Exhibit 10.1
COMMON UNIT
PURCHASE AGREEMENT
by and between
K-SEA TRANSPORTATION PARTNERS
L.P.
and
TORTOISE ENERGY INFRASTRUCTURE
CORPORATION
Table of
Contents
COMMON UNIT PURCHASE
AGREEMENT
This COMMON UNIT PURCHASE AGREEMENT,
dated as of June 1, 2005 (this “ Agreement
”), is by and between K-SEA TRANSPORTATION PARTNERS L.P., a
Delaware limited partnership (“ K-Sea ”), and
TORTOISE ENERGY INFRASTRUCTURE CORPORATION, a Maryland closed-end
management investment company (“ Purchaser
”).
WHEREAS, K-Sea desires to sell
500,000 Common Units to Purchaser and Purchaser desires to purchase
500,000 Common Units from K-Sea in accordance with the provisions
of this Agreement;
WHEREAS, K-Sea has agreed to provide
Purchaser with certain registration rights with respect to the
Common Units acquired pursuant hereto.
NOW THEREFORE, in consideration of
the mutual covenants and agreements set forth herein and for good
and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
Section 1.01
Definitions
. As used in this Agreement,
and unless the context requires a different meaning, the following
terms have the meanings indicated:
“ Affiliate ”
means, with respect to a specified Person, any other Person,
directly or indirectly controlling, controlled by or under direct
or indirect common control with such specified Person. For
purposes of this definition, “control” (including, with
correlative meanings, “controlling”, “controlled
by”, and “under common control with”) means the
power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or
otherwise.
“ Anniversary Date
” means six months from the Closing Date.
“ Basic Documents
” means, collectively, this Agreement, the Registration
Rights Agreement, and any and all other agreements or instruments
executed and delivered to Purchaser by K-Sea or any Subsidiary of
K-Sea hereunder or thereunder.
“ Business Day ”
means any day other than a Saturday, Sunday, or a legal holiday for
commercial banks in Wilmington, Delaware.
“ Closing ” shall
have the meaning specified in Section 2.03 .
“ Closing Date ”
shall have the meaning specified in Section 2.03
.
“ Commission ”
means the United States Securities and Exchange
Commission.
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“ Common Unit Price
” shall have the meaning specified in
Section 2.07 .
“ Common Units ”
means the common units representing limited partner interests in
K-Sea.
“ Confidentiality
Agreement ” means that certain letter agreement between
K-Sea and Purchaser dated May 10, 2005.
“ Delaware LP Act
” shall have the meaning specified in
Section 3.02.
“ Exchange Act ”
means the Securities Exchange Act of 1934, as amended from time to
time, and the rules and regulations of the Commission
promulgated thereunder.
“ GAAP ” means
generally accepted accounting principles in the United States of
America in effect from time to time.
“ General Partners
” means K-Sea General Partner L.P., a Delaware limited
partnership and the general partner of K-Sea, and K-Sea General
Partner GP, LLC, a Delaware limited liability company and the
general partner of K-Sea General Partner L.P.
“ Governmental
Authority ” means, with respect to a particular Person,
the country, state, county, city and political subdivisions in
which such Person or such Person’s Property is located or
which exercises valid jurisdiction over any such Person or such
Person’s Property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any
monetary authority which exercises valid jurisdiction over any such
Person or such Person’s Property. Unless otherwise
specified, all references to Governmental Authority herein with
respect to K-Sea means a Governmental Authority having jurisdiction
over K-Sea, its Subsidiaries or any of their respective
Properties.
“ Indemnified Party
” shall have the meaning specified in
Section 5.03 .
“ Indemnifying Party
” shall have the meaning specified in
Section 5.03 .
“ K-Sea ” has the
meaning set forth in the introductory paragraph.
“ K-Sea Financial
Statements ” shall have the meaning specified in
Section 3.03 .
“ K-Sea Form S-3
” shall have the meaning specified in
Section 3.03 .
“ K-Sea Material Adverse
Effect ” means any material and adverse effect on
(a) the assets, liabilities, financial condition, business,
operations or affairs of K-Sea and its Subsidiaries taken as a
whole; (b) the ability of K-Sea and its Subsidiaries taken as
a whole to carry out their business as such business is conducted
as of the date hereof or to meet their obligations under the Basic
Documents on a timely basis; or (c) the ability of K-Sea to
consummate the transactions under any Basic Document;
provided , however , that a K-Sea Material Adverse
Effect shall not include any material and adverse effect on the
foregoing to the extent such material and adverse effect results
from, arises out of, or
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relates to (x) a general deterioration in
the economy or changes in the general state of the industries in
which the K-Sea Parties operate, except to the extent that the
K-Sea Parties, taken as a whole, are adversely affected in a
disproportionate manner as compared to other industry participants,
(y) the outbreak or escalation of hostilities involving the
United States, the declaration by the United States of a national
emergency or war or the occurrence of any other calamity or crisis,
including acts of terrorism, or (z) any change in accounting
requirements or principles imposed upon K-Sea and its Subsidiaries
or their respective businesses or any change in applicable Law, or
the interpretation thereof.
