CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT among EXTERRAN HOLDINGS, INC. EXTERRAN ENERGY SOLUTIONS, L.P. EES LEASING LLC EXH GP LP LLC EXTERRAN GP LLC EXH MLP LP LLC EXTERRAN GENERAL PARTNER, L.P. EXLP OPERATING LLC EXLP LEASING LLC and...
Exhibit 2.1
Execution Version
CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
among
EXTERRAN HOLDINGS, INC.
EXTERRAN ENERGY SOLUTIONS, L.P.
EES LEASING LLC
EXH GP LP LLC
EXTERRAN GP LLC
EXH MLP LP LLC
EXTERRAN GENERAL PARTNER, L.P.
EXLP OPERATING LLC
EXLP LEASING LLC
and
EXTERRAN PARTNERS, L.P.
dated as of
JULY 26, 2010
TABLE OF CONTENTS
ARTICLE I CONTRIBUTIONS, CONVEYANCES, ACKNOWLEDGMENTS AND DISTRIBUTIONS |
2 | |||
1.1 Transactions |
2 | |||
1.2 Transaction Taxes |
3 | |||
1.3 Proration of 2010 Ad Valorem Taxes |
3 | |||
ARTICLE II CLOSING |
4 | |||
2.1 Closing |
4 | |||
2.2 Deliveries at the Closing |
4 | |||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS |
5 | |||
3.1 Organization and Existence |
5 | |||
3.2 Authority and Approval |
5 | |||
3.3 No Conflict |
5 | |||
3.4 Consents |
6 | |||
3.5 Laws and Regulations; Litigation |
6 | |||
3.6 No Adverse Changes |
7 | |||
3.7 Employee Benefits |
7 | |||
3.8 Management Projections; Financial and Operational Information |
7 | |||
3.9 Environmental Matters |
7 | |||
3.10 Contracts |
8 | |||
3.11 Compression Equipment |
8 | |||
3.12 Sufficiency of Assets |
9 | |||
3.13 Licenses; Permits |
9 | |||
3.14 Insurance |
9 | |||
3.15 Brokerage Arrangements |
9 | |||
3.16 Investment |
9 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE RECIPIENTS |
10 | |||
4.1 Organization and Existence |
10 | |||
4.2 Authority and Approval |
10 | |||
4.3 Delivery of Opinion |
10 | |||
4.4 Brokerage Arrangements |
10 | |||
4.5 Newly Issued Common Units |
11 |
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ARTICLE V CONDITIONS TO CLOSING |
11 | |||
5.1 Conditions to Each Party’s Obligation to Effect the Transactions |
11 | |||
5.2 Conditions to the Obligation of the Recipients |
11 | |||
5.3 Conditions to the Obligation of the Contributors |
12 | |||
ARTICLE VI COVENANTS, ETC. |
12 | |||
6.1 Regulatory Filings; Consents |
12 | |||
6.2 Independent Investigation |
13 | |||
6.3 General |
13 | |||
6.4 Revisions to Schedules A, B and C |
13 | |||
6.5 Inadvertent Transfers of, or Failure to Transfer, Assets |
13 | |||
6.6 Nasdaq Listing |
14 | |||
ARTICLE VII INDEMNIFICATION |
14 | |||
7.1 Indemnification of the Contributors and Other Parties |
14 | |||
7.2 Indemnification of the Recipients and other Parties |
14 | |||
7.3 Demands |
14 | |||
7.4 Right to Contest and Defend |
15 | |||
7.5 Cooperation |
15 | |||
7.6 Right to Participate |
16 | |||
7.7 Payment of Damages |
16 | |||
7.8 Limitations on Indemnification |
16 | |||
7.9 Survival |
16 | |||
7.10 Sole Remedy |
17 | |||
7.11 Express Negligence Rule |
17 | |||
ARTICLE VIII TERMINATION |
17 | |||
8.1 Events of Termination |
17 | |||
8.2 Effect of Termination |
18 | |||
ARTICLE IX MISCELLANEOUS |
18 | |||
9.1 Transfer Restrictions |
18 | |||
9.2 Registration Rights of MLP LP LLC and its Affiliates |
18 | |||
9.3 Expenses |
21 | |||
9.4 Notices |
21 | |||
9.5 Governing Law |
22 | |||
9.6 Public Statements |
22 |
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9.7 Form of Payment |
22 | |||
9.8 Entire Agreement; Amendments and Waivers |
22 | |||
9.9 Binding Effect and Assignment |
23 | |||
9.10 Severability |
23 | |||
9.11 Interpretation |
23 | |||
9.12 Headings and Schedules |
23 | |||
9.13 Counterparts |
23 |
EXHIBITS AND SCHEDULES
Exhibit A
|
EES Leasing Xxxx of Sale | |
Exhibit B
|
EESLP Xxxx of Sale | |
Exhibit C
|
MLP Xxxx of Sale | |
Exhibit D
|
EXLP Operating Xxxx of Sale | |
Exhibit E
|
First Amendment to Second Amended and Restated Omnibus Agreement | |
Schedule A
|
EES Leasing Compression Equipment | |
Schedule B
|
EESLP Compression Equipment | |
Schedule C
|
Master Agreements | |
Schedule 3.10
|
Contracts | |
Schedule 3.11
|
Compression Equipment | |
Schedule 3.14
|
Insurance |
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CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
This Contribution, Conveyance and Assumption Agreement (this “Agreement”) is made and
entered into as of July 26, 2010 by and among Exterran Holdings, Inc., a Delaware corporation
(“EXH”), Exterran Energy Solutions, L.P., a Delaware limited partnership (“EESLP”),
EES Leasing LLC, a Delaware limited liability company (“EES Leasing”), EXH GP LP LLC, a
Delaware limited liability company (“LP LLC”), Exterran GP LLC, a Delaware limited
liability company (“GP LLC”), EXH MLP LP LLC, a Delaware limited liability company
(“MLP LP LLC”), Exterran General Partner, L.P., a Delaware limited partnership
(“GP”), EXLP Operating LLC, a Delaware limited liability company (“EXLP
Operating”), EXLP Leasing LLC, a Delaware limited liability company (“EXLP Leasing”),
and Exterran Partners, L.P., a Delaware limited partnership (“MLP”).
RECITALS:
WHEREAS, prior to the Closing (as defined below) or within 10 business days following the
Closing (as required by Section 6.5), EESLP shall acquire certain compression services
agreements and compression equipment from Exterran ABS 2007 LLC, a Delaware limited liability
company (“ABS 2007”), and Exterran ABS Leasing 2007 LLC, a Delaware limited liability
company (“ABS Leasing”); and
WHEREAS, at the Closing (as defined below), each of the following events shall occur:
1. EES Leasing will sell to EESLP the compression equipment set forth on Schedule A,
as modified in accordance with Section 6.4 (the “EES Leasing Compression
Equipment”), that is, as of the Closing Date, used to provide compression services under
certain compression services agreements (such compression services agreements, the “EES
CSAs”), and in exchange the balance under the existing revolving note, dated October 1, 2007,
from EES Leasing in favor of EESLP (the “EES Leasing Note”) will be reduced by an amount
equal to the net book value of the EES Leasing Compression Equipment as of the Closing Date, all
pursuant to and in accordance with that certain Xxxx of Sale between EES Leasing and EESLP in the
form set forth as Exhibit A (the “EES Leasing Xxxx of Sale”);
2. EESLP will transfer the (a) EES CSAs, (b) the EES Leasing Compression Equipment, (c) the
master agreements set forth on Schedule C, as modified in accordance with Section
6.4 (other than the provisions thereof, if any, pursuant to which services other than
Competitive Services (as defined in that certain Second Amended and Restated Omnibus Agreement (as
amended on or prior to the Closing Date, the “Omnibus Agreement”), dated as of November 10,
2009, by and among EXH, EESLP, GP LLC, GP, MLP and EXLP Operating) are to be provided), (d) the
compression equipment set forth on Schedule B, as modified in accordance with Section
6.4 (the “EESLP Compression Equipment” and, together with the EES Leasing Compression
Equipment, the “Compression Equipment”), and (e) the compression services agreements
pursuant to which the EESLP Compression Equipment is, as of the Closing Date, used to provide
compression services (such compression services agreements, the “EESLP CSAs” and, together
with the master agreements set forth on Schedule C, as modified in accordance with
Section 6.4, and the EES CSAs, the “CSAs”), to MLP pursuant to and in
accordance with that certain Xxxx of Sale between EESLP and MLP dated as of the Closing Date
in the form set forth as Exhibit B (the “EESLP Xxxx of Sale”) (of which Compression
Equipment and CSAs (i) an undivided 1.0000000000% interest shall be deemed contributed to LP LLC, by LP
LLC to GP and by GP to MLP, (ii) an undivided 0.0000199518% interest shall be deemed contributed to GP
LLC, by GP LLC to GP and by GP to MLP and (iii) an undivided
98.00482% interest shall be deemed
contributed to MLP LP LLC and by MLP LP LLC to MLP) in exchange for
(A) MLP’s issuance of 8,206,863
common units (the “New Common Units”) representing limited partner interests in MLP to MLP
LP LLC and (B) MLP’s issuance of 167,075 general partner units (the “New GP Units”) in MLP
to GP in consideration of GP’s continuation of its 1.99518% general partner interest in MLP;
3. MLP will sell the CSAs and the Compression Equipment to EXLP Operating, and in exchange
the balance under the revolving note, effective as of the date hereof, from EXLP Operating in favor
of MLP (the “EXLP Operating Note”) will be increased by an amount equal to the net book
value of the Compression Equipment as of the Closing Date, all pursuant to and in accordance with
that certain Xxxx of Sale between MLP and EXLP Operating dated as of the date hereof in the form
set forth as Exhibit C (the “MLP Xxxx of Sale”); and
4. EXLP Operating will sell the Compression Equipment to EXLP Leasing, and in exchange the
balance under the existing revolving note, dated July 30, 2008, from EXLP Leasing in favor of EXLP
Operating (the “EXLP Leasing Note”) will be increased by an amount equal to the net book
value of the Compression Equipment as of the Closing Date, all pursuant to and in accordance with
that certain Xxxx of Sale between EXLP Operating and EXLP Leasing dated as of the date hereof in
the form set forth as Exhibit D (the “EXLP Operating Xxxx of Sale”).
