Exhibit 2.1
Execution Version
CONTRIBUTION AGREEMENT
by and among
ANADARKO UINTAH MIDSTREAM, LLC
WESTERN GAS RESOURCES, INC.
WGR HOLDINGS, LLC
WGR ASSET HOLDING COMPANY LLC
WESTERN GAS HOLDINGS, LLC
WES GP, INC.
as Contributing Parties
and
WESTERN GAS PARTNERS, LP
WESTERN GAS HOLDINGS, LLC
WESTERN GAS OPERATING, LLC
WGR OPERATING, LP
as Recipient Parties
and, for certain limited purposes,
ANADARKO PETROLEUM CORPORATION
Covering the Contribution of
a 51% membership interest in Chipeta Processing LLC;
the 15-mile, 8 AUM NGL pipeline; and
certain other related rights and assets
Dated as of July 10, 2009
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page
|
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION
|
|
|
3
|
|
|
Section 1.1 Definitions
|
|
|
3
|
|
Section 1.2 Rules of Construction
|
|
|
12
|
|
|
|
|
|
|
ARTICLE II CONTRIBUTION; CLOSING
|
|
|
13
|
|
|
Section 2.1 Contribution of the System Assets
|
|
|
13
|
|
Section 2.2 Excluded Assets
|
|
|
15
|
|
Section 2.3 Contribution of the Chipeta Interest
|
|
|
15
|
|
Section 2.4 Consideration
|
|
|
15
|
|
Section 2.5 Borrowing by the Partnership; Tax Treatment of Cash Consideration
|
|
|
16
|
|
Section 2.6 Purchase Price Adjustments
|
|
|
16
|
|
Section 2.7 Contemplated Legal Steps
|
|
|
17
|
|
|
|
|
|
|
ARTICLE III CLOSING
|
|
|
18
|
|
|
Section 3.1 The Closing
|
|
|
18
|
|
Section 3.2 Deliveries by the Contributing Parties
|
|
|
18
|
|
Section 3.3 Deliveries by the Recipient Parties
|
|
|
19
|
|
Section 3.4 Receipts and Credits
|
|
|
20
|
|
Section 3.5 Prorations
|
|
|
21
|
|
Section 3.6 Closing Costs; Transfer Taxes and Fees
|
|
|
21
|
|
|
|
|
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ANADARKO AND THE CONTRIBUTING PARTIES
|
|
|
22
|
|
|
Section 4.1 Organization
|
|
|
22
|
|
Section 4.2 Authorization; Enforceability
|
|
|
22
|
|
Section 4.3 No Conflicts
|
|
|
22
|
|
Section 4.4 Preference Rights and Transfer Requirements
|
|
|
23
|
|
Section 4.5 Litigation
|
|
|
23
|
|
Section 4.6 Title
|
|
|
23
|
|
Section 4.7 Taxes and Assessments
|
|
|
25
|
|
Section 4.8 Compliance With Laws
|
|
|
26
|
|
Section 4.9 Environmental Matters
|
|
|
26
|
|
Section 4.10 Brokers and Finders
|
|
|
26
|
|
Section 4.11 Permits
|
|
|
27
|
|
Section 4.12 Contracts
|
|
|
28
|
|
Section 4.13 Condition of Assets
|
|
|
28
|
|
Section 4.14 Matters Relating to Chipeta
|
|
|
29
|
|
Section 4.15 Financial Statements
|
|
|
29
|
|
Section 4.16 No Undisclosed Liabilities; Accuracy of Data
|
|
|
29
|
|
i
|
|
|
|
|
|
|
Page
|
Section 4.17 Absence of Certain Changes
|
|
|
30
|
|
Section 4.18 Sufficiency of the Assets
|
|
|
30
|
|
Section 4.19 Regulatory Matters
|
|
|
31
|
|
Section 4.20 Outstanding Capital Commitments
|
|
|
31
|
|
Section 4.21 Insurance
|
|
|
31
|
|
Section 4.22 Employees; Labor Relations
|
|
|
31
|
|
Section 4.23 Management Projections and Budgets
|
|
|
31
|
|
Section 4.24 Waivers and Disclaimers
|
|
|
32
|
|
Section 4.25 Investment
|
|
|
33
|
|
|
|
|
|
|
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE RECIPIENT PARTIES
|
|
|
33
|
|
|
Section 5.1 Organization of Recipient
|
|
|
33
|
|
Section 5.2 Authorization; Enforceability
|
|
|
33
|
|
Section 5.3 No Conflicts
|
|
|
34
|
|
Section 5.4 Litigation
|
|
|
34
|
|
Section 5.5 Brokers Fees
|
|
|
34
|
|
Section 5.6 Investment
|
|
|
34
|
|
|
|
|
|
|
ARTICLE VI COVENANTS
|
|
|
35
|
|
|
Section 6.1 Conduct of Business
|
|
|
35
|
|
Section 6.2 Access
|
|
|
36
|
|
Section 6.3 Cooperation
|
|
|
36
|
|
Section 6.4 Additional Agreements
|
|
|
36
|
|
Section 6.5 Replacement of Bonds, Letters of Credit and Guarantees
|
|
|
36
|
|
Section 6.6 General Matters
|
|
|
36
|
|
Section 6.7 Chipeta Interest Matters
|
|
|
37
|
|
Section 6.8 Required Consents
|
|
|
37
|
|
Section 6.9 Chipeta Capital Contributions
|
|
|
37
|
|
|
|
|
|
|
ARTICLE VII CONDITIONS TO CLOSING
|
|
|
37
|
|
|
Section 7.1 Conditions to Each Partys Obligation to Close
|
|
|
37
|
|
Section 7.2 Conditions to the Recipient Parties Obligation to Close
|
|
|
38
|
|
Section 7.3 Conditions to the Contributing Parties Obligation to Close
|
|
|
39
|
|
|
|
|
|
|
ARTICLE VIII TERMINATION
|
|
|
40
|
|
|
Section 8.1 Termination
|
|
|
40
|
|
Section 8.2 Effect of Termination
|
|
|
41
|
|
|
|
|
|
|
ARTICLE IX INDEMNIFICATION
|
|
|
41
|
|
|
Section 9.1 Survival
|
|
|
41
|
|
Section 9.2 Indemnification of the Anadarko Indemnified Parties
|
|
|
41
|
|
Section 9.3 Indemnification of the Partnership Indemnified Parties
|
|
|
42
|
|
ii
|
|
|
|
|
|
|
Page
|
Section 9.4 Demands
|
|
|
43
|
|
Section 9.5 Right to Contest and Defend
|
|
|
43
|
|
Section 9.6 Cooperation
|
|
|
44
|
|
Section 9.7 Payment of Losses
|
|
|
44
|
|
Section 9.8 Limitations on Indemnification
|
|
|
44
|
|
Section 9.9 Sole Remedy
|
|
|
45
|
|
Section 9.10 Express Negligence Rule
|
|
|
45
|
|
|
|
|
|
|
ARTICLE X ADDITIONAL AGREEMENTS
|
|
|
46
|
|
|
Section 10.1 Further Assurances
|
|
|
46
|
|
Section 10.2 NORM, Wastes and Other Substances
|
|
|
46
|
|
Section 10.3 754 Election
|
|
|
46
|
|
|
|
|
|
|
ARTICLE XI MISCELLANEOUS
|
|
|
47
|
|
|
Section 11.1 Expenses
|
|
|
47
|
|
Section 11.2 Notices
|
|
|
47
|
|
Section 11.3 Severability
|
|
|
49
|
|
Section 11.4 Governing Law; Consent to Jurisdiction
|
|
|
49
|
|
Section 11.5 Parties in Interest
|
|
|
49
|
|
Section 11.6 Assignment
|
|
|
49
|
|
Section 11.7 No Amendment or Waiver
|
|
|
50
|
|
Section 11.8 Counterparts
|
|
|
50
|
|
Section 11.9 Integration
|
|
|
50
|
|
Section 11.10 Determinations by the Partnership
|
|
|
50
|
|
Section 11.11 Public Statements
|
|
|
50
|
|
Disclosure Schedules
|
|
|
|
|
Schedule 2.1(b)
|
|
|
|
Contracts
|
Schedule 2.1(c)
|
|
|
|
Surface Contracts
|
Schedule 2.1(d)
|
|
|
|
Equipment
|
Schedule 2.2(d)
|
|
|
|
Certain Excluded Assets
|
Schedule 2.6(a)
|
|
|
|
Preliminary Settlement Statement
|
Schedule 4.4
|
|
|
|
Preference Rights and Transfer Requirements
|
|
|
|
|
Part 1 Contracts
|
|
|
|
|
Part 2 Surface Contracts
|
Schedule 4.5
|
|
|
|
Contributing Party Litigation
|
Schedule 4.6(a)
|
|
|
|
Title to System Assets
|
Schedule 4.6(b)
|
|
|
|
Title to Chipeta Interest
|
Schedule 4.6(d)
|
|
|
|
Title to Chipeta Assets
|
Schedule 4.7(a)
|
|
|
|
Tax Matters Relating to the System Assets
|
Schedule 4.7(b)
|
|
|
|
Tax Matters Relating to Chipeta
|
Schedule 4.8
|
|
|
|
Compliance With Laws
|
Schedule 4.9
|
|
|
|
Environmental Matters
|
iii
|
|
|
|
|
Schedule 4.11(a)
|
|
|
|
Permits
|
Schedule 4.11(b)
|
|
|
|
Permits
|
Schedule 4.11(c)
|
|
|
|
Chipeta Permits
|
Schedule 4.12(a)
|
|
|
|
System Asset Contract Matters
|
Schedule 4.12(b)
|
|
|
|
Chipeta Contract Matters
|
Schedule 4.14
|
|
|
|
Obligations Relating to Chipeta
|
Schedule 4.15
|
|
|
|
Financial Statements
|
Schedule 4.16
|
|
|
|
Bonds, Letters of Credit and Guarantees
|
Schedule 4.18
|
|
|
|
Sufficiency of the Assets
|
Schedule 4.20(a)
|
|
|
|
Outstanding System Asset Capital Commitments
|
Schedule 4.20(b)
|
|
|
|
Outstanding Chipeta Capital Commitments
|
Schedule 4.21
|
|
|
|
Insurance
|
Schedule 5.4
|
|
|
|
Recipient Party Litigation
|
Exhibits
|
|
|
Exhibit A
|
|
Description of Chipeta Plant
|
Exhibit B
|
|
Description of AUM NGL Line
|
Exhibit C
|
|
Description of Stagecoach Extension
|
Exhibit D
|
|
Description of Chipeta Assets
|
Exhibit E
|
|
Form of Term Loan Agreement
|
Exhibit F
|
|
Form of Chipeta Interest Contribution Agreement
|
Exhibit G
|
|
Form of System Asset Conveyances
|
Exhibit H
|
|
Form of Partnership Agreement Amendment
|
Exhibit I
|
|
Form of Omnibus Agreement Amendment
|
iv
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of July 10, 2009 (the
Agreement
), is made and entered
into by and among Western Gas Resources, Inc., a Delaware corporation (
WGR
), WGR Asset Holding
Company LLC, a Delaware limited liability company (
WGRAH
), Anadarko Uintah Midstream, LLC, a
Delaware limited liability company (
AUM
), WGR Holdings, LLC, a Delaware limited liability company
(
WGR Holdings
), Western Gas Holdings, LLC, a Delaware limited liability company (the
General
Partner
), WES GP, Inc. (
WES GP
and, together with the General Partner, WGR, WGRAH, WGR Holdings
and AUM, the
Contributing Parties
), and Western Gas Partners, LP, a Delaware limited partnership
(the
Partnership
), Western Gas Operating, LLC, a Delaware limited liability company (
Western Gas
Operating
), and WGR Operating, LP, a Delaware limited partnership (the
Operating Partnership
,
and, together with the Partnership, the General Partner and Western Gas Operating, the
Recipient
Parties
). The Contributing Parties and Recipient Parties are sometimes referred to in this
Agreement each as a
Party
and collectively as the
Parties
. In addition, Anadarko Petroleum
Corporation, a Delaware corporation (
Anadarko
), is a party to this Agreement for the limited
purposes set forth in
Article II
,
Article IV
,
Section 6.6
,
Article
VIII
and
Article IX
, and is a Party under this Agreement solely to that extent.
RECITALS
WHEREAS, WGR owns all of the equity interests in WGRAH and WGR Holdings, each of which is a
disregarded entity for U.S. federal income tax purposes;
WHEREAS, WGRAH owns all of the equity interests in AUM;
WHEREAS, WGR Holdings owns 99% of the equity interests in the General Partner, which is a
partnership for U.S. federal income tax purposes;
WHEREAS, WGR Holdings owns all of the equity interests in WES GP, which is a corporation for
federal income tax purposes;
WHEREAS, WES GP owns 1% of the equity interests in the General Partner;
WHEREAS, WGR Holdings is a limited partner of the Partnership;
WHEREAS, the General Partner is the sole general partner of the Partnership;
WHEREAS, the Partnership owns all of the equity interests in Western Gas Operating, which is a
disregarded entity for U.S. federal income tax purposes;
WHEREAS, the Partnership is the sole limited partner and Western Gas Operating is the sole
general partner of the Operating Partnership;
WHEREAS, AUM owns the AUM NGL Line (defined herein) and the related System Assets (defined
herein);
1
WHEREAS, AUM will acquire the Stagecoach Extension (defined herein) and the related System
Assets (defined herein) prior to Closing;
WHEREAS, AUM also owns the Chipeta Interest (defined herein);
WHEREAS, AUM desires to distribute the System Assets and the Chipeta Interest to WGRAH and
WGRAH desires to acquire the same;
WHEREAS, WGRAH desires to distribute the System Assets and the Chipeta Interest to WGR and WGR
desires to acquire the same;
WHEREAS, WGR desires to contribute the System Assets and the Chipeta Interest to WGR Holdings
and WGR Holdings desires to acquire the same;
WHEREAS, WGR Holdings desires to contribute an undivided interest in the System Assets and the
Chipeta Interest to WES GP, and WES GP desires to acquire such undivided interest;
WHEREAS, WES GP desires to contribute such undivided interest in the System Assets and the
Chipeta Interest to the General Partner, and the General Partner desires to acquire such undivided
interest;
WHEREAS, WGR Holdings desires to contribute an undivided interest in the System Assets and the
Chipeta Interest to the General Partner, and the General Partner desires to acquire such undivided
interest;
WHEREAS WGR Holdings and the General Partner desire to contribute all of the undivided
interests in the System Assets and the Chipeta Interest to the Partnership for the consideration
described herein, and the Partnership desires to acquire such undivided interests for such
consideration;
WHEREAS, the Partnership desires to contribute an undivided interest in the System Assets and
the Chipeta Interest to Western Gas Operating, and Western Gas Operating desires to acquire such
undivided interest;
WHEREAS, the Partnership and Western Gas Operating desire to transfer all of the undivided
interests in the System Assets and the Chipeta Interest to the Operating Partnership and the
Operating Partnership desires to acquire such undivided interests; and
WHEREAS, in order to avoid multiple conveyances of the System Assets and the Chipeta Interest,
each of the Parties entitled to receive an interest in the System Assets and the Chipeta Interest
agrees that AUM will be instructed to convey such interest to any Party to which it is required to
make such a conveyance, with the result that AUM will execute and deliver a document to convey
legal title to the System Assets and the Chipeta Interest directly to the Operating Partnership.
2
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1
Definitions
.
Accounting Time
has the meaning set forth in
Section 3.4(a)
.
Affiliate
means, with respect to any Person, any other Person that, directly or indirectly,
Controls, is Controlled by or is under common Control with, such specified Person through one or
more intermediaries or otherwise;
provided
,
however
, that (i) with respect to each of the Anadarko
Entities and the Contributing Parties, the term Affiliate shall exclude the Partnership Entities,
(ii) with respect to each of the Partnership Entities and the Recipient Parties, the term
Affiliate shall exclude the Anadarko Entities, and (iii) Chipeta shall be deemed to be an
Affiliate of the Anadarko Entities before the Closing Date and an Affiliate of the Partnership
Entities on and after the Closing Date.
Aggregate Consideration
has the meaning set forth in
Section 9.8(a)
.
Agreement
has the meaning set forth in the preamble.
