0001140361-21-004157.txt : 20210210 0001140361-21-004157.hdr.sgml : 20210210 20210210172222 ACCESSION NUMBER: 0001140361-21-004157 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 26 CONFORMED PERIOD OF REPORT: 20210204 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210210 DATE AS OF CHANGE: 20210210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CorEnergy Infrastructure Trust, Inc. CENTRAL INDEX KEY: 0001347652 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 203431375 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33292 FILM NUMBER: 21615141 BUSINESS ADDRESS: STREET 1: 1100 WALNUT STREET 2: SUITE 3350 CITY: KANSAS CITY STATE: MO ZIP: 64106 BUSINESS PHONE: 877-699-2677 MAIL ADDRESS: STREET 1: 1100 WALNUT STREET 2: SUITE 3350 CITY: KANSAS CITY STATE: MO ZIP: 64106 FORMER COMPANY: FORMER CONFORMED NAME: TORTOISE CAPITAL RESOURCES CORP DATE OF NAME CHANGE: 20051221 8-K 1 brhc10019770_8k.htm 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):  February 4, 2021

CorEnergy Infrastructure Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Maryland
1-33292
20-3431375
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)


1100 Walnut, Suite 3350, Kansas City, MO
 
64106
(Address of Principal Executive Offices)
 
(Zip Code)

(816) 875-3705
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange On
Which Registered
Common Stock, par value $0.001 per share
CORR
New York Stock Exchange
7.375% Series A Cumulative Redeemable Preferred Stock
CORRPrA
New York Stock Exchange
 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).  Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 1.01
Entry into a Material Definitive Agreement.

Acquisition of Crimson Midstream Holdings, LLC

On February 4, 2021, CorEnergy Infrastructure Trust, Inc., a real estate investment trust (“REIT”) organized as a Maryland corporation (“CorEnergy” or the “Company”) acquired a 49.5% interest in Crimson Midstream Holdings, LLC (“Crimson”), with the right to acquire 100%, in exchange for a combination of cash on hand of approximately $74.6 million (after giving effect to initial working capital adjustments), commitments to issue approximately $118.4 million of new common and preferred equity (also after giving effect to the initial working capital adjustments), contribution of the Grand Isle Gathering System (“GIGS”) (valued for the purposes of the transaction at $50 million) to the sellers and $105.0 million in new term loan and revolver borrowings, all as detailed further below (the “Transaction”).  Crimson is a California Public Utilities Commission (“CPUC”) regulated crude oil pipeline owner and operator, and its assets include four critical infrastructure pipeline systems spanning approximately 1,800 miles across northern, central and southern California, connecting California crude production to in-state refineries.  The acquired assets qualify for REIT treatment under established IRS regulations and the Company’s Private Letter Ruling (PLR).

To effect the Transaction, on February 4, 2021 the Company entered into and consummated a Membership Interest Purchase Agreement (the “MIPA”) with CGI Crimson Holdings, L.L.C. (“Carlyle”), Crimson, and John D. Grier.  Pursuant to the terms of the MIPA, the Company acquired all of the Class C Units of Crimson owned by Carlyle, which represents 49.5% of all of the issued and outstanding membership interests of Crimson for approximately $66.0 million in cash (net of working capital adjustments) and the transfer to Carlyle the Company’s interest in GIGS.  The Company also entered into to a $105.0 million Amended and Restated Credit Agreement with Wells Fargo (as further described below).  Additional information concerning the new credit agreement is set forth under Item 2.03 of this Current Report on Form 8-K and incorporated herein by reference.  The MIPA also contains standard representations, warranties, covenants and indemnities.

Simultaneously, Crimson, the Company, Mr. Grier and certain affiliated trusts of Mr. Grier (collectively with Mr. Grier, the “Grier Members”) entered into the Third Amended and Restated Limited Liability Company Agreement (“Third LLC Agreement”) of Crimson.  Pursuant to the terms of the Third LLC Agreement, the Grier Members’ outstanding membership interests in Crimson were exchanged for 1,613,202 Class A-1 Units of Crimson, 2,436,000 Class A-2 Units of Crimson and 2,450,142 Class A- 3 Units of Crimson, which, as described below, may eventually be exchangeable for shares of the Company’s common and preferred stock.  Additionally, 495,000 Class C-1 Units (representing 49.5% of the voting interests under the Third LLC Agreement) were issued to the Company in exchange for the former Class C Units acquired from Carlyle and 505,000 Class C-1 Units (representing 50.5% of the voting interests under the Third LLC Agreement) were issued to the Grier Members, in exchange for the Class C Units held by Grier prior to the Transaction.

Under the Third LLC Agreement, the Company has the right to designate two of the four managers of Crimson, which shall initially be David J. Schulte, the Company’s Chief Executive Officer and President, and Todd Banks, a member of the Company’s Board of Directors.  The Grier Members have the right to designate the other two managers, which shall initially be Mr. Grier and Larry Alexander, President of Crimson.  All material business decisions and actions will require supermajority approval of the Crimson managers; provided, however, that Mr. Grier will make decisions regarding the day-to-day operations of the assets regulated by the CPUC.  Change of control of the CPUC regulated assets is subject to the approval of the CPUC (“CPUC Approval”), which is expected to occur in the third quarter of 2021.

Upon CPUC Approval, the parties will enter into a Fourth Amended and Restated LLC Agreement of Crimson (“Fourth LLC Agreement”), which will, among other things, (i) give the Company control of Crimson and its assets and (ii) provide the Grier Members and Management Members (as defined below) the right to exchange their entire interest in Crimson for securities of the Company as follows:


Class A-1 Units will become exchangeable for up to 1,613,202 shares of a newly created Series C Preferred Stock of the Company (“Series C Preferred”), which may be converted by the holder into up to 1,716,172 of the Company’s depositary shares, each representing 1/100th of a share of the Company’s 7.375% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred”);

Class A-2 Units will become exchangeable for up to 2,436,000 shares of a newly created Series B Preferred Stock of the Company (“Series B Preferred”), which will be convertible, following approval of the Company’s existing stockholders in compliance with the rules of the New York Stock Exchange (“NYSE”), into up to 8,675,214 additional shares of a new non-listed Class B Common Stock of the Company (“Class B Common Stock”), with such conversion to occur automatically assuming stockholder approval is received; and

Class A-3 Units will become exchangeable for up to 2,450,142 shares of the newly created Class B Common Stock.

Class B Common Stock will eventually be converted into the common stock of the Company (“Common Stock”) on the occurrence of the earlier of the following: (i) the occurrence of the third anniversary of the closing date of the Transaction or (ii) the satisfaction of certain conditions related to an increase in the relative dividend rate of the Common Stock.  The terms of Series C Preferred, Series B Preferred and Class B Common Stock are further described below in Item 3.03 of this Current Report on Form 8-K, which is incorporated herein by reference.

Prior to CPUC approval, the terms of the Third LLC Agreement provide the Grier Members the right to receive any distributions that the Company’s Board of Directors determines would be payable if they held the shares of Class B Common Stock, Series B Preferred, and Series C Preferred, respectively.  Following CPUC Approval, the terms of the Fourth LLC Agreement provide that such rights will continue until the Grier Members elect to exchange the Crimson units for the related securities of the Company.  In addition, after CPUC Approval, certain Crimson units held by the Grier Members are expected to be transferred to other individuals currently managing Crimson (the “Management Members”).

In connection with the Transaction, the Company entered into a Registration Rights Agreement with the Grier Members (the “Registration Rights Agreement”).  The Management Members are expected to become parties to the Registration Rights Agreement in the future.  The Registration Rights Agreement, subject to the terms thereof, provides for certain demand and piggyback registration rights in favor of the Grier Members (and the Management Members, once they become parties), subject to customary underwriter cutbacks, to require the Company to file a shelf registration statement covering the resale of listed Company securities they may ultimately acquire upon conversion of new securities issued pursuant to the Transaction (as further described in Section 3.03 below).  The Company has agreed to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.  The Registration Rights Agreement also restricts the transfer by a holder of any outstanding shares of Class B Common Stock for one year from February 4, 2021, except to an affiliate of such holder for estate planning purposes.

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As described above, a portion of the consideration paid to Carlyle pursuant to the MIPA was the transfer of the Company’s interest in GIGS.  In connection with the disposition, on February 4, 2021, the Company and Grand Isle Corridor, LP, the Company’s subsidiary (“Grand Isle”), entered into a Settlement and Mutual Release Agreement (the “Settlement Agreement”) with Energy XXI GIGS Services, LLC, Energy XXI Gulf Coast, Inc. and CEXXI, LLC (the “EXXI Entities”).  Energy XXI GIGS Services, LLC (“EGC Tenant”) is the tenant under the Lease Agreement, dated June 30, 2015 with Grand Isle (the “GIGS Lease”).  Grand Isle initially received a Guaranty dated June 22, 2015 from Energy XXI Ltd. in connection with the original purchase of the GIGS, which was assumed by Energy XXI Gulf Coast, Inc., as guarantor of the obligations of EGC Tenant pursuant to the terms of the Assignment and Assumption of Guaranty and Release dated December 30, 2016 (as assigned and assumed, the “Landlord Guaranty”).

Pursuant to the terms of the Settlement Agreement, the Company and Grand Isle released the EXXI Entities for any and all claims, except for the Environmental Indemnity under the GIGS Lease, which shall survive, and the EXXI Entities released the Company and Grand Isle from any and all claims.  As previously disclosed in the Company’s periodic reports, the Company had initiated litigation to enforce its rights under the GIGS Lease, including for non-payment of rent.  The parties have agreed to jointly dismiss such litigation in connection with the Settlement Agreement. Additionally, the GIGS Lease and Landlord Guaranty were cancelled and terminated.

The foregoing descriptions of the MIPA, the Third LLC Agreement, the Registration Rights Agreement, and Settlement Agreement are qualified in their entirety by reference to the full text of the MIPA, the Third LLC Agreement, the Registration Rights Agreement, and Settlement Agreement, copies of which are filed as Exhibits 2.1, 10.17, 10.18 and 10.19 to this Current Report on Form 8-K and are incorporated in this Item 1.01 by reference.  The foregoing description of the Fourth LLC Agreement is qualified in its entirety by reference to the full text of the form of Fourth LLC Agreement, a copy of which is provided as Exhibit C to the Third LLC Agreement, filed as Exhibit 10.17 to this Current Report on Form 8-K and is incorporated in this Item 1.01 by reference.

Internalization of the Manager

On February 4, 2021, the Company entered into a Contribution Agreement with Richard C. Green, Rick Kreul, Rebecca M. Sandring, Sean DeGon, Jeff Teeven, Jeffrey E. Fulmer, David J. Schulte (as Trustee of the DJS Trust under Trust Agreement dated July 18, 2016), and Campbell Hamilton, Inc., which is an entity controlled by David J. Schulte (collectively, the “Contributors”), and Corridor InfraTrust Management, LLC, a Delaware limited liability company and the Company’s external manager (the “Manager”).

Consummation of the transactions contemplated in the Contribution Agreement will result in the internalization of the management of the Company (the “Internalization”).  Following the Internalization, the Company will own all material assets of the Manager currently used in the conduct of its business and will be managed by officers and employees who currently work for the Manager and who are expected to become employees of the Company as a result of the Internalization.

In payment of the aggregate Internalization consideration (the “Internalization Consideration”), the Company will issue to the Contributors, on a pro rata basis (i) 1,153,846 shares of Common Stock, (ii) 683,761 shares of the newly created Class B Common Stock described in Item 3.03 below, and (iii) 170,213 depositary shares of Series A Preferred (collectively with the Common Stock and Class B Common Stock, the “REIT Stock”).

Contemporaneously with execution of the Contribution Agreement, the Company and the Manager entered into the First Amendment (the “First Amendment”) to the Management Agreement dated as of May 8, 2015 (as amended, the “Management Agreement”) that has the effect of (i) reducing the amount paid to the Manager until closing of the Internalization or termination of the Contribution Agreement and (ii) provides payment to the Manager to enable distribution of payments to employees of the Manager as approved by the independent directors of the Company and pending closing of the Contribution Agreement.  The Contribution Agreement acknowledges the funding of the distribution of the payments by the Manager pursuant to the First Amendment in connection with closing of the Internalization.

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At closing of the Internalization, the Company will enter into a registration rights agreement in substantially similar to the form of the Registration Rights Agreement entered into with the Grier Members.  Notwithstanding any registration rights, and pursuant to the Contribution Agreement: (i) subject to certain exceptions to sell a number of shares to pay tax obligations in connection with the Internalization, neither Campbell Hamilton, Inc. nor David J. Schulte (as Trustee of the DJS Trust under Trust Agreement dated July 18, 2016) will be permitted to sell or otherwise transfer any of the shares of Common Stock received in connection with the Internalization for a period of twelve months commencing on the closing date of the Internalization and (ii) no Contributor may sell or otherwise transfer any shares of Class B Common Stock issued to such party.

The Contribution Agreement can be terminated by the mutual agreement of the parties before or after stockholder approval and can be terminated by any party if the issuance of additional REIT Stock resulting from the Internalization is not approved by the Company’s stockholders. If the Contribution Agreement is terminated, the existing Management Agreement and Administrative Agreement will revert to the previous revenue formula and otherwise remain in full force and effect.

In connection with the Contribution Agreement, each Contributor has agreed that, for twenty-four (24) months after closing, it will not compete with the Company or solicit its employees, subject to certain exceptions as forth in the Contribution Agreement.

David J. Schulte is the Company’s Chief Executive Officer, Chairman and a member of the Company’s Board of Directors, Rebecca M. Sandring and Jeff Fulmer are both executive officers of the Company, and Rick Kreul, Sean DeGon and Jeff Teeven are all officers of the Company, and all of such individuals are current employees of the Manager. These individuals have interests in the Internalization that differ from those of our stockholders, as each will have a direct or indirect beneficial interest in a portion of the consideration received by the Contributors in the Internalization.

In light of the above relationships, the Company’s Board of Directors formed a special committee comprised entirely of independent and disinterested directors (the “Special Committee”) in connection with the Internalization. The Special Committee received a fairness opinion from Evercore, its independent financial advisor, that the consideration to be paid pursuant to the Contribution Agreement is fair, from a financial point of view, to the Company.

The Company will seek stockholder approval of the Internalization in compliance with the rules of the NYSE. The Contribution Agreement requires that the Internalization be approved at a meeting by the affirmative vote of at least a majority of the votes cast by the stockholders entitled to vote on the matter, other than the votes of shares held by any of the Contributors or their affiliates. Such approval will constitute approval of the issuance of the Company’s securities as required under Section 312.03(b) of the New York Stock Exchange Listed Company Manual, which requires stockholder approval prior to the issuance of common stock, or securities exchangeable for common stock, in excess of one percent (1%) of the Company’s outstanding shares in a transaction with a related party.

The foregoing summary of the Contribution Agreement and First Amendment are qualified in their entirety by reference to the Contribution Agreement and First Amendment, copies of which are filed as Exhibits 2.2 and 10.20 to this Current Report on Form 8-K and are incorporated in this Item 1.01 by reference.

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Item 1.02
Termination of Material Definitive Agreement.

Termination of GIGS Lease

Upon the closing of the MIPA and the Transaction, the sale of GIGS was complete and the Company, Grand Isle and EXXI Entities entered into the Settlement Agreement, which terminated the GIGS Lease and Landlord Guaranty.

As previously disclosed in the Company’s periodic reports filed with the SEC, prior to termination, base rent starting July 2020 increased from $3.2 million per month to $4.0 million per month for the remainder of the year. In addition, the Company was eligible for a participating variable rent component based on daily volume increases over base daily volumes defined in the Lease. There were no participating rents paid in 2019 or 2020.  On April 1, 2020, the EGC Tenant ceased paying rent due and did not resume paying rent through the date of the Settlement Agreement disclosed in Item 1.01 of this Current Report on Form 8-K.

