Document:

exh-10.3x613

Exhibit 10.3
 
CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
EXECUTION VERSION
 
 
 
PURCHASE AND SALE AGREEMENT
 
By And Between
 
MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C.
 
And
 
SUMMIT MIDSTREAM PARTNERS, LP
 

 
Dated as of June 4, 2013
 

 
 
 

 

TABLE OF CONTENTS 
	
				
	ARTICLE I
	 
	 
	

	SALE AND TRANSFER OF ASSETS
	1
	

	 
	 
	 
	

	Section 1.1.
	Purchase and Sale
	1
	

	Section 1.2.
	Time and Place of Closing
	1
	

	Section 1.3.
	Payments; Accounting
	1
	

	Section 1.4.
	Deliveries by Seller
	2
	

	Section 1.5.
	Deliveries by Buyer
	3
	

	Section 1.6.
	Purchase Price Allocation
	3
	

	 
	 
	 
	

	ARTICLE II
	 
	 
	

	REPRESENTATIONS AND WARRANTIES OF SELLER
	4
	

	 
	 
	 
	

	Section 2.1.
	Organization; Etc.
	4
	

	Section 2.2.
	Authority Relative to this Agreement
	5
	

	Section 2.3.
	Absence of Conflicts
	5
	

	Section 2.4.
	Real Property
	6
	

	Section 2.5.
	Personal Property
	6
	

	Section 2.6.
	Absence of Certain Changes
	6
	

	Section 2.7.
	Litigation
	7
	

	Section 2.8.
	Compliance with Law
	7
	

	Section 2.9.
	Permits
	7
	

	Section 2.10.
	Contracts
	7
	

	Section 2.11.
	Taxes
	8
	

	Section 2.12.
	Environmental Matters
	8
	

	Section 2.13.
	Sufficiency of Assets
	9
	

	Section 2.14.
	No Bankruptcy
	9
	

	Section 2.15.
	No Liens
	9
	

	Section 2.16.
	No Undisclosed Liabilities
	9
	

	Section 2.17.
	Regulatory
	9
	

	Section 2.18.
	Brokers; Finders and Fees
	10
	

	Section 2.19.
	Third Party Volumes
	10
	

	Section 2.20.
	Real Property Actions
	10
	

	 
	 
	 
	

	ARTICLE III
	 
	

	DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
	10
	

	 
	 
	 
	

	ARTICLE IV
	 
	

	REPRESENTATIONS AND WARRANTIES OF BUYER
	11
	

	 
	 
	 
	

	Section 4.1.
	Organization; Etc.
	11
	

	Section 4.2.
	Authority Relative to this Agreement
	11
	

	Section 4.3.
	Absence of Conflicts
	12
	

	Section 4.4.
	Compliance with Law
	12
	

	Section 4.5.
	Availability of Funds
	12
	

	Section 4.6.
	Litigation
	12
	

	Section 4.7.
	No Material Adverse Effect
	12
	

	Section 4.8.
	Brokers; Finders and Fees
	12
	

i

	
				
	Section 4.9.
	Third Party Volumes
	12
	

	 
	 
	 
	

	ARTICLE V
	 
	

	REAL PROPERTY MATTERS
	13
	

	 
	 
	 
	

	Section 5.1.
	Real Property Consents
	13
	

	Section 5.2.
	Sole and Exclusive Remedy
	14
	

	 
	 
	 
	

	ARTICLE VI
	 
	

	TAX MATTERS
	14
	

	 
	 
	 
	

	Section 6.1.
	Preparation of Tax Returns
	14
	

	Section 6.2.
	Responsibility for Taxes
	14
	

	Section 6.3.
	Post-Closing Assistance
	15
	

	Section 6.4.
	Conduct of Business
	15
	

	Section 6.5.
	Post-Closing Actions
	16
	

	Section 6.6.
	Refunds of Certain Taxes Received by Buyer
	16
	

	Section 6.7.
	Transfer Taxes
	16
	

	 
	 
	 
	

	ARTICLE VII
	 
	

	ADDITIONAL COVENANTS
	17
	

	 
	 
	 
	

	Section 7.1.
	Conduct of Business
	17
	

	Section 7.2.
	Access to Records and Assets; Access Indemnity and Confidentiality
	18
	

	Section 7.3.
	Confidentiality
	19
	

	Section 7.4.
	Regulatory Filings and Consents
	19
	

	Section 7.5.
	Cooperation; Further Assurances
	20
	

	Section 7.6.
	Public Announcement
	21
	

	Section 7.7.
	Prior Knowledge
	21
	

	Section 7.8.
	Insurance
	22
	

	Section 7.9.
	Casualty or Condemnation Loss
	22
	

	Section 7.10.
	Replacement of Bonds, Letters of Credit and Guarantees
	23
	

	Section 7.11.
	Disclosure Schedule
	23
	

	Section 7.12.
	Antero Leases
	24
	

	Section 7.13.
	Construction Projects
	24
	

	 
	 
	 
	

	ARTICLE VIII
	 
	

	CONDITIONS TO CLOSING
	24
	

	 
	 
	 
	

	Section 8.1.
	Conditions to Obligations of Seller and Buyer Under this Agreement
	24
	

	Section 8.2.
	Additional Conditions to Seller’s Obligation
	24
	

	Section 8.3.
	Additional Conditions to Buyer’s Obligation
	25
	

	 
	 
	 
	

	ARTICLE IX
	 
	

	TERMINATION
	26
	

	 
	 
	 
	

	Section 9.1.
	Termination
	26
	

	Section 9.2.
	Effect of Termination
	26
	

	Section 9.3.
	Specific Performance
	26
	

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	ARTICLE X
	 
	

	SURVIVAL AND INDEMNIFICATION
	27
	

	 
	 
	 
	

	Section 10.1.
	Survival Periods
	27
	

	Section 10.2.
	Seller’s Agreement to Indemnify
	27
	

	Section 10.3.
	Buyer’s Agreement to Indemnify
	29
	

	Section 10.4.
	Third Party Indemnification
	31
	

	Section 10.5.
	No Duplication
	32
	

	Section 10.6.
	Amount of Losses
	32
	

	Section 10.7.
	Remedies Exclusive
	32
	

	Section 10.8.
	No Special Damages
	32
	

	Section 10.9.
	Conspicuous Legends; Nature of Indemnification
	33
	

	 
	 
	 
	

	ARTICLE XI
	 
	

	MISCELLANEOUS PROVISIONS
	33
	

	 
	 
	 
	

	Section 11.1.
	Amendment and Modification
	33
	

	Section 11.2.
	Entire Agreement; Assignment
	33
	

	Section 11.3.
	Severability
	33
	

	Section 11.4.
	Notices
	33
	

	Section 11.5.
	Governing Law, Exclusive Jurisdiction and Waiver of Jury Trial
	34
	

	Section 11.6.
	Descriptive Headings
	35
	

	Section 11.7.
	Counterparts
	35
	

	Section 11.8.
	Fees and Expenses
	35
	

	Section 11.9.
	Interpretation
	35
	

	Section 11.10.
	No Third Party Beneficiaries
	36
	

	Section 11.11.
	No Waivers
	36
	

	Section 11.12.
	Specific Performance
	36
	

	Section 11.13.
	Facsimile Signature
	36
	

	 
	 
	 
	

	ARTICLE XII
	 
	

	DEFINITIONS
	37
	

	 
	 
	 
	

	Section 12.1.
	Certain Definitions
	37
	

 

 

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EXHIBITS:
 
Exhibit A-1                                  Sherwood Gas Gathering and Compression System
 
Exhibit A-2                                  Personal Property
 
Exhibit A-3                                  Real Property Interests
 
Exhibit A-4                                  Permits
 
Exhibit A-5                                  Contracts
 
Exhibit B                                             Form of Interconnect Agreement
 
Exhibit C                                             Form of Transition Services Agreement
 
Exhibit D                                             [***]
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

 

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DISCLOSURE SCHEDULE:
 
Section 2.3(b)                                                                     Real Property Consents and Material Contract Consents
 
Section 2.4(c)                                                                      Underground Storage Tanks
 
Section 2.5                                                                                    Personal Property
 
Section 2.7                                                                                    Litigation
 
Section 2.8                                                                                    Compliance with Law
 
Section 2.9(c)                                                                      Permits
 
Section 2.10                                                                             Sources of Gas
 
Section 2.11                                                                             Taxes
 
Section 2.11(a)                                                              Environmental Matters
 
Section 2.13                                                                             Sufficiency of Assets
 
Section 2.15                                                                             No Liens
 
Section 2.16                                                                             No Undisclosed Liabilities
 
Section 2.18                                                                             Brokers; Finders and Fees
 
Section 7.1                                                                                    Conduct of Business
 
Section 7.9                                                                                    Bonds, Letters of Credit or Guarantees to be Replaced
 
Section 11.9(a)                                                              Seller Knowledge Individuals
 
Section 11.9(b)                                                              Buyer Knowledge Individuals
 
Section 12.1(ii)(vi)                                             Permitted Encumbrances
 

 

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TABLE OF DEFINED TERMS
 
	
			
	Defined Term
	 
	Section

	 
	 
	 

	Affiliate
	 
	Section 12.1(a)

	Agreement
	 
	Preamble

	Allocation
	 
	Section 1.6

	Asset Allocation Statement
	 
	Section 1.6

	Assets
	 
	Section 12.1(f)

	Assumed Liabilities
	 
	Section 12.1(g)

	Authorizations
	 
	Section 12.1(h)

	Bobcat Pipeline
	 
	Section 12.1(i)

	Business Day
	 
	Section 12.1(j)

	Buyer
	 
	Preamble

	Buyer Damages
	 
	Section 10.2(a)

	Buyer Indemnitees
	 
	Section 10.2(a)

	Buyer Material Adverse Effect
	 
	Section 4.1

	Cap
	 
	Section 12.1(h)

	Casualty
	 
	Section 7.9

	Claim
	 
	Section 10.4

	Closing
	 
	Section 1.2

	Closing Date
	 
	Section 1.2

	Closing Failure Breach
	 
	Section 9.3

	Code
	 
	Section 12.1(l)

	Condemnation Proceeding
	 
	Section 7.9

	Confidentiality Agreement
	 
	Section 12.1(m)

	Contracts
	 
	Section 12.1(f)(v)

	Conveyances
	 
	Section 1.4(g)

	Deductible
	 
	Section 10.2(b)(i)

	Deposit
	 
	Section 1.7

	Disclosure Schedule
	 
	Article II

	Environment
	 
	Section 12.1(o)

	Environmental Law
	 
	Section 12.1(p)

	Environmental Matter
	 
	Section 12.1(q)

	Environmental Permit
	 
	Section 12.1(r)

	Escrow Agent
	 
	Section 1.7

	Excluded Assets
	 
	Section 12.1(s)

	Excluded Facilities
	 
	Section 5.1(c)

	Fundamental Representations
	 
	Section 10.1

	Gas
	 
	Section 12.1(t)

	Governmental Authority
	 
	Section 12.1(v)

	Hazardous Materials
	 
	Section 12.1(w)

	Indemnified Party
	 
	Section 10.4(a)

	Indemnifying Party
	 
	Section 10.4(a)

	Independent Accountant
	 
	Section 1.6

	Interconnect Agreement
	 
	Section 1.4(d)

	Laws
	 
	Section 12.1(v)

 

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	Defined Term
	 
	Section

	 
	 
	 

	Leased Real Property
	 
	Section 2.4(a)

	Leases
	 
	Section 2.4(a)

	Liabilities
	 
	Section 12.1(z)

	Lien
	 
	Section 12.1(aa)

	Loss or Losses
	 
	Section 12.1(bb)

	Marketable Title
	 
	Section 12.1(cc)

	Material Contract
	 
	Section 12.1(dd)

	Material Contract
	 
	Section 2.3(b)

	Material Real Property Locations
	 
	Section 2.4(a)

	Middle Point Compressor Station
	 
	Section 12.1(ee)

	Middle Point Pipeline
	 
	Section 12.1(ff)

	Miscellaneous Consents
	 
	Section 12.1(gg)

	NGL
	 
	Section 12.1(hh)

	Party or Parties
	 
	Preamble

	Permits
	 
	Section 2.9(a)

	Permitted Encumbrance
	 
	Section 12.1(ii)

	Person
	 
	Section 12.1(jj)

	Personal Property
	 
	Section 12.1(f)(ii)

	Pike Fork Pipeline
	 
	Section 12.1(kk)

	Pipeline
	 
	Section 12.1(ll)

	Pre-Closing Covenants
	 
	Section 10.1

	Pre-Closing Period
	 
	Section 12.1(mm)

	Proceeding
	 
	Section 12.1(nn)

	Purchase Price
	 
	Section 1.1

	Real Property Claim Threshold
	 
	Section 10.2(b)(i)

	Real Property Consents
	 
	Section 2.3(b)

	Real Property Interests
	 
	Section 12.1(f)(iii)

	Recording Instrument
	 
	Section 1.4(h)

	Records
	 
	Section 12.1(f)(viii)

	Release
	 
	Section 12.1(oo)

	Restoration Costs
	 
	Section 7.9

	Restricted Information
	 
	Section 7.3

	Rights-of-Way
	 
	Section 12.1(mm)

	Seller
	 
	Preamble

	Seller Damages
	 
	Section 10.3

	Seller Policies
	 
	Section 7.8

	Seller Indemnitees
	 
	Section 10.3

	Seller Material Adverse Effect
	 
	Section 12.1(nn)

	Sherwood Gas Gathering and Compression System
	 
	Section 12.1(ss)

	Sherwood Processing Facility
	 
	Section 12.1(uu)

	Straddle Period
	 
	Section 12.1(ww)

	Tax or Taxes
	 
	Section 12.1(xx)

	Tax Audit
	 
	Section 6.4(a)

	Tax Authority
	 
	Section 12.1(yy)

	Tax Indemnified Person
	 
	Section 6.4(a)

 

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	Defined Term
	 
	Section

	 
	 
	 

	Tax Indemnifying Person
	 
	Section 6.4(a)

	Tax Items
	 
	Section 6.4(c)

	Tax Return
	 
	Section 12.1(zz)

	Termination Date
	 
	Section 9.1(d)

	Third Party Contract
	 
	Section 2.10

	Tichenal Compressor Station
	 
	Section 12.1(aaa)

	Transfer Taxes
	 
	Section 6.7

	Transition Services Agreement
	 
	Section 1.4(e)

	Zinnia Compressor Station
	 
	Section 12.1(bbb)

	Zinnia Pipeline
	 
	Section 12.1(ccc)

 

 

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PURCHASE AND SALE AGREEMENT
 
This PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of June 4, 2013, by and between MarkWest Liberty Midstream & Resources, L.L.C., a Delaware limited liability company (“Seller”) and Summit Midstream Partners, LP, a Delaware limited partnership (“Buyer”).  Seller and Buyer are referred to herein as the “Parties” and individually as a “Party.”  Capitalized terms used but not otherwise defined elsewhere in this Agreement shall have the respective meanings given to such terms in Article XII.
 
A.                                    Seller owns and operates certain Assets, including the Sherwood Gas Gathering and Compression System located in Doddridge County, West Virginia.
 
B.                                    Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Assets, upon the terms and subject to the conditions set forth herein.
 
C.                                    At the Closing of the transactions contemplated by this Agreement, Seller and Buyer will enter into the Interconnect Agreement, whereby, among other things, the Parties will agree upon the terms and conditions governing the connection of the Sherwood Gas Gathering and Compression System to the Sherwood Processing Facility.
 
D.                                    NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:
 
ARTICLE I

SALE AND TRANSFER OF ASSETS
 
Section 1.1.                     Purchase and Sale.  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, the Assets, and assume the Assumed Liabilities with respect thereto, in consideration for which, Buyer will pay to Seller an amount equal to Two Hundred Ten Million Dollars ($210,000,000) (the “Purchase Price”).
 
Section 1.2.                     Time and Place of Closing.  Upon the terms and subject to the conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Hogan Lovells US LLP, located at 1200 17th Street, Suite 1500, Denver, Colorado 80202 on the second (2nd) Business Day following the date on which all conditions to Closing set forth in Article VIII (other than actions to be taken or items to be delivered at Closing, but subject to satisfaction of such conditions at the Closing) have been fulfilled or waived by the relevant Party or Parties, or such date as the Parties may mutually agree (the “Closing Date”).  The Closing shall be effective as of 12:00 A.M. Mountain Time on the Closing Date.
 
Section 1.3.                     Payments; Accounting.  All payments made or to be made under this Agreement to Seller shall be made by electronic transfer of immediately available funds to a bank and account specified by Seller in writing to Buyer, for the credit of Seller.  All payments made or to be made hereunder to Buyer shall be by electronic transfer or immediately available 

1

funds to a bank and account specified by Buyer in writing to Seller, for the credit of Buyer.  To the extent that, after the Closing Date, (a) Buyer or any of its Affiliates receives any payment or instrument that is for the account of Seller or any of its Affiliates according to the terms of this Agreement, Buyer shall promptly deliver such amount or instrument to Seller, and (b) Seller or any of its Affiliates receives any payment or instrument that is for the account of Buyer or any of its Affiliates according to the terms of this Agreement, Seller shall promptly deliver such amount or instrument to Buyer.
 
Section 1.4.                     Deliveries by Seller.  Subject to the terms and conditions hereof, at the Closing, Seller will deliver the following to Buyer:
 
(a)                                 a certificate of the secretary of Seller respecting (i) resolutions of Seller (which shall be attached to such certificate) authorizing the execution of this Agreement and the consummation of the transactions contemplated hereby (to the extent required under Seller’s organizational documents) and (ii) the incumbency and true signatures of the officers who execute this Agreement, the Interconnect Agreement and any other agreement, certificate or document related hereto or executed in connection herewith on behalf of Seller or any of its Affiliates;
 
(b)                                 the officer’s certificates referred to in Section 8.3(a) and (b);
 
(c)                                  a duly executed certificate meeting the requirements of Treasury Regulations Section 1.1445-2(b);
 
(d)                                 a duly executed counterpart of the Interconnect Agreement, dated as of the Closing Date, by and between Seller and Buyer, substantially in the form of Exhibit B (the “Interconnect Agreement”);
 
(e)                                  a duly executed counterpart of the Transition Services Agreement, dated as of the Closing Date, by and between Seller and Buyer, substantially in the form of Exhibit C (the “Transition Services Agreement”);
 
(f)                                   the consent of the counter party to the assignment to Buyer of the Contracts set forth on Exhibit A-5 that are indicated as requiring consent;
 
(g)                                  duly executed counterparts of conveyances of the Assets, dated as of the Closing Date, by and between the Parties, in forms reasonably acceptable to Buyer and Seller (the “Conveyances”), in sufficient duplicate originals to allow recording in all applicable real property recording offices;
 
(h)                                 duly executed counterparts of a recording instrument in a form reasonably acceptable to Buyer and Seller, dated as of the Closing Date, by and between the Parties, applicable to the land under the Sherwood Processing Facility, in a form reasonably acceptable to Buyer and Seller (the “Recording Instrument”), in sufficient duplicate originals to allow recording in all applicable real property recording offices;
 

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(i)                                     a duly executed joinder, in a form reasonably acceptable to Buyer, of that certain Master Joint Use and Maintenance Agreement, dated May 1, 2012, between Seller and Antero; and
 
(j)                                    amendments, assignments and conveyances of the leases of real property between Seller and Antero for the Middle Point Compressor Station and the Zinnia Compressor Station in accordance with Section 7.12, including such amendments, assignments and conveyances that provide Buyer with Seller’s real property interests in the compressor sites.
 
Section 1.5.                     Deliveries by Buyer.  Subject to the terms and conditions hereof, at the Closing, Buyer will deliver the following to Seller:
 
(a)                                 the Purchase Price by wire transfer of immediately available funds to the account or accounts designated by Seller in writing prior to the Closing Date;
 
(b)                                 a certificate of the secretary of Buyer respecting (i) resolutions of Buyer (which shall be attached to such certificate) authorizing the execution of this Agreement and the consummation of the transactions contemplated hereby (to the extent required under Buyer’s organizational documents) and (ii) the incumbency and true signatures of the officers who execute this Agreement, the Interconnect Agreement and any other agreement, certificate or document related hereto or executed in connection herewith on behalf of Buyer;
 
(c)                                  the officer’s certificates referred to in Section 8.2(a) and (b);
 
(d)                                 a duly executed counterpart of the Interconnect Agreement;
 
(e)                                  a duly executed counterpart of the Transition Services Agreement;
 
(f)                                   duly executed counterparts of the Conveyances, in sufficient duplicate originals to allow recording in all applicable real property recording offices;
 
(g)                                  duly executed counterparts of the Recording Instrument, in sufficient duplicate originals to allow recording in all applicable real property recording offices; and
 
(h)                                 a duly executed counterpart of the Letter Agreement.
 
Section 1.6.                     Purchase Price Allocation.  The Purchase Price, Assumed Liabilities and other relevant items shall be allocated among the Assets in accordance with their fair market values as reasonably determined by Buyer and Seller in accordance with Section 1060 of the Code and the Treasury Regulations thereunder (the “Allocation”).  Buyer shall, within sixty (60) days following the Closing, initially prepare and deliver to Seller for its review and approval (i) the Allocation and (ii) a draft Internal Revenue Service Form 8594, Asset Acquisition Statement under Code Section 1060 (and any comparable forms required to be filed under state, 

3

local or foreign Tax Law) and any additional data or materials required to be attached to Form 8594 pursuant to the Treasury Regulations promulgated under Code Section 1060 (the “Asset Allocation Statement”).  If Seller does not timely notify Buyer of any objection to the Asset Allocation Statement, then it shall be deemed agreed to by Seller and the Asset Allocation Statement shall be conclusive and binding upon the Parties.  In the event Seller reasonably objects to the manner in which the Asset Allocation Statement has been prepared, Seller shall notify Buyer within twenty-one (21) days of receipt of the Asset Allocation Statement of such objection, and the Parties shall endeavor in good faith to resolve such dispute within the next five (5) days.  If the Parties are unable to resolve such dispute within said five (5) day period, Buyer and Seller shall submit such dispute to Ernst & Young LLP or another nationally-recognized independent accounting firm or consulting firm mutually acceptable to the Parties (the “Independent Accountant”).  Promptly, but not later than ten (10) days after its acceptance of appointment hereunder, the Independent Accountant shall determine (based solely on representations of Buyer and Seller and not upon independent review) only those matters in dispute and will render a written report as to the disputed matters and the resulting preparation of the Asset Allocation Statement shall be conclusive and binding upon the Parties.  Fifty percent (50%) of the costs and expenses of the Independent Accountant shall be borne by Buyer, and the remainder of such costs and expenses shall be borne by Seller.  The Parties agree (A) to file the final Asset Allocation Statement as well as any similar state or local form consistently with the Allocation, in each case as agreed, and (B) that neither Seller nor Buyer or any of their respective Affiliates or direct or indirect owners shall take a position on any Tax Return, or before any Governmental Authority in connection with the examination of a Tax Return or in any judicial proceeding, that is in any manner inconsistent with the terms of the Allocation, except as required by applicable Law.  In recognition of the aggregate capital expenditures that have been incurred by Seller associated with the tangible property included within the existing Sherwood Gas Gathering and Compression System, the Parties agree that in no event will the value allocated to the existing Sherwood Gas Gathering and Compression System be less than $160,000,000.
 
ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller hereby represents and warrants to Buyer as of the date hereof and as of the Closing as follows, except (i) as set forth on the disclosure schedule document being delivered to Buyer concurrently herewith (any such schedule delivered by the Parties under this Agreement is referred to herein as the “Disclosure Schedule”) and (ii) that Seller makes no representation or warranty with respect to any assets owned by third Persons that are present in the Real Property Interests or any operations conducted by any such third Persons in respect thereof (provided that to the knowledge of Seller no assets owned by third Persons that are present in the Real Property Interests or any operations conducted by any such third Persons in respect thereof have resulted in a breach of the following representations and warranties):
 
Section 2.1.                     Organization; Etc.  Seller (a) is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and (b) has all requisite power and authority to own the Assets and to carry on its business substantially as now being conducted.  Seller is duly qualified and in good standing to do business in each jurisdiction in which the ownership and operation of its Assets makes such qualification
 

 

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necessary, except where the failure to be so qualified would not, individually or in the aggregate, have a Seller Material Adverse Effect.
 
Section 2.2.                     Authority Relative to this Agreement.  Seller has all requisite limited liability company power, authority and capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite limited liability company action on the part of Seller.  This Agreement has been duly and validly executed and delivered by Seller and, assuming this Agreement has been duly authorized, executed and delivered by Buyer, constitutes a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, except that (a) such enforcement may be subject to any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other Laws, now or hereafter in effect, relating to or limiting creditors’ rights generally and (b) enforcement of this Agreement, including, among other things, the remedy of specific performance and injunctive and other forms of equitable relief, may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
Section 2.3.                     Absence of Conflicts.
 
(a)                                 Neither the execution and delivery of this Agreement by Seller nor the consummation by Seller of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of Seller’s certificate of formation, limited liability company agreement or other organizational documents of Seller as in effect as of the Closing Date, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or require any consent under, any material note, bond, mortgage, indenture or other financing instrument or obligation to which Seller is a party or by which Seller or the Assets are bound, (iii) violate any Laws applicable to Seller or the Assets, or (iv) require any filing with, or the obtaining of any permit, authorization, consent or approval of, any Governmental Authority that has not been made or obtained, except in the case of clauses (ii), (iii) and (iv) of this Section 2.3(a) for any such violations, breaches, defaults, rights of termination, cancellation or acceleration or requirements which, individually or in the aggregate, (x) would not adversely affect the ability of Seller to consummate the transactions contemplated hereby or result in a Seller Material Adverse Effect or (y) would result from obtaining the Miscellaneous Consents after the Closing.
 
(b)                                 Section 2.3(b) of the Disclosure Schedule identifies with a single asterisk all consents and other restrictions on assignment with respect to (i) the Real Property Interests that are required (or would be applicable) in connection with the transfer of the Real Property Interests to Buyer in accordance with the terms and conditions of this Agreement (the “Real Property Consents”) and (ii) the Material Contracts that are required (or would be applicable) in connection with the transfer of the Material Contracts to Buyer in accordance with the terms and conditions of this Agreement (the “Material Contract Consents”).
 

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Section 2.4.                     Real Property.
 
(a)                                 Seller has Marketable Title to (i) all Rights-of-Way on which the Sherwood Gas Gathering and Compression System is located or pursuant to which the Sherwood Gas Gathering and Compression System is operated, and (ii) all leasehold interests created under real property leases (the “Leases”), other than the Rights-of-Way, necessary for the operation of the Assets as presently operated (the “Leased Real Property” and together with the Rights-of-Way described in clause (ii) above, the “Material Real Property Locations”) and leased by Seller.
 
(b)                                 Except as set forth in Section 2.4(b) of the Disclosure Schedule, to Seller’s knowledge, there are not currently any underground storage tanks installed or operated by Seller on or under the Rights-of-Way described in Section 2.4(a) or the Leased Real Property.
 
(c)                                  Except as could not reasonably be expected to have a Seller Material Adverse Effect:
 
(i)                                     each Lease of a Material Real Property Location is in full force and effect, and with respect to each Material Real Property Location that comprises Leased Real Property, there is no breach or event of default on the part of Seller and, to Seller’s knowledge, there is no breach or event of default on the part of any other party with respect to any Lease covering such Material Real Property Location;
 
(ii)                                  the buildings and improvements included in the Assets have not been affected in any adverse manner as a result of any fire, explosion, flood, drought, windstorm, accident, riot, activities of armed forces or acts of God or of any public enemy; and
 
(iii)                               no eminent domain proceeding or taking has been commenced or, to the knowledge of Seller, is threatened with respect to all or any material portion of the Real Property Interests.
 
Section 2.5.                     Personal Property.  Seller (a) has maintained, in all material respects and in accordance with normal industry practice, all of the Personal Property and (b) has good and valid title to all Personal Property, subject solely to Permitted Encumbrances, except where the failure to have such good and valid title could not reasonably be expected to have a Material Adverse Effect.  There exist no leases of Personal Property to which Seller is a party and the Assets are subject to or bound.
 
Section 2.6.                     Absence of Certain Changes.  Since January 1, 2013, (a) no Seller Material Adverse Effect has occurred, and (b) Seller has not engaged in any practice which would have the effect of (i) accelerating to periods before the Closing collection of revenues attributable to the Assets that would otherwise be expected (based on past practice) to be made in periods after the Closing, or (ii) postponing to periods after the Closing payment of costs in

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respect of the Assets that would otherwise be expected (based on past practice) to be made in periods before the Closing, in each case in a manner outside the ordinary course of business, inconsistent with past practice and contrary to generally accepted industry practices.
 
Section 2.7.                     Litigation.  Except as set forth in Section 2.7 of the Disclosure Schedule, there is no material Proceeding pending or, to the knowledge of Seller, threatened against Seller or any of its Affiliates in respect of the Assets.
 
Section 2.8.                     Compliance with Law.  Except as set forth in Section 2.8 of the Disclosure Schedule, the Assets are not being operated in violation of any applicable Law or any order, writ, injunction or decree of any Governmental Authority (and Seller has not received any written or, to Seller’s knowledge, oral notice of violation with respect to any Laws), except for any such violations which, individually or in the aggregate, would not have a Seller Material Adverse Effect.
 
Section 2.9.                     Permits.
 
(a)                                 All of the permits (including special use permits), licenses, certificates, orders, decrees, approvals, qualifications, authorizations, grants, consents, concessions, waivers, exceptions, registrations, warrants, franchises or similar rights or privileges that are granted by a Governmental Authority and are necessary for, or are used or held for use in connection with, the ownership and operation of the Assets (the “Permits”) are set forth on Exhibit A-4.
 
(b)                                 All of the Permits set forth on Exhibit A-4 are in full force and effect, except such failures to maintain such Permits in full force and effect that would not reasonably be expected to have a Seller Material Adverse Effect.
 
(c)                                  Except as set forth in Section 2.9(c) of the Disclosure Schedule, Seller is not in violation of or default under any Permit, except for any violation or default that would not reasonably be expected to have a Seller Material Adverse Effect.
 
Section 2.10.              Contracts.  Exhibit A-5 lists all Material Contracts.  None of Seller or, to Seller’s knowledge, any other Person that is party to a Material Contract, is in default under any Material Contract except such defaults as would not, individually or in the aggregate, have a Seller Material Adverse Effect.  All Material Contracts are in full force and effect.  No notice of default or breach has been received or delivered by Seller (or any of its Affiliates) under any Material Contract, the resolution of which is currently outstanding, and no currently effective notices have been received by Seller (or any of its Affiliates) of the exercise of any premature termination of any Material Contract.  To Seller’s knowledge, there are no Third Party Contracts to which the Assets themselves are contractually bound; provided, however, Seller makes no representation and warranty with respect to any Third Party Contracts (i) regarding sources or supplies of gas or other products or third party materials for which the Assets are or could be utilized, including the matter set forth on Section 2.10 of the Disclosure Schedule, or (ii) regarding gathering or compression operations that would require facilities that are not part
 

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of the Assets.  As used herein, “Third Party Contract” means a contract to which neither Seller nor any of its Affiliates is a party.
 
Section 2.11.              Taxes.  Except as set forth in Section 2.11 of the Disclosure Schedule:
 
(a)                                 All material Tax Returns required to be filed with respect to the Assets have been duly and timely filed, and all Taxes that have become due with respect to the Assets have been timely paid in full unless being contested in good faith.  Each such Tax Return is true, correct and complete in all material respects.  There are no Liens for Taxes on any of the Assets other than Permitted Encumbrances.
 
(b)                                 None of the material Tax Returns with respect to the Assets is the subject of any Tax Audit by any Tax Authority, and there are no claims or demands for material Taxes now pending or, to the knowledge of Seller, threatened with respect to any material Tax related to the Assets.
 
(c)                                  Seller has not treated any of the Assets as constituting an interest in a partnership for federal income Tax purposes for which a partnership income Tax Return is required to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, that the Assets have been treated for federal income Tax purposes as owned by Seller’s parent, for which a partnership income Tax Return is required.
 
(d)                                 Seller has not made any sales of gathering systems similar to the Assets within the five (5) years prior to the transaction contemplated by this Agreement.
 
Section 2.12.              Environmental Matters.  Except as set forth in Section 2.12(a) of the Disclosure Schedule:
 
(a)                                 (i) To the knowledge of Seller, the Assets are not subject to any Environmental Matter, except for any Environmental Matter that would not reasonably be expected to have a Seller Material Adverse Effect and (ii) the Assets and operations conducted by Seller with respect to the Assets are and have been in compliance with the requirements of all applicable Environmental Laws and Environmental Permits, except such failures to comply that, individually or in the aggregate, would not reasonably be expected to have a Seller Material Adverse Effect.
 
(b)                                 None of Seller or its Affiliates is currently operating or required by any Governmental Authority to be operating any of the Assets under any compliance order, any consent decree or order, or corrective action decree or order issued by or entered into with any Governmental Authority under any Environmental Law, except for any such orders or decrees as would not reasonably be expected to have a Seller Material Adverse Effect.
 

 

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(c)                                  (i) The Environmental Permits that are necessary for, or, to the knowledge of Seller, are otherwise used or held for use in connection with, the ownership and operation of the Assets are set forth on Exhibit A-4; (ii) all of the Environmental Permits set forth on Exhibit A-4 are in full force and effect, except such failures to maintain such Environmental Permits in full force and effect that would not reasonably be expected to have a Seller Material Adverse Effect and (iii) Seller is not in violation of or default under any Environmental Permit, except for any violation or default that would not reasonably be expected to have a Seller Material Adverse Effect.
 
Notwithstanding anything to the contrary in this Section 2.12(a) or elsewhere in this Agreement, except to the extent that Section 2.7 addresses environmental Proceedings, Seller makes no, and disclaims any, representation or warranty, express or implied, with respect to naturally occurring radioactive material, asbestos, mercury, polychlorinated biphenyls, drilling fluids and chemicals, and produced waters and hydrocarbons that may be present in or on the Assets in quantities typical for oilfield or gas operations in the areas in which the Assets are located.
 
Notwithstanding any other representations and warranties contained in this Agreement, this Section 2.11(a) will be deemed to contain the only representations and warranties in this Agreement with respect to Environmental Matters, Environmental Permits or Environmental Laws.
 
Section 2.13.              Sufficiency of Assets.  None of the Assets is owned by any Persons except Seller.  Except as set forth in Section 2.13 of the Disclosure Schedule and for the services to be provided by Seller pursuant to the Transition Services Agreement, the Assets constitute all material assets, properties (real, personal and intangible) and contract rights of Seller and its Affiliates that presently comprise, pertain to or are used in connection with the operation of the Sherwood Gas Gathering and Compression System or the business associated therewith or that are necessary for the conduct of such business as of the date hereof.
 
Section 2.14.              No Bankruptcy.  There are no bankruptcy proceedings pending against, being contemplated by or, to knowledge of Seller, threatened against, Seller.
 
Section 2.15.              No Liens.  Except as described on Section 2.15 of the Disclosure Schedule, the Assets are free and clear of any and all Liens (other than Permitted Encumbrances) granted by Seller securing any indebtedness of Seller.
 
Section 2.16.              No Undisclosed Liabilities.  Except as set forth in Section 2.16 of the Disclosure Schedule, Seller does not have any liabilities with respect to the Assets other than (i) liabilities arising in the ordinary course of business or in the ordinary course of the completion of construction of the Middle Point Compressor Station and the Zinnia Compressor Station, (ii) liabilities that would not be required to be accrued or reserved on a balance sheet prepared in accordance with GAAP or (iii) liabilities that do not exceed $100,000 individually.  There exists no indebtedness for borrowed money of Seller or its Affiliates with respect to the Assets for which Buyer will have any liability after the Closing.
 

 

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Section 2.17.              Regulatory.  The Assets are not subject to the jurisdiction of the Federal Energy Regulatory Commission.
 
Section 2.18.              Brokers; Finders and Fees.  Except as set forth in Section 2.18 of the Disclosure Schedule, neither Seller nor any of its Affiliates has employed any investment banker, broker or finder or incurred any liability for any investment banking, financial advisory or brokerage fees, commissions or finders’ fees in connection with this Agreement or the transactions contemplated hereby.
 
Section 2.19.                          Third Party Volumes.  Prior to the Closing, all of the gas gathered by Seller in the Sherwood Gas Gathering and Compression System has been owned by third Persons.
 
Section 2.20.                          Real Property Actions.  Seller has not sold, alienated, transferred, conveyed or encumbered any of Seller’s right, title or interest in, to or under any of the Real Property Interests, other than in each case any Permitted Encumbrances.
 
ARTICLE III

DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
 
BUYER HAS CONDUCTED ITS OWN INDEPENDENT REVIEW AND ANALYSIS OF THE ASSETS AND ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED SATISFACTORY ACCESS TO THE ASSETS FOR SUCH PURPOSE.  IN ENTERING INTO THIS AGREEMENT, BUYER HAS RELIED SOLELY UPON THE REPRESENTATIONS AND WARRANTIES OF SELLER IN ARTICLE II AND ITS OWN INVESTIGATION AND ANALYSIS, AND BUYER:  (A) ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER IN ARTICLE II, NONE OF SELLER, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, UNIT HOLDERS, MEMBERS, MANAGERS, PARTNERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES MAKES OR HAS MADE ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY OF THE INFORMATION PROVIDED OR MADE AVAILABLE TO BUYER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS OR REPRESENTATIVES; AND (B) AGREES, TO THE FULLEST EXTENT PERMITTED BY LAW, THAT NONE OF SELLER, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, UNIT HOLDERS, MEMBERS, MANAGERS, PARTNERS, AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY LIABILITY OR RESPONSIBILITY WHATSOEVER TO BUYER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS OR REPRESENTATIVES ON ANY BASIS (INCLUDING IN CONTRACT OR TORT, AT LAW OR IN EQUITY, UNDER FEDERAL OR STATE SECURITIES LAWS OR OTHERWISE) BASED UPON ANY INFORMATION PROVIDED OR MADE AVAILABLE, OR STATEMENTS MADE, TO BUYER OR ITS DIRECTORS, OFFICERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, ADVISORS, AGENTS OR REPRESENTATIVES (OR ANY OMISSIONS THEREFROM), INCLUDING IN RESPECT OF THE SUBJECT MATTER OF THE
 

 

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SPECIFIC REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT, EXCEPT THAT THE FOREGOING LIMITATIONS SHALL NOT APPLY IN THE CASE OF ACTUAL FRAUD BY SELLER OR TO THE EXTENT SELLER MAKES THE SPECIFIC REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE II.  BUYER HAS RELIED ON NO REPRESENTATION OR WARRANTY OTHER THAN AS DESCRIBED IN THE PRECEDING SENTENCE.  EXCEPT AS SPECIFICALLY SET FORTH IN ARTICLE II, SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF OR OTHERWISE IN ANY WAY RELATING TO ITSELF OR THE ASSETS, INCLUDING WITH RESPECT TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.  BUYER FURTHER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ARTICLE II, SELLER HAS NOT AND WILL NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING ANY OF THE ASSETS AND BUYER SHALL BE DEEMED TO BE TAKING THE ASSETS “AS IS” AND “WHERE IS” FOR ALL PURPOSES.
 
