CONTRIBUTION
AGREEMENT
between
DCP LP Holdings,
LP
and
DCP Midstream Partners,
LP
October 9,
2006
TABLE OF
CONTENTS
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ARTICLE
I CERTAIN DEFINITIONS
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1
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1.1
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CERTAIN
DEFINED TERMS
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1
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1.2
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OTHER
DEFINITIONAL PROVISIONS
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13
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1.3
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HEADINGS.
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13
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1.4
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OTHER
TERMS
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13
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ARTICLE
II CONTRIBUTION OF THE SUBJECT INTEREST, ISSUANCE OF THE UNITS AND
CONSIDERATION
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13
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2.1
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THE
TRANSACTION.
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13
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2.2
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CONSIDERATION
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14
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ARTICLE
III ADJUSTMENTS, PRORATIONS AND SETTLEMENT
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14
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3.1
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ADJUSTMENTS.
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14
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3.2
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PRORATIONS AND ADJUSTMENTS.
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14
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3.3
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PRELIMINARY SETTLEMENT
STATEMENT
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15
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3.4
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FINAL
SETTLEMENT STATEMENT
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15
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3.5
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DISPUTE
PROCEDURES
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15
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3.6
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PAYMENTS
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15
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3.7
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ACCESS
TO BOOKS AND RECORDS
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16
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3.8
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EXCLUDED ASSETS
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16
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF HOLDINGS
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16
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4.1
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ORGANIZATION, GOOD STANDING, AND
AUTHORITY.
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16
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4.2
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ENFORCEABILITY.
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17
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4.3
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NO
CONFLICTS.
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17
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4.4
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CONSENTS, APPROVALS, AUTHORIZATIONS AND
GOVERNMENTAL REGULATIONS.
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17
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4.5
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TAXES
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18
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4.6
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LITIGATION; COMPLIANCE WITH
LAWS
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19
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4.7
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CONTRACTS
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19
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4.8
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TITLE
TO ASSETS; INTELLECTUAL PROPERTY
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20
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4.9
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PREFERENTIAL RIGHTS TO
PURCHASE.
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21
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4.10
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BROKER'S OR FINDER'S FEES
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21
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4.11
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COMPLIANCE WITH PROPERTY
INSTRUMENTS
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21
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4.12
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ENVIRONMENTAL MATTERS
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21
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4.13
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EMPLOYEE MATTERS
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22
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4.14
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BENEFIT
PLAN LIABILITIES
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22
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4.15
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NO
FOREIGN PERSON
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22
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4.16
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CAPITALIZATION OF GSRLLC.
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22
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4.17
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SUBSIDIARIES AND OTHER EQUITY
INTERESTS
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22
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4.18
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BANK
ACCOUNTS
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22
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4.19
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NO
PREPAYMENTS MADE OR REFUNDS OWED.
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22
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4.20
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INVESTMENT INTENT
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23
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4.21
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NO
OTHER REPRESENTATIONS OR WARRANTIES; SCHEDULES
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23
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ARTICLE
V REPRESENTATIONS AND WARRANTIES OF DCP
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23
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5.1
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ORGANIZATION, GOOD STANDING, AND
AUTHORIZATION
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23
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5.2
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ENFORCEABILITY
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23
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5.3
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NO
CONFLICTS
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24
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5.4
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CONSENTS, APPROVALS, AUTHORIZATIONS AND
GOVERNMENTAL REGULATIONS
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24
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5.5
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LITIGATION
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24
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5.6
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INDEPENDENT INVESTIGATION
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24
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5.7
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BROKER'S OR FINDER'S FEES
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25
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5.8
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INVESTMENT INTENT
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25
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5.9
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AVAILABLE FUNDS
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26
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ARTICLE
VI COVENANTS AND ACCESS
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26
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6.1
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CONDUCT
OF BUSINESS.
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26
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6.2
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CASUALTY LOSS.
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27
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6.3
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ACCESS,
INFORMATION AND ACCESS INDEMNITY.
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28
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6.4
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REGULATORY FILINGS; HART-SCOTT-RODINO
FILING.
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29
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6.5
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LIMITATION ON CASUALTY LOSSES AND OTHER
MATTERS
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29
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6.6
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SUPPLEMENTS TO EXHIBITS AND
SCHEDULES
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30
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6.7
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PRESERVATION OF RECORDS
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30
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6.8
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MEASUREMENT AND VALUATION OF EXCESS
INVENTORY
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30
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6.9
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CAPITAL
PROJECTS
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31
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6.10
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NEW
DEBT
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31
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6.11
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CREDITS
AND RECEIPTS.
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31
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6.12
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TAX
COVENANTS.
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31
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6.13
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FINANCIAL STATEMENTS AND FINANCIAL
RECORDS
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34
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6.14
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INSURANCE
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35
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ARTICLE
VII CONDITIONS TO CLOSING
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35
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7.1
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HOLDINGS' AND DEFS'
CONDITIONS
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35
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7.2
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DCP'S
CONDITIONS
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36
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ARTICLE
VIII CLOSING
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37
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8.1
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TIME
AND PLACE OF CLOSING
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37
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8.2
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DELIVERIES AT CLOSING
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37
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ARTICLE
IX TERMINATION
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38
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9.1
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TERMINATION AT OR PRIOR TO
CLOSING.
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38
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9.2
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EFFECT
OF TERMINATION
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38
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ARTICLE
X INDEMNIFICATION
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38
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10.1
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INDEMNIFICATION BY DCP
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38
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10.2
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INDEMNIFICATION BY HOLDINGS.
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39
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10.3
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DEDUCTIBLES, CAPS, SURVIVAL AND CERTAIN
LIMITATIONS.
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39
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10.4
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NOTICE
OF ASSERTED LIABILITY; OPPORTUNITY TO DEFEND.
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41
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10.5
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MATERIALITY CONDITIONS
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43
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10.6
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EXCLUSIVE REMEDY.
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43
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10.7
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NEGLIGENCE AND STRICT LIABILITY
WAIVER
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43
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10.8
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LIMITATION ON DAMAGES
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43
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10.9
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BOLD
AND/OR CAPITALIZED LETTERS
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44
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ARTICLE
XI MISCELLANEOUS PROVISIONS
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44
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11.1
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EXPENSES
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44
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11.2
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FURTHER
ASSURANCES
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44
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11.3
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APPORTIONMENT OF PROPERTY TAXES; TRANSFER TAXES;
AND RECORDING FEES.
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44
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11.4
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ASSIGNMENT
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44
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11.5
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ENTIRE
AGREEMENT, AMENDMENTS AND WAIVER
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45
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11.6
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SEVERABILITY
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45
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11.7
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COUNTERPARTS
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45
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11.8
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GOVERNING LAW, DISPUTE RESOLUTION AND
ARBITRATION.
