Document:

ex10_1.htm

EXHIBIT 10.1

 

 

CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (this “Agreement”) is effective as of March 24, 2014 (the “Effective Date”) between Profire Energy, Inc., a Nevada corporation with its principal place of business at 321 South 1250 West, Suite 1, Lindon, Utah 84042 (the “Company”), and Terra Industrial Corporation, an Alberta corporation with its principal place of business at #253 51112 RR222 Sherwood Park, Alberta, Canada T8C 1G9 (“Consultant”), and Alan Johnson, an individual and agent of Consultant residing at #253 51112 RR222 Sherwood Park, Alberta, Canada T8C 1G9 (“Agent”).

 

WHEREAS, Consultant or Agent has previously provided the Company with consulting and other services, and the Company has compensated Consultant for such services through cash payments pursuant to oral agreements that have varied from time to time since commencing in August 31, 2003;

 

WHEREAS, Consultant, Agent and the Company have discussed entering a formal written arrangement regarding providing appropriate remuneration to Consultant or Agent relating to services that have been, and are expected to be, provided to the Company; and

 

WHEREAS, the Company, Consultant and Agent desire to enter into this Agreement to establish such formal written arrangement and enter into the additional agreements set forth herein regarding the release of any claims among the parties and to establish the terms under which Consultant will continue to provide consulting services to the Company.

 

NOW THEREFORE, in consideration of the mutual promises set forth in this Agreement, the parties agree as follows:

 

1.           Term.  Unless terminated at an earlier date in accordance with Section 9 of this Agreement, the term of this Agreement shall commence on the Effective Date and shall continue for a period of ten years (the “Term”).

 

2.           Services.

 

(a)           Services.  Subject to the provisions of this Section 2, Consultant will provide to the Company consulting and other services as reasonably requested by the Company’s senior executive officers or board of directors (the “Services”) at such reasonable times, dates, and locations as requested by the Company during the Term of this Agreement.

 

(b)           Manner of Performance.  In performing the Services, Consultant will provide its own equipment, tools and other materials.  The Company shall not control, direct or otherwise instruct the details, manner, or means by which the Consultant performs the Services; provided, however, that (i) Consultant agrees that this Agreement is conditioned upon the Consultant being able to provide the services of Agent to perform the Services, (ii) the Services furnished by Consultant must comply with all applicable laws, rules and regulations, and (iii) the

 

  

  

  

Services furnished by Consultant must comply with the specifications, procedures, policies and directives of the Company.  Consultant will perform the Services in a professional and workmanlike manner.

 

(c)           Work for Others.  Consultant shall not be prohibited from accepting other engagements from third parties, so long as this Agreement remains in effect and such engagements do not conflict with the Services or the time required therefore, or involve a breach of Section 6 or 7 of this Agreement relating to confidentiality, non-solicitation, and non-competition.

 

3.           Compensation.  As compensation in full for the Services, the Company will pay Consultant an annual fee of $400,000 (the “Consulting Fee”).  The Consulting Fee shall be paid in equal quarterly installment payments of $100,000 each, with the first of such payments being paid on April 1, 2014 and the remaining payments being paid on the first business day of each calendar quarter thereafter during the Term of this Agreement. The Company will report the Consulting Fees paid to the Consultant to the Internal Revenue Service using Form 1099-MISC.

 

4.           Release.   Effective upon the execution of this Agreement, Agent and Consultant release and forever discharge the Company, its subsidiaries, affiliates or parent companies (collectively, the “Affiliates”), and any one or all of the their predecessors, successors, heirs, assigns, managers, officers, directors, partners, members, shareholders, attorneys and agents, as well as the employees, agents, attorneys, representatives, predecessors, successors and assigns thereof (collectively, the “Company Release Parties”) from any and all manner of actions, causes of action in law or in equity, suits, debts, liens, contracts, liabilities, claims, demands, damages, losses, fees, costs, expenses, set off, or claims for recoupment, of any nature whatsoever, known or unknown, fixed or contingent that Agent or Consultant may have against the Company Release Parties from the beginning of time to the date of this Agreement, or which may hereafter accrue against the Company Release Parties based upon any claims, acts or omissions occurring prior to the date of this Agreement.  Agent and Consultant expressly agree that the release set forth in this Section 4 includes, without limitation, any and all claims against the Company Release Parties relating to any claim that Agent or Consultant may have on the ownership interests or equity in such Company Release Parties.

 

5.           Intellectual Property

 

(a)           Assignment of Prior Intellectual Property.

 

(i)           Except for any Intellectual Property listed on Exhibit A, which was developed by either Agent or Consultant exclusively outside the scope of any services previously rendered by Agent or Consultant to the Company or its Affiliates, Agent and Consultant hereby assign, transfer and convey to the Company all of their rights, title, and interest in and to the following, as of the date of this Agreement:

 

(a)           All inventions, all improvements to those inventions, and all patents, patent applications, and patent disclosures, together with all re-issuances, continuations, continuations-in-part, revisions, extensions, and reexaminations of these assets; all trademarks, service marks, trade dress, logos, slogans, and all 

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goodwill associated with the use of and symbolized by such assets; all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection with these assets; all trade secrets and confidential business information (including all ideas, practices, improvements, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals); all computer software (including data and related documentation), domain names (whether in use or not); and all other proprietary rights in each case relating to the business and operations of the Company or any of its subsidiaries, affiliates, or parent companies; and

 

(b)           All causes of action and rights of recovery for past, present, or future infringement of foregoing (collectively, the “Intellectual Property”).

 

(ii)           Each of Agent and Consultant hereby represents and warrants that it has full right to convey its entire interest in the Intellectual Property, and that it has not transferred, and will not transfer, any of its right, title, or interest, in and to the Intellectual Property, except as conveyed to the Company previously or in this Agreement.

 

(iii)           Each of Agent and Consultant covenant that it will, upon request, do all other lawful acts reasonably necessary to enable the Company to obtain, maintain and enforce full benefits from the rights and interests to the Intellectual Property.

 

(b)           Assignment of Future Intellectual Property and Inventions.

 

(i)           Notification and Disclosure of Inventions.  Consultant will promptly notify the Company in writing of the existence and nature of, and will promptly and fully disclose to the Company, any and all Intellectual Property which Consultant or Agent has conceived, originated or first actually reduced to practice or may conceive or first actually reduce to practice while the Consultant or Agent was or is providing Services to the Company in any capacity during the Term of this Agreement, if such Intellectual Property relate to the Services provided by Consultant during the Term of this Agreement (the “Inventions”).

 

(ii)           Ownership of Inventions.  All Inventions will be the sole and exclusive property of the Company or its nominee, and the Consultant or Agent will assign, and hereby does assign, to the Company all of its rights to the Inventions.  During the Term of this Agreement and thereafter, whenever requested to do so by the Company, Consultant or Agent will execute and assign any and all applications, assignments and other instruments that the Company deems necessary to preserve, protect, and enforce its rights in the Inventions in the United States and/or any foreign countries, and in order to assign and convey to the Company or its nominee the sole and exclusive right, title and interest in and to such Inventions.  Consultant or Agent will render aid and assistance to the Company in any interference or litigation pertaining to such Inventions, and all associated expenses reasonably incurred by Consultant at the request of the Company shall be borne by the Company.

