Group Entity, or to which any of them had an obligation to contribute. 4.16 Books and Records . The minute books of Enogex contain true and correct copies of all actions taken at all meetings of the Board of Directors of Enogex and all written consents executed in lieu of such meetings. Complete copies of all such minute books for 2007 and 2008 and other records have been made available to outside counsel and other advisors to ETP.
(a) Except as set forth in Section 4.17(a) of the OGE Disclosure Schedule, between January 1, 2008 and the Execution Date, the Business of the Enogex Group Entities, taken as a whole, has been conducted in the ordinary course consistent with past practice, and none of the Enogex Group Entities has taken any of the actions prohibited by Section 5.1(b) , except in connection with entering into this Agreement.
(b) Subsequent to January 1, 2008, there has not been any change, event or occurrence that has had or could reasonably be expected to have an Enogex Material Adverse Effect. 4.18 Regulation . Neither OGE nor any of the Enogex Group Entities is, nor will OGE or any of the Enogex Group Entities be following the consummation of the transactions contemplated by this Agreement, an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 4.19 Energy Regulatory Matters . Except as indicated in Section 4.19 of the OGE Disclosure Schedule, none of the Enogex Group Entities is a “natural gas company” under the Natural Gas Act and none of the Enogex Group Entities has operated or provided services in a manner that would subject it to FERC jurisdiction over rates and terms of service pursuant to the Natural Gas Act. With the exception of Enogex, which provides intrastate transportation services pursuant to Section 311 of the NGPA, none of the Enogex Group Entities has performed services, or is subject to regulation under the NGPA. No approval by any State Regulatory Authority is required in connection with the execution and delivery of this agreement by OGE or the consummation of the transactions contemplated herein. Except as indicated in Section 4.19 of the OGE Disclosure Schedule, none of the Enogex Group Entities has become subject to any proceeding before any State Regulatory Authorities relating to their rates or facilities. 4.20 State Takeover Laws . No approvals are required under state takeover or similar laws in connection with the performance by OGE of its obligations under this Agreement. 4.21 Brokers’ Fees . Neither OGE nor any of the Enogex Group Entities, nor any of their respective officers or directors has employed any broker, finder or other person or incurred any liability on behalf of any ETIH Group Entity, ETP, any Enogex Group Entity or itself for any advisory, brokerage, finder, success, deal completion or similar fees or commissions in connection with the transactions contemplated by this Agreement, other than fees to be paid to UBS Securities LLC. 4.22 Investment Intent . OGE is acquiring a 50% Company Membership Interest pursuant to Article II for investment for its own account and not with a view to, or for sale in connection with, any distribution thereof. OGE (either alone or together with its advisors) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in such Company Membership Interest and is capable of bearing the economic risks of such investment. OGE is aware that the Company Membership Interest has not been registered, and will not be registered after the Closing, under the Securities Act or under any state or foreign securities Laws. 4.23 Certain Business Relationships between Enogex and its Affiliates . Except as set forth on Section 4.23 of the OGE Disclosure Schedule, (a) neither OGE nor any of its Subsidiaries (excluding Enogex and its Subsidiaries) has been involved in any business arrangement or relationship with Enogex and its Subsidiaries within the past two years, (b) neither OGE nor any of its Subsidiaries (excluding the Enogex and its Subsidiaries) owns any asset, tangible or intangible, that is used in Enogex’s or any of its Subsidiaries’ business and (c) neither OGE nor any of its Subsidiaries (excluding Enogex and its Subsidiaries) is a party to any
contract, commitment or agreement (whether written or oral) with Enogex or any of its Subsidiaries or relating to the business of Enogex or its Subsidiaries. 