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer hereby represents and warrants to Seller as of the date hereof and as of the Closing as follows:
 
Section 4.1.                     Organization; Etc.  Buyer (a) is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware and (b) has all requisite power and authority to own, lease and operate all of its properties and assets and to carry on its business substantially as now being conducted. Buyer is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership, operation or leasing of its properties makes such qualification necessary, except where the failure to be so qualified would not, individually or in the aggregate, have a Buyer Material Adverse Effect.  As used in this Agreement, the term “Buyer Material Adverse Effect” shall mean an event, change or circumstance which would adversely affect the ability of Buyer to consummate the transactions contemplated hereby.
 
Section 4.2.                     Authority Relative to this Agreement.  Buyer has all requisite limited partnership power, authority and capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite limited partnership action on the part of Buyer.  This Agreement has been duly and validly executed and delivered by Buyer and, assuming this Agreement has been duly authorized, executed and delivered by Seller, constitutes a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, except that (a) such enforcement may be subject to any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other Laws, now or hereafter in effect, relating to or limiting creditors’ rights generally and (b) enforcement of this Agreement, including, among other things, the remedy of specific performance and injunctive and other forms of equitable relief, may be

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subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
Section 4.3.                     Absence of Conflicts.  Neither the execution and delivery of this Agreement by Buyer nor the consummation by Buyer of the transactions contemplated hereby will (a) conflict with or result in any breach of any provision of the certificate of formation, partnership agreement or other organizational documents of Buyer, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or require any consent under, any indenture, license, contract, agreement or other instrument or obligation to which Buyer or any of its Affiliates is a party or by which any of them or any of their respective properties or assets may be bound, (c) violate any order, writ, injunction, decree or Laws applicable to Buyer, any of its Affiliates or any of their respective properties or assets, or (d) require any filing with, or the obtaining of any permit, authorization, consent or approval of, any Governmental Authority that has not been made or obtained, except in the case of clause (b), (c) and (d) of this Section 4.3 for any such violations, breaches, defaults, rights of termination, cancellation or acceleration or requirements which, individually or in the aggregate, would not have a Buyer Material Adverse Effect.
 
Section 4.4.                     Compliance with Law.  The business of Buyer is not being conducted in violation of any applicable Law or any order, writ, injunction or decree of any Governmental Authority (and Buyer has not received any written or, to Buyer’s knowledge, oral notice of violation with respect to any Laws), except for any such violations which in the aggregate would not have a Buyer Material Adverse Effect.
 
Section 4.5.                     Availability of Funds.  Buyer has access to sufficient immediately available funds to pay the Purchase Price and to pay any other amounts payable pursuant to this Agreement and to effect the transactions contemplated hereby.  Buyer is, and immediately after giving effect to the transactions contemplated by this Agreement, Buyer will be, solvent.
 
Section 4.6.                     Litigation.  As of the date of this Agreement, there is no material Proceeding pending or, to the knowledge of Buyer, threatened against Buyer or any of its Affiliates.
 
Section 4.7.                     No Material Adverse Effect.  To the knowledge of Buyer, as of the date of this Agreement, there has not occurred any breach of any representation, warranty or covenant by Seller that would reasonably be expected to have a Seller Material Adverse Effect.
 
Section 4.8.                     Brokers; Finders and Fees.  Except for amounts payable to Barclays plc by Buyer (for which Seller shall have no liability), neither Buyer nor any of its Affiliates has employed any investment banker, broker or finder or incurred any liability for any investment banking, financial advisory or brokerage fees, commissions or finders’ fees in connection with this Agreement or the transactions contemplated hereby.
 
Section 4.9.                                 Third Party Volumes.  It is Buyer’s present intention now and following the Closing to utilize 100% of the Sherwood Gas Gathering and Compression System to gather gas owned by third Persons.
 
 

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ARTICLE V

REAL PROPERTY MATTERS
 
Section 5.1.                     Real Property Consents.
 
(a)                                 Seller shall identify and list on Schedule 2.3(b), with respect to the Assets, all Real Property Consents that would be applicable to the transactions contemplated hereby.  Prior to the Closing, Seller will request execution of all Real Property Consents.  During such period in which the applicable Asset is not capable of being assigned to Buyer due to the failure to obtain an execution of a Real Property Consent, the Parties mutually agree, as is reasonably practicable, to cooperate to obtain an execution of such Real Property Consent or to make or cause to be made such arrangements as may be reasonably necessary or requested by Buyer to enable Buyer to receive all the economic benefits or same or similar rights with respect to such Asset.
 
(b)                                 Real Property Interests with respect to which a Real Property Consent has not been obtained on or before the day that is three (3) Business Days prior to the Closing shall be deemed to be excluded from the Assets conveyed to Buyer at the Closing, but the Purchase Price shall not be reduced.
 
(c)                                  With respect to any Real Property Interest upon which any Pipeline is located, if, under the terms of such Real Property Interest, a Real Property Consent is required prior to the assignment of such Real Property Interest to Buyer and such Real Property Consent has not been obtained prior to the period described in clause (b) above, this Agreement shall not constitute an agreement to convey at the Closing such Real Property Interest or the portions of such Pipeline that are located upon such Real Property Interest.  In such case, the Parties may agree that (i) with respect to the portions of such Pipeline not conveyed at the Closing (the “Excluded Facilities”), the Parties shall enter into an agreement, the form and substance of which shall be mutually agreed to by the Parties, that provides Buyer, to the commercially reasonable extent possible, with the rights, benefits and burdens with respect to the Excluded Facilities that Buyer would have received had such Excluded Facilities been conveyed to Buyer at the Closing and (ii) the other portions of the Sherwood Gas Gathering and Compression System and the related Real Property Interests shall be conveyed to Buyer at the Closing. With respect to any portion of the Excluded Facilities and related Real Property Interests, when the applicable Real Property Consents are obtained, Seller shall convey the applicable portions of the Excluded Facilities and assign, pursuant to a special warranty deed or assignment, such related Real Property Interests to Buyer within ten (10) days following receipt of such Real Property Consent, and any agreement entered into between the Parties with respect to such portions of the Excluded Facilities shall terminate.  During the term of any such agreement, Seller shall not convey, or allow any Liens by, through, or under Seller to attach to, the applicable portion of the Excluded Facilities or the related Real Property Interests covered by such agreement.  Additionally, Buyer may terminate such agreement at any time by giving sixty (60) days’ notice.  At the

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time of termination of such agreement, to the extent that the Seller may do so if the requisite Real Property Consents have been obtained, Seller shall convey to Buyer the remaining rights they may have in the Excluded Facilities and, assign, to the extent related to the Sherwood Gas Gathering and Compression System, the Real Property Interests pursuant to a special warranty deed or assignment.
 
(d)                                 For a period of one (1) year following the Closing, the Parties shall continue to use their commercially reasonable efforts to obtain any Real Property Consent that was not obtained prior to the Closing.
 
Section 5.2.                     Sole and Exclusive Remedy.  Buyer hereby acknowledges and agrees that its sole and exclusive remedy for Seller’s failure to obtain the Real Property Consents as contemplated in Section 5.1, shall be as provided in this Article V.
 
ARTICLE VI

TAX MATTERS
 
Section 6.1.                     Preparation of Tax Returns.  Seller shall prepare and file (or cause to be prepared and filed) all Tax Returns with respect to the Assets for all Pre-Closing Periods that are required to be filed after the Closing Date, and shall pay (or cause to be paid) all Taxes due with respect to the Assets for all Pre-Closing Periods (whether or not such Taxes are required to be shown on a Tax Return).  Buyer shall prepare and file (or cause to be prepared and filed) all Tax Returns with respect to the Assets for all Straddle Periods (which, for the avoidance of doubt, shall not include income Tax Returns of the Seller), and shall pay (or cause to be paid) all Taxes due with respect to the Assets for all Straddle Periods (whether or not such Taxes are required to be shown on a Tax Return but, for the avoidance of doubt, not including Income Taxes of the Seller).  At least twenty (20) days before the date on which each such Straddle Period Tax Return is to be filed, Buyer shall provide to Seller a copy of such Tax Return and a schedule calculating the portion of the Taxes for which Seller is responsible pursuant to Section 6.2.  Within ten (10) days following its receipt of such Tax Return and schedule, Seller shall notify Buyer whether it disagrees with any matter contained within such Tax Return or schedule, and, if it does, the Parties shall in good faith discuss and resolve such disagreement. Seller shall promptly pay to Buyer the portion of such Tax for which Seller is responsible pursuant to Section 6.2 within five (5) days after the determination of such portion pursuant to the provisions of this Section 6.1.
 
Section 6.2.                     Responsibility for Taxes.  Seller shall be responsible for and entitled to all refunds of, and shall indemnify Buyer Indemnitees from and against, all Taxes which arise with respect to the Assets for any Pre-Closing Period and for that portion of any Straddle Period that ends on the Closing Date.  Buyer shall be responsible for the remaining Straddle Period Taxes.  For this purpose, Straddle Period Taxes shall be (a) allocated on an interim closing of the books method for all Taxes other than those described in clause (b), and (b) prorated on a daily basis to the Closing Date for ad valorem and real and personal property Taxes.  Notwithstanding anything to the contrary herein, (i) any franchise Tax paid or payable with respect to the Assets shall be allocated to the period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another Tax period is obtained by the payment of such franchise Tax and (ii) any ad valorem or property 

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Taxes paid or payable with respect to the Assets shall be allocated to the Tax period applicable to the ownership of the Assets regardless of when such Taxes are assessed (for the avoidance of doubt, the Tax period applicable to the ownership of the Assets shall be the assessment year for West Virginia property Tax purposes, which is July 1st (the date on which ownership of the Assets gives rise to liability for the property Taxes) through June 30th with such property Taxes apportioned on a daily basis over such period even though the Tax year is the subsequent calendar year).
 
Section 6.3.                     Post-Closing Assistance.  Seller and Buyer will each provide the other such assistance as may reasonably be requested in connection with the preparation of any Tax Return with respect to the Assets, or any Tax Audit by any Tax Authority or any Proceeding relating to Taxes with respect to the Assets, and each will retain and provide the requesting Party with any records or information that may be reasonably relevant to such return, audit or examination, proceedings or determination.  The Party requesting assistance will reimburse the other Party for reasonable out-of-pocket expenses (other than salaries or wages of any employees of the Parties) incurred in providing such assistance.
 
Section 6.4.                     Conduct of Business.
 
(a)                                 From and after the applicable Closing Date, each of Buyer and Seller (the “Tax Indemnified Person”), shall notify the chief tax officer (or other appropriate Person) of the other Party (the “Tax Indemnifying Person”), in writing within twenty (20) days of receipt by the Tax Indemnified Person of written notice of any pending or threatened audits, adjustments, claims, examinations, assessments or other proceedings (a “Tax Audit”) which are likely to affect the liability for Taxes of the Tax Indemnifying Person.  If the Tax Indemnified Person fails to give such timely notice to the Tax Indemnifying Person, it shall not be entitled to indemnification for any Taxes arising in connection with such Tax Audit if such failure to give notice materially adversely affects the Tax Indemnifying Person’s right to participate in the Tax Audit.
 
(b)                                 If a Tax Audit relates solely to Taxes for which only Seller would be liable to indemnify Buyer under this Agreement, Seller shall have the option, at its expense, to control the defense and settlement of such Tax Audit.  If Seller does not elect to control the defense and settlement of such Tax Audit, Buyer may, at Seller’s expense, control the defense and settlement of such Tax Audit.  If such Tax Audit relates solely to Taxes for which only Buyer would be liable under this Agreement, Buyer shall, at its expense, control the defense and settlement of such Tax Audit.
 
(c)                                  If a Tax Audit relates to Taxes for which both Seller and Buyer could be liable under this Agreement, to the extent practicable, the items of income, gain, loss, deduction and credit or other item required to be reported on or otherwise reported on the applicable Tax Return (“Tax Items”) with respect to such Tax Audit will be distinguished and each Party will have the option to control the defense and settlement of those Taxes for which it is so liable.  If such Tax Audit relates to a Straddle Period and any Tax Item cannot be identified as

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being a liability of only one Party or cannot be separated from a Tax Item for which the other Party is liable, Seller, at its expense, shall have the option to control the defense and settlement of the Tax Audit.
 
(d)                                 Notwithstanding the foregoing provisions of this Section 6.4, any Party whose liability for Taxes may be affected by a Tax Audit shall be entitled to participate at its expense in such defense and to employ counsel of its choice at its expense and shall have the right to consent to any settlement of such Tax Audit (such consent not to be unreasonably withheld, conditioned or delayed) to the extent that such settlement would have an adverse effect with respect to a period for which that Party is liable for Taxes, under this Agreement or otherwise.
 
Section 6.5.                     Post-Closing Actions.  Except to the extent required by applicable Laws, Buyer shall not and shall not permit its Affiliates to amend any Tax Return for a Pre-Closing or Straddle Period on or after the Closing Date which could reasonably be expected to materially increase Seller’s liability to indemnify Buyer for Taxes under this Agreement without first notifying and obtaining consent from Seller, which consent will not be unreasonably withheld, conditioned or delayed.
 
Section 6.6.                     Refunds of Certain Taxes Received by Buyer.  Buyer and Seller agree to pay to the other Party any refund received (whether by payment, credit, offset or otherwise, and together with any interest thereon) after the Closing Date by Buyer or Seller or any of their Affiliates that is entitled to be paid to the other Party pursuant to Section 6.2.  Buyer and Seller and their Affiliates shall cooperate with the other Party and its Affiliates in order to take all reasonably necessary steps to claim any such refund.  Any such refund received by Buyer or Seller or any of their Affiliates shall be paid to the other Party within thirty (30) days after such refund is received.  Buyer and Seller agree to notify the other Party within ten (10) days following the discovery of a right to claim any such refund and upon receipt of any such refund.  Buyer and Seller agree to furnish to the other Party all information, records and assistance reasonably requested and necessary to verify the amount of the refund or overpayment.
 
Section 6.7.                     Transfer Taxes.  The Parties are not aware of any West Virginia sales and use Tax that will be assessed or collected in connection with the sale of the Assets and such taxes are not being collected in connection with the sale of the Assets pursuant to this Agreement.  Any sales, use, recording or other transfer taxes (“Transfer Taxes”) imposed on the purchase and sale of the Assets pursuant to this Agreement (including any interest, penalties, or additions to tax with respect thereto) shall be paid by [***].  The Parties shall reasonably cooperate in good faith to minimize, to the extent permissible under applicable Law, the amount of any Transfer Taxes described in this Section 6.7.  The parties believe that for West Virginia Transfer Tax purposes, all of the Assets (other than the Rights-of-Way, Easements and the buildings, structures or improvements upon the same) are properly classified as tangible personal property and not as real property, and shall report consistently therewith.
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

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ARTICLE VII

ADDITIONAL COVENANTS
 
Section 7.1.                     Conduct of Business.  Except at set forth in Section 7.1 of the Disclosure Schedule or as consented to in writing by Buyer, such consent not to be unreasonably withheld, delayed or conditioned, from the date hereof through the Closing Date or the earlier termination of this Agreement as provided in Article IX, Seller covenants and agrees to operate its business with respect to the Assets in the ordinary course of business consistent with past practices, and, without limiting the generality of the preceding, Seller shall:
 
(a)                                 not sell, transfer, assign, convey, abandon or otherwise dispose of any of the Assets, except for sales in the ordinary course of business;
 
(b)                                 not make any commitment or enter into any agreement with respect to any capital project relating to any Asset in excess of $500,000 that would become an Assumed Liability;
 
(c)                                  not enter into, terminate, amend, restate, supplement, waive or permit to lapse (prior to its applicable expiration date) in any material respect any material Permit, any contract that is part of the Assets, or any instrument creating a Real Property Interest that is or would be an Asset conveyed to Buyer by Seller at the Closing or that would affect any such Asset, other than in the ordinary course of business;
 
(d)                                 not create or permit the creation of any Lien on any Asset (other than Permitted Encumbrances);
 
(e)                                  not grant or create any preferential right to purchase, right of first opportunity or other material transfer restriction or requirement with respect to any Asset;
 
(f)                                   not make, amend or revoke any material election with respect to any Taxes relating to the Assets;
 
(g)                                  not fail to maintain insurance coverage substantially equivalent to its existing insurance coverage of the Assets as in effect on the date hereof;
 
(h)                                 not modify or operate the Assets in any way that would subject them to the jurisdiction of the Federal Energy Regulatory Commission;
 
(i)                                     other than in respect of the [***], settle or compromise any action, suit, investigation or proceeding relating to the Assets that could be reasonably expected (due to the nature of the claims involved or the scope of their applicability to Seller’s business or operations) to involve amounts of $100,000 or more in value;
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

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(j)                                    not engage in any practice which would have the effect of (i) accelerating to periods before the Closing collection of revenues attributable to the Assets that would otherwise be expected (based on past practice) to be made in periods after the Closing, or (ii) postponing to periods after the Closing payment of costs in respect of the Assets that would otherwise be expected (based on past practice) to be made in periods before the Closing, in each case in a manner outside the ordinary course of business, inconsistent with past practice and contrary to generally accepted industry practices; or
 
(k)                                 not agree, resolve, authorize or commit, whether in writing or otherwise, to do any of the foregoing.
 
Section 7.2.                     Access to Records and Assets; Access Indemnity and Confidentiality.
 
(a)                                 During the period from the date hereof through the Closing, Seller shall at reasonable times and upon reasonable notice (i) make all the books and records relating to the Assets (including the Records) available to Buyer and its authorized representatives for examination as Buyer may request, and (ii) permit Buyer and its authorized representatives to consult with employees, officers, accountants, consultants, legal counsel and other authorized representatives of Seller that Seller designates and to conduct, at Buyer’s sole cost, expense and risk, inspections and site visits of the Assets; provided, however, that none of Buyer and its authorized representatives shall have any right of access to (A) any proprietary data that relates to another business of Seller or its Affiliates, including the Excluded Assets, and is not used in connection with the ownership, use, operation or maintenance of the Assets, (B) confidential information subject to a third party confidentiality agreement, or (C) any such information which, if disclosed, would violate an attorney-client privilege or applicable Law; provided that, prior to withholding access to any information under clauses (B) or (C), Seller shall notify Buyer of the general nature of the information being withheld and, at the request and expense of Buyer, shall use commercially reasonable efforts to seek any consents that may be required for the disclosure of such information to Buyer, and otherwise implement reasonable arrangements permitting such disclosure (which may include entering into joint defense or other agreements with Buyer to preserve any attorney-client or other legal privilege of Seller).  Buyer and its authorized representatives shall comply in all material respects with all rules, regulations, policies and instructions issued by Seller or any third Person operator regarding any of Buyer’s or its authorized representatives’ actions prior to Closing while upon, entering or leaving any property included in the Assets.
 
(b)                                 BUYER SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD SELLER HARMLESS FROM AND AGAINST ANY AND ALL LOSSES OCCURRING ON OR TO THE ASSETS OR TO THE PERSON OR PROPERTY OF ANY PERSON ARISING FROM OR CAUSED BY THE ACTS OR OMISSIONS OF SELLER, ITS AFFILIATES OR ANY OTHER 

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PERSON ACTING ON SELLER’S OR ITS AFFILIATES’ BEHALF IN CONNECTION WITH THE ACCESS RIGHTS UNDER SECTION 7.2(a), EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY INDEMNIFIED PERSON, EXCEPTING ONLY THOSE LOSSES ACTUALLY RESULTING ON THE ACCOUNT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES; PROVIDED, HOWEVER, THAT THE FOREGOING OBLIGATION OF BUYER SHALL NOT APPLY WITH RESPECT TO ANY ENVIRONMENTAL MATTER TO THE EXTENT EXISTING PRIOR TO SUCH ACCESS AND THAT ARE DISCOVERED DURING OR IN CONNECTION WITH SUCH ACCESS.
 
(c)                                  Until the Closing, Buyer shall (and shall cause its Affiliates and authorized representatives to) hold in confidence all information and data furnished to it (or its Affiliates or representatives) pursuant to this Section 7.2 in accordance with the Confidentiality Agreement.
 
Section 7.3.                     Confidentiality.  From and after the Closing, Seller shall, and shall cause its Affiliates to, keep confidential and not disclose all information relating to the Assets (other than relating to the Excluded Assets) (the “Restricted Information”), and shall not directly or indirectly use such Restricted Information for any purpose, except as and to the extent permitted by the terms of this Agreement. The obligation shall continue indefinitely from the Closing and shall not apply to any information that (a) is in the public domain, (b) is published or otherwise becomes part of the public domain through no fault of any Seller or any of its Affiliates or (c) becomes available to any Seller or any of its Affiliates on a non-confidential basis from a source that did not acquire such information (directly or indirectly) from Seller or Buyer or any of their respective Affiliates on a confidential basis. Notwithstanding the foregoing, Seller may make disclosures required by Law and in connection with disputes hereunder; provided, however, that Seller, to the extent practicable, shall provide Buyer with prompt notice thereof so that Buyer may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Section 7.3.  In the event that such protective order or other remedy is not obtained or Buyer waives compliance with the provisions of this Section 7.3, Seller shall or shall cause the Person required to disclose such Restricted Information to furnish only that portion of the information that such Person is legally required, and, to the extent practicable, Seller shall exercise commercially reasonable efforts to obtain reliable assurance that confidential treatment is accorded the Restricted Information so furnished.
 
Section 7.4.                     Regulatory Filings and Consents.  From the date hereof until the Closing:
 
(a)                                 Subject to Seller’s and Buyer’s additional obligations in clauses (b) and (c) of this Section 7.4, Seller and Buyer shall (i) take, or cause to be taken, all actions, and do, or cause to be done, all things that, in either case, are necessary, proper or advisable under Law or otherwise to consummate and make effective the transactions contemplated by this Agreement, and (ii) obtain from the relevant Governmental Authorities all Authorizations, if any, required to be
 

 

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obtained at or prior to the Closing by Buyer or Seller in connection with the authorization, execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; provided, however, that neither Seller nor Buyer nor their respective Affiliates shall be required to make any material monetary expenditure, commence or be a plaintiff in any litigation or offer or grant any material accommodation (financial or otherwise) to any Person.
 
(b)                                 The Parties shall each give prompt notice to the other of the receipt of any written notice or other written communication from (i) any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated hereby, (ii) any Governmental Authority in connection with the transactions contemplated hereby, (iii) any Governmental Authority or other Person regarding the initiation or threat of initiation of any claims, actions, suits, proceedings, arbitrations or investigations against, relating to, or involving or otherwise affecting Buyer or Seller that relate to the consummation of the transactions contemplated hereby, and (iv) any Person regarding the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would be reasonably likely to (A) cause any condition to the obligations of the other Party to consummate the transactions contemplated hereby not to be satisfied, (B) cause a breach of the representations, warranties or covenants of such Party under this Agreement, or (C) delay or impede the ability of either Buyer or Seller, respectively, to consummate the transactions contemplated by this Agreement or to fulfill their respective obligations set forth herein.  No delivery of any notice pursuant to clause (iv) of this Section 7.4(b) shall cure any breach of any representation, warranty or covenant of the Party hereto giving such notice contained in this Agreement.
 
(c)                                  Each Party agrees to use best efforts to vigorously contest and to resist any action, including legislative, administrative or judicial action, and to have vacated, lifted, reversed or overturned any order (whether temporary, preliminary or permanent) of any court or other Governmental Authority that is in effect and that restricts, prevents or prohibits the consummation of the transactions contemplated by this Agreement, including the vigorous pursuit of all available avenues of administrative and judicial appeal and all available legislative action, and each Party agrees to provide reasonable cooperation to the other Party in connection with the foregoing.
 
Section 7.5.                     Cooperation; Further Assurances.
 
(a)                                 In the event that at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, the Parties hereto shall take such further action (including the execution and delivery of such further documents and instruments) as any Party hereto may reasonably request, all at the sole expense of the requesting Party (unless the action requested should have been taken prior to the Closing, in which case the Party or Parties that would have borne the expense of taking such action had it been taken prior to the Closing shall bear such expense).  Without limiting the generality of the foregoing, the
 

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Parties hereto will take all reasonably requested actions to ensure that (i) the Assets are, except as otherwise contemplated hereby, transferred to Buyer, and (ii) that all other assets otherwise used by Seller, are owned by Seller.
 
(b)                                 For the longer period of (i) seven (7) years after the Closing Date, (ii) as required by the terms of the applicable Contract or (iii) as required by Law, Buyer agrees to retain the originals of the Records at its sole cost and expense and provide Seller with access thereto upon reasonable request of Seller in connection with this Agreement or compliance with applicable law.  Seller may retain a copy of the Records to the extent such Records pertain to its obligations under this Agreement.
 
Section 7.6.                     Public Announcement.  Neither Party, nor any of their respective Affiliates, shall make any press release or other public announcement regarding the existence of this Agreement, the contents hereof (including the Purchase Price) or the transactions contemplated hereby without the prior written consent of the other Party (which consent shall not be unreasonably withheld or delayed); provided, however, that the foregoing shall not restrict disclosures to the extent (a) necessary for a Party to perform this Agreement (including disclosure to a Governmental Authority or any third Persons holding rights of consent or other rights that may be applicable to the transactions contemplated by this Agreement, as reasonably necessary to seek such consents or provide notices, seek waivers, amendments or termination of such other rights), (b) required (upon advice of counsel) by applicable securities or other applicable Laws or regulations or the applicable rules of any stock exchange having jurisdiction over the Parties or their respective Affiliates or (c) subject to the Confidentiality Agreement, such Party has given the other Party a reasonable opportunity to review such disclosure prior to its release and no objection is raised; and provided, further, that, in the case of clauses (a) and (b), to the extent permitted by applicable Law, each Party shall use its commercially reasonable efforts to consult with the other Party regarding the contents of any such release or announcement prior to making such release or announcement.
 
Section 7.7.                     Prior Knowledge.  No breach by a Party of any representation, warranty, covenant, agreement or condition of this Agreement shall be deemed to be a breach of this Agreement for any purpose hereunder, and neither the non-breaching Party nor any Affiliate of the non-breaching Party shall have any claim or recourse against the breaching Party or its directors, officers, employees, Affiliates, controlling Persons, agents, advisors or representatives with respect to such breach, under Article X or otherwise, if the non-breaching Party or any Affiliate of the non-breaching Party had knowledge prior to the execution of this Agreement of such breach or of the threat of such breach or the circumstances giving rise to such breach. 

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Section 7.8.                     Insurance.  The Parties hereto acknowledge that Seller maintains a program of property and liability insurance coverage in respect of the Assets.  All of the insurance policies through which the program of coverage is presently or has previously been provided by or to Seller or its Affiliates are herein referred to collectively as the “Seller Policies.”  It is understood and agreed by Buyer that from and after the Closing (i) no insurance coverage shall be provided under Seller Policies to Buyer and (ii) subject to Section 7.9, no claims regarding any matter whatsoever, whether or not arising from events occurring prior to the Closing, shall be made by Buyer against or with respect to any of the Seller Policies, regardless of their date of issuance unless directed by Seller and for Seller’s benefit.
 
Section 7.9.                                 Casualty or Condemnation Loss.
 
(a)                                 If, prior to or after the date of this Agreement but in all cases prior to the Closing Date, any portion of the Assets is or has been damaged or destroyed by fire or other casualty (a “Casualty”) or is or has been taken in condemnation or under right of eminent domain (a “Condemnation Proceeding”) and the amount of accrued but unpaid liability resulting from such Casualty or Condemnation Proceeding (which shall include the estimated amount of reduction in the fair market value of such Assets or, in the event of a Casualty, the estimated cost of repairing the Assets damaged or destroyed by such Casualty or replacing such Assets with assets of similar utility) (the “Restoration Costs”) is less than [***]% of the Purchase Price, in the aggregate, then Buyer shall nevertheless be required to close and Seller, at the Closing, shall pay to Buyer (or its designee) all sums paid to Seller by third Persons by reason of such Casualty or Condemnation Proceeding with respect to the affected Assets and shall assign, transfer and set over to Buyer or Buyer’s designee all of Seller’s and its Affiliate’s right, title and interest (if any) in insurance claims, unpaid awards and other rights against third parties arising out of such Casualty or Condemnation Proceeding with respect to the affected Assets; provided, however, that Seller shall reserve and retain (and Buyer shall assign to Seller) all rights, title, interests and claims against third Persons for the recovery of Seller’s and its Affiliate’s unpaid awards and other rights and costs and expenses incurred prior to the Closing in pursuing or asserting any such insurance claims or other rights against third parties or in defending or asserting rights in connection with such Casualty or Condemnation Proceeding.
 
(b)                                 If, prior to or after the date of this Agreement but in all cases prior to the Closing Date, any portion of the Assets is destroyed by a Casualty or is taken by a Condemnation Proceeding and the Restoration Costs resulting from such Casualty or Condemnation Proceeding is equal to or in excess of [***]% of the Purchase Price, in the aggregate, then Buyer shall nevertheless be required to close and Seller shall have the right to elect to (i) reduce the Purchase Price by the Restoration Costs relating to such Casualty or Condemnation Proceeding or (ii) have Seller repair and restore the affected Asset at Seller’s sole cost and expense (which repair and restoration may extend post-Closing) and (in either case) Seller shall be entitled to all sums paid to Seller by third Persons by reason of such Casualty or Condemnation Proceeding with respect to the
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

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affected Transferred Assets and all rights, title, interests and claims against third Persons arising out of or relating to such Casualty or Condemnation Proceeding.
 
(c)                                  If, prior to or after the date of this Agreement but in all cases prior to the Closing Date, any portion of the Assets is or has been destroyed by a Casualty or is or has been taken by a Condemnation Proceeding and the Restoration Costs resulting from such Casualty or Condemnation Proceeding is equal to or in excess of [***]% of the Purchase Price, in the aggregate, then Buyer may terminate this Agreement upon written notice to Seller.
 
Section 7.10.              Replacement of Bonds, Letters of Credit and Guarantees.  The Parties understand that none of the bonds, letters of credit and guarantees, if any, posted by Seller or any Affiliate of Seller with any Governmental Authority or third Person and relating to the Assets are to be transferred to Buyer.  On or before the Closing, Buyer shall obtain, or cause to be obtained in the name of Buyer, replacements for the bonds, letters of credit and guarantees identified in Section 7.10 of the Disclosure Schedule, and shall cause, effective as of the Closing, the cancellation or return to Seller of such bonds, letters of credit and guarantees posted (or supported) by Seller and such Affiliates, and Seller shall provide reasonable cooperation to Buyer in connection therewith.  Buyer may also provide evidence that such replacements are not necessary as a result of existing bonds, letters of credit or guarantees that Buyer has previously posted as long as such existing bonds, letters of credit or guarantees are adequate to secure the release of those posted (or supported) by Seller.  Section 7.10 of the Disclosure Schedule identifies the bonds, letters of credit and guarantees posted (or supported) by Seller or any other Affiliate of Seller with respect to the Assets as of the date noted on such Disclosure Schedule, which Seller may update through the Closing Date.
 
Section 7.11.              Disclosure Schedule.
 
(a)                                 Any information furnished in the Disclosure Schedule shall be deemed to modify all of the representations and warranties of Seller set forth in Article II.  The inclusion of any information on the Disclosure Schedule shall not be deemed to be an admission or acknowledgment, in and of itself, that such information is required by the terms hereof to be disclosed, is material to the Assets or Seller, has or would have a Seller Material Adverse Effect, or is outside the ordinary course of business.
 
(b)                                 Seller may from time to time prior to the Closing, by written notice to Buyer, supplement or amend the Disclosure Schedule to correct any matter that would constitute a breach of any representation or warranty of Seller in Article II; provided that for all purposes of this Agreement, including purposes of determining whether Buyer’s conditions set forth in Section 8.3(a) have been fulfilled, the Disclosure Schedule shall be deemed to include only that information contained therein on the date of this Agreement and shall be deemed to exclude all information contained in any supplement or amendment thereto.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

 

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Section 7.12.              Antero Leases.  Prior to Closing, Seller shall obtain amendments, assignments and conveyances of the leases of real property between Seller and Antero for the Middle Point Compressor Station and the Zinnia Compressor Station that provide Buyer with Seller’s real property interests in the Middle Point Compressor Station and the Zinnia Compressor Station, and such amendments, assignments and conveyances shall be in a form reasonably acceptable to Buyer’s lenders.  If, prior to Closing, Buyer notifies Seller that Buyer does not believe that the condition in Section 8.3(c)(ii) will be satisfied by the Termination Date, then Seller and Buyer shall collectively use commercially reasonable efforts to obtain amendments, assignments and conveyances that will enable such condition to be satisfied.
 
Section 7.13.              Construction Projects.  As soon as reasonably practicable after the Closing, but in any event on or before July 31, 2013, Seller shall complete, at Seller’s sole cost, the construction of (a) the generator and the building surrounding the compressors at the Zinnia Compressor Station and (b) the generator and the building surrounding the compressors at the Middlepoint Compressor Station, in each case in accordance with Seller’s current designs and specifications.
 
ARTICLE VIII

CONDITIONS TO CLOSING
 
Section 8.1.                     Conditions to Obligations of Seller and Buyer Under this Agreement.  The respective obligations of the Parties to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions (any or all of which may be waived by the Parties, as the case may be in whole or in part, to the extent permitted by applicable Law):  (i) the absence of any temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction or other statute, rule or legal restraint of a Governmental Authority the effect of which prevents the consummation of the transactions contemplated hereby; and (ii) all of the Real Property Consents and the Material Contract Consents shall have been duly obtained, made or given in form reasonably acceptable to Buyer and Seller and shall be in full force and effect.
 
Section 8.2.                     Additional Conditions to Seller’s Obligation.  The obligation of Seller to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived by Seller, in whole or in part, to the extent permitted by applicable Law:
 
(a)                                 (i) The Fundamental Representations of Buyer shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date) and (ii) each of the other representations and warranties of Buyer set forth in this Agreement shall be true and correct (it being understood that, for purposes of determining the accuracy of such representations and warranties, all “Buyer Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that, in each case, representations and
 

24

warranties that speak as of a specified date shall have been true and correct only on such date) except, in the case of clause (ii), for failures that would not be reasonably likely to have, individually or in the aggregate, a Buyer Material Adverse Effect, and Seller shall have received a certificate of an executive officer of Buyer, dated the Closing Date, to such effect.
 
(b)                                 Buyer shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date (including the deliveries at Closing pursuant to Section 1.5), and Seller shall have received a certificate of an executive officer of Buyer, dated the Closing Date, to such effect.
 
Section 8.3.                     Additional Conditions to Buyer’s Obligation.  The obligation of Buyer to effect the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived by Buyer, in whole or in part, to the extent permitted by applicable Law:
 
(a)                                 (i) The Fundamental Representations of Seller shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date) and (ii) each of the other representations and warranties of Seller set forth in this Agreement shall be true and correct (it being understood that, for purposes of determining the accuracy of such representations and warranties, all “Seller Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that, in each case, representations and warranties that speak as of a specified date shall have been true and correct only on such date) except, in the case of clause (ii), for failures that would not be reasonably likely to have, individually or in the aggregate, a Seller Material Adverse Effect, and Buyer shall have received a certificate of an executive officer of Seller, dated the Closing Date, to such effect.
 
(b)                                 Seller shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date (including the deliveries at Closing pursuant to Section 1.4), and Buyer shall have received a certificate of an executive officer of Seller, dated the Closing Date, to such effect.
 
(c)                                  Buyer has determined in its reasonable discretion that (i) no material defects in title exist with respect to that certain property in Union District, Harrison County, West Virginia containing 82 acres, more or less, and 65 acres, more or less, and described in that certain deed recorded in the Office of the Clerk of the County Commission of Harrison County, West Virginia, in Deed Book No. 1206, at page 378, and designated by the Assessor of Harrison County, West Virginia on the Land Books for said county in Union District — Outside as
 

25

Tax Map No. 361, Parcel Nos. 9 and 10 of which ten acres is subject to a Lease Agreement dated as of March 28, 2012 by and between Gerald Wayne Corder and Louella M. Corder, his wife, and Antero Resources Appalachian Corporation, a Delaware Corporation; and (ii) the rights to be conveyed by Seller to Buyer with respect to the Real Property Interests applicable to the Middle Point Compressor Station and the Zinnia Compressor Station are satisfactory to Buyer and Buyer’s lenders for the purposes of ownership and operation of the Middle Point Compressor Station and the Zinnia Compressor Station.
 
ARTICLE IX

TERMINATION
 
Section 9.1.                     Termination.  This Agreement may be terminated at any time prior to the Closing:
 
(a)                                 by mutual written consent of the Parties;
 
(b)                                 by Seller upon notice to Buyer, if any of the conditions in Section 8.1 or Section 8.2 shall not have been fulfilled by the time required or shall have become incapable of fulfillment on or prior to the Termination Date;
 
(c)                                  by Buyer upon notice to Seller, if any of the conditions in Section 8.1 or Section 8.3 shall not have been fulfilled by the time required or shall have become incapable of fulfillment on or prior to the Termination Date; or
 
(d)                                 by either Seller or Buyer upon notice to the other Party, if the Closing contemplated hereby shall not have occurred on or before June 30, 2013 (the “Termination Date”); provided that the right to terminate this Agreement pursuant to this Section 9.1(d) shall not be available to any Party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such time.
 
provided, however, that no Party shall be entitled to terminate this Agreement under this Section 9.1 if the Closing has failed to occur because such Party negligently or willfully failed to perform or observe in any material respect its covenants and agreements hereunder.
 
Section 9.2.                     Effect of Termination.  Except for the provisions of Section 2.18, Section 4.8, Section 7.2, Section 7.6, Article IX, Section 10.8, Section 10.9, Section 11.4, Section 11.5, Section 11.6, Section 11.7, Section 11.8, Section 11.9, Section 11.10 and Article XII and of the Confidentiality Agreement, this Agreement shall, upon termination hereof pursuant to Section 9.1, forthwith become of no further force or effect.  Except as otherwise provided in this Section 9.2, if this Agreement is terminated in accordance with Section 9.1, neither Party shall have any right or remedy against the other Party as a result of such termination, except for any breach of this Agreement.
 
Section 9.3.                     Specific Performance.  Each Party acknowledges and agrees that if the Closing fails to occur, or is rendered incapable of occurring, as a result of the breach by such
 

 

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Party of any term or provision of this Agreement, the other Party would be damaged irreparably.  Accordingly, each Party agrees that the other Party shall be entitled to an injunction or injunctions to prevent any such Closing Failure Breach and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter.
 