“ K-Sea Parties ”
means K-Sea, the General Partners, and all of K-Sea’s
Subsidiaries.
“ K-Sea Related Parties
” shall have the meaning specified in
Section 5.02 .
“ K-Sea SEC Documents
” shall have the meaning specified in
Section 3.03 .
“ K-Sea’s
Knowledge ” means the actual knowledge of Timothy J.
Casey and John J. Nicola, after reasonable inquiry.
“ Law ” means any
federal, state, local or foreign order, writ, injunction, judgment,
settlement, award, decree, statute, law, rule or
regulation.
“ Lien ” means
any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and
whether such obligation or claim is fixed or contingent, and
including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. For the purpose of this Agreement,
a Person shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, or
leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some
other Person in a transaction intended to create a
financing.
“ NYSE ” means
the New York Stock Exchange, Inc.
“ Partnership Agreement
” means the Second Amended and Restated Agreement of Limited
Partnership of K-Sea dated as of January 14, 2004, as
amended.
“ Partnership
Securities ” means any class or series of equity interest
in K-Sea (but excluding any options, rights, warrants and
appreciation rights relating to an equity interest in K-Sea),
including without limitation Common Units, Subordinated Units and
Incentive Distribution Rights (as defined in the Partnership
Agreement).
“ Permits ”
means, with respect to K-Sea or any of its Subsidiaries, any
licenses, permits, variances, consents, authorizations, waivers,
grants, franchises, concessions, exemptions, orders, registrations
and approvals of Governmental Authorities or other Persons
necessary for the ownership, leasing, operation, occupancy and use
of its Properties and the conduct of its businesses as currently
conducted.
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“ Person ” means
any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company,
unincorporated organization or government or any agency,
instrumentality or political subdivision thereof, or any other form
of entity.
“ Property ”
means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
“ Purchase Price
” means the monetary commitment amount of
$16,000,000.
“ Purchased Units
” means the number of Common Units equal to the quotient
determined by dividing (a) the Purchase Price by (b) the
Common Unit Price.
“ Purchaser ” has
the meaning set forth in the introductory paragraph.
“ Purchaser Material
Adverse Effect ” means any material and adverse effect on
(a) the assets, liabilities, financial condition, business,
operations or affairs of Purchaser; (b) the ability of
Purchaser to carry out its business as such business is conducted
as of the date hereof or to meet its obligations under the Basic
Documents to which it is a party on a timely basis; or (c) the
ability of Purchaser to consummate the transactions under any Basic
Document to which it is a party.
“ Purchaser Related
Parties ” shall have the meaning specified in
Section 5.01 .
“ Registration Rights
Agreemen t” means the Registration Rights Agreement, to
be entered into at the Closing, between K-Sea and Purchaser in the
form attached hereto as Exhibit A .
“ Representatives
” of any Person means the officers, directors, employees,
agents, counsel, accountants, investment bankers and other
representatives of such Person.
“ Securities Act
” means the Securities Act of 1933, as amended from time to
time, and the rules and regulations of the Commission
promulgated thereunder.
“ Subordinated Units
” means the subordinated units representing subordinated
limited partner interests in K-Sea.
“ Subsidiary ”
means, as to any Person, any corporation or other entity of which:
(i) such Person or a Subsidiary of such Person is a general
partner or manager; or (ii) at least a majority of the
outstanding equity interest having by the terms thereof ordinary
voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity interest of
any other class or classes of such corporation or other entity
shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more of its
Subsidiaries.
“ Termination Date
” has the meaning set forth in Section 6.11
.
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Section 1.02
Accounting Procedures and
Interpretation .
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all K-Sea Financial Statements
and certificates and reports as to financial matters required to be
furnished to Purchaser hereunder shall be prepared, in accordance
with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q promulgated by
the Commission) and in compliance as to form in all material
respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect
thereto.
Section 2.01
Authorization of Sale of Common
Units . K-Sea has
authorized the issuance and sale to Purchaser of the Purchased
Units.
Section 2.02
Sale and Purchase
. K-Sea hereby agrees to issue
and sell to Purchaser, and Purchaser hereby agrees to purchase from
K-Sea, the Purchased Units, and Purchaser agrees to pay K-Sea the
Purchase Price.
Section 2.03
Closing . Subject to the terms and conditions
hereof, the consummation of the purchase and sale of the Purchased
Units hereunder (the “ Closing ”) shall take
place on June 1, 2005, or on such other date not later than
three full business days thereafter as K-Sea and the Purchaser
determine (such date, the “ Closing Date ”), at
the offices of Baker Botts L.L.P., One Shell Plaza, 910 Louisiana,
Houston, Texas 77002.