Anadarko
has the meaning set forth in the preamble.
Anadarko Entities
means Anadarko and any other Person Controlled by Anadarko other than the
Partnership Entities.
Anadarko Indemnified Parties
has the meaning set forth in
Section 9.2
.
Ancillary Documents
means, collectively, the Recipient Party Ancillary Documents and the
Contributing Party Ancillary Documents.
Annual Financial Statements
has the meaning set forth in
Section 4.15
.
AUM
has the meaning set forth in the preamble.
AUM NGL Line
means the approximately 15-mile, 8-inch NGL pipeline (including all
appurtenances thereto) connecting the Chipeta Plant to the pipeline known as the Mid-America
Pipeline, which NGL pipeline is more specifically described on
Exhibit B
.
Business Day
means any day that is not a Saturday, Sunday or legal holiday in the State of
Texas or a federal holiday in the United States.
Cash Consideration
means (i) $101,450,500 minus (ii) an amount equal to the aggregate amount
of all distributions (if any) made by Chipeta to AUM with respect to the Chipeta Interest (but not the Remaining Interest)
between the date of this Agreement and the
3
Closing Date, except to the extent that such distributions were regular quarterly distributions
required by Section 4.2 of the Chipeta LLC Agreement for quarters ended prior to the Effective
Time.
Chipeta
means Chipeta Processing LLC, a Delaware limited liability company.
Chipeta Assets
means the Chipeta Plant and the other assets owned, held, used or held for
use by Chipeta, which other assets are more specifically described on
Exhibit D
.
Chipeta Asset Required Consents
means any consent, approval, authorization or permit of, or
filing with or notification to, any Person which was required to be obtained, made or complied with
for or in connection with any sale, assignment or transfer to Chipeta of any Chipeta Asset or any
Chipeta Surface Contract (or any interest in any of them), and such required consent, approval,
authorization, permit, filing or notificiation has not been obtained, made or complied with prior
to Closing.
Chipeta LLC Agreement
means the limited liability company agreement of Chipeta, dated May
22, 2008, as such agreement is amended and in effect on the date of this Agreement.
Chipeta Contracts
means all contracts, agreements, instruments, undertakings or commitments
(including intercompany contracts, agreements, instruments, undertakings or commitments), written
or oral, by which Chipeta or any of its properties or assets are bound, or that relate to or are
otherwise applicable to Chipeta or the Chipeta Assets (including exchange agreements,
transportation or gathering agreements, construction agreements, operating agreements,
environmental compliance agreements, processing agreements, work orders, purchase orders, service
agreements, rental agreements, compression agreements, utility services agreements, non-disturbance
agreements for the benefit of the Chipeta, fractionation agreements, and agreements for the sale
and purchase of oil, gas, casinghead gas or other Hydrocarbons or processing agreements to the
extent applicable to Chipeta or any of its properties or assets).
Chipeta Interest
means a 51% membership interest in Chipeta.
Chipeta Interest Contribution Agreement
means a conveyance, substantially in the form
attached hereto as
Exhibit F
, reflecting the contribution of the Chipeta Interest to the
Operating Partnership.
Chipeta Permits
has the meaning set forth in Section 4.11(c).
Chipeta Plant
means the Chipeta natural gas processing plant (including all appurtenances
thereto), which plant is more specifically described on
Exhibit A
.
Chipeta Surface Contracts
means all easements, Chipeta Permits, licenses, servitudes,
rights-of-way, surface leases, fee interests in real property and other surface rights appurtenant
to, and used or held for use in connection with Chipeta or the Chipeta Assets, including those
identified on
Schedule 4.6(d)
.
CIG
means Colorado Interstate Gas Company.
4
CIG Purchase Agreement
means that certain Purchase and Sale Agreement dated November 21,
2008 between CIG and Chipeta.
Closing
has the meaning set forth in
Section 3.1
.
Closing Date
has the meaning set forth in
Section 3.1
.
Code
means the Internal Revenue Code of 1986, as amended and as interpreted by the
applicable Treasury Regulations thereunder.
Consent Decree
has the meaning set forth in
Section 9.3
.
Contracts
has the meaning set forth in
Section 2.1(b)
.
Contributed Assets
has the meaning set forth in
Section 2.7(a)
.
Contributing Party Ancillary Documents
means each agreement, document, instrument or
certificate to be delivered by any Contributing Party, or any Affiliate thereof, at the Closing
pursuant to
Section 3.2
and each other document or contract entered into by any
Contributing Party, or any Affiliate thereof, in connection with this Agreement or the Closing.
Contributing Parties
has the meaning set forth in the preamble.
Contributing Party Closing Certificate
has the meaning set forth in
Section 7.2(c)
.
Control
means, where used with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or otherwise, and the terms
Controlling
and
Controlled
have correlative meanings.
Deductible
has the meaning set forth in
Section 9.8(a)
.
Effective Time
has the meaning set forth in
Section 3.1
.
Environmental Activity
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, pollution control or abatement that
is required or necessary under any applicable Environmental Law, including 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 (i) pollution or
5
protection of the environment or natural resources, (ii) any Release or threatened Release of,
or any exposure of any Person or property to, any Hazardous Substances or (iii) the generation,
manufacture, processing, distribution, use, treatment, storage, transport, disposal or handling of
any Hazardous Substances; including 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 Federal Hazardous Materials
Transportation Law, the Occupational Safety and Health 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.
Environmental Permit
means any permit, approval, identification number, license,
registration, certification, consent, exemption, variance or other authorization required under or
issued pursuant to any applicable Environmental Law.
Equipment
has the meaning set forth in
Section 2.1(d)
.
Equity Interest
means any capital stock, partnership interest, membership interest or other
unit of equity security, equity ownership or voting security (including any security convertible
into or exchangeable or exercisable for any of the same).
Excluded Assets
has the meaning set forth in
Section 2.2
.
Final Settlement Statement
has the meaning set forth in
Section 2.6(b)
.
Financial Statements
has the meaning set forth in
Section 4.15
.
GAAP
means generally accepted accounting principles in the United States, consistently
applied.
General Partner
has the meaning set forth in the preamble.
Governmental Entity
means any Federal, state, local, municipal or foreign court or
governmental agency, authority or instrumentality or regulatory body having jurisdiction.
GP Consideration
means 7,172 general partner units of the Partnership.
Hazardous Substance
means (i) any substance that is designated, defined or classified under
any Environmental Law 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 any hazardous substance as defined under the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended, (ii) 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
(iii) radioactive materials, asbestos containing materials or polychlorinated biphenyls.
6
Hydrocarbons
means oil, gas, condensate and other gaseous and liquid hydrocarbons or any
combination thereof and sulphur extracted from hydrocarbons.
Indemnified Party
means any Person entitled to indemnification in accordance with
Article IX
.
Indemnifying Party
means any Person from whom indemnification is required in accordance with
Article IX
.
Indemnity Claim
has the meaning set forth in
Section 9.4
.
Independent Accountants
has the meaning set forth in
Section 2.6(c)
.
Interim Financial Statements
has the meaning set forth in
Section 4.15
.
Knowledge
and any variations thereof or words to the same effect means: (i) with respect to
the Contributing Parties, the actual knowledge of: (a) the officers of the Contributing Parties and
their respective Affiliates, (b) the employees of Contributing Parties who have responsibility for
the System Assets and who have the title of Midstream General Manager or Midstream Commercial
Development Regional Manager and (c) the employees of Contributing Parties who have responsibility
for Chipeta and who have the title of Midstream General Manager or Midstream Commercial Development
Regional Manager; and (ii) with respect to the Recipient Parties, the actual knowledge of the
officers of Recipient Parties and their respective Affiliates.
Laws
means all statutes, laws, rules, regulations, Orders, ordinances, writs, injunctions,
judgments and decrees of all Governmental Entities.
Lien
means any lien, security interest, mortgage, pledge, charge, encumbrance or right of
others.
Losses
means any losses, damages, liabilities, claims, demands, causes of action, judgments,
settlements, fines, penalties, sanctions, costs and expenses (including court costs and reasonable
attorneys and experts fees) of any and every kind or character.
Material Adverse Effect
means any effect that is material and adverse to the ownership,
operation, value, properties, assets, liabilities, financial condition, results of operations, or
business (as currently operated) of (a) Chipeta, the Chipeta Assets or the Chipeta Interest or (b)
the Systems or the assets related thereto, or the Contributing Parties interest therein;
provided
,
however
, that Material Adverse Effect shall not include (i) any effect resulting from the
announcement of entering into this Agreement or of the transactions contemplated by this Agreement;
(ii) any effect resulting from changes in general market, economic or financial conditions or any
outbreak of hostilities or war, (iii) any effect that affects the Hydrocarbon exploration,
production, development, processing, gathering and/or transportation industry generally (including
changes in commodity prices or general market prices in the Hydrocarbon exploration, production,
development, processing, gathering and/or transportation industry generally) unless such effect
disproportionately affects Chipeta, the
7
Chipeta Plant, the Chipeta Interest or the Systems, as applicable, relative to such industry,
and (iv) any effect resulting from a change in Laws.
NORM
means naturally occurring radioactive material.
Omnibus Agreement
means the Omnibus Agreement dated as of May 14, 2008 among the
Partnership, the General Partner and Anadarko, as amended through the date of this Agreement.
Omnibus Agreement Amendment
means an instrument substantially in the form set forth on
Exhibit I
.
Operating Costs
means all invoices, costs, expenses, disbursements and payables (as
determined in accordance with GAAP consistent with past practices) attributable to the operation
(but not the ownership) of the System Assets in the ordinary course of business and regularly
invoiced to the Contributing Parties. For clarity, Operating Costs do not include, without
limitation, all invoices, costs, expenses, disbursements, payables or Losses directly or indirectly
arising out of, resulting from or attributable to: (i) actual or claimed personal injury, illness
or death; property damage; environmental damage or contamination; negligence, misconduct or failure
to operate properly; other torts; private rights of action given under any Law; violation of any
Law; or breach or violation of contract, agreement or duty; (ii) obligations to abandon, dismantle,
remediate or remove pipelines or facilities; (iii) calamity, natural disaster, casualty, fire,
explosion, weather or condemnation; (iv) claims, investigations, administrative proceedings,
arbitration or litigation directly or indirectly arising out of, resulting from or attributable to
any of the foregoing; (v) any claims for any of the foregoing or for indemnification, contribution,
reimbursement or similar matters with respect to invoices, costs, expenses, disbursements, payables
or Losses of the type described in clauses (i) through (iv), whether such claims are made pursuant
to contract or otherwise; (vi) matters similar to those described in clauses (i) through (v); and
(vii) other matters outside the ordinary course of business or related to the ownership of the
System Assets.
Operating Partnership
has the meaning set forth in the preamble.
Order
means any order, writ, injunction, decree, ruling, compliance or consent order or
decree, settlement agreement, schedule and similar binding legal agreement issued by or entered
into with a Governmental Entity.
Partnership
has the meaning set forth in the preamble.
Partnership Agreement Amendment
means an instrument substantially in the form set forth on
Exhibit H
.
Partnership Agreement
means the First Amended and Restated Agreement of Limited Partnership
of the Partnership, dated as of May 14, 2008, as such agreement is amended and in effect on the
date of this Agreement.
Partnership Debt
has the meaning set forth in
Section 2.5
.
8
Partnership Entities
means the General Partner and each member of the Partnership Group.
Partnership Group
means the Partnership and its Subsidiaries treated as a single
consolidated entity.
Partnership Indemnified Parties
has the meaning set forth in
Section 9.3
.
Party
and
Parties
have the meanings set forth in the preamble.
Permits
means all permits, licenses, variances, exemptions, Orders, franchises, consents,
registrations, exemptions, authorizations, permissions and approvals of all Governmental Entities
necessary for the lawful ownership, lease and operation of the System Assets.
Permitted Liens
means (i) liens for Taxes, impositions, assessments, fees, rents or other
governmental charges levied or assessed or imposed not yet delinquent or being contested in good
faith by appropriate proceedings, provided appropriate reserves have been established with respect
to such contest, (ii) statutory liens (including materialmens, warehousemens, mechanics,
repairmens, landlords, and other similar liens) arising in the ordinary course of business
securing payments not yet delinquent or being contested in good faith by appropriate proceedings,
and (iii) utility easements, restrictive covenants and defects, imperfections or irregularities of
title that do not and could not reasonably be expected to interfere materially with the ordinary
conduct of the business of the System Assets or Chipeta.
Person
means any individual, firm, corporation, partnership (general or limited), limited
liability company, trust, joint venture, Governmental Entity or other entity.
Post Closing Consents
means (i) any consent, approval or permit of, or filing with or notice
to, any Governmental Entity, railroad company or public utility which has issued or granted any
permit, license, right of way, lease or other authorizations permitting any part of any pipeline
included in the System Assets to cross or be placed on land owned or controlled by such
Governmental Entity, railroad company or public utility and (ii) any consent, approval or permit
of, or filing with or notice to, any Governmental Entity or other third party with respect to any
System Assets that, in the case of both clause (i) and (ii), is customarily obtained or made after
closing in connection with transactions similar in nature to the transactions contemplated hereby.
Preference Right
means any right or agreement that enables any Person to purchase or acquire
any System Asset, the Chipeta Interest or any properties or assets of Chipeta (or any interest in
or portion of any of them) as a result of or in connection with (i) the sale, assignment or other
transfer of any System Asset, the Chipeta Interest or any properties or assets of Chipeta (or any
interest in or portion of any of them) or (ii) the execution or delivery of this Agreement or the
consummation or performance of this Agreement or the transactions contemplated hereby.
Preliminary Settlement Statement
has the meaning set forth in
Section 2.6(a)
.
Recipient Party Ancillary Documents
means each agreement, document, instrument or
certificate to be delivered by any Recipient Party, or any Affiliate thereof, at the Closing
9
pursuant to
Section 3.3
and each other document or contract entered into by any
Recipient Party, or any Affiliate thereof, in connection with this Agreement or the Closing.
Recipient Parties
has the meaning set forth in the preamble.
Recipient Party Closing Certificate
has the meaning set forth in
Section 7.3(b)
.
Records
has the meaning set forth in
Section 2.1(i)
.
Release
means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or
disposing into the environment.
Remaining Interest
means the 24% membership interest in Chipeta owned by AUM other than the
Chipeta Interest.
Securities Act
means the Securities Act of 1933.
Settlement Notice
has the meaning set forth in
Section 2.6(c)
.
Services and Secondment Agreement
means the Services and Secondment Agreement dated as of
May 14, 2008 by and between the General Partner and Anadarko, as such agreement is amended and in
effect on the date of this Agreement.
Special Committee
has the meaning set forth in the Partnership Agreement.
Stagecoach Agreement
means the Interconnect Agreement dated July 21, 2008 between AUM and
Questar Gas Management Company.
Stagecoach Extension
means the approximately 1.9-mile, 6-inch pipeline extension (including
all appurtenances thereto) connecting the Chipeta Plant to the plant generally known as the
Stagecoach plant, which pipeline extension is more specifically described on
Exhibit C
.
Subsidiary
means, with respect to any Person, (i) a corporation of which more than 50% of
the voting power of shares entitled (without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such corporation is owned, directly or
indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such
Person or a combination thereof, (ii) a partnership (whether general or limited) in which more than
50% of the partnership interests (considering all of the partnership interests of the partnership
as a single class) is owned, directly or indirectly, at the date of determination, by such Person,
by one or more Subsidiaries of such Person, or a combination thereof, or (iii) any other Person
(other than a corporation or a partnership) in which such Person, one or more subsidiaries of such
Person, or a combination thereof, directly or indirectly, at the date of determination, has (A) at
least a majority ownership interest or (B) the power to elect or direct the election of a majority
of the directors or other governing body of such Person.
Surface Contracts
has the meaning set forth in
Section 2.1(c)
.
10
System Assets
has the meaning set forth in
Section 2.1
.
System Asset Conveyances
means instruments substantially in the forms attached hereto as
Exhibit G
.
System Asset Required Consents
means any consent, approval, authorization or permit of, or
filing with or notification to, any Person which was required to be obtained, made or complied with
for or in connection with any sale, assignment or transfer pursuant to this Agreement (or any
interest in any of them), and such required consent, approval, authorization, permit, filing or
notificiation has not been obtained, made or complied with prior to Closing.
