OMNIBUS AGREEMENT AMONG WILLIAMS ENERGY SERVICES, LLC WILLIAMS ENERGY, L.L.C. WILLIAMS DISCOVERY PIPELINE LLC WILLIAMS PARTNERS HOLDINGS LLC WILLIAMS PARTNERS GP LLC WILLIAMS PARTNERS L.P. WILLIAMS PARTNERS OPERATING LLC AND (FOR PURPOSES OF ARTICLES...
Exhibit 10.1
Execution Copy
AMONG
XXXXXXXX ENERGY SERVICES, LLC
XXXXXXXX ENERGY, L.L.C.
XXXXXXXX DISCOVERY PIPELINE LLC
XXXXXXXX PARTNERS HOLDINGS LLC
XXXXXXXX PARTNERS GP LLC
XXXXXXXX PARTNERS X.X.
XXXXXXXX PARTNERS OPERATING LLC
AND
(FOR PURPOSES OF ARTICLES V AND VI ONLY) THE XXXXXXXX COMPANIES, INC.
THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the Closing Date, among
Xxxxxxxx Energy Services, LLC, a Delaware limited liability company (“XXX”), Xxxxxxxx Energy,
L.L.C., a Delaware limited liability company (“Xxxxxxxx Energy”), Xxxxxxxx Discovery Pipeline LLC,
a Delaware limited liability company (“Xxxxxxxx Discovery”), Xxxxxxxx Partners Holdings LLC, a
Delaware limited liability company (“Xxxxxxxx Holdings,” and with XXX, Xxxxxxxx Energy and Xxxxxxxx
Discovery, the “Xxxxxxxx Indemnitors”), Xxxxxxxx Partners GP LLC, a Delaware limited liability
company (including any permitted successors and assigns under the MLP Agreement (as defined
herein)), the “General Partner”), for itself and on behalf of the MLP in its capacity as general
partner, Xxxxxxxx Partners L.P., a Delaware limited partnership (the “MLP”), Xxxxxxxx Partners
Operating LLC, a Delaware limited liability company (the “OLLC”), and, for purposes of Articles V
and VI hereof only, The Xxxxxxxx Companies, Inc., a Delaware corporation (“Xxxxxxxx”). The
above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively
as the “Parties.”
R E C I T A L S:
The Parties desire by their execution of this Agreement to evidence their understanding, (i)
as more fully set forth in Article II and Article III of this Agreement, with respect to certain
indemnification and reimbursement obligations of the Parties, (ii) as more fully set forth in
Article IV of this Agreement, with respect to the partial credit to be provided to the MLP with
respect to general and administrative services provided by the Xxxxxxxx Entities (as defined
herein) for and on behalf of the Partnership Group (as defined herein) and (iii) as more fully set
forth in Article V of this Agreement, with respect to grants of intellectual property from Xxxxxxxx
to the Licensees (as defined herein).
In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
Definitions
1.1 Definitions. (a) Capitalized terms used herein but not defined shall have the meanings
given them in the MLP Agreement.
(b) As used in this Agreement, the following terms shall have the respective meanings set
forth below:
“Additional Expenditures” has the meaning given such term in Section 3.1 of this
Agreement.
“Agreement” means this Omnibus Agreement, as it may be amended, modified, or
supplemented from time to time in accordance with the terms hereof.
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“Cap” has the meaning give n such term in Section 2.4(a).
“Change of Control” means, with respect to any Person (the “Applicable Person”), any of
the following events: (i) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the Applicable Person’s
assets to any other Person, unless immediately following such sale, lease, exchange or
other transfer such assets are owned, directly or indirectly, by the Applicable Person; (ii)
the dissolution or liquidation of the Applicable Person; (iii) the consolidation or merger
of the Applicable Person with or into another Person pursuant to a transaction in which the
outstanding Voting Securities of the Applicable Person are changed into or exchanged for
cash, securities or other property, other than any such transaction where (a) the
outstanding Voting Securities of the Applicable Person are changed into or exchanged for
Voting Securities of the surviving corporation or its parent and (b) the holders of the
Voting Securities of the Applicable Person immediately prior to such transaction own,
directly or indirectly, not less than a majority of the outstanding Voting Securities of the
surviving corporation or its parent immediately after such transaction; and (iv) a “person”
or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act) being or
becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
of more than 50% of all of the then outstanding Voting Securities of the Applicable Person,
except in a merger or consolidation which would not constitute a Change of Control under
clause (iii) above.
“Closing Date” means the date of the closing of the initial public offering of common
units representing limited partner interests in the MLP.
“Common Unit” has the meaning given such term in the MLP Agreement.
“Conflicts Committee” has the meaning given such term in the MLP Agreement.
“Xxxxxx Plumes” has the meaning given such term in Section 2.1(b).
“Covered Environmental Losses” means all environmental losses, damages, liabilities,
claims, demands, causes of action, judgments, settlements, fines, penalties, costs and
expenses (including, without limitation, costs and expenses of any Environmental Activity,
court costs and reasonable attorney’s and experts’ fees) of any and every kind or character,
suffered or incurred by the Partnership Group by reason of or arising out of:
(i) any violation or correction of violation, including without limitation
performance of any Environmental Activity, of Environmental Laws; or
(ii) any event, omission or condition associated with ownership or operation of the
Assets (including, without limitation, the exposure to or presence of Hazardous Substances
on, under, about or migrating to or from the Assets or the exposure to or Release of
Hazardous Substances arising out of operation of the Assets at non-Asset locations)
including, without limitation, (A) the cost and expense of any Environmental Activities, (B)
the cost or expense of the preparation and implementation of any closure,
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remedial or corrective action or other plans required or necessary under Environmental
Laws and (C) the cost and expense for any environmental or toxic tort pre-trial, trial or
appellate legal or litigation support work; provided, in the case of clauses (A) and (B),
such cost and expense shall not include the costs of and associated with project management
and soil and ground water monitoring;
but only to the extent that such violation complained of under clause (i), or such events or
conditions included in clause (ii), occurred before the Closing Date.
