PURCHASE AND SALE AGREEMENT

BETWEEN

ANADARKO GATHERING COMPANY AND

ANADARKO ENERGY SERVICES COMPANY

AS SELLER

AND

DCP MIDSTREAM PARTNERS, LP

AS PURCHASER

Executed on March 7, 2007

 

 

TABLE OF CONTENTS

 

 

 

EXHIBITS

Exhibit “A”

System

Exhibit “B”

Conveyance

SCHEDULES

Schedule 1.2(a)

Contracts

Schedule 1.2(b)

Surface Contracts

Schedule 1.2(c)

Equipment

Schedule 1.3(e)

Excluded Items

Schedule 2.3

Allocation of Purchase Price for Tax Purposes

Schedule 5.7(a)

Litigation

Schedule 5.7(b)

Notice of Non-Compliance

Schedule 5.8

Taxes and Assessments

Schedule 5.9

Compliance with Laws

Schedule 5.10(a)

Contract Matters

Schedule 5.10(b)

Certain Contracts

Schedule 5.12

Governmental Authorizations

Schedule 5.13

Preference Rights and Transfer Requirements

Schedule 5.15

Outstanding Capital Commitments

Schedule 5.16

Imbalance s

Schedule 7.6

Operation of Business

Schedule 7.12

Non-UCI Compressors

Schedule 8.1(i)

Certain Transfer Requirements

 

 

DEFINITIONS  

 

“Adjusted Purchase Price” shall mean the Purchase Price after calculating and applying the adjustments set forth in Section 2.2 .

“Adjustment Period” has the meaning set forth in Section 2.2(a) .

“AES” has the meaning set forth in the preamble.

 

"AFE" means authority for expenditure.

“Affiliates” with respect to any Person, means any person that directly or indirectly controls, is controlled by or is under common control with such Person.

“AGC” has the meaning set forth in the preamble.

 

“Agreed Interest Rate” means simple interest calculated at the rate of six percent (6%) per annum.

 

“Agreement” means this Purchase and Sale Agreement.

 

“Assets” has the meaning set forth in Section 1.2 .

 

“Assumed Seller Obligations” has the meaning set forth in Section 11.3 .

“Business Day” means each calendar day except Saturdays, Sundays, and Federal holidays.

 

“Claim” or “Claims” has the meaning set forth in Section 11.4(a) .

“Claim Notice” has the meaning set forth in Section 11.5(b) .

 

“Closing” has the meaning set forth in Section 9.1(a) .

 

“Closing Date” has the meaning set forth in Section 9.1(b) .

 

“Closing Payment” has the meaning set forth in Section 9.4(a) .

 

“Code” has the meaning set forth in Section 2.3 .

 

“Confidentiality Agreement” has the meaning set forth in Section 7.1 .

 

“Contracts” has the meaning set forth in Section 1.2(a) .

 

“Conveyance” has the meaning set forth in Section 3.1(b) .

 

“Defensible Title” means that title of Seller with respect to the Real Property Interests, except for and subject to Permitted Encumbrances (as defined in the Conveyance), is free and clear of liens, encumbrances, obligations, security interests, irregularities, pledges, or other defects.

“Deposit” has the meaning set forth in Section 2.4 .

 

 

"DTPA" has the meaning set forth in Section 11.9(a) .

 

“Effective Time” has the meaning set forth in Section 1.4(a) .

“Environmental Laws” means, as the same may have been amended, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq .; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq .; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq .; the Clean Air Act, 42 U.S.C. § 7401 et seq . the Hazardous Materials Transportation Act, 49 U.S.C. § 1471 et seq .; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq .; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq .; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq .; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq .; the Atomic Energy Act, 42 U.S.C. § 2011 et seq .; and all applicable related law, whether local, state, territorial, or national, of any Governmental Body having jurisdiction over the property in question addressing pollution or protection of human health, safety, natural resources or the environment and all regulations implementing the foregoing.

“Environmental Liabilities” shall mean any and all environmental response costs (including costs of remediation), damages, natural resource damages, settlements, consulting fees, expenses, penalties, fines, orphan share, prejudgment and post-judgment interest, court costs, attorneys’ fees, and other liabilities incurred or imposed (i) pursuant to any order, notice of responsibility, directive (including requirements embodied in Environmental Laws), injunction, judgment or similar act (including settlements) by any Governmental Body or court of competent jurisdiction to the extent arising out of any violation of, or remedial obligation under, any Environmental Laws which are attributable to the ownership or operation of the Assets prior to the Effective Time or (ii) pursuant to any claim or cause of action by a Governmental Body or other Person for personal injury, property damage, damage to natural resources, remediation or response costs to the extent arising out of any violation of, or any remediation obligation under, any Environmental Laws which is attributable to the ownership or operation of the Assets prior to the Effective Time.

 

“Equipment” has the meaning set forth in Section 1.2(c) .

 

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

“Excluded Assets” has the meaning set forth in Section 1.3 .

“EXCO PSA” shall have the meaning set forth in Section 8.1(e) .

 

“Governmental Authorizations” has the meaning set forth in Section 5.12 .

 

“Governmental Body” or “Governmental Bodies” means any federal, state, local, municipal, or other governments; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and any court or governmental tribunal.

"HSR Act" means the Hart-Scott Rodino Antitrust Improvements Act of 1976.

 

 

“Hydrocarbons” means oil, gas, condensate and other gaseous and liquid hydrocarbons or any combination thereof and sulphur extracted from hydrocarbons.

 

“Imbalance” or “Imbalances” means over-deliveries or under-deliveries with respect to Hydrocarbons allocated to the Assets.

“Indemnified Party” has the meaning set forth in Section 11.5(a) .

 

“Indemnifying Party” has the meaning set forth in Section 11.5(a) .

“Indemnity Claim” has the meaning set forth in Section 11.5(b) .

“Laws” means all statutes, laws, rules, regulations, ordinances, orders, and codes of Governmental Bodies.

 

“Material Adverse Effect” means any effect that is adverse to the ownership, operation or value of the Assets, taken as a whole, and as currently operated, that has a value of ten percent (10%) or greater of the Purchase Price; provided, however, that “Material Adverse Effect” shall not include (i) any effect resulting from entering into this Agreement or the announcement of the transactions contemplated by this Agreement, (ii) any effect resulting from changes in general market, economic, financial or political conditions or any outbreak of hostilities or war, (iii) any effect that affects the Hydrocarbon exploration, production, development, processing, gathering and/or transportation industry generally (including changes in commodity prices or general market prices in the Hydrocarbon exploration, production, development, processing, gathering and/or transportation industry generally), and (iv) any effect resulting from a change in Laws or regulatory policies.

"NORM" means naturally occurring radioactive material.

 

“Person” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Body or any other entity.

 

"Personal Property Leases" has the meaning set forth in Section 5.10(iv) .

“Pipelines” has the meaning set forth in Section 1.2(f) .

“Preference Right” means any right or agreement that enables any Person to purchase or acquire any Asset or any interest therein or portion thereof as a result of or in connection with (i) the sale, assignment or other transfer of any Asset or any interest therein or portion thereof or (ii) the execution or delivery of this Agreement or the consummation or performance of the terms and conditions contemplated by this Agreement.

 

“Property Costs” has the meaning set forth in Section 1.4(b) .

 

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

 

“Purchaser” has the meaning set forth in the preamble.

"Purchaser Indemnitees" shall mean Purchaser and Purchaser’s Affiliates and each of their respective officers, directors, employees, agents, representatives, insurers, successors and permitted assigns.

 

 

“Real Property Interests” shall mean the easements, rights-of-way, surface leases and fee interests in real property identified on Schedule 1.2(b) .

“Records” has the meaning set forth in Section 1.2(h) .

 

“REGARDLESS OF FAULT” has the meaning set forth in Section 11.4(a) .

“Retained Obligations” shall mean Claims arising out of or related to:

(a)

the Excluded Assets;

 

(b)

Property Costs with respect to periods prior to the Effective Time; provided that with respect to ad valorem, property and similar Taxes imposed upon or arising from the Assets, the period shall not include periods on and after January 1 of the year in which the Closing Date occurs;

 

(c)

Taxes related to the Assets, including any Taxes for which Seller is liable as a successor or transferee for all periods prior to the Effective Time , but excluding (i) ad valorem, property and similar Taxes imposed upon or arising from the Assets and (ii) sales or transfer taxes resulting from the transfer of the Assets to Purchaser; and

 

(d)

any liabilities of Seller (i) with respect to employees of Seller arising under any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is sponsored by, contributed to, or maintained by, Seller, or (ii) arising under ERISA for which Purchaser may have any liability under ERISA solely as a result of the consummation of the transaction contemplated by this Agreement.

 

“Seller” has the meaning set forth in the preamble.

 

"Seller Indemnitees" shall mean Seller and Seller’s Affiliates and each of their respective officers, directors, employees, agents, representatives, insurers, successors and permitted assigns.

“Surface Contracts” has the meaning set forth in Section 1.2(b) .

“System” shall mean the natural gas gathering system and appurtenances thereto that is depicted in the map attached as Exhibit A . Notwithstanding anything to the contrary, the System shall not include any pipelines, equipment or other properties that are located upstream of the inlet flange of the meters where Hydrocarbons are delivered into the pipelines consisting of such natural gas gathering system.

“Tax Allocated Value” has the meaning set forth in Section 2.3 .

“Taxes” means all federal, state, local, and foreign income, profits, franchise, sales, use, ad valorem, property, severance, production, excise, stamp, documentary, real property transfer or gain, gross receipts, goods and services, registration, capital, transfer, or withholding taxes or other governmental fees or charges imposed by any taxing authority, including any interest, penalties or additional amounts which may be imposed with respect thereto.

 

 

“Tax Returns” has the meaning set forth in Section 5.8 .

 

“Transfer Requirement” means any consent, approval, authorization or permit of, or filing with or notification to, any Person which is required to be obtained, made or complied with for or in connection with any sale, assignment or transfer of any Asset or any interest therein, other than any consent of, notice to, filing with, or other action by Governmental Bodies in connection with the sale or conveyance of Surface Contracts or interests therein, if they are not required prior to the assignment of such Surface Contracts or interests or they are customarily obtained subsequent to the sale or conveyance (including consents from state agencies).

“Transition Services Agreement” shall have the meaning set forth in Section 7.13 .

 

PURCHASE AND SALE AGREEMENT

 

This Agreement is executed on March 7, 2007, by and between ANADARKO GATHERING COMPANY , a Delaware corporation (“AGC”), and ANADARKO ENERGY SERVICES COMPANY, a Delaware corporation (“AES”; AGC and AES collectively called   “Seller”), and DCP MIDSTREAM PARTNERS, LP, a Delaware limited partnership (“Purchaser”).

 

RECITALS  

 

A.    Seller owns various natural gas gathering pipeline properties, either of record or beneficially, more fully described in the exhibits hereto.

B.    Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to acquire from Seller, the properties and rights of Seller hereafter described, in the manner and upon the terms and conditions hereafter set forth.

C.    Capitalized terms used herein shall have the meanings ascribed to them in this Agreement as such terms are identified and/or defined in the preceding Definitions section hereof.

 

NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound by the terms hereof, agree as follows:

 

ARTICLE 1

PURCHASE AND SALE

 

Section 1.1 Purchase and Sale .

 

    At the Closing, and upon the terms and subject to the conditions of this Agreement, Seller agrees to sell, transfer, assign and convey the Assets to Purchaser, and Purchaser agrees to purchase, accept and pay for the Assets and to assume certain obligations attributable to the Assets.

 

 

As used herein, the term “Assets” means, subject to the terms and conditions of this Agreement, all of Seller’s and, with respect to Sections 1.2(c) , (d) and (f) only, Seller’s and its Affiliates’, right, title, interest and estate, real or personal, recorded or unrecorded, movable or immovable, tangible or intangible, in and to the following (but excluding the Excluded Assets):

 

(a)    All contracts, agreements and instruments identified on Schedule 1.2(a) (“Contracts”);

(b)    All easements, permits, licenses, servitudes, rights-of-way, surface leases, fee interests in real property and other surface rights appurtenant to, and used or held for use primarily in connection with the System, including those identified on Schedule 1.2(b) (“Surface Contracts”);

 

 

(c)    All equipment, machinery, fixtures and other tangible personal property and improvements located on the System or used or held for use primarily in connection with the operation of the System, including those identified on Schedule 1.2(c) (“Equipment”);

(d)    Computers and other personal property used in connection with the operation of the System that are located in field offices; and laptops, tools, and spare parts used in connection with operation of the System that are in the possession of employees;

(e)    All rights of Seller under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors (other than Affiliates of Seller) to the extent relating to products sold, or services provided, to Seller to the extent used or held for use in connection with or affecting any of the Assets;

(f)    All pipelines, gathering systems and appurtenances thereto being part of the System or used, or held for use, primarily in connection with the operation of the System (“Pipelines”);

(g)    All Hydrocarbon linefill and Hydrocarbons existing within the Pipelines from and after the Effective Time; and

(h)    All land files; gas contract files; gas gathering and processing files; abstracts; title opinions; land surveys; maps; engineering data and reports; and other books, records, data, files, and accounting records, regardless of whether paper or electronic media, in each case to the extent related primarily to the Assets, or used or held for use primarily in connection with the maintenance or operation thereof, but excluding (i) any books, records, data, files, maps and accounting records to the extent disclosure or transfer is restricted by third-party agreement or applicable Law and the necessary consents to transfer are not obtained pursuant to Section 7.8 , (ii) computer or communications software or intellectual property (including tapes, codes, data and program documentation and all tangible manifestations and technical information relating thereto), (iii) attorney-client privileged communications and work product of Seller’s legal counsel (other than title opinions), (iv) reserve studies and evaluations, and (v) records relating to the negotiation and consummation of the sale of the Assets (subject to such exclusions, the “Records”); provided, however, that Seller may retain the originals of such Records as Seller has determined may be required for litigation, tax, accounting, and auditing purposes and provide Purchaser with copies thereof at Purchaser’s cost until such purpose no longer reasonably exists; and then Seller shall promptly deliver such records to the address then provided by Purchaser.