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45
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11.9
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NOTICES
AND ADDRESSES
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48
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11.10
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PRESS
RELEASES
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49
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11.11
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OFFSET.
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49
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11.12
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NO
PARTNERSHIP; THIRD PARTY BENEFICIARIES
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49
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11.13
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NEGOTIATED TRANSACTION
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49
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Form of Amended
Limited Partnership Agreement
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Form of ISDA
Master Agreement
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Form of Omnibus
Agreement Amendment
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Form of Subject
Interests Assignment Agreement
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Form of
Certificate for Class C Units
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Form of Canada
Business Agreement
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List of
Terminals and Field Offices
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HOLDINGS
Consents, Approvals and Authorizations
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DCP Consents,
Approvals and Authorizations
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Measurement and
Valuation of Excess Inventory
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Certain
Indemnified Matters
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CONTRIBUTION
AGREEMENT
This
Contribution Agreement (" Agreement ") is dated as of
October 9, 2006 and is between DCP LP Holdings, LP, a Delaware
limited partnership (" HOLDINGS ") and DCP Midstream
Partners, LP, a Delaware limited partnership (" DCP ").
HOLDINGS and DCP are sometimes referred to collectively herein as
the " Parties " and individually as a " Party
".
RECITALS
A. HOLDINGS owns all of the outstanding limited
liability company member interests of Duke Energy Guadalupe
Pipeline, LLC, a Delaware limited liability company (" DEGP
").
B. DEGP owns all of the outstanding limited
liability company member interests of Gas Supply Resources LLC, a
Texas limited liability company (" GSRLLC ").
C. GSRLLC owns (a) all of the limited liability
company member interests of GSRI Transportation LLC, a Texas
limited liability company (" GSRI ") and (b) 50% of the
limited liability company member interests of Pine Tree Propane
limited liability company, a Maine limited liability company ("
Pine Tree ").
D. R H Foster LLC, a Maine limited liability
company operates and owns the remaining 50% of the limited
liability company member interests of Pine Tree.
E. Prior to Closing, DEGP will distribute, convey
and assign all of the outstanding limited liability company member
interests of GSRLLC to HOLDINGS.
F. HOLDINGS and DCP desire that HOLDINGS
contribute to DCP all of the limited liability company member
interest of GSRLLC (the " Subject Interests ") in accordance
with this Agreement.
FOR GOOD AND VALUABLE
CONSIDERATION, the
receipt and sufficiency of which are hereby acknowledged, DCP and
HOLDINGS agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
1.1 Certain Defined Terms . Capitalized terms used herein and not defined
elsewhere in this Agreement shall have the meanings given such
terms as is set forth below.
" Affiliate " means, when used with
respect to a specified Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the specified Person as of the time or for the
time periods during which such determination is made. By way of
example, the LLCs shall be deemed Affiliates of HOLDINGS during the
time period prior to the Effective Time and shall be deemed
Affiliates of DCP for time periods subsequent to the Effective
Time. For purposes of this definition "control", when used with
respect to any specified Person, means the power to direct the
management and policies of the Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing. Notwithstanding the
foregoing, the term "Affiliate" when applied to (a) DCP shall not
include Duke Energy Corporation, a Delaware corporation, or
ConocoPhillips, a Delaware corporation, or any entities owned,
directly or indirectly, by Duke Energy Corporation or
ConocoPhillips, other than entities owned, directly or indirectly,
by DCP and DCP Midstream GP and (b) HOLDINGS shall not include DCP
or any entities owned, directly or indirectly, by DCP.
" Allocation Statement " shall have the
meaning given such term in Section 6.12(f) .
" Amended Limited Partnership Agreement "
shall mean DCP's Second Amended and Restated Agreement of Limited
Partnership to be dated on or before the Effective Time in
substantially the form of Exhibit B .
" Annual Financial Statements " shall
have the meaning given such term in Section 6.13
.
" Arbitral Dispute " means any dispute,
claim, counterclaim, demand, cause of action, controversy and other
matters in question arising out of or relating to this Agreement or
the alleged breach hereof, or in any way relating to the subject
matter of this Agreement or the relationship between the Parties
created by this Agreement, regardless of whether (a) allegedly
extra-contractual in nature, (b) sounding in contract, tort, or
otherwise, (c) provided for by applicable Law or otherwise, or (d)
seeking damages or any other relief, whether at Law, in equity, or
otherwise.
" Arbitration Rules " shall have the
meaning given such term in Section 11.8(d) .
" Assets " shall mean all of the assets
and properties of the respective LLC, including the respective
LLC's interests in the following, except for the Excluded Assets.
Each Schedule referenced in this definition includes a separate
subpart for each of the three LLCs.
(a) Personal Property . All tangible personal property of every kind
and nature that relate to the ownership, operation, use or
maintenance of the Assets, including field equipment, office
equipment, fixtures, trailers, railcars, tools, instruments, spare
parts, machinery, computer equipment, telecommunications equipment,
furniture, supplies and materials that are located at the Terminals
or Field Offices, including those items of personal property more
particularly described in Schedule 1.1(a) and all
hydrocarbon inventory at the Terminals or in transit to or from the
Terminals (collectively the " Personal Property
");
(b) Real Property . All fee property, rights-of-way, easements,
surface use agreements, licenses and leases that relate to the
ownership, operation, use or maintenance of the other Assets,
including those described in Schedule 1.1(b) (collectively,
the " Real Property Interests "), and all fixtures,
buildings and improvements located on or under such Real Property
Interests;
(c) Permits . All assignable permits, licenses,
certificates, orders, approvals, authorizations, grants, consents,
concessions, warrants, franchises and similar rights and privileges
which are necessary for, or are used or held for use primarily for
or in connection with, the ownership, use, operation or maintenance
of the Assets (collectively, the " Permits "), including
those Permits more particularly described in Schedule 1.1(c)
;
(d) Contract Rights . All contracts that relate to the ownership,
operation, use or maintenance of the Assets, including all propane
purchase and sales agreements, storage agreements, and
transportation agreements, equipment leases, rental contracts, and
service agreements, including those contracts or agreements
described in Schedule 1.1(d) (collectively, the "
Contracts ");
(e) Intellectual Property . All technical information, shop rights,
designs, plans, manuals, specifications and other proprietary and
nonproprietary technology and data used in connection with the
ownership, operation, use or maintenance of the Assets
(collectively, the " Intellectual Property ");
(f) Terminals and Field Offices
. The Terminals and Field
Offices;
(g) Books and Records . All contract, land, title, engineering,
environmental, operating, accounting, business, marketing, and
other data, files, documents, instruments, notes, correspondence,
papers, ledgers, journals, reports, abstracts, surveys, maps,
books, records and studies which relate primarily to the Assets or
which are used or held for use primarily in connection with, the
ownership, operation, use or maintenance of the Assets;
provided , however , such material shall not include
(i) any proprietary data that is not primarily used in connection
with the continued ownership, use or operation of the Assets, (ii)
any information subject to Third Person confidentiality agreements
for which a consent or waiver cannot be secured by HOLDINGS after
reasonable efforts, (iii) 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, or (iv) any information relating
primarily to the Retained Liabilities or any obligations for which
HOLDINGS is required to indemnify the DCP Indemnitees pursuant to
Section 10.2 (collectively, the " Records ");
provided , however , that DCP shall have the right to
copy any of the information specified in clause (iv) ;
and
(h) Incidental Rights . All of the following insofar as the same are
attributable or relate primarily to any of the Assets described in
clauses (a) through (g) : (i) all purchase
orders, invoices, storage or warehouse receipts, bills of lading,
certificates of title and documents, (ii) all keys, lock
combinations, computer access codes and other devices or
information necessary to gain entry to and/or take possession of
such Assets, (iii) all rights in any confidentiality or nonuse
agreements relating to the Assets, and (iv) the benefit of and
right to enforce all covenants, warranties, guarantees and
suretyship agreements running in favor of the LLCs relating
primarily to the Assets and all security provided primarily for
payment or performance thereof.
