UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  December 2, 2013

 

NGL Energy Partners LP

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-35172

 

27-3427920

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

6120 South Yale Avenue

Suite 805

Tulsa Oklahoma 74136

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (918) 481-1119

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 1.01      Entry into a Material Definitive Agreement

 

On December 2, 2013, in connection with the Private Placement described in Item 8.01 below, NGL Energy Partners LP (the “Partnership”) entered into a registration rights agreement (the “Registration Rights Agreement”), by and among the Partnership and the purchasers set forth therein.  Pursuant to the terms of the Registration Rights Agreement, within 90 days following December 2, 2013, the Partnership is required to prepare and file a registration statement (the “Registration Statement”) to permit the public resale of the common units representing limited partner interests in the Partnership (“Common Units”) sold to the purchasers in the Private Placement, as well as any Common Units issued in lieu of cash as liquidated damages under the Registration Rights Agreement, and to use its commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing the Registration Statement.

 

If the Registration Statement is not declared effective within 90 days after the closing of the Private Placement, then the Partnership will be liable to the Purchasers for liquidated damages in accordance with a formula, and subject to the limitations, set forth in the Registration Rights Agreement. The liquidated damages are payable in cash or, if payment in cash would breach any covenant or a cause a default under a credit facility or any other debt instrument filed by the Partnership as an exhibit to a report filed with the Securities and Exchange Commission, the liquidated damages are payable in Common Units. In addition, the Registration Rights Agreement grants the Purchasers piggyback registration rights under certain circumstances. These registration rights are transferable to affiliates of the Purchasers and, in certain circumstances, to third parties.

 

The description of the Registration Rights Agreement in this Item 1.01 is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 4.1 hereto and is incorporated into this Item 1.01 by reference.

 

Item 2.01      Completion of Acquisition or Disposition of Assets

 

As previously reported, on November 5, 2013, the Partnership entered into an Equity Interest Purchase Agreement (the “Acquisition Agreement”) by and among the Partnership, High Sierra Energy, LP, a Delaware limited partnership and wholly-owned subsidiary of the Partnership, Gavilon, LLC (“Gavilon Energy”) and Gavilon Energy Intermediate, LLC (“Seller”), pursuant to which the Partnership agreed to acquire 100% of Seller’s equity interest in Gavilon Energy, a midstream energy business with pipeline, terminal and storage assets located in Oklahoma, Texas and Louisiana (the “Acquisition”).  On December 2, 2013, the Partnership completed the Acquisition for $890 million in cash, including working capital.  The Partnership funded the Acquisition with the net proceeds of the private placement described under Item 8.01 below and with borrowings under the Partnership’s revolving credit facility.The description of the Acquisition Agreement in this Item 2.01 is qualified in its entirety by reference to the full text of the Acquisition Agreement, which is filed as Exhibit 2.1 hereto and is incorporated into this Item 2.01 by reference.

 

Item 8.01      Other Events

 

On December 2, 2013, the Partnership completed its previously announced private placement of an aggregate of 8,110,848 Common Units at a purchase price of $29.59 per Common Unit (the “Private Placement”) pursuant to a Common Unit Purchase Agreement, dated November 5, 2013, by and among the Partnership and the purchasers named therein (the “Purchase Agreement”).  Pursuant to the Purchase Agreement, the Private Placement was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof, as a transaction by an issuer not involving any public offering.

 

The description of the Purchase Agreement in this Item 8.01 is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 10.1 hereto and is incorporated into this Item 8.01 by reference.

 

1



 

Item 9.01      Financial Statements and Exhibits

 

(a) – (b) Financial Statements of Businesses Acquired; Pro Forma Financial Information

 

Pursuant to Item 9.01(a)(4) and Item 9.01(b)(2) of Form 8-K, the Partnership will amend this filing on or before February 17, 2014 to file the financial statements required by Rule 3-05(b) of Regulation S-X and Article 11 of Regulation S-X.

 

(d) Exhibits

 

Exhibit No.

 

Description

2.1

 

Equity Interest Purchase Agreement, dated November 5, 2013, by and among NGL Energy Partners LP, High Sierra Energy, LP, Gavilon, LLC and Gavilon Energy Intermediate, LLC.

4.1

 

Registration Rights Agreement, dated December 2, 2013, by and among NGL Energy Partners LP and the purchasers set forth on Schedule A thereto.

10.1

 

Common Unit Purchase Agreement, dated November 5, 2013, by and among NGL Energy Partners LP and the purchasers listed on Schedule A thereto.

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

 

 

By: NGL Energy Holdings LLC, its general partner

 

 

 

 

 

 

 

 

Date: December 5, 2013

 

By:

/s/ H. Michael Krimbill

 

 

 

H. Michael Krimbill

 

 

 

Chief Executive Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

2.1

 

Equity Interest Purchase Agreement, dated November 5, 2013, by and among NGL Energy Partners LP, High Sierra Energy, LP, Gavilon, LLC and Gavilon Energy Intermediate, LLC.

4.1

 

Registration Rights Agreement, dated December 2, 2013, by and among NGL Energy Partners LP and the purchasers set forth on Schedule A thereto.

10.1

 

Common Unit Purchase Agreement, dated November 5, 2013, by and among NGL Energy Partners LP and the purchasers listed on Schedule A thereto.

 

4


Exhibit 2.1

 

Execution Copy

 

EQUITY INTEREST PURCHASE AGREEMENT

 

by and among

 

NGL ENERGY PARTNERS LP,

 

HIGH SIERRA ENERGY, LP,

 

GAVILON, LLC

and

GAVILON ENERGY INTERMEDIATE, LLC

 

Dated as of November 5, 2013

 



 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE I

DEFINITIONS AND USAGE

1

 

 

 

 

 

Section 1.1

 

Definitions

 

1

Section 1.2

 

Usage

 

15

 

 

 

 

 

ARTICLE II

PURCHASE AND SALE OF EQUITY INTERESTS; CLOSING

 

17

 

 

 

 

 

Section 2.1

 

Purchase and Sale of Equity Interests

 

17

Section 2.2

 

Estimated Closing Balance Sheet; Payment of Closing Date Purchase Price

 

17

Section 2.3

 

Closing

 

18

Section 2.4

 

Closing Obligations

 

19

Section 2.5

 

Post-Closing Adjustment

 

20

Section 2.6

 

Payments

 

22

 

 

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

22

 

 

 

 

Section 3.1

 

Organization and Good Standing

 

22

Section 3.2

 

Enforceability; Authority; No Conflict

 

23

Section 3.3

 

Target Company Records

 

23

Section 3.4

 

Target Company Interests; Title

 

24

Section 3.5

 

Absence of Certain Change

 

24

Section 3.6

 

Employee Benefits

 

24

Section 3.7

 

Compliance with Legal Requirements; Governmental Authorizations

 

26

Section 3.8

 

Legal Proceedings; Orders

 

27

Section 3.9

 

Contracts; No Defaults

 

27

Section 3.10

 

Insurance

 

29

Section 3.11

 

Employees

 

30

Section 3.12

 

Intellectual Property Assets

 

31

Section 3.13

 

Taxes

 

32

Section 3.14

 

Brokers or Finders

 

33

Section 3.15

 

Environmental Compliance

 

33

Section 3.16

 

Financial Statements; No Undisclosed Liabilities

 

34

Section 3.17

 

Real Properties

 

35

Section 3.18

 

Bank Accounts; Authorized Signatories

 

36

Section 3.19

 

Affiliate Agreements

 

36

 

 

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

36

 

 

 

 

 

Section 4.1

 

Organization and Good Standing

 

36

Section 4.2

 

Enforceability; Authority; No Conflict

 

36

Section 4.3

 

Ownership of Equity

 

37

Section 4.4

 

Brokers or Finders

 

37

Section 4.5

 

Legal Proceedings; Orders

 

37

 

i



 

TABLE OF CONTENTS

(continued)

 

 

 

 

Page

 

 

 

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER PARTIES

 

37

 

 

 

 

 

Section 5.1

 

Organization and Good Standing

 

37

Section 5.2

 

Enforceability; Authority; No Conflict

 

38

Section 5.3

 

Available Funds

 

38

Section 5.4

 

Securities Matters

 

39

Section 5.5

 

Brokers or Finders

 

39

Section 5.6

 

Investigation

 

39

 

 

 

 

 

ARTICLE VI

CONDITIONS PRECEDENT TO BUYER PARTIES’ OBLIGATION TO CLOSE

 

40

 

 

 

 

 

Section 6.1

 

Accuracy of Representations

 

40

Section 6.2

 

Performance

 

40

Section 6.3

 

Material Governmental Approval

 

40

Section 6.4

 

Additional Documents

 

40

Section 6.5

 

Orders

 

40

Section 6.6

 

Company Closing Certificate

 

41

Section 6.7

 

Seller Closing Certificate

 

41

Section 6.8

 

No Financing Condition

 

41

 

 

 

 

 

ARTICLE VII

CONDITIONS PRECEDENT TO THE COMPANY’S AND SELLER’S OBLIGATION TO CLOSE

 

41

 

 

 

 

 

Section 7.1

 

Accuracy of Representations

 

41

Section 7.2

 

Buyer Parties’ Performance

 

41

Section 7.3

 

Material Governmental Approval

 

41

Section 7.4

 

Additional Documents

 

41

Section 7.5

 

Orders

 

41

Section 7.6

 

Closing Certificate

 

42

 

 

 

 

 

ARTICLE VIII

ADDITIONAL COVENANTS

 

42

 

 

 

 

 

Section 8.1

 

Conduct of Business

 

42

Section 8.2

 

Information and Access; No Contact

 

44

Section 8.3

 

Notices of Certain Events; Updating of Disclosure Schedules

 

45

Section 8.4

 

Filings; Reasonable Best Efforts to Close

 

45

Section 8.5

 

Employees and Employee Benefits

 

47

Section 8.6

 

Retention of and Access to Records; Financial Statement Preparation

 

51

Section 8.7

 

Further Assurances

 

52

Section 8.8

 

Obligations of Buyer

 

52

Section 8.9

 

Indemnification, Exculpation and Insurance

 

52

Section 8.10

 

Confidential Information

 

53

Section 8.11

 

Third Party Consents

 

53

 

ii



 

TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE IX

TERMINATION

 

53

 

 

 

 

 

Section 9.1

 

Termination

 

53

Section 9.2

 

Effect of Termination

 

54

 

 

 

 

 

ARTICLE X

TAX MATTERS

 

55

 

 

 

 

 

Section 10.1

 

Straddle Period

 

55

Section 10.2

 

Filing and Payment Responsibilities

 

55

Section 10.3

 

Tax Proceedings

 

55

Section 10.4

 

Cooperation and Exchange of Information

 

56

Section 10.5

 

Certain Tax Refunds and Credits

 

56

Section 10.6

 

Transfer Taxes

 

56

Section 10.7

 

Purchase Price Allocation

 

57

Section 10.8

 

Buyer Tax Act

 

58

 

 

 

 

 

ARTICLE XI

INDEMNIFICATION

 

58

 

 

 

 

 

Section 11.1

 

Survival

 

58

Section 11.2

 

Indemnification by Seller

 

59

Section 11.3

 

Indemnification by the Buyer Parties

 

60

Section 11.4

 

Procedures

 

61

Section 11.5

 

Determination of Loss Amount

 

62

Section 11.6

 

Adjustments

 

63

Section 11.7

 

Subrogation

 

63

Section 11.8

 

No Other Representation

 

63

 

 

 

 

 

ARTICLE XII

GENERAL PROVISIONS

 

64

 

 

 

 

 

Section 12.1

 

Expenses

 

64

Section 12.2

 

Public Announcements and Confidentiality

 

64

Section 12.3

 

Notices

 

64

Section 12.4

 

Jurisdiction; Waiver of Jury Trial

 

66

Section 12.5

 

Waiver; Remedies Cumulative

 

66

Section 12.6

 

Entire Agreement and Modification

 

66

Section 12.7

 

Assignments, Successors and no Third-Party Rights

 

67

Section 12.8

 

Severability

 

67

Section 12.9

 

Headings

 

67

Section 12.10

 

Governing Law

 

67

Section 12.11

 

Execution of Agreement

 

67

Section 12.12

 

Specific Performance

 

67

Section 12.13

 

Non-Recourse

 

68

Section 12.14

 

Attorney-Client Privilege and Conflict Waiver

 

68

 

iii



 

Exhibits

 

Exhibit A

List of JVs

Exhibit B

Representative calculation of Estimated Closing Working Capital, Estimated Closing Cash and Estimated Balance Sheet Indebtedness

Exhibit C

Form of Assignment

 

 

 

Company Schedules

 

Schedule 1.1(a)

Company Cash Incentive Bonus Plans

Schedule 1.1(b)

Current Assets and Current Liabilities

Schedule 1.1(c)

Title Policies, Title Commitments and Surveys

Schedule 1.1(d)

Capital Expenditure Plan

Schedule 1.2(a)(ix)(1)

Company Knowledge Officers

Schedule 2.2(b)(i)

Estimated Balance Sheet Indebtedness

Schedule 3.1(a)

Target Companies

Schedule 3.2(b)(iii)

Required Consents

Schedule 3.2(c)

Other Target Company Consents

Schedule 3.4(a)

Equity Interests in Target Companies

Schedule 3.4(b)

Equity Interests in JVs

Schedule 3.5

Absence of Certain Changes

Schedule 3.6(a)

Company Plans

Schedule 3.6(b)

Transition Plans

Schedule 3.6(b)(i)

Seller Affiliate Arrangements

Schedule 3.6(d)

Administration and Compliance

Schedule 3.6(e)

U.S. Plan Investigations or Proceedings

Schedule 3.6(g)

Company Plans and Effect of this Agreement

Schedule 3.7(a)

Compliance with Legal Requirements

Schedule 3.7(b)

Governmental Notices

Schedule 3.7(c)

Governmental Authorizations

Schedule 3.8(a)

Legal Proceedings

Schedule 3.8(b)

Orders

Schedule 3.9(a)

Material Contracts

Schedule 3.9(b)

Defaults and Validity of Material Contracts

Schedule 3.10(a)

Policies

Schedule 3.10(b)

Exceptions to Policies

Schedule 3.11(a)

Designated Employees

Schedule 3.11(b)

Collective Bargaining Agreements and Compliance, Claims and Controversies

Schedule 3.12(a)

Intellectual Property Assets

Schedule 3.13(b)

Taxes

Schedule 3.13(c)

Material Encumbrances, Outstanding Tax Returns, Agreements or Waivers of Statute of Limitations Applicable to Tax Returns

Schedule 3.13(f)

U.S. Federal Income Tax Entity Classification

Schedule 3.14

Brokers or Finders — Target Companies

Schedule 3.15

Environmental Matters

Schedule 3.16(a)

Financial Statements

 

iv



 

Schedule 3.16(b)

Undisclosed Liabilities

Schedule 3.17(a)

Owned Real Property

Schedule 3.17(a)(i)

Exceptions to Owned Real Property

Schedule 3.17(b)

Leased Real Property

Schedule 3.18

Bank Accounts; Authorized Signatories

Schedule 3.19

Affiliate Agreements

Schedule 4.2(b)(iii)

Seller Required Consents

Schedule 4.2(c)

Other Seller Consents

Schedule 4.3(a)

Ownership of Equity

Schedule 4.3(b)

Transferred Interest Contracts

Schedule 4.4

Brokers or Finders —Seller

Schedule 8.1

Conduct of Target Companies

Schedule 8.1(a)(x)

Special Compensation Adjustments and Retention Awards

Schedule 8.5(e)

Severance and Salary Protection

Schedule 8.5(g)(i)

Trusts Related to the Transition Plans

Schedule 8.9(a)

Indemnification Contracts

 

 

 

Buyer Parties’ Schedules

 

 

 

Schedule 1.2(a)(ix)(2)

Buyer Knowledge Officers

Schedule 5.2(b)(iii)

Buyer Required Consents

Schedule 5.2(c)

Other Buyer Consents

Schedule 5.5

Brokers or Finders — Buyer

 

v



 

EQUITY INTEREST PURCHASE AGREEMENT

 

This EQUITY INTEREST PURCHASE AGREEMENT, dated as of November 5, 2013, is entered into by and among NGL Energy Partners LP, a Delaware limited partnership (“ Parent ”), High Sierra Energy, LP, a Delaware limited partnership (“ Buyer ” and, together with Parent, the “ Buyer Parties ”), Gavilon, LLC, a Delaware limited liability company (the “ Company ”), and Gavilon Energy Intermediate, LLC, a Delaware limited liability company (“ Seller ”).  Seller and the Company may be referred to herein collectively as the “ Seller Parties ”.  The Seller Parties and the Buyer Parties may be referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

 

WHEREAS, Seller owns 100% of the Equity Interests in the Company (the “ Transferred Interests ”);

 

WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell to Buyer, on the terms and conditions set forth herein, all of the Transferred Interests; and

 

WHEREAS, upon completion of the purchase by Buyer of all of the Transferred Interests, Buyer will own 100% of the outstanding Equity Interests of the Company, and, at the Closing, Buyer shall, and Parent shall cause Buyer to, pay to Seller the Closing Date Purchase Price.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I
DEFINITIONS AND USAGE

 

Section 1.1               Definitions .  For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 1.1 :

 

ABL ” means that certain Credit Agreement, dated as of July 5, 2013 (as amended, supplemented, restated, or otherwise modified from time to time), among the Company, Gavilon Oil Tanks and Terminals, LLC, an Oklahoma limited liability company, and Gavilon Pipeline and Storage, LLC, an Oklahoma limited liability company, as borrowers, Seller, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto.

 

Accounting Arbitrator ” has the meaning set forth in Section 2.5(c) .

 

Affected Person ” has the meaning set forth in Section 12.2 .

 

Affiliate ” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified Person.  A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct or cause the direction of the management

 



 

and policies of the “controlled” Person, whether through ownership of voting securities, by contract or otherwise.

 

Affiliate Agreements ” has the meaning set forth in Section 3.19 .

 

Agreement ” means this Agreement, as the same may be amended, restated, modified or supplemented from time to time in accordance with its terms, and the Exhibits and Schedules hereto.

 

Agriculture Buyer ” means Marubeni Corporation, a Japanese corporation.

 

Agriculture Company ” means Gavilon Holdings, LLC, a Delaware limited liability company.

 

Allocation Notice ” has the meaning set forth in Section 10.7(a) .

 

Alternative Arrangements ” has the meaning set forth in Section 11.5(a) .

 

Applicable Payments ” means any change-of-control payments that are required to be paid on the Closing Date to any Employees pursuant to any Company Plan.

 

Applicable Proceeding ” has the meaning set forth in Section 8.5(n) .

 

Audited Financial Statements ” has the meaning set forth in Section 3.16(a) .

 

Balance Sheet Indebtedness ” means all Indebtedness of the Target Companies solely to the extent of the type referred to in clause (a), (b), (d), or (e) (in the case of clause (e) of the definition of Indebtedness solely to the extent drawn or funded by the issuer or provider thereof and not reimbursed) of the definition thereof that is outstanding as of 11:59 p.m. on the day immediately preceding the Closing Date (but without giving effect to the Contemplated Transactions).  For the avoidance of doubt, Balance Sheet Indebtedness shall exclude any Indebtedness incurred under any financing or refinancing arrangements entered into at any time by any of the Buyer Parties or any other transaction entered into by any of the Buyer Parties in connection with the Contemplated Transactions (including with respect to any of the Target Companies).

 

Base Price ” has the meaning set forth in Section 2.1 .

 

Business Day ” means a day other than Saturday, Sunday and any day on which banks located in the State of New York are authorized or obligated to close.

 

Buyer ” has the meaning set forth in the preamble.

 

Buyer Fraudulent Misrepresentations ” has the meaning set forth in Section 11.2(a) .

 

Buyer Indemnified Parties ” has the meaning set forth in Section 11.2(a)(i) .

 

Buyer Parties ” has the meaning set forth in the preamble.

 

2



 

Buyer Plans ” has the meaning set forth in Section 8.5(d) .

 

Buyer Required Consents ” has the meaning set forth in Section 5.2(b) .

 

Capex Budget means the aggregate amount of forecasted capital expenditures to be made by the Target Companies from October 1, 2013 to November 30, 2013, as reflected in Schedule 1.1(d) .

 

Cash ” means (a) all cash, cash equivalents, all restricted cash (including all cash posted to support letters of credit, performance bonds or other similar obligations), marketable securities and deposits with third parties (including landlords) of the Company and its Subsidiaries, on a consolidated basis, as of 11:59 p.m. on the day immediately preceding the Closing Date, in each case calculated in accordance with GAAP, plus (b) the actual amount of capital expenditures made by the Target Companies from October 1, 2013 through the Closing Date less the capital expenditures included in the Capex Budget.  For the avoidance of doubt, Cash shall be (i) calculated net of issued but uncleared checks and drafts and will include checks, other wire transfers and drafts deposited or available for deposit for the account of any of the Target Companies and (ii) denominated in United States dollars using the applicable exchange rate published by The Wall Street Journal , Eastern Edition on the Closing Date (other than for purposes of the Estimated Closing Balance Sheet, which shall use the exchange rate so published four (4) Business Days prior to the Closing Date).

 

Closing ” has the meaning set forth in Section 2.3 .

 

Closing Date ” has the meaning set forth in Section 2.3 .

 

Closing Date Purchase Price ” has the meaning set forth in Section 2.1 .

 

Closing Working Capital ” means (a) the Current Assets of the Company and its Subsidiaries on a consolidated basis, as of 11:59 p.m. on the day immediately preceding the Closing Date, as shown on the Estimated Closing Balance Sheet (for purposes of Section 2.2 ), the Proposed Final Balance Sheet (for purposes of Section 2.5(a) ), or the Final Balance Sheet (for purposes of Sections 2.5(a) , (c) , and (d) ), as applicable, minus (b) the Current Liabilities (which shall include the Applicable Payments) of the Company and its Subsidiaries on a consolidated basis, as of 11:59 p.m. on the day immediately preceding the Closing Date, as shown on the Estimated Closing Balance Sheet (for purposes of Section 2.2 ), the Proposed Final Balance Sheet (for purposes of Section 2.5(a) ), or the Final Balance Sheet (for purposes of Sections 2.5(a) , (c) , and (d) ), as applicable, minus (c) the full amount of all future payments (determined as of 11:59 p.m. on the day immediately preceding the Closing Date) that (1) have been earned for services provided as of 11:59 p.m. on the day immediately preceding the Closing Date and (2) were determined (in whole or in part) based on the performance of the Company and its Subsidiaries, in each case of (1) and (2), in the calendar year in which the Closing occurs or any prior calendar year and not paid as of the Closing under the Company Cash Incentive Bonus Plans.  Closing Working Capital shall reflect the Transaction Costs accrued as of the Closing, but otherwise shall be calculated without giving effect to the consummation of the Contemplated Transactions.  Notwithstanding the foregoing and for the avoidance of doubt, (x) Closing Working Capital shall exclude any accrual in respect of (i) change-of-control payments

 

3



 

(other than Applicable Payments), consent payments and similar payments resulting from the Contemplated Transactions or (ii) any financing or refinancing arrangements entered into at any time by any of the Buyer Parties or any other transaction entered into by any of the Buyer Parties in connection with the Contemplated Transactions (including with respect to any of the Target Companies) and (y) the deductions to Closing Working Capital set forth in clause (c) of this definition shall be made (i) without duplication of any Current Liability, (ii) regardless of whether such amounts are required to be accrued for under GAAP or any other accounting standard; provided , however , that for the avoidance of doubt, any such amounts shall not include amounts determined (in whole or in part) based on the performance of the Company and its Subsidiaries for any calendar year following the calendar year of the Closing, and (iii) regardless of whether such amounts are considered a short-term or long-term liability at the time of Closing.

 

Code ” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, in each case as in effect from time to time.  References to sections of the Code shall be construed also to refer to any successor sections.

 

Collective Bargaining Agreement ” has the meaning set forth in Section 3.11(b)(i) .

 

Commodity ” has the meaning assigned to such term in the United States Commodity Exchange Act as in effect on the date of this Agreement.

 

Company ” has the meaning set forth in the preamble.

 

Company Agreement ” means any contract, agreement or other document (whether or not documented on an ISDA Master Agreement) to effect any Swap/Commodity Transaction to which any Target Company is party.

 

Company Business ” means the domestic and international energy commodities and services businesses and the business of refining, processing, blending, tolling, otherwise altering, producing, marketing, distributing (at wholesale or retail), storing, shipping, transporting and generating commodities, crude oil, natural gas, natural gas liquids, refined products, renewable fuels and other energy products through agreements with third parties, in each case, considered as a whole and as so engaged in by the Target Companies.  The definition of Company Business does not include the business and operations of the JVs and the definition of Target Companies does not include the JVs.

 

Company Cash Incentive Bonus Plans ” means certain cash incentive bonus plans established by Gavilon, LLC for Employees, each of which is identified on Schedule 1.1(a) .

 

Company Fraudulent Misrepresentations ” has the meaning set forth in Section 11.2(a) .

 

Company Health and Welfare Plan ” has the meaning set forth in Section 8.5(g) .

 

Company Non-Union 401(k) Plan ” has the meaning set forth in Section 8.5(i) .

 

Company Plans ” has the meaning set forth in Section 3.6(a) .

 

Company 401(k) Plan ” has the meaning set forth in Section 8.5(j) .

 

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Confidentiality Agreement ” means the Confidentiality Agreement dated July 26, 2013 by and between the Company and Parent.

 

Confidential Disclosure Letter ” means the letter provided by the Company to Buyer on the date hereof, on a confidential and limited disclosure basis, as agreed by Seller, the Company and the Buyer Parties.

 

Consent ” means any approval, consent, ratification, waiver or other authorization.

 

Contamination ” means the presence or existence in surface water, air, groundwater, soil, subsurface strata or any other environmental medium of any Hazardous Substance as a result of an emission, discharge or release of any Hazardous Substance to, on, onto or into the Environment.

 

Contemplated Transactions ” means all of the transactions expected to be consummated under this Agreement.

 

Continuation Period ” has the meaning set forth in Section 8.5(d) .

 

Continuing Company Plans ” has the meaning set forth in Section 8.5(d) .

 

Continuing Employees ” has the meaning set forth in Section 8.5(a) .

 

Contract ” means any written or oral contract, Lease, license, evidence of Indebtedness, mortgage, indenture, security agreement, instrument or other commitment, undertaking or agreement that is legally binding.

 

Covered Losses ” means any and all losses, Liabilities, claims, fines, fees, costs, damages, and expenses (including reasonable and out-of-pocket costs of investigation, attorneys’ and other professionals’ fees and disbursements), in each case that are due and payable.

 

Covered Tax Return ” has the meaning set forth in Section 10.2 .

 

Current Assets ” means, without duplication, those categories of “current assets” of the Target Companies that are included in the balance sheet line items specifically set forth on Schedule 1.1(b) , in each case, as of 11:59 p.m. on the day immediately preceding the Closing Date and as determined in accordance with GAAP and on a basis consistent with the GAAP conventions used for the preparation of the Audited Financial Statements, but, for the avoidance of doubt, excluding (a) all Cash, and (b) the current portion of deferred tax assets (established to reflect temporary differences).

 

Current Liabilities ” means, without duplication, those categories of “current liabilities” of the Target Companies that are included in the balance sheet line items specifically set forth on Schedule 1.1(b) , in each case, as of 11:59 p.m. on the date immediately preceding the Closing Date and as determined in accordance with GAAP and on a basis consistent with the GAAP conventions used for the preparation of the Audited Financial Statements, but, for the avoidance of doubt, excluding (a) any Liabilities related to Indebtedness (including, without limitation, any

 

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current Indebtedness or other interest-bearing liabilities), and (b) the current portion of deferred tax liabilities (established to reflect temporary differences).

 

Data Room ” means the electronic data room maintained by Merrill Corporation and made available to the Buyer Parties and/or their respective Representatives in connection with the Contemplated Transactions.

 

Designated Employee ” has the meaning set forth in Section 8.1(a)(ix) .

 

Employees ” has the meaning set forth in Section 3.6(a) .

 

Employment Agreement ” has the meaning set forth in Section 3.11(a) .

 

Encumbrance ” means any lien, hypothecation, option, pledge, assessment, adverse claim, levy, charge, security interest, mortgage, right of way, easement, encroachment, servitude, charge or other encumbrance of any kind.

 

End Date ” means March 31, 2014; provided that if any Material Governmental Approval has not been obtained (but has not become impossible to obtain) by the then applicable End Date (as may be extended in accordance with the terms of this definition), then the Seller Parties or the Buyer Parties may extend the End Date by a period of one (1) month, up to a total of six (6) months, by sending a written notice to the other Parties no later than one (1) day prior to the expiration of the then applicable End Date, it being understood that the End Date cannot be extended by more than six (6) months unless otherwise agreed to in writing by the Parties; provided , further , that none of the Parties then extending the End Date are then in material breach of their respective obligations hereunder or have otherwise caused any delay in obtaining such Material Governmental Approval.

 

Environment ” means navigable waters, waters of the contiguous zone, ocean waters, surface waters, groundwater, drinking water supply, land surface, soil, subsurface strata, outdoor or indoor air or any other environmental medium.

 

Environmental Laws ” means, collectively, as enacted and in effect as of the Closing Date, any and all laws, ordinances, rules, regulations, directives, Orders, common law, authorizations, decrees, notices, permits, binding plans, demand letters or other mandates, proscriptions or prescriptions of any nature, of a Governmental Body relating in any way to any Hazardous Substance, Contamination, protection of the Environment, protection of natural resources, or work place health and safety, including, without limitation, those relating to emissions, discharges, releases or emissions, discharges or releases to, on, onto or into the Environment of, any Hazardous Substance.

 

Environmental Liability ” means Liabilities relating to addressing noncompliance with Environmental Laws, or arising under any Environmental Laws for response, remedial or investigation costs required under, arising from, or necessary to attain or maintain compliance with, applicable Environmental Laws or relating to or arising from Contamination or Hazardous Substances.

 

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Environmental Matters ” means any matter arising out of or relating to (a) Contamination; (b) Environmental Laws or compliance with Environmental Laws; (c) protection of the Environment; or (d) workplace and occupational health and safety.

 

Environmental Permits ” means all approvals, consents, permits, licenses, registrations and authorizations required by applicable Environmental Laws in order to own or operate the Business, Owned Real Property, the Leased Real Property, and assets of the Target Companies as operated by the Target Companies at all relevant times on or prior to the Closing Date in compliance with Environmental Laws.

 

Equity Commitment ” means (a) options, warrants, convertible securities, exchangeable securities, subscription rights, conversion rights, exchange rights, or other Contracts that could require a Person to issue any of its Equity Interests or to sell any Equity Interests it owns in another Person; and (b) any other securities convertible into, exchangeable or exercisable for, or representing the right to subscribe for any Equity Interest of a Person or owned by a Person.

 

Equity Interest ” means (a) with respect to a corporation, any and all shares of capital stock; (b) with respect to a partnership, limited liability company, trust or similar Person, any and all units, interests or other partnership/limited liability company interests; and (c) any other direct or indirect equity ownership, participation or voting right or interest in a Person (including any Contract in the nature of a voting trust or similar agreement or understanding or Indebtedness having general voting rights).

 

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate ” means any entity that is part of the same “controlled group” as the Company or any of its Affiliates for purposes of Sections 414(b), (c), (m) or (o) of the Code.

 

Estimated Balance Sheet Indebtedness ” has the meaning given to such term in Section 2.2(a) .

 

Estimated Closing Balance Sheet ” means a consolidated balance sheet of the Company and its Subsidiaries as of 11:59 p.m. on the day immediately preceding the Closing Date, prepared in accordance with GAAP and on a basis consistent with the GAAP conventions used for the preparation of the Audited Financial Statements; provided that the amounts set forth on the Estimated Closing Balance Sheet shall be estimated in good faith by Seller.

 

Estimated Closing Cash ” has the meaning given to such term in Section 2.2(a) .

 

Estimated Closing Working Capital ” has the meaning given to such term in Section 2.2(a) .

 

Expert ” has the meaning set forth in Section 10.7(b) .

 

Final Allocation Schedule ” has the meaning set forth in Section 10.7(a) .

 

Final Balance Sheet ” has the meaning given to such term in Section 2.5(b) .

 

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Final Balance Sheet Indebtedness ” has the meaning given to such term in Section 2.5(b) .

 

Final Closing Cash ” has the meaning given to such term in Section 2.5(b) .

 

Final Closing Working Capital ” has the meaning given to such term in Section 2.5(b) .

 

Final Purchase Price ” means (i) the Base Price, plus (ii) the Final Closing Cash plus (iii) the amount (if any) by which the Final Closing Working Capital exceeds Target Working Capital less (iv) the amount (if any) by which Target Working Capital exceeds Final Closing Working Capital less (v) the amount, if any, by which the Final Balance Sheet Indebtedness exceeds zero.

 

Financial Statements ” has the meaning set forth in Section 3.16(a) .

 

Fraud ” means an intentional misrepresentation or intentional omission with respect to a representation or warranty made in this Agreement, which is made with the intent to mislead.

 

Fundamental Representations ” has the meaning set forth in Section 11.2(a) .

 

GAAP ” means U.S. generally accepted accounting principles in effect from time to time, applied on a consistent basis.

 

Governing Documents ” means with respect to any particular entity, (a) if a corporation, the articles or certificate of incorporation and the bylaws; (b) if a general partnership, the partnership agreement and any statement of partnership; (c) if a limited partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a limited liability company, the certificate of formation and limited liability company agreement; (e) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of the Person; (f) all equity holders’ agreements, voting agreements, voting trust agreements or other similar agreements or documents relating to the organization, management or operation of such entity; and (g) any amendment or supplement to any of the foregoing.

 

Governmental Authorization ” means any Consent, license, qualification, certificate, franchise, confirmation, registration, clearance, Order or permit issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

 

Governmental Body ” means any international, federal, state, local, municipal, provincial, territorial, foreign or other governmental or quasi-governmental authority or self-regulatory organization of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental powers) or exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, enforcement, regulatory or taxing authority or power.

 

Group Plans ” has the meaning set forth in Section 3.6(b) .

