EXHIBIT 10.14
CONTRIBUTION, CONVEYANCE, ASSIGNMENT AND
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ASSUMPTION AGREEMENT
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THIS AGREEMENT (the "Agreement"), is made this ____ day of
_____________, 2001, by and among the following parties:
INERGY PARTNERS, LLC, a Delaware limited liability company ("Partners");
INERGY PROPANE, LLC, a Delaware limited liability company ("Propane");
NEW INERGY PROPANE, LLC, a Delaware limited liability company
("New Propane");
INERGY, L. P., a Delaware limited partnership ("MLP");
INERGY GP, LLC, a Delaware limited liability company ("GP");
INERGY HOLDINGS, LLC, a Delaware limited liability company ("Holdings");
INERGY SALES & SERVICE, INC., a Delaware corporation ("Inergy S & S");
XXXXXX OIL COMPANY OF XXXXXXXX COUNTY, INC., a North Carolina corporation
("Xxxxxx");
ROLESVILLE GAS AND OIL COMPANY, a North Carolina corporation
("Rolesville") ; and
L & L TRANSPORTATION, LLC, a Delaware limited liability company
("L & L Transportation").
WITNESSETH:
WHEREAS, Holdings has caused to be organized GP as a Delaware limited
liability company and, in that regard, acquired all of the interests in GP in
exchange for a cash capital contribution of $1,000; and
WHEREAS, Partners has caused to be organized New Propane as a Delaware
limited liability company and, in that regard, acquired all of the interests in
New Propane in exchange for a cash capital contribution of $1,000; and
WHEREAS, GP and Partners have caused to be organized MLP as a Delaware
limited partnership of which GP is the managing general partner (with no
economic interest) and of which Partners is a non-managing general partner with
a 2% interest and is a limited partner with a 98% limited partner interest, all
in exchange for an aggregate cash contribution by Partners to MLP of $1,000; and
WHEREAS, Propane has caused to be organized Inergy S & S as a Delaware
corporation of which Propane acquired all of the issued and outstanding capital
stock of Inergy S & S which was received in exchange for a cash contribution by
Propane to Inergy S & S of $1,000; and
WHEREAS, attached hereto as Exhibit A is a diagram of the ownership
structure of each of the parties hereto as it existed immediately prior to the
transactions provided for herein; and
WHEREAS, MLP has filed a registration statement (together with all
amendments thereto, the "Registration Statement") with the Securities and
Exchange Commission to register the sale to the public of Common Units (the "MLP
Common Units") of MLP (such sale to be referred to herein as the "IPO"); and
WHEREAS, MLP has entered into an underwriting agreement with a group
of underwriters respecting such IPO and caused the Registration Statement to
become effective to permit the sale of MLP Common Units to the public; and
WHEREAS, there are various transactions among the parties hereto which
must occur preparatory to entering into such underwriting agreement and
completing such IPO, and the parties desire to effect such transactions as
hereinafter set forth;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
Article I
Contributions of Assets and Various Interests
1. Contribution of Assets by Partners to Propane. By its execution
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and delivery of this Agreement and as a capital contribution to Propane,
Partners hereby grants, contributes, transfers, assigns and conveys to Propane,
its successors and assigns, for its and their own use forever, all right, title
and interest in and to the assets used in the wholesale propane business
conducted by Partners and listed on Exhibit B hereto (the "Assets") other than
(a) $________ in cash, representing all cash and cash equivalents held by
Partners as of the date hereof, other than [$1,800,000] in cash and cash
equivalents and (b) the stock of Xxxxxx. Propane hereby accepts the Assets as a
capital contribution.
TO HAVE AND HOLD the Assets unto Propane, its successors and assigns,
together will all and singular the rights and appurtenances thereto in anywise
belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.
2. Contribution of Partners' Interest in Propane to MLP and Issuance
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of MLP Units to Partners.
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(a) By its execution and delivery of this Agreement, Partners
hereby grants, contributes, transfers, assigns and conveys to MLP, its
successors and assigns, for its and their own use forever, all right, title and
interest in and to the 100% common interest in Propane owned by Partners (the
"Partners Interest in Propane").
TO HAVE AND HOLD the Partners Interest in Propane unto MLP, its
successors and assigns, together will all and singular the rights and
appurtenances thereto
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in anywise belonging, subject, however, to the terms and conditions stated in
this Agreement, forever.
