1
EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
FOR
SYCAMORE GAS SYSTEM
(A GENERAL PARTNERSHIP)
BY AND BETWEEN
ONEOK PRODUCER SERVICES, INC. ("BUYER")
AND
CONTINENTAL/OKLAHOMA NATURAL
GAS GATHERING, L.L.C. ("SELLER")
2
PURCHASE AND SALE AGREEMENT
SYCAMORE GAS SYSTEM
TABLE OF CONTENTS
ARTICLE
- -------
I Recitations 3
II Sale of Partnership Interest and Purchase Price 3
III Assignment and Receipts/Expenses 4
IV Title 4
V Representations and Warranties of Seller 4
VI Representations and Warranties of Buyer 5
VII Closing 5
VIII Condition of Closing 6
IX As Is - Where Is 7
X Miscellaneous Provisions 7
Signature Page 10
Acknowledgments 11
EXHIBITS
- --------
"A" Letter Agreement
"B" General Partnership Agreement of Sycamore Gas System
"C" Assignment
3
PURCHASE AND SALE AGREEMENT
SYCAMORE GAS SYSTEM
(A GENERAL PARTNERSHIP)
THIS AGREEMENT is made and entered into as of this 29th day of May, 1998 by and
between ONEOK Producer Services, Inc., an Oklahoma corporation, ("ONEOK" or
"Buyer") and Continental/Oklahoma Natural Gas Gathering, L.L.C. ("CONGG" or
"Seller").
WHEREAS, CONGG is owner of all of the issued and outstanding capital stock of
Gothic Gas Corporation ("Gothic Gas"); and
WHEREAS, Gothic Gas is the owner of the Partnership Interest (as hereinafter
defined); and
WHEREAS, in connection with Closing under this Agreement, CONGG will cause the
dissolution of Gothic Gas and receive an assignment of the Partnership Interest.
FOR AND IN CONSIDERATION of the premises and the mutual covenants contained
herein, the parties agree as follows:
ARTICLE I. RECITATIONS
1.1 Buyer and Seller entered into that certain Letter Agreement dated May 13,
1998 ("Letter Agreement"), attached hereto as Exhibit "A", whereby Seller
agreed to sell and Buyer agreed to purchase Seller's interest in the
Sycamore Gas System.
A. The Sycamore Gas System ("Sycamore Partnership"), formed by that
certain General Partnership Agreement of Sycamore Gas System dated
February 1, 1985 attached hereto as Exhibit "B", owns 100% of the
Sycamore Gas Pipeline and Gathering System ("Facilities") located
in Carter County, Oklahoma.
B. Seller's interest in the Sycamore Partnership is 55.23%.
1.2 Pursuant to the terms of this Agreement, Seller agrees to sell and Buyer
agrees to purchase all of Seller's interest in the Sycamore Partnership
("Partnership Interest").
ARTICLE II. SALE OF PARTNERSHIP INTEREST AND PURCHASE PRICE
2.1 Sale of Partnership Interest: Subject to the terms and conditions of this
Agreement, Seller agrees to sell and Buyer agrees to purchase, as of the
Effective Date, all of Seller's Interest.
2.2 Purchase Price: The purchase for the Partnership Interest shall be
$12,000,000.00, (twelve million dollars) in cash (hereinafter the
"Purchase Price").
4
ARTICLE III. ASSIGNMENT AND RECEIPTS/EXPENSES
3.1 Effective Date: The Effective Date of the assignments of Partnership
Interest contemplated herein shall be 7:00 a.m. Central Daylight Time on
June 1, 1998 (the "Effective Date").