 

Notwithstanding the foregoing, the Assets shall not include, and there is excepted, reserved and excluded from the purchase and sale contemplated hereby (collectively, the “Excluded Assets”):

 

(a)   all corporate, financial, income and franchise tax and legal records of Seller that relate to Seller’s business generally (whether or not relating to the Assets), and all books, records and files to the extent that the same relate to the Excluded Assets and those records retained by Seller pursuant to Section 1.2(h) and copies of any other Records retained by Seller pursuant to Section 1.5 ;

 

 

(b)    all geological and geophysical data (including all seismic data, including reprocessed data) and all logs, interpretive data, technical evaluations, technical outputs, reserve estimates and economic estimates;

(c)    all rights to any refund of Taxes or other costs or expenses borne by Seller or Seller’s predecessors in interest and title attributable to periods prior to the Effective Time;

 

(d)    Seller’s area-wide bonds, permits and licenses or other permits, licenses or authorizations used in the conduct of Seller’s business generally;

(e)    those items listed in Schedule 1.3(e) ;

 

(f)    all trade credits, account receivables, note receivables, and other receivables attributable to the Assets with respect to any period of time prior to the Effective Time;

 

(g)    all right, title and interest of Seller in and to vehicles used in connection with the Assets;

(h)    all rights, titles, claims and interests of Seller or any Affiliate of Seller (i) to or under any policy or agreement of insurance or any insurance proceeds; except to the extent Purchaser assumes liability for a Claim for which Seller is insured, and (ii) to or under any bond or bond proceeds;

(i)    any patent, patent application, logo, service mark, copyright, trade name or trademark of or associated with Seller or any Affiliate of Seller or any business of Seller or of any Affiliate of Seller; and

(j)    any pipelines, equipment or other properties that are located upstream of the inlet flange of the meters where Hydrocarbons are delivered into the Pipelines.

 

(a)   Subject to Section 1.5 , possession of the Assets shall be transferred from Seller to Purchaser at the Closing, but, if Closing occurs, certain financial benefits and burdens of the Assets shall be transferred effective as of 7:00 A.M., local time, where the respective Assets are located, on May 1, 2007 (the “Effective Time”), as described below.

 

(b)   Purchaser shall be entitled to all Hydrocarbon linefill and Hydrocarbons from or attributable to the Assets at and after the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits earned with respect to the Assets at or after the Effective Time, and shall be responsible for (and entitled to any refunds with respect to) all Property Costs incurred at and after the Effective Time (or, with respect to ad valorem, property and similar Taxes imposed upon or arising from the Assets, for the period from and after January 1, 2007). Seller shall be entitled to Hydrocarbons from or attributable to the Assets prior to the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receipts and credits earned with respect to the Assets prior to the Effective Time, and shall be responsible for (and entitled to any refunds with respect to) all Property Costs incurred prior to the Effective Time (other than with respect to ad valorem, property and similar Taxes imposed upon or arising from the Assets and attributable to the period on or after January 1, 2007 but prior to the Effective Time, which Taxes constitute a Property Cost that Purchaser shall assume and be liable to pay, and entitled to any refunds with respect thereto). “Earned” and "incurred”, as used in this Agreement, shall be interpreted in accordance with generally accepted accounting principles. “ Property Costs ” means all costs attributable to the ownership and operation of the Assets (including without limitation (a) ad valorem, property and similar Taxes based upon or measured by the ownership or operation of the Assets, but excluding any other Taxes, (b) Imbalances, and (c) obligations to make any payments owing to third parties that (i) arise under a contract or agreement or (ii) relate to amounts held in suspense) and capital expenditures incurred in the ownership and operation of the Assets, but excluding without limitation liabilities, losses, costs, and expenses attributable to (i) Claims for personal injury or death, or property damage or to the extent based on a violation of any Law, (ii) obligations to dismantle, abandon and salvage facilities, and (iii) obligations to remediate any contamination of groundwater, surface water, soil, Equipment or Pipelines under applicable Environmental Laws, all of which are addressed in Article 11 . For purposes of this Section 1.4 , determination of whether Property Costs are attributable to the period before or after the Effective Time shall be based on when services are rendered, when the goods are delivered, or when the work is performed. For clarification, the date an item or work is ordered is not the date of a pre-Effective Time transaction for settlement purposes, but rather the date on which the item ordered is delivered to the job site, or the date on which the work ordered is performed, shall be the relevant date. For purposes of allocating Hydrocarbons (and accounts receivable with respect thereto), under this Section 1.4 , Hydrocarbons shall be deemed to be “from or attributable to” the Assets when they pass through the delivery point sales meters on the Pipelines. Seller shall utilize reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production when exact meter readings or gauging and strapping data is not available. Seller shall provide to Purchaser, no later than three (3) Business Days prior to Closing, all data necessary to support any estimated allocation, for purposes of establishing the adjustment to the Purchase Price pursuant to Section 2.2 hereof that will be used to determine the Closing Payment (as defined in Section 9.4(a) ). Taxes, right-of-way fees and other Property Costs that are paid periodically shall be prorated based on the number of days in the applicable period falling before and the number of days in the applicable period falling at or after the Effective Time (or, in the case of ad valorem, property and similar Taxes, January 1, 2007). In each case, Purchaser shall be responsible for the portion allocated to the period at and after the Effective Time (or, in the case of ad valorem, property and similar Taxes, January 1, 2007) and Seller shall be responsible for the portion allocated to the period before the Effective Time (or, in the case of ad valorem, property and similar Taxes, January 1, 2007).

 

 

(a)   Seller, at Purchaser’s cost, shall use reasonable efforts to deliver the Records (FOB Seller's office) to the office designated in writing by Purchaser within sixty (60) days following Closing. Seller may retain original Records of those items as set forth in Section 1.2(h) and/or copies of any Records. If Seller elects to retain original files, Purchaser will be provided with copies of same, at Seller’s cost.

(b)   Purchaser, for a period of seven (7) years following Closing, will (i) retain the Records, (ii) provide Seller, its Affiliates, and its and their officers, employees and representatives with access to the Records during normal business hours for review and copying at Seller’s expense, and (iii) provide Seller, its Affiliates, and its and their officers, employees and representatives with access, during normal business hours, to materials received or produced after Closing relating to any Indemnity Claim made under Section 11.4 of this Agreement for review and copying at Seller’s expense.

 

 

ARTICLE 2

PURCHASE PRICE

 

Section 2.1   Purchase Price .

 

The purchase price for the Assets (the “Purchase Price”) shall be $180,250,000 adjusted as provided in Section 2.2 .

 

Section 2.2   Adjustments to Purchase Price .

 

The Purchase Price for the Assets shall be adjusted as follows with all such amounts being determined in accordance with generally accepted accounting principles:

 

(a)    Reduced by the aggregate amount of the following proceeds received by Seller between the Effective Time and the Closing Date (with the period between the Effective Time and the Closing Date referred to as the “Adjustment Period”): (i) proceeds from the sale of Hydrocarbons (net of any gathering, processing and transportation costs and any Hydrocarbon severance, sales or excise Taxes not reimbursed to Seller by the purchaser of Hydrocarbons) attributable to the Assets during the Adjustment Period, and (ii) other proceeds earned with respect to the Assets during the Adjustment Period;

 

(b)    Increased by the fair market value of merchantable Hydrocarbons stored in tanks (but excluding Hydrocarbon linefill located in Pipelines and volumes of liquid Hydrocarbons located in tanks along the Pipelines that are below the minimum required to operate such tanks) attributable to the ownership and operation of the Assets that belong to Seller as of the Effective Time;

(c)    Increased or reduced as agreed upon in writing by Seller and Purchaser;

(d)    Increased by the amount of all Property Costs and other costs attributable to the ownership and operation of the Assets which are paid by Seller and incurred at or after the Effective Time, except any Property Costs and other such costs already deducted in the determination of proceeds in Section 2.2(a) ; and

(e)    Decreased by an amount equal to the amount of any ad valorem, property and similar Taxes assessed against or pertaining to the Assets for periods after January 1 through the Effective Time with respect to the calendar year in which Closing occurs.

Each adjustment made pursuant to Sections 2.2(a) and (b) shall serve to satisfy, up to the amount of the adjustment, Purchaser’s entitlement under Section 1.4 to Hydrocarbons attributable to the Assets during the Adjustment Period, and to the value of other income, proceeds, receipts and credits earned with respect to the Assets during the Adjustment Period, and as such, Purchaser shall not have any separate rights to receive any Hydrocarbons or income, proceeds, receipts and credits with respect to which a downward adjustment has been made. Similarly, the adjustment described in Section 2.2(d) shall serve to satisfy, up to the amount of the adjustment, Purchaser’s obligation under Section 1.4 to pay Property Costs and other costs attributable to the ownership and operation of the Assets which are incurred during the Adjustment Period, and as such, Purchaser shall not be separately obligated to pay for any Property Costs or other such costs with respect to which an upward adjustment has been made.

 

 

The Purchase Price, adjusted as set forth in Sections (a) through (e) , less the Deposit, shall be increased by simple interest thereon from the Effective Time to the Closing Date, with all interest computed at the Agreed Interest Rate.

A final settlement of the adjustments set forth in Sections 2.2 (a), (b), (c) and (e) , shall be made in accordance with Section 9.4(b) . Notwithstanding anything to the contrary, Property Costs shall also be estimated and adjusted under Sections 2.2(d) and 9.4(b), but shall remain subject to Section 11.2 and indemnification under Section 11.4 .

Section 2.3   Allocation of Purchase Price for Tax Purposes .

 

Concurrent with the execution of this Agreement, Purchaser and Seller will agree upon an allocation of the unadjusted Purchase Price among the Assets, in compliance with the principles of Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations thereunder. Such allocation of value shall be attached to this Agreement as Schedule 2.3 for purposes of Internal Revenue Service Form 8594. The “Tax Allocated Value” for any Asset equals the portion of the unadjusted Purchase Price allocated to such Asset on Schedule 2.3 , increased or reduced as described in this Article 2 . Any such adjustments to the Purchase Price shall be applied on a pro rata basis to the amounts set forth on Schedule 2.3 for all Assets. After Seller and Purchaser have agreed on the Tax Allocated Values for the Assets, Seller will be deemed to have accepted such Tax Allocated Values for purposes of this Agreement and the transactions contemplated hereby, but otherwise makes no representation or warranty as to the accuracy of such values. Seller and Purchaser agree (i) that the Tax Allocated Values shall be used by Seller and Purchaser as the basis for reporting asset values and other items for purposes of all federal, state, and local Tax Returns, including without limitation Internal Revenue Service Form 8594 and (ii) that neither they nor their Affiliates will take positions inconsistent with the Tax Allocated Values in notices to Governmental Bodies or in audit or other proceedings with respect to Taxes.

Section 2.4   Deposit .

Concurrently with the execution of this Agreement, Purchaser has paid to Seller an earnest money deposit in an amount equal to five percent (5%) of the Purchase Price (the "Deposit"). If the Closing occurs, the Deposit with simple interest accruing thereon from the date hereof to the date immediately preceding the Effective Time computed at the Agreed Interest Rate shall be returned to Purchaser by Seller on the Closing Date following the receipt by Seller of the Closing Payment, or if the Closing does not occur, shall be otherwise distributed in accordance with the terms of this Agreement.

 

ARTICLE 3

TITLE MATTERS

Section 3.1   Seller’s Title .

 

(a)   Except for the special warranty of title referenced in Section 3.1(b) , Seller makes no warranty or representation, express, implied, statutory or otherwise, with respect to Seller’s title to any of the Assets and Purchaser hereby acknowledges and agrees that Purchaser’s sole remedy for any defect of title shall be pursuant to the special warranty of title contained in the Conveyance referenced in Section 3.1(b) .

 

(b)   The conveyance to be delivered by Seller to Purchaser shall be substantially in the form of Exhibit B hereto (the “Conveyance”) and contain a special warranty of Defensible Title by, through and under Seller and its Affiliates but not otherwise, but shall otherwise be without warranty of title of any kind, express, implied or statutory or otherwise.

(c)   Purchaser shall not be entitled to protection under Seller’s special warranty of title in the Conveyance against any matter that would cause Seller not to have Defensible Title that is disclosed in writing to Purchaser or of which Purchaser has actual knowledge prior to the date hereof.

(d)   Notwithstanding anything herein provided to the contrary, if any title defect results from any matter which could also result in the breach of any representation or warranty of Seller set forth in Article 5 , then Purchaser shall only be entitled to assert such matter as a breach of Seller’s special warranty of title contained in the Conveyance to the extent not prohibited by Section 3.1(c) , but shall be precluded from also asserting such matter as the basis of the breach of any such representation or warranty of Seller set forth in Article 5 .

Section 3.2   [RESERVED]

 

Section 3.3   [RESERVED]

Section 3.4   [RESERVED]

 

Section 3.5   Casualty or Condemnation Loss .

 

(a)   Subject to the provisions of Section 3.5(b), Purchaser shall assume all risk of loss with respect to, and any change in the condition of the Assets from the Effective Time until Closing and the depreciation of personal property due to ordinary wear and tear.

(b)   Subject to the provisions of Sections 8.1(f) and 8.2(e) hereof, if, after the date of this Agreement but prior to the Closing Date, any portion of the Assets is destroyed by fire or other casualty or is taken in condemnation or under right of eminent domain, and the loss as a result of such individual casualty or taking is less than seven and one-half percent (7.5%)   of the unadjusted Purchase Price, Purchaser shall nevertheless be required to close and Seller shall elect by written notice to Purchaser prior to Closing either (i) to cause the Assets affected by any casualty or taking to be repaired or restored to at least its condition prior to such casualty, at Seller’s sole cost, which repair or restoration may take place after Closing so long as Seller and Purchaser have agreed on a reasonable time period in which to complete such repairs and restoration and Seller executes an access agreement in form and substance reasonably acceptable to Purchaser and Seller, or (ii) to indemnify Purchaser through a document reasonably acceptable to Seller and Purchaser against any costs or expenses that Purchaser reasonably incurs to repair the Assets subject to any casualty or taking. In each case, Seller shall retain all rights to insurance and other claims against third parties with respect to the casualty or taking except to the extent the parties otherwise agree in writing.