(b) The grant, contribution, transfer, assignment and conveyance
provided for in Section 2(a) above is hereby accepted by MLP and MLP hereby (i)
agrees to the continuation of Partners' 2% Non-Managing General Partner Interest
in MLP and all rights related thereto, (ii) issues to Partners 3,135,831 Senior
Subordinated Units of MLP ("MLP Senior Subordinated Units"), (iii) issues to
Partners 480,659 Junior Subordinated Units of MLP ("MLP Junior Subordinated
Units") and (iv) assumes the obligations of Partners under certain Subordinated
Debentures, dated January 12, 2001, in the aggregate principal amount of
$5,000,000.
(c) By its execution and delivery of this Agreement, Xxxxxx and
Rolesville each hereby consents to the transfer referenced in Section 2(a)
above.
3. Contribution of MLP Units by Partners to New Propane. By its
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execution and delivery of this Agreement, Partners hereby grants, contributes,
transfers, conveys and assigns to New Propane, its successors and assigns, for
its and their own use forever, all right, title and interest in and to
[1,082,731] MLP Senior Subordinated Units and 480,659 MLP Junior Subordinated
Units owned by Partners in exchange for 100% of the common interest of New
Propane (the "New Propane Common Interest"). New Propane hereby accepts such
transfer of MLP Senior Subordinated Units and MLP Junior Subordinated Units from
Partners and acknowledges the issuance to and ownership by Partners of all of
the New Propane Common Interest.
TO HAVE AND HOLD the [1,082,731] MLP Senior Subordinated Units and
480,659 MLP Junior Subordinated Units unto New Propane, its successors and
assigns, together will all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.
TO HAVE AND HOLD the New Propane Common Interest unto Partners, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
4. Rolesville and Xxxxxx Exchanges.
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(a) By its execution and delivery of this Agreement, Rolesville
hereby grants, contributes, transfers, conveys and assigns to New Propane, its
successors and assigns, for its and their own use forever, all right, title and
interest in and to a $2,780,000 preferred interest in Propane owned by
Rolesville (the "Rolesville Propane Interest") in exchange for a $2,780,000
preferred interest in New Propane (the "Rolesville New Propane Interest").
TO HAVE AND HOLD the Rolesville Propane Interest unto New Propane, its
successors and assigns, together will all and singular the rights and
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appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
TO HAVE AND HOLD the Rolesville New Propane Interest unto Rolesville,
its successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
(b) By its execution and delivery of this Agreement, Xxxxxx,
hereby grants, contributes, transfers, conveys and assigns to New Propane, its
successors and assigns, for its and their own use forever, all right, title and
interest in and to a $2,608,385 preferred interest in Propane owned by Xxxxxx
(the "Xxxxxx Propane Interest") in exchange for a $2,608,385 preferred interest
in New Propane (the "Xxxxxx New Propane Interest").
TO HAVE AND HOLD the Xxxxxx Propane Interest unto New Propane, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
TO HAVE AND HOLD the Xxxxxx New Propane Interest unto Xxxxxx, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
(c) New Propane hereby accepts the assignments and transfers
made in Sections 4(a) and 4(b) and acknowledges the issuance of the preferred
interests in New Propane as referenced in said sections.
5. Contribution of Preferred Interest in Propane Held by New
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Propane. By its execution and delivery of this Agreement, New Propane hereby
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grants, contributes, transfers, conveys and assigns to MLP, its successors and
assigns, for its and their own use forever, all right, title and interest in and
to a $5,388,385 preferred interest in Propane held by New Propane (the "New
Propane Interest in Propane") in exchange for 177,536 MLP Senior Subordinated
Units and 91,883 MLP Junior Subordinated Units. MLP hereby accepts the foregoing
transfer and assignment and acknowledges the issuance of the foregoing MLP Units
to New Propane.
TO HAVE AND HOLD the New Propane Interest in Propane unto MLP, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
TO HAVE AND HOLD the 177,536 MLP Senior Subordinated Units and 91,883
MLP Junior Subordinated Units unto New Propane, its successors and assigns,
together will all and singular the rights and appurtenances thereto in anywise
belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.
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6. Contribution of Cash by Public to MLP. The parties to this
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Agreement acknowledge a cash contribution of [$34,400,000] from the public to
the MLP in exchange for [1,600,000] MLP Common Units.