 

Hazardous Substance ” means any element, waste, material, substance, compound or mixture whether solid, liquid or gaseous, that:  (a) is or shall in the future be subject to regulation

 

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or standards of conduct or liability of any kind by any Governmental Body with regard to protection of the Environment or protection of human health and safety; or (b) the presence, existence or threatened presence or existence of which shall at any time give rise to any Environmental Liability.

 

HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

Indebtedness ” means with respect to any Person, any obligations of such Person (a) for borrowed money, whether or not evidenced by notes, bonds, debentures or similar instruments (including the principal amount thereof or, if applicable, the accreted amount thereof and the amount of accrued and unpaid interest thereon); (b) all outstanding reimbursement obligations with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person, in each case, that have been “drawn” or funded by the issuer or provider thereof (i.e., pursuant to which the applicable bank or similar entity has paid thereunder obligations which such Person is required to reimburse); (c) for the deferred purchase price of goods or services (other than payables or accruals incurred in the Ordinary Course of Business, including in connection with any trades, hedges or other transactions entered into in connection with the Company Business); (d) under capital leases; or (e) in the nature of guarantees of the obligations described in clauses (a)  through (d)  above of any other Person ( provided that for the avoidance of doubt obligations pursuant to Company Agreements, including the granting of Cash collateral or any obligation under any credit support agreement to return any posted collateral (including Cash collateral) shall not be considered Indebtedness).

 

Indemnified Party ” has the meaning set forth in Section 11.4(a) .

 

Indemnitees ” has the meaning set forth in Section 8.9(a) .

 

Intellectual Property ” means all (a) patents and patent applications, (b) trademarks, service marks, trade names, trade dress, logos and slogans, together with the goodwill associated therewith, (c) copyrights, including copyrights in computer software, (d) registered domain names, (e) trade secrets and (f) registrations and applications for registration of any of the foregoing.

 

Intellectual Property Assets ” has the meaning set forth in Section 3.12(a) .

 

Interim Balance Sheet Date ” has the meaning set forth in Section 3.16(a) .

 

Interim Financial Statements ” has the meaning set forth in Section 3.16(a) .

 

JVs ” means the entities listed on Exhibit A .

 

knowledge ” has the meaning set forth in Section 1.2(a)(ix) .

 

Lease ” means any lease or rental agreement pertaining to the occupancy of any real property or any lease or rental agreement, license, Contract, right to use or installment and conditional sale agreement pertaining to the leasing or use of any Tangible Personal Property.

 

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Lease Agreements ” means all leases, subleases, licenses, concessions and other agreements, including Rail Agreements, railroad rights of way, railroad yard and similar agreements pursuant to which any of the Target Companies hold any Leased Real Property or the right to use such Leased Real Property, including any amendments thereto or assignments thereof.

 

Leased Real Property ” has the meaning set forth in Section 3.17(b) .

 

Legal Requirement ” means any laws, statutes, treaties, rules, regulations, ordinances, judgments, decrees, principles of common law, codes, orders and other pronouncements having the effect of law of any Governmental Bodies, including all Governmental Authorizations.

 

Liability ” means with respect to any Person, any Indebtedness, liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise.

 

Material Adverse Effect ” means any event, change, circumstance or occurrence that, individually or together with any other event, change, circumstance or occurrence, has or would reasonably be expected to have a material adverse effect on (a) the business, assets, properties, operations, results of operations or financial condition of the Target Companies, taken as a whole, or (b) the ability of the Seller Parties to consummate the Contemplated Transactions; provided that any such effect shall, to the extent resulting from any of the following (either alone or in combination), be disregarded in determining whether a “Material Adverse Effect” has occurred:  (i) any changes in Legal Requirements (or official interpretations thereof) or changes in GAAP or other accounting standards (or official interpretations thereof), in each case, to the extent that any such change does not have a disproportionate impact on the Target Companies relative to other Persons in similar businesses; (ii) any adverse change or event to the extent affecting the economy, financial markets (including the cost and availability of debt or equity financing), industries (including any change in the prices of crude oil, fuels, propane, ethanol, biodiesel, natural gas or other similar products or the demand for related transportation, blending, storage or other similar services), markets or geographical areas in which any of the Target Companies conduct their respective businesses, to the extent that any such adverse change or event does not have a disproportionate impact on the Target Companies relative to other Persons in similar businesses; (iii) any failure by the Target Companies to meet any estimates of revenues or earnings for any period ending on or after the date of this Agreement and prior to the Closing; provided that the exception in this clause shall not prevent or otherwise affect a determination that any change, effect, circumstance or occurrence underlying such failure has resulted in, or contributed to, a Material Adverse Effect; (iv) national or international political or social conditions, including the engagement by the United States of America in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States of America, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States of America; (v) the execution of this Agreement, the announcement of this Agreement and the Contemplated Transactions and the pendency of the Contemplated Transactions by this Agreement (including any action or inaction as a result thereof by the

 

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employees, customers, vendors or competitors of any of the Target Companies); or (vi) any action taken by Seller or any of the Target Companies pursuant to this Agreement or with the prior written consent of the Buyer.

 

Material Contract ” has the meaning set forth in Section 3.9(c) .

 

Material Governmental Approval ” means the expiration or termination of all applicable waiting periods under the HSR Act.

 

Notice of Objection ” has the meaning given to such term in Section 2.5(b) .

 

Off-Site Contamination ” means:  (a) Contamination at any real property previously (but not currently) owned, leased or operated by any of the Target Companies; or (b) Contamination, to the extent arising from pre-Closing actions or arrangements, at any off-site location or locations to which any of the Target Companies transported, arranged for the transportation of, disposed of, or arranged for disposal of Hazardous Substances generated by any of the Target Companies, in each and every of the foregoing cases excluding Contamination on the Owned Real Property and Leased Real Property.  Off-Site Contamination shall not mean or include the effects or results of migration outside or beyond the boundary lines of the Owned Real Property and Leased Real Property.

 

Off-the-Shelf Agreements ” means agreements granting rights or licenses with respect to data, databases, materials or Intellectual Property Assets to which the Company or any of its Subsidiaries is a party or beneficiary, in each case, that is generally commercially available on a subscription basis or pursuant to standard or non-negotiated license agreements, including shrink-wrap and click-wrap agreements for software.

 

On-Site Contamination ” means Contamination exceeding applicable standards or thresholds established pursuant to Environmental Laws and the physical effects of such Contamination, in, on, under or about or emanating or migrating from the Owned Real Property or Leased Real Property.  On-Site Contamination shall mean and include the effects or results of migration outside or beyond the boundary lines of the Owned Real Property and Leased Real Property.

 

Order ” means any order, writ, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Body or arbitrator (in each case whether preliminary or final).

 

Ordinary Course of Business ” means the ordinary course of business of a Person and consistent with such Person’s past practices.

 

Owned Real Property ” has the meaning set forth in Section 3.17(a) .

 

Parent ” has the meaning set forth in the preamble.

 

Parties ” has the meaning set forth in the preamble.

 

Party ” has the meaning set forth in the preamble.

 

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Payoff Letters ” has the meaning set forth in Section 2.4(b)(ii) .

 

Permitted Encumbrance ” means (a) any Encumbrance for Taxes, assessments, government charges or levies not yet due or delinquent or being contested in good faith by appropriate proceedings; (b) any statutory Encumbrance arising in the Ordinary Course of Business by operation of Legal Requirements with respect to a Liability that is not yet due or delinquent or that is being contested in good faith by appropriate proceedings; (c) Encumbrances of vendors, suppliers, carriers, warehousemen, mechanics, materialmen and repairmen incurred in the Ordinary Course of Business that are not material in nature or that are being contested in good faith by appropriate proceedings; (d) pledges or deposits to secure obligations under workers’ compensation, unemployment or other social security laws or similar legislation or to secure public or statutory obligations; (e) all easements, reservations, restrictions, covenants, conditions, rights-of-way and all other matters of record or immaterial title or survey exceptions and other similar restrictions, in each case that are not violated by, or would not materially impair or materially interfere with the continued use and operation of the assets to which they relate as used and operated in the Ordinary Course of Business immediately prior to the date hereof and to the Closing; (f) mortgages and other Encumbrances securing Indebtedness of any Target Company under the ABL (each of which shall be released at the Closing), (g) any Encumbrance listed on a title policy showing a Target Company as the insured or an effective title commitment provided or made available to Buyer on or prior to the date hereof and set forth on Schedule 1.1(c) ; (h) any matters disclosed by those surveys of the Owned Real Property or Leased Real Property, as applicable, provided or made available by any of the Seller Parties or their respective Representatives to Buyer on or prior to the date hereof and set forth on Schedule 1.1(c) ; and (i) Encumbrances affecting the lessor under a lease affecting Leased Real Property.

 

Person ” means any natural person, corporation, general partnership, limited partnership, limited liability company, joint venture, trust, union, proprietorship, Governmental Body or other entity, association or organization of any nature, however and wherever organized or constituted.

 

Phantom Units ” means all of the outstanding phantom units, awards and accounts under the Company Cash Incentive Bonus Plans that are based on the value of an Equity Interest of Seller Affiliate.

 

Policies ” has the meaning set forth in Section 3.10(a) .

 

Post-Closing Covenants ” has the meaning set forth in Section 11.2(b) .

 

Proceeding ” means any action, arbitration, audit, hearing, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether public or private) commenced, brought, conducted or heard by or before any Governmental Body or arbitrator.

 

Property Taxes ” has the meaning set forth in Section 10.1 .

 

Proposed Allocation Schedule ” has the meaning set forth in Section 10.7(a) .

 

Proposed Final Balance Sheet ” has the meaning given to such term in Section 2.5(a) .

 

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Proposed Final Balance Sheet Indebtedness ” has the meaning given to such term in Section 2.5(a) .

 

Proposed Final Closing Cash ” has the meaning given to such term in Section 2.5(a) .

 

Proposed Final Closing Statement ” has the meaning given to such term in Section 2.5(a) .

 

Proposed Final Closing Working Capital ” has the meaning given to such term in Section 2.5(a) .

 

Public Disclosure ” has the meaning set forth in Section 12.2 .

 

Purchase Price ” has the meaning set forth in Section 2.1 .

 

Rail Agreements ” has the meaning set forth in Section 3.17(b) .

 

Registered Intellectual Property ” has the meaning set forth in Section 3.12(a) .

 

Representative ” means with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other authorized representative of that Person.

 

Required Consents ” has the meaning set forth in Section 3.2(b) .

 

Schedule ” means each schedule provided by the Company and the Seller in accordance with this Agreement.

 

Seller ” has the meaning set forth in the preamble to this Agreement.

 

Seller Affiliate ” means Gavilon Energy, LLC a Delaware limited liability company.

 

Seller Fraudulent Misrepresentations ” has the meaning set forth in Section 11.2(a) .

 

Seller Fundamental Representations ” has the meaning set forth in Section 6.1(b) .

 

Seller Indemnified Parties ” has the meaning set forth in Section 11.3(a) .

 

Seller Parties ” has the meaning set forth in the preamble to this Agreement.

 

Seller Required Consents ” has the meaning set forth in Section 4.2(b) .

 

Straddle Period ” has the meaning set forth in Section 10.1 .

 

Subsidiary ” means, with respect to any Person, another Person (other than a natural person), of which such first Person is entitled, directly or indirectly through one or more Subsidiaries, through the ownership or control of voting securities, other voting ownership or voting partnership interests or otherwise, to elect at least a majority of its board of directors or

 

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other managing authority or to otherwise, directly or indirectly, control the management of such Person.

 

Swap/Commodity Transaction ” means (i) spot, forward, futures, option, deposit, consignment, loan, lease, swap, exchange, sale, purchase and repurchase (including reverse repurchase and prepaid forward transactions) transactions, hedge transactions, allocated transactions, unallocated transactions, forward rate agreements, cap agreements, floor agreements, collar agreements, or any combination thereof or option or derivative thereon or similar transaction, in any case involving any Commodity or indices on, or comprised of, any Commodity; (ii) dealing, market making, clearing, brokering, trading, marketing, buying, selling or distributing Commodities or transactions of the type described in clause (i) of this definition; (iii) refining, processing, blending, tolling, otherwise altering, producing, marketing, distributing (at wholesale and retail), storing, shipping, transporting and generating Commodities through agreements with third parties; and (iv) transactions of a nature described in clause (i) with respect to, rather than Commodities, interest rates or currency exchange rates.

 

Tangible Personal Property ” means all office equipment, computer hardware, vehicles and other items of tangible personal property of every kind, together with any express or implied warranty by the Third Party manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto.

 

Target Companies ” means the Company and its Subsidiaries.  For the avoidance of doubt, Target Companies excludes the JVs.

 

Target Working Capital ” means an amount equal to $198,000,000.

 

Tax ” or “ Taxes ” means any income, gross receipts, license, payroll, employment, excise, capital gains or corporation tax on capital gains, severance, stamp, stamp duty reserve tax, occupation, premium, property, environmental (including taxes under Section 59A of the Code), windfall profit, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, asset, sales, use, transfer, documentary, value added, alternative, add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any Governmental Body.

 

Tax Proceeding ” has the meaning set forth in Section 10.3 .

 

Tax Representations ” has the meaning set forth in Section 11.1(a) .

 

Tax Return ” means any return (including any information return), report, statement, schedule, notice, form, declaration, or claim for refund (including any amended return, report, statement, schedule, notice, form, declaration, or claim for refund) filed with or submitted to, or required to be filed with or submitted to, any Governmental Body with respect to Taxes, and including any attachments thereto.

 

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Third Party ” means a Person other than Seller, Buyer, the Target Companies or any of their respective Subsidiaries, Affiliates and Representatives.

 

Third Party Claim ” has the meaning set forth in Section 11.4(a) .

 

Transaction Costs ” means all third-party and out-of-pocket fees, costs and expenses of the Company (including Applicable Payments and brokers’ or finders’ fees in connection with the Contemplated Transactions, but excluding costs attributable to any change-of-control payments, consent payments and similar payments that are not Applicable Payments) in connection with the structuring, negotiation or consummation of this Agreement and the Contemplated Transactions, whether incurred prior to, on or after the date hereof, but prior to the Closing, in each case, that are accrued as of the Closing; provided that Transaction Costs do not include Transfer Taxes.  For the avoidance of doubt, Transaction costs shall not include any such fees, costs and expenses incurred after the Closing by the Company to the extent such fees, costs and expenses arise after the Closing.

 

Transfer Taxes ” has the meaning set forth in Section 10.6 .

 

Transferred Interests ” has the meaning set forth in the Recitals.

 

Transition Health and Welfare Plans ” has the meaning set forth in Section 8.5(g) .

 

Transition Services Agreement ” means that certain Transition Services Agreement, dated as of July 5, 2013 (as amended, supplemented, restated, or otherwise modified from time to time), between the Agriculture Company and the Company.

 

Transition Services Benefits Period ” has the meaning set forth in Section 8.5(g) .

 

Transition Plans ” has the meaning set forth in Section 3.6(b) .

 

Unresolved Allocation Changes ” has the meaning set forth in Section 10.7(b) .

 

Unresolved Changes ” has the meaning given to such term in Section 2.5(c) .

 

WARN Act ” has the meaning give such term in Section 3.11(b)(iv) .

 

Section 1.2                                               Usage .

 

(a)                                  Interpretation .  In this Agreement, unless a clear contrary intention appears:

 

(i)                                      the singular number includes the plural number and vice versa;

 

(ii)                                   reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

 

(iii)                                reference to either gender includes the other gender;

 

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(iv)                               reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof;

 

(v)                                  reference to any Legal Requirement means such Legal Requirement as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

 

(vi)                               “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof;

 

(vii)                            “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

 

(viii)                         with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”;

 

(ix)                               the term “ knowledge ” (and similar terms, including “ aware ”), when used in the phrase “ to the knowledge of the Company ” (or when used in similar phrases to refer to the knowledge or awareness of any Target Company), shall mean the actual knowledge of the individuals set forth on Schedule 1.2(a)(ix)(1)  after reasonable inquiry of the other officers of the Company as of the date the representation is given.  The term “ knowledge ” (and similar terms, including “ aware ”), when used in the phrase “ to the knowledge of Buyer ” (or when used in similar phrases to refer to the knowledge or awareness of Buyer), shall mean the actual knowledge of the individuals set forth on Schedule 1.2(a)(ix)(2)  after reasonable inquiry of the other officers of Buyer as of the date the representation is given;

 

(x)                                  all references to “dollar” or “$” are references to United States dollars and, where the context requires, to the equivalent thereof in any foreign currency;

 

(xi)                               the word “or” shall not be deemed to be exclusive;

 

(xii)                            references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto; and

 

(xiii)                         references to any period of time ending on the Closing Date shall refer to a period of time through the end of the Closing Date, without giving effect to the Contemplated Transactions.

 

(b)                                  Accounting Terms and Determinations .  Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP.

 

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(c)                                   Legal Representation of the Parties .  This Agreement was negotiated by the Parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any Party shall not apply to any construction or interpretation hereof.

 

(d)                                  Disclosure Schedules .  Disclosure of any item in any section or subsection of the Schedules hereto shall also be deemed disclosed with respect to any other section or subsection for which the applicability of such disclosure is reasonably apparent on the face and terms of such disclosure.  The Schedules are deemed to be incorporated herein but are qualified in their entirety by the Agreement, and shall not be construed as indicating that any matter disclosed therein is required to be disclosed, nor shall any disclosure be construed as an admission that such information is material with respect to the Company.  Any reference to a contract, statement, plan, report or other document of any kind in the Schedules shall be deemed to be full disclosure of all the terms thereof, and it shall not be necessary to identify or reference specific provisions of such documents in order to make full disclosure.  The Schedules shall include disclosure of any information specified in the Confidential Disclosure Letter as disclosure with respect to any Schedule specified therein; provided , however , that the Confidential Disclosure Letter will not be included in any electronic, printed or other medium of documentation of the final copies of this Agreement or the Schedules.

 

ARTICLE II
PURCHASE AND SALE OF EQUITY INTERESTS; CLOSING

 

Section 2.1                                               Purchase and Sale of Equity Interests .  For purposes of this Agreement, the aggregate purchase price to be paid on the Closing Date by the Buyer Parties to Seller shall be (i) $890,000,000 (the “ Base Price ”) plus (ii) the Estimated Closing Cash plus (iii) the amount (if any) by which Estimated Closing Working Capital exceeds Target Working Capital less (iv) the amount (if any) by which Target Working Capital exceeds Estimated Closing Working Capital less (v) the amount, if any, by which the Estimated Balance Sheet Indebtedness exceeds zero (the sum of clauses (i) through (v) is referred to herein as the “ Closing Date Purchase Price ,” and as such amount shall be adjusted pursuant to Section 2.5 , the “ Purchase Price ”).  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, in exchange for payment of the Closing Date Purchase Price, Seller shall sell, transfer and deliver to Buyer, and Buyer shall, and Parent shall cause Buyer to, purchase from Seller, all of the Transferred Interests.

 

Section 2.2                                               Estimated Closing Balance Sheet; Payment of Closing Date Purchase Price .

 

(a)                                  No later than five (5) Business Days prior to the anticipated Closing Date, Seller shall deliver or cause to be delivered to Buyer the Estimated Closing Balance Sheet signed by a financial officer (in his or her capacity as such) of the Company, which shall reflect Seller’s reasonable good faith estimate of the amount of (i) Closing Working Capital (the “ Estimated Closing Working Capital ”) as of 11:59 p.m. on the day immediately preceding the Closing Date, (ii) Cash of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Estimated Closing Balance Sheet (the “ Estimated Closing Cash ”) and (iii) the Balance Sheet Indebtedness of the Target Companies as of 11:59 p.m. on the

 

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day immediately preceding the Closing Date as reflected in the Estimated Closing Balance Sheet (the “ Estimated Balance Sheet Indebtedness ”).  For purposes of illustration only, attached hereto as Exhibit B is a representative calculation of the Closing Working Capital and the calculation of Cash and Balance Sheet Indebtedness, in each case, assuming a Closing Date of August 31, 2013.  Buyer shall have three (3) Business Days from Buyer’s receipt thereof to review the Estimated Closing Balance Sheet, including the Estimated Closing Working Capital, Estimated Closing Cash and Estimated Balance Sheet Indebtedness set forth therein.  Prior to the expiration of such three (3) Business Day review period, Buyer may submit a written report containing any changes Buyer proposes to be made to the Estimated Closing Balance Sheet, including to the Estimated Closing Working Capital, Estimated Closing Cash and Estimated Balance Sheet Indebtedness.  Seller will consider such revisions in good faith and if Seller elects to make any of Buyer’s proposed changes to the Estimated Closing Balance Sheet, including to the Estimated Closing Working Capital, Estimated Closing Cash and Estimated Balance Sheet Indebtedness, Seller shall do so no later than one (1) Business Day prior to the Closing.

 

(b)                                  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall transfer to Buyer the Transferred Interests and, in exchange for the Transferred Interests, Buyer shall, and Parent shall cause Buyer to, pay by wire transfer of immediately available funds:

 

(i)                                      all amounts necessary to discharge the then outstanding balances of the Estimated Balance Sheet Indebtedness identified in Schedule 2.2(b)(i) , to the holders thereof (or an agent therefor) in accordance with the instructions set forth in the Payoff Letters (a draft of such Payoff Letters to be provided to Buyer at least two (2) Business Days prior to the Closing Date) (and Buyer shall also deliver cash collateral and/or back-to-back letters of credit, as applicable, to the extent required by the Payoff Letters); and

 

(ii)                                   the Closing Date Purchase Price (as determined pursuant to Section 2.1 and Section 2.2(a) ) to the bank accounts designated in writing by Seller (such designation to be made by Seller at least two (2) Business Days prior to the Closing Date).

 

(c)                                   Buyer shall pay the Closing Date Purchase Price and all other amounts due to Seller under this Agreement without withholding or offset of any kind, including any withholding for Taxes.

 

Section 2.3                                               Closing .  The consummation of the Contemplated Transactions (the “ Closing ”) shall be held at 10:00 a.m. Eastern Time on the second (2nd) Business Day after satisfaction or waiver (to the extent permitted by applicable Legal Requirement) of the conditions set forth in Article VI and Article VII (other than conditions which by their terms cannot be satisfied until the Closing Date, which shall be required to be so satisfied or waived (to the extent permitted by applicable Legal Requirement) on the Closing Date) or at such other time as the Buyer Parties and the Seller Parties shall agree in writing.  The Closing (the date of Closing, the “ Closing Date ”) shall be held at the offices of Jones Day, 222 East 41st Street, New York, New York 10017 or at such other place as the Buyer Parties and the Seller Parties shall agree in writing.  The Closing shall be deemed effective as of 12:01 a.m. on the Closing Date.

 

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Section 2.4                                               Closing Obligations .  In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:

 

(a)                                  Seller shall deliver to the Buyer Parties:

 

(i)                                      instruments of sale, transfer and conveyance evidencing and effecting the sale of the Transferred Interests to Buyer in the form attached hereto as Exhibit C , upon payment of the Closing Date Purchase Price;

 

(ii)                                   a certificate or statement from Seller, conforming to the requirements of Treasury Regulations Section 1.1445-2(b) that is necessary to prevent Buyer from having an obligation to withhold an amount of Tax from the consideration otherwise deliverable under this Agreement;

 

(iii)                                a receipt executed by Seller, dated as of the Closing Date, evidencing the receipt of the Closing Date Purchase Price;

 

(iv)                               a certificate executed by Seller, dated as of the Closing Date, in accordance with Section 6.7 ; and

 

(v)                                  executed endorsements that change the named beneficiary of each Policy (other than the executive risk policies, including directors and officers, employment practices, executive liability, fiduciary and crime) to Gavilon, LLC, effective November 1, 2013, and a Consent from the carrier of each such Policy stating that such Policy will remain in place for the Company during the duration of the policy period, subject to all existing policy terms and conditions, provided that the business operations of the Company remain essentially the same.

 

(b)                                  The Company shall deliver or cause to be delivered to the Buyer Parties:

 

(i)                                      a certificate executed by the Company, dated as of the Closing Date, in accordance with Section 6.6 ; and

 

(ii)                                   one or more payoff letters reasonably acceptable to Buyer from the holders of Balance Sheet Indebtedness identified in Schedule 2.2(b)(i)  (or the agent for such holders) which payoff letters set forth the terms and conditions of the payment and discharge in full of all such Balance Sheet Indebtedness and release of all Encumbrances granted by Seller, any Target Company or any of their Affiliates securing the same on and as of the Closing Date upon the payment thereof and, if applicable, Buyer’s provision of cash collateral and/or back-to-back letters of credit with respect to any outstanding letters of credit issued under any document governing Balance Sheet Indebtedness (the “ Payoff Letters ”).

 

(c)                                   The Buyer Parties shall deliver to Seller:

 

(i)                                      a receipt executed by Buyer, dated as of the Closing Date, evidencing the receipt of the Transferred Interests received by Buyer;

 

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(ii)                                   evidence of the payment by Buyer of the Balance Sheet Indebtedness set forth in the Payoff Letters that is reasonably acceptable to Seller and of delivery of cash collateral and/or back-to-back letters of credit, as applicable, to the extent required by the Payoff Letters;

 

(iii)                                the Closing Date Purchase Price pursuant to Section 2.2(b)(ii)  by wire transfer of immediately available funds, to the accounts designated by Seller; and

 

(iv)                               a certificate executed by each Buyer Party, dated as of the Closing Date, in accordance with Section 7.6 .

 

Section 2.5                                               Post-Closing Adjustment .

 

(a)                                  Within ninety (90) calendar days after the Closing Date, Buyer shall prepare and deliver to Seller a consolidated balance sheet of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date, prepared in accordance with GAAP and on a basis consistent with the GAAP conventions used for the preparation of the Audited Financial Statements; provided that such balance sheet shall reflect the Transaction Costs accrued as of the Closing and shall include each of the items set forth in the definition of Closing Working Capital (whether or not otherwise required to be included on a balance sheet prepared in accordance with GAAP), but otherwise shall be calculated without giving effect to the consummation of the Contemplated Transactions and shall exclude any Indebtedness incurred under financing or refinancing arrangements entered into at any time by any of the Buyer Parties or any other transaction entered into by any of the Buyer Parties in connection with the Contemplated Transactions (including with respect to any of the Target Companies) (such balance sheet, the “ Proposed Final Balance Sheet ”).  The Proposed Final Balance Sheet shall also include schedules setting forth the calculation of (i) Closing Working Capital as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “ Proposed Final Closing Working Capital ”), (ii) Cash of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “ Proposed Final Closing Cash ”) and (iii) the Balance Sheet Indebtedness of the Target Companies as of 11:59 p.m. on the day immediately preceding the Closing Date as reflected in the Proposed Final Balance Sheet (the “ Proposed Final Balance Sheet Indebtedness ”).  The Proposed Final Closing Balance Sheet, together with such schedules, is referred to herein as the “ Proposed Final Closing Statement ”.

 

(b)                                  Seller will have forty-five (45) calendar days following delivery of the Proposed Final Closing Statement during which to notify Buyer in writing (the “ Notice of Objection ”) of any objections to the preparation of the Proposed Final Balance Sheet or the calculation of the Proposed Final Closing Working Capital, Proposed Final Closing Cash, and Proposed Final Balance Sheet Indebtedness, in each case, setting forth the basis of its objections in such detail as will permit Buyer to understand such objections, and the U.S. dollar amount of each objection.  In reviewing the Proposed Final Closing Statement, Seller (i) shall be entitled to reasonable access during normal business hours to all material personnel, accountants, books, records, contracts and documents of the Target Companies that are required by Seller to confirm the accuracy of the Proposed Final Closing Statement, and (ii) shall be furnished by the Target Companies such information and data that Seller may reasonably request and that is readily

 

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available to the Target Companies, including the basis of Buyer’s calculations with respect to the Proposed Final Closing Statement, the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and the Proposed Final Balance Sheet Indebtedness in such detail as will permit Seller to understand clearly such calculations.  If Seller fails to deliver a Notice of Objection within such forty-five (45) day period, the Proposed Final Closing Statement, together with Buyer’s calculation of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and the Proposed Final Balance Sheet Indebtedness reflected thereon, shall be conclusive and binding on all Parties and they shall become the “ Final Balance Sheet ,” the “ Final Closing Working Capital ,” the “ Final Closing Cash ,” and the “ Final Balance Sheet Indebtedness .”  If Seller submits a Notice of Objection, then (i) for thirty (30) calendar days after the date Buyer receives the Notice of Objection, Seller and Buyer will cooperate with each other and attempt in good faith to agree on the items set forth in the Notice of Objection and the resulting calculation of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and/or the Proposed Final Balance Sheet Indebtedness, as the case may be, and amounts resolved by such attempts shall be conclusive and binding on the Parties, and (ii) failing such agreement within such thirty (30) calendar day period, the items set forth in the Notice of Objection that have not been resolved will be resolved in accordance with Section 2.5(c) ; and the Proposed Final Closing Statement, and the calculation of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and the Proposed Final Balance Sheet Indebtedness reflected thereon, as they may be modified through the procedures set forth in clauses (i)  and (ii)  of this sentence, shall be conclusive and binding on the Parties and shall become the “ Final Balance Sheet ,” the “ Final Closing Working Capital ,” the “ Final Closing Cash ,” and the “ Final Balance Sheet Indebtedness .”

 

(c)                                   Any amounts remaining in dispute at the conclusion of the thirty (30) calendar day period referred to in Section 2.5(b)  that were properly included in the Notice of Objection (the “ Unresolved Changes ”) shall be submitted to the New York, New York office of Hein & Associates LLP (the “ Accounting Arbitrator ”).  Seller and Buyer agree to execute, if requested by the Accounting Arbitrator, a reasonable engagement letter consistent with this Agreement.  Within ten (10) Business Days following the submission of such Unresolved Changes to the Accounting Arbitrator, Seller and Buyer will each deliver to the other and to the Accounting Arbitrator a notice setting forth in reasonable detail their Proposed Final Balance Sheet and calculation of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and/or the Proposed Final Balance Sheet Indebtedness, as the case may be.  The Accounting Arbitrator shall act as an arbitrator to determine, based on the provisions of this Section 2.5 and the definitions referred to herein, only the Unresolved Changes.  The Accounting Arbitrator shall be instructed to (i) review each of Seller’s and Buyer’s Proposed Final Closing Balance Sheet and their calculations of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and/or the Proposed Final Balance Sheet Indebtedness, as the case may be, (ii) only make determinations with respect to the Unresolved Changes and not make changes to the other amounts not in dispute, (iii) based on its review of the Unresolved Changes, determine the Final Closing Balance Sheet, including the Final Closing Working Capital, the Final Closing Cash and/or the Final Balance Sheet Indebtedness, as the case may be, each of which shall be no higher than the higher, and no lower than the lower, of the calculations of the Proposed Final Closing Working Capital, the Proposed Final Closing Cash and/or the Proposed Final Balance Sheet Indebtedness, as the case may be, respectively, of the Parties, and (iv) provide a written description of the basis for such determination within thirty (30) days after

 

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such matter has been submitted to the Accounting Arbitrator, which written determination shall be final, binding and conclusive on the Parties.  Each of the Parties shall furnish, at its own expense, the Accounting Arbitrator and the other Party with such documents and other written information as the Accounting Arbitrator may request.  Each Party may also furnish to the Accounting Arbitrator such other written information and documents as such Party deems relevant; provided , that copies of all such documents and materials shall be concurrently delivered to the other Party in the same manner as such materials are delivered to the Accounting Arbitrator.  The Accounting Arbitrator may, at its discretion, conduct one or more conferences with respect to the dispute between the Parties, at which conference each Party shall have the right to present such additional documents, materials and other information related to the Unresolved Changes and to be accompanied or represented by such Representatives as each Party shall choose in its sole discretion.  The fees and expenses of the Accounting Arbitrator shall be borne by Seller and Buyer, respectively, in inverse proportion to the degree that each prevails in the dispute, which proportionate allocation shall also be determined by the Accounting Arbitrator.

 

(d)                                  Within five (5) Business Days of the determination, in accordance with this Section 2.5 , of the Final Balance Sheet:  (i) if the Final Purchase Price exceeds the Closing Date Purchase Price, Buyer shall, and Parent shall cause Buyer to, pay to Seller an amount equal to the amount of such excess, and (ii) if the Final Purchase Price is less than the Closing Date Purchase Price (as determined pursuant to Sections 2.1 and 2.2(a) ), Seller shall be required to pay to Buyer an amount equal to such deficit.  Any amounts paid pursuant to this Section 2.5(d)  shall be paid in cash.

 

(e)                                   The dispute resolution provisions of this Section 2.5 shall not apply to, and the scope of the Accounting Arbitrator’s authority herein shall not extend to, any dispute of the Parties relating to the interpretation, breach or enforcement of any provisions of this Agreement.

 

Section 2.6                                               Payments .  All payments of cash pursuant to Section 2.5(d)  shall be paid by wire transfer of immediately available funds to the account or the accounts designated in writing by Seller or to Buyer, as the case may be.  Whenever any such payment under Section 2.5(d)  shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of payment of interest.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as set forth in the Schedules to this Agreement, the Company hereby represents and warrants to the Buyer Parties as set forth in this Article III .

 

Section 3.1                                               Organization and Good Standing .

 

(a)                                  The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority to enter into this Agreement.  Schedule 3.1(a)  lists each of the other Target Companies, together with the jurisdiction in which each such Target Company is organized.  Each such other

 

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Target Company is duly organized, validly existing and in good standing under the laws of the jurisdiction in which such Target Company is organized.

 

(b)                                  The Target Companies have full power and authority to conduct the Company Business as it is now being conducted and to own or use the properties and assets that they purport to own or use in conducting the Company Business.

 

Section 3.2                                               Enforceability; Authority; No Conflict .

 

(a)                                  This Agreement constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (whether considered in a proceeding at law or in equity).  The Company has the requisite right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder and consummate the Contemplated Transactions, and such action has been duly authorized by all necessary corporate or other entity action.

