SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Date of report) April 12, 2006
(Date of earliest event reported) April 6, 2006
ONEOK, Inc.
(Exact name of registrant as specified in its charter)
Oklahoma | 001-13643 | 73-1520922 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
100 West Fifth Street; Tulsa, OK
(Address of principal executive offices)
74103
(Zip code)
(918) 588-7000
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement |
Fifth Amendment to Credit Agreement
On April 6, 2006, we entered into a Fifth Amendment (Fifth Amendment) to our $1.2 billion five-year credit agreement (Credit Agreement) with Bank of America, N.A., as Administrative Agent for the Lenders and as a Lender and Letter of Credit Issuer, and the Lenders. The Credit Agreement was originally effective on September 17, 2004, and the Fifth Amendment is effective as of April 6, 2006.
The primary purpose of the Fifth Amendment was to accommodate the previously announced transactions pursuant to which we contributed and sold certain assets to Northern Border Partners, L.P. (NBP) for $3 Billion in cash and NBP Class B units, and we increased our ownership of general partner interests in NBP to 100 percent. These transactions are more fully described in Item 2.01 below.
Additionally, the Fifth Amendment amended the Credit Agreement as follows:
| the requirement for us to represent that no material adverse change has occurred as a condition to each borrowing under the Credit Agreement was deleted; and |
| a new covenant was added requiring us to maintain the power to control the management and policies of NBP. |
The description of the Fifth Amendment set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms and conditions of the Fifth Amendment itself, which is filed as Exhibit 10 hereto and is incorporated herein by reference.
Services Agreement
On April 6, 2006, we, Northern Plains Natural Gas Company (Northern Plains), NBP Services, LLC (NBP Services), NBP and Northern Border Intermediate Limited Partnership (NBILP) entered into a Services Agreement.
Under the Services Agreement, we will provide to NBP and its subsidiaries at least the type and amount of services that we provide to our other affiliates, including those services required to be provided pursuant to the partnership agreements of NBP and NBILP. The costs for services provided under the Services Agreement will be allocated and billed monthly consistent with the method of allocation of such costs among our other affiliates and consistent with applicable law. The Services Agreement is effective as of April 6, 2006 and remains in effect until terminated or until services are no longer being provided.
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As of April 6, 2006, we indirectly own all of NBPs outstanding general partner interests and we own approximately 43% of NBPs limited partner interests. NBP Services and Northern Plains are subsidiaries of ONEOK and affiliates of NBP and its general partners. Certain of our officers and one of our directors are also officers and partnership policy committee members of NBP.
The description of the Services Agreement set forth under this Item 1.01 is qualified in its entirety by reference to the complete terms of the Services Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 2.01 | Completion of Acquisition or Disposition of Assets |
On April 6, 2006, we completed a series of transactions that resulted in us owning 100 percent of the general partner interest and 45.7 percent of NBP.
Pursuant to the previously announced Contribution Agreement between NBP, NBILP and us (the Contribution Agreement), we completed the contribution to NBP of our entire gathering and processing segment and our entire pipelines and storage segment in exchange for approximately 36,494,126 NBP Class B units representing limited partner interests in NBP. The limited partner units and the related general partner interest contribution are valued at approximately $1.65 billion. The actual number of units issued was determined by using the average closing price of NBP common units for the 20 trading days prior to signing of the Contribution Agreement. A working capital cash adjustment will be determined after closing.
Pursuant to the previously announced Purchase and Sale Agreement, dated February 14, 2006 between us and NBP (the Purchase and Sale Agreement), as amended, we completed the sale to NBILP of our entire natural gas liquids segment in exchange for $1.35 billion in cash, subject to a working capital adjustment to be determined after closing.
Pursuant to the previously announced Purchase and Sale Agreement (the TransCanada Agreement), between our wholly owned subsidiary, Northern Plains, and TransCan, an affiliate of TransCanada Corporation, we completed the purchase all of the issued and outstanding common stock of Northwest Border, an affiliate of TransCanada Corporation that holds 17.5 percent of the general partner interest in NBP. The purchase price was $40 million less $10 million for potential expenses associated with the transfer of responsibility of Northern Border Pipeline Company to TransCanada. As a result, we indirectly own 100 percent of NBPs general partner interest.
Some of our officers and one of our directors are also officers and partnership policy committee members of NBP. Also, some of our subsidiaries provide services to NBP and its subsidiaries as more fully described in the Services Agreement described in Item 1.01 above.
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Our board of directors retained an independent financial advisor to provide an opinion of the fairness of the transactions described above in this Item 2.01.
In connection with the closing of the transactions described above on April 6, 2006, the Contribution Agreement and the ONEOK Purchase and Sale Agreement were amended. The amendments are filed as Exhibits 2.4 and 2.5, respectively, hereto.
A description of the material terms of the Contribution Agreement, Purchase and Sale Agreement and TransCanada Agreement was included in our Form 8-K filed on February 21, 2006, which is incorporated herein by this reference.
Item 5.02(c) | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers |
In connection with the completion of the transactions described in Item 2.01 of this Form 8-K, the following management changes have occurred:
In addition to his current positions, David Kyle also serves as Chairman and Chief Executive Officer of NBP. Mr. Kyle has served as Chairman of the Board of Directors, President and Chief Executive Officer of ONEOK, Inc. since 2000.
In addition to his current position, John W. Gibson also serves as the President and Chief Operating Officer of NBP and will serve as a member of the NBP policy committee. Mr. Gibson has served as our President, ONEOK Energy Companies since 2005 and as our President Energy, which included the gathering and processing segment and the transportation and storage segment, from 2000 to 2005.
William Cordes serves as President, Northern Border Pipeline, reporting to Mr. Gibson. Mr. Cordes has served as Chief Executive Officer of NBP and President - Northern Plains since 2000.
In addition to his current positions, James C. Kneale also serves as Executive Vice President and Chief Financial Officer of NBP. Mr. Kneale has served as our Executive Vice President Finance and Administration and Chief Financial Officer since 2004 and our Senior Vice President, Treasurer and Chief Financial Officer from 2001 to 2004. From 1999 to 2000 he was our Vice President, Treasurer and Chief Financial Officer.
In addition to his current positions, John R. Barker also serves as Executive Vice President, General Counsel and Secretary of NBP. Mr. Barker has served as our Senior Vice President and General Counsel since 2004 and as President and Director of Gable & Gotwals from 1994 to 2004.
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William Maxwell, President of ONEOK Energy Services, will now report to Mr. Kyle. Mr. Maxwell has served as President of ONEOK Energy Services since January, 2006. He was Senior Vice PresidentTrading of ONEOK Energy Marketing and Trading from 2003 to 2005 and Vice PresidentFinancial Trading of ONEOK Energy Marketing and Trading from 1999 to 2003.
Additional information with respect to these individuals is included under Executive Officers in Item 1, Business in our Annual Report on Form 10-K for the year ended December 31, 2005, filed March 13, 2006, which additional information is incorporated herein by reference.
Item 7.01 | Regulation FD Disclosure |
On April 6, 2006 we and NBP issued a joint press release announcing completion of the transactions described in this Form 8-K. A copy of this press release is furnished and attached as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits |
Exhibits
*2.1 | Purchase and Sale Agreement by and between TransCan Northwest Border Ltd. and Northern Plains Natural Gas Company, LLC, dated February 14, 2006 (incorporated by reference from Exhibit 10.30 to our Form 10-K for the year ended December 31, 2005, filed March 13, 2006). | |
*2.2 | Purchase and Sale Agreement by and between ONEOK, Inc. and Northern Border Partners, L.P., dated February 14, 2006 (incorporated by reference from Exhibit 10.31 to our Form 10-K for the year ended December 31, 2005, filed March 13, 2006). | |
*2.3 | Contribution Agreement by and among ONEOK, Inc., Northern Border Partners, L.P. and Northern Border Intermediate Limited Partnership, dated February 14, 2006 (incorporated by reference from Exhibit 10.32 to our Form 10-K for the year ended December 31, 2005, filed March 13, 2006). | |
*2.4 | First Amendment to Contribution Agreement by and among ONEOK, Inc., Northern Border Partners, L.P. and Northern Border Intermediate Limited Partnership dated April 6, 2006. | |
*2.5 | First Amendment to Purchase and Sale Agreement by and between ONEOK, Inc. and Northern Border Partners, L.P. dated April 6, 2006. | |
10 | Fifth Amendment to Credit Agreement, dated April 6, 2006. |
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10.1 | Services Agreement among ONEOK, Inc. and its affiliates and Northern Border Partners, L.P. and Northern Border Intermediate Limited Partnership executed April 6, 2006, but effective as of April 1, 2006. | |
10.2 | Form of Amendment No. 1 Amended and Restated Agreement of Limited Partnership of Northern Border Partners, L.P., to be entered into among Northern Plains Natural Gas Company, LLC, Pan Border Gas Company, LLC and Northwest Border Pipeline Company (incorporated by reference from Exhibit 10.34 to our Form 10-K for the year ended December 31, 2005, filed March 13, 2006). | |
99.1 | Press release issued by ONEOK, Inc. dated April 6, 2006. |
* | ONEOK agrees to furnish supplementally to the Securities and Exchange Commission, upon request, any schedules and exhibits to this agreement, as set forth in the Table of Contents of the agreement, that have not been filed herewith pursuant to Item 601(b)(2) of Regulation S-K. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
ONEOK, Inc. |
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Date: April 12, 2006 |
By: |
/s/ Jim Kneale |
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Jim Kneale |
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Executive Vice President Finance and Administration and Chief Financial Officer (Principal Financial Officer) |
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Exhibit 2.4
FIRST AMENDMENT TO CONTRIBUTION AGREEMENT
This FIRST AMENDMENT TO CONTRIBUTION AGREEMENT (this Amendment ) is entered into as of the 6th day of April, 2006 by and among ONEOK, Inc., an Oklahoma corporation ( ONEOK ), Northern Border Partners, L.P., a Delaware limited partnership ( Northern Border ), and Northern Border Intermediate Limited Partnership ( NBILP , and together with Northern Border, the NBP Partnerships ) (each a Party and collectively, the Parties ). Capitalized terms used in this Amendment but not defined shall have the respective meanings given to such terms in the Contribution Agreement.
WITNESSETH
WHEREAS , the Parties entered into that certain Contribution Agreement dated as of February 14, 2006 (the Contribution Agreement ), pursuant to which ONEOK agreed to contribute to the NBP Partnerships all of the issued and outstanding Equity Interests in the Companies; and
WHEREAS , ONEOK Bushton Processing, Inc. ( OBPI ) is an indirect wholly owned subsidiary of ONEOK and is included in the Contribution Agreement as a Company Subsidiary; and
WHEREAS, in lieu of contributing OBPI to the NBP Partnerships, the Parties desire for ONEOK to retain OBPI (through a dividend prior to Closing of all outstanding Equity Interests in OBPI to ONEOK), and to cause OBPI to enter into a processing and services agreement with one of the NBP Partnerships or a Subsidiary thereof that will provide to the NBP Partnerships substantially the same economic effect as if OBPI had been contributed to the NBP Partnerships; and
WHEREAS , the parties also desire for OBPI prior to Closing to dividend to ONEOK Field Services Company, L.L.C. ( OFS ) all OBPI assets that are not subject to the Bushton Equipment Leases (as defined below) or otherwise used in the operation of the Bushton plant.
NOW, THEREFORE , in consideration of the premises and mutual agreements and covenants herein contained, and intending to be legally bound hereby, the Parties hereto agree as follows:
1. The Closing .
(a) Section 1.3(b)(vi) of the Contribution Agreement is hereby deleted in its entirety and replaced with the following:
(vi) An executed copy of a Processing and Services Agreement (the Processing and Services Agreement ) between ONEOK Bushton Processing, Inc. ( OBPI ) and
one of the NBP Partnerships or a Subsidiary thereof substantially in the form attached hereto as Schedule 1.3(b)(vi).
(b) Section 1.3(c)(iii) of the Contribution Agreement is hereby deleted in its entirety and replaced with the following:
(iii) Intentionally Omitted.
(c) Section 1.3(c)(iv) of the Contribution Agreement is hereby deleted in its entirety and replaced with the following:
(iv) An executed copy of the Processing and Services Agreement.
2. Definitions . The term Company Subsidiary in the Contribution Agreement and this Amendment shall exclude OBPI. Except as otherwise specifically provided in this Amendment, the terms Entity or Entities in the Contribution Agreement and this Amendment shall include OBPI, including for purposes of the representations and warranties contained in Section 2 of the Contribution Agreement.
