Exhibit
10.1
PURCHASE AGREEMENT
by and among
PRO LP CORP.
a Delaware corporation and
PRO GP CORP.
a Delaware corporation
collectively, as Selling Parties,
and
BREITBURN ENERGY PARTNERS L.P.
a Delaware limited partnership,
as Buyer,
for the purchase and sale of
all the limited liability company interests
of
BREITBURN MANAGEMENT COMPANY LLC
a Delaware limited liability company
owned by Pro LP Corp. and Pro GP Corp.
dated as of June 17, 2008
TABLE OF CONTENTS
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Page
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DEFINITIONS
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ARTICLE
II
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SALE
AND PURCHASE
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Section
2.1
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Agreement
to Sell and to Purchase
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5
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Section
2.2
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Certain
Deliveries at Closing
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6
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Section
2.3
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Purchase
Price
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6
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ARTICLE
III
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REPRESENTATIONS
AND WARRANTIES OF SELLING PARTIES
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Section
3.1
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Organization
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6
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Section
3.2
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Capitalization
of GP Entities; Title
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7
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Section
3.3
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Subsidiaries;
Equity Interests
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8
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Section
3.4
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Validity
of Agreement; Authorization
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8
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Section
3.5
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No
Conflict or Violation
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8
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Section
3.6
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Consents
and Approvals
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8
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Section
3.7
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Tax
Matters
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9
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Section
3.8
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Absence
of Undisclosed Liabilities
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9
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Section
3.9
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Compliance
with Laws
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9
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Section
3.10
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Litigation
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10
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Section
3.11
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Contracts
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10
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Section
3.12
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Brokers
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10
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Section
3.13
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Employee
Plans
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10
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Section
3.14
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No
Other Representations
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12
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ARTICLE
IV
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REPRESENTATIONS
AND WARRANTIES OF BUYER
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Section
4.1
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Organization
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12
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Section
4.2
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Validity
of Agreement; Authorization
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12
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Section
4.3
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No
Conflict or Violation
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13
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Section
4.4
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Consents
and Approvals
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13
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Section
4.5
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Brokers
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13
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Section
4.6
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Financial
Ability
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13
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ARTICLE
V
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COVENANTS
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Section
5.1
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Further
Assurances
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13
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Section
5.2
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Commercially
Reasonable Efforts
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13
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Section
5.3
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Confidential
Information
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14
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Section
5.4
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Tax
Covenants
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14
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Section
5.5
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Director
Resignations
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15
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Section
5.6
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Directors’
and Officers’ Indemnification and Insurance
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15
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Section
5.7
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Equity
and Equity-Related Compensation Plans
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16
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Section
5.8
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Employment
Agreements
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17
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Section
5.9
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Post-Closing
Post Closing Payments to Selling Parties and
Affiliates
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18
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ARTICLE
VI
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CLOSING
DELIVERIES-SELLING PARTIES
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Section
6.1
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Receipt
of Documents
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18
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Section
6.2
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Consents
and Approvals
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18
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Section
6.3
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Director
Resignations
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18
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Section
6.4
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Transition
Services Agreement
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18
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Section
6.5
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Contemporaneous
Closing Under the Common Unit Agreement
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18
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Section
6.6
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Amendment
of Administrative Services Agreement with BECLP, Operations
and Proceeds Agreement and Surface Operating Agreement;
Termination of Omnibus Agreement
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18
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ARTICLE
VII
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CLOSING
DELIVERIES-BUYER
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Section
7.1
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Receipt
of Documents
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19