NOW, THEREFORE, in consideration of the mutual undertakings and agreements contained in this
Agreement, the parties hereto agree as follows:
ARTICLE I
CONTRIBUTIONS, CONVEYANCES, ACKNOWLEDGMENTS AND DISTRIBUTIONS
CONTRIBUTIONS, CONVEYANCES, ACKNOWLEDGMENTS AND DISTRIBUTIONS
1.1 Transactions. On the terms and subject to the conditions of this Agreement, at the
Closing, each of the following transactions (collectively, the “Transactions”) will occur:
(a) EES Leasing will grant, sell, bargain, convey, assign, transfer, set over and deliver to
EESLP, its successors and assigns, for its own use forever, all right, title and interest in and to
the EES Leasing Compression Equipment, and the balance under the EES Leasing Note will be reduced
by an amount equal to the net book value of the EES Leasing Compression Equipment as of the Closing
Date, all as further evidenced by the execution and delivery of the EES Leasing Xxxx of Sale by EES
Leasing and EESLP;
(b) EESLP will grant, sell, bargain, convey, assign, transfer, set over and deliver to MLP,
its successors and assigns, for its own use forever, all right, title and interest in and to the
CSAs and the Compression Equipment, and MLP will accept such Compression Equipment and assume such
CSAs (of which (i) an undivided 1.0000000000% interest shall be deemed contributed by EESLP to LP LLC,
by LP LLC to GP and by GP to MLP, (ii) an undivided 0.0000199518% interest shall be deemed contributed by EESLP to GP LLC, by GP LLC to GP and by
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GP to MLP and (iii) an undivided 98.00482% interest shall be deemed contributed by EESLP to MLP LP LLC and by
MLP LP LLC to MLP) in exchange for (i) MLP’s issuance of the New Common Units to MLP LP LLC and
(ii) MLP’s issuance of the New GP Units to GP in
continuation of GP’s 1.99518% general
partner interest in MLP, as further evidenced by the execution and delivery of the EESLP Xxxx of
Sale by EESLP and MLP;
(c) MLP will grant, sell, bargain, convey, assign, transfer, set over and deliver to EXLP
Operating, its successors and assigns, for its own use forever, all right, title and interest in
and to the Compression Equipment and the CSAs, and EXLP Operating will accept such Compression
Equipment and assume such CSAs, and in exchange the balance under the EXLP Operating Note will be
increased by an amount equal to the net book value of the Compression Equipment as of the Closing
Date, as further evidenced by the execution and delivery of the MLP Xxxx of Sale by MLP and EXLP
Operating; and
(d) EXLP Operating will grant, sell, bargain, convey, assign, transfer, set over and deliver
to EXLP Leasing, its successors and assigns, for its own use forever, all right, title and interest
in and to the Compression Equipment, and EXLP Leasing will accept such Compression Equipment, and
in exchange the balance under the EXLP Leasing Note will be increased by an amount equal to the net
book value of the Compression Equipment as of the Closing Date, as further evidenced by the
execution and delivery of the EXLP Operating Xxxx of Sale by EXLP Operating and EXLP Leasing.
1.2 Transaction Taxes. All sales, use, transfer, filing, recordation, registration and
similar taxes and fees arising from or associated with the transactions contemplated hereunder
other than taxes based on income (“Transaction Taxes”), shall be borne 50% on a joint and
several basis by EES Leasing and EESLP (each a “Contributor” and, together, the
“Contributors”) and 50% by MLP. To the extent under applicable law the transferee is
responsible for filing tax returns in respect of Transaction Taxes, MLP shall prepare and file all
such returns. The parties shall provide such certificates and other information and otherwise
cooperate to the extent reasonably required to minimize Transaction Taxes. The party that is not
responsible under applicable law for paying the Transaction Taxes shall pay its share of the
Transaction Taxes to the responsible party prior to the due date of such taxes.
1.3 Proration of 2010 Ad Valorem Taxes. Ad valorem taxes relating to the EES Leasing
Compression Equipment for the 2010 year shall be prorated on a daily basis between EXLP Leasing on
the one hand and EES Leasing on the other hand, with EES Leasing responsible for the prorated
portion of such taxes for the period (for purposes of this Section 1.3, “period” means the period
beginning on the assessment date for ad valorem taxes through the day before the next assessment
date for such taxes) up to and including the Closing Date and EXLP Leasing responsible for the
prorated portion of such taxes after the Closing Date. Ad valorem taxes relating to the EESLP
Compression Equipment for the 2010 year shall be prorated on a daily basis between EXLP Leasing on
the one hand and EESLP on the other hand, with EESLP responsible for the prorated portion of such
taxes for the period up to and including the Closing Date and EXLP Leasing responsible for the prorated portion of such
taxes after the Closing Date. The party that receives the ad valorem tax billing (the “Billed
Party”) shall provide a copy of such billing to the other party together with a calculation of
the prorated ad valorem taxes owed by each party. The party that did not receive the ad valorem tax
billing shall
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pay its prorated portion of the ad valorem taxes to the Billed Party prior to the due
date of such taxes and the Billed Party shall be responsible for the timely payment of the ad
valorem taxes to the taxing authorities.
ARTICLE II
CLOSING
CLOSING
2.1 Closing. Subject to the terms and conditions of this Agreement, the closing (the
“Closing”) of the Transactions will be held at the offices of Xxxxx Xxxxx L.L.P., 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx at 9:00 a.m., Houston, Texas time on a date, as
mutually agreed by the parties, that is within the first five business days immediately following
the date of fulfillment or waiver (in accordance with the provisions hereof) of the last to be
fulfilled or waived of the conditions set forth in Section 5.1, or, if on such day any
condition set forth in Section 5.2 or Section 5.3 has not been fulfilled or waived
(in accordance with the provisions hereof) (other than those conditions that by their nature are to
be fulfilled at the Closing, but subject to the fulfillment or waiver of such conditions), as soon
as practicable after all the conditions set forth in Section 5.2 or Section 5.3, as
applicable, have been fulfilled or waived in accordance with this Agreement; provided, that
in no event shall the Closing occur on or prior to the record date for MLP’s quarterly cash
distribution to limited partners with respect to the quarter ended June 30, 2010. The date on
which the Closing occurs is referred to as the “Closing Date.”
