Document:

exv10w2

 

EXHIBIT 10.2

 

 

OMNIBUS AGREEMENT

AMONG

EAGLE ROCK ENERGY PARTNERS, L.P.

EAGLE ROCK ENERGY G&P, LLC

EAGLE ROCK ENERGY GP, L.P.

AND

EAGLE ROCK HOLDINGS, L.P.

 

 

 

 

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT (“Agreement”) is entered into on, and effective as of, the Closing Date
(as defined herein), and is by and among Eagle Rock Energy Partners, L.P., a Delaware limited
partnership (the “MLP”), Eagle Rock Energy G&P, LLC, a Delaware limited liability company (“G&P”),
Eagle Rock Energy GP, L.P., a Delaware limited partnership (the “General Partner”) and Eagle Rock
Holdings, L.P., a Texas limited partnership (“Holdings”). The above-named entities are sometimes
referred to in this Agreement each as a “Party” and collectively as the “Parties.”

R E C I T A L S:

     The Parties desire by their execution of this Agreement to evidence their understanding, as
more fully set forth in Article II and Article III of this Agreement, with respect to certain
indemnification and reimbursement obligations of the Parties.

     In consideration of the premises and the covenants, conditions, and agreements contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

Definitions

     1.1 Definitions. (a) Capitalized terms used herein but not defined shall have the meanings
given them in the MLP Agreement.

          (b) As used in this Agreement, the following terms shall have the respective meanings set
forth below:

     “Agreement” means this Omnibus Agreement, as it may be amended, modified or
supplemented from time to time in accordance with the terms hereof.

     “Basket” has the meaning given such term in Section 2.3(b).

     “Cause” has the meaning ascribed thereto in the MLP Agreement.

     “Change of Control” means, with respect to any Person (the “Applicable Person”), any of
the following events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the Applicable Person’s
assets to any other Person, unless immediately following such sale, lease, exchange or other
transfer such assets are owned, directly or indirectly, by the Applicable Person; (ii) the
dissolution or liquidation of the Applicable Person; (iii) the consolidation or merger of
the Applicable Person with or into another Person pursuant to a transaction in which the
outstanding Voting Securities of the Applicable Person are changed into or exchanged for
cash, securities or other property, other than any such
transaction where (a) the outstanding Voting Securities of the Applicable Person are
changed into or exchanged for Voting Securities of the surviving Person or its parent and

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(b) the holders of the Voting Securities of the Applicable Person immediately prior to such
transaction own, directly or indirectly, not less than a majority of the outstanding Voting
Securities of the surviving Person or its parent immediately after such transaction; and
(iv) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange
Act) becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of more than 50% of all of the then outstanding Voting Securities of the Applicable
Person, except in a merger or consolidation which would not constitute a Change of Control
under clause (iii) above.

     “Closing Date” means the date of the closing of the initial public offering of Common
Units.

     “Common Unit” has the meaning given such term in the MLP Agreement.

     “Conflicts Committee” has the meaning given such term in the MLP Agreement.

     “Covered Environmental Losses” means all environmental Losses, (including, without
limitation, costs and expenses of any Environmental Activity) of any and every kind or
character, by reason of or arising out of:

     (i) any violation or correction of violation, including without limitation performance
of any Environmental Activity, of Environmental Laws; or

     (ii) any event, omission or condition associated with ownership or operation of the MLP
Assets (including, without limitation, the exposure to or presence of Hazardous Substances
on, under, about or migrating to or from the MLP Assets or the exposure to or Release of
Hazardous Substances arising out of operation of the MLP Assets at non-MLP Asset locations),
including, without limitation, (A) the cost and expense of any Environmental Activities, and
(B) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate
legal or litigation support work, but only to the extent that such violation described in
clause (i), or such events, omissions or conditions described in clause (ii), occurred
before the Closing Date.

     “Environmental Activities” shall mean any investigation, study, assessment, evaluation,
sampling, testing, monitoring, containment, removal, disposal, closure, corrective action,
remediation (regardless of whether active or passive), natural attenuation, restoration,
bioremediation, response, repair, corrective measure, cleanup or abatement that is required
or necessary under any applicable Environmental Law, including, without limitation,
institutional or engineering controls or participation in a governmental voluntary cleanup
program to conduct voluntary investigatory and remedial actions for the clean-up, removal or
remediation of Hazardous Substances that exceed actionable levels established pursuant to
Environmental Laws, or participation in a supplemental environmental project in partial or
whole mitigation of a fine or penalty.

     “Environmental Laws” means all federal, state, and local laws, statutes, rules,
regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental
Permits and other legally enforceable requirements and rules of common law relating to

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(a) pollution or protection of the environment or natural resources including, without
limitation, the federal Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Federal Hazardous Materials
Transportation Law, the Marine Mammal Protection Act, the Endangered Species Act, the
National Environmental Policy Act and other environmental conservation and protection laws,
each as amended through the Closing Date, (b) any Release or threatened Release of, or any
exposure of any Person or property to, any Hazardous Substances and (c) the generation,
manufacture, processing, distribution, use, treatment, storage, transport or handling of any
Hazardous Substances.

     “Environmental Permit” means any permit, approval, identification number, license,
registration, consent, exemption, variance or other authorization required under or issued
pursuant to any applicable Environmental Law.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “G&P” has the meaning given such term in the introduction to this Agreement.

     “General Partner” has the meaning given such term in the introduction to this
Agreement.

     “Hazardous Substance” means (a) any substance that is designated, defined or classified
under any Environmental Law as a hazardous waste, solid waste, hazardous material,
pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that
is otherwise regulated under any Environmental Law, including, without limitation, any
hazardous substance as defined under the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, (b) oil as defined in the Oil Pollution Act of 1990, as
amended, including, without limitation, oil, gasoline, natural gas, fuel oil, motor oil,
waste oil, diesel fuel, jet fuel and other refined petroleum hydrocarbons and petroleum
products and (c) radioactive materials, asbestos containing materials or polychlorinated
biphenyls.

     “Holdings” has the meaning given such term in the introduction to this Agreement.

     “Indemnified Party” means the Partnership Group in their capacity as the parties
entitled to indemnification in accordance with Article II.

     “Indemnifying Party” means the General Partner, G&P and Holdings, collectively in their
capacity as the parties from whom indemnification may be required in accordance with Article
II.

