CONTRIBUTION AND SALE AGREEMENT between Gas Supply Resources Holdings, Inc., DCP Midstream, LLC and DCP Midstream Partners, LP May 21, 2007
between
Gas
Supply Resources Holdings, Inc.,
DCP
Midstream, LLC
and
May
21, 2007
Table
of Contents
ARTICLE
I
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CERTAIN
DEFINITIONS
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1.1
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Certain
Defined Terms
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2
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1.2
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Other
Definitional Provisions
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11
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1.3
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Headings
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11
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1.4
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Other
Terms
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11
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ARTICLE
II
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CONTRIBUTION
OF THE SUBJECT INTERESTS, ISSUANCE OF THE UNITS AND
CONSIDERATION
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2.1
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The
Transaction
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11
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2.2
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Consideration
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11
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2.3
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NYSE
Rule Change for Units
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12
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ARTICLE
III
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ADJUSTMENTS
AND SETTLEMENT
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3.1
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Adjustments.
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13
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3.2
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Preliminary
Settlement Statement
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13
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3.3
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Final
Settlement Statement
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13
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3.4
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Dispute
Procedures
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13
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3.5
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Payments
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14
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3.6
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Access
to Books and Records
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14
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3.7
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Excluded
Assets
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14
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ARTICLE
IV
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REPRESENTATIONS
AND WARRANTIES OF GSR HOLDINGS
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4.1
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Organization,
Good Standing, and Authority.
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14
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4.2
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Enforceability
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15
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4.3
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No
Conflicts
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15
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4.4
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Taxes
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15
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4.5
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Litigation;
Compliance with Laws
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15
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4.6
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Broker’s
or Finder’s Fees
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15
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4.7
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No
Foreign Person
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15
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4.8
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Stock
Purchase Agreement
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16
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4.9
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Investment
Intent
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16
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4.10
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No
Other Representations or Warranties; Schedules
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16
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ARTICLE
V
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REPRESENTATIONS
AND WARRANTIES OF MLP
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5.1
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Organization,
Good Standing, and Authorization
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16
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5.2
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Enforceability
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16
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5.3
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No
Conflicts
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17
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5.4
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Litigation
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17
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5.5
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Independent
Investigation
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17
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i
5.6
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Broker’s
or Finder’s Fees
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18
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5.7
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Investment
Intent
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18
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5.8
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Available
Funds
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18
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ARTICLE
VI
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COVENANTS
AND ACCESS
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6.1
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Conduct
of Business
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18
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6.2
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Casualty
Loss
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19
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6.3
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Access,
Information and Access Indemnity.
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19
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6.4
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Regulatory
Filings; Xxxx-Xxxxx-Xxxxxx Filing.
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20
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6.5
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Preservation
of Records
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20
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6.6
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New
Debt
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21
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6.7
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Tax
Covenants.
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21
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6.8
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Insurance
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23
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6.9
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Enforcement
of Certain SPA Provisions
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24
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ARTICLE
VII
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CONDITIONS
TO CLOSING
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7.1
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GSR
HOLDINGS’ Conditions
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24
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7.2
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MLP’s
Conditions
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25
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7.3
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Exceptions
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25
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ARTICLE
VIII
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CLOSING
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8.1
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Time
and Place of Closing
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26
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8.2
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Deliveries
at Closing
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26
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ARTICLE
IX
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TERMINATION
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9.1
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Termination
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27
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9.2
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Effect
of Termination Prior to Closing
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27
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ARTICLE
X
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INDEMNIFICATION
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10.1
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Indemnification
by MLP
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27
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10.2
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Indemnification
by GSR HOLDINGS
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27
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10.3
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Survival
and Certain Limitations.
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28
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10.4
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Notice
of Asserted Liability; Opportunity to Defend.
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29
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10.5
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Materiality
Conditions
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31
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10.6
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Exclusive
Remedy
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31
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10.7
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Negligence
and Strict Liability Waiver
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31
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10.8
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Limitation
on Damages
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31
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10.9
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Bold
and/or Capitalized Letters
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32
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ARTICLE
XI
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MISCELLANEOUS
PROVISIONS
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11.1
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Expenses
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32
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ii
11.2
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Further
Assurances
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32
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11.3
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Transfer
Taxes
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32
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11.4
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Assignment
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32
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11.5
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Entire
Agreement, Amendments and Waiver
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32
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11.6
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Severability
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33
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11.7
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Counterparts
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33
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11.8
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Governing
Law, Dispute Resolution and Arbitration.
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33
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11.9
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Notices
and Addresses
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35
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11.10
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Press
Releases
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36
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11.11
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Offset
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37
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11.12
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No
Partnership; Third Party Beneficiaries
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37
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11.13
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Negotiated
Transaction
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37
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Schedules
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1.1(a)
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Personal
Property
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1.1(b)
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Real
Property Interests
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1.1(c)
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Permits
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1.1(d)
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Contracts
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1.1(e)
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Post
Closing Consents
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1.1(f)
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List
of Facilities
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1.1(g)
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Excluded
Assets
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1.1(h)
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GSR
HOLDINGS’ Knowledge
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1.1(i)
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Reserved
Liabilities
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4.4
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Taxes
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6.6
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New
Debt
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Exhibits
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A
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Form
of Omnibus Agreement Amendment
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B
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Form
of Subject Interests Assignment Agreement
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C
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Form
of Certificate for Common Units
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iii
This
Contribution and Sale Agreement (“Agreement”)
is
dated as of May 21, 2007 and is by and among Gas Supply Resources Holdings,
Inc., a Delaware corporation (“GSR
HOLDINGS”),
DCP
Midstream, LLC, a Delaware limited liability company (“MIDSTREAM”),
and
DCP Midstream Partners, LP, a Delaware limited partnership (“MLP”).
GSR
HOLDINGS, MIDSTREAM and MLP are sometimes referred to collectively herein as
the
“Parties” and individually as a “Party”.
RECITALS
A. Pursuant
to a Stock Purchase Agreement dated the date hereof (the “Stock
Purchase Agreement”)
among
MIDSTREAM, Momentum Energy Group, Inc., a Delaware corporation (“MEG
Inc”)
and
the stockholders of MEG Inc listed therein (collectively, the “Sellers”),
MIDSTREAM has agreed to purchase (or cause an Affiliate to purchase) all of
the
outstanding stock of MEG Inc, subject to the terms and conditions set forth
in
the Stock Purchase Agreement.
B. MEG
Inc
owns all of the outstanding membership interests (the “MEG
LLC Interest”)
in
Momentum Energy Group LLC, a Colorado limited liability company (“MEG
LLC”).
C. MEG
LLC
owns all of the outstanding membership interests in (A) MEG Colorado Gas
Services, LLC, a Colorado limited liability company (“MEG
Colorado”),
(B)
MEG Wyoming Gas Service, LLC, a Colorado limited liability company
(“MEG
Wyoming”),
(C)
Momentum Acquisition Management, LLC, a Colorado limited liability company
(“MEG
Texas GP”)
and
(D) Momentum Energy Acquisitions, LLC, a Colorado limited liability company
(“MEG
Texas LP”).
D. MIDSTREAM
intends to designate GSR HOLDINGS as the Affiliate to purchase the stock of
MEG
Inc pursuant to the Stock Purchase Agreement.
E. Following
the closing under the Stock Purchase Agreement and prior to the Closing
hereunder, GSR HOLDINGS shall cause MEG LLC to convey to an Affiliate of
MIDSTREAM certain Excluded Assets, including all of the outstanding membership
interests in MEG Texas GP and MEG Texas LP, and shall cause MEG LLC to
distribute to GSR HOLDINGS all of the outstanding membership interests in MEG
Colorado (the “MEG
Colorado Interest”).
F. MIDSTREAM,
GSR HOLDINGS and MLP desire that GSR HOLDINGS sell to MLP the MEG LLC Interest
and contribute to MLP the MEG Colorado Interest in exchange for a cash payment
of $153,000,000 (as adjusted pursuant to the terms of this Agreement) and the
issuance of the Unit Consideration, all in accordance with this Agreement.
FOR
GOOD
AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, MLP, MIDSTREAM and GSR HOLDINGS agree as follows:
1
ARTICLE
I
CERTAIN
DEFINITIONS
1.1 Certain
Defined Terms.
Capitalized terms used herein and not defined elsewhere in this Agreement shall
have the meanings given such terms as is set forth below.
“Affiliate”
means,
when used with respect to a specified Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the specified Person as of the time or for the time periods during
which such determination is made. For purposes of this definition “control”,
when used with respect to any specified Person, means the power to direct the
management and policies of the Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have the meanings correlative to the foregoing.
Notwithstanding the foregoing, the term “Affiliate” when applied to (a) MLP
shall not include Spectra Energy Corporation, a Delaware corporation, or
ConocoPhillips, a Delaware corporation, or any entities owned, directly or
indirectly, by Spectra Energy Corp or ConocoPhillips, other than entities owned,
directly or indirectly, by MLP and (b) GSR HOLDINGS shall not include MLP or
any
entities owned, directly or indirectly, by MLP.
“Allocation
Statement”
shall
have the meaning given such term in Section
6.7(f).
“Alternative
Class”
shall
have the meaning given such term in Section
2.3.
“Applicable
Business”
means
the ownership, management and operation of MEG Wyoming, MEG Colorado and
Collbran JV and any Assets owned by or business conducted by MEG Wyoming, MEG
Colorado and Collbran JV.
“Arbitral
Dispute”
means
any dispute, claim, counterclaim, demand, cause of action, controversy and
other
matters in question arising out of or relating to this Agreement or the alleged
breach hereof, or in any way relating to the subject matter of this Agreement
or
the relationship between the Parties created by this Agreement, regardless
of
whether (a) allegedly extra-contractual in nature, (b) sounding in contract,
tort, or otherwise, (c) provided for by applicable Law or otherwise, or (d)
seeking damages or any other relief, whether at Law, in equity, or
otherwise.
“Arbitration
Rules”
shall
have the meaning given such term in Section
11.8(d).
“Assets”
shall
mean all of the following assets and properties of the Entities, except for
the
Excluded Assets. Each Schedule referenced in this definition includes a separate
subpart for each of the Entities:
(a) Personal
Property.
All
tangible personal property of every kind and nature that relates to the
ownership, operation, use or maintenance of the Facilities, including meters,
valves, engines, field equipment, office equipment, fixtures, trailers, tools,
instruments, spare parts, machinery, computer equipment, telecommunications
equipment, furniture, supplies and materials that are located at the Facilities,
including those items of personal property more particularly described in
Schedule
1.1(a)
and all
hydrocarbon inventory at the Facilities, including linefill (collectively the
“Personal
Property”);
2
(b) Real
Property.
All fee
property, rights-of-way, easements, surface use agreements, licenses and leases
that relate to the ownership, operation, use or maintenance of the Facilities,
including those described in Schedule
1.1(b)
(collectively, the “Real
Property Interests”),
and
all fixtures, buildings and improvements located on or under such Real Property
Interests;
(c) Permits.
All
assignable permits, licenses, certificates, orders, approvals, authorizations,
grants, consents, concessions, warrants, franchises and similar rights and
privileges which are necessary for, or are used or held for use primarily for
or
in connection with, the ownership, use, operation or maintenance of the Assets
(collectively, the “Permits”),
including those Permits more particularly described in Schedule
1.1(c);
(d) Contract
Rights.
All
contracts that relate to the ownership, operation, use or maintenance of the
Assets, including all bank accounts, gathering, processing, balancing and other
agreements for the handling of natural gas or liquids, purchase and sales
agreements, storage agreements, transportation agreements, equipment leases,
rental contracts, and service agreements, including those contracts or
agreements described in Schedule
1.1(d)
(collectively, the “Contracts”);
(e) Intellectual
Property.
All
technical information, shop rights, designs, plans, manuals, specifications
and
other proprietary and nonproprietary technology and data used in connection
with
the ownership, operation, use or maintenance of the Assets (collectively, the
“Intellectual
Property”);
(f) Facilities.
All
meter stations, gas processing plants, treaters, dehydration units, compressor
stations, fractionators, liquid handling facilities, platforms, warehouses,
field offices, control buildings, pipelines, tanks and other associated
facilities owned by MEG Colorado or MEG Wyoming, including those described
on
Schedule
1.1(f)
(collectively, the “Facilities”);
(g) Books
and Records.
