Exhibit 10.5

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

BETWEEN

CGAS Properties, L.P.

AS SELLER

AND

M3 Ohio Gathering LLC

AS PURCHASER

 

Executed on MAY 26, 2015

 

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TABLE OF CONTENTS

 

    Page       Article 1 DEFINITIONS 1 Article 2 PURCHASE AND SALE 2 2.1
Purchase and Sale 2 2.2 Purchase Price 2 2.3 Increase in Subject Interest and
Purchase Price; Extension of Closing Date 2 2.4 Adjustments to Purchase Price 2
2.5 Agreement Regarding LLC Agreement 3 Article 3 CLOSING 3 3.1 Time and Place
of Closing 3 3.2 Obligations of Seller at Closing 3 3.3 Obligations of Purchaser
at Closing 4 Article 4 REPRESENTATIONS AND WARRANTIES OF SELLER 5 4.1 Existence
5 4.2 Power 5 4.3 Authorization and Enforceability 5 4.4 No Conflicts 5 4.5 LLC
Agreement 6 4.6 Ownership 6 4.7 Liability for Brokers’ Fees 6 4.8 Litigation 6
4.9 Taxes 6 4.10 Environmental Laws 7 4.11 Compliance with Laws 7 4.12 Midstream
Assets.. 7 4.13 Contracts 7 4.14 Tag-Along Rights, Consents and Preferential
Rights 7 4.15 Employee Matters 8 4.16 Intellectual Property 8 4.17
Anti-Corruption Matters 8

  

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4.18 OFAC 8 4.19 Solvency. 8 4.20 Certain Disclaimers 9 Article 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER 10 5.1 Existence and Qualification
10 5.2 Power 10 5.3 Authorization and Enforceability 10 5.4 No Conflicts 10 5.5
Liability for Brokers’ Fees 10 5.6 Litigation 11 5.7 Investment Intent 11 5.8
Independent Investigation 11 5.9 Other Consents 11 5.10 Financing. 11 Article 6
COVENANTS OF THE PARTIES 11 6.1 Exclusivity 12 6.2 Government Authorizations;
Cooperation 12 6.3 Public Announcement 13 6.4 Assumption of Obligations 13 6.5
Casualty and Condemnation 14 6.6 Further Assurances 14 6.7 Cooperation on Taxes
14 6.8 Schedule Update 14 6.9 Other Agreement 15 6.10 Encumbrances on the
Subject Interest 15 6.11 Confidentiality 15 6.12 Non-Solicitation 15 6.13
Closing 16 6.14 Conduct Pending Closing. 16 Article 7 CONDITIONS TO CLOSING 16
7.1 Conditions of Seller to Closing 16 7.2 Conditions of Purchaser to Closing 17

 

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Article 8 TERMINATION 18 8.1 Termination 18 8.2 Effect of Termination 19 Article
9 INDEMNIFICATION; LIMITATIONS 19 9.1 Indemnification 19 9.2 Indemnification
Actions 22 9.3 Limitation on Actions 24 Article 10 MISCELLANEOUS 25 10.1
Counterparts 25 10.2 Notice 26 10.3 Expenses 27 10.4 Transfer Taxes 27 10.5
Governing Law 27 10.6 Jurisdiction; Waiver of Jury Trial 27 10.7 Captions 28
10.8 Waivers 28 10.9 Assignment 28 10.10 Entire Agreement 28 10.11 Amendment 28
10.12 References 29 10.13 Construction 29 10.14 Limitation on Damages 29 10.15
Specific Performance 30

 

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Exhibits

 

Exhibit A – Definitions Exhibit B – Form of Assignment Agreement       Schedules
          Schedule 1.1(b) – Knowledge Personnel - Seller Schedule 1.1(c) –
Knowledge Personnel - Purchaser Schedule 4.6 – Encumbrances Schedule 4.8 –
Litigation Schedule 4.9 – Taxes Schedule 4.10 – Environmental Schedule 4.11 –
Compliance with Laws Schedule 4.13 – Existing Agreements Schedule 4.14 – Certain
Consents Schedule 5.9 – Other Purchaser Consents Schedule 6.2 – Government
Authorizations

  

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MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

This Membership Interest Purchase Agreement (this “Agreement”) is dated May 26,
2015 (the “Execution Date”), and is by and between CGAS Properties, L.P., a
Delaware limited partnership (“Seller”) and M3 Ohio Gathering LLC, a Delaware
limited liability company (“Purchaser”). Seller and Purchaser are sometimes
referred to individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Seller owns a 21% Membership Interest (the “Entire Interest”) in Utica
East Ohio Midstream LLC, a Delaware limited liability company (the “Company”);

 

WHEREAS, Purchaser owns a 30% Membership Interest in the Company;

 

WHEREAS, Utica Gas Services, L.L.C., an Oklahoma limited liability company (the
“Other Member”) owns the remaining 49% Membership Interest in the Company;

 

WHEREAS, Seller desires to sell the Entire Interest and, in accordance with
Section 8.6 of the LLC Agreement (as hereinafter defined), has delivered to
Purchaser and the Other Member a Proposed Transfer Notice and Offer Terms, dated
April 2, 2015 (“Transfer Notice”);

 

WHEREAS, Seller and the Other Member have entered into a Membership Interest
Purchase Agreement (the “Other Agreement”), wherein the Seller has agreed to
sell to the Other Member, and the Other Member has agreed to purchase from the
Seller, the Entire Interest, subject to the right of the Purchaser to purchase
its pro rata share of the Entire Interest as provided in Section 8.6 of the LLC
Agreement; and

 

WHEREAS, Purchaser desires to accept the offer set forth in the Transfer Notice
and to exercise its rights as provided in Section 8.6 of the LLC Agreement to
purchase the Subject Interest for the consideration, and subject to the terms
and conditions, set forth in this Agreement.

 

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

 

Article 1

DEFINITIONS

 

In addition to the terms defined in the introductory paragraph and the recitals
of this Agreement, for purposes hereof, the capitalized terms used herein and
not otherwise defined shall have the meanings set forth in Exhibit A.

 

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Article 2

PURCHASE AND SALE

 

2.1           Purchase and Sale.    At the Closing, and upon the terms and
subject to the conditions of this Agreement, Seller shall sell and convey to
Purchaser, and Purchaser shall purchase, accept and pay for, all of Seller’s
right, title and interest in and to the Subject Interest, free and clear of all
Encumbrances other than any restrictions under federal and state securities Laws
and the terms and conditions of the LLC Agreement, for the consideration in
Section 2.2.

 

2.2           Purchase Price.    The purchase price for the Subject Interest
(the “Purchase Price”) shall be Two Hundred and Eighteen Million, Three Hundred
and Fifty Four Thousand Four Hundred and Thirty Dollars ($218,354,430). The
Purchase Price shall be subject to adjustment as provided in Section 2.3 and
2.4.

 

2.3           Increase in Subject Interest and Purchase Price; Extension of
Closing Date.    The Subject Interest shall initially be a 30/79 x 21%
(approximately 7.975%) Membership Interest in the Company. If the Other Member
does not close on the purchase of the Remaining Interest on June 10, 2015, or,
if applicable, on the purchase of the Entire Interest on or before June 24,
2015, and this Agreement has not been terminated, as permitted under Section 8.1
then (a) the Closing Date shall be extended to July 31, 2015 or such earlier
date as agreed to by the Parties, (b) the Subject Interest shall be increased to
21% and (c) the Purchase Price shall be increased to Five Hundred and Seventy
Five Million Dollars ($575,000,000).

 

2.4           Adjustments to Purchase Price.    The Purchase Price for the
Subject Interest shall be adjusted as follows:

 

(a)          Capital Contributions. The Purchase Price shall be increased by an
amount equal to the sum of all Capital Contributions (as defined in the LLC
Agreement) made by Seller to the Company with respect to the Subject Interest
after the Effective Time and prior to Closing.

 

(b)          Distributions. The Purchase Price shall be decreased by an amount
equal to the sum of all Distributions (as defined in the LLC Agreement) received
by Seller from the Company with respect to the Subject Interest after the
Effective Time and prior to Closing.

 

(c)          Casualty. The Purchase Price shall be decreased by any casualty or
condemnation adjustments under Section 6.5.

 

(d)          Adjusted Purchase Price. The Purchase Price, adjusted as set forth
in Section 2.3, this Section 2.4 and Section 6.5, shall be the “Adjusted
Purchase Price.”

 

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2.5           Agreement Regarding LLC Agreement.    Seller and Purchaser agree
and acknowledge that (a) this Agreement and the Transfer Notice constitute the
“Proposed Transfer Notice,” “Offer Terms” and “Purchase Notice” as such terms
are used in the LLC Agreement, (b) this Agreement and the Transfer Notice
satisfy in all respects the requirements of Section 8.6 of the LLC Agreement
imposed on Seller and Purchaser and (c) none of the covenants, agreements,
representations and warranties set forth in this Agreement shall be deemed
breached or violated by Seller or Purchaser because of any alleged or actual
failure of the Transfer Notice or this Agreement to comply with Section 8.6 of
the LLC Agreement.  Seller and Purchaser further agree and acknowledge that (i)
its execution and delivery of this Agreement is consistent with the requirements
of Section 8.6 the LLC Agreement, (ii) that neither Purchaser nor Seller shall
allege or bring any claim of any kind, whether at law or equity or sounding in
contract (express or implied) or tort, against the other concerning, relating to
or arising under Sections 8.6(a) and (b) of the LLC Agreement in connection with
the Transfer Notice and this Agreement constitutes a bar to any such claim and
(iii) Purchaser and Seller shall diligently defend any claim or allegation that
the Transfer Notice and this Agreement do not satisfy the requirements of the
LLC Agreement.

 

Article 3

CLOSING

 

3.1           Time and Place of Closing.    Consummation of the purchase and
sale of the Subject Interest as contemplated by this Agreement (the “Closing”)
shall, unless otherwise agreed to in writing by Purchaser and Seller, take place
at the offices of Haynes and Boone, LLP in Houston, Texas, at 10:00 a.m., local
time, on the Closing Date. From and after the Closing, the Closing shall be
deemed to have been effective as of 12:01 a.m., local time, on the Closing Date.

 

3.2           Obligations of Seller at Closing.    At the Closing, upon the
terms and subject to the conditions of this Agreement, and subject to the
simultaneous performance by Purchaser of its obligations pursuant to
Section 3.3, Seller shall deliver or cause to be delivered to Purchaser the
following:

 

(a)          four (4) duly executed counterparts of an assignment of the Subject
Interest (the “Assignment Agreement”) in substantially the form attached hereto
as Exhibit B;

 

(b)          four (4) originals of a certificate duly executed by an Authorized
Officer of Seller, dated as of the Closing Date, certifying on behalf of Seller
that the conditions set forth in Sections 7.2(a) and 7.2(b) have been fulfilled;

 

(c)          four (4) originals of a certificate duly executed by the secretary
or any assistant secretary of the general partner of Seller, dated as of the
Closing Date, (i) attaching and certifying on behalf of Seller complete and
correct copies of (A) the certificate of formation and agreement of limited
partnership of Seller, as in effect as of the Closing, (B) the resolutions of
the board of directors of the general partner of Seller authorizing the
execution, delivery, and performance by Seller of this Agreement and the
transactions contemplated hereby, and (C) any required approval by the partners
of Seller of this Agreement and the transactions contemplated hereby and
(ii) certifying on behalf of Seller the incumbency of each officer of the
general partner of Seller executing this Agreement or any document delivered in
connection with the Closing;

 

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(d)          four (4) originals of an executed certificate described in Treasury
Regulation Section 1.1445-2(b)(2) certifying that Seller is not a foreign person
within the meaning of the Code;

 

(e)          documents in form and substance reasonably satisfactory to
Purchaser evidencing the release of the Encumbrance listed on Schedule 4.6;

 

(f)          an executed letter of resignation of the Manager (as defined in the
LLC Agreement) appointed to the board of Managers by Seller, in form and
substance reasonably acceptable to Purchaser; and

 

(g)          any other agreements, instruments or documents that are required by
the terms of this Agreement under Article 7 to be delivered by Seller to
Purchaser or as otherwise reasonably requested by Purchaser to consummate the
transactions contemplated hereby.

