Section 4.9 Investment Representations. 

 

(a) Buyer is acquiring Membership Interests for its own account, solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the federal securities laws or any applicable foreign or state securities law.

 

 

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(b) Buyer understands that the acquisition of the Membership Interests to be acquired by it pursuant to the terms of this Agreement involves substantial risk. Buyer and its officers have experience as an investor in securities and equity interests of companies such as the ones being transferred pursuant to this Agreement and acknowledge that it can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that Buyer is capable of evaluating the merits and risks of its investment in the Membership Interests to be acquired by it pursuant to the transactions contemplated hereby.

 

(c) Buyer understands that the Membership Interests to be acquired by it hereunder have not been registered under the Securities Act on the basis that the sale provided for in this Agreement is exempt from the registration provisions thereof. Buyer acknowledges that such securities may not be transferred or sold except pursuant to the registration and other provisions of applicable securities laws or pursuant to an applicable exemption therefrom.

 

(d) Buyer acknowledges that the offer and sale of the Membership Interests to be acquired by it in the contemplated transactions has not been accomplished by the publication of any advertisement.

 

Section 4.10 No Other Representations or Warranties. Except for the representations and warranties contained in this Article IV, neither Buyer nor any other Person makes any other express or implied representation or warranty on behalf of Buyer.

 

ARTICLE V

 

COVENANTS OF THE PARTIES

 

Section 5.1 Consents and Approvals.

 

(a) Upon the terms and subject to the conditions of this Agreement, each of the parties hereto agrees to use, and will cause its Affiliates to use its reasonable commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or advisable under applicable Law to consummate and make effective the transactions contemplated by this Agreement as promptly as practicable including the preparation and filing of all forms, registrations and notices required to be filed by such party in order to consummate the transactions contemplated by this Agreement and the taking of such actions as are necessary to obtain any approvals, consents, orders, exemptions or waivers of Governmental Authorities required to be obtained by such party in order to consummate the transactions contemplated by this Agreement. Each party shall promptly consult with the other with respect to, provide any necessary information with respect to, and provide copies of all filings made by such party with any Governmental Authority or any other information supplied by such party to a Governmental Authority in connection with this Agreement and the contemplated transactions.

 

 

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(b) If any objections are asserted with respect to the transactions contemplated by this Agreement under any anti-competition Law or if any suit or proceeding is instituted or threatened by any Governmental Authority or any private party challenging any of the transactions contemplated by this Agreement as violative of any anti-competition Law, each of Seller and Buyer shall discuss the steps, if any, that should be implemented to respond to the suit, proceeding or challenge described above. No party shall have any obligation to hold separate or divest any of its property or of any of its Affiliates.

 

Section 5.2 Further Assurances. On and after the Closing Date, Seller and Buyer shall cooperate and use their respective reasonable commercial efforts to take or cause to be taken all appropriate actions and do, or cause to be done, all things necessary or appropriate to make effective the transactions contemplated hereby, including the execution of any additional assignment or similar documents or instruments of transfer of any kind, the obtaining of consents which may be reasonably necessary or appropriate to carry out any of the provisions hereof and the taking of all such other actions as such party may reasonably be requested to take by the other party hereto from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the contemplated transactions. Specifically, but not in limitation of this Section, Seller shall collect, compile and forward to Buyer no less frequently than weekly all checks, other forms of payment made in respect of receivables owed to MPP and the Entities from and after the Effective Date, and all correspondence and invoices received by Seller that are directed to MPP or any of the Entities.

 

Section 5.3 Employee Matters. 

 

(a) From the date hereof until the Closing Date, except as otherwise provided in this Section 5.3 or with the prior written consent of Buyer, Seller shall not permit any Entity to (i) hire any employee, officer, director, or consultant, (ii) terminate the employment of any MPP Employee other than for cause, (iii) establish, adopt or enter into any employee benefit plan nor amend or take any other actions, including the acceleration of vesting or waiver of performance criteria, with respect to any Employee Plan, (iv) enter into, modify or extend in any manner the terms of any employment, consulting, severance, benefit, incentive or indemnification agreement or any agreement with respect to a retention bonus or change-in-control with any MPP Employee or any other Person, nor incur or enter into any collective bargaining agreement or other obligation to any labor organization or employee, or (v) grant or pay (or agree to grant or pay) any increase in the rate of compensation of any employee, officer, director or consultant, except that Seller, at its own expense, intends to enter into retention agreements with MPP Employees in order to take positive steps towards smooth transition of the operation to the Buyer.

 

 

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(b) On or before the Closing, but effective immediately prior to the Closing Date, Seller shall take all necessary actions to cause the MPP 401(k) Plan to be terminated. On or before the Closing, but effective as of the Closing Date, Seller shall take all actions necessary to cause (i) MPP to cease to be an adopting or participating employer under all Employee Plans and (ii) MPP to transfer its sponsorship and all of its obligations and Liabilities relating to the Employee Plans to Seller or an Affiliate of Seller. Seller shall remain solely responsible for the Employee Plans, and Buyer shall not, and from and after the Closing Date the Entities shall not, have any responsibilities or Liabilities with respect to the Employee Plans. Without limiting the scope of the preceding provisions of this Section 5.3(b), Seller shall, if required by Law, provide COBRA or other continuation coverage (within the meaning of Section 4980B of the Code and the Treasury regulations thereunder) to all individuals who are M & A qualified beneficiaries (within the meaning assigned to such term under Q&A-4 of Treasury regulation section 54.4980B-9) with respect to the transactions contemplated by this Agreement for the duration of the period to which such individuals are entitled to such coverage. Seller shall take any and all necessary actions to ensure that Buyer, MPP, the Entities and their respective Affiliates are not required to provide such continuation coverage to any such individual at any time. By executing the Assumption Agreement on the Closing Date, Seller agrees to assume and be responsible for the payment of all pre-Closing Date, employee-related Liabilities (e.g., accrued and unpaid salary or wages, vacation pay, accrued and withholding taxes, and other accrued and liabilities under any Employee Plans) with respect to the MPP Employees and any and all former employees of MPP, the Entities and any of their predecessors, provided that such liabilities may be taken into account in the Closing Net Working Capital in which case, they may be paid by Buyer.