 

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(iii)           Limitation.  Notwithstanding the foregoing, the provisions of this Section 5(b) shall not apply to any Invention that:

 

(a)           Consultant or Agent developed entirely on Consultant’s or Agent’s own time;

 

(b)           is outside the scope of the Services provided to the Company by the Consultant;

 

(c)           Consultant or Agent made without the use of any of the equipment, supplies, facility or trade secret information of the Company;

 

(d)           does not relate to a product or process upon which Consultant or Agent worked; and

 

(e)           does not result from any work, services, or duties performed by Consultant or Agent for the Company.

 

(iv)           Representations Regarding Deliverables.  Consultant and Agent represent, warrant and covenant that (i) all work product created and delivered by Consultant or Agent in the course of performing the Services (the “Deliverables”) will be original work product of Consultant or, if applicable, Agent or Consultant’s other employees, each of whom will have executed an agreement assigning all of his or her rights in such Deliverables to the Company in accordance with Section 10(a), (ii) none of the Deliverables or any part thereof will infringe on the proprietary rights of any third party, and (iii) Company will receive good and valid title to the Deliverables, free and clear of any restrictions or to any liens, security interests or encumbrances.

 

(c)           Return of Company Property.  Upon expiration or termination of this Agreement in accordance with Section 1 or Section 9, Consultant and Agent, if applicable, will deliver to the Company any and all drawings, notes, specifications, devices, formulas and documents, together with all copies thereof, and any other material relating to any Deliverables, Invention or containing Confidential Information.

 

6.           Protection of Confidential Information of the Company

 

(a)           Confidential Information.  During the Term of this Agreement or at any time thereafter, neither Agent nor Consultant will divulge, furnish or make accessible to anyone or use in any way (other than as necessary for the performance of the Services) any confidential or proprietary knowledge or information of the Company, its Affiliates, or customers which Agent or Consultant has acquired or become acquainted with or will acquire or become acquainted with prior to or during the Term of this Agreement, whether developed by Agent, Consultant or by others, including without limitation any Intellectual Property directly or indirectly useful in any aspect of the business of the Company, its Affiliates, any customer or supplier lists of the Company or its Affiliates, any personal information, any confidential or secret development or research work of the Company or its Affiliates, or any other confidential information or secret aspects of the business of the Company, its Affiliates or customers.  Agent and Consultant acknowledge that the above-described knowledge or information constitutes a

 

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unique and valuable asset of the Company acquired at great time and expense by the Company and its predecessors, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the Company.  Both during and after the Term of this Agreement, Agent and Consultant will refrain from any acts or omissions that would reduce the value of such knowledge or information to the Company.

 

(b)           Exclusions.  The foregoing obligations of confidentiality, however, shall not apply to any disclosure of knowledge or information if Agent or Consultant can demonstrate:

 

(i)           Agent or Consultant already possessed the knowledge or information, free of any confidentiality restrictions, prior to disclosure by the Company;

 

(ii)           the knowledge or information was published at the time of Company’s disclosure to the Agent or Consultant, or subsequently becomes generally publicly known in the form in which it was publicly disclosed by the Company, other than as a direct or indirect result of the breach of this Agreement by the Agent or Consultant; or

 

(iii)           Agent or Consultant receives the knowledge or information from a third party not in violation of any confidentiality obligations.

 

7.           Non-Competition and Non-Solicitation.

 

(a)           Non-Competition.  During the Term of this Agreement, neither the Agent nor the Consultant will directly or indirectly engage, invest in, manage, operate, finance, advise, render services to, or be employed by any person or entity anywhere within the United States or Canada engaged in any business that the Company or its Affiliates conducts during the Term without prior written consent of Company; provided, however, that Consultant may acquire or otherwise own less than 3% of the outstanding capital stock of a company that is listed on any national securities exchange.

 

(b)           Non-Solicitation.  During the Term of this Agreement and for a period of two years after the termination of this Agreement for any reason, neither the Agent nor the Consultant shall, directly or indirectly (i) recruit, solicit or induce, or attempt to solicit or induce, any officer, shareholder, employee, agent or other representative of, vendor, or independent contractor to the Company or its Affiliates to terminate his, her, or its employment with, or otherwise cease his, her, or its relationship(s) with, the Company or such Affiliate; (ii) solicit, divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company or its Affiliates that were contacted, solicited or otherwise served by the Company or its Affiliates during the Term.

 

8.           Indemnification.  The Consultant will indemnify and hold the Company and its officers, members, employees, representatives and agents harmless from and against any and all claims, demands, losses, lawsuits, proceedings, settlements, judgments, actions, causes of action, damages and expenses incurred (including reasonable attorneys’ fees and expenses) arising out of or related to (i) any breach by Consultant or Agent of the terms of this Agreement and (ii) any

 

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personal injury or death or property damage caused directly or indirectly by any act or omission of the Consultant or Agent in performance of the Services.

 

9.           Termination

 

(a)           Termination by Company.  Notwithstanding any contrary provision contained elsewhere in this Agreement, the Company may terminate this Agreement and the rights and obligations of the parties hereunder:

 

(i)           Immediately in the event that Consultant or Agent is convicted of any crime (excluding traffic violations or other minor offenses), or engages in any activities that constitute a material violation of normal standards of business ethics;

 

(ii)           Immediately in the event that Consultant or Agent breaches Sections 6 or 7 of this Agreement, or

 

(iii)           Upon 30 days’ notice to Consultant if Consultant has failed in any material respect to perform its responsibilities hereunder (other than under Sections 6 or 7) and such default is not cured within such 30-day period. However, the death of the Agent shall not constitute a material breach of this covenant and, in such an event, all rights of the Consultant and Agent will continue for the duration of the Term. 

 

(b)           Survival.  In the event this Agreement is terminated prior to the expiration of the Term pursuant to this Section 9, Consultant shall be entitled to receive any Consulting Fees earned through the date of termination, but all other rights to receive Consulting Fees shall terminate on such date.  The provisions of Sections 4 through 10 shall survive termination of this Agreement.

 

10.           Miscellaneous.

 

(a)           Employee Agreements.  Prior to any employee of Consultant performing any part of the Services or being given access to any Confidential Information in connection therewith, Consultant will obtain from each of such employee a written agreement expressly for the benefit of the Company containing the obligations set forth in Sections 5, 6and 7 of this Agreement.

 

(b)           Assignment.  Consultant may not assign this Agreement or delegate or subcontract any of its obligations hereunder, in whole or in part, without the prior written consent of the Company, and any purported assignment or delegation without the Company’s written consent will be void.  The Company may assign any right or delegate any obligation hereunder without the consent of the Consultant.  This Agreement will be binding upon and inure to the benefit of the parties and their permitted successors and assigns.

 

(c)           Governing Law and Venue.  This Agreement shall be construed and enforced in accordance with the laws of the State of Utah without regard to its conflicts of law provisions.  Company and Consultant each hereby irrevocably consent to the exclusive personal jurisdiction of the state and federal courts in Salt Lake County, Utah in any dispute arising out of this Agreement or any of the transactions contemplated by this Agreement.

 

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(d)           Notices.  All notices required to be given under this Agreement will be given in writing and delivered to the parties’ respective addresses set forth in the first paragraph of this Agreement.