     “Losses” means any losses, damages, liabilities, claims, demands, causes of action,
judgments, settlements, fines, penalties, costs and expenses (including, without

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limitation, court costs and reasonable attorney’s and experts’ fees) of any and every kind or character.

     “MLP” has the meaning given such term in the introduction to this Agreement.

     “MLP Agreement” means the First Amended and Restated Agreement of Limited Partnership
of the MLP, dated as of the Closing Date, as such agreement is in effect on the Closing
Date, to which reference is hereby made for all purposes of this Agreement. An amendment or
modification to the MLP Agreement subsequent to the Closing Date shall be given effect for
the purposes of this Agreement only if it has received the approval of the Conflicts
Committee that would be required, if any, pursuant to Section 4.6 hereof if such amendment
or modification were an amendment or modification of this Agreement.

     “MLP Assets” means the pipelines, processing plants or related equipment or assets, or
portions thereof, conveyed, contributed or otherwise transferred or intended to be conveyed,
contributed or otherwise transferred to any member of the Partnership Group, or owned by,
leased by or necessary for the operation of the business, properties or assets of any member
of the Partnership Group, prior to or as of the Closing Date.

     “Organizational Documents” means certificates of incorporation, by-laws, certificates
of formation, limited liability company operating agreements, certificates of limited
partnership or limited partnership agreements or other formation or governing documents of a
particular entity.

     “Partnership Entities” means G&P, the General Partner and each member of the
Partnership Group.

     “Partnership Group” means the MLP and any Subsidiary of the MLP.

     “Party” or “Parties” have the meaning given such terms in the introduction to this
Agreement.

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

     “Registration Statement” has the meaning given such term in the MLP Agreement.

     “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting,
discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching,
dumping or disposing into the environment.

     “Subsidiary” has the meaning given such term in the MLP Agreement.

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     “Voting Securities” means securities of any class of a Person entitling the holders
thereof to vote in the election of, or to appoint, members of the board of directors or
other similar governing body of the Person.

ARTICLE II

Indemnification

     2.1 Environmental Indemnification. Subject to the provisions of Section 2.3 and Section 2.4,
the Indemnifying Party shall indemnify, defend and hold harmless the Indemnified Party from and
against any Covered Environmental Losses suffered or incurred by the Indemnified Party and arising
from or relating to the MLP Assets for a period of two (2) years from the Closing Date.

     2.2 Additional Indemnification. Subject to the provisions of Section 2.3 and Section 2.4, the
Indemnifying Party shall indemnify, defend and hold harmless the Indemnified Party from and against
any Losses suffered or incurred by the Indemnified Party by reason of or arising from:

          (a) the failure of the Partnership Group to be the owner of valid and indefeasible easement
rights, leasehold and/or fee ownership interests in and to the lands on which are located any MLP
Assets, and such failure renders the Partnership Group liable to a third party or unable to use or
operate the MLP Assets in substantially the same manner that the MLP Assets were used and operated
by Holdings and its Subsidiaries immediately prior to the Closing Date;

          (b) the failure of the Partnership Group to have on the Closing Date any consent or
governmental permit necessary to allow (i) the transfer of any of the MLP Assets to the Partnership
Group on the Closing Date or (ii) the Partnership Group to use or operate the MLP Assets in
substantially the same manner that the MLP Assets were owned and operated by Holdings and its
Subsidiaries immediately prior to the Closing Date;

          (c) all federal, state and local income tax liabilities attributable to the ownership or
operation of the MLP Assets prior to the Closing Date, including any such income tax liabilities of
Holdings and its Subsidiaries that may result from the consummation of the formation transactions
for the Partnership Entities, but excluding any such liabilities attributable to federal, state and
local income taxes reserved on the books of the Partnership Group as of the Closing Date;

          (d) all liabilities, other than Covered Environmental Losses and other than liabilities
incurred in the ordinary course of business conducted in compliance with applicable laws, that
arise out of the operation of the MLP Assets prior to the Closing Date; and

          (e) all liabilities attributable to any assets or liabilities retained by the Indemnifying
Party.

provided, however, that, in the case of clauses (a), (b) and (d) above, such indemnification
obligations shall survive for two (2) years from the Closing Date; and that in the case of clauses

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(c) and (e) above, such indemnification obligations shall survive until sixty (60) days after the
expiration of any applicable statute of limitations.

     2.3 Limitations Regarding Indemnification.

          (a) The aggregate liability of the Indemnifying Party under Section 2.1 shall not exceed $7.5
million and the aggregate liability of the Indemnifying Party under Section 2.2(d) shall not exceed
$5.0 million.

          (b) Subject to the limitations of Section 2.3(a), no claims may be made against the
Indemnifying Party for indemnification pursuant to Section 2.1 unless the aggregate dollar amount
of the Losses suffered or incurred by the Indemnified Party exceed $750,000, but the Indemnifying
Party shall be liable for the full amount of such claims in excess of $750,000 (the “Basket”),
provided, however, that individual claims or a series of related claims that do not exceed $25,000
shall not be charged against the Basket.

          (c) Subject to the limitations of Section 2.3(a), no claims may be made against the
Indemnifying Party for indemnification pursuant to Section 2.2(d) unless the aggregate dollar
amount of the Losses suffered or incurred by the Indemnified Party exceed $500,000, but the
Indemnifying Party shall be liable for the full amount of such claims in excess of $500,000.

          (d) Notwithstanding anything herein to the contrary, in no event shall the Indemnifying Party
have any indemnification obligations under this Agreement for claims made as a result of additions
to or modifications of Environmental Laws promulgated after the Closing Date.

          (e) Notwithstanding anything herein to the contrary, the liability of the Indemnifying Party
for any indemnification obligations under this Agreement will be subject to reduction for (i) any
insurance proceeds realized by the Indemnified Party with respect to the indemnified matter, net of
any premium that becomes due and payable as a result of such claim, (ii) any amounts recovered by
the Indemnified Party under contractual indemnities from third parties and (iii) up to $2.1 million
of costs incurred by the MLP to conduct environmental investigations, implement spill prevention,
control and countermeasure (“SPCC”) plans and perform selected cavern closures on 11 properties, in
each case as described under the heading “Business—Environmental Matters” in the Registration
Statement. The MLP hereby agrees to use commercially reasonable efforts to realize any applicable
insurance proceeds and amounts recoverable under such contractual indemnities.