3. Representations and Warranties of ONEOK . The following Section 2.24 is added to the Contribution Agreement:
2.24 No Transfer to ONEOK . Except in connection with Sections 6.7 and 6.10 of this Agreement, and except as fully reflected in the working capital adjustment described in Section 1.5 of this Agreement, from the close of business on March 31, 2006 until Closing, no Entity (including OBPI) has distributed, dividended or otherwise transferred any cash or assets to ONEOK, any other Entity or any other Affiliate of ONEOK, other than as permitted by Section 4.1 of this Agreement.
4. Covenants of ONEOK . Section 4.1 is hereby amended by adding the following language to the end of that Section 4.1:
Notwithstanding the foregoing, ONEOK shall have the right, in any order, to 1) convert OBPI into a corporation, 2) cause OBPI prior to Closing to dividend to ONEOK Field Services Company, L.L.C. ( OFS ) all property, equipment and other assets of OBPI that are not subject to the Bushton Equipment Leases or otherwise used in the operation of the Bushton plant, and 3) cause OFS prior to Closing to distribute all of the issued and outstanding ownership interests of OBPI to ONEOK.
5. Books and Records . Section 5.1(a) is hereby deleted in its entirety and replaced with the following:
(a) No later than ten (10) days after Closing, ONEOK will make available to the NBP Partnerships or their designee, at ONEOKs sole cost and expense, originals of all files, records, information and data (in all formats) owned by or primarily relating to the Entities that are in the possession or control of ONEOK or its Affiliates, except that ONEOK will retain all such originals items with respect to OBPI and instead provide copies thereof, at ONEOKs sole cost and expense, to the NBP Partnerships. In addition, with respect to the Entities other than OBPI, ONEOK will make available to the NBP Partnerships all ONEOKs and its Affiliates contractual rights to request other such files, records, information and data from any third party.
6. Intercompany Accounts . Section 6.7 is hereby deleted in its entirety and replaced with the following:
6.7 Intercompany Accounts . Except for amounts related to normal operational sales and cost of sales and fuel, prior to Closing, but effective as of the close of business on the last day of the month immediately preceding the Closing Date, ONEOK will settle all Intercompany Accounts and intercompany arrangements between any Entity, on the one hand, and ONEOK and its Affiliates (other than an Entity), on the other hand, and the Entities will not have any Liability whatsoever with respect to such settled intercompany arrangements and Intercompany Accounts. ONEOK shall be solely liable for any contractual or other Liabilities, express or implied, arising out of the termination, cancellation and elimination of any of the foregoing.
7. Indebtedness for Borrowed Money . Section 6.10 is hereby deleted in its entirety and replaced with the following:
6.10 Indebtedness for Borrowed Money . Prior to the Closing, but effective as of the close of business on the last day of the month immediately preceding the Closing Date, (i) ONEOK shall repay or otherwise settle any Indebtedness due to the Entities from ONEOK or its Affiliates (other than the Entities) and (ii) ONEOK shall cause the repayment or settlement of any Indebtedness due
from the Entities to ONEOK or its Affiliates (other than the Entities), in each case, including interest and other amounts accrued thereon or due in respect thereof, other than any Indebtedness fully reflected in the Closing Working Capital. The Parties acknowledge and agree that ONEOK has loaned certain amounts to the Entities after the close of business on March 31, 2006 to fund working capital requirements of the Entities after such date and that such amounts will be repaid by the NBP Partnerships to ONEOK in the ordinary course of business or through the working capital adjustment described in Section 1.5 of this Agreement.
8. ONEOK Marks . The second sentence of Section 6.9 is hereby amended by adding the following language to the beginning of that sentence:
Except with respect to OBPI,
9. Dividend of Certain OBPI Assets to OFS . The following Section 6.15 is added to the Contribution Agreement:
6.15 Dividend of Certain OBPI Assets to OFS . Prior to Closing, ONEOK shall cause OBPI to dividend to OFS all property, equipment and other assets of OBPI that are not subject to the Bushton Equipment Leases or otherwise used in the operation of the Bushton plant. The term Bushton Equipment Leases means those certain leases dated November 26, 1991 entitled: Equipment Lease Undivided Interest (Bushton Equipment Trust 1991-A), Equipment Lease Undivided Interest (Bushton Equipment Trust 1991-B), Equipment Lease Undivided Interest (Bushton Equipment Trust 1991-C), Equipment Lease Undivided Interest (Bushton Equipment Trust 1991-D), and Equipment Lease Undivided Interest (Bushton Equipment Trust 1991-E), originally by and between The First National Bank of Chicago, not in its individual capacity, but solely as trustee under the Trust Agreements that create the trusts described above, as Lessor, and Enron Gas Processing Company (now known as ONEOK Bushton Processing, Inc.) as Lessee.
10. Conditions to Closing . Section 7.1(k) and Section 7.2(m) of the Contribution Agreement (regarding Bushton Consents) are hereby deleted from the Contribution Agreement in their entirety.
11. Indemnification . Section 9.2(c) is hereby deleted in its entirety and replaced with the following:
(c) To the extent that ONEOK or its Affiliates (other than the Entities, but including OBPI) has the right to seek indemnification from third parties for the benefit of the Entities (other than OBPI) or their assets, and the Entities (other than OBPI) are not entitled to seek such indemnification on their own accord, ONEOK, upon Northern Borders written request, shall assign such indemnification rights to Northern Border or, if such rights cannot be assigned, assert (at Northern Borders cost) a claim relating to such matter against such third party on behalf of the applicable Entities (other than OBPI), and provide to Northern Border all benefits of such indemnification as, when and if provided by such third party. Notwithstanding the foregoing, neither ONEOK nor its Affiliates shall be obligated to make any additional payments or to take any action that would cause them to incur or be subject to any additional liabilities or costs with respect to any actions taken under this Section 9.2(c).
12. No Contribution . Section 9.5 is hereby deleted in its entirety and replaced with the following:
9.5 No Contribution . ONEOK shall not have and shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of indemnity or other right or remedy against any Entity (other than OBPI) in connection with any indemnification obligation or any other Liability to which it may become subject under or in connection with this Agreement.
13. Tax Matters . For purposes of Section 10 (Tax Matters) of the Contribution Agreement, and the corresponding definitions to the extent used in such Section 10, the term Entities shall be deemed to exclude OBPI.
14. Certain Definitions .
(a) Section 11.18 of the Contribution Agreement is hereby amended to replace each of the following definitions:
Converting Companies means each of ONEOK Sayre Storage Company, OkTex Pipeline Company, ONEOK Field Services Company and Mid Continent Market Center, Inc.
Northern Border Indemnitees means the NBP Partnerships and their respective Affiliates (including, without limitation, the Entities, but excluding OBPI) and their respective Representatives.
(b) Section 11.19 of the Contribution Agreement is amended to add the following defined terms in the appropriate alphabetical order:
Bushton Equipment Leases |
6.15 | |
OFS |
4.1 | |
OBPI |
1.3(b)(vi) | |
Processing and Services Agreement |
1.3(b)(vi) |
15. Exhibits and Schedules .
(a) Exhibit A to the Contribution Agreement is hereby replaced in its entirety by Exhibit A to this Amendment.
(b) Schedule 1.3(b)(vi) to the Contribution Agreement is hereby replaced in its entirety by Schedule 1.3(b)(vi) to this Amendment.
(c) The first page to Schedule 1.5 to the Contribution Agreement is hereby replaced in its entirety by Schedule 1.5 to this Amendment.
(d) Schedule 2.1(e)(iii) to the Contribution Agreement is hereby amended in its entirety to read as follows:
Software vendor/licensor consents as may be necessary.
(e) Schedule 2.4(b) is hereby amended by adding the following language to the end of that Schedule:
OFS will distribute to ONEOK, prior to Closing of the Agreement, all of the outstanding equity interests of OBPI.
16. Further Assurances . The Parties agree to make such additional amendments or modifications to the Contribution Agreement, and to execute and deliver such additional documents and take such other and further action, as may reasonably be necessary to effect the restructuring of the Contribution Agreement as described in this Amendment.
17. Ratification . Except as expressly set forth herein, all other terms and conditions of the Contribution Agreement shall remain unmodified and in full force and effect, and the Parties hereby confirm and ratify such terms and conditions and agree to perform and comply with the same.
18. Severability . If any provision of this Amendment is invalid or unenforceable, the balance of this Amendment shall remain in effect.
19. Counterparts . This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
20. Governing Law . This Amendment shall be construed under and governed by the internal laws of the State of Delaware without regard to its conflict of laws provisions.
IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed as of the date set forth above by their duly authorized representatives.
ONEOK, INC. |
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By: |
/s/ David L. Kyle |
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Name: |
David L. Kyle |
|
Title: |
Chairman of the Board, President and Chief Executive Officer | |
NORTHERN BORDER PARTNERS, L.P. |
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By: |
/s/ William R. Cordes |
|
Name: |
William R. Cordes |
|
Title: |
Chief Executive Officer |
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NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP | ||
By: |
/s/ William R. Cordes |
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Name: |
William R. Cordes |
|
Title: |
Chief Executive Officer |
Exhibit A to Contribution Agreement
(Companies/Company Subsidiaries)
COMPANIES:
Name |
Type of Entity |
State of
or Formation |
Ownership Percentage |
||||
Mid Continent Market Center, Inc. |
Corporation | Kansas | 100 | % | |||
OkTex Pipeline Company |
Corporation | Delaware | 100 | % | |||
ONEOK Field Services Company |
Corporation | Oklahoma | 100 | % | |||
ONEOK Gas Gathering, L.L.C. |
Limited Liability Company | Oklahoma | 100 | % | |||
ONEOK Gas Storage, L.L.C. |
Limited Liability Company | Oklahoma | 100 | % | |||
ONEOK Gas Storage Holdings, L.L.C. |
Limited Liability Company | Delaware | 100 | % | |||
ONEOK Gas Transportation, L.L.C. |
Limited Liability Company | Oklahoma | 100 | % | |||
ONEOK Midstream Gas Supply, L.L.C. |
Limited Liability Company | Oklahoma | 100 | % | |||
ONEOK Sayre Storage Company |
Corporation | Delaware | 100 | % |
COMPANY SUBSIDIARIES :
Name |
Type of Entity |
State of
or Formation |
Ownership
Percentage |
||||
ONEOK WesTex Transmission, L.P. |
Limited Partnership | Delaware | 100 | % | |||
Potato Hills Gas Gathering System |
Joint Venture | Oklahoma | 51 | % | |||
Sycamore Gas System |
General Partnership | Oklahoma | 48.445 | % | |||
ONEOK VESCO Holdings, L.L.C. |
Limited Liability Company | Delaware | 100 | % |
Notes:
1. | The outstanding membership interests in ONEOK Field Services Holdings, L.L.C. were transferred by ONEOK Field Services Company to ONEOK, Inc. prior to execution of the Contribution Agreement. |
2. | ONEOK Field Services Company (one of the Companies listed above) owns 50% of the outstanding equity interests in Fox Plant, L.L.C., a Delaware limited liability company. However, since ONEOK does not control Fox Plant, L.L.C., the ownership interest for that company is listed on Schedule 2.4(b), rather than on this exhibit. |
3. | ONEOK VESCO Holdings, L.L.C. (one of the Company Subsidiaries listed above) owns 10.1765% of the outstanding interests in Venice Energy Services Company, L.L.C., a Delaware limited liability company. However, since ONEOK does not control Venice Energy Services Company, L.L.C., the ownership interest for that company is listed on Schedule 2.4(b), rather than on this exhibit. |
4. | ONEOK Field Services Company, L.L.C. will distribute to ONEOK, Inc. prior to the Closing of the Contribution Agreement all of the outstanding stock of ONEOK Bushton Processing, Inc. |
Schedule 1.3(b)(vi)
Processing and Services Agreement
Schedule 1.5
Agreed Principles
For purposes of determining Net Working Capital, the following principles shall be used:
| GAAP: Net Working Capital shall be determined in accordance with GAAP, except as set forth below. |
| Reference Statement: The accounts listed on Exhibit D (the Reference Statement) shall be used in determining Net Working Capital, except for those adjustments shown on the Reference Statement. |
| Gas in Storage and Commodity Exchange: The value of the accounts entitled Gas in Storage and Commodity Exchange on the Reference Statement shall be determined at market as set forth in Annex 1.5. |
| Closing Working Capital and Effective Time. The same principles used to calculate Target Working Capital (including those set forth in this Schedule 1.5 and Annex 1.5 and as reflected in the Reference Statement) shall be used to calculate Closing Working Capital, except that the Effective Time for purposes of calculating Target Working Capital shall be close of business on the date of the Reference Statement and the Effective Time for purposes of calculating Closing Working Capital shall be close of business on the last day of the month immediately preceding the Closing Date; provided that natural gas and natural gas liquids shall be measured and valued as of 7:00 a.m. on each of such dates, rather than as of the close of business. |
Exhibit 2.5
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this Amendment ) is entered into as of the 6th day of April, 2006 by and among ONEOK, Inc., an Oklahoma corporation ( ONEOK ), Northern Border Partners, L.P., a Delaware limited partnership ( Northern Border ), and Northern Border Intermediate Limited Partnership ( NBILP , and together with Northern Border, the NBP Partnerships ) (each a Party and collectively, the Parties ). Capitalized terms used in this Amendment but not defined shall have the respective meanings given to such terms in the Purchase Agreement.