2.2 Deliveries at the Closing. At the Closing:
(a) Each party will execute and deliver the bills of sale described in Section 1.1 to
which it is a party;
(b) MLP will issue the New Common Units to MLP LP LLC and the New GP Units to GP;
(c) The Contributors will deliver to MLP a certificate (i) stating that each of the
Contributors is not a foreign corporation, foreign partnership, foreign trust or foreign estate,
(ii) providing their U.S. Employer Identification Numbers and (iii) providing their addresses, all
pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) The Contributors will deliver, or cause to be delivered, to MLP all other documents,
certificates and other instruments required to be delivered or caused to be delivered by the
Contributors pursuant hereto;
(e) Each party will execute and deliver all other documents, certificates and other
instruments required to be delivered or caused to be delivered by it pursuant to this Agreement;
and
(f) Each party to the Omnibus Agreement will execute the First Amendment to the Second Amended
and Restated Omnibus Agreement in the form set forth as Exhibit E to this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
Each of the Contributors hereby represents and warrants, jointly and severally, to MLP, EXLP
Operating and EXLP Leasing (collectively, the “Recipients”) that as of the date hereof:
3.1 Organization and Existence. Each of the Contributors, ABS 2007 and ABS Leasing has
been duly organized and is validly existing and in good standing under the laws of its jurisdiction
of formation, with full limited liability company or limited partnership power and authority to
own, lease and operate the properties and assets it now owns, leases and operates and to carry on
its business as and where such properties and assets are now owned or held and such business is now
conducted. Each of the Contributors, ABS 2007 and ABS Leasing is duly qualified to transact
business and is in good standing as a limited liability company or limited partnership in each
other jurisdiction in which such qualification is required for the conduct of its business, except
where the failure to so qualify or to be in good standing does not have a material adverse effect
on the business, financial or operating condition or results of operations of the Business (defined
herein) or the Assets (defined herein), taken as a whole (a “Material Adverse Effect”).
3.2 Authority and Approval. Each of the Contributors has the limited liability company or
limited partnership power and authority to execute and deliver this Agreement, to consummate the
Transactions and to perform all the terms and conditions hereof to be performed by it. The
execution and delivery by the Contributors of this Agreement, the performance by each of them of
all the terms and conditions hereof to be performed by it and the consummation of the Transactions
have been duly authorized and approved by all requisite limited liability company or limited
partnership action of each of the Contributors. This Agreement constitutes the valid and binding
obligation of each of the Contributors, enforceable against each of them in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors’ rights generally and by
general principles of equity (whether applied in a proceeding at law or in equity).
3.3 No Conflict. This Agreement and the execution and delivery hereof by the Contributors
do not, and the fulfillment and compliance with the terms and conditions hereof and the
consummation of the transactions contemplated hereby will not:
(a) conflict with any of the provisions of the charter documents or bylaws or equivalent
governing instruments of the Contributors or the provisions of the CSAs;
(b) conflict with any provision of any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree applicable to any
Contributor;
(c) conflict with, result in a breach of, constitute a default under (whether with notice or
the lapse of time or both) or accelerate or permit the acceleration of the performance required by,
or require any consent, authorization or approval under, any material indenture,
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mortgage, lien or material agreement, contract, commitment or instrument to which any Contributor is a party or by
which it is bound or to which any of its property is subject;
(d) result in the creation of, or afford any person the right to obtain, any material lien,
charge or encumbrance on the capital stock or other equity interests, property or assets of any
Contributor under any such material indenture, mortgage, lien, agreement, contract, commitment or
instrument; or
(e) result in the revocation, cancellation, suspension or material modification, singly or in
the aggregate, of any Governmental Approval (as defined below) any Contributor possesses that is
necessary or desirable for the ownership, lease or operation of its properties and other assets in
the conduct of its business as now conducted, including any Governmental Approvals under any
applicable Environmental Law (as defined below);
except, in the case of clauses (b), (c), (d) and (e), as would not have, individually or in the
aggregate, a Material Adverse Effect and except for such as will have been cured at or prior to the
Closing.
3.4 Consents. Except for notice to, or consent of, Governmental Authorities (as defined
below) related to the transfer of environmental permits, no consent, approval, license, permit,
order, or authorization of, or registration, declaration, or filing with, (each a “Governmental
Approval”) any court or federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality (collectively, “Governmental Authorities”) or
other person or entity is required to be obtained or made by or with respect to the Contributors in
connection with:
(a) the execution, delivery, and performance of this Agreement or the consummation of the
Transactions;
(b) the enforcement against the Contributors of their respective obligations hereunder; or
(c) following the Closing, the conduct by MLP of the business (the “Business”)
represented by the Compression Equipment and CSAs (the “Assets”) as it was conducted
immediately prior to the Closing.
3.5 Laws and Regulations; Litigation. As of the date hereof, there are no pending claims, fines, actions, suits, demands,
investigations or proceedings or any arbitration or binding dispute resolution proceeding
(collectively, “Litigation”) with respect to which any of the Contributors, ABS 2007 or ABS
Leasing has been contacted in writing by or on behalf of the plaintiff or claimant, against or
affecting the Business or the Assets or the Contributors’, ABS 2007’s or ABS Leasing’s ownership of
the Business or the Assets (other than Litigation under any Environmental Law, which is the subject
of Section 3.9) that (i) would individually, or in the aggregate, have a Material Adverse
Effect or (ii) seek any material injunctive relief. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, (x) the Contributors, ABS 2007 and ABS Leasing are not
in violation of or in default under any law or regulation or under any order (other than
Environmental Laws, which are the subject of Section 3.9) of any Governmental Authority
applicable to it and (y) there is no Litigation (other than Litigation
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under any Environmental Law, which is the subject of Section 3.9) pending or, to any Contributor’s knowledge, threatened
against or affecting such Contributor, ABS 2007 or ABS Leasing, or any of their respective
properties or assets, at law or in equity, by or before any Governmental Authority having
jurisdiction over such party. Except as would not, individually or in the aggregate, have a
Material Adverse Effect, no Litigation is pending or, to any Contributor’s knowledge, threatened to
which any Contributor, ABS 2007 or ABS Leasing is or may become a party that questions or involves
the validity or enforceability of any of such Contributor’s, ABS 2007’s or ABS Leasing’s
obligations under this Agreement or seeks to prevent or delay, or damages in connection with, the
consummation of the Transactions.
3.6 No Adverse Changes. Except for changes in the ordinary course of business due to
matters that generally affect the economy or the industry in which the Business is engaged
(including but not limited to fluctuations in the prices of natural gas or crude oil or any
derivative of natural gas or crude oil), since March 31, 2010 there have been no changes in the
Assets or the liabilities, financial or operational condition or results of operations of the
Business that have a Material Adverse Effect. Since January 1, 2010 the Contributors, ABS 2007 and
ABS Leasing have caused the Business to be conducted in the ordinary course and in substantially
the same manner as previously conducted.
3.7 Employee Benefits. The Business does not have and never has had any employees. None
of the Contributors, ABS 2007 or ABS Leasing is a party to or is bound by any collective bargaining
agreement with respect to any employees who perform services in connection with the Business. The
Business does not and has never sponsored, maintained, contributed to or been a party to any
employee benefit plan as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended, or any other employee benefit or compensation arrangement, agreement or program.
3.8 Management Projections; Financial and Operational Information. The projections
(including projections of maintenance capital and allocated sales, general and administrative
expense required for the Assets) provided to the MLP (including those provided to Xxxxxxx Xxxxxxxx
and Company, LLC (“Xxxxxxx Xxxxxxxx”), the financial advisor to the conflicts committee
(the “Conflicts Committee”) of the Board of Directors of GP LLC) by the Contributors as part of MLP’s due diligence review of the Business in connection with this
Agreement are consistent with management’s current expectations. The historical and current
information regarding horsepower, revenues and costs of sales relating to the Assets and the
Business provided to Xxxxxxx Xxxxxxxx as part of its review of the Assets for the Conflicts
Committee (the “Financial and Operational Information”) is materially correct and
materially complete for the periods covered, and is derived from the Contributors’ books and
records.
3.9 Environmental Matters. With respect to the Business, except as do not (individually or
in the aggregate) have a Material Adverse Effect, the Contributors (i) are in compliance with any
and all applicable federal, state and local laws and regulations relating to the prevention of
pollution or protection of the environment or imposing liability or standards of conduct concerning
any Hazardous Materials (as defined below) (“Environmental Laws”), (ii) have received all
permits required of them under applicable Environmental Laws to conduct the Business as presently
conducted, (iii) are in compliance with all terms and conditions of any such permits and (iv) do
not have any liability in connection with the release into the environment of
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any Hazardous Material. The term “Hazardous Material” means (A) any “hazardous substance” as defined in
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (B)
any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (C) any
petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under
or within the meaning of any applicable Environmental Law.