          (f) The liability of the Indemnifying Party for any indemnification obligations under Section
2.2(d) of this Agreement will be reduced by any amounts reserved or accrued for such Losses on the
balance sheet of the MLP as of December 31, 2005.

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     2.4 Indemnification Procedures.

          (a) The Indemnified Party agrees that within a reasonable period of time after it becomes
aware of facts giving rise to a claim for indemnification pursuant to this Article II, it will
provide notice thereof in writing to the Indemnifying Party specifying the nature of and specific
basis for such claim; provided, however, that the Indemnified Party shall not submit claims more
frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to
the expiration of the applicable indemnity coverage under this Agreement).

          (b) The Indemnifying Party shall have the right to control all aspects of the defense of (and
any counterclaims with respect to) any claims brought against the Indemnified Party that are
covered by the indemnification set forth in this Article II, including, without limitation, the
selection of counsel (provided that if such claim involves Covered Environmental Losses, such
counsel shall be reasonably acceptable to the Indemnified Party), determination of whether to
appeal any decision of any court and the settling of any such matter or any issues relating
thereto; provided, however, that no such settlement shall be entered into without the consent
(which consent shall not be unreasonably withheld, conditioned or delayed) of the Indemnified Party
unless it includes a full release of the Indemnified Party from such matter or issues, as the case
may be.

          (c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party with respect
to all aspects of the defense of any claims covered by the indemnification set forth in Article II,
including, without limitation, the prompt furnishing to the Indemnifying Party of any
correspondence or other notice relating thereto that the Indemnified Party may receive, permitting
the names of the Indemnified Party to be utilized in connection with such defense, the making
available to the Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the making available to
the Indemnifying Party of any employees of the Indemnified Party; provided, however, that in
connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact
thereof on the operations of the Indemnified Party and further agrees to maintain the
confidentiality of all files, records and other information furnished by the Indemnified Party
pursuant to this Section 2.4. In no event shall the obligation of the Indemnified Party to
cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be
construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in
connection with the defense of any claims covered by the indemnification set forth in this Article
II; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire
and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any
such counsel hired by the Indemnified Party reasonably informed as to the status of any such
defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

          (d) The indemnification obligations under this Article II shall continue with respect to any
claim for indemnification pursuant to this Article II that is pending as of the end of the
applicable survival period notwithstanding the expiration of such survival period.

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ARTICLE III

Reimbursement Obligations

     3.1 Reimbursement for Operating and General and Administrative Expenses.

          (a) Each of G&P and Holdings hereby agrees to continue to provide, or cause to be provided,
the Partnership Group with general and administrative services, such as legal, accounting,
treasury, insurance administration and claims processing, risk management, health, safety and
environmental, information technology, human resources, credit, payroll, internal audit, taxes and
engineering, that are substantially identical in nature and quality to the services of such type
previously provided by each of G&P and Holdings in connection with their management and operation
of the MLP Assets during the one-year period prior to the Closing Date.

          (b) The Partnership Group hereby agrees to reimburse each of G&P and Holdings for all expenses
and expenditures they incur or payments they make on behalf of the Partnership Group in connection
with the business and operations of the Partnership Group, including, but not limited to, (i)
salaries of operational personnel performing services on the Partnership Group’s behalf and the
cost of employee benefits for such personnel, (ii) capital expenditures and (iii) maintenance and
repair costs.

          (c) The General Partner shall be entitled to allocate any such expenses and expenditures
between the Partnership Group, on the one hand, and G&P and Holdings, on the other hand, in
accordance with the foregoing provision on any reasonable basis.

     3.2 Reimbursement for Insurance. The Partnership Group hereby agrees to reimburse each of G&P
and Holdings for all expenses they incur or payments they make on behalf of the Partnership Group
for (i) insurance coverage with respect to the MLP Assets, (ii) insurance coverage with respect to
claims related to fiduciary obligations of officers, directors and control persons of the
Partnership Group and (iii) insurance coverage with respect to claims under federal and state
securities laws related to any of the officers, directors and control persons thereof.

ARTICLE IV

Miscellaneous

     4.1 Choice of Law; Submission to Jurisdiction. This Agreement shall be subject to and governed
by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of another state. Each Party
hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to
venue in Texas.

     4.2 Notice. All notices, requests or consents provided for or permitted to be given pursuant to this
Agreement must be in writing and must be given by depositing same in the United States mail,
addressed to the Person to be notified, postpaid, and registered or certified with return receipt
requested or by delivering such notice in person or by telecopier or telegram to such Party.
Notice given by personal delivery or mail shall be effective upon actual receipt.

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Notice given by
telegram or telecopier shall be effective upon actual receipt if received during the recipient’s
normal business hours, or at the beginning of the recipient’s next business day after receipt if
not received during the recipient’s normal business hours. All notices to be sent to a Party
pursuant to this Agreement shall be sent to or made at the address set forth below or at such other
address as such Party may stipulate to the other Parties in the manner provided in this Section
4.2.

14950 Heathrow Forest Parkway, Suite 111

Houston, Texas 77032

Phone: (832) 329-8000

Fax: (832) 327-8009

Attention: Alex A. Bucher, Jr.

     4.3 Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating
to the matters contained herein, superseding all prior contracts or agreements, whether oral or
written, relating to the matters contained herein.

     4.4 Termination. Notwithstanding any other provision of this Agreement, if the General Partner is
removed as general partner of the MLP under circumstances where Cause does not exist and Common
Units held by the General Partner and its Affiliates are not voted in favor of such removal, this
Agreement may immediately thereupon be terminated by either G&P or Holdings. This Agreement shall
also terminate upon a Change of Control of G&P, the General Partner or the MLP.

     4.5 Effect of Waiver or Consent. No waiver or consent, express or implied, by any Party to or
of any breach or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any
Person in default, irrespective of how long such failure continues, shall not constitute a waiver
by such Party of its rights hereunder until the applicable statute of limitations period has run.

     4.6 Amendment or Modification. This Agreement may be amended or modified from time to time
only by the written agreement of all the Parties; provided, however, that the MLP may not, without
the prior approval of the Conflicts Committee, agree to any amendment or modification of this
Agreement
that, in the reasonable discretion of the General Partner, will have a material adverse effect
on the holders of Common Units. Each such instrument shall be reduced to writing and shall be
designated on its face an “Amendment” or an “Addendum” to this Agreement.