The information regarding the disposition of GIGS and the termination of the GIGS Lease and Landlord Guaranty under the heading “Acquisition of Crimson Midstream Holdings, LLC” in Item 1.01 of this Current Report on Form 8-K, as well as additional financial information related to the disposition of GIGS set forth in the second paragraph of Item 2.01 of this Current Report on Form 8-K, is incorporated herein by reference.

Termination of Regions Credit Facility

On February 4, 2021, in connection with entering into the credit facility described in Item 2.03, the Company terminated its amended and restated credit facility dated as of July 28, 2017 by and between the Company and Regions Bank, as lender and administrative agent for other participating lenders (the “Prior Credit Facility”).  The Prior Credit Facility had a 5-year term maturing on July 28, 2022 and provided for borrowing commitments of up to $161.0 million, consisting of (i) $160.0 million secured revolving line of credit facility, subject to borrowing base limitations, and (ii) $1.0 million secured revolving line of credit facility at the MoGas subsidiary level.  Borrowings under the credit facility generally bore interest on the outstanding principal amount using a LIBOR pricing grid that equaled a LIBOR rate plus an applicable margin of 2.75 percent to 3.75 percent, based on the Company’s senior secured recourse leverage ratio. Total availability was subject to a borrowing base. The Prior Credit Facility contained, among other restrictions, certain financial covenants including the maintenance of certain financial ratios, as well as default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods). On the date of termination, there was no indebtedness outstanding under this facility, and the loan documents providing for the facility, and the security interests securing it, were terminated and released.

The termination of the Prior Credit Facility will result in the write-off of the remaining deferred debt costs. As of September 30, 2020, the Company had $1.1 million of deferred debt costs outstanding, which were presented as an asset in the Consolidated Balance Sheet.

Item 2.01
Completion of Acquisition or Disposition of Assets.

On February 4, 2021, the Company completed the Transaction and the disposition of GIGS.  The information regarding the Transaction under the heading “Acquisition of Crimson Midstream Holdings, LLC” in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

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As of September 30, 2020, the carrying value of GIGS was $64.8 million and the related asset retirement obligation was $8.6 million in the Consolidated Balance Sheet. Upon acquiring the GIGS asset, Carlyle assumed the related asset retirement obligation. Further, the Company had $176 thousand of deferred lease costs as of September 30, 2020, which were written off upon termination of the GIGS Lease described in Item 1.02 of this Current Report on Form 8-K.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On February 4, 2021, in connection with the Transaction, Crimson Midstream Operating, LLC, a Delaware limited liability company, and Corridor MoGas, Inc., a Delaware corporation (collectively, the “Borrowers”), together with Crimson, MoGas Debt Holdco LLC, a Delaware limited liability company, MoGas Pipeline, LLC, a Delaware limited liability company, CorEnergy Pipeline Company, LLC, a Delaware limited liability company, United Property Systems, LLC, a Delaware limited liability company, Crimson Pipeline, LLC, a California limited liability company (“Crimson Pipeline”) and Cardinal Pipeline, L.P., a California limited partnership (all direct and indirect subsidiaries of the Company and, collectively, the “Guarantors”) entered into an Amended and Restated Credit Agreement with the lenders from time to time party thereto and Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent for such lenders, Swingline Lender and Issuing Bank (the “Credit Agreement”).  The Credit Agreement provides borrowing capacity of up to $155 million, consisting of: a $50 million revolving credit facility, an $80 million term loan and an uncommitted incremental facility of $25 million.

The loans under Credit Agreement mature on February 4, 2024. Subject to certain conditions all loans made under the Credit Agreement shall, at the option of the Borrowers, bear interest at either (a) LIBOR plus a spread of 325 to 450 basis points, or (b) a rate equal to the highest of (i) the prime rate established by the Administrative Agent, (ii) the federal funds rate plus 0.5%, or (iii) the one-month LIBOR rate plus 1.0%, plus a spread of 225 to 350 basis points. The applicable spread for each interest rate is based on the Total Leverage Ratio (as defined in the Credit Agreement).

In connection with the Credit Agreement, the Company, Crimson, the Borrowers and Crimson Pipeline entered into an Amended and Restated Pledge Agreement with Wells Fargo pledging the equity of the Borrowers and Guarantors as security for outstanding balances under the Credit Agreement.  In addition, outstanding balances under the facility are secured by all assets of the Borrowers and Guarantors, other than any assets regulated by the CPUC and other customary excluded assets, pursuant to an Amended and Restated Security Agreement entered into by the Borrowers and Guarantors with Wells Fargo.

The Credit Agreement contains, among other restrictions, requirements to comply with a maximum total leverage ratio and a minimum debt service coverage ratio.  Cash distributions to the Company are subject to certain restrictions, including without limitation, no default or event of default, compliance with financial covenants and available free cash flow.  The Credit Agreement contains default and cross-default provisions customary for transactions of this type (with applicable customary grace periods). Upon the occurrence of an event of default, payment of all amounts outstanding under the Credit Agreement may become immediately due and payable at the election of may the Required Lenders (as defined in the Credit Agreement).

The Credit Agreement will replace (i) the Prior Credit Facility as described under Item 1.02 of this Current Report on Form 8-K, which includes the $160.0 million secured credit facility and $1.0 million secured revolving line of credit facility at the MoGas subsidiary level, and (ii) the $1.5 million revolving line of credit facility at the Mowood subsidiary level with Regions Bank.

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The foregoing summary of the Credit Agreement, Pledge Agreement and Security Agreement are qualified in their entirety by reference to the Credit Agreement, Pledge Agreement and Security Agreement, copies of which are filed as Exhibits 10.21.1, 10.21.2, and 10.21.3 to this Current Report on Form 8-K and are incorporated in this Item 2.03 by reference.

Item 3.02
Unregistered Sales of Equity Securities.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Transaction and the issuances of Class A-1 Units, Class A-2 Units and Class A-3 Units (the “Crimson Units”) is incorporated by reference in this Item 3.02.  The terms of the Series C Preferred, Series B Preferred and Class B Common Stock that may be issued upon exchange or conversion of such Units are further described below in Item 3.03 of this Current Report on Form 8-K, which is incorporated herein by reference.  The Crimson Units to be issued pursuant to the Third LLC Agreement, and the Series C Preferred, Series B Preferred, Class B Common Stock and Common Stock that may be issued upon exchange or conversion thereof, will be issued and sold in reliance on Section 4(a)(2) of the Securities Act.

The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Internalization and the issuances of REIT Stock is incorporated by reference in this Item 3.02. The REIT Stock to be issued and sold pursuant to the Contribution Agreement, and the Common Stock that may be issued upon conversion thereof, will be issued and sold in reliance on Section 4(a)(2) of the Securities Act.

Item 3.03
Material Modification to Rights of Security Holders.

Class B Common Stock

On February 4, 2021, the Company filed Articles Supplementary (the “Class B Common Articles Supplementary”) with the Department of Assessments and Taxation of the State of Maryland (“SDAT”), which Class B Common Articles Supplementary were effective on filing, classifying 11,810,000 authorized but unissued shares of the Company’s Common Stock, par value $.001 per share, as Class B Common.  The Class B Common Articles Supplementary establish the terms of the Class B Common Stock, which are substantially similar to the Company’s Common Stock, including voting rights, except that the Class B Common Stock will be subordinated to the Common Stock with respect to dividends and liquidation and will automatically convert into Common Stock under certain circumstances.  The Company has not yet issued any shares of Class B Common Stock.  It does not intend to list the Class B Common Stock on any exchange.

Voting Rights.  Class B Common Stock will vote together with the holders of Common Stock, voting as a single class, with respect to all matters on which holders of the Common Stock are entitled to vote.  The Company may not authorize or issue any additional shares of Class B Common Stock beyond the number authorized in the Class B Common Articles Supplementary without the affirmative vote of at least 66-2/3% of the outstanding shares of Class B Common Stock.  Any amendment to the Company’s charter that would alter the rights of the Class B Common Stock must be approved by the affirmative vote of the majority of the outstanding Class B Common Stock.

Dividends.  Subject to preferences that may apply to any shares of preferred stock outstanding at the time, holders of the Class B Common Stock will be entitled to receive dividends to the extent authorized by the Company’s Board of Directors and declared by the Company pursuant to a formula based on the amount of dividends declared on the Company’s Common Stock.  For the first four quarters after closing of the Transaction, the shares of Class B Common Stock will be entitled to receive dividends (“Class B Dividends”) in any quarter only to the extent that the product of (i) the sum of (A) the Company’s cash available for distribution (“CAFD”) and (B) the CAFD budget for any uncompleted quarter in such first four quarter period, as approved by the Company’s Board of Directors, multiplied by (ii) 0.25 for such first four quarters is greater than the base dividend established for the Common Stock as set forth in the Class B Common Articles Supplementary (“Common Base Dividend”) of $0.05 per share per quarter multiplied by 1.25. For the fifth through twelfth quarters after closing of the Transaction, the Class B Common Stock will be entitled to receive Class B Dividends in any quarter only to the extent that: (i) the product of the Company’s latest twelve months (“LTM”) CAFD for that quarter multiplied by 0.25 is greater than (ii) the product of the base dividend established for the Common Stock for that quarter multiplied by 1.25.

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In no event will the Class B Dividend per share be greater than the Common Base Dividend per share during the same quarter and no Class B Dividend will accrue until after April 1, 2021.  As is the case for Common Stock, Class B Dividends will not be cumulative.

Change of Control.  The holders Class B Common Stock will receive the same consideration that the holders of the Common Stock will receive for any change of control but only to the extent that the holders of Common Stock receive consideration.

Conversion.  The shares of Class B Common Stock will convert to Common Stock on a one-for-one basis upon the first to occur of the following:


the Board of Directors authorizes and the Company declares a quarterly dividend per share of outstanding Common Stock in excess of the then-applicable Common Base Dividend;

the issuance of additional shares of Common Stock other than in connection with: (i) any director or management compensation plan or equity award, (ii) the Company’s Dividend Reinvestment Plan, (iii) any conversion rights of the Company’s existing 5.875% Convertible Senior Notes due 2025 or Series A Preferred, (iv) any exchange for fair value for the issuance of Common Stock (as determined by the Company’s Board of Directors), or (v) any stock split, reverse stock split, stock dividend or similar transaction in which the shares of Class B Common Stock share equally; or

the Board of Directors authorizes and the Company declares a quarterly dividend per share to the Class B Common Stock equal to the then-applicable Common Base Dividend for any four consecutive fiscal quarters beginning with the fiscal quarter ending June 30, 2022 through the fiscal quarter ending March 30, 2024.

To the extent no conversion occurs as described above, then the Class B Common will convert to Common Stock on February 4, 2024 at a ratio equal to the quotient obtained by dividing (i) (A) the quotient of the then-applicable LTM CAFD divided by the product of (x) 1.25 and (y) four (4) times the then-applicable Common Base Dividend per share, less (B) the number of then-outstanding shares of Common Stock by (ii) the number of then-outstanding shares of Class B Common Stock; provided, however, that the ratio shall not be less than 0.6800 shares of Common Stock per share of Class B Common or greater than 1.000 shares of Common Stock per share of Class B Common.

Restrictions on Transfer.  The Class B Common Stock is subject to the ownership limitations and transfer restrictions set forth in Article VII of the Company’s charter, designed to protect the Company’s status as a REIT. In addition, pursuant to the terms of the Registration Rights Agreement and the Contribution Agreement, the prospective holders of Class B Common Stock have agreed with the Company that they will not transfer any shares of Class B Common Stock for one year from February 4, 2021.  After one year, the terms of the Class B Common Articles Supplementary generally permit the holders of Class B Common Stock to transfer shares of such stock to affiliates of the holder if at least 15% of the shares of Class B Common Stock then held by the holder will be transferred, subject to compliance with applicable federal and state securities laws.

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The foregoing summary of the Class B Common Articles Supplementary is qualified in its entirety by reference to the Class B Common Articles Supplementary, a copy of which is filed as Exhibit 3.5 to this Current Report on Form 8-K and is incorporated in this Item 3.03 by reference.

Series B Preferred Stock

On February 4, 2021, the Company filed Articles Supplementary (the “Series B Preferred Articles Supplementary”) with the SDAT, which Series B Preferred Articles Supplementary were effective on filing, classifying 2,437,000 authorized but unissued shares of the Company’s preferred stock, par value $.001 per share, as Series B Preferred.  The Company has not yet issued any shares of Series B Preferred.  It does not intend to list the Series B Preferred on any exchange.

Dividends.  Under the Series B Preferred Articles Supplementary, holders of Series B Preferred Stock are entitled to receive cumulative dividends before any dividends are paid to the holders of Common Stock or Class B Common Stock at the rate per share of 4.0% of the stated liquidation preference of $25.00 per annum, or $1.00 per annum, payable quarterly in arrears.  The Company may elect to pay such dividend by issuing additional shares of Series B Preferred.  Upon any liquidation, dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series B Preferred Stock shall be entitled to receive out of the assets of the Company legally available for distribution to stockholders a liquidation preference of $25.00 per share, plus an amount equal to accrued and unpaid dividends thereon, whether or not declared, to the date of payment, before any distribution or payment shall be made to the holders of any junior securities, including the Common Stock or Class B Common Stock.  If existing stockholders of the Company have not approved the convertibility of the Series B Preferred to Class B Common Stock (as described below) by February 3, 2022, then the dividend rate shall increase to 11.00% per annum.

Redemption.  The Company may, at its option, redeem the Series B Preferred at any time in whole, or from time to time in part, for cash at a price per share equal to the liquidation preference of $25.00 per share, plus any accrued and unpaid dividends thereon to, but not including, the date of redemption. In addition, to the extent the Series B Preferred has not previously been redeemed, the Company will redeem the Series B Preferred on the seventh anniversary of the date that Series B Preferred is first issued and sold. If the Company exercises any of its redemption rights relating to the Series B Preferred, the holders of such redeemed shares will have the conversion rights described below.

Voting Rights.  Holders of shares of the Series B Preferred generally do not have any voting rights, except as follows:


The Company may not without the affirmative vote of the holders of 66-2/3% of the outstanding shares of Series B Preferred:

o
Other than the Series A Preferred, (i) authorize or issue any additional class or series of equity securities ranking senior to the Series B Preferred with respect to dividends or liquidation, (ii) reclassify any equity securities of the Company into such senior equity securities, or (iii) other than the Series C Preferred, create, authorize or issue any obligation or security convertible into any such senior equity securities; provided that the holders of Series B Preferred are not authorized to vote on (A) any increase in the amount of the authorized Common Stock, Class B Common Stock, Series A Preferred or Series C Preferred, (B) the creation or issuance of any equity securities ranking on parity with or junior to the Series B Preferred with respect to dividend and liquidation rights, or (C) the creation of any class of securities issued to refinance the Series A Preferred;
9


o
amend or repeal the Company’s charter or the Series B Preferred Articles Supplementary in connection with a merger or a sale of substantially all of the assets, of the Company, or otherwise, in a manner that would materially adversely affect the Series B Preferred; or

The holders of Series B Preferred will have the exclusive right, by the affirmative vote of the majority of the outstanding Series B Preferred to approve any amendment to the Company’s charter that would alter the contract rights, as set forth in the charter, of only the Series B Preferred.

Conversion.  Within five (5) business days after the existing holders of the Company’s Common Stock approve the conversion in accordance with the NYSE rules, the Series B Preferred will automatically convert into a number of shares of the Company’s Class B Common Stock, per share of Series B Preferred, equal to the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the date fixed for conversion by (ii) the product of (A) 90% times (B) the Common Stock Reference Price (as defined below); provided that if the conversion would cause the Company’s status as a REIT to be materially and adversely affected, the Company may elect to settle the conversion in cash.

At any time after the existing holders of the Company’s Common Stock approve the conversion in accordance with the NYSE rules and only to the extent that the mandatory conversion described above does not occur promptly, each holder of Series B Preferred may convert, at such holder’s option, any or all of such holder’s shares of Series B Preferred into a number of shares of Common Stock per share of Series B Preferred equal to the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the date fixed for conversion by (ii) the Common Stock Reference Price (as defined below).