 

(b)                                  The execution, delivery and performance by the Company of this Agreement and the consummation of the Contemplated Transactions, does not and will not:  (i) violate any provision of the Governing Documents of the Target Companies, or any resolution adopted by the respective boards of directors or shareholders (or similar management group) of any such entity, as applicable; (ii) assuming receipt of the consents set forth in Schedule 3.2(c) , violate or conflict with any material provisions of any Legal Requirements or any Order to which any of the Target Companies are subject; (iii) except as set forth on Schedule 3.2(b)(iii)  (the “ Required Consents ”), violate, conflict with, result in a material breach of, constitute (with due notice or lapse of time or both) a material default or cause any material obligation, penalty, premium or other payment to arise or accrue under any Material Contract to which any of the Target Companies is a party or by which any such entity is bound or to which any such entity’s respective properties or assets is subject; or (iv) result in the creation or imposition of any Encumbrance (except Permitted Encumbrances and any Encumbrances imposed directly or indirectly by Buyer) upon any of such properties or assets of the Target Companies or with respect to the Equity Interests of the Target Companies.

 

(c)                                   Except as set forth in Schedule 3.2(c) , no consent, approval, authorization of, declaration, filing, or registration with, any Governmental Body or any Third Party is required to be made or obtained by any of the Target Companies, in connection with the execution, delivery, and performance of this Agreement or the consummation of the Contemplated Transactions.

 

Section 3.3                                               Target Company Records .

 

(a)                                  The Company has provided or made available to Buyer or one or more of its Representatives true, correct and complete copies of the Governing Documents of the Target Companies, in each case as amended and in effect on the date hereof.

 

(b)                                  The minute books of the Target Companies (or similar books and records kept in accordance with the Governing Documents of such Target Companies), to the extent they

 

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have been maintained, have been previously made available to Buyer or one or more of its Representatives, are all of such minute books or similar books and records of the Target Companies and are complete and correct in all material respects in respect of the minutes contained in such minute books.

 

Section 3.4                                               Target Company Interests; Title .

 

(a)                                  The Equity Interests of the Target Companies, as of the date hereof, consist solely of the Equity Interests set forth on Schedule 3.4(a)  and, except as set forth in Schedule 3.4(a) , all of such Equity Interests (i) are issued and outstanding, (ii) have been duly authorized and are validly issued, (iii) were issued in compliance with all applicable state and federal securities laws, (iv) were not issued in breach of any Equity Commitments, and (v) are held of record and owned beneficially as set forth on Schedule 3.4(a) .  Except as set forth on Schedule 3.4(a) , (A) no Equity Commitments of any of the Target Companies exist, (B) no Contracts exist with respect to the voting or transfer of any of the Target Companies’ Equity Interests, (C) no Person is obligated to redeem or otherwise acquire any of the Target Companies’ Equity Interests and (D) each of the Persons identified on Schedule 3.4(a)  as the owner of the Equity Interests of each Target Company has good, valid and marketable title to the Equity Interests of such Target Company free and clear of all Encumbrances, other than Permitted Encumbrances or Encumbrances imposed directly or indirectly by Buyer.  Other than as set forth on Exhibit A and Schedule 3.1(a) , the Target Companies do not own, directly or indirectly, any Equity Interests in any Person.

 

(b)                                  Schedule 3.4(b)  sets forth the Equity Interests of the JVs that are held by any of the Target Companies and the corresponding ownership percentage of such JVs held by such Target Company relative to the ownership percentages held by other Persons in such JVs.  Such Equity Interests are held of record and owned beneficially by such Target Company as set forth on Schedule 3.4(b) .  The Company or one or more of its Subsidiaries has good, valid and marketable title to such Equity Interests free and clear of all Encumbrances, other than Permitted Encumbrances or Encumbrances imposed directly or indirectly by Buyer or the Governing Documents of such JV.

 

Section 3.5                                               Absence of Certain Change .  Except as described in Schedule 3.5 , since the Interim Balance Sheet Date and through the date hereof, (a) the Target Companies have conducted the Company Business in the Ordinary Course of Business, (b) there has not been any event or circumstance in respect of the Company Business or its financial condition, operations, or assets that, individually or in the aggregate with other known events or circumstances, has resulted or would reasonably be expected to result in a Material Adverse Effect, and (c) the Target Companies have not taken any action or failed to take any action that would have resulted in a breach of Section 8.1 or would have required consent of the Buyer Parties pursuant to Section 8.1 had such action or omission occurred after the date of this Agreement.

 

Section 3.6                                               Employee Benefits .

 

(a)                                  Schedule 3.6(a)  contains a true and complete list of each material “employee benefit plan” (within the meaning of Section 3(3) of ERISA) and all material equity, equity incentive, severance, change-in-control, bonus, incentive, retention, deferred

 

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compensation, salary continuation, employee loan and all other material employee benefit (including fringe benefit) plans, agreements, programs, policies or other arrangements, in each case, in which any current or former employee of the Target Companies (collectively, the “ Employees ”) has any present or future right to payments or benefits and which are sponsored by or maintained by any of the Target Companies, (but, for the avoidance of doubt, excluding Transition Plans), but excluding for purposes of Schedule 3.6(a)  any employment agreement (all such plans, agreements, programs, policies and arrangements shall be collectively referred to as the “ Company Plans ”).

 

(b)                                  Schedule 3.6(b)  contains a true and complete list of each material “employee benefit plan” (within the meaning of Section 3(3) of ERISA) and all material employee loan and all other material employee benefit plans, agreements, programs, policies or other arrangements, in each case that is not a Company Plan, in which any Employee has any present or future right to payments or benefits and in which any of the Target Companies is a participating employer or under which any of the Target Companies or any of their ERISA Affiliates has any material present or future liability (actual or contingent) other than Company Plans (all such plans, agreements, programs, policies and arrangements other than Company Plans and other than as specified on Schedule 3.6(b)(i)  shall be collectively referred to as the “ Transition Plans ” and together with the Company Plans the “ Group Plans ”).

 

(c)                                   With respect to each Group Plan, the Company has provided to Buyer a current, accurate and complete copy (or to the extent no such copy exists an accurate description) thereof, except for multiple agreements that are substantially similar to a standard form, in which case only such form has been made available, and, to the extent applicable:  (i) any related trust agreement or other funding instrument; (ii) the most recent determination letter or, for a plan maintained pursuant to a prototype document, opinion letter, if applicable; (iii) any summary plan description; (iv) the nondiscrimination testing performed for the most recent plan year, if applicable; and (v) the two (2) most recent Annual Reports on IRS Form 5500, if applicable.

 

(d)                                  Except as set forth on Schedule 3.6(d) , with respect to each Company Plan:  (i) each has been established and administered in all material respects in accordance with its terms and in substantial compliance with the applicable provisions of ERISA, the Code and other applicable Legal Requirements; (ii) no nonexempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) that could result in a material tax or penalty has occurred; (iii) no material actions, suits or claims are pending or, to the knowledge of the Company, threatened and no facts or circumstances exist that could reasonably be expected to give rise to any such material actions, suits or claims; and (iv) none is subject to Title IV of ERISA or Section 412 of the Code.

 

(e)                                   Except as set forth on Schedule 3.6(e) , (i) each Group Plan which is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination or opinion letter as to its qualification, and to the knowledge of the Company nothing has occurred since the date of such letter, whether by action or failure to act, that could reasonably be expected to cause the revocation of such letter or the loss of such qualification, (ii) all material contributions and premium payments required to be made as of the date hereof in respect of each Group Plan, with respect to Employees, have been timely made; (iii) with respect to each Transition Plan, none is subject to Section 413(c) of the Code; and

 

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(iv) with respect to any Group Plan, no administrative investigation, audit or other administrative proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation, the Internal Revenue Service or other governmental agencies are pending, to the knowledge of the Company, threatened, or in progress.

 

(f)                                    None of the Target Companies has incurred any liability in respect of post-employment or post-retirement health, medical or life insurance benefits for Employees, except as required to avoid an excise tax under Section 4980B of the Code or otherwise except as may be required pursuant to any other applicable Legal Requirements;

 

(g)                                   Except as disclosed on Schedule 3.6(g)  or as provided in Section 8.5 , no Company Plan as a result of the execution of this Agreement or the Contemplated Transactions (whether alone or in connection with any other event(s)) would, with respect to any Employee:

 

(i)                                      result in severance pay or any increase in severance pay upon any termination of service; or

 

(ii)                                   accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits or increase the amount payable.

 

(h)                                  The execution of this Agreement or the Contemplated Transactions (whether alone or in connection with other events), will not result in any payment under any Company Plan that would not be deductible under Section 280G of the Code.

 

(i)                                      Each Company Plan that is a nonqualified deferred compensation plan within the meaning of Section 409A of the Code has been established and maintained in all material respects in accordance with its terms and in substantial compliance with Section 409A of the Code and the applicable regulatory guidance issued thereunder.

 

Section 3.7                                               Compliance with Legal Requirements; Governmental Authorizations .

 

(a)                                  Except as set forth in Schedule 3.7(a) , since the date that is two years prior to the date of this Agreement, the Target Companies are not and have not been in material violation of any applicable Legal Requirements (which term for this purpose shall not include Environmental Laws or Legal Requirements relating to Taxes, employee benefits matters or employee matters).

 

(b)                                  Except as set forth on Schedule 3.7(b) , for the past two years, none of the Target Companies has received any written notice or, to the knowledge of the Company, other notice, from any Governmental Body regarding any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement (which term for this purpose shall not include Environmental Laws or Legal Requirements relating to Taxes, employee benefits matters or employee matters) applicable to it.

 

(c)                                   Except as set forth on Schedule 3.7(c) , (i) each Governmental Authorization (which term for this purpose shall not include Governmental Authorizations relating to Environmental Matters, Taxes, employee benefits matters or employee matters) that is

 

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material to the operation of the Company Business, as currently being conducted, has been issued to the applicable Target Company and is valid and in full force and effect; (ii) such Governmental Authorizations constitute all that are required for the operation of the Company Business as currently conducted (other than any Governmental Authorizations that are not material to the Target Companies taken as a whole); (iii) the holder thereof is in material compliance with such Governmental Authorization; and (iv) there has been no pending or, to the knowledge of the Company, threatened Proceedings seeking termination, revocation, suspension or adverse modification of any such Governmental Authorizations.  Schedule 3.7(c)  sets forth a list of all such Governmental Authorizations referenced in clause (c)(i)  above.  The Company has provided or made available to Buyer true, correct and complete copies of all such Governmental Authorizations referenced in clause (c)(i)  above.

 

Section 3.8                                               Legal Proceedings; Orders .

 

(a)                                  Except for employee benefit matters which are the subject of Section 3.6 , employee matters which are the subject of Section 3.11 , Taxes which are the subject of Section 3.13 , Environmental Matters which are the subject of Section 3.15 , and real property matters which are the subject of Section 3.17 , and except as set forth in Schedule 3.8(a) , there is no pending, or, to the Company’s knowledge, threatened, material Proceeding by or against or affecting any of the Target Companies or the properties or assets of any of the Target Companies.

 

(b)                                  Except for employee benefit matters which are the subject of Section 3.6 , employee matters which are the subject of Section 3.11 , Taxes which are the subject of Section 3.13 , Environmental Matters which are the subject of Section 3.15 , and real property matters which are the subject of Section 3.17 , and except as set forth in Schedule 3.8(b) , there is no Order in regard to the Target Companies (other than orders of general applicability not specific to any of the Target Companies) that, individually or in the aggregate, is material to the properties, assets or operations of the Target Companies, taken as a whole.

 

Section 3.9                                               Contracts; No Defaults .

 

(a)                                  Schedule 3.9(a)  contains, as of the date hereof, an accurate and complete list of each Material Contract (or in the case of forms described in clause (ii)  of this Section 3.9(a) , a listing of such forms) and (ii) except for multiple agreements that are substantially similar to a standard form, in which case only such form has been made available, the Target Companies have made available to Buyer or one or more of its Representatives accurate and complete copies of all such Material Contracts and such standard forms.

 

(b)                                  Except as set forth in Schedule 3.9(b) :

 

(i)                                      each Material Contract is in full force and effect and is a valid and enforceable obligation of the Target Company that is a party thereto, and, to the knowledge of the Company, any counterparty thereto, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (whether considered in a proceeding at law or in equity); and

 

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(ii)                                   no event or condition exists that constitutes or, after notice or a lapse of time or both, will constitute, a material default on the part of any of the Target Companies or, to the knowledge of the Company, by any counterparty thereto under any such Material Contract.

 

(c)                                   For purposes of this Agreement, “ Material Contract ” means any of the following Contracts of any of the Target Companies (excluding any Contracts to be executed and delivered pursuant to this Agreement):

 

(i)                                      any Contract evidencing outstanding Indebtedness exceeding $10,000,000 individually;

 

(ii)                                   any Contract of surety, guarantee or indemnification by any of the Target Companies outside of the Ordinary Course of Business of the Target Companies;

 

(iii)                                any Affiliate Agreement that will survive the Closing;

 

(iv)                               (A) any Contract pursuant to which any Employee is entitled to receive an annual salary in excess of $250,000 or (B) any Contract pursuant to which any consultant is entitled to receive fees in excess of $250,000 which is not terminable at will or with less than thirty (30) days’ notice without penalty or providing for termination payments;

 

(v)                                  other than Company Agreements, any Contract which may not be terminated by the Target Companies party thereto without penalty on 90 days’ or fewer notice and which could reasonably be expected either to (A) commit the Target Companies to aggregate expenditures of more than $10,000,000 in any calendar year or (B) give rise to revenues of more than $10,000,000 in any calendar year;

 

(vi)                               other than the Governing Documents of the Target Companies, any Contract in respect of an equity investment or relating to ongoing rights and obligations with respect to a formal written partnership agreement or a material contractual joint venture;

 

(vii)                            other than customary provisions included in Company Agreements, agreements with respect to the sharing, allocation or indemnities of Taxes or Tax costs that will survive the Closing (other than any agreements which are described in Section 3.9(c)(i) - (v)  or Section 3.9(c)(x) - (xvii) , or would be so described in Section 3.9(c)  but for the $10,000,000 threshold, or would be so described in Section 3.9(c)(v)  but for the limitations in Section 3.9(c)(v)(A)  or (B) ;

 

(viii)                         agreements for the future sale of any assets, property or rights or for the grant of any options or preferential rights to purchase any assets, property or rights, in each case for consideration in excess of $10,000,000;

 

(ix)                               documents granting any power of attorney with respect to the material affairs of the Target Companies (taken as a whole), excluding powers of attorney granted in the Ordinary Course of Business with respect to international operations;

 

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(x)                                  agreements evidencing settlement of litigation with outstanding obligations in excess of $2,000,000;

 

(xi)                               full requirements purchase or supply contracts with a remaining term of more than thirty-six (36) months;

 

(xii)                            any Contract with respect to a Company Agreement that (A) has a term longer than one (1) year and has a positive or negative fair market value in excess of $2,000,000 or (B) has a positive or negative fair market value in excess of $6,000,000, in each case, as calculated as of the Interim Balance Sheet Date;

 

(xiii)                         any Contract containing exclusivity, noncompetition or nonsolicitation provisions where such provisions burden or otherwise restrict any Target Company, including any Target Company’s freedom to compete in any line of business or in any geographic area;

 

(xiv)                        any Contract that constitutes a pipeline or facility operating agreement;

 

(xv)                           any Lease under which any Target Company is the lessor or the lessee of Tangible Personal Property which cannot be terminated by such Target Company upon 90 days’ or fewer notice and involves an annual base rental of more than $1,000,000;

 

(xvi)                        any Contract pursuant to which Seller or any of its Affiliates (other than the Target Companies or the JVs) acts as a surety or otherwise guarantees the obligations of any of the Target Companies or the JVs;

 

(xvii)                     any letter of credit issued under any document governing Balance Sheet Indebtedness and any bond or guarantee posted by any Target Company or the Seller or its Affiliates that relate to the business or operations of any Target Company;

 

(xviii)                  the Transition Services Agreement; and

 

(xix)                        any amendments, modifications, extensions or renewals of any of the foregoing.

 

Section 3.10                                        Insurance .

 

(a)                                  Schedule 3.10(a)  sets forth a true and complete list of all current workers’ compensation, title, fire, general liability, fiduciary liability, directors’ and officers’ liability, malpractice liability, theft and other policies of property and casualty insurance (including liability, and business interruption insurance) insuring the properties, assets and/or operations of the Target Companies (collectively, the “ Policies ”), along with the aggregate coverage amount and type of each of the Policies.

 

(b)                                  As of the date of this Agreement, all premiums with respect to such Policies, which are required to have been paid, have been paid, and no notice of cancellation,

 

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termination, or nonrenewal has been received or given with respect to any such Policy.  Except as set forth on Schedule 3.10(b) , (i) each Policy is in full force and effect, (ii) each Policy is valid and binding on the applicable Target Company, (iii) none of the Target Companies is in default under any provision of any Policy that would give rise to the right of the counterparty to such Policy to terminate such Policy, (iv) each Policy will continue in full force and effect upon consummation of the Contemplated Transactions, and (v) there is no claim by any of the Target Companies or any other Person pending under any of the Policies as to which coverage has been questioned, denied or disputed by the underwriters or issuers of such Policies.

 

Section 3.11                                        Employees .

 

(a)                                  Schedule 3.11(a)  of the Confidential Disclosure Letter contains a list of all of the Designated Employees as of the date hereof, specifying their location and status.  The Company has made available to Buyer or one or more of its Representatives true, correct and complete copies of each employment agreement for each Designated Employee (each, an “ Employment Agreement ”).

 

(b)                                  Except as set forth on Schedule 3.11(b) :

 

(i)                                      None of the Target Companies is a party to or otherwise bound by any collective bargaining agreement with a labor union or labor organization (a “ Collective Bargaining Agreement ”), no pending representation election petition or application for certification has been received by any of the Target Companies that names the Employees as potentially represented parties, and to the Company’s knowledge, there is no union organizing campaign or other attempt to organize or establish a labor union, employee organization or labor organization or group involving Employees, nor, as of the date hereof, are any of the Target Companies the subject of any material Proceeding asserting that any of the Target Companies has committed an unfair labor practice or seeking to compel them to bargain with any labor union or labor organization, nor is there pending or, to the knowledge of the Company, threatened, nor has there been for the past three (3) years, any strike, walk-out, work stoppage, slowdown or lockout involving any of the Target Companies;

 

(ii)                                   There is no material grievance or arbitration pending involving any of the Target Companies;

 

(iii)                                The Target Companies are in material compliance with all applicable Legal Requirements regulating employment and labor relations, including, but not limited to, provisions thereof related to wages, hours, equal opportunity, collective bargaining, layoffs, immigration compliance and the collection and payment of social security and other withholding taxes.  There are no Proceedings relating to employment with any of the Target Companies or compliance with Legal Requirements regulating employment and labor pending or, to the knowledge of the Company, threatened, by any Governmental Body, any employees or former employees, any party or parties representing any of such employees, or any former employer of a current employee, against any of the Target Companies before any court, arbitrator or other tribunal.  There are no charges of discrimination, wrongful termination or other similar complaints,

 

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including complaints related to unpaid wages, bonuses or other compensation or immigration laws pending against the Target Companies under any applicable federal or foreign (including international) Legal Requirement involving employees now or previously employed by the Target Companies that, if adversely determined, could be material to any of the Target Companies; and

 

(iv)                               None of the Target Companies has implemented any employee layoffs that could implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended (the “ WARN Act ”).

 

Section 3.12                                        Intellectual Property Assets .

 

(a)                                  The term “ Intellectual Property Assets ” means all intellectual property material to the Company Business.  Schedule 3.12(a)  sets forth (i) a complete list and description of all Intellectual Property Assets owned by any Target Company that are the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Body (“ Registered Intellectual Property ”) and (ii) a complete list of all licenses granted to a Target Company with respect to any Intellectual Property Assets (other than Off-the-Shelf Agreements). The applicable Target Company is the owner of all right, title and interest in and to each of the Intellectual Property Assets free and clear of all Encumbrances (except Permitted Encumbrances), or the applicable Target Company has a valid and existing license to use the Intellectual Property Assets.

 

(b)                                  All necessary registration, maintenance, and renewal fees in connection with the Registered Intellectual Property have been paid and all necessary documents and certificates in connection with such Registered Intellectual Property have been filed with the relevant Governmental Body for the purposes of maintaining such Registered Intellectual Property.

 

(c)                                   (i) The conduct of the Company Business (as conducted by the Target Companies immediately prior to the Closing Date) does not infringe, violate, dilute or misappropriate the Intellectual Property rights of any Third Party, and (ii) no such claims have been asserted in writing that have not been resolved.

 

(d)                                  To the knowledge of the Company (i) no Third Party is infringing, violating, diluting or misappropriating the rights of any Target Company in the Intellectual Property Assets, and (ii) no such claims are pending by any of the Target Companies or threatened by any of the Target Companies against any Third Party.

 

(e)                                   The execution, delivery or performance of this Agreement and the consummation of the Contemplated Transactions will not result in the material loss or impairment of any of the Intellectual Property Assets and will not restrict or otherwise impair in any material respect the Company’s and its Subsidiaries’ right to use any of the Intellectual Property Assets after the Closing Date without payment of any additional amounts or consideration other than ongoing fees, royalties, or payments that would otherwise be required to be paid by any of the Target Companies had the Contemplated Transactions not occurred.

 

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Section 3.13                                        Taxes .

 

(a)                                  Seller has made available to Buyer complete and correct copies of all material Tax Returns of each Target Company filed after December 31, 2010 and copies of all material correspondence with Taxing authorities relating thereto.

 

(b)                                  Except as set forth on Schedule 3.13(b) :  each of the Target Companies has timely filed (or caused to be timely filed) all material Tax Returns that were required to be filed by the Target Companies, and all such Tax Returns are correct and complete;  all material Taxes shown to be due and payable by any of the Target Companies on such Tax Returns have been paid, except for Taxes being contested in good faith through appropriate proceedings;  no Target Company (A) is or has ever been a member of an affiliated group filing a consolidated U.S. federal income tax return, and (B) has any liability for the Taxes of another Person other than such entity under Treasury Regulation Section 1.1502-6, as a transferee or successor or by contract,  no Target Company has engaged in any “listed transaction” as defined in Treasury Regulation Section 1.6011-4(b)(2); (v) none of the Target Companies or any of their respective Subsidiaries are a party to, bound by or obligated under any tax sharing agreement, tax indemnification agreement or similar Contract or arrangement; and (vi) none of the Target Companies or any of their respective Subsidiaries are currently the beneficiary of any extension of time within which to file any Tax Return and no request for any such extension is pending.

 

(c)                                   To the knowledge of the Company, except as set forth on Schedule 3.13(c) , (i) there are no Encumbrances for Taxes upon any of the assets of the Target Companies, except for Encumbrances for Taxes not yet due and payable or being contested in good faith through appropriate proceedings; (ii) no Tax Return of, or that includes, any of the Target Companies is currently being examined by, and no written notice of any such examination or of a proposed assessment or other adjustment in respect of such Tax Return has been received from, any Tax authority; (iii) there are no outstanding written agreements or waivers extending the statute of limitations applicable to any such Tax Return; and (iv) with respect to the Company Business, no written claim has been made by a Tax authority in a jurisdiction where Seller or the Target Companies have not filed a Tax Return that Seller or the Target Companies may be subject to taxation by that jurisdiction for Taxes.

 

(d)                                  Each of the Target Companies has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and all Internal Revenue Service Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

 

(e)                                   None of the Target Companies has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or 361 of the Code.

 

(f)                                    Except as set forth on Schedule 3.13(f) , each of the Target Companies has been and currently is treated as either (i) an entity disregarded from its owner or (ii) a partnership for U.S. federal income tax purposes.

 

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(g)                                   This Section 3.13 sets forth the sole and exclusive representations and warranties of the Company with respect to Tax matters.  The representations and warranties in this Section 3.13 refer only to the past activities of the Target Companies and are not intended to serve as representations and warranties regarding, or a guarantee of, nor can they be relied upon with respect to, Taxes attributable to any taxable period (or portion thereof) beginning after, or any Tax position taken after, the Closing Date.

 

Section 3.14                                        Brokers or Finders .  Except as set forth on Schedule 3.14 , none of the Target Companies or any of their Representatives has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with the Contemplated Transactions for which any of the Target Companies could be liable.  Without limiting the foregoing, Seller is obligated to pay customary broker fees pursuant to an engagement letter with Barclays Capital Inc., and is obligated to make certain payments to the Agriculture Buyer pursuant to the terms of the purchase agreement pursuant to which the Agriculture Company was sold to Agriculture Buyer and none of the Buyer Parties or the Target Companies shall have any liability therefor.  None of the Target Companies shall have any liability in connection with such obligations.

 

Section 3.15                                        Environmental Compliance .  Except as set forth on Schedule 3.15 :

 

(a)                                  (i) the Target Companies are, and for the past three (3) years have been, in compliance with all applicable Environmental Laws, and (ii) the Target Companies possess, and for the past three (3) years have been in compliance with, all Environmental Permits, except, in each case, for such non-compliance which, individually or in the aggregate, has not resulted in a material Environmental Liability.  The Target Companies have timely filed renewal applications for all Environmental Permits for which renewal is pending.

 

(b)                                  There are no pending or, to the knowledge of the Company, threatened Proceedings under or relating to any Environmental Law that would reasonably be expected to result in a material Environmental Liability to any of the Target Companies, or the revocation or termination of any of a Target Company’s Environmental Permits.  For the past three years, none of the Target Companies has received written notice of or has knowledge of any claim or demand made or threatened by any Person against any of the Target Companies, Owned Real Property or Leased Real Property relating to Environmental Liability for (A) actual or alleged On-Site Contamination; (B) any alleged violation of Environmental Laws; (C) actual or alleged Off-Site Contamination, in each case, which is or could reasonably be expected to result in a material Environmental Liability to any of the Target Companies or the revocation or termination of any of a Target Company’s Environmental Permits.  None of the Target Companies is subject to any Order or third party agreement or Encumbrance with respect to any Environmental Law or any Environmental Liability that is or could reasonably be expected to result in a material Liability to any of the Target Companies.

 

(c)                                   No On-Site Contamination exists and, to the knowledge of the Company, no Off-site Contamination exists that could reasonably be expected to result in a material Environmental Liability to any of the Target Companies.

 

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(d)                                  None of the Target Companies has been identified by a Governmental Body or other Person as potentially responsible within the meaning of applicable Environmental Law for Environmental Liability associated with any site or location formally identified by a Governmental Body as requiring or recommended for environmental investigation or cleanup, which Environmental Liability is or could reasonably be expected to result in a material Environmental Liability to any of the Target Companies.

 

(e)                                   To the knowledge of the Company, neither the Owned Real Property nor the Leased Property has been formally identified by any Governmental Body or any other Person as requiring or recommended for environmental investigation or cleanup.

 

(f)                                    Regarding all Environmental Permits for which renewal, amendment, or modification is currently pending, no expenditures, capital improvements, or changes in operation, in each case which are material in nature, will be necessary as a condition or as a result of such renewal, amendment, or modification.

 

(g)                                   This Section 3.15 sets forth the sole and exclusive representations and warranties of the Company with respect to Environmental Matters.

 

Section 3.16                                        Financial Statements; No Undisclosed Liabilities .

 

(a)                                  Schedule 3.16(a)  contains true and complete copies of (i) the audited consolidated balance sheets of the Target Companies as of December 31, 2011 and 2012 and the related audited consolidated statements of operations and cash flows for the year ended December 31, 2010, 2011 and 2012, including any notes thereto (collectively, the “ Audited Financial Statements ”), and (ii) the unaudited consolidated balance sheet of the Target Companies as of September 30, 2013 (the “ Interim Balance Sheet Date ”) and the related unaudited consolidated statements of operations and cash flows for the eight-month period then ended (the “ Interim Financial Statements ”, and together with the Audited Financial Statements, the “ Financial Statements ”).  The Financial Statements have been prepared in conformity with GAAP (except in each case as described in the notes thereto) applied on a consistent basis throughout the periods covered thereby using the same accounting principles, policies and methods historically used in connection with the calculation of the items reflected thereon and fairly present, in all material respects, the financial condition and results of operations of the Target Companies (taken as a whole) as of the respective dates thereof and for the respective periods indicated therein, except that the Interim Financial Statements omit footnotes and are subject to normal, recurring year-end adjustments and accruals necessary to present fairly the financial condition and results of operations of the Target Companies (taken as a whole).

 

(b)                                  The Target Companies do not have any Liabilities that are required by GAAP to be reflected on the Financial Statements that are not reflected or reserved against thereon or in the notes thereto other than:

 

(i)                                      Liabilities incurred since the Interim Balance Sheet Date in the Ordinary Course of Business;

 

(ii)                                   Liabilities incurred in connection with the Contemplated Transactions;

 

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(iii)                                as set forth on Schedule 3.16(b) ; and

 

(iv)                               any other Liabilities which, individually or in the aggregate, would not have a Material Adverse Effect.

 

Section 3.17                                        Real Properties .

 

(a)                                  Schedule 3.17(a)  sets forth a list of all real properties owned in fee simple by the Target Companies, identifying thereon those properties mortgaged, or required to be mortgaged, under the ABL and, with respect to each property listed thereon, the name of the entity holding title thereto and the address of such property (such properties, together with all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto (the “ Owned Real Property ”).  Except as set forth on Schedule 3.17(a) , none of the Owned Real Property is subject to a mortgage or deed of trust other than Permitted Encumbrances.  With respect to each Owned Real Property, on the Closing Date (i) at least one of the Target Companies shall have good and indefeasible fee simple title to such Owned Real Property, which shall be free and clear of all Encumbrances as of the Closing Date, except Permitted Encumbrances; (ii) except as set forth in Schedule 3.17(a) , the Target Companies shall not have leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof; and (iii) except as set forth in Schedule 3.17(a)  and other than the right of Buyer pursuant to this Agreement, there will be no outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property or any portion thereof or interest therein.  To the knowledge of the Company and except as set forth in Schedule 3.17(a)(i) , (i) the Target Companies have legal access to each parcel of Owned Real Property sufficient for the operation of the Company Business (as conducted by the Target Companies immediately prior to the date hereof and to the Closing consistent with past practices) and (ii) each parcel of Owned Real Property is serviced by and has access to public utilities or utilities are available for each parcel of Owned Real Property sufficient for the operation of the Company Business (as conducted by the Target Companies immediately prior to the date hereof and to the Closing consistent with past practices).  There is no pending, or, to the knowledge of the Company, threatened, condemnation, proposed condemnation or similar proceeding affecting any Owned Real Property that could reasonably be expected to prevent, delay, make illegal or otherwise interfere with, the operation of the Company Business (as conducted by the Target Companies immediately prior to the date hereof and to the Closing consistent with past practices).

 

(b)                                  Schedule 3.17(b)  sets forth a list of the addresses of all real property that is leased or subleased by the Target Companies as lessee or licensee (including pursuant to leases that have expired by their terms since the date hereof but under which any Target Company remains in possession of the leased premises) pursuant to any Lease Agreement (collectively, the “ Leased Real Property ”).  Except as disclosed on Schedule 3.17(b) , the Company has delivered to Buyer a true and complete copy, in all material respects, of each Lease Agreement.  Except as set forth in Schedule 3.17(b) , as of the Closing Date, with respect to each Lease Agreement:  (i) such Lease Agreement shall be legal, valid, binding, enforceable and in full force and effect, subject to the application of any bankruptcy or other creditor’s rights laws and the Target Companies will have the benefits as a lessee thereunder; and (ii) the Target Companies will not be in breach or default under any Lease Agreement, and to the knowledge of the Company, no

 

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event will have occurred or circumstance exist which, with the delivery of notice, the passage of time or both, would constitute such a breach or default.  None of the Target Companies has received a written notice of default with respect to any such Lease Agreement which has not been cured and, to the knowledge of the Company, no other party to any Lease Agreement is in default thereunder.  None of the Target Companies has mortgaged, pledged or otherwise encumbered its interest in any such Leased Real Property, except for any Permitted Encumbrance.  The side track, spur or related land lease agreements with railroad companies (collectively, the “ Rail Agreements ”) of the Target Companies are sufficient for operation of the Company Business (as conducted by the Target Companies immediately prior to the date hereof and to the Closing) consistent with past practices.

 

Section 3.18                                        Bank Accounts; Authorized Signatories .  Set forth on Schedule 3.18 is a list of the names of each bank, broker or other financial institutions in which any of the Target Companies maintains one or more bank accounts or safe deposit boxes, along with the account numbers and the names of all persons holding powers of attorney on behalf of any of the Target Companies and/or are authorized to sign on and/or draw on such accounts or to have access to such safe deposit boxes.

 

Section 3.19                                        Affiliate Agreements Schedule 3.19 provides a complete list of all Contracts between (i) any of the Target Companies and (ii) any director, officer, or Affiliate of the Company (other than another Target Company and other than Company Agreements in respect of Commodities or securities traded on a regulated commodities or securities exchange) and except for employee benefits matters which are the subject of Section 3.6 and employee matters which are the subject of Section 3.11 ), (each referred to herein as an “ Affiliate Agreement ” and together the “ Affiliate Agreements ”) that are in effect on the date hereof.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the Schedules to this Agreement, the Seller hereby represents and warrants to the Buyer Parties as set forth in this Article IV .

 

Section 4.1                                               Organization and Good Standing .  Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority to enter into this Agreement.  Seller has full power and authority to conduct its business and to own or use the properties and assets that Seller purports to own or use in conducting its business.

 

Section 4.2                                               Enforceability; Authority; No Conflict .

 

(a)                                  This Agreement constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (whether considered in a proceeding at law or in equity).  Seller has the requisite right, power and authority to execute and deliver this Agreement and to perform its obligations

 

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hereunder and consummate the Contemplated Transactions, and such action has been duly authorized by all necessary corporate or other entity action.

 

(b)                                  The execution, delivery and performance by Seller of this Agreement and the consummation of the Contemplated Transactions, does not and will not:  (i) violate any provision of the Governing Documents of Seller, or any resolution adopted by the respective boards of directors or shareholders (or similar management group) of Seller, as applicable; (ii) assuming receipt of the consents set forth in Schedule 4.2(c) , violate or conflict with any provisions of any Legal Requirements or any Order to which Seller is subject; (iii) except as set forth on Schedule 4.2(b)(iii)  (the “ Seller Required Consents ”), violate, conflict with, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty, premium or other payment to arise or accrue under any material Contract to which Seller is a party or by which Seller is bound or to which Seller’s properties or assets is subject; or (iv) result in the creation or imposition of any Encumbrance (except Permitted Encumbrances and any Encumbrances imposed directly or indirectly by Buyer) upon any of such properties or assets of Seller or with respect to the Transferred Interests.