Systems
means the AUM NGL Line and the Stagecoach Extension.
Tax
or
Taxes
means (a) all taxes, assessments, duties, levies, imposts or other similar
charges imposed by a Governmental Entity, including all income, franchise, profits, capital gains,
capital stock, transfer, gross receipts, margins, sales, use, transfer, service, occupation, ad
valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll,
employment, social security, unemployment, disability, environmental (including taxes under Code
Section 59A), alternative minimum, add-on, value-added, withholding (including backup withholding)
and other taxes, assessments, duties, levies, imposts or other similar charges of any kind
whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a
Tax Return), and all estimated taxes, deficiency assessments, additions to tax, additional amounts
imposed by any Governmental Entity, penalties and interest, (b) any liability for the payment of
any amounts of any of the foregoing types as a result of being a member of an affiliated,
consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby
liability for payment of such amounts was determined or taken into account with reference to the
liability of any other Person, and (c) any liability for the payment of any amounts as a result of
being a party to any Tax-Sharing Agreement or with respect to the payment of any amounts of any of
the foregoing types as a result of any express or implied obligation to indemnify any other Person.
Tax Authority
means any Governmental Entity having jurisdiction over the assessment,
determination, collection or imposition of any Tax.
Tax Returns
means all reports, returns, statements (including estimated reports, returns or
statements) and other similar filings relating to, or required to be filed in connection with, any
Taxes.
Tax-Sharing Agreements
means all existing contracts or arrangements (whether or not written)
regarding the sharing, allocation, or payment of Taxes or amounts in lieu of Taxes.
Term Loan Agreement
means a term loan agreement substantially in the form of
Exhibit
E
Termination Date
has the meaning set forth in
Section 8.1(a)(ii)
.
TPH
has the meaning set forth in
Section 4.23
.
11
Transfer Requirements
means any consent, approval, authorization or permit of, or filing
with or notification to, any Person which is required to be obtained, made or complied with for or
in connection with any sale, assignment or transfer of any System Asset, other than Post Closing
Consents, or the Chipeta Interest (or any interest in any of them).
Transferor Guaranty
means a written unconditional guaranty by AUM that satisfies the
requirements of clause (ii) of the definition of Permitted Transfer under the Chipeta LLC Agreement
with respect to the transfer of the Chipeta Interest to the Operating Partnership.
Treasury Regulations
has the meaning set forth in
Section 2.5
.
Unit Consideration
means 351,424 common units of the Partnership.
WES GP
has the meaning set forth in the preamble.
Western Gas Operating
has the meaning set forth in the preamble.
WGR
has the meaning set forth in the preamble.
WGR Holdings
has the meaning set forth in the preamble.
WGRAH
has the meaning set forth in the preamble.
Section 1.2
Rules of Construction
.
(a) All article, section, schedule and exhibit references used in this Agreement are to
articles, sections, schedules and exhibits to this Agreement unless otherwise specified.
The schedules and exhibits attached to this Agreement constitute a part of this Agreement
and are incorporated herein for all purposes.
(b) If a term is defined as one part of speech (such as a noun), it shall have a
corresponding meaning when used as another part of speech (such as a verb). Terms defined
in the singular have the corresponding meanings in the plural, and vice versa. Unless the
context of this Agreement clearly requires otherwise, words importing the masculine gender
shall include the feminine and neutral genders and vice versa. The terms
includes,
include
and
including
shall be deemed to be followed by the words
without limitation
.
The words
hereof,
hereto,
hereby,
herein,
hereunder
and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to any
particular section or article in which such words appear.
(c) It is the intention of the Parties that every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and not strictly for or
against any Party (not withstanding any rule of law requiring an agreement to be strictly
construed against the drafting party), it being understood that the Parties to this
Agreement are sophisticated and have had adequate opportunity and means to retain
counsel to represent their interests and to otherwise negotiate the provisions of this
Agreement.
12
(d) The captions in this Agreement are for convenience only and shall not govern or be
considered a part of or affect the construction or interpretation of any provision of this
Agreement.
(e) All references to currency herein shall be to, and all payments required hereunder
shall be paid in, United States dollars.
(f) All accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
(g) Any event hereunder requiring the payment of cash or cash equivalents on a day that
is not a Business Day shall be deferred until the next Business Day without interest.
(h) Any reference to a statute, regulation or Law shall include any amendment thereof
or any successor thereto, and any rules and regulations promulgated thereunder, in each case
as existing on the date of this Agreement.
ARTICLE II
CONTRIBUTION; CLOSING
Section 2.1
Contribution of the System Assets
. At the Closing, upon the terms and subject to the conditions set forth in this Agreement, AUM
shall contribute, assign, transfer and convey (or cause to be contributed, assigned, transferred
and conveyed) to the Operating Partnership, and the Operating Partnership shall accept contribution
of, the System Assets pursuant to the System Asset Conveyances and in accordance with
Section
2.7
. As used herein, the term
System Assets
means the following (but excluding the Excluded
Assets):
(a) The Systems;
(b) All contracts, agreements, instruments, undertakings or commitments (including
intercompany contracts, agreements, instruments, undertakings or commitments), written or
oral, by which any System is bound, or that relate to or are otherwise applicable to any
System (including exchange agreements, transportation or gathering agreements, connection or
interconnect agreements, construction agreements, operating agreements, work orders,
purchase orders, service agreements, rental agreements, compression agreements, utility
services agreements, non-disturbance agreements for the benefit of the Contributing Parties,
fractionation agreements, and agreements for the sale and purchase of oil, gas, casinghead
gas or other Hydrocarbons or processing agreements to the extent applicable to any System),
including those identified on
Schedule 2.1(b)
(hereinafter collectively referred to
as
Contracts
);
(c) All easements, Permits, licenses, servitudes, rights-of-way, surface leases, fee
interests in real property and other surface rights appurtenant to, and used or held for use
in connection with any System (including those identified on
Schedule 2.1(c)
)
(
Surface Contracts
);
13
(d) All equipment, machinery, tools, supplies, parts, work-in-progress, radios and
other communications equipment, leased personal property, fixtures and other tangible
personal property and improvements located on any System or used or held for use primarily
in connection with the operation of any System, including those identified on
Schedule
2.1(d)
(
Equipment
);
(e) All claims, causes of action and rights of Contributing Parties under or pursuant
to all warranties, representations and guarantees made by suppliers, vendors, manufacturers,
subcontractors and contractors or others relating to products sold, or services provided, to
the extent used or held for use in connection with or affecting any of the System Assets;
(f) To the extent owned by AUM, all Hydrocarbon linefill and Hydrocarbons existing
within any System from and after the Effective Time;
(g) All materials and equipment inventory related to or used primarily in connection
with the System Assets;
(h) All (i) accounts, instruments and general intangibles (as such terms are defined in
the Uniform Commercial Code of Texas), cash, cash equivalents, notes payable and receivable,
accounts payable and receivable, supplier and customer lists, files and correspondence
related thereto, bank accounts, savings accounts, safe deposit boxes and the contents of
each of the foregoing, certificates of deposit refunds due customers, refunds from suppliers
or contractors, prepaid and deferred items (including taxes) attributable to the ownership
or operation of the System Assets on or after the Effective Time; and (ii) Liens in favor of
Contributing Parties that exist as of the Effective Time, whether choate or inchoate, under
any Law or under any of the Contracts (A) arising from the ownership, operation or sale or
other disposition of any of the System Assets or (B) arising in favor of Contributing
Parties as the operator of certain of the System Assets, but only to the extent a Recipient
Party is appointed successor operator; and
(i) All land files, gas contract files, gas gathering and processing files, land
surveys, maps, engineering data and reports, and other books, records, data, files, and
accounting records (regardless of whether paper or electronic media), in each case to the
extent related primarily to the System Assets, or used or held for use primarily in
connection with the maintenance or operation thereof, but excluding (i) computer or
communications software of intellectual property (including tapes, codes, data and program
documentation and all tangible manifestations and technical information relating thereto),
(ii) attorney-client privileged communications and work product of Contributing Parties
legal counsel, and (iii) reserve studies and evaluations (subject to such exclusions, the
Records
);
provided
,
however
, that Contributing Parties may retain copies of such Records
as Contributing Parties have reasonably determined may be
required for litigation, tax, accounting, or auditing purposes, or otherwise necessary
to perform such Parties obligations under the Omnibus Agreement and the Services and
Secondment Agreement, and provide Recipient Parties with the originals thereof.
14
Section 2.2
Excluded Assets
. Notwithstanding anything to the contrary in this Agreement, the System Assets shall not include,
and there are excepted, reserved and excluded from the transactions contemplated hereby, the
following (collectively, the
Excluded Assets
):
(a) All corporate, financial, income and franchise Tax and legal records of
Contributing Parties that relate primarily to Contributing Parties business generally
(whether or not relating to the System Assets), and all books, records and files to the
extent that the same relate to the Excluded Assets and copies of those records retained by
Contributing Parties pursuant to
Section 2.1(i)
;
(b) All geological and geophysical data (including all seismic data, including
reprocessed data) and all logs, interpretive data, technical evaluations, technical outputs,
reserve estimates and economic estimates;
(c) All rights to any refund of Taxes in respect of any Taxes for which any
Contributing Party is liable for payment or for which Anadarko is required to indemnify the
Recipient Parties under
Section 9.3
;
(d) Those items listed in
Schedule 2.2(d)
;
(e) All trade credits, accounts receivable, notes receivable, and other receivables
attributable to the System Assets with respect to any period of time ending prior to the
Effective Time;
(f) All right, title and interest of Contributing Parties in and to vehicles used in
connection with the System Assets;
(g) All rights, titles, claims and interests of Contributing Parties or any Affiliate
of a Contributing Party with respect to any period of time prior to the Effective Time (i)
to or under any policy or agreement of insurance or any insurance proceeds, except to the
extent Recipient Parties assume liability for a Loss for which a Contributing Party is
insured, and (ii) to or under any bond or bond proceeds; and
(h) Any patent, patent application, logo, service mark, copyright, trade name or
trademark of or associated with Contributing Parties or any Affiliate of a Contributing
Party or any business of a Contributing Party or of any Affiliate of a Contributing Party.
Section 2.3
Contribution of the Chipeta Interest
. At the Closing, upon the terms and subject to the conditions set forth in this Agreement, AUM
shall contribute, assign, transfer and convey (or cause to be contributed, assigned, transferred
and conveyed) to the Operating Partnership, and the Operating Partnership shall accept contribution
of, the Chipeta Interest pursuant to the Chipeta Interest Contribution Agreement and in accordance
with
Section 2.7
.
Section 2.4
Consideration
. In consideration for the contribution of the System Assets and the contribution of the Chipeta
Interest, the Partnership shall (a) distribute to WGR Holdings at Closing the Cash Consideration,
(b) issue to WGR Holdings at Closing the Unit Consideration and (c) issue to the General Partner
the GP Consideration.
15
Section 2.5
Borrowing by the Partnership; Tax Treatment of Cash Consideration
. Immediately prior to the Closing, the Partnership shall borrow the Cash Consideration from
Anadarko pursuant to the Term Loan Agreement (the
Partnership Debt
). The Parties agree that the
distribution of the Cash Consideration to WGR Holdings shall qualify as a debt-financed transfer
under Section 1.707-5(b) of the Treasury Regulations promulgated under the Code (the
Treasury
Regulations
) and that the entire amount of the Partnership Debt is allocable to, and shall be
allocated to, WGR Holdings under Sections 1.752-2 and 1.707-5(b) of the Treasury Regulations. The
Parties agree that the distribution of the Cash Consideration will be disclosed in accordance with
the requirements of Section 1.707-3(c)(2) of the Treasury Regulations.
Section 2.6
Purchase Price Adjustments
. The amount of the Cash Consideration shall be subject to cash adjustments pursuant to this
Section 2.6
. 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 (defined herein). The Parties shall use all commercially reasonable efforts to agree
upon the adjustments set forth in this
Section 2.6
, and to resolve any differences with
respect thereto. Except as provided herein, no adjustments to the Cash Consideration shall be made
after delivery of the Final Settlement Statement.
(a)
Preliminary Settlement Statement
. Three Business Days before the Closing
Date, the Contributing Parties shall deliver to the Recipient Parties a written statement in
the form of
Schedule 2.6(a)
(the
Preliminary Settlement Statement
) setting forth
the Cash Consideration (showing the elements described in clauses (i) and (ii) of the
definition of Cash Consideration), the Unit Consideration and the GP Consideration. The
Preliminary Settlement Statement shall also set forth wire transfer instructions for the
Closing payments. Payment of the Cash Consideration, the Unit Consideration and the GP
Consideration at the Closing shall be based on the Preliminary Settlement Statement.
(b)
Final Settlement Statement
. No later than 45 days after the Closing Date
and after consultation with the Recipient Parties, the Contributing Parties shall deliver to
the Recipient Parties a revised settlement statement setting forth any applicable revisions
to the information in the Preliminary Settlement Statement and also showing in reasonable
detail the Contributing Parties calculation of any payments to be made pursuant to
Section 3.4
upon the finalization of the Final Settlement Statement (which
payments are not part of or adjustments to the Cash Consideration), as determined in
good faith by the Contributing Parties (said revised statement and the calculation thereof
shall be referred to as the
Final Settlement Statement
).
(c)
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 the Recipient Parties, unless prior to such date the Recipient Parties deliver
written notice to the Contributing Parties of their disagreement with the Final Settlement
Statement (a
Settlement Notice
). Any Settlement Notice shall set forth the Recipient
Parties proposed changes to the Final Settlement Statement, including an explanation in
reasonable detail of the basis on which the Recipient Parties propose such changes. If the
Recipient Parties have timely delivered a Settlement Notice,
16
the Recipient Parties and the
Contributing Parties shall use good faith efforts to reach written agreement on the disputed
items. If the disputed items have not been resolved by the Recipient Parties and the
Contributing Parties by the 30th day following the Contributing Parties receipt of a
Settlement Notice, any remaining disputed items shall be submitted to one of Deloitte &
Touche LLP, Ernst & Young LLP, KPMG LLP or PricewaterhouseCoopers LLP, as mutually agreed
upon by the parties (the
Independent Accountants
) for resolution within ten Business Days
after the end of the foregoing 30-day period. The fees and expenses of the Independent
Accountants shall be borne 50% by the Contributing Parties and 50% by the Recipient Parties.
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. The Final Settlement
Statement, as modified to reflect disputes resolved as described above, shall become the
Final Settlement Statement.
(d)
Payments
. If the final calculated amount as set forth in the Final
Settlement Statement exceeds the estimated calculated amount as set forth in the Preliminary
Settlement Statement, then the Recipient Parties shall pay to the Contributing Parties the
amount of such excess. 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 the Contributing Parties shall pay to the Recipient Parties the
amount of such excess. Any payment shall be made within three Business Days of the date the
Final Settlement Statement becomes final pursuant to
Section 2.6(c)
. Any payment
received by the Contributing Parties pursuant to this
Section 2.6(d)
shall be
treated, to the extent allowed by Law, as a reimbursement of pre-formation expenditures
pursuant to Section 1.707-4(d) of the Treasury Regulations.
(e)
Access to Records
. The Parties shall grant to each other full access to
the Records and any other relevant records (but only to the extent the Party may do so
without breaching any contractual restriction binding on such Party,
provided
that such
Party will use commercially reasonable methods to have such restriction(s) waived for such
purpose) and its relevant personnel to allow each of them to make evaluations under this
Section 2.6
.
