EXHIBIT 99.1
PARTNERSHIP CONTRIBUTION AGREEMENT
BY AND AMONG
DAUPHIN ISLAND GATHERING PARTNERS,
A TEXAS GENERAL PARTNERSHIP,
DAUPHIN ISLAND GATHERING COMPANY, L.P.,
A TEXAS LIMITED PARTNERSHIP,
MCNIC MOBILE BAY GATHERING COMPANY,
A MICHIGAN CORPORATION,
PANENERGY DAUPHIN ISLAND COMPANY,
A DELAWARE CORPORATION,
CNG MAIN PASS GAS GATHERING CORPORATION,
A DELAWARE CORPORATION,
CENTANA GATHERING COMPANY,
A DELAWARE CORPORATION,
COASTAL DAUPHIN ISLAND COMPANY, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY,
AND
MAIN PASS GAS GATHERING COMPANY
A DELAWARE GENERAL PARTNERSHIP
DATED DECEMBER 13, 1996
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PARTNERSHIP CONTRIBUTION AGREEMENT
THIS PARTNERSHIP CONTRIBUTION AGREEMENT (this "AGREEMENT"), dated December
___, 1996, by and among Dauphin Island Gathering Partners, a Texas general
partnership (the "PARTNERSHIP"), Dauphin Island Gathering Company, L.P., a Texas
limited partnership ("DIGC") (the general partner of which is OEDC, Inc.), MCNIC
Mobile Bay Gathering Company, a Michigan corporation ("MMBGC"), PanEnergy
Dauphin Island Company, a Delaware corporation ("PDI" and, together with DIGC
and MMBGC, the "ORIGINAL PARTNERS"), CNG Main Pass Gas Gathering Corporation, a
Delaware corporation ("CNG"), Centana Gathering Company, a Delaware corporation
("CENTANA"), Coastal Dauphin Island Company, L.L.C., a Delaware corporation
("COASTAL" and, together with CNG and Centana, the "NEW PARTNERS" and, together
with the Original Partners, the "PARTNERS") and, Main Pass Gas Gathering
Company, a Delaware general partnership ("MPGC").
W I T N E S S E T H:
WHEREAS, DIGC, MMBGC and PDI are parties to the Fourth Amended and
Restated General Partnership Agreement (the "FOURTH RESTATED PARTNERSHIP
AGREEMENT"), dated as of July 1, 1996, which governs the Partnership; and
WHEREAS, the New Partners desire to cause MPGC to contribute its assets,
properties and rights, other than certain excluded assets, to the "Reconstituted
Partnership" (hereinafter defined) in exchange for certain general partnership
interests in the Reconstituted Partnership (the "PURCHASED INTEREST") and the
assumption by the Reconstituted Partnership of the obligation to perform certain
post-closing obligations of MPGC, all upon the terms and subject to the
conditions set forth below; and
WHEREAS, MPGC desires to assign the general partnership interests in the
Reconstituted Partnership (or the right to receive same) to the New Partners
simultaneous with, or prior to, Closing; and
WHEREAS, MPGC is engaged in the Main Pass Business (hereinafter
defined); and
WHEREAS, the Original Partners desire to reconstitute the Partnership to
admit the New Partners into the Reconstituted Partnership in exchange for
contribution of such assets, properties and rights of MPGC and the other
agreements of the New Partners contained herein, and to reconstitute the
Partnership (as reconstituted, the "RECONSTITUTED PARTNERSHIP") in accordance
with the Fifth Amended and Restated General Partnership Agreement attached as
EXHIBIT C (the "FIFTH RESTATED PARTNERSHIP AGREEMENT"), all upon the terms and
subject to the conditions set forth below; and
WHEREAS, the Partners desire to effect the transactions described herein
as a merger of Main Pass Gas Gathering Company into the Partnership, with the
Partnership treated as continuing pursuant to Treasury Regulation Section
1.708-1(b)(2)(i).
NOW, THEREFORE, in consideration of the foregoing and other consideration
described herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I. DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms have the
indicated meanings:
"ACTION": action, suit, investigation or proceeding before any
Governmental Authority.
"ASSUMED MPGC OBLIGATIONS": all obligations of MPGC under the
Main Pass Agreements that accrue after or relate to events occurring after
the Effective Date.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"CONTRACT": any note, bond, mortgage, indenture, license,
franchise, permit, lease, agreement, contract, other instrument or obligation.
"DAMAGES": losses, costs, expenses, fines, penalties, payments,
damages or other Liabilities including reasonable counsel fees and reasonable
investigation expenses from defending and prosecuting Actions.
"DIGP RETAINED OBLIGATIONS": all accounts payable and contractual
amounts payable to third parties relating to the ownership or operation of the
DIGP Assets or DIGP Business on or prior to the Effective Date, except those
related to the VK 121 and 124 Extension and the Phase I Extension.
"DIGS": the Dauphin Island Gathering System as more
particularly described in the Fifth Restated Partnership Agreement.
"DIGS ASSETS": means all of the assets, properties and rights that
comprise the DIGS, including the Contracts described in Exhibit A-1 to the Fifth
Restated Partnership Agreement, other than the DIGS Excluded Assets.
"DIGS BUSINESS": means the business of owning and operating the
DIGS Assets.
"DIGS EXCLUDED ASSETS": (i) all accounts, accounts receivable,
cash, cash equivalents, proceeds, revenues and prepaid expenses attributable to
the assets, properties, and rights of the Partnership with respect to any period
prior to the Effective Date; (ii) information or data that cannot be disclosed
to the New Partners as a result of confidentiality agreements
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that have been disclosed in writing by the Partnership to the New Partners;
(iii) all documents and instruments that may be protected by an attorney-client
privilege relating to claims or obligations for which the New Partners have not
assumed liability that, upon written advice of counsel, cannot be disclosed to
the New Partners without waiving the attorney-client privilege, and (iv) with
respect to periods of time prior to the Effective Date, all claims for
reimbursements or payments arising under or with respect to the Contracts
described in Exhibit A-1 to the Fifth Restated Partnership Agreement, provided,
however, no Action may be asserted with respect to such claims without Majority
Approval of the Management Committee.
"ENCUMBRANCES": encumbrances, security interests, options, rights
of first refusal, easements, mortgages, charges, debentures, indentures, deeds
of trust, rights-of-way, restrictions, agreements, encroachments, licenses,
leases, permits, security agreements, or any other Encumbrances and other
restrictions or limitations on use of real or personal property or
irregularities in title thereto, in each case, that would have a Material
Adverse Effect.
"ENVIRONMENTAL CONTAMINANT": any pollutant, waste, contaminant,
or hazardous, extremely hazardous, or toxic material, substance, chemical or
waste identified or defined as such under any Environmental Law.
"ENVIRONMENTAL LAWS": all laws, rules, regulations, ordinances,
orders, decisions and decrees of all governmental authorities existing on the
date hereof that regulate the environmental impact of the DIGS Assets and Main
Pass Assets.
"GOVERNMENTAL AUTHORITY": shall mean governmental and regulatory
authorities (including courts) having jurisdiction over any part to this
Agreement, the parties hereto, the assets of the Reconstituted Partnership or
the operation or services thereof.
"HSR ACT": shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
"KNOWLEDGE": in the phrase "to its knowledge," or in "the best of
its knowledge" or a similar phrase, when used to qualify a representation of a
party, shall be deemed to be that knowledge held by the officers, directors, and
managers of the party (or its general partner or other Person controlling such
party) making the representation, including those officers or managers having
authority over or responsibility for the subject matter of the representation,
at the time such representation is made.
"LAW": any statute, ordinance, rule, law (including common law)
or regulation promulgated by a Governmental Authority.
"LIABILITY": means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, direct or indirect, accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due under a
guarantee of another Person's Liability, due or to
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become due, vested or unvested, executory, determined, determinable or otherwise
and whether or not the same is required to be accrued on such Person's financial
statements.
"MAIN PASS AGREEMENTS": those certain natural gas gathering
Contracts, project Contracts, platform space Contracts and other Contracts
described on SCHEDULE 4.5.
"MAIN PASS ASSETS" or "MPGC ASSETS": the assets of MPGC
described on Schedule 4.13 and the Main Pass Agreements, other than the Main
Pass Excluded Assets.
"MAIN PASS BUSINESS": means the business of owning and
operating the Main Pass Assets.
"MAIN PASS EXCLUDED ASSETS": (i) all accounts, accounts receivable,
cash, cash equivalents, proceeds, revenues and prepaid expenses attributable to
the assets, properties, and rights of MPGC with respect to any period prior to
the Effective Date; (ii) information or data that cannot be disclosed to the
Partnership as a result of confidentiality agreements that have been disclosed
in writing by MPGC to the Partnership; (iii) all documents and instruments that
may be protected by an attorney-client privilege relating to claims or
obligations not assumed by the Reconstituted Partnership that, upon written
advice of counsel, cannot be disclosed to the Reconstituted Partnership without
waiving the attorney-client privilege, and (iv) with respect to periods of time
prior to the Effective Date, all claims for reimbursements or payments arising
under or with respect to the Main Pass Agreements; provided, however, no Action
may be asserted with respect to such claims without Majority Approval of the
Management Committee.
"MAIN PASS RECORDS": all of the applicable MPGC files, records and
data directly relating to the Main Pass Assets, Main Pass Business or Main Pass
Rights, including, without limitation, drawings, designs, technical information,
billings and check receipts, third party disbursement records and ad valorem
taxes; except for those relating to the Main Pass Excluded Assets.