“Common Stock Reference Price” means $7.80.

Restrictions on Transfer.  The Series B Preferred is subject to the ownership limitations and transfer restrictions set forth in Article VII of the Company’s charter, designed to protect the Company’s status as a REIT.

The foregoing summary of the Series B Preferred Articles Supplementary is qualified in its entirety by reference to the Series B Preferred Articles Supplementary, a copy of which is filed as Exhibit 3.6 to this Current Report on Form 8-K and is incorporated in this Item 3.03 by reference.

Series C Preferred Stock

On February 4, 2021, the Company filed Articles Supplementary (the “Series C Preferred Articles Supplementary”) with the SDAT, which Series C Preferred Articles Supplementary were effective on filing, classifying 1,652,000 authorized but unissued shares of the Company’s preferred stock, par value $.001 per share, as Series C Preferred.  The Company has not yet issued any shares of Series C Preferred.  It does not intend to list the Series C Preferred on any exchange.

Dividends.  Under the Series C Preferred Articles Supplementary, holders of the Series C Preferred are entitled to receive cumulative dividends before any dividends are paid to the holders of Common Stock or Class B Common Stock at the rate per share of 9.0% of the stated liquidation preference of $25.00 per annum, or $2.25 per annum, payable quarterly in arrears.  Upon any liquidation, dissolution or winding-up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series C Preferred shall be entitled to receive out of the assets of the Company legally available for distribution to stockholders a liquidation preference of $25.00 per share, plus an amount equal to accrued and unpaid dividends thereon, whether or not declared, to the date of payment, before any distribution or payment shall be made to the holders of any junior securities, including the Common Stock or Class B Common Stock.

10

Redemption.  The Company may, at its option, redeem the Series C Preferred at any time in whole, or from time to time in part, for cash at a price per share equal to the liquidation preference of $25.00 per share, plus any accrued and unpaid dividends thereon to, but not including, the date of redemption. In addition, to the extent the Series C Preferred has not previously been redeemed, the Company will redeem the Series C Preferred on the seventh anniversary of the date that Series B Preferred is first issued and sold. If the Company exercises any of its redemption rights relating to the Series C Preferred, the holders of such redeemed shares will have the exchange rights described below.

Voting Rights.  Holders of shares of the Series C Preferred generally do not have any voting rights, except as follows:


The Company may not without the affirmative vote of the holders of 66-2/3% of the outstanding shares of Series C Preferred:

o
Other than the Series A Preferred, (i) authorize or issue any additional class or series of equity securities ranking senior to the Series C Preferred with respect to dividends or liquidation, (ii) reclassify any equity securities of the Company into such senior equity securities, or (iii) create, authorize or issue any obligation or security convertible into senior equity securities; provided further that the holders of Series C Preferred are not authorized to vote on (A) any increase in the amount of the authorized Common Stock, Class B Common, Series A Preferred or Series B Preferred, (B) the creation or issuance of any equity securities ranking on parity with or junior to the Series C Preferred with respect to dividend and liquidation rights or (C) the creation of any class of securities issued to refinance the Series A Preferred;

o
amend or repeal the Company’s charter or the Series C Preferred Articles Supplementary in connection with a merger or a sale of substantially all of the assets of the Company, or otherwise, in a manner that would materially adversely affect the Series C Preferred; or

The holders of Series C Preferred will have the exclusive right, by the affirmative vote of the majority of the outstanding Series C Preferred, to approve any amendment to the Company’s charter that would alter the contract rights, as set forth in the charter, of only the Series C Preferred.

Exchange.  Each holder of Series C Preferred may exchange, at such holder’s option, any or all of such holder’s shares of Series C Preferred into an equal number of depositary shares representing the Company’s Series A Preferred.  If at any time the volume weighted average price per depositary share representing Series A Preferred is greater than $23.50 for at least thirty (30) consecutive trading days, then the Company may elect to exchange all outstanding shares of the Series C Preferred into a number of depositary shares representing Series A Preferred equal to the number of shares of Series C Preferred to be exchanged multiplied by $25.00 and then dividing that product by $23.50.  The Company will pay all accrued and unpaid dividends to but not including the date of the exchange in cash or additional depositary shares representing Series A Preferred.

Restrictions on Transfer.  The Series C Preferred is subject to the ownership limitations and transfer restrictions set forth in Article VII of the Company’s charter, designed to protect the Company’s status as a REIT.

11

The foregoing summary of the Series C Preferred Articles Supplementary is qualified in its entirety by reference to the Series C Preferred Articles Supplementary, a copy of which is filed as Exhibit 3.7 to this Current Report on Form 8-K and is incorporated in this Item 3.03 by reference.

Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) &(d)          In connection with the Transaction, effective February 4, 2021, the Board of Directors of the Company increased the number of directors on the Board pursuant to the provisions of the Company’s Bylaws and appointed Mr. John Grier to fill the vacancy.  In connection with the Transaction on February 4, 2021, the Company also appointed Mr. Grier as Chief Operating Officer, and appointed Robert L. Waldron as Chief Financial Officer.

Mr. Grier is the CEO and Founder of Crimson Pipeline (CP) a company in the business of acquiring and improving the operations of oil and gas pipeline systems. CP made its’ first asset purchase in 2005 and over the past decade, CP  has made six additional major acquisitions, five of those from major oil companies.  Before starting CP, Mr. Grier was primarily in the exploration and production (E&P) business and he started Crimson Resource Management with a partner in 1986. That company again purchased oil and gas-producing properties, mostly from major oil companies. Mr. Grier and his partner successfully grew that company making a major divestiture in 2009, and after the sale, Mr. Grier continued the pipeline company. Mr. Grier has a Bachelor’s Degree in Science/Chemical Engineering from the University of Oklahoma and a Master’s Degree in Business Administration from Harvard University.

Mr. Waldron has been the CFO of Crimson since September 2014. Mr. Waldron began his career at Dow Chemical in September 1999, in Dow’s corporate R&D group, focusing on design and optimization of chemical reactors.  Beginning in August 2007, Mr. Waldron spent seven years in investment banking, first at UBS and then at Citi Group, focused almost exclusively on the midstream sector advising clients on various M&A, IPOs and other capital markets transactions.  Mr. Waldron received a Bachelor’s Degree in Chemical Engineering from the University of Utah, a Master’s Degree in Chemical Engineering from the Massachusetts Institute of Technology, and a Master’s Degree in Business Administration from the Kellogg School of Management, Northwestern University.

Other than the Transaction, there is no arrangement or understanding between each of Mr. Grier or Mr. Waldron and any other person pursuant to which either was appointed as an officer of the Company. There are also no family relationships between Mr. Grier, Mr. Waldron and any director or executive officer of the Company.

Following the closing of the Transaction, Mr. Grier and Mr. Waldron will continue to be employees of Crimson Midstream Services, LLC (“Crimson Services”) and any compensation arrangements will continue.  Mr. Grier has no employment agreement with Crimson Services but will continue to be paid a base salary of $530,450.  He is also entitled to other customary benefits, such as participation in retirement and medical and other plans and vacation leave.  Mr. Waldron previously entered into an Employment Agreement with Crimson Services dated January 23, 2017, as amended by Amendment No. 1 dated January 11, 2019 and Amendment No. 2 dated April 1, 2019 (as amended, the “Employment Agreement”).  Pursuant to the terms of the Employment Agreement as currently in effect, Mr. Waldron will be paid a base salary of no less than $320,000, which is currently $353,068.  In connection with the Transaction, any incentive-based bonus entitlements were terminated.  The Employment Agreement also provides that Mr. Waldron is entitled to certain customary benefits, such as participation in retirement and medical and other plans and vacation leave.  Mr. Waldron is subject to certain restrictive covenants under the Employment Agreement, including a 24-month post-termination non-compete and an agreement not to solicit the employees, customers or potential customers, suppliers and other business contacts of Crimson Services and its affiliates.  Crimson Services will allocate Mr. Grier’s and Mr. Waldron’s time and related compensation for the portion of their services provided to Crimson.  It is currently expected that approximately 50% of Mr. Grier’s time and approximately 60% of Mr. Waldron’s time and compensation will be allocated to Crimson.  The remaining time will be allocated to entities that are not affiliates of the Company.  The unaffiliated companies will reimburse Crimson Services for that portion of the compensation of Mr. Grier and Mr. Waldron attributable to their time allocated to such companies.

12

The foregoing description of the Employment Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Employment Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and is incorporated by reference herein.

Other than the Transaction, neither Mr. Grier nor Mr. Waldron has any direct or indirect material interests in any transaction with the Company or in any currently proposed transaction to which the Company is a party.

Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The disclosure provided under Item 3.03 above is incorporated herein by reference.

Forward-Looking Statements

This Current Report on Form 8-K contains certain statements that may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are “forward-looking statements.” Although CorEnergy believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including, among others, failure to realize the anticipated benefits of the Transaction or Internalization; the risk that CPUC Approval is not obtained, is delayed or is subject to unanticipated conditions that could adversely affect CorEnergy or the expected benefits of the Transaction, risks related to the uncertainty of the projected financial information with respect to Crimson, the failure to receive the required approvals by existing CorEnergy stockholders; the risk that a condition to the closing of the Internalization may not be satisfied, CorEnergy’s ability to consummate the Internalization, and those factors discussed in CorEnergy’s reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Current Report on Form 8-K. Other than as required by law, CorEnergy does not assume a duty to update any forward-looking statement. In particular, any distribution paid in the future to our stockholders will depend on the actual performance of CorEnergy, its costs of leverage and other operating expenses and will be subject to the approval of CorEnergy’s Board of Directors and compliance with leverage covenants.

Additional Information and Where to Find It

The issuance of CorEnergy common stock upon conversion of CorEnergy preferred stock in connection with the Transaction as described above (the “Stock Issuance”) and the Internalization will be submitted to the stockholders of CorEnergy for their consideration. In connection with the Stock Issuance and Internalization, CorEnergy intends to file a proxy statement and other documents with the SEC. INVESTORS AND CORENERGY STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) REGARDING THE STOCK ISSUANCE AND INTERNALIZATION AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE STOCK ISSUANCE AND INTERNALIZATION. The proxy statement and other relevant documents (when they become available), and any other documents filed by CorEnergy with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, stockholders may obtain free copies of the documents filed with the SEC by CorEnergy through its website at corenergy.reit. The information on CorEnergy’s website is not, and shall not be deemed to be a part hereof or incorporated into this or any other filings with the SEC. You may also request them in writing, by telephone or via the Internet at:

CorEnergy Infrastructure Trust, Inc.
Investor Relations
877-699-CORR (2677)
info@corenergy.reit

13

Participants in the Solicitation

CorEnergy, the Manager and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from CorEnergy’s stockholders in respect of the Stock Issuance and Internalization. Information about CorEnergy’s directors and executive officers is available in CorEnergy’s definitive proxy statement, prepared in connection with CorEnergy’s 2020 annual meeting of stockholders and will be set forth in the proxy statement in respect of the Stock Issuance and Internalization when it is filed with the SEC. Other information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of proxies from CorEnergy’s stockholders in connection with the Internalization, including a description of their direct or indirect interests, by security holdings or otherwise, in CorEnergy will be set forth in the proxy statement in respect of the Stock Issuance and Internalization when it is filed with the SEC. You can obtain free copies of these documents, which are filed with the SEC, from CorEnergy using the contact information above.

Item 9.01
Financial Statements and Exhibits.

(a)
Financial statements of businesses acquired. The Company expects to file required financial statements related to the acquired business by amendment not later than 71 calendar days after this Current Report on Form 8-K was required to be filed.

(b)
Pro forma financial information. The Company expects to file required pro forma financial statements related to the acquired business and business disposed by amendment not later than 71 calendar days after this Current Report on Form 8-K was required to be filed.

(d)          Exhibits

Exhibit No.
Description of Exhibit
Membership Interest Purchase Agreement dated February 4, 2021, by and among CorEnergy Infrastructure Trust, Inc., Crimson Midstream Holdings, LLC, CGI Crimson Holdings, L.L.C., and John D. Grier
Contribution Agreement dated February 4, 2021, by and among CorEnergy Infrastructure Trust, Inc., Richard C. Green, Rick Kreul, Rebecca M. Sandring, Sean DeGon, Jeff Teeven, Jeffrey E. Fulmer, David J. Schulte (as Trustee of the DJS Trust under Trust Agreement dated July 18, 2016), and Campbell Hamilton, Inc.
Articles Supplementary for Class B Common Stock

14


Article Supplementary for Series B Preferred Stock
Articles Supplementary for Series C Preferred Stock
Third Amended and Restated Limited Liability Agreement of Crimson Midstream Holdings, LLC
Registration Rights Agreement dated February 4, 2021, by and among CorEnergy Infrastructure Trust, Inc. and the holders of Units listed on Schedule A thereto
Settlement and Mutual Release Agreement dated February 4, 2021, by and among CorEnergy Infrastructure Trust, Inc., Grand Isle Corridor, LP, Energy XXI GIGS Services, LLC, Energy XXI Gulf Coast, Inc., and CEXXI, LLC
First Amendment to Management Agreement dated February 4, 2021, by and between CorEnergy Infrastructure Trust, Inc. and Corridor InfraTrust Management, LLC
Amended and Restated Credit Agreement dated February 4, 2021, by and among Crimson Midstream Operating, LLC, Corridor MoGas, Inc., Crimson Midstream Holdings, LLC, MoGas Debt Holdco LLC, MoGas Pipeline, LLC, CorEnergy Pipeline Company, LLC, United Property Systems, LLC, Crimson Pipeline, LLC, and Cardinal Pipeline, L.P., and Wells Fargo Bank, National Association, as Administrative Agent for such lenders, Swingline Lender and Issuing Bank
Amended and Restated Pledge Agreement dated February 4, 2021, by and among CorEnergy Infrastructure Trust Inc., Crimson Midstream Holdings, LLC, Crimson Midstream Operating, LLC, Corridor MoGas, Inc., the lenders from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent
Amended and Restated Security Agreement dated February 4, 2021, by and among Crimson Midstream Operating, LLC, Corridor MoGas, Inc., Crimson Midstream Holdings, LLC, MoGas Debt Holdco LLC, MoGas Pipeline, LLC, CorEnergy Pipeline Company, LLC, United Property Systems, LLC, Crimson Pipeline, LLC, and Cardinal Pipeline, L.P., the lenders from time to time party thereto and Wells Fargo Bank, National Association, as Administrative Agent
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Non-material schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the SEC.

15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
CORENERGY INFRASTRUCTURE TRUST, INC.
     
     
     
Dated:  February 10, 2021
By:
/s/ Rebecca M. Sandring
   
Rebecca M. Sandring
   
Secretary


16



EX-2.1 2 brhc10019770_ex2-1.htm EXHIBIT 2.1

Exhibit 2.1

Execution Version


MEMBERSHIP INTEREST PURCHASE AGREEMENT
 
by and among
 
CGI CRIMSON HOLDINGS, L.L.C.,
 
CRIMSON MIDSTREAM HOLDINGS, LLC,
 
JOHN D. GRIER,
 
AND
 
CORENERGY INFRASTRUCTURE TRUST, INC.
 