3.2 Revenues/Expenses: Subject to paragraph 9.2 hereof, all monies, proceeds,
receipts, credits, and income attributable to Seller's Partnership
Interest in the Sycamore Partnership and to periods of time before the
Effective Date shall be the sole property and entitlement of Seller; and
to the extent received by Buyer after the Effective Date, Buyer shall
fully disclose, account for, and except as otherwise provided herein,
remit same to Seller promptly. All costs, expenses, and disbursements
attributable to Seller's Partnership Interest in the Sycamore Partnership
to periods of time before the Effective Date shall be the sole obligation
of Seller and Seller shall promptly pay or, if paid by Buyer, promptly
reimburse Buyer for same.
ARTICLE IV. TITLE
4.1 Seller represents that it has not received notice of any claim contesting
the Sycamore Partnership's title to the Facilities or its right or
ability to own the Facilities.
4.2 If Buyer becomes aware of any defects in such title before Closing,
Seller shall, prior to Closing, take any steps that are reasonable in
attempting to eliminate such defects; provided, however, that if CONGG is
unable to cure any such defects, Buyer, at it's option may: (i) elect to
proceed with Closing under this Agreement whereupon Buyer shall take the
Partnership Interest subject to such defects; or (ii) terminate this
Agreement. In the event of termination under this paragraph 4.2, neither
Buyer nor Seller shall have any further liability to the other hereunder.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, on the date hereof and at
Closing, as follows:
5.1 Authority: Seller has the power and authority to enter into and perform
this Agreement and to carry out the transactions contemplated herein.
Seller is a corporation duly organized and existing and in good standing
under the laws of the State of Oklahoma. The execution and delivery of
this Agreement and the consummation by Seller of the transactions
contemplated herein have been duly and validly authorized by all
necessary corporate action by Seller, and this Agreement constitutes a
valid and binding obligation of Seller enforceable in accordance with its
terms. To the best of Seller's knowledge, neither the execution nor
performance of this Agreement will constitute a violation of, or conflict
with, or be a default under any order, judgement, decree, or any law or
regulation of any governmental authority, or any contract, commitment,
agreement, understanding, arrangement, or restriction of any kind to
which Seller is a party or by which Seller is bound.
5
5.2 Title: Seller has good, valid, and marketable title in the Partnership
Interest, free and clear of any and all liens and encumbrances arising
by, through and under Seller, but not otherwise.
5.3 Litigation: Seller is not engaged in or threatened, to Seller's
knowledge, with any legal or administrative action or proceeding relating
to the Facilities or the property upon which the same is located, nor is
Seller aware of any claim, investigation, or inquiry by any person,
entity, or governmental body relating to the Facilities and the real
property upon which the same is located.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer hereby represents and warrants to Seller, on the date hereof and at
Closing as follows:
6.1 Authority: Buyer has the power and authority to enter into and perform
this Agreement and to carry out the transactions contemplated herein.
Buyer is a corporation duly organized and existing and in good standing
under the laws of the State of Oklahoma. The execution and delivery of
this Agreement and the consummation by Buyer of the transactions
contemplated herein have been duly and validly authorized by all
necessary corporate action by Buyer, and this Agreement constitutes a
valid and binding obligation of Buyer enforceable in accordance with its
terms. To the best of Buyer's knowledge, neither the execution nor
performance of this Agreement will constitute a violation of, or conflict
with, or be a default under any order, judgement, decree, or any law or
regulation of any governmental authority, or any contract, commitment,
agreement, understanding, arrangement, or restriction of any kind to
which Buyer is a party or by which Buyer is bound. Buyer has obtained all
needed commitments for financing of the purchase price due at Closing and
is fully willing and able to perform the obligations of Seller under the
contracts to be assigned herein.
ARTICLE VII. CLOSING
7.1 Time and Place: Closing shall occur at the offices of Buyer as may be
mutually agreeable to the parties, including consummation of the
transaction via facsimile transmission and wire transfer of the purchase
price due. At Closing, Buyer will wire transfer to Seller the purchase
price in same-day available funds.
7.2 Dissolution of Gothic Gas: Immediately prior to Closing hereunder, CONGG
shall cause the dissolution of Gothic Gas Corporation and thereupon
receive an assignment of the Partnership Interest. Buyer hereby consents
to assignment of the Partnership Interest in connection with such
dissolution.
