CONTRIBUTION AGREEMENT BY AND AMONG REGENCY HAYNESVILLE INTRASTATE GAS LLC, AND THE INVESTORS
Exhibit B
BY AND AMONG
REGENCY HAYNESVILLE INTRASTATE GAS LLC,
AND
THE INVESTORS
TABLE OF CONTENTS
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ARTICLE 1 |
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DEFINITIONS; INTERPRETATION |
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Section 1.1 | Definitions
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Section 1.2 | Headings; References; Interpretation
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ARTICLE 2 |
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CONTRIBUTIONS, PAYMENTS AND CLOSING |
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Section 2.1 | Pre-Closing Matters
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Section 2.2 | Contributions and Payments
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4 | ||||
Section 2.3 | Closing
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5 | ||||
Section 2.4 | Closing Deliveries
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5 | ||||
ARTICLE 3 |
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REPRESENTATIONS AND WARRANTIES OF REGENCY HIG |
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Section 3.1 | Organization; Qualification
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7 | ||||
Section 3.2 | Authority; Enforceability
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8 | ||||
Section 3.3 | No Violation; Consents and Approvals
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8 | ||||
Section 3.4 | Capitalization; Ownership of RIGS Interests
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9 | ||||
Section 3.5 | Compliance with Law
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10 | ||||
Section 3.6 | Title to Properties and Assets
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10 | ||||
Section 3.7 | Financial Statements
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11 | ||||
Section 3.8 | Environmental Matters
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12 | ||||
Section 3.9 | Material Contracts
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13 | ||||
Section 3.10 | Legal Proceedings
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14 | ||||
Section 3.11 | Permits
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14 | ||||
Section 3.12 | Taxes
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14 | ||||
Section 3.13 | Employees
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Section 3.14 | Brokers’ Fee
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Section 3.15 | Insurance
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Section 3.16 | Intellectual Property
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Section 3.17 | Regulatory Status
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Section 3.18 | Confidentiality
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Section 3.19 | Books and Records
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Section 3.20 | Solvency
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Section 3.21 | Haynesville Expansion
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Section 3.22 | HSR
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Section 3.23 | Internal Controls
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ARTICLE 4 |
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REPRESENTATIONS AND WARRANTIES OF THE INVESTORS |
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Section 4.1 | Organization; Existence and Good Standing
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19 | ||||
Section 4.2 | Authority; Enforceability
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19 |
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Section 4.3 | No Violation; Consents and Approvals
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Section 4.4 | Brokers’ Fee
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Section 4.5 | Financial Ability
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20 | ||||
Section 4.6 | HSR
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20 | ||||
ARTICLE 5 |
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INDEMNIFICATION |
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Section 5.1 | Survival
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Section 5.2 | Indemnification by Regency HIG
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21 | ||||
Section 5.3 | Indemnification by the Investors
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21 | ||||
Section 5.4 | Indemnification by the Company
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22 | ||||
Section 5.5 | Haynesville Cost Overruns
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22 | ||||
Section 5.6 | No Effect on Other Agreements
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22 | ||||
Section 5.7 | Indemnification Procedures
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22 | ||||
Section 5.8 | Limits on Indemnification
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Section 5.9 | Satisfaction of Claims for Indemnification
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24 | ||||
Section 5.10 | Independent Investigation; Waiver of Other Representations
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25 | ||||
ARTICLE 6 |
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COVENANTS |
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Section 6.1 | Formation of the Company; Joinder; Related Matters
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27 | ||||
Section 6.2 | Tax Effect
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27 | ||||
Section 6.3 | Tax Matters
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Section 6.4 | Further Assurances
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28 | ||||
Section 6.5 | Expenses
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Section 6.6 | Public Statements
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29 | ||||
Section 6.7 | Operation of the Assets
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Section 6.8 | Haynesville Expansion Project
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Section 6.9 | Information, Access and Assistance
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Section 6.10 | Exclusivity
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Section 6.11 | Xxxxxx Capital Call
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Section 6.12 | Expenses Paid Post-Closing
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Section 6.13 | Historical Financial Statements
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ARTICLE 7 |
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CONDITIONS PRECEDENT |
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Section 7.1 | Conditions to Each Party’s Obligations
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32 | ||||
Section 7.2 | Conditions to the Investor’s Obligations
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33 | ||||
Section 7.3 | Conditions to Regency HIG’s Obligations
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34 | ||||
ARTICLE 8 |
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TERMINATION |
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Section 8.1 | Termination
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Section 8.2 | Effect of Termination
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35 | ||||
Section 8.3 | Break up Fee
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35 |
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ARTICLE 9 |
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GENERAL PROVISIONS |
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Section 9.1 | Notices
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35 | ||||
Section 9.2 | Binding Effect
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36 | ||||
Section 9.3 | No Third Party Rights
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Section 9.4 | No Waiver
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Section 9.5 | Applicable Law
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Section 9.6 | Severability
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Section 9.7 | Amendment or Modification
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Section 9.8 | Assignment
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37 | ||||
Section 9.9 | Conspicuousness of Provisions
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Section 9.10 | Counterparts
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Section 9.11 | No Recourse
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Section 9.12 | Entire Agreement; Supersedure
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Section 9.13 | Disclosure Schedules
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38 | ||||
Section 9.14 | Reliance on Counsel
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Section 9.15 | Several Obligations
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39 |
EXHIBITS |
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Exhibit A
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Defined Terms | |
Exhibit B-1
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Xxxxxx I Parent Guarantee | |
Exhibit B-2
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Xxxxxx XX Parent Guarantee | |
Exhibit B-3
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RGS Guarantee | |
Exhibit C
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Company Partnership Agreement | |
Exhibit D
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Services Agreement | |
Exhibit E
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RIGS Assignment and Assumption Agreement | |
Exhibit F
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Cash Investment Amount and GP Units | |
Exhibit G-1
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AMI Agreement | |
Exhibit G-2
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Management Rights Letter | |
Exhibit H
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Pipeline Construction Contract | |
Exhibit I
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Compression Contracts | |
Exhibit J
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Firm Transportation Contracts | |
Exhibit K
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Haynesville Shale Expansion Project | |
SCHEDULES |
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Schedule 1.1
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Knowledge of Individuals | |
Schedule 2.1(a)
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Working Capital | |
Schedule 3.3
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Certain Consents or Approvals | |
Schedule 3.5
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Compliance with Law | |
Schedule 3.6(a)-1
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Certain Owned Real Property | |
Schedule 3.6(a)-2
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Certain Leased Real Property | |
Schedule 3.6(b)-1
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Certain Real Property Matters | |
Schedule 3.6(b)-2
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Certain Easements | |
Schedule 3.6(c)
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Certain Personal Property | |
Schedule 3.6(d)-1
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Existing RIGS Pipeline Map | |
Schedule 3.6(d)-2
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Certain Other Real Property Matters | |
Schedule 3.6(e)
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Real Property Consents or Approvals | |
Schedule 3.6(f)
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Certain Assets | |
Schedule 3.6(g)
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Owned Real Property | |
Schedule 3.6(h)
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Leased Real Property | |
Schedule 3.7
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Pro Forma Balance Sheet and Related Matters | |
Schedule 3.8(a)
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Environmental Matters | |
Schedule 3.9(a)
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Material Contracts | |
Schedule 3.9(b)
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Certain Material Contracts | |
Schedule 3.10
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Legal Proceedings | |
Schedule 3.11
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Permits | |
Schedule 3.12
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Tax Matters | |
Schedule 3.15
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Insurance | |
Schedule 3.16
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Intellectual Property | |
Schedule 3.17
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Certain Regulatory Matters | |
Schedule 3.18
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Confidentiality | |
Schedule 3.21
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Haynesville Expansion Project | |
Schedule 3.21(d)
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Haynesville Expansion Project Map | |
Schedule 6.7
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Operation of the Assets |
THIS CONTRIBUTION AGREEMENT, dated as of February 26, 2009 (the “Execution Date”), is entered
into by and among Regency Haynesville Intrastate Gas LLC, a Delaware limited liability company
(“Regency HIG”), General Electric Capital Corporation, a Delaware corporation (the “GE Investor”),
Xxxxxx Gas Pipeline I, L.P., a Delaware limited partnership (“Xxxxxx Investor 1”) and Xxxxxx Gas
Pipeline II, L.P., a Delaware limited partnership (“Xxxxxx Investor 2,” and collectively with
Xxxxxx Investor 1, the “Xxxxxx Investors”). The GE Investor and the Xxxxxx Investors are
collectively referred to herein as the “Investors.” The parties to this Agreement are collectively
referred to herein as the “Parties.”
R E C I T A L S
WHEREAS, on February 26, 2009, Regency HIG and Regency Gas Services LP (“RGS”) entered into
that certain initial Assignment and Assumption Agreement pursuant to which RGS contributed to
Regency HIG all of the issued and outstanding equity interests (the “RIGS Interests”) of Regency
Intrastate Gas LLC, a Delaware limited liability company (“RIGS”);
WHEREAS, prior to the Closing, Regency HIG and an Affiliate of Regency HIG will form RIGS
Haynesville Partnership Co., a Delaware general partnership (the “Company”), pursuant to the Act,
for the purposes described in the Company Partnership Agreement;
WHEREAS, concurrent with the execution and delivery of this Agreement Xxxxxx Infrastructure
Fund II, L.P. (the “Xxxxxx Investor I Parent”), the wholly-owning indirect parent of Xxxxxx
Investor 1, shall execute and deliver that certain Xxxxxx Parent Guarantee in the form attached
hereto as Exhibit B-1, (the “Xxxxxx I Parent Guarantee”), Xxxxxx Infrastructure Parallel
Fund II, L.P. (the “Xxxxxx Investor II Parent”), the wholly-owning indirect parent of Xxxxxx
Investor 2, shall execute and deliver that certain Xxxxxx Parent Guarantee in the form attached
hereto as Exhibit B-2 (the “Xxxxxx XX Parent Guarantee” and collectively with the Xxxxxx I
Parent Guarantee, the “Xxxxxx Parent Guarantees”), and RGS, the sole member of Regency HIG, shall
execute and deliver that certain RGS Guarantee in the form attached hereto as Exhibit B-3
(the “RGS Guarantee”), each of which shall become effective upon such execution and delivery;
WHEREAS, at the Closing Regency HIG and the Investors (collectively, the “Partners”) shall
execute and deliver that certain Amended and Restated General Partnership Agreement of the Company
substantially in the form attached hereto as Exhibit C (the “Company Partnership
Agreement”), which Company Partnership Agreement shall become effective at the Closing;
WHEREAS, at the Closing Regency Employees Management LLC and the Company shall execute and
deliver that certain Master Services Agreement substantially in the form attached hereto as
Exhibit D (the “Services Agreement”), which Services Agreement shall become effective at
the Closing;
WHEREAS, at the Closing Regency HIG and the Company shall execute and deliver that certain
Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit E
(the “RIGS Assignment and Assumption Agreement”), which RIGS Assignment and
Assumption Agreement shall evidence the transfer of the RIGS Interests from Regency HIG to the
Company and which shall become effective at the Closing;
WHEREAS, subject to the terms and conditions of this Agreement, each Investor desires to
contribute to the Company, and the Company desires to accept from each Investor, certain cash
consideration in exchange for the general partner units in the Company (“GP Units”) to be issued to
such Investor as contemplated herein; and
WHEREAS, subject to the terms and conditions of this Agreement, Regency HIG desires to
contribute to the Company, and the Company desires to accept from Regency HIG, the RIGS Interests
in exchange for the GP Units to be issued to Regency HIG and certain cash distributions by the
Company to Regency HIG as contemplated herein.
A G R E E M E N T S
NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the
Parties undertake and agree as follows:
ARTICLE 1
DEFINITIONS; INTERPRETATION
DEFINITIONS; INTERPRETATION
Section 1.1 Definitions. Capitalized terms used in this Agreement but not defined herein
shall have the meanings ascribed to them in Exhibit A.
Section 1.2 Headings; References; Interpretation. In this Agreement, unless a clear contrary
intention appears (a) the singular includes the plural and vice versa; (b) reference to a Person
includes such Person’s successors and assigns but, in the case of a Party, only if such successors
and assigns are permitted by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity; (c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement), document or instrument means such
agreement, document, or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of this Agreement; (e) reference to
any Section or Article means such Section or Article of this Agreement, and references in any
Section or Article or definition to any clause means such clause of such Section, Article or
definition; (f) “hereunder,” “hereof,” “hereto” and words of similar import are references to this
Agreement as a whole and not to any particular provision hereof; (g) the word “or” is not
exclusive, and the word “including” (in its various forms) means including without limitation; (h)
each accounting term not otherwise defined in this Agreement has the meaning commonly applied to it
in accordance with GAAP; and (i) all references to money refer to the lawful currency of the United
States. Section titles and headings in this Agreement 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.
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ARTICLE 2
CONTRIBUTIONS, PAYMENTS AND CLOSING
CONTRIBUTIONS, PAYMENTS AND CLOSING
Section 2.1 Pre-Closing Matters.
(a) Pre-Closing Expenditures and Working Capital.
(i) At least three Business Days before the proposed Closing Date, Regency HIG shall
provide the Investors with its good faith estimate of the Pre-Closing Expenditures (the
“Estimated Pre-Closing Expenditures”) together with any supporting information reasonably
requested by the Investors. At least three Business Days before the proposed Closing Date,
Regency HIG shall provide the Investors its good faith estimate of Working Capital as of the
Closing Date (the “Estimated Working Capital”), together with any supporting information
reasonably requested by the Investors. Attached as Schedule 2.1(a) is an agreed
upon template that includes the methodology that shall be used by Regency HIG in preparing
Estimated Working Capital and Working Capital.
(ii) As soon as practicable, but in no event later than 90 days after the Closing Date,
Regency HIG shall update and provide to the Investors its calculation of (A) the Pre-Closing
Expenditures and (B) Working Capital as of the Closing Date based on the methodologies set
forth in Schedule 2.1(a).
(iii) Regency HIG and the Investors shall have full access to documents and information
to the extent reasonably necessary to prepare and evaluate the calculation of the Adjustment
Items. Any Investor may dispute Regency HIG’s calculation of the Adjustment Items by
delivering to Regency HIG and the other Investors, within 20 Business Days of its receipt of
the calculation, a written notice (a “Dispute Notice”), which shall specify the elements of
the calculation of the Adjustment Items that such Investor disputes. Any elements of
Regency HIG’s calculations of the Adjustment Items not so specified as challenged or
disputed in the Dispute Notice shall be deemed accepted by all Parties and shall not be
subject to subsequent challenge by any Party for any purpose.
(iv) If any Investor timely delivers a Dispute Notice, Regency HIG and the Investors
will seek to resolve the dispute by negotiations among such Parties. Any such resolution
(including any resolution of less than all the items disputed in the Dispute Notice) shall
be binding upon all the Parties. If, however, within 20 days following the delivery of a
Dispute Notice, Regency HIG and the Investors have not fully resolved the Dispute Notice
(each a “Remaining Dispute”), then either Regency HIG or any Investor may initiate binding
arbitration of the Remaining Disputes by giving written notice of an intent to arbitrate to
the other Parties. The arbitrator for such Remaining Disputes shall be a partner in a
nationally recognized firm of independent public accountants mutually acceptable to Regency
HIG and the Investors; if, however, Regency HIG and the GE Investor and the Xxxxxx Investors
have not agreed on the selection of the arbitrator within ten days following the delivery
of a notice of intent to arbitrate, then each such Party shall select (and notify in writing
the other Party of such selection) as a “Selector” a
3
partner at a nationally recognized firm of independent public accountants, and these
two Selectors shall select, within ten days of delivery of the last such notice of
selection, a partner in a nationally recognized firm of independent public accountants who
shall serve as the arbitrator to resolve the Remaining Disputes. The Parties will cooperate
with this arbitrator and timely provide him or her with all information as such arbitrator
shall request. The arbitrator shall be directed to resolve the Remaining Disputes as
promptly as practicable and to provide the Parties with a written decision regarding his or
her decision on each Remaining Dispute, but in no case later than 30 days after the
arbitrator has been selected. The decision by the arbitrator selected pursuant to this
Section 2.1(a)(iv) with respect to each Remaining Dispute shall be binding on all
Parties for all purposes.
