DELAWARE
|
001-32678
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03-0567133
|
(State
or other jurisdiction of
|
(Commission
File Number)
|
(IRS
Employer
|
incorporation)
|
Identification
No.)
|
·
|
MPP
Antrim Gas, LLC owns and operates five natural gas treating plants
all
located at its South Chester Treating Complex in northern Michigan.
The
complex has natural gas throughput capacity of 330 million cubic
feet per
day (MMcf/d), with current throughput of approximately 225 MMcf/d.
Antrim
Shale natural gas production requires the removal of carbon dioxide
in
order to meet downstream gas pipeline quality specifications.
|
·
|
MPP
Grands Lacs Holding, LLC owns and operates an approximately 150 mile
gas
gathering pipeline system that delivers gas to the South Chester
Treating
Complex.
|
·
|
MPP
Bay Area Pipeline, LLC owns an approximately 55 mile residue pipeline
located in eastern Michigan and operated by Consumers Energy that
delivers
fuel gas under a long-term contract to a Consumers Energy power plant.
|
·
|
MPP
Jackson Pipeline, LLC owns a 75 percent interest in an approximately
25
mile pipeline located in southern Michigan and operated by Consumers
Energy that connects several interstate and intrastate pipelines
with
Eaton Rapids Gas Storage System.
|
·
|
MPP
Litchfield Pipeline, LLC owns a 44 percent interest in an approximately
30
mile pipeline located in southern Michigan and operated by ANR Pipeline
that facilitates receipts or deliveries between ANR Pipeline and
Eaton
Rapids Gas Storage System.
|
Exhibit
Number
|
Description
|
Exhibit
10.1
|
Agreement
of Purchase and Sale, dated September 10, 2008, by and among Ganesh
Energy, LLC, Gas Processing
&
Pipeline, LLC and DCP Midstream Partners, LP
|
Exhibit 10.2 |
Seventh Amendment to Omnibus Agreement, dated
October 1,
2008, among DCP Midstream, LLC, DCP
Midstream Partners, LP, DCP Midstream GP, LP,
DCP
Midstream GP, LLC and DCP Midstream Operating, LP
|
Exhibit
99.1
|
Press
Release dated October 1, 2008
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DCP MIDSTREAM PARTNERS, LP | ||
|
|
|
By: |
DCP
MIDSTREAM GP, LP
its General Partner
|
|
By: | DCP MIDSTREAM GP, LLC
its
General Partner
|
|
By: | /s/ Michael S. Richards | |
Name: Michael S. Richards |
||
Title:
Vice
President, General Counsel and
Secretary
|
||
October 7, 2008 |
Exhibit
Number
|
Description
|
Exhibit
10.1
|
Agreement
of Purchase and Sale, dated September 10, 2008, by and among Ganesh
Energy, LLC, Gas Processing
&
Pipeline, LLC and DCP Midstream Partners, LP
|
Exhibit 10.2 |
Seventh Amendment to Omnibus Agreement, dated
October 1,
2008, among DCP Midstream, LLC, DCP
Midstream Partners, LP, DCP Midstream GP, LP,
DCP
Midstream GP, LLC and DCP Midstream Operating, LP
|
Exhibit
99.1
|
Press
Release dated October 1, 2008
|
ARTICLE
I DEFINITIONS
|
1
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|
Section
1.1
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Specific
Definitions
|
1
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ARTICLE
II MECHANICS OF SALE AND PURCHASE
|
14
|
|
Section
2.1
|
Agreement
to Sell and Purchase
|
14
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Section
2.2
|
Time
and Place of Closing/Effective Date of Transaction
|
14
|
Section
2.3
|
Closing.
|
14
|
Section
2.4
|
Seller’s
Deliveries at Closing
|
14
|
Section
2.5
|
Buyer’s
Deliveries at Closing
|
15
|
Section
2.6
|
Deliverables
For Estimated Purchase Price Determination
|
16
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Section
2.7
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Post-Closing
Purchase Price Reconciliation
|
16
|
Section
2.8
|
Allocation
of Purchase Price.
|
18
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ARTICLE
III REPRESENTATIONS AND WARRANTIES OF SELLER
|
18
|
|
Section
3.1
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Organization;
Qualification
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19
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Section
3.2
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Authority
Relative to this Agreement
|
19
|
Section
3.3
|
Equity
Interests.
|
19
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Section
3.4
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Consents
and Approvals
|
21
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Section
3.5
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No
Conflict or Violation
|
21
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Section
3.6
|
Financial
Information.
|
22
|
Section
3.7
|
Contracts.
|
22
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Section
3.8
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Compliance
with Law
|
23
|
Section
3.9
|
Permits.
|
23
|
Section
3.10
|
Litigation
|
23
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Section
3.11
|
Employee
Matters.
|
23
|
Section
3.12
|
Labor
Relations
|
25
|
Section
3.13
|
Intellectual
Property.
|
26
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Section
3.14
|
Representations
with Respect to Environmental Matters.
|
26
|
Section
3.15
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Tax
Matters
|
27
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Section
3.16
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Insurance.
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27
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Section
3.17
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Absence
of Certain Changes or Events.
|
28
|
Section
3.18
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Absence
of Undisclosed Liabilities
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29
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Section
3.19
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Brokerage
and Finders' Fees
|
29
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Section
3.20
|
Corporate
and Accounting Records
|
29
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Section
3.21
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Affiliated
Transactions
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29
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Section
3.22
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Gas
Imbalances
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30
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Section
3.23
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No
Competing or Alternative Treating Plants Under Development
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30
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Section
3.24
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No
Other Representations or Warranties.
|
30
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE BUYER
|
30
|
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Section
4.1
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Corporate
Organization; Qualification.