 

(c)                                   Except as set forth in Schedule 4.2(c) , no consent, approval, authorization of, declaration, filing, or registration with, any Governmental Body or any Third Party is required to be made or obtained by Seller, in connection with the execution, delivery, and performance of this Agreement or the consummation of the Contemplated Transactions.

 

Section 4.3                                               Ownership of Equity .  Seller owns, legally, beneficially and of record, and has good, valid and marketable title to, all of the Transferred Interests set forth on Schedule 4.3(a) , free and clear of all Encumbrances, other than Permitted Encumbrances or Encumbrances imposed directly or indirectly by Buyer.  Except as set forth on Schedule 4.3(b) , Seller is not a party to any Contracts with respect to the voting or transfer of any of the Transferred Interests.

 

Section 4.4                                               Brokers or Finders .  Except as set forth on Schedule 4.4 , Seller has not incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with the Contemplated Transactions.

 

Section 4.5                                               Legal Proceedings; Orders .  There is no pending, or, to Seller’s knowledge, threatened, Proceeding by or against Seller or any Order to which Seller is subject that would have a Material Adverse Effect or would affect the legality, validity or enforceability of this Agreement or the consummation of the Contemplated Transactions.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER PARTIES

 

Except as set forth in the schedules attached hereto and provided by Buyer, each of the Buyer Parties hereby represents and warrants to the Seller Parties as set forth in this Article IV .

 

Section 5.1                                               Organization and Good Standing .  Parent is a limited partnership duly organized, validly existing and in good standing under the laws of State of Delaware, with full power and authority to enter into this Agreement.  Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power

 

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and authority to enter into this Agreement.  The Buyer Parties and their respective Subsidiaries have full power and authority to conduct the Parent business as it is now being conducted and to own or use the properties and assets, including the properties and assets of the Buyer Parties and their respective Subsidiaries that they purport to own or use in conducting in the Parent business.  Parent has provided or made available to Seller or one or more of its Representatives true, correct and complete copies of the Governing Documents of each Buyer Party, in each case, as amended and in effect on the date hereof.

 

Section 5.2                                               Enforceability; Authority; No Conflict .

 

(a)                                  This Agreement constitutes the legal, valid and binding obligation of each Buyer Party, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer or similar laws affecting the enforcement of creditors’ rights generally and general principles of equity (whether considered in a proceeding at law or in equity).  Each Buyer Party has the requisite right, power and authority to execute and deliver this Agreement and to perform its obligations and consummate the Contemplated Transactions, and such actions have been duly authorized by all necessary corporate (or other entity) action.

 

(b)                                  The execution, delivery and performance by each Buyer Party of this Agreement and the consummation of the Contemplated Transactions, does not and will not:  (i) violate any provision of the Governing Documents of such Buyer Party, or any resolution adopted by the board of directors or shareholders (or similar management group) of such Buyer Party; (ii) assuming receipt of the consents set forth in Schedule 5.2(c) , violate or conflict with any provisions of any Legal Requirements or any Order to which such Buyer Party is subject; (iii) except as set forth on Schedule 5.2(b)(iii)  (the “ Buyer Required Consents ”), violate, conflict with, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any Contract to which such Buyer Party is a party or by which it is bound or to which any of its properties or assets is subject; or (iv) result in the creation or imposition of any Encumbrance (except for Permitted Encumbrances) upon any of the properties or assets of the Parent business.  Each Buyer Party has all necessary authorizations and approvals necessary in connection with this Agreement or the consummation of the Contemplated Transactions.

 

(c)                                   Except as set forth in Schedule 5.2(c) , no consent, approval, authorization of, declaration, filing, or registration with, any Governmental Body or any Third Party is required to be made or obtained by either Buyer Party in connection with the execution, delivery, and performance of this Agreement or the consummation of the Contemplated Transactions, including the conduct of the Company Business.

 

Section 5.3                                               Available Funds .  Parent has, and at the Closing, Buyer will have cash on hand in an amount sufficient to:  (i) pay the Closing Date Purchase Price and perform the other obligations of the Buyer Parties hereunder; and (ii) pay any other payments, penalties, fees and expenses or other costs incurred in connection with, related to, arising out of or necessary to consummate the Contemplated Transactions.  Each of the Buyer Parties agrees and acknowledges that its obligations to consummate the Contemplated Transactions are not subject to the availability of any financing.

 

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Section 5.4                                               Securities Matters .  The Transferred Interests are being acquired by Buyer for its own account, and not with a view to, or for the offer or sale in connection with, any public distribution or sale of the Transferred Interests or any interest in them.  Buyer has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of its investment in the Transferred Interests, and Buyer is capable of bearing the economic risks of such investment, including a complete loss of its investment in the Transferred Interests.  The Buyer Parties acknowledge that the Transferred Interests have not been registered under the Securities Act, or any other applicable Legal Requirement of any state or other jurisdiction (domestic or foreign), and understand and agree that Buyer may not sell or dispose of any of the Transferred Interests except pursuant to a registered offering in compliance with, or in a transaction exempt from, the registration requirements of the Securities Act and any other applicable Legal Requirement of any state or other jurisdiction (domestic or foreign).

 

Section 5.5                                               Brokers or Finders .  Except as set forth on Schedule 5.5 , none of the Buyer Parties, or any of their Representatives has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with the Contemplated Transactions for which Seller or any of its Affiliates could be liable.

 

Section 5.6                                               Investigation .  The Buyer Parties acknowledge and agree that they (a) have made their own inquiry and investigation into, and, based thereon, have formed an independent judgment concerning the Target Companies, the Transferred Interests, the Company Business and the assets and Liabilities thereof, the Contemplated Transactions and any other rights or obligations to be transferred, directly or indirectly, pursuant to this Agreement, and (b) have been furnished with, or given adequate access to, such projections, forecasts, estimates, appraisals, statements, promises, advice, data or information about Seller, the Target Companies, the Transferred Interests, the Company Business and the assets and Liabilities thereof and any other rights or obligations to be transferred, directly or indirectly, pursuant to this Agreement, as the Buyer Parties have requested.  The Buyer Parties further acknowledge and agree that (i) the only representations and warranties made by the Company or any of its Affiliates (including Seller and the Company’s Subsidiaries) are the representations and warranties expressly set forth in Article III and Article IV (as modified by the Schedules hereto) and the Buyer Parties have not relied upon any other express or implied representations, warranties or other projections, forecasts, estimates, appraisals, statements, promises, advice, data or information made, communicated or furnished by or on behalf of the Company or any of its Affiliates, any Representatives of the Company or any of its Affiliates or any other Person, including any projections, forecasts, estimates, appraisals, statements, promises, advice, data or information made, communicated or furnished by or through the Company’s banking representatives, or management presentations, Data Room or other due diligence information, and that the Buyer Parties will not have any right or remedy arising out of any such representation, warranty or other projections, forecasts, estimates, appraisals, statements, promises, advice, data or information and (ii) any claims that any Buyer Indemnified Party may have for breach of any representation or warranty shall be based solely on the representations and warranties expressly set forth in Article III and Article IV (as modified by the Schedules hereto).

 

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ARTICLE VI
CONDITIONS PRECEDENT TO BUYER PARTIES’ OBLIGATION TO CLOSE

 

The obligation of the Buyer Parties to consummate the transactions provided for in this Agreement is subject to the satisfaction, as of the Closing, of each of the following conditions (any of which may be waived in writing by Buyer, in whole or in part):

 

Section 6.1                                               Accuracy of Representations .

 

(a)                                  The Company’s representations and warranties in Article III of this Agreement shall be true and accurate in all respects as of the Closing Date as if made on the Closing Date (other than representations and warranties made as of a specific date, which representations and warranties shall have been true and correct as of such date), in each case without regard to any express qualifier therein as to materiality or Material Adverse Effect, except for such inaccuracies that, individually or in the aggregate, have not resulted in a Material Adverse Effect.

 

(b)                                  (i) Seller’s representations and warranties set forth in Sections 4.1 , 4.2 , 4.3 and 4.4 of this Agreement (the “ Seller Fundamental Representations ”) shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (other than representations and warranties made as of a specific date, which representations and warranties shall have been true and correct as of such date) and (ii) Seller’s representations and warranties set forth in Section 4.5 shall be true and correct in all material respects as of the Closing Date as if made on the Closing Date (other than representations and warranties made as of a specific date, which representations and warranties shall have been true and correct as of such date).

 

Section 6.2                                               Performance .

 

(a)                                  The covenants and obligations that the Company is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed or complied with in all material respects.

 

(b)                                  The covenants and obligations that Seller is required to perform or to comply with pursuant to this Agreement at or prior to Closing shall have been duly performed or complied with in all material respects.

 

Section 6.3                                               Material Governmental Approval .  The Material Governmental Approval shall have been obtained and shall be in full force and effect.

 

Section 6.4                                               Additional Documents .  The agreements, documents and instruments required by Section 2.4(a)  and Section 2.4(b) , and to be executed and delivered by the Company or Seller, as applicable, shall have been so executed and delivered, and each such document and instrument shall be in full force and effect and shall not have been materially breached by any Seller Party.

 

Section 6.5                                               Orders .  There shall not be in effect any Order of any Governmental Body of competent jurisdiction enjoining the consummation of the Contemplated Transactions.

 

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Section 6.6                                               Company Closing Certificate .  The Company shall have delivered (or caused to be delivered) to the Buyer Parties a certificate of a duly authorized officer of the Company, dated as of the Closing Date, certifying that the applicable conditions set forth in Section 6.1(a)  and Section 6.2(a) , as they relate to the delivery of such certificate, have been met and satisfied.

 

Section 6.7                                               Seller Closing Certificate .  Seller shall have delivered to the Buyer Parties a certificate of a duly authorized officer of Seller, dated as of the Closing Date, certifying that the applicable conditions set forth in Section 6.1(b)  and Section 6.2(b) , as they relate to the delivery of such certificate, have been met and satisfied.

 

Section 6.8                                               No Financing Condition .  Notwithstanding anything contained in this Agreement to the contrary, each of the Buyer Parties acknowledges and agrees that none of the Buyer Parties’ obligations hereunder are conditioned in any manner upon the Buyer Parties obtaining any financing.  The failure, for any reason, of the Buyer Parties to deliver sufficient funds to pay the Closing Date Purchase Price (as determined pursuant to Section 2.1 and Section 2.2(a) ) shall constitute a breach of this Agreement.

 

ARTICLE VII
CONDITIONS PRECEDENT TO THE
COMPANY’S AND SELLER’S OBLIGATION TO CLOSE

 

The obligation of Seller to sell and deliver the Transferred Interests and to take the other actions required to consummate the transactions provided for in this Agreement is subject to the satisfaction, as of the Closing, of each of the following conditions (any of which may be waived in writing by the Company and Seller in whole or in part):

 

Section 7.1                                               Accuracy of Representations .  Each of the representations and warranties in Article V of this Agreement shall be true and accurate in all material respects as of the Closing Date as if made on the Closing Date (other than representations and warranties made as of a specific date, which representations and warranties shall have been true and correct as of such date).

 

Section 7.2                                               Buyer Parties’ Performance .  The covenants and obligations that the Buyer Parties are required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed or complied with in all material respects.

 

Section 7.3                                               Material Governmental Approval .  The Material Governmental Approval shall have been obtained and shall be in full force and effect.

 

Section 7.4                                               Additional Documents .  The Buyer Parties shall have caused the agreements, documents and instruments required by Section 2.4(c)  to be executed and delivered by the appropriate Buyer Party, and each such document and instrument shall be in full force and effect and shall not have been materially breached by any Buyer Party.

 

Section 7.5                                               Orders .  There shall not be in effect any Order of any Governmental Body of competent jurisdiction enjoining the consummation of the Contemplated Transactions.

 

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Section 7.6                                               Closing Certificate .  The Buyer Parties shall have delivered (or caused to be delivered) to the Company a certificate of a duly authorized officer of Buyer, dated as of the Closing Date, certifying that the conditions set forth in Section 7.1 and Section 7.2 have been met and satisfied.

 

ARTICLE VIII
ADDITIONAL COVENANTS

 

Section 8.1                                               Conduct of Business .

 

(a)                                  Except as set forth on Schedule 8.1 , the Company shall (and shall cause its Subsidiaries to) continue to take such action necessary to operate the Company Business in the Ordinary Course of Business and to maintain their properties in the Ordinary Course of Business and shall use commercially reasonable efforts consistent with past practices to (i) preserve their relationships with their respective customers, suppliers, lenders and other Persons having material business relationships with them and (ii) manage their working capital in the Ordinary Course of Business.  Notwithstanding the foregoing, except (i) for purposes of satisfying the closing conditions set forth in Article VII (ii) as set forth on Schedule 8.1 , or (iii) as required (including by virtue of being an express condition to Closing) or as explicitly permitted by the terms of this Agreement, without the prior written consent (which for the avoidance of doubt may be delivered in the form of an email or other writing) of the Buyer Parties (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall (and shall cause its Subsidiaries to):

 

(i)                                      not amend or otherwise alter (or propose any amendment or alteration to) the Governing Documents of any of the Target Companies;

 

(ii)                                   not (A) create or issue any Equity Commitments, or redeem or repurchase or otherwise acquire Equity Interests, of any of the Target Companies, in either case, other than in the Ordinary Course of Business with respect to compensation arrangements, or (B) make any distribution of any Equity Interests of the Company;

 

(iii)                                not make any sale, assignment, transfer, abandonment, or other conveyance of any material asset (other than in the Ordinary Course of Business) used in the Company Business or any Material Contract (other than any Company Agreement);

 

(iv)                               not create or permit to be created any Encumbrance (other than a Permitted Encumbrance) on any asset of the Target Companies other than in the Ordinary Course of Business or as contemplated in this Agreement;

 

(v)                                  except as otherwise provided in Sections 8.1(a)(xiii)  and 8.1(a)(xiv) , not enter into or amend, modify, extend, renegotiate or terminate any Material Contract (as defined solely in subsections (i)  through (xvi)  of Section 3.9(c) ) other than any such amendment, modification, extension, renegotiation or termination that is entered into in the Ordinary Course of Business and is not material;

 

(vi)                               not change any method of accounting or accounting principle that relates to the Target Companies;

 

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(vii)                            except as expressly required by applicable Legal Requirement, not make or change any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method with respect to Taxes, file any amended Tax Return, settle or compromise any proceeding with respect to any Tax claim or assessment relating to the Target Companies (other than in the Ordinary Course of Business), surrender any right to claim a refund of any Taxes, or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment relating to the Target Companies, if such election, change, adoption, amendment, settlement, compromise, surrender, or consent would have the effect of increasing the Tax liability of any Target Company for any taxable period (or portion thereof) beginning after the Closing Date or decreasing any Tax attribute of any Target Company existing on the Closing Date;

 

(viii)                         not purchase or otherwise acquire (x) any assets whether in one transaction or a series of related transactions for an aggregate purchase price exceeding $3,000,000, or (y) except in connection with any mandatory contribution to any JV, any Equity Interest in an amount exceeding $3,000,000;

 

(ix)                               not make any capital expenditure that would result in aggregate capital expenditures from October 1, 2013 through the Closing Date to be in material excess of the amounts set forth on Schedule 1.1(d) ;

 

(x)                                  except as disclosed on Schedule 8.1(a)(x) , other than as required by applicable Legal Requirements, the terms of any Group Plan, as currently in effect, or in the Ordinary Course of Business consistent with past practice:  (A) not materially alter the total compensation of any Employee with an annual base salary of $250,000 or greater (a “ Designated Employee ”), (B) not grant any severance or termination pay to any Employee other than in accordance with Section 8.5(e)  and except as may be required pursuant to the terms of any Group Plan or other written agreement in effect on the date hereof or except to pay severance or termination pay or termination benefits to Employees in the Ordinary Course of Business, (C) not establish, adopt, enter into, amend or terminate any Company Plan (other than (1) as may be required by the terms of an existing Company Plan or (2) with respect to any Company Plan if the establishment, adoption, execution, amendment or termination of such Company Plan does not otherwise affect any Employee), or (D) not grant any equity or equity-based awards to any Employee;

 

(xi)                               maintain insurance coverage on the assets of the Target Companies in the amounts and of the types currently in force or, upon renewal thereof, in similar amounts and types to the extent then available on similar terms and commercially reasonable prices;

 

(xii)                            use commercially reasonable efforts to maintain all material Government Authorizations in effect on the date hereof and necessary or required for the ownership and operation of the Company Business as currently conducted;

 

(xiii)                         not cause or request any Person to issue any letter of credit on behalf of any Target Company if as a result of such issuance the total face amount of all

 

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letters of credit outstanding on behalf the Target Companies under the ABL exceeds $350 million;

 

(xiv)                        other than in the Ordinary Course of Business in connection with any capital expenditures reflected in Schedule 1.1(d)  or any repairs or maintenance by any of the Target Companies, not post any bond or guarantee;

 

(xv)                           not waive, compromise, or settle any material claim involving or against any of the Target Companies; or

 

(xvi)                        not take any action to do or engage (or commit to do or engage) in any of the foregoing.

 

(b)                                  Other than the consent rights set forth in Section 8.1(a) , nothing contained in this Agreement shall be deemed to give any Buyer Party, directly or indirectly, the right to control or direct any of the Target Companies’ operations prior to the Closing.  Prior to the Closing and subject to the consent rights set forth in Section 8.1(a) , the Seller Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over Target Companies’ respective operations.

 

Section 8.2                                               Information and Access; No Contact .  From the date hereof until the Closing, the Company shall:  (i) permit the Buyer Parties and their Representatives to, upon reasonable prior written notice, have reasonable access during normal business hours, and in a manner so as not to unreasonably interfere with or disrupt the normal operations (after consultation with and in coordination with the Company’s management) to all material premises, properties, personnel, accountants, books, records, contracts and documents of or pertaining to the Company Business; (ii) furnish the Buyer Parties and their Representatives with such information and data concerning the Company Business that the Buyer Parties or their Representatives may reasonably request and that is readily available to any of the Target Companies and (iii) reasonably cooperate with the Buyer Parties in connection with either Buyer Parties’ provision of cash collateral and/or back-to-back letters of credit with respect to any outstanding letters of credit issued under any document governing Balance Sheet Indebtedness; provided that the Company shall not be required to disclose any information to any of the Buyer Parties or their Representatives if such disclosure would be reasonably likely to (i) cause significant competitive harm to Seller or any of the Target Companies if the Contemplated Transactions are not consummated, (ii) destroy any attorney-client privilege or other legal privilege, or (iii) violate any Legal Requirement (including any Legal Requirements for antitrust or competition or affecting privacy, personal information and the collection, handling, storage, processing, use or disclosure of data), Order or Contract applicable to any of the Target Companies or by which any of the assets of the Target Companies are bound.  Notwithstanding anything to the contrary contained herein, prior to the Closing, without the prior written consent of the Company (i) none of the Buyer Parties shall contact any suppliers to, or customers of, any of the Target Companies ( provided that in the case of this clause (i) such consent shall not be unreasonably withheld), and (ii) none of the Buyer Parties shall have any right to perform invasive or subsurface investigations of the properties or facilities of any of the Target Companies.  None of the Seller Parties make any representation or warranty as to the accuracy of

 

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any information (if any) provided pursuant to this Section 8.2 , and Buyer shall not be entitled to rely on the accuracy of any such information.

 

Section 8.3                                               Notices of Certain Events; Updating of Disclosure Schedules .

 

(a)                                  Prior to the Closing, each of the Seller Parties and the Buyer Parties shall promptly notify the other Parties of:

 

(i)                                      any written notice or other written communication from any Person alleging that the Consent of such Person is or may be required in connection with the Contemplated Transactions;

 

(ii)                                   any material written notice or other material written communication to or from any Governmental Body in connection with the Contemplated Transactions;

 

(iii)                                promptly after such Party’s obtaining knowledge of the same, any fact, change, condition, circumstance, event, occurrence or non-occurrence that has caused or is reasonably likely to cause any material inaccuracy, or material violation or material breach by such Person, of any of its representations, warranties or covenants herein that would reasonably be expected to result in any condition of the Contemplated Transactions not to be satisfied; and

 

(iv)                               any event or condition that is reasonably likely to prevent, hinder or delay the consummation of the Contemplated Transactions, including the institution of or the threat of institution of any Proceeding related to this Agreement or the Contemplated Transactions.

 

(b)                                  If the occurrence or nonoccurrence, after the date hereof, of any event has caused or would be likely to cause any representation or warranty contained in this Agreement to become untrue or inaccurate such that any condition set forth in Section 6.1 or Section 7.1 , as applicable, would not be satisfied, Buyer Parties or the Company, as applicable, may deliver to the other Parties a supplement to the relevant section of the schedules, as applicable, specifying such changes.

 

(c)                                   Notwithstanding the foregoing, any such notice under Section 8.3(a)  or supplement under Section 8.3(b)  shall be subject to the termination provisions of Section 9.1 and will not be deemed to have qualified the representations and warranties contained in this Agreement or to have cured any misrepresentation or breach of warranty that otherwise might have existed hereunder by reason of the development and each Buyer Indemnified Party shall have any and all rights to indemnification hereunder notwithstanding any such notice or supplement, as the case may be.

 

Section 8.4                                               Filings; Reasonable Best Efforts to Close .

 

(a)                                  Until the Closing Date, the Company and the Buyer Parties shall (and shall cause their respective Subsidiaries to), as promptly as practicable, (i) use their reasonable best efforts to obtain all consents, approvals or actions of, make all filings with and give all

 

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notices to any Governmental Body or any other Person required of the Parties, as the case may be, to consummate the Contemplated Transactions, including the Material Governmental Approval and the items set forth on Schedules 3.2(b)(iii) , 3.2(c) , 4.2(b)(iii) , 4.2(c) , 5.2(b)(iii)  and 5.2(c) ; and (ii) provide reasonable cooperation to the other Party in connection with the performance of their obligations under this Section 8.4 .  In furtherance, and not in limitation of the foregoing, each of the Company and the Buyer Parties shall, as promptly as practicable but in no event later than five (5) Business Days following the date hereof, make any appropriate filings, if necessary, pursuant to the HSR Act with respect to the Contemplated Transactions and to supply as promptly as practicable and advisable to the appropriate Governmental Bodies any additional information and documentary material that may be requested, necessary, proper or advisable pursuant to the HSR Act.  All antitrust filings to be made to a United States federal Governmental Body shall be made in substantial compliance with the requirements of the HSR Act.

 

(b)                                  The Parties hereto shall cooperate and assist one another in connection with all actions to be taken pursuant to Section 8.4(a) , including the preparation and making of the filings referred to therein and, if requested, amending or furnishing additional information hereunder.  Each Party shall use its reasonable best efforts to provide or cause to be provided promptly to the other Parties all necessary information and assistance as any Governmental Body may from time to time require in connection with obtaining the relevant waivers, permits, consents, approvals, authorizations, qualifications, orders or expiration or termination of waiting periods in relation to these filings or in connection with any other review or investigation of the Contemplated Transactions by a Governmental Body.  The Parties shall consult with each other prior to taking any material substantive position with respect to the filings under the HSR Act, in any written submission to, or, to the extent practicable, in any discussions with, any Governmental Body.  Each Party shall permit the other Parties to review and discuss in advance, and shall consider in good faith the views of the other Parties in connection with, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions, proposals or other materials to be submitted or made to the Governmental Bodies with respect to such filings.  In addition, no Party shall agree to participate in any substantive meeting or discussion with any Governmental Body in respect of any filing, review, investigation or other inquiry concerning this Agreement or the Contemplated Transactions, or enter into any agreements with any Governmental Body, including, without limitation, extending any antitrust waiting periods, unless it consults with the other Parties in advance and, to the extent permitted by such Governmental Body, gives the other Parties the opportunity to attend and participate thereat.  Each Party shall keep the other Parties apprised of the material content and status of any material communications with, and material communications from, any Governmental Body with respect to the Contemplated Transactions, including promptly notifying the other Parties of any material communication it receives from any Governmental Body relating to any review or investigation of the Contemplated Transactions under the HSR Act.  The Parties shall, and shall cause their respective Affiliates to use their reasonable best efforts to, provide each other with copies of all material, substantive correspondence, filings or communications between them or any of their respective representatives, on the one hand, and any Governmental Body or members of its staff, on the other hand, with respect to this Agreement and the Contemplated Transactions; provided , however , that materials may be redacted (i) to remove references concerning valuation; (ii) as necessary to comply with contractual arrangements or applicable Legal Requirements; and (iii) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns.

 

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(c)                                   Notwithstanding the foregoing, nothing contained in this Agreement shall be construed so as to require any Party, or any of its respective Affiliates, without its written consent, to sell, license, dispose of, hold separate or operate in any specified manner any assets or businesses of such Party (or to require such Party or any of its respective Affiliates to agree to any of the foregoing).

 

Section 8.5                                               Employees and Employee Benefits .

 

(a)                                  Employees .  Each Employee who is or will be employed by the Target Companies prior to the Closing (including those who are actively employed or on vacation, layoff, leave or other permitted absence from employment) shall remain an employee of the Target Companies following the Closing (such Employees, the “ Continuing Employees ”); provided that the Target Companies shall not have any obligation to continue employing such Continuing Employees for any length of time thereafter except as required by applicable Legal Requirements or any Employment Agreement.

 

(b)                                  Employee Benefits Liabilities:  the Company Plans .  Effective as of the Closing, the Company shall retain and satisfy any and all responsibility, and Seller shall have no liability or responsibility whatsoever, for any and all claims, liabilities and obligations, whether contingent or otherwise, relating to the Company Plans, whether arising on, prior to, or after the Closing Date.

 

(c)                                   Company Cash Incentive Bonus Plans .  On or prior to the Closing, the Company and Buyer agree to take all actions necessary to ensure that:

 

(i)                                      any forfeiture provisions with respect to all accounts and awards under the Company Cash Incentive Bonus Plans that are outstanding immediately prior to the Closing, in each case, will continue to be in effect following the Closing Date in accordance with the terms and conditions of their respective plan documents; and

 

(ii)                                   all Phantom Units that are outstanding immediately prior to the Closing will convert to rights to cash accounts equal to an amount equal to the cash value of (A) the number of Phantom Units attributable to each award and account specified in Section 8.5(c)(i)  multiplied by (B) the value of an equivalent Equity Interest in Seller Affiliate determined on the Closing Date, as adjusted in respect of Section 2.5 , with the value of such amounts credited to the applicable cash proceeds sub-accounts under the Company Cash Incentive Bonus Plans.  All such awards and accounts shall continue to be governed by the terms of the applicable Company Cash Incentive Bonus Plans.

 

(d)                                  Employee Benefits; General .  Buyer shall cause the Target Companies to either (i) continue to provide each Continuing Employee and his or her eligible dependents and beneficiaries with continued participation under the Group Plans and related trusts, which are intended to be exempt from taxation under Section 501(a) of the Code, in which such Continuing Employees participate immediately prior to the Closing Date; or (ii) to participate in compensation and employee benefit arrangements and related trusts of the Buyer (or its Affiliates) which provide compensation and benefits that are substantially comparable in the aggregate or better than those provided under the Group Plans and the trusts related thereto (the

 

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Buyer Plans ”), and which are intended to be exempt from taxation under Section 501(a) of the Code.  Continuing Employees shall continue to accrue benefits as active participants and shall have rights to continue as active participants under the Group Plans or the Buyer Plans (without derogation of their rights, including vesting and benefit accrual).  For Continuing Employees, subject to Legal Requirements, Buyer will cause the Target Companies to provide such Continuing Employees, during the period beginning immediately following the Closing Date and ending on the 24-month anniversary of the Closing Date (the “ Continuation Period ”), with compensation and employee benefits (other than (i) defined benefit pension benefits and (ii) retiree health, life and other retiree welfare benefits, except as may be required by a Collective Bargaining Agreement) that are substantially comparable in the aggregate to, or better than, the compensation and employee benefits provided as of the date hereof under the Group Plans (any such Company Plans, Buyer Plans and Transition Plans and employee and health and welfare benefit plans of the Target Companies in which Continuing Employees become eligible or continue to participate on and after the Closing Date shall be referred hereinafter as “ Continuing Company Plans ”). Notwithstanding the foregoing, the Company will retain full power and authority with respect to the amendment and termination of the Continuing Company Plans and the investment and disposition of assets held in any applicable Continuing Company Plans and in any trust related thereto pursuant to and in accordance with the terms thereof, in either case, other than any Transition Plans.

 

(e)                                   Severance and Salary Protection .  Buyer shall cause the Target Companies to provide severance benefits to Continuing Employees who experience a qualifying termination of employment during the Continuation Period on terms substantially comparable to those described in Schedule 8.5(e) .

 

(f)                                    Vacation, Sick Leave and Flex Days .  Buyer shall cause the Target Companies to honor each Continuing Employee’s unused vacation, sick leave and flex days accrued by such employee at Target Companies as of the Closing Date.  For purposes of this Agreement, such unused vacation, sick leave and flex days shall be considered to be a Company Plan.

 

(g)                                   Transition Plans, including Health and Welfare Plans .  Buyer shall take or shall cause the Target Companies to take all actions necessary, to assume or retain and be solely responsible for all liabilities and obligations under the Transition Services Agreement with respect to Employees under all Transition Plans identified on Schedule 3.6(b)  and under any Company Plans that are established prior to Closing pursuant to which health and welfare benefits are provided to Employees (any such Transition Plans and Company Plans pursuant to which health and welfare benefits are provided to Employees immediately prior to the Closing (the “ Transition Health and Welfare Plans ”).  Buyer shall also take or shall cause the Target Companies to take all actions necessary to provide that Employees and their eligible dependants and beneficiaries shall continue participation in the Transition Health and Welfare Plans in accordance with the provisions set forth therein and shall continue to accrue benefits under the Transition Health and Welfare Plans from the Closing Date through the later of:  (i) the applicable date specified in the Transition Services Agreement (each such period specified with respect to such plans and the Company Non-Union 401(k) Plan, a “ Transition Services Benefits Period ”) and (ii) the date Employees are extended coverage by the Buyer or the Target

 

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Companies under the Buyer’s (or its Affiliates’) health and welfare benefit plans (each, a “ Company Health and Welfare Plan ”).

 

(i)                                      Effective upon the expiration of the Transition Services Benefits Period or, if later, on and after Closing, Buyer shall take, or shall cause the Target Companies to take, all actions necessary to either (A) establish arrangements substantially similar to the Group Plans and any related trusts identified on Schedule 8.5(g)(i)  including, in respect of the Company Cash Incentive Bonus Plans, and to provide that Employees who participated in such Group Plans and related trusts, including Company Cash Incentive Bonus Plans immediately prior to the Closing shall continue to participate in substantially similar plans on terms and conditions substantially comparable to those in effect immediately prior to the Closing or (B) cause the Employees to participate in the Buyer Plans which provide compensation and benefits substantially comparable in the aggregate to those provided under the Group Plans immediately prior to the later of:  (i) the expiration of the Transition Services Benefit Period and (ii) the Closing.

 

(h)                                  Effective upon the expiration of the Transition Services Benefits Period, or if later, effective on and after the Closing, Buyer shall take or shall cause the Target Companies to take all actions necessary to extend coverage under a Company Health and Welfare Plan to those Employees who participated in the Transition Health and Welfare Plans immediately prior to the later of (i) the end of the Transition Services Benefits Period and (ii) the Closing Date.  With respect to any Company Health and Welfare Plan of Buyer (or its Affiliates) or the Target Companies in which Employees become eligible to participate, except to the extent otherwise required by applicable Legal Requirements, Buyer shall cause the Target Companies to use commercially reasonable best efforts:

 

(i)                                      with respect to each such plan that is a medical or health plan, to waive, or cause the waiver of, any exclusions for pre-existing conditions and waiting periods for each Employee and his/her dependents to the extent that such pre-existing condition exclusions and waiting periods were previously satisfied under the comparable Group Plan for the plan year that includes such transfer;

 

(ii)                                   with respect to each such plan that is a medical or health plan, to provide each Employee with credit for any deductibles and out-of-pocket expenses paid or incurred by such Employee prior to his or her transfer to the applicable Company Health and Welfare Plan (to the same extent such credit was given under the comparable Group Plan) in satisfying any applicable deductible or out-of-pocket requirements under such Company Health and Welfare Plan for the plan year that includes such transfer; and

 

(iii)                                to recognize service of the Employees credited by the Target Companies solely for purposes of eligibility to participate and vesting in any Company Health and Welfare Plan in which the Employees are eligible to participate after the Transition Services Benefit Period, or if later on and after the Closing Date, to the extent that such service was recognized for that purpose under the comparable Group Plan prior to such transfer; provided , that in no event shall the Employees be entitled to any credit to

 

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the extent that it would result in a duplication of benefits with respect to the same period of service.

 

(i)                                      Buyer shall take or shall cause the Target Companies to take all actions necessary, to assume or retain and be solely responsible for all liabilities and obligations under the Transition Services Agreement with respect to Employees under the Gavilon 401(k) Plan for Salaried and Hourly Employees (the “ Company Non-Union 401(k) Plan ”) and related trust, pursuant to which defined contribution benefits are provided to Employees immediately prior to the Closing, to provide that such Employees shall continue participation in such Company Non-Union 401(k) Plan and shall continue to accrue benefits under the Company Non-Union 401(k) Plan from the Closing Date through the expiration of the Transition Services Benefits Period pursuant to and in accordance with the provisions set forth in the Transition Services Agreement.

 

(j)                                     Effective immediately after the expiration of the Transition Services Benefits Period pursuant to and in accordance with the provisions set forth in the Transition Services Agreement, the Target Companies will cause each of the Employees who participated in the Company Non-Union 401(k) Plan immediately prior to the end of the Transition Services Benefits Period to become participants in the NGL Energy 401(k) Plan (the “ Company 401(k) Plan ”), which is a defined contribution plan that is intended to be qualified pursuant to Sections 401(a) and 401(k) of the Code and has a related trust which is intended to be exempt from taxation under Section 501(a) of the Code.  Each Employee who was a participant in the Company Non-Union 401(k) Plan immediately prior to the end of the Transition Services Benefits Period will be credited under a Company 401(k) Plan for purposes of eligibility to participate and vesting with all service recognized for such purposes under the Company Non-Union 401(k) Plan through the end of the Transition Services Benefit Period.