3.10 Contracts.
(a) True and complete copies of the CSAs have been made available to MLP. Except as set forth
in Schedule 3.10, the Contributors, ABS 2007 and ABS Leasing are not and, to the
Contributors’ knowledge, no other party is in default under or in breach or violation of (and no
event has occurred which, with notice or the lapse of time or both, would constitute a default
under or a breach or violation or lapse of) any term, condition or provision of any CSA except for
defaults, breaches, violations or events that, individually or in the aggregate, do not have a
Material Adverse Effect.
(b) Except as set forth in Schedule 3.10, each of the CSAs constitutes a valid,
binding and enforceable obligation of any Contributor, ABS 2007 or ABS Leasing, as applicable, that
is a party thereto and, to the Contributors’ knowledge, enforceable obligations of any other party
thereto, in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, general equitable principles (whether considered on a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing) and is in full force and effect, and
no defenses, off-sets or counterclaims have been asserted or, to the Contributors’ knowledge,
threatened by any party thereto, nor has any Contributor, ABS 2007 or ABS Leasing waived any
material rights thereunder.
(c) Except as set forth in Schedule 3.10, to the Contributors’ knowledge, (i) none of
the Contributors, ABS 2007 or ABS Leasing has received any compensation for services provided under
any CSA that is subject to any refund or creates any repayment obligation either by or to any
Contributor, ABS 2007 or ABS Leasing, and there is no basis for a claim that a refund is due and
(ii) EXLP Operating will be entitled to receive the full contract price, in accordance with the
terms of each CSA, for all services provided under that CSA on and after the Closing Date.
3.11 Compression Equipment.
(a) ABS Leasing or EES Leasing, as applicable, has good and valid title to the Compression
Equipment, in each case free and clear of all security interests, liens, mortgages, pledges,
charges, encumbrances and rights of others (“Liens”) for sums not yet due except (i) those
set forth in Schedule 3.11, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other
like Liens arising or incurred in the ordinary course of business, (iii) Liens for taxes that are
not due and payable or that may thereafter be paid without penalty, (iv) Liens securing debt of ABS
2007 or EXH that will be released prior to or as of the Closing (a complete list of which is set
forth on Schedule 3.11) and (v) other imperfections of title or encumbrances that,
individually or
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in the aggregate, could not reasonably be expected to materially interfere with the
ordinary conduct of the Business (the Liens described in clauses (i), (ii), (iii), (iv) and (v)
above are hereinafter referred to collectively as “Permitted Liens”), as well as free and
clear of all preferential purchase rights, options or other rights to purchase.
(b) The Compression Equipment is, in the aggregate, in good operating condition and repair
(normal wear and tear excepted) and has been maintained in accordance with applicable laws and
regulations, as well as generally accepted industry practice, and is adequate for the purposes for
which it is currently being used or held for use.
3.12 Sufficiency of Assets. The Assets constitute all of the assets necessary to conduct
the Business in a manner materially consistent with the Financial and Operational Information.
3.13 Licenses; Permits. The Contributors, ABS 2007 and ABS Leasing hold all licenses,
permits and authorizations (other than environmental permits, which are the subject of Section
3.9) that are necessary for the conduct of the Business and the ownership and current operation
of the Assets, each in compliance with applicable law and regulation of Governmental Authorities,
except for those the failure of which to have, individually or in the aggregate, does not have a
Material Adverse Effect. The Contributors, ABS 2007 and ABS Leasing have complied in all material
respects with all terms and conditions thereof.
3.14 Insurance. The Contributors or their affiliates maintain policies of fire and casualty, liability, and
other forms of property and liability insurance related to the Assets and the Business in such
amounts, with such deductibles, and against such risks and losses as are, in the Contributors’
judgment, reasonable for the Business and the Assets, and such policies are listed on Schedule
3.14. All such policies are in full force and effect, all premiums due and payable thereon
have been paid, and no notice of cancellation or termination has been received with respect to any
such policy that has not been replaced on substantially similar terms prior to the date of such
cancellation. To the Contributors’ knowledge, the activities and operations of the Business have
been conducted in a manner so as to conform in all material respects to all applicable provisions
of those insurance policies.
3.15 Brokerage Arrangements. None of the Contributors has entered, directly or indirectly,
into any agreement with any person, firm or corporation that would obligate MLP to pay any
commission, brokerage or “finder’s fee” or other fee in connection with this Agreement or the
Transactions.
3.16 Investment. MLP LP LLC is not acquiring the New Common Units with a view to or for
sale in connection with any distribution thereof or any other security related thereto within the
meaning of the Securities Act of 1933, as amended (the “Securities Act”). MLP LP LLC is
familiar with investments of the nature of the New Common Units, understands that this investment
involves substantial risks, has adequately investigated MLP and the New Common Units, and has
substantial knowledge and experience in financial and business matters such that it is capable of
evaluating, and has evaluated, the merits and risks inherent in purchasing the New Common Units,
and is able to bear the economic risks of such investment. MLP LP LLC has had the opportunity to
visit with MLP and meet with the officers of its general partner and other representatives to
discuss the business, assets, liabilities, financial condition, and operations of
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MLP, has received all materials, documents and other information that MLP LP LLC deems necessary or advisable to
evaluate MLP and the New Common Units, and has made its own independent examination, investigation,
analysis and evaluation of MLP and the New Common Units, including its own estimate of the value of
the New Common Units. MLP LP LLC has undertaken such due diligence (including a review of the
properties, liabilities, books, records and contracts of MLP) as MLP LP LLC deems adequate.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE RECIPIENTS
REPRESENTATIONS AND WARRANTIES OF THE RECIPIENTS
Each of the Recipients hereby represents and warrants, jointly and severally, to the
Contributors that as of the date hereof:
4.1 Organization and Existence. Each of the Recipients is a partnership or limited
liability company validly existing and in good standing under the laws of the State of Delaware,
with full partnership or limited liability company power and authority to own, lease and operate
the properties and assets it now owns, leases and operates and to carry on its business as and
where such properties and assets are now owned or held and such business is now conducted. Each of the Recipients is duly qualified to
transact business as a limited partnership or limited liability company and is in good standing in
each other jurisdiction in which such qualification is required for the conduct of its business,
except where the failure to so qualify or to be in good standing does not have a material adverse
effect on the business, financial condition or results of operations of the Recipients, taken as a
whole (a “Recipient Material Adverse Effect”).
4.2 Authority and Approval. Each of the Recipients has the partnership or limited
liability company power and authority to execute and deliver this Agreement, to consummate the
Transactions and to perform all the terms and conditions hereof to be performed by it. The
execution and delivery by the Recipients of this Agreement, the performance by each of them of all
the terms and conditions hereof to be performed by it and the consummation of the Transactions have
been duly authorized and approved by all requisite partnership or limited liability company action
of each of the Recipients. This Agreement constitutes the valid and binding obligation of each of
the Recipients, enforceable in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement
of creditors’ rights generally and by general principles of equity (whether applied in a proceeding
at law or in equity).
4.3 Delivery of Opinion. Xxxxxxx Xxxxxxxx has delivered an opinion to the Conflicts
Committee that the aggregate consideration to be paid by the Recipients as consideration for the
Assets pursuant to this Agreement is fair to the common unitholders of MLP (other than EESLP and
its subsidiaries) from a financial point of view.
4.4 Brokerage Arrangements. No Recipient has entered, directly or indirectly, into any
agreement with any person, firm or corporation that would obligate the Contributors or any of their
affiliates (other than the Recipients) to pay any commission, brokerage or “finder’s fee” or other
fee in connection with this Agreement or the Transactions.
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4.5 Newly Issued Common Units. The New Common Units being issued at Closing will be, when
issued in consideration for the contribution by the Contributors of the Assets, validly issued,
fully paid and nonassessable (except as such nonassessability may be affected by the Delaware
Revised Uniform Limited Partnership Act) and free of any preemptive or similar rights (other than
those set forth in MLP’s limited partnership agreement).