6
7.3 Deliveries by Buyer: At Closing, Buyer shall:
A. Wire full payment of the purchase price in immediately available
same-day funds for credit to Continental/Oklahoma Natural Gas
Gathering, L.L.C., account number 621014844, in Bank One,
Oklahoma, NA, ABA number 103000648.
B. Deliver to Seller an executed Purchase Sale Agreement
C. Deliver to Seller an executed Assignment (Exhibit "C")
7.4 Deliveries by Seller: At Closing, Seller shall deliver to Buyer:
A. An executed Purchase and Sale Agreement
B. An executed Assignment (Exhibit "C")
ARTICLE VIII. CONDITIONS OF CLOSING
8.1 The obligations of Seller to transfer the Facilities to Buyer at closing
are subject to the satisfaction, on or prior to Closing, of each of the
following conditions:
A. Representations, Warranties, and Covenants: All representations
and warranties of Buyer contained in this Agreement shall be true
and correct in all material respects at and as of Closing as if
such representations and warranties were made at and as of
Closing, and Buyer shall have performed in and all material
respects all agreements and covenants required hereby to be
performed by it prior to or at Closing.
B. Consents: All consents, approvals, and waivers from governmental
authorities and other parties necessary to permit Seller to
transfer and Buyer to acquire the Facilities as contemplated
hereby shall have been obtained unless Buyer waives same.
C. No Governmental Proceeding or Litigation: No suit, action,
investigation, inquiry, or other proceeding by and other
governmental authority or other person shall have been instituted
or threatened which questions the validity of legality of the
transactions contemplated hereby and which could reasonably be
expected to materially damage Seller if the transactions
contemplated hereunder are consummated.
8.2 The obligations of Buyer to purchase the Facilities from Seller on
Closing are subject to the satisfaction, on or prior to Closing, of each
of the following conditions:
A. Representations, Warranties, and Covenants: All representations
and warranties of Seller contained in this Agreement shall be true
and correct in all material respects at and as of Closing as if
such representations and warranties were made at and as of
Closing, and Seller shall have performed in and all material
respects all agreements and covenants required hereby to be
performed by it prior to or at Closing.
B. Consents: All consents, approvals, and waivers from governmental
authorities and other parties necessary to permit Seller to
transfer and Buyer to acquire the Facilities as contemplated
hereby shall have been obtained unless Buyer waivers same.
7
C. No Governmental Proceeding or Litigation: No suit, action,
investigation, inquiry, or other proceeding by any other
governmental authority or other person shall have been instituted
or threatened which questions the validity or legality of the
transactions contemplated hereby and which could reasonably be
expected to materially damage Buyer if the transactions
contemplated hereunder are consummated.
ARTICLE IX. AS IS - WHERE IS
9.1 Disclaimer of Warranties: It is expressly understood by the parties
hereto that the Facilities are accepted by the Buyer AS IS, WHERE IS, and
that Buyer has had or will have a reasonable opportunity to inspect and
examine the condition of each and every item thereof. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, BUYER AGREES THAT THE PARTNERSHIP
INTEREST IS BEING TRANSFERRED WITHOUT REPRESENTATION OF WARRANTY, EITHER
EXPRESSED OR IMPLIED (ALL OF WHICH SELLER HEREBY DISCLAIMS), AS TO (i)
FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY OR DESIGN OR
QUALITY, OR (ii) COMPLIANCE WITH SPECIFICATIONS, CONDITION, OPERATION, OR
ABSENCE OF LATENT DEFECTS. TO THE EXTENT APPLICABLE (AND WITHOUT
ADMITTING SUCH APPLICABILITY), BUYER ALSO HEREBY WAIVES THE PROVISIONS OF
THE OKLAHOMA DECEPTIVE TRADE PRACTICES ACT. EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, THE PROVISIONS OF THIS DISCLAIMER OF WARRANTIES HAVE
BEEN NEGOTIATED BY THE SELLER AND BUYER AFTER DUE CONSIDERATION AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS
OR WARRANTIES OR LIABILITIES OF THE SELLER TO THE BUYER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PARTNERSHIP INTEREST THAT MAY ARISE PURSUANT
TO ANY LAW NOR HEREAFTER IN EFFECT, OR OTHERWISE.