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30
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Section
4.2
|
Authority
Relative to this Agreement
|
31
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Section
4.3
|
Consents
and Approvals
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31
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Section
4.4
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No
Conflict or Violation
|
31
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Section
4.5
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Availability
of Funds
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32
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Section
4.6
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Litigation
|
32
|
Section
4.7
|
Brokerage
and Finders' Fees..
|
32
|
Section
4.8
|
Buyer's
Acknowledgement.
|
32
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Section
4.9
|
Investment
Representations.
|
32
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Section
4.10
|
No
Other Representations or Warranties.
|
33
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ARTICLE
V COVENANTS OF THE PARTIES
|
33
|
|
Section
5.1
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Consents
and Approvals.
|
33
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Section
5.2
|
Further
Assurances
|
34
|
Section
5.3
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Employee
Matters.
|
34
|
Section
5.4
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Tax
Covenants.
|
37
|
Section
5.5
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Maintenance
of Insurance Policies.
|
38
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Section
5.6
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Preservation
of Records.
|
38
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Section
5.7
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Public
Statements
|
39
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Section
5.8
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Use
of Corporate Name
|
39
|
Section
5.9
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Confidentiality
|
39
|
Section
5.10
|
MPP
Financial Statements.
|
39
|
Section
5.11
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Non-competition
|
40
|
Section
5.12
|
Conduct
of Business Pending Closing
|
41
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ARTICLE
VI SURVIVAL; INDEMNIFICATION
|
42
|
|
Section
6.1
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Survival.
|
42
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Section
6.2
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Indemnification.
|
42
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Section
6.3
|
Calculation
of Damages.
|
44
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Section
6.4
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Procedures
for Third-Party Claims
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44
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Section
6.5
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Procedures
for First-Party Claims
|
45
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Section
6.6
|
Special
Indemnification Provision Relating to Environmental
Matters.
|
46
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ARTICLE
VII CONDITIONS TO CLOSING
|
47
|
|
Section
7.1
|
Conditions
Precedent to Obligations of Buyer.
|
47
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Section
7.2
|
Conditions
Precedent to Obligations of Seller
|
47
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ARTICLE
VIII MISCELLANEOUS PROVISIONS
|
48
|
|
Section
8.1
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Interpretation.
|
48
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Section
8.2
|
Disclosure
Letters
|
48
|
Section
8.3
|
Payments
|
49
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Section
8.4
|
Expenses
|
49
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Section
8.5
|
Choice
of Law.
|
49
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Section
8.6
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Assignment
|
49
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Section
8.7
|
Notices
|
49
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Section
8.8
|
Resolution
of Disputes.
|
51
|
Section
8.9
|
No
Right of Setoff.
|
51
|
Section
8.10
|
Time
is of the Essence
|
51
|
Section
8.11
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Entire
Agreementt.
|
51
|
Section
8.12
|
Binding
Nature; Third Party Beneficiaries.
|
51
|
Section
8.13
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Counterparts
|
52
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Section
8.14
|
Severability.
|
52
|
Section
8.15
|
Headings
|
52
|
Section
8.16
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Waiver
|
52
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Section
8.17
|
Amendment.
|
52
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Section
8.18
|
Seller
Liability
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52
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EXHIBITS
|
||
EXHIBIT
A
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FIRPTA
Affidavit
|
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EXHIBIT
B
|
Form
of Assumption Agreement
|
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EXHIBIT
C
|
Form
of Transition Services Agreement
|
“Accounting
Firm”
|
shall
have the meaning set forth in Section
2.7(c)
below.
|
“Action”
|
shall
mean any administrative, regulatory, judicial or other formal proceeding,
action, Claim, suit, investigation or inquiry by or before any
Governmental Authority, arbitrator or mediator, at law or at
equity.
|
“Affiliate”
|
shall
have the meaning set forth in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act; provided that, when applied to
Buyer,
the term “Affiliate” shall not include Spectra Energy Corp, a Delaware
corporation, or ConocoPhillips, a Delaware corporation, or any entities
owned, directly or indirectly, by Spectra Energy Corp or ConocoPhillips,
other than entities owned, directly or indirectly, by Buyer and by
DCP
Midstream, LLC.
|
“Agreement”
|
shall
mean this Agreement of Purchase and Sale, together with the Seller
Disclosure Letter, Buyer Disclosure Letter, Annex I and Exhibits
hereto,
as the same may be amended or supplemented from time to time in accordance
with the provisions hereof.
|
“Allocation
Statement”
|
shall
have the meaning set forth in Section
2.8
below.
|
“ANR”
|
shall
have the meaning set forth in Section
3.3(d)
below.
|
“Assumption
Agreement”
|
shall
mean that certain Assumption Agreement in the form of Exhibit
B
attached hereto pursuant to which Seller assumes and remains responsible
for the Retained Liabilities, from and after the Closing
Date.
|
“Bank
Accounts”
|
shall
mean all of the bank accounts existing in the name of MPP or any
Entity,
each of which is described on Schedule 1.1(c) to Seller’s Disclosure
Schedule by bank, account name, type and purpose, and identifying
the
personnel having the power to make withdrawals or otherwise manage
deposits, withdrawals or other business with respect to such
accounts.
|
“Baseline
Date”
|
shall
have the meaning set forth in Section
3.3(e)
below.
|
“Business”
|
shall
have the meaning set forth in the Recitals
of
this Agreement.
|
“Business
Day”
|
shall
mean any day that is not a Saturday, Sunday or other day on which
banks
are required or authorized by Law to be closed in the City of New
York.
|
“Buyer
Disclosure Letter”
|
shall
mean the Buyer Disclosure Letter delivered to Seller concurrently
with
this Agreement, which is an integral part of this
Agreement.
|
“Buyer
Indemnified Parties”
|
shall
have the meaning set forth in Section
6.2(a)
below.
|
“Buyer
Returns”
|
shall
have the meaning set forth in Section
5.4(a)(ii)
below.
|
“Cap
Amount”
|
shall
have the meaning set forth in Section
6.2(d)
below.
|
“Casualty
Loss”
|
shall
have the meaning set forth in Section
7.1(c)
below.
|
“Charlevoix”
|
shall
have the meaning set forth in Section
3.21
below.
|
“Claims”
|
shall
mean any and all demands, claims, lawsuits, arbitral proceedings,
causes
of action, investigations and other proceedings, regardless of the
stage
of prosecution and regardless of whether pending before a court,
regulatory agency or other form of Governmental
Authority.
|
“Closing
Date”
|
shall
mean the date on which the transactions contemplated by this Agreement
actually close.