 

 

Section 3.6   [RESERVED]

 

Section 3.7   Government Approvals Respecting Assets .

(a)   Federal and State Approvals . With respect to consents and approvals customarily obtained from Governmental Bodies after closing in transactions of this nature, Purchaser, within thirty (30) days after Closing, shall file for approval with the applicable Governmental Bodies all assignment documents and other state and federal transfer documents required to effectuate the transfer of the Assets. Purchaser further agrees promptly after Closing to take all other actions reasonably required of it by federal or state agencies having jurisdiction to obtain all requisite regulatory approvals with respect to this transaction, and to use its reasonable commercial efforts to obtain the approval by such federal or state agencies, as applicable, of Seller’s assignment documents requiring federal or state approval in order for Purchaser to be recognized by the federal or state agencies as the owner of the Assets. Purchaser shall provide Seller with approved copies of the assignment documents and other state and federal transfer documents, as soon as they are available.

 

ARTICLE 4

ENVIRONMENTAL MATTERS

Section 4.1   [RESERVED ]

Section 4.2   NORM, Wastes and Other Substances .

Purchaser acknowledges that the Assets have been used for the gathering and transportation of Hydrocarbons and that there may be petroleum, produced water, wastes, or other substances or materials located in, on or under the System or associated with the Assets. Equipment and sites included in the Assets may contain asbestos, hazardous substances, or NORM. NORM may affix or attach itself to the inside of pipes, materials, and equipment as scale, or in other forms. The pipes, materials, and equipment included in the Assets may contain NORM and other wastes or hazardous substances. NORM containing material and/or other wastes or hazardous substances may have come in contact with various environmental media, including without limitation, water, soils or sediment. Special procedures may be required for the assessment, remediation, removal, transportation, or disposal of environmental media, wastes, asbestos, hazardous substances, and NORM from the Assets.

Section 4.3   Inspection Indemnity .

PURCHASER HEREBY AGREES TO DEFEND, INDEMNIFY, RELEASE, PROTECT, SAVE AND HOLD HARMLESS THE SELLER INDEMNITEES FROM AND AGAINST ANY AND ALL LOSSES AND CLAIMS ARISING OUT OF OR RELATING TO ANY DUE DILIGENCE ACTIVITY CONDUCTED BY PURCHASER OR ITS AGENTS, WHETHER BEFORE OR AFTER THE EXECUTION OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY LOSSES RESULTING, IN WHOLE OR IN PART, FROM THE NEGLIGENCE OR STRICT LIABILITY OF SELLER, BUT EXCLUDING ANY LOSSES TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A SELLER INDEMNITEE.

 

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SELLER

Section 5.1   Generally .

 

(a) Any representation or warranty qualified “to the knowledge of Seller” or “to Seller’s knowledge” or with any similar knowledge qualification is limited to matters within the actual knowledge of (i) the officers of Seller and its Affiliates or (ii) the employees of Seller who have responsibility for the Assets and who have the following titles: Antioch Operations Manager and Midstream Commercial Regional Manager. “Actual knowledge” for purposes of this Agreement means information actually personally known by such officers or employees.

 

(b) Inclusion of a matter on a Schedule in relation to a representation or warranty which addresses matters having a Material Adverse Effect shall not be deemed an indication that such matter does, or may, have a Material Adverse Effect. Likewise, the inclusion of a matter on a Schedule in relation to a representation or warranty shall not be deemed an indication that such matter necessarily would, or may, breach such representation or warranty absent its inclusion on such Schedule. Matters may be disclosed on a Schedule to this Agreement for purposes of information only.

 

(c) Subject to the foregoing provisions of this Section 5.1 , the disclaimers and waivers contained in Sections 11.8 and 11.9 and the other terms and conditions of this Agreement, Seller represents and warrants to Purchaser the matters set out in Sections 5.2 through 5.20 .

 

Section 5.2   Existence and Qualification .

 

Each of AGC and AES is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business as a foreign corporation where the Assets are located, except where the failure to so qualify would not have a Material Adverse Effect.

 

Section 5.3   Power .

 

Each of AGC and AES has the corporate power to enter into and perform this Agreement and consummate the transactions contemplated by this Agreement.

 

Section 5.4   Authorization and Enforceability .

 

The execution, delivery and performance of this Agreement, and the performance of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller (and all documents required hereunder to be executed and delivered by Seller at Closing will be duly executed and delivered by Seller) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Seller, enforceable against Seller in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

 

Section 5.5   No Conflicts .

 

To Seller’s knowledge, subject to compliance with the Preference Rights and Transfer Requirements set forth in Schedule 5.13 , the execution, delivery and performance of this Agreement by Seller, and the transactions contemplated by this Agreement will not (i) violate any provision of the certificate of incorporation or bylaws of Seller, (ii) result in default (with due notice or lapse of time or both) or the creation of any lien or encumbrance or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license or agreement to which Seller is a party or which affect the Assets, (iii) violate any judgment, order, ruling, or decree applicable to Seller as a party in interest, (iv) violate any Laws applicable to Seller or any of the Assets, except for (a) rights to consent by, required notices to, filings with, approval or authorizations of, or other actions by any Governmental Body where the same are not required prior to the assignment of the related Asset or they are customarily obtained subsequent to the sale or conveyance thereof and (b) any matters described in clauses (ii), (iii) or (iv) above which would not have a Material Adverse Effect.

 

Section 5.6   Liability for Brokers’ Fees .

 

Purchaser shall not directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Seller, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation in connection with this Agreement or any agreement or transaction contemplated hereby.

 

Section 5.7   Litigation .

 

Except as set forth in: (a) Schedule 5.7(a), to Seller’s knowledge, no investigation, proceeding, action, suit, or other legal proceeding of any kind or nature before any Governmental Body or arbitrator (including any take-or-pay claims) which could have a Material Adverse Effect is pending or, to Seller’s knowledge, threatened to which Seller is a party and which relates to the Assets; and (b) Schedule 5.7(b) , to Seller’s knowledge, no notice in writing from any Governmental Body which could have a Material Adverse Effect has been received by Seller claiming any violation of or noncompliance with any Law with respect to the Assets (including any such Law concerning the conservation of natural resources).

 

Section 5.8   Taxes and Assessments.

 

With respect to all Taxes related to the Assets, to the knowledge of Seller, (a) all reports, returns, statements (including estimated reports, returns or statements), and other similar filings (the “Tax Returns”) relating to the Assets required to be filed by Seller with respect to such Taxes have been timely filed with the appropriate Governmental Body in all jurisdictions in which such Tax Returns are required to be filed, (b) such Tax Returns are true and correct in all material respects, and (c) all Taxes reported on such Tax Returns have been paid, except those being contested in good faith.

To Seller’s knowledge, with respect to all Taxes related to the Assets, except as set forth on Schedule 5.8 , (i) there are not currently in effect any extension or waiver of any statute of limitations of any jurisdiction regarding the assessment or collection of any such Tax; (ii) there are no administrative proceedings or lawsuits pending against the Assets or Seller by any taxing authority; and (iii) there are no Tax liens on any of the Assets except for liens for Taxes not yet due.

 

 

Section 5.9   Compliance with Laws .

 

Except as disclosed on Schedule 5.9 , to the knowledge of Seller, the Assets are, and the operation of the Assets is, in compliance with the provisions and requirements of all Laws of all Governmental Bodies having jurisdiction with respect to the Assets, or the ownership, operation, development, maintenance, or use of any thereof, except where the failure to so comply would not have a Material Adverse Effect. Notwithstanding the foregoing, Seller makes no representation or warranty, express or implied, under this Section relating to any Environmental Liabilities or Environmental Law.

 

Section 5.10   Contracts .

 

Except as disclosed on Schedule 5.10(a) , to the knowledge of Seller, Seller has paid its share of all costs payable by it under the contracts and agreements described in Schedule 1.2(a), and Seller has not received as of the date hereof written notice of termination or breach thereof. Seller is in compliance with all Contracts listed on Schedule 1.2(a) except as disclosed on Schedule 5.10(a) and except such non-compliance as would not, individually or the aggregate, have a Material Adverse Effect. To Seller's knowledge, Schedule 5.10(b) sets forth all of the following contracts and agreements to which any of the Assets are bound as of the date hereof or Closing:

(i)    any agreement with any Affiliate of Seller;

 

(ii)    any agreement or contract for the gathering, processing, transportation, purchase, sale, exchange, or other disposition of Hydrocarbons that is not cancelable without penalty or other payment on not more than 30 days prior written notice;

 

(iii)    any tax partnership agreement of or binding upon Seller affecting any of the Assets; and

 

(iv)    leases of personal property used or held for use primarily in the operation of the Assets to which Seller is a party or by which it is bound (“Personal Property   Leases”) involving annual payments in excess of $150,000, other than any Personal Property Leases that have been terminated or will expire by their terms before or upon the Closing.

 

Section 5.11   [RESERVED]

 

Section 5.12   Governmental Authorizations.

To Seller’s knowledge, except as disclosed on Schedule 5.12 , Seller has obtained and is maintaining all federal, state and local governmental licenses, permits, franchises, orders, exemptions, variances, waivers, authorizations, certificates, consents, rights, privileges and applications therefor (the “Governmental Authorizations”) that are presently necessary or required for the ownership and operation of the Assets as currently owned and operated, the loss of which would, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of Seller, except as disclosed in Schedule 5.7(a) , Schedule 5.7(b) or Schedule 5.12 and except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) Seller has operated the Assets in accordance with the conditions and provisions of such Governmental Authorizations, and (ii) no written notices of violation have been received by Seller, and no proceedings are pending or, to Seller’s knowledge, threatened in writing that might result in any modification, revocation, termination or suspension of any such Governmental Authorizations or which would require any corrective or remediation action by Seller.

 

 

Section 5.13   Preference Rights and Transfer Requirements .

 

To Seller’s knowledge, none of the Assets, or any portion thereof, is subject to any Preference Right or Transfer Requirement which may be applicable to the transactions contemplated by this Agreement, except for (i) Preference Rights and Transfer Requirements contained in easements, rights-of-way or equipment leases and (ii) Preference Rights and Transfer Requirements as are set forth on Schedule 5.13 .

 

Section 5.14   [RESERVED]

 

Section 5.15   Outstanding Capital Commitments .

 

As of the date hereof, there are no outstanding AFEs or other commitments to make capital expenditures which are binding on the Assets and which Seller reasonably anticipates will individually require expenditures by the owner of the Assets after the Closing Date in excess of $75,000 other than those shown on Schedule 5.15 .

 

Section 5.16 Imbalances .

 

To Seller’s knowledge, Schedule 5.16 accurately sets forth in all material respects all of Seller’s Imbalances as of January 1, 2007 arising with respect to the Assets and, except as disclosed in Schedule 5.16 , as of January 1, 2007, (i) no Person is entitled to receive any material portion of the Seller’s Hydrocarbons attributable to the Assets or to receive material cash or other payments to “balance” any disproportionate allocation of Hydrocarbons attributable to the Assets under any gas processing or dehydration agreement, gas gathering and transportation agreements, gas purchase agreement, or other agreements, whether similar or dissimilar, (ii) Seller is not obligated to deliver any material quantities of gas or to pay any material penalties or other amounts, in connection with the violation of any of the terms of any gas contract or other agreement with shippers with respect to the Assets, and (iii) Seller is not obligated to pay any material penalties or other material payments under any gas transportation or other agreement as a result of the delivery of quantities of gas in excess of the contract requirements.

 

Section 5.17   Condemnation .

 

To Seller’s knowledge, there is no actual or threatened taking (whether permanent, temporary, whole or partial) of any part of the Assets by reason of condemnation or the threat of condemnation.

Section 5.18   Bankruptcy .

 

To Seller’s knowledge, there are no bankruptcy, reorganization, or similar arrangement proceedings pending, being contemplated by or threatened against Seller or any Affiliate of Seller.

 

 

Section 5.19   NGA .

 

No consent is required in connection with the transaction contemplated hereby under the Natural Gas Policy Act of 1978, as amended. Seller is not an interstate pipeline company within the meaning of the Natural Gas Act of 1938.

 

Section 5.20   Investment Company .

 

Seller is not an investment company or a company controlled by an investment company within the meaning of the Investment Company Act of 1940, as amended.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller the following:

 

Section 6.1   Existence and Qualification .

 

Purchaser is a limited partnership duly formed, validly existing and in good standing under the laws of the state of Delaware; and Purchaser is duly qualified to do business as a foreign limited partnership in every jurisdiction in which it is required to qualify in order to conduct its business except where the failure to so qualify would not have a material adverse effect on Purchaser or its properties; and Purchaser is duly qualified to do business as a foreign limited partnership in the respective jurisdictions where the Assets are located.

 

Section 6.2   Power .

 

Purchaser has the limited partnership power to enter into and perform this Agreement and consummate the transactions contemplated by this Agreement.

 

Section 6.3   Authorization and Enforceability .

The execution, delivery and performance of this Agreement, and the performance of the transaction contemplated hereby, have been duly and validly authorized by all necessary limited partnership action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser (and all documents required hereunder to be executed and delivered by Purchaser at Closing will be duly executed and delivered by Purchaser) and this Agreement constitutes, and at the Closing such documents will constitute, the valid and binding obligations of Purchaser, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

Section 6.4   No Conflicts .