 

(e)           Entire Agreement.  This Agreement evidences the entire understanding and agreement of the parties relative to the consulting arrangement between Consultant and the Company and the other matters discussed herein.  This Agreement supersedes any and all other agreements and understandings, whether written or oral, relative to the matters discussed herein.  This Agreement may only be amended by a written document signed by both Consultant and the Company.

 

(f)           Injunctive Relief.  Consultant acknowledges that it would be difficult to fully compensate the Company for damages resulting from any breach by Consultant of Sections 5, 6or 7 of this Agreement.  Accordingly, in the event of any actual or threatened breach of such provisions, the Company shall (in addition to any other remedies that it may have) be entitled to temporary and/or permanent injunctive relief to enforce such provisions, and such relief may be granted without the necessity of proving actual damages or posting any bond.

 

(g)           Severability.  To the extent any provision of this Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected.  In furtherance of and not in limitation of the foregoing, Consultant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered.  Consultant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

 

(h)           Status of Consultant.  In rendering services pursuant to this Agreement, Consultant shall be acting as an independent contractor and not as an employee or agent of the Company.  As an independent contractor, the Consultant will not be entitled to participate in any pension, welfare, or fringe benefits plans of the Company.  Nothing contained in this Agreement shall be construed or applied to create a partnership, joint venture, or agency relationship.  Consultant will have no authority, express or implied, to commit or obligate the Company in any manner whatsoever, except as specifically authorized from time to time in writing by an authorized representative of the Company, which authorization may be general or specific.  Consultant shall be responsible for the provision of all necessary supplies used in performance of the Services.  The Company will not withhold or make any payments for social security or unemployment, disability or worker’s compensation insurance on behalf of Consultant.  Consultant shall be solely responsible for payment of all federal, state or local taxes due with respect to all amounts paid to Consultant under this Agreement.  If the Company is determined to be liable for collection and/or remittance of any such taxes, Consultant shall immediately reimburse the Company for all such payments made by the Company.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company, Consultant and Agent have executed this Consulting Agreement effective as of the date set forth in the first paragraph.

 

 

PROFIRE ENERGY, INC.

 

 

By:  /s/ Brenton W. Hatch

 

Name:  Brenton W. Hatch

 

Title:  Chief Executive Officer

 

Date:  March 24, 2014

 

 

 

 

CONSULTANT

 

TERRA INDUSTRIAL CORPORATION

 

By:  /s/ Alan Johnson

 

Name: Alan Johnson

 

Title:  Manager

 

Date:  March 24, 2014

 

Consultant Tax ID #

 

 

AGENT

 

/s/ Alan Johnson

 

Alan Johnson

Date:  March 24, 2014

[Signature Page to Consulting Agreement]

  

  

  

EXHIBIT A

 

 

 

 

List of Intellectual Property

 

Excluded from Section 5

 

	
Title

	
Date

	
Identifying Number or

Brief Description

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  

 

 

____           No inventions or improvements

 

____           Additional sheets attached

 

 

CONSULTANT

 

TERRA INDUSTRIAL CORPORATION

 

By:  /s/ Alan Johnson                                                                                                     

 

Name:  Alan Johnson                                                                                                     

 

Title:  Manager                                                                                                                

 

Date:  March 24, 2014                                                                                                     

 

AGENT

 

/s/ Alan Johnson                                                                                                            

Alan Johnson

 

Date:  March 24, 2014d1463646_ex4-4.htm

Exhibit 4.4

OMNIBUS AGREEMENT

AMONG

Dynagas LNG Partners LP

Dynagas GP LLC

Dynagas Operating LP

Dynagas Operating GP LLC

AND

Dynagas Holding Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

Page

 

	
ARTICLE I

	
DEFINITIONS

	
1

	  	  	  
	  	
Section 1.1

	
Definitions

	
1

	  	  	  	  
	
ARTICLE II

	
FOUR-YEAR LNG CARRIER RESTRICTED BUSINESS OPPORTUNITIES

	
5

	  	  	  
	  	
Section 2.1

	
Four-Year LNG Carrier Restricted Businesses

	
5

	  	  	  	  
	  	
Section 2.2

	
Permitted Exceptions

	
5

	  	  	  	  
	
ARTICLE III

	
BUSINESS OPPORTUNITIES PROCEDURES

	
6

	  	  	  
	  	
Section 3.1

	
Procedures

	
6

	  	  	  	  
	  	
Section 3.2

	
Scope of Prohibition

	
7

	  	  	  	  
	  	
Section 3.3

	
Enforcement

	
7

	  	  	  	  
	
ARTICLE IV

	
RIGHTS OF FIRST OFFER

	
8

	  	  	  
	  	
Section 4.1

	
Rights of First Offer

	
8

	  	  	  	  
	  	
Section 4.2

	
Procedures for Rights of First Offer

	
8

	  	  	  	  
	
ARTICLE V

	
OPTIONAL VESSELS PURCHASE OPTIONS

	
9

	  	  	  
	  	
Section 5.1

	
Options to Purchase the Optional Interests

	
9

	  	  	  	  
	  	
Section 5.2

	
Procedures

	
9

	  	  	  	  
	
ARTICLE VI

	
INDEMNIFICATION

	
10

	  	  	  
	  	
Section 6.1

	
Dynagas Indemnification

	
10

	  	  	  	  
	  	
Section 6.2

	
Limitation Regarding Indemnification

	
 11

	  	  	  	  
	  	
Section 6.3

	
Indemnification Procedures

	
11

	  	  	  	  
	
ARTICLE VII

	
MISCELLANEOUS

	
11

	  	  	  
	  	
Section 7.1

	
Choice of Law; Arbitration

	
 11

	  	  	  	  
	  	
Section 7.2

	
Notice

	
12

	  	  	  	  
	  	
Section 7.3

	
Entire Agreement

	
12

	  	  	  	  
	  	
Section 7.4

	
Termination

	
12

	  	  	  	  
	  	
Section 7.5

	
Waiver; Effect of Waiver or Consent

	
12

	  	  	  	  
	  	
Section 7.6

	
Amendment or Modification

	
12

	  	  	  	  
	  	
Section 7.7

	
Assignment

	
13

	  	  	  	  
	  	
Section 7.8

	
Counterparts

	
 13

	  	  	  	  
	  	
Section 7.9

	
Severability

	
 13

	  	  	  	  
	  	
Section 7.10

	
Further Assurances

	
13

	  	  	  	  
	  	
Section 7.11

	
Withholding or Granting of Consent

	
 13

	  	  	  	  
	  	
Section 7.12

	
Laws and Regulations

	
 13

	  	  	  	  
	  	
Section 7.13

	
Negotiation of Rights of Dynagas, Members, Assignees and Third Parties

	
 13

  

i

  

OMNIBUS AGREEMENT

 

THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the Closing Date (as defined herein), among Dynagas Holding Ltd., a corporation organized under the laws of the Republic of the Marshall Islands ("Dynagas Holding"), Dynagas LNG Partners LP, a limited partnership organized under the laws of the Republic of the Marshall Islands (the "Partnership"), Dynagas GP LLC, a limited liability company organized under the laws of the Republic of the Marshall Islands and general partner of the Partnership including any permitted successors and assigns under the Partnership Agreement (as defined herein)) (the "General Partner"), Dynagas Operating LP, a limited partnership organized under the laws of the Republic of the Marshall Islands ("Operating LP"), Dynagas Operating GP LLC, a limited liability company organized under the laws of the Republic of the Marshall Islands and the general partner of Operating LP ("Operating GP").