|
“Closing
Net Working Capital”
|
which
may be positive or negative, shall mean an amount equal to Current
Assets
minus Current Liabilities as of the Effective Date.
|
“Closing
Statement”
|
shall
have the meaning set forth in Section
2.7(a)
below.
|
“Code”
|
shall
mean the Internal Revenue Code of 1986, as amended.
|
“Commercial
Contracts”
|
shall
mean any and all contracts to which MPP or an Entity is a party (excluding
the rights-of-way or easements associated with the pipelines), pursuant
to
which MPP or any Entity (i) derives Business revenues or secures
the right
to use the assets and properties of the Business or (ii) has provided
a
benefit or right to any third Person; Commercial Contracts shall
include,
without limitation, all CO2
treating
and similar agreements, all natural gas transportation agreements,
all
fuel allocation and oxygen specification agreements, all pipeline
balancing agreements, and all settlement agreements that contain
currently
effective commercial terms, and all lease of property to or from
third
Persons.
|
“Confidentiality
Agreement”
|
shall
mean the confidentiality agreement entered into by and between DCP
Midstream Partners, LP and MPP dated May 9, 2008.
|
“CPFs”
|
shall
have the meaning set forth in the Recitals
above.
|
“Current
Assets”
|
shall
mean the current assets of MPP, excluding the current portion of
net
investment in a direct financing
lease.
|
“Current
Liabilities”
|
shall
mean the current liabilities of the MPP, excluding all debt under
the
LaSalle Loan Documents and any other debt affecting the Business,
and any
accrued interest accrued on any such debt.
|
“Damages”
|
shall
mean judgments, settlements, fines, penalties, damages, Liabilities,
losses or deficiencies, costs and expenses, including reasonable
attorney's fees, court costs, expenses of arbitration or mediation,
and
other out-of-pocket expenses incurred in investigating or preparing
the
foregoing.
|
“DCP
Plans”
|
shall
have the meaning set forth in Section
5.3(d)
below.
|
“Default
Rate”
|
shall
mean a per annum rate of interest equal to the prime rate of interest
charged to Buyer by Wachovia Bank, N.A.
|
“Dispute”
|
shall
have the meaning set forth in Section
8.8
below.
|
“Distribution”
|
shall
mean:
(i) any
dividend, distribution, repayment or repurchase of share capital,
capital
contribution or other return of capital to shareholders or equivalent
holders of its ownership interests;
(ii) any
repayment of any loan owed to an Affiliate;
(iii) any
loan made to an Affiliate, other than to any of the
Entities.
|
“Effective
Date”
|
shall
mean 9:00 AM Eastern Time on the first day of the month in which
the
Closing Date occurs.
|
“EGM”
|
shall
have the meaning set forth in Section 2.4(f) below.
|
“EGM
Management Agreement”
|
shall
have the meaning set forth in Section
2.4(f)
below.
|
“Employee
Plans”
|
shall
have the meaning set forth in Section
3.11(a)(i).
|
“Entities”
|
shall
mean the entities, other than Michigan Pipeline & Processing, LLC,
listed on Annex
I
attached hereto and “Entity”
shall mean one of the entities.
|
“Environmental
Laws”
|
shall
mean all federal, state and local Laws or other legal requirement
in
effect and existence as of the date of this Agreement relating to
the
environment, pollution or protection of the environment for human
health
benefit or natural resources (but not Occupational Safety and Health
Act
or laws regulating food, drink and medicine), including laws relating
to
releases or threatened releases of Hazardous Substances into the
environment (including ambient air, surface water, groundwater, land,
surface and subsurface strata), including
the Comprehensive Environmental Response, Compensation and Liability
Act
(42 U.S.C. §9601 et
seq.),
the Oil Pollution Act of 1990 (33 U.S.C. §2701 et
seq.),
the Resource Conservation and Recovery Act (42 U.S.C. §6901
et
seq.),
the Clean Water Act (33 U.S.C. §1251 et
seq.),
the Clean Air Act (42 U.S.C. §7401 et
seq.),
the Toxic Substances Control Act (15 U.S.C. §2601 et
seq.)
and the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. §136 et
seq.),
as to each, as amended and the regulations promulgated pursuant
thereto.
|
“Environmental
Permit”
|
shall
mean any Permit, formal exemption, identification number or other
authorization issued by a Governmental Authority pursuant to an applicable
Environmental Law.
|
“Equity
Interests”
|
shall
mean the equity interests in the Entities owned by MPP.
|
“ERISA”
|
shall
mean the Employee Retirement Income Security Act of 1974, as amended,
and
the regulations promulgated thereunder.
|
“Estimated
Closing Statement”
|
shall
have the meaning set forth in Section
2.6
below.
|
“Estimated
Closing Net Working Capital”
|
shall
mean an estimate of the Closing Net Working Capital.
|
“Estimated
Purchase Price”
|
shall
mean (i) US $145,000,000 plus
(ii) the Estimated Closing Net Working Capital, (iii) plus
and/or
minus,
as applicable, the various Estimated Purchase Price Adjustments,
utilizing
the formula and the rules of applicability set forth in Section
2.1
below.
|
“Estimated
Purchase Price Adjustments”
|
shall
have the meaning set forth in Section 2.6
below.
|
“Exchange
Act”
|
shall
mean the Securities Exchange Act of 1934, as amended.
|
“Financial
Statements”
|
shall
have the meaning set forth in Section
3.6(a)
below.
|
“First-Party
Claim”
|
shall
have the meaning set forth in Section
6.5
below.
|
“GAAP”
|
shall
mean United States generally accepted accounting principles as in
effect
from time to time
|
“Gas
Imbalance”
|
shall
mean the net aggregate natural gas volumetric imbalance existing
(i)
between MPP Bay Area Pipeline, LLC (“MPPB”)
and Consumers Energy Company under that certain Firm Transportation
Service Agreement dated May 15, 2000, and (ii) between Cinnabar Energy
Services & Trading, LLC under a Firm Transportation Service Agreement
dated in February 2000, as of the Effective Date, reduced to a dollar
value by multiplying said volumetric imbalance by the monthly price
published in Inside FERC Market Center Spot Gas Prices, Upper Midwest,
Consumers Energy city-gate for the month that commences the Effective
Date. A Gas Imbalance owed to MPP shall be referred to as a “Net
Positive Gas Imbalance;”
A Gas Imbalance owed to Consumers Energy Company shall be referred
to as a
“Net
Negative Gas Imbalance.”