 

(k)                                  Effective on or as soon as practicable following the end of the Transition Services Benefit Period pursuant to and in accordance with the provisions set forth in the Transition Services Agreement, the Target Companies shall cause all employee and employer contributions for Employees with respect to all periods immediately prior to the end of the Transition Services Benefits Period to be paid into the Company Non-Union 401(k) Plan as soon as reasonably practicable following the end of the Transition Services Benefits Period but prior to any transfer of account balances to a Company 401(k) Plan in accordance with this Section 8.5(k) .  As soon as practicable following the end of the Transition Services Benefit Period, pursuant to and in accordance with the provisions set forth in the Transition Services Agreement, the account balances of each Employee who participates in the Company Non-Union 401(k) Plan immediately prior to the end of the Transition Services Benefits Period will be transferred in cash or in kind (including in the form of any participant promissory notes) pursuant to the requirements of Section 414(l) of the Code from the Company Non-Union 401(k) Plan to a Company 401(k) Plan.  Effective as of the end of the Transition Services Benefit Period, each Employee will cease to be eligible to contribute to, or receive employer contributions in respect of, such employee’s accounts under the Company Non-Union 401(k) Plan.

 

(l)                                      No Third Party Beneficiary Rights .  Nothing contained herein, whether express or implied shall be treated as an amendment or other modification of any compensation or benefit plan, program, agreement or arrangement.  This Section 8.5 shall inure exclusively to the benefit of, and be binding solely upon, the Parties and their respective successors, permitted

 

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assigns, executors and legal representatives.  Nothing in this Section 8.5 , expressed or implied, shall be construed to create any third party beneficiary rights in any present or former employee, service provider or any such Person’s alternate payees, dependents or beneficiaries, whether in respect of continued employment or resumed employment, compensation, employee benefits or otherwise.

 

(m)                              Power to Amend .  Notwithstanding anything to the contrary contained herein, Buyer will retain full power and authority with respect to the amendment and termination of the Company Plans, the Continuing Company Plans and the investment and disposition of assets held in any applicable Company Plan and Continuing Company Plans and in any trust related thereto, including amendments to cease the accrual of benefits or to revise participation rights under the Company Plans and Continuing Company Plans pursuant to and in accordance with the terms thereof, in either case, other than any Transition Plans.

 

(n)                                  Certain Pending Claims .  After the Closing Date, Buyer and Seller agree that, if any Proceeding, settlement, mediation or any other action should be instituted with respect to the claim identified on Section 3.6(d)  of the Confidential Disclosure Letter (each an “ Applicable Proceeding ”), the Parties shall cooperate reasonably with each other, and Buyer shall cause the Target Companies to take all actions necessary to cooperate reasonably, and assist Seller and its Representatives, in good faith in the defense of any such Applicable Proceeding which may include, but may not be limited to, entering into joint defense or similar agreements, and causing their respective counsel to enter to such agreements, and taking other reasonable actions to preserve privilege and their common interests respecting communications, documents, and information that are or may be protected by the attorney-client privilege, the work product doctrine and/or other applicable privileges, doctrines, exemptions or protections (provided that such actions shall not include entering into any agreement or taking any action that would in any way limit the indemnity provided in Section 11.2(a)(i)(F) ); making available, to the extent reasonably necessary, documents, records, support, and personnel at such reasonable times as any Party shall reasonably request; participating in or attending meetings, conferences, hearings, and other proceedings as necessary to defend against the claims asserted in any Applicable Proceeding, and to avoid the entry of default or adverse judgment; and providing notice and/or consent where reasonably required relating to the defense, resolution, or settlement of any Applicable Proceeding.  Notwithstanding anything the contrary herein, each of the Buyer Parties hereby agrees and acknowledges that Seller shall direct and control the defense of any Applicable Proceeding.  Buyer shall, and shall cause each of the Target Companies to, reasonably cooperate and make available all books and records reasonably necessary and useful in connection with the defense of any Applicable Proceeding.

 

Section 8.6                                               Retention of and Access to Records; Financial Statement Preparation .

 

(a)                                  After the Closing Date, Buyer shall cause the Target Companies to retain their respective books and records and shall provide Seller and their Representatives, substantially consistent with the terms of the Confidentiality Agreement, (i) reasonable access to all personnel, accountants, books, records, contracts and documents of or pertaining to the Company Business and the Target Companies and their respective Representatives (other than books and records relating to Taxes, access to which is governed exclusively by Section 10.4 ), and (ii) such information and data concerning the Company Business and the Target Companies

 

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and their respective Representatives that Seller and their Representatives may reasonably request and that is readily available to the Target Companies or may be prepared or compiled by the Target Companies without undue burden, for purposes of preparing financial statements or tax returns, dealing with tax audits or as Seller and their Representatives may otherwise reasonably request.

 

(b)                                  Following the Closing Date, Seller will (at Parent’s and Buyer’s sole cost and expense) reasonably cooperate with Parent, Buyer and the Target Companies to the extent necessary to allow Parent to prepare financial statements of the Company in accordance with Regulation S-X and meeting the requirements of Item 9.01 of Form 8-K of the Securities Exchange Act of 1934, as amended.

 

Section 8.7                                               Further Assurances .

 

(a)                                  The Parties shall (and shall cause their respective Subsidiaries to) cooperate reasonably with each other and with their respective Representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement, and shall furnish upon request to each other such further information as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement and the Contemplated Transactions.

 

(b)                                  Subject to the terms and conditions of this Agreement, at any time or from time to time after the date of this Agreement, at any Party’s reasonable request and without further consideration, each Party shall do all acts and things as may be necessary or desirable and are within its control to carry out the intent of this Agreement, including executing and delivering further instruments of sale, transfer, conveyance, assignment, novation, confirmation or other documents, and providing additional materials and information, that may be reasonably required or requested.

 

Section 8.8                                               Obligations of Buyer .  Parent shall take any and all action necessary to cause Buyer to perform its obligations under this Agreement.

 

Section 8.9                                               Indemnification, Exculpation and Insurance .

 

(a)                                  Each of the Buyer Parties agrees that all rights of the individuals who on or prior to the Closing Date were directors or officers of any of the Target Companies (the “ Indemnitees ”) to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Closing Date as provided in the respective Governing Documents of any of the Target Companies as now in effect, and any indemnification Contract of the Target Companies listed on Schedule 8.9(a) , in each case which shall survive the Closing Date and shall continue in full force and effect in accordance with their terms for a period of six (6) years from and after the Closing Date.  Such rights shall not be amended, or otherwise modified in any manner that would adversely affect the rights of the Indemnitees, unless such modification is required by Legal Requirement.  In addition, Parent, the Target Companies shall, and Buyer shall cause the Target Companies to, provide advancement of any reasonable, documented out-of-pocket expenses of any Indemnitee under this Section 8.9 , as incurred to the same extent such Indemnitee has the right of advancement under the applicable Governing Documents of the

 

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Target Companies as of the date hereof; provided , that any Indemnitee to whom expenses are advanced provides an undertaking to repay such advances to the extent required by applicable Legal Requirement or the applicable Governing Documents in effect as of the date hereof.

 

(b)                                  Seller shall purchase, as of the Closing Date and at its sole cost and expense, a tail policy to the Company’s current directors’ and officers’ liability insurance covering acts or omissions occurring prior to the Closing Date with respect to those persons who are currently covered by the Company’s directors’ and officers’ liability insurance policy, which tail policy shall be effective from the Closing Date through and including the date six (6) years after the Closing Date with respect to claims arising from facts or events that occurred prior to the Closing Date against each present or former director and officer of the Target Companies who was, as of the Closing Date, covered by the Company’s officers’ and directors’ liability insurance, and which tail policy shall contain substantially the same coverage and amounts as, and contain terms and conditions no less advantageous than, in the aggregate, the coverage currently provided by such current policy; provided , however , that in no event shall Seller be required to expend, for the entire tail policy, in excess of one hundred and fifty percent (150%) of the annual premium paid by the Company for such insurance; and, provided , further , that, if the premium of such insurance coverage exceeds such amount, Seller shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding such amount.

 

(c)                                   The provisions of this Section 8.9 :  (i) are intended to be for the benefit of, and shall be enforceable by, each Indemnitee, his or her heirs and his or her Representatives; and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have by Contract or otherwise.

 

Section 8.10                                        Confidential Information .  Notwithstanding Section 12.6 , the Confidentiality Agreement shall not be superseded by this Agreement but shall remain in full force and effect until the Closing.  At the Closing, the Confidentiality Agreement shall terminate and shall no longer be of any force or effect ( provided that the foregoing will not relieve any party thereto from liability resulting from a breach thereof prior to such termination).

 

Section 8.11                                        Third Party Consents .  Promptly after the date hereof, Seller shall prepare and send notices to the holders of the Required Consents, requesting Consents to the Contemplated Transactions.  Prior to Closing, each of Seller and Buyer shall use commercially reasonable efforts to cause the Required Consents to be obtained and delivered prior to Closing.  In the event any Required Consent is not obtained prior to Closing (or any fee payable has not been paid in connection therewith), Seller shall continue to reasonably assist (at Buyer’s sole cost and expense) Buyer and the Target Companies in obtaining such Required Consents.  For the avoidance of doubt, any consent fees payable in connection with such Required Consents shall be paid by Buyer.

 

ARTICLE IX
TERMINATION

 

Section 9.1                                               Termination .  This Agreement may be terminated at any time prior to the Closing solely as follows:

 

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(a)                                  by mutual written consent of Seller, the Company and the Buyer Parties;

 

(b)                                  on or after the End Date, by Seller or the Company, on one hand, or the Buyer Parties, on the other hand, by written notice to the other Parties, if the Closing has not occurred on or before the date such notice is given; provided , that the right to terminate this Agreement under this subsection (b)  shall not be available to any Party who is then in material breach of any representation or warranty set forth in this Agreement or whose failure to fulfill any obligation under this Agreement, in each case has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;

 

(c)                                   by Seller by written notice to the Buyer Parties if (i) the condition set forth in Section 7.3 (Material Governmental Approval) shall have become incapable of fulfillment, and shall not have been waived by the Seller Parties (unless the failure of any such condition to have been fulfilled results from any action, or failure to act, either individually or in the aggregate, by Seller or the Company (including the breach by Seller or the Company of any of their respective representations or covenants contained in this Agreement)), or (ii) any Buyer Party has breached, or caused the breach of, any of its representations, warranties, covenants, agreements or other obligations hereunder in a manner that would reasonably be expected to cause the condition set forth in Section 7.1 (Accuracy of Representations) or Section 7.2 (Buyer Parties’ Performance) not to be satisfied and such breach has not been cured within thirty (30) days following written notification thereof by the Seller Parties;

 

(d)                                  by the Buyer Parties by written notice to the Seller Parties if (i) the condition set forth in Section 6.3 (Material Governmental Approval) shall have become incapable of fulfillment, and shall not have been waived by the Buyer Parties (unless the failure of any such condition to have been fulfilled results from any action, or failure to act, either individually or in the aggregate, by any of the Buyer Parties (including the breach by them of any of their respective representations or covenants contained in this Agreement)), or (ii) the Company or any other Seller Party has breached, or caused the breach of, its representations, warranties, covenants, agreements or other obligations hereunder in a manner that would reasonably be expected to cause the condition set forth in Section 6.1 (Accuracy of Representations) or Section 6.2 (Performance) not to be satisfied and such breach has not been cured within thirty (30) days following written notification thereof by Buyer; or

 

(e)                                   by either the Seller Parties, on the one hand, or the Buyer Parties, on the other hand, by giving written notice to the other if any Governmental Body with competent jurisdiction shall have issued an Order or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of any of the Contemplated Transactions, and such Order or other action shall not be subject to appeal or shall have become final and unappealable; provided , that the right to terminate this Agreement under this subsection (e)  shall not be available to any Party whose action or failure to act (including the breach of this Agreement) has resulted in such Order or other action.

 

Section 9.2                                               Effect of Termination .  In the event this Agreement is terminated pursuant to Section 9.1 , all further obligations of the Parties hereunder shall terminate and this Agreement shall become null and void and of no further force and effect, except for the obligations set forth in this Section 9.2 , Section 12.4 , and Section 12.10 , and except that such

 

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termination shall not relieve any Party of any Liability for any breach of this Agreement or Fraud prior to such termination.

 

ARTICLE X
TAX MATTERS

 

Section 10.1                                        Straddle Period .  In the case of any taxable period that includes (but does not end on) the Closing Date (a “ Straddle Period ”):  (i) the amount of any real, personal and intangible property Taxes, ad valorem Taxes and similar Taxes (“ Property Taxes ”) for the portion of such Straddle Period through the end of the Closing Date shall be determined between the period (or portion thereof) ending on or prior to the Closing Date and the period (or portion thereof) beginning after the Closing Date by prorating such Property Taxes on a daily basis over the entire Straddle Period, and (ii) the amount of any income Taxes or similar obligations for the portion of such Straddle Period through the end of the Closing Date shall be determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the taxable period of any partnership or other pass-through entity shall be deemed to terminate at such time).

 

Section 10.2                                        Filing and Payment Responsibilities .  The Buyer Parties shall cause the Target Companies to prepare and file when due all Tax Returns that are required to be filed by the Target Companies after the Closing Date and shall cause the Target Companies to remit any Taxes due in respect of such Tax Returns; provided , however , that with respect to any such Tax Return for a taxable period beginning before the Closing Date (a “ Covered Tax Return ”), such Covered Tax Return shall be prepared on a basis consistent with the last previous such Tax Return (except as otherwise required by applicable law), and the Buyer Parties shall provide to Seller a copy of each such Covered Tax Return at least twenty (20) Business Days prior to the due date of such Covered Tax Return (taking into account all applicable extensions) for its review and comment, such reasonable comments of Seller received by the Buyer Parties at least five (5) Business Days prior to such due date to be incorporated by the Buyer Parties in such Covered Tax Return as actually filed.  No Target Company shall, and the Buyer Parties shall cause each Target Company not to, file any amended Tax Return of a Target Company for a taxable period beginning before the Closing Date without the prior written consent of Seller (not to be unreasonably withheld, conditioned or delayed).  Seller shall be responsible for all Taxes shown as due and owing on any Covered Tax Return as prepared and filed in accordance with this Section 10.2 , but only to the extent such Taxes (a) are attributable to any Tax period ending on or prior to the Closing Date, or in the case of any Straddle Period, are attributable to the portion of such Straddle Period through the end of the Closing Date (as determined pursuant to Section 10.1 ), and (b) exceed the amount of such Taxes taken into account in determining the Final Balance Sheet or the Purchase Price.  Seller shall reimburse the Buyer Parties for the amount of such Taxes determined pursuant to the preceding sentence by wire transfer of immediately available funds no later than five (5) days after receipt of written notice (or notice delivered by electronic communication) from the Buyer Parties.

 

Section 10.3                                        Tax Proceedings .  Each Target Company shall control, at its sole cost and expense, any audit, litigation, claim or other proceeding with respect to Taxes of such Target Company (a “ Tax Proceeding ”); provided , however , that to the extent such Tax Proceeding could reasonably result in any obligation of the Seller to indemnify pursuant to Article XI , the

 

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Target Company shall, and the Buyer Parties shall cause the Target Company to, (i) upon notice of such Tax Proceeding, promptly deliver written notice to Seller of such Tax Proceeding, which written notice shall explain in reasonable detail the nature of such Tax Proceeding and shall include copies of all relevant documentation received from any taxing authority, (ii) keep Seller reasonably informed of all developments in such Tax Proceeding, (iii) afford Seller the opportunity to participate (at its sole cost and expense) in the conduct and resolution of such Tax Proceeding, and (iv) not settle, resolve or otherwise dispose of such Tax Proceeding without Seller’s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed.

 

Section 10.4                                        Cooperation and Exchange of Information .  The Target Companies, Seller, and Buyer Parties shall cooperate fully, as and to the extent reasonably requested by any other Party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes.  Such cooperation shall include the retention and (upon such other Party’s request) the provision of records and information reasonably relevant to any such audit, litigation, Tax claim, or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  As applicable, the Target Companies, Seller, and Buyer Parties agree (i) to retain all books and records with respect to Tax matters pertinent to the business relating to any taxable period beginning before the Closing Date until expiration of the statute of limitations (and, to the extent notified by the Target Companies, Seller, or Buyer Parties, as applicable, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give each other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if such other Party so requests, the Target Companies, as the case may be, shall allow such other Party to take possession of such books and records.

 

Section 10.5                                        Certain Tax Refunds and Credits .  Except to the extent taken into account in determining the Final Balance Sheet or the Purchase Price, any Tax refunds that are received by any Buyer Party or Target Company, and any amounts credited against Tax to which any Buyer Party or Target Company are entitled, that relate to Taxes of any Target Company (a) paid on or prior to the Closing Date, (b) for which Seller is responsible pursuant to this Article X , or (c) with respect to which Seller made an indemnity payment pursuant to Article XI , in each case, shall be for the account of Seller, and the Buyer Parties shall pay over (or cause to be paid over) to Seller any such refund or the amount of any such credit within ten (10) days after receipt thereof or entitlement thereto.

 

Section 10.6                                        Transfer Taxes .  Notwithstanding any provision of this Agreement to the contrary, all Transfer Taxes incurred in connection with this Agreement and the Contemplated Transactions shall be borne by Seller.  Seller and the Buyer Parties shall, and the Buyer Parties and Seller shall cause the Target Companies to, cooperate in preparing and timely making all filings, Tax Returns, reports and forms as may be required to comply with the provisions of the Laws relating to such Transfer Taxes.  The Buyer Parties shall, subject to reimbursement from the Seller as provided in this Section 10.6 , pay the Taxes shown on any such Tax Return.  Seller shall reimburse the Buyer Parties for its share of such Transfer Taxes (as provided in this Section 10.6 ) by wire transfer of immediately available funds no later than five (5) days after receipt of written notice (or notice delivered by electronic communication) from the Buyer Parties.  For

 

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purposes of this Agreement, “ Transfer Taxes ” shall mean all transfer, sales, excise, value added, stamp duty, stamp duty reserve tax, documentary, registration and other such taxes (including all applicable real estate transfer taxes).

 

Section 10.7                                        Purchase Price Allocation .

 

(a)                                  On or prior to the Closing Date, Seller shall prepare and deliver to Buyer an allocation schedule (the “ Proposed Allocation Schedule ”) setting forth that portion of the Purchase Price to be allocated among the assets of the Target Companies pursuant to (and to the extent necessary to comply with) Section 1060 of the Code and applicable Treasury Regulations (or, if applicable, any similar provision under state, local or foreign law or regulation).  Buyer will have thirty (30) Business Days following the Closing Date during which to notify Seller in writing (an “ Allocation Notice ”) of any changes or additions to the Proposed Allocation Schedule, setting forth in reasonable detail the basis of such changes or additions.  In reviewing or revising the Proposed Allocation Schedule, Buyer shall be entitled to reasonable access to all relevant books, records and personnel of the Target Companies and their Representatives to the extent Buyer reasonably requests such information and reasonable access to complete its review or revision of the Proposed Allocation Schedule.  After Buyer submits an Allocation Notice, then (A) for thirty (30) Business Days after the date Seller receives the Allocation Notice, Buyer and Seller will use their commercially reasonable efforts to agree on the allocations (such agreed-upon Proposed Allocation Schedule to become the “ Final Allocation Schedule ”) and (B) failing such agreement within thirty (30) Business Days of such notice, the matter will be resolved in accordance with Section 10.7(b) .

 

(b)                                  Any amounts remaining in dispute at the conclusion of such thirty (30) Business Day period that were included in the Allocation Notice (the “ Unresolved Allocation Changes ”) shall be submitted to an independent, internationally recognized accounting firm jointly selected by Buyer and Seller (the “ Expert ”).  Seller and Buyer agree to execute, if requested by the Expert, a reasonable engagement letter.  Buyer and Seller will each deliver to the other and to the Expert a notice setting forth in reasonable detail their proposed allocations.  The Expert shall act as an arbitrator to determine, based on the provisions of this Section 10.7(b)  and the definitions referred to herein, only the Unresolved Allocation Changes.  The Expert shall be instructed to determine its best estimate of the allocation schedule based on its determination of the Unresolved Allocation Changes and provide a written description of the basis for its determination of the allocations therein within forty-five (45) Business Days after the matter has been submitted to the Expert, which written determination shall be final, binding and conclusive.  Each of the Parties shall furnish, at its own expense, the Expert and the other Party with such documents and other written information as the Expert may request.  Each Party may also furnish to the Expert such other written information and documents as such Party deems relevant; provided , that copies of all such documents and materials shall be concurrently delivered to the other Party in the same manner as such materials are delivered to the Expert.  The Expert may, at its discretion, conduct one or more conferences with respect to the dispute between the Parties, at which conference each Party shall have the right to present such additional documents, materials and other information and to be accompanied or represented by such Representatives as each Party shall choose in its sole discretion.  The fees and expenses of the Expert shall be borne by Seller and Buyer, respectively, in inverse proportion to the degree that each prevails in the

 

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dispute, which proportionate allocation shall also be determined by the Expert.  Each Party will bear the costs of its own counsel, witnesses (if any) and employees.

 

(c)                                   The Parties agree to act in accordance with the Final Allocation Schedule for all Tax purposes (including for purposes of the filing of any Tax Return).

 

(d)                                  The dispute resolution provisions of this Section 10.7 shall not apply to, and the scope of the Expert’s authority herein shall not extend to, any dispute of the Parties relating to the interpretation, breach or enforcement of any provisions of this Agreement, except as may be necessary to resolve the Unresolved Allocation Changes.

 

Section 10.8                                        Buyer Tax Act .  The Buyer Parties shall pay and indemnify and hold harmless Seller and its direct and indirect equity holders from and against any Taxes of Seller (including any Taxes for which Seller is responsible under this Agreement) or its direct or indirect equity holders resulting from (i) any actions outside of the ordinary course of business taken, or caused to be taken, by Buyer or Parent or any of their Affiliates following the Closing (other than any transactions pursuant to, or specifically contemplated by, this Agreement, or otherwise agreed to by Seller in writing), or (ii) any Tax elections or positions (other than any Tax elections or positions made or taken pursuant to, or specifically contemplated by this Agreement, or otherwise agreed to by Seller in writing) that Buyer or Parent or any of their Affiliates make (or cause to be made) or take (or cause to be taken) with respect to any of the Target Companies following the Closing.

 

ARTICLE XI
INDEMNIFICATION

 

Section 11.1                                        Survival .

 

(a)                                  The representations and warranties of the Parties contained in this Agreement shall terminate at Closing and be of no further force and effect; provided , however , that (i) the Seller Fundamental Representations and the representations and warranties of the Company set forth in Section 3.1(a)  (Organization), Section 3.2(a)  and ( b)(i)  (Enforceability; Authority; No Conflict), Section 3.4 (Target Company Interests; Title) and Section 3.14 (Brokers or Finders) (collectively, the “ Fundamental Representations ”) shall survive the Closing indefinitely, (ii) the representations and warranties of the Company set forth in Section 3.13 (Taxes) (“ Tax Representations ”) shall survive the Closing until the third anniversary of the Closing Date, (iii) any representation or warranty of Seller set forth in Article IV (other than any Seller Fundamental Representations) that is breached as a result of any Fraud by Seller (collectively, the “ Seller Fraudulent Misrepresentations ”) shall survive until the expiration of the applicable statute of limitations, (iv) any representation or warranty set forth in Article III that is breached as a result of any Fraud by any Target Company (the “ Company Fraudulent Misrepresentations ”) shall survive until the third anniversary of the Closing Date, and (v) any representation or warranty set forth in Article V that is breached as a result of any Fraud by the Buyer Parties (the “ Buyer Fraudulent Misrepresentations ”) shall survive until the expiration of the applicable statute of limitations.

 

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(b)                                  The covenants and agreements contained in this Agreement shall terminate on the Closing Date (and no claim for any indemnification may be made therefor) unless a specific covenant contained in Article VIII or Article X requires performance after the Closing Date (the “ Post Closing Covenants ”), in which case such covenant will survive for the period set forth therein or otherwise until fully performed in accordance with the terms thereof.

 

(c)                                   Except as set forth above, none of the representations, warranties or covenants set forth herein shall survive the Closing.

 

Section 11.2                                        Indemnification by Seller .

 

(a)                                  (i)                                      Subject to this Article XI , from and after the Closing, Seller shall indemnify and hold harmless Buyer and its Affiliates and their respective owners, officers, directors, employees, agents, successors and assigns (including, after the Closing Date, the Target Companies) (collectively, the “ Buyer Indemnified Parties ”) from and against any Covered Losses suffered by any such Buyer Indemnified Party resulting from or arising out of:  (A) the failure of any Fundamental Representations to be true and correct on and as of the Closing Date (or with respect to any Fundamental Representations made as of a specific date, the failure of such representations and warranties to be true and correct as of such date); (B) the failure of any Tax Representations to be true and correct on and as of the Closing Date (or with respect to Tax Representations made as of a specific date, the failure of such representations and warranties to be true and correct as of such date); (C) the failure of any representation or warranty set forth in Article IV (other than any Seller Fundamental Representations) to be true and correct as of the Closing Date (or with respect to any such representation or warranty made as of a specific date, the failure of such representations and warranties to be true and correct as of such date), in each case solely due to a Seller Fraudulent Misrepresentation; (D) the failure of any representation or warranty set forth in Article III to be true and correct as of the Closing Date (or with respect to any such representation or warranty made as of a specific date, the failure of such representations and warranties to be true and correct as of such date), in each case solely due to a Company Fraudulent Misrepresentation; (E) any nonfulfillment or breach of any Post-Closing Covenant made by the Seller in this Agreement or (F) any Applicable Proceeding.

 

(ii)                                   The Buyer Indemnified Parties shall not be entitled to assert any indemnification pursuant to this Section 11.2 after the expiration of the applicable survival periods referenced in Section 11.1 (including the proviso to Section 11.1(a) ); provided , however , that if, on or prior to such expiration of the applicable survival period, a notice of claim shall have been given to the Seller in accordance with Section 11.4 for such indemnification, the Buyer Indemnified Parties shall continue to have the right to be indemnified with respect to such indemnification claim until such claim for indemnification has been satisfied or otherwise resolved as provided in this Article XI .

 

(iii)                                Any indemnification of a Buyer Indemnified Party pursuant to this Section 11.2 shall be effected by wire transfer or transfers of immediately available funds from Seller to an account or accounts designated in writing by the applicable Buyer Indemnified Party to Seller within five (5) Business Days after the final determination thereof.

 

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(b)                                  Seller shall have no liability for indemnification pursuant to Section 11.2(a)(i)  with respect to Covered Losses for Tax Representations for which indemnification is provided thereunder unless such Covered Losses exceed in the aggregate $1,000,000, in which case Seller shall be liable for all Covered Losses in respect of any Tax Representation Claim; provided , however , that the aggregate amount of all payments by Seller in satisfaction of claims for indemnification pursuant to Section 11.2(a)(i)(B)  in respect of Tax Representations shall not exceed $89,000,000.  Notwithstanding anything to the contrary herein, the aggregate amount of all payments by Seller in satisfaction of claims for indemnification pursuant to Section 11.2(a)(i) , including for Tax Representations and any claims based on Fraud, shall not exceed the Purchase Price.

 

(c)                                   Except as otherwise specifically provided in this Agreement, each of the Buyer Parties hereby acknowledges and agrees that its sole and exclusive remedy with respect to any and all claims relating to this Agreement, the Contemplated Transactions or any of the Target Companies, in each case, arising from and after the Closing, shall be pursuant to the indemnification provisions set forth in this Article XI and none of the Buyer Parties will have any other rights or remedies against the other Parties from or in connection with this Agreement, the Contemplated Transactions, or any of the Target Companies, including any remedies at law, in equity, in contract, in tort, for strict liability, or under securities laws or for fraud.  In furtherance of the foregoing, each of the Buyer Parties and the Company hereby waives, from and after the Closing, to the fullest extent permitted under Legal Requirements, any and all rights, claims and causes of action it may have against Seller and its Affiliates arising under, based upon or relating to this Agreement, any document or certificate delivered in connection herewith, any applicable Legal Requirement or otherwise (except pursuant to the indemnification provisions set forth in this Article XI ).

 

Section 11.3                                        Indemnification by the Buyer Parties .

 

(a)                                  Subject to this Article XI , from and after the Closing Date, each of the Buyer Parties, jointly and severally, shall indemnify and hold harmless Seller and its Affiliates and their respective owners, officers, directors, employees, agents, successors and assigns (the “ Seller Indemnified Parties ”) from and against any Covered Losses suffered by any such Seller Indemnified Party resulting from or arising out of:  (i) the failure of any representation or warranty set forth in Article V to be true and correct as of the Closing Date (or with respect to any such representation or warranty made as of a specific date, the failure of such representations and warranties to be true and correct as of such date), in each case solely due to a Buyer Fraudulent Misrepresentation; or (ii) any nonfulfillment or breach of any Post-Closing Covenant made by any of the Buyer Parties in this Agreement.

 

(b)                                  The Seller Indemnified Parties shall not be entitled to assert any indemnification pursuant to this Section 11.3 after the expiration of the applicable survival period referenced in Section 11.1 ; provided , however , that if, on or prior to such expiration of the applicable survival period, a notice of claim shall have been given to Purchaser in accordance with Section 11.4 for such indemnification, the Seller Indemnified Parties shall continue to have the right to be indemnified with respect to such indemnification claim until such claim for indemnification has been satisfied or otherwise resolved as provided in this Article XI .

 

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(c)                                   Any indemnification of a Seller Indemnified Party pursuant to this Section 11.3 shall be effected by wire transfer or transfers of immediately available funds from the Buyer Parties to an account or accounts designated in writing by the applicable Seller Indemnified Party to Buyer within five (5) Business Days after the final determination thereof.

 

Section 11.4                                        Procedures .

 

(a)                                  Third Party Claims .  In order for a Person (the “ Indemnified Party ”) to be entitled to any indemnification provided for under Section 11.2 or Section 11.3 in respect of, arising out of or involving a claim made by any Person against the Indemnified Party, other than a Tax Proceeding governed by Section 10.2 (a “ Third Party Claim ”), such Indemnified Party must notify the indemnifying party in writing (and in reasonable detail) of the Third Party Claim within 10 Business Days after receipt by such Indemnified Party of notice of the Third Party Claim; provided , however , that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the indemnifying party shall have been actually and materially prejudiced as a result of such failure (except that the indemnifying party shall not be liable for any expenses incurred during the period in which the Indemnified Party failed to give such notice).  Thereafter, the Indemnified Party shall deliver to the indemnifying party, within five (5) Business Days’ time after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim.

 

(b)                                  Assumption .  If a Third Party Claim is made against an Indemnified Party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the indemnifying party and reasonably acceptable to the Indemnified Party.  Should the indemnifying party so elect to assume the defense of a Third Party Claim, the indemnifying party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof.  If the indemnifying party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel (reasonably acceptable to the indemnifying party), at its own expense, separate from the counsel employed by the indemnifying party, it being understood that the indemnifying party shall control such defense.  The indemnifying party shall be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the indemnifying party has not assumed the defense thereof (other than during any period in which the Indemnified Party shall have failed to give notice of the Third Party Claim as provided above) to the extent the Third Party Claim is indemnifiable hereunder.  If the indemnifying party chooses to defend or prosecute a Third Party Claim, all the indemnified parties shall cooperate in the defense or prosecution thereof.  Such cooperation shall include the retention and (upon the indemnifying party’s reasonable request) the provision to the indemnifying party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  Whether or not the indemnifying party assumes the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the indemnifying party’s prior written consent (which consent shall not be unreasonably withheld).  If the indemnifying party assumes the defense of a Third Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third Party

 

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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 Third Party Claim and which fully releases the Indemnified Party of any and all obligations in connection with such Third Party Claim.

 

(c)                                   Other Claims .  In the event any Indemnified Party should have a claim against any indemnifying party under Section 11.2 or Section 11.3 that does not involve a Third Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim with reasonable promptness to the indemnifying party.  Subject to Section 11.1 , the failure by any Indemnified Party so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to such Indemnified Party under Section 11.2 or Section 11.3 , except to the extent that the indemnifying party demonstrates that it has been actually and materially prejudiced by such failure.

 

(d)                                  Mitigation .  The Buyer Parties and Seller shall cooperate with each other with respect to resolving any claim or liability with respect to which one Party is obligated to indemnify the other Party hereunder, including by making commercially reasonably efforts to mitigate or resolve any such claim or liability.  In the event that the Buyer Parties or Seller shall fail to make such commercially reasonably efforts to mitigate or resolve any claim or liability, then notwithstanding anything else to the contrary contained herein, the other Party shall not be required to indemnify any Person for any Covered Losses that could reasonably be expected to have been avoided if the Buyer Parties or Seller, as the case may be, had made such efforts.

 

Section 11.5                                        Determination of Loss Amount .

 

(a)                                  The amount of any and all Covered Losses under this Article XI will be determined net of (i) the present value of any Tax benefits reasonably anticipated to be actually realized (calculated using a discount rate of 6%, compounded monthly) by any Party seeking indemnification hereunder arising from the deductibility (or amortization, capitalization, creditability or other tax benefit, etc.) of any such Covered Losses and (ii) any amounts recovered by any party or any Affiliate of a party under or pursuant to any insurance policy, title insurance policy, indemnity, reimbursement arrangement or Contract pursuant to which or under which such party or such party’s Affiliates is a party or has rights (collectively, “ Alternative Arrangements ”).

 

(b)                                  In no event will the Buyer Indemnified Parties be entitled to recover or make a claim for any amounts in respect of consequential, incidental or indirect damages, lost profits, diminutions in value or punitive damages and, in particular, no “multiple of profits” or “multiple of cash flow” or other valuation methodology will be used in calculating the amount of any Covered Losses.  In addition, no indemnifying party will be liable hereunder in respect of any claim if such claim would not have arisen but for a change in legislation or accounting policies or a change in interpretation of applicable Legal Requirement as determined by a Governmental Body.  Notwithstanding any other provision of this Agreement to the contrary, any Covered Loss claimed hereunder will be reasonable and in good faith in light of the facts then known regarding such Covered Loss .