(v) Promptly, but in all events within three Business Days following the agreement or
resolution pursuant to this Section 2.1 of all disputes regarding the calculations
of the Adjustment Items, (A) if the Regency Closing Payment shall be greater than the Total
Adjustment Items, Regency HIG shall pay the Company cash in an amount equal to the positive
difference between the Regency Closing Payment and the Total Adjustment Items; and (B) if
the Total Adjustment Items shall be greater than the Regency Closing Payment, the Company
shall pay Regency HIG cash in an amount equal to the positive difference between the Total
Adjustment Items and the Regency Closing Payment. For avoidance of doubt, any amounts due
from any Party pursuant to this Section 2.1(a)(v) shall not be subject to the
provisions of Article 5.
(b) Pre-Closing Cash Balances. For the avoidance of doubt, (i) the Parties
acknowledge and agree that all cash balances of RIGS and the Company immediately prior to the
Closing shall be the property of Regency HIG and (ii) notwithstanding any other provisions of this
Agreement to the contrary (including Section 6.7), Regency HIG shall be entitled to cause
RIGS and the Company to distribute all cash balances of RIGS and the Company to Regency HIG prior
to the Closing.
Section 2.2 Contributions and Payments. Subject to the terms and conditions of this
Agreement, at the Closing, the following contributions, unit issuances and payments shall be made:
(a) Each Investor shall contribute to the Company in immediately available funds, to an
account designated by the Company to the Investors (which account shall be so designated no later
than two Business Days prior to the Closing), the amount set forth opposite such Investor’s name in
the column entitled “Cash Investment Amount” on Exhibit F in exchange for the number of GP
Units set forth opposite such Investor’s name in the column entitled “GP Units” on Exhibit
F. In its capacity as a holder of such GP Units and as a Partner, each Investor shall have the
obligations set forth in the Company Partnership Agreement with respect to the contribution of
additional capital to the Company, but shall have no other obligation to contribute any additional
capital to the Company, except as otherwise expressly provided in the Company Partnership
Agreement.
(b) Regency HIG shall contribute to the Company, pursuant to the RIGS Assignment and
Assumption Agreement, all of the RIGS Interests in exchange for the GP Units
4
set forth opposite Regency HIG’s name in the column entitled “GP Units” on Exhibit F.
In its capacity as a holder of such GP Units and as a Partner, Regency HIG shall have no obligation
to contribute any additional capital to the Company, except as otherwise expressly provided in the
Company Partnership Agreement.
(c) The Company shall distribute to Regency HIG in immediately available funds, to an account
designated by Regency HIG to the Company (which account shall be so designated no later than two
Business Days prior to the Closing), an amount equal to the Regency Closing Payment. To avoid
characterization of such distribution as a sale of a portion of the Assets to the Company, Regency
HIG shall provide the Management Committee with information reasonably requested by the Management
Committee to avoid treating such distribution as part of a sale under Code Section 707.
Section 2.3 Closing. Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of
Xxxxxx & Xxxxxx LLP, First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 on
either (a) the date that all of the conditions precedent set forth in Article 7 have been
satisfied (other than those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or due waiver of those conditions), or if permissible, waived, but no
earlier than the first Business Day that is 11 Business Days after the date on which the conditions
precedent set forth in Section 7.1(c), Section 7.2(d) and Section 7.2(e)
have been satisfied, or if permissible, waived, and Regency HIG has notified the Xxxxxx Investors
that all other conditions to Closing set forth in Article 7 that are not within the control
of the Xxxxxx Investors will be satisfied without undue delay, or (b) at such other place, time and
date as is agreed to in writing by the Parties (the “Closing Date”). The Closing will be deemed
effective as of 11:59 p.m., Houston, Texas time on the Closing Date.
Section 2.4 Closing Deliveries.
(a) Investor Deliveries. At the Closing, each Investor will execute and deliver, or
cause to be executed and delivered, to the other Parties, as applicable, each of the following
documents, where the execution or delivery of documents is contemplated, and will take or cause to
be taken the following actions, where the taking of action is contemplated:
(i) a certificate of the Secretary of State of the jurisdiction in which it is
organized, dated not more than five days prior to the Closing Date, as to its existence and
good standing;
(ii) a certificate of an officer of such Investor providing the following documents and
certifying that each is a true and correct copy: (A) the Organizational Documents of such
Investor and (B) resolutions of such Investor’s governing body authorizing the transactions
contemplated hereby (including designation of the Persons authorized to execute this
Agreement on behalf of such Investor and the Transaction Documents to which it is a party);
(iii) a duly executed counterpart of the Company Partnership Agreement;
5
(iv) a certificate of an officer of such Investor, dated as of the Closing Date,
certifying that all of the conditions set forth in Section 7.3(a) have been
satisfied; and
(v) pay to the Company in immediately available funds the amount applicable to it as
referred to in Section 2.2(a).
(b) Regency HIG Deliveries. At the Closing, Regency HIG will execute and deliver, or
cause to be executed and delivered, to the other Parties, as applicable, each of the following
documents, where the execution or delivery of documents is contemplated, and will take or cause to
be taken the following actions, where the taking of action is contemplated:
(i) certificates of the Secretary of State of the State of Delaware, dated not more
than five days prior to the Closing Date, as to the existence and good standing of Regency
HIG and RIGS;
(ii) with respect to Regency HIG, a certificate of an officer of Regency HIG providing
the following documents and certifying that each is a true and correct copy: (A) its
Organizational Documents and (B) resolutions of its governing body authorizing the
transactions contemplated hereby (including designation of the Persons authorized to execute
this Agreement on behalf of it and the Transaction Documents to which it is a party);
(iii) with respect to RIGS, a certificate of an officer of RIGS providing its
Organizational Documents and certifying that they are a true and correct copy;
(iv) a duly executed counterpart of the Company Partnership Agreement;
(v) a duly executed counterpart for Regency Employees Management LLC of the Services
Agreement;
(vi) a duly executed counterpart of the RIGS Assignment and Assumption Agreement;
(vii) a duly executed counterpart for the MLP of the Area of Mutual Interest Agreement
substantially in the form attached hereto as Exhibit G-1 (the “AMI Agreement”),
which shall become effective at the Closing;
(viii) a certificate of an officer of Regency HIG, dated as of the Closing Date,
certifying that all of the conditions set forth in Section 7.2(a) have been
satisfied; and
(ix) a certification of non-foreign status of Regency HIG in the form described in
Treasury Regulation Section 1.1445-2(b).
(c) Company Deliveries. At the Closing, the Company will execute and deliver, or
cause to be executed and delivered, to the other Parties, as applicable, each of the
6
following documents, where the execution or delivery of documents is contemplated, and will
take or cause to be taken the following actions, where the taking of action is contemplated:
(i) a certificate of the Secretary of State of the State of Delaware, dated not more
than five days prior to the Closing Date, as to the existence and good standing of the
Company;
(ii) a copy of the Certificate of Partnership Existence of the Company certified by the
Secretary of State of the State of Delaware;
(iii) a duly executed counterpart of the Services Agreement;
(iv) pay to Regency HIG in immediately available funds the amount referred to in
Section 2.2(c);
(v) a duly executed counterpart of the RIGS Assignment and Assumption Agreement;
(vi) a duly executed counterpart of the AMI Agreement; and
(vii) a duly executed Management Rights Letter substantially in the form attached
hereto as Exhibit G-2.
The transactions described in this Article 2 are referred to herein collectively as
the “Transactions.” The “Transaction Documents” shall mean this Agreement, the Xxxxxx Parent
Guarantees, the RGS Guarantee, the Company Partnership Agreement, the Services Agreement, the RIGS
Assignment and Assumption Agreement and the AMI Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REGENCY HIG
REPRESENTATIONS AND WARRANTIES OF REGENCY HIG
Regency HIG hereby makes the following representations and warranties to the Investors:
Section 3.1 Organization; Qualification. Each of the MLP, RGS, Regency HIG and RIGS is a
limited partnership or limited liability company, as the case may be, duly organized, validly
existing and in good standing under the laws of the State of Delaware. Immediately prior to the
Closing, the Company will be a general partnership duly formed, validly existing and in good
standing under the laws of the State of Delaware. Each of Regency HIG and RIGS has all requisite
power and authority to own, lease and operate the properties and assets it currently owns, leases
and operates and to carry on its business as such business is currently conducted, and is qualified
to do business as a foreign partnership, limited partnership or limited liability company, as the
case may be, in each jurisdiction in which the property currently owned, leased or operated by it
or the nature of the business currently conducted by it makes such qualification necessary.
7
Section 3.2 Authority; Enforceability.
(a) Each Regency Entity has the requisite general partnership, limited partnership or limited
liability company power and authority, as applicable, to execute and deliver the Transaction
Documents to which it is, or will be as of the Closing, a party, and to consummate the
Transactions. The execution and delivery by each Regency Entity of the Transaction Documents to
which it is, or will be as of the Closing, a party, and the consummation by such Regency Entity of
the Transactions, have been duly and validly authorized by such Regency Entity and no other general
partnership, limited partnership or limited liability company proceedings, as the case may be, on
the part of such Regency Entity is necessary to authorize the Transaction Documents or to
consummate the Transactions.
(b) Each of the Transaction Documents to which any Regency Entity is, or will be as of the
Closing, a party has been (or will be, in the case of Transaction Documents to be delivered at the
Closing) duly executed and delivered by such Regency Entity and, assuming the due authorization,
execution and delivery by the other parties thereto, each Transaction Document constitutes (or will
constitute, in the case of Transaction Documents to be delivered at the Closing) the valid and
binding agreement of such Regency Entity, and is (or will be, in the case of Transaction Documents
to be delivered at the Closing) enforceable against such Regency Entity in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws relating to or affecting
creditors’ rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 3.3 No Violation; Consents and Approvals. Except as set forth on Schedule
3.3:
(a) The execution, delivery and performance of the Transaction Documents by any Regency Entity
and the consummation by such Regency Entity of the Transactions do not and will not as of the
Closing after giving effect to the Closing and the consummation of the Transactions:
(i) conflict with or violate any of such Regency Entity’s Organizational Documents;
(ii) constitute a default (or an event that with notice or lapse of time or both would
give rise to a default) under, give rise to any right of termination, cancellation,
amendment or acceleration (with or without notice, lapse of time or both) under any of the
terms, conditions or provisions of any contract, note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which such Regency Entity or RIGS is a party
or by which any of its assets is bound, except to the extent that such default, termination,
amendment, acceleration or cancellation right would not reasonably be expected to have a
material adverse effect on the ability of such Person to perform its obligations under the
Transaction Documents;
(iii) violate or breach in any material respects any Law applicable to such Regency
Entity or RIGS; or
8
(iv) constitute an event which, after notice or lapse of time or both, would result in
the creation of an Encumbrance on any of the Assets or RIGS Interests.
(b) No declaration, filing or registration with, or notice to, or authorization, consent or
approval of, any Governmental Authority is necessary for the consummation by any Regency Entity of
the Transactions contemplated by the Transaction Documents, other than such declarations, filings,
registrations, notices, authorization, consents or approvals that have been or will be obtained or
made prior to the Closing and other than such declarations, filings, registrations or notices that
are customarily given or obtained post-closing for transactions of this type.
(c) No consent or approval of any third party with respect to any Material Contract or any
other Contract that is material to the Business is necessary for the consummation by any Regency
Entity of the Transactions contemplated by the Transaction Documents, other than such consents or
approvals that have been or will be obtained prior to the Closing and other than, with respect to
such other Contracts (but not the Material Contracts), such consents or approvals that are
customarily given or obtained post-closing for transactions of this type.
Section 3.4 Capitalization; Ownership of RIGS Interests.
(a) The Company does not (i) own, directly or indirectly, any capital stock, equity interests
or other securities of any Person or (ii) have any Subsidiaries, in each case other than with
respect to its ownership in RIGS upon the Closing.
(b) The Company will not have conducted any business operations, will not have any assets or
liabilities and will not be a party to any contract or agreement of any kind or nature prior to the
Closing (other than the Organizational Documents of the Company and this Agreement).
(c) Upon Closing, the GP Units issued pursuant to this Agreement (i) will constitute all of
the issued and outstanding general partner units of the Company and (ii) will be duly authorized,
validly issued and fully paid (to the extent required under the Company Partnership Agreement).
Upon Closing, Regency HIG and each Investor will own the number of GP Units set forth opposite such
Party’s name in the column entitled “GP Units” on Exhibit F, free and clear of all Liens
except for (i) Liens arising under the Company Partnership Agreement and (ii) Liens that encumber
the GP Units owned by such Party that arise by, through or under such Party. The RIGS Interests
(i) will constitute all of the issued and outstanding membership interests of RIGS and (ii) have
been duly authorized, validly issued and fully paid. There are no existing subscriptions, rights,
warrants, calls, options, convertible or exchangeable securities, “phantom” equity rights, equity
appreciation rights, equity-based performance units, commitments, contracts, agreements or
undertakings of any character to which either of the Company or RIGS is bound that (A) obligate it
to issue, deliver or sell, or cause to be issued, delivered or sold, additional ownership interests
in, or any ownership interest convertible or exercisable for, or exchangeable into, any of its
ownership interests, or (B) obligate it to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, contract, arrangement or undertaking. There are no
outstanding contractual obligations of the Company or RIGS to repurchase, redeem or otherwise
acquire any ownership interests of the Company or
9
RIGS, respectively. There are no outstanding ownership interests or other instruments
convertible into or exchangeable for ownership interests of the Company or RIGS and no commitments
to issue such ownership interests or instruments. There are no voting trusts, proxies or other
agreements or understandings to which the Company or RIGS is bound with respect to the voting of
any ownership interests or other interests of the Company or RIGS, respectively.
(d) Regency HIG has good title to, holds of record, and owns beneficially the RIGS Interests
free and clear of any Liens other than transfer restrictions imposed thereon by applicable
securities Laws and Liens referenced in Section 7.2(c).
Section 3.5 Compliance with Law. Except as set forth on Schedule 3.5, (a) each of
Regency HIG, RIGS and the Company are in compliance in all material respects with all Laws of any
Governmental Authority; (b) none of Regency HIG, RIGS or the Company has received written notice of
any violation in any material respect of any such Law; (c) Regency HIG, RIGS and the Company are
not in default or violation in any material respect of any order, writ, judgment, award, injunction
or decree of any Governmental Authority; and (d) to the Knowledge of Regency HIG, none of Regency
HIG, RIGS or the Company is under investigation by any Governmental Authority for potential
non-compliance with any Law. Notwithstanding the foregoing, this Section 3.5 shall not
apply to any matters relating to Tax matters as it is the Parties’ intent that Section 3.12
shall cover such matters exclusively.
Section 3.6 Title to Properties and Assets. Except as set forth on Schedule 3.6(a)-1,
RIGS has good, valid and marketable fee simple title to all Owned Real Property, free and clear of
Encumbrances. Except as set forth on Schedule 3.6(a)-2, with respect to the Leased Real
Property, such Leased Real Property is held under valid and subsisting and enforceable Real
Property Leases, free and clear of Encumbrances. Except as set forth on Schedule 3.6(b)-1
or in the title insurance policies and surveys related to the Real Property that have been made
available to the Investors, there are no agreements granting to any party or parties other than
RIGS the right of use any of the Real Property other than such rights that do not materially
interfere with the ownership or operation of the Assets. Except as set forth on Schedule
3.6(b)-2, RIGS owns and has good and valid easement title to the Easements, in each case free
and clear of Encumbrances. Except as set forth on Schedule 3.6(c), RIGS is in possession
of and has good title to, or has a valid leasehold interest under a Personal Property Lease to use,
all Tangible Personal Property subject only to Permitted Liens. The map attached as Schedule
3.6(d)-1 depicts the entire existing pipeline system which is currently owned by RIGS
(excluding any portion associated with the Haynesville Expansion Project). Regency HIG has made
available to the Investors, complete and correct copies of (i) the instruments creating the rights
in the Real Property (i.e., deeds, leases, easements) and (ii) the title insurance policies
and surveys related to the Real Property, in each case to the extent such instruments are within
possession and control of RIGS. Except as set forth on Schedule 3.6(d)-2, with respect to
any Real Property Leases, Easements or other applicable interest in Real Property, there are no
existing material events of default, or events which with notice or lapse of time or both would
constitute material events of default, on the part of the RIGS that would enable or permit the
applicable counterparty to terminate the applicable interest in Real Property or to accelerate the
obligations of RIGS thereunder; nor, to the Knowledge of Regency HIG, are there any material
defaults on the part of any counterparty of such interest in Real Property (i.e., lessor,
grantor, licensor). Except as set
10
forth on Schedule 3.6(e), none of the rights of RIGS under any material Real Property
Leases or Easements will be subject to termination or material modification, and no consent or
approval of any party is required under any such Real Property Lease or any such Easement that will
materially impair the ability of RIGS to operate the Business, as a result of the consummation of
the transactions contemplated hereby. Except as set forth on Schedule 3.6(f), the Assets
(together with the Services (as defined in the Services Agreement) to be provided pursuant to the
Services Agreement) constitute all rights and properties (including improvements, fixtures,
equipment, utilities and rights of ingress and egress) necessary in all material respects to own,
operate and maintain the Business (excluding any portion of the Business associated with the
Haynesville Expansion Project) in a manner consistent with the ownership, operation and maintenance
of the Business (excluding any portion of the Business associated with the Haynesville Expansion
Project) by RIGS immediately prior to the Closing. As of the Execution Date, except for the Owned
Real Property, Leased Real Property or Easements, RIGS does not own or have the right to use any
material real property.