ARTICLE X

SURVIVAL AND INDEMNIFICATION
 
Section 10.1.              Survival Periods.  All representations and warranties of the Parties and all covenants required to be performed prior to the Closing (the “Pre-Closing Covenants”) contained in this Agreement shall survive the Closing until the date that is [***] after the Closing Date; provided that the representations and warranties set forth in (a) Section 2.1, Section 2.2, Section 4.1 and Section 4.2 (the “Fundamental Representations”) shall survive the Closing [***] and (b) Section 2.11 shall survive the Closing until [***]. Except for the Fundamental Representations and the representations and warranties set forth in Section 2.11, the Parties hereto intend to shorten the statute of limitations and agree that no claims or causes of action may be brought against Seller or Buyer based upon, directly or indirectly, any of the representations, warranties, or agreements contained in Article II or Article IV or the Pre-Closing Covenants after the date that is [***] after the Closing Date.  This Section 10.1 shall not limit any covenant or agreement of the Parties which contemplates performance after the Closing.  However, no covenants or agreements under Article VI shall survive past the date that is [***] with respect to those tax periods and Tax Returns.
 
Section 10.2.              Seller’s Agreement to Indemnify.
 
(a)                                 Subject to the terms and conditions set forth herein, from and after the Closing, Seller shall indemnify and hold harmless Buyer and its directors, officers, employees, Affiliates, controlling Persons, agents and representatives and their respective successors and assigns (collectively, the “Buyer Indemnitees”) from and against all liability, demands, claims, actions or causes of action, assessments, losses, damages, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Buyer Damages”) asserted against or incurred by any Buyer Indemnitee as a result of or arising out of:
 
(i)                                     a breach of any representation or warranty of Seller contained in Article II or any Pre-Closing Covenant of Seller (provided that for the purposes of determining Buyer Damages and determining whether or not any such breach has occurred, any qualification or exception contained in any representation or warranty of Seller in Article II relating to materiality (including Seller Material Adverse Effect) shall be disregarded, other than the reference to “Material Contracts” in Section 2.10 and the referent to “Seller Material Adverse Effect” in Section 2.6(a));
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

 

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(ii)                                  a breach of any covenant (other than a Pre-Closing Covenant) of Seller contained in this Agreement;
 
(iii)                               the Excluded Assets and Retained Liabilities; or
 
(iv)                              any and all Seller Taxes.
 
(b)                                 Seller’s obligation to indemnify Buyer Indemnitees pursuant to Section 10.2(a) is subject to the following limitations:
 
(i)                                     No indemnification shall be made by Seller pursuant to Section 10.2(a) (other than with respect to the representation and warranty set forth in Section 2.20): (1) with respect to any individual item (or group of related items) of Buyer Damage unless such Buyer Damage exceeds $100,000 (nor shall any such Buyer Damage below such threshold be applied to or considered for purposes of calculating the aggregate amount of Buyer Damages) and (2) unless the aggregate amount of all Buyer Damages of the Buyer Indemnitees with respect to Section 10.2(a) shall exceed the Deductible (after which point Seller will be obligated only to indemnify Buyer from and against Buyer Damage in excess of the Deductible but less than or equal to the Cap).  The maximum amount that Seller shall be required to pay in the aggregate pursuant to Section 10.2(a) in respect of all Buyer Damages by all Buyer Indemnitees is an amount equal to the Cap less the Deductible, after which point Seller will not have an obligation to indemnify Buyer from and against further such Buyer Damage.  Notwithstanding the foregoing, (x) Seller’s obligation to indemnify Buyer under (1) Section 10.2(a)(i) for a breach of any of the Fundamental Representations, any representation or warranty set forth in Section 2.11 or any Pre-Closing Covenant, (2) Section 10.2(a)(ii), (3) Section 10.2(a)(iii) or (4) Section 10.2(a)(iv) shall not be subject to any of the limitations in this Section 10.2(b)(i) but shall not, in the aggregate (together with any and all amounts paid pursuant to Section 10.4(a)), exceed an amount equal to the Purchase Price and (y) no indemnification shall be made by Seller pursuant to Section 10.2(a)(i) for a breach of the representation and warranty set forth in Section 2.20 with respect to any individual item (or group of related items) of Buyer Damage unless such Buyer Damage exceeds $25,000 (nor shall any such Buyer Damage below such threshold be applied to or considered for purposes of calculating the aggregate amount of Buyer Damages), and any amounts paid in respect of such indemnification shall count against the maximum amount that Seller shall be required to pay in the aggregate pursuant to Section 10.2(a) as provided in the second sentence of this Section 10.2(b)(i).
 
(ii)                                  The amount of any Buyer Damages shall be reduced by (A) any amount directly or indirectly received by a Buyer Indemnitee with respect thereto under any insurance coverage or from any other party 
 

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alleged to be responsible therefor and (B) the amount of any net Tax benefit actually realized by Buyer Indemnitee relating thereto.  Buyer Indemnitees shall use commercially reasonable efforts to collect any amounts available under such insurance coverage and from such other party alleged to have responsibility.  If a Buyer Indemnitee directly or indirectly receives an amount under insurance coverage or from such other party with respect to Buyer Damages at any time subsequent to any indemnification provided by Seller pursuant to this Section 10.2, then such Buyer Indemnitee shall promptly reimburse Seller for any payment made or expense incurred by Seller in connection with providing such indemnification up to such amount received by Buyer Indemnitee.  Each Buyer Indemnitee shall take all reasonable steps to mitigate damages in respect of any claim for which such Buyer Indemnitee is seeking indemnification and shall use commercially reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof; and
 
(iii)                               Seller shall be obligated to indemnify Buyer Indemnitees only for those claims giving rise to Buyer Damages as to which Buyer Indemnitees have given Seller written notice thereof, and with respect to any claim pursuant to Section 10.2(a)(i), such notice must be given prior to the end of the applicable survival period set forth in Section 10.1 with respect to such claim.  Any written notice delivered by a Buyer Indemnitee to Seller with respect to Buyer Damages shall set forth with as much specificity as is reasonably practicable the basis of the claim for Buyer Damages and, to the extent reasonably practicable, a reasonable estimate of the amount thereof.
 
THIS INDEMNIFICATION IS EXPRESSLY INTENDED TO APPLY NOTWITHSTANDING ANY NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY ON THE PART OF BUYER INDEMNITEES (BUT NOT ANY SUCH BUYER INDEMNITEE’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE).
 
Section 10.3.              Buyer’s Agreement to Indemnify.  Subject to the terms and conditions set forth herein, from and after the Closing, Buyer shall indemnify and hold harmless Seller and Affiliates and its and their respective directors, officers, employees, members, managers, partners, controlling Persons, agents and representatives and their respective successors and assigns (collectively, the “Seller Indemnitees”) from and against all liability, demands, claims, actions or causes of action, assessments, losses, damages, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Seller Damages”) asserted against or incurred by any of Seller Indemnitees as a result of or arising out of:
 
(i)                                     a breach of any representation or warranty contained in Article IV or any Pre-Closing Covenant of Buyer (provided that for the purposes of determining Seller Damages and determining whether or not 

29

any such breach has occurred, any qualification or exception contained in any representation or warranty of Buyer in Article IV relating to materiality (including Buyer Material Adverse Effect) shall be disregarded, other than the reference to “Seller Material Adverse Effect” in Section 4.7);
 
(ii)                                  a breach of any covenant (other than a Pre-Closing Covenant) of Buyer contained in this Agreement; or
 
(iii)                               the Assumed Liabilities.
 
(b)                                 Buyer’s obligation to indemnify Seller Indemnitees pursuant to Section 10.3(a) is subject to the following limitations:
 
(i)                                     No indemnification shall be made by Buyer pursuant to Section 10.3(a): (A) with respect to any individual item (or group of related items) of Seller Damage unless such Seller Damage exceeds $100,000 (nor shall any such Seller Damage below such threshold be applied to or considered for purposes of calculating the aggregate amount of Seller Damages) and (B) unless the aggregate amount of all Seller Damages of the Seller Indemnitees with respect to Section 10.3(a) shall exceed the Deductible (after which point Buyer will be obligated only to indemnify Seller from and against Seller Damage in excess of the Deductible but less than or equal to the Cap).  The maximum amount that Buyer shall be required to pay in the aggregate pursuant to Section 10.3(a) in respect of all Seller Damages by all Seller Indemnitees is the Cap less the Deductible, after which point Buyer will not have an obligation to indemnify Seller from and against further such Seller Damage.  Notwithstanding the foregoing, Buyer’s obligation to indemnify Seller under (1) Section 10.3(a)(i) for a breach of any of the Fundamental Representations, Section 4.8 or any Pre-Closing Covenant, (2) Section 10.3(a)(ii) or (3) Section 10.3(a)(iii) shall not be subject to any of the limitations in this Section 10.3(b)(i) but shall not, in the aggregate (together with any and all amounts paid pursuant to Section 10.4(b)), exceed an amount equal to the Purchase Price.
 
(ii)                                  The amount of any Seller Damages shall be reduced by (A) any amount directly or indirectly received by a Seller Indemnitee with respect thereto under any insurance coverage or from any other party alleged to be responsible therefor and (B) the amount of any Tax benefit directly or indirectly available to Seller Indemnitee relating thereto.  Seller Indemnitees shall use commercially reasonable efforts to collect any amounts available under such insurance coverage and from such other party alleged to have responsibility.  If a Seller Indemnitee directly or indirectly receives an amount under insurance coverage or from such other party with respect to Seller Damages at any time subsequent to any indemnification provided by Buyer pursuant to this Section 10.3, then 

30

such Seller Indemnitee shall promptly reimburse Buyer for any payment made or expense incurred by Buyer in connection with providing such indemnification up to such amount received by Seller Indemnitee.  Each Seller Indemnitee shall take all reasonable steps to mitigate damages in respect of any claim for which such Seller Indemnitee is seeking indemnification and shall use commercially reasonable efforts to avoid any costs or expenses associated with such claim and, if such costs and expenses cannot be avoided, to minimize the amount thereof; and
 
(iii)                               Buyer shall be obligated to indemnify Seller Indemnitees only for those claims giving rise to Seller Damages as to which Seller Indemnitees have given Buyer written notice thereof, and with respect to any claim pursuant to Section 10.3(b)(i), such notice must be given prior to the end of the applicable survival period set forth in Section 10.1 with respect to such claim.  Any written notice delivered by a Seller Indemnitee to Buyer with respect to Seller Damages shall set forth with as much specificity as is reasonably practicable the basis of the claim for Seller Damages and, to the extent reasonably practicable, a reasonable estimate of the amount thereof.
 
THIS INDEMNIFICATION IS EXPRESSLY INTENDED TO APPLY NOTWITHSTANDING ANY NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY ON THE PART OF SELLER INDEMNITEES (BUT NOT ANY SUCH SELLER INDEMNITEE’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE).
 
Section 10.4.              Third Party Indemnification.  The obligations of Seller to indemnify Buyer Indemnitees under Section 10.2 with respect to Buyer Damages and the obligations of Buyer to indemnify Seller Indemnitees under Section 10.3 with respect to Seller Damages, in either case resulting from the assertion of liability by third parties (each, as the case may be, a “Claim”), will be subject to the following additional terms and conditions:
 
(a)                                 Any Party against whom any Claim is asserted (the “Indemnified Party”) will give the indemnifying party (the “Indemnifying Party”) written notice of any such Claim promptly after learning of such Claim, and the Indemnifying Party may at its option undertake the defense thereof by representatives of its own choosing.  Failure to give prompt notice of a Claim hereunder shall not affect the Indemnifying Party’s obligations under this Article X, except to the extent the Indemnifying Party is prejudiced by such failure to give prompt notice.  If the Indemnifying Party, within thirty (30) days after notice of any such Claim, or such shorter period as is reasonably required, fails to assume the defense of such Claim, the Indemnified Party will (upon further notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such Claim on behalf of and for the account and risk, and at the expense, of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such Claim at any time prior to settlement, compromise or final determination thereof.
 

 

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(b)                                 Anything in this Section 10.4 to the contrary notwithstanding, the Indemnifying Party shall not enter into any settlement or compromise of any action, suit or proceeding or consent to the entry of any judgment (i) which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a written release from all liability in respect of such action, suit or proceeding or (ii) for other than monetary damages to be borne by the Indemnifying Party, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, delayed or conditioned.
 
(c)                                  The Indemnifying Party and the Indemnified Party shall cooperate fully in all aspects of any investigation, defense, pretrial activities, trial, compromise, settlement or discharge of any claim in respect of which indemnity is sought pursuant to this Article X, including by providing the other Party with reasonable access to employees and officers (including as witnesses) and other information.
 
Section 10.5.              No Duplication.  Any liability for indemnification hereunder shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement herein.
 
Section 10.6.              Amount of Losses.  The determination of the dollar amount of any Buyer Damages or Seller Damages, as the case may be, shall be based solely on the actual dollar value thereof, on a dollar-for-dollar basis, and shall not take into account any multiplier valuations, including any multiple based on earnings or other financial indicia.
 
Section 10.7.              Remedies Exclusive.  Indemnification under this Article X will be the exclusive remedy of any Indemnified Party for any breach of a representation or warranty in this Agreement and, in furtherance of the foregoing, each of the Parties, on behalf of itself and its Affiliates, hereby waives and releases the other Parties hereto (and such other Parties’ Affiliates) from, to the fullest extent permitted under any applicable Law, any and all rights, claims and causes of action it or its Affiliates may have against the other Parties hereto except as provided herein.
 
Section 10.8.              No Special Damages.  IN NO EVENT SHALL ANY PARTY BE LIABLE UNDER THIS ARTICLE X OR OTHERWISE IN RESPECT OF THIS AGREEMENT FOR EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, REMOTE, SPECULATIVE OR CONSEQUENTIAL DAMAGES; PROVIDED, HOWEVER, IF ANY OF THE SELLER INDEMNITEES OR BUYER INDEMNITEES IS HELD LIABLE TO A THIRD PERSON FOR ANY SUCH DAMAGES AND THE INDEMNITOR IS OBLIGATED TO INDEMNIFY SUCH SELLER INDEMNITEE OR BUYER INDEMNITEE FOR THE MATTER THAT GAVE RISE TO SUCH DAMAGES, THE INDEMNITOR SHALL BE LIABLE, AND OBLIGATED TO REIMBURSE SUCH INDEMNITEES, FOR SUCH DAMAGES.
 

 

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Section 10.9.              Conspicuous Legends; Nature of Indemnification.  THE PARTIES AGREE THAT THE BOLD OR CAPITALIZED LETTERS IN THIS AGREEMENT CONSTITUTE CONSPICUOUS LEGENDS.  IT IS EXPRESSLY ACKNOWLEDGED THAT THE INDEMNIFICATION PROVIDED IN THIS ARTICLE X COULD INVOLVE INDEMNIFICATION FOR NEGLIGENCE OR UNDER THEORIES OF STRICT LIABILITY.
 
ARTICLE XI

MISCELLANEOUS PROVISIONS
 
Section 11.1.              Amendment and Modification.  This Agreement may be amended, modified or supplemented at any time by the Parties hereto, pursuant to an instrument in writing signed by all of the Parties.
 
Section 11.2.              Entire Agreement; Assignment.  This Agreement (including the exhibits and schedules hereto) and that certain Confidentiality Agreement (a) constitute the entire agreement among the Parties hereto with respect to the subject matter hereof and supersede other prior agreements and understandings, both written and oral, between the Parties hereto with respect to the subject matter hereof and (b) shall not be assigned, by operation of law or otherwise, by a Party hereto, without the prior written consent of the other Parties; provided, however, that prior to the Closing Buyer shall assign its right to take title to the Assets to Mountaineer Midstream Company, LLC, a Delaware limited liability company.
 
Section 11.3.              Severability.  The invalidity or unenforceability of any term or provision of this Agreement in any situation or jurisdiction shall not affect the validity or enforceability of the other terms or provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction and the remaining terms and provisions shall remain in full force and effect, unless doing so would result in an interpretation of this Agreement which is manifestly unjust.
 
Section 11.4.              Notices.  All notices, requests, claims, demands and other communications required or permitted to be given hereunder will be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnight courier (providing proof of delivery) or by facsimile (providing confirmation of transmission).  All such notices, requests, claims, demands or other communications will be addressed as follows:
 
(a)       if to Seller:
 
MarkWest Liberty Midstream & Resources, L.L.C.
1515 Arapahoe Street
Tower 1, Suite 1600
Denver, CO 80202
Attention:  Sr. Vice President and General Counsel and Senior Vice
President and Chief Commercial Officer
Facsimile:  (303) 925-9305

 

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with a copy (which shall not constitute notice) to
 
Hogan Lovells US LLP
One Tabor Center
1200 17th Street, Suite 1500
Denver, CO 80202
Facsimile:  (303) 899-7333
Attention:  George A. Hagerty
 
(b)       if to Buyer:
 
Summit Midstream Partners, LP
2100 McKinney Avenue, Suite 1250
Dallas, TX 75201
Facsimile:  (214) 462-7716
Attention:  Brock Degeyter
 
or in any case to such other address or addresses as hereafter shall be furnished as provided in this Section 11.4 by any Party to the other Parties.
 
Section 11.5.              Governing Law, Exclusive Jurisdiction and Waiver of Jury Trial.
 
(a)                                 THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, USA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS EXCEPT THAT, WITH RESPECT TO ALL MATTERS RELATING TO TITLE TO OR THE CONVEYANCE OF THE ASSETS LOCATED IN WEST VIRGINIA, THE LAWS OF THE STATE OF WEST VIRGINIA SHALL GOVERN.
 
(b)                                 THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF COLORADO LOCATED IN DENVER COUNTY, COLORADO OR THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN DENVER COUNTY, COLORADO AND APPROPRIATE APPELLATE COURTS THEREFROM, AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE, CONTROVERSY OR CLAIM MAY BE HEARD AND DETERMINED IN SUCH COURTS.  THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE, CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY OR CLAIM.
 

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(c)                                  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
 
Section 11.6.              Descriptive Headings.  The descriptive headings herein are inserted for convenience of reference only and shall in no way be construed to define, limit, describe, explain, modify, amplify, or add to the interpretation, construction or meaning of any provision of, or scope or intent of, this Agreement nor in any way affect this Agreement.
 
Section 11.7.              Counterparts.  This Agreement may be executed in multiple counterparts, all of which shall be deemed an original, but both of which together shall constitute one and the same instrument.
 
Section 11.8.              Fees and Expenses.  Except as otherwise provided herein, all costs and expenses (including legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Agreement and the transactions contemplated hereby shall be paid by the Party hereto incurring such expenses.  Seller, on the one hand, and Buyer, on the other hand, shall indemnify and hold harmless the other Party or Parties, as applicable, from and against any and all claims or liabilities for financial advisory and finders’ fees incurred by reason of any action taken by such Party or Parties or otherwise arising out of the transactions contemplated by this Agreement by any Person claiming to have been engaged by such Party or Parties.
 
Section 11.9.              Interpretation.
 
(a)                                 The phrase “to the knowledge of Seller” or any similar phrase shall mean such facts and other information which as of the Closing Date are actually known to the individuals identified in Section 11.9(a) of the Disclosure Schedule, and solely with respect to Section 2.12, shall be deemed to mean such facts and other information which as of the Closing Date are actually known to the individuals identified in Section 11.9(a) of the Disclosure Schedule after reasonable discussions with the managers and supervisors of Seller that such individual reasonably believes would have knowledge of an Environmental Matter relating to the Assets; the phrase “to the knowledge of Buyer” or any similar phrase shall mean such facts and other information which as of the Closing Date are actually known to the individuals identified in Section 11.9(b) of the Disclosure Schedule.
 
(b)                                 Any reference to any federal, state, local, or foreign Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.
 
(c)                                  For purposes of this Agreement, (i) the terms “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, (ii) the word “including” and words of similar import when

35

used in this Agreement will mean “including, without limitation,” unless otherwise specified, (iii) the word “or” will not be exclusive, and (iv) words in the singular will be held to include the plural.
 
(d)                                 All references to Articles and Sections refer to articles and sections of this Agreement, all references to Exhibits refer to exhibits to this Agreement and all references to Schedules refer to Schedules to this Agreement, which Exhibits and Schedules are attached hereto and made a part hereof for all purposes.
 
(e)                                  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.
 
Section 11.10.       No Third Party Beneficiaries.  This Agreement is solely for the benefit of (a) Seller (and its successors and permitted assigns) and Seller Indemnitees, with respect to the obligations of Buyer under this Agreement; and (b) Buyer (and its successors and permitted assigns) and Buyer Indemnitees, with respect to the obligations of Seller under this Agreement.  This Agreement shall not be deemed to confer upon or give to any other third party any remedy, claim of liability or reimbursement, cause of action or other right.
 
Section 11.11.       No Waivers.  Except as otherwise expressly provided herein, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any Party, and no course of dealing between the Parties, shall constitute a waiver of any such right, power or remedy.  No waiver by a Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No waiver shall be valid unless in writing and signed by the Party against whom such waiver is sought to be enforced.
 
Section 11.12.       Specific Performance.  The Parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the Parties shall be entitled to specific performance of the terms hereof and immediate injunctive relief, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or in equity.
 
Section 11.13.       Facsimile Signature.  This Agreement and the documents contemplated hereby may be executed by facsimile or pdf. (or similar technology) signature.
 

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ARTICLE XII

DEFINITIONS
 
Section 12.1.              Certain Definitions.  When used in this Agreement, the following terms shall have the respective meanings specified therefor below.
 
(a)                                 “Affiliate” means, with respect to any Person, a Person that directly or indirectly controls, is controlled by or is under common control with such Person, with control in such context (including, with its correlative meaning, “controlled by” and “under common control with”) meaning the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
 
(b)                                 “Antero” means Antero Resources Appalachian Corporation, a Delaware corporation.
 
(c)                                  “Antero Agreement” means that certain Gas Gathering and Compression Agreement by and between Antero and Seller, dated as of April 16, 2012.
 
(d)                                 “Antero Construction Reimbursements” means all amounts paid or payable by Antero to Seller in respect of the construction of [***].
 
(e)                                  “Antero Gathering Fee Increases” means all amounts paid or payable by Antero to Seller in respect of the period prior to Closing to reflect the increase in gathering fees permitted by Section 4.1 of the Antero Agreement for pipeline construction completed prior to the Closing Date.
 
(f)                                   “Assets” means the following assets and properties, except for the Excluded Assets:
 
(i)                                     the Sherwood Gas Gathering and Compression System and all assets and properties related thereto described in Exhibit A-1;
 
(ii)                                  all tangible personal property of every kind and nature that is solely used in the ownership, operation, use or maintenance of the Sherwood Gas Gathering and Compression System, whether or not currently in service, including meters, gauges, valves, engines, field equipment, fixtures (except to the extent included within Real Property Interests), trailers, tools, instruments, spare parts, machinery, computer equipment, telecommunications equipment, furniture, supplies, materials and other improvements (except to the extent included within Real Property Interests) wherever located, including those items of tangible
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

 

37

personal property described in Exhibit A-2 (collectively, the “Personal Property”);
 
(iii)                               subject to the terms of the Letter Agreement, all fee property, Rights-of-Way, leases and other rights, privileges or interests in real property that are solely used in the ownership, operation, use or maintenance of the Sherwood Gas Gathering and Compression System (collectively, the “Real Property Interests”), including those described in Exhibit A-3 and all fixtures, buildings and improvements located on or under such Real Property Interests;
 
(iv)                              all benefits and rights under permits, licenses, certificates, orders, approvals, authorizations, grants, consents, concessions, waivers, registrations, warrants, franchises and similar rights and privileges that are granted by a Governmental Authority and are necessary for, or are used or held for use solely for or in connection with, the ownership, operation, use or maintenance of the Sherwood Gas Gathering and Compression System, the Personal Property or the Real Property Interests, including the Permits;
 
(v)                                 all benefits and rights under the contracts or portions thereof identified on Exhibit A-5 as assignable to Buyer by the notation “Yes” or “With Prior Consent” in the “Assignable” column of Exhibit A-5 (collectively, the “Contracts”); provided that no Contract with the notation “With Prior Consent” will be assigned to Buyer under this Agreement unless and until the required consent to assignment has been received;
 
(vi)                              all technical information, shop rights, designs, plans, manuals, specifications and other proprietary and nonproprietary technology and data solely used in connection with the ownership, operation, use or maintenance of the Sherwood Gas Gathering and Compression System or the Personal Property;
 
(vii)                           all rights and benefits of the following, in each case relating solely to the Assets: (A) all purchase orders, invoices, storage or warehouse receipts, bills of lading, certificates of title and documents, and (B) all keys, lock combinations, computer access codes and other devices or information necessary to gain entry to or take possession of such Assets;
 
(viii)                        copies or originals of all tangible, digital or electronic contracts, land, title, engineering, environmental, operating, performance, safety, maintenance, warranty, accounting, and other data, files, documents, instruments, notes, correspondence, papers, ledgers, journals, reports, abstracts, surveys, maps, books, records, designs, plans, blueprints, as-built plans and specifications and system drawings and studies which relate solely to the Assets or which are used or held for use solely in connection with, the ownership, operation, use or maintenance of

38

the Assets; provided, however, such material shall not include (A) any proprietary data that is not solely used in connection with the continued ownership, use or operations of the Assets, (B) any information subject to third Person confidentiality agreements for which a consent or waiver cannot be secured after commercially reasonable efforts with no obligation to spend money, (C) any information which, if disclosed, would violate an attorney-client privilege or would constitute a waiver of rights as to attorney work product or attorney-client privileged communications, unless such information is needed for operation of the Sherwood Gas Gathering and Compression System, and the Parties enter a mutually agreeable joint defense agreement related thereto or (D) any information relating solely to the Excluded Assets (collectively, the “Records”); and
 
(ix)                              the benefits in and rights to enforce all claims, causes of action, indemnities, rights of recovery, rights of set off, rights of recoupment, warranties, covenants, guarantees, and all suretyship agreements (and all proceeds from any of the foregoing) to the extent relating solely to the Assets or the Assumed Liabilities, but excluding any such benefits and rights associated with the Excluded Assets or the Retained Liabilities.
 
(g)                                  “Assumed Liabilities” means any and all obligations and liabilities, known or unknown, with respect to the Assets or the procurement, construction, installation, ownership, operation, maintenance or use thereof; regardless of whether such obligations or liabilities arose prior to, on or after the Closing other than the Retained Liabilities.
 
(h)                                 “Authorizations” means any franchise, permit, license, authorization, order, certificate, registration, variance, settlement, compliance plan or other consent or approval granted by any Governmental Authority (i) under any Law, including any Environmental Law, or (ii) under or pursuant to any judgment or material Contract with any such Governmental Authority.
 
(i)                                     “Bobcat Pipeline” means the approximately [***] miles of high pressure [***] inch diameter pipeline that joins the Pike Fork Pipeline.
 
(j)                                    “Business Day” means any day other than a Saturday, a Sunday, or a day on which banks are closed for business in Denver, Colorado or New York, New York.
 
(k)                                 “Cap” means an amount equal to [***] percent ([***)]%) of the Purchase Price.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

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(l)                                     “Code” means the U.S. Internal Revenue Code of 1986, as amended.
 
(m)                             “Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of March 12, 2013, by and between Summit Midstream Partners, LLC and Seller.
 
(n)                                 “Deductible” means an amount equal to [***] percent ([***]%) of the Purchase Price.
 
(o)                                 “Environment” means soil, sediment, surface water, groundwater, land, subsurface strata, ambient air and natural resources (including flora and fauna).
 
(p)                                 “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §§ 11001 et seq.; and the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j, in each case as amended to the Closing Date, and all similar Laws as of the Closing Date of any Governmental Authority having jurisdiction over the Assets addressing pollution or protection of the Environment and all regulations implementing the foregoing, and regional, state or local Laws pertaining to oil and natural gas exploration, production, gathering, and processing wastes, the use, maintenance, and closure of pits and impoundments, or the acquisition, withdrawal, consumptive use, reclamation and disposal of water, produced water, and flowback water in connection with, oil and natural gas upstream and midstream activities.
 
(q)                                 “Environmental Matter” means any Liability (i) resulting from or attributable to the actual or threatened Releases of Hazardous Materials into the Environment or resulting from or attributable to exposure to Hazardous Materials; (ii) arising under Environmental Laws and resulting from or attributable to the generation, manufacture, processing, distribution, use, treatment, storage, Release or threatened Release, transport, or handling of Hazardous Materials; and (c) otherwise arising under or related to Environmental Law.
 
(r)                                    “Environmental Permit” means any permit, registration, license, certificate, approval, exemption, variance and other authorization required by a Governmental Authority under any Environmental Laws.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

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(s)                                   “Excluded Assets” means:
 
(i)                                     all claims for refunds of, and any loss or credit carry forwards with respect to, any Taxes related to any Pre-Closing Period;
 
(ii)                                  all work product of Seller’s or its Affiliates’ attorneys relating to the negotiation and consummation of the transactions contemplated hereby;
 
(iii)                               the Sherwood Processing Facility and all control systems related thereto and the meter on the Zinnia Pipeline located at the Sherwood Processing Facility and any other contracts, properties and assets downstream of the Sherwood Processing Facility;
 
(iv)                              the Sherwood compression station, and all facilities related thereto, located within the Sherwood Processing Facility, but subject to the rights granted pursuant to the Interconnect Agreement;
 
(v)                                 all proceeds, claims and rights arising prior to the Closing under any insurance policies covering the Assets;
 
(vi)                              the rights reserved by Seller pursuant to Letter Agreement;
 
(vii)                           any hedging agreement, including any derivative, swap, option, future, put, call, floor, cap, collar, master agreement or other contract intended to hedge a commodity or interest rate, associated with or encumbering the Assets;
 
(viii)                        any and all rights, causes of action and defenses against third Persons relating to any of the Excluded Assets and arising at any time; and
 
(ix)                              all rights and benefits with respect to the Antero Construction Reimbursements and Antero Gathering Fee Increases.
 
(t)                                    [***].
 
(u)                                 “Gas” means all hydrocarbon and non-hydrocarbon substances produced from gas or oil wells in a gaseous state.
 
(v)                                 “Governmental Authority” means (i) national, state, county, municipal, or local government (whether domestic or foreign) and any political subdivision thereof, (ii) any court or administrative tribunal, (iii) any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity of competent jurisdiction (including any
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

41

zoning authority, or state public utility commission, or any comparable authority), (iv) any non-governmental agency, tribunal or entity that is properly vested by a governmental authority with applicable jurisdiction, or (v) any arbitrator.
 
(w)                               “Hazardous Materials” means any substance regulated, listed or defined under any applicable Environmental Law, including any: (i) chemical, product, material, substance or waste defined as or included in the definition of “hazardous substance,” “hazardous material,” “hazardous waste,” “restricted hazardous waste,” “extremely hazardous waste,” “solid waste,” “toxic substance,” “extremely hazardous substance,” “chemical substance,” “toxic pollutant,” “contaminant” or “pollutant”; (ii) hydrocarbons, petroleum, petrochemical or petroleum products, petroleum substances, NGL, condensate, natural gas, crude oil or any components, fractionations or derivatives thereof; (iii) oil and gas exploration and production wastes, including produced and flow back waters; and (iv) asbestos containing materials, mercury, polychlorinated biphenyls, radioactive materials, urea formaldehyde foam insulation, or radon gas.
 
(x)                                 “Income Taxes” means any income, franchise and similar Taxes.
 
(y)                                 “Laws” all laws, statutes, rules, regulations, ordinances, orders, writs, injunctions, decrees, requirements, judgments and codes of Governmental Authorities, including obligations arising under the common law.
 
(z)                                  “Liabilities” means liabilities and obligations, whether accrued, contingent, absolute, determined, determinable or otherwise, including all debts, losses, deficiencies, costs, expenses, fines, interest, expenditures, claims, suits, proceedings, judgments, demands, damages, and reasonable attorneys’, accountants’ and other similar fees and expenses and reasonable expenses of investigating, defending and prosecuting litigation, excluding any liabilities, costs and expenses arising out of or based upon the employment of any employee of Seller.
 
(aa)                          “Lien” means any mortgage, pledge, deed of trust, hypothecation, security interest, lien, charge, option, warranty, purchase right, right of first refusal, contractual right to sell, assign or otherwise dispose of its interest in any Material Real Property Locations, or any interest therein, assignment, assessment or encumbrance of any kind, whether voluntary or imposed by Law, and any agreement to give any of the foregoing; provided, however, that “Lien” shall not include any Real Property Consent or Miscellaneous Consent.
 
(bb)                          “Loss” or “Losses” means any and all damages, demands, payments, obligations, penalties, assessments, disbursements, claims, costs, Liabilities, losses, causes of action, and expenses, including interest, awards, judgments, settlements, fines, fees, costs of defense and reasonable attorneys’ fees, costs of accountants, expert witnesses and other professional advisors and costs of investigation and preparation of any kind or nature whatsoever.

42

(cc)                            “Marketable Title” means good, valid and marketable title based upon instruments of record, which title is free and clear from any Liens other than Permitted Encumbrances, and would be accepted by a reasonably prudent purchaser of similar assets in Doddridge County, West Virginia.
 
(dd)                          “Material Contract” means any contract of one or more of the following types to which Seller or its Affiliates is a party and the Assets are subject to or bound:
 
(i)                                     involves obligations of, or payments to or from, Seller in excess of [***];
 
(ii)                                  relates to the gathering, processing, compression, blending, treating, dehydration, measurement, balancing or transportation, storage, marketing, sale or purchase of natural gas, NGLs or other hydrocarbons, or the products therefrom, or the provision of services related thereto;
 
(iii)                               constitutes a pipeline interconnect agreement or facility operating agreement, or covers the provision of services related thereto;
 
(iv)                              restricts Seller from freely engaging in any business or competing anywhere;
 
(v)                                 constitutes a partnership agreement, joint venture agreement or similar agreement;
 
(vi)                              any outstanding futures, swap, collar, put, call, floor, cap, option, hedging, forward sale or other derivative Contract involving natural gas or other commodity sales or trading;
 
(vii)                           any contract evidencing indebtedness, whether secured or unsecured, including all loan agreements, line of credit agreements, indentures, mortgages, promissory notes, agreements concerning long and short-term debt, together with all security agreements or other lien documents related to or binding on the Assets;
 
(viii)                        contains a preferential purchase right, consent to assignments, right of first refusal or similar right;
 
(ix)                              any contract with any Affiliate of Seller; or
 
(x)                                 any contract, not referred to above, that is material to the ownership or operation of the Assets.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

43

(ee)                            “Middle Point Compressor Station” means the 11,700 horsepower compressor station located at the beginning of the Middle Point Pipeline.
 
(ff)                              “Middle Point Pipeline” means the approximately 6.3 miles of high pressure 12 inch diameter pipeline that feeds into the Zinnia Pipeline.
 
(gg)                            “Miscellaneous Consents” means any notice to, consent of, or filing with any Governmental Authority relating to any Permits, including any Environmental Permits, that are required in connection with the ownership and operation of the Assets that are customarily obtained post-closing.
 
(hh)                          “NGL” means propane, iso-butane, normal butane, iso-pentane, normal pentane, hexanes and any other liquid hydrocarbon or any mixtures thereof, including incidental methane and incidental ethane, but excluding liquefied methane.
 
(ii)                                  “Permitted Encumbrance” means, with respect to an Asset, any or all of the following:
 
(i)                                     Liens for current period property Taxes not yet due and payable, or if due and payable, being contested in good faith by appropriate action;
 
(ii)                                  mechanic’s, materialmen’s, repairmen’s, employee’s, contractor’s, operator’s or other similar Liens or charges arising in the ordinary course of business for amounts not yet due (including any amounts being withheld as provided by Law);
 
(iii)                               any Liens affecting the Assets that are discharged at or prior to Closing;
 
(iv)                              pipeline, utility and similar easements, all rights of any Governmental Authority to regulate the Assets, immaterial defects and irregularities in title, and other Liens that, singularly and in the aggregate, will not materially interfere with the ownership, use, operation, replacement, repair or maintenance of the Assets;
 
(v)                                 the terms and conditions of the Permits listed on Exhibit A-4 and the Contracts listed on Exhibit A-5;
 
(vi)                              the items set forth in Section 12.1(ii)(vi) of the Disclosure Schedule;
 
(vii)                           Miscellaneous Consents; and
 
(viii)                        (a) the rights of lessors and lessees under Leases executed in the ordinary course of business but only to the extent that they do not materially adversely affect the value of the rights attributed to such Asset

44

to which such matters relate or materially interfere with the ownership, use or operation of such agreement in any event, do not prevent or prohibit the exercise of the rights granted by such agreement as currently used or as otherwise necessary for the conduct of the business by Seller relating to such agreement as presently conducted, and are of a type customarily included such Leases, and (b) the rights of licensors and licensees under licenses executed in the ordinary course of business and which rights are of a type customarily included within licenses.
 
(jj)                                “Person” means any individual, corporation, partnership, limited liability company, trust, estate, Governmental Authority or any other entity.
 
(kk)                          “Pike Fork Pipeline” means the approximately 15.8 miles of high pressure 12-16 inch diameter pipeline that gathers rich Gas to the Sherwood Processing Facility from Northern and Northeastern Doddridge County, West Virginia.
 
(ll)                                  “Pipeline” means collectively the Zinnia Pipeline, Middle Point Pipeline, Pike Fork Pipeline and Bobcat Pipeline.
 
(mm)                  “Pre-Closing Period” means, with respect to the Assets, any Tax period ending on or prior to the Closing Date.
 
(nn)                          “Proceeding” means any action, suit, claim, demand, investigation or other judicial or administrative proceeding, at law or in equity, or any arbitration or other dispute resolution, before or by any Governmental Authority, or any order, judgment, decree, injunction, award or ruling issued thereunder.
 
(oo)                          “Release” means any releasing, depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping or disposing into the Environment.
 
(pp)                          “Retained Liabilities” means any and all obligations and liabilities relating to (i) any act or omission by Seller involving or relating to the Excluded Assets or any other assets excluded from the Assets pursuant to the terms hereof, (ii) the Proceedings, if any, set forth on Section 2.7 of the Disclosure Schedule and any other Proceedings existing as of the Closing and involving the Assets (including the [***]), (iii) any claim for personal injury or death relating to the Assets and arising out of any event occurring prior to the Closing, (iv) any fines or penalties incurred by Seller due to a violation by Seller of any Law (including with respect to the [***]), (v) the completion of the construction of the Middle Point Compressor Station in accordance with Seller’s existing specifications, and (vi) any and all Seller Taxes.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

45

(qq)                          “Rights-of-Way” means easements, licenses, rights-of-way, surface rights grants, instruments creating an interest in real property, and other similar real estate interests.
 