“Covered Shipper Refunds” has the meaning given such term in Section 3.2 of this
Agreement.
“Discovery” means, collectively, Discovery Producer Services LLC, a Delaware limited
liability company, and its wholly owned subsidiary Discovery Gas Transmission LLC, a
Delaware limited liability company.
“Discovery LLC Agreement” means the Third Amended and Restated Limited Liability
Company Agreement of Discovery Producer Services LLC, dated
June 13, 2005 to be effective on
the Effective Date (as defined therein), by and among Duke Energy Field Services, LP,
Xxxxxxxx Energy and the OLLC.
“Discovery Assets” means the assets owned by Discovery as of the Closing Date.
“Environmental Activities” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup, or abatement that is required
or necessary under any applicable Environmental Law, including, but not limited to,
institutional or engineering controls or participation in a governmental voluntary cleanup
program to conduct voluntary investigatory and remedial actions for the clean-up, removal or
remediation of Hazardous Substances that exceed actionable levels established pursuant to
Environmental Laws, or participation in a supplemental environmental project in partial or
whole mitigation of a fine or penalty.
“Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental
Permits and other legally enforceable requirements and rules of common law relating to (a)
pollution or protection of the environment or natural resources including, without
limitation, the federal Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Hazardous Materials
Transportation Act, the Marine Mammal Protection Act, the Endangered Species Act, the
National Environmental Policy Act, and other environmental conservation and protection laws,
each as amended through the Closing Date, (b) any Release or threatened Release of, or any
exposure of any Person or property
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to, any Hazardous Substances and (c) the generation, manufacture, processing,
distribution, use, treatment, storage, transport, or handling of any Hazardous Substances.
“Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance, or other authorization required under or issued
pursuant to any applicable Environmental Law.
“Environmental Policy” means that certain Pollution Legal Liability Select Clean-up
Cost Cap Insurance Policy, Policy number PLCC 1959233, effective as of April 30, 2004,
issued by American International Specialty Lines Ins. Co., as modified by the related
declarations and endorsements attached thereto, and held by Mid-Continent Fractionation &
Storage, LLC, as first named insured, pursuant to an assignment from WMNGL.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“General Partner” has the meaning given such term in the introduction to this
Agreement.
“Hazardous Substance” means (a) any substance that is designated, defined or classified
as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or
hazardous substance, or terms of similar meaning, or that is otherwise regulated under any
Environmental Law, including, without limitation, any hazardous substance as defined under
the Comprehensive Environmental Response, Compensation and Liability Act, as amended, (b)
oil as defined in the Oil Pollution Act of 1990, as amended, including oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other refined
petroleum hydrocarbons and petroleum products and (c) radioactive materials, asbestos
containing materials or polychlorinated biphenyls.
“Indemnified Party” means the Partnership Group or the Xxxxxxxx Entities, as the case
may be, in their capacity as the parties entitled to indemnification in accordance with
Article II.
“Indemnifying Party” means either the Partnership Group or the Xxxxxxxx Indemnitors, as
the case may be, in their capacity as the parties from whom indemnification may be required
in accordance with Article II.
“KDHE” means the Kansas Department of Health and Environement.
“Licensees” means, for purposes of Article V hereof, the Partnership Entities.
“Licensor” means, for purposes of Article V hereof, Xxxxxxxx.
“Losses” has the meaning given such term in Section 2.1(b).
“MAPCO” means MAPCO, Inc., a Delaware corporation and a wholly owned indirect
subsidiary of Xxxxxxxx.
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“Marks” means all trademarks, tradenames, logos and/or service marks identified on
Schedule I attached hereto.
“MLP” has the meaning given such term in the introduction to this Agreement.
“MLP Agreement” means the Amended and Restated Agreement of Limited Partnership of the
MLP, dated as of the Closing Date, as such agreement is in effect on the Closing Date, to
which reference is hereby made for all purposes of this Agreement. An amendment or
modification to the MLP Agreement subsequent to the Closing Date shall be given effect for
the purposes of this Agreement only if it has received the approval of the Conflicts
Committee that would be required, if any, pursuant to Section 6.6 hereof if such amendment
or modification were an amendment or modification of this Agreement.
“MLP Assets” means the pipeline, natural gas fractionator, NGL storage facility or
related equipment or asset, or portion thereof, conveyed, contributed or otherwise
transferred or intended to be conveyed, contributed or otherwise transferred to any member
of the Partnership Group, or owned by or necessary for the operation of the business,
properties or assets or any member of the Partnership Group, prior to or as of the Closing
Date; provided, the MLP Assets do not include the Discovery Assets.
“OLLC” has the meaning given such term in the introduction to this Agreement.
“Organizational Documents” means certificates of incorporation, by-laws, certificates
of formation, limited liability company operating agreements, certificates of limited
partnership or limited partnership agreements or other formation or governing documents of a
particular entity.
“Partnership Entities” means the General Partner and each member of the Partnership
Group.