Dated as of February 4, 2021


Table of Contents
 
 
 
Page
   
ARTICLE I DEFINITIONS
2
   
 
Section 1.01
Definitions
2
   
ARTICLE II PURCHASE AND SALE OF SUBJECT UNITS
19
   
 
Section 2.01
Purchase and Sale of Subject Units
19
 
Section 2.02
Consideration
19
 
Section 2.03
Closing and Closing Deliverables
20
 
Section 2.04
Purchase Price Adjustment.
22
   
ARTICLE III REPRESENTATIONS AND WARRANTIES OF CARLYLE
24
   
 
Section 3.01
Organization
24
 
Section 3.02
Authorization; Validity
24
 
Section 3.03
No Conflict; No Violation
25
 
Section 3.04
Consents and Approvals
25
 
Section 3.05
Title to the Subject Units
25
 
Section 3.06
Brokers
26
 
Section 3.07
Litigation
26
 
Section 3.08
No Other Representations and Warranties
26
   
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
26
   
 
Section 4.01
Organization; Qualifications; Power
26
 
Section 4.02
Authorization; Validity
27
 
Section 4.03
No Conflict; No Violation
27
 
Section 4.04
Consents and Approvals
27
 
Section 4.05
Securities of the Company; Subsidiaries
28
 
Section 4.06
Company Financial Statements
28
 
Section 4.07
Absence of Company Material Adverse Effect
29
 
Section 4.08
Litigation; Compliance with Law; Permits
29
 
Section 4.09
Properties; Titles, Etc
29
 
Section 4.10
Insurance
31
 
Section 4.11
Taxes
31
 
Section 4.12
Company Material Contracts
33
 
Section 4.13
Transactions with Affiliates
33
 
Section 4.14
Employee Benefit Plans
33
 
Section 4.15
Labor Relations
35
 
Section 4.16
Unauthorized Payments
36
 
Section 4.17
Federal and State Regulation
36
 
Section 4.18
Imbalances
36
 
Section 4.19
Maintenance of Properties
36
 
Section 4.20
Customers
36

i

 
Section 4.21
Restrictions on Distributions
37
 
Section 4.22
Environmental Matters
37
 
Section 4.23
Anti‑Corruption
37
 
Section 4.24
Anti‑Money Laundering
38
 
Section 4.25
Compliance with Sanctions Requirements
38
 
Section 4.26
Brokers
38
 
Section 4.27
Company Books and Records
38
 
Section 4.28
Solvency
38
 
Section 4.29
No Other Representations and Warranties
38
   
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARENT GROUP
39
   
 
Section 5.01
Organization; Qualifications; Power
39
 
Section 5.02
Authorization; Validity
39
 
Section 5.03
No Conflict; No Violation
40
 
Section 5.04
Consents and Approvals
40
 
Section 5.05
Brokers
40
 
Section 5.06
Litigation
41
 
Section 5.07
Solvency; No Fraudulent Conveyance; No Bankruptcy
41
 
Section 5.08
Sufficiency of Funds
41
 
Section 5.09
Parent Financial Statements; Parent SEC Reports
41
 
Section 5.10
Absence of Parent Material Adverse Effect
42
 
Section 5.11
Absence of Undisclosed Liabilities
42
 
Section 5.12
GIGS Assets
43
 
Section 5.13
Title to GIGS Assets
44
 
Section 5.14
Sufficiency of Assets
44
 
Section 5.15
Taxes
44
 
Section 5.16
Regulatory Matters
45
 
Section 5.17
Anti‑Corruption
46
 
Section 5.18
Anti‑Money Laundering
46
 
Section 5.19
Compliance with Sanctions Requirements
46
 
Section 5.20
CORR R&W Insurance Policy
46
 
Section 5.21
No Other Representations and Warranties
46
   
ARTICLE VI COVENANTS
47
   
 
Section 6.01
Further Assurances
47
 
Section 6.02
Public Disclosures
47
 
Section 6.03
CPUC Application
47
 
Section 6.04
Wrong Pocket
48
 
Section 6.05
Release; Indemnification of Directors and Officers
48
 
Section 6.06
Post‑Closing Access; Records
49
 
Section 6.07
Tax Matters
50

ii

ARTICLE VII INDEMNIFICATION
51
   
 
Section 7.01
Survival of Agreements
51
 
Section 7.02
Indemnification by the Company
51
 
Section 7.03
Indemnification by Carlyle
52
 
Section 7.04
Indemnification by Parent
52
 
Section 7.05
Limitations
52
 
Section 7.06
Indemnification Procedure
54
 
Section 7.07
Exclusive Remedy; Waiver of Remedies
56
 
Section 7.08
Right to Bring Claims
57
 
Section 7.09
Waiver of Damages
57
 
Section 7.10
Determination of Amount of Damages
57
   
ARTICLE VIII MISCELLANEOUS
58
   
 
Section 8.01
Assignment
58
 
Section 8.02
Notices
58
 
Section 8.03
Governing Law; Waiver of Jury Trial
59
 
Section 8.04
Entire Agreement
60
 
Section 8.05
Counterparts
60
 
Section 8.06
Amendments and Waivers
60
 
Section 8.07
Severability
60
 
Section 8.08
Titles and Subtitles
61
 
Section 8.09
Construction
61
 
Section 8.10
Specific Performance
61
 
Section 8.11
No Third‑Party Beneficiaries
61
 
Section 8.12
No Recourse Against Others
62
 
Section 8.13
Incorporation
62

INDEX TO EXHIBITS
 
Exhibit A
Assignment and Assumption Agreement
Exhibit B-1
Assignment and Bill of Sale
Exhibit B-2
GIGS ROW Assignment
Exhibit C
CPUC Application
Exhibit D
Crimson Gulf Side Letter
Exhibit E
GIGS Release
Exhibit F
Third A&R CMH LLC Agreement
Exhibit G
CORR R&W Insurance Policy
Exhibit H
Sample Working Capital Calculation

iii

MEMBERSHIP INTEREST PURCHASE AGREEMENT
 
This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”), dated as of February 4, 2021, is entered into by and among CGI Crimson Holdings, L.L.C., a Delaware limited liability company (“Carlyle”), John D. Grier, an individual (“J. Grier”), Crimson Midstream Holdings, LLC, a Delaware limited liability company (the “Company”), and CorEnergy Infrastructure Trust, Inc., a Maryland corporation (“Parent”). Each of Carlyle, J. Grier, the Company and Parent are individually referred to herein as a “Party” and collectively as the “Parties.”
 
RECITALS
 
WHEREAS, the Company and its Subsidiaries are collectively engaged in the business of, among other things, owning and operating Hydrocarbon pipeline and storage assets located in the State of California and other matters directly related thereto (the “Crimson CA Business”);
 
WHEREAS, as of the date of this Agreement, Carlyle owns 324,669.4 Class C Units of the Company (the “Subject Units”), which Subject Units represent (i) all of the Class C Units owned by Carlyle and (ii) 49.5% of the issued and outstanding membership interests of the Company;
 
WHEREAS, as of the date of this Agreement, (i) the Grier Members collectively own 331,199.1 Class C Units of the Company (the “Grier CMH Units”), which Grier CMH Units represent (A) all of the Class C Units owned by the Grier Members and (B) 50.5% of the issued and outstanding membership interests of the Company and will continue to be owned by the Grier Members from and after the Closing, and, (ii) pursuant to the terms of the Existing CMH LLC Agreement, J. Grier has sole operational control over the CPUC Assets that comprise a portion of the Crimson CA Business;
 
WHEREAS, Carlyle desires to sell, transfer and assign the Subject Units to Parent, and Parent desires to purchase, assume and accept the Subject Units from Carlyle, in each case in accordance with the terms and conditions set forth in this Agreement;
 
WHEREAS, simultaneously with the Closing, each of the Grier Members and Parent desire to amend and restate the Existing CMH LLC Agreement in the form of the Third A&R CMH LLC Agreement; and
 
WHEREAS, each of J. Grier and Parent, as a result of their respective direct and indirect ownership interests in the Company as of the Closing, expect to benefit economically as a result of the consummation of the transactions contemplated by this Agreement and the Transaction Documents (including pursuant to the terms and conditions of the Third A&R CMH LLC Agreement) and therefore have agreed to certain obligations as further set forth herein.
 
NOW, THEREFORE, in consideration of the foregoing premises and the covenants hereinafter contained, the Parties, intending to be legally bound, hereby agree as follows:
 
1

ARTICLE I
DEFINITIONS

Section 1.01         Definitions. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
 
Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise. For the avoidance of doubt, (a) the Grier Members, on the one hand, and Carlyle on the other hand, shall not be considered Affiliates of each other for purposes of this Agreement, (b) no portfolio company managed or advised by Carlyle Investment Management L.L.C. shall be deemed an Affiliate of the Company, Carlyle or any Grier Member and (c) Crimson Gulf Holdings and each of its Subsidiaries shall not be considered Affiliates of the Company, the Grier Members or Carlyle for purposes of this Agreement.
 
Agreement” is defined in the preamble hereto.
 
Allocation” is defined in Section 6.07(c).
 
Anti‑Corruption Legislation” means the UK Bribery Act of 2010, the Foreign Corrupt Practices Act of the United States of America, the OECD Anti‑Bribery Convention and 2009 Anti‑Bribery Recommendation and all similar laws, codes of practice or guidance notes that, in each case, relate to Corruption.
 
Anti‑Money Laundering Legislation” means (a) anti‑money laundering compliance requirements, including relevant recordkeeping and reporting requirements, such as, in the United States, the Currency and Foreign Transactions Reporting Act of 1970 (also known as the Bank Secrecy Act), as amended, and the regulations of the U.S. Treasury Department’s Financial Crimes Enforcement Network, (b) criminal and other prohibitions on engaging in money laundering or terrorism financing and (c) any related or similar rules, regulations or guidelines issued, administered or enforced by any Governmental Entity.
 
Asset Taxes” means ad valorem, property sales, use and similar Taxes based upon or measured by the ownership or operation of the GIGS Assets (excluding, for the avoidance of doubt, any income, franchise and similar Taxes and Transfer Taxes).
 
Assignment and Assumption Agreement” means an Assignment and Assumption Agreement to be entered into by and between Carlyle and Parent at the Closing in the form attached hereto as Exhibit A, pursuant to which Carlyle shall assign, transfer and deliver to Parent, and Parent shall assume and accept from Carlyle, the Subject Units, in each case in accordance with the terms of this Agreement.
 
Assignment and Bill of Sale” means an Assignment and Bill of Sale to be entered into by and between Carlyle (or a designee thereof) and Grand Isle GP (in its capacity as the general partner of Grand Isle LP) at the Closing in the form attached hereto as Exhibit B, pursuant to which
 
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Grand Isle GP shall cause Grand Isle LP to assign, transfer and deliver to Carlyle, and Carlyle shall assume, accept, fulfill and discharge, as applicable, from Grand Isle LP, (i) all of the Parent Group’s right, title and interest in and to the GIGS Assets and (ii) the GIGS Assumed Liabilities, in each case in accordance with the terms of this Agreement.
 
Audit Fees” is defined in Section 6.07(d).
 
Audit Firm” means Ernst & Young, LLP or, if Ernst & Young, LLP does not accept the engagement as Audit Firm, a national accounting firm that has experience in auditing the financial statements of a Hydrocarbon pipeline company operating in the Gulf of Mexico, reasonably acceptable to Carlyle and Parent.
 
Bankruptcy Event” means, with respect to any Person, the occurrence of one or more of the following events: (a) such Person (i) admits in writing its inability to pay its debts as they become due, (ii) files, consents or acquiesces by answer or otherwise to the filing against it of a petition for relief or reorganization or rearrangement, readjustment or similar relief or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, dissolution, reorganization, moratorium or other similar Law or the expiration of 60 days following the filing against it of a petition for relief if such has not been dismissed, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as bankrupt or as insolvent or to be liquidated, (vi) gives notice to any Governmental Entity of insolvency or pending insolvency, or (vii) takes corporate action for the purpose of any of the foregoing; or (b) a Governmental Entity of competent jurisdiction enters an Order appointing, without consent by such Person, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an Order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency Law, or ordering the dissolution, winding‑up or liquidation of such Person, or a petition or involuntary case with respect to any of the foregoing shall be filed or commenced against such Person.
 
Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the State of New York.
 
Carlyle” is defined in the preamble hereto.
 
Carlyle Fundamental Representations” means the representations and warranties of the Company set forth in Section 3.01 (Organization), Section 3.02 (Authorization; Validity), Section 3.05 (Title to the Subject Units) and Section 3.06 (Brokers).
 
Carlyle/Grier Indemnified Persons” is defined in Section 7.04.
 
Carlyle Material Adverse Effect” means any Effect that, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on Carlyle’s ability to satisfy its obligations under this Agreement or the Transaction Documents to which Carlyle is a party on a timely basis; provided, however, that in no event shall any of the following Effects, alone or in combination, be deemed to constitute, or be taken into account, in determining whether there has been, or would be, a Carlyle Material Adverse Effect: (a) any changes in general
 
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economic conditions or securities, credit, financial or other capital markets conditions, (b) any changes or conditions affecting the oil and gas industry in general (including changes to commodity prices, general market prices and regulatory changes affecting the industry), (c) any weather‑related or other force majeure event (including earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters), (d) pandemics, epidemics, acts of war (whether or not declared), armed hostility (by recognized governmental forces or otherwise), sabotage, terrorism or cyber‑attack, and any escalation or general worsening of any of the foregoing, (e) Effects resulting from the negotiation, execution, announcement, pendency, compliance with or performance of (i) this Agreement or the Transaction Documents, the transactions contemplated hereby or thereby or the terms hereof or thereof or the consummation of the transactions contemplated hereby or thereby, or (ii) the Crimson Gulf Spin; (f) any action taken or failure to take action that was requested in writing by Parent in accordance with the terms of this Agreement, (g) changes in applicable Law or government policy or in accounting standards, or any changes in the interpretation or enforcement of any of the foregoing, or any changes in general legal, regulatory or political conditions, or (h) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, or budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position.
 
Carlyle Released Parties” is defined in Section 6.05(a).
 
Carlyle Resigning Managers” means Ferris Hussein and Peter Taylor.
 
Cash Amount” is defined in Section 2.02(a).
 
Claim Notice” is defined in Section 7.05(d).
 
Class C Unit” is defined in the Existing CMH LLC Agreement.
 
Closing” is defined in Section 2.03(a).
 
Closing Date” is defined in Section 2.03(a).
 
Closing Working Capital” means (a) the Current Assets of the Company, less (b) the Current Liabilities of the Company, determined as of the close of business on the Closing Date and calculated using the format and methodology reflected on Exhibit H.
 
Closing Working Capital Statement” is defined in Section 2.04(b)(i).
 
Code” means the Internal Revenue Code of 1986, as amended, and any reference to any particular Code Section shall be interpreted to include any revision of or successor to that Section regardless of how numbered or classified.
 
Company” is defined in the preamble hereto.
 
Company Benefit Plan” is defined in Section 4.14(a).
 
Company Books and Records” means the books of account, ledgers, order books, records and other documents maintained by the Company Group with respect to the operation of
 
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the Crimson CA Business; provided, that in no event shall Company Books and Records include any of the foregoing to the extent held or maintained by the Company Group or Crimson Gulf Holdings (or any of its Subsidiaries) with respect to the ownership or operation of the Crimson Gulf Business by the Company prior to the consummation of the Crimson Gulf Spin.
 
Company Deeds” is defined in Section 4.09(e).
 
Company Financial Statements” is defined in Section 4.06.
 
Company Fundamental Representations” means the representations and warranties of the Company set forth in Section 4.01 (Organization; Qualifications; Power), Section 4.02 (Authorization; Validity), Section 4.05 (Securities of the Company; Subsidiaries), Section 4.26 (Brokers), and Section 4.28 (Solvency).
 
Company Group” means, collectively, the Company and its Subsidiaries.
 
Company Material Adverse Effect” means any Effect that, individually or in the aggregate, results in a material adverse effect on the financial condition, business, assets or continuing results of operations of the Company Group, taken as a whole; provided, however, that in no event shall any of the following Effects, alone or in combination, be deemed to constitute, or be taken into account, in determining whether there has been, or would be, a Company Material Adverse Effect: (a) any changes in general economic conditions or securities, credit, financial or other capital markets conditions, (b) any changes or conditions affecting the oil and gas industry in general (including changes to commodity prices, general market prices and regulatory changes affecting the industry), (c) any weather‑related or other force majeure event (including earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters), (d) pandemics, epidemics, acts of war (whether or not declared), armed hostility (by recognized governmental forces or otherwise), sabotage, terrorism or cyber‑attack, and any escalation or general worsening of any of the foregoing, (e) Effects resulting from the negotiation, execution, announcement, pendency, compliance with or performance of (i) this Agreement or the Transaction Documents, the transactions contemplated hereby or thereby or the terms hereof or thereof or the consummation of the transactions contemplated hereby or thereby, or (ii) the Crimson Gulf Spin, in each case including the impact thereof on the relationships of the Company Group with customers, suppliers, partners, employees or Governmental Entities; (f) any action taken or failure to take action that was requested in writing by Parent in accordance with the terms of this Agreement, (g) changes in applicable Law or government policy or in accounting standards, or any changes in the interpretation or enforcement of any of the foregoing, or any changes in general legal, regulatory or political conditions, or (h) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, or budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position.
 