Section 2.04
Conditions to the
Closing .
(a)
Mutual
Conditions . The respective
obligations of each party to consummate the purchase and issuance
and sale of the Purchased Units shall be subject to the
satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by a
particular party on behalf of itself in writing, in whole or in
part, to the extent permitted by applicable Law):
(i)
no statute, rule,
order, decree or regulation shall have been enacted or promulgated,
and no action shall have been taken, by any Governmental Authority
of competent jurisdiction which temporarily, preliminarily or
permanently restrains, precludes, enjoins or otherwise prohibits
the consummation of the transactions contemplated hereby or makes
the transactions contemplated hereby illegal; and
(ii)
there shall not
be pending any suit, action or proceeding by any Governmental
Authority seeking to restrain, preclude, enjoin or prohibit the
transactions contemplated by this Agreement.
(b)
Purchaser’s
Conditions . The obligation of
Purchaser to consummate the purchase of the Purchased Units shall
be subject to the satisfaction on or prior to the Closing Date of
each of the following conditions (any or all of which may
be
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waived by Purchaser in
writing, in whole or in part, to the extent permitted by applicable
Law):
(i)
K-Sea shall have
performed and complied with the covenants and agreements contained
in this Agreement which are required to be performed and complied
with by K-Sea on or prior to the Closing Date;
(ii)
The
representations and warranties of K-Sea contained in this Agreement
that are qualified by materiality or K-Sea Material Adverse Effect
shall be true and correct when made and as of the Closing Date and
all other representations and warranties shall be true and correct
in all material respects when made and as of the Closing Date, in
each case as though made at and as of the Closing Date (except that
representations made as of a specific date shall be required to be
true and correct as of such date only);
(iii)
Since the date of
this Agreement, no K-Sea Material Adverse Effect shall have
occurred and be continuing; and
(iv)
K-Sea shall have
delivered, or caused to be delivered, to Purchaser at the Closing,
K-Sea’s closing deliveries described in
Section 2.05 .
(c)
K-Sea’s
Conditions . The
obligation of K-Sea to consummate the sale of the Purchased Units
to Purchaser shall be subject to the satisfaction on or prior to
the Closing Date of the condition (which may be waived by K-Sea in
writing, in whole or in part, to the extent permitted by applicable
Law) that the representations and warranties of Purchaser contained
in this Agreement that are qualified by materiality or a Purchaser
Material Adverse Effect shall be true and correct when made and as
of the Closing Date, all other representations and warranties shall
be true and correct in all material respects when made and as of
the Closing Date, in each case as though made at and as of the
Closing Date (except that representations made as of a specific
date shall be required to be true and correct as of such date only,
and K-Sea shall have received a certificate signed on behalf of
Purchaser to such effect), and Purchaser shall have delivered, or
caused to be delivered, to K-Sea at the Closing Purchaser’s
closing deliveries described in Section 2.06
.
Section 2.05
K-Sea Deliveries
. At the Closing, subject to
the terms and conditions hereof, K-Sea will deliver, or cause to be
delivered, to Purchaser:
(a)
A certificate or
certificates representing the Purchased Units (bearing the legend
set forth in Section 4.05(e)) and meeting the requirements of
the Partnership Agreement, free and clear of any Liens of any other
Person, other than transfer restrictions under applicable federal
and state securities laws;
(b)
Copies of the
Certificate of Limited Partnership of (i) K-Sea and
(ii) K-Sea General Partner L.P., and of the Certificate of
Formation of K-Sea General Partner GP, LLC, each certified by the
Secretary of State of the jurisdiction of its formation as of a
recent date;
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(c)
A certificate of
the Secretary of State of the State of Delaware, dated a recent
date, that K-Sea is in good standing;
(d)
A certificate of
the Secretary or Assistant Secretary of K-Sea General Partner GP,
LLC, on behalf of K-Sea, certifying as to (1) the Partnership
Agreement, (2) board resolutions authorizing the execution and
delivery of this Agreement and all of the agreements and
instruments to be executed and delivered by K-Sea in connection
herewith, and the consummation of the transactions contemplated
hereby and (3) its incumbent officers authorized to execute
and deliver this Agreement and the other agreements and instruments
contemplated hereby, setting forth the name and title and bearing
the signatures of such officers;
(e)
A certificate,
dated the Closing Date and signed by (x) the President and Chief
Executive Officer and (y) the Chief Financial Officer of K-Sea
General Partner GP, LLC, in their capacities as such, stating
that:
(i)
K-Sea has
performed and complied with the covenants and agreements contained
in this Agreement which are required to be performed and complied
with by K-Sea on or prior to the Closing Date; and
(ii)
The
representations and warranties of K-Sea contained in this Agreement
that are qualified by materiality or K-Sea Material Adverse Effect
shall be true and correct when made and as of the Closing Date and
all other representations and warranties shall be true and correct
in all material respects when made and as of the Closing Date, in
each case as though made at and as of the Closing Date (except that
representations made as of a specific date shall be required to be
true and correct as of such date only); and
(f)
A certificate
executed and delivered to Purchaser by K-Sea’s transfer agent
and registrar certifying (i) that it has been duly appointed
and duly authorized to act as transfer agent and registrar for the
Purchased Units; and (ii) to the number of outstanding Common
Units and Subordinated Units as of the date of this Agreement and
the Closing Date;
(g)
A cross-receipt
executed by K-Sea and delivered to Purchaser certifying that it has
received the Purchase Price as of the Closing Date;
(h)
An opinion or
opinions addressed to Purchaser from legal counsel to K-Sea, dated
as of the Closing, in the form and substance attached hereto as
Exhibit B ; and
(i)
The Registration
Rights Agreement in substantially the form attached hereto as
Exhibit A , which shall have been duly executed by
K-Sea.