Section 2.7
Contemplated Legal Steps
. To avoid multiple state law conveyances of the System Assets and the Chipeta Interest, each
Party entitled to receive an interest in the System Assets and the Chipeta Interest pursuant to
this
Section 2.7
agrees that AUM is instructed to convey such interests to each successive
Party such that AUM will convey legal title to the System Assets and the Chipeta Interest directly
to the Operating Partnership in a single state law conveyance, which shall accomplish the following
discrete transfers:
(a) AUM distributes the System Assets and the Chipeta Interest (collectively, the
Contributed Assets
) to WGRAH;
(b) WGRAH distributes the Contributed Assets to WGR;
(c) WGR contributes the Contributed Assets to WGR Holdings;
17
(d) WGR Holdings contributes an undivided interest in the Contributed Assets to the
General Partner where:
(i) The undivided interest transferred by WGR Holdings to the General Partner
is equal to 1.98% of Net Equity; and
(ii) Net Equity is an amount equal to the gross fair market value of the
Contributed Assets
minus
the Cash Consideration to be distributed to WGR Holdings
pursuant to
Section 2.4
;
(e) WGR Holdings contributes an undivided interest in the Contributed Assets to WES GP
equal to 0.02% of Net Equity;
(f) WES GP contributes an undivided interest in the Contributed Assets to the General
Partner equal to 0.02% of Net Equity;
(g) WGR Holdings and the General Partner contribute their respective undivided
interests in the Contributed Assets to the Partnership such that:
(i) The General Partner receives an increased general partner capital account
and the GP Consideration; and
(ii) WGR Holdings receives the Cash Consideration and the Unit Consideration;
(h) The Partnership conveys an undivided .01% interest in the Contributed Assets to
Western Gas Operating; and
(i) The Partnership and Western Gas Operating convey their undivided interests in the
Contributed Assets to the Operating Partnership in exchange for increased capital accounts.
ARTICLE III
CLOSING
Section 3.1
The Closing
. The closing of the transactions contemplated by this Agreement (the
Closing
) shall take place
at the offices of Anadarko Petroleum Corporation, 1201 Lake Robbins Drive, The Woodlands, Texas
77380, commencing at 10:00 a.m. local time on the third Business Day following the satisfaction or
waiver of all conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the Parties shall take at the
Closing itself) or such other date as Recipient Parties and Contributing Parties may mutually
determine (the
Closing Date
), subject to the rights of the Parties under
Article VIII
;
provided
,
however
, that after the Closing has occurred, unless otherwise agreed by the Parties, the
Closing shall be deemed to have been consummated at 12:01 a.m. Houston, Texas time on the Closing
Date (the
Effective Time
).
Section 3.2
Deliveries by the Contributing Parties
. At the Closing, the Contributing Parties will deliver (or cause to be delivered) the following:
18
(a) A counterpart to the Chipeta Interest Contribution Agreement, duly executed by the
applicable Contributing Party or Contributing Parties;
(b) A counterpart to each of the System Asset Conveyances, duly executed by the
applicable Contributing Party or Contributing Parties;
(c) The Contributing Party Closing Certificate, duly executed by an officer of
Anadarko;
(d) A certificate under Section 1.1445-2(b)(2) of the Treasury Regulations certifying
that each applicable Contributing Party is not a foreign person within the meaning of
Section 1445(f)(3) of the Code;
(e) A counterpart to the Partnership Agreement Amendment, duly executed by the General
Partner;
(f) A counterpart to the Term Loan Agreement, duly executed by Anadarko;
(g) A counterpart to the Transferor Guaranty, duly executed by AUM;
(h) A counterpart to the Omnibus Agreement Amendment, duly executed by Anadarko and the
General Partner; and
(i) Such other certificates, instruments of conveyance and documents as may be
reasonably requested by the Recipient Parties prior to the Closing Date to carry out the
intent and purposes of this Agreement.
Section 3.3
Deliveries by the Recipient Parties
. At the Closing, the Recipient Parties will deliver (or cause to be delivered) the following:
(a) The Cash Consideration, by wire transfer to an account specified by WGR;
(b) The Unit Consideration, by issuance of a certificate reflecting the issuance of
such common units to Anadarko or the Anadarko Entity designated by WGR, by instruction to
the Partnerships transfer agent or otherwise;
(c) The GP Consideration, by issuance of a certificate reflecting the issuance of such
general partner units to the General Partner;
(d) A counterpart to the Chipeta Interest Contribution Agreement, duly executed by the
applicable Recipient Party or Recipient Parties;
(e) A counterpart to each of the System Asset Conveyances, duly executed by the
applicable Recipient Party or Recipient Parties;
(f) The Recipient Party Closing Certificate, duly executed by an officer of the General
Partner;
19
(g) A counterpart to the Term Loan Agreement, duly executed by the Partnership;
(h) A counterpart to the Omnibus Agreement Amendment, duly executed by the Partnership;
and
(i) Such other certificates, instruments of conveyance and documents as may be
reasonably requested by the Contributing Parties prior to the Closing Date to carry out the
intent and purposes of this Agreement.
Section 3.4
Receipts and Credits
.
(a) Subject to the terms hereof, all monies, proceeds, receipts, credits and income
attributable to the System Assets (as determined in accordance with GAAP consistent with
past practices) (i) for all periods of time at, from and after 12:01 a.m. Houston, Texas
time on the first day of the calendar month in which the Closing occurs (the
Accounting
Time
), shall be the sole property and entitlement of the Recipient Parties, and, to the
extent received by any Contributing Party or one of its Affiliates, shall be promptly
accounted for and transmitted to the appropriate Recipient Party and (ii) for all periods of
time prior to the Accounting Time, shall be the sole property and entitlement of the
Contributing Parties and, to the extent received by any Recipient Party, shall be promptly
accounted for and transmitted to the appropriate Contributing Party.
(b) In addition, subject to the terms hereof, all invoices, costs, expenses,
disbursements and payables attributable to the System Assets (as determined in
accordance with GAAP consistent with past practices) (A) for all periods of time at,
from and after the Effective Time, shall be the sole obligation of the Recipient Parties,
and the Recipient Parties shall promptly pay or, if paid by any Contributing Party, promptly
reimburse such Contributing Party for, same and (B) for all periods of time prior to the
Effective Time, shall be the sole obligation of the Contributing Parties, and the
Contributing Parties shall promptly pay or, if paid by any Recipient Party, promptly
reimburse such Recipient Party for, same.
(c) Notwithstanding
Section 3.4(b)
, subject to the terms hereof, all Operating
Costs attributable to the operation of the System Assets in the ordinary course of business
during the period from the Accounting Time to the Effective Time shall be the sole
obligation of the Recipient Parties, and the Recipient Parties shall promptly pay or, if
paid by any Contributing Party, promptly reimburse such Contributing Party for, same.
(d) Other than Operating Costs, the Contributing Parties shall be solely responsible
for, and shall indemnify and hold the Partnership Indemnified Parties harmless from and
against, all invoices, costs, expenses, disbursements, payables and Losses paid, incurred or
suffered by the Contributing Parties, the Partnership Indemnified Parties or the System
Assets arising out of or attributable to the ownership or operation of the System Assets
during the period from the Accounting Time to the Effective Time. The indemnification
provided in this
Section 3.4(d)
is in addition to, and is not subject to
20
the
provisions of, the indemnification in
Article IX
, including any limitations or
Deductible therein.
(e) To the extent that any regular quarterly distributions required by Section 4.2 of
the Chipeta LLC Agreement are paid after the Closing Date with respect to the Chipeta
Interest in respect of quarters ended prior to the Effective Time, the Recipient Party
receiving such distributions shall promptly account for and transmit such distributions to
AUM.
(f) Any amounts owing to a Party in accordance with
Section 3.4(a), (b), (c) or
(e)
before the delivery of the revised settlement statement pursuant to
Section
2.6(b)
shall be included in the Final Settlement Statement and paid at the time set
forth in
Section 2.6(d)
. For avoidance of doubt, adjustments and other payments
pursuant to this
Section 3.4
shall not constitute adjustments of the Cash
Consideration, Unit Consideration or GP Consideration.
Section 3.5
Prorations
. On the Closing Date, or as promptly as practicable following the Closing Date, but in no event
later than 60 calendar days thereafter, the real and personal property taxes, water, gas,
electricity and other utilities, local business or other license fees to the extent assigned and
other similar periodic charges payable with respect to the System Assets (in each of the foregoing
cases, to the extent the same constitute Operating Costs) shall be prorated between the Recipient
Parties, on the one hand, and the Contributing Parties, on the other hand, with the Contributing
Parties being responsible for amounts related to the period up to but excluding the Accounting Time
and the Recipient Parties being responsible for amounts related to the period at and after the
Accounting Time. If the final real property tax rate or final assessed value for the current tax year is not
established by the Closing Date, the prorations shall be made on the basis of the rate or assessed
value in effect for the preceding tax year and shall be adjusted when the exact amounts are
determined. All such prorations shall be based upon the most recent available assessed value
available prior to the Closing Date.
Section 3.6
Closing Costs; Transfer Taxes and Fees
.
(a)
Allocation of Costs.
The Contributing Parties shall be responsible for and
pay all sales, transfer, use and similar Taxes arising from or associated with the transfer
of the System Assets and the Chipeta Interest (other than Taxes based on income) and all
costs and expenses (including recording fees and real estate transfer taxes and real estate
transfer stamps) incurred in connection with obtaining or recording title to the System
Assets and the Chipeta Interest.
(b)
Reimbursement.
If any Recipient Party, on the one hand, or any
Contributing Party, on the other hand, pays any tax agreed to be borne by the other Party
under this Agreement, such other Party shall promptly reimburse the paying Party for the
amounts so paid. If any Party receives any tax refund or credit applicable to a tax paid by
another Party hereunder, the receiving Party shall promptly pay such amounts to the Party
entitled thereto.
21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ANADARKO AND THE
CONTRIBUTING PARTIES
Anadarko and the Contributing Parties, jointly and severally, hereby represent and warrant to
the Recipient Parties as follows:
Section 4.1
Organization
. Each Contributing Party is an entity duly organized, validly existing and in good standing under
the Laws of its state of organization and has all requisite entity power and authority to own,
operate and lease the System Assets and the Chipeta Interest and to carry on its business as now
conducted where the System Assets are now located, and is duly qualified to do business as a
foreign entity in each jurisdiction where System Assets are located or its business is conducted.
Chipeta is a limited liability company duly organized, validly existing and in good standing under
the Laws of its state of organization and has all requisite entity power and authority to own,
operate and lease its assets and to carry on its business as now conducted, and is duly qualified
to do business as a foreign entity in each jurisdiction where its assets are located or its
business is conducted.
Section 4.2
Authorization; Enforceability
. Each Contributing Party has, as appropriate, full corporate or limited liability company power
and authority to execute, deliver, and perform its obligations under this Agreement and any
Contributing Party Ancillary Documents to which it is a party. The execution, delivery, and
performance by each Contributing Party of this Agreement and the Contributing Party Ancillary
Documents, and the consummation by such Contributing Party of the transactions contemplated hereby
and thereby, have been duly authorized by all necessary corporate or limited liability company
action of the Contributing Parties. This Agreement has been duly executed and delivered by each
Contributing Party and constitutes (and each Contributing Party Ancillary Document executed or to
be executed by each Contributing Party has been, or when executed will be, duly executed and
delivered by such Contributing Party and constitutes, or when executed and delivered will
constitute), a valid and legally binding obligation of such Contributing Party, enforceable against
it in accordance with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws
affecting creditors rights and remedies generally and (ii) equitable principles which may limit
the availability of certain equitable remedies (such as specific performance) in certain instances.
Section 4.3
No Conflicts
. Subject to compliance with the Preference Rights and Transfer
Requirements set forth in
Schedule 4.4
, the execution and delivery by each Contributing Party of this Agreement and
the other Contributing Party Ancillary Documents to which it is a party, and the performance of its
obligations hereunder and thereunder, do and will not, and the consummation of the transactions
contemplated hereby and thereby will not, (i) violate, conflict with, or result in any breach of
any provision of, or allow or give to others any right to exercise any rights or remedies under,
such Contributing Partys organizational documents or any material agreement or instrument to which
it is a party or by which it is bound, or the Chipeta LLC Agreement or any other organizational
document of Chipeta, (ii) violate any Law applicable to any Contributing Party, the System Assets,
the Chipeta Assets or Chipeta, or (iii) violate, result in any breach of, or constitute a default
under, or give to others any rights of termination, acceleration or cancellation of, or result in
the creation of any Lien (other than a
22
Permitted Lien) on any of the System Assets, the Chipeta
Assets, or the Chipeta Interest pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument relating to such assets or
properties or by which any of such assets or properties is bound or affected, except (in the case
of (iii) above) for (a) rights to consent by, required notices to, filings with, approval or
authorizations of, or other actions by any Governmental Entity where the same are not required
prior to the sale, assignment or contribution of such asset or are customarily obtained subsequent
to the sale, assignment or contribution thereof, and (b) violations, breaches, defaults or Liens
which would not, individually or in the aggregate, have a Material Adverse Effect.
Section 4.4
Preference Rights and Transfer Requirements
. None of the System Assets, the Chipeta Assets, the Chipeta Interest, or any portion of any of
them is subject to any Preference Right or Transfer Requirement which may be applicable to the
transactions contemplated by this Agreement, except (i) as set forth in
Schedule 4.4
, and
(ii) Post Closing Consents.
Section 4.5
Litigation
. Except as disclosed on
Schedule 4.5
, (i) there are no claims, demands, actions, suits,
or proceedings (including condemnation, expropriation, or forfeiture proceedings) pending before
any Governmental Entity or arbitrator (or, to the Contributing Parties Knowledge, threatened in
writing) against a Contributing Party or any of its Affiliates, or any System Asset, Chipeta, the
Chipeta Assets or the Chipeta Interest or the ownership or operation of any thereof (a) seeking to
prevent the consummation of the transactions contemplated hereby, or (b) which, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect; (ii) no event has
occurred nor does any circumstance exist that may give rise to, or serve as a basis for, the
commencement of any proceeding described in the immediately foregoing clause (i); and (iii) there
is no Order relating to the use or ownership of the System Assets, the Chipeta Assets or the
Chipeta Interest to which a Contributing Party, its Affiliates, or any of the System Assets, the
Chipeta Assets, the Chipeta Interest or Chipeta is subject.
Section 4.6
Title
.
(a) Except as set forth on
Schedule 4.6(a)
, AUM is the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests (including rights of
way) in and to the lands on which are located any System Assets sufficient to enable the
Recipient Parties to use or operate the System Assets in substantially the same manner that
the System Assets were used and operated by AUM immediately prior to the Closing Date. A
true and complete list of all material Surface Contracts is set forth on
Schedule
2.1(c)
. AUM has good and valid title in fee to all real property and interests in real
property included in the System Assets purported to be owned in fee, and good and valid
title to the leasehold estates in all real property and interests in real property
(including rights of way) included in the System Assets purported to be leased or held
pursuant to an easement, in each case except as would not have a Material Adverse Effect.
AUM owns all such Surface Contracts, real property and interests in real property free and
clear of any Liens other than Permitted Liens.
23
(b) AUM has good and valid title to, holds of record and owns beneficially the Chipeta
Interest and the Remaining Interest free and clear of any Liens other than transfer
restrictions imposed thereon by applicable securities Laws and as set forth on
Schedule
4.6(b)
. There are no outstanding options, warrants, rights or other securities
convertible into or exchangeable or exercisable for Equity Interests of Chipeta, any other
commitments or agreements providing for the issuance of additional Equity Interests or the
repurchase or redemption of Equity Interests of Chipeta, and there are no agreements or
rights of any kind which may obligate Chipeta to issue, purchase, redeem or otherwise
acquire any of its Equity Interests, other than as expressly set forth in the Chipeta LLC
Agreement. Except as expressly set forth in the Chipeta LLC Agreement (a true, correct and
complete copy of which has been provided to the Recipient Parties), there are no voting
agreements, proxies or other similar agreements or understandings with respect to the Equity
Interests of Chipeta. The Chipeta Interest and the Remaining Interest are duly authorized,
validly issued and outstanding and fully paid, and was issued free of preemptive rights in
compliance with applicable Laws. Immediately after the Closing, the Recipient Parties will
own, beneficially and of record, the Chipeta Interest and AUM will own the Remaining Interest. AUM is a member and the managing member of Chipeta,
has not resigned as such, and has taken no action, and (to the Contributing Parties
Knowledge) no event has occurred and no circumstances exist, that would permit AUM to be
removed as managing member or that would cause it to cease to be a member. As a member and
managing member of Chipeta, AUM is in compliance with and has performed its obligations
under the Chipeta LLC Agreement.
(c) Except as set forth on
Schedule 4.6(a)
with respect to the Stagecoach
Extension and the related System Assets, the Contributing Parties have good and marketable
title to all tangible personal property included in the System Assets, free and clear of all
Liens other than Permitted Liens, other than tangible personal property owned on the date of
this Agreement but subsequently sold or otherwise disposed of in the ordinary course of
business consistent with prior practice.
