warranties, or covenants, insofar
as the same relate to WCGP. Further: (a) to the extent that Quicksilver makes
any representations or warranties regarding WCGP under this Agreement or in any
certificate, instrument or document delivered in
22
connection herewith, such representation and warranty shall be deemed to have
been made only to the Knowledge of Quicksilver; and (b) to the extent that
Quicksilver covenants or agrees to cause WCGP to take or refrain from taking any
actions, such covenant and agreement shall be deemed to only require Quicksilver
to use its good faith efforts to vote its equity interest in such entity (to the
extent any vote is permitted) with regard to such matters and it is acknowledged
that Quicksilver may not, in fact, be able to cause such entity to take or
refrain from taking any actions.
ARTICLE II
CONSIDERATION; CLOSING
Section 2.1
Contribution.
(A)
AGREEMENT OF CONTRIBUTION; CONSIDERATION.
SUBJECT TO AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT,
QUICKSILVER HEREBY AGREES TO CONTRIBUTE TO BREITBURN, AND BREITBURN HEREBY
AGREES TO ACQUIRE FROM QUICKSILVER, (I) THE QRI ASSETS IN EXCHANGE FOR SEVEN
HUNDRED FIFTY MILLION DOLLARS ($750,000,000) (PROVIDED, BREITBURN MAY INCREASE
SUCH CASH CONSIDERATION BY NOTICE TO QUICKSILVER NO LATER THAN THE THIRD (3RD)
BUSINESS DAY PRECEDING THE SCHEDULED CLOSING DATE), PLUS 10,216,529 COMMON UNITS
(THE "QRI ASSETS EQUITY CONSIDERATION"), AND (II) THE EQUITY INTERESTS IN
EXCHANGE FOR 11,131,443 COMMON UNITS (THE "EQUITY INTERESTS EQUITY
CONSIDERATION") (COLLECTIVELY, THE "INITIAL CONSIDERATION"), AS ADJUSTED IN
ACCORDANCE WITH THE OTHER TERMS OF THIS AGREEMENT. THE NUMBER OF COMMON UNITS
COMPRISING THE EQUITY CONSIDERATION WAS ESTABLISHED BY QUICKSILVER AND BREITBURN
BASED ON THE CLOSING PRICE OF THE COMMON UNITS AS OF AUGUST 24, 2007. THE NUMBER
OF COMMON UNITS INCLUDED IN THE EQUITY CONSIDERATION MULTIPLIED BY THE CLOSING
PRICE OF THE COMMON UNITS ON AUGUST 24, 2007, WHEN ADDED TO $750,000,000 IN CASH
CONSIDERATION, EQUALS $1,450,000,000.
(B)
CLOSING DATE CONSIDERATION; FINAL
CONSIDERATION.
(I)
AT CLOSING, BREITBURN SHALL PAY TO
QUICKSILVER, IN ACCORDANCE WITH SECTION 2.1(B)(II) BELOW, THE INITIAL
CONSIDERATION, ADJUSTED AS FOLLOWS: (I) PLUS OR MINUS THE ADJUSTMENTS SET FORTH
IN SECTIONS 2.3-2.6 BELOW, (II) PLUS OR MINUS THE ADJUSTMENTS, IF ANY, SET FORTH
IN SECTION 6.12, (III) MINUS THE ADJUSTMENTS, IF ANY, SET FORTH IN SECTION 6.13,
AND (IV) MINUS THE ADJUSTMENTS, IF ANY, SET FORTH IN SECTION 6.14 (THE INITIAL
CONSIDERATION, AS SO ADJUSTED AT CLOSING, IS HEREIN REFERRED TO AS THE "CLOSING
DATE CONSIDERATION"). THE CLOSING DATE CONSIDERATION SHALL BE FURTHER ADJUSTED
POST-CLOSING IN ACCORDANCE WITH THE TERMS OF SECTIONS 2.5-2.6 (THE CLOSING DATE
CONSIDERATION, AS SO ADJUSTED, THE "FINAL CONSIDERATION"). ANY UPWARD OR
DOWNWARD ADJUSTMENT TO BE MADE PURSUANT TO CLAUSES (I) THROUGH (IV) ABOVE SHALL
BE MADE BY INCREASING OR REDUCING (AS APPLICABLE) THE EQUITY INTERESTS EQUITY
CONSIDERATION BY A NUMBER OF COMMON UNITS DETERMINED BY DIVIDING (A) THE
DIFFERENCE BETWEEN THE INITIAL CONSIDERATION AND THE CLOSING DATE CONSIDERATION,
BY (B) $32.79; PROVIDED, IF EITHER SUCH ADJUSTMENT INVOLVES AN INCREASE IN THE
INITIAL CONSIDERATION