(rr)                                “Seller Material Adverse Effect” means, (i) with respect to Seller, any event, circumstance or condition materially impairing Seller’s authority, right or ability to consummate the transactions contemplated by this Agreement or documents executed in connection herewith; or, (ii) with respect to the Assets, any change in, or effect on, the Assets that is materially adverse to the operations, or physical condition of the Assets or revenues or liabilities associated with the Assets (as compared to the operations or physical condition of the Assets or revenues or liabilities associated with the Assets on the date of this Agreement), taken as a whole; provided, however, that none of the following shall be taken into account for purposes of determining whether or not a Seller Material Adverse Effect has occurred: (A) changes or effects generally affecting the international, national, regional or local economic, market, financial, credit or political conditions in the area in which the Assets are located, the United States or worldwide, or any terrorism or outbreak of hostilities or war (other than terrorism or outbreaks of hostilities or war that directly affect the Assets) , (B) changes or effects generally affecting the international, national, regional or local energy industry, (C) any change or effect generally affecting the natural gas gathering, transportation or processing industries, or resulting from markets for fuel or other raw materials, feedstock or commodities used, gathered, transported, produced or sold at or by the Assets, (D) changes in the prices of hydrocarbons, (E) natural declines in well performance, (F) orders or actions of any Governmental Authority or changes in Law or the interpretation thereof or changes in GAAP or the interpretation thereof, in each case, after the date hereof, (G) actions taken or omitted to be taken by or with the consent of Buyer or its Affiliates, (H) actions or agreements contemplated by this Agreement or referred to in the Exhibits or Schedules, (I) except for purposes of the representation set forth in Section 2.3(a), the announcement or pendency of the transactions contemplated by this Agreement or the consummation of the transactions contemplated hereby, (J) changes which are cured (including by the payment of money) before the earlier of the Closing or the termination of this Agreement under Article IX, and (K) changes in the value of Buyer’s securities resulting from entering into this Agreement or the announcement of the transactions contemplated by this Agreement.  Any determination as to whether any event, circumstance or condition has a Seller Material Adverse Effect shall be made only after taking into account all effective indemnifications with respect to such event, circumstance or condition.
 
(ss)                              “Seller Taxes” means any (A) Income Taxes imposed on Seller, any of its direct or indirect owners, or any combined, unitary or consolidated group of which Seller is or was a member, (B) Taxes allocable to Seller pursuant to Section 6.2, and (C) Taxes imposed on or with respect to any Excluded Asset.

 

46

(tt)                                “Sherwood Gas Gathering and Compression System” means the gas gathering and compression system described on Exhibit A-1, including the Zinnia Pipeline, Middle Point Pipeline, Pike Fork Pipeline, Bobcat Pipeline, Middle Point Compressor Station and Zinnia Compressor Station.
 
(uu)                          “Sherwood Processing Facility” means a natural gas processing complex in Doddridge County, West Virginia.
 
(vv)                          [***].
 
(ww)                      “Straddle Period” means any Tax period that begins before and ends after the Closing Date.
 
(xx)                          “Tax” or “Taxes” means (a) all taxes and similar governmental charges, imposts, levies, fees, unclaimed property and escheat obligations, and assessments imposed by any Governmental Authority, however denominated (including, but not limited to, income taxes, business asset taxes, franchise taxes, net worth taxes, capital taxes, estimated taxes, withholding taxes, use taxes, gross, modified gross or net receipts taxes, sales taxes, transfer taxes or fees, excise taxes, real and personal property taxes, ad valorem taxes, value added taxes, payroll related taxes, employment taxes, unemployment insurance taxes, social security taxes, minimum taxes, and import duties and other obligations of the same or a similar nature), together with any related liabilities, penalties, fines, additions to tax or interest thereon and (b) any liability in respect of any item described in clause (a) above, that arises by reason of a contract, assumption, transferee or successor liability, operation of Law (including by reason of participation in a consolidated, combined or unitary Tax Return) or otherwise.
 
(yy)                          “Tax Authority” means any Governmental Authority having jurisdiction over the payment or reporting of any Tax.
 
(zz)                            “Tax Return” means any report, statement, form, return or other document or information required to be supplied to a Tax Authority in connection with Taxes, including any attachment thereto or amendment thereof.
 
(aaa)                   “Tichenal Compressor Station” means the Crestwood-owned compressor station at the origin point of the Zinnia Pipeline.
 
(bbb)                   “Zinnia Compressor Station” means the 9,360 horsepower compressor station located along the Zinnia Pipeline.
 
(ccc)                      “Zinnia Pipeline” means the approximately 16 miles of high pressure 16 inch pipeline that travels from the Tichenal Compressor Station to the Sherwood Processing Facility.
 
 
__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.

 

47

*  *  *  *  *  *
[Signature Page Follows]

48

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly signed as of the date first above written.
 
	
				
	 
	MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C.

	 
	 

	 
	 

	 
	By:
	 

	 
	 
	Name:

	 
	 
	Title:

	 
	 

	 
	 

	 
	SUMMIT MIDSTREAM PARTNERS, LP

	 
	 

	 
	By:
	Summit Midstream GP, LLC, its general partner

	 
	 
	 

	 
	 

	 
	By:
	 

	 
	 
	Name:
	Steven J. Newby

	 
	 
	Title:
	President & Chief Executive Officer

 

Signature Page to Purchase and Sale Agreement

Exhibit A-1
 
CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
Sherwood Gas Gathering and Compression System
 
The Sherwood Gas Gathering and Compression System is comprised of the Zinnia Pipeline, the Middle Point Pipeline, the Pike Fork Pipeline and the Bobcat Pipeline as well as two compressor stations: the Middle Point Compressor Station and the Zinnia Compressor Station, as further detailed in the following map.  For the avoidance of doubt, the Sherwood Processing Facility depicted on the map as the “Sherwood Plant” is shown for reference purposes only and will not be included in the Sherwood Gas Gathering and Compression System.
 
[***]
 

Exhibit A-2
 
PERSONAL PROPERTY
 
	
		
	 
	Zinnia Assets

	1.
	Zinnia CS Phase 1 - Flare Scrubber

	2.
	Zinnia CS Phase 1 - Pre Dehy Filter Separators (x2)

	3.
	Zinnia CS Phase 1 - Inlet Separator

	4.
	Zinnia CS Phase 1 - Reboiler

	5.
	Zinnia CS Phase 1 - Sand Filter

	6.
	Zinnia CS Phase 1 - Contactor

	7.
	Zinnia CS Phase 1 - Fuel Gas Scrubber

	8.
	Zinnia CS Phase 1 - Gun Barrel Tank

	9.
	Zinnia CS Phase 1 - Condensate Tank

	10.
	Zinnia CS Phase 1 - VRU

	11.
	Zinnia CS Phase 1 - Discharge Meter

	12.
	Zinnia CS Phase 1 - MCC Building & Pannels

	13.
	Zinnia CS Phase 1 - Discharge Separator

	14.
	Zinnia CS Phase I - Compressor #2 3608 F38882 12129

	15.
	Zinnia CS Phase I - Compressor #3 3608 F39084 12131

	16.
	Zinnia CS Phase I - Compressor #4 3608 F39032 12130

	17.
	Zinnia CS Phase I - Compressor #1 3608 F38671 12128

	18.
	Dehy Unit

	19.
	Regen Drip Tank

	20.
	Filter Separators (x2)

	21.
	Instrument Air Compressors (x2)

	22.
	Air Receivers (x3)

	23.
	Instrument Air Building

	24.
	Saltwater Tanks (x3) (400 bbl)

	25.
	ESD Valves (3)

	26.
	Dew Point Meter

	27.
	Coalescer Filter

	28.
	Glycol Scrubber

	29.
	UPS

	30.
	Glycol Tank

	31.
	Methane Tanks (x2) (550 Gal.)

	32.
	2 - 1,500 Gal. Tanks

	33.
	2 - 550 Gal. Tanks

	34.
	PCV’s (x5)

	35.
	Slug Catcher

	36.
	Launcher & Receivers

	37.
	Delta V Cabinet

 

 

	
		
	38.
	Fuel Tank

	39.
	Oil Day Tanks (x2)

	40.
	Natural Gas Generators (x2)

	 
	 

	 
	Middle Point Assets

	41.
	Middle Point CS Phase I - Fuel Gas Meter

	42.
	Middle Point CS Phase I - Inlet Separator

	43.
	Middle Point CS Phase I - Discharge Separator

	44.
	Middle Point CS Phase I - Contactor

	45.
	Middle Point CS Phase I - Pre-Dehy Filter/Separators (x2)

	46.
	Middle Point CS Phase I - Flare Scrubber

	47.
	Middle Point CS Phase I - Discharge Meters (x2)

	48.
	Middle Point CS Phase I - Gun Barrel Tank

	49.
	Middle Point CS Phase I - Reboiler

	50.
	Middle Point CS Phase I - VRU

	51.
	Middle Point CS Phase I - MCC Building and Panels

	52.
	Middle Point CS Phase I - Condensate Tanks (x2)

	53.
	Middle Point CS Phase I - Fuel Gas Scrubber

	54.
	Middle Point CS Phase I - Compressor 2 of 4

	55.
	Middle Point CS Phase I - Compressor 3 of 4

	56.
	Middle Point CS Phase I - Compressor 4 of 4

	57.
	Middle Point CS Phase I - Compressor 1 of 4

	58.
	Middle Point CS - Compressor 3608 #5

	59.
	Dehy Unit

	60.
	Regen Drip Tank

	61.
	Glycol Tank

	62.
	Dewpoint Meter

	63.
	Launchers and Receivers

	64.
	ESD Valves (5)

	65.
	Glycol Separator

	66.
	Contactor

	67.
	Coalescer Filter

	68.
	Slug Catcher

	69.
	PCV’s (6)

	70.
	Sump Tank - 1 Underground

	71.
	Fuel Tank

	72.
	Waste Oil Tank (2,000 Gal.)

	73.
	Antifreeze Tank (2,000 Gal.)

	74.
	Slop Tank (1,500 Gal.)

	75.
	Instrument Air Receivers (x3)

	76.
	Methanol Tanks (x2) (520 Gal. Each)

	77.
	Instrument Air Compressors (x2)

 

 

	
		
	78.
	Instrument Air Building

	79.
	Saltwater Tanks (x2) (400 bbl)

	80.
	UPS

	81.
	Delta V Cabinet

	82.
	Oil Day Tanks (x2)

	83.
	Natural Gas Generators (x2)

	 
	 

	 
	Other Assets

	84.
	Tichenal CS to Serwood Plant Pipeline

	85.
	Bobcat HP to Pike Fork Gathering Pipeline

	86.
	Middle Point CS to Tichenal/Zinnia Gathering Pipeline

	87.
	Pike Fork Gathering Pipeline to Sherwood

 

Exhibit A-3
 
Real Property Interests
 
CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[***]
[Approximately 41 pages redacted]

EXHIBIT A-4
 
PERMITS
 
 
CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
[***]
 [Approximately 292 pages redacted]

__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.
 

Exhibit A-5
 
Contracts
 
1.              Gas Gathering and Compression Agreement, dated April 16, 2012, between MarkWest Liberty Midstream & Resources, L.L.C. and Antero Resources Appalachian Corporation
 
2.              Master Joint Use and Maintenance Agreement, dated May 1, 2012, between MarkWest Liberty Midstream & Resources, L.L.C. and Antero Resources Appalachian Corporation
 

Exhibit B
 
FORM OF INTERCONNECTION AGREEMENT
 
This Interconnection Agreement (“Agreement”) is made and entered into as of June 21, 2013 by and between MarkWest Liberty Midstream & Resources, L.L.C. (“MarkWest”), a Delaware limited liability company, and Summit Midstream Partners, LP (“Gatherer”), a Delaware limited partnership. MarkWest and Gatherer at times may be referred to herein individually as a “Party” and collectively as the “Parties.”
 
RECITALS:
 
A.                                    MarkWest and Gatherer are parties to that certain Purchase and Sale Agreement dated as of June 4, 2013 (as amended from time to time, the “Purchase Agreement”), pursuant to which Gatherer is purchasing from MarkWest certain Assets (as defined in the Purchase Agreement) consisting of natural gas gathering and compression facilities and associated property interests in and around Doddridge County, West Virginia (the “Gathering System”).
 
B.                                    MarkWest owns and operates a natural gas processing complex in Doddridge County, West Virginia referred to as the “Sherwood Plant”.
 
C.                                    The Sherwood Plant is connected to the Gathering System at the point described herein so as to permit the delivery of Gas from the Gathering System to the Sherwood Plant (such interconnection, an “Interconnection”).
 
D.                                    The Parties desire to enter into this Agreement to provide for the operation of the Interconnections.
 
E.                                     The execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the Purchase Agreement.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:
 
ARTICLE I
DESCRIPTION OF INTERCONNECTION
 
1.1                               Location.  The Interconnection is located at the following points:
 
[to be inserted in final execution form]
 
1.2                               Description.  The Interconnection consists of Gatherer’s Connection Facilities and MarkWest’s Connection Facilities, as both are defined below (individually and collectively the “Connection Facilities”), that allow the receipt of Gas from Gatherer into the Sherwood Plant in accordance with this Agreement.  As used herein, the “Interconnection Points” for the Interconnection means the locations as described in 1.1 and additional locations for future expansion of the Gathering System as mutually agreed by the Parties.
 

1.3                               Definitions.  Capitalized terms used but not otherwise defined herein shall have the meaning set forth below:
 
A.                                    “Btu.”  A British Thermal Unit, which is the quantity of heat required to raise the temperature of one (1) pound avoirdupois of pure water from fifty-eight and five tenths degrees Fahrenheit (58.5°F) to fifty-nine and five tenths degrees Fahrenheit (59.5°F) at a pressure of fourteen and six hundred ninety-six thousandths pounds per square inch absolute (14.696 psia).
 
B.                                    “Business Day.”  Any day other than Saturday, Sunday or a legal holiday in the State of West Virginia.
 
C.                                    “Connection Facilities.”  As defined in Section 1.2.
 
D.                                    “Custody Transfer Facilities.”  For the Interconnection, the custody transfer measurement facilities described in Exhibit A attached hereto.
 
E.                                     “Gas.”  All hydrocarbon and non-hydrocarbon substances produced from gas and/or oil wells in a gaseous state at the relevant receipt point.
 
F.                                      “Government and Industry Standards.”  All applicable federal, state, and local laws, rules, regulations and ordinances, and sound and prudent natural gas industry standards and practices.
 
G.                                    “GPM.”  The number of gallons of Plant Products per 1,000 Mcf of Gas.
 
H.                                   “Gross Heating Value.”  The number of Btus produced by the combustion, on a dry basis and at a constant pressure, of the amount of Gas which would occupy a volume of 1 cubic foot at a temperature of 60°F and at a pressure of        psia, with air of the same temperature and pressure as the Gas, when the products of combustion are cooled to the initial temperature of the Gas and air and when the water formed by combustion is condensed to the liquid state. Hydrogen sulfide shall be deemed to have no heating value.
 
I.                                        “Interconnection.”  As defined in the recitals to this Agreement.
 
J.                                        “Interconnection Points.”  As defined in Section 1.2.
 
K.                                   “Mcf.”  1,000 cubic feet of Gas, measured at Standard Base Conditions.
 
L.                                     “MMBtu.”  1,000,000 Btus.
 
M.                                 “MMcf.”  1,000,000 cubic feet of Gas, measured at Standard Base Conditions.
 
N.                                    “Pike Fork Lateral.”  That certain high pressure natural gas gathering pipeline that is part of the Gathering System that is referred to as the “Pike Fork Pipeline” and that, as of the date of this Agreement, gathers Gas from northern and northeastern Doddridge County, West Virginia to the Sherwood Plant.
 

2

 
O.                                    “Plant Products.”  Propane, iso-butane, normal butane, iso-pentane, normal pentane, hexanes plus, any other liquid hydrocarbon product except for a liquefied methane product, or any mixtures thereof, and any incidental methane and incidental ethane included in any Plant Products, which are separated, extracted, recovered or condensed, and saved, from Gas processed in the Sherwood Plant.  After the date on which MarkWest commences recovering ethane in the Sherwood Plant as a purity product, ethane will also be considered a Plant Product.
 
P.                                      “Processing Customer.”  Any person or entity delivering Gas to the Sherwood Plant for processing through the Gathering System.
 
Q.                                    “Purchase Agreement.”  As defined in the recitals to this Agreement.
 
R.                                    “Sherwood Plant.”  As defined in the recitals to this Agreement.
 
S.                                      “Standard Base Conditions.”  A pressure of fourteen and seventy three hundredths pounds per square inch absolute (14.73 psia) at a temperature of sixty degrees Fahrenheit (60°F).
 
T.                                     “Thermal Content.”  For Gas, the product of the measured volume in Mcfs multiplied by the Gross Heating Value per Mcf, adjusted to the same pressure base and expressed in MMBtus; and for a liquid, the product of the measured volume in gallons multiplied by the gross heating value per gallon determined in accordance with the GPA 2145-09 Table of Physical Properties for Hydrocarbons and GPA 8173 Method for converting Mass of Natural Gas Liquids and Vapors to Equivalent Liquid Volumes, in each case as revised from time to time.
 
U.                                    “Zinnia Compressor Station.”  That certain natural gas compressor station that is located along the Zinnia Lateral.
 
V.                                    “Zinnia Lateral.”  That certain high pressure natural gas gathering pipeline that is part of the Gathering System that is referred to as the “Zinnia Pipeline” and that, as of the date of this Agreement, runs from the Zinnia Compressor Station to the Sherwood Plant.
 
ARTICLE II
DESIGN, CONSTRUCTION, INSPECTION AND OPERATION
 
2.1                               Gatherer’s Connection Facilities.  Gatherer shall, at Gatherer’s expense, operate, repair and maintain Gatherer’s Connection Facilities in accordance with this Agreement (including any specifications set forth in Exhibit A attached hereto) and Government and Industry Standards.  As used herein, “Gatherer’s Connection Facilities” consist of the following items, as further described in Exhibit A (Exhibit A, and associated detail, and pictures one through nine [1-9], eleven [11] pages in all) attached hereto.
 
A.                                    All pipelines from any of the main segments of the Gathering System to the inlet of MarkWest’s Connection Facilities.
     

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B.                                    The flange on the upstream side of the control valves listed in Section 1.1 at the Interconnection Points.
 
C.                                    The launcher and receiver facilities associated with the gathering system pipelines located upstream of the flange referenced in Section 2.1(B) above.
 
2.2                               MarkWest’s Connection Facilities.  MarkWest shall, at MarkWest’s expense, operate, repair and maintain MarkWest’s Connection Facilities in accordance with this Agreement (including any specifications set forth in Exhibit A attached hereto) and Government and Industry Standards.  As used herein, “MarkWest’s Connection Facilities” consist of the following items, as further described in Exhibit A attached hereto.
 
A.                                    Physical interconnection of the Gatherer’s Connection Facilities and the Sherwood Plant in the form of the flange on the downstream side of the control valves listed in 1.1 at the Interconnection Points.
 
B.                                    Custody Transfer Facilities.
 
2.3                               Disconnection.  MarkWest shall have the right, at Gatherer’s expense, to immediately disconnect MarkWest’s Connection Facilities from Gatherer’s Connection Facilities if MarkWest determines, in good faith, that Gatherer has failed to operate or maintain Gatherer’s Connection Facilities in accordance with this Agreement and such failure adversely affects (x) the safety, integrity or operation of MarkWest’s Connection Facilities or the Sherwood Plant, (y) the delivery of Gas to the Sherwood Plant or to other redelivery points that may be applicable from time to time, or (z) the Gas of third parties.
 
2.5                               Ownership.  Gatherer shall own Gatherer’s Connection Facilities and MarkWest shall own MarkWest’s Connection Facilities.
 
ARTICLE III
PERMITS, LAND RIGHTS, LICENSES, AND LIENS
 
3.1                               Land Rights.  Except as expressly set forth in this Section 3.1., each Party shall be responsible for obtaining, as applicable, all surface leases, rights-of-way, and easements required for the construction, installation, ownership, use, operation, maintenance, repair, service, improvement, inspection, replacement and removal of each Party’s Connection Facilities (“Land Rights”).
 
A.                                    MarkWest hereby grants to Gatherer, at no cost to Gatherer, joint and non-exclusive use of that certain area on the Sherwood Plant Site identified in Exhibit A attached hereto where a portion of Gatherer’s Connection Facilities are located as of the date of this Agreement (the “Applicable Gatherer’s Connection Facilities”), for the purpose of operating and maintaining the Applicable Gatherer’s Connection Facilities and for no other purposes.  The rights granted herein include the reasonable right to ingress and egress over existing roads for the sole purpose of operating and maintaining the Applicable Gatherer’s Connection Facilities.  Access to the site shall:
 
•Be coordinated with site security and/or on-shift operations personnel
•

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•Require personal protective equipment that, at a minimum, conforms to MarkWest’s safety standards
•Require successful completion of any applicable site specific safety and emergency training
•May be limited or denied, temporarily, by MarkWest, acting in good faith.
 
MarkWest retains the right, acting in good faith and in its sole discretion, to bar or require the removal of any individual from the Sherwood Plant, including but not limited to employees of Gatherer or of a contractor or subcontractor for Gatherer.
 
B.                                    The rights granted by MarkWest to Gatherer under this Section 3.1 to utilize a portion of the Sherwood Plant Site shall be subject to all easements, rights of way, liens, security interests and encumbrances, whether of record or visible on the premises.  In the performance of Gatherer’s obligations under this Agreement with respect to the Applicable Gatherer’s Connection Facilities, Gatherer shall not materially conflict with or interfere with MarkWest’s current or future operations or use of the Sherwood Plant site and, while on MarkWest’s property, Gatherer shall comply with MarkWest’s reasonable safety and security procedures.
 
3.2                               Permits.  Each Party shall be responsible for obtaining or maintaining, as applicable, all local, state, and federal permits required for the construction, installation and operation of its Connection Facilities, including, but not limited to, environmental permits and clearances.
 
3.3                               Contractor Licenses.  Each Party shall be responsible for ensuring that all contractors and/or subcontractors who perform work for such Party under this Agreement are in compliance with and have all applicable licenses required by local, state and federal authorities and perform such work in compliance with this Agreement.
 
3.4                               Liens.  Each Party (herein referred to as the “First Party”) agrees to promptly notify the other Party of the filing of any claims or liens (including, without limitation, laborer’s, materialman’s and mechanic’s liens upon the other Party’s property upon which the work performed hereunder is located) arising out of the services, labor and material furnished by the First Party or its contractors or subcontractors under this Agreement.  The other Party, upon receipt of notice of the filing of any such liens, may at its option require the First Party to furnish a bond in an amount and with such sureties as may be approved by the other Party, conditioned to indemnify and save harmless the other Party from all such liens.  In the event the First Party fails or refuses to furnish such bond when so required, the other Party shall have the right to pay any such sums necessary to obtain the release of such liens and to bill the costs to the First Party, with interest at the lesser of the prime rate published in the Wall Street Journal “Money Rates” column or the maximum rate permitted by law.
 
A.                                    Without limiting the generality of the foregoing, Gatherer shall not permit or grant any liens, claims, security interests or encumbrances of any kind or nature on MarkWest’s property on which the Applicable Gatherer’s Connection Facilities are located.
 

 

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ARTICLE IV
TERM AND ABANDONMENT
 
4.1                               Term.  Unless earlier terminated pursuant to the terms hereof, this Agreement will be effective as of the date first written above and will continue in force and effect unless and until terminated by MarkWest upon (30) days prior written notice following (i) the termination or expiration of all processing agreements between MarkWest and one or more third parties for the processing of Gas that is gathered through the Interconnection Points or (ii) the disconnection of MarkWest’s Connection Facilities from Gatherer’s Connection Facilities pursuant to this Agreement.  Notwithstanding the above, the indemnification provisions and payment obligations set forth in this Agreement will survive any termination of this Agreement.
 
4.2                               Abandonment.  Upon the termination of this Agreement, and subject to all regulatory requirements, each Party shall be responsible for the abandonment and removal of its own Connection Facilities at such Party’s sole cost, risk, and expense.  Each Party shall notify the other Party at least 90 days prior to the abandonment or removal of its Connection Facilities.  Any removal of Connection Facilities by either Party must be undertaken in accordance with Government and Industry Standards and MarkWest’s specifications, which shall be commercially reasonable in light of the facts and circumstances that exist at the time.
 
ARTICLE V
MEASUREMENT AND TESTING
 
5.1                               Responsibility for Measurement and Custody Transfer.  MarkWest shall be responsible for the measurement and custody transfer of the Gas at the Interconnection.
 
5.2                               Measurement and Testing Standards.  Gas shall be measured by MarkWest at the Interconnection Points.  All measurement procedures shall conform to applicable GPA standards for measurement. The measurement and the composition of the gas shall be made in accordance with the following:
 
A.                                    MarkWest shall install, operate and maintain, or cause to be installed, operated and maintained, suitable meter or meters and/or other necessary equipment for the purpose of measuring, with such measurement to conform to the AGA-3 standard (or AGA Standard as applicable for the type of measurement utilized), as revised from time to time, the volume, heating value and composition of Gas at the Interconnection Points.  Each measurement by MarkWest shall be made in accordance with the applicable American Gas Association Gas Measurement Committee standards or any revision thereof.  The measured volume and Btu content, as measured by MarkWest, shall be calculated at Standard Base Conditions.
 
B.                                    The accuracy of MarkWest’s measuring equipment shall be verified by tests using means and methods generally acceptable in the gas industry, at least quarterly.  Measuring equipment found to be registering inaccurately shall be adjusted to read as accurately as possible.  MarkWest shall give Gatherer five (5) Business Days notice of upcoming tests.  If Gatherer fails to have a representative present, the results of the test shall nevertheless be considered valid until the next test.  MarkWest shall, upon written request of Gatherer, conduct a test of MarkWest’s measuring equipment, provided that in no event shall MarkWest be required to test its equipment more frequently than once a month.  All tests of such measuring equipment shall be made at MarkWest’s expense, except that Gatherer

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shall bear the expense of tests made at its request if the inaccuracy is found to be less than two percent (2%).
 
C.                                    If, for any reason, any measuring equipment is inoperative or inaccurate by more than one percent (1.0%) in the measurement of Gas, then the volume of Gas delivered during the period of such inaccuracy shall be determined on the basis of the best data available using the first of the following methods which is feasible:
 
1.                                      By using the registration of any check measuring equipment installed and accurately registering; or
 
2.                                      By using a percentage factor to correct the error if the percentage of error is ascertainable by calibration, test, or mathematical calculations; or
 
3.                                      By comparing deliveries made during preceding periods under similar delivery conditions when the meter was registering accurately.
 
D.                                    An adjustment based on such determination shall be made for such period of inaccuracy as may be definitely known, or if not known, then for one half the period since the date of the last meter test, but in no event shall any adjustment result in a reallocation of shrinkage or Plant Products to extend back beyond six (6) months from the date the error was first made known by one Party hereunder to the other.
 
E.                                     Each Party shall have the right to inspect the other Party’s equipment, charts, and other measurement or test data during business hours; but the reading, calibration, and adjustment of such equipment and changing of charts shall be done by the Party installing and furnishing same.  Unless the Parties otherwise agree, each Party shall preserve all its original test data, charts, and other similar records for a period of at least two (2) years.
 
F.                                      MarkWest shall use gas chromatographs of samples of the Gas at the Receipt Point, which samples shall be analyzed by MarkWest in accordance with applicable industry standards.  All analyses shall determine the composition of the Gas by component in mole percent, Plant Product(s) content in GPM, Thermal Content, and specific gravity, all by means of chromatographic methods.
 
ARTICLE VI
QUALITY
 
6.1                               Quality.  As measured at the Interconnection Points, Gas delivered by Gatherer shall be of a quality that, after processing in the Sherwood Plant as it then currently exists, meets the quality specifications of pipelines receiving Gas at the redelivery point(s) downstream of the Sherwood Plant, as in effect from time to time, and as such specifications may have been waived or grandfathered by such pipelines; provided that the water content of Gas delivered by Gatherer to the Interconnection Points shall not exceed        pounds per MMcf.  Gas delivered by Gatherer to the Interconnection Points with a water content less than or equal to          pounds per MMcf shall be considered to be dry for purposes of measurement and the calculation of Gross Heating Value.  Additionally, at each Interconnection Points, Gas delivered by Gatherer shall:
 

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A.                                    be commercially free from dust, sand, gum, gum forming constituents, diluent, and other liquids and solids;
 
B.                                    have a Gross Heating Value of not less than        Btu per Cubic Foot, unless mutually agreed upon;
 
C.                                    not contain more than 1 grain of hydrogen sulfide per        Cubic Feet of Gas;
 
D.                                    not contain more than       % by volume carbon dioxide; and
 
E.                                     be commercially free of liquid hydrocarbons, free water, and condensed water and other liquids.
 
6.2                               If Gas tendered by Gatherer should fail to meet any one or more of the above specifications from time to time, then:
 
A.                                    MarkWest may take receipt of the non-conforming Gas, and that receipt shall not be construed as a waiver or change of standards for future Gas volumes; or
 
B.                                    MarkWest may, at its sole discretion and without liability to Gatherer, cease receiving the non-conforming Gas from Gatherer, and shall notify Gatherer that it will cease receiving the non-conforming Gas.
 
If the Gas as delivered contains contaminants not in conformance with the specifications in Article 6, then as between the Parties, Gatherer shall be responsible for, and shall reimburse MarkWest for all direct damages and any reasonable incurred costs and expenses resulting therefrom.
 
6.3                               Notwithstanding Section 6.2, if Gas from Gatherer conforms to all specifications required by this Article 6 other than hydrocarbon dew point and/or Gross Heating Value, MarkWest shall use commercially reasonable efforts to accept such Gas and to blend and commingle such Gas with other Gas in the Pipeline so that it meets the applicable specifications, provided that MarkWest shall not be required to accept and to blend or commingle such Gas to the extent that MarkWest determines, in good faith, that the acceptance, blending or commingling of such Gas is reasonably likely to (i) adversely affect (x) the safety, integrity or operation of MarkWest’s Connection Facilities, the Sherwood Plant or facilities downstream therefrom, (y) the delivery of Gas to redelivery points downstream of the Sherwood Plant that may be applicable from time to time, or (z) the Gas of third parties, or (ii) otherwise result in economic harm to third parties using the Sherwood Plant or facilities downstream therefrom.
 
ARTICLE VII
DELIVERIES, PRESSURE AND QUANTITY
 
7.1                               Delivery Pressure.  Gatherer shall deliver Gas to MarkWest at the Interconnection at the prevailing pressures as they exist from time to time.

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7.2                               Quantity.  The maximum daily deliveries of Gas by Gatherer to the Interconnection Points shall not exceed any contractual maximums applicable to Sherwood Plant deliveries related to shippers on the Gathering System, unless mutually agreed by the Parties.
 
A.                                    During any period in which (i) all or any portion of the Sherwood Plant or any facilities downstream therefrom is shut down or has reduced capacity, whether due to mechanical failure, maintenance or repairs, operating conditions outside of the design parameters of the Sherwood Plant or such downstream facilities, Force Majeure, or any constraint or condition involving any facilities downstream of the Sherwood Plant; or (ii) the Gas available for receipt at all receipt points (including the Interconnection Points) at the Sherwood Plant exceeds the capacity thereof; or (iii) MarkWest determines reasonably and in good faith that the operation of all or any portion of the Sherwood Plant or any facilities downstream therefrom will cause injury or harm to persons or property or to the integrity of the Sherwood Plant or such downstream facilities, the receipt and delivery of Gas at the Interconnection Points may be curtailed.
 
B.                                    Notwithstanding any provision in this Agreement to the contrary, MarkWest may, at any time and from time to time in its sole discretion, allocate available capacity in the Sherwood Plant and facilities downstream therefrom consistent with MarkWest’s Gas processing agreements relating to the Sherwood Plant.
 
7.3                               Uniform Deliveries.  Gatherer shall deliver Gas to MarkWest at the Interconnection Points at a reasonably uniform rate of flow.  Each Party will provide prompt notice to the other Party of any events that would cause deliveries to or receipts from an Interconnection Points to be curtailed or interrupted.
 
7.4                               Processing Service.  The execution of this Agreement does not authorize or set forth the terms and conditions of processing services by MarkWest at the Sherwood Plant.  Processing services at the Sherwood Plant will only be rendered after the execution of appropriate agreements with MarkWest for the processing of Gas, the exchange of Plant Products for fractionated products and the marketing thereof.  Gatherer will not deliver any Gas to the Interconnection that is not subject to such agreements with MarkWest for the Sherwood Plant.
 
ARTICLE VIII
ALLOCATION TO GATHERER’S RECEIPT POINTS; IMBALANCES
 
8.1                               Information Required for Allocations.  At any time and from time to time during which MarkWest is requested or required, by one or more Processing Customers, to allocate condensate, Plant Products, bypass Gas, fuel, residue Gas or other items to one or more receipt points on the Gathering System (such points, the “Gathering Receipt Points”), Gatherer shall provide such measurement and allocation information to MarkWest as MarkWest may request to permit MarkWest to make such allocations (such information collectively, the “Information”).  The Parties acknowledge that, as of the date of this Agreement, at least one Processing Customer has requested MarkWest to make such allocations.
 
A.                                    For each calendar month to which this Section 8.1 applies, Gatherer shall provide the Information to MarkWest for each Processing Customer by the fifth business day of the following calendar month.

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B.                                    Without limiting the generality of the foregoing, Gatherer shall measure, and the Information shall include, the volume (MCF and MMBtu, heating content and composition (including the GPM of each Plant Product) of the Gas using meters and other measurement equipment that Gatherer has installed or caused to be installed at each Gathering Receipt Point (each, a “Gathering Measurement Point”).
 
C.                                    Gatherer’s measurement equipment at each Gathering Measurement Point shall include a reasonably sufficient number of data ports, and Gatherer shall permit MarkWest to connect to such data ports, as shall be required to provide to MarkWest on a real-time basis all measurement data generated by such measurement equipment.  MarkWest shall be responsible at its own cost for obtaining equipment and/or services to connect to such data ports and receive and process such data.
 
D.                                    MarkWest shall have no responsibility or liability for, and Gatherer hereby covenants and agrees to indemnify and defend MarkWest and its Affiliates and each of their directors, members, managers, partners, officers and employees from and against all damages, claims, losses or the like arising from or relating to, (i) the timeliness, accuracy or completeness of the Information, (ii) any failure or delay by MarkWest in preparing the statements and making the payments required pursuant to any agreement with any third party (including, without limitation, any Processing Customer) to the extent the same results from any failure or delay by Gatherer to provide the Information, (iii) any errors or inaccuracies in payments made under any agreement with any third party (including, without limitation, any Processing Customer) resulting from errors in the Information.
 
8.2                               Gathering System Allocations.  Gatherer shall remain responsible for making all allocations and measurements relating to the Gathering System or specified herein, and MarkWest has no responsibility therefor.
 
8.3                               Point Operator.  The Parties recognize that MarkWest shall be designated by the downstream pipeline carriers at the Sherwood Plant redelivery point(s) (the “Redelivery Point(s)”) as the point operator and shall be considered by such pipeline carriers to be responsible for the operation of MarkWest’s pipeline interconnections to the pipeline carriers at the Redelivery Point(s).  Upon MarkWest entering into any operational balancing agreements (“OBAs”) with such pipeline carriers, MarkWest shall be responsible for the administration of all such OBAs and, subject to Section 8.4, for all terms and conditions of any such OBA.
 
8.4                               Imbalances.  The Parties recognize that certain residue Gas imbalances may occur, and each calendar month, the Parties agree to actively communicate and cooperate with each other, and with any interconnecting pipeline at the Redelivery Point(s), to review appropriate data to identify any imbalance, and to eliminate or remedy any imbalance as soon as either Party becomes aware of an imbalance.  The Parties further agree to manage daily receipts and deliveries so that the imbalances shall be kept as near to zero as practicable.  MarkWest will use commercially reasonable efforts to manage any imbalances with interconnecting pipeline(s) at the Redelivery Point(s) physically.  To the extent that any such imbalances are balanced by payments between MarkWest and any such interconnecting pipeline(s) at the Redelivery Point(s), and to the extent such imbalances are attributable or related to Gatherer or to Gas delivered by Gatherer to the Sherwood Plant, the Parties shall work in good faith to settle such

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payments between the Parties and shippers on Gatherer’s system.  MarkWest shall not be required to deviate from MarkWest’s standard operating and accounting procedures to reduce or eliminate any such imbalances.
 
ARTICLE IX
INDEMNIFICATION
 
9.1                               Custody, Control and Possession.  As between the Parties:
 
A.                                    Gatherer shall be deemed to be in custody, control and possession of Gas hereunder prior to delivery thereof to the Interconnection Points; and
 
B.                                    MarkWest shall be deemed to be in custody, control and possession of Gas hereunder after delivery thereof to the Interconnection Points.
 
9.2                               Indemnification.  Subject to Section 10.2 of this Agreement, each Party agrees, except to the extent caused by the Indemnitees’ (as defined below) gross negligence or willful misconduct, to protect, defend, indemnify, and hold the Indemnitees harmless from and against any and all suits, demands, causes of action, liabilities, expenses, losses, claims, costs (including, but not limited to contingent costs and reasonable attorneys’ fees) and damages of any kind or character (including, without limitation, fines and penalties imposed by any governmental agency, but excluding any damages or liabilities excluded pursuant to Section 10.2) (the foregoing collectively, “Losses”) to the extent (a) such Losses arise from claims brought by any of the indemnifying Party’s employees, contractors or subcontractors, or their employees, for Losses due to bodily injury, death, or damage to property, or (b) such Losses are not covered by clause (a) and arise out of or are caused by (i) the indemnifying Party’s facilities, (ii) the indemnifying Party’s custody, control or possession of the Gas, or (iii) the indemnifying Party’s negligence, gross negligence, strict liability, fault, or breach of any obligation under this Agreement.  “Indemnitees” is defined as the other Party and its affiliates and such other Party’s and its affiliates’ directors, officers, employees, members, agents and representatives.
 
ARTICLE X
LIMITATION OF LIABILITY AND CHOICE OF LAW
 
10.1                        Choice of Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Colorado, without reference to the conflicts of law provisions thereof.
 
10.2                        Limitation of Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER ANY PROVISION OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, FOR BREACH OF THIS AGREEMENT OR UNDER ANY INDEMNIFICATION OBLIGATION HEREUNDER, FOR ANY PUNITIVE, SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR EXEMPLARY DAMAGES, IN TORT, CONTRACT, OR OTHERWISE, IRRESPECTIVE OF THE FAULT OR NEGLIGENCE OF EITHER PARTY.