All
contract, land, title, engineering, environmental, operating, accounting,
business, marketing, and other data, files, documents, instruments, notes,
correspondence, papers, ledgers, journals, reports, abstracts, surveys, maps,
books, records and studies which relate primarily to the Assets or which are
used or held for use primarily in connection with, the ownership, operation,
use
or maintenance of the Assets; provided,
however,
such
material shall not include (i) any proprietary data that is not primarily used
in connection with the continued ownership, use or operation of the Assets,
(ii)
any information subject to Third Person confidentiality agreements for which
a
consent or waiver cannot be secured by GSR HOLDINGS after reasonable efforts,
(iii) any information which, if disclosed, would violate an attorney-client
privilege or would constitute a waiver of rights as to attorney work product
or
attorney-client privileged communications, or (iv) any information relating
primarily to the Reserved Liabilities or any obligations for which GSR HOLDINGS
is required to indemnify the MLP Indemnitees pursuant to Section
10.2
(collectively, the “Records”);
provided, however, that MLP shall have the right to copy any of the information
specified in clause (iv); and
(h) Incidental
Rights.
All of
the following insofar as the same are attributable or relate primarily to any
of
the Assets described in clauses (a) through (g): (i) all purchase orders,
invoices, storage or warehouse receipts, bills of lading, certificates of title
and documents, (ii) all keys, lock combinations, computer access codes and
other
devices or information necessary to gain entry to and/or take possession of
such
Assets, (iii) all rights in any confidentiality or nonuse agreements relating
to
the Assets, and (iv) the benefit of and right to enforce all covenants,
warranties, guarantees and suretyship agreements running in favor of the
Entities relating primarily to the Assets and all security provided primarily
for payment or performance thereof.
3
“Assumed
Obligations”
shall
mean any and all obligations and liabilities with respect to (i) the
Entities, (ii) the Assets and (iii) the ownership of the Subject
Interests.
“Business
Day”
shall
mean any day, other than Saturday and Sunday, on which federally-insured
commercial banks in Denver, Colorado are generally open for business and capable
of sending and receiving wire transfers.
“Cash
Consideration”
shall
have the meaning given such term in Section
2.2.
“Casualty
Loss”
shall
mean, with respect to all or any portion of the Assets, any destruction by
fire,
storm or other casualty, or any condemnation or taking or threatened
condemnation or taking, of all or any portion of the Assets.
“Certificate
of Common Units”
shall
mean the certificate(s) representing GSR HOLDINGS’ additional interest in MLP in
the form of the attached Exhibit
C.
“Claim”
shall
mean any demand, demand letter, claim or notice by a Third Person of
noncompliance or violation or Proceeding.
“Claim
Notice”
shall
have the meaning given such term in Section
10.3(c).
“Closing”
shall
have the meaning given such term in Section
8.1.
“Closing
Date”
shall
have the meaning given such term in Section
8.1.
“Code”
shall
mean the U.S. Internal Revenue Code of 1986, as amended.
“Collbran
JV”
shall
mean Collbran Valley Gas Gathering, LLC, a Colorado limited liability
company.
“Commercially
Reasonable Efforts”
shall
mean efforts which are reasonably within the contemplation of the Parties on
the
date hereof, which are designed to enable a Party, directly or indirectly,
to
satisfy a condition to, or otherwise assist in the consummation of, the
transactions contemplated by this Agreement and which do not require the
performing Party to expend any funds or assume liabilities other than
expenditures and liabilities which are reasonable in nature and amount in the
context of the transactions contemplated by this Agreement.
“Consideration”
shall
mean the Unit Consideration and Cash Consideration.
“Contracts”
shall
have the meaning given such term in the definition of Assets.
4
“DOJ”
shall
mean the Department of Justice of the United States.
“Effective
Time”
shall
mean 12:01 A.M. Denver time on the date the Closing occurs.
“Entities”
shall
mean MEG LLC, MEG Wyoming, MEG Colorado and Collbran JV.
“Excluded
Assets”
shall
mean, with respect to the Entities, all of the following:
(a) All
of
the outstanding membership interests in MEG Texas GP and MEG Texas
LP;
(b) Claims
for refund of or loss carry forwards with respect to (i) Taxes (other than
property Taxes) attributable to the business of the Entities for any period
prior to the Effective Time or (ii) any Taxes attributable to any of the
Excluded Assets;
(c) All
work
product of MIDSTREAM or GSR HOLDINGS’ or their respective Affiliates’ attorneys,
records relating to the negotiation and consummation of the transactions
contemplated hereby and documents that are subject to a valid attorney client
privilege;
(d) All
real
property, personal property, contracts, intellectual property, Permits, office
computers or other equipment (or any leases or licenses of the foregoing),
if
any, that are listed on Schedule
1.1(g);
(e) All
leases for vehicles that relate to the ownership, operation, use or maintenance
of the Assets;
(f) All
computer software that relates to the ownership, operation, use or maintenance
of the Assets that requires a consent to transfer;
(g) All
accounts receivable and other assets of MEG LLC to the extent not related to
or
arising out of the Applicable Business; and
(h) All
office equipment and accessories (including computers) that relate to the
ownership, operation, use or maintenance of the Assets, other than that located
at the Facilities.
“Exhibits”
shall
mean any and/or all of the exhibits attached to and made a part of this
Agreement.
“Facilities"
shall
have the meaning given such term within the definition of “Assets.”
“Final
Settlement Statement”
shall
have the meaning given such term in Section
3.3.
“FTC”
shall
mean the Federal Trade Commission of the United States of America.
“GAAP”
means
generally accepted accounting principles in the United States as of the date
hereof, consistently applied.
5
“Governmental
Authorities”
shall
mean (a) the United States of America or any state or political subdivision
thereof within the United States of America and (b) any court or any
governmental or administrative department, commission, board, bureau or agency
of the United States of America or of any state or political subdivision thereof
within the United States of America.
“GSR
HOLDINGS”
shall
have the meaning given such term in the introductory paragraph.
“GSR
HOLDINGS’ Indemnitees”
shall
have the meaning given such term in Section
10.1.
“GSR
HOLDINGS’ Knowledge”
or
the
“Knowledge
of GSR HOLDINGS”
or
any
similar term, shall mean the actual knowledge of (i) any officer of GSR HOLDINGS
or MIDSTREAM having a title of Vice President or higher, and (ii) the
individuals listed on Schedule
1.1(h).
“GSR
HOLDINGS’ Required Consents”
shall
mean the expiration of the applicable waiting period under the HSR
Act.
“HSR
Act”
means
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Indemnified
Party”
or
“Indemnitee”
shall
have the meaning given such term in Section
10.4(a).
“Indemnifying
Party”
or
“Indemnitor”
shall
have the meaning given such term in Section
10.4(a).
“Independent
Accountants”
shall
mean PricewaterhouseCoopers.
“Insurance”
shall
have the meaning given such term in Section
6.8.
“Interest
Rate”
shall
LIBOR plus one half of one percent (0.5%).
“Laws”
shall
mean all applicable statutes, laws (including common law), regulations, rules,
rulings, ordinances, orders, restrictions, requirements, writs, judgments,
injunctions, decrees and other official acts of or by any Governmental
Authority.
“Lien”
shall
mean any lien, mortgage, pledge, claim, charge, security interest or other
encumbrance, option or defect on title.
“LIBOR”
shall
mean the British Bankers’ Association interbank offered rates as of
11:00 a.m. London time for deposits in Dollars that appear on the relevant
page of the Reuters service (currently page LIBOR01) or, if not available,
on
the relevant pages of any other service (such as Bloomberg Financial Markets
Service) that displays such British Bankers’ Association rates.
6
“Limited
Partnership Agreement”
shall
mean the Second Amended and Restated Agreement of Limited Partnership of MLP
dated as of November 1, 2006.
“Loss”
or
“Losses”
shall
mean any and all damages, demands, payments, obligations, penalties,
assessments, disbursements, claims, costs, liabilities, losses, causes of
action, and expenses, including interest, awards, judgments, settlements, fines,
fees, costs of defense and reasonable attorneys’ fees, costs of accountants,
expert witnesses and other professional advisors and costs of investigation
and
preparation of any kind or nature whatsoever.
“Material
Adverse Effect”
shall
have the meaning given such term in the Stock Purchase Agreement.
“Materiality
Condition”
shall
have the meaning given such term in Section
10.5.
“MEG
Colorado”
shall
have the meaning given such term in the Recitals.
“MEG
Colorado Interest”
shall
have the meaning given such term in the Recitals.
“MEG
Inc”
shall
have the meaning given such term in the Recitals.
“MEG
LLC”
shall
have the meaning given such term in the Recitals.
“MEG
LLC
Interest” shall have the meaning given such term in the Recitals.
“MEG
Texas GP”
shall
have the meaning given such term in the Recitals.
“MEG
Texas LP”
shall
have the meaning given such term in the Recitals.
“MEG
Wyoming”
shall
have the meaning given such term in the Recitals.
“MIDSTREAM”
shall
have the meaning given such term in the introductory paragraph.
“MLP”
shall
have the meaning given such term in the introductory paragraph.
“MLP
Indemnitees”
shall
have the meaning given such term in Section
10.2.
“MLP’s
Knowledge”
or
the
“Knowledge
of MLP”
or
any
similar term, shall mean the actual knowledge of any officer of MLP having a
title of vice president or higher.
“MLP
Required Consents”
shall
mean the expiration of the applicable waiting period under the HSR
Act.
“Net
Working Capital”
means
$6,440,994, of which (a) ($249,994) is attributable to the contribution of
MEG
Colorado (including Collbran JV) and (b) $6,690,988 is attributable to the
sale of MEG LLC.
“Non-competition
Agreements”
shall
have the meaning given such term in the Stock Purchase Agreement.
7
“Notice
Period”
shall
have the meaning given such term in Section
10.4(c).
“NYSE”
shall
mean The New York Stock Exchange.
“NYSE
Amendment”
shall
have the meaning given such term in Section
2.3.
“Omnibus
Agreement Amendment”
shall
mean the Fifth Amendment to Omnibus Agreement dated as of the Closing Date
among
MIDSTREAM, MLP, DCP Midstream GP, LP and DCP Midstream Operating, LP, in the
form of the attached Exhibit
A.
“Ordinary
Course of Business”
shall
mean the ordinary course of business consistent with past
practices.
“Permits”
shall
have the meaning given such term in the definition of Assets.
“Person”
shall
mean any natural person, corporation, company, partnership (general or limited),
limited liability company, trust, joint venture, joint stock company,
unincorporated organization, or other entity or association.
“Personal
Property”
shall
have the meaning given such term in the definition of Assets.
“Post-Closing
Consents”
shall
mean consents or approvals from, or filings with Governmental Authorities or
consents from railroads customarily obtained following the closing of a
transaction similar to the transaction contemplated hereby, including those
listed on Schedule
1.1(e).
“Pre-Closing
Tax Period”
shall
mean, with respect to the Entities, any taxable period (including the portion
of
any Straddle Period) ending on or prior to the Closing Date.
“Preliminary
Settlement Statement”
shall
have the meaning given such term in Section
3.2.
“Proceeding”
shall
mean any action, suit, claim, investigation, review or other judicial or
administrative proceeding, at Law or in equity, before or by any Governmental
Authority or arbitration or other dispute resolution proceeding.
“Qualified
Claims”
shall
have the meaning given such term in Section
10.3(b)(iv).
“Real
Property Interests”
shall
have the meaning given such term in the definition of Assets.
“Records”
shall
have the meaning given such term in the definition of Assets.
“Reserved
Liabilities”
shall
mean Losses (but only to the extent not reflected in Net Working Capital) with
respect to:
(i) any
accounts payable and other liabilities and activities of MEG LLC prior to the
Effective Time to the extent not related to or arising out of the Applicable
Business;
8
(ii) the
Excluded Assets and Taxes related thereto (including Taxes arising out of the
distribution of the Excluded Assets pursuant to Section 3.7); and
(iii) those
matters, if any, described on Schedule
1.1(i).
“Schedules”
shall
mean any and/or all of the schedules attached to and made a part of this
Agreement.
“Sellers”
shall
have the meaning given such term in the Recitals.
“Settlement
Notice”
shall
have the meaning given such term in Section
3.4.
“Stock
Purchase Agreement”
shall
have the meaning given such term in the Recitals.
“Straddle
Period”
shall
mean any taxable period that begins before and ends after the Closing
Date.