"MAIN PASS RIGHTS": all permits, franchises, licenses or other
rights owned by or for MPGC relating to the ownership or operation of the MPGS,
other than those relating to the Main Pass Excluded Assets.
"MAIN PASS RETAINED OBLIGATIONS": all accounts payable and
contractual amounts owed to third parties by MPGC relating to the ownership or
operation of the Main Pass Assets or Main Pass Business on or prior to the
Effective Date, except those related to the Main Pass Production-Related
Compression Facilities.
"MATERIAL ADVERSE EFFECT": material adverse effect on the
assets, Liabilities, business, financial condition or results of operations
of the applicable Person and its subsidiaries, taken as a whole.
"MMBGC PIPE": the pipe and other materials listed on EXHIBIT A.
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"MPGC PERMITTED ENCUMBRANCES": (i) Encumbrances set forth in
SCHEDULE 4.11, (ii) Encumbrances for taxes not yet delinquent or, if delinquent,
being contested in good faith pursuant to appropriate proceedings; and (iii)
Encumbrances reserved to or vested in any Governmental Authority to control or
regulate any of the MPGC Assets or the Main Pass Business, in any manner, and
all Laws promulgated by any such Governmental Authorities.
"MPGC UNKNOWN LIABILITIES": all Liabilities of MPGC relating to the
ownership or operation of the Main Pass Business or the Main Pass Assets,
whether such Liabilities exist on the Effective Date or arise thereafter, other
than the Assumed MPGC Obligations and other than the Main Pass Retained
Obligations.
"MPGS": the Main Pass Gathering System as more particularly
described in the Fifth Restated Partnership Agreement.
"OLD CAPITAL ACCOUNTS": the capital accounts of an Original
Partner as contemplated by the Fourth Restated Partnership Agreement.
"ORDER": any judgment, order, injunction, writ or decree of a
Governmental Authority.
"PARTNERSHIP PERMITTED ENCUMBRANCES": (i) Encumbrances set forth in
SCHEDULE 3.11, (ii) Encumbrances for taxes not yet delinquent or, if delinquent,
being contested in good faith pursuant to appropriate proceedings; and (iii)
Encumbrances reserved to or vested in any Governmental Authority to control or
regulate any of the Partnership's assets in any manner, and all Laws promulgated
by any such Governmental Authorities.
"PERSON": any natural person, corporation, partnership (general
or limited), joint venture, limited liability company, other entity or
Governmental Authority.
"SEVERALLY, BUT NOT JOINTLY AND SEVERALLY": as used herein, shall
mean (i) that with respect to any representation, warranty, covenant or
agreement of a party hereunder (including the agreements to indemnify, hold
harmless or otherwise compensate a Person hereunder), that such party is making
the representation, warranty, covenant or agreement only with respect to itself
and where expressly indicated in certain circumstances in case of the Original
Partners, the Partnership, and in the case of the New Partners, MPGC and (ii)
that such party shall be liable only for its pro rata share of such obligations
that, in the case of the Original Partners, is a share equal to their respective
Ownership Interests in the Partnership as of the date hereof, and in the case of
the New Partners is a share equal to 1/3.
"VK 826 EXTENSION": An 8" gas gathering line approximately 17 miles
long from VK Block 826 to MP 225.
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1.1 OTHER DEFINITIONS. The following terms are defined in the
indicated sections.
Definition Section
Agreement Introductory Paragraph
Assignment 2.1
Centana Introductory Paragraph
Claim 10.3
CNG Introductory Paragraph
Coastal Introductory Paragraph
Closing 9.1
Closing Date 9.1
DIGC Introductory Paragraph
Effective Date 2.7
Effectiveness 2.7
Enforceability Exceptions 3.2
Fifth Restated Partnership Agreement Recitals
Financial Statements 3.4
Fourth Restated Partnership Agreement Recitals
MMBGC Introductory Paragraph
MPGC Introductory Paragraph
MPGC Balance Sheet 4.4
MPGC Balance Sheet Date 4.4
MPGC Financial Statements 4.4
MPGC Permits 4.6
New Capital Contribution 2.6
New Partners Introductory Paragraph
New Partners Indemnified Parties 10.1
Original Partners Introductory Paragraph
Original Partners Indemnified Parties 10.2
Partners Introductory Paragraph
Partnership Introductory Paragraph
Partnership Balance Sheet 3.4
Partnership Balance Sheet Date 3.4
Partnership Financial Statements 3.4
Partnership Permits 3.6
PDI Introductory Paragraph
Purchased Interest Recitals
Reconstituted Partnership Recitals
1.2 UNDEFINED TERMS; DEFINITIONS FROM FIFTH RESTATED PARTNERSHIP
AGREEMENT. Undefined capitalized terms are defined in the Fifth Restated
Partnership Agreement. These terms include: Capital Account, Main Pass
Production-Related Compression Facilities, Management Committee, Ownership
Interests, Managing Partner, Phase I Extension, Project Plans, Majority Approval
and, VK 121 and 124 Extension.
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ARTICLE II. THE TRANSACTION
2.1 CONTRIBUTION OF ASSETS. Subject to the terms and conditions of this
Agreement, the New Partners shall cause MPGC to contribute to the Reconstituted
Partnership, and the Partners shall cause the Reconstituted Partnership to
accept as of the Effective Date, the Main Pass Assets. The contribution of the
Main Pass Assets shall be made pursuant to an assignment in the form attached as
EXHIBIT B (the "ASSIGNMENT").
2.2 ASSUMPTION OF OBLIGATIONS.
(a) From and after the Effective Date, the New Partners shall assume
and agree to pay, perform and discharge, as general partners in the
Reconstituted Partnership, in a timely manner and in accordance with the
terms of the Fifth Restated Partnership Agreement, their respective
proportionate share of the Liabilities of the Reconstituted Partnership,
other than the DIGP Retained Obligations and Damages for which the New
Partners are released or entitled to indemnity under Article X, whether
such Liabilities exist on the Effective Date or arise thereafter.
(b) From and after the Effective Date, the Reconstituted Partnership
shall assume and agree to pay, perform and discharge, in a timely manner
and in accordance with the terms of the Fifth Restated Partnership
Agreement, the Assumed MPGC Obligations and the MPGC Unknown Liabilities,
other than the Main Pass Retained Obligations and Damages for which the
Original Partners are released or entitled to indemnity under Article X.
2.3 ISSUANCE OF RECONSTITUTED PARTNERSHIP INTEREST. As of the Effective
Date, the Original Partners shall enter into the Fifth Restated Partnership
Agreement with the New Partners and thereby cause the New Partners to become
general partners of the Reconstituted Partnership.
2.4 DETERMINATION OF OWNERSHIP INTERESTS. As of the Effective Date, each
Partner's Ownership Interest in the Reconstituted Partnership shall be the
interest set forth in Section 1.2(a) of the Fifth Restated Partnership
Agreement.
2.5 CAPITAL ACCOUNTS. On the Effective Date, the initial Capital Accounts
of each Original Partner shall be an amount equal to its Capital Account Balance
(as defined in the Fourth Restated Partnership Agreement) immediately prior to
Effectiveness, which are estimated to total, on the Effective Date,
approximately $80,000,000. On the Effective Date, the initial Capital Account of
each New Partner shall be equal to one-third of $55 million.
2.6 NEW CAPITAL CONTRIBUTIONS. On or before January 15, 1997, each Partner
shall pay to the Reconstituted Partnership funds in the amount of its share,
based on its Ownership Interest, of (a) all previously incurred costs of the VK
121 and 124 Extension, the Phase I Extension (including without limitation, the
$17.1 million owed the Affiliate of MMBGC for
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the MMBGC Pipe) and the Main Pass Production-Related Compression Facilities, to
the extent such Partner has not previously paid such costs, and (b) the
estimated capital expenditure to be incurred within 30 days following January
15, 1997 in connection with the VK 121 and 124 Extension, the Phase I Extension
and the Main Pass Production-Related Compression Facilities together with
interest on the amounts set forth in (a) from December 12, 1996 to the date paid
(each inclusive) calculated at an annual rate of 8.25% (the aggregate of such
amounts are herein referred to as the "NEW CAPITAL CONTRIBUTION").
2.7 EFFECTIVENESS. Subject to the satisfaction or waiver of the conditions
to effectiveness set forth herein on or before December 31, 1996, the
transactions contemplated hereby shall be effective (the "EFFECTIVENESS") and
the Fifth Restated Partnership Agreement shall become effective at 7:00 a.m.,
Houston, Texas time, on December 31, 1996. Such time and date are referred to
herein as the "EFFECTIVE DATE".
2.8 CONVEYANCE OF PARTNERSHIP EXCLUDED ASSETS. After the Effective Date,
the Reconstituted Partnership shall assign and convey the Partnership Excluded
Assets to the Original Partners in proportion to their respective Ownership
Interests in the Partnership on the date hereof.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE ORIGINAL PARTNERS
Each Original Partner, severally, but not jointly and severally, hereby
represents and warrants to the New Partners as of the date hereof and as of the
Effective Date, as follows:
3.1 EXISTENCE AND QUALIFICATION. The Partnership is a general partnership
duly organized under the laws of Texas under the provisions of the Texas Revised
Partnership Act. With respect to DIGC only, DIGC is a limited partnership duly
organized and validly existing under the laws of Texas. With respect to MMBGC
and PDI, as applicable, MMBGC and PDI are corporations duly organized, validly
existing and in good standing under the laws of their jurisdiction of
organization. The only general partners of the Partnership are the Original
Partners. The Partnership has the power and authority to own, lease and operate
its property and to carry on its business as now being conducted. The
Partnership conducts no business other than the operation of the DIGS. The
Partnership is duly qualified or licensed to do business in each jurisdiction in
which the character or location of its owned or leased properties or the nature
of its business makes such qualification necessary and the absence of which
would have a Material Adverse Effect.