     4.7 Assignment; Third Party Beneficiaries. No Party shall have the right to assign its rights
or obligations under this Agreement without the prior written consent of the other Parties. Each of
the Parties hereto specifically intends that Holdings and each entity comprising the Partnership
Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to

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assert rights and remedies hereunder as third-party beneficiaries hereto with respect to those provisions
of this Agreement affording a right, benefit or privilege to any such entity.

     4.8 Counterparts. This Agreement may be executed in any number of counterparts with the same
effect as if all signatory Parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument.

     4.9 Severability. If any provision of this Agreement or the application thereof to any Person
or circumstance shall be held invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provision to other Persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

     4.10 Gender, Parts, Articles and Sections. Whenever the context requires, the gender of all
words used in this Agreement shall include the masculine, feminine and neuter, and the number of
all words shall include the singular and plural. All references to Article numbers and Section
numbers refer to Articles and Sections of this Agreement.

     4.11 Further Assurances. In connection with this Agreement and all transactions contemplated
by this Agreement, each Party agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as may be necessary or appropriate to effectuate,
carry out and perform all of the terms, provisions and conditions of this Agreement and all such
transactions.

     4.12 Withholding or Granting of Consent. Each Party may, with respect to any consent or
approval that it is entitled to grant pursuant to this Agreement, grant or withhold such consent or
approval in its sole and uncontrolled discretion, with or without cause, and subject to such
conditions as it shall deem appropriate.

     4.13 Laws and Regulations. Notwithstanding any provision of this Agreement to the contrary, no
Party shall be required to take any act, or fail to take any act, under this Agreement if the
effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule
or regulation.

     4.14 Negation of Rights of Limited Partners, Assignees and Third Parties. Except as set forth
in Section 4.7, the provisions of this Agreement are enforceable solely by the Parties, and no
limited partner, member, or assignee of Holdings or the MLP or other Person shall have the right,
separate and apart from Holdings or the MLP, to enforce any provision of this Agreement or to
compel any Party to comply with the terms of this Agreement.

     4.15 No Recourse Against Officers or Directors. For the avoidance of doubt, the provisions of
this Agreement shall not give rise to any right of recourse against any officer or director of
Holdings or any Partnership Entity.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the
Closing Date.

	 	 	 	 	 
	EAGLE ROCK ENERGY PARTNERS, L.P.
	 
	 	 	 	 
	By: EAGLE ROCK ENERGY GP, L.P., its general partner
	 
	 	 	 	 
	By: EAGLE ROCK ENERGY G&P, LLC, its general partner
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Alex A. Bucher, Jr.
	 

	 	Title:
	 	President and Chief Executive Officer
	 
	 	 	 	 
	EAGLE ROCK ENERGY G&P, LLC
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Alex A. Bucher, Jr.
	 

	 	Title:
	 	President and Chief Executive Officer
	 
	 	 	 	 
	EAGLE ROCK ENERGY GP, L.P.
	 
	 	 	 	 
	By: EAGLE ROCK ENERGY G&P, LLC, its general partner
	By:
	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Alex A. Bucher, Jr.
	 

	 	Title:
	 	President and Chief Executive Officer

 

 

	 	 	 	 	 
	EAGLE ROCK HOLDINGS, L.P.
	 
	 	 	 	 
	By: EAGLE ROCK GP, L.L.C., its general partner
	 
	 	 	 	 
	By:
	 	 	 	 
	 	 	 
	 

	 	Name:
	 	Alex A. Bucher, Jr.
	 

	 	Title:
	 	President and Chief Executive Officer

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Exhibit 10.11

 

CONTRIBUTION, CONVEYANCE

AND ASSUMPTION AGREEMENT

BY AND AMONG

EAGLE ROCK ENERGY PARTNERS, L.P.

EAGLE ROCK ENERGY G&P, LLC

EAGLE ROCK ENERGY GP, L.P.

EAGLE ROCK PIPELINE, L.P.

EAGLE ROCK PIPELINE GP, LLC

AND

EAGLE ROCK HOLDINGS, L.P.

EFFECTIVE AS OF

SEPTEMBER __, 2006

 

 

 

CONTRIBUTION, CONVEYANCE

AND ASSUMPTION AGREEMENT

     This CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of September ___, 2006,
is entered into by and among EAGLE ROCK ENERGY PARTNERS, L.P., a Delaware limited partnership
(“MLP”), EAGLE ROCK ENERGY G&P, LLC, a Delaware limited liability company (“G&P”),
EAGLE ROCK ENERGY GP, L.P., a Delaware limited partnership (“GP LP”), EAGLE ROCK PIPELINE,
L.P., a Delaware limited partnership (“OLP”), EAGLE ROCK PIPELINE GP, LLC, a Delaware
limited liability company (“OLP GP”), and EAGLE ROCK HOLDINGS, L.P., a Texas limited
partnership (“Holdings”). The parties to this agreement are collectively referred to
herein as the “Parties.” Capitalized terms used herein shall have the meanings assigned to
such terms in Section 1.1.

RECITALS

     WHEREAS, GP LP and Holdings have formed MLP, pursuant to the Delaware Revised Uniform Limited
Partnership Act (the “Delaware LP Act”), for the purpose of engaging in any business
activity that is approved by GP LP and that lawfully may be conducted by a limited partnership
organized pursuant to the Delaware LP Act.

     WHEREAS, in order to accomplish the objectives and purposes in the preceding recital, the
following actions have been taken prior to the date hereof:

          1. G&P and Holdings formed GP LP, under the terms of the Delaware LP Act, to which G&P
contributed $0.01 and Holdings contributed $999.99 in exchange for a 0.001% general partner
interest and 99.999% limited partner interest, respectively.

          2. GP LP and Holdings formed MLP, under the terms of the Delaware LP Act, to which GP LP
contributed $20.00 in exchange for a 2% general partner interest and Holdings contributed $980.00
in exchange for a 98% limited partner interest (the “Holdings Initial MLP Interest”).