“Straddle
Tax Return”
shall
mean any Tax Return that covers a taxable period that begins before and ends
after the Closing Date.
“Stub
Period Financial Statements”
shall
have the meaning given such term in the Stock Purchase Agreement.
“Subject
Interests”
shall
mean the MEG LLC Interest and the MEG Colorado Interest.
“Subject
Interests Assignment Agreement”
shall
mean the Assignment Agreement in substantially the form of Exhibit
B
covering
the conveyance of the Subject Interests by GSR HOLDINGS to MLP.
“Subsidiary”
means,
with respect to any Person, (a) any corporation, of which a majority of the
total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote generally in the election of directors thereof
is at
the time owned or controlled, directly or indirectly, by that Person or one
or
more of the other Subsidiaries of that Person or a combination thereof or (b)
any limited liability company, partnership, association or other business
entity, of which a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly,
by
that Person or one or more Subsidiaries of that Person or a combination
thereof.
“Tax”
or
“Taxes”
shall
mean any Governmental Authority income tax, ad valorem tax, excise tax, sales
tax, use tax, franchise tax, real or personal property tax, transfer tax, gross
receipts tax or other tax, assessment, duty, fee, levy or other governmental
charge, together with and including, any and all interest, fines, penalties,
assessments, and additions to Tax resulting from, relating to, or incurred
in
connection with any of those or any contest or dispute thereof.
“Tax
Authority”
shall
mean any Authority having jurisdiction over the payment or reporting of any
Tax.
9
“Tax
Benefits”
means
the amount by which the Tax liability of the Indemnified Party or any of its
Affiliates for a taxable period is actually reduced (including by deduction,
reduction in income upon a sale, disposition or other similar transaction as
a
result of increased tax basis, receipt of a refund of Taxes or use of a credit
of Taxes) plus any related interest (net of Taxes payable thereon) received
from
the relevant Tax Authority, as a result of the incurrence, accrual or payment
of
any Loss or Tax with respect to which the indemnification payment is being
made.
“Tax
Proceeding”
shall
have the meaning given such term in Section
6.7(g).
“Tax
Return”
shall
mean any report, statement, form, return or other document or information
required to be supplied to a Tax Authority in connection with
Taxes.
“Third
Person”
shall
mean (i) any Person other than a Party or its Affiliates, and (ii) any
Governmental Authority.
“Third
Person Awards”
shall
mean any actual recoveries from Third Persons by the Indemnified Party
(including from insurance and third-party indemnification) in connection with
the claim for which such party is also potentially liable.
“Total
Net Working Capital”
means
the amount (which may be positive or negative) equal to (a) the Net Working
Capital plus (b) the sum, for the period from January 1, 2007 through the
Effective Time, of (i) all capital contributions made by MEG Inc to MEG
LLC; (ii) all distributions made by MEG Texas GP or MEG Texas LP to MEG
LLC; (iii) all cash received by MEG LLC (other than amounts set forth in
clause (b)(i) or (ii) hereof) to the extent not related to or arising out of
the
Applicable Business; and (iv) a general and administrative charge equal to
$330,000 for each month (to be prorated for any partial month) during such
period minus (c) the sum, for the period from January 1, 2007 through the
Effective Time, of (i) all distributions (other than distributions of the
Excluded Assets) made by MEG LLC to MEG Inc; (ii) all capital contributions
made by MEG LLC to MEG Texas GP or MEG Texas LP, and (iii) all payments
made by MEG LLC (other than amounts set forth in clause (c)(i) or (ii) hereof)
to the extent not related to or arising out of the Applicable Business, such
Total Net Working Capital to be allocated between the consideration for
contribution of the MEG Colorado Interest and the sale of the MEG LLC Interest
on a reasonable basis to be agreed by the Parties.
“Transaction
Documents”
shall
mean the Omnibus Agreement Amendment, the Subject Interests Assignment
Agreement, a Certificate representing the Unit Consideration, and any other
document related to the sale, transfer, assignment or conveyance of the Subject
Interests to be delivered at Closing.
“Transition
Services Agreement”
shall
have the meaning given such term in the Stock Purchase Agreement.
“Treasury
Regulations”
shall
mean regulations promulgated under the Code.
“Unit
Consideration”
shall
have the meaning given such term in Section
2.2.
“Unit
Purchase Agreement”
shall
have the meaning given such term in the Stock Purchase Agreement.
10
“Units”
shall
mean one of that certain class of limited partnership interests of MLP with
those special rights and obligations specified in the Limited Partnership
Agreement as being appurtenant to a “Common Unit”.
1.2 Other
Definitional Provisions.
As used
in this Agreement, unless expressly stated otherwise or the context requires
otherwise, (a) all references to an “Article,” “Section,” or “subsection” shall
be to an Article, Section, or subsection of this Agreement, (b) the words “this
Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar
import shall refer to this Agreement as a whole and not to a particular Article,
Section, subsection, clause or other subdivision hereof, (c) the words used
herein shall include the masculine, feminine and neuter gender, and the singular
and the plural, (d) the word “including” means “including, without limitation”
and (e) the word “day” or “days” means a calendar day or days, unless otherwise
denoted as a Business Day.
1.3 Headings.
The
headings of the Articles and Sections of this Agreement and of the Schedules
and
Exhibits are included for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction or interpretation hereof
or
thereof.
1.4 Other
Terms.
Other
terms may be defined elsewhere in the text of this Agreement and shall have
the
meaning indicated throughout this Agreement.
ARTICLE
II
CONTRIBUTION
OF THE SUBJECT INTERESTS,
ISSUANCE
OF THE UNITS AND CONSIDERATION
2.1 The
Transaction.
Upon
the terms and subject to the conditions of this Agreement, at the Closing,
but
effective for all purposes as of the Effective Time, GSR HOLDINGS shall sell
to
MLP the MEG LLC Interest and shall contribute as a capital contribution to
MLP
the MEG Colorado Interest in exchange for the issuance of the Consideration
to
GSR HOLDINGS by MLP, and MLP shall assume and thereafter to timely perform
and
discharge in accordance with their respective terms, all Assumed Obligations
related thereto.
2.2 Consideration.
In
consideration for the sale of the MEG LLC Interest and the contribution of
the
MEG Colorado Interest, MLP shall (a) issue and deliver to GSR HOLDINGS at the
Closing one or more certificates duly registered in the name of GSR HOLDINGS
and
representing 275,735 Units (the “Unit
Consideration”,
all of
which shall be deemed consideration for the contribution of the MEG Colorado
Interest) and (b) distribute and pay an aggregate amount of cash to GSR HOLDINGS
equal to the sum of (i) $153,000,000 (of which $108,000,000 shall be deemed
a
distribution in consideration of the contribution of the MEG Colorado Interest
and $45,000,000 shall be deemed a payment in consideration of the sale of the
MEG LLC Interest), (ii) the Total Net Working Capital and (iii) if the
Closing does not occur on or before August 1, 2007, upward by $27,123 per day
for each day during the period from and after August 1, 2007 (inclusive, if
applicable) through (but excluding) the Closing Date that all of the conditions
to Closing (other than the condition specified in Section
7.2(g)(i)
and any
conditions to be satisfied by deliveries at the Closing) have been satisfied
or
waived (collectively, the “Cash
Consideration”).
11
2.3 NYSE
Rule Change for Units.
If ten (10) days prior to the expected Closing Date, the NYSE and the SEC have
not yet adopted and approved an amendment to Section 312.03 of the NYSE Listed
Company Manual that would exempt limited partnerships from the provisions of
Subsections 312.03(b), (c) and (d) thereof (the “NYSE
Amendment”),
the
Parties shall negotiate in good faith to amend the terms of this Agreement
so as
to cause (A) the Units to consist of the maximum number of Common Units that
may
be issued pursuant to this Agreement without requiring the approval of the
unitholders of the MLP under the rules of the NYSE and (B) the remainder of
the
Units to consist of an alternative class of limited partner interests in the
MLP
that do not constitute “common stock” or “voting securities” under Section
312.03 of the NYSE Listed Company Manual and having customary terms and
conditions for offerings of this nature (the “Alternative
Class”).
If
the Parties are unable to reach agreement as contemplated in this paragraph,
and
all Closing conditions herein are otherwise satisfied, the parties shall close
the transactions contemplated herein and submit the matter to arbitration in
accordance with Section 11.8 and the arbitrators are hereby instructed to decide
the matter based upon the attributes of the Class C Units of the MLP (which
were
previously issued to MIDSTREAM or its subsidiaries).
12
ARTICLE
III
ADJUSTMENTS
AND SETTLEMENT
3.1 Adjustments.
(a) The
value
of the Cash Consideration shall be subject to cash adjustments pursuant to
this
Article
III.
(b) For
the
avoidance of doubt, cash adjustments pursuant to this Article
III
shall
not result in any adjustment to the Unit Consideration. Each payment of an
adjustment to the Cash Consideration shall be made at Closing if the adjustment
is determined by such date, or otherwise, in the Final Settlement
Statement.
(c) The
Parties shall use all Commercially Reasonable Efforts to agree upon the
adjustments set forth in this Article
III,
and to
resolve any differences with respect thereto. Except as provided herein, no
adjustments shall be made after delivery of the Final Settlement
Statement.
3.2 Preliminary
Settlement Statement.
Not
later than five (5) business days before the Closing Date, and after
consultation with MLP, GSR HOLDINGS shall deliver to MLP a written statement
(the “Preliminary
Settlement Statement”)
setting forth the Cash Consideration and each component therein, as determined
in good faith by GSR HOLDINGS, that are described in the definition thereof,
with GSR HOLDINGS’ calculation of such items in reasonable detail, based on
information then available to GSR HOLDINGS. The Preliminary Settlement Statement
shall also set forth wire transfer instructions for the Closing payments.
Payment of the Cash Consideration at the Closing shall be based on the
Preliminary Settlement Statement.
3.3 Final
Settlement Statement.
No
later than one hundred twenty (120) days after the Closing Date and after
consultation with MLP, GSR HOLDINGS shall deliver to MLP a revised settlement
statement showing in reasonable detail its calculation of the items described
in
the definition of Cash Consideration along with other adjustments or payments
contemplated in this Agreement (said revised statement and the calculation
thereof shall be referred to as the “Final
Settlement Statement”).
3.4 Dispute
Procedures.
The
Final Settlement Statement shall become final and binding on the Parties on
the
45th day following the date the Final Settlement Statement is received by MLP,
unless prior to such date MLP delivers written notice to GSR HOLDINGS of its
disagreement with the Final Settlement Statement (a “Settlement
Notice”).
Any
Settlement Notice shall set forth MLP’s proposed changes to the Final Settlement
Statement, including an explanation in reasonable detail of the basis on which
MLP proposes such changes. If MLP has timely delivered a Settlement Notice,
MLP
and GSR HOLDINGS shall use good faith efforts to reach written agreement on
the
disputed items. If the disputed items have not been resolved by MLP and GSR
HOLDINGS by the 30th day following GSR HOLDINGS’ receipt of a Settlement Notice,
any remaining disputed items shall be submitted to the Independent Accountants
for resolution within ten (10) Business Days after the end of the foregoing
30-day period. The fees and expenses of the Independent Accountants shall be
borne fifty percent (50%) by GSR HOLDINGS and fifty percent (50%) by MLP. The
Independent Accountants’ determination of the disputed items shall be final and
binding upon the Parties, and the Parties hereby waive any and all rights to
dispute such resolution in any manner, including in court, before an arbiter
or
appeal.
13
3.5 Payments.
If the
final amount as set forth in the Final Settlement Statement exceeds the
estimated amount as set forth in the Preliminary Settlement Statement, then
MLP
shall pay to GSR HOLDINGS the amount of such excess, with interest at the
Interest Rate (calculated from and including the Closing Date to but excluding
the date payment is made). If the final calculated amount as set forth in the
Final Settlement Statement is less than the estimated calculated amount as
set
forth in the Preliminary Settlement Statement, then GSR HOLDINGS shall pay
to
MLP the amount of such excess, with interest at the Interest Rate (calculated
from and including the Closing Date to but excluding the date payment is made).
Any payment shall be made within three (3) Business Days of the date the Final
Settlement Statement becomes final pursuant to Section
3.3
or
3.4.
3.6 Access
to Books and Records.
The
Parties shall grant to each other full access to the Books and Records and
its
relevant personnel to allow each of them to make evaluations under this
Article
III.