3.2 AUTHORIZATION AND VALIDITY OF AGREEMENT AND FIFTH RESTATED PARTNERSHIP
AGREEMENT. Each such Original Partner and the Partnership has full partnership
or corporate power and authority to execute and deliver this Agreement and the
Fifth Restated Partnership Agreement, as applicable, to perform its obligations
hereunder and thereunder and, if applicable, to consummate the transactions
contemplated hereby and thereby. As of the Effective Date, the execution,
delivery and performance of this Agreement and the Fifth Restated Partnership
Agreement by such Original Partner and the Partnership, and the
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consummation by such Person of the transactions contemplated hereby and thereby,
have been duly authorized and approved by each such Person's corporate or
partnership governing authority, and no other action on the part of any such
Person is necessary to authorize the execution, delivery and performance of this
Agreement and the Fifth Restated Partnership Agreement and the consummation of
the transactions contemplated hereby and thereby, as applicable. Each of this
Agreement and the Fifth Restated Partnership Agreement, as applicable, has been
duly executed and delivered by such Original Partner and the Partnership, and is
a valid and binding obligation of such Person enforceable against such Person in
accordance with its terms, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (the "ENFORCEABILITY EXCEPTIONS").
3.3 CONSENTS AND APPROVALS; NO VIOLATIONS. The execution, delivery and
performance of this Agreement and the Fifth Restated Partnership Agreement, as
applicable, by such Original Partner and the Partnership and the consummation of
the transactions contemplated hereby and thereby will not, with or without the
giving of notice or the lapse of time or both: (a) violate or result in a breach
or default under any provision of the organizational documents of such Person;
(b) violate any Law or Order of any Governmental Authority applicable to such
Person or by which any of such Person's properties or assets may be bound; (c)
to the knowledge of such Original Partner, require any filing by such Original
Partner or the Partnership, with, or require such Person to obtain any permit,
consent or approval of, or require any notice to, any Governmental Authority or
third Person; or (d) result in a violation or breach by such Person of,
constitute (with or without due notice or lapse of time or both) a default by
such Person (or give rise to any right of termination, cancellation, payment or
acceleration) under or result in the creation of any Encumbrance upon any of the
properties or assets of such Person under any Contract to which such Person is a
party, or by which it or any of its properties, assets may be bound, except, in
the case of Sections 3.3(c) and (d), for such violations, permits, approvals,
consents, breaches, defaults, terminations, cancellations, payments,
accelerations which in the aggregate would not have a Material Adverse Effect on
the transactions contemplated hereby, the Partnership or the Reconstituted
Partnership.
3.4 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. The Original
Partners have heretofore furnished the New Partners with the unaudited balance
sheet (the "PARTNERSHIP BALANCE SHEET") of the Partnership as of September 30,
1996 (the "PARTNERSHIP BALANCE SHEET DATE"), and statements of operations and
cash flows for the period then ended (the "PARTNERSHIP FINANCIAL STATEMENTS"
included in Exhibit G). The Partnership Financial Statements have been prepared
in accordance with generally accepted accounting principles on a consistent
basis and fairly present in all material respects the financial position of the
Partnership, at the date thereof, and the results of operations of the
Partnership and its cash flows for the period indicated. Since the Partnership
Balance Sheet Date, there has been no change with respect to the Partnership
other than such changes as affect generally the industry in which the
Partnership is engaged and changes permitted under Section 6.2, which will cause
a Material Adverse Effect to the Partnership. Except for the VK 121 and 124
Extension, the
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Phase I Extension and as disclosed on SCHEDULE 3.4, all of the DIGS Assets are
reflected on the Partnership Balance Sheet. There are no assets other than the
DIGS Assets on the Partnership Balance Sheet.
3.5 MATERIAL CONTRACTS. SCHEDULE 3.5 sets forth a list of all material
Contracts of the Partnership in effect as of the date hereof with respect to the
DIGS Assets or DIGS Business, including, without limitation, all gathering
agreements. Except where it would not have a Material Adverse Effect, each such
Contract is in full force and effect, there exists no default or event of
default by the Partnership or event, occurrence, condition or act which, with
the giving of notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default by the Partnership and to
such Original Partner's or the Partnership's knowledge, by any other party
thereto. No notice of termination or of non-renewal of any Contract listed in
SCHEDULE 3.5 has been received by the Partnership or such Original Partner.
3.6 PERMITS. SCHEDULE 3.6 lists all of the governmental and other third
Person permits, licenses, rights-of-way, consents and authorizations
("PARTNERSHIP PERMITS") pursuant to which the DIGS Assets were constructed and
currently are operated, which are all of the permits required by Law to be held
for the current operation of the DIGS Assets and DIGS Business. Except as set
forth on SCHEDULE 3.6, the Partnership holds all of the Partnership Permits in
its name.
3.7 LITIGATION. Except as disclosed in SCHEDULE 3.7, and except where it
would not have a Material Adverse Effect, there is no Action pending, or, to the
knowledge of such Original Partner, threatened, against or affecting the
Partnership, the DIGS Business or the DIGS Assets and such Original Partner does
not know of any valid basis for any such Action.
3.8 COMPLIANCE WITH LAWS. To the knowledge of such Original Partner, the
Partnership is in compliance with all applicable Laws and Orders applicable to
the DIGS Assets or the DIGS Business, except where any noncompliance would not
have a Material Adverse Effect.
3.9 ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE 3.7 OR
3.9, since the Partnership Balance Sheet Date, the Partnership has conducted the
DIGS Business only in the ordinary course and, without limitation of the
foregoing, has not:
(a) except as contemplated by the Project Plan with respect to the
VK 121 and 124 Extension and Phase I Extension, made any cash calls on any
Original Partner;
(b) incurred, or become subject to, any Liability to which it or the
DIGS Assets will be subject and except current Liabilities incurred in the
ordinary course of business and the Liabilities contemplated by the
Project Plans with respect to the VK 121 and 124 Extension and the Phase I
Extension;
(c) subjected any of the DIGS Assets to any Encumbrance other
than a Partnership Permitted Encumbrance;
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(d) disposed of any material tangible asset;
(e) introduced any new or significantly changed management,
operation or accounting practice or policy or operated the DIGS Assets or
DIGS Business other than substantially as previously operated and in the
ordinary course;
(f) suffered any damage, destruction or loss to the DIGS
Assets (whether or not covered by insurance); or
(g) made or committed to make any capital expenditures for any
single item in excess of $50,000 other than as required by any Contract
listed on SCHEDULE 3.5 and/or in connection with the VK 121 and 124
Extension and the Phase I Extension.
3.10 ENVIRONMENTAL COMPLIANCE.
(a) To the knowledge of such Original Partner, the operations of the
DIGS are in compliance with all Environmental Laws, except where any
noncompliance would not have a Material Adverse Effect;
(b) to the knowledge of such Original Partner, no hazardous
substance that has been generated at or transported from the DIGS has been
disposed at a site which is on the National Priorities List, the CERCLIS,
or any analogous list of state Superfund sites, nor has any Governmental
Authority named the Partnership a potentially responsible party in
connection with a cleanup authorized by CERCLA;
(c) neither the Partnership nor such Original Partner has received
any written notice, mandate, Order or request which remains pending under
any Environmental Law concerning the DIGS Assets and which relates to any
substance that is an Environmental Contaminant;
(d) there is no Action pending against the Partnership or any of the
Original Partners by any Governmental Authority with respect to the
presence or release of any Environmental Contaminant from the DIGS; and
(e) to the knowledge of such Original Partner, there has not been
released from or on the DIGS any Environmental Contaminant in a quantity
or concentration which would require remedial action under any
Environmental Law if reported to the relevant Governmental Authorities.
3.11 TITLE TO ASSETS. Except for Partnership Permitted Encumbrances and
those Encumbrances listed on SCHEDULE 3.11, the Partnership has good and valid
title, free and clear of all Encumbrances, to the DIGS Assets.
3.12 ABSENCE OF UNDISCLOSED LIABILITIES. To the knowledge of such Original
Partner, as of the Effective Date, the Partnership and the Reconstituted
Partnership shall have no Liabilities except (i) Liabilities included in the
Partnership Balance Sheet, (ii) Liabilities arising in the ordinary course of
business since the Partnership Balance Sheet Date, (iii) Liabilities
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that would not reasonably be expected to have a Material Adverse Effect on the
Reconstituted Partnership, (iv) Liabilities of MPGC assumed pursuant to Section
2.2, and (v) Liabilities incurred in connection with the VK 121 and 124
Extension and the Phase I Extension.
3.13 ASSETS EMPLOYED. The DIGS Assets include all assets employed in the
conduct of the DIGS Business as currently conducted. The DIGS Assets are
sufficient to conduct the Partnership's business as currently conducted. The
Partnership does not own or lease any material asset (i) that is not used in the
conduct of its business and is used by any other Person or (ii) which is used
primarily in its business but use of which is made available to other Persons
for matters unrelated to the Partnership's business.
3.14 INVESTMENTS. The Partnership does not have any investment in
any Person.
3.15 EMPLOYEES. The Partnership has not had any employees at any
time during its existence.