9.2 Environmental Compliance and Condition: Notwithstanding the terms of
paragraph 3.2 hereof, Buyer shall be responsible for and hereby assumes
liability for any and all past and future expenses (including any and all
remediation expenses - including costs of investigation and cleanup),
claims, liabilities, damages, fines and penalties arising with respect to
the Facilities under any state, federal and local environmental laws,
rules, regulations, or directives and agrees to defend and hold Seller
harmless from and against all such fines, expenses, claims, liabilities,
damages and penalties.
ARTICLE X. MISCELLANEOUS PROVISIONS
10.1 Commissions: Each of the parties hereto represents and warrants that
there are no claims for brokerage commissions or finders' fees in
connection with the transaction contemplated by this Agreement, and
Seller and Buyer will respectively pay or discharge, and will indemnify
the other for, brokerage commissions or finders' fees incurred by reason
of any action taken by such indemnifying party.
8
10.2 Further Assurances: From time to time, and without further consideration,
each party will execute and deliver to the other party such documents and
take such actions as the other party may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
10.3 Risk of Loss and Liability:
A. Seller shall assume all risk of loss accruing to the Partnership
Interest to be transferred hereunder until Closing. In the event
any of the Facilities shall be damaged by fire or other casualty
prior to Closing, and if Closing occurs, Buyer shall, subject to
the next succeeding sentence, close on the purchase of the
Partnership Interest without reduction in the Purchase Price and
shall be entitled to receive the insurance proceeds payable with
respect to such casualty loss. If the total of all damage shall
exceed twenty-five percent (25%) of the total purchase price, this
Agreement may be canceled at the option of Buyer. In no event
shall there be any requirement to repair or rebuild all or any
portion of the Facilities.
B. Buyer shall assume all risk, claims, costs, expenses, and
liabilities of whatever nature, accruing relative to the
Partnership Interest occurring from and after Closing, and agrees
to defend, indemnify, and hold Seller harmless from and against
such claims, costs, expenses, and liabilities.
10.4 Apportionment of Taxes: Real property taxes on the Facilities shall be
apportioned to Closing based on the most recent levy and the most recent
assessments. Personal property taxes shall also be apportioned to
Closing. It is hereby agreed that whichever party receiving statements
for 1998 and ad valorem taxes (or taxes imposed in lieu thereof) assessed
against the Facilities will pay such taxes prior to delinquency, and the
other party agrees to reimburse the paying party for its pro rata share
thereof promptly upon receipt of an invoice accompanied by evidence of
such payment.
10.5 Assignment: The terms, provisions, and conditions of this Agreement shall
extend to, be binding upon, and inure to the benefit of the parties
hereto, their respective successors, assigns, and legal representations.
10.6 Entire Agreement, Amendments: This Agreement and the Exhibits attached
hereto and incorporated by reference herein contain the entire
understanding of the parties with respect to its subject matter. There
are no restrictions, agreements, promises, warranties, covenants, or
undertakings other than those expressly set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties
with respect to its subject matter. This Agreement may be amended only by
a written instrument duly executed by the parties. Any condition to a
party's obligations hereunder may be waived only in writing by such
party. No waiver by any party of any one or more defaults by the other in
performance of any of the provisions of this Agreement shall operate or
be construed as a waiver of any future default or defaults, whether of a
like or different character.
9
10.7 Severability: Each portion of this Agreement is intended to be severable.
If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of this Agreement.