“Partnership Group” means the MLP, the OLLC and any Subsidiary of the OLLC; provided,
the Partnership Group does not include Discovery.
“Person” means an individual, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or any other entity.
“Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping, or disposing into the environment.
“Subsidiary” has the meaning given such term in the MLP Agreement.
“Tahiti AFE” means the AFE (approval for expenditure) approved by the management
committee of Discovery, as of July 22, 2005, with respect to the construction of the Tahiti
Lateral and the Upstream Pipeline.
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“Tahiti Construction Agreement” means the Coordination and Construction Agreement,
dated July 21, 2005, by and among Discovery Producer Services, LLC, Shell Gulf of Mexico
Inc., Chevron U.S.A. Inc. and Statoil Gulf of Mexico LLC.
“Tahiti Escrow Account” means the escrow account to fund the pro rata portion of
expenditures covered by the Tahiti AFE attributable to Xxxxxxxx and the MLP established by
Discovery pursuant to Article XV of the Coordination and Construction Agreement, dated July
21, 2005, by and among Discovery, Shell Gulf of Mexico Inc., Chevron U.S.A. Inc. and Statoil
Gulf of Mexico LLC.
“Tahiti Lateral” has the meaning assigned to such term in the Tahiti Construction
Agreement.
“UOP” means UOP Process Division (a division of Universal Oil Products Company, a
Delaware corporation).
“Upstream Pipeline” has the meaning assigned to such term in the Tahiti Construction
Agreement.
“Voting Securities” means securities of any class of Person entitling the holders
thereof to vote in the election of, or to appoint, members of the board of directors or
other similar governing body of the Person.
“XXX” has the meaning given such term in the introduction to this Agreement.
“Xxxxxxxx” has the meaning given such term in the introduction to this Agreement.
“Xxxxxxxx Discovery” has the meaning given such term in the introduction to this
Agreement.
“Xxxxxxxx Energy” has the meaning given such term in the introduction to this
Agreement.
“Xxxxxxxx Entities” means Xxxxxxxx and any Person controlled by Xxxxxxxx, other than
the Partnership Entities. For purposes of this definition, “control” means the possession,
direct or indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of Voting Securities, by contract or
otherwise.
“Xxxxxxxx Holdings” has the meaning given such term in the introduction to this
Agreement.
“Xxxxxxxx Indemnitors” has the meaning given such term in the introduction to this
Agreement.
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“WMNGL” means Xxxxxxxx Midstream Natural Gas Liquids, Inc., a Delaware corporation.
ARTICLE II
Indemnification
2.1 Environmental Indemnification.
(a) Subject to the provisions of Section 2.4 and Section 2.5, the Xxxxxxxx Indemnitors
shall indemnify, defend and hold harmless the Partnership Group from and against any Covered
Environmental Losses relating to the MLP Assets and the Discovery Assets for a period of
three (3) years from the Closing Date; provided, the Xxxxxxxx Indemnitors shall only be
obligated to indemnify, defend and hold harmless the Partnership Group for forty percent
(40.0%) of any Covered Environmental Losses associated with the Discovery Assets.
(b) Without limiting the indemnity provided pursuant to Section 2.1(a), subject to the
provisions of Section 2.4 and Section 2.5, the Xxxxxxxx Indemnitors shall also indemnify,
defend and hold harmless the Partnership Group from and against any losses, damages,
liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties,
costs and expenses (including, without limitation, court costs and reasonable attorney’s and
experts’ fees) of any and every kind or character (collectively, “Losses”) suffered or
incurred by the Partnership Group by reason of or arising out of:
(i) the completion of the currently ongoing or scheduled remediation projects
at the storage caverns in or in the vicinity of Conway, Kansas pursuant to consent
orders issued by the Kansas Department of Health and Environment, as more fully
described on Schedule II hereto (the “Xxxxxx Plumes”), excluding costs of
and associated with project management and soil and groundwater monitoring or
operation and maintenance relating thereto;
(ii) the performance of any Environmental Activities arising out of or
associated with the natural gas liquids and other hydrocarbons in localized
groundwater resources around two abandoned storage caverns in Conway, Kansas not
covered by the consent orders referred to in clause (i) above;
(iii) the repair and/or replacement costs as well as any fines and penalties
directly associated with the Louisiana Department of Environmental Quality’s Notice
of Potential Penalty issued for the flare at Discovery’s Fractionation Plant in
Paradis, St. Xxxxxxx Xxxxxx, Louisiana;
(iv) the performance of any Environmental Activities arising out of or
associated with the discontinuance of use and any abandonment of Discovery’s shared
concrete storage tank which resides on a Chevron affiliate’s property adjacent to
Discovery’s Fractionation Plant, in Paradis, St. Xxxxxxx Xxxxxx, Louisiana; and
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(v) the completion of the construction and maintenance of the Xxxxx Mitigation
Project Phase II, related to the Louisiana Department of Natural Resources Coastal
Management Division and the U.S. Army Corps of Engineers Permits granted on April
23, 1998, and which includes administratively approved wetland mitigation for 37.211
acres of marshland that was impacted by the April-October 1998 construction of the
Discovery Gas Transmission natural gas pipeline;
provided, however, that in the case of such events or conditions described in clauses (ii),
(iii), (iv) and (v) above, such indemnification obligations shall survive for three (3)
years from the Closing Date; and, provided, further, that in the case of such events or
conditions described in clauses (iii), (iv) and (v) above, that the Xxxxxxxx Indemnitors
shall only be obligated to indemnify, defend and hold harmless the Partnership Group for
forty percent (40.0%) of the Losses associated with such events or conditions.