3.16 ICA/PUHCA. The Partnership 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, or a "holding company", a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
3.17 GAS IMBALANCES. There is no material imbalance of gas under any
gathering or interconnect agreement to which the Partnership is a party.
3.18 CONDITION OF ASSETS. The equipment related to the DIGS Assets has
been maintained in satisfactory operating condition and is capable of being used
in the operation of the DIGS Assets without current need for repair or
replacement except in the ordinary course of business.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
OF THE NEW PARTNERS AND MPGC
Each New Partner and MPGC, severally, but not jointly and severally,
hereby represents and warrants to the Original Partners as of the date hereof
and as of the Effective Date, as follows:
4.1 EXISTENCE AND QUALIFICATION. MPGC is a general partnership duly
organized under the laws of the State of Delaware under the provisions of the
Delaware Uniform Partnership Act. Such New Partner is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. The only general partners of MPGC are the New
Partners. MPGC has the power and authority to own, lease and operate its
property and business as it is now being conducted. MPGC conducts no business
other than the
12
Main Pass Business. MPGC is duly qualified or licensed to do business in each
jurisdiction in which the character or location of its owned or leased
properties or the nature of its business makes such qualification necessary and
the absence of which would have a Material Adverse Effect.
4.2 AUTHORIZATION AND VALIDITY OF AGREEMENT AND FIFTH RESTATED PARTNERSHIP
AGREEMENT. Each such New Partner and MPGC has full partnership or corporate
power and authority to execute and deliver this Agreement and the Fifth Restated
Partnership Agreement, as applicable, to perform its obligations hereunder and
thereunder, if applicable, and to consummate the transactions contemplated
hereby and thereby. As of the Effective Date, the execution, delivery and
performance of this Agreement and the Fifth Restated Partnership Agreement by
such New Partner and MPGC, if applicable, and the consummation by such Person,
as applicable, of the transactions contemplated hereby and thereby, have been
duly authorized and approved by the Board of Directors of such Person, and no
other action on the part of such Person is necessary to authorize the execution,
delivery and performance of this Agreement and the Fifth Restated Partnership
Agreement and the consummation of the transactions contemplated hereby and
thereby, as applicable. Each of this Agreement and the Fifth Restated
Partnership Agreement, as applicable, has been duly executed and delivered by
the New Partners and MPGC and is a valid and binding obligation of such Person,
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to the Enforceability Exceptions.
4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as disclosed on
SCHEDULES 4.5 AND 4.6, the execution, delivery and performance of this Agreement
and the Fifth Restated Partnership Agreement, as applicable, by such New Partner
and MPGC, if applicable and the consummation of the transactions contemplated
hereby (including the transfer of the Main Pass Agreements) and thereby will
not, with or without the giving of notice or the lapse of time or both: (a)
violate or result in a breach or default under any provision of the
organizational documents of such Person; (b) violate any Law or Order of any
Governmental Authority applicable to such Person or by which any of such
Person's properties or assets may be bound; (c) to the knowledge of such New
Partner, require any filing by such New Partner or MPGC with, or require such
Person to obtain any permit, consent or approval of, or require any notice to,
any Governmental Authority or third Person; or (d) result in a violation or
breach by any such Person of, constitute (with or without due notice or lapse of
time or both) a default by such Person (or give rise to any right of
termination, cancellation, payment or acceleration) under or result in the
creation of any Encumbrance upon any of the properties or assets of such Person
under any Contract to which such Person is a party, or by which it or any of its
properties or assets may be bound and except, in the case of Sections 4.3(c) and
(d), for such violations, permits, approvals, consents, breaches, defaults,
terminations, cancellations, payments, accelerations which in the aggregate
would not have a Material Adverse Effect on the transactions contemplated
hereby, MPGC or the Reconstituted Partnership.
4.4 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. The New Partners
have heretofore furnished the Original Partners with the unaudited balance sheet
of MPGC (the "MPGC BALANCE SHEET") as of September 30, 1996 (the "MPGC BALANCE
SHEET DATE"), and
13
statements of operations and cash flows for the period then ended (the "MPGC
FINANCIAL STATEMENTS" included in Exhibit G). The MPGC Financial Statements have
been prepared in accordance with generally accepted accounting principles on a
consistent basis and fairly present in all material respects the financial
position of the MPGC, at the date thereof, and the results of operations of MPGC
and its cash flows for the period indicated. Since the MPGC Balance Sheet Date,
there has been no change with respect to MPGC other than such changes as affect
generally the industry in which MPGC is engaged or changes permitted under
Section 5.2, which will cause a Material Adverse Effect to MPGC. Except as
disclosed on SCHEDULE 4.4, all of the Main Pass Assets are reflected on the MPGC
Balance Sheet and there are no assets other than the Main Pass Assets on the
Main Pass Balance Sheet.
4.5 MATERIAL CONTRACTS. SCHEDULE 4.5 sets forth a list of all material
Contracts of MPGC in effect as of the date hereof with respect to the Main Pass
Assets or the Main Pass Business, including, without limitation, the Main Pass
Agreements and all gathering agreements. Except where it would not have a
Material Adverse Effect, each such Contract is in full force and effect, there
exists no default or event of default by MPGC or event, occurrence, condition or
act which, with the giving of notice, the lapse of time or the happening of any
other event or condition except as set out in Section 4.7, would become a
default or event of default by MPGC and to any New Partner or MPGC's knowledge,
by any other party thereto. No notice of termination or of non-renewal of any
Contract listed in SCHEDULE 4.5 has been received by MPGC or such New Partner.
4.6 PERMITS. SCHEDULE 4.6 lists all of the governmental and other third
Person permits, licenses, rights-of-way, consents and authorizations ("MPGC
PERMITS") pursuant to which the Main Pass Assets were constructed and currently
are operated, which are all of the permits required by law to be held for the
current operation of the Main Pass Assets and the Main Pass Business. Except as
set forth on SCHEDULE 4.6, MPGC holds all of the MPGC Permits in its name.
4.7 LITIGATION. Except as disclosed in SCHEDULE 4.7, and except where it
would not have a Material Adverse Effect, there is no Action pending, or, to the
knowledge of such New Partner, threatened, against or affecting MPGC, the Main
Pass Business or the Main Pass Assets, and such New Partner does not know of any
valid basis for any such Action.
4.8 COMPLIANCE WITH LAWS. To the knowledge of such New Partner, MPGC is in
compliance with all applicable Laws and Orders applicable to the Main Pass
Assets and the Main Pass Business, except where any noncompliance would not have
a Material Adverse Effect.
4.9 ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE 4.9, since
the MPGC Balance Sheet Date, MPGC has conducted the Main Pass Business only in
the ordinary course and, without limitation of the foregoing, has not:
(a) Except in connection with the Main Pass Production-Related
Compression Facilities and the VK 826 Extension, made any cash calls on
any of the New Partners;
14
(b) incurred, or become subject to, any Liability to which it or the
Main Pass Assets will be subject and except current Liabilities incurred
in the ordinary course of business;
(c) subjected any of the Main Pass Assets to any Encumbrance
other than a MPGC Permitted Encumbrance;
(d) disposed of any material tangible asset;
(e) introduced any new or significantly changed management,
operation or accounting practice or policy or operated the Main Pass
Assets or Main Pass Business other than substantially as previously
operated and in the ordinary course;
(f) suffered any damage, destruction or loss to the Main Pass
Assets or Main Pass Business (whether or not covered by insurance); or
(g) made or committed to make any capital expenditures for any
single item in excess of $50,000 other than as required by any Contract
listed on SCHEDULE 4.5 and/or in connection with the Main Pass
Production-Related Compression Facilities and the VK 826 Extension.
4.10 ENVIRONMENTAL COMPLIANCE.
(a) To the knowledge of such New Partner, the operations of the Main
Pass Business and Main Pass Assets are in compliance with all
Environmental Laws, except where any noncompliance would not have a
Material Adverse Effect;
(b) to the knowledge of such New Partner, no hazardous substance
that has been generated at or transported from any of the Main Pass Assets
has been disposed at a site which is on the National Priorities List, the
CERCLIS, or any analogous list of state Superfund sites, nor has any
Governmental Authority named MPGC or any New Partner a potentially
responsible party in connection with a cleanup authorized by CERCLA;
(c) neither MPGC nor any of the New Partners has received any
written notice, mandate, Order or request which remains pending under any
Environmental Law concerning any of the Main Pass Assets or the Main Pass
Business and which relates to any substance that is an Environmental
Contaminant;
(d) there is no Action pending against MPGC or such New Partner by
any Governmental Authority with respect to the presence or release of any
Environmental Contaminant from any of the Main Pass Assets; and
(e) to the knowledge of such New Partner, there has not been
released from or on the Main Pass Assets any Environmental Contaminant in
a quantity or concentration which would require remedial action under any
Environmental Law if reported to the relevant Governmental Authorities.
15
4.11 TITLE TO ASSETS. Except for MPGC Permitted Encumbrances and those
Encumbrances listed on SCHEDULE 4.11, MPGC has good and valid title, free and
clear of all Encumbrances, to the Main Pass Assets.
4.12 ABSENCE OF UNDISCLOSED LIABILITIES. To the knowledge of such New
Partners, as of the Effective Date, MPGC shall have no Liabilities except (i)
Liabilities included in the MPGC Balance Sheet except as provided in SCHEDULE
4.9, (ii) Liabilities arising in the ordinary course of business since the MPGC
Balance Sheet Date, (iii) Liabilities that would not reasonably be expected to
have a Material Adverse Effect on MPGC, (iv) Liabilities incurred in connection
with the Main Pass Production-Related Compression Facilities and the VK 826
Extension, and (v) letters from producers/shippers alleging constraint under the
Main Pass Agreements.