 

R E C I T A L S:

 

1.           The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Articles II and III, with respect to (a) those business opportunities that the Dynagas Holding Entities (as defined herein) will not pursue during the term of this Agreement and (b) the procedures whereby such business opportunities are to be offered to the Partnership Group (as defined herein).

 

2.           The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article IV, with respect to the Partnership's right of first offer relating to Four-Year LNG Carrier (as defined herein) that Dynagas Holding owns or might own.

 

3.           The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article V, with respect to the rights of the Partnership to purchase the Optional Vessels from Dynagas Holding.

 

4.           The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Section 5.2(b)(ii), and Article VI, with respect to certain indemnification obligations of Dynagas Holding.

 

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 hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1   Definitions.

 

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

 

"AAA" has the meaning given such term in Section 7.1.

 

"Acquiring Party" has the meaning given such term in Section 3.1.

 

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of Voting Securities, by contract or otherwise.

 

"Agreement" means this Omnibus Agreement, as it may be amended, modified, or supplemented from time to time in accordance with Section 7.6 hereof.

 

  

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"Board" means the Board of Directors of the Partnership.

 

"Break-up Costs" means the aggregate amount of any and all additional taxes, flag administration, financing, legal and other similar costs (except with respect to Section 2.2(b) where Break-up Costs shall be deemed to include only administrative costs associated with transfer and re-flagging, including related legal costs) to the Dynagas Holding Entities that would be required to transfer Four-Year LNG Carrier acquired by the Dynagas Holding Entities as part of a larger transaction to a Partnership Group Member pursuant to Section 2.2(b) or Section 2.2(d)(i).

 

"Change of Control" means, with respect to any Person (the "Applicable Person"), any of the following events: (a) 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 (other than in the ordinary course of business), unless immediately following such sale, lease, exchange or other transfer such assets are owned, directly or indirectly, by the Applicable Person; (b) 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 (i) the outstanding voting securities of the Applicable Person are changed into or exchanged for Voting Securities of the surviving person or its parent and (ii) 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 (c) a "person" or "group" (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act), other than Dynagas Holding or its Affiliates with respect to the General Partner, being or 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 (b) above.

 

"Closing Date" means the date of the closing of the initial public offering of common units representing limited partner interests in the Partnership.

 

"Conflicts Committee" means the Conflicts Committee of the Board.

 

"Contribution Assets" has the meaning given such term in Section 6.1.

 

"Covered Environmental Losses" means all Losses suffered or incurred by the Partnership Group by reason of, arising out of or resulting from:

 

(a)           any violation or correction of violation of Environmental Laws; or

 

(b)           any event or condition relating to environmental or human health and safety matters, in each case, associated with the ownership or operation by the Partnership Group or the Dynagas Holding Entities of the Contribution Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Contribution Assets or the disposal or release of, or exposure to, Hazardous Substances generated by or otherwise related to operation of the Contribution Assets), including, without limitation, the reasonable and documented cost and expense of (i) any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation or other corrective action required or necessary under Environmental Laws, (ii) the preparation and implementation of any closure, remedial, corrective action or other plans required or necessary under Environmental Laws and (iii) any environmental or toxic tort (including, without limitation, personal injury or property damage claims) pre-trial, trial or appellate legal or litigation support work; but only to the extent that such violation complained of under clause (a), or such events or conditions included in clause (b), occurred before the Closing Date; and, provided, that in no event shall Losses to the extent arising from a change in any Environmental Law after the Closing Date be deemed "Covered Environmental Losses."

 

"Dynagas Holding" is defined in the introduction to this Agreement.

 

"Dynagas Holding Entities" means Dynagas Holding and any Person controlled, directly or indirectly, by Dynagas Holding, other than the Partnership Entities.

 

  

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"Dynagas Potential Transferee" has the meaning given such term in Section 4.2(b).

 

"Dynagas Sale Assets" has the meaning given such term in Section 4.2(b).

 

"Dynagas Transfer Notice" has the meaning given such term in Section 4.2(b).

 

"Dynagas Transferring Party" has the meaning given such term in Section 4.2(b).

 

"Environmental Laws" means all international, federal, state, foreign and local laws, statutes, rules, regulations, treaties, conventions, orders, judgments and ordinances having the force and effect of law and relating to protection of natural resources, health and safety and the environment, each in effect and as amended through the Closing Date.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"First Offer Negotiation Period" has the meaning given such term in Section 4.2(c).

 

"Four-Year LNG Carrier" means any LNG carrier operated or to be operated under a charter with an initial term of four or more years, together with the related charter. For purposes of this definition, the length of the charter shall be calculated beginning on the delivery of vessel to charterer, or the date of execution of an extension related thereto and ending on the date the LNG carrier is redelivered, the commencement of the extension period of the existing charter or the commencement of a new charter.

 

"General Partner" is defined in the introduction to this Agreement.

 

"Hazardous Substances" means (a) each substance defined, designated or classified as a hazardous waste, hazardous substance, hazardous material, solid waste, contaminant or toxic substance under Environmental Laws; (b) petroleum and petroleum products, including crude oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d) any radioactive material; and (e) any asbestos-containing materials in a friable condition.

 

"Losses" means losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorneys' and experts' fees) of any and every kind or character; provided, however, that such term shall not include any special, indirect, incidental or consequential damages.

 

"Non-Four-Year LNG Carriers" means any LNG carrier that is not a Four-Year LNG Carrier.

 

"Offer" has the meaning given such term in Section 3.1.

 

"Offer Period" has the meaning given such term in Section 3.1.

 

"Offered Assets" has the meaning given such term in Section 3.1.

 

"Offeree" has the meaning given such term in Section 3.1.

 

"Operating GP" is defined in the introduction to this Agreement.

 

"Operating LP" is defined in the introduction to this Agreement.

 

"Option Assets" has the meaning given such term in Section 5.1.

 

"Optional Interests" means all of Dynagas Holding's rights, title and interests in the Optional Vessels, including shares of capital stock or other equity interest of any Dynagas Holding Entity holding ownership interests

 

  

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in the Optional Vessels and including any charters or other agreements relating to the operation or ownership of the Optional Vessels then in effect.

 

"Optional Vessels" means the following LNG carriers currently owned by Dynagas Holding: the Yenisei River, Lena River, Arctic Aurora, Clean Ocean, Clean Planet, Hull 2566 and Hull 2567.

 

"Parties" means the parties to this Agreement and their successors and permitted assigns.

 

"Partnership" is defined in the introduction to this Agreement.

 

"Partnership Agreement" means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of , 2013, as such agreement is in effect on the Closing Date, to which reference is hereby made for all purposes of this Agreement. No amendment or modification to the Partnership Agreement subsequent to the Closing Date shall be given effect for purposes of this Agreement unless consented to by each of the Parties to this Agreement.

 

"Partnership Entities" means the General Partner, the Partnership, Operating LP and Operating GP LLC, and any Person controlled by any such entity.

 

"Partnership Group" means the Partnership and Operating LP and any Person controlled by any such

 

entity.

 

"Partnership Group Member" means any Person in the Partnership Group.

 

"Partnership Potential Transferee" has the meaning given such term in Section 4.2(a).

 

"Partnership Sale Assets" has the meaning given such term in Section 4.2(a).