Section 3.7 Financial Statements. Except as otherwise set forth on Schedule 3.7:
(a) Schedule 3.7 contains an accurate copy of the pro forma balance sheet (the “Pro
Forma Balance Sheet”) of RIGS as of December 31, 2008 (the “Pro Forma Balance Sheet Date”),
reflecting adjustments for the material liabilities of RIGS that were recorded on the trial balance
of RGS and certain other adjustments, and the pro forma income statement for the year ended
December 31, 2008, which present fairly in accordance with GAAP the financial position of RIGS at
such date and the results of operations of RIGS for such period, except, in each case, for (i) the
absence of footnotes and (ii) the adjustments set forth on Schedule 3.7.
(b) RIGS has no obligations or liabilities that would be required to be reflected or reserved
against in a balance sheet prepared in accordance with GAAP, except for: (i) liabilities set forth,
reflected in, reserved against or disclosed in the Pro Forma Balance Sheet; (ii) liabilities
incurred in the ordinary course of business or in connection with the Haynesville Expansion Project
since the Pro Forma Balance Sheet Date (none of which results from, arises out of, relates to, is
in the nature of, or was caused by any breach of Contract, breach of warranty, tort, infringement,
or violation of Law or that would individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect other than liabilities relating to the Haynesville Expansion Contracts);
(iii) liabilities under Contracts (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of Contract, breach of warranty, tort, infringement, or
violation of Law); and (iv) such other liabilities that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Except as contemplated by this Agreement or disclosed in this Agreement or as set forth on
Schedule 3.7, and except in connection with the Haynesville Expansion Project in accordance
with the Haynesville Expansion Budget:
(i) from the Pro Forma Balance Sheet Date through the Execution Date RIGS has conducted
its business in all material respects in the ordinary course and consistent with past
practice;
11
(ii) from the Pro Forma Balance Sheet Date through the Closing Date there has not been
(A) any change, circumstance or event that, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect; (B) any damage, destruction
or loss, whether or not covered by insurance that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; or (C) any declaration, setting
aside or payment of any dividend or other distribution (whether in cash, stock or property)
with respect to the RIGS Interests; and
(iii) from the Pro Forma Balance Sheet Date through the Closing Date RIGS has not (A)
sold, transferred, conveyed, assigned or otherwise disposed of any of its material assets or
properties other than in connection with the Haynesville Expansion Project in accordance
with the Haynesville Expansion Budget; (B) made any material loans, advances or capital
contributions to, or investments in, any other Person; (C) terminated, modified, amended or
otherwise altered or changed any of the terms or provisions of any Material Contract; (D)
merged or consolidated with any other Person or acquired the interests in or business of any
other Person or entered into any agreement with respect thereto; (E) made any change in its
accounting methods, principles or practices, except as required by GAAP; or (F) made any
capital expenditure other than under a Material Contract or a Haynesville Expansion
Contract.
Section 3.8 Environmental Matters.
(a) Except as set forth on Schedule 3.8(a) or as covered by Section 3.21:
(i) RIGS and the Assets are in compliance in all material respects with Environmental
Laws and have been in compliance in all material respects for the past 5 years;
(ii) RIGS possesses, and is in compliance in all material respects with, all
Environmental Permits required for the operation of the Assets as presently conducted and
such Environmental Permits are in full force and effect;
(iii) RIGS and the Assets are not subject to any pending nor, to the Knowledge of
Regency HIG, threatened Environmental Claims, nor has MLP, RIGS or Regency HIG received any
notice of violation, noncompliance, enforcement, investigation or remediation pertaining to
RIGS or the Assets from any Governmental Authority pursuant to Environmental Laws;
(iv) There has been no Release of Hazardous Substances by RIGS on or from the Assets or
from or in connection with the operations of RIGS in material violation of any Environmental
Laws or in a manner that could give rise to any Environmental Response obligations pursuant
to Environmental Laws; and
(v) RIGS has not assumed or retained by written contract, or by operation of law, any
material liabilities of any third party Person to the extent arising under any Environmental
Laws.
12
(b) Regency HIG has provided or made available to the Investors complete and correct copies of
all material environmental, healthy and safety, assessment and audit reports and studies in its
possession addressing potentially material environmental liabilities or obligations relating to
RIGS or the operation of the Assets.
Section 3.9 Material Contracts.
(a) Schedule 3.9(a) sets forth a complete and correct list as of the Execution Date of
the Contracts (other than the Transaction Documents) described below to which RIGS is a party
(collectively, the “Material Contracts”):
(i) each Contract for Borrowed Money Debt;
(ii) each swap, exchange, commodity option or hedging agreement, including all master
agreements and any confirmations issued pursuant thereto;
(iii) each Contract involving a remaining commitment by RIGS to pay capital
expenditures in excess of $1,000,000;
(iv) each Contract for the lease or sublease of real property involving aggregate
payments in excess of $250,000 in any calendar year;
(v) each Contract for lease of personal property involving aggregate payments in excess
of $250,000 in any calendar year;
(vi) each natural gas transportation Contract that individually contains a minimum
fixed daily quantity of gas that exceeds 30,000 MMBtu, all of which listed natural gas
transportation Contracts represent in the aggregate in excess of 75% of the total revenue of
RIGS for the year ending December 31, 2008;
(vii) each Contract providing for any compensation payable to employees or consultants
as a result of the consummation of the transaction contemplated by this Agreement;
(viii) except for Contracts of the nature described in clauses (i) through (vii) above
(without regard to any dollar threshold described in such clauses), each Contract involving
aggregate payments by or to RIGS in excess of $250,000 in any future calendar year that
cannot be terminated by RIGS on 60 days or less notice without premium or penalty;
(ix) each Contract under which RIGS has (A) created, incurred, assumed or guaranteed
(or may create, incur, assume or guarantee) any indebtedness or obligations of any other
Person, (B) granted a Lien on any of the Assets to secure any indebtedness or obligations of
any other Person or (C) extended credit to any Person other than as accounts payable arising
in the ordinary course of business;
13
(x) consulting Contracts providing annual compensation in excess of $100,000 that
cannot be terminated by RIGS on 60 days or less notice without premium or penalty;
(xi) Contracts that purport to limit the freedom of RIGS to compete in any line of
business or in any geographic area;
(xii) partnership, joint venture or other similar Contracts providing for the sharing
of profits of RIGS with any third party; and
(xiii) all Contracts between RIGS or the Company, on the one hand, and the MLP, any
Affiliate of the MLP or of their respective officers, managers, directors, employees, or any
of their respective Affiliates, on the other hand.
(b) Regency HIG has provided or made available to the Investors complete and correct copies of
all the Material Contracts. Except as set forth on Schedule 3.9(b), each Material Contract
is a legal, valid and binding obligation of RIGS and, to the Knowledge of Regency HIG, of each
other party thereto in accordance with its respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws relating to or affecting
creditors’ rights generally or by principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law). Except as set forth on Schedule
3.9(b), neither RIGS nor, to the Knowledge of Regency HIG, any other party to any Material
Contract, is (with or without the lapse of time or the giving of notice, or both) in material
breach or default thereunder, nor has any Regency Entity or RIGS received written notice that it is
in material breach or default thereunder. Except as set forth on Schedule 3.9(b), no
Regency Entity or RIGS has received a notice exercising a right to terminate a Material Contract.
Section 3.10 Legal Proceedings. Except as set forth on Schedule 3.10, there are no
Proceedings pending or, to the Knowledge of Regency HIG, threatened, against RIGS, the Company or
the Assets, and there are no orders or unsatisfied judgments from any Governmental Authority
binding on RIGS or the Company. There are no Proceedings pending or, to the Knowledge of Regency
HIG, threatened against Regency HIG, RIGS or the Company that would reasonably be expected to have
a Material Adverse Effect.
Section 3.11 Permits. Except as set forth on Schedule 3.11, RIGS has all material
permits, approvals, consents, licenses, franchises, exemptions and other governmental
authorizations, consents and approvals (collectively, “Permits”) necessary to use, own and operate
the Assets as presently used, owned and operated, except for any such Permits that are or will be
required for the Haynesville Expansion Project. Except as set forth on Schedule 3.11, RIGS
is and has been in compliance in all material respects with all such Permits.
Section 3.12 Taxes. All Tax Returns required to be filed with respect to RIGS and the
ownership or operation of the Assets have been properly and timely filed and all such Tax Returns
are complete and correct in all material respects; all Taxes due relating to RIGS and the ownership
or operation of the Assets have been properly and timely paid in full (whether or not shown to be
due on such Tax Returns). No Tax audits, inquiries or other investigations or
14
proceedings are being conducted with respect to RIGS or its Assets, and no notice of any such
event has been received. There are no Liens with respect to Taxes on the RIGS Interests or Assets.
RIGS has not received any written notice of deficiency or assessment from any Governmental
Authority with respect to liabilities for Taxes of RIGS or arising with respect to the ownership or
operation of the Assets, which have not been paid in full. All Taxes required to be withheld,
collected or deposited by or with respect to RIGS or in connection with the ownership or operation
of the Assets have been timely withheld, collected or deposited, as the case may be, and, to the
extent required, have been timely paid or remitted to the relevant Governmental Authority. There
are no outstanding agreements or waivers extending the applicable statutory periods of limitation
for Taxes of RIGS or arising with respect to the ownership or operation of the Assets for any
period. Since the date of its formation, RIGS has been treated as a partnership or disregarded
entity for U.S. federal tax purposes and no election has been made to treat RIGS as a corporation
for any federal, state or local income tax purposes. There are no Tax indemnity agreements, Tax
sharing agreements, or other similar arrangements with respect to or involving RIGS or any of the
Assets. RIGS has not participated in any transaction that is or is substantially similar to a
“listed transaction” under Section 6011 of the Code and the Treasury regulations thereunder, or any
other transaction requiring disclosure under Treasury Regulation Section 1.6011-4. Notwithstanding
any other provisions of this Agreement to the contrary, this Section 3.12 contains the sole
and exclusive representations and warranties of Regency HIG with respect to Tax matters and such
representations and warranties shall be qualified by all statements set forth on Schedule
3.12.
Section 3.13 Employees.
(a) Neither RIGS nor the Company has, or, to the Knowledge of Regency HIG, previously had any
employees and no Affiliate of RIGS or the Company is a party to a collective bargaining agreement
with employees of RIGS or the Company.
(b) Neither RIGS nor the Company sponsors, maintains, has liability under or has an obligation
to contribute to any “employee benefit plans” (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation,
multiemployer plans within the meaning of Section 3(37) of ERISA), or any stock purchase, stock
option, severance, employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation, employee loan or any other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA (all such plans,
agreements, programs, policies and arrangements, collectively, the “Benefit Plans”). None of RIGS,
the Company or any of their ERISA Affiliates, has any liability under Section 412 of the Code or
Title IV of ERISA.
Section 3.14 Brokers’ Fee. No broker, finder, investment banker or other Person or similar
intermediary has acted for or on behalf of, or is entitled to any brokerage fee, finders’ fee or
similar fee or other commission from RIGS or the Company, in connection with this Agreement or the
Transactions for which either RIGS or the Company is liable.
Section 3.15 Insurance. Schedule 3.15 contains a complete and correct list of all
liability, property, fire, casualty, product liability, workers’ compensation and other insurance
policies, if any, that are in full force and effect as of the Execution Date that insure or relate
to
15
the Assets or RIGS (the “Policies”). Except as set forth on Schedule 3.15, no Regency
Entity or RIGS, with respect to the Assets or RIGS, has received any notice from the insurer under
any Policies disclaiming coverage, reserving rights with respect to a particular claim or such
Policy in general or canceling or materially amending any such Policy. Except as set forth on
Schedule 3.15, there is no claim, suit or other matter currently pending in respect of
which any Regency Entity or RIGS has received such a notice. All premiums due and payable for such
Policies have been duly paid, and such Policies or extensions or renewals thereof in the amounts
described will be outstanding and duly in full force without interruption until the Closing Date.
Section 3.16 Intellectual Property. Schedule 3.16 sets forth a complete and correct
list of all material registered Intellectual Property owned by RIGS that is used by RIGS in
connection with the Business. Except as set forth on Schedule 3.16, (a) upon Closing RIGS
or the Company will own or have the right to use pursuant to license, sublicense, agreement
(including the Services Agreement) or otherwise all material items of Intellectual Property
required in the operation of the Business as presently conducted or as contemplated to be conducted
in connection with the Haynesville Expansion Project; (b) no third party has asserted in writing
delivered to RIGS or the Company an unresolved claim that RIGS is infringing on the Intellectual
Property of such third party; and (c) to the Knowledge of Regency HIG, no third party is infringing
on the Intellectual Property owned by RIGS.
Section 3.17 Regulatory Status. Except as set forth on Schedule 3.17, RIGS (i) has
all necessary approvals from FERC to provide service to customers pursuant to Section 311 of the
Natural Gas Policy Act of 1978, as amended, (ii) has made all required FERC filings necessary to
offer such service and (iii) is not and Regency HIG has not been in violation in any material
respect of any of FERC’s rules, regulations or orders.
Section 3.18 Confidentiality. Schedule 3.18 sets forth a complete and correct list of
all Material Contracts, the disclosure of which or the material terms of which cannot be disclosed
to any Investor as a result of confidentiality or other obligations that have not been waived.
Section 3.19 Books and Records. The books and records, accounts and ledgers of each member of
RIGS are complete and correct in all material respects and have been maintained in accordance with
good business and bookkeeping practices in all material respects. The minute books and other
similar records of RIGS are complete and correct in all material respects and accurately and
adequately reflect in all material respects all resolutions duly adopted at any meeting (or
pursuant to any action by written consent) of the stockholders, members, partners, managers, board
of directors and committees of the board of directors, of RIGS.
Section 3.20 Solvency. There are no bankruptcy, insolvency, reorganization, receivership or
arrangement proceedings pending with respect to, being contemplated by or, to the Knowledge of
Regency HIG, threatened against any Regency Entity or RIGS.
Section 3.21 Haynesville Expansion. Except as otherwise set forth on Schedule 3.21:
(a) Part A of Schedule 3.21 sets forth a complete and correct list of all
Environmental Permits held by RIGS in connection with the construction, ownership and operation of
the Haynesville Expansion Project as contemplated on the Execution Date. Part B
16
of Schedule 3.21 sets forth the Environmental Permits not yet held by RIGS, but that
are required to be obtained in connection with the construction, ownership and operation of the
Haynesville Expansion Project as contemplated on the Execution Date. Any such Environmental
Permits that are required to enable RIGS to construct, own and operate the Haynesville Expansion
Project that are not obtained by the Closing Date can be obtained in the ordinary course without
material delay, condition or expense, other than as set forth in the Haynesville Expansion Budget
or the Initial Operating Budget.
(b) RIGS and the Assets comprising the Haynesville Expansion Project are in compliance in all
material respects with Environmental Laws.
(c) Part C of Schedule 3.21 sets forth a complete and correct list of all material
Permits (other than Environmental Permits) held by RIGS in connection with the construction,
ownership and operation of the Haynesville Expansion Project as contemplated on the Execution Date.