" Assumed Obligations " shall mean,
except for the Retained Liabilities, all rights, liabilities,
duties, obligations, risk of loss, Claims, Losses and any related
responsibility for the ownership, operation or use of the LLCs, the
Assets and the business related thereto and any condition of or on
the Assets attributable to any period of time, whether before, on
or after the Effective Time.
" Benefit Plan " shall mean any of the
following: (a) any employee welfare benefit plan or employee
pension benefit plan as defined in sections 3(1) and 3(2) of ERISA,
and (b) any other material employee benefit agreement or
arrangement, including a deferred compensation plan, incentive
plan, bonus plan or arrangement, stock option plan, stock purchase
plan, stock award plan, golden parachute agreement, severance plan,
dependent care plan, cafeteria plan, employee assistance program,
scholarship program, employment contract, retention incentive
agreement, non-competition agreement, consulting agreement,
vacation policy, and other similar plan, agreement and
arrangement.
" Business Day " shall mean any day,
other than Saturday and Sunday, on which federally-insured
commercial banks in Denver, Colorado are generally open for
business and capable of sending and receiving wire
transfers.
" Canada Business Agreement " shall mean
a Canada Business Agreement between HOLDINGS and GSRLLC in the form
of the attached Exhibit G .
" Capital Projects " shall have the
meaning given such term in Section 6.9 .
" Cash Consideration " shall have the
meaning given such term in Section 2.2 .
" Casualty Loss " shall mean, with
respect to all or any portion of the Assets, any destruction by
fire, storm or other casualty, or any condemnation or taking or
threatened condemnation or taking, of all or any portion of the
Assets.
" Cash Consideration " shall have the
meaning given such term in Section 2.2 .
" Certificate of Class C Units " shall
mean the certificate(s) representing HOLDINGS’ additional
interest in DCP in the form of the attached Exhibit E
.
" Claim " shall mean any demand, demand
letter, claim or notice by a Third Person of noncompliance or
violation or Proceeding.
" Claim Notice " shall have the meaning
given such term in Section 10.3(c) .
" Closing " shall have the meaning given
such term in Section 8.1 .
" Closing Date " shall have the meaning
given such term in Section 8.1 .
" Code " shall mean the U.S. Internal
Revenue Code of 1986, as amended.
" Commercially Reasonable Efforts " shall
mean efforts which are reasonably within the contemplation of the
Parties on the date hereof, which are designed to enable a Party,
directly or indirectly, to satisfy a condition to, or otherwise
assist in the consummation of, the transactions contemplated by
this Agreement and which do not require the performing Party to
expend any funds or assume liabilities other than expenditures and
liabilities which are reasonable in nature and amount in the
context of the transactions contemplated by this
Agreement.
" Contracts " shall have the meaning
given such term in the definition of Assets.
" Consideration " shall mean the Unit
Consideration and Cash Consideration.
" DCP " shall mean DCP Midstream
Partners, LP, a Delaware limited partnership and its permitted
successors and assigns.
" DCP Indemnitees " shall have the
meaning given such term in Section 10.2 .
" DCP's Knowledge " or the " Knowledge
of DCP " or any similar term, shall mean the actual knowledge
of any officer of DCP having a title of vice president or
higher.
" DCP Midstream GP " shall mean DCP
Midstream GP, LP, a Delaware limited partnership.
" DCP Required Consents " shall have the
meaning given such term in Section 5.4 .
" Defensible Title " shall mean, as to
the Assets, such title to the Assets that vests the applicable LLC
with indefeasible title in and to the Assets free and clear of
Liens other than Permitted Encumbrances.
" DEFS " shall mean Duke Energy Field
Services, LLC, a Delaware limited liability company.
" DENGL " shall mean Duke Energy NGL
Services, LP, a Delaware limited partnership.
" DOJ " shall mean the Department of
Justice of the United States.
" Effective Time " shall mean 7:00 A.M.
on the calendar day following the Closing Date; provided, however,
that if Closing occurs after November 1, 2006, but on or before
November 14, 2006, " Effective Time " shall mean 7:00 A.M.
on November 1, 2006.
" Environmental Law " shall mean any and
all Laws, statutes, ordinances, rules, regulations, or orders of
any Governmental Authority in existence at the Effective Time
pertaining to the protection of the environment or natural
resources or to Hazardous Materials in any and all jurisdictions in
which the party in question owns property or conducts business or
in which the Assets are located, including the Clean Air Act, the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (" CERCLA "), the Federal Water Pollution
Control Act, the Occupational Safety and Health Act of 1970 (to the
extent relating to environmental matters), the Resource
Conservation and Recovery Act of 1976 (" RCRA "), the Safe
Drinking Water Act, the Toxic Substances Control Act, the Hazardous
& Solid Waste Amendments Act of 1984, the Superfund Amendments
and Reauthorization Act of 1986, the Hazardous Materials
Transportation Act, the Oil Pollution Act of 1990, any state or
local Laws implementing or substantially equivalent to the
foregoing federal Laws, and any state or local Laws pertaining to
the handling of oil and gas exploration, production, gathering, and
processing wastes or the use, maintenance, and closure of pits and
impoundments.