(d) Except as set forth on
Schedule 4.6(d)
, Chipeta is the owner of valid and
indefeasible easement rights, leasehold and/or fee ownership interests (including rights of
way) in and to the lands on which are located any Chipeta Assets sufficient to enable
Chipeta to use or operate the Chipeta Assets in substantially the same manner that the
Chipeta Assets were used and operated by Chipeta immediately prior to the Closing Date. A
true and complete list of all material Chipeta Surface Contracts is set forth on
Schedule 4.6(d)
. Chipeta has good and valid title in fee to all real property and
interests in real property constituting part of the Chipeta Assets and purported to be owned
in fee, and good and valid title to the leasehold estates in all other real property and
interests in real property (including rights of way) constituting part of the Chipeta
Assets, in each case except as would not have a Material Adverse Effect. Chipeta owns all
such Chipeta Surface Contracts, real property and interests in real property free and clear
of any Liens other than Permitted Liens. Chipeta has good and marketable title to all
tangible personal property included in the Chipeta Assets, free and clear of all Liens other
than Permitted Liens, other than tangible personal property owned on the date of this
Agreement but subsequently sold or otherwise disposed of in the ordinary course of business
consistent with prior practice.
24
Section 4.7
Taxes and Assessments
.
(a)
System Assets
. Except as set forth on
Schedule 4.7(a)
, (i) all Tax
Returns relating to the System Assets have been duly filed on a timely basis with the
appropriate Tax Authority, (ii) such Tax Returns are true, complete and correct in all
material respects, and (iii) all Taxes relating to the System Assets have been paid, except
those being contested in good faith as set forth on
Schedule 4.7(a)
. With respect
to all Taxes related to the System Assets, except as set forth on
Schedule 4.7(a)
,
(i) there are not currently in effect any extension or waiver of any statute of limitations
of any jurisdiction regarding the assessment or collection of any such Tax, (ii) there are
no administrative proceedings or lawsuits pending against the System Assets by any Taxing
Authority; and (iii) there are no Tax Liens on any of the System Assets except for liens for
Taxes not yet due.
(b)
Chipeta
. Except as set forth on
Schedule 4.7(b)
, with respect to
Chipeta (i) all Tax Returns required to be filed have been duly filed on a timely basis with
the appropriate Tax Authority, and are true, correct and complete in all material respects,
(ii) all Taxes due and owing (whether or not shown as due on any Tax Returns) have been
timely paid in full, (iii) there are no Liens on any of the assets of Chipeta that arose in
connection with any failure (or alleged failure) to pay any Tax, (iv) there is no claim,
action, or proceeding pending by any applicable Tax Authority in connection with any Tax,
(v) no Tax Returns are now under audit or examination by any Tax Authority, (vi) there are
no agreements or waivers providing for an extension of time with respect to the filing of
any Tax Returns or the assessment or collection of any such Tax, (vii) no written claim has
been made by any Tax Authority in a jurisdiction where Chipeta does not file a Tax Return
that it is or may be subject to taxation in that jurisdiction, (viii) Chipeta is not a party
to any Tax-Sharing Agreement, or is otherwise liable for the Taxes of any other Person
(including as a transferee or successor), (ix) no power of attorney that is currently in
force has been granted with respect to any matter relating to Taxes that could affect
Chipeta, and (xi) Chipeta has not, during any period for which the statute of limitations
for any relevant Tax has not expired, participated in any listed transaction required to be
disclosed under Treasury Regulation Section 1.6011-4.
(c)
Tax Classification
. Since June 1, 2008, Chipeta has been classified as a
partnership for federal income tax purposes. The classification for federal income tax
purposes of Chipeta will not change after the Closing by reason of any action taken by any
of the Contributing Parties on or before the Closing Date or by reason of any action taken
on or before the Closing Date by any Person who was at the time such action was taken an
Affiliate of any of the Contributing Parties.
(d)
Qualifying Income
. In the 12 month period ended December 31, 2008, more
than 90% of the gross income (as determined for federal income tax purposes) of the
businesses conducted with the System Assets and by Chipeta was qualifying income, within the
meaning of Section 7704(d) of the Code. The Contributing Parties expect that more than 90%
of the gross income of the business that is to be conducted with the System Assets and by
Chipeta in 2009 will be such qualifying income, provided that no significant change occurs
after the Closing Date with respect to the methods by which the
25
System Assets and Chipeta
Assets generate revenue. No action has been taken, or is contemplated, by any Contributing
Party or Chipeta that is expected to result in a significant change in the methods by which
the System Assets or the Chipeta Assets generate revenue.
Section 4.8
Compliance With Laws
. Except as set forth in
Schedule 4.8
, the System Assets, the Chipeta Assets, the Chipeta
Interest and Chipeta are, and the ownership and operation of the System Assets, Chipeta, the
Chipeta Interest and the Chipeta Assets are, in compliance with the provisions and requirements of
all Laws of all Governmental Entities having jurisdiction with respect to the System Assets,
Chipeta, the Chipeta Interest or the Chipeta Assets, or the ownership, operation, development,
maintenance, or use of any thereof, except where the failure to so comply would not have a Material
Adverse Effect. Notwithstanding the foregoing, the Contributing Parties make no
representation or warranty, express or implied, under this
Section 4.8
relating to any
Environmental Activity or Environmental Law, which are addressed in
Section 4.9
.
Section 4.9
Environmental Matters
. To the Knowledge of the Contributing Parties, except as set forth on
Schedule 4.9
:
(a) The operations of the Contributing Parties and Chipeta are in compliance in all
material respects with all Environmental Laws, which compliance includes the possession and
maintenance of, and compliance with, all material Environmental Permits required under all
applicable Environmental Laws;
(b) The Contributing Parties and Chipeta have not caused or allowed the generation,
use, treatment, manufacture, storage or disposal of any Hazardous Substance at, on or from
the System Assets or the Chipeta Assets, except in accordance with all applicable
Environmental Laws;
(c) None of the Contributing Parties or Chipeta is the subject of any outstanding
administrative or judicial order of judgment, agreement or arbitration award from any
Governmental Entity under any Environmental Laws relating to the System Assets or the
Chipeta Assets and requiring remediation or the payment of a fine or penalty; and
(d) None of the Contributing Parties or Chipeta is subject to any action pending or
threatened in writing, whether judicial or administrative, alleging noncompliance with
Environmental Laws or any other environmental matter, including any Environmental Activity,
relating to the System Assets or the Chipeta Assets.
Section 4.10
Brokers and Finders
. No investment banker, broker, finder, financial advisor or other intermediary has been retained
by or is authorized to act on behalf of any of the Contributing Parties or any Affiliate thereof
who is entitled to receive from any Party or its Affiliates any fee or commission in connection
with the transactions contemplated by this Agreement.
26
Section 4.11
Permits
.
(a) Except as set forth in
Schedule 4.11(a)
, the Contributing Parties have
obtained and are maintaining all Permits, in compliance with all Laws and the terms and
conditions of such Permits, the loss of which would, individually or in the aggregate, have
a Material Adverse Effect.
(b) Except as set forth in
Schedule 4.11(b)
, no Permits that are material to
the operation of the System Assets will be subject to suspension, modification, revocation
or nonrenewal as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. All Permits that are held in the
name of any employee, officer, director, stockholder, agent or otherwise on behalf of
the Contributing Parties or the System Assets shall be deemed included under the warranty in
this Section.
(c) Except as set forth in
Schedule 4.11(c)
, Chipeta has obtained and is
maintaining all permits, licenses, variances, exemptions, Orders, franchises, consents,
authorities, and approvals of all Governmental Entities necessary or desirable for the
lawful ownership and operation of Chipeta and its business and assets (the
Chipeta
Permits
), the loss of which would, individually or in the aggregate, have a Material
Adverse Effect, in compliance with all Laws and the terms and conditions of such Chipeta
Permits. Except as set forth in
Schedule 4.11(c)
, no Chipeta Permits will be
subject to suspension, modification, revocation or nonrenewal as a result of the execution
and delivery of this Agreement or the consummation of the transactions contemplated hereby.
All Chipeta Permits that are held in the name of any employee, officer, director,
stockholder, agent or otherwise on behalf of Chipeta or the Chipeta Assets shall be deemed
included under the warranty in this Section.
27
Section 4.12
Contracts
.
(a)
Schedule 4.12(a)
sets forth a complete and accurate list of all material
Contracts. The Contributing Parties have provided true, correct and complete copies of all
material Contracts to the Recipient Parties. Neither the Contributing Parties, nor, to the
Knowledge of the Contributing Parties, any other Person, is in default under any material
Contract except as disclosed on
Schedule 4.12(a)
. Except as set forth in
Schedule 4.12(a)
, each material Contract (other than such Contracts with respect to
which all performance and payment obligations have been fully performed or otherwise
discharged by all parties thereto prior to the Closing) (i) is in full force and effect and
(ii) represents the legal, valid and binding obligation of the Contributing Party that is
party thereto and, to the Knowledge of the Contributing Parties, represents the legal, valid
and binding obligation of the other parties thereto, in each case enforceable in accordance
with its terms. Except as disclosed on
Schedule 4.12(a)
, there are no material
Contracts with Affiliates of a Contributing Party that will be binding on the System Assets
after Closing. Except as set forth in
Schedule 4.12(a)
, none of the Contributing
Parties and, to the Knowledge of the Contributing Parties, no other party is in breach of
any Contract, no notice of default or breach has been received or delivered by a
Contributing Party under any Contract, the resolution of which is currently outstanding, and
there are no current notices received by a Contributing Party of the exercise of any
premature termination, price redetermination, market-out or curtailment of any Contract.
(b)
Schedule 4.12(b)
sets forth a complete and accurate list of all material
Chipeta Contracts. The Contributing Parties have provided true, correct and complete copies
of all material Chipeta Contracts to the Recipient Parties. None of Chipeta, any
Contributing Party nor, to the Knowledge of the Contributing Parties, any other Person, is
in default under any material Chipeta Contract except as disclosed on
Schedule
4.12(b)
. Except as set forth in
Schedule 4.12(b)
, each material Chipeta
Contract (other than such Contracts with respect to which all performance and payment obligations have been fully
performed or otherwise discharged by all parties thereto prior to the Closing) (i) is in
full force and effect and (ii) represents the legal, valid and binding obligation of
Chipeta, any applicable Contributing Party and, to the Knowledge of the Contributing
Parties, the other parties thereto, in each case enforceable in accordance with its terms.
Except as disclosed on
Schedule 4.12(b)
, there are no material Contracts with
Affiliates of a Contributing Party that will be binding on Chipeta or any of its assets
after Closing. Except as set forth in
Schedule 4.12(b)
, Chipeta is not, no
Contributing Party is and, to the Knowledge of the Contributing Parties, no other party is
in breach of any Chipeta Contract, no notice of default or breach has been received or
delivered by Chipeta or any Contributing Party under any Chipeta Contract, the resolution of
which is currently outstanding, and there are no current notices received by Chipeta or any
Contributing Party of the exercise of any premature termination, price redetermination,
market-out or curtailment of any Chipeta Contract.
Section 4.13
Condition of Assets
. There are no material structural defects relating to any of the System Assets or the
Chipeta Assets and the System Assets and the Chipeta Assets are in good repair, working order and
operating condition, ordinary wear and tear excepted, and are adequate for the operation of the
System Assets and the Chipeta Assets consistent with past
28
business practices. To the Knowledge of
the Contributing Parties, all improvements to the real property owned or used in connection with
the System Assets or the Chipeta Assets do not encroach in any material respect on property of
others (other than encroachments that would not materially impair the operations of the System
Assets or the Chipeta Assets). There is no pending or, to the Knowledge of the Contributing
Parties, threatened condemnation of any part of the System Assets or the Chipeta Assets by any
Governmental Entity which would have a material adverse effect on the ownership or operation of the
System Assets or the Chipeta Assets.
Section 4.14
Matters Relating to Chipeta
. Chipeta owns no Equity Interest in any Person, is party to no contracts other than the Chipeta
Contracts, has no material assets other than the Chipeta Assets described in
Exhibits A and
D
, and has no material liabilities or obligations of any kind or character other than those set
forth on
Schedule 4.14
, all of which arise out of its construction and/or ownership of the
Chipeta Plant or status as a party to the Chipeta Contracts. There is no agreement binding on
Chipeta or any Contributing Party, or that is or will be binding on any Recipient Party as a result
of the transactions contemplated by this Agreement, with respect to the size or construction of, or
budget for, or (other than as set forth on
Schedule 4.20
) requiring Chipeta or any
Contributing Party or Recipient Party to make any expenditure or capital contribution with respect
to, Train III (as defined in the Chipeta LLC Agreement), and neither Chipeta nor any Contributing
Party has, and no Recipient Party has or will have as a result of the transactions contemplated by
this Agreement, any legal obligation to build, or (other than as set forth on
Schedule
4.20
) expend any funds or make any capital contribution with respect to, Train III.
Section 4.15
Financial Statements
.
Schedule 4.15
contains audited financial statements of Chipeta as of December 31,
2008 and for the period from June 1, 2008 through December 31, 2008 (collectively, the
Annual
Financial Statements
) and unaudited financial statements of Chipeta as of and for the quarter
ended March 31, 2009 (the
Interim Financial Statements
and, together with the Annual Financial
Statements, the
Financial Statements
). The Financial Statements have been prepared in conformity
with GAAP, consistently applied, except as otherwise disclosed on
Schedule 4.15
and, with
respect to the Interim Financial Statements, except for the absence of notes, a statement of cash
flows and year-end audit adjustments required by GAAP. The Financial Statements fairly present, in
all material respects, the financial position, results of operations and (in the case of the Annual
Financial Statements) cash flows of Chipeta as of and for the periods covered thereby.
Section 4.16
No Undisclosed Liabilities; Accuracy of Data
.
(a) To the Knowledge of the Contributing Parties, all information that has been made
available to the Recipient Parties and their representatives by any Contributing Party or
any of their directors, partners, officers, employees, agents, advisors or representatives
in connection with this negotiation and execution of this Agreement and the transactions
contemplated hereby, is complete and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in any material respect in light of
the circumstances under which such statements were made.
29
(b) Except for bonds, letters of credit and guarantees related primarily to the
Excluded Assets which Contributing Party is retaining,
Schedule 4.16
sets forth all
bonds, letters of credit and guarantees posted as of the date of this Agreement by Chipeta
or any Contributing Party with any Governmental Entity or third Person relating to the
Chipeta Assets or the System Assets.
Section 4.17
Absence of Certain Changes
. Since June 1, 2008, (a) the System Assets and the Chipeta Assets and Chipeta have been operated
only in the ordinary course of business consistent with past practices of the Contributing Parties
and Chipeta, (b) there has not been any material damage, destruction or loss with respect to the
System Assets, Chipeta or the Chipeta Assets, (c) neither Chipeta nor the Chipeta Assets have
become subject to any material obligation or liability, other than those reflected in the Financial
Statements or contained in the Approved Budgets (as defined in the Chipeta LLC Agreement), true and
complete copies of which have been delivered to the Recipient Parties, incurred in the ordinary
course of business consistent with past practice since March 31, 2009, or otherwise permitted under
this Agreement to be incurred between the date hereof and the Closing Date, (d) the System Assets
have not become subject to any obligation or liability outside the ordinary course of business of
the Contributing Parties, and (e) Chipeta has made no distributions other than regular quarterly
distributions required by Section 4.2 of the Chipeta LLC Agreement.
Section 4.18
Sufficiency of the Assets
.
(a) The assets conveyed to the Recipient Parties by the Contributing Parties as of the
Closing Date constitute all of the assets (other than the Excluded Assets) related to the
ownership, use and operation of the System Assets and are sufficient to permit the Recipient
Parties to own and operate the System Assets in the manner the business represented thereby
was conducted by the Contributing Parties on the date of this Agreement and immediately
prior to the Closing Date.
(b) Except as listed on
Schedule 4.18
, (i) there are no obligations under the
terms of the instruments creating the possessory interests of the Contributing Parties or
the Recipient Parties of the System Assets requiring the payment of any money to permit the
continued use of the rights granted by such instruments and (ii) there are no provisions
permitting the termination of any instrument creating the possessory interests of the
Contributing Parties or the Recipient Parties of the System Assets prior to the abandonment
of the improvements thereon established by the respective instruments or unless such
termination is caused by the occurrence of an event of default under the terms of such
instruments, in each case outside the ordinary course of business or that would have a
Material Adverse Effect.