 

3.3           Obligations of Purchaser at Closing.    At the Closing, upon the
terms and subject to the conditions of this Agreement, and subject to the
simultaneous performance by Seller of its obligations pursuant to Section 3.2,
Purchaser shall deliver or cause to be delivered to Seller the following:

 

(a)          a wire transfer of the Adjusted Purchase Price, in same-day funds
to an account of Seller designated in writing by Seller to Purchaser no later
than two days prior to the Closing Date;

 

(b)          four (4) duly executed counterparts of the Assignment Agreement;

 

(c)          four (4) originals of a certificate by an Authorized Officer of
Purchaser, dated as of the Closing Date, certifying on behalf of Purchaser that
the conditions set forth in Sections 7.1(a) and 7.1(b) have been fulfilled;

 

(d)          four (4) originals of a certificate duly executed by the secretary
or any assistant secretary of Purchaser, dated as of the Closing Date,
(i) attaching, and certifying on behalf of Purchaser as complete and correct,
copies of (A) the certificate of formation and limited liability company
agreement of Purchaser, each as in effect as of the Closing, (B) the resolutions
of the managers of Purchaser authorizing the execution, delivery and performance
by Purchaser of this Agreement and the transactions contemplated hereby and
(C) any required approval by the members of Purchaser of this Agreement and the
transactions contemplated hereby and (ii) certifying on behalf of Purchaser the
incumbency of each officer of Purchaser executing this Agreement or any document
delivered in connection with the Closing; and

 

(e)          any other agreements, instruments, or documents that are required
by the terms of this Agreement under Article 7 to be delivered by Purchaser to
Seller or as otherwise reasonably requested by Seller to consummate the
transactions contemplated hereby.

 

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Article 4

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the Schedules to this Agreement, and subject to
Section 4.20, Seller represents and warrants as of the date hereof and as of the
Closing Date to Purchaser that:

 

4.1           Existence.    Seller is a limited partnership duly formed, validly
existing and in good standing under the Laws of the State of Delaware.

 

4.2           Power.    Seller has the requisite partnership power and authority
to execute and deliver this Agreement (and all documents to be executed and
delivered by Seller pursuant to this Agreement), to perform its obligations
hereunder (and thereunder), and to consummate the transactions contemplated
hereby (and thereby).

 

4.3           Authorization and Enforceability.    The execution, delivery and
performance by Seller of this Agreement (and all documents required to be
executed and delivered by Seller pursuant to this Agreement), and the
consummation by Seller of the transactions contemplated hereby (and thereby),
have been duly and validly authorized by all necessary partnership action on the
part of Seller or, in the case of documents to be executed and delivered
pursuant to this Agreement, will 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 pursuant to this Agreement will be duly
executed and delivered by Seller) and, assuming due authorization, execution and
delivery by Purchaser, this Agreement constitutes (and such other documents will
constitute) the valid and binding obligations of Seller, enforceable against
Seller in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar Laws
affecting the rights and remedies of creditors generally as well as by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) (the “Enforceability Exceptions”).

 

4.4           No Conflicts.    The execution, delivery and performance of this
Agreement by Seller (and all documents to be executed and delivered by Seller
pursuant to this Agreement), and the consummation of the transactions
contemplated by this Agreement (and by such documents), do not and will not
(a) violate any provision of the certificate of formation, limited partnership
agreement or other organizational documents of Seller, (b) result in a material
default (with due notice or lapse of time or both) or the creation of any
Encumbrance, or give rise to any right of termination, cancellation or
acceleration under any note, bond, mortgage, indenture, or other financing
instrument to which Seller or, to the Knowledge of Seller, the Company is a
party or by which their respective assets are bound, (c) result in a material
violation or breach of any judgment, order, ruling, or decree applicable to
Seller or, to the Knowledge of Seller, the Company, as a party in interest,
(d) result in a material violation or breach of any Laws applicable to Seller
or, to the Knowledge of Seller, the Company or (e) except for the Government
Authorizations listed in Schedule 6.2, require notice to, filing with, or the
obtaining of approval from, any Governmental Body by or with respect to Seller
or, to the Knowledge of the Seller, the Company.

 

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4.5           LLC Agreement.    Seller has performed all of its material
obligations under the LLC Agreement and is not in material default under any
provision of the LLC Agreement.

 

4.6           Ownership.    Except as set forth on Schedule 4.6, as of the
Execution Date, Seller has good and valid title to the Subject Interest, free
and clear of any Encumbrances, other than any restrictions under federal and
state securities Laws and the terms and condition of the LLC Agreement. As of
the Closing, Seller will have good and valid title to the Subject Interest, in
each case, free and clear of any Encumbrances, other than any restrictions under
federal and state securities Laws and the terms and condition of the LLC
Agreement.

 

4.7           Liability for Brokers’ Fees.    Purchaser will not directly or
indirectly have any responsibility, liability or expense, as a result of
undertakings or agreements of Seller or any Affiliate 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.

 

4.8           Litigation.    Except as set forth on Schedule 4.8, to the
Knowledge of Seller, there are no actions, suits or proceedings pending, or
threatened, before any Governmental Body or arbitrator against the Company.
There are no actions, suits or proceedings pending, or, to the Knowledge of
Seller, threatened, before any Governmental Body or arbitrator against Seller,
which are reasonably likely to materially delay or materially impair Seller’s
ability to perform its obligations under this Agreement.

 

4.9           Taxes.

 

(a)          There are no Encumbrances for Taxes upon the Subject Interest.

 

(b)          Except as set forth on Schedule 4.9, to the Knowledge of Seller:

 

(i)          the Company has timely filed all material Tax Returns required to
have been filed by or with respect to the Company and its operations, and such
Tax Returns are complete and correct in all material respects and all material
Taxes owed by the Company have been timely paid;

 

(ii)         the Company has always been and will be through the Closing Date
validly classified, for United States federal income tax purposes, as either a
“disregarded entity” as defined in Treasury Regulation Section 301.7701-3 or as
a “partnership” as defined in Section 761(a) of the Code;

 

(iii)        there is no material claim, audit, action, suit or proceeding
pending or threatened in writing against or with respect to the Company in
respect of any Tax or Tax Return, and there are no Encumbrances for Taxes (other
than Encumbrances for Taxes not yet due and payable) upon the assets of the
Company;

 

(iv)        the Company is not obligated to pay the Taxes of another person
under applicable Law, by Contract, as a transferee, as a successor or otherwise;
and

 

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(v)         the transactions contemplated by this Agreement would not, if
consummated, result in a Tax Termination Event of the Company as described in
Section 8.2(a) of the LLC Agreement.

 

4.10         Environmental Laws.    Except as set forth in Schedule 4.10, to the
Knowledge of Seller: (a) the Company is in compliance in all material respects
with all applicable Environmental Laws; (b) there are no actions pending or
threatened in writing against the Company, or any real property owned, operated
or leased by it, alleging violation of or liability under any Environmental Law;
(c) the Company has not entered into any order, settlement, judgment, injunction
or decree involving uncompleted, outstanding or unresolved obligations,
liabilities or requirements relating to or arising under Environmental Law; (d)
the Company holds and is in compliance in all material respects with all
material Permits required under Environmental Law for it to conduct its
business; and (e) the Company has not Released any Hazardous Substance in or on
the Company’s assets in quantities or concentrations requiring material remedial
action by the Company under Environmental Laws. Notwithstanding anything to the
contrary contained in this Agreement, the representations and warranties
contained in this Section 4.10 are Seller’s sole representations and warranties
with respect to environmental matters and Environmental Laws.

 

4.11         Compliance with Laws.    Except as set forth in Schedule 4.11, to
the Knowledge of Seller: (a) the Company is conducting its business in
compliance in all material respects with all applicable Laws, including any Laws
relating to bribery, improper payments to a Governmental Body or governmental
officer or employee, candidate for political office, political party or official
thereof, or public international organization, and money laundering; (b) the
Company holds all material Permits necessary for the lawful conduct of its
business as presently conducted; and (c) the Company is in compliance in all
material respects with the terms of all such material Permits, and no written
notices have been received relating to the termination, cancellation or
withdrawal thereof. This Section 4.11 does not address environmental matters and
Environmental Laws, which are exclusively governed by Section 4.10.

 

4.12         Midstream Assets.    To the Knowledge of Seller, the Company has
not disposed of any of its Midstream Assets that are material to its operations
and there are no claims pending or threatened against the Company disputing the
Company’s title to its Midstream Assets.

 

4.13         Contracts.    Except for the Existing Agreements, the Company is
not a party to any Contract with Seller or an Affiliate of Seller which will be
binding on the Company after Closing.

 

4.14         Tag-Along Rights, Consents and Preferential Rights.    Except as
set forth on Schedule 4.14 and as set forth in the LLC Agreement: (a) Seller’s
execution, delivery and performance of this Agreement (and any document required
to be executed and delivered by Seller at Closing) is not and will not be
subject to any option by any Person to participate as a seller in the sale to
Purchaser contemplated by this Agreement; (b) Seller’s execution, delivery and
performance of this Agreement (and any document required to be executed and
delivered by Seller pursuant to this Agreement) is not and will not be subject
to any required consent of, or notice to, any third Person (other than a
Governmental Body); and (c) there are no preferential rights to purchase, rights
of first opportunity or similar rights created by Seller or its Affiliates
applicable to a sale of the Subject Interest.

 

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4.15         Employee Matters.    To the Knowledge of Seller, the Company does
not have any employees and does not maintain, sponsor, contribute to, and is not
required or obligated to contribute to, and is not a party to any, Employee
Benefit Plan. To the Knowledge of Seller, there is no pending or threatened
strike, slowdown, work stoppage, lockout or other labor dispute relating to any
Person providing services for or on behalf of the Company.

 

4.16         Intellectual Property.    To the Knowledge of Seller: (a) the
Company owns or has a license or other right to use all material Intellectual
Property used in the conduct of the Company’s business; (b) neither the
Company’s use of Intellectual Property nor the Company’s conduct of its business
as currently conducted infringes, violates or misappropriates in any material
respect the Intellectual Property of any Person; and (c) there are no actions,
suits or proceedings pending or threatened in writing against the Company
alleging any such infringement, violation or misappropriation.

 

4.17         Anti-Corruption Matters.    To the Knowledge of Seller, the Company
has not, directly or indirectly, taken any action which would cause the Company
to (a) be in violation of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or any similar anti-bribery law or regulation applicable to the Company
or (b) violate or operate in noncompliance with any export restrictions,
anti-boycott regulations, or embargo regulations.