Part D of Schedule 3.21 sets forth the material Permits (other than Environmental Permits)
not yet held by RIGS, but that are required to be obtained in connection with the construction,
ownership and operation of the Haynesville Expansion Project as contemplated on the Execution Date.
Any such material Permits that are required to enable RIGS to construct, own and operate the
Haynesville Expansion Project that have not been obtained by the Execution Date, can be obtained in
the ordinary course without material delay, condition or expense, other than as set forth in the
Haynesville Expansion Budget or the Initial Operating Budget.
(d) RIGS has obtained Contracts to acquire substantially all of the pipe necessary to complete
the Haynesville Expansion Project in accordance with the Haynesville Expansion Budget. Except as
set forth on Schedule 3.6(b)-2, RIGS owns and has good and valid easement title to the
easements and/or rights-of-way, in each case free and clear of Encumbrances, that comprise not less
than approximately 35% of the total length of the pipeline contemplated by the Haynesville
Expansion Project in the locations shown on the map attached as Schedule 3.21(d). Such
real property interests grant to RIGS the right to construct, operate and maintain the pipeline
contemplated on the Execution Date by the Haynesville Expansion Project in, over, under and across
the property covered by such real property interests, except as would not (i) materially impair or
delay the development and construction of the pipeline as contemplated on the Execution Date as a
whole or any individual material segment thereof or (ii) materially increase the cost to develop,
construct, operate or maintain the pipeline as contemplated on the Execution Date in excess of the
costs thereof set forth in the Haynesville Expansion Budget or the Initial Operating Budget. To
the Knowledge of Regency HIG, there are no impediments to obtaining the real property interests not
currently held by RIGS that are necessary to complete the Haynesville Expansion Project in the
ordinary course without material delay, condition or expense, other than as set forth in the
Haynesville Expansion Budget or the Initial Operating Budget.
(e) RIGS has Expropriation Rights.
(f) Part E of Schedule 3.21 sets forth a complete and correct list of (i) all material
Contracts required to construct and complete the Haynesville Expansion Project that are in
existence on the Execution Date (collectively, the “Existing Haynesville Expansion
17
Contracts”) and (ii) all material Contracts that, to the Knowledge of Regency HIG, are
required to construct and complete the Haynesville Expansion Project that are not in existence on
the Execution Date, including the Firm Transportation Contracts, (all of which, together with the
Existing Haynesville Expansion Contracts, are collectively referred to as the “Haynesville
Expansion Contracts”). Except as set forth on Part F of Schedule 3.21, any Haynesville
Expansion Contract that is required to enable RIGS to construct and complete the Haynesville
Expansion Project that is not obtained by the Execution Date can be obtained in the ordinary course
without material delay, condition or expense, other than as set forth in the Haynesville Expansion
Budget. Regency HIG has provided or made available to the Investors complete and correct copies of
all Existing Haynesville Expansion Contracts. Except as set forth on Part G of Schedule
3.21, each Existing Haynesville Expansion Contract is a legal, valid and binding obligation of
RIGS, and, to the Knowledge of Regency HIG, of each other party thereto in accordance with its
respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws relating to or affecting creditors’ rights generally or by principles
of equity (regardless of whether such enforceability is considered in a proceeding in equity or at
law). Except as set forth on Part G of Schedule 3.21, neither RIGS nor, to the Knowledge
of Regency HIG, any other party to any Existing Haynesville Expansion Contract, is (with or without
the lapse of time or the giving of notice, or both) in breach or default thereunder, nor has any
Regency Entity received written notice that Regency HIG is in breach or default thereunder. Except
as set forth on Part G of Schedule 3.21, no Regency Entity has received a notice exercising
a right to terminate an Existing Haynesville Expansion Contract.
(g) To the Knowledge of Regency HIG, there is no public or political opposition to the
Haynesville Expansion Project that would reasonably be expected to result in a material delay,
condition or expense not otherwise contemplated in the Haynesville Expansion Budget or the Initial
Operating Budget in the completion of the Haynesville Expansion Project.
(h) The construction, commissioning and tie-in of the Haynesville Expansion Project shall not
cause RIGS to curtail firm service to those shippers that (i) are served pursuant to Section 311 of
the Natural Gas Policy Act of 1978, as amended, and (ii) receive services from RIGS prior to
completion of the Haynesville Expansion Project.
Section 3.22 HSR. Neither Regency HIG nor any of its Affiliates is required to make any
filing under the HSR Act in connection with the Transactions.
Section 3.23 Internal Controls. RIGS, or Affiliates of RIGS acting on its behalf, maintain a
system of internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the accounting records for
assets are compared with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby severally represents and warrants to Regency HIG and the other Investor
as follows:
Section 4.1 Organization; Existence and Good Standing. The Investor is a corporation, limited
liability company or limited partnership duly incorporated or organized, as the case may be,
validly existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized and has all requisite power and authority to own, lease and operate the
properties and assets it currently owns, leases and operates and to carry on its business as such
business is currently conducted. The Investor has delivered or made available complete and correct
copies of its Organizational Documents to Regency HIG.
Section 4.2 Authority; Enforceability.
(a) The Investor has the full corporate, limited liability company or partnership power and
authority to execute and deliver the Transaction Documents to which it is, or will be as of the
Closing, a party, and to consummate the Transactions. The execution and delivery by the Investor
of the Transaction Documents to which it is, or will be as of the Closing, a party, and the
consummation by such Investor of the Transactions, have been duly and validly authorized by such
Investor and no other corporate, limited liability company or partnership proceedings on the part
of such Investor is necessary to authorize the Transaction Documents or to consummate the
Transactions.
(b) Each of the Transaction Documents to which the Investor is, or will be as of the Closing,
a party has been (or will be, in the case of Transaction Documents to be delivered at the Closing)
duly executed and delivered by such Investor and, assuming the due authorization, execution and
delivery by the other parties thereto, each Transaction Document to which such Investor is, or will
be as of the Closing, a party constitutes (or will constitute, in the case of Transaction Documents
to be delivered at Closing) the valid and binding agreement of such Investor, and is (or will be,
in the case of Transaction Documents to be delivered at the Closing) enforceable against such
Investor in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws relating
to or affecting creditors’ rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 4.3 No Violation; Consents and Approvals.
(a) The execution, delivery and performance of the Transaction Documents by the Investor and
the consummation by such Investor of the Transactions do not and will not as of the Closing after
giving effect to the Closing and the consummation of the Transactions (i) conflict with or violate
any Organizational Document of such Investor; (ii) constitute a default (or an event that with
notice or lapse of time or both would give rise to a default) under, or give rise to any right of
termination, cancellation, amendment or acceleration (with or without notice, lapse of time or
both) under any of the terms, conditions or provisions of any contract, note,
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bond, mortgage, indenture, license, agreement or other instrument or obligation to which such
Investor is a party or by which any of its assets is bound, except to the extent that such default,
termination, amendment, acceleration or cancellation right would not reasonably be expected to have
a material adverse effect on the ability of such Investor to perform its obligations under the
Transaction Documents; or (iii) violate or breach any Law applicable to such Investor.
(b) No declaration, filing or registration with, or notice to, or authorization, consent or
approval of, any Governmental Authority is necessary for the consummation by such Investor of the
Transactions contemplated by the Transaction Documents, other than such declarations, filings,
registrations, notices, authorization, consents or approvals that will have been obtained or made
prior to the Closing.
Section 4.4 Brokers’ Fee. No broker, finder or similar intermediary has acted for or on
behalf of, or is entitled to any broker, finder or similar fee or other commission from the
Investor or any of its Affiliates, in connection with this Agreement or the Transactions for which
RIGS or any Regency Entity is liable.
Section 4.5 Financial Ability. With respect to each Xxxxxx Investor, such Investor or the
Xxxxxx Investor I Parent or Xxxxxx Investor II Parent, as applicable, have, and shall have at all
times prior to the Closing, access to funds sufficient to fund the consummation of the Transactions
(including such Investor’s obligations pursuant to Section 2.2(a)) and satisfy all other
costs and expenses arising in connection with this Agreement. With respect to the GE Investor, such
Investor has, and shall have at all times prior to the Closing, access to funds sufficient to fund
the consummation of the Transactions (including such Investor’s obligations pursuant to Section
2.2(a)) and satisfy all other costs and expenses arising in connection with this Agreement.
Section 4.6 HSR. No Investor is required to make any filing under the HSR Act in connection
with the Transactions.
ARTICLE 5
INDEMNIFICATION
INDEMNIFICATION
Section 5.1 Survival.
(a) The liability of Regency HIG for the representations and warranties of Regency HIG
contained in Article 3 and the certification of any officer of Regency HIG delivered in
connection with the Closing pursuant to Section 2.4(b)(viii) (the “Regency HIG Closing
Certificate”) shall survive the Closing until the date that is 18 months after the Closing Date,
with the exception that the representations and warranties in:
(i) Section 3.12 and the certification in the Regency HIG Closing Certificate
with respect thereto shall survive the Closing until 60 days after the expiration of the
applicable statute of limitations; and
(ii) Section 3.1, Section 3.2, Section 3.3(a)(i), Section
3.4, Section 3.14, Section 3.22 and the Third Party Obligation Representations
(collectively, the “Regency Fundamental Representations”) shall survive the Closing
indefinitely. The
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representations and warranties of the Investors contained in Article 4 and the
certification of any officer of an Investor delivered in connection with the Closing
pursuant to Section 2.4(a)(iv) (the “Investor Closing Certificate”) shall survive
the Closing indefinitely.
(b) All covenants and agreements contained in this Agreement that are to be performed at or
prior to the Closing shall survive the Closing until the date that is 18 months after the Closing
Date. All covenants and agreements contained in this Agreement that are to be performed after the
Closing shall survive in accordance with their terms.
(c) The period of time a representation, warranty, covenant, agreement or certification
survives the Closing pursuant to this Section 5.1 shall be the “Survival Period” with
respect to such representation, warranty, covenant, agreement or certification. NO PARTY SHALL BE
ENTITLED TO ANY RECOVERY FOR INDEMNIFICATION CLAIMS MADE UNDER THIS ARTICLE 5 WITH RESPECT
TO ANY SUCH REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR CERTIFICATION UNLESS A NOTICE OF SUCH
CLAIM IS PROVIDED BY THE CLAIMING PARTY TO SUCH OTHER PARTY PRIOR TO THE EXPIRATION OF THE
APPLICABLE SURVIVAL PERIOD FOR SUCH REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR CERTIFICATION.
Section 5.2 Indemnification by Regency HIG. Notwithstanding any investigation by or on behalf
of any Investor, subject to the terms of Section 5.9 and all other provisions of this
Article 5, from and after the Closing, Regency HIG shall indemnify, defend and hold
harmless the GE Investor, its officers, directors, successors and permitted assigns and its and
their respective Affiliates (collectively, the “GE Covered Persons”), Xxxxxx Investor 1, its
officers, directors, successors and permitted assigns and its and their respective Affiliates
(collectively, the “Xxxxxx 1 Covered Persons”) and Xxxxxx Investor 2, its officers, directors,
successors and permitted assigns and its and their respective Affiliates (collectively, the “Xxxxxx
2 Covered Persons” and together with the Xxxxxx 1 Covered Persons, the “Xxxxxx Covered Persons”;
and the Xxxxxx Covered Persons together with the GE Covered Persons, the “Investor Covered
Persons”), to the fullest extent permitted by Law, from and against any Losses incurred by such
Investor Covered Person, arising out of or relating to (a) any breach of any of the representations
or warranties (in each case, when made) of Regency HIG contained in Article 3 or the
certifications in the Regency HIG Closing Certificate with respect thereto; (b) any breach of any
of the covenants or agreements of Regency HIG contained in this Agreement; or (c) the Indemnified
Subject Litigation.
Section 5.3 Indemnification by the Investors. Notwithstanding any investigation by or on
behalf of Regency HIG, subject to the terms of this Article 5, from and after the Closing,
each Investor shall severally indemnify and hold harmless Regency HIG, its officers, directors,
successors and permitted assigns and its and their respective Affiliates (collectively, the
“Regency HIG Covered Persons”) and the other Investor Covered Persons, to the fullest extent
permitted by Law, from and against any Losses incurred by such Regency HIG Covered Person or other
Investor Covered Person, as applicable, arising out of or relating to (a) any breach of any of the
representations or warranties (in each case, when made) of such Investor contained in
Article 4 or the certifications in the Investor Closing Certificate and (b) any breach of
any of the covenants of such Investor contained in this Agreement.
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Section 5.4 Indemnification by the Company. Subject to the terms of this Article 5,
from and after the Closing, the Company shall indemnify and hold harmless the Regency HIG Covered
Persons and the Investor Covered Persons (collectively, the “Covered Persons”), to the fullest
extent permitted by Law, from and against any Losses incurred by such Covered Person, arising out
of or relating to any breach of any of the covenants of the Company contained in this Agreement.
Section 5.5 Haynesville Cost Overruns. Regency HIG shall contribute to the Company an amount
equal to the Cost Overruns. Regency HIG shall not be issued any GP Units in respect of
contributions under this Section 5.5. All contributions required to be made by Regency HIG
under this Section 5.5 shall be made promptly so as to permit the Company to pay such Cost
Overruns as they come due and shall be treated as capital contributions under the Company
Partnership Agreement.
Section 5.6 No Effect on Other Agreements. Notwithstanding anything to the contrary contained
in this Agreement, no provision of this Agreement shall be construed to have any effect upon, or to
otherwise limit, any indemnification obligation or other provision contained in the Services
Agreement and the Company Partnership Agreement.
Section 5.7 Indemnification Procedures.
(a) Subject to the other provisions of this Article 5, in the event that any action,
suit, claim or proceeding is commenced by a third party involving a claim (a “Third Party Claim”)
in respect of any matter that, if true (without any responsibility for independent investigation of
the facts or law contained in such notice from the third party), would be subject to
indemnification by a Party under Section 5.2, Section 5.3 or Section 5.4
(an “Indemnifying Party”) to a Party entitled to such indemnification (an “Indemnified Party”), the
Indemnified Party shall promptly deliver written notice to the Indemnifying Party of such Third
Party Claim describing in reasonable detail (i) the nature of the Third Party Claim, (ii) if
practicable, the Indemnified Party’s best estimate of the amount of Losses attributable to the
Third Party Claim, (iii) the basis of the Indemnified Party’s request for indemnification under
this Agreement and (iv) a copy of all papers served with respect to such claim (if any) (the “Claim
Notice”). Failure to timely provide such Claim Notice shall not affect the right of the
Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is
prejudiced by such delay or omission.
(b) If the Indemnifying Party notifies the Indemnified Party that the Indemnifying Party
elects to assume the defense of the Third Party Claim within 30 days of such Indemnifying Party’s
receipt of the Claim Notice (such election to be without prejudice to the right of the Indemnifying
Party to dispute whether such claim is an indemnifiable Loss under this Article 5), then
the Indemnifying Party shall have the right to defend such Third Party Claim with counsel selected
by the Indemnifying Party (who shall be reasonably satisfactory to the Indemnified Party), by all
appropriate proceedings, to a final conclusion or settlement at the discretion of the Indemnifying
Party in accordance with this Section 5.7(b). The Indemnifying Party shall have full
control of such defense and proceedings, including any compromise or settlement thereof; provided,
that the Indemnifying Party shall not enter into any settlement agreement without the written
consent of the Indemnified Party (which consent shall not be
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unreasonably withheld, conditioned or delayed); provided further, that such consent shall not
be required if (i) the settlement agreement contains a complete and unconditional general release
by the third party asserting the claim of all Indemnified Parties affected by the claim and
(ii) the settlement agreement does not contain any sanction or restriction upon the conduct of any
business by any Indemnified Party or its Affiliates. If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate reasonably with the Indemnifying Party, at the Indemnifying
Party’s cost and expense, and its counsel in contesting any Third Party Claim which the
Indemnifying Party elects to contest, including the making of any related counterclaim against the
Person asserting the Third Party Claim or any cross complaint against any Person. The Indemnified
Party may participate in, but not control, any defense or settlement of any Third Party Claim
controlled by the Indemnifying Party pursuant to this Section 5.7(b), and the Indemnified
Party shall bear its own costs and expenses with respect to such participation.