          3. Each of G&P, OLP and OLP GP filed the necessary certificates and documents, under the terms
of the applicable laws of the State of Texas and under the Delaware LP Act and the Delaware Limited
Liability Company Act (the “Delaware LLC Act”), pursuant to which each of G&P, OLP and OLP
GP were converted to entities organized under the State of Delaware.

          4. Certain private investors (the “March 2006 Private Investors”) contributed $98.3
million to OLP in exchange for 5,455,050 common units in OLP.

          5. Certain private investors, including Natural Gas Partners VII, L.P., (the “June 2006
Private Investors”) conveyed their ownership interests in Midstream Gas Services, L.P., a
Delaware limited partnership (“MGS”), to OLP and Eagle Rock Energy Services, L.P.
(“Services”) in exchange for an aggregate 1,125,416 common units in OLP and $4.47 million

 

 

from Services, and MGS GP, L.L.C. sold its 1% general partner interest in MGS to Services in
exchange for $0.25 million.

          6. Services distributed its 1% general partner interest in MGS to OLP GP, and OLP GP was
admitted as the general partner of MGS.

          7. Eagle Rock Midstream Resources, L.P., a Texas limited partnership (“Midstream”),
was dissolved and its member interest in G&P was distributed to OLP GP, and its 99% limited partner
interest in each of Eagle Rock Gas Gathering & Processing, Ltd, a Texas limited partnership
(“Gathering”) and Services was distributed to OLP.

          8. G&P distributed its 1% general partner interest in each of Gathering, Services, Eagle Rock
Operating, L.P., a Texas limited partnership (“Operating”), and Eagle Rock Field Services,
L.P., a Texas limited partnership (“Field Services”), to OLP GP, and OLP GP was admitted as
the general partner of each of Gathering, Services, Operating and Field Services.

          9. OLP GP distributed its member interest in G&P to Holdings.

          10. MLP formed Heathrow Energy, LLC (“Heathrow”) under the terms of the Delaware LLC
Act.

          11. Each of OLP, Gathering, Services, Operating and Field Services (through any intermediate
entities) distributed their working capital assets consisting of cash and accounts receivable (the
“Working Capital Assets”), estimated to be approximately $35.0 million, to Holdings, the
March 2006 Private Investors and the June 2006 Private Investors in proportion to their interests
in the OLP.

     WHEREAS, concurrently with the consummation of the transactions contemplated hereby (the
“Closing”), each of the following matters shall occur:

          1. Holdings will contribute to GP LP a limited partner interest (the “Interest”) in
OLP with a value equal to 2% of the equity value of MLP immediately after the Closing as a capital
contribution (of which 0.001% of such conveyance will be made to GP LP on behalf of G&P).

          2. GP LP will convey the Interest to MLP in exchange for (a) a continuation of its 2% general
partner interest, (b) the issuance to GP LP of the IDRs of MLP and (c) the right to receive
$3,790,126 to reimburse it for certain capital expenditures (of which $95,302 is to pay
distribution arrearages on the general partner units in OLP owned by OLP GP).

          3. Holdings will convey all of its member interest in OLP GP to MLP in exchange for (a)
413,830 Subordinated Units in MLP (representing a 1.0% interest), (b) 69,185 Common Units in MLP
(representing a 0.2% interest) and (c) the right to receive $3,105,760 to reimburse Holdings for
certain capital expenditures (of which $78,094 is to pay distribution arrearages on the
subordinated units in OLP owned by Holdings).

2

 

          4. Pursuant to the Merger Agreement, Holdings will convey all of its remaining limited partner
interest in OLP to MLP in exchange for (a) 20,277,665 Subordinated Units in MLP (representing a
48.0% interest), (b) 3,390,051 Common Units in MLP (representing a 8.0% interest) and (c) the right
to receive $152,182,217 to reimburse Holdings for certain capital expenditures (of which $3,826,604
is to pay distribution arrearages on the subordinated units in OLP owned by Holdings).

          5. Pursuant to the Merger Agreement, the March 2006 Private Investors and the June 2006
Private Investors will convey all of their remaining limited partner interest in OLP to MLP in
exchange for (a) 4,732,259 Common Units in MLP (representing a 11.2% interest) and (b) the right
to receive $29,663,072 to reimburse the March 2006 Private Investors and the June 2006 Private
Investors for certain capital expenditures.

          6. Pursuant to the Merger Agreement, Heathrow will merge with and into OLP, and OLP will be
the surviving entity.

          7. The public, through the Underwriters, will contribute $250,000,000 in cash, less the
Underwriters’ discount of $16,250,000, in exchange for 12,500,000 Common Units in MLP (representing
a 29.6% interest).

          8. MLP will (a) pay transaction expenses associated with the transactions contemplated by this
Agreement in the amount of approximately $3,000,000 (exclusive of the Underwriters’ discount), (b)
distribute $3,694,823 to GP LP to reimburse GP LP for certain capital expenditures, (c) distribute
$151,383,279 to Holdings to reimburse Holdings for certain capital expenditures, (d) distribute
$29,663,072 to the March 2006 Private Investors and the June 2006 Private Investors to reimburse
them for certain capital expenditures and (e) contribute $35,000,000 to OLP to replenish working
capital (of which 2% of such contribution will be made to OLP on behalf of OLP GP).

          9. Holdings will pay to Natural Gas Partners $6,000,000 as consideration for the termination
of an advisory services, reimbursement and indemnification agreement between Holdings and Natural
Gas Partners.

          10. OLP will pay to Holdings $7,008,825 to satisfy its obligation to pay distribution
arrearages on the subordinated units and general partner units in OLP owned by Holdings.

          11. MLP will redeem from Holdings and retire the Holdings Initial MLP Interest in exchange for
a payment in cash to Holdings of $980.00.

          12. If the Underwriters exercise their option to purchase up to an additional 1,875,000 Common
Units (the “Option”), MLP shall use proceeds of that exercise, net of the applicable
Underwriters’ discount, to redeem a number of Common Units owned by Holdings, the March 2006
Private Investors and the June 2006 Private Investors equal to the number of Common Units sold
pursuant to the exercise of the Option, and to reimburse Holdings, the March 2006 Private Investors
and the June 2006 Private Investors for certain capital expenditures.

3

 

          13. The agreements of limited partnership and the limited liability company agreements of the
aforementioned entities will be amended and restated to the extent necessary to reflect the
applicable matters set forth above and as contained in this Agreement.

     NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:

ARTICLE 1

DEFINITIONS

          Section 1.1 The following capitalized terms shall have the meanings given below.

          (a) “Agreement” means this Contribution, Conveyance and Assumption Agreement.

          (b) “Assets” has the meaning assigned to such term in Section 4.1 of this Agreement.

          (c) “Common Unit” has the meaning assigned to such term in the Partnership Agreement.

          (d) “Effective Time” shall mean 8:00 a.m. New York, New York time on the date of the
consummation of the Offering.

          (e) “IDRs” means “Incentive Distribution Rights” as such term is defined in the
Partnership Agreement.

          (f) “Merger Agreement” means the Agreement and Plan of Merger of even date herewith,
among MLP, OLP and Heathrow.

          (g) “MLP” has the meaning assigned to such term in the opening paragraph of this
Agreement.

          (h) “Natural Gas Partners” means Natural Gas Partners VII, L.P. and Natural Gas
Partners VIII, L.P. collectively.

          (i) “Offering” means the initial public offering by MLP of Common Units.

          (j) “Omnibus Agreement” means that certain Omnibus Agreement of even date herewith,
among MLP, G&P, GP LP and Holdings.

          (k) “Partnership Agreement” means the First Amended and Restated Agreement of Limited
Partnership of Eagle Rock Energy Partners, L.P. dated as of the Effective Date.

          (l) “Partnership Group” has the meaning assigned to such term in the Omnibus
Agreement.

4

 

          (m) “Registration Statement” means the registration statement on Form S-1
(Registration No. 333-134750) filed by MLP relating to the Offering.

          (n) “Subordinated Unit” has the meaning assigned to such term in the Partnership
Agreement.

          (o) “Underwriters” means UBS Securities LLC, Lehman Brothers Inc., Goldman, Sachs &
Co., A.G. Edwards & Sons, Inc., Wachovia Capital Markets, LLC, Credit Suisse Securities (USA) LLC,
Raymond James & Associates, Inc. and RBC Capital Markets Corporation.

          (p) “Underwriting Agreement” means the underwriting agreement dated September ___, 2006
among MLP, GP LP, G&P and Holdings and the Underwriters relating to the Offering.

ARTICLE 2

CONTRIBUTIONS, ACKNOWLEDGMENTS AND DISTRIBUTIONS

          Section 2.1 Contribution by Holdings of the Interest to GP LP. Holdings hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers to GP LP, its successors
and assigns, for its and their own use forever, all right, title and interest in and to the
Interest, as a capital contribution, for good and valuable consideration, the sufficiency of which
is hereby acknowledged, and GP LP hereby accepts the Interest as a contribution to the capital of
GP LP (of which 0.001% of such conveyance is being made on behalf of G&P).

          Section 2.2 Contribution by GP LP of the Interest to MLP. GP LP hereby grants,
contributes, bargains, conveys, assigns, transfers, sets over and delivers to MLP, its successors
and assigns, for its and their own use forever, all right, title and interest in and to the
Interest, as a capital contribution, in exchange for (a) a continuation of its 2% general partner
interest in MLP, (b) the issuance by MLP to GP LP of the IDRs, (c) the right to receive $3,790,126
to reimburse it for certain capital expenditures (of which $95,302 is to pay distribution
arrearages on the general partner units in OLP owned by OLP GP), and (d) other good and valuable
consideration, the sufficiency of which is hereby acknowledged, and MLP hereby accepts the Interest
as a contribution to the capital of MLP.

          Section 2.3 Contribution by Holdings of Member Interest in OLP GP to MLP. Holdings
hereby grants, contributes, bargains, conveys, assigns, transfers, sets over and delivers to MLP,
its successors and assigns, for its and their own use forever, all right, title and interest in and
to its member interest in OLP GP in exchange for (a) the issuance by MLP to Holdings of 413,830
Subordinated Units in MLP, representing 1.0% interest in MLP, (b) the issuance by MLP to Holdings
of 69,185 Common Units in MLP, representing a 0.2% interest in MLP, (c) the right to receive
$3,105,760 to reimburse Holdings for certain capital expenditures (of which $78,094 is to pay
distribution arrearages on the subordinated units in OLP owned by Holdings) and (d) other good and
valuable consideration, the sufficiency of which is hereby acknowledged, and MLP hereby accepts
such member interest as a contribution to the capital of MLP and agrees to be bound by the terms of
the Limited Liability Company Agreement of OLP GP as its sole member.

5

 

          Section 2.4 Contribution by Holdings of Limited Partner Interest in OLP to MLP. The
Parties acknowledge that pursuant to the Merger Agreement, Holdings conveys and delivers to MLP,
its successors and assigns, for its and their own use forever, all right, title and interest in and
to its limited partner interest in OLP in exchange for (a) the issuance by MLP to Holdings of
20,277,665 Subordinated Units in MLP, representing 48.0% interest in MLP, (b) the issuance by MLP
to Holdings of 3,390,051 Common Units in MLP, representing an 8.0% interest in MLP, (c) the right
to receive $152,182,217 to reimburse Holdings for certain capital expenditures (of which $3,826,604
is to pay distribution arrearages on the subordinated units in OLP owned by Holdings), and (d)
other good and valuable consideration, the sufficiency of which is hereby acknowledged, and MLP
hereby accepts such limited partner interest as a contribution to the capital of MLP, and,
effective as of the completion of the conveyance to MLP of the limited partner interest in OLP
pursuant to the Merger Agreement and Sections 2.4 and 2.5 of this Agreement, agrees to be bound by
the terms of the Limited Partnership Agreement of OLP with respect to the limited partner interest
in OLP so conveyed to MLP.

          Section 2.5 Contribution by the March 2006 Private Investors and the June 2006 Private
Investors of Limited Partner Interest in OLP to MLP. The Parties acknowledge that pursuant to
the Merger Agreement, each of the March 2006 Private Investors and the June 2006 Private Investors
conveys and delivers to MLP, its successors and assigns, for its and their own use forever, all
right, title and interest in and to its limited partner interest in OLP in exchange for (a) the
issuance by MLP to the March 2006 Private Investors and the June 2006 Private Investors of
4,732,259 Common Units in MLP, representing an 11.2% interest in MLP, (b) the right to receive
$29,663,072 to reimburse the March 2006 Private Investors and the June 2006 Private Investors for
certain capital expenditures, and (c) other good and valuable consideration, the sufficiency of
which is hereby acknowledged, and MLP hereby accepts such limited partner interest as a
contribution to the capital of MLP, and, effective as of the completion of the conveyance to MLP of
the limited partner interest in OLP pursuant to the Merger Agreement and Sections 2.4 and 2.5 of
this Agreement, agrees to be bound by the terms of the Limited Partnership Agreement of OLP with
respect to the limited partner interest in OLP so conveyed to MLP.