 

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(c)                                   No Buyer Indemnified Party will be entitled to any indemnification under this Article XI for any Covered Loss to the extent any such Covered Loss (i) was taken into account in determining the Final Balance Sheet or the Purchase Price, (ii) was reserved or accrued for in the Financial Statements or (iii) is disclosed in the Schedules in reference to the representation or warranty related to such Covered Loss.

 

(d)                                  Notwithstanding anything in this Agreement to the contrary, for purposes of the Parties’ indemnification obligations under this Article XI , all of the representations and warranties set forth in this Agreement or any certificate delivered pursuant to Section 2.4(a)(iv) , 2.4(b)(i)  or 2.4(c)(iv)  that are qualified as “material,” “materially,” “material respects,” “material adverse effect,” “Material Adverse Effect” or words of similar import or effect shall be deemed to have been made without any such qualification for purposes of determining (i) whether a breach of any such representation or warranty has occurred and (ii) the amount of Covered Losses resulting from, arising out of or relating to any such breach of representation or warranty. Notwithstanding clause (i) of the immediately preceding sentence, the foregoing, qualifications of materiality and words of similar import or effect appearing in (A) the definition of Material Contracts and (B) any of the representations set forth in Section 3.5 , Section 3.9(c) , and Section 3.16 shall not be read out for purposes of determining whether any of such representations or warranties have been breached.

 

Section 11.6                                        Adjustments .  All payments made pursuant to Article XI shall be treated by the Parties hereto on all applicable Tax Returns as an adjustment to the Purchase Price.

 

Section 11.7                                        Subrogation .  After any indemnification payment is made pursuant to this Article XI , the indemnifying party shall, to the extent of such payment, be subrogated to all rights (if any) of the Indemnified Party against any Third Party in connection with the Covered Losses to which such payment relates.  Without limiting the generality of the preceding sentence, any Indemnified Party receiving an indemnification payment shall execute, upon the written request of the indemnifying party, any instrument reasonable necessary to evidence such subrogation rights.

 

Section 11.8                                        No Other Representation .  Except for the representations and warranties contained in Article III and Article IV (as modified by the Schedules hereto), none of the Company or any of its Affiliates (including Seller and the Company’s Subsidiaries), Representatives of the Company or any of its Affiliates or any other Person makes or shall be deemed to make any other express or implied representation or warranty with respect to Seller, the Target Companies, the Transferred Interests, the Company Business or any assets or Liabilities thereof, the Contemplated Transactions, or any other matter, and the Seller Parties hereby disclaim any other express or implied representations or warranties, whether made by the Company or any of its Affiliates (including Seller and the Company’s Subsidiaries), any Representatives of the Company or any of its Affiliates or any other Person.  Except for the representations and warranties expressly set forth in Article III and Article IV (as modified by the Schedules hereto), the Seller Parties, on behalf of themselves and each of their respective Affiliates, hereby disclaim all Liability and responsibility for any and all representations, warranties, projections, forecasts, estimates, appraisals, statements, promises, advice, data or information made available, communicated or furnished (orally or in writing, including electronically) to Buyer or any of its Affiliates or any Representatives of Buyer or any of its

 

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Affiliates (including any opinion, data, information, projection, forecast, estimate, appraisal, statement, promise or advice that may have been or may be provided to Buyer or any of its Affiliates or any Representatives of Buyer or any of its Affiliates by the Company or any of its Affiliates, any Representatives of the Company or any of its Affiliates or any other Person), or any errors in or omissions from any of the foregoing.  Without limiting the foregoing, the Seller Parties make no express or implied representations or warranties to Buyer or any of its Affiliates or any Representatives of Buyer or any of its Affiliates regarding the probable success or profitability or value of the Target Companies, the Transferred Interests, the Company Business or any assets or Liabilities thereof.

 

ARTICLE XII
GENERAL PROVISIONS

 

Section 12.1                                        Expenses .  Except as otherwise set forth in this Agreement, the Seller Parties, on the one hand, and the Buyer Parties, on the other hand, shall each bear their own costs and expenses in connection with the negotiation of this Agreement and the consummation of the Contemplated Transactions, except that nothing in this Section 12.1 shall preclude any party from seeking its expenses as damages in connection with any breach of this Agreement; provided , however , that Buyer shall be solely responsible for all filing fees in respect of the Material Governmental Approval and all costs associated with obtaining any third party consents in connection with the Contemplated Transactions.

 

Section 12.2                                        Public Announcements and Confidentiality .  None of the Parties nor their respective Subsidiaries, Representatives or Affiliates shall disclose, or cause the disclosure or publication of, this Agreement or the identity of any Party or make or issue any press release or other public announcement or communication with respect to the Contemplated Transactions (each, a “ Public Disclosure ”) without the prior written consent of Seller and Buyer; provided , however , that to the extent that a Public Disclosure directly or indirectly uses or refers to any direct or indirect owner of Seller (each, an “ Affected Person ”), then such Public Disclosure must also be approved by such Affected Person with respect to each such use or reference.  Notwithstanding anything to the contrary herein, if a Party’s counsel deems a Public Disclosure necessary in order to comply with the requirements of any Legal Requirement or the regulations or policies of any securities exchange or other similar regulatory body, then such disclosing Party shall (i) notify Seller (who shall notify any Affected Person) and Buyer, as applicable, prior to such disclosure, (ii) limit such disclosure to the information required to comply with such Legal Requirement or regulations and (iii) use reasonable efforts to accommodate any suggested changes to such disclosure from Seller, Buyer and any Affected Person, as applicable.  Notwithstanding anything to the contrary herein, (a) Seller shall be permitted to provide a copy of this Agreement to the Agriculture Buyer and the Agriculture Company and (b) Affiliates of Seller shall be permitted to provide a copy of this Agreement, and information with respect to the Contemplated Transactions, to any direct or indirect owner of Seller, including limited partners.

 

Section 12.3                                        Notices .  All notices, Consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a Party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid), (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment, or (c) received or rejected by the addressee, if sent by certified

 

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mail, return receipt requested, in each case to the following addresses, facsimile numbers or email addresses and marked to the attention of the Person (by name or title) designated below (or to such other address, facsimile number, e-mail address or Person as a Party may designate by notice to the other Parties):

 

If, prior to the Closing, to the Company:

 

Gavilon, LLC
1331 Lamar Street, Suite 1650  
Houston, Texas 77010
Attention:
                             Greg Piper
Telephone:
                       (713) 496-3945
Facsimile:
                             (402) 889-4537
E-mail:
                                            greg.piper@gavilon.com

 

With copies to (which shall not constitute notice to the Company):

 

Jones Day
222 East 41st Street
New York, New York 10017
Attention:
                             Robert F. Kennedy, Esq.
Telephone:
                       (212) 326-3835
Facsimile:
                             (212) 755-7306
E-mail:
                                            rfkennedy@jonesday.com

 

If to Seller:

 

Gavilon Energy Intermediate, LLC
320 Park Avenue, 27th Floor
New York, New York 10022
Attention:
                             David Blue
Telephone:
                       (212) 602-5000
Facsimile:
                             (212) 980-3796
E-mail:
                                            david.blue@ospraie.com

 

If to Buyer, or after the Closing, the Company:

 

High Sierra Energy, LP
3773 Cherry Creek North Drive, Suite 1000
Denver, Colorado 80209
Attention:
                             General Counsel
Telephone:
                       (720) 838-2748
Facsimile:
                             (303) 370-7109
E-mail:
                                            blaughlin@highsierraenergy.com

 

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with copies to (which shall not constitute notice to Buyer):

 

Locke Lord LLP
600 Travis, Suite 2800
Houston, Texas 77002
Attention:
                             Terry Radney
Facsimile:
                             (713) 223-3717
E-mail:
                                            tradney@lockelord.com

 

Section 12.4                                        Jurisdiction; Waiver of Jury Trial .  Each Party agrees that any Proceeding against any Party hereto arising out of or relating to this Agreement or any of the Contemplated Transactions shall only be brought in any federal or state court located in the State of Delaware, and each Party hereby submits to the exclusive jurisdiction of such courts for the purpose of any such Proceeding.  Each Party further agrees that service of any process, summons, notice or document by U.S. registered mail to such Party’s respective address set forth in Section 12.3 shall be effective service of process for any Proceeding in the State of Delaware with respect to any matters to which it has submitted to jurisdiction in this Section 12.4 .  EACH PARTY (ON BEHALF OF THEMSELVES AND THEIR RESPECTIVE SUBSIDIARIES) HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO (A) THIS AGREEMENT, THE SCHEDULES, AND ANY CERTIFICATE OR OTHER DOCUMENT REQUIRED TO BE DELIVERED HEREBY OR (B) THE TRANSACTIONS CONTEMPLATED HEREBY.  Each Party (a) certifies that no representative, agent or attorney of any Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other Parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 12.4 .

 

Section 12.5                                        Waiver; Remedies Cumulative .  The rights and remedies of the Parties to this Agreement are cumulative and not alternative.  Neither any failure nor any delay by any Party in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable Legal Requirement, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other Party; (b) no waiver that may be given by a Party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one Party will be deemed to be a waiver of any obligation of that Party or of the right of the Party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

 

Section 12.6                                        Entire Agreement and Modification .  This Agreement supersedes all prior agreements, whether written or oral, between the Parties with respect to its subject matter and constitutes (along with the Schedules, Exhibits and other documents delivered pursuant to this Agreement) a complete and exclusive statement of the terms of the agreement between the

 

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Parties with respect to its subject matter; provided that this Section 12.6 shall not apply to any confidentiality agreement between the Parties related to the subject matter of this Agreement, which (subject to Section 8.10 ) shall remain in full force and effect in accordance with its terms.  This Agreement may not be amended, supplemented, or otherwise modified except by a written agreement executed by the Buyer Parties, the Company and Seller.

 

Section 12.7                                        Assignments, Successors and no Third-Party Rights .  No Party may, in whole or in part, assign any of its rights or interests or delegate any of its obligations under this Agreement without the prior written consent of Buyer, Seller and the Company, and any attempt to do so will be void.  Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the Parties.  Nothing expressed or referred to in this Agreement will be construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement, except as contemplated in Section 8.9 and for such rights as shall inure to a successor or permitted assignee pursuant to this Section 12.7 .

 

Section 12.8                                        Severability .  If any provision (or part thereof) of this Agreement is held illegal, invalid or unenforceable under any present or future Legal Requirement, and if the rights or obligations of any Party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision (or part thereof) will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision (or part thereof) had never comprised a part hereof, and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision (or part thereof) or by its severance herefrom.

 

Section 12.9                                        Headings .  The headings of Articles and Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.  All references to “Articles,” “Sections” and “Schedules” refer to the corresponding Articles, Sections and Schedules of this Agreement, unless otherwise specified.

 

Section 12.10                                 Governing Law .  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to the conflicts of law principles of such state.

 

Section 12.11                                 Execution of Agreement .  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.  The exchange of copies of this Agreement and of signature pages by facsimile transmission or by other electronic transmission of a manual signature (by portable data format (PDF) or other method that enables the recipient to reproduce a copy of the manual signature) shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes.  Signatures of the Parties transmitted by facsimile or other electronic transmission shall be deemed to be their original signatures for all purposes.

 

Section 12.12                                 Specific Performance .  Without intending to limit the remedies available to the Parties hereunder, each Party acknowledges that a breach of, conflict with, or failure to

 

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perform or comply with, any of the provisions contained in this Agreement would result in material irreparable injury to the other Party or its Affiliates for which there is no adequate remedy at law and that it will not be possible to measure damages for such injuries precisely.  It is accordingly agreed that the Parties shall be entitled to equitable relief, including in the form of an injunction or injunctions, to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the courts in the State of Delaware or in any other court having competent jurisdiction, this being in addition to any other remedy to which any party is entitled at law or in equity.  The right to specific performance shall include the right of the Parties to cause the Contemplated Transactions to be consummated on the terms and subject to the conditions set forth in this Agreement.  The Parties hereto further agree (a) to cooperate fully in any attempt by the other Parties to obtain any such equitable remedy, (b) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy and (c) not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Legal Requirement or inequitable for any reason, or to assert that a remedy of monetary damages would provide an adequate remedy.  Each of the Parties acknowledges and agrees that such right of specific performance is an integral part of the Contemplated Transactions and without that right, the Parties would not have entered into this Agreement.

 

Section 12.13                                 Non-Recourse .  No past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of the Seller Parties or their respective Affiliates shall have any liability for any obligations or liabilities of Seller under this Agreement or for any claim based on, in respect of, or by reason of, the Contemplated Transactions.

 

Section 12.14                                 Attorney-Client Privilege and Conflict Waiver .  Jones Day has represented the Company, its Subsidiaries and Seller.  All of the Parties recognize the commonality of interest that exists and will continue to exist until Closing, and the Parties agree that such commonality of interest should continue to be recognized after the Closing.  Specifically, the Parties agree that Buyer shall not, and shall not cause any member of the Target Companies to, seek to have Jones Day disqualified from representing Seller, the Seller Indemnified Parties and their respective Affiliates in connection with any dispute that may arise between Seller, the Seller Indemnified Parties or their respective Affiliates and any of the Buyer Parties or the Company in connection with this Agreement or the Contemplated Transactions and (b) in connection with any such dispute that may arise between Seller, the Seller Indemnified Parties or their respective Affiliates and the Buyer Parties or the Company, Seller, the Seller Indemnified Parties or their respective Affiliates involved in such dispute (and not the Buyer Parties or the Company) will have the right to decide whether or not to waive the attorney client privilege that may apply to any communications between the Company, any of its Subsidiaries and Jones Day that occurred before the Closing.

 

*****

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement, all as of the date first above written.

 

 

 

SELLER:

 

 

 

GAVILON ENERGY INTEEMEDIATE,

 

LLC

 

 

 

By:

/s/ Dwight Anderson

 

Name:

Dwight Anderson

 

Title:

Authorized Signatory

 

 

 

 

 

COMPANY:

 

 

 

GAVILON LLC

 

 

 

By:

/s/ Greg Piper

 

Name:

Greg Piper

 

Title:

President and Chief Operating Officer

 

 

 

 

 

BUYER:

 

 

 

HIGH SIERRA ENERGY, LP

 

 

 

By:

/s/ H. Michael Krimbill

 

Name:

H. Michael Krimbill

 

Title:

President

 

 

 

 

 

PARENT:

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

By:

/s/ H. Michael Krimbill

 

Name:

H. Michael Krimbill

 

Title:

CEO

 


Exhibit 4.1

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of December 2, 2013, by and among NGL Energy Partners LP, a Delaware limited partnership (the “ Partnership ”), and the Purchasers set forth on Schedule A to this Agreement (each, a “ Purchaser ” and collectively, the “ Purchasers ”).

 

WHEREAS, this Agreement is entered into in connection with the Closing of the issuance and sale of the Purchased Units pursuant to the Common Unit Purchase Agreement, dated November 5, 2013 by and among the Partnership and the Purchasers (the “ Purchase Agreement ”);

 

WHEREAS, the Partnership has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Purchasers pursuant to the Purchase Agreement; and

 

WHEREAS, it is a condition to the obligations of each Purchaser and the Partnership under the Purchase Agreement that this Agreement be executed and delivered.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

SECTION 1.01                                       Definitions .  Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement. The terms set forth below are used herein as so defined:

 

Agreement ” has the meaning specified therefor in the introductory paragraph.

 

Effectiveness Period ” has the meaning specified therefor in Section 2.01(a) of this Agreement.

 

Holder ” means the record holder of any Registrable Securities.

 

Included Registrable Securities ” has the meaning specified therefor in Section 2.02(a) of this Agreement.

 

Liquidated Damages ” has the meaning specified therefor in Section 2.01(b) of this Agreement.

 

Liquidated Damages Multiplier ” means the product of the Per Unit Price times the number of Common Units purchased by such Purchaser that may not be disposed of without restriction and, in the event the Partnership is not in compliance with Rule 144(c) promulgated under the Securities Act, without the need for current public information.

 



 

Losses ” has the meaning specified therefor in Section 2.08(a) of this Agreement.

 

Managing Underwriter ” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

 

NYSE ” means The New York Stock Exchange, Inc.

 

Opt Out Notice ” has the meaning specified therefor in Section 2.02(a) of this Agreement.

 

Other Holders ” has the meaning specified therefor in Section 2.02(b) of this Agreement.

 

Purchase Agreement ” has the meaning specified therefor in the Recitals of this Agreement.

 

Purchaser ” and “ Purchasers ” have the meanings specified therefor in the introductory paragraph of this Agreement.

 

Registrable Securities ” means: (i) the Common Units comprising the Purchased Units and (ii) any Common Units issued as Liquidated Damages pursuant to Section 2.01 of this Agreement, if any, all of which Registrable Securities are subject to the rights provided herein until such rights terminate pursuant to the provisions hereof.

 

Registration Expenses ” has the meaning specified therefor in Section 2.08(b) of this Agreement.

 

Selling Expenses ” has the meaning specified therefor in Section 2.08(b) of this Agreement.

 

Selling Holder ” means a Holder who is selling Registrable Securities pursuant to a registration statement.

 

Twenty-Day VWAP ” means the volume weighted average price of the Common Units traded on the NYSE, or any other national securities exchange on which the Common Units are then traded, for the twenty trading days ending on the first trading day immediately preceding the date of determination of the Twenty-Day VWAP.

 

Underwritten Offering ” means an offering (including an offering pursuant to a Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

 

SECTION 1.02                                       Registrable Securities .  Any Registrable Security will cease to be a Registrable Security when (a) a registration statement covering such Registrable Security becomes or has been declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in force) under the Securities Act; (c) such Registrable Security is held by the Partnership or one of its

 

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subsidiaries or Affiliates; (d) such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.11 hereof; or (e) such Registrable Security becomes eligible for resale without restriction and, in the event the Partnership is not in compliance with the requirements of Rule 144(c) promulgated under the Securities Act, without the need for current public information, assuming the Holder of such Registrable Security is not an affiliate (as defined in Rule 144(a)(1)) of the Partnership.

 

ARTICLE II
REGISTRATION RIGHTS

 

SECTION 2.01                                       Registration .

 

(a)                                  Effectiveness Deadline .  No later than 90 days following the Closing Date, the Partnership shall prepare and file a registration statement under the Securities Act to permit the public resale of Registrable Securities then outstanding from time to time as permitted by Rule 415 of the Securities Act with respect to all of the Registrable Securities (the “ Registration Statement ”). The Registration Statement filed pursuant to this Section 2.01(a) shall be on such appropriate registration form of the SEC as shall be selected by the Partnership so long as it permits the continuous offering of the Registrable Securities pursuant to Rule 415 of the Securities Act or such other rule as is then applicable at the then prevailing market prices. The Partnership shall use its commercially reasonable efforts to cause the Registration Statement to become effective on or as soon as practicable after the filing thereof. Any Registration Statement shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders of any and all Registrable Securities covered by such Registration Statement. The Partnership shall use its commercially reasonable efforts to cause the Registration Statement filed pursuant to this Section 2.01(a) to be effective, supplemented and amended to the extent necessary to ensure that it is available for the resale of all Registrable Securities by the Holders until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities (the “ Effectiveness Period ”). The Registration Statement when effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two (2) Business Days of such date, the Partnership shall provide the Holders with written notice of the effectiveness of the Registration Statement.

 

(b)                                  Failure To Go Effective .  If the Registration Statement required by Section 2.01(a) is not declared effective within 90 days after Closing, then each Purchaser shall be entitled to a payment (with respect to the Purchased Units of each such Purchaser), as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period, which shall accrue daily, for the first 60 days following the 90th day, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-day period, which shall accrue daily, for each subsequent 60 days ( i.e., an aggregate 0.5% for 61-120 days after the 90th day, 0.75% for

 

3



 

121-180 days after the 90th day and 1.0% thereafter), up to a maximum of 1.0% of the Liquidated Damages Multiplier per 30-day period (the “ Liquidated Damages ”). The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within ten Business Days after the end of each such 30-day period. Any Liquidated Damages shall be paid to each Purchaser in immediately available funds; provided, however, if the Partnership certifies that it is unable to pay Liquidated Damages in cash because such payment would result in a breach of any covenant or constitute a default under a credit facility, indenture, note purchase agreement or other debt instrument filed as an exhibit to an SEC Document, then the Partnership shall pay such Liquidated Damages using as much cash as permitted without breaching any such credit facility or other debt instrument and shall pay the balance of any such Liquidated Damages in kind in the form of the issuance of a number of Common Units equal to the result of dividing the amount of Liquidated Damages due to each holder of Registrable Securities by the Twenty-Day VWAP, rounded to the nearest whole number.  Upon any issuance of Common Units as Liquidated Damages, the Partnership shall promptly (i) prepare and file an amendment to the Registration Statement prior to its effectiveness adding such Common Units to such Registration Statement as additional Registrable Securities and (ii) prepare and file a supplemental listing application with the NYSE (or such other national securities exchange on which the Registrable Securities are then listed and traded) to list such additional Common Units. The accrual of Liquidated Damages to a Holder shall cease at the earlier of (i) the Registration Statement becoming effective or (ii) when such Holder no longer holds Registrable Securities, and any payment of Liquidated Damages shall be prorated for any period of less than 30 days in which the payment of Liquidated Damages ceases. If the Partnership is unable to cause a Registration Statement to be declared effective within 90 days after the Closing Date as a result of an acquisition, merger, reorganization, disposition or other similar transaction, then the Partnership may request a waiver of the Liquidated Damages, and each Holder may individually grant or withhold its consent to such request in its discretion.

 

(c)                                   Termination of Purchaser’s Rights .  A Purchaser’s rights (and any transferee’s rights pursuant to Section 2.11) under this Agreement shall terminate upon the termination of the Effectiveness Period.

 

SECTION 2.02                                       Piggyback Rights .

 

(a)                                  Participation .  If the Partnership proposes to file (i) a shelf registration statement other than the Registration Statement contemplated by Section 2.01(a), (ii) a prospectus supplement to an effective shelf registration statement relating to the sale of equity securities of the Partnership, other than the Registration Statement contemplated by Section 2.01(a) of this Agreement and Holders may be included without the filing of a post-effective amendment thereto, or (iii) a registration statement, other than a shelf registration statement, in each case, for the sale of Common Units in an Underwritten Offering for its own account and/or another Person, then as soon as practicable following the engagement of counsel by the Partnership to prepare the documents to be used in connection with an Underwritten Offering, the Partnership shall give notice (including, but not limited to, notification by electronic mail) of such proposed Underwritten Offering to each Holder (together with its Affiliates) holding at least $10.0 million of the then-outstanding Registrable Securities (based on the Aggregate Purchase Price) and such notice shall offer such Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “ Included Registrable Securities ”) as each such Holder

 

4



 

may request in writing; provided, however , that if the Partnership has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Common Units in the Underwritten Offering, then (A) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, the Partnership shall not be required to offer such opportunity to the Holders or (B) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the Managing Underwriter, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b). Any notice required to be provided in this Section 2.02(a) to Holders shall be provided on a Business Day pursuant to Section 3.01 hereof. Each such Holder shall then have two (2) Business Days (or one (1) Business Day in connection with any overnight or bought Underwritten Offering) after notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Partnership shall determine for any reason not to undertake or to delay such Underwritten Offering, the Partnership may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Partnership of such withdrawal at or prior to the time of pricing of such Underwritten Offering. Any Holder may deliver written notice (an “ Opt-Out Notice ”) to the Partnership requesting that such Holder not receive notice from the Partnership of any proposed Underwritten Offering; provided, however , that such Holder may later revoke any such Opt-Out Notice in writing. Following receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the Partnership shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder shall no longer be entitled to participate in Underwritten Offerings by the Partnership pursuant to this Section 2.02(a). The Holders indicated on Schedule A hereto as having opted out shall each be deemed to have delivered an Opt-Out Notice as of the date hereof.

 

(b)                                  Priority .  If the Managing Underwriter or Underwriters of any proposed Underwritten Offering of Common Units included in an Underwritten Offering involving Included Registrable Securities advises the Partnership that the total amount of Common Units that the Selling Holders and any other Persons intend to include in such offering exceeds the number of Common Units that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units, then the Common Units to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter or Underwriters advises the Partnership can be sold without having such adverse effect, with such number to be allocated (i) first, to the Partnership and (ii) second, pro rata among the Selling Holders who have requested participation in such Underwritten Offering and any other holder of securities of

 

5



 

the Partnership having rights of registration that are neither expressly senior nor subordinated to the Registrable Securities (the “ Parity Securities ”). The pro rata allocations for each Selling Holder who has requested participation in such Underwritten Offering shall be the product of (a) the aggregate number of Registrable Securities proposed to be sold in such Underwritten Offering multiplied by (b) the fraction derived by dividing (x) the number of Registrable Securities owned on the Closing Date by such Selling Holder by (y) the aggregate number of Registrable Securities owned on the Closing Date by all Selling Holders plus the aggregate number of Parity Securities owned on the Closing Date by all holders of Parity Securities that are participating in the Underwritten Offering.

 

(c)                                   Termination of Piggyback Registration Rights .  Each Holder’s rights under Section 2.02 shall terminate upon such Holder (together with its Affiliates) ceasing to hold at least $10.0 million of Registrable Securities (based on the Aggregate Purchase Price).

 

SECTION 2.03                                       Delay Rights .

 

(a)                                  Delay Rights .  Notwithstanding anything to the contrary contained herein, the Partnership may, upon written notice to any Selling Holder whose Registrable Securities are included in the Registration Statement or other registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any prospectus which is a part of the Registration Statement or other registration statement contemplated by this Agreement (a “ Blackout Period ”) (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Registration Statement or other registration statement contemplated by this Agreement) if (i) the Partnership is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Partnership determines in good faith that the Partnership’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the Registration Statement or other registration statement contemplated by this Agreement or (ii) the Partnership has experienced some other material non-public event, the disclosure of which at such time, in the good faith judgment of the Partnership, would materially adversely affect the Partnership; provided, however, in no event shall any Blackout Period exceed an aggregate of 60 days in any 180-day period or 105 days in any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Partnership shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the Registration Statement or other registration statement contemplated by this Agreement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

 

(b)                                  Additional Rights to Liquidated Damages .  If (i) the Holders shall be prohibited from selling their Registrable Securities under the Registration Statement as a result of the implementation of a Blackout Period pursuant to Section 2.03(a) of this Agreement in excess of the periods permitted therein or (ii) the Registration Statement is filed and declared effective but, during the Effectiveness Period, shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 60 days by a post-effective amendment to the Registration Statement, a supplement to the prospectus or a report filed with the SEC pursuant to Sections 13(a), 13(c), 14 or l5(d) of the Exchange Act, then, until the suspension is lifted or a post-effective amendment, supplement or report is filed with the SEC, but not including any day

 

6



 

on which a suspension is lifted or such amendment, supplement or report is filed and declared effective, if applicable, the Partnership shall owe the Holders an amount equal to the Liquidated Damages, following (x) the date on which the suspension period exceeded the permitted period under Section 2.03(a) of this Agreement or (y) the 61st day after the Registration Statement ceases to be effective or fails to be useable for its intended purposes, as liquidated damages and not as a penalty. For purposes of this paragraph, a suspension shall be deemed lifted on the date that notice that the suspension has been terminated is delivered to the Selling Holders. Liquidated Damages shall cease to accrue pursuant to this paragraph upon the Purchased Units of such Holder becoming eligible for resale without restriction and, in the event the Partnership is not in compliance with the requirements of Rule 144(c) promulgated under the Securities Act, without the need for current public information, assuming that each Holder is not an Affiliate of the Partnership, and any payment of Liquidated Damages shall be prorated for any period of less than 30 days in which the payment of Liquidated Damages ceases.

 

SECTION 2.04                                       Underwritten Offerings .

 

(a)                                  General Procedures .  In connection with any Underwritten Offering under this Agreement, the Partnership shall be entitled to select the Managing Underwriter or Underwriters. In connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder participates, each Selling Holder and the Partnership shall be obligated to enter into an underwriting agreement that contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Partnership to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations. No Selling Holder shall be required to make any representations or warranties to or agreements with the Partnership or the underwriters other than representations, warranties or agreements regarding such Selling Holder, its authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf the absence of another exemption to the registration requirements under the Securities Act for the securities being registered on its behalf, its intended method of distribution and any other representation required by Law. If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom by notice to the Partnership and the Managing Underwriter; provided, however, that such withdrawal must be made up to and including the time of pricing of such Underwritten Offering. No such withdrawal or abandonment shall affect the Partnership’s obligation to pay Registration Expenses. The Partnership’s management may but shall not be required to participate in a roadshow or similar marketing effort in connection with any Underwritten Offering.

 

(b)                                  No Demand Rights .  Notwithstanding any other provision of this Agreement, no Holder shall be entitled to any “demand” rights or similar rights that would require the Partnership to effect an Underwritten Offering solely on behalf of the Holders.

 

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SECTION 2.05                                       Sale Procedures .

 

In connection with its obligations under this Article II, the Partnership will, as expeditiously as possible:

 

(a)                                  prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement;

 

(b)                                  if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from the Registration Statement and the Managing Underwriter at any time shall notify the Partnership in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of the Underwritten Offering of such Registrable Securities, the Partnership shall use its commercially reasonable efforts to include such information in such prospectus supplement;

 

(c)                                   furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC to the extent not publicly available), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing the Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

 

(d)                                  if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided, however, that the Partnership will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(e)                                   promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the filing of the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement

 

8



 

thereto, and, with respect to such Registration Statement or any other registration statement contemplated by this Agreement or any post-effective amendment thereto, when the same has become effective; and (ii) any written comments from the SEC with respect to any filing referred to in clause (i) and any written request by the SEC for amendments or supplements to the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement thereto;

 

(f)                                    immediately notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which such statement is made); (ii) the issuance or threat of issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or any other registration statement contemplated by this Agreement, or the knowledge of the initiation of any proceedings for that purpose; or (iii) the receipt by the Partnership of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Partnership agrees as promptly as practicable and subject to the procedures set forth under Section 2.03 to amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other commercially reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

 

(g)                                   upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

 

(h)                                  in the case of an Underwritten Offering, furnish the underwriters upon request, (i) an opinion of counsel for the Partnership dated the date of the closing under the underwriting agreement and (ii) a “cold comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified the Partnership’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Partnership and such other matters as such underwriters and Selling Holders may reasonably request;

 

9



 

(i)                                      otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

 

(j)                                     make available to the appropriate representatives of the Selling Holders access to such information and Partnership personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided , that the Partnership need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Partnership;

 

(k)                                  cause all such Registrable Securities registered pursuant to this Agreement to be listed on the NYSE;

 

(l)                                      use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Partnership to enable the Selling Holders to consummate the disposition of such Registrable Securities;

 

(m)                              provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

 

(n)                                  enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders in order to expedite or facilitate the disposition of such Registrable Securities; and

 

(o)                                  if requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment.

 

The Partnership will not name a Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act in any Registration Statement without such Holder’s consent. If the staff of the SEC requires the Partnership to name any Holder as an underwriter as defined in Section 2(a)(11) of the Securities Act, and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the Registration Statement, such Holder shall no longer be entitled to receive Liquidated Damages under this Agreement with respect thereto and the Partnership shall have no further obligations hereunder with respect to Registrable Securities held by such Holder.

 

Each Selling Holder, upon receipt of notice from the Partnership of the happening of any event of the kind described in subsection (f) of this Section 2.05, shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus

 

10



 

contemplated by subsection (f) of this Section 2.05 or until it is advised in writing by the Partnership that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Partnership, such Selling Holder will, or will request the managing underwriter or underwriters, if any, to deliver to the Partnership (at the Partnership’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

SECTION 2.06                                       Cooperation by Holders .  The Partnership shall have no obligation to include in the Registration Statement, or in an Underwritten Offering pursuant to Section 2.02(a) or Section 2.03(a), Common Units of a Selling Holder who has failed to timely furnish such information that the Partnership determines, after consultation with counsel, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

 

SECTION 2.07                                       Restrictions on Public Sale by Holders of Registrable Securities .  Each Holder of Registrable Securities agrees to enter into a customary letter agreement with underwriters providing such Holder will not effect any public sale or distribution of Registrable Securities during the 60 calendar day period beginning on the date of a prospectus or prospectus supplement filed with the SEC with respect to the pricing of any Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Partnership or the officers, directors or any other Affiliate of the Partnership on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.07 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder. In addition, this Section 2.07 shall not apply to any Holder that is not entitled to participate in such Underwritten Offering, whether because such Holder delivered an Opt-Out Notice prior to receiving notice of the Underwritten Offering or because such Holder holds less than $10.0 million of the then-outstanding Registrable Securities.

 

SECTION 2.08                                       Expenses .

 

(a)                                  Expenses .  The Partnership will pay all reasonable Registration Expenses as determined in good faith, including, in the case of an Underwritten Offering, the reasonable Registration Expenses of an Underwritten Offering regardless of whether any sale is made pursuant to such Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. In addition, except as otherwise provided in Section 2.09 hereof, the Partnership shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

 

(b)                                  Certain Definitions .  “ Registration Expenses ” means all expenses incident to the Partnership’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Registration Statement pursuant to Section 2.01 or an Underwritten Offering covered under this Agreement, and the disposition of such securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws

 

11



 

(other than fees and expenses of counsel to the Managing Underwriter in connection with an Underwritten Offering), fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, any transfer taxes and the fees and disbursements of counsel to the Partnership and independent public accountants for the Partnership, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance.  “ Selling Expenses ” means all underwriting fees, discounts and selling commissions or similar fees or arrangements allocable to the sale of the Registrable Securities.

 

SECTION 2.09                                       Indemnification .