(c) If the Indemnifying Party does not notify the Indemnified Party within 30 days of such
Indemnifying Party’s receipt of the Claim Notice that the Indemnifying Party elects to defend the
Indemnified Party pursuant to Section 5.7(b), then the Indemnified Party shall have the
right to defend, and be reimbursed for its reasonable cost and expense (but only if the Indemnified
Party is actually entitled to indemnification hereunder) in regard to the Third Party Claim with
counsel selected by the Indemnified Party, by all appropriate proceedings, which proceedings shall
be prosecuted diligently by the Indemnified Party. In such circumstances, the Indemnified Party
shall defend any such Third Party Claim in good faith and have full control of such defense and
proceedings; provided, however, that the Indemnified Party may not enter into any compromise or
settlement of such Third Party Claim if indemnification is to be sought hereunder, without first
obtaining the written consent of the Indemnifying Party for such proposed settlement (which consent
shall not be unreasonably withheld, conditioned or delayed); provided further, that such consent
shall not be required if (i) the settlement agreement contains a complete and unconditional general
release by the third party asserting the claim of all Indemnifying Parties affected by the claim
and (ii) the settlement agreement does not contain any sanction or restriction upon the conduct of
any business by any Indemnifying Party or its Affiliates. The Indemnifying Party may participate
in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this
Section 5.7(c), and the Indemnifying Party shall bear its own costs and expenses with
respect to such participation.
(d) Subject to the other provisions of this Article 5, a claim for indemnification by
any Indemnified Party for any matter not involving a Third Party Claim shall be asserted by
delivery of a Claim Notice to the Indemnifying Party from whom indemnification is sought promptly
after such Indemnified Party becomes aware of the facts or circumstances giving rise to such claim.
(e) If Closing occurs, the Parties acknowledge that the Indemnified Subject Litigation is
comprised of Third Party Claims to which this Section 5.7 shall apply.
Section 5.8 Limits on Indemnification.
(a) Calculation of Losses. In calculating amounts payable to an Indemnified Party,
including for purposes of Section 5.8(d), the amount of any Losses for which an Indemnified
Party may receive any payment hereunder shall be determined without duplication
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of any other Loss for which an Indemnified Party has received any payment hereunder and shall
be computed net of (i) payments actually recovered by the Indemnified Party under any insurance
policy with respect to such Losses, (ii) any indemnification or reimbursement payments actually
recovered by the Indemnified Party from any Person with respect to such Losses, (iii) any Tax
Benefit actually realized by any Indemnified Party on account of such Losses and (iv) any payment
made by Regency HIG under Section 5.9.
(b) Limitation on Damages. Notwithstanding any other provision of this Agreement, in
no event shall any Party be liable for punitive, special, incidental, indirect, consequential or
lost profits damages of any kind or nature, regardless of the form of action through which such
damages are sought, except for any such damages recovered by any third party against any Party in
respect of which such Party would otherwise be entitled to indemnification pursuant to the terms
hereof.
(c) Deductible. If the Closing occurs, none of the GE Covered Persons, the Xxxxxx 1
Covered Persons or the Xxxxxx 2 Covered Persons will be entitled to indemnity under Section
5.2 of this Agreement for Losses with respect to any claim under Section 5.2 until the
aggregate amount of all such claims by such GE Covered Persons, such Xxxxxx 1 Covered Persons or
such Xxxxxx 2 Covered Persons, as applicable, exceeds the applicable Regency HIG Basket Amount, and
thereafter, the Investor Covered Persons shall only be entitled to recover Losses in excess of the
applicable Regency HIG Basket Amount; provided that the foregoing limitation shall not apply with
respect to Losses arising out of or relating to (i) any breach of a Regency Fundamental
Representation, (ii) any breach of any of the covenants or agreements of Regency HIG contained in
this Agreement that are to be performed after the Closing other than the covenants in Section
6.3, (iii) any breach by Regency HIG of the representations and warranties in Section
3.12 or the covenants in Section 6.3 and (iv) the Indemnified Subject Litigation.
(d) Cap. Notwithstanding anything to the contrary in this Agreement, if the Closing
occurs, in no event will the aggregate payments required to be made by Regency HIG in respect of
its aggregate liability to an Investor Covered Person arising under this Agreement exceed the
applicable Regency HIG Cap; provided that the foregoing limitation shall not apply with respect to
Losses arising out of or relating to (i) any breach of a Regency Fundamental Representation, (ii)
any breach by Regency HIG of any of the covenants or agreements in this Agreement that are to be
performed after the Closing other than the covenants in Section 6.3, (iii) any breach by
Regency HIG of the representations and warranties in Section 3.12 or the covenants in
Section 6.3 and (iv) the Indemnified Subject Litigation.
(e) Exclusive Remedy. The remedies provided in this Article 5 shall be the
sole and exclusive legal remedies of the Investor Covered Persons, the Regency HIG Covered Persons
and the Covered Persons, from and after the Closing, with respect to this Agreement; provided that
nothing in this Section 5.8(e) shall prevent either Party from seeking specific
performance, injunctive and/or equitable relief for claims of breach or failure to perform
covenants performable under this Agreement at any time after the Closing.
Section 5.9 Satisfaction of Claims for Indemnification. In lieu of making a direct payment to
an Investor Covered Person for any Losses suffered by an Investor Covered Person,
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the Parties agree that in the event (i) any such Losses are determined to be subject to an
indemnification obligation pursuant to Section 5.2, (ii) such Losses are Losses both of the
Company and the Investors as a result of their ownership interests in the Company and (iii) neither
the Company nor RIGS is insolvent or will become insolvent after giving effect to all of such
Losses, Regency HIG shall satisfy any such Losses by contributing cash to the Company equal to 100%
of the Losses suffered by the Company, and each dollar paid by Regency HIG shall for all purposes
of this Agreement reduce the Regency HIG Cap by an aggregate amount of $1 (with each dollar of
reduction allocated among each Investor’s applicable portion of the Regency HIG Cap pro rata based
on such Investor’s applicable Sharing Ratio). For the avoidance of doubt, contributions made
pursuant to this Section 5.9 shall be treated as capital contributions under the Company
Partnership Agreement. Regency HIG shall not be issued any GP Units in respect of such contribution
to the Company.
Section 5.10 Independent Investigation; Waiver of Other Representations.
(a) EACH OF THE INVESTORS HEREBY ACKNOWLEDGES THAT (i) IT HAS MADE ITS OWN INDEPENDENT
EXAMINATION, INVESTIGATION, ANALYSIS AND EVALUATION OF THE BUSINESS, OPERATIONS, ASSETS,
LIABILITIES, RESULTS OF OPERATIONS, FINANCIAL CONDITION, TECHNOLOGY AND PROSPECTS OF RIGS AND THE
COMPANY, (ii) IT HAS BEEN PROVIDED ACCESS TO PERSONNEL, PROPERTIES, PREMISES AND RECORDS OF RIGS
AND THE COMPANY FOR SUCH PURPOSE AND HAS RECEIVED AND REVIEWED SUCH INFORMATION AND HAS HAD A
REASONABLE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS RELATING TO SUCH MATTERS AS IT
DEEMED NECESSARY OR APPROPRIATE TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREIN, (iii) IT HAS
SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT IT IS CAPABLE OF EVALUATING
THE MERITS AND RISKS OF RIGS AND AN INVESTMENT IN THE COMPANY AND (iv) REGENCY HIG, RIGS AND THE
COMPANY HAVE DELIVERED OR MADE AVAILABLE TO THE INVESTORS OR THEIR ADVISORS ALL INFORMATION WHICH
THE INVESTORS OR SUCH ADVISORS HAVE REQUESTED FOR THE PURPOSE OF DECIDING WHETHER OR NOT TO ENTER
INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS.
(b) IN ENTERING INTO THIS AGREEMENT, EACH OF THE INVESTORS HAS RELIED UPON, AMONG OTHER
THINGS, ITS DUE DILIGENCE INVESTIGATION AND ANALYSIS OF RIGS AND THE COMPANY, AND EACH OF THE
INVESTORS:
(i) ACKNOWLEDGES AND AGREES THAT IT HAS NOT BEEN INDUCED BY AND HAS NOT RELIED UPON ANY
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, MADE BY REGENCY HIG OR THE
COMPANY OR ANY OF THEIR RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES,
AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES THAT ARE NOT EXPRESSLY
SET FORTH IN ARTICLE 3 OF THIS AGREEMENT, WHETHER OR
25
NOT SUCH REPRESENTATIONS, WARRANTIES OR STATEMENTS WERE MADE IN WRITING OR ORALLY;
(ii) ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, (A)
THE INVESTORS ARE ACQUIRING THE GP UNITS “AS IS, WHERE IS, WITH ALL FAULTS” AND (B) REGENCY
HIG EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE GP UNITS AND THE ASSETS OR THE
PROSPECTS (FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS OF RIGS, THE COMPANY AND THEIR
RESPECTIVE ASSETS;
(iii) ACKNOWLEDGES AND AGREES THAT NONE OF REGENCY HIG, THE COMPANY OR ANY OF THEIR
RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES, AFFILIATES, CONTROLLING
PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES MAKES OR HAS MADE ANY REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY OF THE
INFORMATION PROVIDED OR MADE AVAILABLE TO THE INVESTORS OR THEIR RESPECTIVE DIRECTORS,
MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS,
ADVISORS OR REPRESENTATIVES, INCLUDING ANY INFORMATION, DOCUMENT, OR MATERIAL PROVIDED OR
MADE AVAILABLE, OR STATEMENTS MADE, TO THE INVESTORS OR THEIR RESPECTIVE DIRECTORS,
MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS,
ADVISORS OR REPRESENTATIVES DURING SITE OR OFFICE VISITS, IN ANY “DATA ROOMS” (INCLUDING
INTERNET-BASED DATA ROOMS), MANAGEMENT PRESENTATIONS OR SUPPLEMENTAL DUE DILIGENCE
INFORMATION PROVIDED TO THE INVESTORS OR THEIR RESPECTIVE DIRECTORS, MANAGERS, OFFICERS,
EQUITY HOLDERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR
REPRESENTATIVES IN CONNECTION WITH DISCUSSIONS OR ACCESS TO MANAGEMENT OF RIGS AND THE
COMPANY OR IN ANY OTHER FORM IN EXPECTATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, IN EACH CASE EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN ARTICLE 3 (COLLECTIVELY, THE “DUE DILIGENCE INFORMATION”);
(iv) ACKNOWLEDGES AND AGREES THAT (A) THE DUE DILIGENCE INFORMATION INCLUDES CERTAIN
PROJECTIONS, ESTIMATES AND OTHER FORECASTS, AND CERTAIN BUSINESS PLAN INFORMATION, (B) THERE
ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH PROJECTIONS, ESTIMATES AND OTHER
FORECASTS AND PLANS AND IT IS FAMILIAR WITH SUCH UNCERTAINTIES, AND (C) IT IS TAKING FULL
RESPONSIBILITY FOR MAKING ITS OWN EVALUATIONS OF THE ADEQUACY AND ACCURACY OF ALL
PROJECTIONS, ESTIMATES AND OTHER
26
FORECASTS AND PLANS SO FURNISHED TO IT AND ANY USE OF OR RELIANCE BY IT ON SUCH PROJECTIONS, ESTIMATES AND OTHER FORECASTS AND PLANS SHALL BE AT ITS
SOLE RISK; AND
(v) AGREES, TO THE FULLEST EXTENT PERMITTED BY LAW, THAT NONE OF REGENCY HIG, THE
COMPANY OR ANY OF THEIR RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EQUITY HOLDERS, EMPLOYEES,
AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY
LIABILITY OR RESPONSIBILITY WHATSOEVER TO THE INVESTORS OR THEIR DIRECTORS, MANAGERS,
OFFICERS, EQUITY HOLDERS, EMPLOYEES, AFFILIATES, CONTROLLING PERSONS, AGENTS, ADVISORS OR
REPRESENTATIVES ON ANY BASIS (INCLUDING IN CONTRACT OR TORT, UNDER FEDERAL OR STATE
SECURITIES LAWS OR OTHERWISE) RESULTING FROM THE FURNISHING TO THE INVESTOR, OR ANY
INVESTOR’S USE OF, ANY DUE DILIGENCE INFORMATION.
ARTICLE 6
COVENANTS
COVENANTS
Section 6.1 Formation of the Company; Joinder; Related Matters.
(a) Formation of the Company. Regency HIG agrees to cause the Company to be formed as
a Delaware general partnership prior to the Closing. The Parties agree that simultaneous with the
Closing, any Affiliate of Regency HIG that is a general partner in the Company will withdraw from
the Company.
(b) Joinder of the Company. Prior to the Closing, Regency HIG shall cause the Company
to execute the joinder set forth on the signature pages of this Agreement.
(c) Company Matters. The Parties agree that all representations and warranties that
relate to the Company and covenants and agreements of the Company set forth in this Agreement shall
not be given any effect for any time period beginning before the date the Company executes and
delivers the joinder referred to in Section 6.1(b).
Section 6.2 Tax Effect. None of the Parties (nor such Parties’ counsel or accountants) has
made or is making any representations to any other Party (nor such Party’s counsel or accountant)
concerning any of the Tax effects of the transactions provided for in this Agreement. Each Party
hereto represents that it has obtained, or may obtain, independent Tax advice with respect thereto
and upon which it, if so obtained, has solely relied.
Section 6.3 Tax Matters.
(a) Each of the Parties agrees to cooperate fully with each other Party to enable each Party
to determine its own Tax liability with respect to the Company accurately. Each Party shall
provide and make available to each other Party such records as a Party may reasonably request for
the defense of any audit, examination, administrative appeal or litigation of any Tax Return or
other similar governmental report or form.
27
(b) Regency HIG shall be liable for, and shall indemnify, defend and hold harmless the Company
for, any and all liability for Taxes with respect to RIGS and the ownership or operation of the
Assets or the RIGS Interests for any taxable period ending on or before the Closing Date (“Pre-Closing Tax Period”) and with respect to any taxable period that
begins on or before and ends after the Closing Date (“Straddle Period”), for the portion thereof
ending at the close of business on the Closing Date. In the case of any Straddle Period, liability
for Income Taxes relating to RIGS or the ownership or operation of the Assets or the RIGS Interests
shall be allocated between Regency HIG and the Company as if all of the books and records relating
to RIGS and the ownership and operation of the Assets were closed as of the close of business on
the Closing Date. In the case of any Straddle Period, the amount of any Non-Income Taxes with
respect to RIGS or the Assets allocable to the portion of the Straddle Period ending on the Closing
Date shall be deemed to be the amount of such Taxes for the entire period (or, in the case of such
Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding
period) multiplied by a fraction, the numerator of which is the number of calendar days in the
applicable period ending on and including the Closing Date and the denominator of which is the
number of calendar days in the entire relevant period. In the case of ad valorem property Taxes,
“taxable period” means the period beginning on the assessment date for ad valorem property Taxes
through the day before the next assessment date for such Taxes. Upon receipt of the ad valorem
property Tax bills for the taxable period that contains the Closing Date, Regency HIG shall
calculate the prorated ad valorem property Taxes and shall xxxx the Company for the amount
allocated to the post-Closing period, with the Company making such payment within 20 days of
receipt of such xxxx. The Company shall promptly forward to Regency HIG any ad valorem property
Tax bills for the taxable period that contains the Closing Date that are received by the Company.
Regency HIG shall be responsible, as between Regency HIG and the Company, for the payment of the
total amount of ad valorem property Taxes imposed on or with respect to the Assets for the taxable
period that contains the Closing Date. Notwithstanding any provision of this Agreement to the
contrary, any Tax receivables included within Current Assets shall be for the benefit of the
Company and shall not reduce or offset any obligation of Regency HIG for Taxes regardless of the
period to which such receivable relates. The Company shall prepare and file all Tax Returns with
respect to RIGS and the ownership or operation of the Assets due after the Closing Date and Regency
HIG shall fully cooperate with the Company, at its own cost, in the preparation of such Tax Returns
relating to any Straddle Period.
Section 6.4 Further Assurances. From time to time after the Closing Date, and without any
further consideration, the Parties agree to execute and deliver all such additional instruments and
documents, and will do all such other acts and things, all in accordance with applicable Laws, as
may be reasonably necessary to give effect to the transactions consummated by this Agreement.