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ARTICLE XI
NOTICES
 
11.1                        Notices.  Unless otherwise provided herein, any notice, request or demand which either Party desires to serve upon the other regarding this Agreement shall be made in writing and shall be considered as delivered when hand delivered, or when delivery is confirmed by pre-paid delivery service (such as FedEx, UPS, DHL or a similar delivery service), or when sent via email, or, if mailed by United States certified mail, postage prepaid, three (3) Days after mailing, or, if sent by facsimile transmission, when receipt is confirmed by the equipment of the transmitting Party; provided, if sent by email after normal business hours or if receipt of a facsimile transmission is confirmed after normal business hours, receipt shall be deemed to be the next Business Day.  Such notice shall be given to the other Party at the following address, or to such other address as either Party shall designate by written notice to the other:
 
If to MarkWest:
 
With a copy to:
 
If to Gatherer:
 
ARTICLE XII
FORCE MAJEURE
 
12.1                        Suspension of Obligations.  In the event a Party is rendered unable, wholly or in part, by Force Majeure, to carry out its obligations under this Agreement, other than the obligation to make any payments due hereunder, the obligations of that Party, so far as they are affected by Force Majeure, shall be suspended from the inception and during the continuance of the inability, and the cause of the Force Majeure, as far as possible, shall be remedied with reasonable diligence.  The Party affected by Force Majeure shall provide the other Party with written notice of the Force Majeure event, with reasonably full detail of the Force Majeure within a reasonable time after the affected Party learns of the occurrence of the Force Majeure event.  The settlement of strikes, lockouts, and other labor difficulty shall be entirely within the discretion of the Party having the difficulty and nothing herein shall require the settlement of strikes, lockouts, or other labor difficulty.
 
12.2                        Definition.  As used herein, “Force Majeure” shall mean any cause or condition not within the commercially reasonable control of the Party claiming suspension and which, by the exercise of commercially reasonable diligence, such Party is unable to prevent or overcome, and, without limiting the generality of the foregoing, specifically includes acts of God; strikes, lockouts, or other industrial disturbances; acts of terrorism; acts of the public enemy, wars, blockades, or military action; earthquakes, fires, storms or storm warnings, crevasses, floods, or washouts; arrests and restraints of governments and people; civil disturbances; explosions, breakage or accident to machinery or lines of pipe (including any compression or processing facilities); the necessity for testing or making repairs or alterations to machinery or lines of pipe; freezing of wells or lines of pipe; inability or delays in obtaining easements and/or rights-of-way; inabilities or delays in obtaining necessary materials or supplies due to existing or future rules,

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regulations, orders, laws, actions or proclamations of governmental authorities (both Federal and State) including both civil and military; inabilities or delays in obtaining requisite permits, authorizations and consents; and delays occasioned by governmental actions.
 
ARTICLE XIII
MISCELLANEOUS
 
13.1                        Assignment.  All covenants, stipulations, terms, conditions, obligations, and provisions of this Agreement shall extend to, be binding upon, and inure to the benefit of the respective successors, assigns and legal representatives of the Parties hereto.
 
13.2                        Waiver.  No waiver by either Party, whether express or implied, of any one or more defaults by the other Party in the performance of this Agreement will operate, or be construed as, a waiver of any future default or defaults, whether of a like or different character.
 
13.3                        Captions.  The titles to each of the various Articles and Sections in this Agreement are included for convenience of reference only and shall have no effect on, or be deemed as part of the text of, this Agreement.
 
13.4                        Entire Agreement.  This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof.  Any prior representations, understandings, or commitments, either written or oral, shall have no force or effect.
 
13.5                        Third-Party Beneficiaries.  This Agreement is for the benefit of the Parties hereto.  Unless expressly provided to the contrary, nothing in this Agreement is intended to benefit any other person not a Party and no so such person shall have any rights, remedies, or claims hereunder.
 
13.6                        Amendment.  No amendment to this Agreement shall be effective unless it is in writing and signed by both Parties.
 
13.7                        Counterparts.  This Agreement may be executed in any number of counterparts, all of which together shall be construed as the same document, and may be delivered by facsimile or PDF.
 
[signature page follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement, as of the date first written above.
 
 
	
					
	Summit Midstream Partners, LP
	 
	MarkWest Liberty Midstream & Resources, L.L.C.

	 
	 
	 

	By:
	Summit Midstream GP, LLC,
	 
	 

	 
	its general partner
	 
	 
	 

	 
	 
	 
	By:
	 

	 
	 
	 
	 

	By:
	 
	 
	 

Exhibit A
 
(attached)
 

Exhibit C
 
FORM OF TRANSITION SERVICES AGREEMENT
 
This TRANSITION SERVICES AGREEMENT (this “Agreement”) is entered into on June 21, 2013 (the “Commencement Date”) between MarkWest Liberty Midstream & Resources, L.L.C., a Delaware limited liability company (“Seller”), and Summit Midstream Partners, LP, a Delaware limited partnership (“Buyer”).  Seller and Buyer are sometimes individually referred to herein as “Party” and collectively referred to herein as the “Parties.”
 
WHEREAS, on June 4, 2013, Seller and Buyer entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) under which Seller agreed to sell and Buyer agreed to purchase Seller’s interest in the Sherwood Gas Gathering and Compression System and other assets as further described in the Purchase and Sale Agreement (the “Assets”); and
 
WHEREAS, to effect the orderly transfer of the Assets from Seller to Buyer, Buyer desires that Seller provide to Buyer certain Services (as hereinafter defined) in connection with the Assets for a limited period of time in accordance with the terms of this Agreement.
 
NOW, THEREFORE, for and in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
 
1.                                      Definitions.  Unless otherwise defined in this Agreement, capitalized terms in this Agreement have the meanings given to them in the Purchase and Sale Agreement.
 
2.                                      Scope of Services.  Effective as of Closing, and as requested by Buyer, Seller shall provide or cause to be provided to Buyer during the Transition Period the Services, in substantially the same manner and form that Seller provided for its own behalf for the management of the Assets prior to the Commencement Date as more fully described in this Section 2.
 
Buyer shall provide and pay for all materials and supplies required to perform the Services, other than those materials and supplies required by Seller to satisfy its obligation set forth in Section 7.13 of the Purchase and Sale Agreement to complete certain construction projects.  Seller shall continue to provide Seller’s existing equipment and facilities to perform the Services.  Except with respect to Seller’s obligations under this Section 2 and Section 9, nothing herein shall require Seller to provide records, financial information, or other information that is not kept or reported by Seller in the ordinary course of business.  Except with respect to Seller’s obligation set forth in Section 7.13 of the Purchase and Sale Agreement to complete certain construction projects, nothing herein shall require Seller to install equipment or facilities, or to expand the Sherwood Processing Facility or any services at the Sherwood Processing Facility or at any other location, beyond the level provided by Seller as of the date hereof with respect to the Assets.
 
The Services to be provided by Seller (or, at the election of Seller, any of its Affiliates) to Buyer during the applicable Transition Period are as follows (such services collectively, the “Services”):

(a)                                 Operations and Support Services.  Operations and support services include the following:
 
(i)                                     Seller shall operate the Assets to the same extent that it did during the twelve (12) months preceding the Closing Date.  Seller shall maintain its current staff to provide these services.  During the Transition Period, Buyer may need to hire additional personnel in order to transition these services, and Seller shall provide training to such new personnel and allow such personnel to accompany Seller’s contractors and staff during their work shifts.
 
(ii)                                  Seller shall provide engineering and construction support as needed to complete ongoing construction projects and secure job completion records.
 
(iii)                               Seller shall comply with its obligations set forth in Section 7.13 of the Purchase and Sale Agreement.
 
(iv)                              Seller shall continue to provide gas control monitoring services in a similar manner as such duties are performed for Seller’s other assets that are not being sold to Buyer.  Seller’s office personnel will perform scheduling and nomination duties including the allocation and balancing of Seller’s volume as well as confirmation of third party volumes.
 
(b)                                 Accounting Services and Contract Administration Services.  Seller shall provide Accounting Support Services (as defined below) with respect to the Assets.  Buyer shall direct Seller to make disbursements and collect payments on behalf of Buyer, and manage all matters reasonably related to such disbursements and payments.  On or before the fifteenth (15th) Business Day of each calendar month, Seller shall submit an invoice to Buyer detailing the monthly expenditures for the immediately preceding calendar month, including but not limited to operating expenses, capital expenses, as well as the cost of gas and products.  On or before the last Business Day of each month in which it receives an invoice, Buyer shall remit to Seller by wire transfer the invoiced amounts (“Expenditures Transfer”) to an account designated in writing by Seller and provide Seller with detailed supporting information for each such transfer.  No later than three (3) Business Days following Seller’s receipt of such Expenditures Transfer, Seller shall remit to Buyer by wire transfer the monthly cash receipts (“Cash Receipts Transfer”) for the calendar month immediately preceding the calendar month that the last Expenditures Transfer covered to an account designated in writing by Buyer and provide Buyer with detailed supporting information for each such Cash Receipts Transfer.
 
The general accounting and contract administration support services to be provided by Seller (the “Accounting Support Services”) shall include:
 
(i)                                     Maintain accounts receivable and accounts payable information.
 
(ii)                                  Provide a basic list of revenues and operating and capital expenditures, which shall identify expenditures that shall be expenses or capitalized in accordance with Seller’s policies and procedures.

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(iii)                               Cooperate with Buyer to facilitate the transfer of data relevant to the Assets from Seller’s accounting system(s) to Buyer’s accounting system.
 
(iv)                              Complete the allocation/settlement process each period including the distribution of gas statements to producers, completion of revenue distribution, and the preparation of monthly and quarterly statements and billing and collecting accounts receivable from all third parties, together with the calculation, collection and disbursement of state taxes, if any.
 
(v)                                 Account for all prior period adjustments, as necessary and/or to the extent reasonably practicable in the judgment and opinion of Seller, in the accounting settlement process, but not beyond the Transition Period.
 
(vi)                              Perform contract maintenance and administration for new and existing third party agreements.
 
(vii)                           Buyer shall be solely responsible for arranging for new gas to be connected to the Assets and for the negotiation of any related new agreement.  Buyer shall also be solely responsible for all amendments to new and existing agreements and shall have the ongoing right to connect such new gas, reconnect existing wells and make such other changes as it may deem necessary to the Assets.  Buyer will furnish on a timely basis all information related to any such new or amended agreement to Seller. Likewise, Seller shall timely forward to Buyer all notices and other correspondence it may receive pertaining to the Assets and the gas gathering agreements associated therewith (the “Gas Gathering Agreements”).
 
(c)                                  Information Technology (IT) Services.  Seller shall provide the IT support services, communications and network services set forth below with respect to the Assets to the same, but no greater extent, than Seller has rendered such services during the twelve (12) months preceding the Closing Date.
 
(i)                                     Maintain and support relevant existing computer and IT services necessary to continue the business operations of the Assets, including the following services:
 
(A)                               Computer desktop support for all Seller’s computers including both desktop and laptop units.
 
(B)                               Maintenance and support of cellular phone hardware and contracts and invoices.
 
(C)                               Maintenance and support of office telephones as well as local and long-distance telephone equipment and service invoices.
 
(D)                               Maintenance of satellite communications and related invoices for such services.

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(E)                                Maintenance of Wide Area Network leased lines and related invoices and fees.
 
(F)                                 Maintenance of hardware and software for support of SCADA and measurement systems.
 
(G)                               Field communications maintenance and support and related invoices and fees including any tower, radio, cellular or other network/communications related items.
 
(H)                              Other miscellaneous business system and software support, including application and software support and email service support.
 
(ii)                                  Software As A Service Providers
 
(A)                               Seller is responsible for identifying to Buyer any outsourced or Software As A Service (SAAS) providers Seller utilizes for maintaining the assets.
 
(B)                               Seller is responsible for informing the software provider that there is a pending transition of Seller’s assets and ensuring there will not be a licensing violation associated with the transfer.
 
(C)                               Seller shall maintain the agreements and fees associated with the use of the software during the Transition Period.
 
(iii)                               Seller shall not be responsible for designing, selecting, ordering, installing, implementing, maintaining, troubleshooting, repairing, servicing, supporting or bearing any cost burden for and with respect to any Buyer supplied computers, software or services.
 
(iv)                              Buyer assumes the responsibility and costs for non-routine information technology services, data transfers and applications associated with transitioning these capabilities from Seller to Buyer.
 
(v)                                 Buyer shall not install any new software or modify the setup of any existing computer, automation, network or communications equipment without the express written consent of Seller.  To the extent Buyer personnel are connected, or otherwise have access, to any server owned by Seller, or the information contained therein, Buyer agrees that it will not utilize, convert, copy, reverse engineer, damage or otherwise take advantage of such access for any purpose other than as necessary to allow the Parties to perform their obligations under this Agreement during the Transition Period.
 
(vi)                              Seller shall not be responsible for designing, selecting, ordering, installing, implementing, maintaining, troubleshooting, repairing, servicing,

4

supporting or bearing any cost burden for and with respect to any new communications equipment or services.  Seller shall work with Buyer on any previously planned items that will be put into place during the Transition Period to ensure this is still the desired direction of Buyer.
 
(vii)                           Seller and Buyer agree that to ensure safe transition of the Assets, it may be necessary to connect the respective networks at key locations. Adequate planning and documentation of properly implemented firewalls to ensure each Party’s data security must be agreed on in writing by the Parties before respective networks are connected.
 
(viii)                        Transition of Software Licenses
 
(A)                               Seller shall work with Buyer to successfully transition all HMI software licenses associated with the facilities being transitioned. Examples of such software licenses include, but are not limited to, Wonderware, DeltaV, and iFix.
 
(B)                               Seller shall work with Buyer to successfully transition all other software licenses that are exclusively related to the assets and personnel being transitioned for the licenses that can be transferred. This will include all initially identified software, and any that is identified during the transition period.
 
(d)                                 Environmental, Health and Safety Services.  Seller shall provide certain “Environmental Health and Safety” services as set forth below.  Seller shall manage and maintain an environmental permitting system during the Transition Period; provided, however, that Seller shall not be deemed a representative of Buyer authorized to serve as a responsible official, or designated representative accountable for signing and submitting any official reports, permit submissions or responses to governmental authorities on behalf of Buyer.  Seller shall provide the following services with respect to the Assets:
 
(i)                                     Maintain computer and other records regarding air permits, storm water permits, spill prevention control and countermeasure plans, and greenhouse gas reporting.  All such records shall be made available to Buyer during the Transition Period, and provided to Buyer at the end of the Transition Period.
 
(ii)                                  Provide advisory services relating to permitting and compliance strategies (including with respect to the requirements of emergency response plans), as well as provide, and/or participate in creation of, site-specific procedures.
 
(iii)                               Use commercially reasonable efforts to provide to Buyer copies of all Permits and Environmental Permits necessary for the operation of the Assets by Buyer after the Closing.

5

(iv)                              Manage air permitting activities for all required equipment including but not limited to completing and signing Air Pollution Emission Notices, self-certification forms, annual and semi-annual compliance certifications, semi-annual deviation reports and NESHAP notifications.
 
(v)                                 Maintain existing and assist Buyer in securing new Environmental Permits required for all facilities and any other pertinent documentation, as necessary for operation of the Assets by Buyer after the Closing, and recommend to Buyer necessary action items to comply with applicable environmental permits and regulations.
 
(vi)                              Comply with all applicable drug and alcohol testing policies, as required by the United States Department of Transportation or other entity with jurisdiction.
 
(vii)                           Comply with all applicable training and operator qualification requirements as required by the United States Department of Transportation or other entity with jurisdiction.
 
(viii)                        Seller shall maintain erosion and sediment control structures where needed until achievement of 70% revegetation on all sites that require such structures.  Seller shall remove all such structures, as appropriate, upon achievement of 70% revegetation.
 
Seller shall work together in good faith with Buyer to assist Buyer in the transition of the performance of the Services to Buyer, including using good faith commercially reasonable efforts to make reasonably available to Buyer such personnel of Seller as may be reasonably requested by Buyer to facilitate such transfer; provided, that Seller has available personnel with the expertise necessary to provide such assistance.
 
The “Transition Period” shall mean, with respect to each Service, the period beginning on the Commencement Date and ending on the ninety (90) day anniversary of the Commencement Date unless the Parties mutually agree otherwise (the “Initial Period”); provided, however, that, with respect to each Service described in Sections 2(b), 2(c) or 2(d), Buyer shall have the option to extend each Initial Period for two successive thirty (30) day periods upon fifteen (15) days’ written notice prior to the expiration of the then current term.
 
3.                                      Key Personnel.  Annex 1 attached to this Agreement identifies the key personnel of Buyer and Seller with respect to the Services and the contact information for such personnel.  Buyer may also designate certain employees (each a “Transition Relationship Manager”) for Seller’s personnel to contact for the approval of contracts, the execution of documents and the making of elections as set forth in Section 2, and for all other matters concerning the Services.
 
4.                                      Bills and Information.  Buyer and Seller shall cooperate to send such notices to operators, vendors and other payees as are reasonably necessary to cause such payees to continue to send bills and statements during the term of this Agreement to Seller or its applicable Affiliate.  Should any of these bills or statements nevertheless be sent to Buyer, Buyer shall promptly

6

forward such bills and statements to Seller in sufficient time to allow Seller to make timely payment.
 
5.                                      Limitation on Services.  Seller shall not be obligated to provide any Services that Seller did not perform with respect to the Assets for its own account immediately prior to the Closing Date or perform any such Services in a manner different from the manner in which Seller performed such Services for its own account immediately prior to the Closing Date and, furthermore, Seller shall not be required to retain or provide any records, information and data in any form or format except that in which Seller currently maintains such records, information and data nor to provide any records, information and data that are Excluded Assets.
 
6.                                      Term and Termination.
 
The term of this Agreement shall commence upon the Closing and, unless extended by mutual agreement of Buyer and Seller, shall terminate upon the expiration of the longest Transition Period (such date, the “Termination Date”).  No Service shall be performed after the expiration of the applicable Transition Period related to such Service.
 
After the date hereof, Buyer may, without cause and in accordance with the terms and conditions hereunder, request the discontinuation of a Service (whether in full or in relation to one or a series but less than all of the Assets) or all of the Services by giving Seller at least fifteen (15) days prior written notice (or such shorter period as Seller, in its sole discretion, may agree).  In addition, as soon as reasonably practicable following receipt of such written notice, but in any event, within fifteen (15) days, Seller will notify Buyer as to whether termination of such Service will: (i) require the termination or partial termination of, or otherwise affect the provision of, any other Services, or (ii) result in any early termination costs payable to third party providers.  If Buyer does not withdraw its termination notice within three (3) days after receipt of such notice from Seller, Buyer will reimburse Seller for the reasonable costs resulting from Buyer’s early termination of such Service.
 
7.                                      Reimbursement.  Buyer shall reimburse Seller for all costs and expenses (including operating costs, capital expenditures, and Taxes) associated with the Assets during the term of this Agreement; provided that Seller shall not be entitled to any reimbursement for any costs and expenses associated with its obligation set forth in Section 7.13 of the Purchase and Sale Agreement to complete certain construction projects.
 
8.                                      Fees.  Buyer shall, in addition to other amounts owed under this Agreement, pay Seller the amount set forth below per month for each month (prorated on a daily basis with respect to each partial month during the applicable Transition Period) for which any particular Service is performed by Seller pursuant to the terms of this Agreement:
 
Operations and Support Services
 
All other Services, in the aggregate
 
9.                                      Payment Procedures.  Seller shall submit an invoice (the “Invoice”) to Buyer on or before the fifteenth (15th) Business Day of each calendar month setting forth the charges for each Service, if applicable, for the preceding month pursuant to Section 8, including any costs and

7

expenses permitted pursuant to this Agreement.  Absent manifest error in calculations contained in an Invoice (if there is a manifest error, Buyer will correct such error and show such recalculation), Buyer shall pay on or before the last Business Day of each month in which it receives an Invoice the amounts invoiced to Buyer by wire transfer of immediately available funds in U.S. dollars to the bank account designated on the Invoice by Seller.  Adjustment credits or debits shall be shown on the Invoice next succeeding the Invoice in which the adjustment is made.  Buyer may object to any invoiced amounts for any Service at any time before, at the time of, or after payment is made, provided such objection is made in good faith and in writing to Seller no later than fifteen (15) days after receipt of such Invoice.  Payment of any amount set forth in an Invoice shall not constitute approval thereof.  Seller and Buyer shall meet as expeditiously as possible to resolve any dispute.
 
10.                               Late Payments.  Any amount not paid by either Party under this Agreement on or before the due date shall bear interest, compounded monthly, at an annual rate equal to ten percent (10%).
 
11.                               Default.  It shall constitute a default on behalf of Buyer (a “Default”) if Buyer fails to timely pay any invoiced amount for Services provided pursuant to this Agreement in accordance with the provisions of Section 9, which failure continues for at least thirty (30) days following receipt of written notice to Buyer that such invoiced amount is past due.  Upon the occurrence of a Default, at Seller’s option, (a) Seller may suspend all or any portion of the provision of Services hereunder, including Services for which payment is outstanding, until such time as the Default is cured and all amounts owing to Seller under this Agreement for such suspended Services are paid in full or (b) Seller may elect to terminate this Agreement.  If Seller elects to suspend Services, Seller shall continue to have the right at any time thereafter to terminate this Agreement.  Notwithstanding any suspension or termination by Seller, Seller shall remain entitled to receive payment in full for all amounts due, together with interest pursuant to Section 10.
 
12.                               Disclaimer of Warranties/Indemnification.  Notwithstanding anything in this Agreement to the contrary, neither Seller nor its Affiliates (collectively, “Seller Group”) makes any, and disclaims any, representations and warranties, express or implied, with respect to the performance of the Services, and Seller Group shall have no liability for or in connection with any and all claims arising out of or resulting directly or indirectly from the Services performed by Seller Group or Seller Group’s contractors, other than (a) matters caused by or resulting from the gross negligence or willful misconduct of Seller, (b) claims brought against Buyer by employees and contractors of Seller or (c) damages to any equipment of Seller or its contractors; provided, however, that Seller shall not indemnify Buyer in the case of clause (a) or (b) to the extent that such claims are caused by Buyer or arise from or are related to Buyer’s negligence or willful misconduct.  Notwithstanding any other terms in this Agreement, subject to this Section 12(a), (b) and (c), Buyer (on behalf of itself and its Affiliates (collectively, “Buyer Group”) and their successors and assigns) hereby releases Seller Group from and shall fully protect, defend, indemnify and hold harmless Seller Group and Seller Group’s contractors from and against any and all claims arising out of or resulting from the Services or the performance thereof, including any and all claims relating to (v) injury, illness or death of any Person including Buyer Group, Seller Group or their respective representatives, (w) damages to or loss of any property or resources (including damage to

8

property or resources of third parties, Seller Group, Buyer Group or their respective and/or of Buyer’s representatives), (x) breach of contract, (y) common law causes of action such as active or passive, sole, concurrent or comparative negligence, strict liability, nuisance or trespass, or (z) violation of Law or otherwise.  Subject to this Section 12(a), (b) and (c), these indemnity and defense obligations apply regardless of cause or of any negligent acts or omissions (including active or passive, sole, concurrent or comparative negligence), strict liability, breach of duty (statutory or otherwise), violation of Law, or other fault of Seller Group or Seller Group’s contractors, or any pre-existing defect.  In each case, the indemnification procedures applicable to this Agreement shall be the same indemnification procedures set forth in Article X of the Purchase and Sale Agreement.
 
13.                               Force Majeure.
 
(a)                                 If a Party to this Agreement is rendered unable, wholly or in part, by force majeure (as hereafter defined in (c) below) to carry out its obligations under this Agreement, other than obligations to make money payments, that Party shall give the other Party prompt written notice of the force majeure with reasonably full particulars and the obligations of the Party giving notice, so far as they are affected by force majeure, shall be suspended during, but no longer than, the continuance of the force majeure.  The affected Party shall use all reasonable diligence to remove the effects of the force majeure.
 
(b)                                 The requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes, lockouts, or other labor difficulty by the Party involved, contrary to its wishes; the handling of such difficulties shall be entirely within the discretion of the Party concerned.
 
(c)                                  The term “force majeure” for purposes of this Agreement means an act of God, strike, lockout, or other industrial disturbance, act of the public enemy, terrorism, war, blockade, public riot, lightning, fire, storm, flood, explosion, governmental action, governmental delay, restraint or inaction, unavailability of equipment, and any other cause, whether of the kind specifically enumerated above or otherwise, which is not reasonably within the control of the Party claiming the right to suspend its obligations under this Section 13.
 
14.                               Assignability.  Neither Buyer nor Seller shall assign or sublease any rights or obligations under this Agreement without the prior written consent of the non-assigning Party, except to an Affiliate of the assigning Party.  This restriction shall not affect Seller’s right to engage its Affiliates and contractors and their respective employees to perform the Services.
 
15.                               Purchase and Sale Agreement.  This Agreement is made in accordance with and is subject to the terms and conditions of the Purchase and Sale Agreement, and the terms, covenants and conditions of the Purchase and Sale Agreement are incorporated herein by reference, provided that in the event of any conflict between the provisions of the Purchase and Sale Agreement and this Agreement, the provisions of this Agreement shall control.

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16.                               Governing Law; Exclusive Jurisdiction and Waiver of Jury Trial.  THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, USA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS EXCEPT THAT, WITH RESPECT TO ALL MATTERS RELATING TO TITLE TO OR THE CONVEYANCE OF THE ASSETS LOCATED IN WEST VIRGINIA, THE LAWS OF THE STATE OF WEST VIRGINIA SHALL GOVERN.  THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF COLORADO LOCATED IN DENVER COUNTY, COLORADO OR THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN DENVER COUNTY, COLORADO AND APPROPRIATE APPELLATE COURTS THEREFROM, AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE, CONTROVERSY OR CLAIM MAY BE HEARD AND DETERMINED IN SUCH COURTS.  THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE, CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY OR CLAIM.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
 
17.                               Waivers.  Any failure by any Party to comply with any of its obligations, agreements or conditions herein contained may be waived by the Party to whom such compliance is owed by an instrument signed by the Party to whom compliance is owed and expressly identified as a waiver, but not in any other manner.  No waiver of, or consent to a change in, any of the provisions of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in, other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.
 
18.                               Amendment.  This Agreement may be amended or modified only by an agreement in writing executed by Buyer and Seller.
 
19.                               No Third Party Beneficiaries.  Nothing contained in this Agreement entitles anyone other than Seller or Buyer or their authorized successors and assigns to any claim, cause of action, remedy or right of any kind whatsoever, except with respect to waivers and indemnities that expressly provide for indemnification of Buyer Group or Seller Group, in which case members of such groups are considered third party beneficiaries for the sole purposes of those indemnity provisions.
 
20.                               Independent Contractor.  In its performance of Services, Seller shall be considered an independent contractor, and it is not the purpose or intention of this Agreement to create (and it shall not be construed as creating) a joint venture, partnership or any type of association, and neither Party is authorized to act as an agent or principal for the other Party with respect to any matter related hereto.  It is expressly understood and agreed that this Agreement is a purely

10

commercial transaction between the Parties and that nothing stated herein shall operate to create any fiduciary duty which a Party shall owe to another Party, except with respect to the handling of cash by either Party on behalf of the other Party.
 
21.                               Construction.  Each of Buyer and Seller has had an adequate opportunity to review each and every provision of this Agreement and to submit the same to legal counsel for review and advice.  Based on the foregoing, the rule of construction, if any, that a contract be construed against the drafter shall not apply to interpretation or construction of this Agreement.
 
22.                               No Restrictions.  Nothing contained in this Agreement shall prevent either Buyer or Seller from engaging in any business or purchasing any property, whether or not in the vicinity of the Assets or in competition with the business of the other.
 
23.                               Survival.  Notwithstanding anything to the contrary in this Agreement, the terms of Sections 1, 4, 6, 7, 8, 9, 10, 12 and 15 through 23 shall survive termination of this Agreement indefinitely.
 
24.                               Execution in Counterparts.  This Agreement may be executed simultaneously in two or more counterparts (including by means of facsimile or email of a portable document format (pdf) of the signature pages), each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.
 
[Signature Page to Follow]
 

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The Parties have caused their duly authorized representatives to execute this Agreement as of the day and year first set forth above.
 
	
					
	 
	MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C.

	 
	 

	 
	 

	 
	By:
	 

	 
	 

	 
	SUMMIT MIDSTREAM PARTNERS, LP

	 
	 

	 
	By:
	Summit Midstream GP, LLC,

	 
	 
	its general partner

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	 

	 
	 
	 
	 
	 

 

 

12

 
Annex 1

13

Exhibit D

[***]

CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.  THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[***]
[Approximately 62 pages redacted]

__________
***Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission.  Confidential treatment has been requested with respect to the omitted portions.Exhibit 10.1

 

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

 

dated October 2, 2013

 

by and among

 

AM RETAIL GROUP, INC.,

 

G-III APPAREL GROUP, LTD.,

 

PVH RETAIL STORES LLC,

 

PVH CORP.

 

and 

 

PVH PUERTO RICO, INC.

 

    	 

    	 

    

 

TABLE OF CONTENTS 

 

	 	 	Page
	 	 	 
	ARTICLE I. DEFINITIONS	1
	 	 	 
	1.1	Definitions	1
	 	 	 
	ARTICLE II. CLOSING; SALE OF PURCHASED ASSETS	10
	 	 	 
	2.1	The Closing	10
	2.2	Sale of Purchased Assets	10
	2.3	Assumption of Liabilities	12
	2.4	Purchase Price; Closing Payment	14
	2.5	Purchase Price Adjustment	15
	2.6	Allocation of Purchase Price	16
	2.7	Actions Simultaneous	16
	 	 	 
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLER	16
	 	 	 
	3.1	Organization; Good Standing	17
	3.2	Authority; Execution and Delivery; Enforceability	17
	3.3	Non-Contravention	17
	3.4	Consents and Approvals	18
	3.5	Purchased Assets; Title to Assets	18
	3.6	Financial Data	18
	3.7	Leased Property	19
	3.8	Contracts	20
	3.9	Labor and Employment Matters	21
	3.10	Intellectual Property	22
	3.11	Tax Matters	23
	3.12	Litigation and Claims	24
	3.13	Governmental Permits; Compliance
with Laws	24
	3.14	Environmental Matters	25
	3.15	Employee Plans	25
	3.16	Inventory	26
	3.17	Suppliers	26
	3.18	Privacy and Data Security	26
	3.19	Insurance	26
	3.20	No Finder	27
	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE PARENT	27
	 	 	 
	4.1	Organization; Good Standing	27
	4.2	Authority; Execution and Delivery; Enforceability	27
	4.3	Non-Contravention	27
	4.4	Consents and Approvals	28
	4.5	Litigation and Claims	28
	4.6	No Finder	28
	 	 	 
	ARTICLE V. ACTIONS PRIOR TO THE CLOSING DATE	28
	 	 	 
	5.1	Access	28

 

    	i

    	 

    

 

	5.2	Fulfillment of Conditions to the Buyer’s Obligations	29
	5.3	Fulfillment of Conditions to the Seller’s Obligations	29
	5.4	Conduct of Business Prior to the Closing	29
	5.5	No Solicitation of Other Bids	30
	5.6	Notice of Certain Events	31
	5.7	Leases	32
	 	 	 
	ARTICLE VI. OTHER AGREEMENTS OF THE PARTIES	32
	 	 	 
	6.1	Employees	32
	6.2	Non-Solicitation, Non-Derogation
and Confidentiality	34
	6.3	Tax Matters	35
	6.4	Access to Records	36
	6.5	Further Assurances	37
	6.6	Third Party Consents	37
	6.7	Publicity	37
	6.8	Store Leases	38
	6.9	Mail, Receivables and Other Items to be Given to Proper Party	38
	6.10	Proration	38
	6.11	Gift Cards; Loyalty Program	39
	6.12	Software Items	39
	6.13	Buyer Services to the Excluded Stores	39
	 	 	 
	ARTICLE VII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER	40
	 	 	 
	7.1	Representations and Warranties	40
	7.2	Performance	40
	7.3	Certificate	40
	7.4	Orders	40
	7.5	Release of Liens	40
	7.6	Bill of Sale and Assignment and Assumption Agreement	40
	7.7	License Agreement	41
	7.8	Non-Foreign Affidavit	41
	7.9	Transition Services Agreement	41
	7.10	Intellectual Property Agreement	41
	7.11	Store Leases	41
	 	 	 
	ARTICLE VIII. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER	41
	 	 	 
	8.1	Representations and Warranties	41
	8.2	Performance	41
	8.3	Certificate	41
	8.4	Orders	41
	8.5	Bill of Sale and Assignment and Assumption Agreement	42
	8.6	License Agreement	42
	8.7	Store Leases	42
	 	 	 
	ARTICLE IX. INDEMNIFICATION	42
	 	 	 
	9.1	Survival	42
	9.2	Indemnification by PVH, PVH Retail
and PVH Puerto Rico	42
	9.3	Indemnification by the Buyer	43
	9.4	Limitations on Indemnification	43
	9.5	Tax Treatment of Indemnity Payments	44

 

    	ii

    	 

    

 

	9.6	Notice of Claims	44
	9.7	Third Party Claims	45
	9.8	Payments	45
	9.9	Effect of Investigation	45
	 	 	 
	ARTICLE X. TERMINATION	46
	 	 	 
	10.1	Termination	46
	10.2	Effects of Termination	46
	 	 	 
	ARTICLE XI. MISCELLANEOUS	47
	 	 	 
	11.1	Expenses of the Transaction	47
	11.2	Notices	47
	11.3	No Modification Except in Writing	48
	11.4	Entire Agreement	48
	11.5	Severability	48
	11.6	Assignment	48
	11.7	Governing Law; Jurisdiction; Waiver of Jury Trial	48
	11.8	Specific Performance	49
	11.9	Headings; References	49
	11.10	Interpretation	49
	11.11	Schedules	49
	11.12	Third Parties	49
	11.13	Counterparts	50

  

    	iii

    	 

    

 

APPENDICES

 

	APPENDIX A.  PURCHASE PRICE ALLOCATION	A-1
	 	 
	APPENDIX B.  SELLER DISCLOSURE SCHEDULES	B-1
	 	 
	APPENDIX C.  EXCLUDED CONTRACTS	C-1

 

EXHIBITS

 

 

	EXHIBIT A	Intellectual Property Agreement
	 	 
	EXHIBIT B	Bill of Sale and Assignment and Assumption Agreement
	 	 
	EXHIBIT C	License Agreement
	 	 
	EXHIBIT D	Form of Assignment and Assumption Agreement

 

    	iv

    	 

    

 

ASSET PURCHASE AGREEMENT

 

ASSET PURCHASE AGREEMENT (this “Agreement”),
dated October 2, 2013, by and among AM Retail Group, Inc., a Delaware corporation and indirect wholly-owned subsidiary of the Parent
(the “Buyer”), G-III Apparel Group, Ltd., a Delaware corporation (the “Parent”), PVH Retail
Stores LLC, a Delaware limited liability company (“PVH Retail”), PVH Corp., a Delaware corporation (“PVH”)
and PVH Puerto Rico, Inc., a Delaware corporation (“PVH Puerto Rico” and, collectively with PVH Retail and PVH,
the “Seller”).

 

WITNESSETH:

 

WHEREAS, the Seller owns the Bass
and G.H. Bass & Co. (collectively, “Bass”) and certain other related trademarks (the “Trademarks”)
and other Intellectual Property;

 

WHEREAS, the Seller is engaged in
the business (the “Business”) of designing, marketing, selling, distributing, promoting and licensing products
bearing the Trademarks; and

 

WHEREAS, the Buyer desires to purchase
and acquire from the Seller, and the Seller desires to sell and transfer to the Buyer, certain of the assets of the Seller related
exclusively to the Business, and the Buyer desires to assume, and the Seller desires to assign to the Buyer, specified liabilities
of the Seller related exclusively to the Business, all on the terms and subject to the conditions hereinafter set forth.

 

NOW, THEREFORE, the parties hereto
hereby agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1        Definitions.
The following terms when used in the Agreement shall have the respective meanings ascribed to them below:

 

“Accounting Firm” has
the meaning ascribed to such term in Section 2.5(a).

 

“Acquisition Proposal”
has the meaning ascribed to such term in Section 5.5(a).

 

“Action” shall mean any
action, suit, claim, demand, litigation, proceeding, arbitration, inquiry, notice of violation, audit, investigation or hearing
of any nature (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or
before, any Governmental Authority, whether at law or in equity.

 

“Affiliate” shall mean,
with respect to a specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common
control with such specified Person. As used in this definition, the term “control” means the possession, directly or
indirectly, 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.

 

    	1

    	 

    

 

“Agreement” has the meaning
ascribed to such term in the Preamble hereto.

 

“Assumed Contracts” has
the meaning ascribed to such term in Section 2.2(a)(ii).

 

“Assumed Liabilities”
has the meaning ascribed to such term in Section 2.3(a).

 

“Balance Sheet Date”
shall have the meaning ascribed to such term in Section 3.6.

 

“Basket” has the meaning
ascribed to such term in Section 9.4(a).

 

“Bass” has the meaning
ascribed to such term in the Preamble hereto.

 

“Bill of Sale” has the
meaning ascribed to such term in Section 7.6.

 

“Business” has the meaning
ascribed to such term in the preamble hereto.

 

“Business Day” shall
mean a day (other than a Saturday or Sunday), on which commercial banks are open for business in New York, New York.

 

“Business Employees”
shall mean all of the Seller’s employees employed exclusively in connection with the Business.

 

“Buyer” has the meaning
ascribed to such term in the preamble hereto.

 

“Buyer Group Member”
shall mean each of the Buyer, the Parent and their Affiliates and their respective directors, officers, and their respective successors
and assigns.

 

“Buyer Employees” has
the meaning ascribed to such term in Section 6.2(a).

 

“Cap” has the meaning
ascribed to such term in Section 9.4(a).

 

“Category 1 Leases” has
the meaning ascribed to such term in Section 3.7(c)(i).

 

“Category 2 Leases” has
the meaning ascribed to such term in Section 3.7(c)(ii).

 

“Category 3 Leases” has
the meaning ascribed to such term in Section 3.7(c)(iii).

 

“Claim Notice” has the
meaning ascribed to such term in Section 9.6.

 

“Closing” has the meaning
ascribed to such term in Section 2.1.

 

“Closing Date” has the
meaning ascribed to such term in Section 2.1.

 

“Closing Date Inventory Value”
has the meaning ascribed to such term in Section 2.5(a).

 

“Closing Date Statement”
has the meaning ascribed to such term in Section 2.5(a).

 

“Closing Time” has the
meaning ascribed to such term in Section 2.1.

 

    	2

    	 

    

 

“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, and any successor statute thereto and all final or temporary regulations
promulgated thereunder and published.