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Section
7.2
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Consents
and Approvals
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19
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Section
7.3
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Contemporaneous
Closing Under the Common Unit Agreement
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19
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ARTICLE
VIII
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[RESERVED]
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ARTICLE
IX
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SURVIVAL;
INDEMNIFICATION
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Section
9.1
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Survival
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19
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Section
9.2
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Indemnification
Coverage
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19
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Section
9.3
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Procedures
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21
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Section
9.4
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Waiver
of Consequential, Etc
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22
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Section
9.5
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Compliance
with Express Negligence Rule
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22
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Section
9.6
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Remedy
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22
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Section
9.7
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Tax
Treatment of Indemnity Payments
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22
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ARTICLE
X
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MISCELLANEOUS
PROVISIONS
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Section
10.1
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Publicity
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22
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Section
10.2
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Successors
and Assigns; No Third Party Beneficiaries
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22
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Section
10.3
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Investment
Bankers, Financial Advisors, Brokers and Finders
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23
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Section
10.4
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Fees
and Expenses
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23
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Section
10.5
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Notices
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23
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Section
10.6
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Entire
Agreement
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23
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Section
10.7
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Amendments
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23
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Section
10.8
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Severability
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23
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Section
10.9
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Titles
and Headings
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25
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Section
10.10
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Signatures
and Counterparts
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25
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Section
10.11
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Enforcement
of the Agreement; Damages
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25
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Section
10.12
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Governing
Law
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25
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Section
10.13
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Disclosure
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25
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Section
10.14
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Consent
to Jurisdiction
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26
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EXHIBITS
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Exhibit
2.2(a)(i)
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Pro
LP Bill of Sale
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Exhibit
2.2(a)(ii)
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Pro
GP Bill of Sale
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Exhibit
5.5
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Director
Resignations
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Exhibit
6.4
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Transition
Services Agreement
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Exhibit
6.6(a)
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Amendment
to Administrative Services Agreement
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Exhibit
6.6(b)
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Amendment
to Operations and Proceeds Agreement
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Exhibit
6.6(c)
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Amendment
to Surface Operating Agreement
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Exhibit
6.6(d)
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Termination
of Omnibus Agreement
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Disclosure Schedules
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Schedule
2.3
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Purchase
Price Allocation
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Schedule
3.1
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Organization
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Schedule
3.2(a)
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Preferential
Rights
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Schedule
3.3
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Selling
Parties’ Subsidiaries; Equity Interests
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Schedule
3.5
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Selling
Parties’ No Conflict or Violation
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Schedule
3.6
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Selling
Parties’ Consents and Approvals
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Schedule
3.7(b)
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Selling
Parties’ Tax Matters
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Schedule
3.8
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Selling
Parties’ Material Indebtedness or Liability
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Schedule
3.9
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Selling
Parties’ Compliance with Laws
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Schedule
3.10
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Selling
Parties’ Litigation
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Schedule
3.11
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Selling
Parties’ Contracts
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Schedule
3.12
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Selling
Parties’ Brokers
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Schedule
3.13(b)
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Employee
Plans
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Schedule
4.3
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Buyer’s
No Conflict or Violation
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Schedule
4.4
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Buyer’s
Consents and Approvals
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Schedule
4.6
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Buyer’s
Brokers
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Schedule
5.9
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Post-Closing
Payments to Selling Parties and Affiliates
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PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT (this “
Agreement ”)
is made and entered into as of this 17th day of June, 2008, by and
among PRO LP CORP., a Delaware corporation (“
Pro LP ”),
and PRO GP CORP., a Delaware corporation (“
Pro GP ,”
and collectively with Pro LP, the “
Selling Parties ”),
and BREITBURN ENERGY PARTNERS L.P., a Delaware limited partnership
(“
Buyer ”).