(c) The Chipeta Assets constitute all of the assets related to the ownership, use and
operation of the Chipeta Plant and are sufficient to permit Chipeta to own and operate the
Chipeta Plant in the manner the business represented thereby was conducted by Chipeta on the
date of this Agreement and immediately prior to the Closing Date.
(d) Except as listed on
Schedule 4.18
, (i) there are no obligations under the
terms of the instruments creating the possessory interests of Chipeta in the Chipeta Assets
30
requiring the payment of any money to permit the continued use of the rights granted by such
instruments and (ii) there are no provisions permitting the termination of any instrument
creating the possessory interests of Chipeta in the Chipeta Assets prior to the abandonment
of the improvements thereon established by the respective instruments or unless such
termination is caused by the occurrence of an event of default under the terms of such
instruments, in each case outside the ordinary course of business or that would have a
Material Adverse Effect.
Section 4.19
Regulatory Matters
.
(a) No Contributing Party is regulated as a common carrier under applicable Law as a
result of a Contributing Partys ownership and operation of the System Assets, and Chipeta
is not regulated as a common carrier under applicable Law;
(b) The System Assets and the assets of Chipeta are intrastate pipelines and not
currently subject to regulation by the United States Federal Energy Regulatory Commission;
and
(c) No assets constituting part of the System Assets were acquired through the use or
threatened use of eminent domain by a Contributing Party or, to the Knowledge of any
Contributing Party, by that Contributing Partys predecessors in interest to any of the
System Assets. No assets of Chipeta were acquired through the use or threatened use of
eminent domain by Chipeta or a Contributing Party or, to the Knowledge of the Contributing
Parties, by any other Person.
Section 4.20
Outstanding Capital Commitments
.
(a) As of the date of this Agreement, there are no outstanding capital commitments or
other expenditure commitments which are binding on a Contributing Party or the System Assets
and which the Contributing Parties reasonably anticipate will individually or in the
aggregate require expenditures by the owner of the System Assets after the Closing Date in
excess of $250,000 other than those shown on
Schedule 4.20(a)
.
(b) As of the date of this Agreement, there are no outstanding capital commitments or
other expenditure commitments or budgets of Chipeta which will require any Contributing
Party or Recipient Party to make capital contributions to Chipeta in respect of the Chipeta
Interest other than those shown on
Schedule 4.20(b)
.
Section 4.21
Insurance
.
Schedule 4.21
lists all insurance policies separately maintained by (or on behalf of)
the Contributing Parties with respect to the System Assets, Chipeta, the Chipeta Assets and the
Chipeta Interest.
Section 4.22
Employees; Labor Relations
. Chipeta has no employees.
Section 4.23
Management Projections and Budgets
. The projections and budgets provided to the Partnership (including those provided to Tudor,
Pickering, Holt & Co., LLC (
TPH
), the financial advisor to the Special Committee), by the
Contributing Parties as part of the Partnerships review in connection with this Agreement have a
reasonable basis and are
31
consistent with the Contributing Parties managements current
expectations. The other financial and operational information provided by the Contributing Parties
to TPH as part of its review of the proposed transaction for the Special Committee is complete and
correct in all material respects for the periods covered, and is derived from and is consistent
with the Contributing Parties and Chipetas books and records.
Section 4.24
Waivers and Disclaimers
. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR THE EXPRESS
REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND AGREEMENTS MADE BY THE
PARTIES IN THIS AGREEMENT AND THE ANCILLARY DOCUMENTS, NONE OF THE CONTRIBUTING PARTIES HAS MADE OR
MAKES, AND EACH SUCH CONTRIBUTING PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER,
WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (I) THE VALUE,
NATURE, QUALITY OR CONDITION OF THE SYSTEM ASSETS, INCLUDING THE WATER, SOIL, GEOLOGY OR
ENVIRONMENTAL CONDITION OF THE SYSTEM ASSETS, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS
SUBSTANCES OR OTHER MATTERS ON THE SYSTEM ASSETS, (II) THE INCOME TO BE DERIVED FROM THE SYSTEM
ASSETS, (III) THE SUITABILITY OF THE SYSTEM ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE
CONDUCTED THEREON, (IV) THE COMPLIANCE OF OR BY THE SYSTEM ASSETS OR THEIR OPERATION WITH ANY LAWS
(INCLUDING ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS,
ORDERS OR REQUIREMENTS), OR (V) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF THE SYSTEM ASSETS. EXCEPT TO THE EXTENT PROVIDED IN THIS
AGREEMENT OR THE ANCILLARY DOCUMENTS, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY
VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE SYSTEM ASSETS
FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN THIS
AGREEMENT OR THE ANCILLARY DOCUMENTS, EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT TO THE MAXIMUM
EXTENT PERMITTED BY LAW, THE TRANSFER AND CONVEYANCE OF THE SYSTEM ASSETS SHALL BE MADE IN AN AS
IS, WHERE IS CONDITION WITH ALL FAULTS, AND THE SYSTEM ASSETS ARE TRANSFERRED AND CONVEYED SUBJECT
TO ALL OF THE MATTERS CONTAINED IN THIS AGREEMENT. THIS SECTION SHALL SURVIVE SUCH TRANSFER AND
CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN
NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT
TO THE SYSTEM ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE,
EXCEPT AS SET FORTH IN THIS AGREEMENT OR THE ANCILLARY DOCUMENTS. THE PARTIES AGREE THAT
32
THE
DISCLAIMERS OF WARRANTIES CONTAINED IN THIS PARAGRAPH ARE CONSPICUOUS DISCLAIMERS FOR THE PURPOSE
OF ANY APPLICABLE LAW.
Section 4.25
Investment
.
The Contributing Parties (which for purposes of this Section include any Anadarko Entity
designated by Anadarko to receive any portion of the Unit Consideration) are not acquiring the Unit
Consideration with a view to or for sale in connection with any distribution thereof or any other
security related thereto in violation of the Securities Act or any state securities Laws. The
Contributing Parties are familiar with investments of the nature of the Unit Consideration,
understand that this investment involves substantial risks, have adequately investigated the
Partnership and the Unit Consideration, and have substantial knowledge and experience in financial
and business matters such that they are capable of evaluating, and have evaluated, the merits and
risks inherent in purchasing the Unit Consideration, and are able to bear the economic risks of
such investment. The Contributing Parties have had the opportunity to visit with the Partnership
and meet with its officers and other representatives to discuss the business, assets, liabilities,
financial condition, and operations of the Partnership, have received all materials, documents and
other information that the Contributing Parties deem necessary or advisable to evaluate the
Partnership and the Unit Consideration, and have made their own independent examination,
investigation, analysis and evaluation of the Partnership and the Unit Consideration, including
their own estimate of the value of the Unit Consideration. The Contributing Parties have
undertaken such due diligence (including a review of the properties, liabilities, books, records
and contracts of the Partnership) as the Contributing Parties deem adequate. The Contributing
Parties acknowledge that the common units constituting the Unit Consideration have not been
registered under applicable federal and state securities laws and that the such common units may
not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless
such transfer, sale, assignment, pledge, hypothecation or other disposition is registered under
applicable federal and state securities laws or pursuant to an exemption from registration under
any federal or state securities laws, and that the certificates representing such common units will
bear a legend to the foregoing effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE RECIPIENT PARTIES
The Recipient Parties, jointly and severally, hereby represent and warrant to the Contributing
Parties as follows:
Section 5.1
Organization of Recipient
. Each Recipient Party is an entity duly organized, validly existing and in good standing under
the Laws of its state of organization, and has all requisite entity power and authority to own,
operate and lease the System Assets and prior to Closing will be duly qualified to do business as a
foreign entity in the jurisdiction where the System Assets are located.
Section 5.2
Authorization; Enforceability
. Each Recipient Party, as appropriate, has full partnership or limited liability company power
and authority to execute, deliver, and perform its obligations under this Agreement and any
Recipient Party Ancillary Documents to which it is a party. The execution, delivery, and
performance by each Recipient Party of this Agreement and the Recipient Party Ancillary Documents
and the consummation by such Recipient Party of the
33
transactions contemplated hereby and thereby,
have been duly authorized by all necessary partnership or limited liability company action, as
appropriate, of the Recipient Parties. This Agreement has been duly executed and delivered by each
Recipient Party and constitutes (and each Recipient Party Ancillary Document executed or to be
executed by each Recipient Party has been, or when executed will be, duly executed and delivered by
such Recipient Party and constitutes), or when executed and
delivered will constitute, a valid and legally binding obligation of the Recipient Party,
enforceable against it in accordance with its terms, except as such enforceability may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar Laws affecting creditors rights and remedies generally and (ii) equitable principles
which may limit the availability of certain equitable remedies (such as specific performance) in
certain instances.
Section 5.3
No Conflicts
. The execution and delivery by each Recipient Party of this Agreement and the other Recipient
Party Ancillary Documents to which it is a party, and the performance of its obligations hereunder
and thereunder, do not, and the consummation of the transactions contemplated hereby and thereby
will not, (i) violate, conflict with, or result in any breach of any provision of such Recipient
Partys organizational documents or any agreement or instrument to which it is a party or by which
it is bound, or (ii) violate any Law applicable to such Recipient Party, except in the case of (ii)
above for violations which would not have a material adverse effect on such Recipient Partys
ability to consummate the transactions contemplated by this Agreement.
Section 5.4
Litigation
. Except as set forth in
Schedule 5.4
, there are no claims, demands, actions, suits, or
proceedings pending before any Governmental Entity or arbitrator or, to the Recipient Parties
Knowledge, threatened in writing against any Recipient Party or any of its Affiliates which are
reasonably likely to impair materially the ability of the Recipient Parties to perform their
obligations under this Agreement or the Recipient Party Ancillary Documents.
Section 5.5
Brokers Fees
. Except for TPH, no investment banker, broker, finder, financial advisor or other intermediary
has been retained by or is authorized to act on behalf of any of the Recipient Parties or any of
their Affiliates who is entitled to receive from any Party or any of its Affiliates any fee or
commission in connection with the transactions contemplated by this Agreement.
Section 5.6
Investment
. The Recipient Parties are not acquiring the Chipeta Interest with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act or any state securities
Laws. The Recipient Parties have such knowledge and experience in financial and business matters
that they are capable of evaluating the merits and risks of an investment in the Chipeta Interest.
The Recipient Parties acknowledge that the Chipeta Interest has not been registered under
applicable federal and state securities Laws and that the Chipeta Interest may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer,
sale, assignment, pledge, hypothecation or other disposition is registered under applicable federal
and state securities Laws or pursuant to an exemption from registration under any federal or state
securities Laws.
34
ARTICLE VI
COVENANTS
Section 6.1
Conduct of Business
. Except as specifically provided in this Agreement or as expressly agreed to in writing by the
Partnership, during the period from the date of this Agreement until the Closing, each Contributing
Party shall (i) own, operate and maintain the System Assets in all material respects according to
their usual and ordinary course of business consistent with past practice, (ii) use commercially
reasonable efforts to preserve its relationships with customers, suppliers, licensors, licensees,
advertisers, distributors, shippers and others having business dealings relating to the System
Assets, and (iii) except as prohibited by the Chipeta LLC Agreement, (A) cause Chipeta to own,
operate and maintain the Chipeta Assets in all material respects according to its usual and
ordinary course of business consistent with past practice, (B) cause Chipeta to conduct its
operations in all material respects according to its usual and ordinary course of business
consistent with its past practice and (C) cause Chipeta to preserve intact its assets and its
current business organization and preserve its relationships with customers, suppliers, licensors,
licensees, advertisers, distributors, shippers and others having business dealings with it.
Without limiting the generality of the foregoing, except as expressly provided in this Agreement or
as expressly agreed to in writing by the Partnership, the Contributing Parties shall not agree to,
promote, or vote or cause to be voted the Chipeta Interest or the Remaining Interest in favor of,
or permit Chipeta to:
(a) declare, set aside or pay any dividends, or make any distributions, in respect of
its Equity Interests, other than the smallest quarterly distribution required by the Chipeta
LLC Agreement, determined, declared and paid in accordance with past practice; or
repurchase, redeem or otherwise acquire any such Equity Interests;
(b) merge into or with or consolidate with any other Person or acquire all or
substantially all of the business or assets of any Person or other entity;
(c) make any change in its organizational documents or governing instruments;
(d) purchase any securities of any Person, except short-term debt securities of
governmental entities, or make any investment in any corporation, partnership, joint venture
or other business enterprise;
(e) increase its indebtedness, or incur any obligation or liability, direct or
indirect, other than the incurrence of liabilities pursuant to existing agreements in the
ordinary course of business consistent with past practice;
(f) (i) issue or sell any membership interests or other Equity Interests in Chipeta,
(ii) amend any of the terms of any such interests outstanding as of the date hereof, or
(iii) admit any new members;
(g) adopt a plan of complete or partial liquidation or resolutions providing for or
authorizing its liquidation, dissolution, recapitalization, restructuring, or other
reorganization; or
35
(h) make any capital commitments or other expenditure commitments or change any budgets
of Chipeta which will require any Recipient Party to make any capital contributions to
Chipeta in respect of the Chipeta Interest other than those shown on
Schedule
4.20(b)(ii)
.
Section 6.2
Access
. From the date of this Agreement until the Closing Date, each Contributing Party shall (and, as
applicable, shall cause Chipeta to), upon reasonable advance notice by the Partnership, (i) provide
each Recipient Party and its representatives reasonable access, during normal business hours, to
the System Assets, the Chipeta Assets and Chipeta and (ii) furnish to each Recipient Party such
documents and information in the possession or control of Contributing Parties concerning the
System Assets, the Chipeta Assets, Chipeta and the Chipeta Interest, as the Partnership from time
to time may reasonably request, but only to the extent that Contributing Parties may comply with
the covenants in clause (i) and (ii) above without breaching any confidentiality obligation or
other contractual restriction binding on any Contributing Party.
Section 6.3
Cooperation
. Each Contributing Party shall cooperate with each Recipient Party and assist such Recipient
Party in identifying all Permits necessary to own and operate the System Assets from and after the
Closing Date and, where permissible, transfer existing Permits to such Recipient Party, or, where
not permissible, assist the Recipient Party in obtaining new Permits at no cost, fee or liability
to such Contributing Party.
Section 6.4
Additional Agreements
. Subject to the terms and conditions of this Agreement, each of the Parties shall use its
commercially reasonable efforts to do, or cause to be taken all action and to do, or cause to be
done, all things necessary, proper, or advisable to consummate and make effective the transactions
contemplated by this Agreement, including the fulfillment of the conditions set forth in
Article VII
, to the extent that the fulfillment of such conditions is within the control of
such Party; provided, however
,
that in no event shall any Party or its Affiliates be required to
divest any interest that they may have in any material assets or business.
Section 6.5
Replacement of Bonds, Letters of Credit and Guarantees
. The Parties understand that none of the bonds, letters of credit or guarantees, if any, set
forth on
Schedule 4.16
posted by any Contributing Party with any Governmental Entity or
third Person and relating to the System Assets or the Chipeta Interest are to be transferred to the
Recipient Parties. The Recipient Parties shall use commercially reasonable efforts to obtain, or
cause to be obtained in the name of a Recipient Party, replacements for such bonds, letters of
credit and guarantees, and shall use commercially reasonable efforts to cause, effective on or
promptly after the Closing, the cancellation or return to the Contributing Parties of such bonds,
letters of credit and guarantees posted by such Contributing Party, but only to the extent such
replacements are necessary or required under the Contracts, the Chipeta Contracts or by applicable
Law.
Section 6.6
General Matters
. The Recipient Parties shall use commercially reasonable efforts to take all action and to do all
things necessary, proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement, including the Contributing Parties conditions to closing in
Section 7.3
. Anadarko and the Contributing Parties shall use commercially reasonable
efforts to take all action and to do all things necessary, proper,
36
or advisable in order to
consummate and make effective the transactions contemplated by this Agreement, including the
Recipient Parties conditions to closing in
Section 7.2
.