4.13 ASSETS EMPLOYED. The Main Pass Assets listed on SCHEDULE 4.13 include
all assets employed in the conduct of the Main Pass Business as currently
conducted. The Main Pass Assets are sufficient to operate the Main Pass Business
as currently conducted. MPGC does not own or lease any material asset (i) that
is not used in the conduct of its business and is used by any other Person or
(ii) which is used primarily in its business but use of which is made available
to other Persons for matters unrelated to MPGC's business.
4.14 INVESTMENTS. MPGC does not have any investment in any Person.
4.15 EMPLOYEES. MPGC has not had any employees at any time during
its existence.
4.16 ICA/PUHCA. MPGC 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, or a "holding company", a "subsidiary company"
of a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.17 GAS IMBALANCES. There is no material imbalance of gas under any
gathering or interconnect agreement to which MPGC is a party.
4.18 CONDITION OF ASSETS. The equipment related to the Main Pass Assets
has been maintained in satisfactory operating condition and is capable of being
used in the operation of the Main Pass Assets without current need for repair or
replacement except in the ordinary course of business.
16
ARTICLE V. COVENANTS OF THE NEW PARTNERS AND MPGC
Each of the New Partners and MPGC hereby covenants and agrees with the
Original Partners as follows:
5.1 COOPERATION BY THE NEW PARTNERS. Such New Partner and MPGC shall use
its reasonable efforts to cooperate with the Original Partners and the
Partnership to secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as shall be required to enable the
Original Partners and the Partnership to effect the transactions contemplated
hereby, and such New Partner and MPGC shall otherwise use its reasonable efforts
to cause the consummation of such transactions in accordance with the terms and
conditions hereof and to cause all conditions contained in this Agreement over
which it has control to be satisfied. Such New Partner and MPGC further agrees
to deliver to the Original Partners prompt written notice of any event or
condition which if it existed on the date of this Agreement, would result in any
of the representations and warranties of the New Partners contained herein being
untrue in any material respect.
5.2 CONDUCT OF BUSINESS. Except as the Original Partners may otherwise
consent to in writing, between the date hereof and the Effective Date, MPGC
shall:
(a) conduct business in connection with the Main Pass Assets
only in the ordinary course,
(b) use its reasonable efforts to maintain satisfactory
relationships with any suppliers, lessors, distributors, customers,
clients and others in connection with the Main Pass Assets and MPGC,
(c) maintain, consistent with past practice and good business
judgment, all the Main Pass Assets in customary repair, order and
condition, ordinary wear and tear excepted, and insurance or
self-insurance upon all such assets in such amounts and of such kinds
comparable to that in effect on the date hereof,
(d) maintain the books and records of MPGC in the usual,
regular and ordinary manner, on a basis consistent with past practice,
(e) not incur, or become subject to, any Liability to which it or
its assets will be subject and except current Liabilities incurred in the
ordinary course of business which in the aggregate would not cause a
Material Adverse Effect to the Main Pass Assets or MPGC, other than
Contracts listed in SCHEDULE 4.5, Liabilities incurred in connection with
the Main Pass Production-Related Compression Facilities, and the
construction of the VK 826 Extension,
(f) not subject any of its assets to any Encumbrance,
17
(g) not dispose of any material tangible asset,
(h) not introduce any new or significantly changed management,
operation or accounting practice or policy or operate the Main Pass Assets
or Main Pass Business other than substantially as previously operated and
in the ordinary course,
(i) not make or commit to make any capital expenditures for any
single item in excess of $50,000 other than as required by any Contract
listed on SCHEDULE 4.5, in connection with the Main Pass
Production-Related Compression Facilities and the VK 826 Extension, and
(j) pay all payments under its Contracts as they first come
due.
5.3 EXCLUSIVE DEALING. From the date of this Agreement to the earlier of
the Effective Date or the termination of this Agreement, such New Partner and
MPGC shall not take any action to, directly or indirectly, encourage, initiate
or engage in discussions or negotiations with, or provide any information to,
any Person other than the Original Partners and the Partnership, concerning any
sale or other transfer of the Main Pass Assets or the Main Pass Business or any
material part thereof or a similar transaction involving such New Partner or its
Affiliates.
5.4 GOVERNMENTAL FILINGS. Each New Partner agrees that it will cooperate
with the other Partners in all respects in connection with any required
governmental filings including filings under the HSR Act, and in connection with
any requests for information or further filings which may be necessary to obtain
the necessary consents (or to allow the applicable time periods to expire) with
respect thereto. The New Partners and the Original Partners each shall deliver
to the other and its respective counsel drafts of such filings and all other
materials to be submitted sufficiently in advance of any such submission so that
the parties and their respective counsel may review and comment upon such
filings and other materials. The costs of any such filings shall be borne and
paid by the Partners based on their respective Ownership Interests.
5.5 FURTHER ASSURANCES. At any time or from time to time after the
Effective Date, the New Partners shall, at the reasonable request of the
Original Partners, execute and deliver any further instruments or documents and
take all such further action as the Original Partners may reasonably request to
consummate and make effective the transactions contemplated by this Agreement.
5.6 AD VALOREM TAXES. Prior to the Effective Date, the New Partners
shall cause MPGC to accrue and pay for any unpaid ad valorem taxes due for
all periods prior to the Effective Date.
5.7 NEW CAPITAL CONTRIBUTIONS. Each New Partner shall contribute its
share of the New Capital Contributions to the Reconstituted Partnership (based
on its Ownership Interest); provided that any such New Partner, subject to the
provisions for interest set forth in Section 2.6, may defer payment of such
amounts until January 15, 1997.
18
5.8 DELIVERY OF NEW SCHEDULES. From time-to-time, the New Partners will
notify the Original Partners in writing of any changes that would be required to
make the schedules to this Agreement true and correct as of Closing.
5.9 CLARIFICATION OF TERMS IN GATHERING AGREEMENTS. MPGC shall diligently
seek to obtain documentation reasonably satisfactory to the Original Partners
that producers/shippers under the gathering Contracts listed in SCHEDULE 4.5
will be limited to gathering under such agreements to the Main Pass Assets, and
that such agreements shall not be construed to provide for gathering on DIGS on
or after the Effective Date.
5.10 CONSENTS. MPGC shall diligently seek to obtain consents and
authorizations required under the Main Pass Agreements for the assignment of the
Main Pass Agreements to the Reconstituted Partnership.
ARTICLE VI. COVENANTS OF ORIGINAL PARTNERS AND THE PARTNERSHIP
Each of the Original Partners and the Partnership hereby covenants and
agrees with MPGC and the New Partners as follows:
6.1 COOPERATION BY ORIGINAL PARTNERS. Such Original Partner will use its
reasonable efforts, and will cooperate with the New Partners and MPGC to secure
all necessary consents, approvals, authorizations, exemptions and waivers from
third parties as shall be required to enable the New Partners and MPGC to effect
the transactions contemplated herein, and such Original Partner and the
Partnership will otherwise use its reasonable efforts to cause the consummation
of such transactions in accordance with the terms and conditions hereof and to
cause all conditions contained in this Agreement over which it has control to be
satisfied. Such Original Partner and the Partnership further agree to deliver to
MPGC prompt written notice of any event or condition, which if it existed on the
date of this Agreement, would result in any of the representations and
warranties of such Original Partner contained herein being untrue in any
material respect.
6.2 CONDUCT OF BUSINESS. Except as the New Partners may otherwise consent
to in writing, between the date hereof and the Effective Date, the Partnership
shall:
(a) conduct business in connection with the DIGS Assets only
in the ordinary course,
(b) use its reasonable efforts to maintain satisfactory
relationships with any suppliers, lessors, distributors, customers,
clients and others in connection with the DIGS Assets and the Partnership,
(c) maintain, consistent with past practice and good business
judgment, all the DIGS Assets in customary repair, order and condition,
ordinary wear and tear excepted,
19
and insurance upon all such assets in such amounts and of such kinds
comparable to that in effect on the date hereof,
(d) maintain the books and records of the Partnership in the
usual, regular and ordinary manner, on a basis consistent with past
practice,
(e) not incur, or become subject to, any Liability to which it or
its assets will be subject and except current Liabilities incurred in the
ordinary course of business which in the aggregate would not cause a
Material Adverse Effect to the Partnership or the DIGS Assets, other than
Contracts listed in Schedule 3.5, and Liabilities incurred in connection
with the VK 121 and 124 Extension and the Phase I Extension,
(f) not subject any of its assets to any Encumbrance,
(g) not dispose of any material tangible asset,
(h) not introduce any new or significantly changed management,
operation or accounting practice or operate the DIGS Assets or Partnership
other than substantially as previously operated and in the ordinary
course, except as may be required to comply with the Natural Gas Act of
1938, as amended,
(i) not make or commit to make any capital expenditures for any
single item in excess of $50,000 other than as required by any Contract
listed on SCHEDULE 3.5 and/or in connection with the VK 121 and 124
Extension or the Phase I Extension, and
(j) pay all payments under its Contracts as they come due.
6.3 EXCLUSIVE DEALING. From the date of this Agreement to the earlier of
the Effective Date or the termination of this Agreement, such Original Partner
and the Partnership shall not take any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or provide
any information to, any Person other than the New Partners and MPGC, concerning
any sale or other transfer of the DIGS Assets or the DIGS Business or any
material part thereof or a similar transaction involving such Original Partner
or its Affiliates.