4.24 Limitation of Representations and Warranties . EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE IV , OGE IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE MEMBERSHIP INTERESTS OF ENOGEX, OR THE BUSINESS, ASSETS, OR LIABILITIES OF ANY ENOGEX GROUP ENTITY, INCLUDING, IN PARTICULAR, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED. ARTICLE V ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND OBLIGATIONS 5.1 Conduct of Business . Except (i) as otherwise contemplated by this Agreement, (ii) as otherwise required by Law or Environmental Law or ERISA, (iii) subject to applicable Laws, or (iv) as set forth in Section 5.1 of the ETP Disclosure Schedule or in Section 5.1 of the OGE Disclosure Schedule, without the prior written consent of the other Party hereto (which consent will not be unreasonably withheld, delayed or conditioned), each Party agrees that from the Execution Date through the Closing Date: (a) Each Party, with respect to the business of its Consolidated Group, shall, except as otherwise permitted under this Section 5.1 , (i) conduct the business of such Consolidated Group in the ordinary course consistent with past practices, (ii) use all reasonable efforts to preserve intact the present business organizations and material rights and franchises of such Consolidated Group, to keep available the services of and maintain positive employee relations with the ETIH Related Employees and ETIH Independent Contractors or the Enogex Related Employees and Enogex Independent Contractors, as applicable, and the current officers and employees of such Consolidated Group, and to preserve the material relationships of such Consolidated Group with customers, suppliers and others having business dealings with them, and (iii) maintain and keep the material properties and assets of such Consolidated Group in as good repair and condition, including any material insurance coverage thereon, as at the Execution Date, subject to ordinary wear and tear. (b) Without limiting the generality of Section 5.1(a) , except as disclosed in Section 5.1(b) of the ETP Disclosure Schedule or Section 5.1(b) of the OGE Disclosure Schedule, as applicable, each Party agrees that it will cause its respective Consolidated Group not to: (i) make any change in its Consolidated Group’s Governing Documents; (ii) issue, deliver or sell or authorize or propose the issuance, delivery or sale of, any of its equity securities or securities convertible into its equity securities, or subscriptions, rights, warrants or options to acquire or other agreements or commitments of any character obligating it to issue any such securities;
(iii) except for (A) any distributions from the ETIH Subsidiaries to ETIH or any of its Subsidiaries, or from the Enogex Subsidiaries to Enogex and (B) any cash distributions from Canyon to ETP or any of its Subsidiaries, declare, set aside or pay any distributions in respect of its equity securities, or split, combine or reclassify any of its equity securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any of its equity securities, or purchase, redeem or otherwise acquire, directly or indirectly, any of its equity securities; (iv) merge into or with any other person (other than (A) mergers among wholly-owned subsidiaries of the same Person, (B) mergers between ETIH and its wholly-owned subsidiaries, (C) mergers between Enogex and its wholly-owned subsidiaries or (D) as permitted by clause (v)); (v) acquire, through merger, consolidation or otherwise, all or substantially all of the business or assets of any person, or acquire any interest in or contribute any assets to any partnership or joint venture or enter into any similar arrangement for consideration in excess of $50,000,000 individually or $100,000,000 in the aggregate; (vi) (A) except as permitted by exclusions under other clauses of this Section 5.1(b) , other than in the ordinary course of business consistent with past practices, enter into any material contract or agreement or terminate or amend in any material respect any material contract or agreement to which it is a party or waive any material rights under any material contract or agreement to which it is a party, (B) with respect to OGE and its Consolidated Group, enter into any contract, agreement or commitment between OGE and its Subsidiaries (excluding the Enogex Group Entities), on the one hand, and the Enogex Group Entities, on the other hand, or terminate or waive any existing right or claim by the Enogex Group Entities against OGE and its Subsidiaries (excluding the Enogex Group Entities) and (C) with respect to ETP and its Consolidated Group, enter into any contract, agreement or commitment between ETP and its Subsidiaries (excluding the ETIH Group Entities), on the one hand, and the ETIH Group Entities, on the other hand, or terminate or waive any existing right or claim by the ETIH Group Entities against ETP and its Subsidiaries (excluding the ETIH Group Entities); (vii) purchase any securities of or make any investment in any Person (other than (A) ordinary-course overnight investments consistent with cash management practices of such Party, (B) investments in wholly-owned subsidiaries, (C) purchases and investments in addition to those contemplated by (A) and (B) above up to an aggregate amount of $10,000,000 for each Party and (D) as permitted pursuant to clause (v); (viii) incur, assume or guarantee any indebtedness for borrowed money, issue, assume or guarantee any debt securities, grant any option, warrant or right to purchase any debt securities, or issue any securities convertible into or exchangeable for any debt securities other than in connection with borrowings in the ordinary course of business by any member of its Consolidated Group under its existing bank credit facilities and intercompany debt for existing projects under development and acquisitions and capital expenditures permitted by this Section 5.1(b) , provided that such Party shall