WITNESSETH
WHEREAS , ONEOK and Northern Border entered into that certain Purchase and Sale Agreement dated as of February 14, 2006 (the Original Purchase Agreement ), pursuant to which ONEOK agreed to sell to Northern Border all of the issued and outstanding Equity Interests in the Companies;
WHEREAS, the Parties entered into that certain Assignment of Purchase Right dated April 6, 2006, pursuant to which, among other things, Northern Border assigned its right to purchase the Companies to NBILP, and NBILP assumed the obligation to pay the purchase price to ONEOK (the Original Purchase Agreement, as assigned by the Assignment of Purchase Right, is referred to as the Purchase Agreement ); and
WHEREAS , the Parties desire to amend certain terms of the Purchase Agreement.
NOW, THEREFORE , in consideration of the premises and mutual agreements and covenants herein contained, and intending to be legally bound hereby, the Parties hereto agree as follows:
1. Representations and Warranties of ONEOK . The following Section 2.23 is added to the Purchase Agreement:
2.23 No Transfer to ONEOK . Except in connection with Sections 6.7 and 6.10 of this Agreement, and except as fully reflected in the working capital adjustment described in Section 1.4 of this Agreement, from the close of business on March 31, 2006 until Closing, no Entity has distributed, dividended or otherwise transferred any cash or assets to ONEOK, any other Entity or any other Affiliate of ONEOK.
2. Intercompany Accounts . Section 6.7 of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
6.7 Intercompany Accounts. Except for amounts related to normal operational sales and cost of sales and fuel, prior to Closing, but effective as of the close of business on the last day of
the month immediately preceding the Closing Date, ONEOK will settle all Intercompany Accounts and intercompany arrangements between any Entity, on the one hand, and ONEOK and its Affiliates (other than an Entity), on the other hand, and the Entities will not have any Liability whatsoever with respect to such settled intercompany arrangements and Intercompany Accounts. ONEOK shall be solely liable for any contractual or other Liabilities, express or implied, arising out of the termination, cancellation and elimination of any of the foregoing.
3. Indebtedness for Borrowed Money . Section 6.10 of the Purchase Agreement is hereby deleted in its entirety and replaced with the following:
6.10 Indebtedness for Borrowed Money . Prior to the Closing, but effective as of the close of business on the last day of the month immediately preceding the Closing Date, (i) ONEOK shall repay or otherwise settle any Indebtedness due to the Entities from ONEOK or its Affiliates (other than the Entities) and (ii) ONEOK shall cause the repayment or settlement of any Indebtedness due from the Entities to ONEOK or its Affiliates (other than the Entities), in each case, including interest and other amounts accrued thereon or due in respect thereof, other than any Indebtedness fully reflected in the Closing Working Capital. The Parties acknowledge and agree that ONEOK has loaned certain amounts to the Entities after the close of business on March 31, 2006 to fund working capital requirements of the Entities after such date and that such amounts shall be repaid by the NBP Partnerships to ONEOK in the ordinary course of business or through the working capital adjustment described in Section 1.4 of this Agreement.
4. Schedule 1.4. The first page to Schedule 1.4 to the Purchase Agreement is hereby replaced in its entirety by Schedule 1.4 to this Amendment.
5. Ratification . Except as expressly set forth herein, all other terms and conditions of the Purchase Agreement shall remain unmodified and in full force and effect, and the Parties hereby confirm and ratify such terms and conditions and agree to perform and comply with the same.
6. Severability . If any provision of this Amendment is invalid or unenforceable, the balance of this Amendment shall remain in effect.
7. Counterparts . This Amendment may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
8. Governing Law . This Amendment shall be construed under and governed by the internal laws of the State of Delaware without regard to its conflict of laws provisions.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed as of the date set forth above by their duly authorized representatives.
ONEOK, INC. |
||
By: |
/s/ David L. Kyle |
|
Name: |
David L. Kyle |
|
Title: |
Chairman of the Board, President and Chief Executive Officer | |
NORTHERN BORDER PARTNERS, L.P. |
||
By: |
/s/ William R. Cordes |
|
Name: |
William R. Cordes |
|
Title: |
Chief Executive Officer |
|
NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP | ||
By: |
/s/ William R. Cordes |
|
Name: |
William R. Cordes |
|
Title: |
Chief Executive Officer |
Schedule 1.4
(Agreed Principles)
For purposes of determining Net Working Capital, the following principles shall be used:
| GAAP: Net Working Capital shall be determined in accordance with GAAP, except as set forth below. |
| Reference Statement: The accounts listed on Exhibit D (the Reference Statement) shall be used in determining Net Working Capital, except for those adjustments shown on the Reference Statement. |
| Gas in Storage and Commodity Exchange: The value of the accounts entitled Gas in Storage and Commodity Exchange on the Reference Statement shall be determined at market as set forth in Annex 1.4. |
| Closing Working Capital and Effective Time. The same principles used to calculate Target Working Capital (including those set forth in this Schedule 1.4 and Annex 1.4 and as reflected in the Reference Statement) shall be used to calculate Closing Working Capital, except that the Effective Time for purposes of calculating Target Working Capital shall be close of business on the date of the Reference Statement and the Effective Time for purposes of calculating Closing Working Capital shall be close of business on the last day of the month immediately preceding the Closing Date; provided that natural gas and natural gas liquids shall be measured and valued as of 7:00 a.m. on each of such dates, rather than as of the close of business. |
Exhibit 10
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this Amendment ) is effective as of the 6th day of April, 2006 (the Amendment Effective Date ).
RECITALS
WHEREAS, ONEOK, INC. , an Oklahoma corporation (the Borrower ), BANK OF AMERICA, N.A. , as Administrative Agent (the Administrative Agent ) and as a Lender and L/C Issuer, and the financial institutions therein named as Lenders are parties to that certain Credit Agreement dated as of September 17, 2004, as amended by the First Amendment dated as of May 4, 2005, the Second Amendment dated as of July 25, 2005, the Third Amendment dated as of September 13, 2005, and the Fourth Amendment dated as of September 1, 2005 (the Credit Agreement );
WHEREAS, Borrower owns all of the issued and outstanding Equity Interests (the Shares ) of each of the Persons listed on Exhibit A hereto under the heading Company (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, Louisiana, Oklahoma and Texas (the Business );
WHEREAS, Borrower has agreed to contribute the Shares of some of the Companies to Northern Border Partners, L.P., a Delaware limited partnership ( Northern Border ) and Northern Border Intermediate Limited Partnership, a Delaware limited partnership ( NBILP , and together with Northern Border, the NBP Partnerships ), and Northern Border has agreed to accept the contribution of the Shares, upon the terms and conditions set forth in that certain Contribution Agreement between Borrower, Northern Border, and NBILP dated February 14, 2006 (the Contribution Agreement );
WHEREAS, concurrently with the execution and delivery of the Contribution Agreement, Borrower and Northern Border also entered into a Purchase and Sale Agreement (the Purchase Agreement ) pursuant to which Borrower agreed to sell and Northern Border agreed to purchase all the other Companies that will not be transferred pursuant to the Contribution Agreement;
WHEREAS, concurrently with the execution and delivery of the Contribution Agreement and the Purchase Agreement, TransCan Northwest Border Ltd. and Northern Plains Natural Gas Company, LLC, a wholly owned Subsidiary of Borrower ( Northern Plains ), entered into a Purchase and Sale Agreement (the GP Purchase Agreement ) pursuant to which Northern Plains has agreed to purchase all of the shares of common stock of Northwest Border Pipeline Company, which in turn owns the general partner interests in Northern Border that are not currently owned by Subsidiaries of Borrower; and
WHEREAS, Borrower and the undersigned Lenders desire to amend the Credit Agreement in anticipation of and to accommodate the above described transactions.
NOW THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows:
Paragraph | 1. Definitions . |
(a) The following definitions shall be added to Section 1.01 of the Credit Agreement:
Fifth Amendment means that certain Fifth Amendment to Credit Agreement by and among Borrower, Administrative Agent, L/C Issuer and the Lenders party thereto, dated effective as of the Fifth Amendment Effective Date.
Fifth Amendment Effective Date means April 6, 2006.
NBP Partnerships means Northern Border Partners, L.P., a Delaware limited partnership, and Northern Border Intermediate Limited Partnership, a Delaware limited partnership.
Transactions means the transactions contemplated by the Contribution Agreement, Purchase Agreement, and GP Purchase Agreement, as each such term is defined in the Fifth Amendment.
Unrestricted MLP Project Financing Subsidiary means a direct or indirect Subsidiary of an MLP (such MLP, the MLP Project Financing Subsidiarys Parent ) that has been formed for the purpose of acquiring, constructing or developing certain specified assets to be financed, in whole or in part through the incurrence of Indebtedness by such Subsidiary that is non-recourse to the MLP Project Financing Subsidiarys Parent, the Borrower or any other Subsidiary of the Borrower.
MLP Project Financing Subsidiarys Parent has the meaning set forth in the definition of Unrestricted MLP Project Financing Subsidiary.
(b) The definition of Consolidated Net Worth is hereby amended and replaced with the following:
Consolidated Net Worth means, as of any date of determination, consolidated shareholders equity, determined in accordance with GAAP, of the Borrower and its Restricted Subsidiaries as of that date, adjusted as follows: (a) either (i) less the absolute value of net unrealized gains resulting from Swap Contracts that are recorded by the Borrower in accumulated other comprehensive income (loss) as determined in accordance with GAAP, or (ii) plus the absolute value of net unrealized losses resulting from Swap Contracts that are recorded by the Borrower in accumulated other comprehensive income (loss) as determined in accordance with GAAP; and (b) either (i) less the absolute value of defined benefit plan assets that are recorded by the Borrower in accumulated other comprehensive income (loss) as determined in accordance with GAAP, or (ii) plus the absolute value of defined benefit plan liabilities that are recorded by the Borrower in accumulated other comprehensive income (loss) as determined in accordance with GAAP.
Paragraph 2. Material Adverse Effect Representation .
(a) Section 5.05(c) of the Credit Agreement is hereby deleted in its entirety.
(b) The parenthetical phrase beginning in the first line of Section 4.02(a) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
(other than, in the case of a Commercial Paper Borrowing, Section 5.06 )
(c) Paragraph 3 of Exhibit A to the Credit Agreement is hereby deleted in its entirety and
2
Paragraphs 4 and 5 of such Exhibit A are hereby accordingly renumbered as Paragraphs 3 and 4, respectively.
Paragraph 3. No Burdensome Agreements Representation . Section 5.17 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
5.17 No Burdensome Agreements . Neither the Borrower, nor any of its Restricted Subsidiaries is bound by any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability of any Restricted Subsidiary to pay dividends or make other payments or distributions to the Borrower or any Restricted Subsidiary or to otherwise transfer property to the Borrower or any Restricted Subsidiary. No Unrestricted MLP Subsidiary is bound by any Contractual Obligation that limits the ability of any Unrestricted MLP Subsidiary to pay dividends or make other payments or distributions to the owners of equity interests in such Unrestricted MLP Subsidiary in any manner that is more restrictive than those existing and in effect as of the Fifth Amendment Effective Date; provided that any such Contractual Obligation of a Person existing at the time such Person is merged with or into or consolidated with or acquired by any Unrestricted MLP Subsidiary or existing at the time of the acquisition of assets by an Unrestricted MLP Subsidiary that are subject to such a Contractual Obligation shall be permitted and not be deemed to violate this provision, so long as such Contractual Obligations were not entered in contemplation of, and were in existence prior to, such merger, consolidation or acquisition and do not extend to any assets other than those acquired directly or the assets of the Person merged into or consolidated with the Unrestricted MLP Subsidiary that were subject to such Contractual Restriction prior to such merger, consolidation or acquisition; and provided further that any such Contractual Obligation of an Unrestricted MLP Project Financing Subsidiary shall be permitted and not be deemed to violate this provision, so long as such Contractual Obligations are permitted by the organizational documents and other Contractual Obligations of the MLP Project Financing Subsidiarys Parent; and provided further that the issuance by an MLP of limited partnership interests with preferential distribution rights shall not be deemed to violate this provision.