ARTICLE V
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
5.1 Conditions to Each Party’s Obligation to Effect the Transactions. The respective obligation of each party to proceed with the Closing is subject to the
satisfaction or waiver by each of the parties to this Agreement (subject to applicable laws) on or
prior to the Closing Date of all of the following conditions:
(a) all necessary filings with and consents of any Governmental Authority required for the
consummation of the transactions contemplated in this Agreement shall have been made and obtained,
all waiting periods with respect to filings made with Governmental Authorities in contemplation of
the consummation of the transactions described herein shall have expired or been terminated;
(b) all necessary consents, waivers, conditions precedent or similar transfer restrictions
held by or to be granted by any third party, other than any Governmental Authority, required for
the consummation of the Transactions shall have been made and obtained, except where the failure to
so obtain does not have a Material Adverse Effect or Recipient Material Adverse Effect or
materially impair the ability of the parties to consummate the Transactions;
(c) no party shall be subject to any decree, order or injunction of a court of competent
jurisdiction that prohibits the consummation of the Transactions and no statute, rule, regulation,
order, decree or injunction enacted, entered, or issued by any Governmental Authority, or other
legal restraint or prohibition preventing the consummation of the Transactions, shall be in effect;
and
(d) the New Common Units shall have been approved for listing upon notice of issuance on The
Nasdaq Stock Market.
5.2 Conditions to the Obligation of the Recipients. The obligation of the Recipients to
proceed with the Closing is subject to the satisfaction or waiver by the Recipients on or prior to
the Closing Date of the following conditions: (a) the Contributors shall have materially performed
their covenants and agreements contained in this Agreement required to be performed on or prior to
the Closing Date and (b) the representations and warranties of the Contributors made in this
Agreement shall be true and correct (without regard to qualifications as to materiality or Material
Adverse Effect contained therein) as of the Closing Date (except to the extent such representations
and warranties expressly relate to an earlier date, in which case as of such earlier date), except
in the case of clause (b) where the failure of the representations and warranties to be true and
correct, individually or in the aggregate, has not had a Material Adverse Effect; provided,
that the Compression Equipment being utilized to service the customers that are parties to the CSAs
at the time of Closing shall not, taken together, consist of less than an
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aggregate of 238,000 operating horsepower of compression. The Contributors shall have delivered to the Recipients a
certificate dated the Closing Date and signed by an authorized officer of each of the Contributors
confirming the foregoing matters set forth in this Section 5.2.
5.3 Conditions to the Obligation of the Contributors. The obligation of the Contributors
to proceed with the Closing is subject to the satisfaction or waiver by the Contributors on or
prior to the Closing Date of the following conditions: (a) the Recipients shall have materially
performed their covenants and agreements contained in this Agreement required to be performed on or prior to the Closing Date, (b) the representations and
warranties of the Recipients made in this Agreement shall be true and correct (without regard to
qualifications as to materiality or Recipient Material Adverse Effect contained therein) as of the
Closing Date (except to the extent such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), except in the case of clause (b) where the
failure of the representations and warranties to be true and correct, individually or in the
aggregate, has not had a Recipient Material Adverse Effect and (c) ABS 2007 shall have received the
consent of each Control Party (as defined in that certain First Amended and Restated Indenture,
dated June 9, 2010, by ABS 2007 and ABS Leasing in favor of Xxxxx Fargo Bank, National Association,
as indenture trustee (as amended, the “Indenture”)) under Section 645 of the Indenture for
the distribution to EESLP of the Compression Equipment and the CSAs owned by ABS 2007 as of the
date of this Agreement. The Recipients shall have delivered to the Contributors a certificate
dated the Closing Date and signed by an authorized officer of each of the Recipients confirming the
foregoing matters set forth in clauses (a) and (b) of this Section 5.3.
ARTICLE VI
COVENANTS, ETC.
COVENANTS, ETC.
6.1 Regulatory Filings; Consents.
(a) The Contributors and the Recipients shall in good faith cooperate with each other and (i)
promptly prepare and file all necessary documentation, (ii) effect all necessary applications,
notices, petitions and filings and execute all agreements and documents, (iii) use commercially
reasonable efforts to obtain the transfer or issuance to the Recipients of all necessary consents,
approvals and authorizations of all Governmental Authorities at the earliest possible date and (iv)
use commercially reasonable efforts to obtain all consents, approvals and authorizations of all
other parties, in the case of each of clauses (i) through (iv) above as are necessary or advisable
to consummate the transactions contemplated by this Agreement at the earliest possible date or
required by the terms of any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, concession, contract, lease or other instrument to which any of the Contributors, ABS 2007,
ABS Leasing or the Recipients is a party or by which any of them is bound.
(b) Notwithstanding anything in this Agreement, the Recipients agree that the Contributors’
obligations under this Agreement shall in no way require any Contributor to accept any condition or
requirement of any regulatory approval that is or could reasonably be determined to be adverse to
any Contributor, ABS 2007, ABS Leasing or EXH.
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6.2 Independent Investigation. The Recipients acknowledge that in making the decision to
enter into this Agreement and to consummate the Transactions, they have relied solely on their own
independent investigation of the Business and the Assets and upon the express written
representations, warranties and covenants in this Agreement. Without diminishing the scope of the
express written representations, warranties and covenants of the parties in this Agreement and without affecting or
impairing its right to rely thereon, THE RECIPIENTS ACKNOWLEDGE THAT THE CONTRIBUTORS HAVE NOT
MADE, AND THE CONTRIBUTORS HEREBY EXPRESSLY DISCLAIM AND NEGATE, ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE ASSETS OR THE BUSINESS (INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS).
6.3 General. Subject to Section 6.1(c), each party hereto will use good-faith
commercially reasonable efforts to take all action and to do all things necessary, proper or
advisable in order to consummate the transactions contemplated by this Agreement.
6.4 Revisions to Schedules A, B and C. Prior to the Closing, the Contributors shall use
commercially reasonable efforts to revise Schedules A, B and C to reflect
the EES Leasing Compression Equipment, EESLP Compression Equipment and master agreements (if they
are intended to be transferred), respectively, that are anticipated to be used to provide
compression services as of the Closing Date to the customers listed in Schedules A and
B as of the date of this Agreement, with such changes to the Schedules identified as of the
date hereof to reflect only those changes in the CSAs with, and equipment then being used to
provide compression services to, the customers that occur in the ordinary course of business and
subject to the proviso set forth in Section 5.2.
6.5 Inadvertent Transfers of, or Failure to Transfer, Assets. Within 10 business days
following the Closing, the Contributors shall provide the Recipients a definitive list (the
“Closing Asset List”) of the Compression Equipment and, if they are intended to be
transferred, master agreements that were used as of the Closing Date to provide compression
services to the customers listed in Schedules A and B, as modified in accordance
with Section 6.4, with such changes from Schedules A, B and C provided
pursuant to Section 6.4 to reflect only those changes in Compression Equipment and, where
applicable, master agreements governing the provisions of compression services to the customers
that occur in the ordinary course of business, provided that such definitive list must include
Compression Equipment being utilized to service the customers that are parties to the CSAs at the
time of Closing consisting of at least an aggregate of 238,000 operating horsepower of compression.
In the event that the Closing Asset List indicates that any assets were inadvertently transferred
by the Contributors as part of the Assets, the applicable Recipient shall execute, deliver and
record (where appropriate) any and all instruments or other documents of transfer, conveyance and assignment, or amend or correct any such existing instruments or documents, and take such other
action as EESLP may reasonably request, as may be necessary or advisable to effect or evidence the
transfer of those assets to EESLP or such affiliate as EESLP directs. In the event that the
Closing Asset List indicates that any Contributor failed to transfer (A) any assets that are used
to provide compression services under the CSAs or (B) any CSAs as of the Closing Date, the
applicable parties shall execute, deliver and record (where appropriate) any and all instruments or other
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documents of transfer, conveyance and assignment, or amend or correct any such existing
instruments or documents, and take such other action as MLP may reasonably request, as may be
necessary or advisable to effect or evidence the transfer of those assets or CSAs in accordance
with this Agreement.
6.6 Nasdaq Listing. Prior to the Closing, MLP will use its best efforts to list, subject
to notice of issuance, the New Common Units on The Nasdaq Stock Market.