 

(c) On or before the Closing Date, Seller shall cause to be transferred to Seller the employment of each individual employed by an Entity (i) who is on a disability or other leave of absence as of the Closing Date or (ii) who has been identified on a list furnished by Buyer to Seller at least two Business Days prior to the Closing Date. Each MPP Employee who is employed by MPP on the Closing Date and whose employment is not transferred as provided in the preceding sentence is referred to herein as a “Transferred Employee.”

 

(d) For purposes of eligibility and vesting (but not benefit accrual) under the employee benefit plans of Buyer or its Affiliates providing benefits to Transferred Employees after the Closing Date (the “DCP Plans”), to the extent permitted by the terms of the insured DCP Plans, and for purposes of determining the vacation and sick leave benefits to be provided to Transferred Employees under the DCP Plans, Buyer shall cause each Transferred Employee to be credited with his or her years of service with MPP and predecessor entities to the same extent, if any, as such Transferred Employee was entitled immediately prior to the Closing Date to credit for such service under any similar Employee Plan. Seller has provided Buyer with all the necessary information to enable Buyer to credit such prior service credit. The DCP Plans that provide medical and dental benefits shall credit Transferred Employees for the year in which the Closing Date occurs with any deductibles and out-of-pocket expenses paid by such Transferred Employees under the corresponding Employee Plans during the portion of such year preceding the Closing Date (provided, however, that such credit shall only be provided based on information Seller provides to Buyer pursuant to the following sentence). Seller shall provide to Buyer within 60 days after the Closing Date a list of deductibles and out-of-pocket expenses for the year in which the Closing Date occurs for the Transferred Employees and their dependents who provide authorization for the release of such data. Each Transferred Employee shall be eligible for vacation and sick leave effective as of the day after the Closing Date to the same extent as similarly situated employees of Buyer (prorated for the number of days remaining in Buyer’s fiscal year), taking into account the prior service credit granted in accordance with this Section 5.3.

 

 

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(e) During the final 10 Business Days preceding the Closing Date, Seller and Buyer shall cooperate in scheduling (i) all Employees to participate in Buyer’s safety and process safety management two day training course and (ii) those Employees directly (and on a relief basis) involved in the operation of the Grands Lacs pipeline, to participate in Buyer’s Operator Qualified Program to ensure that those Employees are qualified under U.S. Department of Transportation Part 192 regulations; the foregoing shall be conducted while maintaining reasonable staffing at MPP for operations.

(f) Nothing contained in this Agreement shall be construed to limit in any way the ability of Buyer or its Affiliates to terminate the employment of any Transferred Employee from and after the Closing Date; provided, that Buyer or its applicable Affiliate shall be responsible for issuing required notices under the Worker Adjustment and Retraining Notification Act and similar foreign, state and local rules, statutes and ordinances resulting from the actions of Buyer and its Affiliates after the Closing Date, and shall be responsible for the consequences of failure to so comply.

 

(g) From the date hereof through the second anniversary of the Closing Date, without the prior written consent of Buyer, neither Seller, nor any of its members or any or its Affiliates shall, directly or indirectly, solicit for employment or employ (i) any Transferred Employee or (ii) any other employee of Buyer or its Affiliates; provided that this Section shall not prohibit (A) solicitation of Transferred Employees whose employment has been terminated by Buyer or its Affiliates after the Closing Date or (B) general solicitations to the public or general advertising not specifically directed toward any Transferred Employee.

 

(h) Nothing in this Agreement, the Transaction Documents or this Section 5.3 shall provide any MPP Employee or any other Person any separate right or cause of action against Buyer, MPP, any Entity or Seller. The duties and obligations of Seller and Buyer to each other hereunder are intended to be enforceable only between them, and do not grant any benefits, duties or obligations to any third party, including the current or future employees of Buyer or its Affiliates or the employees of Seller, MPP, or any of the Entities or any of their respective Affiliates. Nothing in this Agreement, whether express or implied, shall amend or modify, or be construed as amending or modifying, any benefit plan, program or agreement sponsored, maintained or contributed to by Seller, MPP, any Entity, Buyer, or any of their respective Affiliates. Nothing in this Agreement, whether express or implied shall limit the right of Seller, MPP, any Entity, Buyer, or any of their respective Affiliates to amend, terminate or otherwise modify any such benefit plan, program or agreement after the Closing Date.

 

 

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Section 5.4 Tax Covenants.

 

(a) Tax Return Filings, Refunds, and Credits.

 

(i) Seller shall timely prepare and file (or cause such preparation and filing) with the appropriate Tax authorities all Tax Returns with respect to MPP and the Entities for Tax periods that end on or before the Effective Date (the “Seller Returns”), and will pay (or cause to be paid) all Taxes due with respect to the Seller Returns. The taxes shown on the Tax Returns shall be correct and complete.

 

(ii) Buyer shall timely prepare and file (or cause preparation and filing) with the appropriate Tax authorities all Tax Returns with respect to MPP for all Tax periods ending after the Effective Date (the “Buyer Returns”), and will pay (or cause to be paid) all Taxes due with respect to the Buyer Returns. The taxes shown on the Tax Returns shall be correct and complete.