Paragraph 4. Maintenance of Control of Northern Border Partnerships . A new Section 6.12 is hereby added to the Credit Agreement, such Section 6.12 to read, in its entirety, as follows:
6.12 Maintenance of Control of Northern Border Partnerships. Borrower shall at all times have the power to control the management and policies of each of the NBP Partnerships. In the event of any Disposition of general partner interests in either of the NBP Partnerships by the Borrower or any of its Subsidiaries at a time when the aggregate general partner interests in such NBP Partnership owned by the Borrower, directly or indirectly through any of its wholly-owned Subsidiaries, together with the aggregate voting rights of Borrower with respect thereto, is less than (or which Disposition would result in such ownership being less than) fifty percent (50%) of the aggregate outstanding general partner interests and voting rights of all general partners of such NBP Partnership (each a GP Disposition), the Borrower shall provide prior written notice thereof to the Administrative Agent and the Lenders, together with such other information as may be reasonably necessary to demonstrate to the reasonable satisfaction of the Required Lenders that Borrower will retain control of each of the NBP Partnerships after giving effect to such GP Disposition (which reasonable satisfaction will be deemed unless objected to in writing by the Required Lenders or the Administrative Agent acting at the direction of the Required Lenders, within 15 days of receipt of such notice).
Paragraph 5. Fundamental Changes Covenant . The parties agree and acknowledge that the Transactions are not prohibited by Section 7.03 of the Credit Agreement and the Lenders hereby waive any non-compliance with respect to the Transactions based on Section 7.03 of the Credit Agreement. Further, the last paragraph of Section 7.03 is hereby deleted in its entirety and replaced with the following:
3
For purposes of determining compliance with this Section 7.03 , in the event of a Disposition of assets by the Borrower or a Restricted Subsidiary, the assets being Disposed of by the Borrower or such Restricted Subsidiary shall be considered to constitute a Material Portion of the assets of the Borrower and its Restricted Subsidiaries taken as a whole only if
(a) | the aggregate book value of such assets being Disposed of, plus |
(b) | the book value of all other assets Disposed of by the Borrower and Restricted Subsidiaries taken as a whole since the Fifth Amendment Effective Date, excluding in all cases the assets Disposed of pursuant to the Transactions, minus |
(c) | the book value of all assets (other than cash and cash equivalents) acquired by the Borrower and Restricted Subsidiaries taken as a whole since the Fifth Amendment Effective Date, excluding in all cases the assets acquired pursuant to the Transactions, |
is equal to or greater than Two Billion Three Hundred Million Dollars ($2.3 billion).
In addition to and without limiting the foregoing provisions, the Borrower shall not permit any Unrestricted MLP Subsidiary to merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets of the Unrestricted MLP Subsidiaries taken as a whole (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:
(i) | any Unrestricted MLP Subsidiary may merge with any one or more other Unrestricted MLP Subsidiaries, provided that when any wholly-owned Unrestricted MLP Subsidiary is merging with another Unrestricted MLP Subsidiary which is not wholly-owned, the wholly-owned Unrestricted MLP Subsidiary shall be the continuing or surviving Person; and |
(ii) | any Unrestricted MLP Subsidiary may consolidate or merge with another corporation or entity, and a Person may consolidate with or merge into any Unrestricted MLP Subsidiary, provided that (x) the Unrestricted MLP Subsidiary shall be the ultimate surviving entity, and (y) (i) the surviving entity shall be after the merger a solvent corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and (ii) immediately after giving effect to such transaction and treating any Indebtedness which becomes an obligation of the Unrestricted MLP Subsidiary as a result of such transaction as having been incurred by the Unrestricted MLP Subsidiary at the time of such transaction, no Default shall have happened and be continuing; |
provided , however , that nothing contained in this Section 7.03 shall be or be deemed to permit any merger, dissolution, liquidation, consolidation or Disposition which would result in Borrowers failure to comply with Section 6.12 .
Paragraph 6. Change in Nature of Business . Section 7.04 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
4
7.04 Change in Nature of Business. Engage in or permit any Unrestricted MLP Subsidiary to engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.
Paragraph 7. Burdensome Agreements . Section 7.06 of the Credit Agreement is hereby deleted in its entirety and replaced with the following:
7.06 Burdensome Agreements. (a) Enter into any Contractual Obligation that limits the ability of any Restricted Subsidiary to pay dividends or make other payments or distributions to the Borrower or to otherwise transfer property to the Borrower, or (b) permit any Unrestricted MLP Subsidiary to enter into any Contractual Obligation that limits the ability of any Unrestricted MLP Subsidiary to pay dividends or make other payments or distributions to the owners of equity interests in such Unrestricted MLP Subsidiary in any manner that is more restrictive than those existing and in effect as of the Fifth Amendment Effective Date; provided that any such Contractual Obligation of a Person existing at the time such Person is merged with or into or consolidated with or acquired by any Unrestricted MLP Subsidiary or existing at the time of the acquisition of assets by an Unrestricted MLP Subsidiary that are subject to such a Contractual Obligation shall be permitted and not be deemed to violate this provision, so long as such Contractual Obligations were not entered in contemplation of, and were in existence prior to, such merger, consolidation or acquisition and do not extend to any assets other than those acquired directly or the assets of the Person merged into or consolidated with the Unrestricted MLP Subsidiary that were subject to such Contractual Restriction prior to such merger, consolidation or acquisition; and provided further that any such Contractual Obligation of an Unrestricted MLP Project Financing Subsidiary shall be permitted and not be deemed to violate this provision, so long as such Contractual Obligations are permitted by the organizational documents and other Contractual Obligations of the MLP Project Financing Subsidiarys Parent; and provided further that the issuance by an MLP of limited partnership interests with preferential distribution rights shall not be deemed to violate this provision.
Paragraph 8. Investments in Unrestricted MLP Subsidiaries . The parties agree and acknowledge that the Transactions are not prohibited by Section 7.09(d) of the Credit Agreement and the Lenders hereby waive any non-compliance with respect to the Transactions based on Section 7.09(d) of the Credit Agreement. Further, Section 7.09(d) of the Credit Agreement is hereby deleted, in its entirety and replaced with the following:
(d) The aggregate net amount of new Investments made by the Borrower and its Restricted Subsidiaries in Unrestricted MLP Subsidiaries after the Fifth Amendment Effective Date (and after giving effect to the Transactions) shall not at any time exceed the sum of (i) $1,800,000,000, plus (ii) the book value of all assets (other than cash and cash equivalents) acquired by the Borrower and its Restricted Subsidiaries, taken as a whole, after the Fifth Amendment Effective Date. For purposes of determining compliance with this subsection (d): (i) the aggregate net amount of new Investments shall be equal to: (A) the aggregate dollar amount of Investments made by the Borrower and its Restricted Subsidiaries in Unrestricted MLP Subsidiaries after the Fifth Amendment Effective Date (and for this purpose, Investments made by transfer of assets other than cash from the Borrower or a Restricted Subsidiary to an Unrestricted MLP Subsidiary shall be valued at the fair market value of such assets at the time of transfer), minus (B) (I) dividends and other distributions of cash received by the Borrower and its Restricted Subsidiaries after the Fifth Amendment Effective Date in respect of Investments in Unrestricted MLP Subsidiaries (or, in the case of Investments made after the Fifth Amendment Effective Date in the form of loans or other extensions of credit by the Borrower or its Restricted Subsidiaries to Unrestricted MLP Subsidiaries, repayments of the principal of such loans or other extensions of credit) and (II) cash consideration
5
received by the Borrower and its Restricted Subsidiaries after the Fifth Amendment Effective Date from the sale to unrelated third parties of equity interests in Unrestricted MLP Subsidiaries, and (ii) fair market value of assets shall be equal to the fair market value of such assets as determined by an independent third party retained by the Borrower or an Unrestricted MLP Subsidiary or directors of either of the foregoing in connection with the Borrowers or its Restricted Subsidiarys Investment in such Unrestricted MLP Subsidiary.
Paragraph 9. Compliance Certificate . Exhibit C to the Credit Agreement is hereby amended and restated, in its entirety to read as Exhibit C attached hereto and incorporated by reference herein.
Paragraph 10. Designation of Unrestricted MLP Subsidiaries . Pursuant to Section 7.09(a) of the Credit Agreement, the Borrower hereby designates the Companies and all of their Subsidiaries as Unrestricted MLP Subsidiaries effective simultaneously with the effectiveness of the Transactions. The Borrower hereby certifies that, subject to the following sentence, all of the conditions to such designation set forth in Section 7.09 of the Credit Agreement, as amended by this Amendment, have been satisfied. Notwithstanding the requirements of Section 7.09(a)(ii) of the Credit Agreement, the Lenders agree that any of the matters described in such Section may continue in effect in respect of the Companies and all of their Subsidiaries for a period not exceeding 60 days after the Fifth Amendment Effective Date, so long as such matters are in existence prior to the Fifth Amendment Effective Date and were not incurred in contemplation of the Transactions, and the continuation of any such matters for such period shall not prevent or affect the designation and treatment of the Companies and their Subsidiaries as Unrestricted MLP Subsidiaries.
Paragraph 11. Acknowledgment and Ratification; Representations and Warranties . The Borrower acknowledges and agrees that, except as expressly provided herein, the execution, delivery, and performance of this Amendment shall in no way release, diminish, impair, reduce, or otherwise affect the obligations of the Borrower under the Credit Agreement, which Credit Agreement, as amended hereby, shall remain in full force and effect, and is hereby ratified and confirmed. Borrower represents and warrants to the Lenders that as of the date of execution of this Amendment and as of the Amendment Effective Date:
(a) (i) all representations and warranties set forth in the Credit Agreement are true and correct in all material respects as though made on the date hereof, except to the extent that any of them speak to a different specific date, in which case they are true and correct as of such earlier date, and for purposes of this Amendment the representations and warranties contained in subsection (a) and (b) of Section 5.05 shall be deemed to refer to the most recent financial statements furnished by the Borrower pursuant to clauses (a) and (b) of Section 6.01 , (ii) no Default or Event of Default exists; and (iii) since December 31, 2005 there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect;
(b) the execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate action, and do not and will not contravene the terms of any of the Borrowers organizational documents or any Requirement of Law or any indenture or loan or credit agreement or any other material agreement or instrument to which the Borrower is a party or by which it is bound or to which it or its properties are subject;
(c) no authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any other person are necessary for the execution, delivery or performance by the Borrower of this Amendment or for the validity or enforceability thereof, other than routine informational filings with the SEC and/or other Governmental Authorities; and
(d) this Amendment constitutes the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with its terms, except as limited by applicable
6
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors rights generally or by equitable principles relating to enforceability, and by judicial discretion regarding the enforcement of or any applicable laws affecting remedies (whether considered in a court of law or a proceeding in equity).
Paragraph 12. Definitions Generally; Governing Law; Miscellaneous . Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meaning set forth in the Credit Agreement. This Amendment shall be governed by the internal laws of the State of New York. Unless stated otherwise, (a) the singular number includes the plural and vice versa and words of any gender include each other gender, in each case, as appropriate, (b) headings and captions may not be construed in interpreting provisions, and (c) this Amendment may be executed in any number of counterparts with the same effect as if all signatories had signed the same document, and all of those counterparts must be construed together to constitute the same document.
Paragraph 13. E NTIRE A GREEMENT . T HIS A MENDMENT R EPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR , CONTEMPORANEOUS , OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES . T HERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS SUBJECT MATTER .
Remainder of Page Intentionally Blank.
Signature Pages to Follow
7
IN WITNESS WHEREOF , the parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers to be effective as of the day and year first above written.