3.7 Excluded
Assets.
Prior
to the Closing, the Excluded Assets will be distributed by and among MIDSTREAM
and its Affiliates.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF GSR HOLDINGS
GSR
HOLDINGS represents and warrants to MLP that the statements set forth below
are
true and correct as of the date hereof and will be true and correct as of the
Closing Date (except to the extent any representation or warranty speaks as
of a
specified date, in which case as of such date):
4.1 Organization,
Good Standing, and Authority.
(a) GSR
HOLDINGS is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware. The execution and delivery of this
Agreement and the other Transaction Documents to which GSR HOLDINGS is a party
and the consummation by GSR HOLDINGS of the transactions contemplated herein
and
therein have been duly and validly authorized by all necessary action by GSR
HOLDINGS. This Agreement has been duly executed and delivered by GSR HOLDINGS.
GSR HOLDINGS has all requisite corporate power and authority to enter into
and
perform this Agreement and the other Transaction Documents to which it is a
party, to perform its obligations hereunder and thereunder and to carry out
the
transactions contemplated herein and therein.
(b) MIDSTREAM
is a limited liability company duly formed, validly existing and in good
standing under the Laws of the State of Delaware. The execution and delivery
of
this Agreement and the other Transaction Documents to which MIDSTREAM is a
party
and the consummation by MIDSTREAM of the transactions contemplated herein and
therein have been duly and validly authorized by all necessary limited liability
company action by MIDSTREAM. This Agreement has been duly executed and delivered
by MIDSTREAM. MIDSTREAM has all requisite limited liability company power and
authority to enter into and perform this Agreement and the other Transaction
Documents to which it is a party, to perform its obligations hereunder and
thereunder and to carry out the transactions contemplated herein and
therein.
14
4.2 Enforceability.
This
Agreement constitutes and, upon execution of and delivery by GSR HOLDINGS and
MIDSTREAM of the other Transaction Documents to which it is a party, such
Transaction Documents will constitute, valid and binding obligations of GSR
HOLDINGS and MIDSTREAM, enforceable against such Parties in accordance with
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar Laws affecting creditor’s rights generally and
general principles of equity.
4.3 No
Conflicts.
The
execution, delivery and performance by GSR HOLDINGS and MIDSTREAM of this
Agreement, and the execution, delivery and performance by GSR HOLDINGS and
MIDSTREAM of the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby or thereby, will
not:
(a) Provided
all of GSR HOLDINGS’ Required Consents and Post Closing Consents have been
obtained, conflict with, constitute a breach, violation or termination of,
give
rise to any right of termination, cancellation or acceleration of or result
in
the loss of any right or benefit under, any agreements to which GSR HOLDINGS
or
MIDSTREAM is a party or by which any of them are bound;
(b) Conflict
with or violate the limited liability company agreement of MIDSTREAM or the
organizational documents of GSR HOLDINGS; and
(c) Provided
that all of GSR HOLDINGS’ Required Consents and Post Closing Consents have been
obtained, violate any Law applicable to GSR HOLDINGS or MIDSTREAM.
4.4 Taxes.
Except
as set forth in Schedule
4.4,
all
withholding Tax and Tax deposit requirements imposed on GSR HOLDINGS for any
and
all periods or portions thereof ending prior to the Effective Time have been
or
will be timely satisfied in full by GSR HOLDINGS.
4.5 Litigation;
Compliance with Laws.
There
is no injunction, restraining order or Proceeding pending against GSR HOLDINGS
or MIDSTREAM that restrains or prohibits the consummation of the transactions
contemplated by this Agreement.
4.6 Broker’s
or Finder’s Fees.
No
investment banker, broker, finder or other Person is entitled to any brokerage
or finder’s fee or similar commission in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of GSR HOLDINGS
or any of its Affiliates.
4.7 No
Foreign Person.
GSR
HOLDINGS is not a “foreign person” as defined in Section 1445 of the Code and in
any regulations promulgated thereunder.
15
4.8 Stock
Purchase Agreement.
GSR
HOLDINGS has provided MLP a true, correct and complete copy of the Stock
Purchase Agreement and all schedules and exhibits thereto.
4.9 Investment
Intent.
GSR
HOLDINGS is acquiring the Units for its own account, and not with a view to,
or
for sale in connection with, the distribution thereof in violation of state
or
federal Law. GSR HOLDINGS acknowledges that the Units have not been registered
under the Securities Act or the securities Laws of any state and neither GSR
HOLDINGS nor any of its Affiliates has any obligation or right to register
the
Units except as set forth in the Limited Partnership Agreement. Without such
registration, the Units may not be sold, pledged, hypothecated or otherwise
transferred unless it is determined that registration is not required. GSR
HOLDINGS, itself or through its officers, employees or agents, has sufficient
knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment such as an investment in the
Units, and GSR HOLDINGS, either alone or through its officers, employees or
agents, has evaluated the merits and risks of the investment in the
Units.
4.10 No
Other Representations or Warranties; Schedules.
GSR
HOLDINGS makes no other express or implied representation or warranty with
respect to the Entities or any of their respective Affiliates, the Assets or
the
transactions contemplated by this Agreement, and disclaims any other
representations or warranties. The disclosure of any matter or item in any
schedule to this Agreement shall not be deemed to constitute an acknowledgment
that any such matter is required to be disclosed.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF MLP
MLP
hereby represents and warrants to GSR HOLDINGS that the statements set forth
below are true and correct as of the date hereof and will be true and correct
as
of the Closing Date (except to the extent any representation or warranty speaks
as of a specified date, in which case as of such date):
5.1 Organization,
Good Standing, and Authorization.
MLP is
a limited partnership duly formed, validly existing and in good standing under
the Laws of the State of Delaware. MLP has all requisite limited partnership
power and authority to enter into and perform this Agreement and the Transaction
Documents to which it is a party, to perform its obligations hereunder and
thereunder and to carry out the transactions contemplated herein and therein.
The execution and delivery of this Agreement and the Transaction Documents
to
which it is a party and the consummation by MLP of the transactions contemplated
herein have been duly and validly authorized by all necessary limited
partnership action by MLP. This Agreement has been duly executed and delivered
by MLP.
5.2 Enforceability.
This
Agreement constitutes, and upon execution and delivery of the Transaction
Documents to which MLP is a party, such Transaction Documents will constitute,
valid and binding obligations of MLP, enforceable against MLP in accordance
with
their terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar Laws affecting creditor’s rights generally and
general principles of equity.
16
5.3 No
Conflicts.
The
execution, delivery and performance by MLP of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated hereby or
thereby, will not:
(a) provided
that any MLP Required Consents and Post-Closing Consents have been obtained,
conflict with, constitute a breach, violation or termination of, give rise
to
any right of termination, cancellation or acceleration of or result in the
loss
of any right or benefit under, any agreement to which MLP is a
party;
(b) conflict
with or violate the Limited Partnership Agreement or result in the creation
of a
Lien on the Units; or
(c) provided
that all of the MLP Required Consents and Post Closing Consents have been
obtained, violate any Law applicable to MLP.
5.4 Litigation.
There
is no injunction, restraining order or Proceeding pending against MLP that
restrains or prohibits the consummation of the transactions contemplated by
this
Agreement.
5.5 Independent
Investigation.
MLP is
knowledgeable in the business of owning and operating natural gas and natural
gas liquids facilities and has had access to the Assets, the representatives
of
GSR HOLDINGS, MIDSTREAM and their respective Affiliates, and to the records
of
GSR HOLDINGS, MIDSTREAM and their respective Affiliates and the Sellers with
respect to the Assets. MLP ACKNOWLEDGES THAT THE ASSETS ARE IN THEIR “AS IS,
WHERE IS” CONDITION AND STATE OF REPAIR, AND WITH ALL FAULTS AND DEFECTS, AND
THAT, EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT, GSR HOLDINGS HAS MADE
NO
REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MARKETABILITY, QUALITY, CONDITION,
CONFORMITY TO SAMPLES, MERCHANTABILITY, AND/OR FITNESS FOR A PARTICULAR PURPOSE,
ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY GSR HOLDINGS AND EXCEPT AS SET FORTH
IN
THIS AGREEMENT, WAIVED BY MLP. MLP FURTHER ACKNOWLEDGES THAT: (I) THE ASSETS
HAVE BEEN USED FOR NATURAL
GAS AND NATURAL GAS LIQUIDS
OPERATIONS AND PHYSICAL CHANGES IN THE ASSETS AND IN THE LANDS BURDENED THEREBY
MAY HAVE OCCURRED AS A RESULT OF SUCH USES; (II) THE ASSETS MAY INCLUDE BURIED
PIPELINES AND OTHER EQUIPMENT, THE LOCATIONS OF WHICH MAY NOT BE KNOWN BY GSR
HOLDINGS OR READILY APPARENT BY A PHYSICAL INSPECTION OF THE ASSETS OR THE
LANDS
BURDENED THEREBY; (III) MLP SHALL HAVE INSPECTED PRIOR TO CLOSING, OR SHALL
BE
DEEMED TO HAVE WAIVED ITS RIGHTS TO INSPECT, THE ASSETS AND THE ASSOCIATED
PREMISES, AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION,
AND THAT MLP SHALL, SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT, ACCEPT
ALL OF THE SAME IN THEIR “AS IS, WHERE IS” CONDITION AND STATE OF REPAIR, AND
WITH ALL FAULTS AND DEFECTS, INCLUDING, BUT NOT LIMITED TO, THE PRESENCE OF
MAN-MADE MATERIAL FIBERS AND THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS
MATERIALS. EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT, GSR HOLDINGS MAKES
NO
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, AS TO (A) THE
ACCURACY OR COMPLETENESS OF ANY DATA OR RECORDS DELIVERED TO MLP WITH RESPECT
TO
THE INTERESTS, INCLUDING, WITHOUT LIMITATION, ANY DESCRIPTION OF THE INTERESTS,
PRICING ASSUMPTIONS, QUALITY OR QUANTITY OF THE INTERESTS, FREEDOM FROM PATENT
OR TRADEMARK INFRINGEMENT OR (B) FUTURE VOLUMES OF HYDROCARBONS OR OTHER
PRODUCTS TRANSPORTED, TREATED, STORED OR PROCESSED THROUGH OR AT THE ASSETS.
With respect to any projection or forecast delivered by or on behalf of GSR
HOLDINGS or its Affiliates to MLP, MLP acknowledges that (i) there are
uncertainties inherent in attempting to make such projections and forecasts,
(ii) MLP is familiar with such uncertainties, (iii) MLP is taking full
responsibility for making its own evaluation of the adequacy and accuracy of
all
such projections and forecasts furnished to MLP and (iv) MLP will not have
a
claim against GSR HOLDINGS, MIDSTREAM or any of their respective advisors or
Affiliates with respect to such projections or forecasts.
Notwithstanding the foregoing, nothing in this Agreement is intended to waive,
limit or restrict any rights of the Parties with respect to Third
Persons.
17
5.6 Broker’s
or Finder’s Fees.
No
investment banker, broker, finder or other Person is entitled to any brokerage
or finder’s fee or similar commission in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of MLP or any
of
its Affiliates which is, or following the Closing would be, an obligation of
GSR
HOLDINGS, MIDSTREAM or any of their respective Affiliates.
5.7 Investment
Intent.
MLP is
acquiring the Subject Interests for its own account, and not with a view to,
or
for sale in connection with, the distribution thereof in violation of state
or
federal Law. MLP acknowledges that the Subject Interests have not been
registered under the Securities Act or the securities Laws of any state and
neither GSR HOLDINGS, MIDSTREAM nor any of their respective Affiliates has
any
obligation to register the Subject Interests. Without such registration, the
Subject Interests may not be sold, pledged, hypothecated or otherwise
transferred unless it is determined that registration is not required. MLP,
itself or through its officers, employees or agents, has sufficient knowledge
and experience in financial and business matters to be capable of evaluating
the
merits and risks of an investment such as an investment in the Subject
Interests, and MLP, either alone or through its officers, employees or agents,
has evaluated the merits and risks of the investment in the Subject
Interests.
5.8 Available
Funds.
MLP
will have at Closing, sufficient cash to enable it to make payment in
immediately available funds of the cash portion of the Consideration when due
and any other amounts to be paid by it hereunder.
ARTICLE
VI
COVENANTS
AND ACCESS
6.1 Conduct
of Business.