 

"Partnership Transfer Notice" has the meaning given such term in Section 4.2(a).

 

"Partnership Transferring Party" has the meaning given such term in Section 4.2(a).

 

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

 

"Potential Transferee" has the meaning given such term in Section 4.2(b).

 

"Sale Assets" has the meaning given such term in Section 4.2(b).

 

"Transfer" means any transfer, assignment, sale or other disposition of any Four-Year LNG Carrier by any Dynagas Holding Entity; provided, however, that such term shall not include (i) transfers, assignments, sales or other dispositions from a Dynagas Holding Entity to another Dynagas Holding Entity, (ii) transfers, assignments, sales or other dispositions, pursuant to the terms of any related charter or other agreement with a charter counterparty, (iii) transfers, assignments, sales or other dispositions pursuant to Article II of this Agreement, or (iv) grants of security interests in or mortgages or liens on such Four-Year LNG Carrier in favor of a bona fide third party lender (but not the foreclosing of any such security interest, mortgage or lien).

 

"Transfer Notice" has the meaning given such term in Section 4.2(b).

 

"Transferring Party" has the meaning given such term in Section 4.2(b).

 

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

 

  

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ARTICLE II

 

FOUR-YEAR LNG CARRIER RESTRICTED BUSINESS OPPORTUNITIES

 

Section 2.1            Four-Year LNG Carrier Restricted Businesses.

 

Subject to Section 7.4 and except as permitted by Section 2.2, each of the Dynagas Holding Entities shall be prohibited from acquiring, owning, operating or chartering Four-Year LNG Carriers.

 

Section 2.2            Permitted Exceptions.

 

Notwithstanding any provision of Section 2.1 to the contrary, the restrictions in this Agreement shall not prevent any Dynagas Holding Entity from:

 

(a)           acquiring, owning, operating or chartering Non- Four-Year LNG Carrier;

 

(b)           acquiring or owning one or more Four-Year LNG Carriers if such Dynagas Holding Entity offers to sell such Four-Year LNG Carrier to the Partnership for the acquisition price plus any Break-up Costs in accordance with the procedures set forth in Section 3.1 (and the Partnership does not fulfill its obligation to purchase such Four-Year LNG Carrier in accordance with the terms of this Agreement);

 

(c)           operating or chartering a Non-Four-Year LNG Carrier under a charter with a term of four or more years if such Dynagas Holding Entity offers to sell such Non-Four-Year LNG Carrier to the Partnership for fair market value (x) promptly after the time it becomes a Four-Year LNG Carrier and (y) at each renewal or extension of that charter for four or more years, in each case in accordance with the procedures set forth in Section 3.1;

 

(d)           acquiring and owning one or more Four-Year LNG Carriers as part of the acquisition of a interest in a business or package of assets that owns, operates or charters such Four-Year LNG Carriers; provided, however; if a majority of the value of the business or assets acquired is attributable to Four-Year LNG Carriers, as determined in good faith by Dynagas Holding's board of directors, the Dynagas Holding Entity must offer to sell such Four-Year Vessel(s) to the Partnership for their fair market value plus any Break-up Costs in accordance with the procedures set forth in Section 3.1 (for the avoidance of doubt, nothing herein shall prohibit the acquisition and owning of one or more Four-Year LNG Carriers as part of the acquisition of a minority interest in a business or package of assets that owns, operates or charters Four-Year LNG Carriers);

 

(e)           acquiring a non-controlling interest in any company, business or pool of assets;

 

(f)           acquiring, owning, operating or chartering an Four-Year LNG Carrier if the Partnership does not fulfill its obligations to purchase such Four-Year LNG Carrier in accordance with the terms of this Agreement;

 

(g)           acquiring, owning, operating or chartering any Four-Year LNG Carrier that is subject to an offer to purchase by a Partnership Group Member as described in paragraphs (b), (c) and (d) above, in each case pending the offer of such Four-Year LNG Carrier to the Partnership and the Partnership's determination pursuant to Section 3.1 whether to purchase the Four-Year LNG Carrier and, if the Partnership has determined to purchase or to cause any Partnership Group Member to purchase such Four-Year LNG Carrier, pending the closing of such purchase;

 

(h)           providing vessel management services relating to any LNG carrier;

 

(i)           acquiring and owning any Four-Year LNG Carrier as part of a financing arrangement, including by way of a sale leaseback transaction, which is accounted for as a financial lease under United States generally accepted accounting principals;

 

  

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(j)           owning or operating any Four-Year LNG Carrier that Dynagas Holding owns and operates as of the Closing Date and that is not included in the fleet of vessels to be contributed to the Partnership Group on the Closing Date or the Optional Vessels; or

 

(k)           acquiring, owning, operating or chartering any Four-Year LNG Carrier if the Partnership has previously advised Dynagas Holding that it consents to such acquisition, operation or charter.

 

ARTICLE III

 

BUSINESS OPPORTUNITIES PROCEDURES

 

Section 3.1            Procedures.

 

In the event that a Dynagas Holding Entity acquires, operates or charters Four-Year LNG Carriers in accordance with Sections 2.2(b), 2.2(c) or 2.2(d)(i), then simultaneously or in any event not later than 30 calendar days after the consummation of the acquisition or the commencement of operations or charter, such Dynagas Holding Entity (the "Acquiring Party") shall notify the Board and offer the Partnership (the "Offeree") the opportunity for any Partnership Group Member to purchase such Four-Year LNG Carriers (the "Offered Assets"), for their fair market value (or, in the case of an acquisition in accordance with Section 2.2(b), the acquisition price) plus, in the case of an acquisition in accordance with Sections 2.2(b),or 2.2(d)(i), any applicable Break-up Costs, in each case on commercially reasonable terms in accordance with this Section 3.1 (the "Offer"). The Offer shall set forth the Acquiring Party's proposed terms relating to the purchase of the Offered Assets by the applicable Partnership Group Member, including any liabilities to be assumed by the applicable Partnership Group Member as part of the Offer. As soon as practicable after the Offer is made, the Acquiring Party will deliver to the Offeree all information prepared by or on behalf of or in the possession of such Acquiring Party relating to the Offered Assets and reasonably requested by the Offeree. As soon as practicable, but in any event, within 30 calendar days after receipt of the Offer, the Offeree shall notify the Acquiring Party in writing that either:

 

(a)           The Board has elected not to cause any Partnership Group Member to purchase such Offered Assets, in which event the Acquiring Party and its Affiliates shall, subject to the other terms of this Agreement (including Section 2.2(b)), be forever free, subject to the provisions of this Agreement, to continue to own, operate and charter such Offered Assets; or

 

(b)           The Board has elected to cause any Partnership Group Member to purchase such Offered Assets, in which event the following procedures shall be followed:

 

(i)           After the receipt of the Offer by the Offeree, the Acquiring Party and the Offeree shall negotiate in good faith regarding the fair market value and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer and the other terms of the Offer on which the Offered Assets will be sold to the applicable Partnership Group Member. If the Acquiring Party and the Offeree agree on the fair market value (and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer and the other terms of the Offer during the 30-day period (the "Offer Period") after receipt by the Acquiring Party of the Board's election to cause any Partnership Group Member to purchase the Offered Assets, the Board shall cause any Partnership Group Member to purchase the Offered Assets on such terms as soon as commercially practicable after such agreement has been reached.