ONEOK, INC. |
||
By: |
/s/ Jim Kneale |
|
Name: |
Jim Kneale | |
Title: |
Executive Vice President-Finance and Administration and Chief Financial Officer |
Signature Page to Fifth Amendment to Credit Agreement
BANK OF AMERICA, N.A., as |
||
Administrative Agent |
||
By: |
/s/ Kevin Wagley |
|
Name: |
Kevin Wagley |
|
Title: |
Senior Vice President |
|
BANK OF AMERICA, N.A., as a Lender and L/C Issuer |
||
By: |
/s/ Kevin Wagley |
|
Name: |
Kevin R. Wagley |
|
Title: |
Senior Vice President |
Signature Page to Fifth Amendment to Credit Agreement
CITIBANK, N.A., as |
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a Lender and L/C Issuer |
||
By: |
/s/ Oscar Cragwell |
|
Name: |
Oscar Cragwell | |
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
ABN AMRO Bank N.V., as |
||
a Lender |
||
By: |
/s/ Jamie Conn |
|
Name: |
Jamie Conn |
|
Title: |
Managing Director |
|
By: |
/s/ John Reed |
|
Name: |
John Reed |
|
Title: |
Director |
Signature Page to Fifth Amendment to Credit Agreement
JPMORGAN CHASE BANK, N.A., as successor by merger to BANK ONE, NA, as a Lender |
||
By: |
/s/ Robert Traband |
|
Name: |
Robert W. Traband | |
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender |
||
By: |
/s/ J. Matthew Rowand |
|
Name: |
J. Matthew Rowand | |
Title: |
Assistant Vice President |
Signature Page to Fifth Amendment to Credit Agreement
KBC BANK N.V., as a Lender |
||
By: |
/s/ Jean-Pierre Diels |
|
Name: |
Jean-Pierre Diels |
|
Title: |
First Vice President |
|
By: |
/s/ Eric Raskin |
|
Name: |
Eric Raskin |
|
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
THE ROYAL BANK OF SCOTLAND plc, as a Lender |
||
By: |
/s/ John Preece |
|
Name: |
John Preece | |
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
UBS LOAN FINANCE LLC, as a Lender |
||
By: |
/s/ Irja R. Otsa |
|
Name: |
Irja R. Otsa |
|
Title: |
Associate Director |
|
By: |
/s/ Richard L. Tavrow |
|
Name: |
Richard L. Tavrow |
|
Title: |
Director |
Signature Page to Fifth Amendment to Credit Agreement
SUMITOMO MITSUI BANKING CORPORATION, as a Lender |
||
By: |
/s/ William Ginn |
|
Name: |
William Ginn | |
Title: |
General Manager |
Signature Page to Fifth Amendment to Credit Agreement
SUNTRUST BANK, as a Lender |
||
By: |
/s/ Peter Panos |
|
Name: |
Peter Panos | |
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
BANK OF OKLAHOMA N.A., as a Lender |
||
By: |
/s/ Matt C. Crew |
|
Name: |
Matt C. Crew | |
Title: |
Commercial Banking Officer |
Signature Page to Fifth Amendment to Credit Agreement
WESTLB AG, NEW YORK BRANCH, as a Lender |
||
By: |
/s/ Duncan Robertson |
|
Name: |
Duncan Robertson |
|
Title: |
Executive Director |
|
By: |
/s/ James D. McPartlan |
|
Name: |
James D. McPartlan |
|
Title: |
Managing Director |
Signature Page to Fifth Amendment to Credit Agreement
UNION BANK OF CALIFORNIA, N.A., as a Lender |
||
By: |
/s/ Bryan Read |
|
Name: |
Bryan Read | |
Title: |
Vice President |
Signature Page to Fifth Amendment to Credit Agreement
UMB BANK, N.A., as a Lender |
||
By: |
/s/ Michael P. Nash |
|
Name: |
Michael P. Nash | |
Title: |
Executive Vice President |
Signature Page to Fifth Amendment to Credit Agreement
ARVEST BANK, as a Lender |
||
By: |
/s/ Rick Gaut |
|
Name: |
Rick Gaut | |
Title: |
Commercial Loan Officer |
Signature Page to Fifth Amendment to Credit Agreement
EXHIBIT A
COMPANIES :
Name |
Mid Continent Market Center, Inc. |
OkTex Pipeline Company |
ONEOK Field Services Company |
ONEOK Gas Gathering, L.L.C. |
ONEOK Gas Storage, L.L.C. |
ONEOK Gas Storage Holdings, L.L.C. |
ONEOK Gas Transportation, L.L.C. |
ONEOK Midstream Gas Supply, L.L.C. |
ONEOK Sayre Storage Company |
ONEOK Hydrocarbon, L.L.C. |
ONEOK Transmission Company |
COMPANY SUBSIDIARIES :
Name |
ONEOK Bushton Processing, Inc. |
ONEOK WesTex Transmission, L.P. |
Potato Hills Gas Gathering System |
Sycamore Gas System |
ONEOK VESCO Holdings, L.L.C. |
Chisholm Pipeline Holdings, Inc. |
ONEOK Hydrocarbon, L.P. |
ONEOK Hydrocarbon GP, L.L.C. |
ONEOK Hydrocarbon Holdings, L.L.C. |
ONEOK Hydrocarbon Southwest, L.L.C. |
ONEOK MB I, L.P. |
ONEOK NGL Pipeline, L.P. |
ONEOK Underground Storage Company |
ONEOK Texas Gas Storage, L.P. |
Mont Belvieu I Fractionation Facility |
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of September 17, 2004 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the Agreement ; the terms defined therein being used herein as therein defined), among ONEOK, Inc., an Oklahoma corporation (the Borrower ), the Lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent and L/C Issuer, and Citibank, N.A., as L/C Issuer.
The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. (a) The year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section, and (b) [refer to accompanying financial statements of each MLP that is an Unrestricted MLP Subsidiary for the year ended as of the above date]
[select one:]
[are attached hereto as Schedule 1 ]
or
[are available in electronic format and have been delivered pursuant to Section 6.02 of the Agreement].
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. (a) The unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date, and (b) [refer to accompanying financial statements of each MLP that is an Unrestricted MLP Subsidiary for the quarter ended as of the above date]
[select one:]
[are attached hereto as Schedule 1 ]
or
[are available in electronic format and have been delivered pursuant to Section 6.02 of the Agreement].
The financial statements described in 1(a) above fairly present the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by the attached financial statements.
3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it.]
or
[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]
4. The representations and warranties of the Borrower contained in Article V of the Agreement, or which are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except (a) that to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, (b) for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered, [and (c) (describe other exceptions, if any)].
5. The financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of , .
ONEOK, Inc. | ||
By: |
|
|
Name: |
|
|
Title: |
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( Statement Date )
SCHEDULE 2
to the Compliance Certificate
($ in 000s)
Section 7.08 Debt to Capital.
A. Consolidated Total Indebtedness at Statement Date (sum of Lines A.1. through A.8.): |
$ | |
1. the outstanding principal amount of all obligations for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments |
$ | |
a. Less: 75% of the principal amount of Pledged Notes and Convertibles, not to exceed 10% of Total Capital (this amount is the Qualifying Amount of Pledged Notes and Convertibles) |
-$ | |
(i) indicate outstanding principal amount of Pledged Notes: $ |
||
(ii) indicate outstanding principal amount of Convertibles*: $ |
||
(iii) 10% of Total Capital equals $
b. Less: 75% of the principal amount of Subordinated Securities*, not to exceed an amount equal to (x) 15% of Total Capital minus (y) the Qualifying Amount of Pledged Notes and Convertibles (taken from line A.1.a. above) |
-$ | |
(i) indicate outstanding principal amount of Subordinated Securities: $ |
||
* Note: If there are any Convertibles or Subordinated Securities, attach a separate schedule showing for each, the date of issuance and outstanding principal amount. |
||
2. direct or contingent obligations arising under letters of credit, bankers acceptances, bank guaranties, surety bonds and similar instruments |
$ | |
3. obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business) |
$ | |
4. Swap Termination Value under any Swap Contract (excluding commodity swap transaction, commodity options, forward commodity contracts, commodity cap transactions, commodity floor transactions, commodity collar transactions, and commodity spot contracts) |
$ | |
5. indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse |
$ |
6. Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations |
$ | |
7. Off-Balance Sheet Liabilities (other than those listed in Line A.6.) |
$ | |
8. without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in Lines A.1. through A.7. above of Persons other than the Borrower or any Restricted Subsidiary |
$ | |
B. Consolidated Net Worth at Statement Date: (sum of Lines B.1. through B.4.): |
$ | |
1. Consolidated Net Worth at Statement Date on the Balance Sheet |
$ | |
2. Plus the sum of (a) the Qualifying Amount of Pledged Notes and Convertibles (taken from line A.1.a. above) plus (b) the Qualifying Amount of Subordinated Securities (taken from line A.1.b. above): |
$ | |
3. Either: Less the absolute value of net unrealized gains resulting from Swap Contracts that are recorded by the Borrower in accumulated other comprehensive income (loss) |
$ | |
or Plus the absolute value of net unrealized losses resulting from Swap Contracts that are recorded by the Borrower in accumulated other comprehensive income (loss) |
$ | |
4. Either: Less the absolute value of defined benefit plan assets that are recorded by the Borrower in accumulated other comprehensive income (loss) |
$ | |
or Plus the absolute value of defined benefit plan liabilities that are recorded by the Borrower in accumulated other comprehensive income (loss) |
$ | |
C. Total Capital at Statement Date: (Lines A + B) |
$ | |
D. Debt to Capital at Statement Date: (Line A ÷ Line C) (cannot exceed 0.675) |
$ |
Section 7.09 Investment in Unrestricted MLP Subsidiaries.
A. Aggregate Net Amount of new Investments in Unrestricted MLP Subsidiaries (Line 6): |
||
1. Aggregate cash consideration paid after the Fifth Amendment Effective Date for purchase of equity interests in Unrestricted MLP Subsidiaries: |
$ | |
2. Aggregate fair market value (FMV) of assets transferred to Unrestricted MLP Subsidiaries after the Fifth Amendment Effective Date (FMV determined as of date |
$ |
of transfer): |
||
3. Total (Line 1 plus Line 2): |
$ | |
4. Less cash distributions (or loan payments) received after the Fifth Amendment Effective Date: |
-$ | |
5. Less cash received from sales of equity interests in Unrestricted MLP Subsidiaries: |
-$ | |
6. Aggregate Net Amount invested in Unrestricted MLP Subsidiaries after Fifth Amendment Effective Date (Line 3 minus the sum of Line 4 and Line 5): |
$ | |
B. Book value of all assets (other than cash and cash equivalents) acquired by the Borrower and its Restricted Subsidiaries taken as a whole since the Fifth Amendment Effective Date: |
$ | |
C. Sum of Line B plus $1,800,000,000: |
$ | |
D. Is the amount in Line A.6 equal to or less than Line C?: Yes No |
Exhibit 10.1
SERVICES AGREEMENT
This Services Agreement ( Agreement ) is made and entered into as of the 6 th day of April, 2006 (the Effective Date ) by and among ONEOK, Inc., an Oklahoma corporation ( ONEOK ), Northern Plains Natural Gas Company, LLC, a Delaware limited liability company ( Northern Plains ), NBP Services, LLC, a Delaware limited liability company ( NBP Services ), Northern Border Partners, L.P., a Delaware limited partnership (the MLP ), and Northern Border Intermediate Limited Partnership (the ILP ), a Delaware limited partnership. Each party is referred to herein individually as a Party , and collectively as the Parties . Capitalized terms used herein and not otherwise defined shall have the meanings given to them in Section 10.1 .