" Environmental Matter " shall have the
meaning given such term in Section 4.4(b) .
" ERISA " shall mean the Employee
Retirement Income Security Act of 1974, as amended.
" Excess Inventory " shall mean all
propane included in the Assets above the necessary minimum
operating inventory, which shall be measured in accordance with
Section 6.8 .
" Excluded Assets " shall mean all of the
following:
(a) All deposits, cash, checks, funds, claims for
refund and accounts receivable to the extent related to the
business of the LLCs prior to the Effective Time;
(b) any deposits or pre-paid items attributable to
the operation of the Assets;
(c) the Excess Inventory;
(d) Claims for refund of or loss carry forwards
with respect to (i) Taxes attributable to the business of the LLCs
for any period prior to the Effective Time or (ii) any Taxes
attributable to any of the Excluded Assets;
(e) All work product of HOLDINGS' or its
Affiliates' attorneys, records relating to the negotiation and
consummation of the transactions contemplated hereby and documents
that are subject to a valid attorney-client privilege;
(f) All real property, personal property,
contracts, intellectual property, Permits, office computers or
other equipment (or any leases or licenses of the foregoing ), if
any, that are listed on Schedule 1.1(g) ;
(g) All vehicles, and all leases for vehicles that
relate to the ownership, operation, use or maintenance of the
Assets, except the leasehold interest in tractors and trailers
under the lease agreements described in Schedule 1.1(d)
;
(h) All computer software that relates to the
ownership, operation, use or maintenance of the Assets that
requires a consent to transfer;
(i) All rights and obligations under swaps, futures
or other similar derivative-based transactions that relate to the
ownership, operation, use or maintenance of the Assets, except
those that are specifically described in Schedule 1.1(d)
;
(j) all Canadian propane supply and
inventory/storage contracts (i.e., the only Canadian assets that
will be included within the Assets are rail car leases);
(k) All office equipment and accessories (including
computers) that relate to the ownership, operation, use or
maintenance of the Assets, other than that located at the Terminals
and the Field Offices; and
(l) Subject to Sections 6.2 and 6.14
, all rights to claim coverage or benefits under HOLDINGS' or its
Affiliates' insurance policies or coverage, including
self-insurance and insurance which HOLDINGS has obtained through a
captive insurance carrier.
" Exhibits " shall mean any and/or all of
the exhibits attached to and made a part of this
Agreement.
" Field Offices " shall mean
GSRLLC’s offices (or leasehold interest in offices) described
in Schedule 1.1(i) .
" Final Settlement Statement " shall have
the meaning given such term in Section 3.4 .
" FTC " shall mean the Federal Trade
Commission of the United States of America.
" GAAP " means generally accepted
accounting principles in the United States as of the date hereof,
consistently applied.
" Governmental Authorities " shall mean
(a) the United States of America or any state or political
subdivision thereof within the United States of America and (b) any
court or any governmental or administrative department, commission,
board, bureau or agency of the United States of America or of any
state or political subdivision thereof within the United States of
America.
" Hazardous Materials " shall mean:
(a) any chemicals, materials or substances defined or included
in the definition of "hazardous substances," "hazardous materials,"
"toxic substances," "solid wastes," "pollutants," "contaminants,"
or words of similar import, under any Environmental Law,
(b) any petroleum, petroleum products (including, without
limitation, crude oil or any faction thereof), natural gas liquids,
natural gas condensate, or oil and gas exploration or production
waste, radioactive materials (other than naturally occurring
radioactive materials), friable asbestos, mercury, lead based
paints and polychlorinated biphenyls, (c) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority; or (d) any regulated
constituents or substances in concentrations or levels that exceed
numeric or risk-based standards established pursuant to
Environmental Laws.
" HOLDINGS " shall mean DCP LP Holdings,
LP, a Delaware limited partnership.
" HOLDINGS' Indemnitees " shall have the
meaning given such term in Section 10.1 .
" HOLDINGS' Knowledge " or the "
Knowledge of HOLDINGS " or any similar term, shall mean the
actual knowledge of (i) any officer of HOLDINGS having a title of
Vice President or higher, and (ii) the individuals listed on
Schedule 1.1(h) .
" HOLDINGS' Property Tax " shall have the
meaning given such term in Section 11.3(a) .
" HOLDINGS' Required Consents " shall
have meaning given such term in Section 4.4(a)
.
" HSR Act " means the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
" Imbalance " shall mean all hydrocarbon
imbalances between an LLC and a Third Person relating to or arising
out of the operation of the Assets that exist at the Effective
Time.
" Imbalance Payable " shall mean an
account payable for an Imbalance owed by an LLC to a Third
Person.
" Imbalance Receivable " shall mean an
account receivable for an Imbalance owed by a Third Person to an
LLC.
" Indemnified Party " or "
Indemnitee " shall have the meaning given such term in
Section 10.4(a) .
" Indemnifying Party " or "
Indemnitor " shall have the meaning given such term in
Section 10.4(a) .
" Independent Accountants " shall mean
PriceWaterhouseCoopers.
" Insurance " shall have the meaning give
such term in Section 6.14 .
" Interest Rate " shall mean a per annum
rate of interest equal to the lesser of (a) the prime rate of
interest by Bank of America plus one percent (1%), which rate shall
change when and as such prime rate changes, or (b) the maximum
non-usurious rate of interest permitted to be charged under
applicable Law.
" ISDA Agreement " shall mean an ISDA
Master Agreement between DENGL and GSRLLC in the form of the
attached Exhibit C .
" Laws " shall mean all applicable
statutes, laws (including common law), regulations, rules, rulings,
ordinances, orders, restrictions, requirements, writs, judgments,
injunctions, decrees and other official acts of or by any
Governmental Authority.
" Lien " shall mean any lien, mortgage,
pledge, claim, charge, security interest or other encumbrance,
option or defect on title.
" Limited Partnership Agreement " shall
mean the First Amended and Restated Agreement of Limited
Partnership of DCP dated as of December 7, 2005.
" LLCs " shall mean GSRLLC, GSRI and Pine
Tree.
" Loss " or " Losses " shall mean
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.
" Material Adverse Effect " shall mean a
single event, occurrence or fact, or series of events, occurrences
or facts, that, alone or together with all other events,
occurrences or facts (a) would have an adverse change in or effect
on the LLCs or the Assets (including the cost to remedy, replace or
obtain same) taken as a whole, in excess of $3,400,000 or (b) would
result in the prohibition or material delay in the consummation of
the transactions contemplated by this Agreement, excluding (in each
case) matters that are generally industry-wide developments or
changes or effects resulting from changes in Law or general
economic, regulatory or political conditions.