(c) The Partnership Group shall indemnify, defend and hold harmless the Xxxxxxxx
Entities from and against any Covered Environmental Losses relating to the MLP Assets
occurring after the Closing Date, except to the extent that the Partnership Group is
indemnified with respect to any of such Covered Environmental Losses under Section 2.1(a) or
2.1(b).
2.2 Indemnification for Certain Repair and Compliance Costs. Subject to the provisions of
Section 2.4 and Section 2.5, the Xxxxxxxx Indemnitors shall also indemnify, defend and hold
harmless the Partnership Group from and against any Losses suffered or incurred by the
Partnership Group by reason of or arising out of:
(a) the repair and/or replacement of the overburden along the Carbonate Trend natural
gas pipeline as a result of erosion caused by Hurricane Xxxx in 2004;
(b) the compliance with the KDHE-required installation of wellhead control equipment
and well meters associated with the following KDHE regulations, which pertain to underground
liquified petroleum gas or hydrocarbon storage cavern/well permits: Kan. Admin.
Regs. §§ 28-45a-1 to 28-45a-19 (2003) and Kan. Admin. Regs. §§ 28-45-2a to
28-45-30 (2003)) ; and
(c) the repair and/or replacement costs associated with changing piping and flow
processes and the installation of a new separator tank that are directly associated with the
discontinuance of Discovery’s shared concrete storage tank which resides on a Chevron
affiliate’s property adjacent to Discovery’s Fractionation Plant in Paradis, St. Xxxxxxx
Xxxxxx, Louisiana;
provided, however, that in the case of such events or conditions described in clause (c)
above, the Xxxxxxxx Indemnitors shall only be obligated to indemnify, defend and hold
harmless the Partnership Group for forty percent (40.0%) of the Losses associated with such
events or conditions.
2.3 Additional Indemnification
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(a) Subject to the provisions of Section 2.4 and Section 2.5, the Xxxxxxxx Indemnitors
shall indemnify, defend and hold harmless the Partnership Group from and against any Losses
suffered or incurred by the Partnership Group by reason of or arising out of:
(i) the failure of the Partnership Group to be the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests in and to the
lands on which are located any MLP Assets, and such failure renders the Partnership
Group liable or unable to use or operate the MLP Assets in substantially the same
manner that the Pipeline Assets were used and operated by the Xxxxxxxx Entities
immediately prior to the Closing Date;
(ii) the failure of the Partnership Group to have on the Closing Date any
consent or governmental permit necessary to allow any such MLP Assets referred to in
clause (ii) of this Section 2.1 to cross the roads, waterways, railroads and other
areas upon which any such Pipeline Assets are located as of the Closing Date, and
such failure renders the Partnership Group unable to use or operate the MLP Assets
in substantially the same manner that the MLP Assets were owned and operated by the
Xxxxxxxx Entities immediately prior to the Closing Date;
(iii) all federal, state and local income tax liabilities attributable to the
ownership or operation of the MLP Assets prior to the Closing Date, including any
such income tax liabilities of the Xxxxxxxx Entities that may result from the
consummation of the formation transactions for the Partnership Group, but excluding
any federal, state and local income taxes reserved on the books of the Partnership
Group as of the Closing Date; and
(iv) the failure of MAPCO to assign or extend that certain License Agreement,
dated March 21, 1973, between MAPCO and UOP, to a member of the Partnership Group
prior to or on the Closing Date or any payment made by a member of the Partnership
Group to obtain a consent from UOP to permit the assignment or extension of such
License Agreement to a member of the Partnership Group;
provided, however, that, in the case of clauses (i) and (ii) above, such indemnification
obligations shall survive for three (3) years from the Closing Date; that in the case of
clause (iii) above, such indemnification obligations shall survive until sixty (60) days
after the expiration of any applicable statute of limitations; and that in the case of
clause (iv) above, such indemnification obligations shall survive without termination; and
provided, further, that the indemnification obligations under clauses (i) and (ii) above do
not include any pipeline or related equipment owned by Discovery.
(b) In addition to and not in limitation of the indemnification provided under this
Article II, the Partnership Group shall indemnify, defend, and hold harmless the Xxxxxxxx
Entities from and against any Losses suffered or incurred by the Xxxxxxxx
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Entities by reason of or arising out of events and conditions associated with the
operation of the MLP Assets and occurring on or after the Closing Date.
2.4 Limitations Regarding Indemnification.
(a) The aggregate liability of the Xxxxxxxx Indemnitors under Sections 2.1(a), 2.1(b)
and 2.2 shall not exceed $14.0 million (the “Cap”); provided, however, the Cap shall be
reduced by the amount of any recoveries under the Environmental Policy. To the extent that
any of the events and conditions described in such Sections 2.1(a), 2.1(b) and 2.2 are
insured against under the Environmental Policy, the Partnership Group agrees to use
commercially reasonable efforts to pursue the recovery of such Losses under the
Environmental Policy for a reasonable period of time before seeking indemnification with
respect thereto from the Xxxxxxxx Indemnitors under this Agreement. In the case of
recoveries under the Environmental Policy made after indemnification has been provided by
the Xxxxxxxx Indemnitors in respect of a Loss pursuant to Section 2.1(a), 2.1(b) or 2.2, the
Partnership Group shall promptly remit to the Xxxxxxxx Indemnitors an amount equal to the
amount of such recovery.