7. Contribution of Cash by MLP to Propane. By its execution and
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delivery of this Agreement, MLP hereby grants, contributes, transfers, conveys
and assigns to Propane, its successors and assigns, for its and their own use
forever, all cash and cash equivalents MLP holds as a result of the transactions
described above, as a result of the IPO and otherwise. Propane hereby accepts
such cash as a capital contribution.
8. Propane Uses Cash to Pay Transaction Costs. By its execution and
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delivery of this Agreement, Propane hereby agrees to use the cash contributed by
MLP to Propane pursuant to Section 6 above to pay all transaction costs relating
to the IPO (estimated to be $5,000,000) and retire approximately [$24,400,000]
of Propane's outstanding indebtedness.
9. Transfer of Incentive Distribution Rights by Partners to
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Holdings. By its execution and delivery of this Agreement, Partners hereby
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grants, contributes, transfers, conveys and assigns to Holdings, its successors
and assigns, for its and their own use forever, all of its right, title and
interest in and to the Incentive Distribution Rights of MLP in redemption of a
____% common interest in Partners held by Holdings (the "Holdings Interest in
Partners").
TO HAVE AND HOLD the Incentive Distribution Rights unto Holdings, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
TO HAVE AND HOLD the Holdings Interest in Partners unto New Propane, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
10. Redemption of Certain Preferred Interest in Partners. By its
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execution and delivery of this Agreement, Partners hereby agrees to distribute
to certain members of Partners an aggregate of [2,053,118] MLP Senior
Subordinated Units in redemption of $________ in preferred interests held by
such members of Partners.
TO HAVE AND HOLD [2,053,118] MLP Senior Subordinated Units unto certain
members of Partners, its successors and assigns, together will all and singular
the rights and appurtenances thereto in anywise belonging, subject, however, to
the terms and conditions stated in this Agreement, forever.
Article II
Post-Closing Matters
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1. Transfer of Assets to S & S Services. By its execution and
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delivery of this Agreement, each of Propane and L & L Transportation hereby
grants, contributes, transfers, conveys and assigns to S & S Services, its
successors and assigns, for its and their own use forever, all of their
respective right, title and interest in and to the assets (the "Sales and
Service Assets") listed on Exhibits C-1 and C-2, respectively, as a capital
contribution to S & S Services by Propane and L&L Transportation. S & S Services
accepts the Sales and Service Assets as a capital contribution.
TO HAVE AND HOLD the Sales and Service Assets unto S & S Services, its
successors and assigns, together will all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.
2. Redemption of MLP Limited Partner Interest Held by Partners. By
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its execution and delivery of this Agreement, MLP hereby agrees to redeem the
limited partner interest in MLP held by Partners (as the Organizational Limited
Partner) in exchange for $1,000 in cash.
3. Purchase of Additional MLP Common Units. The underwriters of the
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IPO were granted a 30-day option (the "Option") to purchase up to [240,000] MLP
Common Units. In the event the Option is exercised, the parties hereto
acknowledge an additional cash contribution of [$5,160,000] from the public to
the MLP in exchange for [240,000] MLP Common Units.
Article III
Assumption of Certain Liabilities
1. Assumption of Certain Liabilities of Partners by Propane. In
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connection with the contribution by Partners of the Assets to Propane, as set
forth in Section 1 of Article I, Propane hereby assumes and agrees to duly and
timely pay, perform and discharge all of the Assumed Liabilities, to the full
extent that Partners has been heretofore or would have been in the future, were
it not for the execution and delivery of this Agreement, obligated to pay,
perform and discharge such Assumed Liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge the
Assumed Liabilities shall not (i) increase the obligation of Propane with
respect to the Assumed Liabilities beyond that of Partners, (ii) waive any valid
defense that was available to Propane with respect to such Assumed Liabilities
or (iii) enlarge any rights or remedies of any third party under any of the
Assumed Liabilities.
2. As used in this Article III, the term "Assumed Liabilities" means
all of Partners' liabilities arising from or relating to the Assets, of every
kind, character and description, whether known or unknown, accrued or
contingent, and whether or not reflected on the books and records of Partners.
Article V
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Indemnification
1. Indemnification.
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(a) Partners, on behalf of itself and its Affiliates (as defined in
the Amended and Restated Agreement of Limited Partnership of the MLP) excluding
the MLP Entities (as hereinafter defined, shall indemnify, defend and hold
harmless the MLP, Propane, Inergy S&S, L&L Transportation LLC and Inergy
Transportation LLC (the "MLP Entities") from and against all federal, state and
local income tax liabilities attributable to the operation of the Assets and to
the operation of the Assets of Propane, in each case, prior to the date of this
Agreement, including any such income tax liabilities of any of Partners and its
Affiliates that may result from the consummation of the transactions provided
for in Sections 1, 2(a) and 5 of Article I of this Agreement.