W I T N E S S E T H:
WHEREAS ,
Pro LP holds limited liability company interests (the
“
Pro LP LLC Interests ”)
comprising 95.15% of the outstanding limited liability company
interests in BreitBurn Management Company, LLC, a Delaware limited
liability company (“
BreitBurn Management ”);
WHEREAS ,
Pro GP holds membership interests (the “
Pro GP LLC Interests ,”
and collectively with the Pro LP LLC Interests, the “
Sellers’ LLC Interests ”)
comprising approximately 0.4% of the outstanding membership
interests in BreitBurn Management;
WHEREAS ,
BreitBurn Management holds all of the issued and outstanding
limited liability company interests in BreitBurn GP, LLC, a
Delaware limited liability company (“
BreitBurn GP ”
and, together with BreitBurn Management, the “
GP Entities ”);
WHEREAS ,
BreitBurn GP is the sole general partner of BreitBurn Energy
Partners L.P., a Delaware limited partnership (the “
Partnership ”),
and BreitBurn GP owns a 0.66473% general partner interest in the
Partnership (the “
GP Interest ”);
WHEREAS ,
other than the GP Interest, the Partnership also has outstanding
common units representing limited partner interests in the
Partnership (the “
Common Units ”);
WHEREAS ,
Pro LP and Pro GP own certain Common Units, representing an
approximate 21.5% limited partner interest in the Partnership,
which are being sold to Buyer contemporaneously herewith pursuant
to a separate Purchase Agreement among Pro LP, Pro GP and Buyer of
even date herewith (the “
Common Unit Agreement ”);
WHEREAS ,
Buyer desires to purchase the Sellers’ LLC Interests from the
respective Selling Parties and be admitted to BreitBurn Management
as a substitute member of BreitBurn Management, and each Selling
Party desires to sell the Sellers’ LLC Interests owned by it
to Buyer and cease to be a member of BreitBurn Management, in each
case upon the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS ,
as of the date hereof, Provident Energy Ltd., an Alberta
corporation (“
Seller Parent ”),
has entered into a Guaranty Agreement (the “
Seller Parent Guaranty ”)
in favor of Buyer and the other Buyer Indemnified Parties, pursuant
to which the Seller Parent has guaranteed the performance by the
Selling Parties of all of their obligations under this Agreement
and the Transaction Documents.
NOW, THEREFORE ,
in consideration of the mutual terms, conditions and other
agreements set forth herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
As
used herein, the following terms have the following
meanings:
“
Affiliate ”
of a Person means a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under
common control with, the first-mentioned Person.
“
Agreement ”
has the meaning assigned to such term in the Preamble.
“
BECLP ”
means BreitBurn Energy Company L.P., a Delaware limited
partnership.
“
Bidder Confidentiality Agreements ”
has the meaning assigned to such term in
Section 5.3(b) .
“
Bills of Sale ”
has the meaning assigned to such term in
Section 2.2(a)(ii) .
“
BreitBurn GP ”
has the meaning assigned to such term in the Recitals.
“
BreitBurn GP LLC Agreement ”
has the meaning assigned to such term in
Section 3.2(b) .
“
BreitBurn Management ”
has the meaning assigned to such term in the Recitals.
“
BreitBurn Management LLC Agreement ”
has the meaning assigned to such term in
Section 3.2(a) .
“
Buyer ”
has the meaning assigned to such term in the Preamble.
“
Buyer Indemnified Parties ”
has the meaning assigned to such term in
Section 9.2(a) .
“
Closing ”
has the meaning assigned to such term in
Section 2.1(b) .
“
Closing Date ”
has the meaning assigned to such term in
Section 2.1(b) .
“
Code ”
has the meaning assigned to such term in
Section 3.7(b) .
“
Common Unit Agreement ”
has the meaning assigned to such term in the Recitals.
“
Common Units ”
has the meaning assigned to such term in the Recitals.
“
Controlled Group Liability ”
has the meaning assigned to such term in
Section 3.13(a)(i) .
“
Deductible ”
has the meaning assigned to such term in
Section 9.2(c)(ii) .
“
Encumbrances ”
has the meaning assigned to such term in
Section 2.1(a)(i) .
“
Equity Plan ”
or “
Equity Plans ”
have the meanings assigned to such terms in
Section 3.13(a)(v) .
“
ERISA ”
has the meaning assigned to such term in
Section 3.13(a)(ii) .
“
ERISA Affiliate ”
has the meaning assigned to such term in
Section 3.13(a)(vi) .
“
Exchange Act ”
means the Securities Exchange Act of 1934, as amended.
“
Governmental Authority ”
has the meaning assigned to such term in
Section 3.5 .
“
GP Entities ”
has the meaning assigned to such term in the Recitals.
“
GP Entity Plan ”
has the meaning assigned to such term in
Section 3.13(a)(iii) .
“
GP Interest ”
has the meaning assigned to such term in the Recitals.
“
Indemnified Officers and Directors ”
has the meaning assigned to such term in
Section 5.6(b) .