 

(b) Property Tax Pro-ration and Post-Closing Adjustment. Ad valorem and real and tangible personal property Taxes with respect to the property and assets of MPP and the Entities (“Property Taxes”) for the calendar year in which the Closing Date occurs shall be prorated between Seller and Buyer as of the Effective Date. Actual Property Taxes paid by MPP before the Effective Date shall be prorated between the Seller and Buyer as of the Effective Date and the amount allocable for the period after the Effective Date shall be included as a prepayment in the Closing Net Working Capital calculation as provided in Section 2.1. All future Property Taxes paid by MPP after the Effective Date shall be prorated between the Seller and Buyer as of the Effective Date and the amount allocable for the period prior to the Effective Date shall represent Seller’s obligation and shall be accounted for in the Post-Closing Purchase Price Reconciliation. Any Property Taxes allocable to the Seller’s account arising from proration of any future Property Tax bill received by MPP after the Post-Closing Purchase Price Reconciliation shall be billed to the Seller.

 

(c) Transfer Taxes. Seller shall bear all transfer, documentary, sales, use, stamp, registration, value added and other similar Taxes and fees (including any penalties and interest) incurred in connection with transactions contemplated by this Agreement (including any real property transfer tax and any similar Tax).

(d) Allocation of Taxes. Seller and Buyer shall, unless prohibited by applicable state or local Law, cause MPP and each of the Entities to close all Tax periods at the Effective Date. If applicable Law does not permit MPP or any of the Entities to close Tax period at the Effective Date, the amount of Taxes allocable to the portion of such period ending at the Effective Date shall be deemed equal to the amount that would be payable if the relevant taxable period ended at the Effective Date. Any allocation of income or deductions required to determine any Income Taxes relating to such period shall be taken into account as though the relevant taxable period ended at the Effective Date and by means of a closing of the books and records of MPP and the Entities at the Effective Date; provided that exemptions, allowances or deductions that are calculated on an annual basis (including, but not limited to, depreciation and amortization deductions) shall be allocated between the period ending at the Effective Date and the period thereafter in proportion to the number of days in each such period. All Tax Returns filed by Buyer, Seller or MPP and each of the Entities shall be prepared consistently with such allocation. Neither Seller, any of its Subsidiaries nor Buyer shall make an election under Treasury Regulation Section 1.1502-76(b)(2)(ii) (or any similar provision of state or local Tax) to ratably allocate Tax items for any year or taxable period that includes the Closing Date. Notwithstanding anything to the contrary herein, any Tax payable by MPP or the Entities in respect of the Michigan Business Tax or any comparable franchise Tax (a “Michigan Tax”) paid or payable with respect to MPP or the Entities, shall be allocated to the taxable 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 taxable period is obtained by the payment of the Michigan Tax.

 

 

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Section 5.5 Maintenance of Insurance Policies. 

 

(a) Prior to the Closing Date, Seller shall have provided Buyer true, correct and complete copies of all Insurance Policies. Seller agrees to maintain all Insurance Policies in effect and all premiums therefore fully paid up at least through the Closing Date. Buyer reserves the right to cause any or all of the Insurance Policies to be terminated at any time from and after the Closing Date and obtain refunds of unused premiums which will be taken into account in determining the Closing Statement.

 

(b) Seller’s only right to receive or share in the proceeds of any Insurance Policy Claims from and after the Closing Date are set forth in Section 6.3(b) below.

 

(c) Nothing in this Agreement is intended to provide or shall be construed as providing a benefit or release to any insurer or claims service organization with respect to any obligation under any Insurance Policy. Nothing herein shall be construed as creating or permitting any insurer or claims service organization the right of subrogation against Seller or Buyer or any of their Affiliates in respect of payments made by one to the other under any Insurance Policy.

 

Section 5.6 Preservation of Records.

 

(a) Buyer agrees that it shall, at its own expense, preserve and keep the records held by it relating to the businesses of MPP that could reasonably be required after the consummation of the transaction contemplated in this Agreement by Seller for the time periods required; provided, however, that upon expiration of such period, as applicable, Buyer shall give written notice to Seller if it or the custodian of such books and records proposes to destroy or dispose of the same. Seller shall have the opportunity for a period of 30 days after receiving such notice to elect to have some or all of such books and records delivered, at Seller's expense and risk, to a location chosen by Seller. In addition, Buyer shall make such records available to Seller as may reasonably be required by Seller in connection with, among other things, any insurance claim, legal proceeding or governmental investigation relating to the business of MPP. Seller agrees to maintain the confidentiality of all information provided by Buyer or MPP hereunder during the time periods provided for in this Section.

 

 

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(b) Seller agrees that it shall, at its own expense, preserve and keep the records held by it relating to the business of MPP which are contained in the records of Seller or its Affiliates that could reasonably be required after the consummation of the transaction contemplated by this Agreement by Seller for the time periods required. In addition, Seller shall make such records available to Buyer as may reasonably be required by Buyer in connection with, among other things, any insurance claim, legal proceeding or governmental investigation relating to MPP.

 

Section 5.7 Public Statements. No public or private release announcement or regulatory filing concerning the transactions contemplated hereby shall be issued by any of the parties without the prior written consent of the other parties (which consent shall not unreasonably withheld), except for such press release, announcement or regulatory filing as is required by Law, court process or stock exchange rule to be made by the party proposing to issue the same, in which case such party shall use its reasonable commercial efforts to consult in good faith with the other party prior to the issuance of any such press release, announcement or filing. In no event shall either party disclose the Purchase Price for the Membership Interests unless compelled by court order or other legal process and after prompt prior notice to the other party of any requested or demanded disclosure. Seller will cooperate with Buyer in respect of public announcements and Seller will coordinate with the Buyer regarding private announcement of the transaction to the employees.