(b) No claims may be made against the Xxxxxxxx Indemnitors for indemnification pursuant
to Sections 2.1(a), 2.1(b) or 2.2 unless the aggregate dollar amount of such claims for
indemnification exceed $250,000, after such time the Xxxxxxxx Indemnitors shall be liable
for the full amount of such claims.
(c) Notwithstanding anything herein to the contrary, in no event shall the Xxxxxxxx
Indemnitors have any indemnification obligations under this Agreement for claims made as a
result of additions to or modifications of Environmental Laws promulgated after the Closing
Date.
2.5 Indemnification Procedures.
(a) The Indemnified Party agrees that within a reasonable period of time after it
becomes aware of facts giving rise to a claim for indemnification pursuant to this Article
II, they will provide notice thereof in writing to the Indemnifying Party specifying the
nature of and specific basis for such claim; provided, however, that the Indemnified Party
shall not submit claims more frequently than once a calendar quarter (or twice in the case
of the last calendar quarter prior to the expiration of the applicable indemnity coverage
under this Agreement).
(b) The Indemnifying Party shall have the right to control all aspects of the defense
of (and any counterclaims with respect to) any claims brought against the Indemnified Party
that are covered by the indemnification set forth in this Article II, including, without
limitation, the selection of counsel, determination of whether to appeal any decision of any
court and the settling of any such matter or any issues relating thereto; provided, however,
that no such settlement shall be entered into without the consent (which consent shall not
be unreasonably withheld, conditioned or delayed) of the Indemnified Party unless it
includes a full release of the Indemnified Party from such matter or issues, as the case may
be.
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(c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party with
respect to all aspects of the defense of any claims covered by the indemnification set forth
in Article II, including, without limitation, the prompt furnishing to the Indemnifying
Party of any correspondence or other notice relating thereto that the Indemnified Party may
receive, permitting the names of the Indemnified Party to be utilized in connection with
such defense, the making available to the Indemnifying Party of any files, records or other
information of the Indemnified Party that the Indemnifying Party considers relevant to such
defense and the making available to the Indemnifying Party of any employees of the
Indemnified Party; provided, however, that in connection therewith the Indemnifying Party
agrees to use reasonable efforts to minimize the impact thereof on the operations of the
Indemnified Party and further agrees to maintain the confidentiality of all files, records
and other information furnished by the Indemnified Party pursuant to this Section 2.5. In
no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying
Party as set forth in the immediately preceding sentence be construed as imposing upon the
Indemnified Party an obligation to hire and pay for counsel in connection with the defense
of any claims covered by the indemnification set forth in this Article II; provided,
however, that the Indemnified Party may, at its own option, cost and expense, hire and pay
for counsel in connection with any such defense. The Indemnifying Party agrees to keep any
such counsel hired by the Indemnified Party reasonably informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole control over such
defense.
(d) In determining the amount of any loss, cost, damage or expense for which the
Indemnified Party is entitled to indemnification under this Agreement, the gross amount of
the indemnification will be reduced by (i) any insurance proceeds realized by the
Indemnified Party, and such correlative insurance benefit shall be net of any incremental
insurance premium that becomes due and payable by the Indemnified Party as a result of such
claim and (ii) all amounts recovered by the Indemnified Party under contractual indemnities
from third Persons. The Partnership hereby agrees to use commercially reasonable efforts to
realize any applicable insurance proceeds or amounts recoverable under such contractual
indemnities.
ARTICLE III
Additional Reimbursement Obligations
Additional Reimbursement Obligations
3.1 Tahiti Reimbursement. The Xxxxxxxx Indmenitors hereby agree to contribute to the MLP
funds in an amount equal to forty percent (40.0%) of any Additional Expenditures by
Discovery covered by the Tahiti AFE; provided, the Xxxxxxxx Indemnitors shall have no
obligation to make any contribution to the MLP pursuant to this Section 3.1 until all
amounts in the Tahiti Escrow Account attributable to the MLP have been withdrawn by
Discovery and used to fund expenditures covered by the Tahiti AFE; and, provided, further,
the maximum amount that the Xxxxxxxx Indemnitors shall be required to contribute to the MLP
pursuant to this Section 3.1 shall be $3.4 million. For purposes of this Article III,
“Additional Expenditures” shall mean those expenditures by Discovery covered by the Tahiti
AFE in excess of $61.0 million.
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3.2 Reimbursement for Shipper Refunds. The Xxxxxxxx Indemnitors hereby agree to contribute
to the MLP funds in an amount equal to forty percent (40.0%) of any amounts that the FERC
requires Discovery to refund to shippers for retained system gas gains or over-recovery of
lost and unaccounted for gas in excess of $4.0 million; provided, that the reimbursement
obligation of the Xxxxxxxx Indemnitors under this Section 3.2 shall only apply to refunds in
excess of such $4.0 million amount (“Covered Shipper Refunds”). For purposes of this
Section 3.2, in-kind refunds of natural gas to shippers will be valued at the cost to
Discovery for purchases of natural gas in the month such in-kind repayments occur.