6.4 GOVERNMENTAL FILINGS. Each Original Partner agrees that it will
cooperate with the other Partners in all respects in connection with any
required governmental filings including filings under the HSR Act, and in
connection with any requests for information or further filings which may be
necessary to obtain the necessary consents (or to allow the applicable time
periods to expire) with respect thereto. The New Partners and the Original
Partners each shall deliver to the other and its respective counsel drafts of
such filings and all other materials to be submitted sufficiently in advance of
any such submission so that the parties and their respective counsel may review
and comment upon such filings and other materials. The costs of any such filings
shall be borne and paid by the Partners based on their respective Ownership
Interests.
20
6.5 FURTHER ASSURANCES. At any time or from time to time after the date
hereof, the Original Partners shall, at the request of MPGC and/or the New
Partners, execute and deliver any further instruments or documents and take all
such further action as the New Partners may reasonably request to consummate and
make effective the transactions contemplated by this Agreement.
6.6 AD VALOREM TAXES. Prior to the Effective Date, the Original
Partners shall cause the Partnership to accrue and pay for any unpaid ad
valorem taxes due for all periods prior to the Effective Date.
6.7 NEW CAPITAL CONTRIBUTIONS. Each Original Partner shall contribute its
share of the New Capital Contributions to the Reconstituted Partnership (based
on Ownership Interests); provided that any such Original Partner, subject to the
provisions for interest set forth in Section 2.6, may defer payment of such
amounts until January 15, 1997, except for amounts due pursuant to the Fourth
Restated Partnership Agreement which shall be paid when due under such
agreement.
6.8 NEW SCHEDULES. From time to time, the Original Partners will notify
the New Partners in writing of any changes that would be required to make the
schedules to this Agreement true and correct as of Closing.
ARTICLE VII. CONDITIONS TO ORIGINAL PARTNERS' AND PARTNERSHIP'S
OBLIGATIONS
The obligations of each Original Partner and the Partnership under
this Agreement to consummate the transactions contemplated hereby shall be
subject to the satisfaction (or waiver in writing by each Original Partner) on
or prior to the dates set forth below of all of the following conditions:
7.1 PERFORMANCE OF AGREEMENTS AND REPRESENTATION. Each of the agreements
and covenants of each New Partner to be performed on or before the date hereof,
the Closing Date or the Effective Date pursuant to the terms hereof shall have
been duly performed in all material respects on or prior to such applicable
date, and all representations and warranties of MPGC and each New Partner shall
be true in all material respects as of the date hereof; provided, however, each
Original Partner and the Partnership shall be deemed to have waived any breach
of the representations and warranties of MPGC or the New Partners based upon
facts of which such Original Partner or the Partnership had actual knowledge, on
or before the date hereof.
7.2 NO LITIGATION THREATENED. On or before the Effective Date, no Action
shall have been instituted to restrain or prohibit any of the transactions
contemplated hereby except any Action disclosed on SCHEDULES 3.7 OR 4.7.
7.3 GOVERNMENTAL APPROVALS. All Governmental Authority consents and
approvals (including consents under the HSR Act), if any, necessary to permit
the consummation of the
21
transactions contemplated by this Agreement shall have been received, on or
before the Effective Date.
7.4 OTHER CONSENTS. Each consent required to contribute the MPGC Assets to
the Reconstituted Partnership, including, without limitation, all consents
required to assign the Main Pass Agreements, shall have been obtained on or
before the Effective Date.
7.5 CONSENTS OF THE ORIGINAL PARTNERS' BOARDS OF DIRECTORS. All necessary
corporate approvals of each Original Partner shall have been obtained on or
before the Effective Date.
7.6 NO MATERIAL CHANGE. Since the MPGC Balance Sheet Date and until the
date hereof, there has been no material change to MPGC other than such changes
as affect generally the industry in which MPGC is engaged, and other than
changes related to the VK 826 Extension and the Main Pass Production-Related
Compression Facilities, which will cause a Material Adverse Effect to MPGC or
the Reconstituted Partnership.
7.7 NO DAMAGE. On or before the date hereof, the Main Pass Assets shall
not have suffered any damage, destruction or loss that is not fully covered by
insurance that, in the aggregate, exceeds $1,000,000.
ARTICLE VIII. CONDITIONS TO THE NEW PARTNERS' AND MPGC'S OBLIGATIONS
The obligations of each New Partner and MPGC under this Agreement to
consummate the transactions contemplated hereby shall be subject to the
satisfaction (or waiver in writing by each New Partner) on or prior to the dates
set forth below of all of the following conditions:
8.1 PERFORMANCE OF AGREEMENTS AND REPRESENTATIONS. Each of the agreements
and covenants of each Original Partner to be performed on or before the date
hereof, the Closing Date or the Effective Date pursuant to the terms hereof
shall have been duly performed on or before such applicable date, and all
representations and warranties of the Partnership and each Original Partner
shall be true in all material respects as of the date hereof; provided,
however, that each New Partner and MPGC shall be deemed to have waived any
breach of the representations and warranties of the Partnership or the Original
Partners based upon facts of which such New Partner or MPGC had actual
knowledge, on or before the date hereof.
8.2 NO LITIGATION THREATENED. On or before the Effective Date, no Action
shall have been instituted to restrain or prohibit any of the transactions
contemplated hereby, except any Action disclosed on Schedules 3.7 or 4.7.
8.3 GOVERNMENTAL APPROVALS. All Governmental Authority consents and
approvals (including consent under the HSR Act), if any, necessary to permit the
consummation of the transactions contemplated by this Agreement shall have been
received on or before the Effective Date.
22
8.4 OTHER CONSENTS. Each consent required to contribute the MPGC Assets to
the Reconstituted Partnership, including, without limitation, all consents
required to assign the Main Pass Agreements, shall have been obtained on or
before the Effective Date.
8.5 CONSENTS OF THE NEW PARTNERS' BOARDS OF DIRECTORS. All necessary
corporate approvals of each New Partner shall have been obtained on or before
the Effective Date.
8.6 NO MATERIAL CHANGE. Since the Partnership Balance Sheet Date until
the date hereof, there has been no material change to the Partnership other than
such changes as affect generally the industry in which the Partnership is
engaged, and other than changes related to the VK 121 and 124 Extension, the
Phase I Extension and the Petition for Declaratory Order of Dauphin Island
Gathering System, which will cause a Material Adverse Effect to the Partnership
or the Reconstituted Partnership.
8.7 NO DAMAGE. On or before the date hereof, DIGS shall not have suffered
any damage, destruction or loss that is not fully covered by insurance that, in
the aggregate, exceeds $1,000,000.
ARTICLE IX. CLOSING
9.1 PLACE AND TIME. The Closing of the transactions contemplated hereby
(the "CLOSING" (the date which is referred to as the "CLOSING DATE") shall take
place at the offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 711 Louisiana
Street, Suite 1900, Houston, Texas, at 7:00 a.m. Houston, Texas time on December
31, 1996, or any mutually agreed earlier date. All matters at the Closing shall
be considered to take place simultaneously, and no delivery of any document
shall be deemed complete until all transactions and deliveries of documents
contemplated hereby are completed.
9.2 CLOSING OBLIGATIONS. At the Closing:
(a) the Original Partners shall deliver, or shall have caused to be
released from escrow, as applicable, the following duly executed
documents, in substantially the form set forth in the Exhibit
corresponding to such document, as follows:
DOCUMENT: EXHIBIT:
Fifth Amended and Restated
Partnership Agreement C
Agreement Regarding Jurisdictionality D
Coastal Processing Plant Option
Agreement E
CNG Processing Plant Option Agreement F
23
(b) MPGC shall deliver, or shall have caused to be released from
escrow, as applicable, (i) an executed Assignment of Contract Rights and
Bill of Sale, in substantially the form set forth as Exhibit B, and (ii)
any consents required by Section 8.4.
(c) The New Partners shall deliver or shall have caused to be
released from escrow, as applicable, the following duly executed
documents, in substantially the form set forth in the Exhibit
corresponding to such document, as follows:
DOCUMENT: EXHIBIT:
Fifth Amended and Restated
Partnership Agreement C
Agreement Regarding Jurisdictionality D
Coastal Processing Plant Option
Agreement (delivery required of
Coastal only) E
CNG Processing Plant Option Agreement
(delivery required of CNG only) F
9.3 RECORDS. MPGC shall cause the Main Pass Records to be delivered to
the Managing Partner no later than sixty (60) days after the Effective Date, but
may retain copies of such Records.
ARTICLE X. INDEMNIFICATION
10.1 INDEMNIFICATION OF THE NEW PARTNERS. Each Original Partner,
severally, but not jointly and severally, from and after the Effective Date,
shall indemnify, defend and hold each New Partner, its Affiliates and their
respective directors, officers and shareholders (collectively, "NEW PARTNERS
INDEMNIFIED PARTIES"), harmless from and against any and all Damages suffered by
each of the New Partners Indemnified Parties as a result of, caused by, arising
out of, or in any way relating to (i) any breach of any representation or
warranty of such Original Partner and/or the Partnership contained in or made
pursuant to this Agreement, (ii) any breach of any covenant or agreement of such
Original Partners and/or the Partnership contained in or made pursuant to this
Agreement, and (iii) the construction, ownership and operation of the DIGS
Assets or the DIGS Business prior to the Effective Date.