|
“Governmental
Authority”
|
shall
mean any executive, legislative, judicial, tribal, regulatory, taxing
or
administrative agency, body, commission, department, board, court,
tribunal, arbitrating body or authority of the United States or any
foreign country, or any state, local or other governmental subdivision
thereof.
|
“HSR
Act”
|
shall
mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (Public Law 94-435).
|
“Hazardous
Substances”
|
shall
mean any chemicals, materials or substances defined as or otherwise
characterized as “hazardous substances”, “hazardous wastes”, “hazardous
materials”, “hazardous constituents”, “restricted hazardous materials”,
“extremely hazardous substances”, “toxic substances”, “contaminants”,
“pollutants”, “toxic pollutants”, “radioactive” or words of similar
meaning and regulatory effect under any applicable Environmental
Law,
including
petroleum and its by-products, asbestos, polychlorinated biphenyls,
radon,
hazardous waste, mold and urea formaldehyde insulation.
|
“Indebtedness”
|
of
any Person shall mean (i) all liabilities and obligations of such
Person
for borrowed money or evidenced by notes, bonds or similar instruments,
(ii) obligations in respect of the deferred purchase price of property
or
services (other than any amount that would constitute current assets)
to
the extent that such amount would be accrued as a liability on a
balance
sheet prepared in accordance with GAAP, (iii) obligations in respect
of
capitalized leases, (iv) obligations in respect of letters of credit,
acceptances or similar obligations, (v) obligations under interest
rate
cap agreements, interest rate swap agreements, foreign currency exchange
contracts or other hedging contracts, and (vi) any guarantee of the
obligations of another Person with respect to any of the
foregoing.
|
“Indemnified
Party”
|
shall
have the meaning set forth in Section
6.2(c)
below.
|
“Indemnifying
Party”
|
shall
have the meaning set forth in Section
6.2(c)
below.
|
“Indemnity
Period”
|
shall
have the meaning set forth in Section
6.1(a)
below.
|
“Insurance
Policies”
|
shall
have the meaning set forth in Section
3.16
below.
|
“Interest
Rate”
|
shall
mean a rate per annum equal to the 30 day London Interbank Offered
Rate
plus 1%, as reported daily in the Wall Street Journal.
|
“Intellectual
Property”
|
shall
mean all U.S. and foreign (a) patents and patent applications, (b)
trademarks, service marks, logos and slogans, (c) copyrights, (d)
software
(excluding commercial off-the-shelf software), and (e) all confidential
and proprietary information and know-how.
|
“Karn
Chromatograph”
|
shall
mean the chromatograph that MPP Bay Area Pipeline, LLC has covenanted
to
install at the Consumers Energy Company Karn Units 3 and 4 generating
facility pursuant to Section 2.4 of that certain Supplemental Agreement
Between Consumers Energy Company and MPP Bay Area Pipeline, LLC dated
October 29, 2007.
|
“Karn
Chromatograph Costs”
|
shall
mean the equipment, parts, freight/transportation, and testing costs
and
any expenses associated with the Karn Chromatograph and its installation,
including any costs, charges or burdens that Consumers Energy Company
may
impose in connection with the Karn Chromatograph and its installation,
a
good faith estimate of which has been provided by Seller to
Buyer.
|
“Knowledge”
|
shall
mean: (i) as to Seller, the knowledge of those Persons set forth
in
Section 1.1(b) of the Seller Disclosure Letter, which knowledge will
be
based in part on the results of due inquiry made of David M. Bennett
and
Dave H. Meredith, the operations managers of the Business, or (ii)
as to
Buyer, the knowledge of those Persons set forth in Section 1.1(b)
of the
Buyer Disclosure Letter.
|
“LaSalle
Bank”
|
shall
mean LaSalle Bank National
Association.
|
“LaSalle
Loan Document”
|
shall
mean that certain Amended and Restated Credit Agreement dated May
16, 2007
executed by MPP and Seller, together with all guaranty agreements,
security agreement and ancillary agreements and documents executed
and/or
delivered in connection therewith.
|
“LaSalle
Loan Lien Releases”
|
shall
have the meaning set forth in Section
2.4(f)
below.
|
“LaSalle
Loan Pay-Off Certificate”
|
shall
have the meaning set forth in Section
2.6
below.
|
“Law”
|
shall
mean any statute, treaty, code, law, ordinance, executive order,
rule or
regulation (including a regulation that has been formally promulgated
in a
rule-making proceeding but, pending final adoption, is in proposed
or
temporary form having the force of law); guideline or notice having
the
force of law; or approval, permit, license, franchise, judgment,
order,
decree, injunction or writ of any Governmental Authority applicable
to a
specified Person or specified property, as in effect from time to
time.
|
“Liabilities”
|
shall
mean any and all debts, liabilities, commitments and obligations,
whether
or not fixed, contingent or absolute, matured or unmatured, liquidated
or
unliquidated, accrued or unaccrued, known or unknown, whether or
not
required by GAAP to be reflected in financial statements or disclosed
in
the notes thereto.
|
“Liens”
|
shall
mean any mortgage, pledge, lien (statutory or otherwise and including,
without limitation, environmental, ERISA and tax liens), security
interest, easement, right of way, limitation, encroachment, covenant,
claim, restriction, right, option, conditional sale or other title
retention agreement, charge or encumbrance of any kind or nature
(except
for any restrictions arising under any applicable securities laws).