 

The execution, delivery and performance of this Agreement by Purchaser, and the transactions contemplated by this Agreement will not (i) violate any provision of the limited partnership agreement or other governing documents of Purchaser, (ii) result in a default (with due notice or lapse of time or both) or the creation of any lien or encumbrance or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license or agreement to which Purchaser is a party, (iii) violate any judgment, order, ruling, or regulation applicable to Purchaser as a party in interest, or (iv) violate any Law applicable to Purchaser or any of its assets, or (v) require any filing with, notification of or consent, approval or authorization of any Governmental Body or authority, except any matters described in clauses (ii), (iii), (iv) or (v) above which would not have a material adverse effect on Purchaser or the transactions contemplated hereby.

 

 

Section 6.5   Liability for Brokers’ Fees .

 

Seller shall not directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of Purchaser, for brokerage fees, finder’s fees, agent’s commissions or other similar forms of compensation in connection with this Agreement or any agreement or transaction contemplated hereby.

 

  Section 6.6   Litigation .

 

There are no actions, suits or proceedings pending, or to the actual knowledge of Purchaser’s officers, threatened in writing before any Governmental Body against Purchaser or any Affiliate of Purchaser which are reasonably likely to impair materially Purchaser’s ability to perform its obligations under this Agreement.

Section 6.7   Financing .

 

As of Closing, Purchaser will have sufficient cash, available lines of credit or other sources of immediately available funds (in United States dollars) to enable it to pay the Closing Payment to Seller at the Closing.

Section 6.8   [RESERVED]

Section 6.9   Limitation .

 

Except for the representations and warranties expressly made by Seller in Article 5 of this Agreement, or confirmed in any certificate furnished or to be furnished to Purchaser pursuant to this Agreement, Purchaser represents and acknowledges that (i) there are no representations or warranties, express, statutory or implied, as to the Assets or prospects thereof, and (ii) Purchaser has not relied upon any oral or written information provided by Seller. Without limiting the generality of the foregoing, Purchaser represents and acknowledges that Seller has made and will make no representation or warranty regarding any matter or circumstance relating to Environmental Laws, Environmental Liabilities, the release of materials into the environment or protection of human health, safety, natural resources or the environment or any other environmental condition of the Assets. Purchaser further represents and acknowledges that it is knowledgeable of the oil and gas business and of the usual and customary practices of owners such as Seller and that it has had access to the Assets, the officers and employees of Seller, and the books, records and files of Seller relating to the Assets, and in making the decision to enter into this Agreement and consummate the transactions contemplated hereby, Purchaser has relied solely on the basis of its own independent due diligence investigation of the Assets.

 

 

Section 6.10   SEC Disclosure .

Purchaser is acquiring the Assets for its own account for use in its trade or business, and not with a view toward or for sale associated with any distribution thereof, nor with any present intention of making a distribution thereof within the meaning of the Securities Act of 1933, as amended and applicable state securities laws.

Section 6.11   Bankruptcy .

There are no bankruptcy, reorganization or receivership proceedings pending against, being contemplated by, or threatened against Purchaser.

ARTICLE 7

COVENANTS OF THE PARTIES

 

Section 7.1   Access .

 

Between the date of execution of this Agreement and continuing until ten (10) Business Days prior to the Closing Date, Seller will give Purchaser and its representatives access to the Assets and access to the Records in Seller’s possession, for the purpose of conducting an investigation of the Assets, but only to the extent that Seller may do so without violating any obligations to any third party and to the extent that Seller has authority to grant such access without breaching any restriction binding on Seller. Notwithstanding anything to the contrary contained herein, Purchaser shall not conduct any environmental assessment of the Assets from the date hereof through the Closing Date and shall not have access to the Assets for such purpose. Any access by Purchaser under this Section 7.1 shall be limited to Seller’s normal business hours, and any weekends and after hours requested by Purchaser that can be reasonably accommodated by Seller, and Purchaser’s investigation shall be conducted in a manner that minimizes interference with the operation of the Assets. All information obtained by Purchaser and its representatives under this Section shall be subject to the terms of Section 11.4(b)(vi) and the terms of that certain confidentiality agreement between Anadarko Petroleum Corporation and Purchaser dated December 1, 2006, as amended (the "Confidentiality Agreement").

Section 7.2   Government Reviews .

 

Seller and Purchaser shall in a timely manner (a) make all required filings, if any, with and prepare applications to and conduct negotiations with, each governmental agency as to which such filings, applications or negotiations are necessary or appropriate in the consummation of the transactions contemplated hereby specifically including but not limited to the HSR Act, (b) provide such information as each may reasonably request to make such filings, prepare such applications and conduct such negotiations, and (c) request early termination or waiver of any applicable waiting period under the HSR Act. Each party shall cooperate with and use all commercially reasonable efforts to assist the other with respect to such filings, applications and negotiations.

 

 

Section 7.3   Notification of Breaches .

Until the Closing,

 

(a)   Purchaser shall notify Seller promptly after Purchaser obtains actual knowledge that any representation or warranty of Seller or Purchaser contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Seller prior to or on the Closing Date has not been so performed or observed in any material respect.

 

(b)   Seller shall notify Purchaser promptly after Seller obtains actual knowledge that any representation or warranty of Seller or Purchaser contained in this Agreement is untrue in any material respect or will be untrue in any material respect as of the Closing Date or that any covenant or agreement to be performed or observed by Purchaser prior to or on the Closing Date has not been so performed or observed in any material respect.

 

(c)   If any of Purchaser’s or Seller’s representations or warranties is untrue or shall become untrue in any material respect between the date of execution of this Agreement and the Closing Date, or if any of Purchaser’s or Seller’s covenants or agreements to be performed or observed prior to or on the Closing Date shall not have been so performed or observed in any material respect, but if such breach of representation, warranty, covenant or agreement shall (if curable) be cured by the Closing (or, if the Closing does not occur, by the date set forth in Section 10.1 ), then such breach shall be considered not to have occurred for all purposes of this Agreement.

Section 7.4   Operatorship .

 

(a)    Seller will prepare and Seller and Purchaser will execute on the Closing Date all assignments necessary to convey to Purchaser all Surface Contracts in the form as prescribed by the applicable Governmental Body and otherwise acceptable to Purchaser and Seller.

(b)    Purchaser shall, promptly following Closing, file all appropriate forms and declarations or bonds with federal and state agencies relative to its assumption of operatorship. Seller shall execute and deliver to Purchaser and Purchaser shall promptly file the appropriate forms with the applicable regulatory agency transferring operatorship of such Assets to Purchaser.

Section 7.5   Public Announcements .

 

Until the Closing, neither party shall make any press release or other public announcement regarding the existence of this Agreement, the contents hereof or the transactions contemplated hereby without the prior written consent of the other; provided, however, the foregoing shall not restrict disclosures by Purchaser or Seller which are required by applicable securities or other laws or regulations or the applicable rules of any stock exchange having jurisdiction over the disclosing party or its Affiliates; and provided, further, that Purchaser may disclose the existence and contents of this Agreement and the transactions contemplated hereby to the Standard & Poor’s and Moody’s rating agencies (provided that such agencies are obligated to keep such information confidential). At or within 60 days after Closing, the content of any press release or public announcement shall be subject to the prior review and reasonable approval of Seller and Purchaser.

 

 

Section 7.6   Operation of Business .

 

Except as set forth on Schedule 7.6 , until the Closing, Seller (i) will operate its business in the ordinary course, consistent with past practices, (ii) will not, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, commit to any operation, or series of related operations, reasonably anticipated by Seller to require future capital expenditures by Seller or Buyer in respect of the Assets in excess of $150,000.00, or make any capital expenditures in excess of $150,000.00, or terminate, materially amend, execute or extend any material agreements affecting the Assets, (iii) will maintain insurance coverage on the Assets presently furnished by nonaffiliated third parties in the amounts and of the types presently in force, (iv) will use commercially reasonable efforts to maintain in full force and effect all Contracts and Surface Contracts, (v) will maintain all material governmental permits and approvals affecting the Assets, (vi) will not transfer, sell, hypothecate, encumber or otherwise dispose of any material Assets except for sales and dispositions of Hydrocarbons and Equipment made in the ordinary course of business consistent with past practices, and (vii) will not commit to do any of the foregoing. Purchaser’s approval of any action restricted by this Section 7.6 shall be considered granted within ten (10) days (unless a shorter time is reasonably required by the circumstances and such shorter time is specified in Seller’s written notice) of Seller’s notice to Purchaser requesting such consent unless Purchaser notifies Seller to the contrary in writing during that period. In the event of an emergency, Seller may take such action as a prudent operator would take and shall notify Purchaser of such action promptly thereafter.

  Section 7.7   [RESERVED]

Section 7.8   Preference Rights and Transfer Requirements .

 

Purchaser’s purchase of the Assets is expressly subject to all validly existing and applicable Preference Rights and Transfer Requirements. Prior to the Closing Date, Seller shall initiate all procedures which in Seller’s good faith judgment are reasonably required to comply with or obtain the waiver of all Preference Rights and Transfer Requirements set forth in Schedule 5.13 with respect to the transactions contemplated by this Agreement. Seller shall not be obligated to pay any consideration to (or incur any cost or expense for the benefit of) the holder of any Preference Right or Transfer Requirement in order to obtain the waiver thereof or compliance therewith.

 

Section 7.9   Tax Matters .

 

(a)   Subject to the provisions of Section 12.3 , Seller shall be responsible for all Taxes related to the Assets (other than ad valorem, property, severance and similar Taxes based upon or measured by the ownership or operation of the Assets which are addressed in Section 1.4 ) attributable to any period of time at or prior to the Closing Date, and Purchaser shall be responsible for all such Taxes related to the Assets attributable to any period of time after the Closing Date. Regardless of which party is responsible, Seller shall handle payment to the appropriate Governmental Body of all Taxes with respect to the Assets which are required to be paid prior to Closing (and shall file all Tax Returns with respect to such Taxes). If requested by Purchaser, Seller will assist Purchaser with preparation of all ad valorem and property Tax Returns due on or before December 31, 2007 (including any extensions requested) to the extent such Tax Returns relate or are attributable to the period occurring before the Closing Date. Seller shall deliver to Purchaser within thirty (30) days of filing copies of all Tax Returns filed by Seller after the Closing Date relating to the Assets and any supporting documentation provided by Seller to taxing authorities, excluding Tax Returns related to income tax, franchise tax, or other similar Taxes.

 

 

(b)   So long as it does not delay the Closing , Purchaser agrees to cooperate (at no cost or liability to Purchaser) with Seller so that Seller’s transfer of the Assets to Purchaser shall, at Seller’s election, be accomplished in a manner enabling the transfer to qualify as a part of a like-kind exchange of property by Seller within the meaning of Section 1031 of the Code. If Seller so notifies Purchaser of this election, Purchaser shall reasonably cooperate with Seller to effect such like-kind exchange, which cooperation shall include, without limitation, taking such actions as Seller reasonably requests in order to pay the Purchase Price in a manner which enables such transfer to qualify as part of a like-kind exchange of property within the meaning of Section 1031 of the Code, and Purchaser agrees that Seller may assign its rights (but not its obligations) under this Agreement to a qualified intermediary as defined in Treasury Regulations Section 1.1031(k) - 1(g)(4)(iii) under United States Treasury Regulations, to qualify the transfer of the Purchase Price as a part of a like-kind exchange of property within the meaning of Section 1031 of the Code. Any assignment of this Agreement to a qualified intermediary shall not release Seller from any of its liabilities or obligations to Purchaser under this Agreement . Seller shall be solely responsible to designate and obtain exchange property and to otherwise comply with Section 1031 of the Code . The rights of the Parties shall not be affected by any determination that the transaction does not q ualify as a like-kind exchange.

 

Section 7.10   Further Assurances .

 

After Closing, Seller and Purchaser each agrees to take such further actions and to execute, acknowledge and deliver all such further documents as are reasonably requested by the other party for carrying out the purposes of this Agreement or of any document delivered pursuant to this Agreement.

 

Section 7.11   [ RESERVED]

 

Section 7.12   Non-UCI Compressors.   Prior to Closing, Seller shall purchase at its cost all leased compressors identified on Schedule 7.12 .   Said purchased compressors shall be included in the Assets.

 

Section 7.13   Transition Services Agreement .

Between the date hereof and the Closing Date, each of Seller and Purchaser shall use its reasonable efforts to negotiate in good faith a form of transition services agreement on terms that are mutually acceptable to Seller and Purchaser to be executed at Closing by Seller and Purchaser (the “Transition Services Agreement”).

 

ARTICLE 8

CONDITIONS TO CLOSING

 

Section 8.1   Conditions of Seller to Closing.

The obligations of Seller to consummate the transactions contemplated by this Agreement are subject, at the option of Seller, to the satisfaction on or prior to Closing of each of the following conditions:

  (a)   Representations . The representations and warranties of Purchaser set forth in Article 6 shall be true and correct in all material respects (other than those representations and warranties of Purchaser that are qualified by materiality, which shall be true and correct in all respects) as of the Closing Date as though made on and as of the Closing Date;

 

(b)   Performance . Purchaser shall have performed and observed, in all material respects, all covenants and agreements to be performed or observed by it under this Agreement prior to or on the Closing Date;

(c)   Pending Litigation . No suit, action or other proceeding by a third party (including any Governmental Body) seeking to restrain, enjoin or otherwise prohibit the consummation of the transactions contemplated by this Agreement shall be pending before any Governmental Body;

 

(d)   Deliveries . Purchaser shall have delivered to Seller duly executed counterparts of the Conveyance and the other documents and certificates to be delivered by Purchaser under Section 9.3 ;

 

(e)   EXCO PSA . The transactions contemplated by that certain Purchase and Sale Agreement dated February 1, 2007 (the “EXCO PSA”), by and among Anadarko Petroleum Corporation, Anadarko E&P Company LP, Howell Petroleum Corporation and Kerr-McGee Oil & Gas Onshore LP, as “Seller,” and EXCO Resources, Inc. as “Purchaser,” shall have been consummated.