provide prior written notice to the other Party of any such borrowing that is in excess of $50,000,000 individually or $100,000,000 in the aggregate; (ix) (A) sell, assign, transfer, abandon, lease or otherwise dispose of assets having a fair market value in excess of $2,000,000 in the aggregate, except for (1) assets listed in Section 5.1(b)(ix) of the ETP Disclosure Schedule and Section 5.1(b)(ix) of the OGE Disclosure Schedule, (2) natural gas, natural gas liquids, oil and condensate sales in the ordinary course of business consistent with past practices, and (3) dispositions of inventory or worn-out or obsolete equipment for fair value in the ordinary course of business consistent with past practices or (B) other than Permitted Encumbrances, grant any security interest with respect to, pledge or otherwise encumber any assets other than security interests granted after the Execution Date (i) with respect to assets acquired after the Execution Date (which acquisition is otherwise permitted by this Agreement) pursuant to related financing arrangements (which financing arrangements are otherwise permitted by this Agreement), (ii) with respect to assets already owned prior to the Execution Date, pursuant to the requirements of existing financial arrangements or (iii) pursuant to financing arrangements entered into after the Execution Date in accordance with Section 5.1(b)(ix) ; (x) (A) settle any claims, demands, lawsuits or state or federal regulatory proceedings for damages to the extent such settlements in the aggregate assesses damages in excess of $5,000,000 (other than any claims, demands, lawsuits or proceedings to the extent insured (net of deductibles), to the extent reserved against in the Transwestern Financial Statements, MEP Financial Statements, Canyon Financial Statements or the Enogex Financial Statements, as applicable, or to the extent covered by an indemnity obligation not subject to dispute or adjustment from a solvent indemnitor) or (B) settle any claims, demands, lawsuits or state or federal regulatory proceedings seeking an injunction or other equitable relief where such settlements could reasonably be expected to have an ETIH Material Adverse Effect or an Enogex Material Adverse Effect, as applicable; (xi) except as set forth in Section 5.1(b)(xi) of the ETP Disclosure Schedule or in Section 5.1(b)(xi) of the OGE Disclosure Schedule or as required on an emergency basis or for the safety of persons or the environment, make any capital expenditure in excess of $50,000,000 in the aggregate (other than as permitted by clause (v)); (xii) make any material change in its tax methods, principles or elections; (xiii) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP or by a change in Law; (xiv) fail to file on a timely basis all applications and other documents necessary to maintain, renew or extend any material permit, license, variance or any other material approval required by any Governmental Entity for the continuing operation of its business;
(xv) (A) grant any increases in the compensation of any of its officers or employees or independent contractors, except in the ordinary course of business consistent with past practices, (B) amend any existing employment or severance or termination contract with any officer or employee or independent contractor, (C) establish, adopt or become obligated under any new pension plan, welfare plan, multiemployer plan, Employee Benefit Plan, severance plan, change of control or other benefit arrangement or similar plan or arrangement, or (D) except as required by applicable Law, amend or take any other actions with respect to any Employee Benefit Plan of Enogex, ETIH or Canyon, as applicable, if such amendment would have the effect of enhancing any benefits thereunder, including acceleration of vesting and waiver of performance criteria; (xvi) adopt or vote to adopt a plan of complete or partial dissolution or liquidation; (xvii) make any material change to its officers’ and directors’ liability insurance as existing on of the Execution Date; or