“
Indemnified Parties ”
has the meaning assigned to such term in
Section 9.2(c)(iii) .
“
Indemnifying Party ”
has the meaning assigned to such term in
Section 9.2(c)(iii) .
“
Knowledge of the Selling Parties ”
shall mean the actual knowledge, without inquiry, of Thomas W.
Buchanan, David I. Holm, Daniel J. O’Byrne and Mark N.
Walker.
“
Legal Proceeding ”
has the meaning assigned to such term in
Section 3.10 .
“
License ”
or “
Licenses ”
shall mean all consents, licenses, permits, certificates,
franchises, authorizations and approvals issued or granted to any
GP Entity, any registration or filing with, any Governmental
Authority as are necessary for the conduct of each GP
Entity’s business as currently conducted.
“
Loss ”
or “
Losses ”
has the meaning assigned to such term in
Section 9.2(a) .
“
Material Adverse Effect ”
shall mean an adverse effect on the assets, properties, business,
operations, or financial condition of the GP Entities, taken as a
whole, that would have a material adverse effect on the value of
the Sellers’ LLC Interests;
provided, however ,
that none of the following shall be deemed to constitute a Material
Adverse Effect: (a) any effect resulting from entering into this
Agreement or the announcement of the transactions contemplated by
this Agreement; (b) any effect resulting from changes in general
market, economic, financial or political conditions in the area in
which any of the GP Entities conduct any business or own any
assets, the United States or worldwide; (c) any effect resulting
from changes in general economic conditions in the industry in
which the GP Entities operate or any outbreak of hostilities or
war; (d) any effect resulting from a change in law from and after
the date of this Agreement; (e) any reclassification or
recalculation of reserves of the Partnership or any of its
Subsidiaries in the ordinary course of business; (f) any change in
the prices of oil, natural gas or other hydrocarbons; (g) any
effect that results from oil and gas exploration, production,
development, processing, gathering and/or transportation industry
generally, including the cessation of production from any producing
well or the drilling of an oil or gas well that does not encounter
commercial quantities of oil, gas or other hydrocarbons; and (h)
any natural declines in the performance of any well of any of the
Partnership or any of its Subsidiaries.
“
Material Contract ”
has the meaning assigned to such term in
Section 3.11 .
“
Organizational Documents ”
shall mean certificates of incorporation, by-laws, certificates of
formation, limited liability company operating agreements,
partnership or limited partnership agreements or other formation or
governing documents of a particular entity.
“
Partnership ”
has the meaning assigned to such term in the Recitals.
“
Person ”
shall mean an individual, corporation, association, trust, limited
liability company, limited partnership, limited liability
partnership, partnership, incorporated organization, other entity
or group (as defined in Section 13(d)(3) of the Exchange
Act).
“
Plan ”
has the meaning assigned to such term in
Section 3.13(a)(iv) .
“
Pre-Existing Equity Plans Obligations ”
has the meaning assigned to such term in
Section 5.7 .
“
Pro GP ”
has the meaning assigned to such term in the Preamble.
“
Pro GP Bill of Sale ”
has the meaning assigned to such term in
Section 2.2(a)(ii) .
“
Pro GP LLC Interests ”
has the meaning assigned to such term in the Recitals.
“
Pro LP ”
has the meaning assigned to such term in the Preamble.
“
Pro LP Bill of Sale ”
has the meaning assigned to such term in
Section 2.2(a)(i) .
“
Pro LP LLC Interests ”
has the meaning assigned to such term in the Recitals.
“
Provident Plan ”
has the meaning assigned to such term in
Section 3.13(a)(vii) .
“
Purchase Price ”
has the meaning assigned to such term in
Section 2.3 .
“
SEC Reports ”
means all forms, reports, schedules and statements required to be
filed by the Partnership with the Securities and Exchange
Commission under the Exchange Act since October 4,
2006.
“
Seller Indemnified Parties ”
has the meaning assigned to such term in
Section 9.2(b) .
“
Seller Parent ”
has the meaning assigned to such term in the Recitals.
“
Seller Parent Guaranty ”
has the meaning assigned to such term in the Recitals.