Section 6.5 Expenses. Except as otherwise provided in this Section 6.5, each Party
shall bear its own expenses incurred in connection with the Transaction Documents and the
Transactions whether or not the Transactions are consummated, including all fees of its legal
counsel, financial and business advisers and accountants; provided that Regency HIG shall reimburse
the Xxxxxx Investors for reasonable and documented third party expenses paid in connection with the
Transaction Documents and the Transactions if this Agreement is terminated by any Xxxxxx Investor
pursuant to Section 8.1(b). Regency HIG shall bear all transfer,
28
recording, sales and similar Taxes resulting from the conveyance of the RIGS Interests to the Company.
Section 6.6 Public Statements. The Parties shall consult with each other prior to issuing any
public announcement, statement or other disclosure with respect to this Agreement, the other
Transaction Documents or the transactions contemplated hereby or thereby and neither Regency HIG on
one hand nor any Investor on the other shall issue any such public announcement, statement or other
disclosure without having first received the written consent of the other Party, except as may be
required by Law or any listing agreement with a national securities exchange; provided that the
Xxxxxx Investors are given the prior opportunity to review and comment on any such public
announcement, statement or other disclosure required to be issued to the extent related to the
Xxxxxx Investors or their Affiliates.
Section 6.7 Operation of the Assets. From the Execution Date through the Closing, Regency HIG
shall use reasonable efforts to cause the Business to be operated in the ordinary course (other
than in connection with the Haynesville Expansion Project, which shall be operated as provided for
in Section 6.8) and, without limiting the generality or effect of the foregoing, Regency
HIG shall use reasonable efforts to cause RIGS to maintain the Assets, comply with all applicable
Laws, and preserve intact the Business and its relationships with customers, suppliers and others
having business relationships with RIGS, in each case in all material respects and as consistent
with past practices employed with respect to the Assets. Without limiting the generality or effect
of the foregoing, except as set forth on Schedule 6.7, prior to the Closing, without the
prior written consent of the Investors, which consent shall not be unreasonably withheld,
conditioned or delayed, neither Regency HIG nor the Company shall cause or allow the Company or
RIGS to, except as otherwise permitted or required by the other terms of this Agreement or by the
terms of any other Transaction Document:
(a) amend its Organizational Documents;
(b) liquidate, dissolve, recapitalize or otherwise wind up its business;
(c) issue, grant or sell any equity interests, notes, bonds (or options or warrants) or any
other securities or obligations convertible into or exchangeable for any of its equity interests;
(d) declare or pay dividends or make any other distributions in respect of its equity
interests, or purchase, redeem or otherwise acquire or retire for value any of its equity
interests;
(e) incur any Borrowed Money Debt other than Borrowed Money Debt that will be paid or
otherwise discharged in full at or prior to the Closing by Regency HIG or its Affiliates (other
than the Company or RIGS);
(f) cancel, compromise, waive, release or settle any right, claim or lawsuit, other than in
the ordinary course of business; provided that Regency HIG and/or the Company will consult with
Investors prior to such cancellation, compromise, waiver, release or settlement if the amount
involved or required to be paid under (i) any such single cancellation, compromise,
29
waiver, release or settlement exceeds $500,000 or (ii) all such cancellations, compromises,
waivers, releases and settlements exceeds $500,000 in the aggregate;
(g) except in the ordinary course of business or as contemplated by the Haynesville Expansion
Project, terminate, amend in any material respect or grant a waiver of any material term of, or
give any material consent with respect to, any Material Contract after the Execution Date;
(h) subject to any Encumbrance on any of the Assets or the RIGS Interests;
(i) enter into any employment, deferred compensation, severance, consulting, non-competition
or similar agreement involving any executive officer or other employee of RIGS or employ any Person
as an employee of RIGS or the Company;
(j) make, change or revoke any election in respect of Taxes, make any agreement or settlement
with any Governmental Authority with respect to Taxes, file any amended Tax Return or consent to
any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(k) except as may be required as a result of a change in applicable Laws or GAAP, change in
any material respect any accounting method;
(l) sell, assign, transfer, lease or otherwise dispose of any assets or properties, except in
the ordinary course of business or obsolete assets or properties;
(m) other than (i) to the extent necessary to satisfy the obligations of the Company or RIGS
under applicable Law or (ii) in respect to an emergency situation as is reasonably necessary to
protect human health and safety or the environment, or to provide for continuation of the
operations and business of the Company or RIGS, in each case as determined by the Company or RIGS
in its reasonable discretion, make or commit to make any capital expenditures not provided for in
the Haynesville Expansion Budget in excess of $125,000 per month;
(n) other than compliance filings or other routine tariff, comments, interventions or response
filings made in the ordinary course of business, make any substantive filings or submit any
documents or information to FERC or any other Governmental Authority;
(o) merge or consolidate with, or purchase substantially all of the assets or business of, or
equity interests in, or make an investment in any Person or make any loan to any Person (other than
extensions of credit to customers in the ordinary course of business);
(p) except as otherwise contemplated by the Transaction Documents, enter into a transaction
with another Regency Entity or any of its Affiliates; or
(q) take or agree to take any of the actions described above.
Section 6.8 Haynesville Expansion Project. From the Execution Date through the Closing,
Regency HIG shall use reasonable efforts to cause the Haynesville Expansion Project to
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continue to be developed in all material respects in accordance with the Haynesville Expansion Budget and
Exhibit C to the Company Partnership Agreement.
Section 6.9 Information, Access and Assistance.
(a) Prior to the Closing, each of Regency HIG and the Investors shall keep the others apprised
of the status of matters relating to completion of the Transactions, including promptly furnishing
the others with copies of notices or other communications received by such Party from any third
party or any Governmental Authority with respect to the Transactions. Prior to the Closing, each
of Regency HIG and the Investors shall give prompt notice to the others of any development or
combination of developments that, individually or in the aggregate, is reasonably likely to
prevent, materially delay or materially impair its ability to consummate the Transactions.
(b) Upon receipt of reasonable advance notice, Regency HIG will afford the Investors and their
respective authorized representatives reasonable access from the Execution Date through the earlier
of the termination of this Agreement pursuant to Article 8 and the Closing Date, during
normal business hours, solely in furtherance of each Investor’s investigation of the Company and
RIGS, to the offices, properties, books and records of RIGS and to any personnel that provide
services to RIGS, and will furnish each Investor with such additional information concerning the
Company, RIGS, the Business and the Assets as may be reasonably requested, but only to the extent
such information is in the possession of Regency HIG or any of its Affiliates or is otherwise
readily available. Notwithstanding the foregoing, (i) the Investors shall have no right of access
to, and Regency HIG shall have no obligation to provide to any Investor, (A) information relating
to bids received from others in connection with any of the transactions contemplated by this
Agreement and information and analysis (including financial analysis) relating to such bids, (B)
any information the disclosure of which would jeopardize any privilege available to Regency HIG or
any of its Affiliates, (C) any information the disclosure of which would cause Regency HIG or any
of its Affiliates to breach a confidentiality obligation or (D) any information the disclosure of
which would result in a violation of Law; and (ii) without the prior written consent of Regency HIG
(which will not be unreasonably withheld or delayed), the Investors shall not contact any suppliers
to, or customers of, Regency HIG or any of its Affiliates with respect to the Transactions.
(c) All information obtained pursuant to this Section 6.9 shall be “Evaluation
Material” as such term is used in the Confidentiality Agreement and shall be subject to the terms
thereof. The Confidentially Agreement shall terminate as of the Closing.
Section 6.10 Exclusivity. From the Execution Date through the earlier of the Closing Date or
the date that this Agreement is terminated in accordance with Article 8, each of Regency
HIG and the GE Investor will negotiate and shall cause their Affiliates to negotiate exclusively
with the Xxxxxx Investors in order to finalize and close the Transactions. Each of Regency HIG and
the GE Investor agrees (i) to discontinue all discussions with any Person other than the Xxxxxx
Investors concerning any transaction or series of transactions that would impede or preclude the
Transactions being consummated with the Xxxxxx Investors and (ii) none of Regency HIG, the GE
Investor or any of their respective affiliates, officers, employees, directors, stockholders,
advisers and representatives will, directly or indirectly, solicit or otherwise
31
encourage the submission of, initiate or participate in any discussions with any Person other than the Xxxxxx
Investors concerning, or enter into any agreement with respect to the Transactions, directly or indirectly, or any other transaction that could impede or preclude the
Transactions being consummated with Xxxxxx Investors.
Section 6.11 Xxxxxx Capital Call. Upon the first Business Day after the Regency Conditions
Notice Date, Xxxxxx Investor I and Xxxxxx Investor II shall request Xxxxxx XX XX, L.P. and Xxxxxx
Parallel Fund XX XX, L.P., respectively, to (a) make the requisite capital call pursuant to the
Organizational Documents of Xxxxxx Infrastructure Fund II, L.P. and Xxxxxx Infrastructure Parallel
Fund II, L.P., respectively, necessary to fully satisfy and discharge each of the Xxxxxx Investor’s
payment obligations set forth in Article 2. The Xxxxxx Investors shall notify Regency HIG
when such capital call has been made.
Section 6.12 Expenses Paid Post-Closing. The Parties agree that all costs incurred after the
Closing in connection with the Haynesville Expansion Project that are approved pursuant to the
Company Partnership Agreement or the Services Agreement shall be borne exclusively by the Company
or RIGS. To the extent any such costs (a) are paid by the MLP or any of its Affiliates (other than
the Company and RIGS) after the Closing and (b) are not otherwise reimbursed to such Person
pursuant to Section 2.1, the Company agrees to reimburse such Person promptly after such
Person provides the Company with documentation that reasonably supports the payment of such costs.
Section 6.13 Historical Financial Statements. In connection with a financing transaction
approved by the Management Committee, Regency HIG agrees that it will use commercially reasonable
efforts to assist a nationally recognized accounting firm in the preparation of up to three years
of audited historical financial statements of the Company and/or RIGS; provided that the Company
shall reimburse Regency HIG and/or its Affiliates for all costs associated with the preparation of
such historical financial statements, including all third party costs and any portion of internal
costs that are allocable to the preparation of such financial statements.
ARTICLE 7
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party’s Obligations. The respective obligation of each Party
to effect the transactions contemplated hereby is subject to the satisfaction at or prior to the
Closing Date of the following conditions:
(a) No temporary restraining order, preliminary or permanent injunction or other order
(whether temporary, preliminary or permanent) issued by any court or other Governmental Authority
of competent jurisdiction or other legal restraint or prohibition shall be in effect which prevents
the consummation of the transactions contemplated by this Agreement.
(b) No legal proceeding shall be pending that involves any challenge to or seeking damages or
other relief in connection with the transactions contemplated by this Agreement or that may have
the effect of preventing, delaying, making illegal, imposing
32
limitations or conditions on or
otherwise interfering with the transactions contemplated by this Agreement.
(c) The amendment to the Credit Agreement that allows for the consummation of the transactions
contemplated by this Agreement without any obligation of or liability to RIGS or the Company under
the Credit Agreement and without any liens, security interests or other rights to the Assets or the
RIGS Interests arising under the Credit Agreement, shall have been executed and delivered to the
Company by the administrative agent under the Credit Agreement.
(d) RIGS shall have been converted into a Delaware limited partnership.
Section 7.2 Conditions to the Investor’s Obligations. The obligation of the Investors to
consummate the transactions contemplated by this Agreement is subject to the satisfaction of the
following conditions, any one or more of which may be waived in writing by the Investors in their
sole discretion:
(a) (i) Each of the representations and warranties of Regency HIG made in this Agreement will
be true and correct as of the Execution Date (except to the extent such representations and
warranties speak to an earlier date, in which case as of such earlier date) and as of the Closing
Date (as if made anew at and as of the Closing Date, except to the extent such representations
speak to an earlier date, in which case as of such earlier date) except to the extent the failure
of such representations and warranties to be so true and correct has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect
(provided that for purposes of determining whether the condition set forth in this sentence has
been satisfied, all “Material Adverse Effect” and other materiality qualifiers contained in Regency
HIG’s representations and warranties shall be disregarded), and (ii) Regency HIG shall have
performed or complied in all material respects with all of the covenants and agreements required by
this Agreement to be performed or complied with by Regency HIG on or before the Closing.
(b) Regency HIG shall have delivered or caused to be delivered all of the closing deliveries
set forth in Section 2.4(b).
(c) With respect to Liens on any assets of RIGS (including the Assets) or the RIGS Interests
that secure any Borrowed Money Debt, including any Borrowed Money Debt under the Credit Agreement,
the holders of the Liens shall have either (i) released the Liens or (ii) furnished to the Company
fully executed releases of such Liens, with the release to the Company of such releases conditioned
only on the Closing.
(d) The Firm Transportation Contracts and Compression Contracts shall have been executed and
delivered by the parties thereto and any rights thereunder to terminate any such contracts or any
automatic expiration of such contracts resulting from the failure of any conditions precedent (such
as approval of the board of an entity) shall have been waived in writing by all of the
counterparties thereto.
33
(e) The Pipeline Construction Contract to be entered into by and between RIGS and Xxxxx
Xxxxxxx International, Inc. substantially in the form attached hereto as Exhibit H shall
have been executed and delivered by the parties thereto.
Section 7.3 Conditions to Regency HIG’s Obligations. The obligation of Regency HIG to
consummate the transactions contemplated by this Agreement is subject to the satisfaction of the
following conditions, any one or more of which may be waived in writing by Regency HIG in its sole
discretion:
(a) (i) Each of the representations and warranties of the Investors made in this Agreement
will be true and correct as of the Execution Date (except to the extent such representations and
warranties speak to an earlier date, in which case as of such earlier date) and as of the Closing
Date (as if made anew at and as of the Closing, except to the extent such representations and
warranties speak to an earlier date, in which case as of such earlier date) except to the extent
the failure of such representations and warranties to be so true and correct has not had, and would
not reasonably be expected to have, individually or in the aggregate, a material adverse effect on
the ability of any Investor to perform its obligations under this Agreement (provided that for
purposes of determining whether the condition set forth in this sentence has been satisfied, all
“material adverse effect” and other materiality qualifiers contained in the Investors’
representations and warranties shall be disregarded), and (ii) the Investors shall have performed
or complied in all material respects with all of the covenants and agreements required by this
Agreement to be performed or complied with by the Investors on or before the Closing.
(b) The Investors shall have delivered or caused to be delivered all of the closing deliveries
set forth in Section 2.4(a).
(c) Regency HIG shall have received the Fairness Opinion.
ARTICLE 8
TERMINATION
TERMINATION
Section 8.1 Termination. At any time prior to the Closing, this Agreement may be terminated
and the transactions contemplated hereby abandoned:
(a) by mutual consent of the Investors and Regency HIG as evidenced in writing signed by each
of the Investors and Regency HIG;
(b) by any Investor, if there has been a breach by Regency HIG of any representation, warranty
or covenant contained in this Agreement that has prevented the satisfaction of any condition to the
obligations of such Investor at the Closing and, if such breach is of a character that it is
capable of being cured, such breach has not been cured by Regency HIG within 30 days after written
notice thereof from any Investor;
(c) by Regency HIG, if there has been a breach by any Investor of any representation, warranty
or covenant contained in this Agreement that has prevented the satisfaction of any condition to the
obligations of Regency HIG at the Closing and, if such
34
breach is of a character that it is capable of being cured, such breach has not been cured by any Investor within 30 days after written notice
thereof from Regency HIG;
(d) by any Investor or Regency HIG if any Governmental Authority having competent jurisdiction
has issued a final, non-appealable order, decree, ruling or injunction (other than a temporary restraining order) or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or
(e) by any Investor or Regency HIG, if the transactions contemplated hereby have not been
consummated by April 30, 2009; provided that neither any Investor nor Regency HIG will be entitled
to terminate this Agreement pursuant to this Section 8.1(e) if such Person’s breach of this
Agreement has prevented the consummation of the transactions contemplated by this Agreement.
Section 8.2 Effect of Termination. With the exception the expense reimbursement provisions of
Section 6.5, the provisions of Section 6.6 and Section 8.3, if this
Agreement is terminated under Section 8.1, all further obligations of the Parties under
this Agreement will terminate without further liability or obligation of any Party to the other
Parties hereunder; provided, however, nothing herein shall prejudice the ability of the
non-breaching Party from seeking damages from any other Party for any actual fraud involving a
knowing and intentional misrepresentation or omission of a material fact or willful or intentional
breach of this Agreement, including attorneys’ fees and the right to pursue any remedy at law or in
equity. The Confidentiality Agreement shall not be affected by a termination of this Agreement.