10.8 Actions and Consents: Seller and Buyer, singularly and plurally, warrant
and agree that each shall use their best efforts to take or cause to be
taken all such action as may be necessary to consummate and make
effective the transaction as set forth in this Agreement and to assure
that it will not be under any material corporate, legal, or contractual
restriction that would prohibit or delay the timely consummation of such
transaction.
10.9 Time is of the Essence: Time is of the essence hereof and if any payment
or other condition hereof is not made, tendered, or performed by either
Seller or Buyer as herein provided, then this Agreement, at the option of
the party who is not in default, may be terminated by such party, in
which case the nondefaulting party may recover such damages as may be
proper. If the nondefaulting party elects to treat this Agreement as
being in full force and effect, the nondefaulting party shall have the
right to an action for specific performance and/or damages.
10.10 Counterparts: This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.11 Governing: This Agreement shall be governed by, enforced in accordance
with, and interpreted under the laws of the State of Oklahoma.
10.12 Notices and Addresses: Any notice, request, instruction, waiver, or other
communication to be given hereunder by any party shall be in writing and
shall be considered duly delivered if personally delivered, mailed by
certified mail with the postage prepaid, or sent by telegraph to the
addresses of the parties as follows:
Buyer: ONEOK Producer Services, Inc.
Attention: Mr. Don Jacobsen, Vice President
P. O. Box 345
Tulsa, Oklahoma 74101-0345
Seller: Continental/Oklahoma Natural Gas Gathering, L.L.C.
Attention: Mr. Terry Spencer, Vice President
1437 South Boulder, Suite 1250
Tulsa, OK 74119
or at such other address as either party may designate by written notice.
10
10.13 Survival of Representations, Warranties, and Covenants: Each warranty,
representation, and covenant contained in this Agreement, whether in
Articles V and VI or elsewhere, is material and each has been relied upon
in entering this Agreement. Each such warranty, representation, and
covenant, and each agreement of indemnity contained in this Agreement,
shall survive the Closing and the delivery of the instruments of
conveyance of the parties hereto, and shall not be deemed to be
superseded by the conditions of the instruments delivered at Closing.
10.14 Table of Contents and Articles and Section Headings: The table of
contents and article and section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
10.15 Reference to a Section: All references herein to a particular section of
this Agreement shall be deemed to refer also to any subsections of the
referenced section.
IN WITNESS WHEREOF, the parties have hereto set their hands by their duly
authorized officials as of the date set forth above.
ONEOK PRODUCER SERVICES, INC. CONTINENTAL/OKLAHOMA NATURAL
GAS GATHERING, L.L.C.
("BUYER") ("SELLER")
By Continental Natural Gas, Inc.,
Manager
By: /s/ Don Jacobsen By: /s/ Gary C. Adams
------------------------------ ------------------------------
Don Jacobsen Name: Gary C. Adams
Vice President Title: President
11
ACKNOWLEDGEMENT
STATE OF OKLAHOMA
COUNTY OF TULSA
This instrument was acknowledged before me on May 29, 1998 by Don Jacobsen, Vice
President of ONEOK Producer Services, Inc.
/s/ Martha Ryan
---------------------------
Notary Public
My Commission Expires:
Aug. 18, 2000
- ----------------------
================================================================================
ACKNOWLEDGEMENT
STATE OF OKLAHOMA
COUNTY OF TULSA
This instrument was acknowledged before me on May 29, 1998 by Gary Adams,
President, of Continental Natural Gas, Inc.
/s/ Martha Ryan
---------------------------
Notary Public
My Commission Expires:
Aug. 18, 2000
- ----------------------
12
EXHIBIT "A"
LETTER AGREEMENT OMITTED
13
EXHIBIT "B"
PARTNERSHIP AGREEMENT FOR SYCAMORE GAS SYSTEM OMITTED
14
EXHIBIT "C"
FORM OF ASSIGNMENT OMITTED