 

4.18         OFAC.    To the Knowledge of Seller, (a) neither the Company nor
any of its officers or managers is currently the subject or target of any
sanctions administered or enforced by the U.S. Government (including the Office
of Foreign Assets Control of the United States Department of the Treasury and
the U.S. Department of State and including the designation as a “specially
designated national” or “blocked person”), the United Nations Security Council,
the European Union, or Her Majesty’s Treasury, (collectively “Sanctions”),
(b) nor does the Company have its principal place of business or the majority of
its business operations (measured by revenues) located in a country that is the
subject or target of Sanctions, including Cuba, Burma (Myanmar), Iran, North
Korea, Sudan, and Syria. To the Knowledge of Seller, neither the Company nor any
of its officers or directors has in the last five (5) years knowingly engaged
in, or is now knowingly engaged in, any dealings or transactions relating to or
with any Person, or in any country or territory, that at the time of the dealing
or transaction is or was the subject of Sanctions.

 

4.19         Solvency.    Seller is not now insolvent and will not be rendered
insolvent by any of the transactions contemplated hereby. As used in this
Section 4.19, “insolvent” means that the sum of the debts and other probable
Liabilities of Seller exceeds the present fair saleable value of Seller's
assets. Immediately after giving effect to the consummation of the transactions
contemplated hereunder: (i) Seller will be able to pay its obligations and
liabilities as they become due in the usual course of its business; (ii) Seller
will have adequate capital with which to conduct its business; and (iii) Seller
will have assets (calculated at fair market value) that exceed its obligations
and liabilities, including a reasonable estimate of the amount of all contingent
liabilities of Seller.

 

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4.20         Certain Disclaimers.

 

(a)          The representations and warranties set forth in this Article 4 and
in the agreements and certificates to be delivered by Seller at Closing pursuant
to Section 3.2 are the only representations and warranties made by Seller.
Except as specifically set forth in this Article 4, or in the agreements and
certificates to be delivered by Seller at Closing pursuant to Section
3.2, Seller makes no, and disclaims any, warranty, express or implied, as to any
matter whatsoever relating to Seller, the Company, their respective businesses,
assets, liabilities or any other matter relating to the transactions
contemplated by this Agreement.

 

(b)          WITHOUT LIMITING THE GENERALITY OF SECTION 4.20(a), EXCEPT AS MAY
BE SPECIFICALLY SET FORTH IN THIS ARTICLE 4 OR IN THE AGREEMENTS OR CERTIFICATES
TO BE DELIVERED BY SELLER AT CLOSING PURSUANT TO SECTION 3.2, SELLER FURTHER
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING
(I) TITLE TO ANY OF THE COMPANY’S ASSETS, (II) THE CONTENTS, CHARACTER OR NATURE
OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OF ANY CONSULTANT, RELATING TO THE
COMPANY’S ASSETS, (III) ANY ESTIMATES OF THE VALUE OF THE SUBJECT INTEREST, THE
COMPANY’S ASSETS OR FUTURE REVENUES GENERATED BY ANY OF THE PRECEDING, OR (IV)
THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR
MARKETABILITY OF THE COMPANY’S ASSETS, AND FURTHER DISCLAIMS ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, OF  MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OR OTHER PERSONAL
PROPERTY, OR REGARDING INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS IN
CONNECTION WITH THE OPERATION OF THE COMPANY AND ITS ASSETS, IT BEING EXPRESSLY
UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT PURCHASER SHALL BE DEEMED TO BE
OBTAINING THE SUBJECT INTEREST SUBJECT TO ALL OF THE COMPANY’S RESPECTIVE DIRECT
AND INDIRECT RIGHTS AND ASSETS BEING IN THEIR PRESENT STATUS, CONDITION AND
STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS, AND THAT PURCHASER
SHALL CAUSE TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE. The
Parties agree that the disclaimers in this Section are “conspicuous” disclaimers
for the purpose of any applicable Law.

 

(c)          Inclusion of information in the Schedules to this Agreement shall
not be construed as an admission that such information is material to the
business, assets, liabilities, financial condition or results of operations of
Seller, or the Company, or otherwise material, or that such information is
required to be included in the Schedules to this Agreement, and inclusion of a
matter on a Schedule addressing matters reasonably expected to have a Material
Adverse Effect shall not necessarily be deemed an indication that such matter
does, or may, have a Material Adverse Effect. Matters may be disclosed on a
Schedule for purposes of information only, and inclusion of any such matter does
not mean that all such matters are included. A matter disclosed on a Schedule to
this Agreement shall be deemed to be an exception to all representations, and
any indemnifications under Section 9.1, to which it is relevant, but only if it
is reasonably apparent that such matter also applies to such other
representations.

 

 9 

 

 

 

Article 5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller as of the date hereof and as of the
Closing:

 

5.1           Existence and Qualification.    Purchaser is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware.

 

5.2           Power.    Purchaser has the requisite corporate power and
authority to execute and deliver this Agreement (and all documents to be
executed and delivered by Purchaser pursuant to this Agreement), to perform its
obligations hereunder (and thereunder), and to consummate the transactions
contemplated hereby (and thereby).

 

5.3           Authorization and Enforceability.    The execution, delivery and
performance by Purchaser of this Agreement (and all documents required to be
executed and delivered by Purchaser pursuant to this Agreement), and the
consummation by Purchaser of the transactions contemplated hereby (and thereby),
have been duly and validly authorized by all necessary company action on the
part of Purchaser, or in the case of documents to be executed and delivered
pursuant to this Agreement, will have been duly and validly authorized by all
necessary corporate 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 pursuant to this Agreement will be
duly executed and delivered by Purchaser), and, assuming due authorization,
execution and delivery by Seller, this Agreement constitutes (and at the Closing
such documents will constitute) the valid and binding obligation of Purchaser,
enforceable in accordance with its terms, subject to the Enforceability
Exceptions.

 

5.4           No Conflicts.    The execution, delivery and performance of this
Agreement (and all documents to be executed and delivered by Purchaser pursuant
to this Agreement) by Purchaser, and the transactions contemplated by this
Agreement (and by such documents), do not and will not (a) violate any provision
of the certificate of formation and limited liability company agreement or other
organizational documents of Purchaser, (b) result in a material default (with
due notice or lapse of time or both) or the creation of any 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 or other
financing instrument to which Purchaser is a party or by which any of its assets
are bound, (c) result in a material violation or breach of any judgment, order,
ruling, or regulation applicable to Purchaser as a party in interest, or (d) 
result in a material violation or breach of any Laws applicable to Purchaser.

 

5.5           Liability for Brokers’ Fees.    Seller will not directly or
indirectly have any responsibility, liability or expense, as a result of
undertakings or agreements of Purchaser or any Affiliate 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.

 

 10 

 

 

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

 

5.7           Investment Intent.    Purchaser is acquiring the Subject Interest
for its own account and not with a present intent to transfer or otherwise
distribute the Subject Interest to any other Person in violation of applicable
securities Laws.

 

5.8           Independent Investigation.    Purchaser recognizes that investment
in the Subject Interest involves substantial risks. Purchaser is (or its
advisors are) experienced and knowledgeable in the oil and gas business and
aware of the risks of that business. Purchaser acknowledges and affirms that, as
of the Execution Date, it has made all such independent investigation,
verification, analysis and evaluation of the Company and its assets,
liabilities, businesses and prospects as Purchaser deems necessary or
appropriate to enter into this Agreement. Except for the representations and
warranties expressly made by Seller in Article 4 of this Agreement, or in the
certificate to be delivered to Purchaser pursuant to Section 3.2(b) of this
Agreement, Purchaser acknowledges that there are no representations or
warranties, express or implied, as to the Company or its assets, liabilities,
businesses and prospects and that in making its decision to enter into this
Agreement and to consummate the transactions contemplated hereby, Purchaser has
relied solely upon its own independent investigation, verification, analysis and
evaluation.

 

5.9           Other Consents.    Purchaser’s execution, delivery and performance
of this Agreement (and any document required to be executed and delivered by
Purchaser pursuant to this Agreement) is not and will not be subject to any
consent, approval, or waiver from any Governmental Body or other third Person,
except for the Government Authorizations listed in Schedule 6.2 and as set forth
on Schedule 5.9.

 

5.10         Financing.    At the Closing Date, Purchaser will have sufficient
cash, available lines of credit or other sources of immediately available funds
(in U.S. dollars) to enable it to pay all amounts required to be paid hereunder,
including the payment required to be paid to Seller at the Closing.

 

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Article 6

COVENANTS OF THE PARTIES

 

6.1           Exclusivity.    In consideration of the resources, time and
expense Purchaser has and will incur in connection with transactions
contemplated in this Agreement, without the prior written consent of Purchaser,
(i) during the period from the Execution Date until the earlier of the Closing
Date or the termination of this Agreement, Seller shall not sell, transfer, or
place an Encumbrance (other than any Encumbrances that may be imposed by
applicable securities Laws or Encumbrances under the LLC Agreement), upon the
Subject Interest or any portion thereof, and (ii) during the period from the
Execution Date until June 1, 2015, Seller shall not (a) directly or indirectly
solicit, facilitate or knowingly encourage any other proposal relating to a
Competing Transaction (defined below), (b) negotiate or enter into a letter of
intent, agreement in principle, arrangement, understanding or Contract,
regarding a Competing Transaction, or (c) otherwise cooperate in any way,
including through the provision of confidential information, with any person in
connection with a Competing Transaction; provided that if the condition to
Closing set forth in Section 7.2(d) has been satisfied on or prior to June 1,
2015, Seller shall not take any of the foregoing actions until the termination
of this Agreement. As used in this Agreement, “Competing Transaction” means the
direct or indirect sale, lease, license, exchange, mortgage, transfer or other
disposition, or financing, in a single transaction or series of related
transactions, of all or any portion of the Subject Interest. In addition,
without limiting the foregoing, if Seller provides confidential information to a
Person in connection with a Competing Transaction after June 1, 2015: (a) prior
to disclosing any such confidential information to such prospective purchaser,
Seller shall receive an executed customary confidentiality agreement from such
prospective purchaser containing language that makes the Company a third party
beneficiary under such confidentiality agreement and within two Business Days
provides an unredacted copy of such executed confidentiality agreement to the
Purchaser; and (b) Seller promptly provides to the Purchaser a copy of any
confidential information disclosed to such prospective purchaser..

 

6.2           Government Authorizations; Cooperation.

 

(a)          Seller and Purchaser shall, each in a timely manner, (i) make all
required filings, provide all required notices, prepare all required
applications and conduct negotiations with each Governmental Body as to which
such filings, notices, applications or negotiations are necessary or appropriate
in the consummation of the transactions contemplated hereby, including the
filings, notices and applications listed on Schedule 6.2 (the “Government
Authorizations”), provided that Purchaser agrees to (and shall only be required
to) make any required filings under the HSR Act within three (3) Business Days
after June 10, 2015 if the Closing does not occur on such date, and (ii) provide
such information as the other may reasonably request to make or obtain the
Government Authorizations. Each Party shall reasonably cooperate with and use
commercially reasonable efforts to assist the other with respect to the
Government Authorizations. Each Party shall promptly supply any additional
information and documentary material that may reasonably be requested by any
Governmental Body in connection with the filings, notices and applications for
the Government Authorizations. Each Party shall bear its own costs of all filing
or application fees payable to any Governmental Body with respect to the
transactions contemplated by this Agreement, provided that if an HSR filing is
required as provided herein, the costs of filing fees under the HSR Act will be
paid equally by Purchaser and Seller.