(b) As used in this Article IV, the term "Indemnifying Party" refers
to Partners in the case of any indemnification obligation arising under
paragraph (a) above, and the term "Indemnified Party" refers to the MLP
Entities, as applicable, in the case of any indemnification obligation arising
under paragraph (a) above.
(c) If any action, suit or proceeding shall be brought against an
Indemnified Party, or if the Indemnified Party should otherwise become aware of
facts giving rise to a claim for indemnification pursuant to paragraph (a)
above, the Indemnified Party shall promptly notify the Indemnifying Party in
writing specifying the nature of and specific basis for such claim.
(d) The Indemnifying Party shall have the right to control all
aspects of the defense of (and any counterclaims with respect to) any claims
brought against the Indemnified Party that are covered by the indemnification
set forth in paragraph (a) above including, without limitation, the selection of
counsel, determination of whether to appeal any decision of any court and the
settling of any such matter or any issues relating thereto; provided, however,
that no such settlement shall be entered into without the consent of the
Indemnified Party unless it includes a full release of the Indemnified Party
from such matter or issues, as the case may be.
(e) The Indemnified Party agrees, at its own cost and expense, to
cooperate fully with the Indemnifying Party with respect to all aspects of the
defense of any claims covered by the indemnification set forth in paragraph (a)
above, including, without limitation, the prompt furnishing to the Indemnifying
Party of any correspondence or other notice relating thereto that the
Indemnified Party may receive, permitting the name(s) of the Indemnified Party
to be utilized in connection with such defense, the making available to the
Indemnifying Party of any files, records or other information of the Indemnified
Party that the Indemnifying Party considers relevant to such defense and the
making available to the Indemnifying Party of any employees of the Indemnified
Party; provided, however, that in connection therewith the Indemnifying Party
agrees to use reasonable efforts to minimize the impact thereof on the
operations of such Indemnified Party. In no event shall the obligation of the
Indemnified Party to cooperate with the Indemnifying Party as set forth in the
immediately preceding sentence
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be construed as imposing upon the Indemnified Party an obligation to hire and
pay for counsel in connection with the defense of any claims covered by the
indemnification set forth in this Article IV; provided, however, that an
Indemnified Party may, at its own option, cost and expense, hire and pay for
counsel in connection with any such defense. The Indemnifying Party agrees to
keep any such counsel hired by the Indemnified Party reasonably informed as to
the status of any such defense, but the Indemnifying Party shall have the right
to retain sole control over such defense.
(f) In determining the amount of any Losses (as hereinafter defined)
for which any Indemnified Party is entitled to indemnification under this
Article V, the gross amount thereof will be reduced by any insurance proceeds
realized or to be realized by such Indemnified Party, and such correlative
insurance benefit shall be net of any insurance premium that becomes due as a
result of such claim. "Losses" shall mean means all liabilities, losses, costs,
damages (including punitive, consequential and treble damages), penalties or
expenses (including, without limitation, reasonable attorneys' fees and expenses
and costs of investigation and litigation), and also including any expenditures
or expenses incurred to cover, remedy or rectify any such Losses.
Article V
Miscellaneous
1. Order of Transactions. The transactions provided for in
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Articles I, II and III of this Agreement shall be completed in the following
order:
(a) First, the transactions provided for in Article I shall
be completed;
(b) Second, the transactions provided for in Article III
shall be completed; and
(c) Third, the transactions provided for in Article II
shall be completed.
2. Amendments to Organizational Documents.
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(a) The Agreement of Limited Partnership of MLP will be
amended and restated to reflect the matters set forth in Articles I and II of
this Agreement.
(b) The Limited Liability Company Agreements of the
following will be amended (or amended and restated) to reflect the applicable
matters set forth in Articles I and II of this Agreement:
(i) Partners; and
(ii) New Propane.