W I T N E S S E T H:
WHEREAS, the MLP and ILP previously contracted for NBP Services to provide certain services to the MLP and the ILP in connection with the day-to-day business and affairs of the MLP and ILP pursuant to the Administrative Services Agreement;
WHEREAS, the Parties desire for the Administrative Services Agreement to be terminated, superseded and replaced by this Agreement and to have the services previously provided under that Administrative Services Agreement be provided under this Agreement;
WHEREAS, Northern Plains, pursuant to certain Operating Agreements, is the operator of certain interstate natural gas pipelines in which the MLP and the ILP have an ownership interest;
WHEREAS, the Operating Agreements each provide that Northern Plains may delegate or cause one or more of its affiliates to fulfill its obligations under the Operating Agreements;
WHEREAS, certain affiliates of ONEOK own all of the outstanding general partner interests of each of the MLP and ILP and own a substantial percentage of the outstanding equity interests in the MLP;
WHEREAS, the Parties have determined that the operations of ONEOK and its affiliates and the Northern Border Companies can operate more efficiently and cost effectively if certain common services are combined and shared;
WHEREAS, certain ONEOK Affiliates and Northern Border Companies are regulated by various governmental entities that require a fair and reasonable method of allocation for costs incurred for such common services; and
WHEREAS, ONEOK (an affiliate of NBP Services and Northern Plains) desires to provide or cause the provision of certain services to the Northern Border Companies, and the Northern Border Companies desire to receive these services, in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the premises and the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
SERVICES TO BE PROVIDED
1.1 Services . On the terms and conditions set forth in this Agreement, ONEOK will provide or cause to be provided to the Northern Border Companies at least the type and amount of services that it provides or causes to be provided to ONEOK Affiliates, including but not limited to, executive officers, legal services, human resources and employee benefits, information technology, insurance and risk management, purchasing, inventory control, gas supply services, marketing, pipeline control, right of way management, general operations and maintenance, measurement, engineering, accounting, contract administration, SEC reporting, day-to-day supervisory and administrative services, planning support, budgeting support, technical, treasury services, tax and internal audit services and other services required to be provided pursuant to the partnership agreements of the MLP and ILP, as amended from time to time, and various other services routinely and customarily provided to the ONEOK Affiliates (the Services ). Each Northern Border Company or permitted successor or assign that receives Services shall be referred to as a Purchaser and collectively as the Purchasers . ONEOK and the ONEOK Affiliates that provide Services under this Agreement, including Northern Plains and NBP Services, shall be collectively referred to as the Provider .
1.2 Operating Agreement Services . The Parties acknowledge and agree that Northern Plains will continue to perform its obligations under each of the Operating Agreements. To the extent Northern Plains requests Services from ONEOK under this Agreement in order to perform those obligations, ONEOK shall provide such Services, and Northern Plains shall pay for such Services, under the terms and conditions set forth in this Agreement. To the extent Northern Plains receives Services under this Agreement, it will be deemed a Purchaser with respect to such Services.
1.3 Additional Services . Any additional services requested by any Purchaser will be provided on the basis agreed upon by the Parties in writing. Unless the context otherwise requires, the term Services in this Agreement shall include any such additional services agreed upon in writing by the Parties.
1.4 Costs . The costs for the Services provided under this Agreement will be allocated and billed monthly to the Purchasers in a manner consistent with the method of allocation of such costs among other ONEOK Affiliates and consistent with applicable law, including the requirements of the Federal Energy Regulatory Commission ( FERC ). Direct costs will be allocated to the Purchasers having activities that give rise to such costs to the extent that such direct basis can reasonably be determined and allocated. The remaining unallocated direct costs and all indirect costs will then be allocated on the basis of a three-factor formula (the Distrigas Method ), consistent with methods approved by the FERC. The Distrigas Method provides for the allocation of common costs based on the average of the percentage of gross plant and investment, operating income and labor expense, as such terms are defined in FERC regulations of each company involved in the calculation. The Provider will determine an average of those three factors for each Purchaser and for ONEOK and each ONEOK Affiliate
that is involved in the calculation. That average will be the allocation ratio for each such entity (the Distrigas Allocation Ratio ). The Distrigas Allocation Ratio for each such entity will then be applied to the total amount of common costs to determine the amount of common costs that will be allocated to each such entity. The Distrigas Allocation Ratio will be recalculated annually, or as required due to acquisitions, divestitures or other similar types of transactions or regulatory requirements. For the avoidance of doubt, the costs allocated through the Distrigas Method are based on actual costs recognized under U.S. generally accepted accounting principles and do not include a mark-up or other element of profit. The Provider is not entitled to and will not receive any other fee or other compensation for the performance of the Services other than as set forth in this Section 1.4 .
ARTICLE II
SERVICE STANDARD
2.1 Standard of Care; Limited Warranty .
(a) The Provider represents that it will discharge its duties hereunder in good faith and with reasonable diligence and on a basis consistent with the standards of service provided to ONEOK Affiliates. EXCEPT AS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, THE PROVIDER MAKES NO (AND HEREBY DISCLAIMS AND NEGATES ANY AND ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES. IN NO EVENT SHALL THE PROVIDER BE LIABLE TO THE NORTHERN BORDER COMPANIES OR ANY OTHER PERSON FOR ANY INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING FROM ANY ERROR IN THE PERFORMANCE OF THE SERVICES, REGARDLESS OF WHETHER THE PROVIDER OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY, OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT; PROVIDED HOWEVER, THAT THE PROVIDER SHALL BE LIABLE FOR ANY DAMAGES ARISING OUT OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE PRECEDING IS THE ONLY WARRANTY CONCERNING THE SERVICES AND ANY RESULTS, WORK PRODUCT OR PRODUCTS RELATED THERETO, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR NONINFRINGEMENT. THE PARTIES UNDERSTAND, ACKNOWLEDGE AND AGREE THAT THE LEVEL OF COMPENSATION THE PARTIES HAVE AGREED TO ACCEPT IS PREDICATED ON THIS LIMITATION OF LIABILITY AND DISCLAIMER OF WARRANTIES.
(b) The Parties shall agree and communicate regarding (i) any changes to the Services or (ii) service level expectations related to the Services. The Provider shall not make any changes to the Services or the manner in which they are provided without advance notice to the Purchaser.
2.2 Consequences of Breach or Non-Performance . The Purchasers shall promptly notify the Provider of any failure by the Provider to perform one or more of the Services in
accordance with the terms of this Agreement. In the event that the Provider does not cure such non-performance within thirty (30) business days of the receipt of such notice, the Purchasers may terminate such Service(s) by delivering notice to the Provider.
2.3 Relationship of Parties . The Parties hereby acknowledge and agree that, in providing the Services and otherwise in connection with this Agreement, the Provider is an independent contractor and is not, and shall not be deemed to be, an agent, employee or legal representative of the Purchasers or otherwise as having power or authority to bind the Purchasers, unless specifically delegated to do so in order to facilitate the Services.
ARTICLE III
TERM AND TERMINATION
3.1 Term . This Agreement shall become effective as of the Effective Date and shall remain in effect until terminated as herein provided or until Services are no longer being provided (the Term ).
3.2 Termination of this Agreement . Except as set forth in Section 2.2 of this Agreement, a Party may not terminate this Agreement during the Term except under the following circumstances:
(a) The Parties may terminate this Agreement by the execution of a written agreement signed by authorized representatives of all Parties, in which event the termination shall be effective on the date specified in such agreement.
(b) If a transaction is consummated which would cause the Provider or its Affiliates (other than the Northern Border Companies and their subsidiaries) to cease to be a general partner of the MLP or the ILP, then ONEOK or the MLP, as the case may be, shall have the right to terminate this Agreement upon the execution and delivery of a mutually agreeable transition services agreement between the Parties.
3.3 Termination of the Administrative Services Agreement . Effective as of the execution and delivery of this Agreement, the Administrative Services Agreement is hereby terminated, superseded and replaced by this Agreement; provided, however, that all amounts due or to become due under that Administrative Services Agreement shall be paid in full and the Administrative Services Agreement shall continue in effect with respect thereto until all such amounts are paid in full.
ARTICLE IV
BILLING AND PAYMENT
4.1 Invoices . The Provider will send one monthly invoice to the ILP covering all of the Services provided under this Agreement. The monthly invoice will be sent following completion of the Providers normal monthly financial reporting process, including completion of the Distrigas Method calculation. The ILP shall pay each invoice by wire transfer or other means of immediate payment within fifteen (15) days of the invoice date without setoff or deduction of any kind, except as provided in Section 4.2 . Any late payment by the ILP shall incur a late fee of ten percent (10%) per annum, calculated from the due date until the date of
payment. In the event that any invoice is based on estimated costs, the Provider shall make adjustments by increasing or decreasing the costs in the invoice subsequent to the determination of the actual costs.
4.2 Disputed Amounts . In the event that a dispute arises as to the amount of any statement or invoice or any portions thereof submitted pursuant to this Article IV , the Parties will resolve the dispute in accordance with this Section 4.2 and Section 4.3 below. Pending resolution of the dispute, the ILP may withhold payment of the amounts on an invoice or statement to the extent such amounts are disputed in good faith, but shall pay all charges on such invoice or statement that are not so disputed. If the ILP disputes any amount on an invoice or statement it shall promptly notify the Provider in writing of such disputed amounts and the reasons each such charge is disputed. The Provider shall provide the ILP with sufficient records relating to the disputed charge to enable the Parties to resolve the dispute. In the event the determination is made that the ILP should have paid the disputed amount, the ILP shall pay the disputed amount, with interest on the disputed amount at a rate of ten percent (10%) per annum, calculated from and after the original due date of such invoice until the date of payment. If the ILP paid the disputed amount, but such disputed amount is ultimately determined not to have been payable, then the Provider shall refund to the ILP the disputed amount, with interest on the disputed amount at a rate of ten percent (10%) per annum, calculated from and after the date the Provider received the payment to the date of the refund. Payment by the ILP of a disputed amount shall not be deemed a waiver of the right of the ILP to recoup any contested portion of any bill or statement.
4.3 Dispute Resolution . In the event of a dispute under this Agreement, the Parties shall, during the fifteen (15) days after notice of such a dispute, use their commercially reasonable efforts to reach agreement on the disputed items or amounts. If the Parties are unable to reach agreement within such period, they shall promptly thereafter cause a nationally recognized accounting firm agreeable to the Parties (the Accounting Referee ) to review this Agreement and the disputed items or amounts. The Accounting Referee shall deliver to the Parties as promptly as practicable (but in any event no later than thirty (30) days from the date of engagement of the Accounting Referee), a report setting forth the Accounting Referees determination of the appropriate resolution of the dispute. Such determination shall be final and binding upon the Parties. The cost of such review and report shall be borne equally by each Party involved in the dispute.
4.4 Audit . The Northern Border Companies and their designated representatives, after fifteen (15) days notice in writing to the Provider, shall have the right during normal business hours to audit, at their own expense, all books and records of the Provider related to the Services. Such audits shall not be commenced more often than twice each calendar year. The Northern Border Companies shall have two (2) years after the close of a calendar year in which to make an audit of the Providers records for such calendar year. Absent fraud or intentional concealment or misrepresentation by the Provider or its employees, the Provider shall neither be required nor permitted to adjust any item unless a claim therefore is presented or adjustment is initiated within two (2) years after the close of the calendar year in which the statement therefore is rendered, and in the absence of such timely claims or adjustments, the bills and statements rendered shall be conclusively established as correct. The Provider shall use reasonable
commercial efforts to obtain similar audit rights from contractors, consultants and suppliers engaged to perform any of the Services on behalf of the Provider.
ARTICLE V
LIMITATION OF LIABILITY AND INDEMNITIES
5.1 Purchasers Limitation of Liability . Each of the Northern Border Companies agrees, with respect to the Services provided to such entity hereunder, to indemnify, defend and hold harmless the Provider and its Affiliates (provided that Northern Plains shall not be entitled to indemnity for any costs, expenses or liabilities incurred by it as a general partner of the MLP or the ILP), and their respective employees, officers, directors, representatives and agents harmless from and against all claims, losses, costs, damages and expenses (including, without limitation, attorneys fees and expenses), penalties and liabilities (collectively, Liabilities ) arising out of the acts (or failure to act) by any such persons or entities in connection with the performance by such persons or entities of such Services, REGARDLESS OF WHETHER THE PROVIDER OR SUCH OTHER PERSONS OR ENTITIES MAY BE WHOLLY, CONCURRENTLY, PARTIALLY OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT IN CONNECTION THEREWITH; PROVIDED, HOWEVER, THAT NEITHER THE PROVIDER NOR ANY OF SUCH OTHER PERSONS AND ENTITIES SHALL BE INDEMNIFIED FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PROVIDER OR SUCH OTHER PERSONS OR ENTITIES.
5.2 Providers Indemnification . The Provider shall indemnify, defend and hold the Northern Border Companies and their general partners and their respective employees, directors, policy committee members, officers, representatives and agents harmless from and against all Liabilities arising out of the performance of this Agreement and resulting from the gross negligence or willful misconduct of the Provider or its Affiliates.