" Materiality Condition " shall have the
meaning given such term in Section 10.5 .
" Notice Period " shall have the meaning
given such term in Section 10.4(c) .
" Omnibus Agreement Amendment " shall
mean the Second Amendment to Omnibus Agreement among DEFS, DCP, DCP
Midstream GP, DCP Midstream GP, LLC and DCP Midstream Operating,
LP, in the form of the attached Exhibit D .
" Ordinary Course of Business " shall
mean the ordinary course of business consistent with past
practices.
" Permits " shall have the meaning given
such term in the definition of Assets.
" Permitted Encumbrances " shall mean the
following:
(a) the terms, conditions, restrictions,
exceptions, reservations, limitations, and other matters contained
in any document creating the Real Property Interests, or in any
Permit or Contract;
(b) Liens for property Taxes and assessments that
are not yet due and payable (or that are being contested in good
faith by appropriate Proceedings for which HOLDINGS will retain
liability);
(c) mechanic's, materialmen's, repairmen's and
other statutory Liens arising in the ordinary course and securing
obligations incurred prior to the Effective Time and (i) for which
HOLDINGS or a Third Person is, and will after the Effective Time
be, responsible for payment, or (ii) that are not delinquent and
that will be paid and discharged in the ordinary course of business
by HOLDINGS or a Third Person or, if delinquent, that are being
contested in good faith with any action to foreclose on or attach
any Assets on account thereof properly stayed and for which
HOLDINGS, its Affiliates or a Third Person will retain
liability;
(d) utility easements, restrictive covenants,
defects and irregularities in title, encumbrances, exceptions and
other matters that are of record that, singularly or in the
aggregate, will not materially interfere with the ownership, use or
operation of the Assets to which they pertain;
(e) required Third Person consents to assignment,
preferential purchase rights and other similar agreements with
respect to which consents or waivers are obtained from the
appropriate Person for the transaction contemplated hereby prior to
Closing or, as to which the appropriate time for asserting such
rights has expired as of the Closing without an exercise of such
rights;
(f) any Post-Closing Consent;
(g) Liens created by DCP or its successors or
assigns; and
(h) The Liens listed on Schedule 1.1(a)
.
" Person " shall mean any natural person,
corporation, company, partnership (general or limited), limited
liability company, trust, joint venture, joint stock company,
unincorporated organization, or other entity or
association.
" Personal Property " shall have the
meaning given such term in the definition of Assets.
" Post-Closing Consents " shall mean
consents or approvals from, or filings with Governmental
Authorities or consents from railroads customarily obtained
following the closing of a transaction similar to the transaction
contemplated hereby, including those listed on
Schedule 1.1(e) .
" Pre-Closing Tax Period " shall mean,
with respect to the LLCs, any taxable period (including the portion
of any Straddle Period) ending on or prior to the Closing
Date.
" Preliminary Settlement Statement "
shall have the meaning given such term in Section 3.3
.
" Proceeding " shall mean any action,
suit, claim, investigation, review or other judicial or
administrative proceeding, at Law or in equity, before or by any
Governmental Authority or arbitration or other dispute resolution
proceeding.
" Qualified Claims " shall have the
meaning given such term in Section 10.3(b)(iv) .
" Real Property Interests " shall have
the meaning given such term in the definition of Assets.
" Records " shall have the meaning given
such term in the definition of Assets.
" Recoupments " shall have meaning given
such term in Section 6.9 .
" Retained Liabilities " shall mean
Losses with respect to:
(i) except for sales, transfer, use or similar
Taxes that are due or should hereafter become due (including
penalty and interest thereon) by reason of the transaction
contemplated by this Agreement and property Taxes, all Taxes with
respect to the LLCs or the Assets to the extent related to periods
prior to and including the Closing Date;
(ii) property Taxes on the Assets related to periods
prior to January 1, 2006;
(iii) disposal of Hazardous Substances generated at
the Terminals at offsite locations between April 30, 2001 and the
Closing Date;
(iv) the Excluded Assets and Taxes related thereto;
and
(v) those matters, if any, described on Schedule
1.1(f) .
" Schedules " shall mean any and/or all
of the schedules attached to and made a part of this
Agreement.
" SEC " shall mean the U.S. Securities
and Exchange Commission.
" SEC Financial Statements " shall have
the meaning specified in Section 6.13 .
" Securities Act " shall mean the
Securities Act of 1933, as amended.
" Settlement Notice " shall have the
meaning given such term in Section 3.5 .
" Straddle Period " shall mean any
taxable period that begins before and ends after the Closing
Date.
" Straddle Tax Return " shall mean any
Tax Return that covers a taxable period that begins before and ends
after the Closing Date.
" Stub Period Financial Statements "
shall have the meaning given such term in Section 6.13
.
" Subject Interests " shall mean 100% of
the limited liability company membership interests of
GSRLLC.
" Subject Interests Assignment Agreement
" shall mean the Assignment Agreement in substantially the form of
Exhibit E covering the conveyance of the Subject Interests
by HOLDINGS to DCP.
" Subject Time " shall mean the current
local time then in effect (a) with respect to the Closing, in
Denver, Colorado and (b) with respect to Personal Property or Real
Property Interests, where such property is located.
" Tank Damage " shall have the meaning
given such term in Section 6.9 .
" Tax " or " Taxes " shall mean
any Governmental Authority income tax, ad valorem tax, excise tax,
sales tax, use tax, franchise tax, real or personal property tax,
transfer tax, gross receipts tax or other tax, assessment, duty,
fee, levy or other governmental charge, together with and
including, any and all interest, fines, penalties, assessments, and
additions to Tax resulting from, relating to, or incurred in
connection with any of those or any contest or dispute
thereof.
" Tax Authority " shall mean any
Authority having jurisdiction over the payment or reporting of any
Tax.
" Tax Benefits " means the amount by
which the Tax liability of the Indemnified Party or any of its
Affiliates for a taxable period is actually reduced (including,
without limitation, by deduction, reduction in income upon a sale,
disposition or other similar transaction as a result of increased
tax basis, receipt of a refund of Taxes or use of a credit of
Taxes) plus any related interest (net of Taxes payable thereon)
received from the relevant Tax Authority, as a result of the
incurrence, accrual or payment of any Loss or Tax with respect to
which the indemnification payment is being made.
" Tax Claim " shall mean the written
notice of the assertion or commencement of any claim, assessment,
deficiency, audit, review, examination or other proposed change or
adjustment by any Tax Authority or any judicial or administrative
proceeding relating to a Pre-Closing Tax Period of the
Company.
" Tax Proceeding " shall have the meaning
given such term in Section 6.12(g) .