Company Material Contracts” means, collectively, each of the following types of agreements or other instruments to which any member of the Company Group is bound, or any of the assets of any member of the Company Group is subject:
 
(a)       any Hydrocarbon (or byproducts from Hydrocarbon production) gathering, compression treating, transportation, dehydration, marketing, disposal, storage, injection,
 
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stabilization or processing contract (and any other similar contract) entered into by a member of the Company Group;
 
(b)         any Hydrocarbon (or byproducts from Hydrocarbon production) sales contract entered into by a member of the Company Group;
 
(c)          agreements that provide for (i) dedications of acreage or Hydrocarbons or (ii) a party being required to purchase, sell, tender or provide a stated portion (by volumes, geographic area or otherwise) of its production, output or receipts from or to another party (or other similar commitments or obligations);
 
(d)          agreements that provide for the construction of gathering or other pipeline systems or processing, compression, treating or storage facilities that provide for payments by the Company Group in excess of $500,000 in any 12‑month period during the remaining term thereof (in each case, based on the express terms of such contract or, if not ascertainable on its face, the Company’s good‑faith estimate);
 
(e)          any agreement that grants to a third Person a right of first refusal, option, preferential right or similar right to acquire any property or assets of the Company Group;
 
(f)          any agreement that is a settlement, conciliation or similar agreement with any Governmental Entity or pursuant to which the Company Group will (i) have any material obligations to any Governmental Entity, or (ii) have any limitations or prohibitions imposed on it by any Governmental Entity after the date of this Agreement (other than with respect to any Permit issued by such Governmental Entity);
 
(g)          agreements restricting a member of the Company Group from freely engaging in any line of business or competing with any other Person or in any geographic location;
 
(h)          agreements evidencing indebtedness for borrowed money;
 
(i)          other agreements involving obligations of, or payments to or from, a member of the Company Group which are outstanding immediately prior to the Closing in excess of $1,000,000 or the loss or termination of which would constitute a Company Material Adverse Effect (excluding, for the avoidance of doubt, gathering, treating, transportation, processing and sales contracts, or any purchase or work orders issued under an existing master services agreement or similar principal agreement); or
 
(j)          agreements entered into since January 1, 2018 that relate to the acquisition or disposition of any business, a material amount of equity or assets of any other Person or any real property (whether by merger, sale of stock or other equity interests, sale of assets or otherwise); or
 
Company Midstream Properties” means, except for excluded assets set forth on Schedule 1.01(a), all tangible and intangible property used by the Company Group in the operation of the Crimson CA Business, including in (a) gathering, compressing, treating, dehydrating, storing, injecting, processing, fractioning or transporting crude or other Hydrocarbons; (b) supporting and maintaining the properties, including electrical, safety, SCADA, and cathodic protection assets and equipment; and (c) marketing and monitoring crude or other Hydrocarbons,
 
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including gathering lines, pipelines, storage facilities, surface leases, Company Rights of Way and servitudes related to each of the foregoing; provided, that in no event shall any of the foregoing to the extent used or held for use primarily in connection with the Crimson Gulf Business constitute Company Midstream Properties for purposes of this Agreement.
 
Company Permit” means any franchise, grant, authorization, license, permit, easement, variance, exception, consent, certificate, approval, clearance, permission, qualification, registration or order necessary for the Company Group to own, lease and operate its properties and assets and to carry on the Crimson CA Business as presently conducted.
 
Company Released Parties” is defined in Section 6.05(b).
 
Company Rights of Way” is defined in Section 4.09(b).
 
Confidentiality Agreements” means (a) that certain Confidentiality and Nondisclosure Agreement, dated as of May 22, 2020, by and between Parent and Carlyle Investment Management L.L.C., and (b) that certain Confidentiality Agreement, dated as of October 4, 2019, by and among Parent and Carlyle Investment Management L.L.C.
 
CORR R&W Insurance Policy” means the buyer‑side representation and warranty insurance policy obtained by the Company for the benefit of the Parent Group at or prior to the Closing in the form attached hereto as Exhibit G.
 
Corruption” means the making or receiving of bribes, gifts or hospitality outside of normal business practices, and any other actions that induce or seek to induce any Person to perform a corrupt act.
 
Cox Entities” means, collectively, Energy XXI GIGS Services, LLC, a Delaware limited liability company, Energy XXI Gulf Coast, Inc., a Delaware corporation, and CEXXI, LLC, a Delaware limited liability company.
 
CPUC” means the California Public Utility Commission.
 
CPUC Assets” is defined in Section 6.03.
 
CPUC Application” means the Application for Authority to Sell and Transfer Indirect Control of Crimson California Pipeline, L.P. and San Pablo Bay Pipeline Company, LLC to be filed by J. Grier and Parent following the Closing in the form attached hereto as Exhibit C in accordance with Section 6.03, pursuant to which J. Grier and Parent shall request approval from the CPUC pursuant to Section 854 of the PU Code in respect of the CPUC Approval Transactions.
 
CPUC Approval Transactions” means those certain transactions as more particularly set forth in the Third A&R LLC Agreement to be consummated by the Grier Members and the Parent Group upon receipt of approval from the CPUC of the CPUC Application, including (a) the contribution by Parent of all of its assets to CMH (or an entity wholly‑owned by CMH), thereby reducing the Grier Members’ overall ownership of CMH, and (b) receipt by the Grier Members of the right to exchange the Grier CMH Units in exchange for Equity Securities of Parent or an Affiliate thereof.
 
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Crimson CA Business” is defined in the recitals hereto.
 
Crimson Gulf” means Crimson Gulf, LLC, a Delaware limited liability company.
 
Crimson Gulf Business” means (a) prior to the Crimson Gulf Spin, the Company’s, or (b) from and after the Crimson Gulf Spin, Crimson Gulf Holdings’, business of indirectly owning and operating Hydrocarbon pipeline and refining assets located in the State of Louisiana and offshore in the Gulf of Mexico and other matters directly related thereto.
 
Crimson Gulf Holdings” means Crescent Midstream Holdings, LLC, a Delaware limited liability company that directly and indirectly owns and operates the Crimson Gulf Business as of the date of this Agreement.
 
Crimson Gulf Side Letter” means a Letter Agreement to be entered into by and between Crimson Gulf (at the joint direction of J. Grier and Carlyle) and Parent at the Closing in the form attached hereto as Exhibit D, pursuant to which each of Crimson Gulf and Parent shall agree to certain non‑competition and right of first refusal obligations, in each case as more particularly set forth therein.
 
Crimson Gulf Spin” means the series of transactions consummated by the Company, the Grier Members and Carlyle prior to the date of this Agreement pursuant to which all of the assets and Liabilities of the Company (including the Equity Securities indirectly owned by the Company in Crimson Gulf and each Subsidiary of Crimson Gulf) that related to the Crimson Gulf Business were contributed to Crimson Gulf Holdings.
 
Current Assets” means cash and cash equivalents, accounts receivable, inventory and prepaid expenses, but excluding (a) the portion of any prepaid expense of which Company will not receive the benefit following the Closing; (b) deferred Tax assets; and (c) receivables from any of the Company Group, directors, employees, officers or stockholders and any of their respective Affiliates, determined in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the audited financial statements for the most recent fiscal year end as if such accounts were being prepared and audited as of a fiscal year end.
 
Current Liabilities” means accounts payable, accrued Taxes and accrued expenses, but excluding payables to any of the Company Group, directors, employees, officers or stockholders and any of their respective Affiliates, deferred Tax liabilities and the current portion of long term debt, determined in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the audited financial statements for the most recent fiscal year end as if such accounts were being prepared and audited as of a fiscal year end.
 
Damages” means any and all losses, damages, Taxes, fines, penalties, interest payments, deficiencies, judgements, awards, and other costs and expenses of whatever kind (including documented out‑of‑pocket costs and expenses of Proceedings, amounts paid in connection with any assessments, judgments or settlements relating to Proceedings, court costs, and reasonable fees
 
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of attorneys, accountants and other experts incurred in connection with defending against any such Proceedings).
 
Deductible” is defined in Section 7.05(a).
 
Direct Claim” is defined in Section 7.06(f).
 
Disputed Items” is defined in Section 6.07(c).
 
Disputed Amounts” is defined in Section 2.04(c)(iii).
 
Effect” means any state of facts, change, development, event, effect, condition or occurrence.
 
Employment Laws is defined in Section 4.15.
 
Encumbrance” means any charge, encumbrance, claim, option, security interest, assignment, hypothecation, condition, mortgage, pledge, deed of trust, lien (statutory or other), carriers’, workmen’s, repairmen’s or other like lien, encroachment, easement, right‑of‑way, lease, license, franchise, right of first refusal, or restriction of any kind (including any restriction on any attribute of ownership), and including all restatements, modifications, amendments, consolidations, extensions, renewals or substitutions thereto or thereof.
 
Energy Policy Act” means the Energy Policy Act of 1992, Pub.L. No. 102‑486, 106 Stat. 2776 (codified as amended in scattered sections of 15, 16, 25, 20, 42 U.S.C.), and any successor thereto.
 
Environmental Law” means any Law or contractual obligation that relates to public or worker health or safety (in each such case, regarding Hazardous Materials), pollution or the protection of the environment.
 
Environmental Permits” means any permit, approval, consent, identification number, certificate, registration, license or other authorization required or otherwise issued under any Environmental Law.
 
Equity Securities” means, with respect to any Person, all of the shares or quotas of capital stock or equity of (or other ownership or profit interests in) such Person, all of the warrants, trust rights, options or other rights for the purchase or acquisition from such Person of shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), and all of the other ownership or profit interests of such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
 
Equity Security Equivalents” means all rights, warrants, options, convertible securities or indebtedness, exchangeable securities or other instruments, or other rights that are outstanding
 
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and exercisable for or convertible or exchangeable into, directly or indirectly, any Equity Security described in the definition thereof at the time of issuance or upon the passage of time or occurrence of some future event.
 
ERISA is defined in Section 4.14(a).
 
ERISA Affiliate is defined in Section 4.14(a).
 
“Estimated Closing Working Capital” is defined in Section 2.04(a)(i).
 
“Estimated Closing Working Capital Statement” is defined in Section 2.04(a)(i).
 
Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
Existing CMH LLC Agreement” means that certain Second Amended and Restated Limited Liability Company Agreement of the Company, dated as of January 11, 2019, as amended, restated, supplemented or otherwise modified from time to time.
 
Existing Credit Facility” means that certain Amended and Restated Credit Agreement, dated as of February 4, 2021 (the “Credit Agreement”), by and among Crimson Midstream Operating, LLC, a Delaware limited liability company (“Crimson Operating”), Corridor MoGas, Inc., a Delaware corporation (“MoGas”, and together with Crimson Operating, the “Borrowers”, and each, individually, a “Borrower”), Crimson Midstream Holdings, LLC, a Delaware limited liability company (“Holdings”),  MoGas Debt Holdco LLC, a Delaware limited liability company (“MoGas HoldCo”), MoGas Pipeline LLC, a Delaware limited liability company (“MoGas Pipeline”), CorEnergy Pipeline Company, LLC, a Delaware limited liability company (“CorEnergy Pipeline”), United Property Systems, LLC, a Delaware limited liability company (“United Property”), Crimson Pipeline, LLC, a California limited liability company (“Crimson Pipeline”), Cardinal Pipeline, L.P., a California limited partnership (“Cardinal Pipeline”), the lenders party thereto, Wells Fargo Bank, National Association, in its individual capacity and as Administrative Agent (as defined in the Credit Agreement) for such lenders party thereto, Swingline Lender (as defined in the Credit Agreement) and Issuing Bank (as defined in the Credit Agreement), and the other parties from time to time party hereto.
 
Final Allocation” is defined in Section 6.07(c).
 
GAAP” means United States generally accepted accounting principles.
 
GIGS” means that certain pipeline system known as the “Grand Isle Pipeline System” consisting of (a) generally, the system of pipelines, storage tanks, collection and separation facilities, salt water disposal wells and facilities, and related properties, facilities, equipment and rights, identified as a part of Exhibit B, as such system exists on the Effective Date that is capable of (i) transporting, collecting, separating, storing, and delivering for sale or transport oil produced from oil wells located in the Gulf of Mexico, and (ii) transporting, collecting, separating, and disposing of salt water associated with the production of such oil, and (b) includes, specifically, the GIGS Land, the GIGS Right of Use Agreements, and the GIGS Improvements. The GIGS begins at the inlet flange to each pipeline pig launcher trap on oil platforms GI 22L, ST 54G, WD
 
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73A, WD 30J, MC 268A, MC 397A, and SP 93A in the Gulf of Mexico, but expressly excluding the MC 268 “A” Platform, extends through an interconnected system of pipelines and subsea tie‑in valves to the collection, separation equipment, storage tanks, disposal wells, and pipelines located at the Grand Isle terminal facility on the GIGS Land, and includes the pipeline from such terminal facility to the interconnection point under the Interconnection Agreement, dated December 17, 2010, with ExxonMobil Pipeline Company (as such agreement may be amended or replaced from time to time).
 
GIGS Assets means Grand Isle LP’s 100% undivided interest in and to (a) the GIGS, (b) the GIGS Personal Property and (c) the GIGS Interconnection Agreements.
 
GIGS Books and Records” means the following, to the extent in the Parent Group’s possession: all engineering drawings or plans of or covering the GIGS or any component thereof, site assessments and environmental reports regarding or covering the GIGS or any component thereof, and “as‑built” surveys of the pipelines and drawings of the GIGS, which have been provided to the Company in responding to its due diligence requests.
 
GIGS Assumed Liabilities” means any and all Liabilities to the extent relating to, arising out of or resulting from the ownership or operation of the GIGS Assets prior to, on, and after the Closing, but expressly excluding any GIGS Retained Liabilities.
 
GIGS Federal ROWs” means the federal Outer Continental Shelf pipeline rights‑of‑way referenced in Exhibit B.
 
GIGS Improvements” means all of the improvements and fixtures owned by Grand Isle Corridor LP and used as part of the GIGS, including: any and all surface or subsurface pipelines; surface or subsurface machinery and equipment, line pipe, pipe connections, fittings, flanges, welds, other interconnections, and valves (including subsea tie‑in valves); control and monitoring equipment; cathodic or electrical protection units; by‑passes; regulators; drips; brine pumps, salt water disposal pumps, and oil pumps; salt water filter systems; treating, dehydration, separation, processing equipment; crude oil and produced water storage tanks; gas compressors; vapor recovery units and associated gas lines; towers and storage sheds; gas and electric fixtures; electrical generators, fuel tanks, switchgear, transformers, and switches; and motor control center, in each case that are downstream of the inlet flange to each pipeline pig launcher trap on oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, and SP 93A in the Gulf of Mexico to, and including, the Grand Isle terminal facility on the GIGS Land, including any of the foregoing described on the attached Exhibit B. The term “GIGS Improvements” includes all of the improvements and fixtures owned by Grand Isle Corridor LP and which are a part of the GIGS as described herein, regardless of whether they are included or properly described in Exhibit B.
 
GIGS Interconnection Agreements” means any agreements to which Parent and any of its Affiliates are a party and pursuant to which the GIGS, or any component thereof, is interconnected to other facilities or assets.
 
GIGS Landmeans the approximately 16 acre parcel of land described on Exhibit B.
 