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3. Representations and Warranties. Each party hereto represents and
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warrants to each of the other parties hereto as follows:
(a) Such party has the right, power and authority for, and has
taken all necessary corporate and other action to authorize, the execution,
delivery and performance of this Agreement;
(b) This Agreement has been duly executed and delivered by the
duly authorized officers of such party and constitutes the legal, valid and
binding obligation of such party, enforceable in accordance with its terms; and
(c) Any property or right being transferred and assigned by such
party hereunder to another party is owned by such transferor/assignor, free and
clear of all liens, claims and encumbrances, and upon such transfer the
transferee/assignee will succeed to all right, title and ownership in such
property or right, other than any security interest, mortgage, lien, claim or
encumbrance created pursuant to the ____________ Credit Agreement, dated the
date hereof, among ________________ Bank and ______________________,
______________________ and ____________________.
THE PARTIES ACKNOWLEDGE AND AGREE THAT, EXCEPT FOR THE FOREGOING REPRESENTATIONS
AND WARRANTIES, ALL PROPERTY AND RIGHTS TRANSFERRED AND ASSIGNED PURSUANT TO
THIS AGREEMENT ARE BEING TRANSFERRED AND ASSIGNED ON AN AS-IS, WHERE-IS BASIS,
AND NO OTHER REPRESENTATIONS OR WARRANTIES ARE MADE WITH RESPECT TO SUCH
PROPERTY OR RIGHTS.
4. Costs. Each transferee/assignee hereunder shall pay all sales,
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use and similar taxes arising out of the contributions, conveyances and
deliveries to be made hereunder, and shall pay all documentary, filing,
recording, transfer, deed, and conveyance taxes and fees required in connection
therewith.
5. Headings. All section headings in this Agreement are for
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convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof.
6. Successors and Assigns. The Agreement shall be binding upon and
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inure to the benefit of the parties signatory hereto and their respective
successors and assigns.
7. No Third Party Rights. The provisions of this Agreement are
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intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to
be a third party beneficiary of any of the provisions of this Agreement.
8. Counterparts. This Agreement may be executed in any number of
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counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
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9. Governing Law. This Agreement shall be governed by, and construed
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in accordance with, the laws of the State of Missouri applicable to contracts
made and to be performed wholly within such state without giving effect to
conflict of law principles thereof.
10. Severability. If any of the provisions of this Agreement are
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held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.
11. Deed; Xxxx of Sale; Assignment. To the extent required by
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applicable law, this Agreement shall also constitute a "deed," "xxxx of sale" or
"assignment" of the Assets.
12. Amendment or Modification. This Agreement may be amended or
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modified from time to time only by the written agreement of all the parties
hereto.
13. Integration. This Agreement supersedes all previous
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understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This document is an integrated agreement which
contains the entire understanding of the parties. No understanding,
representation, promise or agreement, whether oral or written, is intended to be
or shall be included in or form part of this Agreement unless it is contained in
a written amendment hereto executed by the parties hereto after the date of this
Agreement.
14. Further Assurances. Each party hereto agrees to execute and
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deliver such additional instruments, documents and certifications and to take
such other action as is necessary or appropriate to carry out the purpose and
intent of this Agreement and the transactions contemplated herein.
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IN WITNESS WHEREOF, the undersigned have executed the foregoing
Agreement as of the day and year first above written.
INERGY HOLDINGS, LLC INERGY, L. P.
By: Inergy GP, LLC (its General Partner)
By________________________________
Xxxx X. Xxxxxxx,
Sole Voting Member By_________________________________
Xxxx X. Xxxxxxx
President of Inergy GP, LLC
INERGY PARTNERS, LLC INERGY PROPANE, LLC*
By________________________________ By________________________________
Xxxx X. Xxxxxxx, Representative Xxxx X. Xxxxxxx, President
of a Voting Member Majority
INERGY GP, LLC L & L TRANSPORTATION, LLC
By________________________________ By________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
NEW INERGY PROPANE, LLC INERGY TRANSPORTATION, LLC
By________________________________ By________________________________
Xxxx X. Xxxxxxx, Representative Xxxx X. Xxxxxxx, President
of a Voting Member Majority
INERGY SALES & SERVICE, INC. XXXXXX OIL COMPANY OF
XXXXXXXX COUNTY, INC.
By________________________________ By________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
______________________
* This assumes this entity will have a board of directors and officers, as is
currently under discussion.
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ROLESVILLE GAS AND OIL L & L TRANSPORTATION, LLC
COMPANY
By_______________________________ By________________________________
Xxxx X. Xxxxxxx, President Xxxx X. Xxxxxxx, President
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