 

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(b)          If any objections are asserted with respect to the transactions
contemplated hereby under any antitrust or competition Law or if any suit or
proceeding is instituted or threatened by any Governmental Body or any private
party challenging any of the transactions contemplated hereby as violating any
antitrust or competition Law, each of Purchaser and Seller shall use its
commercially reasonable efforts to promptly resolve such objections in order to
enable the transactions contemplated by this Agreement to be consummated as
promptly as practicable, provided, however, that notwithstanding the foregoing,
that Purchaser and Seller shall have the right, but not the obligation, to
defend any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement under any antitrust or competition
Law, including but not limited to seeking to have any stay, injunction, or
temporary restraining order entered by any court or other Governmental Body
vacated or reversed. Each Party shall give notice to the other Party with
respect to any meeting, discussion, appearance or contact with any governmental
authority or the staff or regulators of any governmental authority, with such
notice being sufficient to provide the other Party with the opportunity to
attend and participate in such meeting, discussion, appearance or contact.
Notwithstanding anything to the contrary in this Agreement, neither Purchaser
nor Seller shall be required to take or agree to take any action, including
entering into any consent decree, hold separate order or other arrangement, that
would (i) require or result in the sale, divestiture or other direct or indirect
disposition of any assets or rights of Purchaser or any of its Affiliates or any
portion of the Seller or any of its Affiliates, or (ii) limit Purchaser’s or its
Affiliates’ freedom of action with respect to, or its or their ability to
retain, conduct, consolidate or otherwise control, any of Purchaser’s or its
Affiliates’ assets or businesses.

 

6.3           Public Announcement.    Except as expressly provided in this
Section 6.3, until the Closing, no Party, or any Affiliate of a 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 Party. Each Party acknowledges
that the other Party (or its Affiliates) intends to issue a press release
concerning this Agreement shortly after the execution of this Agreement in
substantially the form previously provided to and approved by the other Party.
The foregoing shall not restrict disclosures by Purchaser or Seller or any of
their respective Affiliates (a) that 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 or, (b) to Governmental
Bodies and third Persons holding rights of consent or rights to receive notice
that may be applicable to the transactions contemplated by this Agreement, as
reasonably necessary to obtain waivers of such rights or such consents or to
provide such notice, provided that, in each case to which such an exception
applies, the releasing Party shall, to the extent legally permissible, provide
the other Party not less than twenty-four (24) hours to comment on a draft of
such disclosure, and such releasing Party shall consider in good faith all
comments provided by such other Party. Seller and Purchaser shall each be liable
for compliance by its respective Affiliates with the terms of this Section.

 

6.4           Assumption of Obligations.    By the consummation of the
transactions contemplated by this Agreement at the Closing, and without limiting
the indemnification obligations of Seller under Article 9 (including those
relating to the representations and warranties contained herein), Purchaser
assumes and agrees to pay, perform and discharge all obligations with respect to
the Subject Interest, whether arising under the LLC Agreement, applicable Law or
otherwise, and whether attributable to the period before or after the Effective
Time, but excluding, for the avoidance of doubt, (a) any obligations of Seller
or any of its Affiliates under this Agreement or as a counterparty to the
Company (or any now or hereafter existing Affiliate of the Company) under the
Existing Agreements or any other contract entered into by Seller or any of its
Affiliates and the Company or any Affiliate of the Company, (b) any obligations
to the extent caused by the gross negligence, willful misconduct or criminal
activity of Seller or any of its Affiliates, (c) any obligations of Seller or
its Affiliates arising under U.S. federal, state or local income, franchise or
similar Tax Laws for periods prior to the Closing and (d) any obligation arising
out of the material breach by Seller of the LLC Agreement.

 

 13 

 

 

6.5           Casualty and Condemnation.

 

(a)          If after the Execution Date but prior to Closing, any of the
Midstream Assets are actually damaged or destroyed by any casualty or are taken
in condemnation or under right of eminent domain, then the Purchase Price shall
be reduced (without duplication) by the Proportionate Share of the amount of the
actual out-of-pocket losses caused to the Company by any such casualty or taking
(after giving effect to any insurance proceeds received by the Company);
provided that if the Proportionate Share of the aggregate actual out-of-pocket
losses caused to the Company by such casualties and takings (i) is less than
$600,000 (after giving effect to any insurance proceeds received by the
Company), there shall be no adjustment to the Purchase Price, but the
Proportionate Share of any such actual out-of-pocket losses shall be credited
against the Deductible as if such losses are Damages for which Purchaser is
entitled to indemnification pursuant to Article 9 or (ii) exceeds in value ten
percent (10%) of the Purchase Price (without giving effect to any insurance
proceeds available to the Company), either Party may, by notice to the other
Party at least one (1) Business Day prior to Closing, elect to terminate this
Agreement under Section 8.1. Except as provided in the immediately preceding
sentence, Purchaser shall be required to close as provided for in this Agreement
notwithstanding any such casualties or takings.

 

(b)          Seller and Purchaser shall reasonably cooperate with each other in
determining the Proportionate Share of the amount of any losses caused to the
Company by any casualty or taking described in Section 6.5(a), including as
promptly as reasonably possible requesting information on the amount of the
losses from the Company and providing each other with copies of any estimates of
losses provided by the Company.

 

6.6           Further Assurances.    At and after the Closing, Seller and
Purchaser agree 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.

 

6.7           Cooperation on Taxes.    Each Party shall promptly furnish to the
other such information pertaining to the Company or the transactions
contemplated by this Agreement, as may reasonably be requested by the other
Party with respect to Tax matters of such other Party or Affiliate of such other
Party, including by providing access to relevant books and records and making
employees available to provide additional information and explanation of any
materials provided hereunder, but in each case only to the extent that such
Party may do so without violating applicable Laws or any obligations to any
third Person and to the extent that such Party has access to such information
and has authority to furnish such information under any restrictions binding on
such Party. The Parties shall further reasonably cooperate, and cause their
Affiliates to reasonably cooperate, with each other in connection with the
preparation of any Tax Returns.

 

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6.8           Schedule Update.    From time to time prior to the Closing, for
purposes of its certificate to be delivered at Closing pursuant to Section
3.2(b) and for purposes of determining whether the Seller’s representations and
warranties are true and correct as of the Closing Date as though made on and as
of the Closing Date, to the extent and in the manner provided under Section
7.2(a), Seller may at its option supplement or amend and deliver updates to the
Schedules to Article 4 to include reference to any matter relating to Seller,
the Company or its assets which first arises or occurs after the Execution Date
and does not represent a breach of Seller’s covenants in this Agreement;
provided, however, notwithstanding the foregoing, (a) no such supplement or
amendment shall in any way affect Purchaser’s ability to terminate this
Agreement based upon the condition to closing set forth in Section 7.2(f) not
being satisfied and (b) Purchaser shall have the right to terminate this
Agreement in the event Seller supplements or amends any Schedule relating to the
Fundamental Reps.

 

6.9           Other Agreement.    Seller has provided Purchaser a copy of the
Other Agreement in the form executed by the parties thereto, and shall provide
Purchaser with copies of any amendments to the Other Agreement within one (1)
Business Day of the execution thereof. Purchaser acknowledges that Seller is
required to provide a copy of this Agreement to the Other Member. Each Party
shall reasonably cooperate with and use commercially reasonable efforts to
facilitate the simultaneous closings of this Agreement and the Other Agreement.

 

6.10         Encumbrances on the Subject Interest.    Prior to Closing, Seller
shall take such commercially reasonable actions as are necessary to cause
release of the Encumbrance listed on Schedule 4.6.

 

6.11         Confidentiality.    Upon Closing and for a period of one (1) year
thereafter, Seller agrees to keep confidential, and not to make use of (other
than for purposes of filing its tax returns or for other routine matters
required by law) or, without the prior written consent of the Company, disclose
to any Person, any information or matter relating to the Company and its affairs
or any of the terms and conditions of the LLC Agreement (other than disclosure
as required by any applicable law, including the rules and regulations of the
United States Securities and Exchange Commission, and the New York Stock
Exchange, NASDAQ, or any other applicable national securities exchange),
provided, however, in the event that Seller receives a request to disclose any
such information under the terms of a subpoena or order issued by a court of
competent jurisdiction or by any applicable law, Seller will, to the extent
permitted by law: (a) immediately notify each of the Company of the existence,
terms, and circumstances surrounding such request; (b) consult with the Company
as to the advisability of taking steps legally available to resist or narrow the
scope of the disclosure required by such subpoena, order, or law; and (c)
exercise its commercially reasonable efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to any
information so disclosed by Seller, with the Company being liable to reimburse
Seller for any actions taken at the request of the Company that are described in
clause (b) of this Section 6.11.

 

6.12         Non-Solicitation.    For a period of two (2) years commencing on
the Closing Date, Seller will not, and will cause EVEP not to, directly or
indirectly, solicit, canvass, approach, entice or induce any employee of
Purchaser or its Affiliates who have responsibilities related to the Company
during such time period to alter, lessen or terminate his, her or its
employment, engagement or relationship with Purchaser; provided, however, that
the foregoing restriction on solicitation shall not prohibit the Purchaser or
EVEP from hiring any such employee of Purchaser pursuant to a general
solicitation (such as an advertisement) not specifically directed to employees
of Purchaser.

 

 15 

 

 

6.13         Closing.    If on June 10, 2015 (a) the conditions to the closing
of the Other Agreement are satisfied and the Other Member is prepared to close
on the purchase of the Remaining Interest as evidenced by delivery of the
closing certificates and documents required thereby; (b) the conditions to
Closing set forth in Section 7.2 (other than (d)) are satisfied as evidenced by
delivery of the closing certificates and documents required thereby; and (c)
Purchaser does not close the purchase of the Subject Interest, then Seller shall
have the right to terminate this Agreement pursuant to Section 8.1(a)(vii), and
Seller may consummate the sale of the Entire Interest to the Other Member as
contemplated by the Other Agreement by June 24, 2015 and so long as the Other
Member consummates the sale of the Entire Interest as contemplated by the Other
Agreement on or before June 24, 2015, Purchaser shall have no further right,
claim or interest in or to all or part of the Entire Interest.

 

6.14         Conduct Pending Closing.    Except as otherwise expressly
contemplated by this Agreement or with the prior written consent of the
Purchaser, from the date hereof until the Closing or termination of this
Agreement as provided in Article 8, Seller shall not:

 

(a)          vote any of the Subject Interests in favor of: (i) any amendment to
the LLC Agreement or the Transaction Documents (as such terms are defined in the
LLC Agreement); (ii) to take any of the actions contemplated under Section
7.4(b) of the LLC Agreement; (iii) any election to dissolve the Company; or (iv)
issuing any equity interests, options, warrants, convertible securities or other
rights of any kind to acquire any equity or ownership interest of the Company;

 

(b)          amend or otherwise change the certificate of formation, limited
partnership agreement or other organizational documents of Seller in any manner
that would adversely affect or impede the ability of Seller to consummate the
transactions contemplated by this Agreement;

 

(c)          vote or consent to or permit its Managers (as defined in the LLC
Agreement) to vote or consent to (i) sell, assign, transfer, lease, license or
otherwise dispose of any assets owned by the Company; (ii) have the Company make
or commit to make any capital expenditure not approved under the existing
Capital Expenditure Budget (as defined in the LLC Agreement); or (iii) create,
incur, assume, guarantee, endorse or otherwise become liable or responsible with
respect to (whether directly, contingently or otherwise) any indebtedness of the
Company or otherwise amend, modify, alter, waive or otherwise change any rights
or obligations with respect thereto, including any claims thereunder; or

 

(d)          agree to take any action prohibited by this Section 6.14.