 

(a)                                  By the Partnership .  In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Partnership will indemnify and hold harmless each Selling Holder thereunder, its directors, officers, employees and agents, and each Person, if any, who controls such Selling Holder within the meaning of the Securities Act and the Exchange Act, and its directors, officers, employees or agents (collectively, the “ Selling Holder Indemnified Persons ”), against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances in which such statement is made) contained in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings; provided, however, that the Partnership will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in the Registration Statement or such other registration statement contemplated by this Agreement, or any preliminary prospectus, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereto, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

 

(b)                                  By Each Selling Holder .  Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Partnership, the General Partner, its directors, officers, employees and agents and each Person, if any, who controls the Partnership within the meaning of the Securities Act or of the Exchange Act, and its directors, officers, employees and agents, to the same extent as the foregoing indemnity from the Partnership to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Registration Statement or any other

 

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registration statement contemplated by this Agreements, or any preliminary prospectus, free writing prospectus or final prospectus contained therein, or any amendment or supplement thereto or, in the case of an omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, if and to the extent that a Selling Holder failed to provide any information requested by the Partnership in writing for inclusion in the Registration Statement or such other registration statement contemplated by this Agreement; provided, however , that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

 

(c)                                   Limitation on Damages .  Notwithstanding anything to the contrary in this Agreement, in no event shall any party hereunder be entitled to recovery of or indemnification for any special, consequential (including lost profits) or punitive damages.

 

(d)                                  Notice .  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.08. In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party.

 

(e)                                   Contribution .  If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or

 

13



 

payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however , that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

 

(f)                                    Other Indemnification .  The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.

 

SECTION 2.10                                       Rule 144 Reporting .  With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Partnership agrees to use its commercially reasonable efforts, until the disposition by the Selling Holders of all Common Units purchased under the Purchase Agreement, including any Common Units issued by the Partnership hereunder as a payment of Liquidated Damages in kind, to:

 

(a)                                  Make and keep public information regarding the Partnership available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

 

(b)                                  File with the SEC in a timely manner all reports and other documents required of the Partnership under the Securities Act and the Exchange Act at all times from and after the date hereof; and

 

(c)                                   So long as a Holder owns any Registrable Securities, furnish, unless otherwise available on EDGAR, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Partnership, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing such Holder to sell any such securities without registration.

 

14



 

SECTION 2.11                                       Transfer or Assignment of Registration Rights .  The rights to cause the Partnership to register Registrable Securities granted to the Purchasers by the Partnership under this Article II may be transferred or assigned by any Purchaser to one or more transferee(s) or assignee(s) of such Registrable Securities; provided, however, that (a) unless such transferee is an Affiliate of such Purchaser, each such transferee or assignee holds Registrable Securities representing at least $10.0 million of the Purchased Units, based on the Purchase Price per Common Unit under the Purchase Agreement, (b) the Partnership is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee assumes in writing responsibility for its portion of the obligations of such Purchaser under this Agreement.

 

SECTION 2.12                                       Limitation on Subsequent Registration Rights .  From and after the date hereof, the Partnership shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities, enter into any agreement with any current or future holder of any equity securities of the Partnership that would allow such current or future holder to require the Partnership to include equity securities in any registration statement filed by the Partnership on a basis that is superior in any way to the piggyback rights granted to the Purchasers hereunder.

 

ARTICLE III
MISCELLANEOUS

 

SECTION 3.01                                       Communications .  All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

 

(a)                                  if to Purchaser, to the address set forth in Schedule 8.06 to the Purchase Agreement;

 

(b)                                  if to a transferee of Purchaser, to such Holder at the address provided pursuant to Section 2.10 above; and

 

(c)                                   if to the Partnership at 6120 S. Yale Avenue, Suite 700, Tulsa, Oklahoma 74136 (facsimile: (918) 492-0990).

 

All such notices and communications shall be deemed to have been received at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or sent via Internet electronic mail; and when actually received, if sent by courier service or any other means.

 

SECTION 3.02                                       Successor and Assigns .  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

 

SECTION 3.03                                       Assignment of Rights .  All or any portion of the rights and obligations of any Purchaser under this Agreement may be transferred or assigned by such Purchaser in accordance with Section 2.11 hereof.

 

15



 

SECTION 3.04                                       Recapitalization, Exchanges, Etc. Affecting the Common Units .  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, unit splits, recapitalizations, pro rata distributions of units and the like occurring after the date of this Agreement.

 

SECTION 3.05                                       Specific Performance .  Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

 

SECTION 3.06                                       Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, including facsimile or .pdf counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

 

SECTION 3.07                                       Headings .  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

SECTION 3.08                                       Governing Law . This agreement shall be construed in accordance with and governed by the laws of the State Of New York.

 

SECTION 3.09                                       Severability of Provisions .  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 3.10                                       Entire Agreement .  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by the Partnership set forth herein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.

 

SECTION 3.11                                       Amendment .  This Agreement may be amended only by means of a written amendment signed by the Partnership and the Holders of a majority of the then

 

16



 

outstanding Registrable Securities; provided, however , that no such amendment shall materially and adversely affect the rights of any Holder hereunder without the consent of such Holder.

 

SECTION 3.12                                       No Presumption .  If any claim is made by a party relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

 

SECTION 3.13                                       Aggregation of Purchased Units .  All Purchased Units held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

 

SECTION 3.14                                       Interpretation .  Article and Section references to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any determination, consent or approval is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified.

 

SECTION 3.15                                       Independent Nature of Purchaser’s Obligations .  The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. Nothing contained herein, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

 

SECTION 3.16                                       Obligations Limited to Parties to Agreement .  Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Purchasers shall have any obligation hereunder and that, notwithstanding that one or more of the Purchasers may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchaser or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise by incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the Purchasers or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the

 

17



 

Purchasers under this Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation, except in each case for any transferee or assignee of a Purchaser hereunder.

 

(Signature pages to follow)

 

18



 

IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

 

 

By:

NGL Energy Holdings LLC,

 

 

 

its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ H. Michael Krimbill

 

 

Name:

H. Michael Krimbill

 

 

Title:

Chief Executive Officer

 

Signature Page to

Registration Rights Agreement

 



 

 

 

CLEARBRIDGE ENERGY MLP TOTAL RETURN FUND INC.

 

 

CLEARBRIDGE ENERGY MLP OPPORTUNITY FUND INC.

 

 

 

 

 

By:

ClearBridge Investments, LLC,

 

 

 

as the Discretionary Investment Adviser

 

 

 

 

 

 

 

 

 

 

By:

/s/ Terrence Murphy

 

 

Name:

Terrence Murphy

 

 

Title:

CEO

 

Signature Page to

Registration Rights Agreement

 



 

 

 

OPPENHEIMER STEELPATH MLP ALPHA FUND

 

 

 

 

 

 

 

 

By:

/s/ Stuart Cartner

 

 

Name:

Stuart Cartner

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

OPPENHEIMER STEELPATH MLP ALPHA PLUS FUND

 

 

 

 

 

 

 

 

By:

/s/ Stuart Cartner

 

 

Name:

Stuart Cartner

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

OPPENHEIMER STEELPATH MLP INCOME FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

AIC/CORNERSTONE ADVISORS INCOME OPPORTUNITIES FUND-STEELPATH-209780

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

Signature Page to

Registration Rights Agreement

 



 

 

 

OPPENHEIMER STEELPATH MLP SELECT 40 FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

OPPENHEIMER STEELPATH MLP MASTER FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

Signature Page to

Registration Rights Agreement

 



 

 

 

AT MLP FUND, LLC

 

 

 

 

 

 

 

 

By:

/s/ Chris Linder

 

 

Name:

Chris Linder

 

 

Title:

Vice President

 

Signature Page to

Registration Rights Agreement

 



 

 

 

EAGLE INCOME APPRECIATION PARTNERS, L.P.

 

 

 

 

 

By:

Eagle Income Appreciation GP, LLC,

 

 

 

its General Partner

 

 

 

 

 

 

By:

Eagle Global Advisors, LLC,

 

 

 

its Managing Member

 

 

 

 

 

 

 

 

 

 

By:

/s/ Steven S. Russo

 

 

Name:

Steven S. Russo

 

 

Title:

Senior Partner, Managing Member

 

 

 

 

 

 

EAGLE INCOME APPRECIATION II, L.P.

 

 

 

 

 

By:

Eagle Income Appreciation GP, LLC,

 

 

 

its General Partner

 

 

 

 

 

 

By:

Eagle Global Advisors, LLC,

 

 

 

its Managing Member

 

 

 

 

 

 

 

 

 

 

By:

/s/ Steven S. Russo

 

 

Name:

Steven S. Russo

 

 

Title:

Senior Partner, Managing Member

 

Signature Page to

Registration Rights Agreement

 



 

 

 

SALIENT MLP FUND, L.P.

 

 

OHIO POLICE AND FIRE PENSION FUND

 

 

COMMONWEALTH OF PENNSYLVANIA PUBLIC SCHOOL EMPLOYEES’ RETIREMENT SYSTEM

 

 

SALIENT MLP & ENERGY INFRASTRUCTURE FUND

 

 

SALIENT MIDSTREAM & MLP FUND

 

 

SALIENT MLP & ENERGY INFRASTRUCTURE FUND II

 

 

SALIENT MLP TOTAL RETURN FUND, L.P.

 

 

 

 

 

 

By:

Salient Capital Advisors LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gregory A. Reid

 

 

Name:

Gregory A. Reid

 

 

Title:

Managing Director

 

Signature Page to

Registration Rights Agreement

 



 

 

 

HARVEST MLP INCOME FUND LLC

 

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

 

Name:

Anthony Merhige

 

 

Title:

Officer

 

 

 

 

 

 

 

 

 

 

HARVEST MLP INCOME FUND III LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

 

Name:

Anthony Merhige

 

 

Title:

Officer

 

 

 

 

 

 

 

 

 

 

HARVEST ENERGY FUND LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

 

Name:

Anthony Merhige

 

 

Title:

Officer

 

Signature Page to

Registration Rights Agreement

 



 

 

 

THE CUSHING MLP TOTAL RETURN FUND

 

 

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

 

 

 

 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jerry V. Swank

 

 

Name:

Jerry V. Swank

 

 

Title:

Managing Member

 

 

 

 

 

 

THE CUSHING MLP PREMIER FUND

 

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

 

 

 

 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jerry V. Swank

 

 

Name:

Jerry V. Swank

 

 

Title:

Managing Member

 

 

 

 

 

 

CUSHING SCS MLP FUND, LP

 

 

 

 

 

By:

Cushing MLP Asset Management, LP, its general partner

 

 

 

 

 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jerry V. Swank

 

 

Name:

Jerry V. Swank

 

 

Title:

Managing Member

 

Signature Page to

Registration Rights Agreement

 



 

 

 

TEACHER’S RETIREMENT SYSTEM OF OKLAHOMA

 

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

 

 

 

 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jerry V. Swank

 

 

Name:

Jerry V. Swank

 

 

Title:

Managing Member

 

 

 

 

 

 

CITY OF NEW HAVEN CITY EMPLOYEES RETIREMENT FUND

 

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

 

 

 

 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jerry V. Swank

 

 

Name:

Jerry V. Swank

 

 

Title:

Managing Member

 

Signature Page to

Registration Rights Agreement

 



 

 

 

COHEN & STEERS INFRASTRUCTURE FUND, INC.

 

 

 

 

 

 

 

 

By:

/s/ Robert Becker

 

 

Name:

Robert Becker

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

COHEN & STEERS MLP INCOME AND ENERGY OPPORTUNITY FUND, INC.

 

 

 

 

 

 

 

 

By:

/s/ Robert Becker

 

 

Name:

Robert Becker

 

 

Title:

Vice President

 

Signature Page to

Registration Rights Agreement

 



 

 

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Mary R. Linehan

 

 

Name:

Mary R. Linehan

 

 

Title:

Managing Director

 

Signature Page to

Registration Rights Agreement

 


Exhibit 10.1

 

COMMON UNIT

 

PURCHASE AGREEMENT

 

DATED NOVEMBER 5, 2013

 

BY AND AMONG

 

NGL ENERGY PARTNERS LP

 

AND

 

THE PURCHASERS NAMED ON SCHEDULE A HERETO

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

3

 

 

SECTION 1.01

Definitions

3

SECTION 1.02

Accounting Procedures and Interpretation

7

 

 

 

ARTICLE II SALE AND PURCHASE

7

 

 

SECTION 2.01

Sale and Purchase

7

SECTION 2.02

Funding Notice

7

SECTION 2.03

Closing

7

SECTION 2.04

Independent Nature of Purchasers’ Obligations and Rights

8

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

8

 

 

SECTION 3.01

Existence

8

SECTION 3.02

Capitalization

9

SECTION 3.03

Subsidiaries

9

SECTION 3.04

SEC Documents

10

SECTION 3.05

Independent Accountants

10

SECTION 3.06

Internal Accounting Controls

11

SECTION 3.07

Litigation

11

SECTION 3.08

No Material Adverse Change

11

SECTION 3.09

No Conflicts

11

SECTION 3.10

Authority

12

SECTION 3.11

Approvals

12

SECTION 3.12

Compliance with Law

12

SECTION 3.13

Valid Issuance

12

SECTION 3.14

No Preemptive Rights

13

SECTION 3.15

MLP Status

13

SECTION 3.16

Investment Company Status

13

SECTION 3.17

No Registration Required

13

SECTION 3.18

No Integration

13

SECTION 3.19

Certain Fees

13

SECTION 3.20

No Side Agreements

13

SECTION 3.21

Form S-3 Eligibility

13

SECTION 3.22

Absence of Price Manipulation

13

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

14

 

 

SECTION 4.01

Valid Existence

14

SECTION 4.02

No Consents; Violations, Etc.

14

SECTION 4.03

Investment

14

SECTION 4.04

Nature of Purchaser

14

SECTION 4.05

Receipt of Information

15

SECTION 4.06

Restricted Securities

15

SECTION 4.07

Certain Fees

15

SECTION 4.08

Domestic Jurisdiction

15

 

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SECTION 4.09

Legend

15

SECTION 4.10

Reliance on Exemptions

15

SECTION 4.11

Authority

16

SECTION 4.12

No Side Agreements

16

 

 

 

ARTICLE V COVENANTS

16

 

 

SECTION 5.01

Taking of Necessary Action

16

SECTION 5.02

Return of Proceeds

16

SECTION 5.03

Disclosure; Public Filings

16

SECTION 5.04

NYSE Listing Application

17

SECTION 5.05

Purchaser Lock-Up

17

SECTION 5.06

Subsequent Offerings

17

SECTION 5.07

Certain Special Allocations of Book and Taxable Income

17

SECTION 5.08

Partnership Fees

18

SECTION 5.09

Purchaser Fees

18

SECTION 5.10

Use of Proceeds

18

 

 

 

ARTICLE VI CLOSING CONDITIONS

18

 

 

SECTION 6.01

Conditions to the Closing

18

SECTION 6.02

Partnership Deliveries

20

SECTION 6.03

Purchaser Deliveries

20

 

 

 

ARTICLE VII INDEMNIFICATION, COSTS AND EXPENSES

21

 

 

SECTION 7.01

Indemnification by the Partnership

21

SECTION 7.02

Indemnification by Purchasers

21

SECTION 7.03

Indemnification Procedure

22

 

 

 

ARTICLE VIII MISCELLANEOUS

22

 

 

 

SECTION 8.01

Interpretation

22

SECTION 8.02

Survival of Provisions

23

SECTION 8.03

No Waiver; Modifications in Writing

23

SECTION 8.04

Binding Effect; Assignment

24

SECTION 8.05

Communications

24

SECTION 8.06

Removal of Legend

25

SECTION 8.07

Entire Agreement

25

SECTION 8.08

Governing Law

25

SECTION 8.09

Execution in Counterparts

25

SECTION 8.10

Termination

26

SECTION 8.11

Recapitalization, Exchanges, Etc.

26

 

Schedules and Exhibits :

 

Schedule A

List of Purchasers and Commitment Amounts

Schedule 8.05

Notice and Contact Information

Exhibit A

Form of Registration Rights Agreement

Exhibit B

Form of General Partner Officer’s Certificate

Exhibit C

Form of Purchaser’s Officer’s Certificate

Exhibit D

Form of Andrews Kurth LLP Legal Opinion

Exhibit E

Form of Instruction and Representation Letter

 

ii



 

COMMON UNIT PURCHASE AGREEMENT

 

COMMON UNIT PURCHASE AGREEMENT dated November 5, 2013 (this “ Agreement ”), by and among NGL Energy Partners LP, a Delaware limited partnership (the “ Partnership ”), and each of the Purchasers listed in Schedule A attached hereto (each referred to herein as a “ Purchaser ” and collectively, the “ Purchasers ”).

 

WHEREAS, the Partnership desires to issue and sell to the Purchasers, and each Purchaser desires to purchase from the Partnership, certain common units representing limited partnership interests in the Partnership (“ Common Units ”) in accordance with the provisions of this Agreement; and

 

WHEREAS, the Partnership and the Purchasers will enter into a registration rights agreement (the “ Registration Rights Agreement ”), substantially in the form attached hereto as Exhibit A , pursuant to which the Partnership will provide the Purchasers with certain registration rights with respect to the Common Units to be issued and sold to the Purchasers pursuant to this Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partnership and each of the Purchasers, severally and not jointly, hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

SECTION 1.01                                       Definitions .  As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

 

8-K Filing ” has the meaning given to such term in Section 5.03.

 

Acquisition ” means the acquisition by the Partnership from Gavilon Energy Intermediate, LLC, a Delaware limited liability company, of all of the equity interests of Gavilon, LLC, a Delaware limited liability company, pursuant to the Acquisition Agreement.

 

Acquisition Agreement ” means the Equity Interest Purchase Agreement dated as of November 5, 2013 by and among the Partnership, High Sierra Energy, LP, a Delaware limited partnership, Gavilon, LLC, a Delaware limited liability company, and Gavilon Energy Intermediate, LLC, a Delaware limited liability company.

 

Action ” against a Person means any lawsuit, action, proceeding, investigation or complaint before any Governmental Authority, mediator or arbitrator.

 

Affiliate ” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, “ controlling ,” “ controlled by ,” and “ under common control with ”) means the power to direct or cause the direction of the management and policies

 

3



 

of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

Aggregate Purchase Price ” means, with respect to each Purchaser, the dollar amount set forth opposite such Purchaser’s name under the heading “ Purchase Price ” on Schedule A hereto, as adjusted in accordance with Section 8.11, if applicable; provided , that in no event will the Aggregate Purchase Price applicable to such Purchaser be increased without the prior written consent of such Purchaser.

 

Agreement ” has the meaning given to such term in the introductory paragraph hereof.

 

Anticipated Closing Date ” has the meaning given to such term in Section 2.02.

 

Business Day ” means any day other than (i) a Saturday or Sunday or (ii) a day on which banks located in New York, New York are authorized or obligated to close.

 

Closing ” means the consummation of the purchase and sale of the Purchased Units hereunder.

 

Closing Date ” has the meaning given to such term in Section 2.02.

 

Common Units ” has the meaning given to such term in the recitals to this Agreement.

 

Credit Agreement ” shall mean the Credit Agreement, dated as of June 19, 2012, by and among the Operating Company, the other subsidiary borrowers party thereto, the Partnership, as guarantor, Deutsche Bank Securities, as administrative agent, and the other financial institutions party thereto, as amended to date.

 

Delaware LLC Act ” means the Delaware Limited Liability Company Act.

 

Delaware LP Act ” means the Delaware Revised Uniform Limited Partnership Act.

 

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

 

Funding Notice ” has the meaning given to such term in Section 2.02.

 

GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time.

 

General Partner ” means NGL Energy Holdings LLC, a Delaware limited liability company and the general partner of the Partnership.

 

Governmental Authority ” shall include the country, state, county, city and political subdivisions in which any Person or such Person’s Property is located or which exercises valid jurisdiction over any such Person or such Person’s Property, and any court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authorities that exercise valid jurisdiction over any such Person or such Person’s Property. Unless otherwise

 

4



 

specified, all references to Governmental Authority herein shall mean a Governmental Authority having jurisdiction over, where applicable, any of the Partnership Entities or their Properties.

 

Incentive Distribution Rights ” has the meaning given to such term in the Partnership Agreement.

 

Indemnified Party ” has the meaning given to such term in Section 7.03.

 

Indemnifying Party ” has the meaning given to such term in Section 7.03.

 

Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended.

 

Law ” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

 

Lien ” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.

 

LTIP ” means the NGL Energy Partners LP 2011 Long-Term Incentive Plan.

 

NYSE ” means The New York Stock Exchange.

 

Operating Company ” means NGL Energy Operating LLC.

 

Outstanding ” has the meaning given to such term in the Partnership Agreement.

 

Partnership ” has the meaning given to such term in the introductory paragraph.

 

Partnership Agreement ” means the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of May 10, 2011, as amended to date and as it may be further amended from time to time.

 

Partnership Bank Account ” means the bank account designated as such by Partnership pursuant to the Funding Notice.

 

Partnership Entities ” means the Partnership and its Subsidiaries.

 

Partnership Material Adverse Effect ” means any material and adverse effect on (i) on the legality, validity or enforceability of any Transaction Document, (ii) the financial condition, business, assets or results of operations of the Partnership Entities, considered as a single enterprise or (iii) the ability of the Partnership perform its obligations under the Transaction Agreements in full on a timely basis. Notwithstanding the foregoing, a “Partnership Material Adverse Effect” shall not include any effect resulting or arising from: (a) any change in general economic conditions in the industries or markets in which any of the Partnership Entities operate that do not have a disproportionate effect on the Partnership Entities, considered as a single

 

5



 

enterprise; (b) any engagement in hostilities pursuant to a declaration of war, or the occurrence of any military or terrorist attack; (c) changes in GAAP or other accounting principles, except to the extent such change has a disproportionate effect on the Partnership Entities, considered as a single enterprise; or (d) the consummation of the transactions contemplated hereby.

 

Partnership Related Parties ” has the meaning given to such term in Section 7.02.

 

Party ” or “ Parties ” means the Partnership and the Purchasers party to this Agreement, individually or collectively, as the case may be.

 

Per Unit Capital Amount ” has the meaning given to such term in the Partnership Agreement.

 

Per Unit Price ” means $29.59, as adjusted in accordance with Section 8.11, if applicable.

 

Person ” means any individual, corporation, company, voluntary association, partnership, joint venture, trust, limited liability company, unincorporated organization or government or any agency, instrumentality or political subdivision thereof, or any other form of entity.

 

Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

Purchased Units ” means, with respect to each Purchaser, the number of Common Units equal to the quotient determined by dividing (i) the Aggregate Purchase Price set forth opposite such Purchaser’s name under the heading “Purchase Price” on Schedule A hereto by (ii) the Per Unit Price.

 

Purchaser ” and “ Purchasers ” have the meaning given to such term in the introductory paragraph of this Agreement.

 

Purchaser Material Adverse Effect ” means any material and adverse effect on the ability of a Purchaser to perform its obligations under the Transaction Agreements on a timely basis.

 

Purchaser Related Parties ” has the meaning given to such term in Section 7.01.

 

Purchasers ” has the meaning given to such term in the introductory paragraph of this Agreement.

 

Registration Rights Agreement ” has the meaning given to such term in the recitals to this Agreement.

 

Representatives ” of any Person means the Affiliates, control persons, officers, directors, employees, agents, counsel, investment bankers and other representatives of such Person.

 

SEC ” means the United States Securities and Exchange Commission.

 

SEC Documents ” has the meaning given to such term in Section 3.04.

 

6



 

Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

 

Subordinated Units ” has the meaning given to such term in the Partnership Agreement.

 

Subsidiary ” means, as to any Person, any corporation or other entity of which at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation or other entity is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries.

 

Transaction Agreements ” means, collectively, this Agreement, the Registration Rights Agreement and any amendments, supplements, continuations or modifications thereto.

 

Unitholders ” has the meaning given to such term in the Partnership Agreement.

 

Unrealized Gain ” has the meaning given to such term in the Partnership Agreement.

 

SECTION 1.02                                       Accounting Procedures and Interpretation .  Unless otherwise specified in this Agreement, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters under this Agreement shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Purchasers under this Agreement shall be prepared, in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, as permitted by Form 10-Q promulgated by the SEC) and in compliance as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto.

 

ARTICLE II
SALE AND PURCHASE

 

SECTION 2.01                                       Sale and Purchase .  Subject to the terms and conditions hereof, the Partnership will issue and sell to each Purchaser on the Closing Date, and each Purchaser hereby agrees, severally and not jointly, to purchase from the Partnership on the Closing Date, such Purchaser’s respective Purchased Units as set forth on Schedule A hereto.

 

SECTION 2.02                                       Funding Notice .  On or prior to the fifth Business Day prior to the date on which the Partnership reasonably anticipates the Closing to occur (the “ Anticipated Closing Date ”), the Partnership shall deliver a written notice (the “ Funding Notice ”) to each of the Purchasers (a) specifying the Anticipated Closing Date, (b) directing such Purchaser to pay the Aggregate Purchase Price for its Purchased Units by wire transfer(s) of immediately available funds to the Partnership Bank Account, prior to 10:00 a.m. Central Time on the Anticipated Closing Date and (c) specifying wiring instructions for wiring funds into the Partnership Bank Account.

 

SECTION 2.03                                       Closing .  Subject to the terms and conditions hereof, the Closing shall take place at the offices of Andrews Kurth LLP, 600 Travis, Suite 4200, Houston, Texas 77002 or such other location as mutually agreed to by the parties, and upon the later to occur of (i) the first Business Day on which the satisfaction or waiver of the conditions set forth in Sections

 

7



 

6.01(a), 6.01(b) and 6.01(c) has occurred (other than those conditions that are by their terms to be satisfied at the Closing) or (ii) the closing of the Acquisition; provided , that if such later event is the closing of the Acquisition, then the Closing shall occur concurrently therewith (the date of such Closing, the “ Closing Date ”).

 

SECTION 2.04                                       Independent Nature of Purchasers’ Obligations and Rights .  The respective representation, warranties and obligations of each Purchaser under the Transaction Agreements are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the representation and warranties or the performance of the obligations of any other Purchaser under any Transaction Agreement. The failure or waiver of performance under any Transaction Agreement by any Purchaser, or on its behalf, does not excuse performance by any other Purchaser. Nothing contained in any Transaction Agreement, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Agreements. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the Registration Rights Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The failure or waiver of performance by any Purchaser does not excuse performance by any other Purchaser.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

 

The Partnership represents and warrants to the Purchasers that the representations and warranties set forth in this Article III are true and correct as of the date of this Agreement.  Subject to delivery by the Partnership of the Officer’s Certificate contemplated by Section 6.02(c), the Partnership represents and warrants to the Purchasers as of the Closing Date that (a) the following representations and warranties that are qualified by materiality or Partnership Material Adverse Effect are true and correct as of such date and (b) all other representations and warranties are true and correct in all material respects as of such date.

 

SECTION 3.01                                       Existence .  The General Partner and each of the Partnership Entities has been duly formed and is validly existing and in good standing under the laws of the State or other jurisdiction of its organization and has the requisite power and authority, and has all governmental licenses, authorizations, consents and approvals necessary, to own, lease, use or operate its Properties and carry on its business as now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not be reasonably likely to have a Partnership Material Adverse Effect.  The General Partner and each of the Partnership Entities is duly qualified or licensed and in good standing as a foreign corporation, limited partnership, limited liability company or unlimited liability company, as applicable, and is authorized to do business in each jurisdiction in which the ownership or leasing of its Properties or the character of its operations makes such qualification necessary, except where the failure to obtain such qualification, license, authorization or good standing would not be reasonably likely to have a Partnership Material Adverse Effect.

 

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SECTION 3.02                                       Capitalization .

 

(a)                                  The Purchased Units shall have those rights, preferences, privileges and restrictions governing the Common Units as reflected in the Partnership Agreement.

 

(b)                                  The General Partner is the sole general partner of the Partnership and owns a 0.1% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and the General Partner owns such general partner interest free and clear of any Liens, except for such Liens as may be imposed pursuant to the Credit Agreement.

 

(c)                                   As of November 4, 2013, the issued and outstanding limited partner interests of the Partnership consist of 66,650,735 Common Units, 5,919,346 Subordinated Units, and the Incentive Distribution Rights.  All of the outstanding limited partner interests have been duly authorized and validly issued in accordance with applicable Law and the Partnership Agreement and are fully paid (to the extent required under applicable Law and the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).

 

(d)                                  Except as have been granted under the LTIP or the Partnership Agreement, no options, warrants, preemptive rights or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, securities or ownership interests in the Partnership are outstanding on the date of this Agreement and there are no outstanding obligations of the Partnership to repurchase, redeem or otherwise acquire ownership interests in the Partnership.

 

(e)                                   The Partnership’s currently outstanding Common Units are registered pursuant to Section 12(b) of the Exchange Act are quoted on the NYSE, and the Partnership has taken no action designed to terminate the registration of the Common Units under the Exchange Act nor has the Partnership received any notification that the SEC is contemplating terminating such registration. The Partnership has not, in the 12 months preceding the date hereof, received written notice from the NYSE to the effect that the Partnership is not in compliance with the listing or maintenance requirements of the NYSE.  The Partnership is, and has no reason to believe that it will not continue to be, in compliance in all material respects with the listing and maintenance requirements for continued trading of the Common Units on the NYSE.

 

SECTION 3.03                                       Subsidiaries .  All of the issued and outstanding equity interests of each of the Partnership’s Subsidiaries are owned, directly or indirectly, by the Partnership free and clear of any Liens (except for such restrictions as may exist under applicable Law and except for such Liens as may be imposed pursuant to the Credit Agreement), and all such ownership interests have been duly authorized, validly issued and are fully paid (to the extent required by applicable Law and the organizational documents of such Subsidiaries) and non-assessable (except as nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act and Sections 18-607 and 18-804 of the Delaware LLC Act, as applicable, or the organizational documents of such Subsidiaries).

 

9



 

SECTION 3.04                                       SEC Documents .  The Partnership has filed with the SEC all reports, schedules and statements required to be filed by it under the Exchange Act on a timely basis since October 1, 2012 (all such documents, collectively, the “ SEC Documents ”). The SEC Documents, including any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed, (i) complied as to form in all material respects with applicable requirements of the Exchange Act and the applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (ii) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and (iii) fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of the Partnership as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended.  A true and correct copy of the Partnership Agreement has been filed with the SEC as an exhibit to an SEC Document.

 

SECTION 3.05                                       Independent Accountants .

 

(a)                                  Grant Thornton LLP, who certified (i) the audited consolidated financial statements of the Partnership and subsidiaries as of March 31, 2013 and 2012 and for the years ended March 31, 2013 and March 31, 2012 and the six-month period ended March 31, 2011 and (ii) the audited consolidated financial statements of NGL Supply, Inc. for the six-month period ended September 30, 2010, are independent public accountants as required by the Securities Act, the rules and regulations of the SEC thereunder (the “ Securities Act Regulations ”) and the standards of the Public Company Accounting Oversight Board.

 

(b)                                  Grant Thornton LLP, who issued an unqualified audit report on the consolidated financial statements of High Sierra Energy GP, LLC and subsidiaries as of December 31, 2011 and for the three years in the period then ended, are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the American Institute of Certified Public Accountants (the “ AICPA ”).

 

(c)                                   Graham Shepherd, PC, who issued an unqualified audit report on the combined financial statements of Osterman Associated Companies contributed to the Partnership as of September 30, 2011 and 2010 and for each of the three years in the period ended September 30, 2011, are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the AICPA.

 

(d)                                  BDO USA, LLP, who issued an unqualified audit report on the combined financial statements of SemStream, L.P. Non-Residential Division as of December 31, 2010 and for each of the three years in the period ended December 31, 2010, are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the AICPA.  (v) EKS&H, LLP, who issued an unqualified audit report on the combined financial statements of Pecos Gathering and Marketing, L.L.C., Transwest Leasing, LLC, Black Hawk Gathering, L.L.C., Midstream Operations, LLC, Toro Operating Company, Inc. and Striker Oilfield Services, LLC as of September 30, 2012 and for the nine months ended September 30, 2012 and 2011, are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the AICPA.

 

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(e)                                   Roloff, Hnatek & Co., L.L.P., who issued an unqualified audit report on the financial statements of Third Coast Towing, LLC as of December 31, 2011 and for the two years then ended, are independent public accountants as required by the Securities Act, the Securities Act Regulations and the standards of the AICPA.

 

SECTION 3.06                                       Internal Accounting Controls .  The Partnership Entities maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Partnership is not aware of any failures of such internal accounting controls.

 

SECTION 3.07                                       Litigation .  There are no legal or governmental proceedings pending to which any Partnership Entity is a party or to which any of their Properties is subject that would reasonably be expected to have, individually or in the aggregate, a Partnership Material Adverse Effect or which challenges the validity of any of the Transaction Agreements or the right of the Partnership to enter into the Transaction Agreements or to consummate the transactions contemplated thereby and, to the knowledge of the Partnership, no such proceedings are threatened by Governmental Authorities or others.

 

SECTION 3.08                                       No Material Adverse Change .  Since March 31, 2013, except as disclosed in the SEC Documents, the Partnership Entities, considered as a single enterprise, have conducted their business in the ordinary course, consistent with past practice, and there has been no (i) Partnership Material Adverse Effect or any change, effect, event or development that individually or in the aggregate has had or could reasonably be expected to have a Partnership Material Adverse Effect, (ii) acquisition or disposition of any material asset by any of the Partnership Entities or any contract or arrangement therefor, otherwise than for fair value in the ordinary course of business, (iii) material change in the Partnership’s accounting principles, practices or methods or (iv) incurrence of material indebtedness.

 

SECTION 3.09                                       No Conflicts .  None of (i) the offering, issuance and sale by the Partnership of the Purchased Units and the application of the proceeds therefrom, (ii) the execution, delivery and performance of the Transaction Agreements by the Partnership and (iii) the consummation of the transactions contemplated hereby, (a) requires any consent, approval or notice under, or constitutes or will constitute a violation or breach of, the Partnership Agreement or the limited liability company agreement of the General Partner currently in effect, (b) constitutes or will constitute a violation or breach of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default or give rise to any right of termination, cancellation or acceleration) under, any note, bond, mortgage, lease, loan or credit agreement or other instrument, obligation or agreement to which any of the Partnership Entities is a party or by which any of them or any of their respective Properties may be bound, (c) violates or will violate any provision of any Law or any order, judgment or decree of any court or Governmental Authority having jurisdiction over any of the Partnership Entities or their Properties or (d) results or will result in the creation or imposition of any Lien upon any Properties of any of the

 

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Partnership Entities, except in the cases of clauses (b), (c) and (d) where such violation, breach, default or Lien, would not, individually or in the aggregate, reasonably be expected to have a Partnership Material Adverse Effect.