 

Section 5.8 Use of Corporate Name. Buyer is acquiring and shall be entitled to use the names of MPP and the Entities after the Closing Date.

 

Section 5.9 Confidentiality. Each of Buyer and Seller will hold, and will cause its Representatives to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of Law, all confidential documents and information concerning MPP and the Entities furnished to Buyer in connection with the transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (i) previously known on a non-confidential basis by Buyer or Seller, (ii) in the public domain through no fault of Buyer or Seller or (iii) later lawfully acquired by Buyer or Seller from sources other than the other party; provided that Buyer and Seller may disclose such information to their Representatives in connection with the transactions contemplated by this Agreement so long as such Persons are informed by Buyer and Seller respectively of the confidential nature of such information and are directed by Buyer and Seller to treat such information confidentially. The obligation of each of Buyer and Seller 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 their own similar information.

 

Section 5.10 MPP Financial Statements. From the date of execution of this Agreement to the Closing Date and thereafter, Seller will use commercially reasonable efforts to assist Buyer in complying with the requirements of Regulation S-X adopted by the U.S. Securities and Exchange Commission in connection with the MPP Annual Audited Financial Statements and the MPP Unaudited Financial Statements, including providing customary management representation letters and obtaining consents from Plante Moran, PLLC necessary for the filing of all Financial Statements with the Securities and Exchange Commission. In addition, from the date of execution of this Agreement to the Closing Date and thereafter, Seller will use commercially reasonable efforts to assist Buyer with the determination of purchase accounting allocations and the transition of ongoing accounting requirements.

 

 

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Section 5.11 Non-competition. For a period beginning on the date hereof and ending two (2) years after the Closing Date (the “Non-Compete Period”), Seller agrees that it will not, directly or indirectly, on his own behalf or as a partner, officer, director, stockholder, member, employee, Seller, agent or consultant of, or in any other capacity for, any other person or entity:

 

(a) engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing, or control of, lend his funds or credit to, or render services or advice to, any Person or entity that is engaged in or owns, operates or leases assets that involve the natural gas gathering, transportation, processing, compression or treating business that competes with the Business or which is a foreseeable extension of the Business (including without limitation assets and services upstream of the central production facilities which are used to dehydrate or deliver natural gas to the Business such as wellhead gathering pipelines and compression, but excluding any aspect of business opportunities in which Buyer has the contractual right to participate with Seller, and excluding such activities as natural gas exploration, production and storage which are primary businesses of the Seller) (the “Non-Compete Business”); or

 

(b) persuade or attempt to persuade any customer or prospective customer of the Company, of any Entity, or of MichCon (as to MichCon, regarding any supply, transportation, gas gathering, processing, compression or treating arrangement that MichCon may conduct upstream of the Business) to discontinue or reduce its business with the Company, any Entity or MichCon, as applicable; and

 

(c) provided however, that (a) the Non-Compete Business shall not be construed to include the leasing and development of oil and gas properties and Seller may be employed by or render services or advice to any entity engaged in the Non-Compete Business as long as such employment, services rendered or advice given by Seller do not directly or indirectly relate to the Non-Compete Business.

 

Notwithstanding anything herein to the contrary, the parties acknowledge and agree that Seller, if otherwise in compliance with this Agreement may own or hold, as a passive investment, not more than five percent (5%) of the outstanding securities of any person or entity engaged in the Non-Compete Business if the securities of such a person or entity are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934, as amended

 

 

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Section 5.12 Conduct of Business Pending Closing

 

Prior to the Closing Date, the Seller will take all measures necessary to cause MPP and each Entity to (except with the prior written consent of Buyer or as otherwise permitted by this Agreement and the Transaction Documents):

 

(a) carry on the Business only in the ordinary course of business and in a manner consistent with past practice;

 

(b) maintain its assets, properties and facilities, including those held under leases, in as good working order and condition as at present, ordinary wear and tear excepted;

 

(c) not acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or any assets of, or by any other manner, any business or any entity, partnership, association or other business organization or division thereof;

 

(d) not sell, lease, mortgage, encumber, pledge, grant a lien on or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), or dispose of any portion of its assets, other than in the ordinary course of MPP’s or any Entity’s business consistent with past practice;

 

(e) (i) not increase or agree to increase the compensation payable or to become payable to any of the Employees: provided, that the foregoing restriction shall not prohibit MPP from maintaining contributions to and/or accruing liabilities in respect of the Employee bonus pool, so long as the same are reflected in the MPP Financial Statements, (ii) not grant any severance or termination pay to, or enter into any employment or severance agreement with any Person; (iii) not enter into any collective bargaining agreement; or (iv) not establish, adopt, enter into, amend or terminate any employee benefit plan, except as contemplated by first sentence of Section 5.3(b) above;

 

(f) keep in full force and effect Insurance Policies;

 

(g) maintain and preserve its business organization intact, retain present employees (Seller intends, at its expense, to enter into retention agreements with MPP Employees) and maintain its relationships with suppliers, vendors, customers, creditors and others having business relations with it;

 

(h) not declare, set aside or pay any dividend or other distribution (whether in units, other form of equity or property) with respect to any of its outstanding capital units, or make any issuance, reclassification, redemption, purchase or other acquisition of any of its equity securities (except (i) to the extent permitted in distributing Net Current Assets to Seller pursuant to this Agreement and (ii) regularly scheduled interest and principal payments to LaSalle Bank);

 

(i) not incur any indebtedness for borrowed money;

 

 

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(j) not enter into any Material Contract that is not terminable by MPP or an Entity on no greater than 90 days notice;

 

(k) not make any change in accounting principles, methods or policies (except as may be required by changes in Law or changes in GAAP);

 

(l) not cancel or compromise any Claim or amend, modify, cancel, terminate, relinquish, waive or release any Material Contract or material right of MPP or any Entity; and

 

(m) not make or commit to make any capital expenditures or issue any new “authorities for expenditure,” in either case in excess of $100,000 or make or commit to make any individual operating expenditure in excess of $100,000.