 

(ii)           If the Acquiring Party and the Offeree are unable to agree on the fair market value (and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer or on any other terms of the Offer during the Offer Period, the Acquiring Party and the Offeree will engage a mutually-agreed-upon investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged prior to the end of the Offer Period to determine the fair market value of the Offered Assets and/or the other terms on which the Acquiring Party and the Offeree are unable to agree. In determining the fair market value of the Offered Assets and other terms on which the Offered Assets are to be sold, the investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged, as applicable, will have access to the proposed sale and

 

  

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purchase values and terms for the Offer submitted by the Acquiring Party and the Offeree, respectively, and to all information prepared by or on behalf of the Acquiring Party relating to the Offered Assets and reasonably requested by such investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged. Such investment banking firm, broker, expert advisor or other or firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged will determine the fair market value (and any applicable Break-up Costs) of the Offered Assets and/or the other terms on which the Acquiring Party and the Offeree are unable to agree within 30 calendar days of its engagement and furnish the Acquiring Party and the Offeree its determination. The fees and expenses of the investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged, as applicable, will be divided equally between the Acquiring Party and the Offeree. Upon receipt of such determination, the Offeree will have the option, but not the obligation:

 

(A)           to cause any Partnership Group Member to purchase the Offered Assets for the fair market value (and any applicable Break-up Costs), and on the other terms determined by the investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged, as soon as commercially practicable after determinations have been made; or

 

(B)           not to cause any Partnership Group Member to purchase such Offered Assets, in which event the Acquiring Party and its Affiliates shall, subject to the other terms of this Agreement, be forever free to continue to own and operate such Offered Assets.

 

Section 3.2            Scope of Prohibition.

 

If any Dynagas Holding Entity or its Affiliates engages in the ownership or operation of Four-Year LNG Carriers pursuant to any of the exceptions described in Section 2.2, the Dynagas Holding Entity and its Affiliates may not subsequently expand that portion of their business other than pursuant to the exceptions contained in such Section 2.2. Except as otherwise provided in this Agreement or the Partnership Agreement, each Party and its Affiliates shall be free to engage in any business activity whatsoever, including those that may be in direct competition with the Dynagas Holding Entities or the Partnership Group Members.

 

Section 3.3            Enforcement.

 

Each Party agrees and acknowledges that the other Parties do not have an adequate remedy at law for the breach by any such Party of its covenants and agreements set forth in this Article III, and that any breach by any such Party of its covenants and agreements set forth in this Article III would result in irreparable injury to such other Parties. Each Party further agrees and acknowledges that any other Party may, in addition to the other remedies which may be available to such other Party, file a suit in equity to enjoin such Party from such breach, and consent to the issuance of injunctive relief to enforce the provisions of Article III of this Agreement.

 

ARTICLE IV

 

RIGHTS OF FIRST OFFER

 

Section 4.1            Rights of First Offer.

 

(a)           The Partnership Group hereby grants Dynagas Holding a right of first offer on any proposed Transfer by any Partnership Group Member of any Four-Year LNG Carriers or any Non-Four-Year LNG Carriers owned or acquired by any Partnership Group Member. The Dynagas Holding Entities hereby grant the Partnership a right of first offer on any proposed Transfer of any Four-Year LNG Carriers owned or acquired by any Dynagas Holding Entity.

 

  

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(b)           The Parties acknowledge that all potential Transfers of Four-Year LNG Carriers or Non-Four-Year LNG Carriers pursuant to this Article IV are subject to obtaining any and all written consents of governmental authorities and other non-affiliated third parties and to the terms of all existing agreements in respect of such Four-Year LNG Carriers or Non-Four-Year LNG Carriers, as applicable.

 

Section 4.2            Procedures for Rights of First Offer.

 

(a)           In the event that a Partnership Group Member (a "Partnership Transferring Party") proposes to Transfer any LNG carrier (the "Partnership Sale Assets"), prior to engaging in any negotiation for such Transfer with any non-affiliated third party or otherwise offering to Transfer the Partnership Sale Assets to any non­affiliated third party, such Partnership Transferring Party shall give Dynagas Holding (a "Partnership Potential Transferee"), written notice setting forth all material terms and conditions (including, without limitation, the purchase price or the terms of the charter agreement and a description of the Partnership Sale Assets on which such Partnership Transferring Party desires to Transfer the Partnership Sale Assets) (a "Partnership Transfer Notice").

 

(b)           In the event that a Dynagas Holding Entity (a "Dynagas Transferring Party" and, together with a Partnership Transferring Party, a "Transferring Party") proposes to Transfer any LNG carrier (the "Dynagas Sale Assets" and, together with the Partnership Sale Assets, the "Sale Assets"), prior to engaging in any negotiation for such Transfer with any non-affiliated third party or otherwise offering to Transfer the Dynagas Sale Assets to any non-affiliated third party, such Dynagas Transferring Party shall give the Partnership (a "Dynagas  Potential Transferee" and, together with a Partnership Potential Transferee, a "Potential Transferee"), written notice setting forth all material terms and conditions (including, without limitation, the purchase price or the terms of the charter and a description of the Dynagas Sale Asset(s) on which such Dynagas Transferring Party desires to Transfer the Dynagas Sale Assets) (a "Dynagas Transfer Notice" and, together with a Partnership Transfer Notice, each a "Transfer Notice").

 

(c)           After delivery of a Transfer Notice, the Transferring Party then shall be obligated to negotiate in good faith for a 30-day period following the delivery by the Transferring Party of the Transfer Notice (the "First Offer Negotiation Period") to reach an agreement for the Transfer of such Sale Assets to the Potential Transferee or any of its Affiliates on the terms and conditions set forth in the Transfer Notice. If no such agreement with respect to the Sale Assets is reached during the First Offer Negotiation Period, and the Transferring Party has not Transferred, or agreed in writing to Transfer, such Sale Assets to a third party within 180 calendar days after the end of the First Offer Negotiation Period on terms generally no less favorable to the Transferring Party than those included in the Transfer Notice, then the Transferring Party shall not thereafter Transfer any of the Sale Assets without first offering such assets to the applicable Potential Transferee in the manner provided above.

 

ARTICLE V

 

PURCHASE OPTIONS - OPTIONAL VESSELS

 

Section 5.1            Options to Purchase the Optional Interests.

 

(a)           Dynagas Holding hereby grants to the Partnership Group the unconditional right and option to purchase for a respective purchase price to be agreed upon by Dynagas Holding and the Partnership Group, at any time within 24 months following the delivery of an Optional Vessel from the shipyard, all of the Optional Interests in such Optional Vessel (each, an "Option Asset" and, together, the "Option Assets").

 

(b)           The Parties acknowledge that the potential transfer of the Option Assets pursuant to this Article V is subject to obtaining any and all written consents of governmental authorities and other third parties and to the terms of all agreements existing as of the date hereof in respect of the Option Assets including, without limitation, any rights of first refusal of the parties to such agreements to purchase the Option Assets. Dynagas Holding hereby covenants and agrees to use its reasonable efforts to obtain any such consents required to be obtained by it in connection with the transfer of the Option Assets pursuant to this Article V.

 

Section 5.2            Procedures.