|
“Material
Adverse Effect”
|
shall
mean actions, circumstances or omissions that have an effect, individually
or in the aggregate, that is materially adverse to (a) the business,
operations, financial condition or assets of MPP and the Entities,
taken
as a whole, or (b) the ability of Seller to consummate the transactions
contemplated hereby, in each case, other
than
actions, circumstances or omissions that result from, relate to or
arise
out of: (i) the negotiation, execution, announcement of this
Agreement and the transactions contemplated hereby, including the
impact
thereof on relationships, contractual or otherwise, with customers,
suppliers, distributors, partners, joint owners or venturers and
employees, but only if and to the extent that the negotiation, execution,
announcement of this Agreement and the transactions contemplated
hereby do
not breach, violate or deprive any of Seller’s, MPP’s or any Entity’s
customers, suppliers, distributors, partners, joint owners or venturers
or
employees of any rights, benefits or property that any of them would
otherwise have but for the existence and execution of this Agreement
and
the transactions contemplated hereby, (ii) any action taken by
Seller, MPP, Buyer or any of their respective Representatives or
Affiliates required or permitted to be taken by the terms of this
Agreement or necessary to consummate the transactions contemplated
by this
Agreement, (iii) the specific items set forth in the Seller Disclosure
Letter, (iv) general legal, regulatory, political, business, economic,
capital market and financial market conditions (including prevailing
interest rate levels), or conditions otherwise generally affecting
the
industries in which MPP operates, (v) any change in law, rule or
regulation or GAAP or interpretations thereof applicable to MPP,
Seller or
Buyer, and (vi) acts of God, national or international political
or social
conditions, so long as the same do not constitute a Casualty Loss.
In
determining the existence of a Material Adverse Effect, the effect
on the
business, operations, financial condition or assets of a Person shall
include only the portion of such effect attributable to the ownership
interest of MPP and the Entities and shall exclude any portion of
such
effect attributable to the ownership interest of any third party
in such
Person.
|
“Material
Contract”
|
shall
have the meaning set forth in Section
3.7(a)
below.
|
“Membership
Interests”
|
shall
mean the Membership Interests of each Seller in MPP which, together,
comprise all the outstanding Membership Interests in
MPP.
|
“MichCon”
|
shall,
as applicable, mean any of Michigan Consolidated Gas Company, MichCon
Gathering Company, and/or MichCon Gathering Pipeline Company, or
any of
their successors, assigns or Affiliates that are as to the date of
the
Agreement or hereafter parties to Commercial Contracts with MPP or
any of
the Entities.
|
“Michigan
Tax”
|
shall
have the meaning set forth in Section
5.4(d)
below.
|
“MPP
401(k) Plan”
|
shall
means that certain Employee Plan titled:
Michigan
Pipeline & Processing, LLC 401 (k) Plan.
|
“MPP
Annual Audited Financial Statements”
|
shall
mean the consolidated balance sheet of MPP and the Entities as of
December
31, 2007, with the related statements of income and retained earnings
and
of cash flows for the year then ended, prepared in accordance with
the
requirements of Regulation S-X adopted by the Securities and Exchange
Commission, audited by Plante Moran, PLLC.
|
“MPP
Employees”
|
shall
mean the Employees listed on Section 1.1(a) of the Seller Disclosure
Letter.
|
“MPP
Financial Statements”
|
shall
collectively refer to whichever of the following that Seller is obligated
to cause to be prepared and audited or reviewed as a condition to
Buyer’s
acquiring the Membership Interests: (i) the MPP Annual Audited Financial
Statements; and (ii) the MPP Unaudited Financial
Statements.
|
“MPP
Unaudited Financial Statements”
|
shall
mean the consolidated balance sheets of MPP and the Entities with
the
related statements of income and retained earnings and of cash flows,
prepared in accordance with the requirements of Regulation S-X adopted
by
the U.S. Securities and Exchange Commission, on a basis consistent
with
the basis of presentation of the MPP Annual Audited Financial Statements
(except to the extent of differences permitted by Regulation S-X
with
respect to financial statements for interim periods), reviewed by
Plante
Moran, PLLC.
|
“Non-Compete
Business”
|
shall
have the meaning set forth in Section
5.11(a)
below.
|
“Non-Compete
Period”
|
shall
have the meaning set forth in Section
5.11
below.
|
“Past Due Receivables” |
shall
mean any amount that on the Effective Date has been due and payable
to MPP
or any Entity for more than 30 days under any Commercial Contract
and
remains due and payable on the Closing
Date.
|
“Permits”
|
shall
have the meaning set forth in Section
3.9(a)
below.
|
“Permitted
Liens”
|
shall
mean (a) zoning, planning and building codes and other applicable
Laws regulating the use, development and occupancy of real property
and
permits, consents and rules under such Laws; (b) such other Liens,
imperfections in title, charges, easements, restrictions and encumbrances
that would not reasonably be expected to result in a Material Adverse
Effect or restrict the use of such real property; (c) the terms and
conditions of leases and subleases of real property; (d) such easements
as
are utilized by third party utilities to provide service to the businesses
of MPP and the Entities or that are filed of record when crossing
or
affecting any assets of MPP and the Entities; (e) mechanics’, carriers’,
workers’ and similar Liens arising in the ordinary course of business, or
that are not yet due and payable, incurred consistent with past practice,
(f) Liens for Taxes and other governmental levies not yet due and
payable
or, if due, (i) not delinquent or (ii) being contested in good faith
by
appropriate proceedings during which collection or enforcement against
the
property is stayed and with respect to which adequate reserves have
been
established on the MPP Financial Statements; and (g)
those defects, exceptions, restrictions, easements, rights of way
disclosed in the Title Insurance Policy.
|
“Person”
|
shall
mean any natural person, corporation, company, general partnership,
limited partnership, limited liability partnership, joint venture,
proprietorship, limited liability company, or other entity or business
organization or vehicle, trust, unincorporated organization or
Governmental Authority or any department or agency
thereof.
|
“Pre-Effective
Date Employee Wage and Benefit Cost”
|
shall
mean any and all obligations, liabilities, payments, Claims, or amounts
of
any kind whatsoever owed by MPP or any Entity in respect of all current
and former Employees, including any wages, salaries, fees, earnings,
bonuses, incentive payments, vacation accruals, Employee Plan payments,
benefits, or requirements, whether under retirement, medical, disability
or other form to employee benefit offered or maintained for or on
behalf
of any Employee, for all periods prior to and including the Effective
Date.
|
“Predecessor”
|
shall
have the meaning set forth in Section
3.3(e)
below.