 

ARTICLE VI

 

SURVIVAL; INDEMNIFICATION

 

Section 6.1 Survival.

 

(a) All representations and warranties contained herein shall survive for a period of twelve (12) months following the Closing Date except for the representations and warranties of Seller set forth in Section 3.1 (Corporate Organization; Qualification), 3.2 (Authority Relative to this Agreement), and 3.3 (Equity Interests), and of Buyer in Sections 4.1 (Corporate Organization; Qualification) and 4.2 (Authority Relative to this Agreement), which shall survive without any time period limitation except the applicable statute of limitations, and the representations of Seller set forth in Section 3.7 (Contracts) and Section 3.15 (Taxes), which shall survive for the applicable statute of limitations periods (such periods set forth above are referred to herein as the relevant “Indemnity Period”). The parties intend that solely as to those representations and warranties that survive for a period of twelve (12) months following the Closing, that the statute of limitations be contractually shortened and the parties agree that no Claims or causes of action may be brought against Seller, Buyer or any of their respective directors, officers, members, employees, Affiliates, controlling persons, agents or Representatives based upon, directly or indirectly, any of the representations and warranties contained in this Agreement after the Indemnity Period; provided that if a written notice of Claim for indemnification is made during the applicable Indemnity Period in accordance with this Article VI, such Claim shall survive until its resolution.

 

(b) All covenants and agreements contained herein that by their terms are to be performed in whole or in part, or which prohibit actions, subsequent to the date hereof, shall survive the consummation of the transaction contemplated hereby in accordance with their terms.

 

Section 6.2 Indemnification.

 

(a) Subject to the limitations set forth in this Article VI, from and after the Closing Date, Seller shall indemnify, defend, save and hold harmless Buyer and its Affiliates, their respective successors and permitted assigns, and their officers and directors (collectively, the “Buyer Indemnified Parties”), from and against any and all Damages incurred by a Buyer Indemnified Party arising out of, resulting from or incurred in connection with:

 

 

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(i) any breach or inaccuracy of any representation or warranty of Seller contained in this Agreement, in each case, when made or deemed made (without giving effect to the words “material” or “Material Adverse Effect” or other similar exceptions or qualifiers);

 

(ii) any breach by Seller of any covenant or agreement contained in this Agreement; and

 

(iii) any Retained Liabilities.

 

(b) Subject to the limitations set forth in this Article VI, from and after the Closing Date, Buyer shall indemnify, defend, save and hold harmless Seller and its Affiliates, their respective successors and permitted assigns, and their officers and directors (collectively, the “Seller Indemnified Parties”) from and against any and all Damages to the extent incurred by the Seller Indemnified Party arising out of, resulting from or incurred in connection with:

 

(i) any breach or inaccuracy of any representation or warranty of such Buyer contained in this Agreement, in each case, when made or deemed made; and

 

(ii) any breach by Buyer of any covenant or agreement contained in this Agreement; and

 

(iii) any Liabilities arising from operations or business on or after the Closing Date, that did not exist prior to the Closing Date.

 

(c) Any Person providing indemnification pursuant to the provisions of this Section 6.2 is referred to herein as an “Indemnifying Party”, and any Person entitled to be indemnified pursuant to the provisions of this Section 6.2 is referred to herein as an “Indemnified Party”.

 

(d) Seller's indemnification obligations contained in Section 6.2(a)(i) shall not apply to any Claim for Damages unless and until the aggregate of all such Damages exceeds $1,000,000 (the “Threshold Amount”), in which event Seller's indemnity obligation contained in Section 6.2(a)(i) shall apply to all Claims for Damages in excess of the Threshold Amount, subject to a maximum liability to Seller, in the aggregate, of $15,000,000 (the “Cap Amount”); provided, however, that the following Claim for Damages shall not be subject to the Threshold Amount or Cap Amount: (i) Seller’s breach of the representations and warranties set forth in Sections 3.1, 3.2 and 3.3, and Section 3.15 and (ii) those that relate to or arise out of the Retained Liabilities.

 

(e) Buyer's indemnification obligations contained in Section 6.2(b)(i) shall not apply to any Claim for Damages unless and until the aggregate of all such Damages equals the Threshold Amount, in which event Buyer's indemnification obligation contained in Section 6.2(b)(i) shall apply to all Claims for Damages in excess of the Threshold Amount, subject to a maximum liability to the Buyer, in the aggregate, of the Cap Amount.

 

 

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(f) The indemnification obligations of each party hereto under this Section 6.2 shall inure to the benefit of the Buyer Indemnified Parties and Seller Indemnified Parties, and such Buyer Indemnified Parties and Seller Indemnified Parties shall be obligated to keep and perform the obligations imposed on an Indemnified Party by this Section 6.2, on the same terms as are applicable to such other party.

 

(g) In all cases in which a Person is entitled to be indemnified in accordance with this Agreement, such Indemnified Party shall be under a duty to act in a commercially reasonable manner to mitigate its Losses.