GSR
HOLDINGS and MIDSTREAM each covenants and agrees that from and after the
execution of this Agreement and until the Closing:
(a) Without
the prior written consent of MLP, neither MIDSTREAM nor GSR HOLDINGS will grant
consent to any action by the Sellers or MEG Inc that is prohibited under the
Stock Purchase Agreement or amend any provision of the Stock Purchase Agreement;
and
18
(b) GSR
HOLDINGS will not (i) create or permit the creation of any Lien on the Subject
Interests, any interest in any of the Entities or any Asset; (ii) sell, convey
or transfer (or commit to sell, convey or transfer) all or any portion of the
Subject Interests, any interest in any of the Entities or any Asset (in each
case, other than the Excluded Assets and other than any transfer to GSR HOLDINGS
of any Entity); or (iii) amend or modify the limited liability company agreement
of MEG LLC; and
(c) If
GSR
HOLDINGS becomes aware of any event or development that it reasonably believes
is likely to cause a material breach or default hereunder or to have a Material
Adverse Effect, it will give prompt written notice to MLP.
6.2 Casualty
Loss.
Each of
GSR HOLDINGS and MIDSTREAM shall promptly notify MLP of any Casualty Loss of
which it becomes aware prior to the Closing.
6.3 Access,
Information and Access Indemnity.
(a) Prior
to
Closing, GSR HOLDING and MIDSTREAM will make available to MLP and MLP’s
authorized representatives for examination as MLP may reasonably request, all
Records available to GSR HOLDINGS or MIDSTREAM under the Stock Purchase
Agreement; provided, however, such material shall not include (i) any
proprietary data which relates to another business of GSR HOLDINGS, MIDSTREAM
or
their respective Affiliates and is not primarily used in connection with the
continued ownership, use or operation of the Assets, (ii) any information
subject to Third Person confidentiality agreements for which a consent or waiver
cannot be secured by GSR HOLDINGS, MIDSTREAM or their respective Affiliates
after reasonable efforts, or (iii) any information which, if disclosed, would
violate an attorney-client privilege or would constitute a waiver of rights
as
to attorney work product or attorney-client privileged
communications.
(b) Subject
to subsection
(a)
above,
to the extent they may do so under the Stock Purchase Agreement, GSR HOLDINGS
and MIDSTREAM shall permit MLP and MLP’s authorized representatives to consult
with employees of MEG Inc and its Affiliates during the business hours of 8:00
a.m. to 5:00 p.m. (local time), Monday through Friday and to conduct, at MLP’s
sole risk and expense, inspections and inventories of the Assets and to examine
all Records over which MEG Inc and its Affiliates have control. GSR HOLDINGS
and
MIDSTREAM shall also coordinate, in advance, with MLP to allow site visits
and
inspections at the field sites on Saturdays unless operational conditions would
reasonably prohibit such access.
(c) MLP
SHALL
PROTECT, DEFEND, INDEMNIFY AND HOLD THE GSR HOLDINGS’ INDEMNITEES HARMLESS FROM
AND AGAINST ANY AND ALL CLAIMS AND LOSSES OCCURRING ON OR TO THE ASSETS CAUSED
BY THE ACTS OR OMISSIONS OF MLP, MLP’S AFFILIATES OR ANY PERSON ACTING ON MLP’S
OR ITS AFFILIATES’ BEHALF IN CONNECTION WITH ANY DUE DILIGENCE CONDUCTED
PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT PRIOR TO CLOSING, INCLUDING
ANY
SITE VISITS AND ENVIRONMENTAL SAMPLING; PROVIDED, HOWEVER, THE FOREGOING
OBLIGATION OF MLP SHALL NOT APPLY WITH RESPECT TO ANY ENVIRONMENTAL CONDITIONS
TO THE EXTENT EXISTING PRIOR TO THE CONDUCT OF SUCH DUE DILIGENCE WHICH ARE
DISCOVERED DURING SUCH DUE DILIGENCE. MLP shall comply in all material respects
with all rules, regulations, policies and instructions issued by GSR HOLDINGS,
MIDSTREAM, the Sellers or any Third Person operator regarding MLP’s actions
prior to Closing while upon, entering or leaving any property included in the
Assets, including any insurance requirements that GSR HOLDINGS, MIDSTREAM or
the
Sellers may impose on contractors authorized to perform work on any property
owned or operated by GSR HOLDINGS, MIDSTREAM or the Sellers.
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6.4 Regulatory
Filings; Xxxx-Xxxxx-Xxxxxx Filing.
(a) MLP,
MIDSTREAM and GSR HOLDINGS will take all commercially reasonable actions
necessary or desirable, and proceed diligently and in good faith and use all
commercially reasonable efforts, as promptly as practicable to obtain all
consents, approvals or actions of, to make all filings with, and to give all
notices to, Governmental Authorities required to accomplish the transactions
contemplated by this Agreement; provided, however, that the cost to obtain
Post-Closing Consents shall be borne by MLP.
(b) The
Parties shall make any filings required under the HSR Act on or prior to twenty
three (23) days after the date of this Agreement and provide such information
to
the FTC as is required in connection with the HSR Act as soon as practicable
after a request therefore.
(c) Notwithstanding
any provision herein to the contrary, each of the Parties will (i) use
reasonable efforts to comply as expeditiously as possible with all lawful
requests of Governmental Authorities for additional information and documents
pursuant to the HSR Act, (ii) not (A) extend any waiting period under the HSR
Act or (B) enter into any voluntary agreement with any Governmental Authority
not to consummate the transactions contemplated by this Agreement, except with
the prior consent of the other Party, and (iii) cooperate with each other and
use reasonable efforts to obtain the requisite approval of the FTC and DOJ;
provided, however, that the Parties are not obligated to accept any conditional
approval or divest any of the Assets or any of their properties.
(d) MLP
will
be responsible for paying the filing fees required with respect to any filing
under the HSR Act.
6.5 Preservation
of Records.
For a
period of seven (7) years after the Closing Date, the Party in possession of
the
originals of the Records will retain such Records at its sole cost and expense
and will make such Records available to the other Party to the extent pertaining
to such other Parties’ obligations hereunder upon reasonable notice for
inspection and/or copying, at the expense of the requesting Party, at the
headquarters of the Party in possession (or at such other location in the United
States as the Party in possession may designate in writing to the other Party)
at reasonable times and during regular office hours. MLP agrees that GSR
HOLDINGS may retain a copy of the Records to the extent such Records pertain
to
its obligations hereunder.
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6.6 New
Debt.
MLP or
its Affiliates will incur new indebtedness that will be used and subject to
the
restrictions and other matters as set forth in Schedule
6.6.
6.7 Tax
Covenants.
(a) Preparation
of Tax Returns.
GSR
HOLDINGS shall prepare and file or cause to be prepared and filed all Tax
Returns with the appropriate federal, state, local and foreign Tax Authorities
relating to the Entities for periods ending on or prior to the Closing Date,
and
shall pay or cause the Entities to pay all Taxes due with respect to such Tax
Returns. MLP shall prepare and file, or cause to be prepared and filed, all
other Straddle Tax Returns required to be filed by the Entities and MLP shall
cause the Entities to pay the Taxes shown to be due thereon; provided, however,
that GSR HOLDINGS shall promptly reimburse MLP for the portion of such Tax
that
relates to a Pre-Closing Tax Period, to the extent not accrued in the Final
Settlement Statement. GSR HOLDINGS shall furnish to MLP all information and
records reasonably requested by MLP for use in preparation of any Straddle
Tax
Returns. MLP shall allow GSR HOLDINGS to review, comment upon and reasonably
approve without undue delay any Straddle Tax Return at any time during the
twenty (20) day period immediately preceding the filing of such Tax Return.
(b) Close
of Prior Periods.
Except
as otherwise provided in Section
11.3,
GSR
HOLDINGS and MLP shall, unless prohibited by Law, cause the Entities to close
all Tax periods on the Closing Date, with GSR HOLDINGS bearing the sole
obligation for filing the Tax Returns and paying all Taxes for such Tax periods.
If applicable Law does not permit any of the Entities to close a Tax period
on
the Closing Date, except as otherwise provided in this Section
6.7(b),
the
amount of Taxes allocable to the portion of such period ending on the Closing
Date shall be deemed equal to the amount that would be payable if the relevant
taxable period ended on the Closing Date. Any allocation of income or deductions
required to determine any income Taxes relating to such period shall be taken
into account as though the relevant taxable period ended on the Closing Date
and
by means of a closing of the books and records of the Entities on the Closing
Date; provided that exemptions, allowances or deductions that are calculated
on
an annual basis (including, but not limited to, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date
and
the period after the Closing Date in proportion to the number of days in each
such period. All Tax Returns filed by MLP, GSR HOLDINGS, and the Entities shall
be prepared consistently with such allocation. Notwithstanding anything to
the
contrary herein, any franchise Tax paid or payable with respect to the Entities
shall be allocated to the taxable period during which the income, operations,
assets or capital comprising the base of such Tax is measured, regardless of
whether the right to do business for another taxable period is obtained by
the
payment of such franchise Tax.
21
(c) Refund
or Credit.
Any
refund or credit (including any interest with respect thereto) of Taxes of
the
Entities attributable to any taxable period (or portion thereof) ending on
or
before the Closing Date shall be the property of GSR HOLDINGS to the extent
not
previously accrued in the Final Settlement Statement, and if Tax refund or
credits in excess of that accrued in the Final Settlement Statement is received
by MLP or the Entities after the Closing Date, MLP shall promptly notify GSR
HOLDINGS of such refund or credit and pay over to GSR HOLDINGS the amount of
such refund or credit (net of any Tax liability imposed on MLP or the Entities
in connection with the receipt of such refund).
(d) Post-Closing
Assistance.
GSR
HOLDINGS and MLP will each provide the other, and subsequent to the Closing,
MLP
will cause the Entities to provide GSR HOLDINGS with such assistance as may
reasonably be requested in connection with the preparation of any Tax Return,
any audit or other examination by any Tax Authority, or any judicial or
administrative proceedings relating to liability for Taxes, and each will retain
and provide the requesting party with any records or information that may be
reasonably relevant to such return, audit or examination, proceedings or
determination. The party requesting assistance will reimburse the other party
for reasonable out-of-pocket expenses (other than salaries or wages of any
employees of the parties) incurred in providing such assistance. Any information
obtained pursuant to this Section
6.7(d)
or
pursuant to any other Section hereof providing for the sharing of information
or
the review of any Tax Return or other schedule relating to Taxes will be kept
confidential by the Parties.
(e) Maintaining
Records.
MLP and
GSR HOLDINGS will maintain all Tax records, working papers and other supporting
financial records and documents relating to the Tax Returns filed by the
Entities for all open years. Such Tax Returns will be delivered to and
maintained by MLP for a period of seven years after the Closing, and MLP will
make the same available to GSR HOLDINGS or their agents at reasonable times
for
inspection and copying.
(f) Allocation
Statement.
As
promptly as practicable, but in no event later than sixty (60) days after the
delivery of Final Settlement Statement, MLP shall prepare and deliver to GSR
HOLDINGS a statement (the “Allocation
Statement”)
allocating the Consideration among the assets of the Entities in accordance
with
Section 1060 of the Code and the Treasury Regulations promulgated thereunder.
GSR HOLDINGS shall have fifteen (15) days to review the Allocation Statement
and
shall notify MLP of any disputes with the allocation as set forth in the
Allocation Statement. GSR HOLDINGS and MLP shall negotiate in good faith to
resolve any such dispute prior to the date that is sixty (60) days prior to
the
due date of the Tax Returns that reflect the allocation. If GSR HOLDINGS and
MLP
cannot resolve the disputed allocation prior to such date, then GSR HOLDINGS
and
MLP shall refer the dispute to the Independent Accountant to review and to
determine the proper allocation (it being understood that in making such
determination, the Independent Accountant shall be functioning as an expert
and
not as an arbitrator). The Independent Accountant shall deliver to GSR HOLDINGS
and MLP, as promptly as practicable (but in any case no later than thirty (30)
days from the date of engagement of the Independent Accountant), a determination
of the allocation, which determination will be binding on the parties hereto.
The cost of such review and report shall be borne one-half by GSR HOLDINGS
and
one-half by MLP. All Tax Returns filed by MLP, GSR HOLDINGS, the Entities and
each of their Affiliates concerning the Entities or the Assets shall be prepared
consistently with the allocation determined under this Section
6.7.