 

Article 7

CONDITIONS TO CLOSING

 

7.1           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:

 

 16 

 

 

(a)          Representations. The representations and warranties of Purchaser
set forth in Article 5 shall be true and correct in all material respects
(except to the extent that such representations and warranties are qualified by
the term “material,” “in all material respects,” “Material Adverse Effect” or
similar words in which case such representations and warranties shall be true
and correct in all respects at and as of the Closing Date), in each case as of
the Execution Date and as of the Closing Date as though made on and as of the
Closing Date.

 

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

 

(c)          Pending Litigation. On the Closing Date, no injunction, order or
award restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, or granting material damages in
connection therewith, shall have been issued and remain in force, and no suit,
action or other proceeding (excluding any such matter initiated by Seller or its
Affiliates) seeking to restrain, enjoin or otherwise prohibit the consummation
of the transactions contemplated by this Agreement, or seeking substantial
damages in connection therewith, shall be pending before any Governmental Body
or arbitrator.

 

(d)          Deliveries to Seller. Purchaser shall have delivered to Seller the
documents and certificates to be delivered by Purchaser under Section 3.3.

 

(e)          Government Authorizations. The Government Authorizations set forth
on Schedule 6.2 shall have been duly obtained, made or given and shall be in
full force and effect, and all terminations or expirations of waiting periods
imposed by any Governmental Body shall have occurred; provided, however, that
the absence of any appeals and the expiration of any appeal period with respect
to any of the foregoing shall not constitute a condition to Closing hereunder.

 

(f)          Payment. Purchaser shall have paid to Seller the Adjusted Purchase
Price.

 

7.2           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 4 shall be true and correct in all material respects (except to
the extent that such representations and warranties are qualified by the term
“material,” “in all material respects,” “Material Adverse Effect” or similar
words in which case such representations and warranties shall be true and
correct in all respects at and as of the Closing Date), as of the Execution Date
and 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 in all material respects, on and as of such specified
date).

 

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

 

(c)          Pending Litigation. On the Closing Date, no injunction, order or
award restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, or granting material damages in
connection therewith, shall have been issued and remain in force, and no suit,
action or other proceeding (excluding any such matter initiated by Purchaser or
its Affiliates) seeking to restrain, enjoin or otherwise prohibit the
consummation of the transactions contemplated by this Agreement, or seeking
substantial damages in connection therewith, shall be pending before any
Governmental Body or arbitrator.

 

(d)          Government Authorizations. The Government Authorizations set forth
on Schedule 6.2 shall have been duly obtained, made or given and shall be in
full force and effect, and all terminations or expirations of waiting periods
imposed by any Governmental Body shall have occurred; provided, however, that
the absence of any appeals and the expiration of any appeal period with respect
to any of the foregoing shall not constitute a condition to Closing hereunder.

 

(e)          Deliveries. Seller shall have delivered to Purchaser duly executed
counterparts of the documents and certificates to be delivered by Seller under
Section 3.2.

 

(f)          Material Adverse Effect. From the Execution Date, no Material
Adverse Effect shall have occurred.

 

Article 8

TERMINATION

 

8.1           Termination.

 

(a)          This Agreement may be terminated at any time prior to Closing:

 

(i)          by the mutual prior written consent of Seller and Purchaser;

 

(ii)         by Purchaser, if Purchaser is not then in material breach of any
provision of this Agreement and there has been a breach, inaccuracy in or
failure to perform any representation, warranty, covenant or agreement made by
Seller pursuant to this Agreement that would give rise to the failure of any of
the conditions specified in Section 7.2 and such breach, inaccuracy or failure
has not been cured by Seller within ten days of Seller’s receipt of written
notice of such breach from Purchaser;

 

(iii)        by Seller, if Seller is not then in material breach of any
provision of this Agreement and there has been a breach, inaccuracy in or
failure to perform any representation, warranty, covenant or agreement made by
Purchaser pursuant to this Agreement that would give rise to the failure of any
of the conditions specified in Section 7.1 and such breach, inaccuracy or
failure has not been cured by Purchaser within ten days of Purchaser’s receipt
of written notice of such breach from Seller;

 

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(iv)        by either Seller or Purchaser, if Closing has not occurred on or
before the Termination Date, provided, however, that no Party shall be entitled
to terminate this Agreement under this Section 8.1(a)(iv) (x) if the Closing has
failed to occur because such Party failed to perform or observe in any material
respect its covenants and agreements hereunder or (y) if the other Party has
filed (and is then pursuing) an action seeking specific performance as permitted
by Section 10.15;

 

(v)         by either Seller or Purchaser in accordance with Section 6.5
provided, however that no Party shall be entitled to terminate this Agreement
under this Section 8.1 (a)(v) if the other Party has filed (and is then
pursuing) an action seeking specific performance as permitted by Section 10.15;

 

(vi)        by Purchaser pursuant to Section 6.8; or

 

(vii)       by Seller pursuant to Section 6.13(b).

 

(b)          The Party desiring to terminate this Agreement pursuant to
Section 8.1(a) shall give written notice of such termination to the other Party
hereto specifying the provision hereof pursuant to which such termination is
made.

 

8.2           Effect of Termination.    If this Agreement is terminated pursuant
to Section 8.1, this Agreement shall become void and of no further force or
effect (except for the provisions of Sections 4.7, 5.5, 6.3, this Section 8.2
and Article 10, which shall continue in full force and effect). Notwithstanding
anything to the contrary contained in this Agreement, the termination of this
Agreement shall not relieve any Party from liability for any breach or breaches
of its agreements or covenants which occurred on or prior to the date of such
termination, which breach or breaches resulted in the conditions set forth in
Section 7.1(b), Section 7.1(d), Section 7.2(b), or Section 7.2(e), as
applicable, not being satisfied, in which case 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.

 

Article 9

INDEMNIFICATION; LIMITATIONS

 

9.1           Indemnification.

 

(a)          From and after the Closing, Purchaser shall indemnify, defend and
hold harmless Seller from and against all Damages incurred or suffered by
Seller:

 

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(i)          to the extent constituting obligations assumed by Purchaser
pursuant to Section 6.4; provided, however, that Purchaser shall have no
liability to Seller for any Damages for which (A) Purchaser is entitled to be
indemnified pursuant to this Agreement or (B) the event or circumstance giving
rise to such Damages also constitutes a breach of any of Seller’s
representations or warranties set forth in this Agreement or arises as a result
of Seller’s breach of any of its covenants or agreements under this Agreement or
the LLC Agreement (whether or not Purchaser would then be entitled to be
indemnified therefor under this Agreement or otherwise). For the avoidance of
doubt, the foregoing indemnity shall not be applicable with respect to any
obligations of Seller to make payments under Section 9.1(b).

 

(ii)         caused by or arising out of or resulting from Purchaser’s breach of
any of Purchaser’s covenants or agreements contained in this Agreement, or

 

(iii)        caused by or arising out of or resulting from any breach of any
representation or warranty made by Purchaser contained in Article 5 of this
Agreement or in the certificate delivered by Purchaser at Closing pursuant to
Section 3.3(c); provided, however, that if a representation or warranty is
qualified by “in all material respects,” “in any material respect,” or “material
default,” then for purposes of this clause (a)(iii), such qualifier will in all
respects be ignored, even if such Damages are caused in whole or in part by the
negligence (whether sole, joint or concurrent), strict liability or other legal
fault of any Indemnified Person, but excepting in each case Damages to the
extent caused by the willful misconduct of any Indemnified Person.

 

(b)          From and after the Closing, Seller shall indemnify, defend and hold
harmless Purchaser against and from all Damages incurred or suffered by
Purchaser:

 

(i)          caused by or arising out of or resulting from Seller’s breach of
any of Seller’s covenants or agreements contained in this Agreement,

 

(ii)         caused by or arising out of or resulting from any breach of any
representation or warranty made by Seller contained in Article 4 of this
Agreement, or in the certificate delivered by Seller at Closing pursuant to
Section 3.2(b); provided, however, that if a representation or warranty is
qualified by Material Adverse Effect, “in all material respects,” “in any
material respect,” or “material default,” then for purposes of this clause
(b)(ii), such qualifier will in all respects be ignored, even if such Damages
are caused in whole or in part by the negligence (whether sole, joint or
concurrent), strict liability or other legal fault of any Indemnified Person,
but excepting in each case Damages to the extent caused by the willful
misconduct of any Indemnified Person, or

 

(iii)        caused by or arising out of (x) the Subject Interest or (y) the
Company or its assets, liabilities, operations or other activities, whether
arising under contracts, applicable Law or otherwise, in the case of each of (x)
and (y) attributable to the period before the Effective Time (A) resulting from
the gross negligence, willful misconduct or criminal activity of Seller or any
of its Affiliates; (B) in connection with any obligations of Seller or any of
its Affiliates as a counterparty to the Company (or any now or hereafter
existing Affiliate of the Company) under the Existing Agreements or any other
contract or other arrangement entered into by the Seller or its Affiliates and
the Company or any Affiliate of the Company; or (C) with respect to any
obligations of Seller or its Affiliates arising under U.S. federal, state, or
local income, franchise or similar Tax Laws for periods prior to the Closing.

 

 20 

 

 

 

(c)          Notwithstanding anything to the contrary contained in this
Agreement, except (i) as provided in Section 8.2 and Section 10.15, (ii) the
right of a Party to exercise all remedies available at law or equity in
connection with the other Party’s failure to consummate the transactions
contemplated by this Agreement as required by the terms hereof, and (iii) for
causes of action based upon intentional fraud or intentional misrepresentation,
this Section 9.1 contains the Parties’ sole and exclusive remedies against each
other with respect to any and all claims for any breaches of the
representations, warranties, covenants and agreements herein or otherwise
relating to the subject matter of this Agreement (subject to the stated
exclusions, the “Exclusive Representations and Covenants”). Except for the
remedies contained in this Section 9.1, the remedies provided for in Section 8.2
and Section 10.15, the right of a Party to exercise all remedies available at
law or in equity in connection with the other Party’s failure to consummate the
transactions contemplated by this Agreement as required by the terms hereof, and
causes of action based on intentional fraud or intentional misrepresentation,
other than the Exclusive Representations and Covenants, Seller and Purchaser
each release, remise and forever discharge the other and its or their Affiliates
and all such Parties’ officers, directors, employees, agents, advisors and
representatives from any and all suits, legal or administrative proceedings,
claims, demands, damages, losses, costs, liabilities, interest, or causes of
action whatsoever, in law or in equity, known or unknown, which such Parties
might now or subsequently may have, based on, relating to or arising out of this
Agreement, the Subject Interest, the activities, operations, assets or
liabilities of the Company, whether before or after the Effective Time, or the
use, condition, quality, status or nature of the assets of the Company,
including rights to contribution under any Law, breaches of statutory or implied
warranties, nuisance or other tort actions, rights to punitive damages and
rights of contribution, rights under agreements between the Company and Seller
or any of its Affiliates, and rights under insurance maintained by Seller or any
Affiliate of Seller, even if caused in whole or in part by the negligence
(whether sole, joint or concurrent), strict liability or other legal fault of
any released Person, but, for the avoidance of doubt, without prejudice to
either Party’s rights under Section 8.2 and Section 10.15, the right of a Party
to exercise all remedies available at law or in equity in connection with the
other Party’s failure to consummate the transactions contemplated by this
Agreement as required by the terms hereof, or Purchaser’s right to cause the
Company to enforce any obligations of Seller as a counterparty pursuant to the
Existing Agreements.