Section 2.06
Purchaser
Deliveries
(a)
Payment to K-Sea
of the Purchase Price hereto by wire transfer of immediately
available funds to an account designated by K-Sea in writing
at
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least three
(3) Business Days (or such shorter period as shall be
agreeable to all parties hereto) prior to the Closing;
(b)
A certificate of
the Secretary or Assistant Secretary of the Purchaser, on behalf of
Purchaser, certifying as to (1) its Articles of Incorporation,
(2) board resolutions authorizing the execution and delivery
of this Agreement and all of the agreements and instruments to be
executed and delivered by Purchaser in connection herewith, and the
consummation of the transactions contemplated hereby and
(3) its incumbent officers authorized to execute and deliver
this Agreement and the other agreements and instruments
contemplated hereby, setting forth the name and title and bearing
the signatures of such officers;
(c)
A certificate,
dated the Closing Date and signed by (x) the President and Chief
Executive Officer and (y) the Chief Financial Officer of Purchaser,
in their capacities as such, stating that:
(i)
Purchaser has
performed and complied with the covenants and agreements contained
in this Agreement which are required to be performed and complied
with by Purchaser on or prior to the Closing Date; and
(ii)
The
representations and warranties of Purchaser contained in this
Agreement that are qualified by materiality or Purchaser Material
Adverse Effect shall be true and correct when made and as of the
Closing Date and all other representations and warranties shall be
true and correct in all material respects when made and as of the
Closing Date, in each case as though made at and as of the Closing
Date (except that representations made as of a specific date shall
be required to be true and correct as of such date
only).
(d)
The Registration
Rights Agreement in substantially the form attached hereto as
Exhibit A , which shall have been duly executed by
Purchaser; and
(e)
A cross-receipt
executed by Purchaser and delivered to K-Sea certifying that it has
received the Purchased Units as of the Closing Date.
Section 2.07
Price Per Unit
. The amount per Common Unit
the Purchaser will pay to K-Sea to purchase the Purchased Units
(the “ Common Unit Price ”) shall be
$32.00.
Section 2.08
Lock-Up . Purchaser agrees that from and after
Closing it will not sell any of the Purchased Units prior to the
Anniversary Date.
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K-Sea represents and warrants to
Purchaser as follows:
Section 3.01
Corporate Existence
. K-Sea (a) is a limited
partnership duly formed, validly existing and in good standing
under the laws of the State of Delaware; and (b) has all
requisite power and authority, and has all governmental licenses,
authorizations, consents and approvals necessary, to own, lease,
use and operate its Properties and carry on its business as its
business is now being conducted, except where the failure to obtain
such licenses, authorizations, consents and approvals would not be
reasonably likely to have a K-Sea Material Adverse Effect.
Each of K-Sea’s Subsidiaries that is a corporation is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State or other jurisdiction of its
incorporation and has all requisite power and authority, and has
all governmental licenses, authorizations, consents and approvals
necessary, to own, lease, use or operate its respective Properties
and carry on its business as now being conducted, except where the
failure to obtain such licenses, authorizations, consents and
approvals would not be reasonably likely to have a K-Sea Material
Adverse Effect. Each of K-Sea’s other Subsidiaries has
been duly formed, is validly existing and in good standing under
the laws of the State or other jurisdiction of its organization and
has all requisite power and authority, and has all governmental
licenses, authorizations, consents and approvals necessary, to own,
lease, use or operate its respective Properties and carry on its
business as now being conducted, except where the failure to obtain
such licenses, authorizations, consents and approvals would not be
reasonably likely to have a K-Sea Material Adverse Effect.
None of K-Sea or any of its Subsidiaries are in default in the
performance, observance or fulfillment of any provisi