 

SECTION 3.10                                       Authority .  The Partnership has all necessary limited partnership power and authority to execute, deliver and perform its obligations under the Transaction Agreements and to consummate the transactions contemplated thereby; the execution, delivery and performance by the Partnership of the Transaction Agreements and the consummation of the transactions contemplated thereby have been duly authorized by all necessary action on its part; and, assuming the due authorization, execution and delivery by the other parties thereto, the Transaction Agreements will constitute the legal, valid and binding obligations of such Partnership, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

 

SECTION 3.11                                       Approvals .  Except as required by the SEC in connection with the Partnership’s obligations under the Registration Rights Agreement, no authorization, consent, approval, waiver, license, qualification or written exemption from, nor any filing, declaration, qualification or registration with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by Partnership of the Transaction Agreements or the issuance and sale of the Purchased Units, except (i) as may be required under the state securities or “Blue Sky” Laws, or (ii) where the failure to receive such authorization, consent, approval, waiver, license, qualification or written exemption or to make such filing, declaration, qualification or registration would not, individually or in the aggregate, reasonably be expected to have a Partnership Material Adverse Effect.

 

SECTION 3.12                                       Compliance with Law .  None of the Partnership Entities is in violation of any Law applicable to such Partnership Entity, except as would not, individually or in the aggregate, have a Partnership Material Adverse Effect.  The Partnership Entities each possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, have a Partnership Material Adverse Effect, and none of the Partnership Entities has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit, except where such potential revocation or modification would not, individually or in the aggregate, have a Partnership Material Adverse Effect.

 

SECTION 3.13                                       Valid Issuance .  The offer and sale of the Purchased Units and the limited partner interests represented thereby have been duly authorized by the Partnership pursuant to the Partnership Agreement and, when issued and delivered to the Purchasers against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required by applicable Law and the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act) and will be free of any and all Liens and restrictions on transfer, other than restrictions on transfer under the Partnership Agreement and under applicable state and federal securities Laws.

 

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SECTION 3.14                                       No Preemptive Rights .  The holders of outstanding Common Units are not entitled to preemptive rights to subscribe for any of the Common Units to be issued and sold to the Purchasers pursuant to this Agreement.

 

SECTION 3.15                                       MLP Status .  The Partnership is properly treated as a partnership for United States federal income tax purposes and has, for each taxable year beginning after December 31, 2010 during which the Partnership was in existence, met the gross income requirements of Section 7704(c)(2) of the Internal Revenue Code.

 

SECTION 3.16                                       Investment Company Status .  The Partnership is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

SECTION 3.17                                       No Registration Required . Assuming the accuracy of the representations and warranties of the Purchasers contained in this Agreement, the sale and issuance of the Purchased Units pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither the Partnership nor, to the Partnership’s knowledge, any authorized Representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.  The issuance and sale of the Purchased Units does not contravene the rules and regulations of the NYSE.

 

SECTION 3.18                                       No Integration .  Neither the Partnership nor any of its Affiliates has, directly or indirectly through any agent, made any offers or sales of any security of the Partnership or solicited any offers to buy any security that is or will be integrated with the sale of the Purchased Units in a manner that would require such registration under the Securities Act.

 

SECTION 3.19                                       Certain Fees .  Other than fees payable to UBS Securities LLC for its service as placement agent, no fees or commissions are or will be payable by the Partnership to brokers, finders or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.

 

SECTION 3.20                                       No Side Agreements .  Other than the Transaction Agreements, there are no other agreements by, among or between the Partnership or its Affiliates, on the one hand, and any of the Purchasers or their Affiliates, on the other hand, with respect to the transactions contemplated hereby nor promises or inducements for future transactions between or among any of such parties.

 

SECTION 3.21                                       Form S-3 Eligibility .  The Partnership is eligible to register the resale of the Purchased Units by the Purchasers on a registration statement on Form S-3 under the Securities Act..

 

SECTION 3.22                                       Absence of Price Manipulation .  The Partnership has not taken and will not take any action that violates applicable law and is designed to, or would reasonably be expected to, cause or result in the stabilization or manipulation of the price of the Common Units to facilitate the sale or resale of the Purchased Units.

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

 

Each Purchaser, severally and not jointly, represents and warrants to the Partnership with respect to itself (and not with respect to any other Purchaser) as follows:

 

SECTION 4.01                                       Valid Existence .  Such Purchaser (i) is duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and (ii) has the requisite power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its Properties and carry on its business as its business is now being conducted, except where the failure to obtain such licenses, authorizations, consents and approvals would not reasonably be expected to have a Purchaser Material Adverse Effect.

 

SECTION 4.02                                       No Consents; Violations, Etc .  The execution, delivery and performance of the Transaction Agreements by such Purchaser and the consummation of the transactions contemplated thereby will not (a) require any consent, approval or notice under, or constitute a violation or breach of, the organizational documents of such Purchaser, (b) constitute a violation or breach of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default or give rise to any right of termination, cancellation or acceleration) under, any note, bond, mortgage, lease, loan or credit agreement or other material instrument, obligation or agreement to which such Purchaser is a party or by which such Purchaser or any of its Properties may be bound, (c) violate any provision of any Law or any order, judgment or decree of any court or Governmental Authority having jurisdiction over such Purchaser or its Properties, except in the cases of clauses (b) and (c) where such violation, breach or default, would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect.

 

SECTION 4.03                                       Investment .  The Purchased Units are being acquired for such Purchaser’s own account, or the accounts of clients for whom such Purchaser exercises discretionary investment authority, not as a nominee or agent, and with no present intention of distributing the Purchased Units or any part thereof, and such Purchaser has no present intention of selling or granting any participation in or otherwise distributing the same, in any transaction in violation of the securities Laws of the United States of America or any state, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of the Purchased Units under a registration statement under the Securities Act and applicable state securities laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated thereunder). If such Purchaser should in the future decide to dispose of any of the Purchased Units, such Purchaser understands and agrees that it may do so only (i) in compliance with the Securities Act and applicable state securities law, as then in effect, or (ii) in the manner contemplated by any registration statement pursuant to which such securities are being offered.

 

SECTION 4.04                                       Nature of Purchaser .  Such Purchaser represents and warrants to, and covenants and agrees with, the Partnership that, (a) it is an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act and a “qualified institutional buyer” as defined in Rule 144A under the Securities Act, (b) by reason of its business and financial experience it has such knowledge, sophistication and experience in

 

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business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Units, is able to bear the economic risk of such investment and, at the present time, would be able to afford a complete loss of such investment and (c) it is acquiring the Purchased Units purchased by it only for its own account and not for the account of others, for investment purposes and not on behalf of any other account or Person or with a view to, or for offer or sale in connection with, any distribution thereof.  Such Purchaser is not an entity formed for the specific purpose of acquiring the Purchased Units.

 

SECTION 4.05                                       Receipt of Information .  Such Purchaser acknowledges that it (a) has access to the SEC Documents, (b) has been provided a reasonable opportunity to ask questions of and receive answers from Representatives of the Partnership regarding such matters and (c) has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Purchased Units.

 

SECTION 4.06                                       Restricted Securities .  Such Purchaser understands that the Purchased Units it is purchasing are characterized as “restricted securities” under the federal securities Laws inasmuch as they are being acquired from the Partnership in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, such Purchaser represents that it is knowledgeable with respect to Rule 144 of the SEC promulgated under the Securities Act.

 

SECTION 4.07                                       Certain Fees .  No fees or commissions will be payable by such Purchaser to brokers, finders, or investment bankers with respect to the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.

 

SECTION 4.08                                       Domestic Jurisdiction .  Each Purchaser is a resident of the jurisdiction specified in its address for notices set forth on Schedule A hereto.

 

SECTION 4.09                                       Legend .  It is understood that the certificates evidencing the Purchased Units will bear the following legend:

 

“These securities have not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or the securities laws of any state or other jurisdiction. These securities may not be sold or offered for sale, pledged or hypothecated except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such securities may only be transferred if the transfer agent for such securities has received documentation satisfactory to it that such transaction does not require registration under the Securities Act.”

 

SECTION 4.10                                       Reliance on Exemptions .  Each Purchaser understands that the Purchased Units are being offered and sold to such Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Partnership is relying upon the truth and accuracy of, and Purchaser’s compliance

 

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with, the representations, warranties, agreements, acknowledgments and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Purchased Units.

 

SECTION 4.11                                       Authority .  Such Purchaser has all necessary power and authority to execute, deliver and perform its obligations under the Transaction Agreements to which such Purchaser is a Party and to consummate the transactions contemplated thereby; the execution, delivery and performance by such Purchaser of the Transaction Agreements and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary action on its part; and, assuming the due authorization, execution and delivery by the other parties thereto, the Transaction Agreements to which it is a party constitute the legal, valid and binding obligation of such Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar Laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

 

SECTION 4.12                                       No Side Agreements .  Other than the Transaction Agreements, there are no other agreements by, among or between such Purchaser or any of its Affiliates, on the one hand, and the Partnership or any of its Affiliates, on the other hand, with respect to the transactions contemplated hereby.

 

ARTICLE V
COVENANTS

 

SECTION 5.01                                       Taking of Necessary Action .  Each of the Parties hereto shall use its commercially reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, the Partnership and each Purchaser shall use its commercially reasonable efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the Purchasers or the Partnership, as the case may be, advisable for the consummation of the transactions contemplated by the Transaction Agreements.

 

SECTION 5.02                                       Return of Proceeds .  If the Acquisition is not consummated within two Business Days after the Anticipated Closing Date, or if any of the conditions set forth in Section 6.01 have not been satisfied or waived, and any Purchaser has paid its Aggregate Purchase Price into the Partnership Bank Account in advance of the Closing, then on or prior to the third Business Day after the Anticipated Closing Date (or if the Partnership receives a written request by any such Purchaser on or before 1:00 pm Central time on the Anticipated Closing Date and the Acquisition is not consummated by 3:00 pm Central time on the Anticipated Closing Date, then not later than the close of business on the Anticipated Closing Date), the Partnership shall return such Aggregate Purchase Price, without interest, to such Purchaser.

 

SECTION 5.03                                       Disclosure; Public Filings .  The Partnership may, without prior written consent or notice, (i) file the Transaction Agreements as exhibits to Exchange Act reports and (ii) disclose such information with respect to any Purchaser as required by applicable Law or the

 

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rules or regulations of the NYSE or other exchange on which securities of the Partnership are listed or traded. The Partnership shall, on or before the fourth Business Day following the date hereof, file one or more Current Reports on Form 8-K with the SEC (the “ 8-K Filing ”) describing the terms of the transactions contemplated by the Transaction Agreements and including as exhibits to such 8-K Filing, the Transaction Agreements in the form required by the Exchange Act.

 

SECTION 5.04                                       NYSE Listing Application .  The Partnership shall, not later than immediately prior to the Closing, file a supplemental listing application with the NYSE to list the Purchased Units and will otherwise use its reasonable commercial efforts to list the Purchased Units on the NYSE and maintain such listing.

 

SECTION 5.05                                       Purchaser Lock-Up .  Without the prior written consent of the Partnership, each Purchaser agrees that from and after the Closing until the earlier to occur of (a) the end of the 90th day after the Closing Date or (b) the time when the shelf registration statement (registering resales of the Purchased Units) contemplated by the Registration Rights Agreement becomes effective, neither such Purchaser nor any of its Affiliates will offer, sell, pledge or otherwise transfer or dispose of any of its Purchased Units or enter into any transaction or device designed to do the same; provided , however , that each Purchaser may transfer its Purchased Units to an Affiliate of such Purchaser or to any other Purchaser or an Affiliate of such other Purchaser, provided that such Affiliate agrees to the restrictions in this Section 5.05.

 

SECTION 5.06                                       Subsequent Offerings .  Without the prior written consent of the holders of a majority of all the Common Units issued and sold to the Purchasers pursuant to this Agreement, during the period from and after the date of this Agreement until the end of the 45th day after the Closing Date, the Partnership shall not grant, issue or sell any Common Units or any securities convertible into or exchangeable or exercisable for Common Units, or take any other action that may result in the issuance of any of the foregoing; provided , however , that the Partnership may issue Common Units or any securities convertible or exchangeable into Common Units as payment of any part of the purchase price for businesses that are acquired by the Partnership or its Subsidiaries ( provided that any recipient of such Common Units must agree in writing to be bound by the terms of this Section 5.06 for the remaining term of such 45-day period); provided, further that no such consent shall be required in respect of the issuance of Common Units pursuant to the LTIP or upon the exercise of options to purchase Common Units granted pursuant to the LTIP or with respect to the issuance of Common Units upon the vesting of phantom or restricted units granted pursuant to the LTIP.

 

SECTION 5.07                                       Certain Special Allocations of Book and Taxable Income .  To the extent that the Per Unit Price differs from the Per Unit Capital Amount as of the Closing Date for a then Outstanding Common Unit after taking into account the issuance of the Purchased Units, the General Partner intends to specially allocate Partnership items of book and taxable income, gain, loss or deduction to the Purchasers so that the Per Unit Capital Amount with respect to their Purchased Units are equal to the Per Unit Capital Amounts with respect to other Common Units (and thus to assure fungibility of all Common Units). Such special allocations will occur upon the earlier to occur of any taxable period of the Partnership ending upon, or after, (a) an event described in Section 5.5(d) of the Partnership Agreement or a sale of all or substantially all of the assets of the Partnership occurring after the date of the issuance of the Purchased Units, or (b) the

 

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transfer of the Purchased Units to a Person that is not an Affiliate of the Purchaser, in which case, such allocation shall be made only with respect to the Purchased Units so transferred. To the maximum extent permissible under the Partnership Agreement or under applicable law, including under the Treasury Regulations issued under Section 704(b) of the Internal Revenue Code, the special allocations resulting from clause (a) will be made through allocations of Unrealized Gain.

 

SECTION 5.08                                       Partnership Fees .  The Partnership agrees that it will indemnify and hold harmless each Purchaser from and against any and all claims, demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by the Partnership in connection with the sale of the Purchased Units or the consummation of the transactions contemplated by this Agreement.

 

SECTION 5.09                                       Purchaser Fees .  Each Purchaser agrees, severally and not jointly, that it will indemnify and hold harmless the General Partner and the Partnership Entities from and against any and all claims, demands, or liabilities for broker’s, finder’s, placement, or other similar fees or commissions incurred by such Purchaser in connection with the purchase of the Purchased Units or the consummation of the transactions contemplated by this Agreement. Agreement.

 

SECTION 5.10                                       Use of Proceeds .  The Partnership will use the net proceeds from the sale of Common Units under this Agreement to pay for a portion of the purchase price for the Acquisition, to repay indebtedness incurred in connection therewith, or for other general partnership purposes.

 

ARTICLE VI
CLOSING CONDITIONS

 

SECTION 6.01                                       Conditions to the Closing .

 

(a)                                  Mutual Conditions .  The respective obligation of each Party to consummate the purchase and issuance and sale of the Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a particular Party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

 

(i)                                      no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction which temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal;

 

(ii)                                   there shall not be pending any Action by any Governmental Authority seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement; and

 

(iii)                                the Purchased Units shall have been approved for listing on the NYSE, subject to notice of issuance.

 

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(b)                                  Each Purchaser’s Conditions .  The respective obligation of each Purchaser to consummate the purchase of its Purchased Units shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a particular Purchaser only on behalf of itself in writing, in whole or in part):

 

(i)                                      the Partnership shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Partnership on or prior to the Closing Date;

 

(ii)                                   the representations and warranties of the Partnership contained in this Agreement that are qualified by materiality or Partnership Material Adverse Effect shall be true and correct when made and as of the Closing Date and all other representations and warranties of the Partnership shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations made as of a specific date shall be required to be true and correct as of such date only);

 

(iii)                                the NYSE shall have authorized, upon official notice of issuance, the listing of the Purchased Units and no notice of delisting from the NYSE shall have been received by the Partnership with respect to the Common Units;

 

(iv)                               the Partnership shall have (or shall have concurrently with the Closing) consummated the Acquisition on substantially the terms set forth in the Acquisition Agreement, with only such modifications or waivers as the General Partner reasonably determines do not materially adversely affect the Purchasers in their capacity as unitholders following the Closing; and

 

(v)                                  the Partnership shall have delivered, or caused to be delivered, to the Purchasers at the Closing, the Partnership’s closing deliveries described in Section 6.02.

 

(c)                                   The Partnership’s Conditions .  The obligation of the Partnership to consummate the sale of the Purchased Units to each of the Purchasers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions with respect to each Purchaser individually and not the Purchasers jointly (any or all of which may be waived by the Partnership in writing, in whole or in part, to the extent permitted by applicable Law):

 

(i)                                      each Purchaser shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by that Purchaser on or prior to the Closing Date;

 

(ii)                                   the representations and warranties of each Purchaser contained in this Agreement that are qualified by materiality or Purchaser Material Adverse Effect shall be true and correct when made and as of the Closing Date and all other representations and warranties of such Purchaser shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations made as of a specific date shall be required to be true and correct as of such date only); and

 

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(iii)                                each Purchaser shall have delivered, or caused to be delivered, to the Partnership at the Closing, such Purchaser’s closing deliveries described in Section 6.03.

 

SECTION 6.02                                       Partnership Deliveries .  At the Closing, subject to the terms and conditions of this Agreement, the Partnership will deliver, or cause to be delivered, to each Purchaser:

 

(a)                                  evidence of issuance of a certificate evidencing the Purchased Units or the Purchased Units credited to book-entry accounts maintained by the transfer agent, as the case may be, bearing the legend or restrictive notation set forth in Section 4.09, and meeting the requirements of the Partnership Agreement, free and clear of any Liens, other than transfer restrictions under the Partnership Agreement and applicable federal and state securities laws;

 

(b)                                  a certificate of the Secretary of State of Delaware, dated a recent date, to the effect that each of the General Partner and the Partnership is in good standing;

 

(c)                                   an Officer’s Certificate substantially in the form attached to this Agreement as Exhibit B ;

 

(d)                                  an opinion addressed to the Purchasers from Andrews Kurth LLP, special counsel to the Partnership dated the Closing Date, substantially similar in substance to the form of opinion attached to this Agreement as Exhibit D ;

 

(e)                                   the Registration Rights Agreement in substantially the form attached to this Agreement as Exhibit A , which shall have been duly executed by the Partnership; and

 

(f)                                    a certificate of the Secretary or Assistant Secretary of the General Partner, on behalf of the Partnership, certifying as to (i) the certificate of formation of the General Partner, the limited liability company agreement of the General Partner, the certificate of limited partnership of the Partnership, and the Partnership Agreement, (ii) board resolutions authorizing the execution and delivery of the Transaction Agreements and the consummation of the transactions contemplated thereby and (iii) the incumbent officers authorized to execute the Transaction Agreements, setting forth the name and title and bearing the signatures of such officers.

 

(g)                                   a cross receipt, dated the Closing Date, executed by the Partnership confirming that the Partnership has received such Purchaser’s Aggregate Purchase Price.

 

SECTION 6.03                                       Purchaser Deliveries .  At or prior to the Closing, subject to the terms and conditions of this Agreement, each Purchaser will deliver, or cause to be delivered to the Partnership:

 

(a)                                  payment to the Partnership, by wire transfer(s) of immediately available funds to the Partnership Bank Account, of such Purchaser’s Aggregate Purchase Price ( provided , however that such payment shall be made on the morning of the Closing Date and must be received in the Partnership Bank Account prior 10:00 a.m. Central Time on the Closing Date);

 

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(b)                                  the Registration Rights Agreement in substantially the form attached to this Agreement as Exhibit A , which shall have been duly executed by such Purchaser;

 

(c)                                   an officer’s certificate substantially in the form attached to this Agreement as Exhibit C ;

 

(d)                                  a completed Internal Revenue Service Form W-9; and

 

(e)                                   a cross receipt, dated the Closing Date, executed by such Purchaser confirming that such Purchaser has received the Common Units being purchased by such Purchaser pursuant hereto.

 

ARTICLE VII
INDEMNIFICATION, COSTS AND EXPENSES

 

SECTION 7.01                                       Indemnification by the Partnership .  The Partnership agrees to indemnify each Purchaser and its Representatives (collectively, “ Purchaser Related Parties ”) (a) from costs, losses, liabilities, damages, or expenses, and (b) hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Partnership contained herein, and in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties to the extent applicable; and provided further , that no Purchaser Related Party shall be entitled to recover special, consequential (including lost profits) or punitive damages under this Section 7.01.

 

SECTION 7.02                                       Indemnification by Purchasers .  Each Purchaser agrees, severally and not jointly, to indemnify the Partnership, the General Partner and their respective Representatives (collectively, “ Partnership Related Parties ”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation, or inquiries), demands and causes of action and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of such Purchaser contained herein; provided that such claim for indemnification relating to a breach of a representation or warranty is made prior to the expiration of such representation or warranty; and provided further , that no Partnership Related Party shall be entitled to recover special, consequential (including lost profits) or punitive damages; provided further , that absent fraud, bad faith, gross negligence or willful misconduct

 

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on the part of a Purchaser, in no event will such Purchaser be liable under this Section 7.02 for any amount in excess of its Aggregate Purchase Price.

 

SECTION 7.03                                       Indemnification Procedure .  Promptly after any Partnership Related Party or Purchaser Related Party (hereinafter, the “ Indemnified Party ”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third party, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “ Indemnifying Party ”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however , that the Indemnified Party shall be entitled (i) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (B) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from those available to the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, involves no admission of wrongdoing or malfeasance by, and includes a complete release from liability of, the Indemnified Party.

 

ARTICLE VIII
MISCELLANEOUS

 

SECTION 8.01                                       Interpretation .  Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents,

 

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contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever a party has an obligation under the Transaction Agreements, the expense of complying with such obligation shall be an expense of such party unless otherwise specified therein. Whenever any determination, consent or approval is to be made or given by a Purchaser under the Transaction Agreements, such action shall be in such Purchaser’s sole discretion, unless otherwise specified therein. If any provision in the Transaction Agreements is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Transaction Agreements shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of the Transaction Agreements, and the remaining provisions shall remain in full force and effect. The Transaction Agreements have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

 

SECTION 8.02                                       Survival of Provisions .  The representations and warranties set forth in Sections 3.01, 3.02, 3.10, 3.13, 3.17, 3.19, 4.01, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 of this Agreement shall survive the execution and delivery of this Agreement indefinitely, and the other representations and warranties set forth in this Agreement shall survive for a period of 12 months following the Closing Date regardless of any investigation made by or on behalf of the Partnership or any Purchaser. The covenants made in this Agreement or any other Transaction Agreement shall survive the Closing and remain operative and in full force and effect regardless of acceptance of any of the Purchased Units and payment therefor and repayment, conversion or repurchase thereof. All indemnification obligations of the Partnership and the Purchasers pursuant to this Agreement shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the Parties, regardless of any purported general termination of this Agreement.

 

SECTION 8.03                                       No Waiver; Modifications in Writing .

 

(a)                                  Delay .  No failure or delay on the part of any Party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a Party at Law or in equity or otherwise.

 

(b)                                  Specific Waiver; Amendment .  Except as otherwise provided herein, no amendment, waiver, consent, modification or termination of any provision of this Agreement shall be effective, unless signed by each of Parties or each of the original signatories thereto affected by such amendment, waiver, consent, modification or termination. Any amendment, supplement or modification of or to any provision hereof, any waiver of any provision hereof and any consent to any departure by the Partnership from the terms of any provision hereof shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Partnership in any case shall entitle the Partnership to any other or further notice or demand in similar or other circumstances.

 

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SECTION 8.04                                       Binding Effect; Assignment .

 

(a)                                  Binding Effect .  This Agreement shall be binding upon the Partnership, each Purchaser and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the Parties to this Agreement and as provided in Article VII, and their respective successors and permitted assigns.

 

(b)                                  Assignment of Rights .  All or any portion of the rights and obligations of any Purchaser under this Agreement may be transferred by such Purchaser to any Affiliate of such Purchaser without the consent of the Partnership by delivery of an agreement to be bound and a revised Schedule A . No portion of the rights and obligations of any Purchaser under this Agreement may be transferred by such Purchaser to a non-Affiliate without the written consent of the Partnership (which consent shall not be unreasonably withheld by the Partnership).

 

SECTION 8.05                                       Communications . All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery, electronic mail or personal delivery to the following addresses:

 

(a)                                  If to any Purchaser:

 

To such Purchaser’s address listed on Schedule 8.05 hereof or such other address as such Purchaser shall have specified by written notice to the Partnership.

 

(b)                                  If to the Partnership:

 

6120 S. Yale Avenue, Suite 805

Tulsa, OK 74136

Attention: H. Michael Krimbill

Facsimile: 918-492-0990

Email: michael.krimbill@nglep.com

 

With a copy to (which shall not constitute notice):

 

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: G. Michael O’Leary

Facsimile: 713-220-4285

Email: moleary@andrewskurth.com

 

or to such other address as the Partnership or such Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; at the time of transmittal, if sent via electronic mail; upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt

 

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acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.

 

SECTION 8.06                                       Removal of Legend .  The Partnership, at its sole cost, shall remove the legend described in in Section 4.09 (or instruct its transfer agent to so remove such legend) from the certificates evidencing Common Units issued and sold to each Purchaser pursuant to this Agreement if (i) a registration statement under the Securities Act permitting the public resale of such Common Units has become effective under the Securities Act, (ii) such Common Units are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Partnership), or (iii) such Common Units are eligible for sale under Rule 144, without the requirement for the Partnership to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to such securities and without volume or manner-of-sale restrictions.  Each Purchaser agrees to provide the Partnership, its counsel and/or the transfer agent with evidence reasonably requested by it in order to cause the removal of the legend described in in Section 4.09, including without limitation an Instruction and Representation Letter in substantially the form attached to this Agreement as Exhibit E (an “ Instruction and Representation Letter ”).  Any fees (with respect to the transfer agent, Partnership counsel or otherwise) associated with the issuance of any legal opinion required by the Partnership’s transfer agent or the removal of such legend shall be borne by the Partnership.  If a legend is no longer required pursuant to the foregoing, the Partnership will no later than three (3) Business Days following the delivery by a Purchaser to the Partnership or the transfer agent (with notice to the Partnership) of a legended certificate or instrument representing Common Units (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer) and an Instruction and Representation Letter, deliver or cause to be delivered to such Purchaser a certificate or instrument (as the case may be) representing such Common Units that is free from all restrictive legends.  Certificates for Common Units free from all restrictive legends may be transmitted by the transfer agent to the Purchasers by crediting the account of the Purchaser’s prime broker with DTC as directed by such Purchaser.

 

SECTION 8.07                                       Entire Agreement .  This Agreement and the other Transaction Agreements are intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto and thereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein, with respect to the rights granted by the Partnership or a Purchaser set forth herein and therein. This Agreement and the other Transaction Agreements supersede all prior agreements and understandings between the Parties with respect to such subject matter. The Schedules and Exhibits referred to herein and attached hereto are incorporated herein by this reference, and unless the context expressly requires otherwise, are incorporated in the definition of “ Agreement .”

 

SECTION 8.08                                       Governing Law .  This Agreement will be construed in accordance with and governed by the Laws of the State of New York.

 

SECTION 8.09                                       Execution in Counterparts .  This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, including

 

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facsimile or .pdf format counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

 

SECTION 8.10                                       Termination .

 

(a)                                  Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by the mutual written consent of the Purchasers entitled to purchase a majority of the Purchased Units and the Partnership.

 

(b)                                  Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing:

 

(i)                                      if a statute, rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Authority of competent jurisdiction which permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal; or

 

(ii)                                   if the Closing shall not have occurred on or before March 31, 2014.

 

(c)                                   In the event of the termination of this Agreement as provided in Section 8.10(a) or Section 8.10(b), this Agreement shall forthwith become null and void.  In the event of such termination, there shall be no liability on the part of any party hereto, except with respect to the requirement to comply with any confidentiality agreement in favor of the Partnership; provided that nothing herein shall relieve any party from any liability or obligation with respect to any willful breach of this Agreement.

 

SECTION 8.11                                       Recapitalization, Exchanges, Etc .  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Partnership or any successor or assign of the Partnership (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Purchased Units, and shall be appropriately adjusted for combinations, unit splits, recapitalizations and the like occurring after the date of this Agreement.

 

( Signature Page Follows )

 

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IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.

 

 

 

NGL ENERGY PARTNERS LP

 

 

 

 

 

By:

NGL Energy Holdings LLC,

 

 

 

its General Partner

 

 

 

 

 

 

 

 

 

 

By:

/s/ H. Michael Krimbill

 

 

Name:

H. Michael Krimbill

 

 

Title:

Chief Executive Officer

 

Signature Page to

Common Unit Purchase Agreement

 



 

 

 

CLEARBRIDGE ENERGY MLP TOTAL RETURN FUND INC.

 

 

CLEARBRIDGE ENERGY MLP OPPORTUNITY FUND INC.

 

 

 

 

 

 

By:

ClearBridge Investments, LLC,

 

 

 

as the Discretionary Investment Adviser

 

 

 

 

 

 

 

 

 

 

By:

/s/ Terrence Murphy

 

 

Name:

Terrence Murphy

 

 

Title:

CEO

 

Signature Page to

Common Unit Purchase Agreement

 



 

 

 

OPPENHEIMER STEELPATH MLP ALPHA FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

OPPENHEIMER STEELPATH MLP ALPHA PLUS FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

OPPENHEIMER STEELPATH MLP INCOME FUND

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

 

 

 

 

 

AIC/CORNERSTONE ADVISORS INCOME OPPORTUNITIES FUND-STEELPATH-209780

 

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

 

Name:

Brian Watson

 

 

Title:

Portfolio Manager

 

Signature Page to

Common Unit Purchase Agreement

 



 

 

OPPENHEIMER STEELPATH MLP SELECT 40 FUND

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

Name:

Brian Watson

 

Title:

Portfolio Manager

 

 

 

 

OPPENHEIMER STEELPATH MLP MASTER FUND

 

 

 

 

 

 

 

By:

/s/ Brian Watson

 

Name:

Brian Watson

 

Title:

Portfolio Manager

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

AT MLP FUND, LLC

 

 

 

 

 

 

By:

/s/ Paul McPheeters

 

Name:

Paul McPheeters

 

Title:

Managing Director

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

EAGLE INCOME APPRECIATION PARTNERS, L.P.

 

 

 

 

By:

Eagle Income Appreciation GP, LLC,

 

 

its General Partner

 

 

 

 

By:

Eagle Global Advisors, LLC,

 

 

its Managing Member

 

 

 

 

 

 

 

By:

/s/ P. David Chiaro

 

Name:

P. David Chiaro

 

Title:

Partner

 

 

 

 

EAGLE INCOME APPRECIATION II, L.P.

 

 

 

 

By:

Eagle Income Appreciation GP, LLC,

 

 

its General Partner

 

 

 

 

By:

Eagle Global Advisors, LLC,

 

 

its Managing Member

 

 

 

 

 

 

 

By:

/s/ P. David Chiaro

 

Name:

P. David Chiaro

 

Title:

Partner

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

SALIENT MLP FUND, L.P.

 

OHIO POLICE AND FIRE PENSION FUND

 

COMMONWEALTH OF PENNSYLVANIA PUBLIC SCHOOL EMPLOYEES’ RETIREMENT SYSTEM

 

SALIENT MLP & ENERGY INFRASTRUCTURE FUND

 

SALIENT MIDSTREAM & MLP FUND

 

SALIENT MLP & ENERGY INFRASTRUCTURE FUND II

 

SALIENT MLP TOTAL RETURN FUND, L.P.

 

 

 

By: Salient Capital Advisors LLC

 

 

 

 

 

 

By:

/s/ Gregory A. Reid

 

Name:

Gregory A. Reid

 

Title:

Managing Director

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

HARVEST MLP INCOME FUND LLC

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

Name:

Anthony Merhige

 

Title:

Officer

 

 

 

 

 

 

 

HARVEST MLP INCOME FUND III LLC

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

Name:

Anthony Merhige

 

Title:

Officer

 

 

 

 

 

 

 

HARVEST ENERGY FUND LLC

 

 

 

 

 

 

 

By:

/s/ Anthony Merhige

 

Name:

Anthony Merhige

 

Title:

Officer

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

THE CUSHING MLP TOTAL RETURN FUND

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

By:

/s/ Jerry V. Swank

 

Name:

Jerry V. Swank

 

Title:

Managing Member

 

 

 

 

THE CUSHING MLP PREMIER FUND

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

By:

/s/ Jerry V. Swank

 

Name:

Jerry V. Swank

 

Title:

Managing Member

 

 

 

 

CUSHING SCS MLP FUND, LP

 

 

 

 

By:

Cushing MLP Asset Management, LP, its general partner

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

By:

/s/ Jerry V. Swank

 

Name:

Jerry V. Swank

 

Title:

Managing Member

 

 

 

 

TEACHER’S RETIREMENT SYSTEM OF OKLAHOMA

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

By:

/s/ Jerry V. Swank

 

Name:

Jerry V. Swank

 

Title:

Managing Member

 

 

 

 

CITY OF NEW HAVEN CITY EMPLOYEES RETIREMENT FUND

 

 

 

 

By:

Cushing MLP Asset Management, LP, its investment adviser

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

By:

Swank Capital, LLC, its General Partner

 

 

 

 

By:

/s/ Jerry V. Swank

 

Name:

Jerry V. Swank

 

Title:

Managing Member

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

COHEN & STEERS INFRASTRUCTURE FUND, INC.

 

 

 

 

 

 

 

By:

/s/ Benjamin Morton

 

Name:

Benjamin Morton

 

Title:

Vice President

 

 

 

 

 

 

 

COHEN & STEERS MLP INCOME AND ENERGY OPPORTUNITY FUND, INC.

 

 

 

 

 

 

 

By:

/s/ Benjamin Morton

 

Name:

Benjamin Morton

 

Title:

Vice President

 

Signature Page to
Common Unit Purchase Agreement

 



 

 

THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

 

 

 

 

 

 

By:

/s/ Mary R. Linehan

 

Name:

Mary R. Linehan

 

Title:

Managing Director

 

Signature Page to
Common Unit Purchase Agreement