 

(d)          “Damages,” for purposes of this Article 9, shall mean the amount of
any actual liability, loss, cost, expense, claim, award or judgment incurred or
suffered by any Indemnified Person arising out of or resulting from the
indemnified matter, whether attributable to personal injury or death, property
damage, contract claims (including contractual indemnity claims), torts, or
otherwise, including the costs of enforcement of the indemnity and shall include
(i) reasonable fees and expenses of attorneys, consultants, accountants or other
agents and experts reasonably incident to matters indemnified against, and
(ii) the costs of investigation and/or monitoring of such matters. No
Indemnified Person shall be entitled to indemnification under this Section 9.1
for, and “Damages” shall not include, (A) any punitive damages (other than
punitive damages suffered by Persons other than Indemnified Persons for which an
Indemnified Person has been held liable), (B) any Taxes that may be assessed on
payments made under this Article 9 or the loss, reduction or limitation of any
Tax benefits to which the Indemnified Person may be entitled (nor shall any
offset be made for Tax benefits to which the Indemnified Person becomes entitled
as a consequence of the liability, loss, cost, expense, claim, award or
judgment), and (C) any liability, loss, cost, expense, claim, award or judgment
to the extent resulting from or to the extent increased by the actions or
omissions of any Indemnified Person after the Closing Date.

 

 21 

 

 

(e)          The indemnity in favor of each Party provided in this Section 9.1
shall be for the benefit of and extend to such Party’s present and former
Affiliates and its and their directors, officers, employees, and agents. Any
claim for indemnity under this Section 9.1 by any such Affiliate, director,
officer, employee, or agent must be brought and administered by a Party to this
Agreement. No Indemnified Person other than Seller and Purchaser shall have any
rights against either Seller or Purchaser under the terms of this Section 9.1
except as may be exercised on its behalf by Purchaser or Seller, as applicable,
pursuant to this Section 9.1(e). Seller and Purchaser may each elect to exercise
or not exercise indemnification rights under this Section on behalf of the other
Indemnified Person affiliated with it in its sole discretion and shall have no
liability to any such other Indemnified Person for any action or inaction under
this Section.

 

(f)           To the extent permitted by applicable Laws, the Parties shall
treat, for Tax purposes, any amounts paid under this Article 9 as an adjustment
to the Purchase Price.

 

9.2           Indemnification Actions.    All claims for indemnification under
Section 9.1 shall be asserted and resolved as follows:

 

(a)           For purposes of this Article 9, the term “Indemnifying Person”
when used in connection with particular Damages shall mean the Person or Persons
having an obligation to indemnify another Person or Persons with respect to such
Damages pursuant to this Article 9, and the term “Indemnified Person” when used
in connection with particular Damages shall mean the Person or Persons having
the right to be indemnified with respect to such Damages by another Person or
Persons pursuant to this Article 9.

 

(b)           To make a claim for indemnification under Section 9.1, an
Indemnified Person shall notify the Indemnifying Person of its claim under this
Section 9.2 in writing, including the specific details of and specific basis
under this Agreement for its claim (the “Claim Notice”). In the event that the
claim for indemnification is based upon a claim by a third Person against the
Indemnified Person (a “Third Party Claim”), the Indemnified Person shall provide
its Claim Notice promptly after the Indemnified Person has actual knowledge of
the Third Party Claim and shall enclose a copy of all papers (if any) served
with respect to the Third Party Claim. The failure of any Indemnified Person to
give notice of a claim as provided in this Section 9.2 shall not relieve the
Indemnifying Person of its obligations under Section 9.1 except to the extent
such failure materially prejudices the Indemnifying Person’s ability to defend
against the claim. In the event that the claim for indemnification 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.

 

 22 

 

 

(c)           In the case of a claim for indemnification based upon a Third
Party Claim, the Indemnifying Person shall have thirty (30) days from its
receipt of the Claim Notice to notify the Indemnified Person whether it admits
or denies its obligation to defend the Indemnified Person against such Third
Party Claim under this Article 9. If the Indemnifying Person does not notify the
Indemnified Person within such thirty (30) day period whether the Indemnifying
Person admits or denies its obligation to defend the Indemnified Person, it
shall be conclusively deemed obligated to provide such indemnification
hereunder. The Indemnified Person is authorized, prior to and during such thirty
(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
Person and that is not prejudicial to the Indemnifying Person (it being
understood that if the Indemnified Person is ultimately entitled to be
indemnified with respect to such Third Party Claim, the cost of filing such
motion, answer or other pleading shall be reimbursed by the Indemnifying
Person).

 

(d)           If the Indemnifying Person admits its obligation, it shall have
the right and obligation to diligently defend, at its sole cost and expense, the
Third Party Claim, and shall have full control of such defense and proceedings,
including any compromise or settlement thereof, provided that if the Third Party
Claim consists of a criminal proceeding or regulatory proceeding with potential
criminal sanctions by any Governmental Body against the Indemnified Person or
seeks permanent injunctive relief, or primarily seeks other permanent equitable
relief, with respect to the Indemnified Person, the Indemnified Person shall
have the option, by notice to the Indemnifying Person within the thirty (30) day
period set forth in Section 9.2(c), to control such defense and proceedings (at
the cost and expense of the Indemnifying Person, if the Indemnified Person is
entitled to indemnification hereunder). If requested by the Indemnifying Person,
the Indemnified Person agrees to cooperate in contesting any Third Party Claim
which the Indemnifying Person elects to contest (provided, however, that the
Indemnified Person shall not be required to bring any counterclaim or
cross-complaint against any Person). The Indemnified Person may at its own
expense participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Person pursuant to this
Section 9.2(d). An Indemnifying Person shall not, without the written consent of
the Indemnified Person, settle any Third Party Claim or consent to the entry of
any judgment with respect thereto which (i) does not result in a final
resolution of the Indemnified Person’s liability with respect to the Third Party
Claim (including, in the case of a settlement, an unconditional written release
of the Indemnified Person from all further liability with respect to the Third
Party Claim) or (ii) may materially and adversely affect the Indemnified Person
(other than as a result of money damages covered by the indemnity).

 

(e)           If the Indemnifying Person does not admit its obligation or admits
its obligation but fails to diligently defend or settle the Third Party Claim,
then the Indemnified Person shall have the right to defend against the Third
Party Claim (at the sole cost and expense of the Indemnifying Person, if the
Indemnified Person is entitled to indemnification hereunder), with counsel of
the Indemnified Person’s choosing, subject to the right of the Indemnifying
Person to admit its obligation and assume the defense of the Third Party Claim
at any time prior to settlement or final determination thereof. If the
Indemnifying Person has not yet admitted its obligation to provide
indemnification with respect to a Third Party Claim, the Indemnified Person
shall send written notice to the Indemnifying Person of any proposed settlement
and the Indemnifying Person shall have the option for ten (10) days following
receipt of such notice to (i) admit in writing its obligation to provide
indemnification with respect to the Third Party Claim and (ii) if its obligation
is so admitted, assume the defense of the Third Party Claim and reject the
proposed settlement. If the Indemnified Person settles any Third Party Claim,
other than a Third Party Claim consisting of a criminal proceeding or regulatory
proceeding with potential criminal sanctions by any Governmental Body against
the Indemnified Person or seeking permanent injunctive relief, or primarily
seeking other permanent equitable relief, over the objection of the Indemnifying
Person after the Indemnifying Person has timely admitted its obligation in
writing and assumed the defense of a Third Party Claim, the Indemnified Person
shall be deemed to have waived any right to indemnity therefor.

  

 23 

 

 

(f)          In the case of a claim for indemnification not based upon a Third
Party Claim, the Indemnifying Person shall have thirty (30) days from its
receipt of the Claim Notice to (i) cure the Damages complained of, (ii) admit
its obligation to provide indemnification with respect to such Damages or
(iii) dispute the claim for such Damages.  If the Indemnifying Person does not
notify the Indemnified Person within such thirty (30) day period that it has
cured the Damages or that it disputes the claim for such Damages, the
Indemnifying Person shall be conclusively deemed obligated to provide such
indemnification hereunder.

 

9.3           Limitation on Actions.

 

(a)          The Sections 4.1, 4.2, 4.3, 4.6, 4.7, 4.9(a) and 4.14 (the
“Fundamental Reps”) and the representations and warranties of Purchaser in
Sections 5.1, 5.2 and 5.3 and the corresponding representations and warranties
given in the certificates delivered at the Closing pursuant to Sections 3.2(b)
and 3.3(c), as applicable, shall survive the Closing indefinitely; the
representations and warranties of Seller in Section 4.9 shall survive until six
months after the expiration of the applicable statute of limitations (taking
into account any extension thereof); and all other representations and
warranties of the Parties in Article 4 and Article 5 and the corresponding
representations and warranties given in the certificates delivered at the
Closing pursuant to Sections 3.2(b) and 3.3(c), as applicable, shall survive the
Closing for a period of fifteen (15) months (unless a shorter period is
expressly provided within the applicable section).  Representations, warranties,
covenants and agreements 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 such a
representation, warranty, covenant or agreement prior to its expiration date.

 

(b)          The indemnity in Section 9.1(a)(i) and 9.1(b)(iii) shall continue
without time limit.  The indemnities in Sections 9.1(a)(ii), 9.1(a)(iii),
9.1(b)(i) and 9.1(b)(ii) shall terminate as of the termination date of each
respective representation, warranty, covenant or agreement that is subject to
indemnification thereunder, except in each case as to matters for which a
specific written claim for indemnity has been delivered to the Indemnifying
Person on or before such termination date.

 

(c)          Subject to Section 9.3(e), neither Seller nor Purchaser shall have
any liability for any indemnification under Section 9.1(a)(iii) or Section
9.1(b)(ii) for any Damages with respect to any claim (or a series of related
claims arising from the same facts or circumstances) that do not exceed $60,000
(the “Individual Claim Threshold”), provided, however, to the extent all claims
(or a series of related claims arising from the same facts or circumstances) for
indemnification by Seller result in aggregate Damages exceeding the Deductible
(including those claims (or a series of related claims arising from the same
facts or circumstances) under the Individual Claim Threshold), then Purchaser
shall be entitled to be indemnified for such Damages under this Article 9
without regard to the Individual Claim Threshold.

 

 24 

 

 

(d)          Subject to Section 9.3(c) and Section 9.3(e), (A) Seller shall not
have any liability for any indemnification under Section 9.1(b)(ii) unless and
until the aggregate Damages for which Claim Notices for claims (or a series of
related claims arising from the same facts or circumstances) meeting the
Individual Claim Threshold are delivered by Purchaser with respect to such
matters exceed one percent (1%) of the Purchase Price (the “Deductible”), and
then only to the extent such Damages exceed the Deductible and (B) Seller shall
not be required to indemnify Purchaser under the indemnity in Section 9.1(b)(ii)
for aggregate Damages in excess of fifteen percent (15%) of the Purchase Price
(the “Cap”).  

 

(e)          The Deductible and the Cap shall not apply to any indemnification
obligations of Seller under Section 9.1(b)(ii) for Damages caused by or arising
out of or resulting from Seller’s breach of any Fundamental Reps; provided that
Seller shall not be required to indemnify Purchaser under this Article 9 for
breaches of such Fundamental Reps for aggregate Damages in excess of the
Purchase Price.

 

(f)          The amount of any Damages for which an Indemnified Person is
entitled to indemnity under this Article 9 shall be reduced by the amount of
insurance proceeds realized by the Indemnified Person or its Affiliates with
respect to such Damages (net of any collection costs, and excluding the proceeds
of any insurance policy issued or underwritten by the Indemnified Person or its
Affiliates).