Notwithstanding any provision in this Section 5.1 to the contrary, but subject to the following proviso, to the extent that they relate to ETP, the restrictions set forth in this Section 5.1 shall not apply to the business, operations, employees, agreements, indebtedness and securities of, or otherwise restrict the activities of MEP and its Subsidiaries; provided, however , that without the prior written consent of OGE, ETP will not take any action to approve the taking by MEP or any of its Subsidiaries or any MEP Designee (as defined in the LLC Agreement) of any of the following actions: (A) any matters that require Special Consent (as defined in the MEP LLC Agreement) pursuant to Section 6.3(b) of the MEP LLC Agreement other than the incurrence of indebtedness pursuant to the MEP Credit Facility in accordance with its terms existing on the date hereof; (B) except as permitted by exclusions under other clauses of this Section 5.1(b) , other than in the ordinary course of business consistent with past practices, enter into any material contract or agreement or terminate or amend in any material respect any material contract or agreement to which it is a party or waive any material rights under any material contract or agreement to which it is a party; (C) purchase any securities of or make any investment in any Person (other than (1) ordinary-course overnight investments consistent with cash management practices of such Party, (2) investments in wholly-owned subsidiaries and (3) purchases and investments in addition to those
contemplated by (1) and (2) above up to an aggregate amount of $10,000,000 for each Party; (D) except in accordance with the Development Plan (as defined in the MEP LLC Agreement) set forth on Schedule 5.1(b)(D) or in accordance with a Budget (as defined in the MEP LLC Agreement) approved in accordance with the MEP LLC Agreement prior to the date of this Agreement (provided that such previously approved Budget has been disclosed in writing to OGE) or as required on an emergency basis or for the safety of persons or the environment, make any capital expenditure in excess of $25 million in the aggregate; (E) make any material change in its tax methods, principles or elections; or (F) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP or by a change in Law; or
(c) Notification of Certain Events . From the Execution Date until the Closing Date, each Party shall promptly notify the other Parties in writing of (i) any event, condition or circumstance that could reasonably be expected to result in any representation or warranty of the notifying Party contained in this Agreement to be inaccurate in any material respect as of the Closing Date (or, in the case of any representation or warranty made as of a specified date, as of such specified date), (ii) any event, condition or circumstance that could reasonably be expected to result in any of the conditions set forth in Article VI not being satisfied on or prior to the Closing Date, (iii) any change, event or occurrence that has had or could reasonably be expected to have an ETIH Material Adverse Effect or Enogex Material Adverse Effect, as applicable, and (iv) any material breach by the notifying Party of any covenant, obligation or agreement contained in this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.1(c) shall not limit or otherwise affect the remedies available hereunder to the notified Parties.
(a) Subject to Section 5.2(b) and applicable Laws, upon reasonable notice, each Party shall (and shall cause its Consolidated Group to) afford the officers, employees, counsel, accountants and other authorized representatives and advisors of the requesting Party reasonable access, during normal business hours from the Execution Date until the Closing Date, to its properties, books, contracts and records as well as to its management personnel; provided that such access shall be provided on a basis that minimizes the disruption to the operations of the disclosing Party and its Consolidated Group. To the fullest extent permitted by law, the disclosing Party shall not be responsible or liable to the requesting Party for personal injuries
sustained by the requesting Party’s officers, employees, counsel, accountants and other representatives and advisors in connection with the access provided pursuant to this Section 5.2(a) , and shall be indemnified and held harmless by the requesting Party for any losses suffered by the disclosing Party or its officers, employees or representatives in connection with any such personal injuries. (b) The parties acknowledge that certain information received pursuant to Section 5.2(a) will be non-public or proprietary in nature and as such will be deemed to be “ Confidential Evaluation Material ” for purposes of the Confidentiality Agreement. Each Party further agrees to be bound by the terms and conditions of the Confidentiality Agreement (except that the term of the Confidentiality Agreement shall be two years from the Execution Date) and to maintain the confidentiality of such Confidential Evaluation Material in accordance with the Confidentiality Agreement. 5.3 Certain Filings . As promptly as practicable following the Execution Date (and in any event no later than 10 Business Days following the Execution Date), (i) the parties shall (A), to the extent required, make their respective filings under the HSR Act with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice, which filings will include a request for early terminatio |
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