3.3 Reimbursement Procedures. The Xxxxxxxx Indemnitors shall have no obligation to make any
contribution to the MLP pursuant to Section 3.1 until the three (3) business days following
receipt by the Xxxxxxxx Indemnitors of written notice from the MLP that either (a) the MLP
has received a written request from Discovery pursuant to Section 3.2 of the Discovery LLC
Agreement for the MLP to make a capital contribution to Discovery for the express purpose of
funding Additional Expenditures covered by the Tahiti AFE or (b) Discovery has actually paid
or incurred Additional Expenditures covered by the Tahiti AFE. The Xxxxxxxx Indemnitors
shall have no obligation to make any contribution to the MLP pursuant to Section 3.2 until
three (3) business days following receipt by the Xxxxxxxx Indemnitors of written notice from
the MLP that either (a) the MLP has received a written request from Discovery pursuant to
Section 3.2 of the Discovery LLC Agreement for the MLP to make a capital contribution to
Discovery for the express purpose of funding Covered Shipper Refunds or (b) Discovery has
actually paid or incurred Covered Shipper Refunds. The Xxxxxxxx Indemnitors shall not be
required to make a contribution to the MLP in response to receipt of such notices more
frequently than once each calendar quarter. Upon receipt of such notice, the Xxxxxxxx
Indemnitors shall promptly contribute to the MLP funds in amount equal to forty percent
(40.0%) of, as applicable, the amount of Additional Expenditures covered by the Tahiti AFE
or Covered Shipper Refunds specified in such notice.
ARTICLE IV
Partial Credit for General and Administrative Expenses
4.1 General. Pursuant to the MLP Agreement, the Partnership Group is required to reimburse
the General Partner for, among other things, all general and administrative expenses
incurred or payments made by the General Partner or another Xxxxxxxx Entity on behalf of the
Partnership Group. Pursuant to this Article IV, the General Partner will provide an annual
credit to the Partnership Group for a portion of the amount of such reimbursement obligation
with respect to general and administrative expenses, with such credit to be recognized
ratably over the course of the Partnership’s fiscal year. The amount of the credit for
general and administrative expenses to be provided by the General Partner in each fiscal
year, or portion thereof, from the Closing Date shall be:
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(a) for the fiscal year ending December 31, 2005, the amount of the credit shall be
$3.9 million times a fraction the number of which is the number of days from the Closing
Date through December 31, 2005 and the denominator of which is 365;
(b) for the fiscal year ending December 31, 2006, the amount of the credit shall be
$3.2 million;
(c) for the fiscal year ending December 31, 2007, the amount of the credit shall be
$2.4 million;
(d) for the fiscal year ending December 31, 2008, the amount of the credit shall be
$1.6 million; and
(e) for the fiscal year ending December 31, 2009, the amount of this credit shall be
$0.8 million.
After December 31, 2009, the Partnership Group shall not be entitled to receive any credit
from the General Partner or any other Xxxxxxxx Entity relating to the Partnership Group’s
reimbursement obligations under the MLP Agreement.
ARTICLE V
License Agreement
License Agreement
5.1 Grant of License. Subject to the terms and conditions herein, Licensor hereby grants to
Licensees the right and license to use the Marks solely in connection with the Licensees’
businesses and the services performed therewith within the United States during the term of
this Agreement.
5.2 Restrictions on Marks. In order to ensure the quality of uses under the Marks, and to
protect the goodwill of the Marks, Licensees agree as follows:
(a) Licensees will only use the Marks in formats approved by Licensor and only in
strict association with the Licensees’ businesses and the services performed therewith;
(b) Prior to publishing any new format or appearance of the Marks or any advertising or
promotional materials that incorporate the Marks, Licensees shall first provide such format,
appearance or materials to Licensor for its approval. If Licensor does not inform Licensees
in writing within fourteen (14) days from the date of the receipt of such new format,
appearance, or materials that such new format, appearance, or materials is unacceptable,
then such new format, appearance or materials shall be deemed to be acceptable and approved
by Licensor. Licensor may withhold approval of any proposed changes to the format,
appearance or materials which Licensees propose to use in Licensor’s sole discretion; and
(c) Licensees shall not use any other trademarks, service marks, trade names or logos
in connection with the Marks or use the Marks or any trademark or service xxxx
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confusingly similar to the Marks after the termination of this Agreement. Licensor
will not use the Marks in such a manner so as to impair the validity or enforceability or in
any way disparage or dilute the Marks.
5.3 Ownership. Licensor shall own all right, title and interest, including all goodwill
relating thereto, in and to the Marks, and all trademark rights embodied therein shall at
all times be solely vested in Licensor. Licensees have no right, title, interest or claim of
ownership in the Marks, except for the licenses granted in this Agreement. All use of the
Marks shall inure to the benefit of Licensor. Licensees agree that they will not attack the
title of Licensor in and to the Marks.
5.4 Confidentiality. The Licensees shall maintain in strictest confidence all confidential
or nonpublic information or material disclosed by Licensors and in the materials supplied
hereunder in connection with the license of the Marks, whether in writing or orally and
whether or not marked as confidential. Such confidential information includes, but is not
limited to, algorithms, inventions, ideas, processes, computer system architecture and
design, operator interfaces, operational systems, technical information, technical
specifications, training and instruction manuals, and the like. In furtherance of the
foregoing confidentiality obligation, Licensees shall limit disclosure of such confidential
information to those of their employees, contractors or agents having a need to access the
confidential information for the purpose of exercising rights granted hereunder.
5.5 Estoppel. Nothing in this Agreement shall be construed as conferring by implication,
estoppel, or otherwise upon Licensees (a) any license or other right under the intellectual
property rights of Licensor other than the license granted herein to the Marks as set forth
expressly herein or (b) any license rights other than those expressly granted herein.
5.6 Warranties; Disclaimers.
(a) The Licensor represents and warrants that (i) it owns and has the right to license
the Marks licensed under this Agreement and (ii) the Marks do not infringe upon the rights
of any third parties.