          Section 2.6 Underwriters’ Cash Contribution. The Parties acknowledge that the
Underwriters have, pursuant to the Underwriting Agreement, made a capital contribution to MLP of
approximately $250,000,000 in cash ($233,750,000 net to MLP after the underwriting discount of
$16,250,000) in exchange for the issuance by MLP to the Underwriters of 12,500,000 Common Units,
representing a 29.6% interest in MLP.

          Section 2.7 Payment of Transaction Costs. The Parties acknowledge (a) the payment by
MLP, in connection with the Closing, of transaction expenses in the amount of approximately
$3,000,000 (exclusive of the Underwriters’ discount), (b) distribute $3,790,126 to GP LP to
reimburse GP LP for certain capital expenditures, (c) distribute $155,287,977 to Holdings to
reimburse Holdings for certain capital expenditures, (d) distribute $29,663,072 to the March 2006
Private Investors and the June 2006 Private Investors to reimburse them for certain capital
expenditures and (e) contribute $35,000,000 to OLP to replenish working capital (of which 2% of
such contribution will be made to OLP on behalf of OLP GP).

6

 

          Section 2.8 Payment of Fee to Natural Gas Partners. Holdings hereby agrees to pay
Natural Gas Partners $6,000,000 as consideration for the termination of an advisory services,
reimbursement and indemnification agreement between Holdings and Natural Gas Partners.

          Section 2.9 Payment of Distribution Arrearages to Holdings. OLP hereby agrees to pay
Holdings $7,008,825 to satisfy OLP’s obligation to pay distribution arrearages on the subordinated
units and general partner units in OLP owned by Holdings.

          Section 2.10 Redemption of Holdings Initial MLP Interest. MLP hereby agrees to redeem
from Holdings and agrees to retire the Holdings Initial MLP Interest in exchange for a payment in
cash to Holdings of $980.00.

ARTICLE 3

ADDITIONAL TRANSACTIONS

          Section 3.1 Purchase of Additional Common Units. If the Option is exercised in whole
or in part, the Underwriters, will contribute additional cash to MLP in exchange for up to an
additional 1,875,000 Common Units on the basis of the initial public offering price per Common Unit
set forth in the Registration Statement, net of underwriting discounts and fees.

          Section 3.2 Redemption of Common Units. MLP hereby agrees to redeem a number of Common
Units held by Holdings, the March 2006 Private Investors and the June 2006 Private Investors equal
to the number of Common Units issued to the public, through the underwriters, upon exercise of the
Option, if any, at a redemption price per Common Unit equal to the initial public offering price
per Common Unit set forth in the Registration Statement, net of underwriting discounts and fees.

ARTICLE 4

TITLE MATTERS

          Section 4.1 Encumbrances.

          (a) Except to the extent provided in any other document executed in connection with this
Agreement or the Offering, the contribution and conveyance (by operation of law or otherwise) of
the various physical assets owned as reflected in this Agreement (collectively, the
“Assets”) are made expressly subject to all recorded and unrecorded liens (other than
consensual liens), encumbrances, agreements, defects, restrictions, adverse claims and all laws,
rules, regulations, ordinances, judgments and orders of governmental authorities or tribunals
having or asserting jurisdictions over the Assets and operations conducted thereon or in connection
therewith, in each case to the extent the same are valid and enforceable and affect the Assets,
including all matters that a current survey or visual inspection of the Assets would reflect.

          (b) To the extent that certain jurisdictions in which the Assets are located may require that
documents be recorded in order to evidence the transfers of title reflected in this

7

 

Agreement, then the provisions set forth in Section 4.1(a) immediately above shall also be
applicable to the conveyances under such documents.

          Section 4.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.

          (a) EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION THE OMNIBUS AGREEMENT, THE
PARTIES ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY
SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR
STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION
OF THE ASSETS INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF
THE ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON
THE ASSETS, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE SUITABILITY OF THE ASSETS FOR ANY
AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS
OR THEIR OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (E) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF
THE ASSETS. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION, THE OMNIBUS
AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE THAT EACH HAS HAD THE OPPORTUNITY TO INSPECT THE
RESPECTIVE ASSETS, AND EACH IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE RESPECTIVE ASSETS AND
NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ANY OF THE PARTIES. EXCEPT TO THE EXTENT
PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
OFFERING INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR
BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING
TO THE ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT
PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
OFFERING INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT, EACH OF THE PARTIES ACKNOWLEDGES
THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN
IS MADE IN AN “AS IS”, “WHERE IS” CONDITION WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND
CONVEYED SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE SUCH
CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS

8

 

AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE
CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS THAT MAY ARISE
PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT
OR ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING,
INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT.

          (b) The contributions of the Assets made under this Agreement are made with full rights of
substitution and subrogation of the respective parties receiving such contributions, and all
persons claiming by, through and under such parties, to the extent assignable, in and to all
covenants and warranties by the predecessors-in-title of the parties contributing the Assets, and
with full subrogation of all rights accruing under applicable statutes of limitation and all rights
of action of warranty against all former owners of the Assets.

          (c) Each of the Parties agrees that the disclaimers contained in this Section 4.2 are
“conspicuous” disclaimers. Any covenants implied by statute or law by the use of the words
“grant,” “convey,” “bargain,” “sell,” “assign,” “transfer,” “deliver,” or “set over” or any of them
or any other words used in this Agreement or any exhibits hereto are hereby expressly disclaimed,
waived or negated.

          (d) Each of the Parties hereby waives compliance with any applicable bulk sales law or any
similar law in any applicable jurisdiction in respect of the transactions contemplated by this
Agreement.