“
Sellers’ LLC Interests ”
has the meaning assigned to such term in the Recitals.
“
Selling Parties ”
has the meaning assigned to such term in the Preamble.
“
Subsidiary ”
when used with respect to any party means any corporation or other
organization of which such party directly or indirectly owns at
least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board
of directors or others performing similar functions with respect to
such corporation or other organization.
“
Tax ”
or “
Taxes ”
shall have the meaning assigned to such term in
Section 3.7(a) .
“
Tax Returns ”
shall have the meaning assigned to such term in
Section 3.7(a) .
“
Transaction Documents ”
shall mean the agreements, contracts, documents, instruments and
certificates provided for in this Agreement to be entered into by
one or more of the parties hereto or any of their Affiliates in
connection with the sale of the Seller’s LLC Interests
contemplated by this Agreement, including without limitation the
Bills of Sale and the Seller Parent Guaranty.
“
Transfer Taxes ”
has the meaning assigned to such term in
Section 5.4(c) .
ARTICLE II
SALE AND PURCHASE
Section
2.1
Agreement to Sell and to Purchase .
(a)
On
the Closing Date (as hereinafter defined) and upon the terms
and subject to the conditions set forth in this
Agreement:
(i)
Pro
LP shall sell, assign, transfer, convey and deliver to Buyer,
and Buyer shall purchase and accept from Pro LP, the Pro LP
LLC Interests, free and clear of any 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 (“
Encumbrances ”),
except for restrictions on transfer arising under applicable
securities laws or as may be set forth in the BreitBurn Management
LLC Agreement; and
(ii)
Pro
GP shall sell, assign, transfer, convey and deliver to Buyer,
and Buyer shall purchase and accept from Pro GP, the Pro GP
LLC Interests, free and clear of any Encumbrances, except for
restrictions on transfer arising under applicable securities
laws or as may be set forth in the BreitBurn Management LLC
Agreement.
(b)
The
closing of such sale and purchase (the “
Closing ”)
shall take place at 8:00 a.m. (Central Time), on the date hereof
(the “
Closing Date ”)at
the offices of Andrews Kurth LLP in Houston, Texas or at such other
place as the parties hereto shall agree in writing.
(c)
Buyer
hereby agrees that it is bound by the terms and conditions of
the BreitBurn Management LLC Agreement. Notwithstanding any
provision in the BreitBurn Management LLC Agreement, Buyer is
deemed admitted to BreitBurn Management as a substitute member
of BreitBurn Management simultaneously with the consummation
of the transfer of the Sellers’ LLC Interests
contemplated hereby, and immediately thereafter, each of the
Selling Parties shall and do hereby cease to be a member of
BreitBurn Management, and shall thereupon cease to have or
exercise any right or power as a member of BreitBurn
Management. The parties hereto agree that the transfer of
Sellers’ LLC Interests, the admission of Buyer as a
substitute member of BreitBurn Management and the Selling
Parties ceasing to be members of BreitBurn Management, shall
not dissolve BreitBurn Management, and BreitBurn Management
shall be continued without dissolution.
Section
2.2
Certain Deliveries at Closing .
(a)
At
the Closing, the Selling Parties shall make the following
deliveries to Buyer:
(i)
Pro
LP shall deliver to Buyer a duly executed bill of sale, in
substantially the form attached hereto as
Exhibit
2.2(a)(i) ,
transferring the Pro LP LLC Interests (the “
Pro LP Bill of Sale ”);
(ii)
Pro
GP shall deliver to Buyer a duly executed bill of sale, in
substantially the form attached hereto as
Exhibit
2.2(a)(ii) ,
transferring the Pro GP LLC Interests (the “
Pro GP Bill of Sale ,”
and with the Pro LP Bill of Sale, the “
Bills of Sale ”);
and
(iii)
a
certificate of non-foreign status of each of the Selling
Parties meeting the requirements of Treasury Regulation
Section 1.1445-2(b)(2).
(b)
At
the Closing, Buyer shall make payment of the Purchase Price,
as provided in
Section 2.3 below,
to the Selling Parties.
Section
2.3
Purchase Price
.