   

(f)   Casualty or Condemnation . The aggregate losses from casualties to the Assets and takings of Assets under right of eminent domain shall be less than seven and one-half percent (7.5%) of the unadjusted Purchase Price;

 

(g)    Payment . Purchaser shall have paid the Closing Payment;

(h)    HSR Act . Any waiting period applicable to the consummation of the transaction contemplated by this Agreement under the HSR Act shall have lapsed or terminated (by early termination or otherwise); and

(i)    Transfer Requirements . All Transfer Requirements that are necessary to transfer the Surface Contracts and Contracts listed on Schedule 8.1(i) shall have been obtained.

 

 

Section 8.2   Conditions of Purchaser to Closing .

 

The obligations of Purchaser to consummate the transactions contemplated by this Agreement are subject, at the option of Purchaser, to the satisfaction on or prior to Closing of each of the following conditions:

(a)   Representations . The representations and warranties of Seller set forth in Article 5 shall be true and correct in all material respects as of the Closing Date as though made on and as of the Closing Date (other than representations and warranties that refer to a specified date which need only be true and correct on and as of such specified date), without giving effect to the words “material” or “Material Adverse Effect” or other similar exceptions or qualifiers; provided, however, that in the event of a breach of a representation or warranty, the condition set forth in this Section 8.2(a) shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together result in a Material Adverse Effect;

 

(b)   Performance . Seller shall have performed and observed, in all material respects, all covenants and agreements to be performed or observed by it under this Agreement prior to or on the Closing Date;

 

(c)   Pending Litigation . No suit, action or other proceeding by a third party (including any Governmental Body) seeking to restrain, enjoin or otherwise prohibit the consummation of the transactions contemplated by this Agreement shall be pending before any Governmental Body;

 

(d) Deliveries . Seller shall have delivered to Purchaser duly executed counterparts of the Conveyance and the other documents and certificates to be delivered by Seller under Section 9.2 ;

(e) Casualty or Condemnation . The aggregate losses from casualties to the Assets and takings of Assets under right of eminent domain shall be less than seven and one-half percent (7.5%) of the unadjusted Purchase Price;  

 

(f) HSR Act . Any waiting period applicable to the consummation of the transaction contemplated by this Agreement under the HSR Act shall have lapsed or terminated (by early termination or otherwise);

(g) Transfer Requirements . All Transfer Requirements that are necessary to transfer the Surface Contracts and Contracts listed on Schedule 8.1(i) shall have been obtained; and

(h) EXCO PSA . The transactions contemplated by the EXCO PSA shall have been consummated.

ARTICLE 9

CLOSING

 

Section 9.1   Time and Place of Closing .

 

(a)   Consummation of the purchase and sale transaction as contemplated by this Agreement (the “Closing”), shall, unless otherwise agreed to in writing by Purchaser and Seller, take place at the offices of Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas, at 10:00 a.m., local time, on May 9, 2007 or if all conditions in Article 8 to be satisfied prior to Closing have not yet been satisfied or waived, as soon thereafter as such conditions have been satisfied or waived, subject to the rights of the parties under Article 10 .

 

 

(b)   The date on which the Closing occurs is herein referred to as the “Closing Date.”

 

Section 9.2   Obligations of Seller at Closing .

 

At the Closing, upon the terms and subject to the conditions of this Agreement, Seller shall deliver or cause to be delivered to Purchaser, the following:

 

(a)   the Conveyance, in sufficient duplicate originals to allow recording in all appropriate jurisdictions and offices, duly executed by Seller;

 

(b)   a certificate duly executed by an authorized corporate officer of Seller, dated as of Closing, certifying on behalf of Seller that the conditions set forth in Sections 8.2(a) and 8.2(b) have been fulfilled;

 

(c)    one (1) original legal opinion of Seller's Associate General Counsel dated as of the Closing regarding the due authorization, execution, delivery and performance by Seller of this Agreement and the transactions contemplated hereby in form and substance reasonably satisfactory to Purchaser;

(d)    one (1) original executed statement described in Treasury Regulation §1.1445-2(b)(2) certifying that Seller is not a foreign person within the meaning of the Code; and

(e)    the Transition Services Agreement, duly executed by Seller.

Section 9.3   Obligations of Purchaser at Closing .

 

At the Closing, upon the terms and subject to the conditions of this Agreement, Purchaser shall deliver or cause to be delivered to Seller, the following:

 

(a)   a wire transfer of the Closing Payment in same-day funds;

 

(b)   the Conveyance, duly executed by Purchaser;

(c)   a certificate by an authorized corporate officer of Purchaser, dated as of Closing, certifying on behalf of Purchaser that the conditions set forth in Sections 8.1(a) and 8.1(b) have been fulfilled;

 

(d)   a legal opinion of counsel to Purchaser dated as of the Closing regarding the due authorization, execution, delivery and performance by Purchaser of this Agreement and the transactions contemplated hereby in form and substance reasonably satisfactory to Seller; and

(e)   the Transition Services Agreement, duly executed by Purchaser.

Section 9.4   Closing Payment & Post-Closing Purchase Price Adjustments.

(a)   Not later than three (3) Business Days prior to the Closing Date, Seller shall prepare and deliver to Purchaser, based upon the best information available to Seller, a preliminary settlement statement estimating the Adjusted Purchase Price after giving effect to all Purchase Price adjustments provided for in this Agreement. The estimate delivered in accordance with this Section 9.4(a) shall constitute the dollar amount to be paid by Purchaser to Seller at the Closing (the “Closing Payment”).

 

 

(b)   As soon as reasonably practicable after the Closing but not later than one hundred and twenty (120) days following the Closing Date, Seller shall prepare and deliver to Purchaser a statement setting forth the final calculation of the Adjusted Purchase Price and showing the calculation of each adjustment, based, to the extent possible, on actual credits, charges, receipts and other items before and after the Effective Time and taking into account all adjustments provided for in this Agreement. Seller shall at Purchaser’s request supply reasonable documentation available to support any credit, charge, receipt or other item. As soon as reasonably practicable but not later than the 45th day following receipt of Seller’s statement hereunder, Purchaser shall deliver to Seller a written report containing any changes that Purchaser proposes be made to such statement. The parties shall undertake to agree on the final statement of the Adjusted Purchase Price no later than one hundred eighty (180) days after the Closing Date. In the event that the parties cannot reach agreement within such period of time, either party may refer the remaining matters in dispute for arbitration to KPMG LLP, or such other nationally-recognized independent accounting firm as may be accepted by Purchaser and Seller, for review, arbitration and final determination. The accounting firm shall conduct the arbitration proceedings in Houston, Texas in accordance with the Commercial Arbitration Rules of the American Arbitration Association, to the extent such rules do not conflict with the terms of this Section 9.4 . The accounting firm’s determination shall be made within thirty (30) days after submission of the matters in dispute and shall be final and binding on both parties, without right of appeal. In determining the proper amount of any adjustment to the Purchase Price, the accounting firm shall not increase the Purchase Price more than the increase proposed by Seller nor decrease the Purchase Price more than the decrease proposed by Purchaser, as applicable. The accounting firm shall act as an expert for the limited purpose of determining the specific disputed matters submitted by either party and may not award damages or penalties to either party with respect to any matter. Seller and Purchaser shall each bear its own legal fees and other costs of presenting its case. Each party shall bear one-half of the costs and expenses of the accounting firm. Within ten (10) Business Days after the date on which the parties or the accounting firm, as applicable, finally determines the disputed matters, (x) Purchaser shall pay to Seller the amount by which the Adjusted Purchase Price exceeds the Closing Payment or (y) Seller shall pay to Purchaser the amount by which the Closing Payment exceeds the Adjusted Purchase Price, as applicable. Any post-Closing payment pursuant to this Section 9.4(b) shall bear interest at the Agreed Interest Rate from the Closing Date to the date both Purchaser and Seller have executed the final settlement statement.

(c)   All payments made or to be made hereunder to Seller shall be by electronic transfer of immediately available funds to the account of Anadarko Petroleum Corporation, Account No. 5762707 at JPMorgan Chase, Chicago, Illinois, ABA No. 021000021, for the credit of Seller or to such other bank and account as may be specified by Seller in writing. All payments made or to be made hereunder to Purchaser shall be by electronic transfer of immediately available funds to a bank and account specified by Purchaser in writing to Seller.

 

 

ARTICLE 10

TERMINATION  

  Section 10.1   Termination .

 

Unless terminated earlier pursuant to other provisions provided herein, this Agreement may be terminated at any time prior to Closing: (i) by the mutual prior written consent of Seller and Purchaser; or (ii) by Seller, if Closing has not occurred on or before July 9, 2007, other than due to default by Seller, or by Purchaser, if Closing has not occurred on or before July 9, 2007, other than due to default by Purchaser.

 

Section 10.2   Effect of Termination .

 

If this Agreement is terminated pursuant to Section 10.1 , this Agreement shall become void and of no further force or effect (except for the provisions of Sections 5.6, 6.5, 7.5, 11.4(b)(vi), 11.5, 11.8, 11.9, 12.2, 12.4, and 12.7 through 12.19 of this Agreement all of which shall continue in full force and effect) and Seller shall be free immediately to enjoy all rights of ownership of the Assets and to sell, transfer, encumber or otherwise dispose of the Assets to any party without any restriction under this Agreement. Notwithstanding anything to the contrary in this Agreement, the termination of this Agreement under Section 10.1(ii) shall not relieve any party from liability for any willful or negligent failure to perform or observe in any material respect any of its agreements or covenants contained herein which are to be performed or observed at or prior to Closing. In the event this Agreement terminates under Section 10.1(ii) because a party has willfully or negligently failed to perform or observe in any material respect any of its agreements or covenants contained herein which are to be performed at or prior to Closing, then the other party shall be entitled to all remedies available at law or in equity and shall be entitled to recover court costs and attorneys’ fees in addition to any other relief to which such party may be entitled.

Section 10.3   Distribution of Deposit Upon Termination .

(a)   If Seller terminates this Agreement (i) because Purchaser has failed to comply with any provision of Section 8.1(a), (b) or (d) ; or (ii) as the result of any material default or breach by Purchaser of Purchaser's obligations hereunder, then Seller may retain the Deposit as liquidated damages, free of any claims by Purchaser or any other Person with respect thereto. It is expressly stipulated by the parties that the actual amount of damages resulting from such a termination would be difficult if not impossible to determine accurately because of the unique nature of this Agreement, the unique nature of the Assets, the uncertainties of applicable commodity markets and differences of opinion with respect to such matters, and that the liquidated damages provided for herein are a reasonable estimate by the parties of such damages.

(b)   If this Agreement is terminated for any reason other than the reasons set forth in Section 10.3(a) , then within ten (10) days Seller shall deliver the Deposit with simple interest thereon accruing from the date of this Agreement to the date of repayment computed at the Agreed Interest Rate to Purchaser, free of any claims by Seller or any other Person with respect thereto.

 

 

(c)   Notwithstanding anything to the contrary in this Agreement, Purchaser shall not be entitled to receive interest on the Deposit if the Deposit is retained by Seller for a reason set forth in Section 10.3(a) .

ARTICLE 11

POST-CLOSING OBLIGATIONS; INDEMNIFICATION;

LIMITATIONS; DISCLAIMERS AND WAIVERS

 

Section 11.1   Receipts .

Except as otherwise provided in this Agreement, any Hydrocarbons attributable to the Assets (and all products and proceeds attributable thereto) and any other income, proceeds, receipts and credits attributable to the Assets which are not reflected in the adjustments to the Purchase Price following the final adjustment pursuant to Section 9.4(b) shall be treated as follows: (a) all Hydrocarbons attributable to the Assets (and all products and proceeds attributable thereto) and all other income, proceeds, receipts and credits earned with respect to the Assets to which Purchaser is entitled under Section 1.4 shall be the sole property and entitlement of Purchaser, and, to the extent received by Seller, Seller shall fully disclose, account for and remit the same promptly to Purchaser, and (b) all Hydrocarbons attributable to the Assets (and all products and proceeds attributable thereto) and all other income, proceeds, receipts and credits earned with respect to the Assets to which Seller is entitled under Section 1.4 shall be the sole property and entitlement of Seller and, to the extent received by Purchaser, Purchaser shall fully disclose, account for and remit the same promptly to Seller.

Section 11.2   Expenses .

 

Except as otherwise provided in this Agreement, any Property Costs which are not reflected in the adjustments to the Purchase Price following the final adjustment pursuant to Section 9.4(b) shall be treated as follows: (a) all Property Costs for which Seller is responsible under Section 1.4 shall be the sole obligation of Seller and Seller shall promptly pay, or if paid by Purchaser, promptly reimburse Purchaser for and hold Purchaser harmless from and against same; and (b) all Property Costs for which Purchaser is responsible under Section 1.4 shall be the sole obligation of Purchaser and Purchaser shall promptly pay, or if paid by Seller, promptly reimburse Seller for and hold Seller harmless from and against same. Seller is entitled to resolve all joint interest audits and other audits of Property Costs covering periods for which Seller is in whole or in part responsible, provided that Seller shall not agree to any adjustments to previously assessed costs for which Purchaser is liable without the prior written consent of Purchaser, such consent not to be unreasonably withheld. Seller shall provide Purchaser with a copy of all applicable audit reports and written audit agreements received by Seller and relating to periods for which Purchaser is partially responsible.

 

Section 11.3   Assumed Seller Obligations .

 

Without limiting Purchaser’s rights to indemnity under this Article 11 , upon Closing Purchaser shall assume and hereby agrees to fulfill, perform, pay and discharge (or cause to be fulfilled, performed, paid or discharged) all of the obligations and liabilities of Seller, known or unknown, with respect to the Assets, regardless of whether such obligations or liabilities arose prior to, on or after the Effective Time, including but not limited to obligations to (i) dismantle, salvage and remove any equipment, structures, materials, platforms, flowlines, and property of whatever kind related to or associated with operations and activities conducted on the Assets or otherwise pursuant to the Assets, (ii) clean up, restore and/or remediate the premises covered by or related to the Assets in accordance with applicable agreements and Laws, and (iii) perform all obligations applicable to or imposed by or under the Surface Contracts or the Contracts, or as required by applicable Laws (all of said obligations and liabilities, subject to the exclusions below, herein being referred to as the “Assumed Seller Obligations”); provided, however, that Purchaser does not accrue any rights or assume any obligations or liabilities of Seller to the extent that they are:

 

 

(i)   attributable to or arise out of the Excluded Assets; or

 

(ii)   the continuing responsibility of the Seller under Sections 11.1 and 11.2 or matters for which Seller is required to indemnify Purchaser under Section 11.4(c) .