 

(h) Notwithstanding any other provision of this Agreement, in no event shall any Indemnified Party be entitled to indemnification pursuant to this Article VI to the extent any Damages were attributable to such Indemnified Party's own gross negligence or willful misconduct.

 

(i) THE REMEDIES PROVIDED IN THIS ARTICLE VI SHALL BE DEEMED TO SET FORTH AND ESTABLISH THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES, FROM AND AFTER THE DATE HEREOF, WITH RESPECT TO THE BREACH OR FAILURE TO PERFORM THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 6.3 Calculation of Damages. 

 

(a) The amount of any Damages suffered by Buyer hereto shall be reduced if and only to the extent that Seller’s (i) breached or inaccurate representation or warranty or (ii) breached covenant or agreement is accurately and adequately reserved for in the Closing Statement and Buyer actually receives the cash related to such reserve as a Current Asset upon acquiring the Membership Interests.

 

(b) If a Buyer Indemnified Party Claim for Damages under this Article VI is covered by an Insurance Policy maintained in effect by MPP prior to the Closing Date, contemporaneously with Seller’s payment of the Buyer Indemnified Party Claim for Damages, Buyer shall cause MPP, or its successor to assign to Seller whatever right to recovery as to the particular Claim for Damages under the relevant Insurance Policy, as can be assigned to Seller, and Buyer shall take such action as Seller may reasonably request without the expenditure of funds to assist Seller to collect under the relevant Insurance Policy.

 

Section 6.4 Procedures for Third-Party Claims. The obligations of any Indemnifying Party to indemnify any Indemnified Party under this Article VI with respect to for Claim for Damages pursued against an Indemnified Person by any Person other than an Indemnifying Party (including Governmental Entities) (a “Third-Party Claim”), shall be subject to the following terms and conditions:

 

 

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(a) The Indemnified Party shall give the Indemnifying Party written notice of any such Third-Party Claim reasonably promptly after learning of such Third-Party Claim. The Indemnifying Person’s failure to give prompt written notice of a Third-Party Claim shall not affect the Indemnifying Party's obligations under this Article VI, except to the extent that the Indemnifying Party is actually prejudiced by its failure to receive prompt written notice.

 

(b) If the Indemnifying Party elects to defend against, negotiate, settle or otherwise deal with any Third Party Claim, it shall within 30 days notify the Indemnified Party of its decision. If the Indemnifying Party elects not to or fails to defend against, negotiate, settle or otherwise deal with any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise deal with such Third Party Claim. If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified Party may participate, at its own expense, in the defense of such Third Party Claim; provided, however, that such Indemnified Party shall be entitled to participate in any such defense with separate counsel at the expense of the Indemnifying Party if, (i) so requested by the Indemnifying Party to participate or (ii) in the reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists between the Indemnified Party and the Indemnifying Party that would make such separate representation advisable; and provided, further, that the Indemnifying Party shall not be required to pay for more than one such counsel for all Indemnified Parties in connection with any Third Party Claim.

 

(c) The Indemnified Party shall, and shall cause its employees and Representatives to, cooperate reasonably with the Indemnifying Party in connection with the defense negotiation, settlement or other handling of each Third-Party Claim and shall provide the Indemnifying Party with all available information and documents concerning such Third-Party Claim.

 

(d) Notwithstanding anything else in this Section 6.4, (i) the Indemnified Party shall not settle a Third-Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed and (ii) 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 for relief 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, conditioned or delayed.

 

Section 6.5 Procedures for First-Party Claims. The obligations of any Indemnifying Party to indemnify an Indemnified Party under this Article VI in respect of a Claim for Damages pursued directly by an Indemnified Party against an Indemnifying Party (a “First-Party Claim”) shall be subject to the following terms and conditions:

 

(a) Once an Indemnified Party determines that it has a First-Party Claim, the Indemnified Party shall give reasonably prompt written notice thereof to the Indemnifying Party, specifying the amount of such claim and any relevant facts and circumstances relating thereto, and such notice shall be promptly given even if the nature or extent of the Damages is not then known. Such written notification shall be subsequently supplemented within a reasonable time as additional information regarding the First-Party Claim or the nature or extent of Damages resulting therefrom becomes available to the Indemnified Party.

 

 

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(b) Any failure to give such reasonably prompt notice or supplement thereto or to provide any such facts and circumstances will not waive any rights of the Indemnified Party, except to the extent that the rights of the Indemnifying Party are actually and materially prejudiced thereby.

 

(c) The Indemnified Party and the Indemnifying Party shall attempt to negotiate in good faith for a 30-day period regarding the resolution of any disputed First-Party Claim. Promptly following the final determination of the amount of any Damages Claimed by the Indemnified Party, the Indemnifying Party, subject to the limitations of the Threshold Amount and the Cap Amount (if applicable), shall pay such Damages to the Indemnified Party by wire transfer of immediately available funds.

 

Section 6.6 Special Indemnification Provision Relating to Environmental Matters. 

 

(a) Buyer shall indemnify and hold the Seller harmless from that portion of Damages resulting from Buyer’s, MPP’s or any Entity’s failure to comply with or to remediate property in accordance with applicable Environmental Law, but only to the extent that such Damages are directly attributable to Buyer’s, MPP’s or any Entity’s actions or omissions occurring on or after the Closing Date.

 

(b) Seller shall indemnify and hold Buyer harmless from all Damages under any Environmental Law that arise out of actions or omissions that occurred before the Closing Date but were not disclosed in the Seller Disclosure Letter, if they relate to matters as to which written notification is given by Buyer to Seller during a period ending one year after the Closing Date.