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GIGS Lease” means that certain Lease, dated as of June 30, 2015, by and between Grand Isle Corridor LP and Energy XXI GIGS Services, LLC, as amended, restated, replaced, supplemented or otherwise modified from time to time.
 
GIGS Louisiana ROW” means any right‑of‑way granted by the State of Louisiana included in the GIGS Right of Use Agreements, as specified in Exhibit B.
 
GIGS Personal Property” means, to the extent owned by Parent or its Subsidiaries (a) the monitoring equipment located in or on the GIGS, (b) the computer hardware and software used in respect of the GIGS, (c) the wires and other connectors between such computer hardware and such monitoring equipment, (d) all office furnishings, computers and associated hardware located at the Grand Isle terminal facility, (e) spare parts and stores for the GIGS, and (f) the GIGS Books and Records, all as of the date of this Agreement.
 
GIGS Release” means that certain Settlement and Mutual Release Agreement to be entered into by and among Parent, Grand Isle LP and each of the Cox Entities at or prior to the Closing in the form attached hereto as Exhibit E.
 
GIGS Retained Liabilities” means those Liabilities relating to, arising out of or resulting from (i) any income, franchise and similar Taxes of the Parent Group or their Affiliates and (ii) any Asset Taxes allocable to any taxable period before or ending on (and including) the Closing Date (determined in accordance with Section 6.07(a)). Notwithstanding the foregoing, CORR shall not retain any liabilities for any Asset Taxes resulting from any of the Cox Entities or their respective Affiliates’ failure, if any, to pay Taxes related to the GIGS Assets as required pursuant to the terms of the GIGS Lease.
 
GIGS Right of Use Agreements” means the easements, servitudes, rights of way, and similar agreements and instruments listed in Exhibit B, including all of the Parent Group’s rights thereunder, which shall be assigned to Carlyle (or Carlyle’s designee pursuant to Section 2.02(b)(ii), as applicable) pursuant to the Assignment and Bill of Sale and the ROW Assignments.
 
GIGS ROW Assignments” means (a) for each Federal ROW, a Form BSEE‑0149 executed by Carlyle (or Carlyle’s designee pursuant to Section 2.02(b)(ii), as applicable) and Grand Isle LP, and (b) for each Louisiana ROW, an Assignment of Right‑of‑Way executed and acknowledged at Closing by Carlyle and Grand Isle LP in the form attached hereto as a part of Exhibit B-2.
 
Governing Documents” means (a) in the case of a corporation, its certificate of incorporation (or analogous document) and bylaws; (b) in the case of a limited liability company, its certificate of formation (or analogous document) and limited liability company operating agreement; or (c) in the case of a Person other than a corporation or limited liability company, the documents by which such Person (other than an individual) establishes its legal existence or which govern its internal affairs.
 
Governmental Entity” means any nation or government, any state, province or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, arbitrator or other
 
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body or administrative, regulatory or quasi‑judicial authority, agency, department, board, commission or instrumentality of any federal, state, local or foreign jurisdiction.
 
Grand Isle GP” means Grand Isle GP, Inc., a Delaware corporation and the general partner of Grand Isle LP and a wholly owned Subsidiary of Parent (directly or indirectly).
 
Grand Isle LP” means Grand Isle Corridor, LP, a Delaware limited partnership and a wholly owned Subsidiary of Parent (directly or indirectly).
 
Grier CMH Units” is defined in the recitals hereto.
 
Grier Members” means J. Grier, each family member of J. Grier and each trust maintained by J. Grier for the benefit of any such family member, in each case to the extent any of the foregoing own, beneficially and of record, any Equity Securities of the Company.
 
Hazardous Materials” means any material, waste or other substance for which Liability or standards of conduct may be imposed pursuant to any Environmental Law, including Hydrocarbons, naturally occurring radioactive materials, asbestos, and polychlorinated biphenyls.
 
Hydrocarbons” means, collectively, petroleum, oil, gas, coal seam gas, casinghead gas, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons, all products and byproducts refined, separated, settled and dehydrated therefrom and all products and byproducts refined therefrom, including kerosene, liquefied petroleum gas, refined lubricating oils, diesel fuel, drip gasoline, and natural gasoline.
 
Indemnified Person” is defined in Section 7.06(a).
 
Indemnifying Person” is defined in Section 7.06(a).
 
Indemnity Claim” is defined in Section 7.06(a).
 
Independent Accountant” is defined in Section 2.04(c)(iii).
 
J. Grier” is defined in the preamble hereto.
 
Knowledge” means, (a) with respect to Carlyle, the actual knowledge of Ferris Hussein, (b) with respect to the Company, the actual knowledge of J. Grier, Larry Alexander, Robert Waldron, Valerie Jackson, and Nestor Taura and (c) with respect to Parent, David Schulte, Jeffrey Fulmer, and Sean DeGon.
 
Law” means any statute, law, rule or regulation, or any Order of any Governmental Entity.
 
Liabilities” means all indebtedness, Proceedings, obligations, duties, warranties or liabilities, including strict liability, of any nature (including any undisclosed, unfixed, unknown, unliquidated, unsecured, unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied, vicarious, joint, several or secondary liabilities, including as a result of diminution in value), regardless of whether any such indebtedness, claims, Proceedings, obligations, duties,
 
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warranties or liabilities would be required to be disclosed on a balance sheet prepared in accordance with GAAP.
 
"Management Members" means those individuals who are employed by the Company Group and who become members of the Company contemporaneous with the Closing.
 
MC 268 “A” Platform” means that certain platform located on Block 268, Mississippi Canyon Area, as shown on OCS Official Protraction Diagram NH 16‑10 at Latitude 28.652145, Longitude 89.786457, along with all buildings, vessels, tanks, motors, pumps, compressors and equipment, located thereon, if any.
 
Multiemployer Plan” is defined in Section 4.14(f).
 
No Recourse Party” is defined in Section 8.12(a).
 
NYSE” means the New York Stock Exchange.
 
Order” means all applicable writs, judgments, injunctions, decrees, and other official acts of or by any Governmental Entity.
 
Parent” is defined in the preamble hereto.
 
Parent Fundamental Representations” means the representations and warranties of Parent set forth in Section 5.01 (Organization; Qualifications; Power), Section 5.02 (Authorization; Validity), Section 5.07 (Solvency; No Fraudulent Conveyance; No Bankruptcy) and Section 5.13 (Title to GIGS Assets).
 
Parent Group” means, collectively, Parent and its Subsidiaries.
 
Parent Indemnified Persons” is defined in Section 7.02.
 
Parent Material Adverse Effectmeans any Effect that, individually or in the aggregate, would reasonably be expected to result in a material adverse effect on the financial condition, business, assets or continuing results of operations of the Parent Group, taken as a whole; provided, however, that in no event shall any of the following Effects, alone or in combination, be deemed to constitute, or be taken into account, in determining whether there has been, or would be, a Parent Material Adverse Effect: (a) any changes in general economic conditions or securities, credit, financial or other capital markets conditions, (b) any changes or conditions affecting the oil and gas industry in general (including changes to commodity prices, general market prices and regulatory changes affecting the industry), (c) any weather‑related or other force majeure event (including earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters), (d) pandemics, epidemics, acts of war (whether or not declared), armed hostility (by recognized governmental forces or otherwise), sabotage, terrorism or cyber‑attack, and any escalation or general worsening of any of the foregoing, (e) Effects resulting from the negotiation, execution, announcement, pendency, compliance with or performance of this Agreement or the Transaction Documents, the transactions contemplated hereby or thereby or the terms hereof or thereof or the consummation of the transactions contemplated hereby or thereby, including the impact thereof on the relationships of the Parent Group with customers, suppliers, partners,
 
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employees or Governmental Entities; (f) any action taken or failure to take action that was requested in writing by the Company and Carlyle in accordance with the terms of this Agreement, (g) changes in applicable Law or government policy or in accounting standards, or any changes in the interpretation or enforcement of any of the foregoing, or any changes in general legal, regulatory or political conditions, or (h) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, or budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position.
 
Parent SEC Report” means all periodic reports, current reports and registration statements, including exhibits and other information incorporated therein, filed by Parent with, or furnished by Parent to, the SEC under the Exchange Act or the Securities Act, since January 1, 2020.
 
Party” or “Parties” is defined in the preamble.
 
PBGC” means the Pension Benefit Guaranty Corporation.
 
Permits” means all permits, licenses, sublicenses, certificates, approvals, consents, notices, waivers, variances, franchises, registrations, Orders, filings, accreditations or other similar authorizations required by any Law or Governmental Entity or granted by any Governmental Entity.
 
Permitted Encumbrances” means, with respect to Encumbrances of a member of the Company Group or a member of the Parent Group, as applicable:
 
(a)          any Encumbrance for Taxes not yet delinquent or being contested in good faith by appropriate proceedings, so long as such proceedings shall not involve any material risk of the sale, forfeiture or loss of any of the property in question, title thereto or any interest therein and shall not interfere in any material respect with the use or disposition of property, diligently conducted, and for which adequate reserves have been established in accordance with GAAP;
 
(b)          any statutory Encumbrance arising in the ordinary course of business by operation of Law with respect to a Liability that is not yet delinquent (including mechanics’, materialmen’s, warehousemen’s, repairmen’s, landlord’s, and other similar liens but excluding any Encumbrance imposed with respect to any Environmental Laws) or that is being contested in good faith by appropriate proceedings, so long as such proceedings shall not involve any material risk of the sale, forfeiture or loss of any of the property, title thereto or any interest therein and shall not interfere in any material respect with the use or disposition of property, diligently conducted, and for which adequate reserves have been established in accordance with GAAP;
 
(c)          in the case of real property, (i) any imperfection of title or other Encumbrance that individually or, in the aggregate with all other Encumbrances affecting the applicable real property in question that (x) does not materially and adversely interfere or affect the ownership, operation, use or value of the affected property (or assets associated with such affected property), as such affected property is owned, operated or used on the date of this Agreement and (y) are of a nature that would be reasonably acceptable to a prudent operator of such affected property (or assets associated with such affected property), (ii) any easement, Right of Way, servitude, Permit, surface lease and other rights with respect to surface operations, pipelines, grazing, logging, canals,
 
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ditches, reservoirs or the like, and easements for streets, alleys, highways, pipelines, telephone lines, power lines, railway and other easements and rights of way, on, over or in respect of any of the properties or any restriction on access thereto that (A) does not materially and adversely interfere or affect the ownership, operation, use or value of the affected property (or assets associated with such affected property), as such affected property is owned, operated or used on the date of this Agreement and (B) are of a nature that would be reasonably acceptable to a prudent operator of such affected property (or assets associated with such affected property), (iii) restrictive covenants, building restrictions and zoning restrictions, or other restrictions affecting title to, or possession of, any real property that exist generally with respect to properties of a similar character in the jurisdiction in which the applicable real property is located that (A) do not materially and adversely interfere or affect the ownership, operation, use or value of the affected property (or assets associated with such affected property), as such affected property is owned, operated or used on the date of this Agreement and (B) are of a nature that would be reasonably acceptable to a prudent operator of such affected property (or assets associated with such affected property) and (iv) the rights of lessees and lessors of any real property pursuant to the terms and conditions of the applicable lease, sublease or license that (A) do not materially and adversely interfere or affect the ownership, operation, use or value of the affected property (or assets associated with such affected property), as such affected property is owned, operated or used on the date of this Agreement and (B) are of a nature that would be reasonably acceptable to a prudent operator of such affected property (or assets associated with such affected property);
 
(d)        the rights of a common owner of any interest in rights of way, Permits or easements held by (i) with respect to Encumbrances of the Company Group, any member of the Company Group, or (ii) with respect to Encumbrances of the Parent Group, the Parent Group and such common owner as tenants in common or through common ownership to the extent the foregoing (A) do not materially and adversely interfere or affect the ownership, operation, use or value of the affected property (or assets associated with such affected property), as such affected property is owned, operated or used on the date of this Agreement and (B) are of a nature that would be reasonably acceptable to a prudent operator of such affected property (or assets associated with such affected property);
 
(e)          solely with respect to Encumbrances of the Company Group, Encumbrances created by Parent or its successors and assigns or otherwise consented to by Parent in accordance with the terms of this Agreement;
 
(f)          solely with respect to Encumbrances of the Parent Group, Encumbrances created by Carlyle or its successors and assigns or otherwise consented to by Carlyle in accordance with the terms of this Agreement;
 
(g)          solely with respect to Encumbrances of the Company Group, any Encumbrance that is set forth on Schedule 1.01(b); and
 
(h)          solely with respect to Encumbrances of the Parent Group, any Encumbrance that is set forth on Schedule 1.01(c).
 
Permitted Equity Encumbrances” means:
 
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(a)       Encumbrances in favor of the holders of the Subject Units pursuant to the terms of the Governing Documents of the Company;
 
(b)          restrictions on sales of securities under generally applicable securities Laws;
 
(c)          Encumbrances created by Parent or any other member of the Parent Group or its respective successors or assigns;
 
(d)          Encumbrances securing the financing of the acquisition of the Subject Units by the Parent;
 
(e)          Encumbrances affecting Equity Securities which are terminated and released at or prior to Closing; and
 
(g)          Encumbrances granted in connection with the Existing Credit Facility.
 
Person” means any natural person, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or Governmental Entity.
 
Post‑Closing Adjustment” is defined in Section 2.04(b)(ii).
 
Principal Officers” is defined in Section 5.09(c).
 
Proceedings” means all proceedings, actions, claims, suits, investigations and inquiries by or before any arbitrator or Governmental Entity.
 
Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible (including cash, securities, accounts, contact rights and Equity Securities or other ownership interest of any Person).
 
REIT” is defined in Section 5.15(h).
 
Release” means the presence, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, migration, movement or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Materials).
 
Representatives” of any Person means the officers, directors, managers, employees, independent contractors, consultants, advisors, agents, counsel, accountants, investment bankers and other representatives of such Person.
 
Sanctioned Country” is defined in Section 4.25.
 
Sanctions” is defined in Section 4.25.
 
Sarbanes‑Oxley Act” means the Sarbanes‑Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.
 
SEC” means the United States Securities and Exchange Commission.
 
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Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
Solvent” means, with respect to any Party, that (i) the present fair value of the consolidated assets of such Party exceeds its consolidated Liabilities; (ii) the present fair salable value of the consolidated assets of such Party exceeds its consolidated Liabilities; (iii) such Party, on a consolidated basis, is a going concern and has sufficient capital to ensure that it will continue to be a going concern in light of the nature of the particular business or businesses conducted or to be conducted, and based on the needs and anticipated needs for capital of the business conducted or anticipated to be conducted by such Party following the Closing as reflected in projected financial statements and in light of anticipated credit capacity; and (iv) such Party, on a consolidated basis, will have sufficient assets and cash flow to pay its Liabilities as those Liabilities mature or otherwise become payable, in light of the business conducted or anticipated to be conducted by such Party as reflected in projected financial statements and in light of anticipated credit capacity. For purposes of this definition, the amount of any Liability that is contingent on the occurrence or existence of certain facts or circumstances at any time shall be computed as the amount that, in light of all facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured Liability (irrespective of whether such contingent Liabilities meet the criteria for accrual under GAAP).
 
Statement of Objections” is defined in Section 2.04(c)(ii).
 
Subject Units” is defined in the recitals hereto.
 
Subsidiaries” of any Person means any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than 50% of the voting power or equity is owned or controlled directly or indirectly by such Person, or one or more of the Subsidiaries of such Person, or a combination thereof.
 
Target Working Capital” is defined in Section 2.04(a)(ii).
 
Tax” means any federal, state, local or foreign taxes, assessments, fees, imposts, levies, duties and other governmental charges of a similar nature, including any income, gross receipts, payroll, employment, excise, severance, stamp, occupation, windfall, profits, customs, capital stock, withholding, social security, unemployment, disability, real property, personal property, escheat or unclaimed property, sales, use, transfer, value added, alternative or add‑on minimum taxes, and any interest, penalties or additions with respect to any of the foregoing.
 