The aggregate purchase price for the Sellers’ LLC
Interests (the “
Purchase Price ”)
shall be $9,966,825, subject to adjustment, if applicable, only
pursuant to
Section 9.7 .
At the Closing, Buyer shall deliver to the Selling Parties the
Purchase Price, which shall be paid by wire transfer to the Selling
Parties of immediately available funds made to such bank account or
accounts as designated in writing by the Selling Parties on or
before the Closing Date. The Purchase Price shall be allocated
between the Selling Parties in accordance with
Schedule
2.3 .
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLING
PARTIES
As
of the date hereof, each of the Selling Parties hereby
represents and warrants, jointly and severally, to Buyer as
follows:
Section
3.1
Organization .
(a)
Each
of Pro LP and Pro GP is a corporation duly formed, validly
existing and in good standing under the laws of the State of
Delaware.
(b)
Each
of the GP Entities is a limited liability company, duly
formed, validly existing and in good standing under the laws
of Delaware. Each of the GP Entities has all requisite limited
liability company power and authority and all governmental
licenses, authorizations, permits, consents and approvals to
own its respective properties and assets and to conduct its
business as now conducted, except where the failure to have
such governmental licenses, authorizations, permits, consents
and approvals would not have a Material Adverse Effect. Each
of the GP Entities is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction
where the character of the properties owned or leased by it or
the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so
qualified or in good standing would not individually or in the
aggregate have a Material Adverse Effect.
Schedule
3.1 sets
forth for each GP Entity all of the jurisdictions in which such GP
Entity is qualified to do business.
Section
3.2
Capitalization of GP Entities; Title .
(a)
Pro
LP and Pro GP are members of BreitBurn Management with the
percentage membership interests in BreitBurn Management set
forth in the Recitals to this Agreement. The Pro LP LLC
Interests are owned of record and beneficially by Pro LP, and
the Pro GP LLC Interests are owned of record and beneficially
by Pro GP. All of such Sellers’ LLC Interests have been
duly authorized and validly issued in accordance with the
First Amended and Restated Limited Liability Company Agreement
of BreitBurn Management, dated as of October 10, 2006 (the
“
BreitBurn Management LLC Agreement ”),
are fully paid (to the extent required by the BreitBurn Management
LLC Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware Limited Liability
Company Act). Except as set forth in
Schedule
3.2(a) the
BreitBurn Management LLC Agreement, there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any interest in BreitBurn
Management pursuant to any agreement to which any of BreitBurn
Management or the Selling Parties is a party or to which any of
them may be bound. Except as set forth in
Schedule
3.2(a) ,
there are no outstanding options, warrants or similar rights to
purchase or acquire any equity interests in BreitBurn Management.
Each of the Selling Parties has valid and marketable title to the
Sellers’ LLC Interest owned by it, free and clear of any
Encumbrances (other than (i) restrictions on transfer arising under
applicable securities laws or as set forth in
Schedule
3.2(a) ,
or (ii) as may be set forth in the BreitBurn Management LLC
Agreement).
(b)
BreitBurn
Management is the sole member of BreitBurn GP. The BreitBurn
GP LLC Interests are owned of record and beneficially by
BreitBurn Management. All of such BreitBurn GP LLC Interests
have been duly authorized and validly issued in accordance
with the Limited Liability Company Agreement of BreitBurn GP,
dated as of October 10, 2006 (the “
BreitBurn GP LLC Agreement ”),
are fully paid (to the extent required by the BreitBurn GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by Section 18-607 or 18-804 of the Delaware Limited
Liability Company Act). Except as set forth in the BreitBurn GP LLC
Agreement, there are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any interest in BreitBurn GP pursuant to any agreement to which any
of BreitBurn GP or BreitBurn Management is a party or to which any
of them may be bound. There are no outstanding options, warrants or
similar rights to purchase or acquire any equity interests in
BreitBurn GP. BreitBurn Management has valid and marketable title
to the BreitBurn GP LLC Interests, free and clear of any
Encumbrances (other than (i) restrictions on transfer arising under
applicable securities laws, or (ii) as may be set forth in the
BreitBurn GP LLC Agreement).