22
(g) Notice
of Audit.
If
notice of any claim, audit, examination, or other proposed change or adjustment
by any Tax Authority, as well as any notice of assessment and any notice and
demand for payment, concerning any Taxes for any taxable period (or portion
thereof) ending on or before the Closing Date (a “Tax
Proceeding”)
shall
be received by MLP, MLP shall promptly inform GSR HOLDINGS in writing of such
Tax Proceeding. GSR HOLDINGS shall have the right, at its expense to represent
the interests of any of the Entities and control the prosecution, defense and
settlement of any Tax Proceeding relating exclusively to taxable periods ending
on or before the Closing Date. MLP shall represent, at its expense, the
interests of the Entities in any Tax Proceeding relating to any taxable period
that begins on or before the Closing Date and ends after the Closing Date;
provided, however, that (i) MLP shall allow GSR HOLDINGS and its counsel to
participate in any such Tax Proceeding at GSR HOLDINGS’ sole expense; (ii) MLP
shall keep GSR HOLDINGS fully and timely informed with respect to the
commencement, status and nature of such Tax Proceeding; and (iii) if the results
of any such Tax Proceeding involve an issue that is otherwise the subject of
indemnification by GSR HOLDINGS under this Agreement or for which a refund
may
be available to GSR HOLDINGS, then MLP and GSR HOLDINGS shall, subject to the
indemnification procedures set forth in Article
X,
jointly
control the prosecution, defense and settlement of any such Tax Proceeding,
each
Party shall cooperate with the other Party at its own expense and there shall
be
no settlement or closing or other agreement with respect thereto without the
consent of the other Party, which consent shall not be unreasonably
withheld.
(h) Carry
Back of Losses.
MLP
agrees that, unless required by applicable Law, it shall not, and shall not
cause or permit any of the Entities to, carry back to any taxable period ending
on or prior to the Closing Date any net operating loss or other Tax attribute
and further agrees that GSR HOLDINGS has no obligation under this Agreement
or
otherwise to return or remit any refund or other Tax benefit attributable to
a
breach by MLP of the foregoing undertaking.
(i) Certain
Elections.
MLP
shall not make any Tax elections that would affect GSR HOLDINGS or any of its
Affiliates (including the Entities) for any taxable period (or portion thereof,
determined under Section
6.7(f))
ending
on or prior to the Closing Date.
6.8 Insurance.
MIDSTREAM shall provide certain property and liability insurance coverage
related to the Assets (the “Insurance”)
and
administer any insured claims asserted by MLP. The Insurance will be part of
MIDSTREAM’s corporate insurance program. It is anticipated that the Insurance
will be provided for up to one (1) year. However, either Party may terminate
any
or all of the Insurance upon 30 days notice. MIDSTREAM will invoice MLP for
premiums related to the Insurance. MLP shall pay such invoices within 30 days
after receipt. With respect to the Insurance, MLP shall be solely responsible
for (a) deductibles, (b) self insured retentions, (c) out of pocket costs,
(d)
claims that are not insured or excluded from coverage, and (e) amounts in excess
of policy limits. The foregoing costs shall be paid directly by
MLP.
23
6.9 Enforcement
of Certain Provisions.
(a) GSR
HOLDINGS agrees that to the extent MLP is not entitled to enforce against the
Sellers or any other party thereto (i) the requirements set forth in
Sections
7.4 and 7.14
of the
Stock Purchase Agreement, (ii) the requirements set forth in the Transition
Services Agreement or (iii) the restrictions set forth in (A) Section
7.3(f) of the Stock Purchase Agreement or (B) the Non-competition
Agreements (as such restrictions relate to the Entities, the employees of the
Entities, the Assets and the Applicable Business), GSR HOLDINGS shall, at the
direction and sole cost, expense and liability of MLP, take reasonable
enforcement action against such Sellers.
(b) If
prior
to the Closing, GSR HOLDINGS is unable to assign to MIDSTREAM or an Affiliate
thereof any capital lease or other agreements due to transfer restrictions
set
forth therein, then the Parties will enter into commercially reasonable
arrangements to grant to GSR HOLDINGS the reasonable equivalent benefits and
impose on GSR HOLDINGS the reasonably equivalent obligations in relation to
such
agreements as if such assignment had been made.
(c) If
prior
to the Closing, none of the Entities has been assigned the ISDA Agreement dated
May 30, 2006 between MEG Inc and Bank of America, N.A. due to transfer
restrictions, then the Parties will enter into commercially reasonable
arrangements to grant to MLP the reasonable equivalent benefits and impose
on
MLP the reasonably equivalent obligations in relation to such agreements as
if
such assignment had been made.
ARTICLE
VII
CONDITIONS
TO CLOSING
7.1 GSR
HOLDINGS’ Conditions.
The
obligation of GSR HOLDINGS to close is subject to the satisfaction of the
following conditions, any of which may be waived in GSR HOLDINGS’ sole
discretion:
(a) The
representations of MLP contained in Article
V
shall be
true, in all material respects (or, in the case of representations or warranties
that are already qualified by a materiality standard, shall be true in all
respects) on and as of Closing.
(b) MLP
shall
have performed in all material respects the obligations, covenants and
agreements of MLP contained herein.
(c) There
is
no injunction, restraining order or Proceeding pending against GSR HOLDINGS
or
the Entities that restrains or prohibits the consummation of the transactions
contemplated by this Agreement.
24
(d) All
of
GSR HOLDINGS’ Required Consents, MLP’s Required Consents, consents or approvals
under the HSR Act (or expiration of the waiting period) shall have been
obtained.
(e) MLP
shall
have made all deliveries in accordance with Section
8.2.
(f) MLP
shall
have consummated the transactions contemplated by the Unit Purchase Agreement
(unless the failure to consummate such transactions is caused by any action
or
failure by a party thereto other than the MLP).
(g) The
closing under the Stock Purchase Agreement has been consummated.
7.2 MLP’s
Conditions.
The
obligation of MLP to close is subject to the satisfaction of the following
conditions, any of which may be waived (such waiver not to be unreasonably
withheld or conditioned):
(a) The
representations of GSR HOLDINGS contained in Article
IV
shall be
true, in all material respects (or in the case of representations or warranties
that are already qualified by a materiality standard, shall be true in all
respects) on and as of the Closing.
(b) GSR
HOLDINGS shall have performed, in all material respects, the obligations,
covenants and agreements of GSR HOLDINGS contained herein.
(c) There
is
no injunction, restraining order or Proceeding pending against GSR HOLDINGS
or
the Entities that restrains or prohibits the consummation of the transactions
contemplated by this Agreement.
(d) All
of
GSR HOLDINGS’ Required Consents, MLP’s Required Consents, and consents or
approvals under the HSR Act (or expiration of the waiting period) shall have
been obtained.
(e) There
shall have been no events or occurrences, including any breach of
representation, warranty or covenant by the Sellers under the Stock Purchase
Agreement, that could reasonably be expected to have a Material Adverse Effect;
provided,
however,
that
for purposes of determining the foregoing, any events or occurrences affecting
any of the Excluded Assets shall be disregarded.
(f) GSR
HOLDINGS shall have delivered all documents in accordance with Section
8.2.
(g) (i)
Sellers shall have delivered the Stub Period Financial Statements as required
under the Stock Purchase Agreement, and (ii) the conditions set forth in
Sections 8.1(a), (f), (h) and (i) of the Stock Purchase Agreement shall have
been satisfied.
7.3 Exceptions.
Notwithstanding the provisions of Sections
7.1(a)
and
(b)
and
7.2(a)
and
(b),
if the
closing under the Stock Purchase Agreement has occurred, no Party shall have
the
right to refuse to close the transaction contemplated hereby by reason of this
Article
VII
unless
(a) in the case of GSR HOLDINGS, the sum of all representations of MLP contained
in Article
V
which
are not true and all obligations, covenants and agreements which MLP has failed
to perform, would reasonably be expected to have a Material Adverse Effect,
and
(b) in the case of MLP, the sum of all representations of GSR HOLDINGS contained
in Article
IV
which
are not true and all obligations, covenants and agreements which GSR HOLDINGS
has failed to perform, would reasonably be expected to have a Material Adverse
Effect.
25
ARTICLE
VIII
CLOSING
8.1 Time
and Place of Closing.
The
consummation of the transactions contemplated by this Agreement (the
“Closing”)
shall
take place in the offices of MIDSTREAM in Denver, Colorado at 9:00 a.m. Denver
time on the third Business Day following the satisfaction or waiver of the
conditions set forth in Article VII (other than those to be satisfied at
Closing), or such other time and place as the Parties agree to in writing (the
“Closing
Date”),
and
shall be effective as of the Effective Time.
8.2 Deliveries
at Closing.
At the
Closing,
(a) GSR
HOLDINGS, as applicable, will execute and deliver or cause to be executed and
delivered to MLP:
(i) Each
of
the Transaction Documents to which GSR HOLDINGS or Affiliates are a
party.
(ii) Certificates
of a corporate officer or other authorized person dated the Closing Date,
certifying on behalf of GSR HOLDINGS that the conditions in Sections
7.2(a)
and
(b)
have
been fulfilled.
(iii) The
Stub
Period Financial Statements.
(b) MLP
will
execute and deliver or cause to be executed and delivered to GSR
HOLDINGS:
(i) Each
of
the Transaction Documents to which MLP or MLP’s Affiliates are a
party.
(ii) A
certificate of a corporate officer or other authorized person dated the Closing
Date certifying on behalf of MLP that the conditions in Sections
7.1(a)
and
(b)
have
been fulfilled.
(iii) A
certificate, in the form of Certificate for Common Units attached as
Exhibit
C,
for the
number of Units determined in accordance with Section
2.1.
(iv) A
wire
transfer to GSR HOLDINGS of the amount due with respect to the Cash
Consideration (as set forth in the Preliminary Settlement Statement).
26
ARTICLE
IX
TERMINATION
9.1 Termination.
This
Agreement may be terminated and the transactions contem-plated hereby abandoned
as follows:
(a) GSR
HOLDINGS and MLP may elect to terminate this Agreement at any time prior to
the
Closing by mutual written consent thereof; and
(b) Either
GSR HOLDINGS or MLP by written notice to the other may terminate this Agreement
if the Closing shall not have occurred on or before September 27, 2007;
provided,
however,
that
neither Party may terminate this Agreement if such Party is at such time in
material breach of any provision of this Agreement.
9.2 Effect
of Termination Prior to Closing.
If
Closing does not occur as a result of any Party exercising its right to
terminate pursuant to Section
9.1,
then no
Party shall have any further rights or obligations under this Agreement, except
that (i) nothing herein shall relieve any Party from any liability for any
willful breach of this Agreement, and (ii) the provisions of Section
6.3(c)
and
Article
XI
shall
survive any termination of this Agreement.
ARTICLE
X
INDEMNIFICATION
10.1 Indemnification
by MLP.
Effective upon Closing, MLP shall defend, indemnify and hold harmless GSR
HOLDINGS and its Affiliates, and all of its and their directors, officers,
employees, partners, members, contractors, agents, and representatives
(collectively, the “GSR
HOLDINGS Indemnitees”)
from
and against any and all Losses asserted against, resulting from, imposed upon
or
incurred by any of the GSR HOLDINGS Indemnitees as a result of or arising out
of:
(a) the
breach of any of the representations or warranties under Article
V;
(b) the
breach of any covenants or agreements of MLP contained in this Agreement;
(c) to
the
extent that GSR HOLDINGS is not required to indemnify any of the MLP Indemnitees
pursuant to Section
10.2,
the
Assumed Obligations; and
(d) any
actions of MEG Inc at any time prior to the Effective Time to the extent
attributable to the Assets or the business conducted by MEG Colorado, MEG
Wyoming or Collbran JV.
10.2 Indemnification
by GSR HOLDINGS.
Effective upon Closing, GSR HOLDINGS shall defend, indemnify and hold harmless
MLP and its Affiliates, and all of its and their directors, officers, employees,
partners, members, contractors, agents, and representatives (collectively,
the
“MLP
Indemnitees”)
from
and against any and all Losses asserted against, resulting from, imposed upon
or
incurred by any of the MLP Indemnitees as a result of or arising out
of:
27
(a) the
breach of any of the representations or warranties under Article
IV
(other
than Sections
4.1
and
4.2);
(b) to
the
extent MLP is not entitled to a direct indemnity under the Stock Purchase
Agreement, any matter for which GSR HOLDINGS or MIDSTREAM is entitled to
indemnity under the Stock Purchase Agreement, but limited in all respects to
amounts actually recovered thereunder;
(c) the
breach of any of the representations or warranties under Sections
4.1
and
4.2
or the
covenants or agreements of GSR HOLDINGS or MIDSTREAM contained in this
Agreement; and
(d) any
Reserved Liabilities.