 

Section 11.4   Indemnities.

(a)   Definitions .

“Claim” or “Claims” means, unless specifically provided otherwise, all claims (including, but not limited to, those for damage to property, bodily injury and death, personal injury, illness, disease, maintenance, cure, loss of parental and spousal consortium, wrongful death, loss of support, and wrongful termination of employment), damages, liabilities, losses, demands, liens, encumbrances, fines, penalties, causes of action of any kind (including actions for indirect, consequential, punitive and exemplary damages), obligations, costs (including payment of all reasonable attorneys’ fees and costs of litigation), judgments, interest, and awards or amounts, of any kind or character, whether under judicial proceedings, administrative proceedings, investigation by a Governmental Body or otherwise, or conditions in the premises of or attributable to any Person or Persons or any party or parties, breach of representation or warranty (expressed or implied), under any theory of tort, contract, breach of contract (including any Claims which arise by reason of indemnification or assumption of liability contained in other contracts entered into by an Indemnified Party hereunder), at law or in equity, under statute, or otherwise, arising out of, or incident to or in connection with this Agreement or the ownership or operation of the Assets, including but not limited to Claims which arise out of or are directly or indirectly connected with vessels and/or the ownership, possession, management, manning, maintenance, supply, operation (including, but not limited to, ingress, egress, loading and unloading operations) or navigation of any vessel.

The phrase “REGARDLESS OF FAULT” means WITHOUT REGARD TO THE CAUSE OR CAUSES OF ANY CLAIM, INCLUDING, WITHOUT LIMITATION, EVEN THOUGH A CLAIM IS CAUSED IN WHOLE OR IN PART BY:

THE NEGLIGENCE (WHETHER SOLE, JOINT, CONCURRENT, COMPARATIVE, CONTRIBUTORY, ACTIVE, PASSIVE, GROSS, OR OTHERWISE), WILLFUL MISCONDUCT, STRICT LIABILITY, OR OTHER FAULT OF PURCHASER INDEMNITEES, SELLER INDEMNITEES, INVITEES AND/OR THIRD PARTIES; AND/OR

A PRE-EXISTING DEFECT, WHETHER PATENT OR LATENT, OF THE PREMISES OF PURCHASER’S PROPERTY OR SELLER’S PROPERTY (INCLUDING WITHOUT LIMITATION THE ASSETS), INVITEES AND/OR THIRD PARTIES; AND/OR

THE UNSEAWORTHINESS OF ANY VESSEL OR UNAIRWORTHINESS OF ANY AIRCRAFT OF A PARTY WHETHER CHARTERED, OWNED, OR PROVIDED BY PURCHASER INDEMNITEES, SELLER INDEMNITEES, INVITEES AND/OR THIRD PARTIES.

 

 

(b)   Purchaser Indemnity Obligation . Subject only to Section 11.4(c), upon Closing Purchaser shall be responsible for and indemnify, defend, release and hold harmless Seller Indemnitees from and against all Claims caused by, arising out of or resulting from :

(i)   the Assumed Seller Obligations, REGARDLESS OF FAULT ;

 

(ii)   the ownership, use or operation of the Assets after the Effective Time, REGARDLESS OF FAULT ;

 

(iii)   Purchaser’s breach of any of Purchaser’s covenants or agreements contained in Article 7 , REGARDLESS OF FAULT ;

 

(iv)   any breach of any representation or warranty made by Purchaser contained in Article 6 of this Agreement or confirmed in the certificate delivered by Purchaser at Closing pursuant to Section 9.3(c) ;

(v)   with respect to the Assets, Environmental Laws, Environmental Liabilities, the release of materials into the environment or protection of human health, safety, natural resources or the environment, or any other environmental condition of the Assets , REGARDLESS OF FAULT ;   and  

(vi)   Purchaser Indemnitees’ access under Section 4.1 , Section 7.1 , or otherwise, to the Assets, the Records and other related activities or information prior to the Closing, REGARDLESS OF FAULT except to the extent caused by the gross negligence or willful misconduct of a Seller Indemnitee .

 

Notwithstanding anything to the contrary contained herein, Purchaser shall have no indemnification obligation with respect to any Claim under Section 11.4(b)(i) , (ii) or (v) to the extent such Claim results from physical actions taken by a Seller Indemnitee after the Closing Date on or directly affecting the System or the real property associated therewith.

(c)    Seller Indemnity Obligation . Subject to the limitations contained in Section 11.7, upon Closing Seller shall be responsible for and indemnify, defend and hold harmless Purchaser against and from all Claims caused by, arising out of or resulting from:

 

(i)   the Retained Obligations;

 

(ii)    Seller’s breach of any of its covenants or agreements contained in Article 7 ; and

(iii)    any breach of any representation or warranty made by Seller contained in Article 5 of this Agreement or confirmed in the certificate delivered by Seller at Closing pursuant to Section 9.2(b) , without giving effect to the words “material” or “Material Adverse Effect” or other similar exceptions or qualifiers.

 

(d)   Additional Provisions .

It is the intention of the parties that this Article 11 shall govern the allocation of risks and liabilities between Purchaser and Seller except to the extent that it is expressly stated (whether elsewhere in this Article 11 or in some other Article hereof) that the provisions of such other Article (or part thereof) shall control over the terms of all or part of this Article 11 .

Notwithstanding anything to the contrary contained in this Agreement, this Section 11.4 contains the parties’ exclusive remedy against each other with respect to breaches of the representations, warranties, covenants and agreements of the parties contained in Articles 5, 6 and Sections 7.1 , 7.2 , 7.3 , 7.4 , 7.5 and 7.6 and the affirmations of such representations, warranties, covenants and agreements contained in the certificate delivered by each party at Closing pursuant to Sections 9.2(b) or 9.3(c) , as applicable.

 

Section 11.5   Indemnification Actions .

 

All claims for indemnification under Section 11.4 shall be asserted and resolved as follows:

 

(a)   For purposes of this Article 11 , the term “Indemnifying Party” shall mean the party or parties having an obligation to indemnify another party or parties pursuant to the terms of this Agreement. The term “Indemnified Party” shall mean the party or parties having the right to be indemnified by another party or parties pursuant to the terms of this Agreement.

(b)   To make a claim for indemnification (“Indemnity Claim”) under Section 11.4 , an Indemnified Party shall notify the Indemnifying Party in writing of its Indemnity Claim, including the specific details of and specific basis under this Agreement for its Indemnity Claim (the “Claim Notice”). The Indemnified Party shall provide its Claim Notice promptly after the Indemnified Party has actual knowledge of the Claim for which it seeks indemnification and shall enclose a copy of all papers (if any) served with respect to the Claim; provided that the failure of any Indemnified Party to give notice of a Claim as provided in this Section 11.5 shall not relieve the Indemnifying Party of its obligations under Section 11.4 except to the extent such failure results in insufficient time being available to permit the Indemnifying Party to effectively defend against the Claim or otherwise prejudices the Indemnifying Party’s ability to defend against the Claim. In the event that the Indemnity Claim is based upon an inaccuracy or breach of a representation, warranty, covenant or agreement, the Claim Notice shall specify the representation, warranty, covenant or agreement which was inaccurate or breached.

 

(c)   The Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice to notify the Indemnified Party whether it admits or denies its liability to defend the Indemnified Party against the relevant Claim at the sole cost and expense of the Indemnifying Party. The Indemnified Party is authorized, prior to and during such 30-day period, to file any motion, answer or other pleading that it shall deem necessary or appropriate to protect its interests or those of the Indemnifying Party and that it reasonably believes is not prejudicial to the Indemnifying Party.

(d)   If the Indemnifying Party admits its liability to indemnify the Indemnified Party, it shall have the right and obligation to diligently defend, at its sole cost and expense, the Claim. The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof. If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate in contesting any Claim which the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Claim controlled by the Indemnifying Party pursuant to this Section 11.5(d) . An Indemnifying Party shall not, without the written consent of the Indemnified Party, (i) settle any Claim or consent to the entry of any judgment with respect thereto which does not include an unconditional written release of the Indemnified Party from all liability in respect of such Claim, or (ii) settle any Claim or consent to the entry of any judgment with respect thereto in any manner that may materially and adversely affect the Indemnified Party (other than as a result of money damages covered by the indemnity).

 

 

(e)   If the Indemnifying Party does not admit its liability to indemnify the Indemnified Party or admits its liability but fails to diligently prosecute or settle the Claim, then the Indemnified Party shall have the right to defend against the Claim at the sole cost and expense of the Indemnifying Party, with counsel of the Indemnified Party’s choosing, subject to the right of the Indemnifying Party to admit its liability and assume the defense of the Claim at any time prior to settlement or final determination thereof. If the Indemnifying Party has not yet admitted its liability for a Claim, the Indemnified Party shall send written notice to the Indemnifying Party of any proposed settlement and the Indemnifying Party shall have the option for ten (10) Business Days following receipt of such notice to (i) admit in writing its liability to indemnify the Indemnified Party from and against the Claim and (ii) if liability is so admitted, reject, in its reasonable judgment, the proposed settlement.

 

Section 11.6   Release.

(a)   UPON CLOSING, PURCHASER RELEASES, REMISES AND FOREVER DISCHARGES SELLER INDEMNITEES FROM ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, WHETHER NOW EXISTING OR ARISING IN THE FUTURE, CONTINGENT OR OTHERWISE, WHICH PURCHASER MIGHT NOW OR SUBSEQUENTLY MAY HAVE AGAINST SELLER INDEMNITEES, RELATING DIRECTLY OR INDIRECTLY TO THE ASSETS, THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CLAIMS ARISING OUT OF OR INCIDENT TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, INCLUDING, WITHOUT LIMITATION, RIGHTS TO CONTRIBUTION UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980, AS AMENDED, REGARDLESS OF FAULT. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING RELEASE SHALL NOT APPLY: (A) TO ANY PHYSICAL ACTIONS TAKEN BY A SELLER INDEMNITEE AFTER THE CLOSING DATE ON OR DIRECTLY AFFECTING THE SYSTEM OR THE REAL PROPERTY ASSOCIATED THEREWITH OR (B) TO THE EXTENT THAT PURCHASER IS INDEMNIFIED FOR SUCH MATTER UNDER SECTION 11.4(c) .

(b)   Purchaser covenants and agrees that it will not attempt to avoid the effect of the release made by it hereinabove by later arguing that at the time of the release it did not fully appreciate the extent of any such Claims, including without limitation, environmental Claims.

 

Section 11.7   Limitation on Actions.

(a)   The representations and warranties of the parties in Articles 5 and 6 shall   terminate six (6) months after the Closing Date. All covenants and agreements shall survive indefinitely. Representations and warranties shall be of no further force and effect after the date of their expiration, provided that there shall be no termination of any bona fide Claim asserted pursuant to this Agreement with respect to the breach of such a representation or warranty on or before its expiration date.

 

 

(b)   Seller shall not have any liability for any indemnification under Section 11.4(c)(iii) until and unless the aggregate amount of the liability for all Claims for which Claim Notices are delivered by Purchaser exceeds ten percent (10%) of the Purchase Price, and then only to the extent such damages exceed such ten percent (10%) of the Purchase Price. The adjustments to the Purchase Price under Section 2.2 and any payments in respect thereof shall not be limited by this Section.

 

(c)   Notwithstanding anything to the contrary contained elsewhere in this Agreement, Seller shall not be required to indemnify Purchaser for aggregate damages in excess of an amount equal to twenty five percent (25%) of the final Adjusted Purchase Price.

 

Section 11.8   Disclaimers .

(a)   EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN ARTICLE 5 OF THIS AGREEMENT, OR CONFIRMED IN THE CERTIFICATE OF SELLER TO BE DELIVERED PURSUANT TO SECTION 9.2(b), OR IN THE CONVEYANCE, (I) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, AND (II) SELLER EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO PURCHASER OR ANY OF ITS AFFILIATES, EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES (INCLUDING, WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO PURCHASER BY ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT, CONSULTANT, REPRESENTATIVE OR ADVISOR OF SELLER OR ANY OF ITS AFFILIATES).

 

(b)   EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE 5 OF THIS AGREEMENT, OR CONFIRMED IN THE CERTIFICATE OF SELLER TO BE DELIVERED PURSUANT TO SECTION 9.2(b), OR IN THE CONVEYANCE, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) TITLE TO ANY OF THE ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY PETROLEUM ENGINEERING CONSULTANT, OR ANY GEOLOGICAL OR SEISMIC DATA OR INTERPRETATION, RELATING TO THE ASSETS, (III) THE QUANTITY, QUALITY OR RECOVERABILITY OF PETROLEUM SUBSTANCES IN OR FROM THE ASSETS, (IV) ANY ESTIMATES OF THE VALUE OF THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, (V) THE PRODUCTION OF HYDROCARBONS FROM THE ASSETS, (VI) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (VII) THE CONTENT, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, REPORTS, BROCHURES, CHARTS OR STATEMENTS PREPARED BY THIRD PARTIES, (VIII) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS, STATUTORY OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE OBTAINING THE ASSETS IN THEIR PRESENT STATUS, CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS AND THAT PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE, OR (IX) ANY IMPLIED OR EXPRESS WARRANTY OF FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT.