|
“Proceeding”
|
shall
mean any judicial, administrative or arbitral actions, suits or
proceedings (public or private) by or before a Governmental
Authority.
|
“Property
Taxes”
|
shall
have the meaning set forth in Section
5.4(b)
below.
|
“Purchase
Price”
|
shall
have the meaning set forth in Section
2.1
below.
|
“Purchase
Price Adjustments”
|
shall
have the meaning set forth in
Section 2.7(a)
below.
|
“Representatives”
|
shall
mean accountants, counsel or representatives.
|
“Retained
Liabilities”
|
shall
mean any Claim, charge, cost, Damage, expense, or form of Liability,
whether or not fixed, contingent or absolute, matured or unmatured,
liquidated or unliquidated, known or unknown, accrued or unaccrued,
arising out of, as a result of, or in respect of, any of the following
matters:
(i) Taxes
on the Business, MPP or any Entity for any period prior to the Effective
Date;
(ii) Employee
Plans (including any failure to operate or maintain any Employee
Plan in
compliance with its terms and applicable law) as in existence prior
to the
Effective Date;
(iii) Employees
or former employees of MPP or the Entities relating to their employment
or
termination of employment with MPP, any Entity or Affiliate or predecessor
before the Closing Date (including respecting compensation, benefits
or
the failure to comply with applicable employment laws);
(iv) Disposal
of Hazardous Substances generated by the Business, MPP or any Entity
prior
to the Closing Date;
(v) Fines
or Penalties assessed by any Governmental Authority with respect
to any
action or omission of the Business, MPP or any Entity prior to the
Closing
Date, excluding non-record keeping fines and penalties that may arise
from
matters disclosed in Section 3.9.
|
“Selected
Courts”
|
shall
have the meaning set forth in Section
8.8
below.
|
“Seller
Disclosure Letter”
|
shall
mean the Seller Disclosure Letter delivered to Buyer concurrently
with
this Agreement, which is an integral part of this
Agreement.
|
“Seller
Indemnified Parties”
|
shall
have the meaning set forth in Section
6.2(b)
below.
|
“Seller’s
Notice of Disagreement”
|
shall
have the meaning set forth in Section
2.7(b)
below.
|
“Seller
Party”
|
shall
have the meaning set forth in Section
3.2 below.
|
“Seller
Property Tax Burden”
|
shall
have the meaning set forth in Section
5.4(b)
below.
|
“Seller
Returns”
|
shall
have the meaning set forth in Section
5.4(a)(i)
below.
|
“Subsidiary”
|
of
any Entity means, at any date, any Person (a) the accounts of which
would
be consolidated with and into those of the applicable Person in such
Person's consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date or (b) of which
securities or other ownership interests representing more than fifty
percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than
fifty
percent (50%) of the general partnership interests or more than fifty
percent (50%) of the profits or losses of which are, as of such date,
owned, controlled or held by the applicable Person or one or more
subsidiaries of such Person.
|
“Tax
Allocation Referee”
|
shall
have the meaning set forth in Section
2.8
below.
|
“Tax
Return”
|
shall
mean any report, return, declaration, or other information required
to be
supplied to a Governmental Authority in connection with Taxes including
any claim for refund or amended return.
|
“Taxes”
|
shall
mean all taxes, levies or other like assessments, including income,
gross
receipts, excise, value added, real or personal property, withholding,
asset, sales, use, license, payroll, transaction, capital, business,
corporation, employment, net worth and franchise taxes, or other
governmental taxes imposed by or payable to any foreign, Federal,
state or
local taxing authority, whether computed on a separate, consolidated,
unitary, combined or any other basis, including, without limitation
the
Michigan Business Tax and any predecessor thereof; in each instance
the
term Taxes shall include any interest, penalties or additions attributable
to or imposed as a result of how or whether any such Tax is computed
or
paid.
|
“TBA”
|
shall
have the meaning set forth in Section
3.7(d)
below.
|
“Third-Party
Claim”
|
shall
have the meaning set forth in Section
6.4
below.
|
“Threshold
Amount”
|
shall
have the meaning set forth in Section
6.2(d)
below.
|
“Title
Insurance Policy”
|
shall
mean that certain mortgage policy of title insurance obtained by
Seller
with respect to the fee property interest upon which the South Chester
CO2
treating facilities are located, issued by Chicago Title Insurance
Company
on March 27, 2007.
|
“Transaction
Costs”
|
shall
mean any and all expenses, costs, fees, charges or expenditures or
any
type or form whatsoever relating to, arising out of or otherwise
due to
the sale by Seller of the Membership Interests, that are reflected
in any
of the MPP Financial Statements, including without limitation, legal
fees,
accounting and financial statement preparation and audit fees and
costs,
including those payable to Plante Moran, PLLC, and any filing preparation
costs, filing fees and other expenses incurred by a party to comply
with
the HSR Act, as well as due diligence preparation and response costs,
as
well as expenditures made for the purpose of ensuring that Seller’s
representations and warranties contained in this Agreement are true
and
correct.
|
“Transaction
Documents”
|
shall
mean all documents, contracts, certificates or other deliverables
that
Seller, MPP or any Entity is obligated to deliver to Buyer pursuant
to the
terms of this Agreement prior to, on or after the Closing
Date.
|
“Transferred
Employee”
|
shall
have the meaning set forth in Section
5.3(c)
below.
|
“Transition
Services Agreement”
|
shall
mean that certain transition services agreement in the form of
Exhibit
C.
|
“Treasury
Regulation”
|
shall
mean the income Tax regulations, including temporary and proposed
regulations, promulgated under the Code, as amended.
|
“Uncollected
Reallocation Fees”
|
shall
mean the net increase of any fees, fuel charges or other amounts
due and
payable by any counterparty to MPP or any Entity under any Commercial
Contract: (i) for any delivery month that ends prior to the Effective
Date; (ii) that was not included in the initial customer invoice;
(iii)
that resulted from MichCon’s customary conduct of a nomination vs. actual
receipt volume reallocation and/or any meter-measurement recalibration,
correction or true up process; and (iv) which net increase amount
is not
received by MPP nor any Entity within 30 days of issuing an updated
invoice therefore and remains unpaid on the Closing Date.