10.2 INDEMNIFICATION OF THE ORIGINAL PARTNERS. Each New Partner,
severally, but not jointly and severally, from and after the Effective Date,
shall indemnify, defend and hold each Original Partner, its respective
Affiliates, and their respective directors, officers and shareholders
(collectively, the "ORIGINAL PARTNERS INDEMNIFIED PARTIES") harmless from and
against any and all Damages suffered by each of the Original Partners
Indemnified Parties as a result of, caused by, arising out of, or in any way
relating to (i) any breach of any representation or warranty of such New Partner
and/or MPGC contained in or made pursuant to this Agreement, (ii) any breach of
any
24
covenant or agreement of such New Partners and/or MPGC contained in or made
pursuant to this Agreement, and (iii) the construction, ownership or operation
of the Main Pass Assets or Main Pass Business prior to the Effective Date.
10.3 DEMANDS. Each indemnified Person hereunder agrees that promptly upon
its discovery of facts giving rise to a claim for indemnity hereunder (a
"CLAIM"), it will give prompt written notice thereof to the indemnifying party,
together with a statement of such information respecting any of such facts as it
may have and a formal demand for indemnification. The indemnifying party shall
not be obligated to indemnify the indemnified Person with respect to any Claim
if the indemnified Person knowingly fails to notify the indemnifying party in
sufficient time to permit the indemnifying party to defend against such matter
and to make a timely response thereto, only insofar as such knowing failure to
notify the indemnifying party has actually resulted in prejudice or Damage to
the indemnifying party.
10.4 RIGHT TO CONTEST AND DEFEND. The indemnifying party shall be entitled
at its cost and expense to contest and defend by all appropriate Actions any
Claim with respect to which it is called upon to indemnify the indemnified
Person; PROVIDED, if the indemnifying party shall decide not to contest and
defend such Action it shall deliver notice of its intention to not so contest to
the indemnified Person within 20 days after the date of receipt by the
indemnifying party of notice by the indemnified Person of the assertion of the
Claim. Any such contest may be conducted in the name and on behalf of the
indemnifying party or the indemnified Person as may be appropriate. The
indemnified party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense. The indemnifying party shall have full authority to
determine all action to be taken with respect thereto; PROVIDED, HOWEVER, that
the indemnifying party will not have the authority to subject the indemnified
party to any obligation whatsoever, other than the performance of purely
ministerial tasks or obligations not involving material expense. If the
indemnifying party does not elect to contest any such Claim, the indemnifying
party shall be bound by the result obtained with respect thereto by the
indemnified Person. At any time after the commencement of the defense of any
Claim, the indemnifying party may request the indemnified Person to agree in
writing to the abandonment of such contest or to the payment or compromise by
the indemnified party of the asserted Claim, whereupon such action shall be
taken unless the indemnified Person determines that the contest should be
continued, and so notifies the indemnifying party in writing within 15 days of
such request from the indemnifying party. If the indemnified Person determines
that the contest should be continued, the indemnifying party shall be liable
hereunder only to the extent of the amount that the other Person to the
contested Claim had agreed unconditionally to accept in payment or compromise as
of the time the indemnifying party made its request therefor to the indemnified
Person.
10.5 COOPERATION. If requested by the indemnifying party, the indemnified
Person shall cooperate with the indemnifying party and its counsel in contesting
any Claim that the indemnifying party elects to contest or, if appropriate, in
making any counterclaim against the Person asserting the Claim, or any
cross-complaint against any Person, and the indemnifying
25
party will reimburse the indemnified Person for any expenses it incurs by so
cooperating. The indemnified Person shall afford the indemnifying party and its
counsel the opportunity to be present at, and to participate in, conferences
with all persons asserting any Claim against the indemnified Person or
conferences with representatives of or counsel for such Persons.
10.6 PAYMENT OF DAMAGES. The indemnifying party shall pay to the
indemnified Person in immediately available funds any amounts to which the
indemnified Person may become entitled by reason of the provisions of this
Agreement, such payment to be made within five days after any such amounts are
finally determined either by mutual agreement of the parties hereto or pursuant
to the final unappealable judgment of a court of competent jurisdiction or
binding award of an arbitration panel of proper jurisdiction. In calculating any
amount to be paid by an indemnifying party by reason of the provisions of this
Agreement, the amount shall be reduced by all net tax benefits and other
reimbursements actually received by the indemnified Person related to the
Damages.
10.7 LIMITATIONS ON LIABILITY.
(a) No Original Partner shall be required or obligated to indemnify
or otherwise compensate any of the New Partners Indemnified Parties under
Section 10.1(i), under Section 10.1(ii) with respect to a breach of
Section 6.8 or under Section 10.1(iii) of this Agreement unless the
aggregate amount of Damages which such New Partners Indemnified Party
would, but for the provisions of this Article X, have incurred exceeds an
amount equal to the product of $500,000 multiplied by the Ownership
Interest of such Original Partner in the Partnership on the date hereof,
and then only to the extent of any such excess. No New Partner shall be
required or obligated to indemnify or otherwise compensate any of the
Original Partners Indemnified Parties under Section 10.2(i), under Section
10.2(ii) with respect to a breach of Section 5.8 or under Section
10.2(iii) of this Agreement unless the aggregate amount of Damages for
which such Original Partners Indemnified Parties would, but for the
provisions of this Article X, have incurred exceeds an amount equal to the
product of $500,000 multiplied by 1/3, and then only to the extent of any
such excess.
(b) The maximum amount for which an Original Partner shall be
required or obligated to indemnify or otherwise compensate the New
Partners Indemnified Parties under Section 10.1(i), under Section 10.1(ii)
with respect to a breach of Section 6.8 or under Section 10.1(iii) of this
Agreement, in the aggregate, shall be limited to an amount equal to the
product of such Original Partners' Ownership Interest in the Partnership
on the date hereof multiplied by $20,000,000, except for claims made
against such Original Partner for breach by such Original Partner of
Sections 3.1, 3.2 or 3.3. The maximum amount for which a New Partner shall
be required or obligated to indemnify or otherwise compensate the Original
Partners Indemnified Parties under Section 10.2(i), under Section 10.2(ii)
with respect to a breach of Section 5.8 or under Section 10.2(iii) of this
Agreement, in the aggregate, shall be limited to an amount equal to 1/3
multiplied by $20,000,000, except for claims made against such New Partner
for breach by such New Partner of Sections 4.1, 4.2 or 4.3.
26
(c) Notwithstanding any other provision in this Agreement to the
contrary, none of Original Partners shall be required or obligated to
indemnify or otherwise compensate any of the New Partners Indemnified
Parties under Section 10.1 for any Damages as a result of, caused by,
arising out of, or in any way relating to the VK 121 and 124 Extension or
the Phase I Extension except to the extent such Original Partner would
have been obligated to indemnify the New Partners Indemnified Parties
under the Reconstituted Partnership Agreement had the Reconstituted
Partnership Agreement been in effect at such time.
(d) Notwithstanding any other provision in this Agreement to the
contrary, none of New Partners shall be required or obligated to indemnify
or otherwise compensate any of the Original Partners Indemnified Parties
under Section 10.2 for any Damages as a result of, caused by, arising out
of, or in any way relating to the Main Pass Production-Related Compression
Facilities and the VK 826 Extension, except to the extent such New Partner
would have been obligated to indemnify the Original Partners Indemnified
Parties under the Reconstituted Partnership Agreement had the
Reconstituted Partnership Agreement been in effect at such time.
(e) Each of the Original Partners Indemnified Parties' and the New
Partners Indemnified Parties' sole and exclusive remedy with respect to
(i) any and all Claims relating to the representations, warranties,
covenants and agreements contained in this Agreement or (ii) other Claims
pursuant to or in connection with this Agreement shall be pursuant to the
indemnification provisions set forth in this Article X and, in furtherance
of the foregoing, each such Person hereby waives, to the fullest extent
permitted under applicable Law, any and all rights, claims and causes of
Action it may have against the other arising under or based upon any Law.
(f) Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall
give rise to any right on the part of any party after the consummation of
the transactions contemplated hereby to rescind this Agreement or any of
the transactions contemplated hereby.
(g) Each of the Original Partners Indemnified Parties and the New
Partners Indemnified Parties shall take all reasonable steps to mitigate
all Damages upon and after becoming aware of any event which could
reasonably be expected to give rise to any Damages that are indemnifiable
hereunder.
(h) No party shall have any Liability hereunder to any indemnified
Person for any breach, misrepresentation or noncompliance with respect to
any representation, warranty, covenant or obligation contained herein if
the fulfillment of which has been waived by such indemnified Person.
(i) After the Effective Date, no party shall be required or
obligated to indemnify or otherwise compensate an indemnified Person under
this Agreement if the indemnified Person asserting the Claim had knowledge
of the relevant facts at or before the Effective Date.
27
(j) No party shall be liable to any indemnified Person for any
exemplary or punitive Damages or for loss of profits or consequential
losses (other than such exemplary or punitive Damages or loss of profits
or consequential losses for which such Person is liable to a Person not a
member of the Original Partners Indemnified Parties or the New Partners
Indemnified Parties) because of the provisions of this Article X, EVEN IF
CAUSED BY THE SOLE, JOINT, CONTRIBUTORY AND/OR COMPARATIVE NEGLIGENCE,
STRICT LIABILITY, AND/OR OTHER FAULT OF SUCH PARTY OR AFFILIATE.
(k) The indemnities provided for in this Article X are expressly
limited to Claims asserted by written notice given by the indemnified
Person to the relevant indemnifying party prior to November 30, 1998.