(c)   SELLER HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY MATTER OR CIRCUMSTANCE RELATING TO ENVIRONMENTAL LAWS, ENVIRONMENTAL LIABILITIES, THE RELEASE OF MATERIALS INTO THE ENVIRONMENT OR THE PROTECTION OF HUMAN HEALTH, SAFETY, NATURAL RESOURCES OR THE ENVIRONMENT, OR ANY OTHER ENVIRONMENTAL CONDITION OF THE ASSETS, AND NOTHING IN THIS AGREEMENT OR OTHERWISE SHALL BE CONSTRUED AS SUCH A REPRESENTATION OR WARRANTY, AND PURCHASER SHALL BE DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” FOR PURPOSES OF THEIR ENVIRONMENTAL CONDITION.

Section 11.9   Waiver of Trade Practices Acts .

(a)   It is the intention of the parties that Purchaser's rights and remedies with respect to this transaction and with respect to all acts or practices of Seller, past, present or future, in connection with this transaction shall be governed by legal principles other than the Texas Deceptive Trade Practices--Consumer Protection Act, Tex. Bus. & Com. Code Ann. § 17.41 et seq . (the "DTPA"). As such, Purchaser hereby waives the applicability of the DTPA to this transaction and any and all duties, rights or remedies that might be imposed by the DTPA, whether such duties, rights and remedies are applied directly by the DTPA itself or indirectly in connection with other statutes; provided, however , Purchaser does not waive § 17.555 of the DTPA. Purchaser acknowledges, represents and warrants that it is purchasing the goods and/or services covered by this Agreement for commercial or business use; that it has assets of $5 million or more according to its most recent financial statement prepared in accordance with generally accepted accounting principles; that it has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of a transaction such as this; and that it is not in a significantly disparate bargaining position with Seller.

(b)   Purchaser expressly recognizes that the price for which Seller has agreed to perform its obligations under this Agreement has been predicated upon the inapplicability of the DTPA and this waiver of the DTPA. Purchaser further recognizes that Seller, in determining to proceed with the entering into of this Agreement, has expressly relied on this waiver and the inapplicability of the DTPA.

   

Section 11.10   Recording .

 

As soon as practicable after Closing, Purchaser shall record the Conveyance in the appropriate counties and provide Seller with copies of all recorded or approved instruments.

The conveyance in the form attached as Exhibit B is intended to convey all of the Assets being conveyed pursuant to this Agreement. Specific portions of the Assets that are leased from, or require the approval to transfer by, a governmental entity are conveyed under the Conveyance and also are described and covered other separate assignments made by Seller to Purchaser on officially approved forms, or forms acceptable to such entity, in sufficient multiple originals to satisfy applicable statutory and regulatory requirements. The interests conveyed by such separate assignments are the same, and not in addition to, the interests conveyed in the Conveyance attached as Exhibit B. Further, such assignments shall be deemed to contain the special warranty of title of Seller and all of the exceptions, reservations, rights, titles, power and privileges set forth herein and in the Conveyance as fully and only to the extent as though they were set forth in each such separate assignment.  

 

 

ARTICLE 12

MISCELLANEOUS

 

Section 12.1   Counterparts .

 

This Agreement may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement.

Section 12.2   Notice .

 

All notices which are required or may be given pursuant to this Agreement shall be sufficient in all respects if given in writing and delivered personally, by telecopy or by registered or certified mail, postage prepaid, as follows:

 

If to Seller:

Anadarko Gathering Company Anadarko Energy Services Company 1201 Lake Robbins Drive The Woodlands, TX 77380 Attention: Transactions Manager, Business Development Telephone: (832)636-3088 Telecopy: (832)636-5889

 

With a copy to:

Anadarko Petroleum Corporation 1201 Lake Robbins Drive The Woodlands, TX 77380 Attention:   Associate General Counsel Oil, Gas and Minerals Telephone: (832)636-7530 Telecopy: (832)636-5889

 

If to Purchaser:

DCP Midstream Partners, LP 370 17 th Street, Suite 2775 Denver, CO 80202 Attention: Greg K. Smith, Vice President Business Development Telephone: (303) 633-2911 Telecopy: (303) 633-2921

 

 

With a copy to:

DCP Midstream Partners, LP 370 17 th Street, Suite 2775 Denver, CO 80202 Attention: General Counsel Telephone: (303) 633-2911 Telecopy: (303) 633-2921

 

 

Either party may change its address for notice by notice to the other in the manner set forth above. All notices shall be deemed to have been duly given at the time of receipt by the party to which such notice is addressed.

 

Section 12.3   Sales or Use Tax Recording Fees and Similar Taxes and Fees .

 

Purchaser shall bear any sales, use, excise, real property transfer, documentary, stamp or transfer Taxes, recording fees and similar Taxes and fees incurred and imposed upon, or with respect to, the transactions contemplated hereby. Seller and Purchaser shall jointly determine sales tax, if any, that is due in connection with the transactions consistent with the allocation of value determined under Section 2.3. Purchaser agrees to pay any such tax to Seller at Closing.  If such transactions are exempt from any such taxes or fees upon the filing of an appropriate certificate or other evidence of exemption, Purchaser will timely furnish to Seller such certificate or evidence.

Section 12.4   Expenses .

 

Except as provided in Section 12.3 , all expenses incurred by Seller in connection with or related to the authorization, preparation or execution of this Agreement, the Conveyance delivered hereunder and the Exhibits and Schedules hereto and thereto, and all other matters related to the Closing, including without limitation, all fees and expenses of counsel, accountants and financial advisers employed by Seller, shall be borne solely and entirely by Seller, and all such expenses incurred by Purchaser shall be borne solely and entirely by Purchaser.

 

Section 12.5   Change of Name .

 

As promptly as practicable, but in any case within thirty (30) days after the Closing Date, Purchaser shall eliminate the names “Anadarko Petroleum Corporation”, “Anadarko” and any variants thereof from the Assets acquired pursuant to this Agreement and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks or trade names belonging to Seller or any of its Affiliates.

 

Section 12.6   Replacement of Bonds, Letters of Credit and Guarantees .

 

The parties understand that none of the bonds, letters of credit and guarantees, if any, posted by Seller with Governmental Bodies and relating to the Assets may be transferable to Purchaser. Promptly following Closing, Purchaser shall obtain, or cause to be obtained in the name of Purchaser, replacements for such bonds, letters of credit and guarantees, to the extent such replacements are necessary to permit the cancellation of the bonds, letters of credit and guarantees posted by Seller or to consummate the transactions contemplated by this Agreement.

 

 

Section 12.7   Governing Law and Venue .

 

THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OTHERWISE APPLICABLE TO SUCH DETERMINATIONS. JURISDICTION AND VENUE WITH RESPECT TO ANY DISPUTES ARISING HEREUNDER SHALL BE PROPER ONLY IN HARRIS COUNTY, TEXAS.

 

Section 12.8   Captions .

 

The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.

Section 12.9   Waivers .

 

Any failure by any party or parties to comply with any of its or their obligations, agreements or conditions herein contained may be waived in writing, but not in any other manner, by the party or parties to whom such compliance is owed. No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

 

Section 12.10   Assignment .

 

No party shall assign all or any part of this Agreement, nor shall any party assign or delegate any of its rights or duties hereunder, without the prior written consent of the other party and any assignment or delegation made without such consent shall be void; provided, however, that Purchaser may assign its rights and duties hereunder to a wholly-owned subsidiary of Purchaser without obtaining the prior written consent of Seller, provided that no such assignment shall relieve Purchaser from any of its duties, obligations or liabilities hereunder. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

Section 12.11   Entire Agreement .

 

The Confidentiality Agreement, this Agreement and the Exhibits and Schedules attached hereto, and the documents to be executed hereunder constitute the entire agreement between the parties pertaining to the subject matter hereof, and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties pertaining to the subject matter hereof.

 

Section 12.12   Amendment .

 

(a)   This Agreement may be amended or modified only by an agreement in writing executed by both parties.

 

(b)   No waiver of any right under this Agreement shall be binding unless executed in writing by the party to be bound thereby.

 

 

Section 12.13   No Third-Party Beneficiaries .

 

Nothing in this Agreement shall entitle any Person other than Purchaser and Seller to any Claims, remedy or right of any kind, except as to those rights expressly provided to Seller Indemnitees and Purchaser Indemnitees (provided, however, any claim for indemnity hereunder on behalf of a Seller Indemnitee or a Purchaser Indemnitee must be made and administered by a party to this Agreement).

 

Section 12.14   References .

 

In this Agreement:

 

(a)   References to any gender includes a reference to all other genders;

 

(b)   References to the singular includes the plural, and vice versa;

   

(c)   Reference to any Article or Section means an Article or Section of this Agreement;

 

(d)   Reference to any Exhibit or Schedule means an Exhibit or Schedule to this Agreement, all of which are incorporated into and made a part of this Agreement;

(e)   Unless expressly provided to the contrary, “hereunder”, “hereof’, “herein” and words of similar import are references to this Agreement as a whole and not any particular Section or other provision of this Agreement;

(f)   “Include” and “including” or any variation thereof shall mean include or including without limiting the generality of the description preceding such term;

(g)   Whenever the parties have agreed that a matter under this Agreement is subject to any approval or consent of the other party, such approval or consent shall not be unreasonably withheld, delayed or conditioned; and

(h)   Reference to “day” or “days” in this Agreement shall refer to calendar days unless otherwise stated.

Section 12.15   Construction .

 

Purchaser is a party capable of making such investigation, inspection, review and evaluation of the Assets as a prudent purchaser would deem appropriate under the circumstances including with respect to all matters relating to the Assets, their value, operation and suitability. Each of Seller and Purchaser has had substantial input into the drafting and preparation of this Agreement and has had the opportunity to exercise business discretion in relation to the negotiation of the details of the transactions contemplated hereby. This Agreement is the result of arm’s-length negotiations from equal bargaining positions. In the event of a dispute over the meaning or application of this Agreement, it shall be construed fairly and reasonably and neither more strongly for nor against either party.

 

 

Section 12.16   Limitation on Damages

 

Notwithstanding any other provision contained elsewhere in this Agreement to the contrary, the parties acknowledge that this Agreement does not authorize one party (or any of such party’s Indemnitees) to sue for or collect its or their punitive damages from the other party to this Agreement, or its own (or any of its Indemnitee’s) consequential or indirect damages in connection with this Agreement and the transactions contemplated hereby and each party expressly waives for itself and on behalf of its Affiliates and each of their respective Indemnitees, any and all Claims it may have against the other party for its own such damages in connection with this Agreement and the transactions contemplated hereby.

 

Section 12.17   Conspicuousness .

 

The parties agree that provisions in this Agreement in "bold" type satisfy any requirements of the "express negligence rule" and any other requirements at law or in equity that provisions be conspicuously marked or highlighted.

 

Section 12.18   Severability.

 

If any term or other provisions of this Agreement is held invalid, illegal or incapable of being enforced under any rule of law, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a materially adverse manner with respect to either party.

 

Section 12.19   Time of Essence.

 

Time is of the essence in this Agreement. If the date specified in this Agreement for giving any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action taken expires on a date which is not a Business Day), then the date for giving such notice or taking such action (and the expiration date of such period during which notice is required to be given or action taken) shall be the next day which is a Business Day.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

 

 

IN WITNESS WHEREOF, this Agreement has been signed by each of the parties hereto on the date first above written.

 

 

ANADARKO ENERGY SERVICES COMPANY

 

 

/s/ Albert L. Richey
Albert L. Richey Vice President, Corporate Development

Page 36 of 36

 

 

 

 

BRIDGE CREDIT AGREEMENT

Dated as of May 9, 2007

among

 

DCP MIDSTREAM OPERATING, LP

as the Borrower,

DCP MIDSTREAM PARTNERS, LP

and its subsidiaries

as Guarantors,

THE LENDERS PARTY HERETO

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

WACHOVIA CAPITAL MARKETS, LLC

as Sole Lead Arranger and Sole Book Manager

 

 

 

TABLE OF CONTENTS

 

SCHEDULES

Schedule 1.1

Commitment Percentages

Schedule 6.13

Subsidiaries

Schedule 8.5

Affiliate Transactions

Schedule 11.1

Notices

EXHIBITS

Exhibit 1.1

Form of Rating Agency Designation

Exhibit 2.3

Form of Notice of Borrowing

Exhibit 2.5

Form of Notice of Continuation/Conversion

Exhibit 2.9

Form of Term Loan Note

Exhibit 5.1

Form of Account Designation Letter

Exhibit 7.1(d)

Form of Officer's Certificate

Exhibit 7.12

Form of Joinder Agreement

Exhibit 11.3(b)

Form of Assignment Agreement

 

 

BRIDGE CREDIT AGREEMENT

 

THIS BRIDGE CREDIT AGREEMENT (this " Credit Agreement "), dated as of May 9, 2007, is entered into among DCP MIDSTREAM OPERATING, LP , a Delaware limited partnership (the " Borrower "), DCP MIDSTREAM PARTNERS, LP , a Delaware limited partnership (the " Parent ") and all Subsidiaries of the Parent (collectively, the " Guarantors "), the Lenders (as defined herein) and WACHOVIA BANK, NATIONAL ASSOCIATION , as administrative agent for the Lenders (in such capacity, the " Agent ").

 

RECITALS

 

WHEREAS , the Borrower has requested that the Lenders make available to it a term loan credit facility in the amount of $100 million for the purposes set forth herein; and

 

WHEREAS , the Lenders have agreed to provide the requested term loan credit facility to the Borrower on the terms, and subject to the conditions, set forth herein.

 

NOW , THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1 .

DEFINITIONS AND ACCOUNTING TERMS

1.1	Definitions.

As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms herein shall include in the singular number the plural and in the plural the singular:

 

" 2005 CA Agent " means Wachovia Bank, N.A., in its capacity as agent under the 2005 Credit Agreement, together with its permitted successors and/or assigns in such capacity.

" 2005 CA Cash Collateral " means the “Cash Collateral” as defined in the 2005 Credit Agreement.