" Tax Return " shall mean any report,
statement, form, return or other document or information required
to be supplied to a taxing authority in connection with
Taxes.
" Terminals " shall mean those propane
terminal facilities described in Schedule 1.1(i) and
identified on the Terminal Map.
" Terminal Map " shall mean the map
describing the Terminals attached to this Agreement as Exhibit
A .
" Third Person " shall mean (i) any
Person other than a Party or its Affiliates, and (ii) any
Governmental Authority.
" Third Person Awards" shall mean any
actual recoveries from Third Persons by the Indemnified Party
(including, without limitation, from insurance and third-party
indemnification) in connection with the claim for which such party
is also potentially liable.
" Third Person Claim " shall have the
meaning given such term in Section 10.4(c) .
" Transaction Documents " shall mean the
ISDA Agreement, the Amended Limited Partnership Agreement, the
Canada Business Agreement, the Omnibus Agreement Amendment, the
Subject Interests Assignment Agreement, a Certificate representing
the Unit Consideration, and any other document related to the sale,
transfer, assignment or conveyance of the Subject Interests to be
delivered at Closing.
" Treasury Regulations " shall mean
regulations promulgated under the Code.
" Unit Consideration " shall have the
meaning given such term in Section 2.2 .
" Units " shall mean one of that certain
class of limited partnership interests of DCP with those special
rights and obligations specified in the Amended Limited Partnership
Agreement as being appurtenant to a "Class C Unit".
1.2 Other Definitional Provisions
. As used in this Agreement, unless
expressly stated otherwise or the context requires otherwise, (a)
all references to an "Article," "Section," or "subsection" shall be
to an Article, Section, or subsection of this Agreement, (b) the
words "this Agreement," "hereof," "hereunder," "herein," "hereby,"
or words of similar import shall refer to this Agreement as a whole
and not to a particular Article, Section, subsection, clause or
other subdivision hereof, (c) the words used herein shall include
the masculine, feminine and neuter gender, and the singular and the
plural, (d) the word "including" means "including, without
limitation" and (e) the word "day" or "days" means a calendar day
or days, unless otherwise denoted as a Business Day.
1.3 Headings . The headings of the Articles and Sections of
this Agreement and of the Schedules and Exhibits are included for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction or interpretation hereof or
thereof.
1.4 Other Terms . Other terms may be defined elsewhere in the
text of this Agreement and shall have the meaning indicated
throughout this Agreement.
ARTICLE
II
CONTRIBUTION OF THE SUBJECT
INTEREST, ISSUANCE OF THE UNITS AND
CONSIDERATION
2.1 The Transaction . At the Closing, but effective for all purposes
as of the Effective Time, HOLDINGS shall contribute to DCP the
Subject Interests in exchange for the issuance of the Consideration
to HOLDINGS by DCP.
2.2 Consideration . In consideration for the contribution of the
Subject Interests, DCP shall (i) issue and deliver to HOLDINGS
at the Closing one or more certificates duly registered in the name
of HOLDINGS and representing 200,312 Units (the " Unit
Consideration ") and (ii) distribute $57,057,000.00 in cash to
HOLDINGS (the " Cash Consideration ").
ARTICLE
III
ADJUSTMENTS, PRORATIONS AND
SETTLEMENT
(a) The value of the Cash Consideration shall be
subject to cash adjustments pursuant to this Article III
.
(b) For the avoidance of doubt, cash adjustments
pursuant to this Article III shall not result in any
adjustment to the Unit Consideration. Each payment of an adjustment
to the Cash Consideration shall be made at Closing if the
adjustment is determined by such date, or otherwise, in the Final
Settlement Statement.
(c) The Parties shall use all Commercially
Reasonable Efforts to agree upon the adjustments set forth in this
Article III , and to resolve any differences with respect
thereto. Except as provided herein, no adjustments shall be made
after delivery of the Final Settlement Statement.
3.2 Prorations and Adjustments
.
(a) The amount payable to HOLDINGS will be reduced
by the amount of any unpaid general property Tax assessed against
or pertaining to the Assets for periods before the Effective Time
with respect to any taxable period that includes the Effective
Time, prorated in accordance with Section 11.3(a)
.
(b) The amount payable to HOLDINGS will be
increased by the value of Excess Inventory under
Section 6.8 , prepaid items and any other Excluded
Assets that DCP agrees to acquire at Closing (in which event, such
Excluded Assets shall be transferred to the respective
LLC).
(c) The amount payable to HOLDINGS will be reduced
by the amount of any utility charges or other items of expense
attributable to the operation of the Assets prior to the Effective
Time paid by GSRLLC. Such amounts shall be prorated as of the
Effective Time.
(d) Subject to Sections 3.2(e) and
6.9 , the amount payable to HOLDINGS will be reduced by the
amount of any trade accounts payable (including Imbalance Payables)
of the LLCs that exist as of the Effective Time.
(e) Notwithstanding anything to the contrary,
including Sections 3.2(d) and 10.2(b) , the amount
payable to HOLDINGS will be increased by the amount of DCP's
reimbursement obligation in respect of the Capital Projects in
accordance with Section 6.9 .
(f) If Closing occurs after November 1, 2006 but on
or before November 14, 2006, the amount payable to HOLDINGS will be
increased by an amount equal to the Interest Rate times X divided
by 365 times the number of days from and including November 1, 2006
through but excluding the Closing Date; where X equals what the
value of the Cash Consideration plus the Unit Consideration, as
adjusted by Section 3.2(a) through (e) , would have
been if Closing had occurred on November 1, 2006.
3.3 Preliminary Settlement Statement
. Not later than five (5) business
days before the Closing Date, and after consultation with DCP,
HOLDINGS shall deliver to DCP a written statement (the "
Preliminary Settlement Statement ") setting forth the Cash
Consideration and the description and amount of each item
determined in good faith by HOLDINGS that are described in
Section 3.2 , with HOLDINGS' calculation of such items
in reasonable detail, based on information then available to
HOLDINGS. The Preliminary Settlement Statement shall also set forth
wire transfer instructions for the Closing payments. Payment
of the Cash Consideration at the Closing shall be based on the
Preliminary Settlement Statement.
3.4 Final Settlement Statement
. No later than ninety (90) days
after the Closing Date and after consultation with DCP, HOLDINGS
shall deliver to DCP a revised settlement statement showing in
reasonable detail its calculation of the items described in
Section 3.2 along with other adjustments or payments
contemplated in this Agreement (said revised statement and the
calculation thereof shall be referred to as the " Final
Settlement Statement ").