Section 8.3 Break up Fee. Notwithstanding anything to the contrary contained herein, in
addition to the potential expense reimbursement under Section 6.5, in the event this
Agreement is terminated for any reason other than a termination by Regency HIG under Section
8.1(c) with respect to the representations, warranties or covenants of either of the Xxxxxx
Investors and an Alternate Transaction is consummated within 365 days after the date of termination
of this Agreement, Regency HIG, contemporaneously with the consummation of the Alternate
Transaction, shall pay to the Xxxxxx Investors $6 million in immediately available funds.
ARTICLE 9
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 9.1 Notices. Any notice, demand or communication required or permitted under this
Agreement shall be in writing and delivered personally or by reputable overnight delivery service
or other courier, and shall be deemed to have been duly given as of the date and time reflected on
the delivery receipt, addressed as follows:
If to Regency HIG or the Company:
Regency GP LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
35
and
Regency GP LLC
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Legal Officer
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Legal Officer
If to the GE Investor:
General Electric Capital Corporation
c/o GE Energy Financial Services
000 Xxxx Xxxxx Xxxx
Xxxxxxxx XX 00000
Attention: Legal Counsel
c/o GE Energy Financial Services
000 Xxxx Xxxxx Xxxx
Xxxxxxxx XX 00000
Attention: Legal Counsel
If to either Xxxxxx Investor:
c/o Xxxxxx Capital Partners LLC
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
and
Xxxxxx Capital Partners LLC
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
A Party may change its address for the purposes of notices hereunder by giving notice to the other
Parties specifying such changed address in the manner specified in this Section 9.1.
Section 9.2 Binding Effect. This Agreement will be binding upon, and will inure to the
benefit of, the Parties and their respective successors, permitted assigns and legal
representatives.
Section 9.3 No Third Party Rights. The provisions of this Agreement are intended to bind the
Parties 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.
Section 9.4 No Waiver. No waiver or consent by any Party to or of any breach by any other
Party of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of
any other breach by such other Party of the same or any other obligations of such other Party
hereunder. Failure on the part of a Party to complain of any breach by any other Party,
irrespective of how long such failure continues, shall not constitute a waiver by such Party of its
36
rights hereunder until the applicable statute of limitations period has run. No waiver by any of
the Parties of any of the provisions hereof shall be effective unless explicitly set forth in
writing and executed by the Party sought to be charged with such waiver.
Section 9.5 Applicable Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE
THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER
JURISDICTION. A PARTY MAY BRING AN ACTION ARISING UNDER OR RELATING TO THIS AGREEMENT, IF AT ALL,
ONLY IN A FEDERAL OR STATE COURT OF COMPETENT JURISDICTION IN WILMINGTON, DELAWARE. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON-CONVENIENCE, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF SUCH ACTION OR PROCEEDING IN ANY SUCH RESPECTIVE JURISDICTION.
Section 9.6 Severability. If any provision of this Agreement or the application of any such
provision to any Person or circumstance shall be declared by any court of competent jurisdiction to
be invalid, illegal, void or unenforceable in any respect, all other provisions of this Agreement,
or the application of such provision to Persons or circumstances other than those as to which it
has been held invalid, illegal, void or unenforceable, shall nevertheless remain in full force and
effect and will in no way be affected, impaired or invalidated thereby. Upon such determination
that any provision, or the application of any such provision, is invalid, illegal, void or
unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
Section 9.7 Amendment or Modification. This Agreement may be amended, modified or
supplemented from time to time only by a written agreement executed by all the Parties.
Section 9.8 Assignment. No Party shall have the right to assign its rights or obligations
under this Agreement without the prior written consent of the other Parties; provided that each
Investor may assign its rights or obligations under this Agreement to a direct or indirect
wholly-owned subsidiary of such Investor, but no such assignment shall relieve such Investor of its
obligations under this Agreement prior to the Closing, including the obligations of such Investor
under Article 2.
Section 9.9 Conspicuousness of Provisions. THE PARTIES ACKNOWLEDGE AND AGREE THAT THE
PROVISIONS CONTAINED IN THIS AGREEMENT THAT ARE IN CAPITALIZED LETTERS SATISFY THE REQUIREMENT OF
THE “EXPRESS NEGLIGENCE RULE” AND ANY OTHER REQUIREMENT AT LAW OR IN EQUITY THAT PROVISIONS
CONTAINED IN A CONTRACT BE CONSPICUOUSLY MARKED OR HIGHLIGHTED.
37
Section 9.10 Counterparts. This Agreement may be executed in any number of counterparts with
the same effect as if all Parties had signed the same document. All counterparts shall be
construed together and shall constitute one and the same instrument. Execution and delivery of
this Agreement by exchange of facsimile or other electronically transmitted counterparts bearing
the signature of a Party shall be equally as effective as delivery of a manually executed
counterpart by such Party.
Section 9.11 No Recourse. For the avoidance of doubt, the provisions of this Agreement shall
not give rise to any right of recourse against any directors, members, managers, stockholders,
owners, officers, partners, employees, agents, consultants, attorneys or representatives of any
Party, but nothing herein shall limit any obligation of the Xxxxxx Investor I Parent as set forth
in the Xxxxxx I Parent Guarantee or of the Xxxxxx Investor II Parent as set forth in the Xxxxxx XX
Parent Guarantee.
Section 9.12 Entire Agreement; Supersedure. This Agreement and the instruments referenced
herein supersede all previous understandings or agreements among the Parties, whether oral or
written, with respect to their subject matter, including the Letter of Intent; provided that the
Confidentiality Agreement shall remain in full force and effect until the Closing. This Agreement
and such instruments contain the entire understanding of the Parties with respect to the subject
matter hereof and thereof. 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 after the Execution Date.
Section 9.13 Disclosure Schedules. The inclusion of any information (including dollar
amounts) in any of the disclosure schedules attached hereto (collectively, the “Disclosure
Schedules”) shall not be deemed to be an admission or acknowledgment by any Party that such
information is required to be listed on such section of the relevant Disclosure Schedules or is
material to or outside the ordinary course of business of such Party. The information contained in
this Agreement, the Exhibits hereto and the Disclosure Schedules are disclosed solely for purposes
of this Agreement, and no information contained herein or therein shall be deemed to be an
admission by any Party to any third party of any matter whatsoever (including any violation of any
Law or breach of contract). Unless the context otherwise requires, all capitalized terms used in
the Disclosure Schedules shall have the respective meanings assigned in this Agreement. Prior to
the Closing, Regency HIG shall notify Investors of any changes, additions, or events which cause
any material change in or addition to the Disclosure Schedules promptly in the event Regency HIG
becomes aware of the same by delivery of appropriate updates to the Disclosure Schedules to the
Investors. Such supplemental disclosures shall amend and supplement the Disclosure Schedules
delivered on the Execution Date for all purposes only if Closing occurs.
Section 9.14 Reliance on Counsel.
(a) Each of the Parties agrees that it has been represented by independent counsel of its
choice during the negotiation and execution of this Agreement and the documents referred to herein,
and that it has executed the same upon the advice of such independent counsel. Each Party and its
counsel cooperated in the drafting and preparation of this Agreement
38
and the documents referred to herein, and any and all drafts relating thereto shall be deemed
the work product of the Parties and may not be construed against any Party by reason of its
preparation. Therefore, the Parties hereto 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.
(b) Each of the Investors and the Company acknowledge that Xxxxxx & Xxxxxx L.L.P. has been and
is solely representing the MLP, Regency HIG and Regency Employees Management LLC and not any
Investor or the Company in connection with the Transaction Documents or the Transactions.
Section 9.15 Several Obligations. Parties agree that the obligations and liabilities of each
Investor hereunder are several and not joint obligations and liabilities.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Execution Date.
REGENCY HAYNESVILLE INTRASTATE GAS LLC | ||||||
By: | Regency Gas Services LP, its sole member | |||||
By: | Regency OLP GP LLC, its general partner | |||||
By: Name: |
/s/
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Title: | Chairman and President | |||||
GENERAL ELECTRIC CAPITAL CORPORATION | ||||||
By: Name: |
/s/
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Title: | ||||||
XXXXXX GAS PIPELINE I, L.P. | ||||||
By: | Xxxxxx Gas Pipeline I GP LLC, its general partner | |||||
By: Name: |
/s/
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Title: | President | |||||
XXXXXX GAS PIPELINE II, L.P. | ||||||
By: | Xxxxxx Gas Pipeline II GP LLC, its general partner | |||||
By: | ||||||
Name: | ||||||
Title: | President |
Signature Page to Contribution Agreement
JOINDER:
IN WITNESS WHEREOF, by executing this Joinder, the Company agrees to be bound by all of the
terms and conditions of this Agreement that are applicable to the Company.
RIGS HAYNESVILLE PARTNERSHIP CO. | ||||||
By: Name: |
/s/
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Title: | ||||||
Date: | ||||||
Signature Page to Joinder of Company to Contribution Agreement
EXHIBIT A
DEFINED TERMS
“Act” means the Delaware Revised Uniform Partnership Act, 6 Del.C. §§ 15-101 et
seq., as it may be amended from time to time, and any successor thereto.
“Actual Haynesville Capex” means the amount by which (a) the actual capital expenditures paid by
the Company or RIGS with respect to the Haynesville Expansion Project exceed (b) the sum of (i) the
amount of contributions made to the Company by Regency HIG pursuant to Section 5.9 in
respect of HEP Losses and (ii) the Basket Credit Amount, if any.
“Adjustment Items” means the Pre-Closing Expenditures and Working Capital, collectively.
“Affiliate” means with respect to a Person, any other Person that, directly or indirectly,
Controls, is Controlled by, or is under Common Control with, the specified Person.
“Agreement” means this Contribution Agreement, as it may be amended, supplemented or modified from
time to time in accordance with its terms.
“Xxxxxx 1 Covered Persons” shall have the meaning set forth in Section 5.2.
“Xxxxxx 2 Covered Persons” shall have the meaning set forth in Section 5.2.
“Xxxxxx Covered Persons” shall have the meaning set forth in Section 5.2.
“Xxxxxx Investor 1” shall have the meaning set forth in the preamble.
“Xxxxxx Investor 2” shall have the meaning set forth in the preamble.
“Xxxxxx Investors” shall have the meaning set forth in the preamble.
“Xxxxxx Investor I Parent” shall have the meaning set forth in the recitals.
“Xxxxxx Investor II Parent” shall have the meaning set forth in the recitals.
“Xxxxxx I Parent Guarantee” shall have the meaning set forth in the recitals.
“Xxxxxx XX Parent Guarantee” shall have the meaning set forth in the recitals.
“Alternate Transaction” shall mean any financing or similar transaction or transactions similar to
the Transaction that are undertaken by the MLP or any of its Affiliates that results in funds being
directly provided to RIGS or any other Affiliate of the MLP for the funding in whole or in part of
the Haynesville Expansion Project or any material segment thereof.
“AMI Agreement” shall have the meaning set forth in Section 2.4(b)(vii).
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“Assets” means (a) all of the assets owned by RIGS as of the Execution Date that are used in
connection with the Business that are not referred to specifically in (b) through (g) below, (b)
all real property owned in fee (or equivalent interest) on which the Business or its assets are
located which specifically include, without limitation, the fee interests identified on
Schedule 3.6(g), together with all buildings, structures, facilities, fixtures and other
improvements thereon (“Owned Real Property”); (c) the easements, servitudes, surface use rights and
rights-of-way used in connection with the Business or which are necessary in all material respects,
to operate the Business in a manner consistent with the operation of the Business by RIGS
immediately prior to the Closing (“Easements”), together with all pipelines, storage tanks, utility
assets and other facilities situated thereon; (d) all leasehold and subleasehold estates and other
rights to use or occupy any land, buildings, structures, fixtures, improvements or other interests
in real property on which the Business or its assets are located which specifically include,
without limitation, the leasehold and subleasehold estates identified on Schedule 3.6(h)
(“Leased Real Property,” and, together with the Owned Real Property and the Easements, “Real
Property”), together with all leases, subleases, licenses, concessions and other agreements
(written or oral), and any ancillary documents pertaining thereto, including, for example,
amendments, modifications, supplements, exhibits, schedules, addenda and restatements thereto and
thereof (“Real Property Leases”); (e) the furniture, fixtures, equipment, machinery, computers and
other tangible personal property used or held for use in the conduct of the Business at the
locations at which the Business is currently conducted or at customers’ premises (the “Tangible
Personal Property”); (f) the leases or subleases of Tangible Personal Property that are used in
connection with the Business (“Personal Property Leases”); and (g) all right, title and interest in
and under all Contracts to which RIGS is a party relating to the Business, other than Real Property
Leases, Easements and Personal Property Leases (“Business Contracts”).
“Basket Credit Amount” means an amount equal to the lesser of (a) Shielded HEP Losses and (b)
Non-HEP Losses.
“Benefit Plans” shall have the meaning set forth in Section 3.13(b).
“Borrowed Money Debt” means all indebtedness for borrowed money and any guaranties of indebtedness
for borrowed money.
“Budgeted Haynesville Capex” means the total amount of capital expenditures included in the
Haynesville Expansion Budget (which shall be adjusted for any approved increase in scope of the
Haynesville Expansion Project).
“Business” means the business of RIGS conducted over the 12 months prior to the Execution Date and
as of the date hereof, including the portion of the Haynesville Expansion Project covered by such
time period.
“Business Contracts” shall have the meaning set forth in “Assets” above.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks
are required or authorized by law to be closed in the State of Texas.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq., as amended.
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“Claim Notice” shall have the meaning set forth in Section 5.7(a).
“Closing” shall have the meaning set forth in Section 2.3.
“Closing Date” shall have the meaning set forth in Section 2.3.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” shall have the meaning set forth in the recitals.
“Company Partnership Agreement” shall have the meaning set forth in the recitals.
“Compression Contracts” means the contracts, substantially in the form attached hereto as
Exhibit I.
“Confidentiality Agreement” means that certain Non-Disclosure Agreement, dated December 16, 2008,
by and between the MLP and Xxxxxx Capital Partners LLC.
“Contract” means any contract, commitment, lease, license, mortgage, bond, note or other instrument
evidencing indebtedness, or other legally binding agreement, in each case containing terms that
remain executory, and all amendments thereof, but excluding any permits or employee benefit plans.
“Control,” including the correlative terms “Controlling,” “Controlled by” and “under Common Control
with” means possession, directly or indirectly (through one or more intermediaries), of the power
to direct or cause the direction of the management or policies (whether through ownership of
securities or any partnership or other ownership interest, by contract or otherwise) of a Person.
For the purposes of this definition, ownership of more than 50% of the voting interests of any
entity shall be conclusive evidence that Control exists.
“Cost Overruns” means the lesser of (a) the amount, if any, by which (i) Actual Haynesville Capex
exceeds (ii) Budgeted Haynesville Capex and (b) $20,000,000.
“Covered Persons” shall have the meaning set forth in Section 5.4.
“Credit Agreement” means that certain Fourth Amended and Restated Credit Agreement dated as of
August 15, 2006, as amended and restated, supplemented or otherwise modified from time to time,
among RGS, the MLP, the subsidiary guarantors and the lenders and other parties thereto.
“Current Assets” means the current assets reasonably described by the subheadings under such term
in Schedule 2.1(a), which amounts are prepared in accordance with GAAP, consistently
applied, except as otherwise set forth on Schedule 2.1(a).
“Current Liabilities” means the current liabilities reasonably described by the subheadings under
such term in Schedule 2.1(a), which amounts are prepared in accordance with GAAP,
consistently applied, except as otherwise set forth on Schedule 2.1(a).
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“Disclosure Schedules” shall have the meaning set forth in Section 9.13.
“Dispute Notice” shall have the meaning set forth in Section 2.1(a)(iii).
“Due Diligence Information” shall have the meaning set forth in Section 5.10(b)(iii).
“Easements” shall have the meaning set forth in “Assets” above.
“Encumbrances” means all liens, encumbrances, security interests, charges or claims or restrictions
on transfer other than Permitted Liens.
“Environmental Claim” means any Proceeding or Loss resulting from or arising out of (a) violation
of or liability (including STRICT LIABILITY) under any Environmental Law or Environmental Permit;
(b) the performance of an Environmental Response; (c) unlawful exposure to Hazardous Substances; or
(d) the Release of any Hazardous Substances.