ARTICLE 5

FURTHER ASSURANCES

          Section 5.1 Further Assurances. From time to time after the Effective Time, and
without any further consideration, the Parties agree to execute, acknowledge and deliver all such
additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases,
acquittances and other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate (a) more fully to assure that the
applicable Parties own all of the properties, rights, titles, interests, estates, remedies, powers
and privileges granted by this Agreement, or which are intended to be so granted, or (b) more fully
and effectively to vest in the applicable Parties and their respective successors and assigns
beneficial and record title to the interests contributed and assigned by this Agreement or intended
so to be and to more fully and effectively carry out the purposes and intent of this Agreement.

          Section 5.2 Other Assurances. From time to time after the Effective Time, and without
any further consideration, each of the Parties shall execute, acknowledge and deliver all such
additional instruments, notices and other documents, and will do all such other acts and things,
all in accordance with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement. Without limiting the generality
of the foregoing, the Parties acknowledge that the parties have used their good faith

9

 

efforts to attempt to identify all of the assets being contributed to MLP or its subsidiaries
as required in connection with the Offering. However, due to the age of some of those assets and
the difficulties in locating appropriate data with respect to some of the assets it is possible
that assets intended to be contributed to MLP or its subsidiaries were not identified and therefore
are not included in the assets contributed to MLP or its subsidiaries. It is the express intent of
the Parties that MLP or its subsidiaries own all assets necessary to operate the assets that are
identified in this Agreement and in the Registration Statement. To the extent any assets were not
identified but are necessary to the operation of assets that were identified, then the intent of
the Parties is that all such unidentified assets are intended to be conveyed to the appropriate
members of the Partnership Group. To the extent such assets are identified at a later date, the
Parties shall take the appropriate actions required in order to convey all such assets to the
appropriate members of the Partnership Group. Likewise, to the extent that assets are identified
at a later date that were not intended by the parties to be conveyed as reflected in the
Registration Statement, the Parties shall take the appropriate actions required in order to convey
all such assets to the appropriate party.

ARTICLE 6

EFFECTIVE TIME

          Notwithstanding anything contained in this Agreement to the contrary, none of the provisions
of Article 2 or Article 3 of this Agreement shall be operative or have any effect until the
Effective Time, at which time all the provisions of Article 2 and Article 3 of this Agreement shall
be effective and operative in accordance with Article 7, without further action by any party
hereto.

ARTICLE 7

MISCELLANEOUS

          Section 7.1 Order of Completion of Transactions. The transactions provided for in
Article 2 and Article 3 of this Agreement shall be completed immediately following the Effective
Time in the following order: first, the transactions provided for in Article 2 shall be completed
in the order set forth therein; and second, following the completion of the transactions as
provided in Article 2, the transactions, if they occur, provided for in Article 3 shall be
completed.

          Section 7.2 Costs. Except for the transaction costs set forth in Section 2.7, the OLP
shall pay all expenses, fees and costs, including but not limited to, all sales, use and similar
taxes arising out of the contributions, conveyances and deliveries to be made hereunder and shall
pay all documentary, filing, recording, transfer, deed, and conveyance taxes and fees required in
connection therewith. In addition, the OLP shall be responsible for all costs, liabilities and
expenses (including court costs and reasonable attorneys’ fees) incurred in connection with the
implementation of any conveyance or delivery pursuant to Section 5.1 or Section 5.2.

          Section 7.3 Headings; References; Interpretation. All Article and Section headings in
this Agreement are for convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof. The words “hereof,” “herein” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this

10

 

Agreement as a whole and not to any particular provision of this Agreement. All references
herein to Articles and Sections shall, unless the context requires a different construction, be
deemed to be references to the Articles and Sections of this Agreement. All personal pronouns used
in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all
other genders, and the singular shall include the plural and vice versa. The use herein of the
word “including” following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not non-limiting language (such as “without
limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that could reasonably fall within the
broadest possible scope of such general statement, term or matter.

          Section 7.4 Successors and Assigns. The Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns.

          Section 7.5 No Third Party Rights. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create rights in any other
person or confer upon any other person any benefits, rights or remedies and no person is or is
intended to be a third party beneficiary of any of the provisions of this Agreement.

          Section 7.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on the parties hereto.

          Section 7.7 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas applicable to contracts made and to be performed
wholly within such state without giving effect to conflict of law principles thereof.

          Section 7.8 Severability. If any of the provisions of this Agreement are held by any
court of competent jurisdiction to contravene, or to be invalid under, the laws of any political
body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not
invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not
contain the particular provision or provisions held to be invalid and an equitable adjustment shall
be made and necessary provision added so as to give effect to the intention of the Parties as
expressed in this Agreement at the time of execution of this Agreement.

          Section 7.9 Amendment or Modification. This Agreement may be amended or modified from
time to time only by the written agreement of all the Parties. Each such instrument shall be
reduced to writing and shall be designated on its face as an Amendment to this Agreement.

          Section 7.10 Integration. This Agreement and the instruments referenced herein
supersede all previous understandings or agreements among the Parties, whether oral or written,
with respect to their subject matter. This document and such instruments contain the entire
understanding of the Parties with respect to the subject matter hereof and thereof. No
understanding, representation, promise or agreement, whether oral or written, is intended to be or

11

 

shall be included in or form part of this Agreement unless it is contained in a written
amendment hereto executed by the parties hereto after the date of this Agreement.

          Section 7.11 Deed; Bill of Sale; Assignment. To the extent required and permitted by
applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of
the assets and interests referenced herein.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date
first above written.

	 	 	 	 	 
	 	EAGLE ROCK ENERGY PARTNERS, L.P.

 	 
	 	By:  	Eagle Rock Energy GP, L.P., its general partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                          Eagle Rock Energy G&P, LLC, its general partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EAGLE ROCK ENERGY GP, L.P.

 	 
	 	By:  	Eagle Rock Energy G&P, LLC, its general partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EAGLE ROCK ENERGY G&P, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EAGLE ROCK PIPELINE, L.P.

 	 
	 	By:  	Eagle Rock Pipeline GP, LLC, its general partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

Signature Page to

Contribution, Conveyance and Assumption Agreement

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	EAGLE ROCK PIPELINE GP, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EAGLE ROCK HOLDINGS, L.P.

 	 
	 	By:  	Eagle Rock GP, L.L.C., its general partner
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	Alex A. Bucher 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

Signature Page to

Contribution, Conveyance and Assumption Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]