ARTICLE VII
INDEMNIFICATION
INDEMNIFICATION
7.1 Indemnification of the Contributors and Other Parties. Solely for the purpose of
indemnification in this Section 7.1, the representations and warranties of the Recipients
in this Agreement shall be deemed to have been made without regard to any materiality or Recipient
Material Adverse Effect qualifiers. From and after the Closing Date, the Recipients shall
indemnify and hold the Contributors and their affiliates (other than GP LLC, GP and the Recipients
and their respective subsidiaries), equity holders, directors, officers, employees, agents,
representatives and insurers (together with the Contributors, the “Contributor Parties”)
harmless from and against any and all damages (including exemplary damages and penalties), losses,
deficiencies, costs, expenses, obligations, fines, expenditures, claims and liabilities, including
reasonable counsel fees and reasonable expenses of investigation, defending and prosecuting
litigation (collectively, the “Damages”), suffered by the Contributor Parties as a result
of, caused by, arising out of, or in any way relating to (a) any breach of a representation or
warranty of any Recipient in this Agreement, (b) any breach of any agreement or covenant under this
Agreement on the part of any Recipient or (c) the ownership, operation or conduct of the
Businesses or the Assets on or after the Closing Date, other than those for which the Recipients
may be indemnified by the Contributors hereunder.
7.2 Indemnification of the Recipients and other Parties. Solely for the purpose of
indemnification in this Section 7.2, the representations and warranties of the Contributors
in this Agreement shall be deemed to have been made without regard to any materiality or Material
Adverse Effect qualifiers. The Contributors shall indemnify and hold GP LLC, GP and the Recipients
and their respective subsidiaries, equity holders (other than LP LLC, MLP LP LLC and any of the
Contributor Parties), directors, officers, employees, agents, representatives and insurers
(together with the Recipients, the “Recipient Parties”) harmless from and against any and
all Damages suffered by the Recipient Parties as a result of, caused by, arising out of, or in any
way relating to (a) any breach of a representation or warranty of any Contributor in this
Agreement, (b) any breach of any agreement or covenant under this Agreement on the part of any
Contributor or (c) the ownership, operation or conduct of the Business or the Assets prior to the
Closing Date.
7.3 Demands. Each indemnified party agrees that promptly upon its discovery of facts giving rise to a claim
for indemnity under the provisions of this Agreement, including receipt by it of notice of any
demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such
third party actions being collectively referred to herein as the “Indemnity Claim”), with
respect to any matter as to which it claims to be entitled to indemnity under the provisions of
this Agreement, it will give prompt notice thereof in writing to the
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indemnifying party, together with a statement of such information respecting any of the foregoing as it shall have. Such notice
shall include a formal demand for indemnification under this Agreement. The indemnifying party
shall not be obligated to indemnify the indemnified party with respect to any Indemnity Claim if
the indemnified party knowingly failed to notify the indemnifying party thereof in accordance with
the provisions of this Agreement to the extent that knowing failure to notify actually results in
material prejudice or damage to the indemnifying party.
7.4 Right to Contest and Defend. The indemnifying party shall be entitled at its cost and
expense to contest and defend by all appropriate legal proceedings any Indemnity Claim with respect
to which it is called upon to indemnify the indemnified party under the provisions of this
Agreement; provided, that notice of the intention to so contest shall be delivered by the
indemnifying party to the indemnified party within 20 days from the date of receipt by the
indemnifying party of notice by the indemnified party of the assertion of the Indemnity Claim. Any
such contest may be conducted in the name and on behalf of the indemnifying party or the
indemnified party as may be appropriate. Such contest shall be conducted and prosecuted diligently
to a final conclusion or settled in accordance with this Section 7.4 by reputable counsel
employed by the indemnifying party and not reasonably objected to by the indemnified party, but the
indemnified party shall have the right but not the obligation to participate in such proceedings
and to be represented by counsel of its own choosing at its sole cost and expense. The
indemnifying party shall have full authority to determine all action to be taken with respect
thereto; provided, however, that the indemnifying party will not have the authority to subject the
indemnified party to any obligation whatsoever, other than the performance of purely ministerial
tasks or obligations not involving material expense. If the indemnifying party does not elect to
contest any such Indemnity Claim or elects to contest such Indemnity Claim but fails diligently and
promptly to prosecute or settle such claim, the indemnifying party shall be bound by the result
obtained with respect thereto by the indemnified party. If the indemnifying party shall have
assumed the defense of an Indemnity Claim, the indemnified party shall agree to any settlement,
compromise or discharge of an Indemnity Claim that the indemnifying party may recommend and that by
its terms obligates the indemnifying party to pay the full amount of the liability in connection
with such Indemnity Claim, which releases the indemnified party completely in connection with such
Indemnity Claim and which would not otherwise adversely affect the indemnified party.
Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the
defense of any Indemnity Claim (and shall be liable for the reasonable fees and expenses of counsel
incurred by the indemnified party in defending such Indemnity Claim) if the Indemnity Claim seeks
an order, injunction or other equitable relief or relief for other than money damages against the
indemnified party which the indemnified party reasonably determines, after conferring with its
outside counsel, cannot be separated from any related claim for money damages. If such equitable
relief or other relief portion of the Indemnity Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the
defense of the portion relating to money damages.
7.5 Cooperation. If requested by the indemnifying party, the indemnified party agrees to
cooperate with the indemnifying party and its counsel in contesting any Indemnity Claim that the
indemnifying party elects to contest or, if appropriate, in making any counterclaim
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against the person asserting the Indemnity Claim, or any cross-complaint against any person, and the
indemnifying party will reimburse the indemnified party for any expenses incurred by it in so
cooperating. At no cost or expense to the indemnified party, the indemnifying party shall
cooperate with the indemnified party and its counsel in contesting any Indemnity Claim.
7.6 Right to Participate. The indemnified party agrees to afford the indemnifying party
and its counsel the opportunity to be present at, and to participate in, conferences with all
persons, including Governmental Authorities, asserting any Indemnity Claim against the indemnified
party or conferences with representatives of or counsel for such persons.
7.7 Payment of Damages. The indemnification required hereunder shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, within 10 days as
and when reasonably specific bills are received or loss, liability, claim, damage or expense is
incurred and reasonable evidence thereof is delivered. In calculating any amount to be paid by an
indemnifying party by reason of the provisions of this Agreement, the amount shall be reduced by
all tax benefits and other reimbursements (including, without limitation, insurance proceeds)
credited to or received by the other party related to the Damages.
7.8 Limitations on Indemnification.
(a) To the extent the Recipient Parties are entitled to indemnification for Damages pursuant
to Section 7.2(a) or (b), the Contributors shall not be liable for those Damages
unless the aggregate amount of Damages exceeds $2.14 million (the “Deductible”), and then
only to the extent of any such excess; provided, that the Contributors shall not be liable for
Damages that exceed, in the aggregate, $21.4 million less the Deductible.
(b) Notwithstanding clause (a) above, to the extent the Recipient Parties are entitled to
indemnification for Damages for claims pursuant to Section 7.2(c) or arising from fraud, the
Contributors shall be fully liable for such Damages without respect to the Deductible or the
limitations in Section 7.8(a).
(c) To the extent the Contributor Parties are entitled to indemnification for Damages pursuant
to Section 7.1(a) or (b), the Recipients shall not be liable for those Damages
unless the aggregate amount of Damages exceeds, in the aggregate, the Deductible, and then
only to the extent of any such excess; provided, that the Recipients shall not be liable for
Damages that exceed, in the aggregate, $21.4 million less the Deductible.
(d) Notwithstanding clause (c) above, to the extent the Contributor Parties are entitled to
indemnification for Damages pursuant to Section 7.1(c), related to the proviso in the first
sentence of Section 6.5 or for claims arising from fraud, the Recipients shall be fully
liable for such Damages without respect to the Deductible and the limitations in Section
7.8(c).
7.9 Survival.
(a) The liability of the Contributors for the breach of any of the representations and
warranties of the Contributors set forth in Sections 3.1, 3.2, 3.3 and 3.11(a) shall be
limited to claims for which the Recipients deliver written notice to the Contributors on or before
the date that is two years after the Closing Date. The liability of the Contributors for
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the breach of any of the representations and warranties of the Contributors set forth in Article
III other than those set forth in the immediately previous sentence shall be limited to claims
for which the Recipients deliver written notice to the Contributors on or before the date that is
one year after the Closing Date.
(b) The liability of the Recipients for the breach of any of the representations and
warranties of the Recipients set forth in Article IV shall be limited to claims for which
the Contributors deliver written notice to the Recipients on or before the date that is one year
after the Closing Date.