 

“Confidential Information”
shall mean trade secrets, confidential or proprietary information, knowledge, or know-how pertaining exclusively to the Business
or any confidential or proprietary information concerning any vendor or customer of the Seller, including, without limitation,
customer lists, research and development information and materials, inventions, formulas, methods, techniques, processes, plans,
product designs, material designs, fabric designs, procedures, contracts, financial information and computer models. The term Confidential
Information shall not include (i) information that is generally available to the public or within the apparel and fashion industry,
other than as a result of a disclosure by the Seller, any Seller Group Members or any of their respective employees, agents or
advisors in violation of this Agreement; (ii) information which, prior to disclosure to the receiving party by or on behalf of
the disclosing party, was already in the receiving party’s possession on a non-confidential basis; (iii) information that
was developed without the use of Confidential Information; and (iv) information that becomes available to the receiving party on
a non-confidential basis from a source other than the Seller or any of its advisors, agents or Affiliates, provided, that
such source is not known by the receiving party to be bound by a confidentiality agreement with or other obligation of secrecy
to the Seller or any other party.

 

“Contracts” shall mean
all written leases, including, without limitation, Store Leases, licenses, contracts, purchase orders, agreements, indentures,
promissory notes, guarantees, arrangements, commitments and understandings of any kind, and all written amendments to any of the
foregoing, in each case to the extent related exclusively to the Business, to which the Seller is a party or by which the Seller
or any of the Purchased Assets may be bound, and all rights arising under any of them.

 

“Credit and Guaranty Agreement”
shall mean the Credit and Guaranty Agreement, dated as of February 13, 2013, by and among PVH, PVH B.V. (f/k/a Tommy Hilfiger B.V.),
certain subsidiaries of PVH , the lenders party thereto, Barclays Bank PLC, as administrative agent and collateral agent, Merrill
Lynch, Pierce, Fenner & Smith Incorporation and Citigroup Global Markets Inc., as co-syndication agents, and Credit Suisse
Securities (USA) LLC and Royal Bank of Canada, as co-documentation agents.

 

“Damages” means losses,
damages, liabilities, judgments, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’
and auditors’ fees.

 

“Employee Plan” has the
meaning ascribed to such term in Section 3.15(a).

 

“Environment” shall mean
soil, surface waters, ground waters, land, stream, sediments, surface or subsurface strata and ambient air.

 

    	3

    	 

    

 

“Environmental Laws”
shall mean all Laws relating to the pollution of or protection of the Environment, from contamination by, or relating to injury
to, or the protection of, real or personal property or human health or the Environment, including, without limitation, all valid
and lawful requirements of courts and other Governmental Authorities pertaining to reporting, licensing, permitting, investigation,
remediation and removal of, emissions, discharges, releases or threatened releases of Hazardous Substances, chemical substances,
pesticides, petroleum or petroleum products, pollutants, contaminants or hazardous or toxic substances, materials or wastes, into
the Environment, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Substances, pollutants, contaminants or hazardous or toxic substances, materials or wastes.

 

“Environmental Report”
shall mean any report, study, assessment, audit, or other similar document that addresses any issue of actual or potential noncompliance
with, actual or potential liability under or cost arising out of, or actual or potential impact on business in connection with,
any Environmental Law or any proposed or anticipated change in or addition to any Environmental Law.

 

“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute thereto and all final
or temporary regulations promulgated thereunder.

 

“Exchange Act” shall
mean the U.S. Securities Exchange Act of 1934, as amended, or any successor law, and regulations and rules issued under that Act
or any successor law.

 

“Excluded Assets” shall
have the meaning ascribed to such term in Section 2.2(b).

 

“Excluded Contracts”
shall mean the Contracts listed on Appendix C.

 

“Excluded Liabilities”
shall have the meaning ascribed to such term in Section 2.3(b).

 

“Excluded Stores” means
the Bass retail stores listed on Section 3.7 of the Seller Disclosure Schedule.

 

“Financial Data” shall
have the meaning ascribed to such term in Section 3.6.

 

“GAAP” shall mean United
States generally accepted accounting principles consistently applied.

 

“Governmental Authority”
shall mean any (i) federal, state, local, provincial, municipal, foreign, or other government, (ii) governmental or quasi-governmental
authority of any nature or (iii) other body exercising any statutory, administrative, judicial, arbitrative, legislative, police,
regulatory, or taxing authority or power, including any arbitrator, court or tribunal of competent jurisdiction.

 

“Governmental Permits”
shall mean all licenses, franchises, registrations, permits, privileges, immunities, approvals and other authorizations or similar
rights obtained, or required to be obtained, from a Governmental Authority.

 

    	4

    	 

    

 

“Hazardous Substance”
shall mean any substance whether solid, liquid or gaseous in nature:

 

(i)         
the presence of which requires or may hereafter require notification, investigation, or remediation under any Environmental
Law;

 

(ii)         which
is or becomes defined as “toxic”, a “hazardous waste”, “hazardous material” or “hazardous
substance” or “pollutant” or “contaminant” under any present or future Environmental Laws;

 

(iii)        
the presence of which adversely affects or is injurious to human health or the Environment;

 

(iv)    
    which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and is or becomes regulated by any Governmental Authority;

 

(v)       
  which contains gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic compounds;

 

(vi)        
which contains polychlorinated byphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or

 

(vii)     
  which contains or emits radioactive particles, waves or materials, including radon gas.

 

“Heritage Brands” means
the Heritage Brands business described in PVH’s Form 10-K for its fiscal year ended February 3, 2013, filed with the SEC
on April 3, 2013.

 

“Indemnitee” has the
meaning ascribed to such term in Section 9.6.

 

“Indemnitor” has the
meaning ascribed to such term in Section 9.6.

 

“Intellectual Property”
shall mean (i) all trademarks, service marks, trade dress, logos, trade names, domain names, web-site wireframes, brand
names and corporate names and including all goodwill associated therewith, and all applications, registrations and renewals in
connection therewith, (ii) all inventions and designs (whether patentable or unpatentable and whether or not reduced to practice),
all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, extensions and reexaminations thereof, (iii) all protectable subject matter under
U.S. copyright law, including, but not limited to, artwork, photographs and advertising and promotional materials, computer software
(excluding “off the shelf” software programs and the licenses therefor) and all copyrights and all applications, registrations
and renewals in connection therewith and all associated rights, including moral rights and waivers thereof, (iv) all trade secrets
and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings, specifications, fabrications, patterns, customer and
supplier lists, pricing and cost information, business and marketing plans and proposals, and all rights of privacy and publicity,
(v) all other proprietary rights in the foregoing, and (vi) all copies and tangible embodiments of the foregoing (in whatever form
or medium, including historical and retrospective data, materials and objects), in each case as owned by or licensed to the Seller
and exclusively used for the Business.

 

    	5

    	 

    

 

“Intellectual Property Agreement”
shall mean the Intellectual Property Agreement between the Buyer and the Seller in the form of Exhibit A hereto.

 

“Intellectual Property Contract”
shall mean any Contract whereby the Seller licenses Intellectual Property from or to any third party.

 

“Inventory” shall mean
all products intended for sale in the Bass retail stores or through the Bass e-commerce website, wherever such products are located
including, without limitation, at the Bass retail stores, the warehouses of the Seller or of third parties, or in-transit between
such warehouses and the Bass retail stores, but excluding products intended for sale that are located at the Excluded Stores or
at a warehouse in Canada.

 

“Inventory Value” means
the value of the Inventory (other than Inventory in transit from vendors, which shall be paid for by the Buyer in accordance with
the terms of the Transition Services Agreement), as reflected on the Seller’s books and records, which shall include all
inventory acquisition costs, including freight, duty, sourcing, design and capital freight costs, loaded in accordance with past
practice; less reserves reflected on the Seller’s books and records for (i) Inventory markdowns, (ii) excess sourcing loads
and (iii) estimated inventory shrinkage, in each case to be computed in accordance with Seller’s past accounting practices
for such reserves and updated as if the Closing Date is at the end of a fiscal quarter; provided, that for Inventory that
the Seller determines to be non-basic in accordance with past practice, the Inventory markdown reserve as a percentage of Inventory
acquisition cost shall be 18.5% of the Fall 2013 season Inventory and 81% of the Spring 2013 season and older Inventory.

 

“Knowledge” shall mean,
with respect to a Person that is not an individual, the knowledge of such Person’s officers after reasonable inquiry.

 

“Law” shall mean any
constitution, law, treaty, compact, directive, ordinance, principle of common law, permit, authorization, variance, regulation,
rule, statute or other legal requirement of any Governmental Authority, including, without limitation, all federal, foreign, international,
state and local laws related to Taxes, ERISA, Hazardous Substances and the Environment, zoning and land use, Intellectual Property,
privacy, occupational safety and health, consumer protection, product quality, safety, employment and labor matters.

 

“Lease” has the meaning
ascribed to such term in Section 3.7(a).

 

“Leased Real Property”
has the meaning ascribed to such term in Section 3.7(a).

 

“Liabilities” shall mean
any and all debts, liabilities and obligations, of any kind or nature, including those arising under common law, statute (or other
Law), Contract or otherwise, whether known or unknown, asserted or unasserted, accrued or fixed, absolute or contingent, matured
or unmatured, or determined or determinable.

 

    	6

    	 

    

 

“License Agreement” shall
mean the License Agreement, in substantially the form attached hereto as Exhibit C, by and among the Buyer, PVH, PVH Retail
and PVH Canada, pursuant to which the Seller will have the right to operate the Bass wholesale business through April 30, 2014
and certain Excluded Stores through no later than July 31, 2014.

 

“Liens” shall mean all
mortgages, pledges, liens (statutory or other), security interests, conditional sale agreements, encumbrances, charges, claims
or similar restrictions.

 

“Material Adverse Effect”
shall mean any event, condition, occurrence, fact or change that has, individually or in the aggregate, a material adverse effect
on the results of operations or financial condition of the Business; provided, that none of the following shall be deemed
to constitute, and none of the following will be taken into account in determining the occurrence of a Material Adverse Effect:
any event, condition, occurrence, fact or change resulting from (i) changes in the general economic or political conditions in
the markets in which the Business operates, (ii) changes in applicable Law, (iii) acts of war, sabotage or terrorism or natural
disasters, (iv) compliance by the Buyer or the Seller with the terms of this Agreement or any other Related Agreement, and (v)
the announcement of this Agreement or the transactions contemplated hereby, except, in the case of any matter referred to in either
of clauses (i) or (iii), to the extent that the same affects the Business in a disproportionate manner relative to other participants
in the footwear or retail industry in the markets in which the Business operates.

 

“Material Contracts”
has the meaning ascribed to such term in Section 3.8(a).

 

“Minimum Cash” shall
mean, as of the Closing, the amount of cash held in the Bass retail stores (other than the Excluded Stores) at the opening of business
of such stores in accordance with the Seller’s policies.

 

“Non-Store Employee”
has the meaning ascribed to such term in Section 6.1(a).

 

“Notice of Disagreement”
has the meaning ascribed to such term in Section 2.5(a).

 

“Order” shall mean any
award, decision, injunction, decree, stipulation, determination, writ, judgment, order, ruling, or verdict ordered, issued, made
or rendered by any court, administrative agency or other Governmental Authority.

 

“Parent” has the meaning
ascribed to such term in the Preamble hereto.

 

“Permitted Liens” shall
mean Liens (i) for any current taxes or assessments not yet due and payable, (ii) created by statute of carriers, warehousemen,
mechanics, laborers or materialmen incurred in the ordinary course of business for sums not yet due and which are not, individually
on in the aggregate, material to the Business or the Purchased Assets, (iii) under Store Leases, or under personal property leases
with third parties entered into in the ordinary course of business consistent with past practices, and which are not, individually
on in the aggregate, material to the Business or the Purchased Assets or (iv) under licenses for the use of Intellectual Property
set forth in Section 3.10 of the Seller Disclosure Schedule.

 

“Person” shall mean any
individual, firm, unincorporated organization, corporation (including any not-for-profit corporation), general or limited partnership,
limited liability company, cooperative marketing association, joint venture, estate, trust, association, Governmental Authority
or other entity as well as any syndicate or group that would be deemed to be a person under Section 13(a)(3) of the Exchange Act.

 

    	7

    	 

    

 

“Preliminary Inventory Value”
shall have the meaning ascribed to such term in Section 2.4(b).

 

“Preliminary Statement”
shall have the meaning ascribed to such term in Section 2.4(b).

 

“Purchase Price” has
the meaning ascribed to such term in Section 2.4(a).

 

“Purchased Assets” has
the meaning ascribed to such term in Section 2.2(a).

 

“PVH” has the meaning
ascribed to such term in the Preamble hereto.

 

“PVH Canada” shall mean
PVH Canada, Inc., a Canadian corporation.

 

“PVH Puerto Rico” has
the meaning ascribed to such term in the Preamble hereto.

 

“PVH Retail” has the
meaning ascribed to such term in the Preamble hereto.

 

“Reasonable Best Efforts”
shall mean the Seller’s reasonable best efforts to obtain the assignment or extension of the specified Leases, as the case
may be; provided, that in no event shall the Seller be required to (i) make any payments to any landlord in connection with
obtaining such assignments or extensions (other than to the extent required by the applicable Lease) or (ii) make any other commitment
to any landlord in connection with the Seller’s business.

 

“Registered IP” has the
meaning ascribed to such term in Section 3.10(b).

 

“Related Agreements”
shall mean those agreements and documents entered into or delivered between the Buyer and the Seller related to, ancillary to,
or in connection with this Agreement.

 

“Representatives” has
the meaning ascribed to such term in Section 6.7.

 

“Retained Employee Liabilities”
shall mean, except as specifically set forth in Section 6.1(d), any and all Liabilities of the Seller and its Affiliates
to or with respect to any of its or their current or former employees, leased employees, independent contractors or other personnel
(and any of their respective spouses, dependents and beneficiaries), but with respect to Transferred Employees, only for periods
prior to the Closing Date, and any and all Liabilities to, under or with respect to any Employee Plan (including, for the avoidance
of doubt, any bonus plan of the Seller providing for bonuses to Business Employees payable as a result of the consummation of the
transactions contemplated by this Agreement, the performance of the Bass retail stores or of Seller, or otherwise).

 

“SEC” shall mean the
United States Securities and Exchange Commission.

 

“Seller” has the meaning
ascribed to such term in the Preamble hereto.

 

    	8

    	 

    

 

“Seller Disclosure Schedule”
shall mean that certain schedule attached hereto as Appendix B qualifying the representations and warranties contained in
Article III and certain other provisions of this Agreement.

 

“Seller Group Member”
shall mean the Seller and its Affiliates and their respective directors, officers, and their respective successors and assigns.

 

“Seller Employees” has
the meaning ascribed to such term in Section 6.2(b).

 

“Store Employee” has
the meaning ascribed to such term in Section 6.1(a).

 

“Store Leases” shall
mean all real property leases for Bass retail stores to which the Seller is a party or by which it is bound (other than Excluded
Contracts).

 

“Straddle Period” has
the meaning ascribed to such term in Section 6.3(c).

 

“Tax Authority” shall
mean any foreign or domestic government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body
or other authority exercising any taxing or Tax regulatory authority.

 

“Tax Returns” shall mean
all returns, reports, declarations, estimates, information returns and statements (including any related or supporting information)
filed or to be filed with any Tax Authority in connection with the determination, assessment, collection or administration of any
Taxes.

 

“Taxes” shall mean (i)
any and all federal, state, local and foreign taxes, assessments, governmental charges, duties, impositions and liabilities, including,
but not limited to, income (whether net or gross), excise, property, sales, transfer, gains, gross receipts, occupation, privilege,
payroll, wage, unemployment, workers’ compensation, social security, escheat, unclaimed property, use, value added, capital,
gross receipts, franchise, license, severance, stamp, premium, windfall profits, environmental (including taxes under Code Sec.
59A), capital stock, profits, withholding, disability, real property, personal property, registration, customs duties, alternative
or add-on minimum, estimated or other tax of any kind whatsoever (whether disputed or not) imposed by any Tax Authority, including
any related charges, fees, interest, penalties, additions to tax or other assessments, (ii) any liability for the payment of any
amounts of the type described in clause (i) as a result of being a member of a consolidated, combined, unitary, or aggregate group
for any Tax period, and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result
of being a transferee or successor to any person or as a result of any express or implied obligation to indemnify any other person.

 

“Tenant” has the meaning
ascribed to such term in Section 3.7(b).

 

“Trademarks” has the
meaning ascribed to such term in the Preamble hereto.

 

“Transfer Taxes” has
the meaning ascribed to such term in Section 6.3(b).

 

“Transferred Employees”
has the meaning ascribed to such term in Section 6.1(b).

 

    	9

    	 

    

 

“Transition Services Agreement”
shall mean the Transition Services Agreement by and among the Buyer, the Parent and PVH, dated as of the date hereof and to be
effective as of the Closing.

 

“Transition Services Agreement
Term” shall mean the Agreement Term (as defined in the Transition Services Agreement).

 

“Utilities Deposits”
has the meaning ascribed to such term in Section 2.2(a)(v).

 

ARTICLE II.

CLOSING; SALE OF PURCHASED ASSETS

 

2.1        The
Closing. The closing (the “Closing”) of the transactions contained in this Article II shall
take place at 9:00 a.m. (New York time) on November 4, 2013, unless all of the conditions contained in Articles VII
and VIII have not been satisfied or waived prior to such date (other than those conditions which will be satisfied as of
the Closing Time), in which event the Closing shall take place on the third Business Day after which all of the conditions contained
in Articles VII and VIII have been satisfied or waived (other than those conditions which will be satisfied
at the Closing Time), or at such other time as the Buyer and the Parent, on the one hand, and the Seller, on the other hand, may
agree, at the offices of Norton Rose Fulbright, 666 Fifth Avenue, New York, New York. (Hereinafter, such date is referred
to as the “Closing Date” and such time on the Closing Date is referred to as the “Closing Time.”)
The parties agree that documents may be delivered at the Closing by facsimile, electronic delivery in portable document format
(PDF) or other electronic means. The Closing shall be effective as of 12:01 a.m. on the Closing Date.

 

2.2        Sale
of Purchased Assets.

 

(a)        On
the terms and subject to the conditions set forth herein, at the Closing, the Seller shall sell, convey, transfer, assign and deliver
to the Buyer, and the Buyer shall, and the Parent shall cause the Buyer to, purchase from the Seller, all of the Seller’s
right, title and interest in, to and under the following assets exclusively used in the Business (collectively, the “Purchased
Assets”), free and clear of any Liens (other than Permitted Liens):

 

(i)         all
Inventory;

 

(ii)        all
Contracts (other than the Excluded Contracts), (the “Assumed Contracts”);

 

(iii)        all
Intellectual Property;

 

(iv)       all
leasehold improvements located at any Leased Real Property;

 

(v)        all
deposits with respect to utilities used in the operation of the Leased Real Property (collectively, the “Utilities Deposits”);

 

    	10

    	 

    

 

(vi)       all
post office boxes and addresses, telephone numbers and facsimile numbers associated with each Leased Real Property;

 

(vii)      all
items of tangible personal property used exclusively in the Business including, without limitation, marketing materials, current
photo imagery, shoe molds, garment patterns, furniture, computers, registers and other point-of-sale equipment, telephones, other
equipment, office materials, supplies, store fixtures, decorative items and showroom fixtures, in each case to the extent located
at the Leased Real Property; provided, however, that title to all computers, registers and other point-of-sale equipment
purchased hereunder shall not be deemed to have passed to the Buyer until immediately following the expiration of the Transition
Services Agreement Term;

 

(viii)     the
Minimum Cash;

 

(ix)       any
archival materials related exclusively to the Business;

 

(x)        all
showroom fixtures located at the Seller’s headquarters relating exclusively to the Business;

 

(xi)      
the goodwill associated with and the going concern value of the Business;

 

(xii)      to
the extent transferrable to the Buyer, all Governmental Permits which are held by the Seller and required for the conduct of the
Business as currently conducted or for the ownership and use of the Purchased Assets including, without limitation, those set forth
in Section 3.4 of the Seller Disclosure Schedule;

 

(xiii)      all
of the Seller’s rights under guarantees, warranties, indemnities and all similar rights against third parties, including
manufacturers or suppliers, to the extent related to any Purchased Assets or Assumed Liabilities; and

 

(xiv)      copies
of all books, records, files and materials in the care, custody or control of the Seller, to the extent relating exclusively to
any and all of the Purchased Assets, to the operations of the Business, and to Transferred Employees regardless of form or medium
of storage, including, without limitation, intellectual property files relating to the Intellectual Property included in the Purchased
Assets and the Intellectual Property Contracts, customer and prospective customer files, loyalty program customer contact information,
the design and corporate history library of the Business, payment and credit and collection records, invoices, packing lists and
shipping documents and supplier and prospective supplier files, maintenance records, sales and advertising material, documentation,
manuals, transaction history data, purchase orders, accounting and financial records and correspondence files.

 

(b)        Any
assets of the Seller not referenced in Section 2.2(a) shall not be included in the Purchased Assets (the “Excluded
Assets”). In addition, notwithstanding Section 2.2(a), the following assets shall also be deemed to be Excluded
Assets:

 

(i)          the
Excluded Contracts;

 

    	11

    	 

    

 

(ii)         all
(1) rent credits/deposits, (2) security deposits and deposits with respect to utilities and (3) prepaid rent and property taxes,
in each case solely to the extent related to the Excluded Stores;

 

(iii)        all
rights under Contracts associated with the Excluded Stores, including, without limitation, real property leases with respect to
the Excluded Stores; and

 

(iv)        all
leasehold improvements and all other tangible assets located at the Excluded Stores.

 

The Purchased Assets shall not include any
of the Seller’s assets which would otherwise constitute a part of the Purchased Assets, the assignment or attempted assignment
of which would be invalid or would constitute a breach of any agreement or commitment to which the Seller is a party or by which
the Seller may be bound; provided, however, that any such Purchased Asset referred to in this sentence shall be held
and/or received by the Seller for the benefit of the Buyer so that the Buyer will be in substantially the same position as if such
Purchased Asset had been transferred to the Buyer at the Closing. The sale, conveyance, transfer, assignment and delivery of the
Purchased Assets by the Seller to the Buyer hereunder shall be effected by such assignments, transfers of title, deeds, bills of
sale and other instruments as shall be reasonably requested by the Buyer.

 

2.3         Assumption
of Liabilities.

 

(a)         On
the terms and subject to the conditions set forth herein, at the Closing, the Buyer shall, and the Parent shall cause the Buyer
to, assume, become liable for and agree to pay, discharge and perform, as the case may be, only the following Liabilities of the
Seller (collectively, the “Assumed Liabilities”), and no other Liabilities whatsoever:

 

(i)          all
Liabilities under the Assumed Contracts (including the Store Leases), accruing, or arising out of facts or events occurring, on
or after the Closing Time;

 

(ii)         all
Liabilities for personal injury or property damage (or other product liability) with respect to Inventory that is sold by the Buyer
following the Closing Time;

 

(iii)        all
Liabilities relating to the Purchased Assets and the operation of the Business following the Closing Time;

 

(iv)        all
Liabilities arising out of the Seller’s Bass and the Seller’s other Heritage Brands gift card and loyalty programs
for purchases at the Bass retail stores (other than the Excluded Stores) accruing prior to, on or after the Closing Time; and

 

(v)         all
Liabilities relating to merchandise credits at the Bass retail stores, whether accruing prior to, on or after the Closing Time.

 

All of the Assumed Liabilities shall be
paid, performed or otherwise discharged by the Buyer as and when due.

 

    	12

    	 

    

 

(b)        Notwithstanding
anything else contained in this Agreement, other than the Assumed Liabilities, the Buyer shall not assume any Liabilities of the
Seller, including, without limitation, the following (collectively, the “Excluded Liabilities”):

 

(i)          Liabilities
under the Excluded Contracts or any other Contracts which are not validly and effectively assigned to the Buyer pursuant to this
Agreement and the benefit of which has not been secured for Buyer as provided in the final paragraph of Section 2.2;

 

(ii)         Liabilities
for Taxes (a) of the Seller, whether or not they relate to the operation of the Business or (b) relating to the Business or the
ownership of the Purchased Assets for any Tax period (or portion thereof) ending prior to the Closing Date; provided, that in no
event shall the Seller be responsible for Taxes for which the Buyer is responsible under Section 6.3, or that are Assumed
Liabilities described in Sections 2.3(a)(i)-(v);

 

(iii)        all
Retained Employee Liabilities;

 

(iv)        all
Liabilities for personal injury, property damage or other product liability with respect to any products sold by the Seller prior
to the Closing Time;

 

(v)         Liabilities
of the Seller arising out of or in connection with the negotiation, preparation, investigation and performance of this Agreement,
the Related Agreements, and the transactions hereby and thereby contemplated;

 

(vi)        any
Liabilities relating to or arising out of the Excluded Assets;

 

(vii)       other
than with respect to Actions related to the Assumed Liabilities set forth in Section 2.3(a)(ii), any Liabilities in respect
of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation of the Business or the
Purchased Assets to the extent such Action relates to such operation on or prior to the Closing Time;

 

(viii)      any
Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances or conditions existing on
or prior to the Closing Time or otherwise to the extent arising out of any actions or omissions of the Seller;

 

(ix)         any
trade accounts payable of the Seller (i) which constitute intercompany payables owing to Affiliates of the Seller; (ii) which constitute
debt, loans or credit facilities to financial institutions; or (iii) which did not arise in the ordinary course of business;

 

(x)          any
Liabilities of the Business relating or arising from unfulfilled commitments, quotations, purchase orders, customer orders or work
orders that are not effectively assigned to the Buyer pursuant to this Agreement and the benefit of which has not been secured
for Buyer as provided in the final paragraph of Section 2.2;

 

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(xi)         any
Liabilities to indemnify, reimburse or advance amounts to any present or former officer, director, employee or agent of the Seller
(including with respect to any breach of fiduciary obligations by same), except for indemnification of same pursuant to Section
9.3 as a Seller Group Member;

 

(xii)        any
Liabilities associated with debt, loans or credit facilities of the Seller and/or the Business owing to financial institutions;

 

(xiii)       any
Liabilities arising out of, in respect of or in connection with the failure by the Seller to comply with any Law or Order; and

 

(xiv)      any
Liabilities of the Business to the extent that such Liabilities are required to be performed prior to the Closing Date.

 

All of the Excluded Liabilities shall be
paid, performed or otherwise discharged by the Seller as and when due.

 

2.4         Purchase
Price; Closing Payment.  

 

(a)         The
aggregate purchase price for the Purchased Assets shall be equal to (x) the sum of (i) the Preliminary Inventory Value, (ii) the
Utilities Deposits and (iii) the Minimum Cash, less (y) $425,000 in respect of the Seller’s Bass and the Seller’s other
Heritage Brands gift card and loyalty programs and merchandise credit program (the sum of the amounts of the items identified in
clause (x), less the amount in clause (y), the “Purchase Price”).

 

(b)        Not
less than five (5) Business Days prior to the Closing Date, the Seller shall prepare and deliver to the Buyer a statement (the
“Preliminary Statement”) reflecting the Seller’s good faith estimate of the Purchase Price as of the Closing
Date. Such calculation shall be prepared in accordance with the books and records of the Seller; provided, that the calculation
of the Inventory Value as of the Closing Date (the “Preliminary Inventory Value”), shall be based on a physical
inventory count conducted by the Seller during October, 2013, which count may be observed by the Buyer and the Buyer’s accountants,
Ernst & Young LLP. At the Closing, in consideration of the sale of the Purchased Assets to the Buyer, the Buyer shall, and
the Parent shall cause the Buyer to, pay to the Seller (or its designee) an amount equal to the Purchase Price as set forth in
the Preliminary Statement by wire transfer of immediately available funds to an account designated in writing by the Seller.

 

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2.5        Purchase
Price Adjustment. The Purchase Price shall be adjusted as follows:

 

(a)        Within
30 days after the Closing Date, the Seller shall deliver to the Buyer a statement (the “Closing Date Statement”)
setting forth the actual Inventory Value as of the Closing Date (the “Closing Date Inventory Value”), prepared
in a manner consistent with the preparation of, and based on, the Preliminary Inventory Value; provided, that the Seller
shall not be required to conduct an additional physical inventory count in connection with such calculation. The Closing Date Statement
shall include a copy of the inventory data, including valuation, upon which such statement is based. The Closing Date Statement
shall become final and binding upon the parties on the 30th day following delivery thereof (or, if the Buyer earlier confirms in
writing its agreement with the Closing Date Statement, upon the Seller’s receipt of such confirmation), unless the Buyer
gives notice of its disagreement with the Closing Date Statement (a “Notice of Disagreement”) to the Seller
prior to such date. Any Notice of Disagreement shall (i) specify in reasonable detail the nature of any disagreement so asserted
and (ii) only include disagreements based on mathematical errors or based on the Inventory Value as of the Closing Date not being
calculated in accordance with the terms of this Agreement. If a Notice of Disagreement is received by the Seller in a timely manner,
then the Closing Date Statement (as revised in accordance with this sentence) shall become final and binding upon the Buyer and
the Seller on the earlier of (A) the date the Buyer and the Seller resolve in writing any differences they have with respect to
the matters specified in the Notice of Disagreement and (B) the date any disputed matters are finally resolved in writing by the
Accounting Firm. During the 30-day period following the delivery of a Notice of Disagreement, the Buyer and the Seller shall seek
in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement.
Unless otherwise agreed by the Buyer and the Seller in writing, at the end of such 30-day period, the Buyer and the Seller shall
submit to an independent accounting firm (the “Accounting Firm”) for arbitration, in accordance with the standards
set forth in this Section 2.5, only matters that remain in dispute and were properly included in the Notice of Disagreement
in accordance with this Section 2.5 and any claim of calculation-related errors. The Accounting Firm shall be a nationally
recognized independent public accounting firm as shall be agreed upon by the Buyer and the Seller in writing. The Buyer and the
Seller shall use their commercially reasonable efforts to cause the Accounting Firm to render a written decision resolving the
matters submitted to the Accounting Firm within 30 days of the receipt of such submission. The scope of the disputes to be resolved
by the Accounting Firm shall be limited to whether the items in dispute that were properly included in the Notice of Disagreement
were correctly determined pursuant to this Section 2.5 and may include calculation-related errors, and the Accounting Firm
is not to make any other determination. The Accounting Firm’s decision shall be based solely on written submissions by the
Buyer and the Seller and their respective representatives and by reference to the terms of this Agreement. The Seller and the Buyer
shall furnish or cause to be furnished to the Accounting Firm such work papers and other documents and information related to the
disputed matters as the Accounting Firm may request and are reasonably available to the Seller, the Buyer or their respective agents.
The Accounting Firm shall address only those items in dispute and calculation-related errors. Judgment may be entered upon the
determination of the Accounting Firm in any court having jurisdiction over the party against which such determination is to be
enforced. The fees and expenses of the Accounting Firm incurred pursuant to this Section 2.5 shall be borne by the Buyer
and the Seller equally.

 

(b)        Within
five Business Days after the Closing Date Statement becomes final and binding on the parties pursuant to this Section 2.5,
the Buyer shall, and the Parent shall cause the Buyer to, pay to the Seller an amount equal to the amount by which the Closing
Date Inventory Value exceeds the Preliminary Inventory Value, by wire transfer in immediately available funds (or, in the event
that the Preliminary Inventory Value exceeds the Closing Date Inventory Value, the Seller shall pay to the Buyer an amount equal
to the amount by which the Preliminary Inventory Value exceeds the Closing Date Inventory Value, by wire transfer of immediately
available funds).

 

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(c)        The
Seller agrees that following the Closing it shall not take any actions, including by not maintaining appropriate books and records,
which would affect the ability of any party to calculate the Closing Date Inventory Value in accordance with the terms hereof,
determine the grounds for any Notice of Disagreement or evaluate any disagreement set forth in a Notice of Disagreement. During
the period of time from and after the delivery of the Closing Date Statement through the final determination of the Closing Date
Statement, the Buyer and/or its authorized representatives shall have the right, during normal business hours and upon reasonable
prior notice, to examine and have copies of those books and records of the Seller relevant to the preparation of the Closing Date
Statement, and may have reasonable access to employees of the Seller for purposes of asking questions relating to the preparation
of the Closing Date Statement. Such rights of access shall be exercised in a manner that does not unreasonably interfere with the
operations of the Seller.

 

2.6        Allocation
of Purchase Price. Appendix A sets forth an allocation of the Purchase Price (and all other capitalized costs)
among the Purchased Assets in accordance with Code §1060 (and any similar provision of state, local or foreign Law, as appropriate),
subject to any post-Closing adjustment to the Purchase Price provided in this Agreement. Any post-Closing adjustments to the Purchase
Price shall be reflected in the Purchase Price allocation as revised hereunder in a manner consistent with Appendix A and
as agreed to by the Buyer and the Seller at the time of the applicable adjustment (such agreement not to be unreasonably withheld
or delayed). Each of the Buyer and the Seller acknowledges and confirms that the allocation was determined at arm’s length
based on fair market values and their willingness to proceed with the transactions contemplated by this Agreement. The Buyer and
the Seller, and their respective Affiliates, shall report, act and file all income and franchise Tax Returns (including, but not
limited to, Internal Revenue Service Form 8594) in all respects and for all purposes consistent with such allocation. Neither the
Buyer nor the Seller shall take any position (whether in audits, Tax Returns or otherwise) for income or franchise Tax purposes
that is inconsistent with such allocation, unless required to do so by applicable Law. In the event the allocation is audited or
disputed by any Tax Authority, the party receiving notice thereof shall promptly notify the other party, and each of the Seller
and the Buyer shall provide each other with all documents, forms and other information regarding the allocation of the Purchase
Price as it may reasonably request in order to defend such audit or dispute.

 

2.7        Actions
Simultaneous. All actions to be taken and all documents to be executed and delivered by all parties at the Closing shall
be deemed to have been taken and executed and delivered simultaneously and no actions shall be deemed to have been taken nor shall
any documents be deemed to have been executed and delivered until all actions have been taken and all documents have been executed
and delivered.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE
SELLER

 

Except as set forth in the Seller Disclosure
Schedule, PVH, PVH Retail and PVH Puerto Rico hereby jointly and severally represent and warrant to the Buyer and the Parent as
follows:

 

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3.1        Organization;
Good Standing. Each of PVH and PVH Puerto Rico is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware. PVH Retail is a limited liability company duly organized, validly existing and in good
standing under the Laws of the State of Delaware. Each of PVH, PVH Retail and PVH Puerto Rico has full corporate or limited liability
company power and authority, as the case may be, to conduct the Business as presently conducted by it, and to own or lease all
of the assets owned or leased by it in connection with the Business; and is duly licensed or qualified to do business and is in
good standing as a foreign corporation or limited liability company in all jurisdictions in which the nature of the Business and
activities conducted by it exclusively in connection with the Business, and/or the character of the assets owned or leased by it
in connection with the Business, makes such qualification or license necessary, except for those jurisdictions in which the failure
to be so qualified or licensed would not have a Material Adverse Effect.

 

3.2        Authority;
Execution and Delivery; Enforceability. Each of PVH, PVH Retail and PVH Puerto Rico has full corporate or limited liability
company power and authority, as the case may be, to execute and deliver this Agreement and, to the extent a party thereto, the
Related Agreements, to perform its obligations hereunder and under such Related Agreements and to consummate the transactions contemplated
hereby and by such Related Agreements. All corporate or limited liability company acts and other proceedings required to be taken
by each of PVH, PVH Retail and PVH Puerto Rico to authorize the execution, delivery and performance of this Agreement and such
Related Agreements have been duly and properly taken. Each of this Agreement and the Related Agreements has been duly executed
and delivered by each of PVH, PVH Retail and PVH Puerto Rico (to the extent a party thereto), and constitutes the legal, valid
and binding obligation of each of PVH, PVH Retail and PVH Puerto Rico (to the extent a party thereto), enforceable against PVH,
PVH Retail and PVH Puerto Rico in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium
and other similar Laws of general applicability relating to or affecting creditors’ rights and to general equitable principles.

 

3.3        Non-Contravention.
Assuming the consents described in Section 3.4 have been received, the execution and delivery of this Agreement and the
Related Agreements by each of PVH, PVH Retail and PVH Puerto Rico, to the extent a party thereto, does not, and the consummation
by the Seller of the transactions contemplated hereby and by such Related Agreements and compliance by the Seller with the terms
hereof and of such Related Agreements, will not:

 

(i)          violate
or result in a breach of the certificate of incorporation, the by-laws, the certificate of formation or operating agreement, as
applicable, of PVH, PVH Retail or PVH Puerto Rico;

 

(ii)         except
as set forth in Section 3.3 of the Seller Disclosure Schedule, constitute a default under, or a violation or breach of,
or result in the acceleration of any obligation of PVH, PVH Retail or PVH Puerto Rico under, or a change in any right or obligation
of, PVH, PVH Retail or PVH Puerto Rico or counterparty, under, any provision of any Assumed Contract to which PVH, PVH Retail or
PVH Puerto Rico is a party or by which the Business is bound or to which any of the Purchased Assets are subject, in each case,
in any material respect;

 

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(iii)        violate
any Order or any Law applicable to the Seller or affecting the Purchased Assets or the Business in any material respect; or

 

(iv)        result
in the creation of any Lien on any of the Purchased Assets, other than any Lien created by or through any action of the Buyer or
its Affiliates.

 

3.4        Consents
and Approvals. Except as set forth in Section 3.4 of the Seller Disclosure Schedule, no consent, approval, declaration
or filing with, any Governmental Authority, and no consent or approval of any Person, is required to be obtained by or on behalf
of Seller in connection with the execution, delivery and performance by Seller of this Agreement or the Related Agreements, to
the extent a party thereto, or the consummation of the transactions contemplated hereby and by such Related Agreements, the absence
of which, in each case, would adversely affect the Business in a material respect.

 

3.5        Purchased
Assets; Title to Assets.

 

(a)        Except
for the Excluded Contracts, the assets referred to in Section 2.2(b) and as set forth in Section 3.5 of the Seller
Disclosure Schedule, the Purchased Assets constitute all of the assets used exclusively by the Seller in the Business.

 

(b)        Except
as set forth in Section 3.5 of the Seller Disclosure Schedule, the Seller has good and valid title to, or a valid leasehold
interest in, all of the Purchased Assets, free and clear of all Liens (other than (i) Permitted Liens and (ii) Liens created under
the Credit and Guaranty Agreement, which shall be released on or prior to the Closing Time).

 

3.6       Financial
Data. Section 3.6 of the Seller Disclosure Schedule contains the unaudited balance sheets of the Business as
of, and the unaudited statements of income of the Business for, the fiscal year of the Business ended February 3, 2013 and the
twenty six weeks of the Business ended August 4, 2013 (the “Balance Sheet Date”, and such financial statements,
the “Financial Data”). The Financial Data have been prepared by PVH in accordance with GAAP applied on a consistent
basis except that (i) inventory markdown adjustments under the retail inventory method utilized by PVH are trued up on the financial
statements of the Business only at year end, (ii) adjustments to account for excess capitalized inventory sourcing costs are only
recorded on a quarterly basis and (iii) the Financial Data do not contain all line items and footnotes that would be presented
in financial statements prepared in accordance with GAAP. The Financial Data are based on the books and records of the Business,
are extracted from the Seller’s consolidated financial statements on a basis consistent with past practice, and represents
in all material respects the financial position and results of operations of the Business as Seller views the Business.