3.5 Dispute Procedures . The Final Settlement Statement shall become
final and binding on the Parties on the 45 th day
following the date the Final Settlement Statement is received by
DCP, unless prior to such date DCP delivers written notice to
HOLDINGS of its disagreement with the Final Settlement Statement (a
" Settlement Notice "). Any Settlement Notice shall set
forth DCP's proposed changes to the Final Settlement Statement,
including an explanation in reasonable detail of the basis on which
DCP proposes such changes. If DCP has timely delivered a Settlement
Notice, DCP and HOLDINGS shall use good faith efforts to reach
written agreement on the disputed items. If the disputed items have
not been resolved by DCP and HOLDINGS by the 30 th day
following HOLDINGS' receipt of a Settlement Notice, any remaining
disputed items shall be submitted to the Independent Accountants
for resolution within ten (10) Business Days after the end of the
foregoing 30-day period. The fees and expenses of the Independent
Accountants shall be borne fifty percent (50%) by HOLDINGS and
fifty percent (50%) by DCP. The Independent Accountants'
determination of the disputed items shall be final and binding upon
the Parties, and the Parties hereby waive any and all rights to
dispute such resolution in any manner, including in court, before
an arbiter or appeal.
3.6 Payments . If the final amount as set forth in the Final
Settlement Statement exceeds the estimated amount as set forth in
the Preliminary Settlement Statement, then DCP shall pay to
HOLDINGS the amount of such excess, with interest at the Interest
Rate (calculated from the Closing Date). If the final calculated
amount as set forth in the Final Settlement Statement is less than
the estimated calculated amount as set forth in the Preliminary
Settlement Statement, then HOLDINGS shall pay to DCP the amount of
such excess, with interest at the Interest Rate. Any payment shall
be made within three (3) Business Days of the date the Final
Settlement Statement becomes final pursuant to Section 3.5
.
3.7 Access to Books and Records
. The Parties shall grant to each
other full access to the Books and Records and its relevant
personnel to allow each of them to make evaluations under this
Article III .
3.8 Excluded Assets . Prior to the Closing, the Excluded Assets will
be distributed by the LLCs to DEGP.
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES OF HOLDINGS
HOLDINGS represents and warrants to DCP as
follows:
4.1 Organization, Good Standing, and
Authority .
(a) HOLDINGS is a limited partnership duly formed,
validly existing and in good standing under the Laws of the State
of Delaware. The execution and delivery of this Agreement and the
other Transaction Documents to which HOLDINGS is a party and the
consummation by HOLDINGS of the transactions contemplated herein
and therein have been duly and validly authorized by all necessary
limited partnership action by HOLDINGS. This Agreement has been
duly executed and delivered by HOLDINGS. HOLDINGS has all requisite
limited partnership power and authority to enter into and perform
this Agreement and the other Transaction Documents to which it is a
party, to perform its obligations hereunder and thereunder and to
carry out the transactions contemplated herein and
therein.
(b) DEGP is a limited liability company duly
formed, validly existing and in good standing under the Laws of the
State of Delaware. The execution and delivery of this Agreement and
the other Transaction Documents to which DEGP is a party and the
consummation by DEGP of the transactions contemplated herein and
therein have been duly and validly authorized by all necessary
limited partnership action by DEGP. HOLDINGS has all requisite
limited liability company power and authority to enter into and
perform the Transaction Documents to which it is a party, to
perform its obligations thereunder and to carry out the
transactions contemplated herein and therein.
(c) GSRLLC is a limited liability company duly
formed, validly existing and in good standing under the Laws of the
State of Texas and has all requisite limited liability company
power and authority to own or otherwise hold and operate its
Assets. GSRLLC is duly licensed or qualified and in good standing
as a foreign limited liability company authorized to do business in
each additional State in which it owns assets.
(d) GSRI is a limited liability company duly
formed, validly existing and in good standing under the Laws of the
State of Texas and has all requisite limited liability company
power and authority to own or otherwise hold and operate its
Assets. GSRI is duly licensed or qualified and in good standing as
a foreign limited liability company authorized to do business in
each additional State in which it owns assets.
(e) To HOLDINGS' Knowledge, Pine Tree is a limited
liability company duly formed, validly existing and in good
standing under the Laws of the State of Maine and has all requisite
limited liability company power and authority to own or otherwise
hold and operate its Assets. To HOLDINGS' Knowledge, Pine Tree is
duly licensed or qualified and in good standing as a foreign
limited liability company authorized to do business in each
additional State in which it owns assets.
4.2 Enforceability . This Agreement constitutes and, upon execution
of and delivery by HOLDINGS, DENGL and DEFS of the other
Transaction Documents to which they are a party, such Transaction
Documents will constitute, valid and binding obligations of
HOLDINGS, DENGL and DEFS, as applicable, enforceable against such
Parties in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other
similar Laws affecting creditor's rights generally and general
principles of equity.
4.3 No Conflicts . The execution, delivery and performance by
HOLDINGS of this Agreement, and the execution, delivery and
performance by HOLDINGS, DEGP, DENGL and DEFS of the other
Transaction Documents to which they are party and the consummation
of the transactions contemplated hereby or thereby, will
not:
(a) Provided all of HOLDINGS' Required Consents and
Post Closing Consents have been obtained, conflict with, constitute
a breach, violation or termination of, give rise to any right of
termination, cancellation or acceleration of or result in the loss
of any right or benefit under, any agreements to which HOLDINGS,
DENGL, DEFS, DEGP, GSRI or GSRLLC (and to HOLDINGS' Knowledge, Pine
Tree) is a party or by which any of them, the Subject Interests or
the Assets are bound;
(b) Conflict with or violate the limited liability
company agreements of DEGP or the LLCs, or the limited partnership
agreement of HOLDINGS; and
(c) Provided that all of HOLDINGS' Required
Consents and Post Closing Consents have been obtained, violate any
Law applicable to HOLDINGS, DENGL, DEFS, GSRLLC, GSRI or the Assets
(and to HOLDINGS' Knowledge, Pine Tree).
4.4 Consents, Approvals, Authorizations and
Governmental Regulations .
(a) Except (i) for Post-Closing Consents, (ii) as
set forth in Schedule 4.4 and (iii) as may be required under
the HSR Act (the items described in clauses (ii) and
(iii) being collectively referred to as the " HOLDINGS'
Required Consents "; no order, consent, waiver, permission,
authorization or approval of, or exemption by, or the giving of
notice to or the registration or filing with any Governmental
Authority or Third Person, is necessary for HOLDINGS to execute,
deliver and perform this Agreement or for HOLDINGS, DEGP, DEFS or
DENGL to execute, deliver and perform the other Transaction
Documents to which it is a party.