7.10 Sole Remedy. After the Closing, no party shall have liability under this Agreement or
the Transactions except as is provided in this Article VII (other than claims or causes of
action arising from fraud).
7.11 Express Negligence Rule. THE INDEMNIFICATION AND ASSUMPTION PROVISIONS PROVIDED FOR
IN THIS AGREEMENT HAVE BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND
LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, OBLIGATIONS, CLAIMS,
JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION ARISE OR AROSE SOLELY OR IN PART FROM THE
GROSS, ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF ANY
INDEMNIFIED PARTY. THE RECIPIENTS AND THE CONTRIBUTORS ACKNOWLEDGE THAT THIS STATEMENT COMPLIES
WITH THE EXPRESS NEGLIGENCE RULE AND CONSTITUTES CONSPICUOUS NOTICE. NOTICE IN THIS
CONSPICUOUS NOTICE IS NOT INTENDED TO PROVIDE OR ALTER THE RIGHTS AND OBLIGATIONS OF THE PARTIES,
ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT.
ARTICLE VIII
TERMINATION
TERMINATION
8.1 Events of Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by mutual written consent of EESLP and MLP;
(b) by either EESLP or MLP in writing after the date that is six months after the date of this
Agreement if the Closing has not occurred by that date, provided that as of that date the
terminating party is not in default under this Agreement;
(c) by either EESLP or MLP in writing without prejudice to other rights and remedies the
terminating party or its affiliates may have (provided the terminating party and its affiliates are
not otherwise in material default or breach of this Agreement, or have not failed or refused to
close without justification hereunder), if the other party or its affiliates shall have (i)
materially failed to perform its covenants or agreements contained herein required to be performed
on or prior to the Closing Date, or (ii) materially breached any of its representations or
warranties contained herein; provided, however, that in the case of clause (i) or (ii), the
defaulting party shall have a period of 30 days following written notice from the non-defaulting
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party to cure any breach of this Agreement, if the breach is curable; provided further, that for
purposes of this Section 8.1(c), the term “affiliates,” when used with respect to EESLP, shall not
include GP LLC, GP or the Recipients and their respective subsidiaries, and, when used with respect
to MLP, shall not include LP LLC, MLP LP LLC or the Contributor Parties;
(d) by either EESLP or MLP in writing, without liability, if there shall be any order, writ,
injunction or decree of any Governmental Authority binding on the parties that prohibits or
restrains any party from consummating the Transactions; provided, that the applicable party
shall have used its reasonable best efforts to have any such order, writ, injunction or decree
removed but it shall not have been removed within 30 days after entry by the Governmental
Authority; or
(e) by EESLP, if any Governmental Authority shall have indicated that any Contributor may be
required to accept any condition or requirement of any regulatory approval that is or could
reasonably be determined to be adverse to that Contributor or EXH.
8.2 Effect of Termination. In the event of the termination of this Agreement by a party as
provided in Section 8.1, this Agreement shall thereafter become void except for this
Section 8.2 and Section 9.3. Nothing in this Section 8.2 shall be deemed
to release any party from any liability for any breach by such party of the terms and provisions of
this Agreement or to impair any rights of any party under this Agreement. If this Agreement is
terminated by MLP pursuant to Section 8.1(c), then EESLP shall reimburse MLP for its
out-of-pocket expenses incurred in connection with the negotiation, execution and performance of
this Agreement (including legal fees and fees paid to Xxxxxxx Xxxxxxxx, in either case incurred by
the MLP or the Conflicts Committee). If this Agreement is terminated by EESLP pursuant to
Section 8.1(e), then EESLP shall reimburse MLP for 50% of
its out-of-pocket expenses incurred in connection with the negotiation, execution and performance
of this Agreement (including legal fees and fees paid to Xxxxxxx Xxxxxxxx, in either case incurred
by the MLP or the Conflicts Committee).
ARTICLE IX
MISCELLANEOUS
MISCELLANEOUS
9.1 Transfer Restrictions. For a 180-day period beginning on the Closing Date, neither the
New Common Units nor any interest therein shall be transferable by MLP LP LLC without the prior
written consent of MLP, except for transfers to affiliated entities of the Contributors in
compliance with the provisions of the Securities Act, and the rules and regulations thereunder.
MLP shall require (in form and substance reasonably satisfactory to MLP) any proposed permitted
transferee of any such New Common Units or any interest therein to be acquired from MLP LP LLC to
agree to take and hold such New Common Units or any interest therein subject to the provisions and
upon the conditions specified in this Section 9.1. Any transfer of those New Common Units
or any interest therein otherwise than in accordance with the terms of this Agreement shall be null
and void.
9.2 Registration Rights of MLP LP LLC and its Affiliates.
(a) If (i) MLP LP LLC or any affiliate of MLP LP LLC (including for purposes of this
Section 9.2, any affiliate of MLP LP LLC as of the date hereof notwithstanding
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that it may later cease to be an affiliate of MLP LP LLC) desires to sell New Common Units and (ii) Rule 144 of
the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from
registration is not available to enable such holder of New Common Units (the “Holder”) to
dispose of the number of New Common Units it desires to sell at the time it desires to do so
without registration under the Securities Act, then at the option and upon the request of the
Holder, MLP shall file with the United States Securities and Exchange Commission (the
“Commission”) as promptly as practicable after receiving such request, and use all
commercially reasonable efforts to cause to become effective and remain effective for a period of
not less than six months following its effective date or such shorter period as shall terminate
when all New Common Units covered by such registration statement have been sold, a registration
statement under the Securities Act registering the offering and sale of the number of New Common
Units specified by the Holder; provided, however, that MLP shall not be required to effect more
than three registrations pursuant to this Section 9.2(a) and Section 9.2(b); and
provided further, however, that if the Conflicts Committee determines that the requested
registration would be materially detrimental to MLP or the limited partners of MLP (other than
EESLP and its subsidiaries) because such registration would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving MLP, (y) require
premature disclosure of material information that MLP has a bona fide business purpose for
preserving as confidential or (z) render MLP unable to comply with requirements under applicable
securities laws, then MLP shall have the right to postpone such requested registration for a period
of not more than three months after receipt of the Holder’s request, such right pursuant to this
Section 9.2(a) or Section 9.2(b) not to be utilized more than twice in any 12-month
period. In connection with any registration pursuant to the first sentence of this Section 9.2(a), MLP shall
(i) promptly prepare and file (A) such documents as may be necessary to register or qualify the
securities subject to such registration under the securities laws of such states as the Holder
shall reasonably request; provided, however, that no such qualification shall be required in any
jurisdiction where, as a result thereof, MLP would become subject to general service of process or
to taxation or qualification to do business as a foreign corporation or partnership doing business
in such jurisdiction solely as a result of such registration, and (B) such documents as may be
necessary to apply for listing or to list the New Common Units subject to such registration on a
national securities exchange as the Holder shall reasonably request, and (ii) use commercially
reasonable efforts to do any and all other acts and things that may be necessary or appropriate to
enable the Holder to consummate a public sale of such New Common Units in such states. Except as
set forth in Section 9.2(d), all costs and expenses of any such registration and offering
(other than the underwriting discounts and commissions and excluding the legal fees and other
expenses incurred by the Holder) shall be paid by MLP, without reimbursement by the Holder.
(b) If any Holder holds New Common Units that it desires to sell and Rule 144 of the
Securities Act (or any successor rule or regulation to Rule 144) or another exemption from
registration is not available to enable such Holder to dispose of the number of New Common Units it
desires to sell at the time it desires to do so without registration under the Securities Act, then
at the option and upon the request of the Holder, MLP shall file with the Commission as promptly as
practicable after receiving such request, and use all reasonable efforts to cause to become
effective and remain effective for a period of not less than six months following its effective
date or such shorter period as shall terminate when all New Common Units covered by a shelf
registration statement have been sold, a “shelf” registration statement covering the New Common
Units specified by the Holder on an appropriate form under Rule 415
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under the Securities Act, or any similar rule that may be adopted by the Commission; provided,
however, that MLP shall not be required to effect more than three registrations pursuant to
Section 9.2(a) and this Section 9.2(b); and provided further, however, that if the
Conflicts Committee determines in good faith that any offering under, or the use of any prospectus
forming a part of, the shelf registration statement would be materially detrimental to MLP and its
Partners because such offering or use would (x) materially interfere with a significant
acquisition, reorganization or other similar transaction involving MLP, (y) require premature
disclosure of material information that MLP has a bona fide business purpose for preserving as
confidential or (z) render MLP unable to comply with requirements under applicable securities laws,
then MLP shall have the right to suspend such offering or use for a period of not more than three
months after receipt of the Holder’s request, such right pursuant to Section 9.2(a) or this
Section 9.2(b) not to be utilized more than twice in any 12-month period.