5.3 Defense of Claims . It is understood and agreed that in the event that any Party is made a defendant in any suit, action or proceeding for which it is entitled to be indemnified pursuant to this Agreement, and the applicable indemnifying party fails or refuses to timely assume the defense thereof, after having been notified by the indemnified party to do so, that the indemnified party may compromise and settle or defend any such claim, and the applicable indemnifying party shall be bound and obligated to reimburse said indemnified party for the amount expended by the indemnified party in settling and compromising any such claim, or for the amount expended by the indemnified party in paying any judgment rendered therein, together with all reasonable attorneys fees and costs incurred by the indemnified party for defense or settlement of such claim. Any judgment rendered against the indemnified party or amount expended by the indemnified party in compromising or settling such claim, together with all reasonable attorneys fees and costs, shall be conclusive as determining the amount for which the applicable indemnifying party is liable to reimburse the indemnified party hereunder.
ARTICLE VI
CONFIDENTIALITY AND OWNERSHIP OF RECORDS
6.1 Confidentiality . The Parties acknowledge that in the course of this Agreement they may have access to and be in possession of Confidential Information (as described
immediately below) of the other Party. Each Party shall protect the other Parties Confidential Information in the same manner as it protects its own confidential information of like kind, which in no event shall be less than reasonable care. Each Partys access to the Confidential Information of the other Parties shall be restricted to those of such Partys personnel who have a need to know in order to perform under this Agreement. The provisions of this Section shall survive any termination or expiration of this Agreement and shall not be limited by any limitation of liability contained herein. The term Confidential Information shall mean information regarded by that Party as proprietary or confidential, including, but not limited to, information relating to its business affairs, financial information and prospects; future projects or purchases; proprietary products, materials or methodologies; data; customer lists; system or network configurations; passwords and access rights; and any other information marked as confidential or, in the case of information verbally disclosed, verbally designated as confidential.
6.2 Ownership of Records . The Northern Border Companies shall own the data, records, information, etc. provided, generated, or otherwise related to the Services and the business of the Northern Border Companies ( Northern Border Company Records ), regardless of who prepares or generates such Northern Border Company Records. The Provider shall maintain on behalf of the Northern Border Companies all Northern Border Company Records and shall not destroy or delete any Northern Border Company Records without the prior written consent of the Northern Border Companies. Additionally, should this Agreement be terminated, then the Provider shall deliver or cause to be delivered all Northern Border Company Records to the Northern Border Companies; provided, however, that ONEOK shall be entitled to retain copies of any such Records.
ARTICLE VII
FORCE MAJEURE
7.1 Force Majeure . Subject to the standards set forth in Article II , if, by reason of force majeure (as defined in Section 7.2 below), a Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, and if the non-performing Party declaring force majeure gives notice and reasonable particulars of such force majeure to the Party to whom the performance is due within a reasonable time after the occurrence of the cause relied on, upon giving such notice, so far as and to the extent that it is affected by such force majeure, the non-performing Party declaring force majeure shall not be liable solely on account of such inability to perform during the continuance of any inability so caused; provided, however, the non-performing Party shall use commercially reasonable efforts to recommence performance of the affected Services as promptly as possible; provided, further, however , that an event of force majeure shall not excuse payment for Services provided hereunder.
7.2 Definition of Force Majeure . The term force majeure as employed in this Agreement shall mean acts of God; strikes, lockouts or industrial disputes or disturbances; civil disturbances; arrests and restraints from rulers of people; interruptions by government, administrative agency or court orders, other than as a result of a failure to comply with laws; present and future valid orders, decisions or rulings of any governmental or administrative entity having proper jurisdiction; acts of a public enemy; wars; acts of terrorism; riots; blockades; insurrections; inability to secure materials by reason of allocations promulgated by authorized governmental agencies; epidemics; landslides; lightning; earthquakes; fire; storm; floods;
washouts; whether of the kind herein enumerated or otherwise, not reasonably within the control of the Party claiming force majeure and not caused, in whole or in part, by the acts or omissions of the Party so affected by force majeure.
ARTICLE VIII
NOTICES AND REPORTS
8.1 Notices . All notices and other communications under this Agreement shall be in writing and shall be deemed duly given (i) when delivered personally or by prepaid overnight courier, with a record of receipt, (ii) the fourth day after mailing, if mailed by certified mail, return receipt requested, or (iii) the day of transmission, if sent by facsimile or telecopy during regular business hours, or the day after transmission if sent after regular business hours (with a copy promptly sent by prepaid overnight courier with record of receipt or by certified mail, return receipt requested), to the Parties at the following addresses or telecopy numbers (or to such other address or telecopy number as a Party may have specified by notice given to the other Party pursuant to this provision):
If to the Provider(s), to:
ONEOK, Inc.
100 West 5 th Street
Tulsa, OK 74103
Attn: General Counsel
Facsimile: (918) 588-7971
If to Northern Border Companies:
Northern Border Partners, L.P.
13710 FNB Parkway
Omaha, NE 68154-5200
Attention: General Counsel
Facsimile: (402) 492-7480
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law . THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED, AND DETERMINED IN ACCORDANCE WITH, THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE AND THE INTERNAL LAWS OF THE STATE OF OKLAHOMA (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION).
9.2 Waiver . The performance of or compliance with a Partys obligation hereunder may be waived, but only in writing signed by an authorized representative of the other relevant Party. No waiver or failure of enforcement by any Party of any default by any other Party in the performance of any provision, condition or requirement herein shall be deemed to be a waiver of, or in any manner a release of the defaulting Party from, performance of any other provision, condition or requirement herein, nor deemed to be a waiver of, or in any manner a release of the defaulting Party from, future performance of the same provision, condition or requirement; nor shall any delay or omission of any non-defaulting Party to exercise any right hereunder in any manner impair the exercise of any such right or any like right accruing to it thereafter.
9.3 Modification . This Agreement may not be modified, varied or amended except by an instrument in writing signed by the Parties.
9.4 Headings . The headings to each of the various Articles and Sections in this Agreement are included for convenience and reference only and shall have no effect on, or be deemed as part of the text of, this Agreement.
9.5 Third Parties . Except as provided in Article V hereof, this Agreement is not intended to confer upon any Person not a Party hereto any rights or remedies hereunder, and no Person other than the Parties hereto is entitled to rely on or enforce any representation, warranty or covenant contained herein.
9.6 Survival; Limitations Period . Notwithstanding any other provisions in this Agreement, all indemnities, limitations of liability, and payment obligations set forth in this Agreement, and the provisions set forth in Section 4.2 and Articles V , VI , VII , VIII , IX , X and XI , shall survive the termination of this Agreement or the expiration of the Term, in whole or in part. NO PARTY MAY ASSERT ANY CAUSE OF ACTION AGAINST ANY OTHER PARTY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT MORE THAN ONE (1) YEAR AFTER TERMINATION OF THIS AGREEMENT.
9.7 Binding Effect Assignment .
(a) Subject to Section 9.7(b) below, no Party hereto may assign this Agreement, in whole or in part, except with the prior written approval of each other Party. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective permitted successors and assigns.
(b) The Provider may assign the performance by it of any Service to an Affiliate (other than the Northern Border Companies and their subsidiaries) or any subsidiary or any successor in interest to any such Affiliate or subsidiary. In addition, the Provider may subcontract or outsource the performance of any Service to a third party.
9.8 Entire Agreement . This Agreement, including any exhibits, attachments and schedules hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes any prior understandings or written or oral agreements relative to such subject matter. However, this Agreement in no way changes or amends the terms of the Operating Agreements or the Administrative Services Agreement or the obligations of NBP
Services and Northern Plains to any of the Northern Border Companies under any of those agreements.
9.9 Waiver of Jury Trial . THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9.10 No Strict Construction . The Parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring a Party by virtue of the authorship of any of the provisions of this Agreement.
9.11 Severability . If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.
9.12 Counterparts . This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
9.13 Acknowledgement of Applicability of Section 365(n) of the Bankruptcy Code . The Parties hereby acknowledge that this Agreement is an executory contract granting rights in intellectual property to the Northern Border Companies as described in the U. S. Bankruptcy Code, Title 11 Section 365(n)(1)(B), and, as such, the Northern Border Companies may retain their rights under this Agreement in the event that the Provider or its Affiliates or its trustee, as applicable, rejects such executory contract or this Agreement pursuant to, and in accordance with, Section 365(n) of Title 11. Furthermore, the Parties acknowledge and agree that the execution of this Agreement shall not impair any of the Providers rights under title 11 of the United States Code.
ARTICLE X
INTERPRETATION; DEFINITIONS
10.1 Definitions . Capitalized terms used herein and not otherwise defined shall have the following meanings:
Administrative Services Agreement means the agreement between NBP Services, LLC, Northern Border Partners, L.P. and Northern Border Intermediate Limited Partnership effective as of October 1, 1993, as amended.
Affiliate means any person or entity that is Controlled By a person. For purposes of this Agreement, a Provider shall not constitute an Affiliate of any Purchaser.
Control or Controlled By means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by written contract or otherwise).
Northern Border Companies (each, individually, a Northern Border Company) means (i) the MLP, (ii) the ILP, (iii) any direct or indirect subsidiary of the MLP, and (iv) any other entity that directly, or through one or more intermediaries, is controlled by the MLP, and (v) any entity in which the MLP or ILP has a direct or indirect ownership interest and NBP Services or Northern Plains is contractually obligated to provide administrative and/or operational services.
ONEOK Affiliates means any direct or indirect subsidiary of ONEOK or any entity controlled by ONEOK, but shall exclude any of the Northern Border Companies.
Operating Agreements include (i) the Northern Border Pipeline Project Operating Agreement between Northern Plains Natural Gas Company and Northern Border Pipeline Company dated February 28, 1980; (ii) the Midwestern Gas Transmission Company Operating Agreement between Northern Plains Natural Gas Company and Midwestern Gas Transmission Company dated May 1, 2001; (iii) the Viking Gas Transmission Company Operating Agreement between Northern Plains Natural Gas Company and Viking Gas Transmission Company dated January 17, 2003, and (iv) the Operating Agreement between Northern Plains Natural Gas Company and Guardian Pipeline, L.L.C. dated April 5, 2004. Additionally, this definition shall include any other operating agreement subsequently entered into by Northern Plains for the purpose of providing similar services to other natural gas transmission companies or similar services to other entities in the energy industry.
10.2 Construction and Interpretation . All references herein to agreements and other contractual instruments shall be deemed to include all exhibits, attachments and appendices attached thereto and all amendments and other modifications to such agreements and instruments. Words used herein in the singular, where the context so permits, shall also apply to words when used in the plural and visa versa. The term including when used in this Agreement will be by way of example and not considered in any way to be a limitation, and means including, without limitation.
ARTICLE XI
LICENSE GRANT
11.1 License . Subject to the terms and conditions of this Agreement, and subject to the right of ONEOK and the ONEOK Affiliates to do so, ONEOK and the ONEOK Affiliates (collectively, for purposes of this Article XI , Licensor ) hereby grant and agree to grant to each Northern Border Company (each, for purposes of this Article XI , a Licensee ), under all of Licensors intellectual property rights in and to the software programs, object code and source
code, and documentation related to the Services and licensed patents related thereto ( Licensed Programs ), a fully paid-up, irrevocable and perpetual (during the term of this Agreement), worldwide, non-exclusive, transferable, sublicensable, assignable license to: (i) copy, modify and use the Licensed Programs and documentation; (ii) use, make, have made, distribute, and sell any and all products and services of Licensee, its Affiliates, and its sublicensees (if any) and (iii) engage in the business as conducted by Licensee, its Affiliates, and sublicensees (if any). The foregoing license shall include the right for any third party service company or independent contractor retained by any Licensee or an Affiliate of any Licensee ( Contractor ) to install, copy, modify and/or use the Licensed Programs on behalf of such Licensee and its Affiliates. The grant of the foregoing licenses with respect to any particular Licensed Program and related documentation or patents shall be limited to those Licensed Programs utilized by the Provider to provide the Services to the Purchasers and shall not include any Licensed Programs subject to agreements that would be breached by the grant in this paragraph.
11.2 Existing Rights . Except as expressly provided herein, Licensor shall retain all of its right, title and interest, including, without limitation, all intellectual property rights, in and to the Licensed Programs, including any and all copies in whatever form. Licensee acknowledges that all materials provided by Licensor to Licensee under this provision, including, but not limited to the Licensed Programs, class libraries, scripts, algorithms, designs, flow-charts, procedures, processes, systems, methodologies, and information shall remain the sole and exclusive property of Licensor.