 

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3.7        Leased
Property. 

 

(a)        Section
3.7 of the Seller Disclosure Schedule contains a complete and correct list as of the date hereof of (i) all the real property
leased to the Seller that is used exclusively in connection with the Business (the “Leased Real Property”),
including the street address, city and state at which each of the premises is located and, if applicable, the mall in which the
premises is located, and (ii) each Store Lease, including the name of the lessor and lessee thereunder. Complete and correct copies
of each lease for the Leased Real Property including every Store Lease (each a “Lease” and, collectively, the
“Leases”), as amended, modified or supplemented, have been provided to the Buyer.

 

(b)        Seller,
or an Affiliate of Seller, is the tenant (collectively, “Tenant”) under the Leases.

 

(c)        Section
3.7 of the Seller Disclosure Schedule identifies:

 

(i)          each
Lease the terms of which provide that the Lease may be assigned to the Buyer, require that the Tenant furnish notice to the landlord
of an assignment to the Buyer and set forth a Lease expiration date in 2014 or later (the “Category 1 Leases”);

 

(ii)         each
Lease which requires the landlord’s consent to the assignment of such Lease to the Buyer (the “Category 2 Leases”);

 

(iii)        each
Lease which sets forth a Lease expiration date in 2013, and the proposed extension or renewal term being negotiated by the Seller
(the “Category 3 Leases”); and

 

(iv)        each
Lease with respect to an Excluded Store.

 

(d)        Except
as set forth in Section 3.7 of the Seller Disclosure Schedule, no event has occurred which, with the lapse of time or the
giving of notice or both, would constitute a default in any material respect by the Seller, or, to the Knowledge of PVH, by any
other party to any Lease.

 

(e)        Except
as set forth in Section 3.7 of the Seller Disclosure Schedule, to the Knowledge of PVH, there is no condemnation or other
proceeding in eminent domain, pending or threatened, with respect to any of the Leased Real Property.

 

(f)         Other
than those agreements contained in the Leases, there are no agreements or understandings in writing between Tenant and any landlord
with respect to the Leases or the Leased Real Property.

 

(g)        Tenant
has not subleased or assigned any Lease or any part thereof.

 

(h)        Neither
Tenant nor any landlord has commenced any Action with respect to any Lease.

 

(i)         Since
October 1, 2012, Tenant has not received any written notice of any violation of any Laws relating to use, storage or release of
hazardous materials with regard to the Leased Real Property.

 

(j)         Tenant
has paid in full when due for all improvements made to any of the Leased Real Property.

 

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3.8       Contracts.

 

(a)        Except
as set forth in Section 3.8 of the Seller Disclosure Schedule, exclusively with respect to the Business, as of the date
hereof the Seller is not a party to:

 

(i)          any
Contract (other than Store Leases) providing for an aggregate purchase price or payments of more than $25,000 in any one-year period
or $100,000 during the term of such Contract;

 

(ii)         any
Contract for the purchase by the Seller of any supply or product that calls for performance over a period of more than twelve months,
other than those that are terminable at will by the Seller;

 

(iii)        any
Contract under which the Seller is obligated to repay or has guaranteed any outstanding indebtedness for borrowed money;

 

(iv)        any
Contract providing for any joint venture, partnership or similar business arrangement;

 

(v)         any
Intellectual Property Contract;

 

(vi)        any
individual employment, consulting or severance Contract;

 

(vii)       any
Contract that limits the freedom of the Seller or its Affiliates to own, operate, sell, transfer, pledge or otherwise dispose of
or encumber any Purchased Assets or which would limit the freedom of the Buyer after the Closing Time;

 

(viii)      any
Contract with the Seller or any Affiliate of the Seller other than a Contract that terminates at the Closing;

 

(ix)         any
Contract restricting the Seller from carrying on the Business in its usual and customary manner in any jurisdiction; and

 

(x)          any
other Contract not made in the ordinary course of business that is material to the Business.

 

The Contracts listed on the Seller Disclosure
Schedule in accordance with clauses (i) through (x) of this Section 3.8(a) are hereinafter referred to as the “Material
Contracts.”

 

(b)        Each
Material Contract is legal, valid and binding against the Seller or its Affiliate party thereto, enforceable against the Seller
or its Affiliate party thereto in accordance with its terms; and, to the Seller’s Knowledge, against each other party thereto,
subject to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar Laws or general applicability relating to
or affecting creditors’ rights and to general equitable principles. Except as set forth in Section 3.8 of the Seller
Disclosure Schedule, the Seller has, with respect to each Material Contract, performed in all material respects all obligations
required to be performed by it, and is not in default in any material respect under any such Material Contract, and, to the Knowledge
of PVH, no other party to any such Material Contract is in default in any material respect under any such Material Contract. Except
as set forth in Section 3.8 of the Seller Disclosure Schedule, no event has occurred which, with the lapse of time or the
giving of notice or both, would constitute a default in any material respect by the Seller, or, to the Knowledge of PVH, by any
other party to any such Material Contract. The Seller has provided to the Buyer a complete and correct copy of each Material Contract
required to be listed on the Seller Disclosure Schedule. The Seller has not assigned or otherwise transferred any of its rights
under any Material Contract.

 

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3.9        Labor
and Employment Matters.

 

(a)        Section
3.9 of the Seller Disclosure contains a complete and correct list of all Contracts currently in effect with respect to each
of the Business Employees. The Seller has provided to the Buyer the name, job title, location (e.g., store number or headquarters)
and salary for each Business Employee as of a date as close as practicable to the date hereof.

 

(b)        To
the Knowledge of the Seller, no Business Employee is a party to any confidential information or other agreement that in any way
restricts the ability of such Business Employee to perform his or her duties for the Seller.

 

(c)        Except
as set forth in Section 3.9 of the Seller Disclosure Schedule, there are no proceedings pending or, to the Knowledge of
the Seller, threatened, between the Seller, on the one hand, and any current Business Employees thereof, on the other hand, including
any claims for actual or alleged harassment or discrimination based on race, national origin, age, sex, sexual orientation, religion
or disability.

 

(d)        With
respect to the Business Employees, the Seller is not a party to, or bound in any manner by, any collective bargaining agreement
contract with a labor or trade union, labor organization, staff association or works council, or similar grouping of employee representations,
and PVH has no Knowledge of any activities or proceedings of any labor union to organize the Business Employees by any Person,
unit or group seeking to act as their bargaining agent. There has not been over the last three years any labor strike or work stoppage
by the Business Employees.

 

(e)        The
Seller has provided all of its Business Employees with all wages, benefits, relocation benefits, stock options, bonuses and incentives
and all other compensation which became due and payable. Neither the execution or delivery of this Agreement, nor the continuing
conduct of the Business will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default
of, any Contract under which the Business Employees are now obligated.

 

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3.10      Intellectual
Property.

 

(a)        The
Seller owns or otherwise has a right to use, free and clear of any obligations to pay royalties, all material Intellectual Property
necessary for the conduct of the Business as currently conducted, free and clear of all Liens other than (i) Permitted Liens and
(ii) Liens created under the Credit and Guaranty Agreement, which shall be released on or prior to the Closing Time. All material
Registered IP (as defined below) is valid and enforceable and free and clear of any Lien other than (i) Permitted Liens and (ii)
Liens created under the Credit and Guaranty Agreement, which shall be released on or prior to the Closing Time. Except as set forth
in Section 3.10 of the Seller Disclosure Schedule, each item of Intellectual Property included in the Purchased Assets will
be owned or available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing. The Seller
does not own any material common law Intellectual Property necessary for the conduct of the Business as currently conducted (other
than those common law rights in any Registered IP) and, except as set forth in Section 3.10 of the Seller Disclosure Schedule,
there is no Intellectual Property owned by third parties that is material to or necessary for the conduct of the Business as currently
conducted. Except as would not have a Material Adverse Effect, (i) there is not pending against or, to the Seller’s Knowledge,
threatened in writing against the Seller, any claim by any third party contesting the validity, enforceability, use or ownership
of any material Intellectual Property owned by the Seller, or alleging that the Seller is infringing on or misappropriating any
Intellectual Property of a third party with respect to the operation of the Business, (ii) there are no claims pending or, to PVH’s
Knowledge, threatened in writing that have been brought by the Seller against any third party alleging infringement of any material
Intellectual Property, (iii) the Seller has not received any written notice that any of the Intellectual Property currently used
by the Seller infringes upon or otherwise violates the rights of others and (iv) there are no claims pending or, to the Knowledge
of PVH, threatened in writing contesting the right of the Seller to make, use, distribute, import, export, sell or promote any
of the products or services currently sold or offered exclusively in connection with the Business.

 

(b)        Section
3.10 of the Seller Disclosure Schedule sets forth a true, complete and correct list as of the date indicated thereon of: (i)
all registrations and applications for registration in the name of the Seller for any Intellectual Property (“Registered
IP”), and (ii) all pending, threatened in writing and actual written claims, actions and proceedings (including those
in Patent and Trademark Offices and courts in the United States and throughout the world) relating to any material Intellectual
Property owned by the Seller, if any. The Seller has delivered to the Buyer correct and complete copies of all material written
documentation evidencing ownership and prosecution (if applicable) of each item of Intellectual Property of the Business. Section
3.10 of the Seller Disclosure Schedule also identifies all domain names, email addresses, vanity telephone numbers, material
trade names, and material unregistered trademarks and service marks the Seller uses exclusively in connection with the operation
of the Business.

 

(c)        Consummation
of the transactions contemplated by this Agreement will not materially alter, result in the loss of or require payments of any
additional amounts with respect to the Intellectual Property owned by the Seller utilized exclusively in connection with the Business.

 

(d)        Except
as would not have a Material Adverse Effect, no Intellectual Property owned by the Seller is subject to any outstanding Action
pursuant to which the Seller was a party or any agreement to which the Seller is a party restricting the use of such Intellectual
Property.

 

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(e)        Except
as would not have a Material Adverse Effect, the Seller takes commercially reasonable measures to protect and preserve its Intellectual
Property and the confidentiality of all trade secrets and other confidential information that comprise any Intellectual Property
owned by the Seller.

 

(f)         Except
as set forth in Section 3.10 of the Seller Disclosure Schedule, as of the date hereof there are no material Intellectual
Property Contracts, licenses, sublicenses, covenants or agreements which have been entered into by the Seller with respect to any
material Intellectual Property. The Seller is not in default in any material respect under or in relation to any such license,
sublicense, covenant or agreement. Section 3.10 of the Seller Disclosure Schedule identifies as of the date hereof each
material Intellectual Property Contract and each item of material Intellectual Property that any third party owns and that the
Seller uses pursuant to license, sublicense, agreement, or permission (other than “off-the-shelf” software purchased
or licensed for use in the day-to-day operations of the Business). The Seller has delivered to the Buyer correct and complete copies
of all such material Intellectual Property Contracts, licenses, sublicenses, agreements, and permissions (as amended to date).
To the Knowledge of PVH, with respect to each such item of used material Intellectual Property (including any such “off-the-shelf”
software):

 

(i)          the
underlying item of Intellectual Property is not subject to any outstanding Order; and

 

(ii)         no
claim, action or proceeding is pending or threatened that challenges the legality, validity, or enforceability of the underlying
item of Intellectual Property.

 

(g)        To
the Knowledge of PVH, except as set forth in Section 3.10 of the Seller Disclosure Schedule, all current and former employees,
agents and consultants of the Seller who have made material contributions to the development of the Intellectual Property or who
have had access to the Seller’s Confidential Information and trade secrets with respect to Intellectual Property, have entered
into contractual agreements with the Seller whereby (a) the Seller is entitled to all ownership rights in any Intellectual Property,
that the employee, agent, or consultant may have invented, discovered, originated, made, or conceived while working for the Seller,
and all such ownership rights are duly assigned to the Seller and (b) the employee, agent, or consultant agrees to hold and maintain
in confidence all Confidential Information and trade secrets of the Seller relating exclusively to the Business.

 

(h)        Solely
with respect to the Business, to the Knowledge of PVH: (i) neither the Seller or any of its employees or consultants has infringed
or made unlawful use of, or is infringing or making unlawful use of, any proprietary or confidential information of any Person,
including without limitation any former employer of any past or present employee or consultant of the Seller; and (ii) the activities
of the Seller’s employees and consultants in connection with their employment or consulting do not violate any agreements
or arrangements that any such employees or consultants have with any former employer or any other Person concerning the confidential
or proprietary information of the former employer.

 

3.11 
    Tax Matters. Except as set
forth in Section 3.11 of the Seller Disclosure Schedule, to the extent relating to the Business or the Purchased
Assets:

 

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(a)        the
Seller has timely filed all income and other material Tax Returns that it was required to file. All such Tax Returns were correct
and complete in all material respects. All material Taxes owed by the Seller (whether or not shown on said Tax Returns) have been
paid. All material Taxes that the Seller is or was obligated to withhold from amounts paid to any Person have been fully paid and
all Tax Returns that relate to such payments have been filed.

 

(b)        no
Tax proceeding is currently being conducted with respect to the Business and no Tax Authority has given written notice to the Seller
of any intention to assert any deficiency or claim for additional Taxes relating to the Business; and

 

(c)        there
are no Liens for any Taxes (other than Taxes not yet due and payable).

 

3.12      Litigation
and Claims. Except as set forth in Section 3.12 of the Seller Disclosure Schedule, there is no Action
pending or, to the Knowledge of PVH, threatened, against or affecting the Purchased Assets or the Business that, if adversely
determined, would have an adverse effect in any material respect upon the Business or the Purchased Assets, and there is no
Action pending or, to the Knowledge of PVH, threatened, against the Seller that seeks to enjoin, prohibit or otherwise
challenge, or affecting the propriety or validity of the transactions contemplated hereby or by the Related Agreements. As of
the date of this Agreement, the Seller is not subject to any material restriction or limitation on the Business under any
Order and no unsatisfied Order rendered against or affecting the Seller or any of the Purchased Assets might reasonably
result in an adverse effect in any material respect upon the Business or any of the Purchased Assets.

 

3.13      Governmental
Permits; Compliance with Laws.

 

(a)        The
Seller owns, holds or possesses all material Governmental Permits which are necessary to entitle it to own or lease, operate and
use its assets that are utilized exclusively in connection with the Business and to carry on and conduct the Business substantially
as currently conducted, except for such incidental Governmental Permits which would be obtainable in due course by any qualified
applicant without any adverse effect on the Business or any undue burden or cost in the event of any failure to apply, lapse, termination,
cancellation or forfeiture thereof.

 

(b)        Except
as set forth in Section 3.13 of the Seller Disclosure Schedule, (i) the Seller has fulfilled and performed in all material
respects its obligations under each of the Governmental Permits which it owns, holds or possesses exclusively in connection with
the Business, and (ii) since February 3, 2013, no written notice of cancellation, of default or of any material dispute concerning
any Governmental Permit held exclusively in connection with the Business, or of any event, condition or state of facts described
in the preceding clause, has been received by the Seller.

 

(c)        The
Seller is in compliance in all material respects with all Laws which are applicable to the Business or the ownership or use of
the Purchased Assets.

 

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3.14      Environmental
Matters. 

 

(a)        Except
as set forth in Section 3.14 of the Seller Disclosure Schedule to the extent relating to the Business or the Purchased Assets:

 

(i)          the
Seller is in compliance, in all material respects, with its obligations under applicable Environmental Laws;

 

(ii)         the
Seller has obtained and at all times has been in compliance, in all material respects, with, and has submitted any necessary applications
for renewals of, material permits required pursuant to Environmental Law; and

 

(iii)        the
Seller has not disposed of, arranged for the disposal of, released, threatened to release, or transported any Hazardous Substances
in violation of any applicable Environmental Law in any material respect.

 

(b)        The
Seller has made available to the Buyer a true, correct and complete copy of all Environmental Reports related to any of the Leased
Real Property that are in the Seller’s possession or control.

 

(c)        There
is no Action pending or, to the Seller’s Knowledge, threatened pursuant any Environmental Law against the Seller that is
related to the Business which, if adversely determined, might reasonably result in an adverse effect upon the Business in any material
respect.

 

3.15      Employee
Plans.

 

(a)        For
purposes of this Agreement, “Employee Plan” means each “employee benefit plan” (as defined in Section
3(3) of ERISA), and any employment, severance, retention, change in control, incentive (equity or otherwise), deferred compensation,
vacation, holiday, sick leave, fringe benefit, educational assistance, flexible spending or other compensatory agreement, plan,
program or arrangement that is not an “employee benefit plan” as so defined and that, in either case, is made or maintained
with or for the benefit of or otherwise covers any Business Employee or any beneficiary or dependent of any Business Employee.

 

(b)        Except
as would not result in liability to the Buyer, (i) each Employee Plan is in compliance in all material respects with its terms
and with the requirements of applicable Law, including the Code and ERISA, and (ii) all contributions and payments (including all
premiums, employer contributions, employee salary reduction contributions and benefits) required to have been made to, under or
with respect to each Employee Plan with respect to Business Employees (and their dependents and beneficiaries) prior to the Closing
will have been made, other than immaterial amounts that will be made after the Closing by the Seller without an adverse effect
on the Buyer or any Business Employee.

 

(c)        The
Seller has neither incurred nor may incur, directly or indirectly, any Liability under Title IV of ERISA with respect to any “employee
pension plan” (within the meaning of Section 3(2) of ERISA), including, without limitation, any multiemployer plan described
in Section 3(37) of ERISA, which could be or become a liability of the Buyer. No Lien has been imposed on the Purchased Assets
pursuant to Section 302, 303 or Title IV of ERISA or Section 412 or 430 of the Code and no fact exists that would reasonably be
expected to give rise to any such Lien.

 

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(d)         Except
as would not reasonably be expected to result in liability to the Buyer, the execution and delivery by the Seller of this Agreement
and the Related Agreements and the consummation by the Seller of the transactions contemplated hereby and thereby shall not result
in the payment of or obligation to pay any “excess parachute payment” (within the meaning of Code Section 280G).

 

(e)         The
Seller is not entering into the transactions contemplated by this Agreement with a principal purpose of evading liability as described
in Section 4069 of ERISA.

 

3.16      Inventory.
Section 3.16 of the Seller Disclosure Schedule sets forth the Inventory as at the Balance Sheet Date, by location.
Except as set forth in Section 3.16 of the Seller Disclosure Schedule, all of the Inventory has been acquired by the Seller
in the ordinary course of business and is of a quality reasonable for use in the Business consistent with past practice, subject
to reserves. All such inventory is owned free and clear of any Liens (other than (i) Permitted Liens and (ii) Liens created under
the Credit and Guaranty Agreement, which shall be released on or prior to the Closing Time).

 

3.17      Suppliers.
Section 3.17 of the Seller Disclosure Schedule contains, for the fiscal year of the Business ended February 3, 2013 and
the twenty six weeks of the Business ended on the Balance Sheet Date, a complete and correct list of the suppliers of the Business
that accounted for more than $100,000 of the purchases of the Business during any such period. No supplier required to be listed
on the Seller Disclosure Schedule has since February 3, 2013 threatened in writing to cancel or otherwise to terminate its relationship
with the Seller, or its business done with the Seller.

 

3.18      Privacy
and Data Security.

 

(a)         In
relation to the Business, the Seller has not been required under applicable Law to issue, and has not issued, any notifications
under any applicable Law relating to the actual or suspected unauthorized access or acquisition of personally identifiable information.

 

(b)         In
relation to the Business, the Seller has not undergone any audit or regulatory inquiry from any Governmental Authority with respect
to privacy or data security of personally identifiable information and, to the Seller’s Knowledge, no inquiry from any Governmental
Authority (including as a result of complaints from any individuals provided to such Governmental Authority) is threatened regarding
same.

 

3.19      Insurance.
The Seller maintains product liability and general liability insurance policies for the Business that are reasonable and customary
in scope and amount of coverage for businesses similarly situated.

 

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3.20      No
Finder. Other than Peter J. Solomon Company (whose fee is the sole responsibility of the Seller), neither the Seller
nor any party acting on its behalf, has paid or become obligated to pay any fee or commission to any broker, finder or intermediary
for or on account of the transactions contemplated hereby or by the Related Agreements.

 

Except for the representations and warranties made
herein, in any Related Agreement or in any certificate to be delivered hereunder, the Seller makes no representation or warranty
express or implied, at law or in equity, and any such other representations or warranties are hereby expressly disclaimed.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE PARENT

 

The Buyer and the Parent hereby jointly and
severally represent and warrant to the Seller as follows:

 

4.1        Organization;
Good Standing. Each of the Buyer and the Parent is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware.

 

4.2        Authority;
Execution and Delivery; Enforceability. Each of the Buyer and the Parent has full corporate power and authority to execute
and deliver this Agreement and, to the extent a party thereto, the Related Agreements, to perform its obligations hereunder and
under the Related Agreements and to consummate the transactions contemplated hereby and by the Related Agreements. All corporate
acts and other proceedings required to be taken by each of the Buyer and the Parent to authorize the execution, delivery and performance
of this Agreement and the Related Agreements have been duly and properly taken. Each of this Agreement and the Related Agreements
has been duly executed and delivered by the Buyer and the Parent (to the extent a party thereto), and constitutes the legal, valid
and binding obligation of each of the Buyer and the Parent (to the extent a party thereto), enforceable against the Buyer and the
Parent in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium and other similar Laws
of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

4.3        Non-Contravention.
Assuming the consents described in Section 4.4 have been received, the execution and delivery of this Agreement and the
Related Agreements by each of the Buyer and the Parent, to the extent a party thereto, does not, and the consummation by each of
the Buyer and the Parent of the transactions contemplated hereby and by the Related Agreements and compliance by each of the Buyer
and the Parent with the terms hereof and of the Related Agreements, will not:

 

(i)          violate
or results in a breach of the certificate of incorporation or the bylaws of the Buyer or the Parent;

 

(ii)         constitute
a default or a violation or breach of, or result in the acceleration of any obligation of the Buyer or the Parent under, or a change
in any right or obligation of the Buyer or the Parent under, any provision of any Contract to which the Buyer or the Parent is
a party or by which any of the assets of the Buyer or the Parent may be affected that would, in each case, adversely affect the
business of the Buyer or the Parent in a material respect; or

 

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(iii)        violate
any Order or any Law applicable to the Buyer or the Parent or affecting their respective assets.

 

4.4        Consents
and Approvals. Except for such filings as Parent may be required to make with the SEC pursuant to its obligations under
the Exchange Act, no consent, approval, declaration or filing with, any Governmental Authority, and no consent or approval of any
Person, is required to be obtained by or on behalf of the Buyer or the Parent in connection with the execution, delivery and performance
by the Buyer or the Parent of this Agreement or the Related Agreements, to the extent a party thereto, or the consummation of the
transactions contemplated hereby and by the Related Agreements, the absence of which, in each case, would adversely affect the
Buyer’s or the Parent’s business in a material respect.

 

4.5        Litigation
and Claims. There is no Action pending or, to the Knowledge of the Buyer or the Parent, threatened, against the Buyer
or the Parent that seeks to enjoin, prohibit or otherwise challenge, or affecting the propriety or validity of the transactions
contemplated hereby or by the Related Agreements.

 

4.6        No
Finder. None of the Buyer, the Parent or any party acting on their behalf has paid or become obligated to pay any fee
or commission to any broker, finder or intermediary (other than counsel and accountants) for or on account of the transactions
contemplated hereby or by the Related Agreements.

 

Except for the representations and
warranties made herein, in any Related Agreement or in any certificate to be delivered hereunder, neither the Buyer nor the Parent
makes any representation or warranty express or implied, at law or in equity, and any such other representations or warranties
are hereby expressly disclaimed.

 

ARTICLE V.

ACTIONS PRIOR TO THE CLOSING DATE

 

From and after the execution of this Agreement
until the Closing Time (or earlier termination of this Agreement in accordance with Section 10.1):

 

5.1        Access.
The Seller shall afford the Buyer’s Representatives such access during normal business hours as the Buyer may reasonably
request to inspect and investigate the Purchased Assets and the Assumed Liabilities and to interview the Business Employees. In
addition, the Seller shall furnish the Buyer’s Representatives with such financial, operating and other data and information
related to the Business as the Buyer’s Representatives may reasonably request and instruct the Seller’s Representatives
to cooperate with the Buyer in its investigation of the Business. Such rights of access shall be exercised in a manner that does
not unreasonably interfere with the operations of the Seller. No investigation by the Buyer or its Representatives or other information
received by the Buyer or its Representatives shall operate as a waiver or otherwise affect any representation, warranty or agreement
given or made by the Seller in this Agreement.

 

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5.2        Fulfillment
of Conditions to the Buyer’s Obligations. The Seller shall use commercially reasonable efforts (or reasonable
best efforts or Reasonable Best Efforts, to the extent expressly provided herein) to effectuate the transactions contemplated hereby
and by the Related Agreements and to fulfill the conditions to the Buyer’s obligations contained in Article VII.

 

5.3        Fulfillment
of Conditions to the Seller’s Obligations. The Buyer shall, and the Parent shall cause the Buyer to, use commercially
reasonable efforts (or reasonable best efforts, to the extent expressly provided herein) to effectuate the transactions contemplated
hereby and by the Related Agreements and to fulfill the conditions to the Seller’s obligations contained in Article VIII.

 

5.4        Conduct
of Business Prior to the Closing From the date hereof until the Closing, except as otherwise provided in this Agreement
or consented to in writing by the Buyer (which consent shall not be unreasonably withheld or delayed), the Seller shall (x) conduct
the Business in the ordinary course of business consistent with past practice; and (y) other than with respect to the closing of
certain of the Excluded Stores, use commercially reasonable efforts to maintain and preserve intact its current Business organization,
operations and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, suppliers,
regulators and others having relationships with the Business. Without limiting the foregoing, but subject to the parenthetical
set forth in the preceding sentence, from the date hereof until the Closing Date, the Seller shall:

 

(a)         use
commercially reasonable efforts to preserve and maintain all Governmental Permits required for the conduct of the Business as currently
conducted or the ownership and use of the Purchased Assets;

 

(b)         pay
the debts, Taxes and other obligations of the Business when due, other than those disputed in good faith;

 

(c)         maintain
the properties and assets included in the Purchased Assets in substantially the same condition as they were on the date of this
Agreement, subject to reasonable wear and tear;

 

(d)         use
commercially reasonable efforts to continue in full force and effect without modification all insurance policies covering the Business
or the Purchased Assets, except as required by applicable Law;

 

(e)         use
commercially reasonable efforts to defend and protect the properties and assets included in the Purchased Assets from infringement
or encroachment;

 

(f)          perform
all of its obligations under all Assumed Contracts in all material respects;

 

(g)         maintain
the books and records of the Business in accordance with past practice;

 

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(h)         comply
in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets;

 

(i)          except
as required by GAAP, not make any material change in any method of accounting or accounting practice for the Business;

 

(j)          not
enter into any Contract with respect to the Business that would constitute a Material Contract;

 

(k)         not
transfer, assign, sell or otherwise dispose of any of the Purchased Assets, except for the sale of Inventory in the ordinary course
of business;

 

(l)          not
transfer, assign or grant any license or sublicense of any material rights under or with respect to any Intellectual Property included
in the Purchased Assets;

 

(m)        not
grant any bonuses, whether monetary or otherwise (other than those payable under the Seller’s bonus plan with respect to
the Bass retail stores that is in effect as of the date of this Agreement), or increase any wages, salary, severance, pension or
other compensation or benefits in respect of any Business Employees or independent contractors or consultants of the Business,
other than as provided for in any written agreements or required by applicable Law, change in the terms of employment for any Business
Employee (including, without limitation, reassigning any Business Employee from a Bass retail store (other than an Excluded Store)
to an Excluded Store or other Heritage Brands store that is not a Bass retail store, or terminate any Business Employee; and

 

(n)         not
enter into any Contract to do any of the foregoing, or any take any action or omit to take any action that would result in any
of the foregoing.

 

5.5         No
Solicitation of Other Bids.

 

(a)         The
Seller shall not, and shall not authorize or permit any of its Affiliates or any of its or their Representatives to, directly or
indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into
discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii)
enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. The Seller shall immediately
cease and cause to be terminated, and shall cause its Affiliates and all of its and their Representatives to immediately cease
and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or
that could lead to, an Acquisition Proposal. For purposes hereof, “Acquisition Proposal”
means any inquiry, proposal or offer from any Person (other than the Buyer or any of its Affiliates) relating to the direct
or indirect disposition, whether by sale, merger or otherwise, of all or any portion of the Business or the Purchased Assets.

 

(b) 
       Seller agrees that the rights and remedies for noncompliance with this Section
5.5 shall include having such provision specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Buyer and that money
damages would not provide an adequate remedy to the Buyer.

 

    	30

    	 

    

 

5.6        Notice
of Certain Events.

 

(a)         From
the date hereof until the Closing, the Seller shall promptly notify the Buyer in writing of:

 

(i)          any
fact, circumstance, event or action, the existence or occurrence of which has resulted in, or would reasonably be expected to result
in, the failure of any of the conditions set forth in Article VII to be satisfied;

 

(ii)         any
written notice or other written communication from any Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;

 

(iii)        any
written notice or other written communication from any Governmental Authority in connection with the transactions contemplated
by this Agreement;

 

(iv)        any
Actions commenced or, to the Seller’s Knowledge, threatened against, relating to or involving or otherwise affecting the
Business, the Purchased Assets or the Assumed Liabilities that, if pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Article III or that relates to the consummation of the transactions contemplated by this
Agreement;

 

(v)         any
written notice or other written communication from any landlord (A) contesting the valid assignment of a Category 1 Lease
following the delivery of the applicable notice set forth in Section 5.7(a), (B) denying consent to the assignment of a
Category 2 Lease or (C) denying assignment, extension or renewal of a Category 3 lease; and

 

(vi)        the
grant or payment of any bonus in respect of any Business Employees in accordance with Section 5.4(m).

 

(b)         From
and after the date hereof, the Buyer shall promptly notify the Seller in writing of:

 

(i)          any
fact, circumstance, event or action, the existence or occurrence of which has resulted in, or would reasonably be expected to result
in, the failure of any of the conditions set forth in Article VIII to be satisfied; and

 

(ii)         any
written notice or other communication from any Governmental Authority in connection with the transactions contemplated by this
Agreement.

 

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5.7        Leases.

 

(a)         Within
ten (10) Business Days following the date of this Agreement, the Seller shall cause the Tenant under each Category 1 Lease to furnish
written notice, in accordance with the terms of such Category 1 Lease, to the landlord thereunder to the assignment of such Category
1 Lease to the Buyer as of the Closing, in each case in the form prepared by the Buyer and reasonably acceptable to the Seller.
The Buyer shall, and the Parent shall cause the Buyer to, cooperate with the Seller and the Tenant in connection with furnishing
each such notice.

 

(b)         Seller
shall, or shall cause the Tenant under each Category 2 Lease to, use its Reasonable Best Efforts to secure, prior to the Closing,
the written consent of the landlord under such Category 2 Lease to the assignment of such Category 2 Lease to the Buyer as of the
Closing. The Buyer shall, and the Parent shall cause the Buyer to, cooperate with the Seller or the applicable Tenant in connection
with securing each such consent to assignment.

 

(c)         Seller
shall, or shall cause the Tenant under each Category 3 Lease to, use its Reasonable Best Efforts to secure, prior to the Closing,
a valid assignment of each Category 3 Lease to the Buyer as of the Closing and a valid and legally binding renewal or extension
of each Category 3 Lease, on terms substantially identical to those of the Category 3 Lease as in effect on the date hereof, with
such amendments thereto (including expiration date) as shall be reasonably acceptable to the Buyer. The Buyer shall, and the Parent
shall cause the Buyer to, cooperate with the Seller or the applicable Tenant in connection with securing each such assignment and
renewal or extension.

 

ARTICLE VI.

OTHER AGREEMENTS OF THE PARTIES

 

6.1        Employees.

 

(a)     
   No later than five (5) Business Days prior to the Closing Date, the Buyer shall determine (and shall notify
the Seller of such determination) which of (i) the Business Employees who are not employed at the Bass retail stores and (ii)
the district sales managers of the Seller who the Seller has presented to the Buyer as being available for employment by the
Buyer, to whom it will make offers of employment (each, a “Non-Store Employee”). All employment by the
Buyer of the Non-Store Employees who accept the Seller’s offer of employment shall commence employment with the Buyer
as of the Closing Date. All of the Business Employees employed at the Bass retail stores on the day prior to the Closing Date
(other than those employed at the Excluded Stores) shall be offered employment by the Buyer and, subject to acceptance of
such offer, shall become employees of the Buyer as of the Closing Date (each, a “Store Employee”).
Notwithstanding the foregoing, a Non-Store Employee or Store Employee who accepts the Buyer’s offer of employment and
who is absent from work on the Closing Date due to vacation or other authorized short-term leave of absence or paid time off
will not become an employee of the Buyer as of the Closing Date unless he or she returns to active employment by the time
required under the terms of such authorized absence; and, if such employee is absent due to long term disability or other
authorized long term leave of absence, he or she will become an employee of the Buyer on the date such employee returns to
active employment with the Buyer promptly following the expiration of such disability or other long term leave of
absence.

 

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(b)        Any
offers of employment by the Buyer pursuant to the foregoing paragraph may be subject to such reasonable conditions as the Buyer
may designate. Each Non-Store Employee and Store Employee to whom employment is offered shall be offered substantially the same
base salary or hourly wage (but not bonuses or equity grants) as in effect for such Non-Store Employee or Store Employee, as the
case may be, on the date hereof, and employee benefits, including bonus eligibility or equity grants, in accordance with the Buyer’s
existing policies. The Buyer shall provide each Non-Store Employee and Store Employee who it employs (collectively, the “Transferred
Employees”) with credit for years of service with the Seller prior to the Closing Date for the purpose of eligibility,
vesting and seniority under the Buyer’s employee benefit plans. The Seller shall (i) reasonably cooperate with the Buyer
to enable the Buyer to consider each Non-Store Employee for employment by Buyer, (ii) to the extent permitted by applicable Law,
provide such employee information as reasonably requested by the Buyer in connection with such consideration and (iii) provide
the Buyer with reasonable access to each such Non-Store Employee to enable the Buyer to discuss the potential employment of such
Non-Store Employee with the Buyer.

 

(c)        Except
as specifically set forth in Section 6.1(d) with respect to the payment of certain severance benefits, (i) the Buyer shall
not assume any Employee Plan and shall not have any obligations for or with respect to any Retained Employee Liabilities, and (ii)
the Seller shall not be, and the Buyer shall be, responsible for the satisfaction of all Liabilities of the Buyer to or with respect
to any Transferred Employee for any period beginning on the Closing Date (or, if later, the date he or she becomes a Transferred
Employee).

 

(d)        The
Transferred Employees will be employed on an at-will basis, and nothing contained in this Agreement shall confer upon any Transferred
Employee any right with respect to continuance of employment by the Buyer after Closing Date, nor shall anything herein interfere
with the right of the Buyer to terminate the employment of any Transferred Employee at any time, with or without notice, or restrict
the Buyer, in the exercise of its business judgment, from modifying any of the terms or conditions of employment of the Transferred
Employees at any time. In the event that any Non-Store Employee employed by the Buyer is terminated by the Buyer during the one-year
period immediately following the Closing Date, such Non-Store Employee shall be eligible for severance based on the Seller’s
applicable severance policy in effect on the date hereof with the cost of such severance borne by the Buyer.  In the event
that any Transferred Employee who is a Store Employee is terminated by Buyer other than for cause during the 90-day period immediately
following the Closing Date, such Store Employee shall be eligible for severance based on the Seller’s applicable severance
policy in effect on the date hereof with the cost of such severance borne 25% by Buyer and 75% by Seller; provided, however,
that the Buyer shall be responsible for the cost of all severance for such Store Employees from and after the time that the Seller’s
aggregate expense for severance for such Store Employees equals $1,200,000. The Buyer shall furnish an invoice to the Seller as
to the Seller’s portion of severance liability at the end of each fiscal month.

 

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(e)         The
Seller shall bear any and all obligations and Liabilities under the Worker Adjustment and Retraining Notification Act (WARN Act),
and all other similar state and local Laws, with respect to any action taken by the Seller prior to the Closing Date.

 

6.2        Non-Solicitation,
Non-Derogation and Confidentiality.

 

(a)        With
respect to each Transferred Employee and each employee of the Buyer or the Parent (the “Buyer Employees”), from
the Closing Date until the date that is one year following the Closing Date, the Seller shall not, and shall cause its Affiliates
not to, without the prior written consent of the Buyer, directly or indirectly, for itself or any of its Affiliates, solicit for
employment such Transferred Employee or Buyer Employee; provided that nothing in this Section 6.2(a) shall prevent
the Seller or its Affiliates from soliciting any Transferred Employee or Buyer Employee (i) who has voluntarily left the employ
of the Buyer or the Parent, as the case may be, at least six months prior to such solicitation or hiring, (ii) whose employment
was terminated by the Buyer or the Parent, as the case may be, or (iii) applies for a position with the Seller or its Affiliates
as a result of a general solicitation for employment.

 

(b)        With
respect to each employee of the Seller (the “Seller Employees”), from the Closing Date until the date that is
one year following the Closing Date, each of the Buyer and the Parent shall not, and shall cause their respective Affiliates not
to, without the prior written consent of PVH, directly or indirectly, for itself or any of their respective Affiliates, solicit
for employment any Seller Employee; provided that nothing in this Section 6.2(b) shall prevent the Buyer, the Parent
or their respective Affiliates from soliciting any Seller Employee (i) who has voluntarily left the employ of the Seller at least
six months prior to such solicitation or hiring, (ii) whose employment was terminated by the Seller, or (iii) applies for a position
with the Buyer, the Parent or any of their respective Affiliates as a result of a general solicitation for employment.

 

(c)        From
and after the Closing Date, the Seller shall not, and shall cause its Affiliates not to, make any comment or act in any manner,
which is derogatory towards, or which is not respectful, complimentary and supportive of, the Buyer, the Parent or any of their
respective subsidiaries or any of their officers, directors or employees (current or former), their operation of the Business,
the Business itself or any products manufactured, sold or distributed by the Buyer, the Parent, their respective Affiliates, their
licensees or their licensors. Each of the Buyer and the Parent shall not, and shall cause their respective Affiliates not to, issue
or make any comment or act in any manner which is derogatory towards, or which is not respectful of, the Seller or any of its subsidiaries
or any of their officers, directors or employees (current or former), their operation of the Business, or any products manufactured,
sold or distributed by the Seller, its Affiliates, its licensees or its licensors. Notwithstanding the foregoing, nothing in this
Agreement shall prevent the Buyer, the Parent, the Seller or any of their respective Affiliates from making any such comments that
are specifically related to asserting their claims or defending themselves against claims filed in a court of law or with another
body exercising arbitration or similar quasi-judicial authority or power or defending itself against claims made by the Buyer,
the Parent or the Seller.