 

(g)          Any Indemnified Person that becomes aware of a loss for which it
seeks indemnification shall be required to use commercially reasonable efforts
to mitigate the loss, including taking any actions reasonably requested by the
Indemnifying Party, and an Indemnifying Party shall not be liable for any loss
to the extent that it is attributable to the Indemnified Party’s failure to use
commercially reasonable efforts to mitigate.

 

(h)          In no event shall any Indemnified Person be entitled to duplicate
compensation with respect to the same Damage, liability, loss, cost, expense,
claim, award or judgment under more than one provision of this Agreement and the
various documents delivered in connection with the Closing.

 

Article 10

 

MISCELLANEOUS

 

10.1         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.  Any signature of this Agreement
delivered by a Party by facsimile or scanned document transmitted by email shall
be deemed to be an original signature for all purposes.

 

 25 

 

 

10.2         Notice.  All notices which are required or may be given pursuant to
this Agreement must be given in writing and delivered personally, by courier, or
by scanned document transmitted by email (with written confirmation of delivery)
or by registered or certified mail, postage prepaid, as follows:

 

If to Seller:

 

CGAS Properties, L.P.

c/o EV Energy Partners, L.P.

1001 Fannin, Suite 800

Houston, Texas 77002

Attn: Michael E. Mercer, President and Chief Executive Officer

Email: mmercer@EVEnergyPartners.com

 

With a copy to:

 

EnerVest, Ltd.

1001 Fannin, Suite 800

Houston, Texas 77002

Attn:  Fabene Welch, Senior Vice President and General Counsel

Email: Fwelch@EnerVest.net

 

With a copy to:

 

Haynes and Boone, LLP

1221 McKinney Street, Suite 2100

Houston, Texas 77010

Attn: Debra Gatison Hatter

Email: debra.hatter@haynesboone.com

 

 26 

 

 

If to Purchaser:

 

M3 Ohio Gathering LLC

600 Travis, Suite 4910

Houston, Texas 77002

Attn: Laranne Breagy, Senior VP & General Counsel

Email: l.breagy@m3midstream.com

 

With a copy to:

 

Vinson & Elkins LLP

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attn: Doug Bland

Email: dbland@velaw.com

 

Either Party may change its address for notices by giving notice to the other
Party 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.

 

10.3         Expenses.  Except as provided in Sections 6.2 and 10.4, all
expenses incurred by Seller in connection with or related to the authorization,
preparation or execution of this Agreement, the conveyances 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.

 

10.4         Transfer Taxes.  All Transfer Taxes associated with the purchase
and sale of the Subject Interest contemplated by this Agreement shall be paid by
Purchaser.

 

10.5         Governing Law.  This Agreement and any documents delivered pursuant
hereto, and the legal relations between the Parties hereunder and thereunder,
shall be governed by and construed in accordance with the Laws of the State of
Delaware, excluding any conflict of laws rules that would refer the matter to
the Laws of another jurisdiction.

 

10.6         Jurisdiction; Waiver of Jury Trial.

 

(a)          Any legal suit, action or proceeding arising out of or based upon
this Agreement, or the transactions contemplated hereby may be instituted in the
federal courts of the United States of America or the courts of the State of
Delaware in each case located in the County of New Castle, and each party
irrevocably submits to the exclusive jurisdiction of such courts in any such
suit, action or proceeding.  Service of process, summons, notice or other
document by mail to such party's address set forth herein shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or any proceeding in such courts and
irrevocably waive and agree not to plead or claim in any such court that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

 

 27 

 

 

(b)          EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE
FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY,
AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.6(b).

 

10.7         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.

 

10.8         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 by the Party or Parties to whom such compliance is owed by an instrument
signed by such Party or Parties and expressly identified as a waiver, but not in
any other manner.  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.

 

10.9         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.  Subject to the
preceding sentences, this Agreement shall be binding upon, inure to the benefit
of and be enforceable by the Parties and their respective successors and
permitted assigns.  Any purported assignment not permitted under this
Section 10.9 shall be null and void.

 

10.10         Entire Agreement.  This Agreement and the documents to be executed
hereunder (and the Exhibits, Attachments and Schedules attached hereto)
constitutes 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.

 

10.11         Amendment.  This Agreement may be amended or modified only by an
agreement in writing executed by all Parties and expressly identified as an
amendment or modification.

 

 28 

 

 

10.12         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, Attachment
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 to any particular Section or other provision of this Agreement; and

 

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

 

10.13         Construction.  Purchaser is a party capable of making such
investigation, inspection, review and evaluation of the Company and the Subject
Interest as a prudent purchaser would deem appropriate under the circumstances
including with respect to all matters relating to the value, operation and
suitability of the assets of the Company.  Seller and Purchaser have had the
opportunity to exercise business discretion in relation to the negotiation of
the details of the transaction contemplated hereby.  This Agreement is the
result of arm’s-length negotiations from equal bargaining positions.  Based on
the foregoing, any rule of construction that a contract be construed against the
drafter shall not apply to the interpretation or construction of this Agreement.

 

10.14         Limitation on Damages.  Notwithstanding anything to the contrary
contained in this Agreement, except in connection with (i) any Party’s failure
to consummate the transactions contemplated by this Agreement as required by the
terms hereof, in which case a Party has all remedies and damages available to it
at law or in equity, as well as pursuant to Section 8.2 and Section 10.15, and
(ii) any such damages claimed by Persons other than the Parties or their
Affiliates for which indemnification is available under the terms of this
Agreement, none of Purchaser, Seller or any of their respective Affiliates shall
be entitled to punitive or exemplary damages in connection with this Agreement
and the transactions contemplated hereby and, except as otherwise provided in
this sentence, Purchaser and Seller, for themselves and on behalf of their
Affiliates, hereby expressly waive any right to punitive or exemplary damages in
connection with this Agreement and the transactions contemplated hereby.

 

10.15         Specific Performance.  The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed or were threatened to be not performed in accordance with their
specific terms or were otherwise breached, and that money damages or legal
remedies would not be an adequate remedy for any such damages.  The Parties
accordingly agree that, in addition to any other remedy that may be available to
it, including monetary damages, each party shall be entitled to enforce
specifically the terms and provisions of this Agreement, or to enforce
compliance with, the covenants and obligations of any other party and
appropriate injunctive relief shall be granted in connection therewith and all
such rights and remedies at law or in equity shall be cumulative, except as may
be limited by Section 9.1(c).  Any party seeking an injunction, a decree or
order of specific performance shall not be required to provide any bond or other
security in connection therewith and any such remedy shall be in addition and
not in substitution for any other remedy to which such party is entitled at law
or in equity.

 

 29 

 

 

10.16         Right to Rely.  Notwithstanding any other provision of this
Agreement, if the transactions contemplated hereby are consummated, Purchaser
expressly reserves the right to seek indemnity or other remedy for any Damages
arising out of or relating to any breach of any representation, warranty or
covenant contained herein, notwithstanding any investigation by, disclosure to,
knowledge or imputed knowledge of Purchaser or any of its Affiliates and its and
their managers, directors, officers, employees and agents in respect of any fact
or circumstances that reveals the occurrence of any such breach, whether before
or after the execution and delivery hereof.  In furtherance of the foregoing,
Seller agrees that as knowledge or lack of reliance shall not be a defense in
law or equity to any claim of breach of representation, warranty or covenant by
Seller herein, Seller shall not in any action, suit or proceeding concerning a
breach or alleged breach of any representation, warranty or covenant herein, or
any indemnity thereof, seek information concerning knowledge or reliance of
Purchaser or any of its Affiliates and its and their managers, directors,
officers, employees and agents, through deposition, discovery or otherwise or
seek to introduce evidence or argument in any action, suit or proceeding
regarding the knowledge or lack of reliance of Purchaser or any of its
Affiliates and its and their managers, directors, officers, employees and agents
prior to the Closing on or with respect to any such representations, warranties
or covenants.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

 30 

 

 

The Parties are signing this Agreement as of the Execution Date.

 

  SELLER:       CGAS PROPERTIES, L.P.       EVCG GP, LLC, its general partner  
    By: /s/Michael E. Mercer   Name: Michael E. Mercer   Title: President and
Chief Executive Officer       PURCHASER:       M3 Ohio Gathering LLC       By:
/s/Frank D. Tsuru   Name: Frank D. Tsuru   Title: Manager

 

Signature Page to Membership Interest Purchase Agreement

 

 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

Exhibit A

 

Definitions

 

“Adjusted Purchase Price” has the meaning set forth in Section 2.4(d).

 

“Affiliate” with respect to any Person, means any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person, with control in such context meaning the ability to direct the
management and policies of a Person through ownership of voting shares or other
equity rights, pursuant to a written agreement, or otherwise.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Assignment Agreement” has the meaning set forth in Section 3.2(a).

 

“Authorized Officer” means, with respect to any act to be performed or duty to
be discharged by any Person which is not an individual, any officer or other
representative thereof then authorized to perform such act or discharge such
duty.

 

“Business Day” means each calendar day except Saturday, Sunday, and any other
day on which banks are generally closed for business in Houston, Texas.

 

“Cap” has the meaning set forth in Section 9.3(d).

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.

 

“Claim Notice” has the meaning set forth in Section 9.2(b).

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” means June 10, 2015, or July 31, 2015 (if extended to such date
pursuant to Section 2.3) or such earlier date as agreed to by the Parties.

 

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

 

“Company” has the meaning set forth in the Recitals.

 

“Competing Transaction” has the meaning set forth in Section 6.1.

 

“Contract” means any legally binding contract, lease, license, evidence of
indebtedness, mortgage indenture, purchase order, binding bid, letter of credit,
security agreement or other written or oral and legally binding arrangement.  

 

“Damages” has the meaning set forth in Section 9.1(d).

 

“Deductible” has the meaning set forth in Section 9.3(d)

 

 A- 1 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

“Dispute” means any dispute, controversy or claim and other matter in question
arising out of or relating to this Agreement, including any dispute as to the
interpretation, construction, validity, enforceability, breach, or termination
hereof.

 

“Effective Time” means 12:01 a.m., United States of America central time, on May
1, 2015.

 

“Employee Benefit Plan” means any employment, consulting, services, stock
option, equity or equity based, change-in-control, retention, incentive,
severance, termination, deferred compensation, profit sharing, retirement,
supplemental income, fringe benefit, collective bargaining, employee loan or
extension of credit, vacation, sick leave, workmen’s compensation or other
insurance, disability, death benefit, group insurance, health, life, welfare,
accident or other plan, program, understanding, agreement, practice, policy or
arrangement of any kind, whether written or oral, including, without limitation,
each “employee benefit plan” within the meaning of Section 3(3) of ERISA and
each “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA,
whether or not subject to ERISA.

 

“Encumbrance” means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, option, preemptive right, right of first
refusal or first offer, proxy, levy, voting trust or agreement, encumbrance, or
other adverse claim or restriction on title or transfer of any nature
whatsoever.

 

“Enforceability Exceptions” has the meaning set forth in Section 4.3.

 

“Entire Interest” has the meaning set forth in the Recitals.

 

“Environmental Laws” means all Laws of any Governmental Body having jurisdiction
over the Company or its property in question addressing pollution or protection
of the environment.

 

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

 

“Exclusive Representations and Covenants” has the meaning set forth in Section
9.1(c).

 

“Execution Date” has the meaning set forth in the Preamble.

 

“Existing Agreements” means the agreements listed on Schedule 4.13.