10.3 Survival
and Certain Limitations.
(a) Subject
to this Section
10.3,
all
representations, warranties, covenants and indemnities made by the Parties
in
this Agreement or pursuant hereto shall survive the Closing as hereinafter
provided, and shall not be merged into any instruments or agreements delivered
at Closing.
(b) With
respect to the obligations of GSR HOLDINGS under Section
10.2(a),
none of
the MLP Indemnitees shall be entitled to assert any right to indemnification
after one (1) year from the Closing.
(c) With
respect to the obligations of GSR HOLDINGS under Section
10.2(b),
GSR
HOLDINGS shall, at the direction and sole cost, expense and liability of MLP,
take reasonable enforcement action against such Sellers under the Stock Purchase
Agreement and pay to MLP any proceeds actually received by GSR HOLDINGS from
the
Sellers on account of such enforcement action. MLP shall be entitled to select
any counsel required for such enforcement (unless GSR HOLDINGS has independent
claims against the Sellers that are being advanced contemporaneously, in which
case GSR HOLDINGS shall be entitled to select counsel for all such claims,
with
(i) the costs of such counsel to be shared between MLP and GSR HOLDINGS in
proportion to the amounts claimed by the Parties and (ii) any settlement thereof
requiring the consent of both Parties).
(d) Any
claim
for indemnity under this Agreement made by a Party Indemnitee shall be in
writing, be delivered in good faith prior to the respective survival period
under Section
10.3(b)
(to the
extent applicable), and specify in reasonable detail the specific nature of
the
claim for indemnification hereunder (“Claim
Notice”).
Any
such claim that is described in a timely (if applicable) delivered Claim Notice
shall survive with respect to the specific matter described therein.
(e) Notwithstanding
anything contained herein to the contrary, in no event shall GSR HOLDINGS be
obligated under this Agreement to indemnify (or be otherwise liable hereunder
in
any way whatsoever to) any of the MLP Indemnitees with respect to a breach
of
any representation or warranty (other than under Section
10.2(b)
in
respect of breaches of representations or warranties of the Sellers under the
Stock Purchase Agreement), if MLP had Knowledge thereof at Closing and failed
to
notify GSR HOLDINGS of such breach prior to Closing. Unless GSR HOLDINGS or
a
Third Person shall have made a claim or demand or it appears reasonably likely
that such a claim or demand appears reasonably likely, MLP shall not take any
voluntary action that is intended by MLP to cause a Claim to be initiated that
would be subject to indemnification by GSR HOLDINGS (other than under Section
10.2(b)).
28
(f) All
Losses indemnified hereunder shall be determined net of any (i) Third Person
Awards, (ii) Tax Benefits; and (iii) amount which specifically pertains to
such
Loss and is reflected in the calculations of the amounts set forth on the Final
Settlement Statement.
10.4 Notice
of Asserted Liability; Opportunity to Defend.
(a) All
claims for indemnification hereunder (other than under Section
10.2(b))
shall
be subject to the provisions of this Section
10.4.
Any
person claiming indemnification hereunder is referred to herein as the
“Indemnified Party” or “Indemnitee” and any person against whom such claims are
asserted hereunder is referred to herein as the “Indemnifying Party” or
“Indemnitor.”
(b) If
any
Claim is asserted against or any Loss is sought to be collected from an
Indemnified Party, the Indemnified Party shall with reasonable promptness
provide to the Indemnifying Party a Claim Notice. The failure to give any such
Claim Notice shall not otherwise affect the rights of the Indemnified Party
to
indemnification hereunder unless the Indemnified Party has proceeded to contest,
defend or settle such Claim or remedy such a Loss with respect to which it
has
failed to give a Claim Notice to the Indemnifying Party, but only to the extent
the Indemnifying Party is prejudiced thereby. Additionally, to the extent the
Indemnifying Party is prejudiced thereby, the failure to provide a Claim Notice
to the Indemnifying Party shall relieve the Indemnifying Party from liability
for such Claims and Losses that it may have to the Indemnified Party, but only
to the extent the liability for such Claims or Losses is directly attributable
to such failure to provide the Claim Notice.
(c) The
Indemnifying Party shall have thirty (30) days from the personal delivery or
receipt of the Claim Notice (the “Notice
Period”)
to
notify the Indemnified Party (i) whether or not it disputes the liability to
the
Indemnified Party hereunder with respect to the Claim or Loss, and in the event
of a dispute, such dispute shall be resolved in the manner set forth in
Section
11.8
hereof,
(ii) in the case where Losses are asserted against or sought to be collected
from an Indemnifying Party by the Indemnified Party, whether or not the
Indemnifying Party shall at its own sole cost and expense remedy such Losses
or
(iii) in the case where Claims are asserted against or sought to be collected
from an Indemnified Party, whether or not the Indemnifying Party shall at its
own sole cost and expense defend the Indemnified Party against such Claim;
provided however, that any Indemnified Party is hereby authorized prior to
and
during the Notice Period to file any motion, answer or other pleading that
it
shall deem necessary or appropriate to protect its interests or those of the
Indemnifying Party (and of which it shall have given notice and opportunity
to
comment to the Indemnifying Party) and not prejudicial to the Indemnifying
Party.
29
(d) If
the
Indemnifying Party does not give notice to the Indemnified Party of its election
to contest and defend any such Claim described in Section
10.4(c)(iii)
within
the Notice Period, then the Indemnifying Party shall be bound by the result
obtained with respect thereto by the Indemnified Party and shall be responsible
for all costs incurred in connection therewith.
(e) If
the
Indemnifying Party is obligated to defend and indemnify the Indemnified Party,
and the Parties have a conflict of interest with respect to any such Claim,
then
the Indemnified Party may, in its sole discretion, separately and independently
contest and defend such Claim, and the Indemnifying Party shall be bound by
the
result obtained with respect thereto by the Indemnified Party and shall be
responsible for all costs incurred in connection therewith.
(f) If
the
Indemnifying Party notifies the Indemnified Party within the Notice Period
that
it shall defend the Indemnified Party against a Claim, the Indemnifying Party
shall have the right to defend all appropriate Proceedings, and with counsel
of
its own choosing (but reasonably satisfactory to the Indemnified Party) and
such
Proceedings shall be promptly settled (subject to obtaining a full and complete
release of all Indemnified Parties) or prosecuted by it to a final conclusion.
If the Indemnified Party desires to participate in, but not control, any such
defense or settlement it may do so at its sole cost and expense. If the
Indemnified Party joins in any such Claim, the Indemnifying Party shall have
full authority to determine all action to be taken with respect thereto, as
long
as such action could not create a liability to any of the Indemnified Parties,
in which case, such action would require the prior written consent of any
Indemnified Party so affected.
(g) If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any Claim and in
making any counterclaim against the Third Person asserting the Claim, or any
cross-complaint against any person as long as such cooperation, counterclaim
or
cross-complaint could not create a liability to any of the Indemnified Parties.
(h) At
any
time after the commencement of defense by Indemnifying Party under Section
10.4(f)
above of
any Claim, the Indemnifying Party may request the Indemnified Party to agree
in
writing to the abandonment of such contest or to the payment or compromise
by
the Indemnifying Party of the asserted Claim, but only if the Indemnifying
Party
agrees in writing to be solely liable for such Claim; whereupon such action
shall be taken unless the Indemnified Party determines that the contest should
be continued and notifies the Indemnifying Party in writing within fifteen
(15)
days of such request from the Indemnifying Party. If the Indemnified Party
determines that the contest should be continued, the amount for which the
Indemnifying Party would otherwise be liable hereunder shall not exceed the
amount which the Indemnifying Party had agreed to pay to compromise such Claim;
provided that, the other Person to the contested Claim had agreed in writing
to
accept such amount in payment or compromise of the Claim as of the time the
Indemnifying Party made its request therefor to the Indemnified Party, and
further provided that, under such proposed compromise, the Indemnified Party
would be fully and completely released from any further liability or obligation
with respect to the matters which are the subject of such contested Claim.
30
10.5 Materiality
Conditions.
For
purposes of determining whether an event described in this Article
X
has
occurred for which indemnification under this Article
X
can be
sought (other than under Section
10.2(b)),
any
requirement in any representation, warranty, covenant or agreement by GSR
HOLDINGS or MLP, as applicable, contained in this Agreement that an event or
fact be “material,” “Material,” meet a certain minimum dollar threshold or have
a “Material Adverse Effect” or a material adverse effect (each a “Materiality
Condition”)
in
order for such event or fact to constitute a misrepresentation or breach of
such
representation, warranty, covenant or agreement under this Agreement, such
Materiality Condition shall be disregarded and such representations, warranties,
covenants or agreements shall be construed solely for purposes of this
Article
X
as if
they did not contain such Materiality Conditions. Notwithstanding anything
in
this Section
10.5,
any
claim for indemnification under this Article
X
will be
subject to Section
10.3.
10.6 Exclusive
Remedy.
AS
BETWEEN THE MLP INDEMNITEES AND THE GSR HOLDINGS INDEMNITEES, AFTER CLOSING
(A)
THE EXPRESS INDEMNIFICATION PROVISIONS SET FORTH IN THIS AGREEMENT, WILL BE
THE
SOLE AND EXCLUSIVE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES WITH RESPECT
TO SAID AGREEMENT AND THE EVENTS GIVING RISE THERETO, AND THE TRANSACTIONS
PROVIDED FOR THEREIN OR CONTEMPLATED THEREBY (OTHER THAN THE OTHER TRANSACTION
DOCUMENTS) AND (B) NEITHER PARTY NOR ANY OF ITS RESPECTIVE SUCCESSORS OR ASSIGNS
SHALL HAVE ANY RIGHTS AGAINST THE OTHER PARTY OR ITS AFFILIATES WITH RESPECT
TO
THE TRANSACTIONS PROVIDED FOR HEREIN OTHER THAN AS IS EXPRESSLY PROVIDED IN
THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS.
10.7 Negligence
and Strict Liability Waiver.
WITHOUT
LIMITING OR ENLARGING THE SCOPE OF THE INDEMNIFICATION OBLIGATIONS SET FORTH
IN
THIS AGREEMENT, AN INDEMNIFIED PARTY SHALL BE ENTITLED TO INDEMNIFICATION UNDER
THIS AGREEMENT IN ACCORDANCE WITH THE TERMS HEREOF, REGARDLESS OF WHETHER THE
LOSS OR CLAIM GIVING RISE TO SUCH INDEMNIFICATION OBLIGATION IS THE RESULT
OF
THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY, OR VIOLATION
OF ANY LAW OF OR BY SUCH INDEMNIFIED PARTY.
10.8 Limitation
on Damages.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL
ANY OF GSR HOLDINGS OR MLP BE LIABLE TO THE OTHER, OR TO THE OTHERS’
INDEMNITEES, UNDER THIS AGREEMENT FOR ANY EXEMPLARY, PUNITIVE, REMOTE,
SPECULATIVE, CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES OR LOSS OF PROFITS;
PROVIDED THAT, IF ANY OF THE GSR HOLDINGS INDEMNITEES OR MLP INDEMNITEES IS
HELD
LIABLE TO A THIRD PERSON FOR ANY SUCH DAMAGES AND THE INDEMNITOR IS OBLIGATED
TO
INDEMNIFY SUCH GSR HOLDINGS INDEMNITEES OR MLP INDEMNITEES FOR THE MATTER THAT
GAVE RISE TO SUCH DAMAGES, THE INDEMNITOR SHALL BE LIABLE FOR, AND OBLIGATED
TO
REIMBURSE SUCH INDEMNITEES FOR SUCH DAMAGES.
31
10.9 Bold
and/or Capitalized Letters.
THE
PARTIES AGREE THAT THE BOLD AND/OR CAPITALIZED LETTERS IN THIS AGREEMENT
CONSTITUTE CONSPICUOUS LEGENDS.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
11.1 Expenses.
Unless
otherwise specifically provided for herein, each Party will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with the
negotiation of this Agreement and the transactions contemplated hereby; provided
that GSR HOLDINGS will bear the cost of all Post-Closing Consents which must
be
obtained from any railroad.