 

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(d)        Each
of the Buyer, the Parent and the Seller acknowledge and agree that the covenants and agreements contained in this Section 6.2
have been negotiated in good faith by each of them. Each of the Buyer, the Parent and the Seller further acknowledges that (i)
the goodwill associated with the existing Business, vendors, customers and assets of the Business  prior to the transactions
contemplated herein is an integral component of the value of the Business to the Buyer and is reflected in the consideration to
be received by the Seller pursuant to this Agreement, and (ii) the covenants and agreements contained in this Section 6.2
are necessary to preserve the value of the Business for the Buyer following the transaction. The Seller further acknowledges that
the limitations agreed to in this Section 6.2 are reasonable because, among other things: (A) the Buyer, the Parent and
the Seller are engaged in a highly competitive industry and their operations are worldwide, (B) the Seller has unique access to,
and will continue to have access to, Confidential Information, including trade secrets, and know-how of the Business, (C) the Seller
is receiving significant consideration in connection with the transactions contemplated herein and (D) this Section 6.2
provides no more protection than is necessary to protect the Buyer’s interest in the goodwill of the Business, Confidential
Information and trade secrets.  If any one or more of the provisions contained in this Section 6.2 shall be held
to be excessively broad as to scope, territory or period of time, such provisions shall be construed by limiting and reducing them
so as to be enforceable to the maximum extent allowed by applicable Law.

 

(e)        Except
as required by Law, the Seller shall hold in confidence all Confidential Information obtained in the course of its ownership of
or participation in, the Business (whether obtained prior to or following the Closing Time) or otherwise which is either non-public,
confidential or proprietary in nature. The Seller shall, subject to any requirement of Law, keep such Confidential Information
confidential and such Confidential Information shall not, without the prior written consent of the Buyer, be disclosed by it to
any Person. Notwithstanding the foregoing, in the event that the Seller or its representatives is requested or required by law,
rule, regulation or legal process (including by oral questions, interrogatories, request for information or documents, subpoena,
criminal or civil investigative demand or similar process) to disclose any Confidential Information or make any disclosure that
is prohibited under this Section 6.2(e), the Seller will, to the extent legally permitted, provide the Buyer with prompt
written notice of such request so that the Buyer, at its sole cost and expense, may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Section 6.2(e).  The Seller will reasonably cooperate with
the Buyer in such regard at the Buyer’s sole cost and expense.  In the event that such protective order or other remedy
is not obtained or that the Buyer waives compliance with the provisions of this Section 6.2(e), the Seller and its representatives
will furnish only that portion of the Confidential Information which is legally required to be disclosed, the Seller will give
the Buyer written notice of the information to be disclosed as far in advance as practicable, and, upon the Buyer’s request
and at its sole cost and expense, the Seller will use its commercially reasonable efforts to obtain a protective order or other
reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed.

 

6.3        Tax
Matters.

 

(a)        The
parties shall use or cause their respective Affiliates to use the standard procedure set forth in Revenue Procedure 2004-53 with
respect to wage reporting.

 

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(b)        All
applicable transfer Taxes, sales and/or use Taxes, real property transfer or excise Taxes, recording, deed, stamp, and other similar
Taxes, fees and duties under applicable Law incurred in connection with the transfer of the Purchased Assets to the Buyer pursuant
hereto (“Transfer Taxes”), shall be borne by the Seller and the Buyer equally. The Seller and the Buyer shall
jointly prepare or cause to be prepared and file or cause to be filed in a timely manner all Tax Returns required to be filed with
respect to Transfer Taxes.

 

(c)        Each
of the Seller and the Buyer shall provide the other with such assistance as the other may reasonably request in connection with
the preparation of any Tax Return, any Tax audit or other examination by any Governmental Authority or any judicial or administrative
proceeding relating to Taxes attributable to the Purchased Assets or the Business, and each shall provide the other with any records
or information relevant to such Tax Return, Tax audit, examination or proceeding. Such assistance shall include making employees
reasonably available on a mutually convenient basis to provide additional information and explanation of material provided hereunder
and providing copies of any relevant Tax Returns and supporting work schedules. The party requesting assistance hereunder shall
reimburse the other for reasonable expenses incurred in providing such assistance. For purposes of this Agreement, whenever it
is necessary to determine the liability for Taxes for a taxable period that begins before the Closing Date and ends after the Closing
Date (a “Straddle Period”), the Taxes for the portion of the Straddle Period ending before, and the portion
of the Straddle Period beginning on or after, the Closing Date shall be determined by assuming that the Straddle Period consisted
of two taxable periods, one which ended at the close of the day immediately preceding the Closing Date and the other which began
at the beginning of the Closing Date, and items of income, gain, deduction, loss or credit, and state and local apportionment factors
for the Straddle Period shall be allocated between such two taxable periods on a “closing of the books basis”.

 

6.4        Access
to Records.

 

(a)        For
a period of six years after the Closing Date, the Seller shall afford the Buyer and its representatives reasonable access to all
the books and records relating to the Purchased Assets or the Business that the Buyer requires in connection with the preparation
of its Tax Returns, a Tax investigation, or audit of the Buyer. Such access shall be afforded by the Seller upon receipt of reasonable
advance notice and during normal business hours and shall be had or done in such a manner so as not to interfere with the normal
conduct of business of the Seller. The Buyer shall be responsible for any costs and expenses incurred by the Seller in retrieving
and copying such books and records at the Buyer’s request. However, if the Seller shall desire to dispose of any of such
books and records prior to the expiration of such six-year period, the Seller shall, prior to such disposition, give twenty (20)
Business Days’ notice to the Buyer, and the Buyer shall have the right at its option and expense to segregate and remove
such books and records as the Buyer may select from those the Seller desires to dispose of within ten (10) Business Days after
receipt of such notice.

 

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(b)        For
a period of six years after the Closing Date, the Buyer and the Parent shall afford the Seller and its representatives reasonable
access to all the books and records relating to the Purchased Assets or the Business that the Seller requires in connection with
the preparation of its Tax Returns, a Tax investigation or audit of the Seller, and in connection with the fulfillment of an indemnification
obligation under Article IX. Such access shall be afforded by the Buyer and the Parent upon receipt of reasonable advance
notice and during normal business hours and shall be had or done in such a manner so as not to interfere with the normal conduct
of business of the Buyer or the Parent. The Seller shall be responsible for any costs and expenses incurred by the Buyer and the
Parent in retrieving and copying such books and records at the Seller’s request. However, if the Buyer or the Parent shall
desire to dispose of any of such books and records prior to the expiration of such six-year period, the Buyer or the Parent, as
the case may be, shall, prior to such disposition, give twenty (20) Business Days’ notice to the Seller, and the Seller shall
have the right at its option and expense to segregate and remove such books and records as the Seller may select from those the
Buyer or the Parent, as the case may be, desires to dispose of within ten (10) Business Days after receipt of such notice.

 

6.5        Further
Assurances. 

 

From and after the Closing Date,
each party shall, at any time and from time to time, make, execute and deliver, or cause to be made, executed and delivered, for
no additional consideration but at the cost and expense of the requesting party (excluding any internal costs incurred, such as
having any of the following reviewed by counsel) such assignments, deeds, drafts, checks, returns, filings and other instruments,
agreements, consents and assurances and take or cause to be taken all such actions as the other party or its counsel may reasonably
request for the effectual consummation and confirmation of this Agreement and the Related Agreements and the transactions contemplated
hereby and by the Related Agreements.

 

6.6        Third
Party Consents. The Seller and the Buyer shall use their commercially reasonable efforts (without the obligation to
make payment other than obligations when and as required under existing Contracts) to obtain all consents from parties to Contracts
(including, without limitation, Store Leases) which are necessary to be obtained in connection with the transactions contemplated
hereby and by the Related Agreements.

 

6.7        Publicity.
From and after the date hereof, the parties hereto shall not, and shall use their reasonable best efforts to cause their respective
officers, directors, employees, accountants, counsel, consultants, advisors, and agents (collectively, “Representatives”)
not to, make any press release, disclosure or public announcement in respect of the transactions contemplated by the this Agreement
and the Related Agreements; provided, that each party may make such press release, disclosure or public announcement if
(i) it is mutually accepted in writing by the Buyer and the Parent, on the one hand, and the Seller, on the other hand, (ii) such
disclosure is required by law or regulation, including applicable stock exchange rules, or by legal process, or (iii) such disclosure
is contained in any report or filing made by a party to the SEC or any other applicable Governmental Authority; provided, further,
that in the case of clauses (ii) and (iii) above, the party making disclosure (A) allows the non-disclosing party, to the extent
permitted by applicable Law, reasonable time to comment on such disclosure in advance of such issuance and (B) reasonably considers
such comments. Except for the foregoing exceptions, the contents of the this Agreement and the Related Agreements shall not be
distributed or disclosed to, or otherwise relied upon by, any other person, other than the board of directors, advisors, attorneys,
accountants and consultants of the Buyer, the Parent, the Seller and their respective Affiliates as deemed appropriate by the Seller
or the Buyer and the Parent, respectively, and only on a need-to-know basis. The obligation of each party to hold any such information
in confidence shall be satisfied if it exercises the same care with respect to such information as it would take to preserve the
confidentiality of its own similar information.

 

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6.8        Store
Leases.

 

(a)        From
and after the Closing Time, to the extent that, prior to the Closing, (i) the Seller has not, or has not caused the Tenant under
any Category 2 Lease to, secure the written consent of the landlord under such Category 2 Lease to the assignment of such Category
2 Lease to the Buyer as of the Closing, or (ii) the Seller has not, or has not caused the Tenant under any Category 3 Lease to,
secure a valid assignment of any Category 3 Lease to the Buyer as of the Closing or a valid and legally binding renewal or extension
of any Category 3 Lease for the term set forth in Section 3.7 of the Seller Disclosure Schedule, on terms substantially
identical to those of the Category 3 Lease as in effect on the date hereof, with such amendments thereto (including expiration
date) as shall be reasonably acceptable to the Buyer, then the Seller shall continue to use its Reasonable Best Efforts or cause
the applicable Tenant to use its Reasonable Best Efforts to secure such written consent to assignment of a Category 2 Lease or
valid assignment and valid and legally binding renewal or extension of such Category 3 Lease. The Buyer shall, and the Parent shall
cause the Buyer to, continue to cooperate with the Seller or the applicable Tenant in connection with securing each such consent
to assignment or assignment and renewal or extension.

 

(b)        From
and after the Closing Time, if the Seller has not been released from Liabilities under any Store Lease that accrue after the Closing
Time, neither the Buyer nor any of its Affiliates shall, and the Parent shall cause the Buyer and its Affiliates not to, without
the Seller’s prior written consent, (i) extend, amend or otherwise modify such Store Lease in any manner that could reasonably
be expected to adversely affect the interests of the Seller or any of its Affiliates or (ii) directly or indirectly, assign, sublet,
mortgage, hypothecate, pledge, encumber or otherwise transfer, by operation of law or otherwise, its interest under such Store
Lease, or permit or suffer any associated Leased Real Property or any part thereof to be used by any Person other than the Buyer
or its Affiliates. The Seller shall reasonably cooperate with the Buyer, at the Buyer’s request, in seeking the release of
the Seller’s obligations under any Store Lease or any renewal, amendment or modification of a Store Lease together with a
release of the Seller’s obligations thereunder.

 

6.9        Mail,
Receivables and Other Items to be Given to Proper Party. After Closing, (a) each party will promptly deliver to the proper
party the original of any mail or other communication received by such party that is or should properly be the property of such
other party and (b) within two Business Days of receipt, each party will deliver to the proper party any monies, checks or
other instruments of payment received by such party to which such other party is entitled.

 

6.10      Proration.
After Closing, to the extent that it is necessary for the parties to prorate expenses (other than expenses the payment of which
is provided for in the Transition Services Agreement) related to the operation of the Business with respect to a particular period
(such as a month or quarter) that commenced prior to the Closing Date and ends on or after the Closing Date, proration will be
based on the respective number of calendar days in the applicable period occurring prior to the Closing Date and on or after the
Closing Date, divided by the total number of calendar days in the applicable period. 

 

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6.11      Gift
Cards; Loyalty Program.  

 

(a)        As
soon as reasonably practicable following the Closing, the Seller shall deliver gift cards to each of the Seller’s retail
businesses that exclude references to the Bass retail stores or the Trademarks. Promptly following the delivery of such gift cards
to the Seller’s other retail businesses, the Seller shall cease to sell gift cards that include references to the Bass retail
stores or the Trademarks in any of its retail businesses.

 

(b)        As
soon as reasonably practicable following the Closing and at the Buyer’s expense, the Seller shall deliver “Bass”
gift cards to the Buyer that exclude references to the Izod and Van Heusen retail stores and related trademarks. Promptly following
the delivery of such gift cards to the Buyer, the Buyer shall cease to sell in any of its retail businesses any gift cards that
include references to the Izod and Van Heusen retail stores and related trademarks. Promptly following the Buyer’s receipt
of such “Bass” gift cards, the Buyer shall deliver to the Seller any remaining gift cards that include references to
the Izod and Van Heusen retail stores and related trademarks.

 

(c)        The
gift cards delivered to the Seller and the Buyer pursuant to Sections 6.11(a) and 6.11(b), respectively, shall only
be redeemable at the stores indicated on such cards. In the event that a customer attempts to redeem any such at a store that is
not indicated on such gift card, the Seller or the Buyer, as the case may be, shall cause its employees to redirect such customer
to the valid stores at which such gift card may be redeemed.

 

(d)        Prior
to the delivery of the gift cards contemplated by Sections 6.11(a) and 6.11(b), each of the Seller and the Buyer
shall continue to honor gift cards that list the Bass, Izod and Van Heusen names if presented in their stores.

 

(e)        By
no later than February 2, 2014, the Seller shall have removed purchases at Bass retail stores from inclusion in the Seller’s
loyalty programs for its other Heritage Brands. From and after such time, the Buyer shall be permitted to utilize the Seller’s
existing loyalty system for the Bass retail stores only.

 

6.12      Software
Items. Promptly following the transfer of title to all computers, registers and other
point-of-sale equipment purchased hereunder in accordance with Section 2.2(a)(vii),
the Buyer shall, and the Parent shall cause the Buyer to, erase any and all software contained or stored on such computers, registers
and other point-of-sale equipment.

 

6.13      Buyer
Services to the Excluded Stores. From and after the Closing Time until the earlier
to occur of (i) the expiration of the Transition Services Agreement Term and (ii) with respect to any particular Excluded Store,
the termination of the Store Lease for such Excluded Store, the Buyer shall, and the Parent shall cause the Buyer to, provide purchasing,
product allocation, marketing materials, merchandising communications and other services to each of the Excluded Stores (other
than those Excluded Stores that are closed prior to the Closing) such that the Seller is able to continue to operate such Excluded
Stores in substantially the same manner in which the Seller operated such Excluded Stores prior to the Closing Time.

 

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ARTICLE VII.

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER

 

The obligation of the Buyer to consummate
the transactions contemplated under this Agreement are subject to the fulfillment of each of the following conditions, any or all
of which may be waived in whole or in part by the Buyer, in its sole discretion:

 

7.1        Representations
and Warranties. The representations and warranties of the Seller contained in this Agreement when taken as a whole,
shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Time, with the same force
and effect as if made as of the Closing Time (other than such representations and warranties as are made as of a specified date,
the accuracy of which for purposes of this clause shall be determined as of such date) and the representations and warranties set
forth in Section 3.7 (Leased Property) and Section 3.10 (Intellectual Property) (disregarding all qualifications
on materiality, including “Material Adverse Effect,” set forth in such representations and warranties) shall be true
and correct in all material respects as of the date of this Agreement and as of the Closing Time, with the same force and effect
as if made as of the Closing Time (other than such representations and warranties set forth in Section 3.7 or Section
3.10 as are made as of a specified date, which shall be true and correct in all material respects as of such date).

 

7.2        Performance.
The Seller shall have performed and complied in all material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Seller prior to or at the Closing Time.

 

7.3        Certificate.
The Buyer shall have received a certificate executed by an executive officer of PVH dated the Closing Date and certifying to the
fulfillment on the part of the Seller of the conditions specified in Sections 7.1 and 7.2;

 

7.4        Orders.
No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Order which is in effect and has the
effect of making the transactions contemplated by this Agreement or the Related Agreements illegal, otherwise restraining or prohibiting
consummation of such transactions or causing any of the transactions contemplated hereunder or in the Related Agreements to be
rescinded following completion thereof.

 

7.5        Release
of Liens. The Buyer shall have received evidence of releases of all Liens on the Purchased Assets (other than Permitted
Liens), including, without limitation a release of all Liens on the Purchased Assets under the Credit and Guaranty Agreement.

 

7.6        Bill
of Sale and Assignment and Assumption Agreement. The Seller shall have received a Bill of Sale and Assignment and Assumption
Agreement in the form attached hereto as Exhibit B (the “Bill of Sale”), dated the Closing Date, duly
executed by each of PVH, PVH Retail and PVH Puerto Rico.

 

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7.7        License
Agreement. The Buyer shall have received the License Agreement, duly executed by each of PVH, PVH Retail and PVH Canada.

 

7.8        Non-Foreign
Affidavit. The Buyer shall have received a non-foreign affidavit dated as of the Closing Date, sworn under penalties
of perjury and in form and substance required under Code §1445, stating that each of PVH, PVH Retail and PVH Puerto Rico is
not a “foreign person”.

 

7.9        Transition
Services Agreement. PVH shall be able to provide the services under the Transition Services Agreement to the Buyer substantially
in accordance with the terms set forth therein.

 

7.10      Intellectual
Property Agreement. The Buyer shall have received the Intellectual Property Agreement duly executed by PVH.

 

7.11      Store
Leases. The Buyer shall have received Assignment and Assumption Agreements with respect to each of the Category 1 Leases
in the form attached hereto as Exhibit D, effective as of the Closing Date, each duly executed by the applicable Seller.

 

ARTICLE VIII.

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER

 

The obligation of the Seller to consummate
the transactions contemplated under this Agreement are subject to the fulfillment of each of the following conditions, any or all
of which may be waived in whole or in part by the Seller, in its sole discretion:

 

8.1        Representations
and Warranties. The representations and warranties of the Buyer and the Parent contained in this Agreement, when taken
as a whole, shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Time, with
the same force and effect as if made as of the Closing Time (other than such representations and warranties as are made as of a
specified date, which shall be true and correct in all material respects as of such date).

 

8.2        Performance.
Each of the Buyer and the Parent shall have performed and complied in all material respects with all covenants and agreements required
by this Agreement to be performed or complied with by the Buyer and the Parent prior to or at the Closing Time.

 

8.3        Certificate.
The Seller shall have received a certificate executed by an executive officer of the Buyer dated the Closing Date and certifying
to the fulfillment on the part of the Buyer and Parent of the conditions specified in Sections 8.1 and 8.2.

 

8.4        Orders.
No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Order which is in effect and has the
effect of making the transactions contemplated by this Agreement or the Related Agreements illegal, otherwise restraining or prohibiting
consummation of such transactions or causing any of the transactions contemplated hereunder or in the Related Agreements to be
rescinded following completion thereof.

 

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8.5        Bill
of Sale and Assignment and Assumption Agreement. The Seller shall have received the Bill of Sale duly executed by the
Buyer. 

 

8.6        License
Agreement. The Seller shall have received the License Agreement, duly executed by the Buyer.

 

8.7        Store
Leases. The Seller shall have received Assignment and Assumption Agreements with respect
to each of the Category 1 Leases in the form attached hereto as Exhibit D,
effective as of the Closing Date, each duly executed by the Buyer.

 

ARTICLE IX.

INDEMNIFICATION

 

9.1        Survival.
All indemnifications, representations, warranties, covenants and agreements made herein by the parties to this Agreement and their
respective obligations to be performed pursuant to the terms hereof, shall survive the Closing Time, provided, that, the
representations and warranties made herein by the parties shall terminate on the eighteen month anniversary of the Closing Date,
except that (i) the representations and warranties set forth in Sections 3.11 (Tax Matters), 3.14 (Environmental
Matters) and 3.15 (Employee Plans) shall survive the Closing Time for the applicable statute of limitations (as the same
may have been extended), and (ii) the representations and warranties set forth in Sections 3.1 (Organization; Good Standing),
3.3 (Authority; Execution and Delivery; Enforceability), 3.19 (No Finder), 4.1 (Organization, Good Standing),
4.2 (Authority; Execution and Delivery; Enforceability), and 4.6 (No Finder), shall survive until the latest date
permitted by applicable Law. All covenants and agreements of the parties contained herein shall survive the Closing indefinitely
or for the period explicitly specified therein. Notwithstanding the foregoing, if notice of any matter setting forth in reasonable
detail a claim for a breach of any representation or warranty is given to the Buyer or the Seller, as the case may be, in writing
pursuant to this Agreement prior to the end of the applicable survival period, any such representation or warranty that would otherwise
terminate shall be deemed to survive solely with respect to such matter until such matter is finally resolved. 

 

9.2        Indemnification
by PVH, PVH Retail and PVH Puerto Rico. PVH, PVH Retail and PVH Puerto Rico shall, jointly and severally, indemnify
and hold harmless any Buyer Group Member from and against any and all Damages incurred or sustained by such Buyer Group Member
based upon or arising from:

 

(a)        any
failure by the Seller to perform any covenants or other obligations of the Seller contained in this Agreement;

 

(b)        any
breach of any representation or warranty of the Seller contained in Article III of this Agreement;

 

(c)        any
failure or alleged failure of the Seller to pay, perform or discharge any of the Excluded Liabilities in accordance with the terms
thereof;

 

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(d)        the
failure by the parties to comply with any bulk sales Laws in connection with the transactions contemplated by this Agreement; or

 

(e)        any
pending or threatened third party Action based upon, resulting from or arising out of any of the foregoing.

 

9.3        Indemnification
by the Buyer. The Buyer and the Parent shall, jointly and severally, indemnify and hold harmless any Seller Group Member
from and against any and all Damages incurred or sustained by such Seller Group Member based upon or arising from:

 

(a)        any
failure by the Buyer or the Parent to perform any covenants or other obligations of the Buyer or the Parent in this Agreement;

 

(b)        any
breach of any representation or warranty of the Buyer or the Parent contained in Article IV this Agreement;

 

(c)        any
failure or alleged failure of the Buyer to pay, perform, discharge any of the Assumed Liabilities in accordance with the terms
thereof including, without limitation, any Assumed Contract; or

 

(d)        any
pending or threatened third party Action based upon, resulting from or arising out of any of the foregoing.

 

9.4        Limitations
on Indemnification.

 

(a)        No Buyer Group Member shall be entitled
to be indemnified pursuant to Section 9.2(b) or Section 9.2(e) (insofar as such third party Action relates to a breach
of a representation or warranty), unless and until the aggregate of all Damages incurred by Buyer Group Members shall exceed 1%
of the Purchase Price (the “Basket”) and thereafter only for indemnification pursuant to Section 9.2(b)
or Section 9.2(e) (insofar as such third party Action relates to a breach of a representation or warranty), in excess of
the Basket, and the maximum aggregate amount of Damages for which indemnification pursuant to Section 9.2(b) and Section
9.2(e) (insofar as such third party Action relates to a breach of a representation or warranty) may be received by the Buyer
Group Members shall not exceed 20% of the Purchase Price (the “Cap”); provided, however, that
Buyer Group Members shall be entitled to be indemnified for all Damages on a dollar-for-dollar basis from the first dollar of Damages,
without regard to the Basket or the Cap, incurred as a result of any breach of the representations and warranties set forth in
Sections 3.1 (Organization; Good Standing), 3.3 (Authority; Execution and Delivery; Enforceability), 3.5(b)
(Title to Assets); 3.11 (Tax Matters); 3.14 (Environmental Matters) and 3.19 (No Finder).

 

(b)        No
Seller Group Member shall be entitled to be indemnified pursuant to Section 9.3(b) or Section 9.3(d) (insofar as
such third party Action relates to a breach of a representation or warranty), unless and until the aggregate of all Damages incurred
by Seller Group Members shall exceed the Basket and thereafter only for indemnification pursuant to Section 9.3(b) or Section
9.3(d) (insofar as such third party Action relates to a breach of a representation or warranty), in excess of the Basket, and
the maximum aggregate amount of Damages for which indemnification pursuant to Section 9.3(b) and Section 9.3(d) (insofar
as such third party Action relates to a breach of a representation or warranty) may be received by the Seller Group Members shall
not exceed the Cap; provided, however, that Seller Group Members shall be entitled to be indemnified for all Damages
on a dollar-for-dollar basis from the first dollar of Damages, without regard to the Basket or the Cap, incurred as a result of
any breach of the representations and warranties set forth in Section 4.1 (Organization, Good Standing), 4.2 (Authority;
Execution and Delivery; Enforceability), and 4.6 (No Finder).

 

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(c)         For
purposes of Section 9.2(b) or Section 9.2(e) (insofar as such third party Action relates to a breach of a representation
or warranty) and Section 9.3(b) or Section 9.3(d) (insofar as such third party Action relates to a breach of a representation
or warranty), in determining the amount of any Damages in connection with any breach of a representation or warranty (but not for
purposes of determining whether any breach has occurred) any materiality, Material Adverse Effect or similar qualification contained
in or otherwise applicable to such representation or warranty shall be disregarded.

 

(d)        Subject
to Sections 6.2 and 11.8, the parties acknowledge and agree that the indemnification provisions contained in Sections
9.2 and 9.3 shall be the sole and exclusive remedy for Damages arising out of or caused by the breach of any of the
representations and warranties, covenants or agreements of the parties contained in this Agreement or any Related Agreement, except
for any remedies that may be available under the Related Agreements; provided, however, that nothing in this Section
9.4(d) shall limit any Person’s right to seek and obtain any equitable relief to which such Person shall be entitled
or to seek any remedy on account of fraud on the part of a party hereto in connection with the transactions contemplated by this
Agreement.

 

(e)        The
parties hereto acknowledge and agree that nothing contained herein is intended to limit or waive any duty to mitigate damages imposed
by New York law.

 

(f)         No
Indemnitor shall be liable to an Indemnitee for any punitive, consequential, exemplary or special damages for which such Indemnitee
seeks indemnification.

 

9.5        Tax
Treatment of Indemnity Payments. Unless otherwise required by Law, any indemnity payment made under this Agreement shall
be treated as an adjustment to the Purchase Price for all Tax purposes.

 

9.6        Notice
of Claims. Any Buyer Group Member or Seller Group Member seeking indemnification hereunder (an “Indemnitee”)
shall give to the party or parties obligated to provide indemnification to such Indemnitee (an “Indemnitor”)
a notice (“Claim Notice”) describing in reasonable detail the facts giving rise to any claim for indemnification
hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such
claim, and a reference to the provision of this Agreement upon which such claim is based. Any Claim Notice shall be given by the
Indemnitee to the Indemnitor promptly after the Indemnitee becomes aware of the claim; provided, however, that the
Indemnitee shall not be foreclosed from seeking indemnification pursuant to this Article IX by any failure to provide timely
notice of the existence of an Action to the Indemnitor except and only to the extent that the Indemnitor has been materially damaged
or prejudiced as a result of such delay.

 

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9.7        Third
Party Claims. In the case of any third party Action as to which indemnification is sought by an Indemnitee, the Indemnitor
shall have 30 days after receipt of a Claim Notice to notify the Indemnitee that it elects to conduct and control such Action at
its own expense. If the Indemnitor does not give the foregoing notice, the Indemnitee shall have the right to conduct and control
such Action (without prejudice to the Indemnitee’s right to seek indemnification pursuant to this Article IX), provided,
that the Indemnitee shall permit the Indemnitor to participate in the conduct of such Action through counsel chosen by the Indemnitor,
but the fees and expenses of such counsel shall be borne by the Indemnitor. If the Indemnitor gives the foregoing notice, the Indemnitor
shall have the right, at the sole expense of the Indemnitor, to conduct and control such Action, and the Indemnitee shall cooperate
with the Indemnitor in connection therewith, provided, that (x) the Indemnitor shall permit the Indemnitee to participate
in such conduct or settlement through counsel chosen by the Indemnitee, but the fees and expenses of such counsel shall be borne
by the Indemnitee, and (y) the Indemnitor may not compromise or settle any such Action without the consent of the Indemnitee (which
consent will not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of Law by the
Indemnitee or any violation by the Indemnitee of the rights of any Person and no effect on any other claims that may be made against
the Indemnitee, (ii) the sole relief provided is money Damages that are paid in full by the Indemnitor, (iii) the Indemnitee shall
have no liability with respect to any compromise or settlement (other than the Basket, if applicable) and (iv) such settlement
includes an unconditional release in favor of the Indemnitee by the third-party claimant from all liability with respect to such
claim. The parties hereto shall use their reasonable best efforts to minimize any Damages from claims by third parties and shall
act in good faith in responding to, defending against, settling or otherwise dealing with such claims, notwithstanding any dispute
as to liability under this Article IX. 

 

9.8        Payments.
Once Damages are agreed to by the Indemnitor or finally adjudicated to be payable pursuant to this Article IX, the Indemnitor shall
satisfy its obligations within ten (10) Business Days of such final, non-appealable adjudication by wire transfer of immediately
available funds.

 

9.9        Effect
of Investigation. The representations, warranties and covenants of an Indemnitor, and the Indemnitee’s right
to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf
of the Indemnitee (including by any of its Representatives) or by reason of the fact that the Indemnitee or any of its Representatives
knew or should have known that any such representation or warranty is, was or might be inaccurate. 

 

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ARTICLE X.

TERMINATION

 

10.1      Termination.
This Agreement may be terminated at any time prior to the Closing Date:

 

(a)         by
mutual written consent of the Buyer and the Parent, on the one hand, and the Seller, on the other hand; or

 

(b)         by
the Buyer, by written notice to the Seller, if there has been a material violation or breach by the Seller of any representation,
warranty, covenant or agreement contained in this Agreement; provided, that notice of such material violation or breach
shall have been given to the Seller and such material violation or breach shall not have been cured within ten (10) Business Days
of receipt of such notice (provided, further, that, to exercise its rights under this Section 10.1(b) for any particular
violation or breach, the Buyer (x) must terminate this Agreement within fifteen (15) Business Days after the end of the cure period
provided for in this Section 10.1(b) and (y) each of the Buyer and the Parent must not be in violation or breach of any
representation, warranty, covenant or agreement contained in this Agreement); or

 

(c)         by
the Seller, by written notice to the Buyer and Parent, if there has been a material violation or breach by the Buyer or the Parent
of any representation, warranty, covenant or agreement contained in this Agreement; provided, that notice of such material
violation or breach shall have been given to the Buyer and the Parent and such material violation or breach shall not have been
cured within ten (10) Business Days of receipt of such notice (provided, further, that, to exercise their rights under this Section
10.1(c) for any particular violation or breach, the Seller (x) must terminate this Agreement within fifteen (15) Business Days
after the end of the cure period provided for in this Section 10.1(c) and (y) the Seller must not be in violation or breach
of any representation, warranty, covenant or agreement contained in this Agreement); or

 

(d)         by
either the Buyer and the Parent, on one hand, or the Seller, on the other hand, if the Closing shall not have occurred by February
2, 2014 (unless the Closing shall have not occurred on or before such date due to a breach of a representation and warranty or
of a covenant by such party and/or the action or failure to act of the party seeking to terminate this Agreement).

 

10.2      Effects
of Termination. Except as otherwise provided in this Section 10.2, in the event of a termination of this Agreement
pursuant to this Article X (i) all further obligations of the parties under this Agreement shall terminate, (ii) no
party shall have any right under this Agreement against any other party except as set forth in Section 11.8, and (iii) each
party shall bear its own costs and expenses, except as provided in Section 11.1; provided, however, that the termination
of this Agreement under this Article X shall not relieve any party of liability for any willful breach of this Agreement
prior to the date of termination, or constitute a waiver of any claim with respect thereto.

 

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ARTICLE XI.

MISCELLANEOUS

 

11.1      Expenses
of the Transaction. Each of the Buyer and the Parent agrees to pay all of its fees and expenses in connection with this
Agreement and the Related Agreements and the transactions contemplated hereby and by the Related Agreements, including, without
limitation, legal and accounting fees and expenses. The Seller agrees to pay all of its fees and expenses in connection with this
Agreement and the Related Agreements and the transactions contemplated hereby and by the Related Agreements, including, without
limitation, the Excluded Liabilities, and legal and accounting fees and expenses.

 

11.2      Notices.
All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered
(i) when delivered personally or by private courier, (ii) when actually delivered by registered or certified United States mail,
return receipt requested, or (iii) when sent by facsimile transmission (provided, that it is confirmed by a means specified
in clause (i) or (ii)), addressed as follows:

 

If to the Buyer or the Parent to:

 

G-III Apparel Group, Ltd.

512 Seventh Avenue

New York, New York 10018

Attention: Wayne S. Miller

Facsimile:  (212) 719-0921

Telephone: (212) 403-0507

 

with a copy to:

 

Norton Rose Fulbright

666 Fifth Avenue

New York, NY 10103

Attention: Neil Gold, Esq.

                 Manuel G. Rivera, Esq.

Facsimile:  (212) 318-3400

Telephone: (212) 318-3000

 

If to PVH, PVH Retail or PVH Puerto Rico to:

 

PVH Corp.

200 Madison Avenue

New York, New York 10016

Attention: Mark D. Fischer, Esq., Executive Vice President, General Counsel and Secretary

Facsimile:  (212) 381-3970

Telephone: (212) 381-3509

 

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with a copy to:

 

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Attention: David H. Landau, Esq.

Facsimile:  (212) 940-8776

Telephone: (212) 940-8800

 

or to such other address as such party may indicate by a notice
delivered to the other parties hereto.

 

11.3      No
Modification Except in Writing. This Agreement shall not be changed, modified, or amended except by a writing signed
by the party to be affected by such change, modification or amendment, and this Agreement may not be discharged except by performance
in accordance with its terms or by a writing signed by the party to which performance is to be rendered.

 

11.4      Entire
Agreement. This Agreement together with the Schedules, Appendices and Exhibits hereto and the Related Agreements, sets
forth the entire agreement and understanding among the parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of every kind and nature among them with respect to such subject matter.

 

11.5      Severability.
If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless
the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.

 

11.6      Assignment.
No party may assign any of its rights under this Agreement, other than to an Affiliate of such party, without the prior written
consent of the other parties hereto; provided, that no party may assign its obligations under this Agreement to any Person without
the prior written consent of the other parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and permitted assigns.

 

11.7      Governing
Law; Jurisdiction; Waiver of Jury Trial.

 

(a)     
   This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York
applicable to contracts made and to be performed wholly within said State, without giving effect to the conflict of laws
principles thereof.

 

(b)      
  EACH PARTY TO THIS AGREEMENT IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF (I) THE COURTS OF THE STATE OF
NEW YORK LOCATED IN NEW YORK COUNTY AND (II) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE
PURPOSES OF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE THEREIN OF ANY SUCH
ACTION. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN ANY SUCH ACTION.

 

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11.8      Specific
Performance. The parties agree that if any of the provisions of this Agreement were not performed by the Buyer and the
Parent, on the one hand, or the Seller, on the other hand, in accordance with their specific terms or were otherwise breached by
such parties, irreparable damage would occur, no adequate remedy at Law would exist and damages would be difficult to determine,
and that the non-breaching party will be entitled to specific performance of the terms hereof.

 

11.9      Headings;
References. The headings appearing in this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope and intent of this Agreement or any of the provisions hereof. Any reference in
this Agreement (including in any Exhibit, Appendix or Schedule hereto) to a “Section,” “Article,”
or “Exhibit” shall mean a Section, Article or Exhibit of or to this Agreement unless expressly stated otherwise.

 

11.10    Interpretation.
In this Agreement, (a) words used herein regardless of the gender specifically used shall be deemed and construed to include any
other gender, masculine, feminine or neuter, as the context shall require, (b) all terms defined in the singular shall have the
same meanings when used in the plural and vice versa and (c) the words “include”, “includes” or
“including” are deemed to be followed by the words “without limitation”. Any statute defined or referred
to herein or in any agreement or instrument that is referred to herein means such statute as from time to time amended, modified
or supplemented, including (in the case of statutes) by succession of comparable successor statutes. References to a Person are
also its predecessors and permitted successors and assigns.

 

11.11    Schedules.
Any item that is disclosed in any section of the Seller Disclosure Schedule with sufficient specificity so that it is reasonably
apparent on the face of such Schedule that such disclosure is also applicable to one or more other sections of the Seller Disclosure
Schedule shall also be deemed disclosed for purposes of such other parts of such Schedule to which such disclosure is applicable.
Terms used in any Schedule to this Agreement and not otherwise defined in such Schedule shall have the meaning ascribed to such
term in this Agreement.

 

11.12    Third
Parties. Except as expressly provided herein or as otherwise agreed by the parties hereto, the provisions of this Agreement
are solely for the benefit of the parties hereto and shall not inure to the benefit of any third party.

 

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11.13    Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together
shall constitute a single agreement. This Agreement will be binding when one or more counterparts taken together will have been
executed and delivered (including by facsimile) by the parties. Transmission by telecopy, facsimile, email or other form of electronic
transmission of an executed counterpart of this Agreement shall be deemed to constitute due and sufficient delivery of such counterpart.

 

[Signature page follows]

 

    	50

    	 

    

 

IN WITNESS WHEREOF, each of the parties
hereto has executed this Agreement on the day and year first above written.

 

	 	AM RETAIL GROUP, INC.
	 	 
	 	By:	/s/Wayne S. Miller
	 	 	Name:   Wayne S. Miller
	 	 	Title:     Chief Operating Officer and Secretary

 

	 	G-III APPAREL GROUP, LTD.
	 	 
	 	By:	/s/Wayne S. Miller
	 	 	Name:   Wayne S. Miller
	 	 	Title:     Chief Operating Officer and Secretary

 

	 	PVH RETAIL STORES LLC
	 	 
	 	By:	/s/Mark D. Fischer
	 	 	Name:   Mark D. Fischer
	 	 	Title:     Executive Vice President

 

	 	PVH CORP.
	 	 
	 	By:	/s/Mark D. Fischer
	 	 	Name:   Mark D. Fischer
	 	 	Title:     Executive Vice President

 

	 	PVH PUERTO RICO, INC.
	 	 
	 	By:	/s/Mark D. Fischer
	 	 	Name:   Mark D. Fischer
	 	 	Title:     Executive Vice President

 

    	51

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