 

Should Seller be obligated, as a result of Section 6.6(b) or due to any Retained Liability to conduct remediation, Buyer shall reasonably cooperate with environmental response activities of Seller on the applicable property. Buyer shall ensure that Seller has reasonable access to investigate, monitor, and remediate said property, and to install, operate, and maintain facilities for the containment or treatment of the soil and groundwater, and to perform other environmental remediation and response activities, so long as such activities do not unreasonably interfere with the operation of the Business. In conducting the above-described environmental remediation, Seller may elect to perform a cleanup in accordance with applicable industrial cleanup standards or (if applicable and suitable pursuant to Environmental Law in force at the time of cleanup) commercial III or IV cleanup standards under the Michigan Natural Resources and Environmental Protection Act, Part 201 (Part 201), or similar standards which may be allowed under Michigan law in the future. Seller shall conduct any and all investigations, monitoring, and remediation in compliance with applicable Environmental Laws; (ii) cleanup standards or cleanup criteria applicable to any remedial action by Seller at the property shall not be inconsistent in any way with current use of the subject property or expansion of uses of a similar nature at the property; and Seller shall access and disturb the absolute least amount of surface property possible in conducting it remediation operations.

 

 

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ARTICLE VII

 

CONDITIONS TO CLOSING

 

Section 7.1 Conditions Precedent to Obligations of Buyer. Buyer’s obligation to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of which may be waived by Buyer in whole or in part:

 

(a) The representations and warranties of Seller set forth in this Agreement shall be true and correct, at and as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all respects, on and as of such earlier date without giving effect to the words “material” or “Material Adverse Effect” or other similar exception or qualifier; provided, however, that in the event of such a breach of a representation or warranty, the condition set forth in this Section 7.1(a) shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together result in a Material Adverse Effect;

 

(b) Seller shall have performed and complied in all material respects with all obligations and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date;

 

(c) no casualty losses shall have occurred with respect to the assets of the Business that could result in the aggregate, in Losses (including future losses due to business interruption) equal or greater than 5% of the Purchase Price (a “Casualty Loss”);

 

(d) MPP Financial Statements. Seller must have delivered to Buyer as soon as prepared, and in any event, prior to the Closing Date:

 

(i)

The MPP Annual Audited Financial Statements; and

 

(ii)

The MPP Unaudited Financial Statements, as of and for the six-month periods ended June 30, 2007 and 2008; provided that if the Closing Date occurs after November 8, 2008, the MPP Unaudited Financial Statements shall be prepared as of and for the nine-month periods ended September 30, 2007 and 2008; and

 

(e) Security Agreement. Seller shall have caused to be delivered to Buyer one of more certain letter(s) of credit referenced in that certain Security Agreement dated of even date herewith, by and between Buyer on the one hand and Michigan Energy Investment, LLC, Ganesh Energy, LLC and Gas Processing & Pipeline, LLC on the other hand.

 

Section 7.2 Conditions Precedent to Obligations of Seller. Seller’s obligation to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions (any or all of which may be waived by Seller in whole or in part:

 

 

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(a) the representations and warranties of Buyer set forth in this Agreement shall be true and correct, at and as of the Closing Date as though made on the Closing Date (except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all respects, on and as of such earlier date provided, however, that in the event of such a breach of a representation or warranty, the condition set forth in this Section 7.2(a) shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together result in a Material Adverse Effect;

 

(b) the waiting period applicable to the transactions contemplated by this Agreement under the HSR Act shall have expired without any order by a Governmental Authority restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby, or early termination shall have been granted.

 

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

Section 8.1 Interpretation. 

 

(a) Unless the context of this Agreement otherwise requires, (a) words of any gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (d) the terms “Article,” “Section” and “Exhibit” refer to the specified Article, Section and Exhibit of this Agreement, respectively; and (e) “including,” shall mean “including, but not limited to”; and (v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties (whether real or personal). Unless otherwise expressly provided, any agreement, instrument, law or regulation defined or referred to herein means such agreement, instrument, law or regulation as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of a law or regulation) by succession of comparable successor law and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein.

 

(b) For purposes of Article III and all covenants and obligations of Seller hereunder including indemnification obligations of Article VI, all representations, warranties, covenants and obligations made by Seller shall be deemed to be jointly and severally made by each Seller.

 

Section 8.2 Disclosure Letters. The Seller Disclosure Letter and the Buyer Disclosure Letter are incorporated into this Agreement by reference and made a part of it.

 

 

 

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Section 8.3 Payments. All payments set forth in this Agreement are in United States Dollars. Such payments shall be made by wire transfer of immediately available funds or by such other means as the parties to such payment shall designate.

 

Section 8.4 Expenses. Except as expressly set forth herein, or as agreed upon in writing by the parties, each party shall bear its own costs, fees and expenses, including the expenses of its representatives, incurred by such party in connection with this Agreement and the contemplated transaction.

 

Section 8.5 Choice of Law. THIS AGREEMENT, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS OR ANY OTHER LAW THAT WOULD MAKE THE LAWS OF ANY OTHER JURISDICTION OTHER THAN THE STATE OF NEW YORK APPLICABLE HERETO.

 

Section 8.6 Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party.

 

Section 8.7 Notices. All demands, notices, consents, approvals, reports, requests and other communications hereunder must be in writing, will be deemed to have been duly given only if delivered personally or by facsimile transmission (with confirmation of receipt) or by an internationally-recognized express courier service or by mail (first class, postage prepaid) to the parties at the following addresses or telephone or facsimile numbers and will be deemed effective upon delivery; provided, however, that any communication by facsimile shall be confirmed by a nationally-recognized express courier service or regular mail.