Tax Returns” means all returns, declarations, reports, elections, notices, claims for refund and information returns and statements filed or required to be filed with any Taxing Authority with respect to, or in respect of, any Taxes, including any schedule or attachment thereto and any amendment thereof.
 
Taxing Authority” means, with respect to any Tax, the Governmental Entity charged with the administration, collection or imposition of such Tax.
 
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Third A&R CMH LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of the Company to be entered into by and among, inter alia, the Company, Parent and the Grier Members at the Closing in the form attached hereto as Exhibit F.
 
Third‑Party Claim” is defined in Section 7.06(a).
 
Transaction Documents” means, collectively, each contract or agreement required to be entered into by and among the Parties or their respective Affiliates in accordance with the terms of this Agreement, including the Third A&R CMH LLC Agreement, the GIGS Release, the Assignment and Bill of Sale, the Assignment and Assumption Agreement, and the Crimson Gulf Side Letter.
 
Transfer Tax” is defined in Section 6.07(e).
 
Treasury Regulations” means the regulations promulgated under the Code.
 
Undisputed Amounts” has the meaning set forth in Section 2.04(c)(iii).
 
ARTICLE II
PURCHASE AND SALE OF SUBJECT UNITS
 
Section 2.01       Purchase and Sale of Subject Units. Subject to and upon the terms and conditions of this Agreement, at the Closing, Carlyle shall sell, assign, transfer and deliver to Parent, and Parent shall purchase, accept and assume from Carlyle, the Subject Units, free and clear of all Encumbrances, except for Permitted Equity Encumbrances.
 
Section 2.02         Consideration.
 
(a)         The aggregate consideration to be paid or delivered, as applicable, to Carlyle, in exchange for (x) the sale of the Subject Units and (y) the assumption of the GIGS Assumed Liabilities shall consist of (i) an amount of cash equal to $67,000,000 (the “Cash Amount”), which shall be payable in accordance with this Section 2.02, and (ii) all of Parent’s direct and indirect rights, title and interest in and to the GIGS Assets, which shall be assigned, transferred and conveyed to Carlyle at the Closing free and clear of all Encumbrances, except for Permitted Encumbrances.
 
(b)          Subject to the other terms of this Agreement, at the Closing:
 
(i)         Parent shall pay or cause to be paid to Carlyle, in cash by wire transfer of immediately available funds, to the account(s) designated by Carlyle in writing prior to the Closing, the Cash Amount;
 
(ii)         Parent shall cause Grand Isle LP to assign, transfer and convey (or cause to be assigned, transferred and conveyed) the GIGS Assets to Carlyle or an Affiliate thereof as designated by Carlyle to Parent in writing on or prior to the Closing;
 
(iii)         Carlyle shall assign, transfer and convey the Subject Units to Parent; and
 
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(iv)       Carlyle or Carlyle’s designee pursuant to Section 2.02(b)(ii), as applicable, shall accept, assume and agree to perform, discharge and fulfill the GIGS Assumed Liabilities (and no other Liabilities).
 
(c)         From and after the Closing, the GIGS Assumed Liabilities shall be the sole responsibility of Carlyle. Notwithstanding any provision in this Agreement to the contrary, Carlyle shall not assume and shall not be responsible to pay, perform, or discharge any Liabilities of the Parent Group or any of their respective Affiliates of any kind or nature whatsoever related to the GIGS Assets other than the GIGS Assumed Liabilities.
 
Section 2.03          Closing and Closing Deliverables.

(a)          Closing. Upon the terms and subject to the conditions hereof, the consummation of the transactions referred to in Section 2.01 (the “Closing”) shall take place on the date hereof (the “Closing Date”) via an electronic exchange of documents and signatures at such time as mutually agreed between Carlyle and Parent.
 
(b)          Deliverables of Carlyle at the Closing. At the Closing, Carlyle shall deliver or cause to be delivered to Parent:
 
(i)         a counterpart to the Assignment and Assumption Agreement, duly executed by an authorized representative of Carlyle;
 
(ii)        a counterpart to the Assignment and Bill of Sale, duly executed by an authorized representative of Carlyle or Carlyle’s designee pursuant to Section 2.02(b)(ii), as applicable;
 
(iii)         a counterpart to each of the GIGS ROW Assignments, duly executed by an authorized representative of Carlyle or Carlyle’s designee pursuant to Section 2.02(b)(ii), as applicable;
 
(iv)        duly executed letters of resignation or evidence of removal, effective as of the Closing, of the Carlyle Resigning Managers; and
 
(v)          a certificate pursuant to Treasury Regulations Section 1.1445‑2(b) that Carlyle (or its regarded owner, if Carlyle is disregarded as separate from its owner for U.S. federal income tax purposes) is not a foreign person within the meaning of Section 1445 of the Code duly executed by Carlyle.
 
(c)          Deliverables of Parent at the Closing. At the Closing, Parent shall deliver or cause to be delivered:
 
(i)           to Carlyle, the Cash Amount, which shall be payable pursuant to Section 2.02(b)(i);
 
(ii)      to Carlyle, a counterpart to the Assignment and Assumption Agreement, duly executed by an authorized representative of Parent;
 
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(iii)        to Carlyle, a counterpart to the Assignment and Bill of Sale, duly executed by an authorized representative of Grand Isle GP in its capacity as the general partner of Grand Isle LP;
 
(iv)       to Carlyle and J. Grier, a counterpart to the Crimson Gulf Side Letter, duly executed by an authorized representative of Parent;
 
(v)          to Carlyle, a counterpart to the GIGS Release, duly executed by an authorized representative of Parent on behalf of Parent and each of its Affiliates;
 
(vi)         to Carlyle, a counterpart to each of the GIGS ROW Assignments, duly executed by an authorized representative of Grand Isle GP in its capacity as the general partner of Grand Isle LP;
 
(vii)        to Carlyle, a certificate pursuant to Treasury Regulations Section 1.1445‑2(b) that Parent (and any other member of the Parent Group that transfers any GIGS Assets pursuant to this Agreement) is not a foreign person within the meaning of Section 1445 of the Code duly executed by Parent (or such other member of the Parent Group);
 
(viii)       to J. Grier, a counterpart to the Third A&R CMH LLC Agreement, duly executed by an authorized representative of Parent, with accompanying resolutions executed by the two managers of CMH appointed by Parent; and
 
(ix)          to Carlyle and J. Grier, evidence that the CORR R&W Insurance Policy is in full force and effect.
 
(d)          Deliverables of the Company at the Closing. At the Closing, the Company shall deliver or cause to be delivered:
 
(i)          to Parent and J. Grier, a counterpart to the Third A&R CMH LLC Agreement, duly executed by an authorized representative of the Company; and
 
(ii)          to Parent, the Estimated Closing Working Capital Statement.
 
(e)          Deliverables of J. Grier at the Closing. At the Closing, J. Grier shall deliver or cause to be delivered:
 
(i)           to Parent and the Company, a counterpart to the Third A&R CMH LLC Agreement, duly executed by each of the Grier Members and each of the Management Members, with accompanying resolutions executed by the two managers of CMH appointed by the Grier Members.
 
(f)          Joint Deliverables of J. Grier and Carlyle at the Closing. At the Closing, J. Grier and Carlyle shall cause to be delivered to Parent a counterpart to the Crimson Gulf Side Letter, duly executed by an authorized representative of Crimson Gulf.
 
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Section 2.04          Purchase Price Adjustment.
 
(a)          Closing Adjustment.
 
(i)          At Closing, the Company shall prepare and deliver to Buyer a statement setting forth its good faith estimate of Closing Working Capital (the “Estimated Closing Working Capital”), which statement shall contain an estimated balance sheet of the Company as of the Closing Date (without giving effect to the transactions contemplated herein), a calculation of Estimated Closing Working Capital (the “Estimated Closing Working Capital Statement”), and a certificate of the Chief Financial Officer of the Company that the Estimated Closing Working Capital Statement was prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Company Financial Statements for the most recent fiscal year end as if such Estimated Closing Working Capital Statement was being prepared and audited as of a fiscal year end.
 
(ii)          The “Closing Adjustment” shall be an amount equal to the Estimated Closing Working Capital minus $8,990,000 (the “Target Working Capital”). If the Closing Adjustment is a positive number, the Cash Amount shall be increased by 49.5% of the amount of the Closing Adjustment and the number of Class A‑1 Units of the Company to be issued to the Grier Members pursuant to Section 3.1(b)(i) of the Third A&R CMH LLC Agreement and to the Management Members pursuant to Section 3.1(b)(ii) of the Third A&R CMH LLC Agreement (as defined therein) shall be increased based on the calculation set forth on Schedule 2.04(a). If the Closing Adjustment is a negative number, the Cash Amount shall be reduced by 49.5% of the amount of the Closing Adjustment and the number of Class A‑1 Units of the Company to be issued to the Grier Members pursuant to Section 3.1(b)(i) of the Third A&R CMH LLC Agreement and to the Management Members pursuant to Section 3.1(b)(ii) of the Third A&R CMH LLC Agreement (as defined therein) shall be reduced based on the calculation set forth on Schedule 2.04(a).
 
(b)          Post‑Closing Adjustment.
 
(i)          Within 90 days after the Closing Date, Parent shall prepare and deliver to Carlyle and J. Grier a statement setting forth its calculation of Closing Working Capital, which statement shall contain an unaudited balance sheet of the Company as of the Closing Date (without giving effect to the transactions contemplated herein), a calculation of Closing Working Capital (the “Closing Working Capital Statement”) and a certificate of the Chief Financial Officer of Parent that the Closing Working Capital Statement was prepared in accordance with GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Company Financial Statements for the most recent fiscal year end as if such Closing Working Capital Statement was being prepared and audited as of a fiscal year end.
 
(ii)         The post‑closing adjustment shall be an amount equal to the Closing Working Capital minus the Estimated Closing Working Capital (the “Post‑Closing Adjustment”). If the Post‑Closing Adjustment is a positive number, Parent shall pay to Carlyle an amount equal to 49.5% of the Post‑Closing Adjustment and shall increase the number of Class
 
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A‑1 Units of the Company issued to the Grier Members pursuant to Section 3.1(b)(i) of the Third A&R CMH LLC Agreement and to the Management Members pursuant to Section 3.1(b)(ii) of the Third A&R CMH LLC Agreement (as defined therein) based on the calculation set forth on Schedule 2.04(b). If the Post‑Closing Adjustment is a negative number, Carlyle shall pay to Parent an amount equal to 49.5% of the Post‑Closing Adjustment and the number of Class A‑1 Units of the Company to be issued to the Grier Members pursuant to Section 3.1(b)(i) of the Third A&R CMH LLC Agreement and to the Management Members pursuant to Section 3.1(b)(ii) of the Third A&R CMH LLC Agreement (as defined therein) shall be reduced based on the calculation set forth on Schedule 2.04(b).
 
(c)          Examination and Review.
 
(i)         After receipt of the Closing Working Capital Statement, Carlyle and J. Grier shall have 30 days (the “Review Period”) to review the Closing Working Capital Statement. During the Review Period, Carlyle and J. Grier and their accountants shall have full access to the books and records of the Company, the personnel of, and work papers prepared by, Parent and Parent’s accountants to the extent that they relate to the Closing Working Capital Statement and to such historical financial information (to the extent in Parent’s possession) relating to the Closing Working Capital Statement as Carlyle and J. Grier may reasonably request for the purpose of reviewing the Closing Working Capital Statement and to prepare a Statement of Objections (defined below), provided, that such access shall be in a manner that does not interfere with the normal business operations of Parent or the Company.
 
(ii)         On or prior to the last day of the Review Period, Carlyle and J. Grier may object to the Closing Working Capital Statement by delivering to Parent a written statement setting forth Carlyle and J. Grier’s objections in reasonable detail, indicating each disputed item or amount and the basis for Carlyle and J. Grier’s disagreement therewith (the “Statement of Objections”). If Carlyle and J. Grier fail to deliver the Statement of Objections before the expiration of the Review Period, the Closing Working Capital Statement and the Post‑Closing Adjustment, as the case may be, reflected in the Closing Working Capital Statement shall be deemed to have been accepted by Carlyle and J. Grier. If Carlyle and J. Grier deliver the Statement of Objections before the expiration of the Review Period, Carlyle, J. Grier and Parent shall negotiate in good faith to resolve such objections within 30 days after the delivery of the Statement of Objections (the “Resolution Period”), and, if the same are so resolved within the Resolution Period, the Post‑Closing Adjustment and the Closing Working Capital Statement with such changes as may have been previously agreed in writing by Carlyle, J. Grier and Parent, shall be final and binding.
 
(iii)        If Carlyle, J. Grier and Parent fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Resolution Period, then any amounts remaining in dispute (“Disputed Amounts” and any amounts not so disputed, the “Undisputed Amounts”) shall be submitted for resolution to the office of an impartial nationally recognized firm of independent certified public accountants other than Carlyle’s audit firm or Parent’s audit firm (the “Independent Accountants”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post‑Closing Adjustment, as the case may be, and the Closing Working Capital Statement. The parties hereto agree that all adjustments shall be made without regard to materiality. The Independent Accountants shall only decide the specific items under dispute by the parties and their decision for
 
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each Disputed Amount must be within the range of values assigned to each such item in the Closing Working Capital Statement and the Statement of Objections, respectively.
 
(iv)       Fees of the Independent Accountants. The fees and expenses of the Independent Accountant shall be paid by Carlyle and J. Grier, on the one hand, and by Parent, on the other hand, based upon the percentage that the amount actually contested but not awarded to Carlyle and J. Grier or Parent, respectively, bears to the aggregate amount actually contested by Carlyle and J. Grier and Parent.
 
(v)         The Independent Accountants shall make a determination as soon as practicable within 30 days (or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Closing Working Capital Statement and/or the Post‑Closing Adjustment shall be conclusive and binding upon the parties hereto.
 
(vi)       Except as otherwise provided herein, any payment of the Post‑Closing Adjustment, together with interest calculated as set forth below, shall (A) be due (x) within five Business Days of acceptance of the applicable Closing Working Capital Statement or (y) if there are Disputed Amounts, then within five Business Days of the resolution described in clause (v) above; and (B) be paid by wire transfer of immediately available funds to such account (or issued to J. Grier and the Management Members in the case of the issuance of Class A‑1 Units) as is directed by Carlyle and J. Grier or Parent, as the case may be. The amount of any Post‑Closing Adjustment shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to 6%. Such interest shall be calculated daily on the basis of a 365 day year and the actual number of days elapsed.
 
(d)        Adjustments for Tax Purposes. Any payments made pursuant to Section 2.04 shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CARLYLE
 
Carlyle represents and warrants to Parent as of the Closing that:
 
Section 3.01         Organization. Carlyle is a limited liability company duly formed, validly existing, and in good standing under the Laws of Delaware and has all requisite power and authority to own, lease, and operate its properties and to carry on its business as now being conducted.
 
Section 3.02         Authorization; Validity. This Agreement and each Transaction Document to which Carlyle is or will be a party and the performance by Carlyle of its obligations pursuant to this Agreement and such Transaction Documents has been duly authorized and approved by all necessary limited liability company action on behalf of Carlyle. This Agreement and each Transaction Document to which Carlyle is or will be a party has been or will be duly authorized, executed and delivered by Carlyle and (assuming the due authorization, execution and delivery by each other party thereto) constitutes the legal, valid and binding obligation of Carlyle, enforceable against Carlyle in accordance with its respective terms, except to the extent limited by
 
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(a) applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws of general application related to the enforcement of creditors’ rights generally and (b) general principles of equity, except that enforcement of rights to indemnification and contribution contained herein or therein may be limited by applicable federal or state Laws or the public policy underlying such Laws, regardless of whether enforcement is considered in a Proceeding in equity or at law.
 