Section 6.7
Chipeta Interest Matters
. Until the Closing, AUM will not resign as a member or as managing member of Chipeta and will
not, directly or indirectly, sell, assign, transfer, convey or otherwise cease to own the Remaining
Interest or any portion thereof.
Section 6.8
Required Consents
.
(a) In the event any of the System Asset Required Consents have not been obtained, made
or complied with as of the Closing, AUM shall appoint the Operating Partnership as agent
with respect to the related System Assets such that: (i) from and after the Effective Time,
the Operating Partnership will receive the revenues and other material benefits from, and
pay the costs and expenses required to be paid under, each such System Asset; (ii) the
Operating Partnership will be entitled to and will assume the responsibility to discharge
AUMs obligations under each such System Asset; and (iii) AUM will use commercially
reasonable efforts to obtain, make or comply with promptly after Closing any such System
Asset Required Consents.
(b) In the event any of the Chipeta Asset Required Consents have not been obtained,
made or complied with as of the Closing, the Contributing Parties will, and will cause their
Affiliates to, obtain, make or comply with promptly after Closing any such Chipeta Asset
Required Consents.
Section 6.9
Chipeta Capital Contributions
. The Parties agree and acknowledge that, with respect to the Chipeta Interest, AUM is responsible
for the capital contributions listed on
Schedule 4.20(b)(i)
. If such capital contributions
are called by or on behalf of Chipeta in respect of the Chipeta Interest after the Closing Date,
AUM will contribute all such amounts when due for the account of the Operating Partnership.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1
Conditions to Each Partys Obligation to Close
. The obligations of the Parties to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction, at or prior to the Closing, of each of the following
conditions:
(a)
No Restraint.
No temporary restraining order, preliminary or permanent
injunction or other Order issued by any Governmental Entity or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this Agreement
shall be in effect.
(b)
Legality of Transactions.
No action shall have been taken nor any Law
shall have been enacted by any Governmental Entity that makes the consummation of the
transactions contemplated by this Agreement illegal.
37
(c)
Opinion of Financial Advisor to Special Committee.
The Special Committee
shall have received the opinion, in form and substance satisfactory to the Special
Committee, of TPH, the financial advisor to the Special Committee, that the transactions
contemplated by this Agreement are fair to the Partnership from a financial point of view,
and such opinion shall not have been withdrawn.
Section 7.2
Conditions to the Recipient Parties Obligation to Close
. The obligation of the Recipient Parties to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction (or waiver by the Partnership in its sole
discretion), at or prior to the Closing, of each of the following conditions:
(a)
Preference Rights and Transfer Requirements.
With respect to each
Preference Right, (i) each holder of such Preference Right has waived such Preferred Right
or (ii) the time in which such Preference Right may be exercised has expired and no suit,
action or other proceeding has been initiated by a third party seeking to restrain, enjoin
or otherwise prohibit the consummation of the transactions contemplated hereby in connection
with a claim to enforce such Preference Right. All Transfer Requirements described in
Schedule 4.4
that provide that transfer of a System Asset without compliance with
such Transfer Requirement would reasonably be expected to result in termination or other
material impairment of any rights in relation to such System Asset, have been complied with
or otherwise satisfied. All Transfer Requirements related to the Chipeta Interest have been
complied with or otherwise satisfied.
(b)
Representations and Warranties.
The representations and warranties set
forth in
Article IV
shall be true and correct in all material respects (other than
representations and warranties that are already qualified as to materiality or Material
Adverse Effect, which representations and warranties shall be true and correct in all
respects) as of the Closing Date as though made on and as of the Closing Date, and the
Recipient Parties shall have received a certificate to such effect signed on behalf of
Anadarko and the Contributing Parties by an officer of Anadarko.
(c)
Performance of Obligations.
The Contributing Parties shall have performed
in all material respects (other than covenants and obligations that are already qualified as
to materiality or Material Adverse Effect, which covenants and obligations shall have been
performed in all respects) all covenants and obligations required to be performed by the
Contributing Parties under this Agreement prior to or on the Closing Date, and the Recipient
Parties shall have received a certificate to such effect signed on behalf of the
Contributing Parties by an officer of Anadarko (such certificate, together with the
certificate described in
Section 7.2(b)
, the
Contributing Party Closing
Certificate
).
(d)
Contributing Party Ancillary Documents.
The Contributing Parties shall
have delivered, or caused to be delivered, to the Recipient Parties the Contributing Party
Ancillary Documents required under
Section 3.2
.
(e)
Permits.
Each of the Permits held by the Contributing Parties which are
assignable by the Contributing Parties shall have been assigned to the applicable
38
Recipient
Party in accordance with applicable Law, and for Permits held by the Contributing Parties
which are not so assignable, the applicable Recipient Party shall have been issued a new
replacement Permit with terms and conditions reasonably satisfactory to the Recipient
Parties except for Permits that, in transactions similar to the transactions contemplated by
this Agreement, are normally obtained by the acquirer thereunder after the consummation
thereof.
(f)
Preliminary Settlement Statement.
The Partnership shall have received the
Preliminary Settlement Statement.
(g)
Chipeta Interest Matters.
(i) All members of Chipeta shall have consented (whether by written consent or by
approval of an amendment to the Chipeta LLC Agreement), in form and substance reasonably
satisfactory to the Partnership, to (A) the admission of the Operating Partnership as a
member of Chipeta and (B) the substitution of the Operating Partnership as managing member
of Chipeta.
(ii) The Operating Partnership shall have been admitted as a member of Chipeta and
appointed as managing member of Chipeta effective as of the Closing.
(h)
Title to System Assets.
Each of the Surface Contracts described on
Schedule 4.6
shall have been assigned to AUM pursuant to conveyances in form and
substance reasonably satisfactory to the Partnership.
(i)
Stagecoach Extension.
AUM shall have acquired the Stagecoach Extension
pursuant to the terms of the Stagecoach Agreement.
Section 7.3
Conditions to the Contributing Parties Obligation to Close
. The obligation of the Contributing Parties to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction (or waiver by Anadarko), at or prior to the Closing,
of each of the following conditions:
(a)
Representations and Warranties.
The representations and warranties of the
Recipient Parties set forth in
Article V
shall be true and correct in all material
respects (other than representations and warranties that are already qualified as to
materiality or Material Adverse Effect, which representations and warranties shall be true
and correct in all respects) as of the Closing Date as though made on and as of the Closing
Date, and the Contributing Parties shall have received a certificate to such effect signed
on behalf of the Recipient Parties by an officer of the General Partner.
(b)
Performance of Obligations.
The Recipient Parties shall have performed in
all material respects (other than covenants and obligations that are already qualified as to
materiality or Material Adverse Effect, which covenants and obligations shall have been
performed in all respects) all covenants and obligations required to be performed by the
Recipient Parties under this Agreement prior to or on the Closing Date, and the Contributing
Parties shall have received a certificate to such effect signed on behalf of the
39
Recipient
Parties by an officer of the General Partner (such certificate, together with the
certificate described in
Section 7.3(a)
, the
Recipient Party Closing Certificate
).
(c)
Recipient Party Ancillary Documents.
The Recipient Parties shall have
delivered, or caused to be delivered, to the Contributing Parties the Recipient Party
Ancillary Documents required under
Section 3.3
.
(d)
Delivery of Consideration.
The Recipient Parties shall have delivered the
Cash Consideration, the Unit Consideration and the GP Consideration in accordance with
Section 3.3
.
ARTICLE VIII
TERMINATION
Section 8.1
Termination
.
(a)
Right to Terminate.
This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(i) by mutual written consent of Anadarko and the Partnership;
(ii) by either Anadarko or the Partnership if the Closing has not occurred
within 90 days of the date of this Agreement (the
Termination Date
); provided,
however
,
that this right to terminate this Agreement shall not be available to any
Party whose breach of this Agreement or whose Affiliates breach of this Agreement
has been the cause of, or resulted in, the failure of the Closing to occur on or
before such date;
(iii) by either Anadarko or the Partnership if a Governmental Entity shall have
issued an Order or taken any other action, in each case permanently restraining,
enjoining, or otherwise prohibiting the transactions contemplated by this Agreement;
or
(iv) by Anadarko in the event of a breach by any Recipient Party, or by the
Partnership in the event of a breach by any Contributing Party, of any
representation, warranty, covenant or other agreement contained in this Agreement
which (A) would give rise to the failure of a condition set forth in
Section
7.2(b)
,
Section 7.2(c)
,
Section 7.3(a)
or
Section
7.3(b)
, as applicable, and (B) cannot be or has not been cured by the earlier of
(1) 20 days following receipt by the breaching party of written notice of such
breach or (2) the Business Day immediately preceding the Termination Date.
(b)
Effect of Investigation.
The right of any Party to terminate this
Agreement pursuant to this
Section 8.1
shall remain operative and in full force and
effect regardless of the actual or constructive knowledge of such Party regarding the
subject matter giving rise to such right of termination.
40
Section 8.2
Effect of Termination
. Upon termination of this Agreement pursuant to
Section 8.1
, the undertakings of the
Parties set forth in this Agreement shall forthwith be of no further force and effect;
provided
,
however
, that no such termination shall relieve any Party of any intentional material breach of any
term or provision hereof.
ARTICLE IX
INDEMNIFICATION
Section 9.1
Survival
.
(a) The representations and warranties in this Agreement shall survive the Closing
until the applicable dates specified in
Sections 9.1(b)
and
9.1(c)
and
regardless of any inspection or investigation by or on behalf of the Recipient Parties or
the Contributing Parties, respectively; provided that any representation or warranty with
respect to which a claim for indemnification has been brought pursuant to this
Article
IX
that is pending at the end of the applicable survival period shall continue to
survive until the final resolution of such claim.
(b) The liability of Anadarko and the Contributing Parties for the breach of any of the
representations and warranties of Anadarko and the Contributing Parties set forth in
Article IV
shall be limited to claims for which a Partnership Indemnified Party
delivers written notice to Anadarko on or before 18 months after the Closing Date;
provided
,
however
, that (i) the representations and warranties in
Section 4.9
shall be limited
to claims for which a Partnership Indemnified Party delivers written notice to Anadarko on
or before 24 months after the Closing Date; and (ii) the representations and
warranties set forth in
Sections 4.1
,
4.2
and
4.7
shall not be
limited as to time other than the applicable statute of limitations.
(c) The liability of the Recipient Parties for the breach of any of the representations
and warranties of the Recipient Parties set forth in
Article V
shall be limited to
claims for which an Anadarko Indemnified Party delivers written notice to the Partnership on
or before 18 months after the Closing Date;
provided
,
however
, that the representations and
warranties set forth in
Sections 5.1
and
5.2
shall not be limited as to time
other than the applicable statute of limitations.
Section 9.2
Indemnification of the Anadarko Indemnified Parties
. Solely for the purpose of indemnification in this
Section 9.2
, the representations and
warranties of the Recipient Parties in this Agreement shall be deemed to have been made without
regard to any materiality or Material Adverse Effect qualifiers. The Partnership, from and after
the Closing Date, shall indemnify and hold Anadarko and the Contributing Parties and their
respective Affiliates (other than any of the Partnership Entities), shareholders, unitholders,
members, directors, officers, employees, agents and representatives (together with Anadarko and the
Contributing Parties, the
Anadarko Indemnified Parties
) harmless from and against any and all
Losses, suffered or incurred by the Anadarko Indemnified Parties as a result of, caused by, arising
out of, or in any way relating to (a) subject to
Section 9.1
, any breach of a
representation or warranty of the Recipient Parties in this Agreement (which for this purpose is
deemed not to
41
include
Exhibits E, F or G
), and (b) any breach of any agreement or covenant
on the part of the Recipient Parties in this Agreement.
Section 9.3
Indemnification of the Partnership Indemnified Parties
. Solely for the purpose of indemnification in this
Section 9.3
, the representations and
warranties of Anadarko and the Contributing Parties in this Agreement shall be deemed to have been
made without regard to any materiality or Material Adverse Effect qualifiers. Anadarko shall
indemnify and hold the Recipient Parties and their respective Affiliates (other than any of the
Anadarko Entities), shareholders, unitholders, members, directors, officers, employees, agents and
representatives (together with the Recipient Parties, the
Partnership Indemnified Parties
)
harmless from and against any and all Losses suffered or incurred by the Partnership Indemnified
Parties as a result of, caused by, arising out of, or in any way relating to:
(a) subject to
Section 9.1
, any breach of a representation or warranty of
Anadarko or the Contributing Parties in this Agreement (which for this purpose is deemed not
to include
Exhibits E, F or G
) other than
Section 4.20(b)
;
(b) any breach of any agreement or covenant on the part of Anadarko or the Contributing
Parties in this Agreement;
(c) (i) if Chipeta acquires CIGs Natural Buttes Compressor Station and Processing
Plant, the completion of any remediation commenced pursuant to Section 6.5(b)(ii) of the CIG
Purchase Agreement, (ii) any penalties, fines or compliance costs or obligations arising
under the consent decree described in
Schedule 4.9
(A) if Chipeta has made a claim
for indemnity therefor from CIG pursuant to the CIG Purchase Agreement within one year after the closing of the transactions contemplated by the CIG Purchase
Agreement, (B) if Chipeta has used commercially reasonable efforts to obtain such indemnity
and (C) to the extent Chipeta has not been indemnified therefor pursuant to the CIG Purchase
Agreement, and (iii) any remediation or other Environmental Activity identified through or
created by the requirements associated with closing or shutting down any of the System
Assets where such shutting down or closing occurred less than one year prior to the Closing
Date;
(d) all Tax liabilities (i) attributable to the ownership or operation of the System
Assets or the Chipeta Interest prior to the Closing Date, or (ii) with respect to Chipeta,
arising under Treasury Regulation Section 1.1502-6 and any similar Law, by contract, as
successor or transferee or otherwise and which Tax is attributable to having been a member
of any consolidated, combined or unitary group prior to the Closing Date;
(e) to the extent such Losses are incurred within one year after the Closing Date, the
renewal or replacement of, or the inability to renew or replace, the easements and
rights-of-way listed on
Schedule 4.6(a)
;
(f) the failure to obtain, make or comply with any System Asset Required Consents or
Chipeta Asset Required Consents;
(g) (i) any breach or violation of, default under, failure to comply with, or penalty
related to the Consent Decree entered in
United States v. Kerr-McGee
42
Corporation
, Civil
Action No. 07-CV-01034-WDM-MJW, in the United States District Court for the District of
Colorado (the
Consent Decree
) that is related to any facility covered by the Consent
Decree other than the System Assets and the Chipeta Assets, (ii) any breach or violation of,
default under, failure to comply with, or penalty related to the Consent Decree that is
related to the System Assets or the Chipeta Assets and that occurred prior to Closing and
(iii) to the extent incurred within three years after the Closing Date, any costs of
compliance with, failure to comply with, penalties under or other costs related to
compliance with the Consent Decree of the Chipeta Assets; and
(h) any breach of
Section 4.20(b)
.
Section 9.4
Demands
. The Indemnified Party agrees that within 30 days after it becomes aware of facts giving rise to
a claim for indemnification pursuant to this
Article IX
, including receipt by it of notice
of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party
(any such third party action being referred to herein as the
Indemnity Claim
), with respect to
any matter as to which it claims to be entitled to indemnity under the provisions of this
Agreement, it will provide notice thereof in writing to the Indemnifying Party specifying in
reasonable detail the nature of and specific basis for such claim. Notwithstanding the foregoing,
the Indemnified Partys failure to provide notice under this
Section 9.4
will not relieve
the Indemnifying Party from the liability hereunder with respect to such matter except in the event
and only to the extent that the Indemnifying Party is materially prejudiced by such failure or
delay. Such notice shall include a formal demand for indemnification under this Agreement.