“Environmental Laws” means any and all applicable laws (including common law), rules, ordinances,
codes, decrees, judgments, directives, judicial or administrative orders or regulations of any
Governmental Authority having jurisdiction over RIGS or the Assets pertaining to prevention of
pollution, protection of the environment, generation, transportation, or disposal of Hazardous
Substances, remediation of contamination, development, construction, ownership and operation of the
Haynesville Expansion Project, or workplace health and safety, including CERCLA; the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. §
7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 5101
et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil
Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community
Xxxxx-xx-Xxxx Xxx, 00 X.X.X. § 00000 et seq.; the Safe Drinking Water Act, 42
U.S.C. §§ 300f through 300j; the Occupational Safety and Health Act, 29 U.S.C. § 651 et
seq.; each as amended, and all similar laws, rules and regulations of any Governmental
Authority having jurisdiction over RIGS, the Assets, or the Haynesville Expansion Project.
“Environmental Permits” means all permits, approvals, consents, licenses, franchises, exemptions
and other governmental authorizations, consents and approvals required under Environmental Law.
“Environmental Response” means any action required under Environmental Law (a) to prevent, respond
to, remove, remediate, xxxxx, investigate or monitor the Release or threatened Release of Hazardous
Substances at, on, in, about, under, within or near the air, soil, surface water, groundwater or
other environmental media; or (b) to correct a violation under Environmental Law.
“ERISA” shall have the meaning set forth in Section 3.13(b).
“ERISA Affiliate” means any trade or business (whether or not incorporated) which is a member of a
controlled group including RIGS or the Company or which is under common control with RIGS or the
Company within the meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b)(i) of
ERISA.
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“Estimated Pre-Closing Expenditures” shall have the meaning set forth in Section 2.1(a)(i).
“Estimated Working Capital” shall have the meaning set forth in Section 2.1(a)(i).
“Execution Date” shall have the meaning set forth in the preamble.
“Existing Haynesville Expansion Contracts” shall have the meaning set forth in Section
3.21(f).
“Expropriation Rights” means the right of expropriation with authority to expropriate private
property in the State of Louisiana granted to a Person pursuant to LSA-R.S. 30:554 as a result of
such Person’s receipt of a certificate of transportation from the appropriate Governmental
Authority.
“Fairness Opinion” means the written opinion as to the fairness to the MLP and its applicable
Subsidiaries (as that term is defined in the Indenture) required by the Indenture in connection
with the consummation of the Transactions.
“FERC” means the Federal Energy Regulatory Commission.
“Firm Transportation Contracts” means firm transportation Contracts attached hereto as
Exhibit J.
“GAAP” means generally accepted accounting principles in the United States.
“GE Covered Persons” shall have the meaning set forth in Section 5.2.
“GE Investor” shall have the meaning set forth in the preamble.
“Governmental Authority” means any governmental, quasi-governmental, state, county, city or other
political subdivision of the United States or any other country, or any agency, court or
instrumentality, foreign or domestic, or statutory or regulatory body thereof.
“GP Units” shall have the meaning set forth in the recitals.
“Haynesville Expansion Budget” shall have the meaning ascribed to such term in the Company
Partnership Agreement.
“Haynesville Expansion Contracts” shall have the meaning set forth in Section 3.21(f).
“Haynesville Expansion Project” means the planned midstream infrastructure development in the
Haynesville Shale region of Louisiana by RIGS more particularly described on Exhibit K
hereto.
“Hazardous Substances” means and includes each substance, waste or material regulated, defined,
designated or classified as a hazardous waste, hazardous substance, hazardous material, pollutant,
contaminant or toxic substance under any Environmental Law and any petroleum or petroleum products
that have been Released into the environment, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls and naturally occurring radioactive material.
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“HEP Losses” means any Losses that relate to capital expenditures incurred in connection with the
Haynesville Expansion Project.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976.
“Income Taxes” means all Taxes calculated with respect to income, receipts, payroll, use, sales,
profits or similar measure.
“Indemnified Party” shall have the meaning set forth in Section 5.7(a).
“Indemnified Subject Litigation” means each of the matters described in Item No. 1,
Item No. 4 and Item No. 5 of Schedule 3.10, and, in each case, the facts
and allegations related thereto.
“Indemnifying Party” shall have the meaning set forth in Section 5.7(a).
“Indenture” means that certain Indenture, dated as of December 12, 2006, by and among the MLP, and
Regency Energy Finance Corp., the Guarantors (as defined in the Indenture) and Xxxxx Fargo Bank,
National Association, as trustee.
“Initial Operating Budget” means the operating budget attached as Exhibit E to the Company
Partnership Agreement.
“Intellectual Property” means intellectual property rights, statutory or common Law, worldwide,
including (a) trademarks, service marks, trade dress, slogans, logos and all goodwill associated
therewith, and any applications or registrations for any of the foregoing; (b) copyrights and any
applications or registrations for any of the foregoing; and (c) patents, all confidential know-how,
trade secrets and similar proprietary rights in confidential inventions, discoveries, improvements,
processes, techniques, devices, methods, patterns, formulae, specifications, and lists of
suppliers, vendors, customers, and distributors.
“Investor Closing Certificate” shall have the meaning set forth in Section 5.1(a)(ii).
“Investor Covered Persons” shall have the meaning set forth in Section 5.2.
“Investors” shall have the meaning set forth in the preamble.
“Knowledge” means the actual knowledge, without investigation or further inquiry, of the Persons
listed on Schedule 1.1.
“Law” means any law, statute, code, ordinance, order, rule, rules of common law, regulation,
judgment, decree, injunction, franchise, permit, certificate, license, authorization, or other
directional requirement of any Governmental Authority.
“Leased Real Property” shall have the meaning set forth in “Assets” above.
“Letter of Intent” means that certain Letter dated as of February 4, 2009 from Xxxxxx Acquisitions
II LLC to GE Energy Financial Services and the MLP.
“Lien” means all liens, charges or encumbrances.
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“Losses” means any and all judgments, losses, liabilities, damages, costs or expenses (including
reasonable legal fees and expenses), and, in the case of the matter described in Item No. 4
of Schedule 3.10, any diminution in value of the Assets from their value on the Closing
Date as a result of such matter and the negative effect to RIGS resulting from any loss related to
or settlement of such matter (without duplication), based on the assumption that the contract
involved in such matter is not a firm transportation contract.
“Management Committee” shall have the meaning ascribed to such term in the Company Partnership
Agreement.
“Material Adverse Effect” means any effect, event, development or change, which individually or in
the aggregate with all other such effects, events, developments or changes, that (i) is materially
adverse to the business, assets, results of operations or financial condition of RIGS and the
Company, taken as a whole, or (ii) materially impedes the ability of any Regency Entity to enter
into the Transaction Documents or to perform their obligations thereunder, but in the case of
clause (i) above, excluding any such effect, event, development or change resulting from or related
to (a) changes in general economic, political or business conditions; (b) conditions affecting the
oil and gas industry or oil and gas services industry (including the gas transportation and gas
storage industry) generally; (c) any change in law or in financial accounting rules; (d) conditions
or effects that have resulted from the announcement of the existence of this Agreement or the
pendency of this Transaction; or (e) changes or developments in commodity prices.
“Material Contracts” shall have the meaning set forth in Section 3.9(a).
“MLP” means Regency Energy Partners LP, a Delaware limited partnership.
“MMBtu” means one million (1,000,000) British thermal units.
“Organizational Documents” means the articles of incorporation, certificate of incorporation,
certificate of formation, certificate of limited partnership, bylaws, operating agreement,
partnership agreement, stockholders’ agreement and all other similar documents, instruments or
certificates executed, adopted or filed in connection with the creation, formation or organization
of a Person, including any amendments thereto.
“Non-HEP Losses” means any Losses paid by Regency HIG pursuant to Article 5.9 that are not
HEP Losses.
“Non-Income Taxes” means all Taxes other than Income Taxes.
“Owned Real Property” shall have the meaning set forth in “Assets” above.
“Partners” shall have the meaning set forth in the recitals.
“Party” and/or “Parties” shall have the meaning set forth in the preamble.
“Permits” shall have the meaning set forth in Section 3.11.
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“Permitted Liens” means (a) statutory liens for current Taxes applicable to the Assets or
assessments not yet delinquent; (b) mechanics’, carriers’, workers’, repairers’, landlords’, and
other similar liens arising or incurred in the ordinary course of business of RIGS or incurred in
connection with the Haynesville Expansion Project relating to obligations as to which there is no
default on the part of RIGS or that are not yet due or delinquent or that are being contested in
good faith, which amounts have been appropriately recorded in accordance with GAAP or bonded; (c)
applicable zoning, building and land use or similar Laws to the extent that there are no material
violations thereof that have not been disclosed in the Disclosure Schedules; (d) the terms and
conditions of all Business Contracts, Easements, Real Property Leases, and Personal Property
Leases; (e) the terms and conditions of all other documents and instruments entered into in the
ordinary course of business or in connection with the Haynesville Expansion Project listed on any
Schedule, pursuant to which any interest in the Assets was created; (f) all oil, gas or other
mineral reservations, servitudes, or interests of record or disclosed on any title insurance
policies or surveys related to the Real Property that have been made available to the Investors;
(g) liens that are to be released as of Closing; and (h) any and all other liens, encumbrances,
security interests, charges, restrictions on transfer and other minor imperfection in title which,
individually or together with all other liens, encumbrances, security interests, charges,
restrictions on transfer or other minor imperfections in title, do not materially detract from the
value of the Assets or materially interfere with the present use of the Assets or the conduct of
the Business.
“Person” means any natural person, corporation, limited partnership, general partnership, limited
liability company, joint stock company, joint venture, association, company, estate, trust, bank
trust company, land trust, business trust, or other organization, whether or not a legal entity,
custodian, trustee-executor, administrator, nominee or entity in a representative capacity and any
Governmental Authority.
“Personal Property Leases” shall have the meaning set forth in “Assets” above.
“Policies” has the meaning provided such term in Section 3.15.
“Pre-Closing Expenditures” the amount of all reasonable expenditures actually paid by Regency HIG
and its Affiliates (together with all reasonable expenditures incurred by Regency HIG and its
Affiliates (other than RIGS and the Company) that have not been paid) through the Closing Date in
connection with the Haynesville Expansion Project; provided that if any amounts otherwise included
in “Pre-Closing Expenditures” were used to purchase assets that were subsequently disposed of or
returned by Regency HIG or its Affiliates (other than RIGS and the Company), the net amount
realized by such Person upon such disposal or return shall reduce “Pre-Closing Expenditures” on a
dollar for dollar basis.
“Pre-Closing Tax Period” shall have the meaning set forth in Section 6.3(b).
“Proceeding” means any legal action, litigation, arbitration, hearing, written claim, legal
proceeding, prosecution, investigation (for which investigation a Governmental Authority has
provided notice to the applicable Party), or suit (whether civil, criminal or administrative)
commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental
Authority or any arbitrator.
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“Pro Forma Balance Sheet” shall have the meaning set forth in Section 3.7(a).
“Pro Forma Balance Sheet Date” shall have the meaning set forth in Section 3.7(a).
“Real Property” shall have the meaning set forth in “Assets” above.
“Real Property Leases” shall have the meaning set forth in “Assets” above.
“Regency Closing Payment” means an amount equal to the sum of (i) the Estimated Pre-Closing
Expenditures and (iii) the Estimated Working Capital.
“Regency Conditions Notice Date” the date that Regency HIG notifies the Xxxxxx Investors that it is
reasonably certain that all conditions to Closing set forth in Article 7 that are not
within the control of the Xxxxxx Investors will be satisfied without undue delay.
“Regency Entities” means the MLP, RGS, Regency HIG and the Company, collectively.
“Regency Fundamental Representations” shall have the meaning set forth in Section
5.1(a)(ii).
“Regency HIG” shall have the meaning set forth in the preamble.
“Regency HIG Basket Amount” means $6,000,000 and (a) with respect to indemnification by Regency HIG
that is paid to the GE Covered Persons rather than to the Company pursuant to Section 5.9,
12% of such amount and (b) with respect to indemnification by Regency HIG that is paid to the
Xxxxxx Covered Persons rather than to the Company pursuant to Section 5.9, 50% of such
amount.
“Regency HIG Cap” means $100,000,000 and (a) with respect to indemnification by Regency HIG that is
paid to the GE Covered Persons rather than to the Company pursuant to Section 5.9, $12,000,000 and
(b) with respect to indemnification by Regency HIG that is paid to the Xxxxxx Covered Persons
rather than to the Company pursuant to Section 5.9, $50,000000.
“Regency HIG Closing Certificate” shall have the meaning set forth in Section 5.1(a).
“Regency HIG Covered Persons” shall have the meaning set forth in Section 5.3.
“Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding,
abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing.
“Remaining Dispute” shall have the meaning set forth in Section 2.1(a)(iv).
“RGS” shall have the meaning set forth in the recitals.
“RGS Guarantee” shall have the meaning set forth in the recitals.
“RIGS” shall have the meaning set forth in the recitals.
“RIGS Assignment and Assumption Agreement” shall have the meaning set forth in the recitals.
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“RIGS Interests” shall have the meaning set forth in the recitals.
“Selector” shall have the meaning set forth in Section 2.1(a)(iv).
“Services Agreement” shall have the meaning set forth in the recitals.
“Sharing Ratio” shall have the meaning ascribed to such term in the Company Partnership Agreement.
“Shielded HEP Losses” means any HEP Losses applied against the Regency HIG Basket Amount.
“Straddle Period” shall have the meaning set forth in Section 6.3(b).
“Subsidiary” of any Person (the “Subject Person”) means any Person, whether incorporated or
unincorporated, of which (a) at least 50% of the securities or ownership interests having by their
terms ordinary voting power to elect a majority of the board of directors or other Persons
performing similar functions, (b) a general partner interest or (c) a managing member interest, is
directly or indirectly owned or Controlled by the Subject Person or by one or more of its
respective Subsidiaries.
“Survival Period” shall have the meaning set forth in Section 5.1(c).
“Tangible Personal Property” shall have the meaning set forth in “Assets” above.
“Tax” or “Taxes” means (a) any taxes, assessments, fees, unclaimed property and escheat obligations
and other governmental charges imposed by any Governmental Authority, including, but not limited
to, income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad valorem, value
added, turnover, sales, use, property, personal property (tangible and intangible), environmental,
stamp, leasing, lease, user, excise, duty, franchise, capital stock, transfer, registration,
license, withholding, social security (or similar), unemployment, disability, payroll, employment,
social contributions, fuel, excess profits, occupational, premium, windfall profit, severance,
estimated, or other charge of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not; (b) any liability for the payment of any amounts of the type
described in clause (a) of any other person arising by Law including any transferee or successor
liability; and (c) any liability for the payment of any amounts of the type described in clause (a)
or (b) as a result of any contract or similar agreement including the operation of all or any
express or implied obligation to indemnify any other Person.
“Tax Benefit” means the reduction in the amount of Taxes that otherwise would have been paid by any
Indemnified Party as a result of incurring any Losses. To determine such reduction in Taxes, all
deductions, losses and credits available to the Indemnified Party to reduce its Taxes shall be
deemed to be utilized in full before any Losses are applied to reduce such Taxes.
“Tax Return” means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
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“Targeted Working Capital” means $5 million.
“Third Party Claim” shall have the meaning set forth in Section 5.7(a).
“Third Party Obligation Representations” means the representations and warranties of Regency HIG
contained in Section 3.6 and Section 3.9(a)(ix) with respect to the absence or existence of any
guarantee of RIGS of, or Liens on its Assets securing, indebtedness or obligations of any Affiliate
of the MLP (other than RIGS or the Company), including Borrowed Money Debt under the Credit
Agreement and the certification in the Regency HIG Closing Certificate with respect to the
condition in Section 7.1(c).
“Total Adjustment Items” means an amount equal to the sum of (i) the Pre-Closing Expenditures and
(ii) Working Capital.
“Transaction Documents” shall have the meaning set forth in Section 2.4.
“Transactions” shall have the meaning set forth in Section 2.4.
“Working Capital” means, with respect to RIGS, an amount, which can be positive or negative, equal
to (a) Current Assets less (b) Current Liabilities less (c) Targeted Working Capital, in each case
determined as of the Closing Date.
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