 

“EVEP” means EV Energy Partners, L.P., a Delaware limited partnership and
indirect owner of all of the partnership interests in the Seller.

 

“Fundamental Reps” has the meaning set forth in Section 9.3(a).

 

“GAAP” means US generally accepted accounting principles, consistently applied.

 

“Government Authorizations” has the meaning set forth in Section 6.2(a).

 

 A- 2 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

“Governmental Body” means any domestic or foreign national, state, local,
municipal, or other government, and 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.

 

“Hazardous Substance” means (i) any petroleum or petroleum products, flammable
explosives, radioactive materials, medical waste, radon, asbestos or
asbestos-containing products or materials, chlorofluorocarbon,
hydrofluorocarbon, urea formaldehyde foam insulation, polychlorinated biphenyls
(PCBs) or lead-containing paint or plumbing; and (ii) any element, compound,
substance, waste or other material that is defined as, or included in the
definition of, or deemed by or pursuant to any Environmental Law or by any
Governmental Body to be “hazardous,” “toxic,” a “contaminant,” “waste,” a
“pollutant,” “hazardous substance,” “hazardous waste,” “restricted hazardous
waste,” “hazardous material,” “extremely hazardous waste,” a “toxic substance,”
a “toxic pollutant” or words with similar meaning.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended and the accompanying rules and regulations.

 

“Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in
association therewith (whether or not any such item is in liquid or gaseous
form), or any combination thereof, and any minerals produced in association
therewith.

 

“Indemnified Person” has the meaning set forth in Section 9.2(a).

 

“Indemnifying Person” has the meaning set forth in Section 9.2(a).

 

“Individual Claim Threshold” has the meaning set forth in Section 9.3(c).

 

“Intellectual Property” means any trademarks, service marks, copyrights, trade
secrets, patents, patent applications and other intellectual property rights.  

 

“Knowledge” means (a) with respect to Seller, the actual knowledge, without
investigation, of those individuals identified on Schedule 1.1(b), and (b) with
respect to Purchaser, the actual knowledge, without investigation, of those
individuals identified on Schedule 1.1(c).

 

“Laws” means all laws, statutes, rules, regulations, ordinances, orders,
restrictions, decrees, common law, directives, judgments, injunctions, writs,
awards, codes and other legal requirements of, or issued by, any Governmental
Body.

 

“LLC Agreement” means the Limited Liability Company Agreement of the Company
dated as of March 9, 2012, as amended from time to time.

 

 A- 3 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is or could be reasonably expected to become, individually or in the
aggregate, with all other such events, occurrences, facts, conditions or
changes, materially adverse to the ownership, operation, business, assets,
liabilities, results of operations, financial condition or value of the Company,
as currently operated, taken as a whole (it being understood and agreed that, if
the aggregate amount of Damages resulting therefrom is ten percent (10%) or more
of the Purchase Price, such event, occurrence, fact, condition or change shall
be deemed to constitute a Material Adverse Effect), or prevents or materially
delays the ability of Seller to consummate the transactions contemplated by this
Agreement; provided, however, in no event shall any of the following be deemed
to constitute, nor shall any of the following be taken into account in
determining whether there has been or will be, a Material Adverse Effect:

 

(A)         changes in Hydrocarbon prices;

 

(B)         any change affecting the oil and gas industry generally in the
region in which the Company operates;

 

(C)         any change in the economy or the financial, capital or
energy  markets generally in the region in which the Company operates, in the
United States or elsewhere in the world, including changes generally in supply,
demand, price levels or interest or exchange rates;

 

(D)         any change in Law or in GAAP or interpretations thereof or
accounting standards, governmental policy or political conditions;

 

(E)         any labor strike, request for representation, organizing campaign,
work stoppage, slowdown, lockout or other labor disputes;

 

(F)         any change in general regulatory or political conditions, including
acts of war, sabotage, armed hostilities or terrorism, embargo, sanctions or
interruption of trade, or any escalation or worsening of any acts of war,
sabotage, armed hostilities or terrorism, embargo, sanctions or interruption of
trade;

 

(G)         any change in the financial condition or results of operation of
Purchaser or its Affiliates;

 

(H)         any failure of any assumptions, estimates or projections relating to
the Company to be accurate (provided that the underlying causes of such failures
(subject to the other provisions of this definition) shall not be excluded);

 

(I)         the announcement of the execution, or the pendency, of this
Agreement or the performance of obligations under this Agreement;

 

(J)         any casualty loss or condemnation, which shall be subject to the
provisions of Section 6.5;

 

(K)         any natural disasters or acts of God; or

 

(L)         any actions or inactions of Seller or the Company consented to by
Purchaser;

 

 A- 4 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

provided further, however, that any event, occurrence, fact, condition or change
referred to in the immediately preceding clauses (A), (B), (C), (D), (E), (F),
or (K) shall be taken into account for purposes of determining whether a
Material Adverse Effect has occurred or could reasonably be expected to occur
only to the extent such event, occurrence, fact, condition or change adversely
affects the Company in a disproportionate manner relative to other companies
operating in the industries in which the Company operates (provided for the
avoidance of doubt, to the extent any such disproportionate impact is the
physical damage or destruction to the assets of the Company constituting a
casualty loss, such impact shall not be considered and the provisions of Section
6.5 shall apply).

 

“Member” has the meaning set forth in the LLC Agreement.

 

“Membership Interest” has the meaning given to it in the LLC Agreement.

 

“Midstream Assets” means collectively, the Plant Facilities and the Gas Pipeline
Facilities as defined in the LLC Agreement.

 

“Other Agreement” has the meaning set forth in the Recitals.

 

“Other Member” has the meaning set forth in the Recitals.

 

“Party” and “Parties” have the meanings set forth in the Preamble.

 

“Permit” means all permits, licenses, registrations, certifications,
authorizations, approvals, consents, exemptions, waivers, variances, privileges
and other authorizations of or by any Governmental Body.

 

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

 

“Proportionate Share” means 30/79 x 21% (approximately 7.975%), unless the
Subject Interest is increased to 21% pursuant to Section 2.3, in which case
“Proportionate Share” means 21%.

 

“Purchase Price” has the meaning set forth in Section 2.2, subject to adjustment
as provided in Sections 2.3 and 2.4.

 

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

 

“Release” means any releasing, spilling, leaking, discharging, disposing of,
pumping, pouring, emitting, emptying, injecting, leaching, dumping or allowing
to escape and includes “release” as defined in CERCLA or any other Environmental
Law.

 

“Remaining Interest” means a Membership Interest equal to the Entire Interest
minus the Subject Interest.

 

“Sanctions” has the meaning set forth in Section 4.18.

 

 A- 5 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

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

 

“Subject Interest” means a 30/79 x 21% (approximately 7.975%) Membership
Interest in the Company or a 21% Membership Interest in the Company (if
increased to such percentage pursuant to Section 2.3).

 

“Tax” and “Taxes” mean 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, value-added or withholding taxes or
other assessments, duties, fees or charges imposed by any Governmental Body,
including any interest, penalties or additional amounts which may be imposed
with respect thereto except insofar as such interest, penalties or additional
amounts are attributable to the delay or default of a Person seeking
indemnification therefor.

 

“Tax Return” means any return, report or other information required to be
supplied to a Governmental Body in connection with Taxes, or amendment thereto.

 

“Termination Date” means September 1, 2015.

 

“Third Party Claim” has the meaning set forth in Section 9.2(b).

 

“Transfer Notice” has the meaning set forth in the Recitals.

 

“Transfer Taxes” means all sales, use, VAT, business transfer, real property
transfer, recording, documentary, stamp, registration, stock transfer, or
similar taxes and fees.

 

“Treasury Regulations” means the regulations promulgated under the Code by the
United States Department of the Treasury, as such regulations may be amended
from time to time.

 

“$” means United States dollars.

 

 A- 6 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

Exhibit B

 

Form of Assignment Agreement

 

ASSIGNMENT

 

This Assignment (this “Assignment”) is dated [ ● ], 2015 (the “Execution Date”),
and is between CGAS Properties, L.P., a Delaware limited partnership
(“Assignor”), and M3 Ohio Gathering LLC, a Delaware limited liability company
(“Assignee”).  Assignor and Assignee are sometimes referred to individually as a
“Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, Assignor owns twenty-one percent (21%) of the membership interests of
Utica East Ohio Midstream, LLC, a Delaware limited liability company (the
“Company”);

 

WHEREAS, the Parties have entered into that certain Membership Interest Purchase
Agreement dated May 26, 2015 (the “MIPA”), whereby Assignor agreed to sell to
Assignee, and Assignee agreed to purchase from Assignor, a [__] membership
interest (“Subject Interest”); and

 

WHEREAS, the Parties are executing this Assignment to effect the assignment and
transfer from Assignor to Assignee of the Subject Interest, subject to the terms
and conditions herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual promises,
representations, warranties, covenants, conditions and agreements contained
herein, and for other good and 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:  

 

1.          Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings given such terms in the MIPA.

 

2.          Conveyance of the Subject Interest. On and with effect from the date
of this Assignment, Assignor hereby sells, assigns, and transfers to Assignee,
and Assignee hereby acquires, accepts, and assumes from Assignor, all of
Assignor’s right, title and interest in and to the Subject Units, free and clear
of all Encumbrances other than restrictions that may be imposed by applicable
Laws and restrictions under the LLC Agreement.

 

3.          Disclaimer of Representations and Warranties.  Other than the
representations and warranties of Assignor specifically set forth in the MIPA
and without prejudice to the rights of Assignee under the MIPA, the assignment
of the Subject Interest pursuant to this Assignment is made without
representation or warranty, express or implied, and Assignor hereby disclaims
and negates any such representation or warranty.

 

 B- 1 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

4.          Severability.  If any provision or provisions of this Assignment is
or at any time becomes illegal, invalid or unenforceable in any respect, the
legality, validity and enforceability of the remaining provisions of this
Assignment shall not in any way be affected or impaired thereby.

 

5.          Entire Agreement; Amendment. This Assignment and the MIPA and the
other documents to be executed thereunder and the Exhibits, Attachments and
Schedules attached thereto constitute the entire agreement between the Parties
pertaining to the subject matter thereof and hereof, and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties pertaining to the subject matter thereof and
hereof.  This Assignment may be amended or modified only by an agreement in
writing executed by all Parties and expressly identified as an amendment or
modification.

 

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

 

7.          Governing Law; Disputes.  This Assignment and the legal relations
between the Parties shall be governed by and construed in accordance with the
laws of the State of Texas, excluding any conflict of laws rules that would
refer the matter to the Laws of another jurisdiction.  Any Dispute between the
Parties with respect to this Assignment shall be resolved in accordance with the
terms of Section 10.6 of the MIPA, which is incorporated into this Assignment by
reference.

 

8.          MIPA; Conflict. This Assignment is made subject to the terms and
conditions of the MIPA. In the event of any conflict between this Assignment and
the MIPA, the provisions of the MIPA shall prevail.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 B- 2 

 

 

Attached to and made part of that certain Membership Interest Purchase Agreement
between CGAS Properties, L.P. and M3 Ohio Gathering LLC

 

The Parties are signing this Assignment as of the Execution Date.

 

  ASSIGNOR:       CGAS PROPERTIES, L.P.       By:  EVCG GP, LLC, its general
partner         By: /s/Michael E. Mercer   Name: Michael E. Mercer   Title:
President and Chief Executive Officer         ASSIGNEE:       M3 Ohio Gathering
LLC         By: /s/Frank D. Tsuru   Name: Frank D. Tsuru   Title: Manager

 

 B- 3