(b) Except as set forth in Schedule 4.4 ,
(i), all material permits, licenses, certificates, orders,
approvals, authorizations, grants, consents, concessions, warrants,
franchises and similar rights and privileges, of all Governmental
Authorities required or necessary for GSRLLC and GSRI (and to
HOLDINGS' Knowledge, Pine Tree) to own and operate its Assets in
the places and in the manner currently owned or operated, have been
obtained, and are in full force and effect, (ii) HOLDINGS and its
Affiliates have received no written notification concerning, and
there are no violations that are in existence with respect to the
Permits and (iii) no Proceeding is pending or threatened with
respect to the revocation or limitation of any of the Permits.
Notwithstanding anything herein to the contrary, the provisions of
this Section 4.4(b) shall not relate to or cover any matter
relating to or arising out of any Environmental Laws (an "
Environmental Matter "), which shall be governed by
Section 4.12 .
4.5 Taxes . Except as set forth in Schedule 4.5
:
(a) GSRLLC and GSRI have not and will not (and,
with respect to Pine Tree, GSRLLC has not and will not consent to
Pine Tree to) on or prior to the Closing Date, file an election
under Treasury Regulation §301.7701-3 to be classified as a
corporation for U.S. federal income tax purposes. Since December 7,
2005 until Closing, GSRLLC and GSRI have been and will be business
entities that will be disregarded for federal Tax purposes under
Treasury Regulation §§301.7701-2 and - 3. To
HOLDINGS' Knowledge, during the entirety of the period from the
date of its formation until Closing, Pine Tree has been and will be
a partnership for federal tax purposes;
(b) Except with respect to ad valorem Taxes for the
year in which Closing occurs, all Taxes due and owing or claimed to
be due and owing (whether such claim is asserted before or after
the Effective Time) from or against HOLDINGS, DEGP, GSRLLC, GSRI or
Pine Tree relating to the Assets, or the operation thereof, prior
to the Effective Time have been or will be timely paid in full by
HOLDINGS or its Affiliates;
(c) All withholding Tax and Tax deposit
requirements imposed on HOLDINGS, DEGP, GSRLLC, GSRI or Pine Tree
and applicable to the Assets, or the operation thereof, for any and
all periods or portions thereof ending prior to the Effective Time
have been or will be timely satisfied in full by HOLDINGS or its
Affiliates;
(d) All Tax Returns that are required to be timely
filed for, by, on behalf of or with respect to GSRLLC or GSRI (and
to HOLDINGS' Knowledge, Pine Tree), before the Effective Time have
been or will be filed with the appropriate Governmental Authority;
all Taxes shown to be due and payable on such Tax Returns have been
or will be paid in full by HOLDINGS or its Affiliates;
(e) None of DEGP or the LLCs are under audit or
examination by any Governmental Authority. There are no Claims now
pending or, to the Knowledge of HOLDINGS, threatened against DEGP
or the LLCs with respect to any Tax or any matters under discussion
with any Governmental Authority relating to any Tax. There are no
claims for any additional Tax asserted by any Governmental
Authority against DEGP or the LLCs, in each case, relating to its
Assets or the operation thereof;
(f) None of DEGP, GSRLLC or GSRI (and to HOLDINGS'
Knowledge, Pine Tree) (i) have agreed to make, nor is required to
make, any adjustment under Section 481 of the Code or any
comparable provision of state, local or foreign Law by reason of a
change in accounting method or otherwise, and (ii) is a party to or
bound by (or will become a party to or bound by) any Tax sharing,
Tax indemnity, or Tax allocation agreement; and
(g) Pine Tree has made, or will make, an election
under Section 754 of the Code.
4.6 Litigation; Compliance with Laws
.
(a) There is no injunction, restraining order or
Proceeding pending against HOLDINGS, DENGL, DEFS, DEGP or the LLCs
that restrains or prohibits the consummation of the transactions
contemplated by this Agreement.
(b) Except for the litigation and Claims identified
on Schedule 4.6 , there is no written Claim, investigation
or examination pending, or to the Knowledge of HOLDINGS,
threatened, against or affecting the Assets or the Subject
Interests before or by any Governmental Authority or any Third
Person.
(c) To HOLDINGS' Knowledge, the Assets have been
owned and operated in compliance with applicable Laws, except for
any non-compliance which has been timely brought into compliance
therewith. Notwithstanding anything herein to the contrary, the
provisions of this Section 4.6(c) shall not relate to or
cover any Environmental Matters, which shall be governed by
Section 4.12 .
4.7 Contracts . All of the Contracts that are material are
listed on Schedule 1.1(d) . GSRLLC, GSRI and, to HOLDINGS'
Knowledge, Pine Tree are not in default and there is no event or
circumstance that with notice, or lapse of time or both, would
constitute an event of default by the applicable LLC under the
terms of the Contracts. All of the Contracts are in full force and
effect and to HOLDINGS' Knowledge, no counter-party to any of the
Contracts is in default under the terms of such Contracts.
Schedule 1.1(d) lists each Contract that:
(a) expressly obligates an LLC to pay an amount of
$500,000 or more and has not been fully performed as of the date
hereof;
(b) expressly restricts the ability of an LLC to
compete or otherwise to conduct its business in any manner or
place;
(c) provides for the sale of products or the
provision of services for amounts in excess of $500,000 (including
outstanding offers or quotes which by acceptance would create such
a Contract) and which have not been fully performed as of the date
hereof;
(d) is a sales, agency, marketing or distribution
agreement which is material to an LLC, taken as a whole; provides a
right of first refusal or other restrictive right that limits the
ability to transfer, sell or assign an interest in an asset or an
equity interest in a Person;
(e) is a master agreement, swap, derivative,
option, future or similar type Contract or any open agreement or
position thereunder;
(f) is with any current or former employee,
officer, director or consultant of any LLC;
(g) is with HOLDINGS' or any Affiliate (other than
an LLC);
(h) is with any labor union or
association;
(i) is a partnership or joint venture agreement
with a Third Person in which one of the LLCs is a party or by which
any of them are bound;
(j) is an agreement with a consideration in excess
of $500,000 by one of the LLCs to purchase or sell any assets
(other than inventory in the Ordinary Course of Business),
businesses, capital stock or other debt or equity securities of any
Person;
(k) any agreements with a consideration in excess
of $500,000 involving the merger, consolidation, purchase, sale,
transfer or other disposition of interests in real property,
capital stock or other debt or equity securities of any Person
prior to Closing; or
(l) is any other lease agreements with respect to
any parcel of real property in which the Company or any of its
Subsidiaries has a leasehold or similar interest.
4.8 Title to Assets; Intellectual
Property .
Exce