|
(i) |
The
MPP Annual Audited Financial Statements;
and
|
(ii)
|
The
MPP Unaudited Financial Statements, as of and for the six-month periods
ended June 30, 2007 and 2008; provided that if the Closing Date occurs
after November 8, 2008, the MPP Unaudited Financial Statements shall
be
prepared as of and for the nine-month periods ended September 30,
2007 and
2008; and
|
(i) If
to the Seller:
Ganesh
Energy, LLC
30078
Schoenherr, Suite 150
Warren,
Michigan
Attention:
Manouch
Daneshvar
Telephone:
(586)
445-2300
Facsimile:
(586)
445-1782
Gas
Processing & Pipeline, LLC
200
Greenbrier Road
P.O.Box
460
Summersville,
WV 26651
Attention:
James
E. Davis
Telephone:
(304)
872-3000
Facsimile:
(304)
872-3040
With
a required copy to:
Ufer
& Spaniola, P.C.
5440
Corporate Drive, Suite 250
Troy,
Michigan 48098-2648
Attention:
Gerald
Van Wyke, Esquire
Telephone:
(248)
641-7000 Facsimile: (248)
641-5120
|
||
(ii) If
to
Buyer:
DCP
Midstream Partners, LP
370
17th Street, Suite 2700
Denver,
CO 80202-0202
Attention:
Anthony
A. Blando, Director of Business
Development
Telephone:
303-633-2916
Facsimile:
303-633-2921
|
||
With
a required copy to:
DCP
Midstream Partners, LP
370
17th Street, Suite 2700
Denver,
CO 80202-0202
Attention:
Michael
S. Richards, General Counsel
Telephone:
303-633-
2912
Facsimile:
303-633-2921
|
||
Entity
Name
|
Jurisdiction
|
%
Ownership Interest
|
Michigan
Pipeline & Processing, LLC
|
Michigan
|
53.75%
owned by Ganesh Energy, LLC (“Ganesh”)and
46.25% owned by Gas Processing & Pipeline, LLC
(“GPP”).
|
MPP
Antrim Gas LLC
|
Michigan
|
100%
owned by Michigan Pipeline & Processing, LLC
|
MPP
Bay Area Pipeline, LLC
|
Michigan
|
100%
owned by Michigan Pipeline & Processing, LLC
|
MPP
Grands Lacs LLC
|
Michigan
|
100%
owned by Michigan Pipeline & Processing, LLC
|
MPP
Jackson LLC1
|
Michigan
|
100%
owned by Michigan Pipeline & Processing, LLC
|
MPP
Litchfield LLC2
|
Michigan
|
100%
owned by Michigan Pipeline & Processing,
LLC
|
1 |
MPP
Jackson LLC owns 75% equity interest in the Jackson Pipeline Company
(general partnership).
|
2 |
MPP
Litchfield owns 44% equity interest in the Litchfield
Pipeline.
|
A.
|
The
Parties entered into that certain Omnibus Agreement dated as of December
7, 2005, as amended by that certain First Amendment to Omnibus Agreement
dated April 1, 2006, Second Amendment to Omnibus Agreement dated
November
1, 2006, Third Amendment to Omnibus Agreement dated May 9, 2007,
Fourth
Amendment to Omnibus Agreement dated July 1, 2007, Fifth Amendment
to
Omnibus Agreement dated August 7, 2007 and Sixth Amendment to Omnibus
Agreement dated August 29, 2007 (together referred to as the "Omnibus
Agreement")
(capitalized terms used but not defined herein shall have the meaning
given thereto in the Omnibus
Agreement).
|
B.
|
Section
3.3
of
the Omnibus Agreement currently addresses the fixed general and
administrative expenses for the original assets that were part of
the
MLP’s initial public offering, the Gas Supply Resources LLC assets
("GSR")
transferred to the MLP in the transaction set forth in that certain
Contribution Agreement between DCP LP Holdings, LP and the MLP, dated
as
of October 9, 2006 (the "GSR
Contribution Agreement"),
the assets acquired by the MLP from Anadarko Anadarko Gathering Company
and Anadarko Energy Services Company in the transaction set forth
in that
certain Purchase and Sale Agreement dated March 7, 2007 (the "Panther
PSA"),
the 40% interest in Discovery Producer Services, LLC (the general
and
administrative expenses for the MLP’s 25% interest in DCP East Texas
Holdings, LLC is addressed in the limited liability company agreement
for
that entity) transferred to the MLP in the transaction set forth
in that
certain Contribution Agreement between DCP LP Holdings, LP and the
MLP
dated May 23, 2007 (the "Columbus
Contribution Agreement"),
and the membership interest in Momentum Energy Group, LLC transferred
to
the MLP in the transaction set forth in that certain Contribution
and Sale
Agreement dated May 21, 2007 among Gas Supply Resources Holdings,
Inc.,
("GSR
HOLDINGS"),
DCPM, and the MLP (the "Bass
Contribution Agreement")
and the adjustments to take into account three additional full time
equivalents and extending the term through December 31, 2009 that
was
dated August 7, 2007 (the "2007
Adjustment").
|
C.
|
The
Parties desire to amend Section
3.3
of
the Omnibus Agreement to adjust the fixed general and administrative
expenses to take into account all of the membership interest in Michigan
Pipeline & Processing, LLC acquired by the MLP in the transaction set
forth in that certain Agreement of Purchase and Sale dated September
10,
2008 among the MLP, Ganesh Energy, LLC and Gas Processing & Pipeline,
LLC (the "MPP
Agreement").
|
1.
|
Omnibus
Agreement Amendment.
The Omnibus Agreement is hereby amended by replacing Section
3.3(a)
in
its entirety with the following:
|
(i)
|
General
and administrative expenses associated with the original assets that
were
part of the MLP’s initial public offering shall be a fixed fee equal to
$4.8 million per year through calendar year 2006 (the “IPO
G&A Expenses Limit”).