11.3 Hardware and Software Platform . Licensee acknowledges that Licensees operation of the Licensed Programs may require, among other things, Licensees obtaining rights to use third party hardware and licensed copies of third party software, and Licensee shall be responsible for obtaining such rights to use third party hardware and software. Licensor assumes no responsibility or liability under this license grant or otherwise for obtaining or providing any such third party hardware or software or for providing any labor support. Licensor shall provide reasonable assistance in converting Licensees data files for use with the Licensed Programs.
(Signature Page Follows)
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, all as of the date first above written.
ONEOK, Inc., an Oklahoma corporation |
||
By: |
/s/ Jim Kneale |
|
Name: |
Jim Kneale |
|
Title: |
Executive Vice President Finance and Administration and Chief Financial Officer |
NORTHERN PLAINS NATURAL GAS COMPANY, LLC , a Delaware limited liability company | ||
By: |
/s/ Jerry L. Peters |
|
Name: |
Jerry L. Peters |
|
Title: |
Vice President, Finance and Treasurer |
NBP SERVICES, LLC , a Delaware limited liability company | ||
By: |
/s/ Jerry L. Peters |
|
Name: |
Jerry L. Peters |
|
Title: |
Vice President, Finance and Treasurer |
NORTHERN BORDER PARTNERS, L.P. , a Delaware limited partnership | ||
By: |
/s/ Jerry L. Peters |
|
Name: |
Jerry L. Peters |
|
Title: |
Chief Financial and Accounting Officer |
NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP , a Delaware limited partnership | ||
By: |
/s/ Jerry L. Peters |
|
Name: |
Jerry L. Peters |
|
Title: |
Chief Financial and Accounting Officer |
Exhibit 99.1
News
Analyst Contact: Dan Harrison | Analyst Contact: Jan Pelzer | |||
918-588-7950 | 877-208-7318 | |||
Media Contact: Dan Harrison | Media Contact: Beth Jensen | |||
918-588-7950 | 402-492-3400 |
ONEOK and Northern Border Partners Complete Transactions,
Announce Management Changes
TULSA, Okla. April 6, 2006 ONEOK, Inc. (NYSE: OKE) and Northern Border Partners, L.P. (NYSE: NBP) today announced they have completed a series of transactions that result in ONEOK owning 100 percent of the general partner interest and 45.7 percent of Northern Border Partners.
With the completion of these transactions, ONEOK and the partnership are well positioned to grow, said David Kyle, ONEOK chairman, president and chief executive officer. ONEOK will benefit from the expected growth of the partnership, both by acquisition and from internally generated projects. We firmly believe that our interests are clearly aligned with the limited partners and are very excited about the future.
In connection with the completion of the transactions, the following management changes were announced:
| David Kyle, ONEOK chairman, president and chief executive officer, will also serve as chairman and chief executive officer of Northern Border Partners. |
| John W. Gibson, president of ONEOK Energy Companies, will become president and chief operating officer of the partnership. William Cordes, chief executive officer of the partnership, will become president, Northern Border Pipeline, reporting to Gibson. |
| Other partnership officers include: James C. Kneale, ONEOK executive vice president finance and administration and chief financial officer, assumes additional responsibilities as chief financial officer of the partnership; Jerry Peters, chief financial officer of the partnership, becomes senior vice president, chief accounting officer and treasurer of the partnership; John R. Barker, ONEOK senior vice president and general counsel, assumes additional responsibilities as general counsel and secretary of the partnership; and Janet Place, general counsel of the |
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partnership, becomes general counsel of Northern Border Pipeline, and associate general counsel and assistant secretary of the partnership.
As previously announced, the partnerships policy committee intends to consider an increase of $0.13 to $0.15 per unit in the quarterly distributions to unit holders, which, at the indicated potential distribution level, would exceed the maximum general partner incentive distribution target. A portion of that increase could be included in the first-quarter distribution, payable in May.
ONEOK and the partnership previously increased their 2006 earnings guidance in anticipation of the closing of these transactions. ONEOK expects its 2006 net income per diluted share to be in the range of $2.30 to $2.36. The partnerships 2006 estimated net income is expected to range from $426 million to $446 million, or $4.43 to $4.69 per unit, and includes a one-time gain of $108 million, or $1.44 per unit, on the sale of the 20 percent interest in Northern Border Pipeline. Distributable cash flow is expected to be in the range of $324 million to $344 million, or $3.96 to $4.23 per unit.
In separate transactions completed today:
| ONEOK, through its wholly owned subsidiary Northern Plains Natural Gas Company, purchased a TransCanada Corp. affiliates 17.5 percent general partner interest, increasing ONEOKs ownership of the general partner interest to 100 percent. The purchase price was $40 million, less $10 million for potential expenses associated with the transfer of operating responsibility of Northern Border Pipeline Company to TransCanada. |
| ONEOK transferred to the partnership its entire gathering and processing, natural gas liquids, and pipelines and storage segments in a $3 billion transaction. ONEOK received approximately $1.35 billion in cash and 36.5 million limited partner units. The limited partner units and the related general partner interest contribution are valued at $1.65 billion. ONEOK owns approximately 37.0 million limited partner units, which when combined with its 100 percent general partner interest, increases its total ownership in the partnership to 45.7 percent. |
| The partnership sold to TC PipeLines, LP, a publicly traded partnership affiliated with TransCanada, a 20 percent interest in Northern Border Pipeline Company for approximately $300 million. The price of the 20 percent interest, along with a related share of Northern Border Pipelines outstanding debt, totals $420 million. As a result, Northern Border Partners and TC PipeLines, LP, will each own a 50-percent interest in the pipeline, with an affiliate of TransCanada becoming operator of the pipeline in April 2007. |
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ONEOK and Northern Border Partners Complete Transactions,
Announce Management Changes
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To finance the transactions, the partnership has obtained $1.1 billion, 364-day bridge-financing and renegotiated its credit revolver, expanding the facility to $750 million for a new five-year term.
ONEOK intends to use $40 million of the $1.35 billion cash proceeds from the transactions to acquire the general partnership interest from TransCanada, with the remainder being used to reduce short-term debt, acquire other assets or repurchase ONEOK common stock.
ONEOK, Inc. (NYSE: OKE) is a diversified energy company. We are among the largest natural gas distributors in the United States, serving more than 2 million customers in Oklahoma, Kansas and Texas. We are a leader in the gathering, processing, storage and transportation of natural gas in the mid-continent region of the U.S. and own one of the nations premier natural gas liquids (NGL) systems, connecting much of the NGL supply in the mid-continent with two key market centers. Our energy services operation focuses primarily on marketing natural gas and related services throughout the U.S. ONEOK is the majority general partner of Northern Border Partners, L.P. (NYSE:NBP), one of the largest publicly traded limited partnerships. ONEOK is a Fortune 500 company.
For information about ONEOK, Inc. visit the Web site: www.oneok.com.
Northern Border Partners, L.P. is a publicly traded partnership whose purpose is to own, operate and acquire a diversified portfolio of energy assets. The Partnership owns and manages natural gas pipelines and is engaged in the gathering and processing of natural gas. More information can be found at http://www.northernborderpartners.com .
Some of the statements contained and incorporated in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Acts of 1995. The forward-looking statements relate to both ONEOK and Northern Border Partners, L.P. and apply to: anticipated financial performance, including anticipated operating income from the businesses ONEOK acquired on July 1, 2005, from Koch Industries, Inc. and affiliates, and the businesses to be acquired by Northern Border Partners from ONEOK in the transactions; managements plans and objectives for future operations; business prospects; outcome of regulatory and legal proceedings; market conditions and other matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements in certain circumstances. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items describing increased 2006 guidance in the preceding paragraphs, the information concerning possible or assumed future results of operations and distribution levels and other statements contained or incorporated in this press release generally identified by words such as anticipate, estimate, expect, forecast, intend, believe, projection or goal.
You should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Those factors may affect operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
| actions by rating agencies concerning the credit ratings of ONEOK and Northern Border Partners; |
| the effects of weather and other natural phenomenon on our operations, including energy sales and prices and demand for pipeline capacity; |
| competition from other U.S. and Canadian energy suppliers and transporters as well as alternative forms of energy; |
| the capital intensive nature of our respective businesses; |
| the profitability of assets or businesses acquired by us; |
| risks of marketing, trading and hedging activities as a result of changes in energy prices or the financial condition of our counterparties; |
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ONEOK and Northern Border Partners Complete Transactions,
Announce Management Changes
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| economic climate and growth in the geographic areas in which we each do business; |
| the uncertainty of estimates, including accruals and cost of environmental remediation; |
| the timing and extent of changes in commodity prices for natural gas, natural gas liquids, electricity and crude oil; |
| the effects of changes in governmental policies and regulatory actions, including changes with respect to income taxes, environmental compliance, authorized rates or recovery of gas costs; |
| the impact of recently issued and future accounting pronouncements and other changes in accounting policies; |
| the possibility of future terrorist attacks or the possibility or occurrence of an outbreak of, or changes in, hostilities or changes in the political conditions in the Middle East and elsewhere; |
| the risk of increased costs for insurance premiums, security or other items as a consequence of terrorist attacks; |
| the impact of unforeseen changes in interest rates, equity markets, inflation rates, economic recession and other external factors over which we have no control, including the effect on pension expense and funding resulting from changes in stock and bond market returns; |
| risks associated with pending or possible acquisitions and dispositions, including our respective ability to finance or integrate any such acquisitions and any regulatory delay or conditions imposed by regulatory bodies in connection with any such acquisitions and dispositions; |
| the results of administrative proceedings and litigation, regulatory actions and receipt of expected regulatory clearances involving the Oklahoma Corporation Commission, Kansas Corporation Commission, Texas regulatory authorities or any other local, state or federal regulatory body, including the Federal Energy Regulatory Commission; |
| our respective ability to access capital at competitive rates or on terms acceptable to us; |
| the risk of a significant slowdown in growth or decline in the U.S. economy or the risk of delay in growth recovery in the U.S. economy; |
| risks associated with adequate supply to the gathering and processing, fractionation and pipeline facilities of Northern Border Partners, including production declines which outpace new drilling; |
| the risk that material weaknesses or significant deficiencies in our respective internal controls over financial reporting could emerge or that minor problems could become significant; |
| the impact of the outcome of pending and future litigation; |
| the possible loss of franchises or other adverse effects caused by the actions of municipalities; |
| the impact of unsold capacity on Northern Border Pipeline being greater or less than expected; |
| the ability to market pipeline capacity on favorable terms, which is affected by: |
| future demand for and prices of natural gas; |
| competitive conditions in the overall natural gas and electricity markets; |
| availability of supplies of Canadian and United States natural gas; |
| availability of additional storage capacity; weather conditions; and |
| competitive developments by Canadian and U.S. natural gas transmission peers; |
| orders by the FERC which are significantly different than our assumptions related to Northern Border Pipelines November 2005 rate case; |
| performance of contractual obligations by the customers and shippers; |
| the ability to recover operating costs, costs of property, plant and equipment and regulatory assets in our FERC regulated rates; |
| timely receipt of approval by FERC for construction and operation of the Midwestern Gas Transmission Eastern Extension Project and required regulatory clearances; |
| our ability to acquire all necessary rights-of-way and obtain agreements for interconnects in a timely manner; |
| our ability to promptly obtain all necessary materials and supplies required for construction; |
| the composition and quality of the natural gas we gather and process in our plants; |
| the efficiency of our plants in processing natural gas and extracting natural gas liquids; |
| renewal of the coal slurry pipeline transportation contract under reasonable terms and our success in completing the necessary rebuilding of the coal slurry pipeline; |
| the impact of a potential impairment charges; |
| developments in the December 2, 2001, filing by Enron of a voluntary petition for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code affecting our settled claims; |
| the ability to control operating costs; |
| the risk inherent in the use of information systems in our respective businesses, implementation of new software and hardware, and the impact on the timeliness of information for financial reporting; |
| acts of nature, sabotage, terrorism or other similar acts causing damage to our facilities or our suppliers or shippers facilities; |
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| and the other factors listed in the reports we each have filed and may file with the Securities and Exchange Commission, which are incorporated by reference. |
Other factors and assumptions not identified above were also involved in the making of forward-looking statements. The failure of those assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. ONEOK and Northern Border Partners have no obligation and make no undertaking to update publicly or revise any forward-looking information.