(b) EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN SECTION 5.6(a), LICENSOR
DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR
WRITTEN) WITH RESPECT TO THE SUBJECT MATTER HEREOF, OR ANY PART THEREOF, INCLUDING ANY AND
ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR
ANY PURPOSE (WHETHER ANY LICENSEE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS
OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF
CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.
5.7 Indemnification.
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(a) Each Licensee shall jointly and severally, and to the fullest extent permitted by
applicable law, defend, indemnify and hold harmless the Licensor and its successors and
assigns authorized hereunder and any of their respective officers, directors, employees,
agents and representatives from and against any and all claims, demands, damages, losses,
costs and expenses arising out of or related in any way to this Article V to the extent such
claims are attributable to such Licensee’s failure to comply with its obligations under this
Article V or such Licensee’s negligence or the negligence of such Licensee’s employees,
agents, subcontractors or other representatives regarding this Article V.
(b) Licensor shall jointly and severally, and to the fullest extent permitted by
applicable law, defend, indemnify and hold harmless the Licensees and their respective
successors and assigns authorized hereunder and any of their respective officers, directors,
employees, agents and representatives from and against any and all claims, demands, damages,
losses, costs and expenses arising out of or related in any way to this Article V to the
extent such claims are attributable to (i) Licensor’s failure to comply with its obligations
under this Article V, (ii) any claim of infringement or ownership asserted by a third party
as to the Marks or (iii) Licensor’s negligence or the negligence of Licensor’s employees,
agents, subcontractors or other representatives regarding this Article V.
5.8 Remedies and Enforcement. Each Licensee acknowledges and agrees that a breach by such
Licensee of its obligations under this Article V would cause irreparable harm to Licensor
and that monetary damages would not be adequate to compensate Licensor. Accordingly, each
Licensee agrees that Licensor shall be entitled to immediate equitable relief, including,
without limitation, a temporary or permanent injunction, to prevent any threatened, likely
or ongoing violation by such Licensee, without the necessity of posting bond or other
security. Licensor’s right to equitable relief shall be in addition to other rights and
remedies available to Licensor for monetary damages or otherwise.
5.9 In the Event of Termination. In the event of termination of this Agreement pursuant to
Section 6.4 or otherwise, the Licensees’ right to utilize or possess the Marks licensed
under this Agreement shall automatically cease, and concurrently with such termination of
this Agreement, the Licensees shall (i) cease all use of the Marks and shall adopt new
trademarks, service marks, and trade names that are not confusingly similar to the Marks and
(ii) no later than ninety (90) days following the termination of this Agreement, the General
Partner shall have caused each of the Partnership Entities to change its legal name so that
there is no longer any reference therein to the name “Xxxxxxxx” or any variation, derivation
or abbreviation thereof, and in connection therewith, the General Partner shall cause each
such Partnership Entity to make all necessary filings of certificates with the Secretary of
State of the State of Delaware and to otherwise amend its Organizational Documents by such
date.
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5.10 Acknowledgment. Each member of the Partnership Group hereby acknowledges that Xxxxxxxx
is a party to this Agreement only for purposes of the provisions of this Article V and
Article VI only and no other provision of this Agreement.
ARTICLE VI
Miscellaneous
6.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and
governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle
that might refer the construction or interpretation of this Agreement to the laws of another
state. Each Party hereby submits to the jurisdiction of the state and federal courts in the
State of Texas and to venue in Texas.
6.2 Notice. All notices or requests or consents provided for or permitted to be given
pursuant to this Agreement must be in writing and must be given by depositing same in the
United States mail, addressed to the Person to be notified, postpaid, and registered or
certified with return receipt requested or by delivering such notice in person or by
telecopier or telegram to such Party. Notice given by personal delivery or mail shall be
effective upon actual receipt. Notice given by telegram or telecopier shall be effective
upon actual receipt if received during the recipient’s normal business hours, or at the
beginning of the recipient’s next business day after receipt if not received during the
recipient’s normal business hours. All notices to be sent to a Party pursuant to this
Agreement shall be sent to or made at the address set forth below or at such other address
as such Party may stipulate to the other Parties in the manner provided in this Section 6.2.
| For notices to The Xxxxxxxx Companies, Inc., Xxxxxxxx Energy Services, | ||
| LLC; Xxxxxxxx Energy, L.L.C.; Xxxxxxxx Discovery Pipeline LLC, | ||
| Xxxxxxxx Partners Holdings LLC or Xxxxxxxx Partners GP LLC: | ||
| Xxx Xxxxxxxx Xxxxxx | ||
| Xxxxx, Xxxxxxxx 00000 | ||
| Phone: (000) 000-0000 | ||
| Fax: (000) 000-0000 | ||
| Attention: General Counsel | ||
| For notices to Xxxxxxxx Partners L.P. or Xxxxxxxx Partners Operating LLC: |
||
| Xxx Xxxxxxxx Xxxxxx | ||
| Xxxxx, Xxxxxxxx 00000 | ||
| Phone: (000) 000-0000 | ||
| Fax: (000) 000-0000 | ||
| Attention: General Counsel |
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6.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties
relating to the matters contained herein, superseding all prior contracts or agreements,
whether oral or written, relating to the matters contained herein.
6.4 Termination. The provisions of Article III, Article IV and Article V of this Agreement
shall terminate upon a Change of Control of the General Partner or the MLP.
