Purchase and Sale Agreement (2006)Full Document 

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PURCHASE AND SALE AGREEMENT

by and between

ONEOK, INC.

and

NORTHERN BORDER PARTNERS, L.P.

February 14, 2006

 



TABLE OF CONTENTS

 

SECTION 1. PURCHASE AND SALE

   1

1.1

 

Interests

   1

1.2

 

Consideration and Payment

   1

1.3

 

The Closing

   1

1.4

 

Working Capital Adjustment

   2

SECTION 2. REPRESENTATIONS AND WARRANTIES OF ONEOK

   4

2.1

 

Organization and Authority of ONEOK

   4

2.2

 

Organization, Authority and Qualification of the Entities

   5

2.3

 

Capital of Companies; Beneficial Ownership

   5

2.4

 

Subsidiaries

   6

2.5

 

Financial Statements

   6

2.6

 

Taxes

   7

2.7

 

Absence of Certain Changes

   8

2.8

 

Ordinary Course

   9

2.9

 

Intellectual Property

   9

2.10

 

Contracts

   10

2.11

 

Compliance

   11

2.12

 

Litigation

   11

2.13

 

Insurance

   11

2.14

 

Related Transactions

   12

2.15

 

Employee Benefit Matters

   12

2.16

 

Environmental Matters

   13

2.17

 

Regulatory Matters

   13

2.18

 

Operating Assets

   14

2.19

 

Brokers’ Fees

   15

2.20

 

Books and Records

   15

2.21

 

Indebtedness

   15

2.22

 

Disclaimer

   15

SECTION 3. REPRESENTATIONS AND WARRANTIES OF NORTHERN BORDER

   16

3.1

 

Organization and Authority of Northern Border

   16

3.2

 

Litigation

   17

3.3

 

Securities Act

   17

3.4

 

Brokers’ Fees

   18

3.5

 

Opinion of Financial Adviser

   18

3.6

 

Disclaimer

   18

SECTION 4. COVENANTS OF ONEOK

   19

4.1

 

Conduct of the Entities

   19

4.2

 

Cash Management

   21

SECTION 5. COVENANTS OF NORTHERN BORDER

   21

5.1

 

Northern Border’s Efforts Regarding Financing Arrangements.

   21

5.2

 

Books and Records

   21

SECTION 6. COVENANTS OF ONEOK AND NORTHERN BORDER

   22

6.1

 

Access to Information

   22

6.2

 

Commercially Reasonable Efforts

   23


6.3

 

Regulatory and Other Authorizations; Notices and Consents

   23

6.4

 

Public Announcements

   24

6.5

 

Notices of Certain Events

   24

6.6

 

Entity Guarantees

   24

6.7

 

Intercompany Accounts

   25

6.8

 

Shared Contracts and Drop-Down Contracts

   25

6.9

 

ONEOK Marks

   26

6.10

 

Indebtedness for Borrowed Money

   26

6.11

 

Conversion Transactions

   26

6.12

 

Interim Financial Statements

   27

6.13

 

Cooperation Regarding Audits

   27

6.14

 

Insurance Matters

   27

SECTION 7. CONDITIONS TO CLOSING

   27

7.1

 

Conditions to the Obligations of ONEOK

   27

7.2

 

Conditions to the Obligations of Northern Border

   29

SECTION 8. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED

   31

8.1

 

Termination

   31

8.2

 

Effect of Termination

   31

SECTION 9. INDEMNIFICATION

   32

9.1

 

Survival of Representations and Warranties, Etc.

   32

9.2

 

Indemnification

   32

9.3

 

Threshold; Cap

   33

9.4

 

Exclusive Remedy; Sole Recourse

   34

9.5

 

No Contribution

   35

9.6

 

Setoff

   35

9.7

 

Third Party Claims

   35

SECTION 10. TAX MATTERS

   36

10.1

 

Retention of Records

   36

10.2

 

Cooperation

   36

10.3

 

Transfer Taxes

   37

10.4

 

Tax Returns

   37

10.5

 

Allocation of Taxes

   38

10.6

 

Tax Indemnity

   39

10.7

 

Contests

   41

10.8

 

Amended Tax Returns

   41

10.9

 

Miscellaneous

   42

10.10

 

Allocation of the Purchase Price

   42

SECTION 11. MISCELLANEOUS

   43

11.1

 

Fees and Expenses

   43

11.2

 

Governing Law

   43

11.3

 

Notices

   43

11.4

 

Entire Agreement

   44

11.5

 

Assignability; Binding Effect

   44

11.6

 

Captions and Gender

   45

11.7

 

Execution in Counterparts

   45

11.8

 

Amendments

   45

 

ii


11.9

 

Publicity and Disclosures

   45

11.10

 

Severability

   45

11.11

 

Waiver of Jury Trial

   45

11.12

 

Arbitration

   45

11.13

 

Time of the Essence

   46

11.14

 

Remedies Cumulative; Specific Performance

   46

11.15

 

Further Assurances

   46

11.16

 

Third Party Beneficiaries

   46

11.17

 

Audit Committee Authority

   46

11.18

 

Certain Definitions

   47

11.19

 

Other Defined Terms

   54

 

Exhibit A — Companies/Company Subsidiaries

Exhibit B — Intentionally Omitted

Exhibit C — ONEOK Guaranty Agreement

Exhibit D — Target Working Capital

Exhibit E — Services Agreement

 

iii


PURCHASE AND SALE AGREEMENT

This PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into as of February 14, 2006 by and between ONEOK, Inc., an Oklahoma corporation (“ONEOK”), and Northern Border Partners, L.P., a Delaware limited partnership (“Northern Border”) (each a “Party” and together, the “Parties”). Capitalized terms used but not defined shall have the meaning given in Section 11.18.

W I T N E S S E T H

WHEREAS, ONEOK owns all of the issued and outstanding Equity Interests (the “Shares”) of each of the Persons listed on Exhibit A hereto under the heading “Companies,” (the “Companies”, and each, individually, a “Company”);

WHEREAS, the Companies and their Subsidiaries, all of which are listed on Exhibit A under the heading “Company Subsidiaries”, own and operate natural gas gathering, processing, fractionating, transportation, storage, pipelines and natural gas liquids assets located in Kansas, Oklahoma, Texas and Louisiana (the “Business”); and

WHEREAS, ONEOK wishes to sell the Shares to Northern Border and Northern Border wishes to purchase the Shares, upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual agreements and covenants herein contained, and intending to be legally bound hereby, the Parties hereto hereby agree as follows:

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