 

  

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(a)           If a Partnership Group Member decides to exercise the option to purchase the Option Assets, it will provide written notice to Dynagas Holding of such exercise, the purchase price it proposes to pay for the applicable Option Asset, and the other material terms of the purchase. The decision to purchase the applicable Option Asset, the purchase price to be paid for the applicable Option Asset, and the other terms of the purchase shall be approved by the Conflicts Committee. If the Partnership Group Member and Dynagas Holding are unable to agree on the purchase price of the applicable Option Asset and/or the other material terms, Dynagas Holding and the Conflicts Committee shall engage a mutually-agreed-upon independent appraiser, such as an investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged, to determine the fair market value of the applicable Option Asset and/or any other material terms on which the Partnership Group Member and Dynagas Holding are unable to agree. In determining the fair market value of the applicable Option Asset and/or the other material terms on which the applicable Option Asset will be sold, such independent appraiser will have access to the proposed sale and purchase values and terms for the offer submitted by the Partnership Group Member and Dynagas Holding, respectively, and to all information prepared by or on behalf of the Partnership Group Member and Dynagas Holding with respect to the Option Assets and reasonably requested by such independent appraiser. Such independent appraiser will determine the fair market value of the applicable Option Asset and/or the other terms on which the Partnership Group Member and Dynagas Holding are unable to agree within 30 calendar days of its engagement and furnish the Partnership Group Member and Dynagas Holding its determination in writing. The fees and expenses of such independent appraiser will be divided equally between the Partnership Group Member and Dynagas Holding. Upon receipt of such determination, the Partnership Group Member will have the option, but not the obligation, to purchase the applicable Option Asset for the fair market value and on the other terms determined by the independent appraiser as soon as commercially practicable after determinations have been made.

 

(b)           If a Partnership Group Member chooses to exercise its option to purchase the applicable Option Asset under Section 5.2(a), the applicable parties shall enter into a purchase and sale agreement for the purchase and sale of the applicable Option Asset pursuant to which Dynagas Holding shall be obligated to sell the applicable Option Asset to the Partnership Group Member and the Partnership Group Member shall be obligated to purchase such Option Asset from Dynagas Holding on the terms either agreed upon or determined in accordance with Section 5.2(a). The terms of the purchase and sale agreement will include the following:

 

(i)           the Partnership Group Member will deliver a cash purchase price (unless the Partnership Group Member and Dynagas Holding agree that the consideration will be paid by means of equity of the Partnership, an interest-bearing promissory note or other form of consideration);

 

(ii)           the Partnership Group will be entitled to the benefit of the indemnification contained in Article VI of this Agreement for the remaining term of such indemnification with respect to events or conditions associated with the operation of the Optional Vessels and occurring before the date of acquisition of the applicable Option Asset by the Partnership Group Member;

 

(iii)           Dynagas Holding will provide customary representations and warranties with respect to title to the applicable Option Asset and any other such matters as the Partnership Group Member may approve, which approval will not be unreasonably withheld;

 

(iv)           Dynagas Holding will grant to the Partnership Group Member the right, exercisable at the Partnership Group Member's risk and expense, to make such surveys, tests and inspections of the Optional Vessels as the Partnership Group Member may deem desirable, so long as such surveys, tests or inspections do not damage the Optional Vessels or interfere with the activities of the Dynagas Holding Entities thereon and so long as the Partnership Group Member has furnished Dynagas Holding with evidence that adequate liability insurance is in full force and effect;

 

(v)           the Partnership Group Member will have the right to terminate its obligation to purchase the Option Assets under this Article V and the related purchase and sale agreement if the results of any searches, surveys, tests or inspections conducted pursuant to paragraph (iv) above are, in the reasonable opinion of the Partnership Group Member, unsatisfactory; and

 

  

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(vi)           neither Dynagas Holding nor the applicable Partnership Group Member shall have any obligation to sell or buy the applicable Option Asset if any of the consents referred to in Section 5.1(b) above have not been obtained.

 

(c)           If a Partnership Group Member chooses or is deemed to have chosen not to exercise its option to purchase the applicable Option Asset at the price determined by the investment banking firm, broker, expert advisor or other firm generally recognized in the shipping industry as qualified to perform the tasks for which such firm has been engaged under Section 5.2(a), all future rights to purchase such Option Asset by the Partnership Group will be extinguished.

 

ARTICLE VI

 

 

INDEMNIFICATION

 

Section 6.1            Dynagas Holding Indemnification.

 

Subject to the provisions of Section 6.2 and Section 6.3, Dynagas Holding shall indemnify, defend and hold harmless the Partnership Group from and against: (a) any Covered Environmental Losses relating to the assets contributed by the Dynagas Holding Entities to the Partnership Group prior to or on the Closing Date (the "Contribution Assets") to the extent that Dynagas Holding is notified by the Partnership of any such Covered Environmental Losses within five (5) years after the Closing Date; (b) Losses to the Partnership Group arising from (i) the failure of the Partnership Group, immediately after the Closing Date, to be the owner of such valid leasehold interests or fee ownership interests in and to the Contribution Assets as are necessary to enable the Partnership Entities to own and operate the Contribution Assets in substantially the same manner that the Contribution Assets were owned and operated by the Dynagas Holding Entities immediately prior to the respective dates on which each such Contribution Asset was acquired by the Partnership Entities or (ii) the failure of the Partnership Entities to have by the Closing Date any consent or governmental permit necessary to allow the Partnership Entities to own or operate the Contribution Assets in substantially the same manner that the Contribution Assets were owned and operated by the Dynagas Holding Entities immediately prior to the respective dates on which each such Contribution Asset was acquired by the Partnership Entities, in each of clauses (b)(i) and (b)(ii) above, to the extent that Dynagas Holding is notified by the Partnership of such Losses within three (3) years after the Closing Date; and (c) all federal, state, foreign and local income tax liabilities attributable to the operation of the Contribution Assets prior to the Closing Date, including any such income tax liabilities of the Dynagas Holding Entities that may result from the consummation of the formation transactions for the Partnership Group and the Partnership, but excluding any federal, state, foreign and local income taxes reserved on the books of the Partnership Group on the Closing Date.

 

Section 6.2            Limitation Regarding Indemnification.

 

The aggregate liability of Dynagas Holding under Section 6.1(a) above shall not exceed $5,000,000. Furthermore, no claim may be made against Dynagas Holding for indemnification pursuant to Section 6.1(a), unless the aggregate dollar amount of all claims for indemnification pursuant to such section shall exceed $500,000, in which case Dynagas Holding shall be liable for claims for indemnification only to the extent such aggregate amount exceeds $500,000.

 

Section 6.3            Indemnification Procedures.

 

(a)           The Partnership Group Members agree that within a reasonable period of time after they become aware of facts giving rise to a claim for indemnification pursuant to Section 6.1, they will provide notice thereof in writing to Dynagas Holding specifying the nature of and specific basis for such claim.

 

(b)           Dynagas Holding shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Partnership Group that are covered by the indemnification set forth in Section 6.1, including, without limitation, the selection of counsel, 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

 

  

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unreasonably withheld) of the Partnership Group unless it includes a full release of the Partnership Group from such matter or issues, as the case may be.