(c) Except as provided in the first sentence of each of subsections (a) and (b) of this
Section 9.2, MLP shall be deemed not to have used all reasonable efforts to keep the
registration statement effective during the applicable period if it voluntarily takes any action
that would result in Holders of New Common Units covered thereby not being able to offer and sell
such New Common Units at any time during such period, unless such action is required by applicable
law.
(d) If MLP shall at any time propose to file a registration statement under the Securities Act
for an offering of equity securities of MLP for cash (other than an offering relating solely to an
employee benefit plan), MLP shall use all reasonable efforts to provide the Holders notice of its
intention to file such registration statement and shall use all reasonable efforts to include such
number or amount of securities held by the Holder in such registration statement as the Holder
shall request; provided, that MLP is not required to make any effort or take any action to so
include the securities of the Holder once the registration statement is declared effective by the
Commission or otherwise becomes effective, including any registration statement providing for the
offering from time to time of securities pursuant to Rule 415 of the Securities Act. If the
proposed offering pursuant to this Section 9.2(d) shall be an underwritten offering, then,
if the managing underwriter or managing underwriters of such offering advise MLP and the Holder in
writing that in their opinion the inclusion of all or some of the Holder’s New Common Units would
adversely and materially affect the success of the offering, MLP shall include in such offering
only that number or amount, if any, of securities held by the Holder that, in the opinion of the
managing underwriter or managing underwriters, will not adversely and materially affect the
offering. All costs and expenses of any such registration and offering (other than the underwriting
discounts and commissions and excluding the legal fees and other expenses incurred by the Holder)
shall be paid by MLP, without reimbursement by the Holder.
(e) The provisions of Section 9.2(a), Section 9.2(b) and Section
9.2(d) shall continue to be applicable with respect to MLP LP LLC (and any of MLP LP LLC’s
affiliates) after GP ceases to be a general partner of MLP, during a period of two years subsequent
to the effective date of such cessation and for so long thereafter as is required for the Holder to
sell all of the New Common Units with respect to which it has requested during such two-year period
inclusion in a registration statement otherwise filed or that a registration statement be filed;
provided, however, that MLP shall not be required to file successive registration statements
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covering the same New Common Units for which registration was demanded during such two-year
period. The provisions of Section 9.2(d) shall continue in effect thereafter.
(f) The rights to cause MLP to register New Common Units pursuant to this Section 9.2
may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of
such New Common Units if (i) MLP is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the number of New Common
Units with respect to which such registration rights are being assigned and (ii) such transferee or
assignee agrees in writing to be bound by and subject to the terms set forth in this Section
9.2.
(g) Any request to register New Common Units pursuant to this Section 9.2 shall (i)
specify the New Common Units intended to be offered and sold by the person making the request, (ii)
express such person’s present intent to offer such New Common Units for distribution, (iii)
describe the nature or method of the proposed offer and sale of New Common Units, and (iv) contain
the undertaking of such Person to provide all such information and materials and take all action as
may be required in order to permit MLP to comply with all applicable requirements in connection
with the registration of such New Common Units.
9.3 Expenses. Except as otherwise set forth herein, each party hereto shall pay its own
expenses incident to this Agreement and all action taken in preparation for effecting the
provisions of this Agreement.
9.4 Notices. Any notice, request, instruction, correspondence or other document to be given
hereunder by either party to the other shall be in writing and delivered in person or by courier
service requiring acknowledgment of receipt of delivery or mailed by certified mail, postage
prepaid and return receipt requested, or by telecopier, as follows:
If to the Contributors or any other party except the Recipients, addressed to:
Exterran Energy Solutions, L.P.
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
with a copy, which will not constitute notice, to:
Xxxxx Xxxxx L.L.P.
One Shell Plaza
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
One Shell Plaza
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
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If to the Recipients, addressed to:
Exterran Partners, L.P.
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
with a copy, which will not constitute notice, to:
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
Notice given by personal delivery, courier service or telecopier shall be effective upon actual
receipt. Notice given by mail shall be effective at the close of business on the third business
day following the day when placed in the mail, certified, with postage prepaid and return receipt
requested, appropriately addressed. Any party may change any address to which notice is to be
given to it by giving notice as provided above of such change of address.
9.5 Governing Law. This Agreement shall be governed and construed in accordance with the
substantive laws of the State of Texas without reference to principles of conflicts of law that
would result in the application of the laws of another jurisdiction.
9.6 Public Statements. The parties hereto shall consult with each other and no party shall
issue any public announcement or statement with respect to the Transactions without the consent of
the other parties, which shall not be unreasonably withheld or delayed, unless the party desiring
to make such announcement or statement, after seeking such consent from the other parties, obtains
advice from legal counsel that a public announcement or statement is required by applicable law or
stock exchange regulations.
9.7 Form of Payment. All payments hereunder shall be made in United States dollars and, unless
the parties making and receiving such payments shall agree otherwise or the provisions hereof
provide otherwise, shall be made by wire or interbank transfer of immediately available funds by
12:00 noon Houston, Texas time on the date such payment is due to such account as the party
receiving payment may designate at least three business days prior to the proposed date of payment.
9.8 Entire Agreement; Amendments and Waivers. This Agreement and the documents and instruments and other agreements specifically referred to
herein or delivered pursuant hereto, including the schedules hereto (collectively, the
“Constituent Documents”), (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof and (b) are not
intended to confer upon any other person or entity any rights or remedies hereunder except as
Article VII or Article IX contemplates or
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except as otherwise expressly provided
herein or therein. Each party to this Agreement agrees that (i) no other party to this Agreement
(including its agents and representatives) has made any representation, warranty, covenant or
agreement to or with such party relating to this Agreement or the transactions contemplated hereby,
other than those expressly set forth in the Constituent Documents, and (ii) such party has not
relied upon any representation, warranty, covenant or agreement relating to this Agreement or the
Transactions other than those referred to in clause (i) above. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by each party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
9.9 Binding Effect and Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and assigns, but, except as
provided in Section 9.2(f), neither this Agreement nor any of the rights, benefits or obligations
hereunder shall be assigned, by operation of law or otherwise, by any party hereto without the
prior written consent of the other parties.
9.10 Severability. If any provision of the Agreement is rendered or declared illegal or
unenforceable by reason of any existing or subsequently enacted legislation or by decree of a court
of last resort, the parties shall meet promptly and negotiate substitute provisions for those
rendered or declared illegal or unenforceable, but all of the remaining provisions of this
Agreement shall remain in full force and effect and will not be affected or impaired in any way
thereby.
9.11 Interpretation. The parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or document.
9.12 Headings and Schedules. The headings of the several Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement. The schedules referred to herein are attached hereto
and incorporated herein by this reference, and unless the context expressly requires otherwise,
those schedules are incorporated in the definition of “Agreement.”
9.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
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EXECUTED as of the date first set forth above.
EXTERRAN HOLDINGS, INC. |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | President and Chief Executive Officer | |||
EXTERRAN ENERGY SOLUTIONS, L.P. |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | President and Chief Executive Officer | |||
EES LEASING LLC |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Chief Executive Officer | |||
EXH GP LP LLC |
||||
By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxx | |||
Title: | Manager | |||
EXTERRAN GP LLC |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President and Chief Financial Officer | |||
EXH MLP LP LLC |
||||
By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxx | |||
Title: | Manager | |||
Contribution Agreement Signature Page
EXTERRAN GENERAL PARTNER, L.P. |
||||
By: | Exterran GP LLC, its general partner |
|||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President and Chief Financial Officer | |||
EXLP OPERATING LLC |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President and Chief Financial Officer | |||
EXLP LEASING LLC |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President and Chief Financial Officer | |||
EXTERRAN PARTNERS, L.P. |
||||
By: | Exterran General Partner, L.P., its general partner |
|||
By: | Exterran GP LLC, its general partner |
|||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | Vice President and Chief Financial Officer | |||
Contribution Agreement Signature Page