" 2005 Credit Agreement " means that certain Credit Agreement dated as of December 7, 2005 among the Borrower, the Guarantors, Wachovia Bank, N.A., as agent, the lenders from time to time party thereto, as amended pursuant to that certain First Amendment to Credit Agreement dated as of May 4, 2007 and as the same may be from time to time further amended, restated, supplemented or otherwise modified in accordance with its terms.

" Acquisition " by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of property or assets (other than capital expenditures or acquisitions of inventory or supplies in the ordinary course of business) of, or of a business unit or division of, another Person or at least a majority of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities or otherwise.

 

 

" Account Designation Letter " means the Notice of Account Designation Letter dated the Closing Date from the Borrower to the Agent in substantially the form attached hereto as Exhibit 5.1 .

" Adjusted Base Rate " means the Base Rate plus the Applicable Margin for Base Rate Loans.

" Adjusted Eurodollar Rate " means the Eurodollar Rate plus the Applicable Margin for Eurodollar Loans.

 

" Affiliate " means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. A Person shall be deemed to control a corporation if such Person possesses, directly or indirectly, the power to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

 

" Agency Services Address " means Wachovia Bank, National Association, as Administrative Agent, 201 South College Street, CP-8, Charlotte, North Carolina 28288-0680, or such other address as may be identified by written notice from the Agent to the Borrower and the Lenders.

 

" Agent " means Wachovia Bank, National Association and any successors and assigns in such capacity.

 

" Applicable Margin " means, at any time (a) for Eurodollar Loans, 0.75% and (b) for Base Rate Loans, 0%.

" Approved Officer " means the president, a vice president, the treasurer or the assistant treasurer of the applicable Credit Party or such other authorized representative of such Credit Party as may be designated by any one of the foregoing.

 

" Assignment Agreement " means an Assignment Agreement executed and delivered pursuant to Section 11.3(b).

 

" Available Cash " has the meaning ascribed to such term in the First Amended and Restated Agreement of Limited Partnership of the Parent as in effect on the Effective Date, with such amendments thereto as agreed to by the Required Lenders.

 

" Bankruptcy Code " means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

" Base Rate " means, for any day, the rate per annum equal to the greater of (a) the Federal Funds Rate in effect on such day plus ½ of 1% or (b) the Prime Rate in effect on such day. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.

 

" Base Rate Loan " means a Loan which bears interest based on the Base Rate.

 

 

" Borrower " means DCP Midstream Operating, LP a Delaware limited partnership.

 

" Business Day " means any day other than a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or required by law or other governmental action to close in New York, New York or Charlotte, North Carolina; provided , that in the case of Eurodollar Loans, such day is also a day on which dealings between banks are carried on in U.S. dollar deposits in the London interbank market.

 

" Businesses " has the meaning set forth in Section 6.12.

 

" Capital Lease " means, as applied to any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee that, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of that Person.

" Capital Stock " means (a) in the case of a corporation, all classes of capital stock of such corporation, (b) in the case of a partnership, partnership interests (whether general or limited), (c) in the case of a limited liability company, membership interests and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

" Cash Equivalents " means, as at any date, (a) securities guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof (any such bank being an " Approved Bank "), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody's and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 or having portfolio assets of at least $5,000,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d).

" Change of Control " means as of any date, the failure of (a) the Parent to own, directly or indirectly, 100% of the equity of the Borrower or (b) Duke Energy Field Services, LLC to own, directly or indirectly, a majority of the voting equity of the general partner of the Parent.

 

" Closing Date " means the date hereof.

 

 

" Code " means the Internal Revenue Code of 1986, as amended from time to time.

 

" Commitment " means, as to each Lender, the commitment of such Lender with respect to the Term Loan Committed Amount and " Commitments " means, collectively, all such commitments of the Lenders.

 

" Commitment Percentage " means, for each Lender, the percentage identified as its Commitment Percentage opposite such Lender's name on Schedule 1.1 , as such percentage may be modified by assignment.

 

" Conflicts Committee " has the meaning ascribed thereto in the First Amended and Restated Agreement of Limited Partnership of the Parent, as amended or restated from time to time.

 

" Consolidated EBITDA " means, for any period, an amount equal to Consolidated Net Income for such period plus, to the extent deducted in determining Consolidated Net Income for such period, the aggregate amount of (a) taxes based on or measured by income, (b) Consolidated Interest Expense and (c) depreciation and amortization expense.

 

" Consolidated Indebtedness " means, without duplication, all Indebtedness of the Parent and its Subsidiaries on a consolidated basis, minus the principal amount of 2005 CA Cash Collateral then held by the 2005 CA Agent.

 

" Consolidated Interest Coverage Ratio " means, as of the last day of each fiscal quarter of the Parent, the ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal quarters ending on such day to (b) Consolidated Interest Expense for the period of four consecutive fiscal quarters ending on such day.

 

" Consolidated Interest Expense " means interest expense as would appear on a consolidated statement of income of the Parent and its Subsidiaries prepared in accordance with GAAP; provided , that Consolidated Interest Expense associated with the term loans under the 2005 Credit Agreement for any period shall be reduced by any interest income earned on the 2005 CA Cash Collateral during such period.

 

" Consolidated Leverage Ratio " means, as of the last day of each fiscal quarter of the Parent, the ratio of (a) Consolidated Indebtedness on such day to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ending on such day.

 

" Consolidated Net Income " means, for any period, the net income of the Parent and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided , that Consolidated Net Income shall not include (i) extraordinary gains or extraordinary losses, (ii) net gains and losses in respect of disposition of assets other than in the ordinary course of business, (iii) gains or losses attributable to write-ups or write-downs of assets other than hedging and derivative activities in the ordinary course of business and (iv) the cumulative effect of a change in accounting principles, all as reported in the Parent's consolidated statement(s) of income for the relevant period(s) prepared in accordance with GAAP.

 

" Consolidated Net Tangible Assets " means, at any date of determination, the total amount of consolidated assets of the Parent and its Subsidiaries after deducting therefrom the value (net of any applicable reserves) of all goodwill, trade names, trademarks, patents and other like intangible assets, all as set forth, or on a pro forma basis would be set forth, on the consolidated balance sheet of the Parent and its Subsidiaries for the most recently completed fiscal quarter, in accordance with GAAP.

 

 

" Credit Documents " means this Credit Agreement, the Notes, any Notice of Borrowing, any Notice of Continuation/Conversion and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.

 

" Credit Exposure " means, as applied to each Lender the sum of the principal balance of the outstanding Loans of such Lender.

 

" Credit Facility Swap Contract " means any interest rate Swap Contract entered into by a Credit Party with a Lender or an Affiliate of a Lender with respect to the Obligations.

" Credit Parties " means the Borrower and the Guarantors.

 

" Debt Rating " means, the long-term senior unsecured, non-credit enhanced debt rating of the Parent by the Designated Rating Agencies.

 

" Default " means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

 

" Defaulting Lender " means, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the term of this Credit Agreement, (b) has failed to pay to the Agent or any Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement or (c) has been deemed insolvent by a court of competent jurisdiction or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

 

" Designated Rating Agencies " shall mean any two of S&P, Moody's or any other rating agency selected by the Parent which is recognized by the Securities and Exchange Commission and identified by the Parent from time to time in a Rating Agency Designation and “ Designated Rating Agency ” shall mean any one of the foregoing. Until such time as the Parent shall have delivered a Rating Agency Designation to the Agent, the Designated Rating Agencies shall be S&P and Moody's.

 

" Disposition " or " Dispose " means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any Property by a Credit Party (including the Equity Interests of any Subsidiary), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

" Dollars " and " $ " means dollars in lawful currency of the United States of America.

 

" Effective Date " means the date on which the conditions set forth in Section 5.1 shall have been fulfilled (or waived in the sole discretion of the Lenders).

 

" Eligible Assignee " means (a) any Lender approved by the Borrower and the Agent, (b) any existing Lender or an Affiliate of an existing Lender and (c) any other Person approved by the Borrower and the Agent (in each case, which approval by the Borrower and the Agent shall not be unreasonably withheld or delayed); provided , that (A) the Borrower's consent is not required during the existence and continuation of an Event of Default and (B) neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

 

 

" Environmental Laws " means any legal requirement of any Governmental Authority pertaining to (a) the protection of health, safety, and the indoor or outdoor environment, (b) the conservation, management, or use of natural resources and wildlife, (c) the protection or use of surface water and groundwater or (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, release, threatened release, abatement, removal, remediation or handling of, or exposure to, any hazardous or toxic substance or material or (e) pollution (including any release to land surface water and groundwater) and includes, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act, as amended, 42 USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing or successor law, and any amendment, rule, regulation, order, or directive issued thereunder.

 

" ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.

 

" ERISA Affiliate " means an entity, whether or not incorporated, which is under common control with the Parent or any of its Subsidiaries within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes the Parent or any of its Subsidiaries and which is treated as a single employer under Sections 414(b), (c), (m), or (o) of the Code.

 

" Eurodollar Loan " means a Loan bearing interest at the Adjusted Eurodollar Rate.

 

" Eurodollar Rate " means with respect to any Eurodollar Loan, for the Interest Period applicable thereto, a rate per annum equal to the London Interbank Offered Rate.

 

" Eurodollar Reserve Percentage " means, for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities, as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined).

 

" Event of Default " has the meaning specified in Section 9.1.

 

" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

 

 

" Extension of Credit " means, as to any Lender, the making of a Loan by such Lender (or a participation therein by a Lender).

 

" Federal Funds Rate " means for any day the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided , that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Agent on such day on such transactions as determined by the Agent.

 

" GAAP " means generally accepted accounting principles in the United States applied on a consistent basis and subject to Section 1.3.

 

" Governmental Authority " means any Federal, state, local or foreign court, monetary authority or governmental agency, authority, instrumentality or regulatory body.

 

" Guarantor " means (a) the Parent, (b) each Subsidiary of the Parent in existence as of the Effective Date (other than the Borrower) and (c) any Person which becomes a "Guarantor" pursuant to Section 7.11 hereof, in each case, together with their successors and permitted assigns.

" Indebtedness " of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services purchased, (c) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to the property acquired, (d) all obligations of such Person under lease obligations which shall have been, or should be, in accordance with GAAP, recorded as capital leases in respect of which such Person is liable as lessee, (e) the face amount of all letter of credit indebtedness available to be drawn (other than letter of credit obligations relating to indebtedness included in Indebtedness pursuant to another clause of this definition) and, without duplication, the unreimbursed amount of all drafts drawn thereunder, (f) obligations of others secured by a Lien on property or assets of such Person, whether or not assumed (but in any event not exceeding the fair market value of the property or asset), (g) all guarantees of Indebtedness referred to in clauses (a) through (f) above, (h) all amounts payable by such Person in connection with mandatory redemptions or repurchases of preferred stock, (i) any obligations of such Person (in the nature of principal or interest) in respect of acceptances or similar obligations issued or created for the account of such Person, (j) all Off Balance Sheet Indebtedness of such Person and (k) obligations (contingent or otherwise) existing or arising under any interest rate Swap Contract, to the extent such obligations are classified as "indebtedness" for purposes of GAAP.

 

" Interest Payment Date " means (a) as to Base Rate Loans, the first day of each calendar quarter of the Borrower and the Maturity Date and (b) as to Eurodollar Loans, the last day of each applicable Interest Period and the Maturity Date and, in addition, where the applicable Interest Period for a Eurodollar Loan is greater than three months, then also on the last day of each three-month period during such Interest Period. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day.

 

 

" Interest Period " means, with respect to Eurodollar Loans, a period of one, two, three or six months' duration, as the Borrower may elect, commencing, in each case, on the date of the borrowing (including continuations and conversions of Eurodollar Loans); provided, however, (a) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (b) no Interest Period shall extend beyond the Maturity Date and (c) where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last Business Day of such calendar month.

" Investment " means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of the Capital Stock of another Person, (b) an Acquisition or (c) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person   and any arrangement pursuant to which the investor guarantees Indebtedness of such other Person.

" Investment Grade Rating " means BBB- or better from S&P or Baa3 or better from Moody's.

 

" Investment Grade Rating Date " means the date on which the Parent first achieves an Investment Grade Rating.

 

" Lead Arranger " means Wachovia Capital Markets, LLC, in its capacity as Sole Lead Arranger and Sole Book Manager hereunder.

 

" Lender " means any Person identified as a Lender on the signature pages hereto and any Eligible Assignee which may become a Lender by way of assignment in accordance with the terms hereof, together with their successors or permitted assigns.

 

" Lien " means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

 

" Loans " means the Term Loans.

 

" London Interbank Offered Rate " means, with respect to any Eurodollar Loan for the Interest Period applicable thereto, the rate of interest per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however, if more than one rate is specified on Telerate Page 3750, the applicable rate shall be the arithmetic mean of all such rates. If, for any reason, such rate is not available, the term "London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan for the Interest Period applicable thereto, the rate of interest per annum appearing on such other service as may be nominated by the British Bankers' Association as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however, if more than one rate is specified, the applicable rate shall be the arithmetic mean of all such rates.

 

 

" Material Adverse Effect " means a material adverse effect on the business, financial positions or results of operations of the Parent and its Subsidiaries taken as a whole.

 

" Maturity Date " means July 9, 2007.

 

" Moody's " means Moody's Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities.

 

" Multiemployer Plan " means a Plan covered by Title IV of ERISA which is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.

 

" Multiple Employer Plan " means a Plan covered by Title IV of ERISA, other than a Multiemployer Plan, which the Parent or any ERISA Affiliate and at least one employer other than the Parent or any ERISA Affiliate are contributing sponsors.

 

“ Net Cash Proceeds ” means with respect to the sale or issuance of any Capital Stock by the Borrower or any of its Subsidiaries, or the incurrence or issuance of any Indebtedness by the Borrower or any of its Subsidiaries, the excess of (a) the sum of the cash and Cash Equivalents received in connection with such transaction over (b) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket expenses, incurred by the Borrower   or such Subsidiary in connection therewith.

 

" Non-Excluded Taxes " has the meaning specified in Section 4.4(a).