 

(c)           The Partnership Group Members agree to cooperate fully with Dynagas Holding with respect to all aspects of the defense of any claims covered by the indemnification set forth in Section 6.1, including, without limitation, the prompt furnishing to Dynagas Holding of any correspondence or other notice relating thereto that the Partnership Group may receive, permitting the names of the members of the Partnership Group to be utilized in connection with such defense, the making available to Dynagas Holding of any files, records or other information of the Partnership Group that Dynagas Holding considers relevant to such defense and the making available to Dynagas Holding of any employees of the Partnership Group; provided, however, that in connection therewith Dynagas Holding agrees to use reasonable efforts to minimize the impact thereof on the operations of the Partnership Group and further agrees to maintain the confidentiality of all files, records and other information furnished by a Partnership Group Member pursuant to this Section 6.3. In no event shall the obligation of the Partnership Group to cooperate with Dynagas Holding as set forth in the immediately preceding sentence be construed as imposing upon the Partnership Group 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 VI; provided, however, that the Partnership Group Members may, at their own option, cost and expense, hire and pay for counsel in connection with any such defense. Dynagas Holding agrees to keep any such counsel hired by the Partnership Group reasonably informed as to the status of any such defense (including providing such counsel with such information related to any such defense as such counsel may reasonably request) but Dynagas Holding shall have the right to retain sole control over such defense.

 

In determining the amount of any Loss for which any of the members of the Partnership Group is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (a) any insurance proceeds realized by the Partnership Group, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Partnership Group as a result of such claim, and (b) all amounts recovered by the Partnership Group under contractual indemnities from third Persons. The Partnership Group hereby agrees to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities; provided, however, that the costs and expenses (including, without limitation, court costs and reasonable attorneys' fees) of the Partnership Group in connection with such efforts shall be promptly reimbursed by Dynagas Holding in advance of any determination of whether such insurance proceeds or other amounts will be recoverable.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.1            Choice of Law; Arbitration.

 

This Agreement shall be subject to and governed by the laws of the State of New York. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by final and binding arbitration in New York, New York, before a single arbitrator, in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). The arbitrator shall be selected by mutual agreement of the parties, if possible. If the parties fail to reach agreement upon appointment of an arbitrator within 30 days following receipt by one party of the other party's notice of desire to arbitrate, the arbitrator shall be selected from a panel or panels of persons submitted by AAA. Judgment upon any award rendered pursuant to such arbitration may be entered in any court of competent jurisdiction or application may be made to any such court for enforcement of any such award and the entry of whatever orders are necessary for the enforcement thereof.

 

Section 7.2            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 the same in the 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 private-courier, prepaid, or by telecopier to such party. Notice given by personal delivery or mail shall be effective upon actual receipt. Couriered notices shall be deemed delivered on the date the courier represents that delivery will occur.

 

  

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Notice given by 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 such party's signature to this Agreement, or at such other address as such party may stipulate to the other parties in the manner provided in this Section 7.2.

 

Section 7.3            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.

 

Section 7.4            Termination.

 

Upon a Change of Control of the General Partner or of the Partnership, the provisions of Articles II, III and IV, of this Agreement (but not less than all of such Articles) shall terminate immediately. Upon a Change of Control of Dynagas Holding, the provisions of Articles II, III and IV of this Agreement applicable to Dynagas Holding (but not less than all of such Articles) shall terminate at the time that is the later of (a) the date on which all of the Partnership's outstanding subordinated units have converted to common units of the Partnership and (b) the date of the Change of Control of Dynagas Holding. In addition, on the date on which a majority of the Partnership's directors ceases to consist of directors that were (1) appointed by the General Partner prior to the Partnership's first annual meeting of unitholders and (2) recommended for election by a majority of the Partnership's appointed directors, the provisions of Articles II, III and IV applicable to Dynagas Holding shall terminate immediately.

 

Section 7.5            Waiver; Effect of Waiver or Consent.

 

Any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto or (b) waive compliance with any agreement or condition contained herein. Except as otherwise specifically provided herein, any such extension or waiver shall be valid only if set forth in a written instrument duly executed by the party or parties to be bound thereby; provided, however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any extension or waiver of this Agreement that, in the reasonable discretion of the Board, will adversely affect the holders of common units of the Partnership. No waiver or consent, express or implied, by any party of or to 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 waiver or consent of or to 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.

 

Section 7.6            Amendment or Modification.

 

This Agreement may be amended or modified from time to time only by the written agreement of all the parties hereto; provided, however, that the Partnership 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 Board, will adversely affect the holders of common units of the Partnership.

 

Section 7.7            Assignment.

 

No party shall have the right to assign its rights or obligations under this Agreement without the consent of the other parties hereto.

 

Section 7.8            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.

 

  

12

  

Section 7.9            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.

 

Section 7.10          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.

 

Section 7.10          Further Assurances.

 

In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto 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.

 

Section 7.11          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.

 

Section 7.12          Laws and Regulations.

 

Notwithstanding any provision of this Agreement to the contrary, no party to this Agreement 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.

 

Section 7.13          Negotiation of Rights of Dynagas Holding, Members, Assignees and Third Parties.

 

The provisions of this Agreement are enforceable solely by the parties to this Agreement, and no shareholder of Dynagas Holding and no member, assignee or other Person of the Partnership shall have the right, separate and apart from Dynagas Holding or the Partnership, as applicable, to enforce any provision of this Agreement or to compel any party to this Agreement to comply with the terms of this Agreement.

 

  

13

  

	  	  	
DYNAGAS HOLDING LTD.

	  	  	  
	  	  	
By:

	
/s/ Konstantinos Lampsias

	  	  	  	
Name: Konstantinos Lampsias

	  	  	  	
Title: Sole Director

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  
	  	  	  	  
	  	  	
DYNAGAS LNG PARTNERS LP

	  	  	  
	  	  	
By:

	  
	  	  	  	
Name:

	  	  	  	
Title:

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  
	  	  	  	  
	  	  	
DYNAGAS GP LLC

	  	  	  
	  	  	
By:

	  
	  	  	  	
Name:

	  	  	  	
Title:

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  

(Signature Pages to Ombibus Agreement)

  

  

  

	  	  	
DYNAGAS HOLDING LTD.

	  	  	  
	  	  	
By:

	  
	  	  	  	
Name:

	  	  	  	
Title:

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  
	  	  	  	  
	  	  	
DYNAGAS LNG PARTNERS LP

	  	  	  
	  	  	
By:

	
/s/ Michael Gregos

	  	  	  	
Name: Michael Gregos

	  	  	  	
Title: CFO

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  
	  	  	  	  
	  	  	
DYNAGAS GP LLC

	  	  	  
	  	  	
By:

	
/s/ Michael Gregos

	  	  	  	
Name: Michael Gregos

	  	  	  	
Title:  Authorized Signatory

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  

(Signature Pages to Ombibus Agreement)

  

  

  

	  	  	
DYNAGAS OPERATING LP

	  	  	  
	  	  	
By:

	
/s/ Michael Gregos

	  	  	  	
Name: Michael Gregos

	  	  	  	
Title: Authorized Signatory

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  
	  	  	  	  
	  	  	
DYNAGAS OPERATING GP LLC

	  	  	  
	  	  	
By:

	
/s/ Michael Gregos

	  	  	  	
Name: Michael Gregos

	  	  	  	
Title:  Authorized Signatory

	  	  	  
	  	  	  
	  	  	
Address for Notice:

	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Telephone: (   )    -

	  	  	  	
Fax: : (   )    -

	  	  	  	
Attention: _____________________

	  	  	  	  

(Signature Pages to Ombibus Agreement)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}]]