Section
3.3
Subsidiaries; Equity Interests .
Except as set forth on
Schedule
3.3 ,
BreitBurn Management does not have any Subsidiaries, and does not
own, directly or indirectly, any shares of capital stock, voting
rights or other equity interests or investments in any other
Person.
Section
3.4
Validity of Agreement; Authorization .
Each of the Selling Parties has the power and authority to enter
into this Agreement and the Transaction Documents to which it is
party and to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and such Transaction
Documents and the performance of the Selling Parties’
obligations hereunder and thereunder have been duly authorized by
the Board of Directors of Pro LP and the Board of Directors of Pro
GP, as applicable, and no other proceedings on the part of any of
the Selling Parties are necessary to authorize such execution,
delivery and performance. This Agreement and the Transaction
Documents to which any of the Selling Parties is party each have
been duly executed and delivered by each of the Selling Parties, as
applicable, and constitute such Selling Party’s valid and
binding obligation enforceable against such Selling Party in
accordance with its terms (except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar law affecting the enforcement of
creditors’ rights generally or by general equitable
principles).
Section
3.5
No Conflict or Violation .
The execution, delivery and performance of this Agreement and the
Transaction Documents to which each of the Selling Parties is party
by each of the Selling Parties does not: (a) violate or conflict
with any provision of the Organizational Documents of any Selling
Party or either of the GP Entities; (b) violate any applicable
provision of law, statute, judgment, order, writ, injunction,
decree, award, rule, or regulation of any foreign, federal, state
or local government, court, arbitrator, agency or commission or
other governmental or regulatory body or authority (“
Governmental Authority ”);
(c) violate, result in a breach of, constitute (with due notice or
lapse of time or both) a default or cause any obligation, penalty
or premium to arise or accrue under any material contract, lease,
loan agreement, mortgage, security agreement, trust indenture or
other agreement or instrument to which any of the Selling Parties
or GP Entities is a party or by which any of them is bound or to
which any of their respective properties or assets is subject; (d)
result in the creation or imposition of any Encumbrance upon any of
the properties or assets of any of the GP Entities; or (e) result
in the cancellation, modification, revocation or suspension of any
License of any of the GP Entities, except in the cases of clauses
(b) through (e) above, as set forth on
Schedule
3.5 or
as would not have a Material Adverse Effect.
Section
3.6
Consents and Approvals .
Except as disclosed on
Schedule
3.6 ,
no consent, approval, waiver or authorization of, or filing,
registration or qualification with, any Governmental Authority or
any other Person (on the part of any of the Selling Parties or GP
Entities) is required for any such party to execute and deliver
this Agreement or to perform its respective obligations hereunder,
except for such consents, approvals, waivers or authorizations or
filings, registrations or qualifications the failure to obtain
which would not have a Material Adverse Effect.
Section
3.7
Tax Matters .
(a)
For
purposes of this Agreement, “
Tax Returns ”
shall mean returns, reports, exhibits, schedules, information
statements and other documentation filed or required to be filed in
connection with the calculation, determination, assessment or
collection of any Tax and shall include any amended returns. For
purposes of this Agreement, “
Tax ”
or “
Taxes ”
shall mean any and all federal, state, local, foreign and other
taxes of whatever kind (including any interest, penalties or
additions to the tax imposed in connection therewith or with
respect thereto).
(b)
Except
as disclosed on
Schedule
3.7(b) ,
to the Knowledge of the Selling Parties (i) each of the GP Entities
has filed (or joined in the filing of) when due (taking into
account any extensions of time within which to file) all Tax
Returns required by applicable law to be filed with respect to each
of the GP Entities and all such Tax Returns were true, correct and
complete in all material respects as of the time of such filing,
other than those Tax Returns the failure of which to file or to be
true, correct and complete would not have a Material Adverse
Effect; (ii) all Taxes due and owing by the GP Entities on or prior
to the Closing Date have been paid (except for Taxes that are being
contested in good faith); (iii) there is no action, suit,
proceeding, investigation, audit or claim now pending against any
of the GP Entities in respect of any material Tax assessment; (iv)
no written claim has been made by any Tax authority of a
jurisdiction in which a GP Entities does not currently file a Tax
Return that such GP Entity is subject to Tax by such jurisdiction,
(v) none of the GP Entities has granted an extension of time within
which to pay its Taxes or file its Tax Returns which extension
remains in effect; (vi) none of the GP Entities has waived or
extended any applicable statute of limitations for the assessment
or collection of Taxes of a GP Entity which waiver or extension
remains in effect; (vii) none of the Selling Parties is a
“foreign person” within the meaning of Section 1445 of
the United States Internal Revenue Code of 1986, as amended (the
“
Code ”);
and (viii) BreitBurn Management has made, or shall be eligible to
make, an election under Section 754 of the Code.