After calendar year 2006, the IPO G&A Expenses Limit shall be
increased annually by the percentage increase in the Consumer Price
Index
- All Urban Consumers, U.S. City Average, Not Seasonally Adjusted
for the
applicable year (the "CPI
Adjustment").
|
(ii)
|
General
and administrative expenses associated with the contribution of the
GSR
assets to the MLP in the GSR Contribution Agreement shall be a fixed
fee
equal to $2.0 million per year for calendar years 2006 and 2007 (the
"GSR
G&A Expenses Limit"),
but shall be prorated for calendar year 2006 based on the number
of days
remaining in calendar year 2006 following the Closing Date (as that
term
is defined in the GSR Contribution Agreement). After calendar year
2007,
the GSR G&A Expenses Limit shall be increased by the CPI Adjustment.
|
(iii)
|
General
and administrative expenses associated with the operation of the
Antioch
Gathering System (acquired under the Panther PSA) shall be a fixed
fee
equal to $200,000 per year for calendar year 2007 (the "Panther
G&A Expenses Limit"),
but shall be prorated for calendar year 2007 based on the number
of days
remaining in calendar year 2007 following the Closing Date (as that
term
is defined in the Panther PSA). After calendar year 2007, the Panther
G&A Expenses Limit shall be increased by the CPI Adjustment.
|
(iv)
|
General
and administrative expenses associated with the contribution to the
MLP of
the interest in Discovery Producer Services, LLC under the Columbus
Contribution Agreement shall be a fixed fee equal to $158,000 per
year for
calendar year 2007 (the "Discovery
G&A Expenses Limit"),
but shall be prorated for calendar year 2007 based on the number
of days
remaining in calendar year 2007 following the Closing Date (as that
term
is defined in the Columbus Contribution Agreement). After calendar
year
2007, the Discovery G&A Expenses Limit shall be increased by the CPI
Adjustment.
|
(v)
|
The
2007 Adjustment to add three additional full time equivalents that
devote
100% of their time to the MLP shall be a fixed fee equal to $561,584
per
year for calendar year 2007 (the "2007
Adjustment Expenses Limit"),
but shall be prorated for calendar year 2007 based on the number
of days
remaining in calendar year 2007 following August 1, 2007. After calendar
year 2007, the 2007 Adjustment Expenses Limit shall be increased
by the
CPI Adjustment.
|
(vi)
|
General
and administrative expenses associated with the contribution to the
MLP of
the interests under the Bass Contribution Agreement shall be a fixed
fee
equal to $1,570,000 per year for calendar year 2007 (the "Bass
G&A Expenses Limit"),
but shall be prorated for calendar year 2007 based on the number
of days
remaining in calendar year 2007 following the Closing Date (as that
term
is defined in the Bass Contribution Agreement). After calendar year
2007,
the Bass G&A Expenses Limit shall be increased by the CPI Adjustment.
|
(vii)
|
General
and administrative expenses associated with the operation of the
MPP
assets (acquired under the MPP Agreement) shall be a fixed fee equal
to
$400,000 per year for calendar year 2008 (the "MPP
G&A Expenses Limit"),
but shall be prorated for calendar year 2008 based on the number
of days
remaining in calendar year 2008 following the Closing Date (as that
term
is defined in the MPP Agreement). After calendar year 2008, the MPP
G&A Expenses Limit shall be increased by the CPI
Adjustment.
|
(viii)
|
Notwithstanding
anything to the contrary, for time periods after December 31, 2009,
DCPM
and the General Partner will determine the amount of general and
administrative expenses contemplated by this paragraph that will
be
properly allocated to the Partnership in accordance with the terms
of the
Partnership Agreement.
|
(ix)
|
If
the Partnership Group makes any additional acquisitions of assets
or
businesses or the business of the Partnership Group otherwise expands
following the date of this Agreement, then the IPO G&A Expenses Limit
shall be appropriately increased in order to account for adjustments
in
the nature and extent of the general and administrative services
by DCPM
to the Partnership Group, with any such increase subject to the approval
of both the Special Committee of DCPM GP LLC’s Board of Directors and
DCPM.
|
2.
|
Acknowledgement.
Except as amended hereby, the Omnibus Agreement shall remain in full
force
and effect as previously executed, and the Parties hereby ratify
the
Omnibus Agreement as amended hereby.
|
3. | Counterparts. This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties hereto and delivered (including by facsimile) to the other Parties. |
DCP MIDSTREAM, LLC | ||
|
|
|
By: | /s/ Brent L. Backes | |
Name: | Brent L. Backes | |
Title: | Group Vice President, General Counsel & Corporate Secretary |
DCP MIDSTREAM GP, LLC | ||
|
|
|
By: | /s/ Greg K. Smith | |
Name: | Greg K. Smith | |
Title: | Vice President |
DCP MIDSTREAM GP, LP | ||
By: DCP MIDSTREAM GP, LLC, its general partner | ||
|
|
|
By: | /s/ Greg K. Smith | |
Name: | Greg K. Smith | |
Title: | Vice President |
DCP MIDSTREAM PARTNERS, LP | ||
By: DCP MIDSTREAM GP, LP, its general partner | ||
By: DCP MIDSTREAM GP, LLC, its general partner | ||
|
|
|
By: | /s/ Greg K. Smith | |
Name: | Greg K. Smith | |
Title: | Vice President |
DCP MIDSTREAM OPERATING, LP | ||
|
|
|
By: | /s/ Greg K. Smith | |
Name: | Greg K. Smith | |
Title: | Vice President |
Oct.
1, 2008
|
MEDIA
AND INVESTOR RELATIONS CONTACT:
|
Karen
L. Taylor
|
Phone:
|
303/633-2913
|
|
24-Hour:
|
303/809-9160
|
·
|
the
level and success of natural gas drilling around our assets and our
ability to connect supplies to our gathering and processing systems
in
light of competition;
|
·
|
our
ability to grow through acquisitions, asset contributions from our
parents, or organic growth projects, and the successful integration
and
future performance of such
assets;
|
·
|
our
ability to access the debt and equity
markets;
|
·
|
fluctuations
in oil, natural gas, propane and other NGL prices; our ability to
purchase
propane from our principal suppliers for our wholesale propane logistics
business; and
|
·
|
the
credit worthiness of counterparties to our transactions.
|