Section 9.5
Right to Contest and Defend
. The Indemnifying Party shall be entitled at its cost and expense to contest and defend by all
appropriate legal proceedings any Indemnity Claim with respect to which it is called upon to
indemnify the Indemnified Party under the provisions of this Agreement; provided, that notice of
the intention to so contest shall be delivered by the Indemnifying Party to the Indemnified Party
within 20 days from the date of receipt by the Indemnifying Party of notice by the Indemnified
Party of the assertion of the Indemnity Claim. Any such contest may be conducted in the name and
on behalf of the Indemnifying Party or the Indemnified Party as may be appropriate. Such contest
shall be conducted by reputable counsel (in the reasonable opinion of the Indemnifying Party)
employed by the Indemnifying Party and not reasonably objected to by the Indemnified Party, but the
Indemnified Party shall have the right but not the obligation to participate in such proceedings
and to be represented by counsel of its own choosing at its sole cost and expense. The
Indemnifying Party shall have full authority to determine all action to be taken with respect
thereto; provided, however, that the Indemnifying Party will not have the authority to subject the
Indemnified Party to any obligation whatsoever, other than the performance of purely ministerial
tasks or obligations not involving material expense. If the Indemnifying Party does not elect to
contest any such Indemnity Claim, the Indemnifying Party shall be bound by the result obtained with
respect to such claim by the Indemnified Party. If the Indemnifying Party shall have assumed the
defense of an Indemnity Claim, the Indemnified Party shall agree to any settlement, compromise or
discharge of an Indemnity Claim that the Indemnifying Party may recommend and that by its terms
obligates the Indemnifying Party to pay the full amount of the liability in connection with such
Indemnity Claim, which fully and completely releases the Indemnified
43
Party in connection with such
Indemnity Claim and which would not otherwise adversely affect the Indemnified Party.
Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the
defense of any Indemnity Claim (and shall be liable for the reasonable fees and expenses of counsel
incurred by the Indemnified Party in defending such Indemnity Claim) if the Indemnity Claim seeks
an order, injunction or other equitable relief or relief for other than money damages against the
Indemnified Party which the Indemnified Party reasonably determines, upon the advice of outside
counsel, cannot be separated from any related claim for money damages. If such equitable relief or
other relief portion of the Indemnity Claim can be so separated from that for money damages, the
Indemnifying Party shall be entitled to assume the defense of the portion relating to money
damages.
Section 9.6
Cooperation
. The Indemnified Party agrees to cooperate with the Indemnifying Party with respect to all
aspects of the defense of any Indemnity Claims covered by the indemnification set forth in this
Article IX
, including 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 reasonably 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 9.6
, unless otherwise required by Law or the listing standards of
the New York Stock Exchange or any other applicable exchange or quotation system. 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 IX
;
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 to the extent provided above.
Section 9.7
Payment of Losses
. The indemnification required hereunder shall be made by monthly payments of the amount thereof
during the course of the investigation or defense, within 30 days as and when reasonably specific
bills are received or Loss is incurred and reasonable evidence thereof is delivered. In
calculating any amount to be paid by an Indemnifying Party by reason of the indemnification
provisions of this Agreement, the amount to be paid shall be reduced by (i) any insurance proceeds
related to indemnified Losses realized by the Indemnified Party and (ii) any amounts related to
indemnified Losses recovered by the Indemnified Party under contractual indemnities from third
parties.
Section 9.8
Limitations on Indemnification
.
44
(a) To the extent the Partnership Indemnified Parties are entitled to indemnification
for Losses pursuant to
Section 9.3(a)
(other than for Losses related to a breach of
the representations and warranties in
Section 4.6
), Anadarko shall not be liable for
those Losses unless the aggregate amount of Losses exceeds 1% of the sum of (i) the Cash
Consideration, plus (ii) the dollar value of the Unit Consideration on the Closing Date,
plus (iii) the dollar value of the GP Consideration on the Closing Date (with each general
partner unit being deemed for this purpose to have the same value as a common unit) (the sum
of (i), (ii) and (iii) being the
Aggregate Consideration
) (the
Deductible
), and then
only to the extent of any such excess.
(b) In addition, to the extent the Partnership Indemnified Parties are entitled to
indemnification for Losses pursuant to
Section 9.3(a)
, Anadarko shall not be liable
for such Losses that exceed, in the aggregate, 25% of the Aggregate Consideration less the
Deductible.
(c) Notwithstanding
Section 9.8(a)
and
(b)
, to the extent the
Partnership Indemnified Parties are entitled to indemnification for Losses pursuant to
Section 9.3(b)
,
9.3(c)
,
9.3(d)
,
9.3(f)
,
9.3(g)(i)
,
9.3(g)(ii)
or
9.3(h)
or for claims arising from fraud, Anadarko shall be fully liable for such Losses without respect to the Deductible in
Section 9.8(a)
and the limitations in
Section 9.8(b)
.
(d) To the extent the Anadarko Indemnified Parties are entitled to indemnification for
Losses pursuant to
Section 9.2(a)
, the Partnership shall not be liable for those
Losses unless the aggregate amount of Losses exceeds, in the aggregate, the Deductible, and
then only to the extent of any such excess. In addition, to the extent the Anadarko
Indemnified Parties are entitled to indemnification for Losses pursuant to
Section
9.2(a)
, the Partnership shall not be liable for such Losses that exceed, in the
aggregate, 10% of the Aggregate Consideration less the Deductible.
(e) Notwithstanding
Section 9.8(d)
, to the extent the Anadarko Indemnified
Parties are entitled to indemnification for Losses pursuant to
Section 9.2(b)
or for
claims arising from fraud, the Partnership shall be fully liable for such Losses without
respect to the Deductible and the limitations in
Section 9.8(d)
.
Section 9.9
Sole Remedy
. Notwithstanding anything herein to the contrary, after the Closing, this
Article IX
contains the Anadarko Indemnified Parties and the Partnership Indemnified Parties exclusive
remedy against each other with respect to breaches of the representations, warranties, covenants
and agreements of the Parties contained in
Article IV
and
Article V
and in the
covenants in this Agreement to be performed prior to Closing, in each case other than claims or
causes of action arising from fraud. All references in this
Article IX
to such breaches of
such representations, warranties, covenants and agreements include any affirmation of such
representations, warranties, covenants and agreements contained in the certificates delivered at
Closing by the Contributing Parties pursuant to
Section 3.2(c)
and by the Recipient Parties
pursuant to
Section 3.3(f)
.
Section 9.10
Express Negligence Rule
. THE INDEMNIFICATION PROVISIONS PROVIDED FOR IN THIS
AGREEMENT HAVE BEEN EXPRESSLY NEGOTIATED IN
45
EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR
NOT THE LIABILITIES, OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION
ARISE OR AROSE SOLELY OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY, OR OTHER FAULT OF ANY INDEMNIFIED PARTY. ANADARKO AND THE CONTRIBUTING PARTIES AND THE
RECIPIENT PARTIES ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND
CONSTITUTES CONSPICUOUS NOTICE. NOTICE IN THIS CONSPICUOUS NOTICE IS NOT INTENDED TO PROVIDE OR
ALTER THE RIGHTS AND OBLIGATIONS OF ANADARKO AND THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE
IN THIS AGREEMENT.
ARTICLE X
ADDITIONAL AGREEMENTS
Section 10.1
Further Assurances
. The Contributing Parties hereby agree that, from time to time, at the request of a Recipient
Party and without further consideration, they will execute and deliver to the Recipient Parties
such other deeds, bills of sale, instruments of conveyance, assignment and transfer, and notices,
affidavits and acknowledgements, and take such action as the Recipient Parties may reasonably
require to effectively convey, transfer, and assign to the Recipient Parties, and to put the
Recipient Parties in possession of the System Assets and the Chipeta Interest. After the Closing,
each Party shall take such further actions, including obtaining consents to assignment from third
parties, and execute such further documents as may be necessary or reasonably requested by the
other Parties in order to effectuate the intent of this Agreement and the Ancillary Documents and
to provide such other Parties with the intended benefits of this Agreement and the Ancillary
Documents.
Section 10.2
NORM, Wastes and Other Substances
. Each Recipient Party acknowledges that the System Assets have been used for the gathering and
transportation of Hydrocarbons and that there may be petroleum, produced water, wastes, or other
substances or materials located in, on or under the AUM NGL Line or associated with the System
Assets. Equipment and sites included in the System Assets may contain asbestos, hazardous
substances, or NORM. NORM may affix or attach itself to the inside of pipes, materials, and
Equipment as scale, or in other forms. The pipes, materials, and Equipment included in the System
Assets may contain NORM and other wastes or hazardous substances. NORM containing material and/or
other wastes or hazardous substances may have come in contact with various environmental media,
including water, soils or sediment. Special procedures may be required for the assessment,
remediation, removal, transportation, or disposal of environmental media, wastes, asbestos,
hazardous substances, and NORM from the System Assets. This
Section 10.2
does not relieve
or release Anadarko and the Contributing Parties from any representation, warranty, covenant,
obligation, indemnification, or commitment by Anadarko and the Contributing Parties regarding
Environmental Laws, Environmental Activity or Hazardous Substances in this Agreement, including but
not limited to those contained in
Section 4.9
and
Section 9.3
.
Section 10.3
754 Election
. AUM shall cause Chipeta to make the election provided in Code Section 754 with respect to the
tax year which includes the Closing Date to adjust the basis
46
of Chipetas assets under Code Section
743, unless such election has previously been made by Chipeta and remains in effect as of the
Closing Date.
ARTICLE XI
MISCELLANEOUS
Section 11.1
Expenses
. Except as provided in
Section 3.6
, or as provided in the Ancillary Documents, regardless
of whether the transactions contemplated in this Agreement occur, all costs and expenses incurred
by the Parties in connection with the consummation of the transactions contemplated hereby shall be
borne solely and entirely by the Party which has incurred such cost or expense.
Section 11.2
Notices
. Any notice or other communication to be given under this Agreement by any Party to another shall
be in writing and shall be (i) delivered personally, (ii) sent by courier service requiring
acknowledgement of receipt or, (iii) sent by facsimile transmission. Notice given by personal
delivery or courier shall be effective upon actual receipt. Notice given by facsimile transmission
shall be confirmed by appropriate answer-back, and shall be effective upon actual receipt if
received during the recipients normal business hours, or at the beginning of the recipients next
Business Day after receipt if not received during the recipients normal business hours. Notices
or other communications shall be directed to the following addresses:
Notices to Anadarko:
Anadarko Petroleum Corporation
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: Senior Vice President, General Counsel
and Chief Administrative Officer
Facsimile No.: (832) 636-0547
Notices to any of the Contributing Parties:
Western Gas Resources, Inc.
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President
Facsimile No.: (832) 636-7130
WES GP, Inc.
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President
Facsimile No.: (832) 636-7130
WGR Holdings, LLC
1201 Lake Robbins Drive
47
The Woodlands, Texas 77380
Attention: President
Facsimile No.: (832) 636-7130
WGR Asset Holding Company LLC
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President
Facsimile No.: (832) 636-7130
Western Gas Holdings, LLC
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President
Facsimile No.: (832) 636-6001
Notices to any of the Recipient Parties:
Western Gas Partners, LP
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: General Partner
Facsimile No.: (832) 636-6001
Western Gas Holdings, LLC
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President and Chief Executive Officer
Facsimile No.: (832) 636-6001
Western Gas Operating, LLC
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: President and Chief Executive Officer
Facsimile No.: (832) 636-6001
WGR Operating, LP
1201 Lake Robbins Drive
The Woodlands, Texas 77380
Attention: General Partner
Facsimile No.: (832) 636-6001
with copies (which shall not constitute notice) to:
Special Committee of the Board of Directors of Western Gas Holdings, LLC
1201 Lake Robbins Drive
The Woodlands, Texas 77380
48
Attention: Chairman
Facsimile No.: (832) 636-6001
Bracewell & Giuliani LLP
711 Louisiana, Suite 2300
Houston, Texas 77002
Attention: Gary W. Orloff
Facsimile No.: (713) 221-2166
Any Party may at any time change its address for service from time to time by giving notice in
accordance with this
Section 11.2
.
Section 11.3
Severability
. If any term or other provision of this Agreement or in any other document delivered
pursuant hereto shall, for any reason, be held to be invalid, illegal, or incapable of being
enforced under applicable Law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such determination that any
term or other provision of this Agreement is invalid, illegal, or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect the original
intention of the Parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to the fullest extent
possible.
Section 11.4
Governing Law; Consent to Jurisdiction
. This Agreement shall be governed by and construed and enforced in accordance with 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. The Parties hereto
irrevocably submit to the jurisdiction of the courts of the State of Texas and the federal courts
of the United States of America located in Harris County, Texas over any dispute between the
Parties arising out of this Agreement or the transaction contemplated hereby, and each Party
irrevocably agrees that all such claims in respect of such dispute shall be heard and determined in
such courts. The Parties hereto irrevocably waive, to the fullest extent permitted by Law, any
objection which they may now or hereafter have to the venue of any dispute arising out of this
Agreement or the transaction contemplated hereby being brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each Party agrees that a judgment in any
such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law.
Section 11.5
Parties in Interest
. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and
their successors and permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement, except for express language with respect to the Partnership
Indemnified Parties and the Anadarko Indemnified Parties contained in the indemnification
provisions of
Article IX
.
Section 11.6
Assignment
. Neither this Agreement nor any of the rights, interests, or obligations hereunder may be
assigned, by operation of Law or otherwise, by any Party without the prior written consent of the
other Parties, and any attempted assignment without such consent shall be void.
49
Section 11.7
No Amendment or Waiver
. No amendment, supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the Party to be bound thereby. No waiver of any of the provisions of this
Agreement or a breach hereof shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 11.8
Counterparts
. This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Facsimile copies
of signatures shall constitute original signatures for all purposes of this Agreement and any
enforcement hereof.
Section 11.9
Integration
. This Agreement, the Exhibits and Schedules hereto and the Ancillary Documents supersede any
previous understandings or agreements among the Parties, whether oral or written, with respect to
their subject matter. This Agreement, the Exhibits and Schedules hereto and the Ancillary Documents
contain the entire understanding of the Parties with respect to the subject matter hereof and
thereof. No understanding, representation, promise or agreement, whether oral or written, is
intended to be or shall be included in or form part of this Agreement or the Ancillary Documents
unless it is contained in a written amendment hereto or thereto and executed by the Parties hereto
or thereto after the date of this Agreement or the Ancillary Documents.
Section 11.10
Determinations by the Partnership
. Whenever a determination, decision or approval by the Partnership is called for in this
Agreement, such determination, decision or approval must be authorized by the Special Committee.
Section 11.11
Public Statements
. The Parties hereto shall consult with each other and no Party shall issue any public
announcement or statement with respect to the transactions contemplated hereby without the consent
of the other Parties, unless such announcement or statement is required by applicable Law or stock
exchange requirements.
[Signature page follows]
50
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above
written.
|
|
|
|
|
|
|
|
|
|
|
RECIPIENT PARTIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN GAS PARTNERS, LP
|
|
|
|
|
By:
|
|
Western Gas Holdings, LLC,
|
|
|
|
|
|
|
its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ Robert G. Gwin
Robert G. Gwin
|
|
|
|
|
|
|
Its:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN GAS HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ Robert G. Gwin
Robert G. Gwin
|
|
|
|
|
|
|
Its:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN GAS OPERATING, LLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ Robert G. Gwin
Robert G. Gwin
|
|
|
|
|
|
|
Its:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGR OPERATING, LP
|
|
|
|
|
By:
|
|
Western Gas Operating, LLC,
|
|
|
|
|
|
|
its General Partner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ Robert G. Gwin
Robert G. Gwin
|
|
|
|
|
|
|
Its:
|
|
President and Chief Executive Officer
|
|
|
|
|
Signature Page to Contribution Agreement
|
|
|
|
|
|
|
|
|
CONTRIBUTING PARTIES:
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN GAS RESOURCES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
WGR HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
|
WGR ASSET HOLDING COMPANY LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
WESTERN GAS HOLDINGS, LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ Robert G. Gwin
Robert G. Gwin
|
|
|
|
|
Its:
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
WES GP, INC.
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
|
ANADARKO UINTAH MIDSTREAM, LLC
|
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
President
|
|
|
Signature Page to Contribution Agreement
Executed by Anadarko Petroleum Corporation,
solely for purposes of its obligations and rights under
Article II
,
Article IV
,
Section 6.6
,
Article VIII
and
Article
IX
of this Agreement
|
|
|
|
|
|
|
|
ANADARKO PETROLEUM CORPORATION
|
|
|
|
|
|
|
|
|
|
|
By:
Name:
|
|
/s/ R.A. Walker
R.A. Walker
|
|
|
|
|
Its:
|
|
Chief Operating Officer
|
|
|
Signature Page to Contribution Agreement