(l) EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, THE NEW PARTNERS ARE
NOT MAKING, AND THE ORIGINAL PARTNERS HEREBY WAIVE, ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE QUALITY, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO SAMPLES, OR CONDITION OF
MPGS ASSETS OR ANY PART THEREOF, AND THE MPGS ASSETS ARE TRANSFERRED AND
CONTRIBUTED, AND THE ORIGINAL PARTNERS ACCEPT, MPGS ASSETS "AS IS, WITH
ALL FAULTS."
ARTICLE XI. TERMINATION
11.1 TERMINATION.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned by the New Partners in writing,
without Liability on the part of the terminating Person on account of such
termination (provided the terminating Person is not otherwise in default
or breach of this Agreement) at any time prior to the Effective Date, if
the Original Partners shall fail to perform its or their covenants or
agreements contained herein required to be performed prior to the
Effective Date or if the conditions set forth in Sections 8.2, 8.3, 8.4
and 8.5 are not satisfied or waived as of and at the Effective Date.
(b) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned by the Original Partners, in writing,
without Liability on the part of the terminating Person on account of such
termination (provided the terminating Person is not otherwise in default
or breach of this Agreement) at any time prior to the Effective Date if
the New Partners shall fail to perform its or their covenants or
agreements contained herein required to be performed on or prior to the
Effective Date, or if the conditions set forth in Sections 7.2, 7.3, 7.4
and 7.5 are not satisfied or waived as of and at the Effective Date.
28
11.2 EFFECT ON OBLIGATIONS. Termination of this Agreement pursuant to
Section 11.1 shall terminate all obligations of the parties hereunder, except
for the obligations under Article XII and the obligations set forth in the next
two sentences of this Section 11.2; provided, however, termination shall not
relieve a Person that has breached this Agreement from liability under this
Agreement. Upon termination of this Agreement each Person hereto will redeliver
all documents, work papers and other material of any other Person relating to
the transactions contemplated hereby, and all copies of such materials, whether
so obtained before or after the execution hereof, to the Person furnishing the
same. Notwithstanding such termination, the obligations of the Partners under
the Confidentiality Agreement dated June 14, 1996, among the Partnership and
MPGC shall survive; PROVIDED that none of the Partnership, MPGC, any New Partner
or any Original Partner shall assert a claim on the basis of such
confidentiality agreements in connection with any Person to this Agreement or
any Affiliate thereof extending its gathering system and services or
constructing additional gathering systems.
ARTICLE XII.
MISCELLANEOUS
12.1 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules) and the Confidentiality Agreement dated June 14, 1996, among the
Partnership and MPGC set forth the entire understanding of the parties with
respect to the subject matter hereof. Any previous agreements or understandings
(whether oral or written) between the parties regarding the subject matter
hereof are merged into and superseded by this Agreement.
12.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors of
the parties hereto; PROVIDED that this Agreement, including the representations
and warranties herein, may not be assigned by any Person without the prior
written consent of the other parties hereto.
12.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
12.4 HEADINGS. The headings of the Articles, Sections and paragraphs of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
12.5 MODIFICATION AND WAIVER. No amendment, modification or alteration of
the terms or provisions of this Agreement shall be binding unless the same shall
be in writing and duly executed by the parties hereto, except that any of the
terms or provisions of this Agreement may be waived in writing at any time by
the Person which is entitled to the benefits of such waived terms or provisions.
No waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
29
similar). No delay on the part of either Person in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
12.6 NO THIRD PARTY BENEFICIARY RIGHTS. Except as provided in the second
sentence of this Section 12.6, this Agreement is not intended to and shall not
be construed to give any Person (other than the parties signatory hereto) any
interest or rights (including, without limitation, any third Person beneficiary
rights) with respect to or in connection with any agreement or provision
contained herein or contemplated hereby. The directors, officers, shareholders
of the Original Partners and the New Partners, and of their respective
Affiliates, and the respective Affiliates of the Original Partners and the New
Partners are expressed third Person beneficiaries of the indemnification
provisions contained in Article X of this Agreement.
12.7 EXPENSES. Except as otherwise provided in this Agreement, each Person
shall pay all costs and expenses incurred by them or on their behalf in
connection with this Agreement and the transactions contemplated hereby.
12.8 NOTICE. Any notice, request, instruction or other document to be
given hereunder by any party hereto or any indemnified Person to any party or
indemnified Person shall be in writing and shall be sufficiently given if
delivered in person or sent by telecopier (with confirmation) or registered or
certified mail, postage prepaid, return receipt requested. As to any party, such
notice shall be addressed as follows:
if to MCNIC Mobile Bay Gathering Company, to:
Attention: Vice President
c/o Pipeline & Processing Group, Inc.
150 W. Jefferson, Suite 1700
Detroit, Michigan 48226
if to PanEnergy Dauphin Island Company, to:
Attn: Vice President - Offshore
5718 Westheimer, Suite 2000
Houston, Texas 77057
if to CNG Main Pass Gas Gathering Corporation, to:
Attn: Vice President
Park Ridge Center
Pittsburgh, Pennsylvania 15244-0746
if to Centana Gathering Company, to:
Attn: Vice President - Offshore
5718 Westheimer, Suite 2000
Houston, Texas 77057
30
if to Coastal Dauphin Island Company, L.L.C., to:
Attn: Vice President - Gulf Coast
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
if to Dauphin Island Gathering Company, L.P., to:
Attn: Mr. Keith Anderson
1400 Woodloch Forest Drive, Suite 200
The Woodlands, Texas 77380
if to the Partnership, to Dauphin Island Gathering Company, L.P.,
as Managing Partner:
Attn: Mr. Keith Anderson
1400 Woodloch Forest Drive, Suite 200
The Woodlands, Texas 77380
if to MPGC, to Centana Gathering Company,
as Operator:
Attn: Vice President - Offshore
5718 Westheimer, Suite 2000
Houston, Texas 77057
or at such other address for a Person as shall be specified by like
notice, and such notice or communication shall be deemed to have been duly given
as of the date so delivered, mailed or sent by telecopier (with confirmation as
contemplated above if telecopied).
12.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to its conflicts
of law rules that might refuse or permit the application of the law of another
jurisdiction.
12.10 PUBLICITY. Except as otherwise required by applicable laws or
regulations, or the rules of any stock exchange on which the securities of a
Person or its Affiliates are listed, no Person hereto shall issue any press
release or make any other public statement, in each case relating to or
connected with or arising out of this Agreement or the matters contained herein,
without obtaining the prior approval of the other parties hereto to the contents
and the manner of presentation and publication thereof.
12.11 SEVERABILITY. If any provision of this Agreement is unenforceable,
all other 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 any manner materially adverse to any
party. Upon such determination that any provision is unenforceable, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled.
31
12.12 ENFORCEMENT. The parties hereto agree that the remedy at law for any
breach of this Agreement is inadequate and that should any dispute arise
concerning the transfer of the Main Pass Assets or any other matter hereunder,
this Agreement shall be enforceable in a court of equity by an injunction or a
decree of specific performance. Such remedies shall, however, be cumulative and
nonexclusive, and shall be in addition to any other remedies which the parties
hereto may have.
[NEXT PAGE IS SIGNATURE PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
Dauphin Island Gathering Partners, by its General
Partners in their capacity as partners and
individually:
Dauphin Island Gathering Company, L.P.
By: OEDC, Inc., its General Partner
By:DOUGLAS H. KIESEWETTER
Name: DOUGLAS H. KIESEWETTER
Title:EXECUTIVE VICE PRESIDENT
MCNIC Mobile Bay Gathering Company
By:JOSEPH L. ROBERTS
Name:JOSEPH L. ROBERTS
Title: VICE PRESIDENT
PanEnergy Dauphin Island Company
By: BRAD D. REESE
Name:BRAD D. REESE
Title: VICE PRESIDENT
Main Pass Gas Gathering Company
by its General Partners in their capacity
as partners and individually
Centana Gathering Company
By: BRAD D. REESE
Name:BRAD D. REESE
Title: VICE PRESIDENT
Coastal Dauphin Island Company, L.L.C.
By:STEVEN R. ANDERSON
Name:STEVEN R. ANDERSON
Title:VICE PRESIDENT
CNG Main Pass Gas Gathering Corporation
By: JAMES D. KEIFFER
Name: JAMES D. KEIFFER
Title:VICE PRESIDENT
LIST OF EXHIBITS AND SCHEDULES
Exhibit A - MMBGC Affiliate Pipe
Exhibit B - Assignment of Contract Rights and Bill of Sale
Exhibit C - Fifth Amended and Restated Partnership Agreement
Exhibit D - Agreement Regarding Jurisdictionality
Exhibit E - Coastal Form of Processing Plant Option Agreement
Exhibit F - CNG Form of Processing Plant Option Agreement
Exhibit G - Partnership and MPGC Financials
Schedule 3.4 - Partnership Assets Not Reflected on Partnership Balance Sheet
Schedule 3.5 - Partnership's Material Contracts
Schedule 3.6 - Partnership Permits/Agreements
Schedule 3.7 - Litigation - Partnership
Schedule 3.9 - Certain changes since Partnership Balance Sheet
Schedule 3.11- Partnership Permitted Encumbrances
Schedule 4.4 - MPGC Assets Not Reflected on MGPC Balance Sheet
Schedule 4.5 - MPGC Material Contracts
Schedule 4.6 - MPGC Permits
Schedule 4.7 - Litigation - MPGC
Schedule 4.9 - Certain changes since MPGC Balance Sheet Date
Schedule 4.11- MPGC Permitted Encumbrances
Schedule 4.13- Main Pass Assets