 

 

 

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	(i)    If to the Seller: Ganesh Energy, LLC 30078 Schoenherr, Suite 150 Warren, Michigan Attention: Manouch Daneshvar Telephone: (586) 445-2300 Facsimile: (586) 445-1782   Gas Processing & Pipeline, LLC 200 Greenbrier Road P.O.Box 460 Summersville, WV 26651 Attention: James E. Davis Telephone: (304) 872-3000 Facsimile: (304) 872-3040   With a required copy to:   Ufer & Spaniola, P.C. 5440 Corporate Drive, Suite 250 Troy, Michigan 48098-2648 Attention: Gerald Van Wyke, Esquire Telephone: (248) 641-7000 Facsimile: (248) 641-5120
	(ii)    If to Buyer: DCP Midstream Partners, LP 370 17th Street, Suite 2700 Denver, CO 80202-0202 Attention: Anthony A. Blando, Director of Business Development Telephone: 303-633-2916 Facsimile: 303-633-2921
	With a required copy to:   DCP Midstream Partners, LP 370 17th Street, Suite 2700 Denver, CO 80202-0202 Attention: Michael S. Richards, General Counsel Telephone: 303-633- 2912 Facsimile: 303-633-2921

or to such other address as the addressee shall have last furnished in writing in accord with this provision to the addressor.

 

 

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Section 8.8 Resolution of Disputes. 

 

 

(b) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 8.9 No Right of Setoff. Neither party hereto nor any Affiliate thereof may deduct from, set off, holdback or otherwise reduce in any manner whatsoever any amount owed to it hereunder or pursuant to any related agreement.

 

Section 8.10 Time is of the Essence. Time is of the essence in the performance of the provisions of this Agreement.

 

Section 8.11 Entire Agreement. This Agreement, together with the Seller Disclosure Letter, Buyer Disclosure Letter, Annex I, the Exhibits hereto, and the Confidentiality Agreement and Transaction Documents constitute the entire agreement between the parties hereto with respect to the subject matter herein and supersede all previous agreements, whether written or oral, relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into this Agreement. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving this Agreement.

 

Section 8.12 Binding Nature; Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors (whether by operation of law or otherwise) and permitted assigns. Except as expressly provided herein, none of the provisions of this Agreement shall be for the benefit of or enforceable by any third party, including any creditor of either party or any of their Affiliates. Except as expressly provided herein, no such third party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any Claim in respect of any Liability (or otherwise) against either party hereto.

 

 

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Section 8.13 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which, when executed, shall be deemed to be an original and both of which together shall constitute one and the same document. Any counterpart or other signature to this Agreement that is delivered by facsimile or electronic mail shall be deemed for all purposes as constituting good and valid execution and delivery by such party of this Agreement.

 

Section 8.14 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any applicable present or future law, and if the rights or obligations of either party under this Agreement will not be materially and adversely affected thereby, (i) such provision shall be fully severable, (ii) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of it, (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance this Agreement and (iv) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

 

Section 8.15 Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit its provisions.

 

Section 8.16 Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party or parties waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by law or otherwise afforded, will be cumulative and not alternative.

 

Section 8.17 Amendment. This Agreement may be altered, amended or changed only by a writing making specific reference to this Agreement and signed by duly authorized representatives of each party.

 

Section 8.18 Seller Liability. Each of Ganesh, LLC and Gas Processing and Pipeline, LLC agree that they are jointly and severally liable for the performance of all transactions and the assumption of all liabilities by Seller that are set forth in this Agreement and in the Transaction Documents.

 

 

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IN WITNESS WHEREOF, Seller and Buyer, by their duly authorized officers, have executed this Agreement as of the date first written above.

 

GANESH ENERGY, LLC

 

 

By:  /s/ Rai P. Bhargava

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Name: Rai P. Bhargava

Title: Chairman

 

 

GAS PROCESSING AND PIPELINE, LLC

 

 

By:  /s/ William T. Bright

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Name: William T. Bright

Title: Chairman

 

 

MICHIGAN ENERGY INVESTMENTS, LLC

 

 

By:  /s/ Rai P. Bhargava

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Name: Rai P. Bhargava

Title: Chairman

 

 

(Collectively, the Seller)

 

 

DCP MIDSTREAM PARTNERS, LP

 

By:  DCP Midstream GP, LP

Its General Partner

 

By: DCP Midstream GP, LLC

Its General Partner

 

By:  /s/ Greg K. Smith

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Name: Greg K. Smith

Title:  Vice President, Business Development

 

(the Buyer)

 

 

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ANNEX I

ENTITIES and EQUITY INTERESTS

Equity Interests

 

Entity Name	Jurisdiction	% Ownership Interest
Michigan Pipeline & Processing, LLC	Michigan	53.75% owned by Ganesh Energy, LLC (“Ganesh”)and 46.25% owned by Gas Processing & Pipeline, LLC (“GPP”).
MPP Antrim Gas LLC	Michigan	100% owned by Michigan Pipeline & Processing, LLC
MPP Bay Area Pipeline, LLC	Michigan	100% owned by Michigan Pipeline & Processing, LLC
MPP Grands Lacs LLC	Michigan	100% owned by Michigan Pipeline & Processing, LLC
MPP Jackson LLC1	Michigan	100% owned by Michigan Pipeline & Processing, LLC
MPP Litchfield LLC2	Michigan	100% owned by Michigan Pipeline & Processing, LLC

 

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1	MPP Jackson LLC owns 75% equity interest in the Jackson Pipeline Company (general partnership).

 

2	MPP Litchfield owns 44% equity interest in the Litchfield Pipeline.

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