11.2 Further
Assurances.
From
time to time, and without further consideration, each Party will execute and
deliver to the other Party such documents and take such actions as the other
Party may reasonably request in order to more effectively implement and carry
into effect the transactions contemplated by this Agreement.
11.3 Transfer
Taxes.
The
Parties believe that the contribution of the Subject Interests as provided
for
herein is exempt from or is otherwise not subject to any and all sales, use,
transfer, or similar Taxes. If any such sales, transfer, use or similar Taxes
are due or should hereafter become due (including penalty and interest thereon)
by reason of this transaction, MLP shall timely pay and solely bear all such
type of Taxes.
11.4 Assignment.
Neither
Party may assign this Agreement or any of its rights or obligations arising
hereunder without the prior written consent of the other Party; provided,
however, MLP shall be permitted to assign this Agreement to an Affiliate prior
to Closing, provided, that, notwithstanding such assignment, MLP shall continue
to remain responsible for all obligations of MLP hereunder following such
assignment.
11.5 Entire
Agreement, Amendments and Waiver.
This
Agreement, together with the Transaction Documents and all certificates,
documents, instruments and writings that are delivered pursuant hereto and
thereto contain the entire understanding of the Parties with respect to the
transactions contemplated hereby and supersede all prior agreements,
arrangements and understandings relating to the subject matter hereof. This
Agreement may be amended, superseded or canceled only by a written instrument
duly executed by the Parties specifically stating that it amends, supersedes
or
cancels this Agreement. Any of the terms of this Agreement and any condition
to
a Party’s obligations hereunder may be waived only in writing by that Party
specifically stating that it waives a term or condition hereof. No waiver by
either Party of any one or more conditions or defaults by the other in
performance of any of the provisions of this Agreement shall operate or be
construed as a waiver of any future conditions or defaults, whether of a like
or
different character, nor shall the waiver constitute a continuing waiver unless
otherwise expressly provided.
32
11.6 Severability.
Each
portion of this Agreement is intended to be severable. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the validity of the remainder of this
Agreement.
11.7 Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.8 Governing
Law, Dispute Resolution and Arbitration.
(a) Governing
Law.
This
Agreement shall be governed by, enforced in accordance with, and interpreted
under, the Laws of the State of Colorado, without reference to conflicts of
Laws
principles.
(b) Negotiation.
In the
event of any Arbitral Dispute, the Parties shall promptly seek to resolve any
such Arbitral Dispute by negotiations between senior executives of the Parties
who have authority to settle the Arbitral Dispute. When a Party believes there
is an Arbitral Dispute under this Agreement that Party will give the other
Party
written notice of the Arbitral Dispute. Within thirty (30) days after receipt
of
such notice, the receiving Party shall submit to the other a written response.
Both the notice and response shall include (i) a statement of each Party’s
position and a summary of the evidence and arguments supporting such position,
and (ii) the name, title, fax number, and telephone number of the executive
or
executives who will represent that Party. If the Arbitral Dispute involves
a
claim arising out of the actions of any Person not a signatory to this
Agreement, the receiving Party shall have such additional time as necessary,
not
to exceed an additional thirty (30) days, to investigate the Arbitral Dispute
before submitting a written response. The executives shall meet at a mutually
acceptable time and place within fifteen (15) days after the date of the
response and thereafter as often as they reasonably deem necessary to exchange
relevant information and to attempt to resolve the Arbitral Dispute. If one
of
the executives intends to be accompanied at a meeting by an attorney, the other
executive shall be given at least five (5) Business Days’ notice of such
intention and may also be accompanied by an attorney.
(c) Failure
to Resolve.
If the
Arbitral Dispute has not been resolved within sixty (60) days after the date
of
the response given pursuant to Section
11.8(b)
above,
or such additional time, if any, that the Parties mutually agree to in writing,
or if the Party receiving such notice denies the applicability of the provisions
of Section
11.8(b)
or
otherwise refuses to participate under the provisions of Section
11.8(b),
either
Party may initiate binding arbitration pursuant to the provisions of
Section
11.8(d)
below.
(d) Arbitration.
Any
Arbitral Disputes not settled pursuant to the foregoing provisions shall be
resolved through the use of binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
(“Arbitration
Rules”),
as
supplemented to the extent necessary to determine any procedural appeal
questions by the Federal Arbitration Act (Title 9 of the United States Code)
and
in accordance with the following provisions:
33
(i) If
there
is any inconsistency between this Section
11.8(d)
and the
Arbitration Rules or the Federal Arbitration Act, the terms of this Section
11.8(d)
will
control the rights and obligations of the Parties.
(ii) Arbitration
shall be initiated by a Party serving written notice, via certified mail, on
the
other Party that the first Party elects to refer the Arbitral Dispute to binding
arbitration, along with the name of the arbitrator appointed by the Party
demanding arbitration and a statement of the matter in controversy. Within
thirty (30) days after receipt of such demand for arbitration, the receiving
Party shall name its arbitrator. If the receiving Party fails or refuses to
name
its arbitrator within such thirty (30) day period, the second arbitrator shall
be appointed, upon request of the Party demanding arbitration, by the Chief
U.S.
District Court Judge for the District of Colorado, or such other person
designated by such judge. The two arbitrators so selected shall within thirty
(30) days after their designation select a third arbitrator; provided, however,
that if the two arbitrators are not able to agree on a third arbitrator within
such thirty (30) day period, either Party may request the Chief U.S. District
Court Judge for the District of Colorado, or such other person designated by
such judge to select the third arbitrator as soon as possible. If the Judge
declines to appoint an arbitrator, appointment shall be made, upon application
of either Party, pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. If any arbitrator refuses or fails to fulfill his
or
her duties hereunder, such arbitrator shall be replaced by the Party which
selected such arbitrator (or if such arbitrator was selected by another Person,
through the procedure which such arbitrator was selected) pursuant to the
foregoing provisions.
(iii) The
hearing will be conducted in Denver, Colorado, no later than sixty (60) days
following the selection of the arbitrators or thirty (30) days after all
prehearing discovery has been completed, whichever is later, at which the
Parties shall present such evidence and witnesses as they may choose, with
or
without counsel. The Parties and the arbitrators should proceed diligently
and
in good faith in order that the award may be made as promptly as
possible.
(iv) Except
as
provided in the Federal Arbitration Act, the decision of the arbitrators will
be
binding on and non-appealable by the Parties. Any such decision may be filed
in
any court of competent jurisdiction and may be enforced by any Party as a final
judgment in such court.
(v) The
arbitrators shall have no right or authority to grant or award exemplary,
punitive, remote, speculative, consequential, special or incidental
damages.
(vi) The
Federal Rules of Civil Procedure, as modified or supplemented by the local
rules
of civil procedure for the U.S. District Court of Colorado, shall apply in
the
arbitration. The Parties shall make their witnesses available in a timely manner
for discovery pursuant to such rules. If a Party fails to comply with this
discovery agreement within the time established by the arbitrators, after
resolving any discovery disputes, the arbitrators may take such failure to
comply into consideration in reaching their decision. All discovery disputes
shall be resolved by the arbitrators pursuant to the procedures set forth in
the
Federal Rules of Civil Procedure.
34
(vii) Adherence
to formal rules of evidence shall not be required. The arbitrators shall
consider any evidence and testimony that they determine to be
relevant.
(viii) The
Parties hereby request that the arbitrators render their decision within thirty
(30) days following conclusion of the hearing.
(ix) The
defenses of statute of limitations and laches shall be tolled from and after
the
date a Party gives the other Party written notice of an Arbitral Dispute as
provided in Section
11.8(b)
above
until such time as the Arbitral Dispute has been resolved pursuant to
Section
11.8(b),
or an
arbitration award has been entered pursuant to this Section
11.8(d).
(e) Recovery
of Costs and Attorneys’ Fees.
If
arbitration arising out of this Agreement is initiated by either Party, the
decision of the arbitrators may include the award of court costs, fees and
expenses of such arbitration (including reasonable attorneys’ fees).
(f) Choice
of Forum.
If,
despite the Parties’ agreement to submit any Arbitral Disputes to binding
arbitration, there are any court proceedings arising out of or relating to
this
Agreement or the transactions contemplated hereby, such proceedings shall be
brought and tried in, and the Parties hereby consent to the jurisdiction of,
the
federal or state courts situated in the City and County of Denver, State of
Colorado.
(g) Jury
Waivers.
THE
PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY.
(h) Settlement
Proceedings.
All
aspects of any settlement proceedings, including discovery, testimony and other
evidence, negotiations and communications pursuant to this Section
11.8,
briefs
and the award shall be held confidential by each Party and the arbitrators,
and
shall be treated as compromise and settlement negotiations for the purposes
of
the Federal and State Rules of Evidence.
11.9 Notices
and Addresses.
Any
notice, request, instruction, waiver or other communication to be given
hereunder by either Party shall be in writing and shall be considered duly
delivered if personally delivered, mailed by certified mail with the postage
prepaid (return receipt requested), sent by messenger or overnight delivery
service, or sent by facsimile to the addresses of the Parties as
follows:
35
MLP:
|
000
- 00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
President
|
with
a copy to:
|
000
- 00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
|Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
General Counsel
|
GSR
HOLDINGS:
|
Gas
Supply Resources Holdings, Inc.
000
- 00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
President
|
with
a copy to:
|
Gas
Supply Resources Holdings, Inc.
000
- 00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
General Counsel
|
or
at
such other address as either Party may designate by written notice to the other
Party in the manner provided in this Section
11.9.
Notice
by mail shall be deemed to have been given and received on the third (3rd)
day
after posting. Notice by messenger, overnight delivery service, facsimile
transmission (with answer-back confirmation) or personal delivery shall be
deemed given on the date of actual delivery.
11.10 Press
Releases.
Except
as may otherwise be required by securities Laws and public announcements or
disclosures that are, in the reasonable opinion of the Party proposing to make
the announcement or disclosure, legally required to be made, there shall be
no
press release or public communication concerning the transactions contemplated
by this Agreement by either Party except with the prior written consent of
the
Party not originating such press release or communication, which consent shall
not be unreasonably withheld or delayed. MLP and GSR HOLDINGS will consult
in
advance on the necessity for, and the timing and content of, any communications
to be made to the public and, subject to legal constraints, to the form and
content of any application or report to be made to any Governmental Authority
that relates to the transactions contemplated by this Agreement.
36
11.11 Offset.
Nothing
contained herein or in any Transaction Document shall create a right of offset
or setoff for any Party under this Agreement and each Party hereby waives and
disclaims any such right of offset or setoff under all applicable Law (including
common Law).
11.12 No
Partnership; Third Party Beneficiaries.
Nothing
in this Agreement shall be deemed to create a joint venture, partnership, tax
partnership, or agency relationship between the Parties. Nothing in this
Agreement shall provide any benefit to any Third Person or entitle any Third
Person to any claim, cause of action, remedy or right of any kind, it being
the
intent of the Parties that this Agreement shall not be construed as a
third-party beneficiary contract; provided, however, that the indemnification
provisions of Article
X
shall
inure to the benefit of the MLP Indemnitees and the GSR HOLDINGS Indemnitees
as
provided therein.
11.13 Negotiated
Transaction.
The
provisions of this Agreement were negotiated by the Parties, and this Agreement
shall be deemed to have been drafted by both Parties.
THE
PARTIES HAVE signed this Agreement by their duly authorized officials as of
the
date first set forth above.
[Signatures
begin on next page]
37
GAS SUPPLY RESOURCES HOLDINGS, INC. | ||
|
|
|
By: | /s/ Xxxx X. Xxxxxxx | |
Name:Xxxx X. Xxxxxxx |
||
Title: Group Vice President and Chief Financial Officer |
DCP MIDSTREAM, LLC | ||
|
|
|
By: | /s/ Xxxx X. Xxxxxxx | |
Name:Xxxx X. Xxxxxxx |
||
Title: Group Vice President and Chief Financial Officer |
DCP MIDSTREAM PARTNERS, LP | ||
|
|
|
By: | DCP MIDSTREAM GP, LP, | |
Its General Partner | ||
By: DCP MIDSTREAM GP, LLC, | ||
Its General Partner | ||
By: | /s/ Xxxx X. Xxxxx | |
Name:Xxxx X. Xxxxx |
||
Title: Vice President |