(c)
To
the Knowledge of the Selling Parties, each of the GP Entities
has, since formation, been classified as either a partnership
or a disregarded entity for federal income tax
purposes.
(d)
To
the Knowledge of the Selling Parties, there are no Transfer
Taxes arising under the laws of Canada resulting from the
transactions contemplated by this Agreement.
(e)
The
only representations and warranties given in respect of Tax
matters are those contained in this
Section 3.7 and
none of the other representations and warranties herein shall be
deemed by the parties hereto to constitute, directly or indirectly,
a representation or warranty in respect of Tax
matters.
Section
3.8
Absence of Undisclosed Liabilities .
Except as disclosed on
Schedule
3.8 ,
to the Knowledge of the Selling Parties, BreitBurn Management has
no material indebtedness or liability, absolute or contingent,
other than (i) pursuant to the contracts set forth on
Schedule
3.11 and
(ii) liabilities of the Partnership.
Section
3.9
Compliance with Laws .
Except with respect to Tax matters (which are provided for
in
Section 3.7 ),
and except as set forth on
Schedule
3.9 or
in the SEC Reports, since October 4, 2006, to the Knowledge of the
Selling Parties the operations of BreitBurn Management have been
conducted in material compliance with all applicable laws,
regulations, orders and other requirements of all Governmental
Authorities having jurisdiction over BreitBurn Management and its
assets, properties and operations.
Section
3.10
Litigation .
Except as set forth on
Schedule
3.10 ,
to the Knowledge of the Selling Parties there are no Legal
Proceedings pending or threatened against or involving the Selling
Parties or either of the GP Entities that, individually or in the
aggregate, are reasonably likely to (a) have a Material Adverse
Effect or (b) materially impair or delay the ability of any of the
Selling Parties to perform their obligations under this Agreement
or the Transaction Documents or consummate the transactions
contemplated hereby or thereby. Except as set forth on
Schedule
3.10 or
as set forth in the SEC Reports, to the Knowledge of the Selling
Parties there is no order, judgment, injunction or decree of any
Governmental Authority outstanding against any of the Selling
Parties or GP Entities that, individually or in the aggregate,
would have any effect referred to in the foregoing clauses (a) and
(b). “
Legal Proceeding ”
shall mean any judicial, administrative or arbitral actions, suits,
proceedings (public or private), investigations or governmental
proceedings before any Governmental Authority.
Section
3.11
Contracts .
To the Knowledge of the Selling Parties,
Schedule
3.11 sets
forth (other than those contracts filed as exhibits to the SEC
Reports or those contracts that are non-recourse to BreitBurn
Management and subject to the dollar amount limitations of clauses
(i) or (ii) below) a true and complete list of the following
contracts, agreements, instruments and commitments to which
BreitBurn Management is a party or otherwise relating to or
affecting any of its assets, properties or operations, whether
written or oral: (i) contracts calling for payments by or to
BreitBurn Management of amounts greater than $500,000 per year;
(ii) contracts, loan agreements, letters of credit, repurchase
agreements, mortgages, security agreements, guarantees, pledge
agreements, trust indentures and promissory notes and similar
documents relating to the borrowing of money or for lines of
credit; and (iii) partnership or joint venture agreements
(collectively with those contracts filed as exhibits to the SEC
Reports, “
Material Contracts ”).
To the Knowledge of the Selling Parties, each Material Contract is
valid, binding and enforceable