6.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to
or of any breach or default by any Person in the performance by such Person of its
obligations hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance by such Person of the same or any other
obligations of such Person hereunder. Failure on the part of a Party to complain of any act
of any Person or to declare any Person in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Party of its rights hereunder until the
applicable statute of limitations period has run.
6.6 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of all the Parties; provided, however, that the MLP and the
OLLC may not, without the prior approval of the Conflicts Committee, agree to any amendment
or modification of this Agreement that, in the reasonable discretion of the General Partner,
will adversely affect the holders of Common Units. Each such instrument shall be reduced to
writing and shall be designated on its face an “Amendment” or an “Addendum” to this
Agreement.
6.7 Assignment; Third Party Beneficiaries. No Party shall have the right to assign its
rights or obligations under this Agreement without the consent of the other Parties. Each
of the Parties hereto specifically intends that each entity comprising the Xxxxxxxx Entities
or the Partnership Entities, as applicable, whether or not a Party to this Agreement, shall
be entitled to assert rights and remedies hereunder as third-party beneficiaries hereto with
respect to those provisions of this Agreement affording a right, benefit or privilege to any
such entity.
6.8 Counterparts. This Agreement may be executed in any number of counterparts with the
same effect as if all signatory Parties had signed the same document. All counterparts
shall be construed together and shall constitute one and the same instrument.
6.9 Severability. If any provision of this Agreement or the application thereof to any
Person or circumstance shall be held invalid or unenforceable to any extent, the remainder
of this Agreement and the application of such provision to other Persons or circumstances
shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
6.10 Gender, Parts, Articles and Sections. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural. All references to Article
numbers and Section numbers refer to Articles and Sections of this Agreement.
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6.11 Further Assurances. In connection with this Agreement and all transactions
contemplated by this Agreement, each Party agrees to execute and deliver such additional
documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions and conditions
of this Agreement and all such transactions.
6.12 Withholding or Granting of Consent. Each Party may, with respect to any consent or
approval that it is entitled to grant pursuant to this Agreement, grant or withhold such
consent or approval in its sole and uncontrolled discretion, with or without cause, and
subject to such conditions as it shall deem appropriate.
6.13 Laws and Regulations. Notwithstanding any provision of this Agreement to the contrary,
no Party shall be required to take any act, or fail to take any act, under this Agreement if
the effect thereof would be to cause such Party to be in violation of any applicable law,
statute, rule or regulation.
6.14 Negation of Rights of Xxxxxxxx, Limited Partners, Assignees, and Third Parties. The
provisions of this Agreement are enforceable solely by the Parties, and no stockholder of
Xxxxxxxx and no limited partner, member, or assignee the MLP or the OLLC or other Person
shall have the right, separate and apart from Xxxxxxxx, the MLP or the OLLC, to enforce any
provision of this Agreement or to compel any Party to comply with the terms of this
Agreement.
6.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the provisions
of this Agreement shall not give rise to any right of recourse against any officer or
director of any Xxxxxxxx Entity or any Partnership Entity.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.
| XXXXXXXX ENERGY SERVICES, LLC | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||
| Name: Xxxx X. Xxxxxxxxx | ||||||
| Title: Senior Vice President | ||||||
| XXXXXXXX ENERGY, L.L.C. | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||
| Name: Xxxx X. Xxxxxxxxx | ||||||
| Title: Senior Vice President and General
Manager — Business Development |
||||||
| XXXXXXXX DISCOVERY PIPELINE LLC | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||
| Name: Xxxx X. Xxxxxxxxx | ||||||
| Title: Senior Vice President and General Manager | ||||||
| XXXXXXXX PARTNERS HOLDINGS LLC | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||
| Name: Xxxx X. Xxxxxxxxx | ||||||
| Title: Chief Operating Officer | ||||||
| XXXXXXXX PARTNERS GP LLC | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||
| Name: Xxxx X. Xxxxxxxxx | ||||||
| Title: Chief Operating Officer | ||||||
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| XXXXXXXX PARTNERS L.P. | ||||||||
| By: | Xxxxxxxx Partners GP LLC, its general partner | |||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||||
| Name: Xxxx X. Xxxxxxxxx | ||||||||
| Title: Chief Operating Officer | ||||||||
| XXXXXXXX PARTNERS OPERATING LLC | ||||||||
| By: | XXXXXXXX PARTNERS L.P., its sole member | |||||||
| By: | Xxxxxxxx Partners GP LLC, its general partner | |||||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||||||
| Name: Xxxx X. Xxxxxxxxx | ||||||||
| Title: Chief Operating Officer | ||||||||
| THE XXXXXXXX COMPANIES, INC. (For purposes of Articles V and VI only) |
||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Name: Xxxxxx X. Xxxxxxx | ||||||||
| Title: Senior Vice President and Chief Financial Officer | ||||||||
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Schedule I
Marks
Marks
The Xxxxxxxx name and logo necessary for the following MLP name and logo:
WILLIAMS PARTNERS L.P. LOGO)"/>
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Schedule II
Xxxxxx Plumes
Xxxxxx Plumes
Remediation activities related to past releases at the Conway West Storage Facility as required by
and described in the Kansas Department of Health and Environment Consent Order 92-E-274, dated
September 13, 1993.
Remediation activities related to past releases at the Xxxxxx East Storage Facility as required by
and described in the Kansas Department of Health and Environment Consent Order 94-E-0201, dated
December 19, 1994.
Remediation activities related to past releases at the Xxxxxxxx Storage Facility as required by and
described in the Kansas Department of Health and Environment Consent Order 96-E-0273, dated April
24, 1997.
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