Section 3.03      No Conflict; No Violation. The execution and delivery by Carlyle of this Agreement and the Transaction Documents to which Carlyle is, or will be, a party, and performance of its obligations hereunder and thereunder, and the transactions contemplated hereby and thereby, including the sale and delivery by Carlyle of the Subject Units, will not (a) conflict with, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under the Governing Documents of Carlyle, (b) result in a violation of any Law or (c) conflict with, violate, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under, or give rise to any right of termination, acceleration or cancellation under, any indenture, agreement, contract, license, arrangement, understanding, evidence of indebtedness, note, lease or other financing or debt instrument to which Carlyle is a party or by which any of its properties or assets is bound, except (x) in the case of clause (a), such matters as would not reasonably be expected to prevent, delay, make illegal or otherwise interfere with the ability of Carlyle to consummate the transactions contemplated hereby and (y) in the case of clauses (b) and (c), such matters as would not have a Carlyle Material Adverse Effect.
 
Section 3.04         Consents and Approvals. No registration or filing with, or consent, approval, notification, waiver or other action by, any Governmental Entity or any third party is or will be necessary for Carlyle’s valid execution, delivery and performance of this Agreement or the Transaction Documents to which it is or will be a party, or the transactions contemplated hereby and thereby, including the sale and delivery of the Subject Units to Parent, including any consent or approval of the CPUC, other than those which (a) have previously been obtained or made, or (b) are required for compliance with any applicable requirements of the federal securities Laws, any applicable state or local securities Laws and any applicable requirements of a national securities exchange.
 
Section 3.05         Title to the Subject Units. Carlyle has record and beneficial title to the Subject Units, free and clear of any and all Encumbrances, except for Permitted Equity Encumbrances. Upon the Closing (should the Closing occur), Parent will acquire record and beneficial title to all of the Subject Units, free and clear of any Encumbrances, except for Permitted Equity Encumbrances. Carlyle owns no units in the Company other than the Subject Units and is not a party to (a) any Equity Security Equivalent or other contract, agreement or other instrument (other than this Agreement) that could require Carlyle to sell, transfer, or otherwise dispose of any of the Subject Units or (b) any voting trust, proxy, or other agreement or understanding with respect to the voting of any Equity Security of the Company, in each case, other than this Agreement or the Governing Documents of the Company.
 
Section 3.06         Brokers. Except for The Bank of Nova Scotia and Royal Bank of Canada, the fees and expenses of which will be paid by Carlyle at or prior to the Closing, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the other
 
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Transaction Documents or any of the transactions contemplated hereby or thereby based upon arrangements made by or on behalf of Carlyle or any of its Affiliates.
 
Section 3.07         Litigation. There are no Proceedings pending against Carlyle or, to the Knowledge of Carlyle, threatened against Carlyle that, individually or in the aggregate, have had or would reasonably be expected to have a Carlyle Material Adverse Effect. There is no Order of any Governmental Entity outstanding against Carlyle or any of its assets and properties that would, individually or in the aggregate, reasonably be expected to have a Carlyle Material Adverse Effect or prevent the execution, delivery and performance of this agreement or the transaction documents to which Carlyle is or will be a party, or the transactions contemplated hereby or thereby.
 
Section 3.08        No Other Representations and Warranties. Except as expressly set forth in this Article III (including the related Schedules), (a) neither Carlyle nor any other Person has made or makes any other representation or warranty on behalf of Carlyle, whether written or oral, express or implied, and any such other representation or warranty is hereby expressly disclaimed and (b) Carlyle disclaims all Liability and responsibility for any other representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Parent Group or its Affiliates or Representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Parent Group by any director, officer, employee, agent, consultant, or Representative of Carlyle, J. Grier and/or the Company Group). Without limiting the generality of the foregoing, neither Carlyle nor any other Person makes any representation or warranty on behalf of Carlyle with respect to any projections, estimates or budgets of future revenues, future results of operations, future cash flows or future financial condition (or any component of the foregoing) of the Crimson CA Business, it being understood that the Company Group is not disclaiming any representation and warranties set forth in this Agreement which may be deemed to impact future revenues, results of operations, cash flows or financial condition (or any component of the foregoing) of the business of the Company Group.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company represents and warrants to Parent as of the Closing that:
 
Section 4.01          Organization; Qualifications; Power.
 
(a)          Each member of the Company Group is a limited liability company, limited partnership or corporation, as applicable, duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and is duly licensed or qualified to transact business as a foreign limited liability company or foreign limited partnership, as applicable, and is in good standing in each jurisdiction in which the nature of the business transacted by it or the character of the properties owned or leased by it requires such licensing or qualification. Each member of the Company Group has full limited liability company or limited partnership power and authority, as applicable, to own and hold its properties and to carry on its business as now conducted, and the Company has full limited liability company power and authority to execute, deliver and perform this Agreement and the Transaction Documents to which the Company is a party in accordance herewith and therewith.
 
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(b)         As of the date hereof, the Company has made available to Parent true and correct copies of the Governing Documents of each member of the Company Group and all amendments thereto.
 
Section 4.02        Authorization; Validity.This Agreement and each Transaction Document to which the Company is or will be a party and the performance by the Company of its obligations pursuant to this Agreement and such Transaction Documents has been duly authorized and approved by all necessary limited liability company action on behalf of the Company. This Agreement and each Transaction Document to which the Company is or will be a party has been or will be duly authorized, executed and delivered by or on behalf of the Company and (assuming the due authorization, execution and delivery by each other party thereto) constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, except to the extent limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws of general application related to the enforcement of creditors’ rights generally and (b) general principles of equity, except that enforcement of rights to indemnification and contribution contained herein or therein may be limited by applicable federal or state Laws or the public policy underlying such Laws, regardless of whether enforcement is considered in a Proceeding in equity or at law.
 
Section 4.03        No Conflict; No Violation. Except as set forth on Schedule 4.03, the execution and delivery by the Company of this Agreement and the other Transaction Documents to which the Company is or will be a party, and performance of its obligations hereunder and thereunder, and the transactions contemplated hereby and thereby, will not (a) conflict with, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under the Governing Documents of any member of the Company Group, (b) result in a violation of any Law, (c) conflict with, violate, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under, or give rise to any right of termination, acceleration or cancellation under, any indenture, agreement, contract, license, arrangement, understanding, evidence of indebtedness, note, lease or other financing or debt instrument to which any member of the Company Group is a party or by which any of their respective properties or assets is bound or (d) result in the creation or imposition of any Encumbrance upon any member of the Company Group or any of its respective properties or assets.
 
Section 4.04         Consents and Approvals. Except for those registrations, filings, consents, approvals, notifications, waivers, or other actions set forth on Schedule 4.04, each of which have been obtained as of the date hereof or will be obtained on or prior to the Closing Date, no registration or filing with, or consent, approval, notification, waiver or other action by, any Governmental Entity or any third party is or will be necessary for the Company’s valid execution, delivery and performance of this Agreement or the Transaction Documents to which the Company is a party or the transactions contemplated hereby and thereby, other than those which (a) have previously been obtained or made or (b) are required for compliance with any applicable requirements of the federal securities Laws, any applicable state or local securities Laws and any applicable requirements of a national securities exchange. Except as set forth in the Governing Documents of the members of the Company Group, there are no rights of first refusal, rights of first negotiation, preferential purchase rights or similar rights in favor of third parties that are
 
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triggered by the transactions contemplated hereby or the Transaction Documents to which the Company is a party.
 
Section 4.05         Securities of the Company; Subsidiaries.
 
(a)          Schedule 4.05(a) sets forth the number of issued and outstanding Equity Securities and Equity Security Equivalents of each member of the Company Group and the record and beneficial owners thereof as of the date of this Agreement. Except as set forth on Schedule 4.05(a), no member of the Company Group has outstanding any Equity Securities or Equity Securities Equivalents, nor does it have outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, Equity Securities or Equity Securities Equivalents.
 
(b)         Except for the Third A&R LLC Agreement or as set forth on Schedule 4.05(b), there are no voting trusts or agreements, pledge agreements, buy‑sell agreements, rights of first refusal, preemptive rights or other similar rights or proxies relating to any of the Company’s Equity Securities, or agreements relating to the issuance, sale, redemption, transfer or other disposition of the Company’s Equity Securities.
 
(c)         Each Subsidiary of the Company is set forth on Schedule 4.05(c). All of the outstanding Equity Securities in each of the Company’s Subsidiaries have been duly authorized and validly issued and are fully paid, nonassessable and not subject to preemptive rights, and are owned, directly or indirectly, by the Company free and clear of all Encumbrances other than Permitted Equity Encumbrances. Except for its ownership of Equity Securities of its Subsidiaries, the Company does not own, directly or indirectly, any Equity Securities of any Person.
 
Section 4.06          Company Financial Statements.
 
(a)         The unaudited balance sheet of Crimson Midstream Operating, LLC and its Subsidiaries as of September 30, 2020, the audited balance sheet of Crimson Midstream Operating, LLC and its Subsidiaries as of December 31, 2019 and as of December 31, 2018, and the related statements of income or operations and cash flows relating thereto, in each case, as set forth on Schedule 4.06 (collectively, the “Company Financial Statements”), have been prepared in accordance with GAAP and present fairly the financial condition and results of operations of Crimson Midstream Operating, LLC and its Subsidiaries, as of the respective dates thereof and for the periods covered thereby, subject, in the case of the September 30, 2020 unaudited balance sheet, to normal year‑end audit adjustments and the absence of footnotes. The Company has no assets or liabilities and the Company has received no income or incurred any expenses since January 1, 2020 other than as a result of its ownership of Crimson Midstream Operating, LLC and its Subsidiaries and as reflected on the Company Financial Statements. Except for (i) obligations arising under this Agreement or the Third A&R LLC Agreement, (ii) as provided for in the Company Financial Statements, (iii) Liabilities (other than Liabilities reflected in Working Capital) incurred after September 30, 2020 in the ordinary course of business and totaling less than $1,000,000 in the aggregate, or (iv) other Liabilities arising from or relating to the items set forth on Schedule 4.06, the Company Group is not subject to any material Liability.
 
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(b)          There are no intercompany balances.
 
Section 4.07        Absence of Company Material Adverse Effect. Except for (a) the execution and delivery of this Agreement and the other Transaction Documents to which the Company is a party and the consummation of the transactions contemplated hereby or thereby and (b) as set forth on Schedule 4.07, since June 30, 2018: (a) the Company Group has in all material respects conducted the business of the Company Group in the ordinary course of business consistent with past practice, (b) there has not been any change, event or development which, individually or together with other such events, would reasonably be expected to have a Company Material Adverse Effect, (c) none of the Company Group has suffered any material casualty, loss, theft, destruction or damage to its assets or properties, whether or not covered by insurance, and (d) except as set forth on Schedule 4.07 and as expressly contemplated by this Agreement and the Transaction Documents, no member of the Company Group has entered into, amended or terminated any agreement with any (x) member of the Company or (y) Affiliate of the Company Group or any of its officers (other than any transaction between the Company and a wholly owned Subsidiary of the Company or between two wholly owned Subsidiaries), or agreed to do any of the foregoing.
 
Section 4.08       Litigation; Compliance with Law; Permits. Except as set forth on Schedule 4.08, and except for those matters which are reasonably likely to result in a Liability to the Company Group of less than $150,000 in the aggregate, there is no (a) action, suit, claim, Proceeding or investigation pending or, to the Company’s Knowledge, threatened against any member of the Company Group or any of their respective properties, assets, officers, directors or managers (in their capacities as officers, directors or managers, as applicable), at law or in equity, or before or by any Governmental Entity, (b) arbitration proceeding pending or, to the Company’s Knowledge, threatened, against or affecting the Company Group or their respective properties or assets or (c) governmental inquiry pending or, to the Company’s Knowledge, threatened, against the Company Group or their respective properties or assets (including any inquiry as to the qualification of any member of the Company Group to hold or receive any Permit). No member of the Company Group has violated in any material manner or is in material non‑compliance with respect to any applicable Law. The applicable member of the Company Group (i) possesses all material Company Permits, (ii) does not have any reason to believe that any such Company Permit will not be renewed and (iii) has fulfilled and performed all of their respective obligations with respect to such Company Permits. All such Company Permits are valid and in full force and effect and not subject to any pending or, to the Company’s Knowledge, threatened Proceeding that, if adversely determined, would reasonably be expected to result in modification, termination, revocation or failure to renew thereof in the ordinary course of business.
 
Section 4.09        Properties; Titles, Etc. Other than with respect to the Permitted Encumbrances and the matters set forth on Schedule 4.09:
 
(a)         Except as would not reasonably be expected to be material to the business of the Company Group, each member of the Company Group has, as applicable, good and valid title to, valid leasehold interests in, or valid easements, rights of way or other property interests in all of its real and personal Properties, including, without limitation, the Company Midstream Properties, free and clear of all Encumbrances, except Permitted Encumbrances.
 
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(b)          The Company Midstream Properties are covered by valid and subsisting deeds, leases, easements, rights of way, servitudes, permits, franchises, licenses and other instruments and agreements (collectively, “Company Rights of Way”) enforceable by the applicable member of the Company Group and their respective successors and assigns, except where any failure of the Company Midstream Properties to be so covered, individually or in the aggregate, does not (i) materially interfere with the ownership, use or conduct of business of any member of the Company Group as presently conducted or (ii) materially detract from the value or use of the portion of the Company Midstream Properties that is not covered.
 
(c)          The Company Rights of Way grant the applicable member of the Company Group the right to construct, operate, maintain, repair, and replace the applicable Company Midstream Properties in, over, under, or across the land(s) covered thereby in the same way that a reasonably prudent owner and operator would construct, operate, maintain, repair, and replace similar assets, and in the same way as the applicable members of the Company Group have constructed, operated, maintained and repaired the Company Midstream Properties as reflected in the Company Financial Statements, subject to Permitted Encumbrances; provided, however, (i) some of the Company Rights of Way granted to the members of the Company Group (or their predecessors in interest) by private parties and Governmental Entities are revocable at the right of the applicable grantor; and (ii) some of the Company Rights of Way cover land(s) that are subject to Encumbrances granted by the owner of the underlying real estate in favor of third parties that have not been subordinated to the Company Rights of Way, none of which obligations secured by such Encumbrances are, to Company’s Knowledge, in default and, to Company’s Knowledge, none of such third parties have asserted any rights or claims under or with respect to such Encumbrances; provided, further, that none of the matters described in clauses (i) and (ii) above, individually or in the aggregate, (x) materially interfere with the ownership, use or conduct of business of any member of the Company Group as presently conducted, or (y) materially detract from the value or use of the portion of the Company Midstream Properties that is not covered.
 
(d)        No eminent domain proceeding or taking has been commenced or, to the Company’s Knowledge, is contemplated with respect to all or any portion of the Company Midstream Properties, except for that which, individually or in the aggregate, does not (i) materially interfere with the ownership, use or conduct of business of any member of the Company Group as presently conducted, or (ii) materially detract from the value or use of the portion of the Company Midstream Properties subject to eminent domain or taking.
 
(e)       To the Company’s Knowledge, all Company Rights of Way and deeds, real property leases, or other instruments (collectively, “Company Deeds”) necessary for the conduct of business of the Company Group are valid and subsisting, in full force and effect, and there exists no breach, default or event or circumstance that, with the giving of notice or the passage of time, or both, would give rise to a default under any such Company Rights of Way and Company Deeds. All Company Midstream Properties are located within the areas permitted under Company Rights of Way or on lands owned by the Company Group pursuant to or covered by good, valid and binding Company Deeds in favor of the Company or any other applicable member of the Company Group.
 
(f)          No portion of the Company Midstream Properties has, since June 30, 2018, suffered any damage by fire or other casualty loss except that which has heretofore been repaired or
 
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replaced in all material respects, or any such loss with respect to which the Company Group has recovered the full fair market value amount of such loss from insurance proceeds.
 
(g)         Each member of the Company Group owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and to the Company’s Knowledge the use thereof by the Company Group does not infringe upon the rights of any other Person.
 
Section 4.10        Insurance. There is in full force and effect one or more policies of insurance issued by insurers of recognized responsibility, insuring the Company Group and its properties, the business of the Company Group and projects against such losses and risks, and in such amounts, on both a per occurrence and an aggregate basis, as are reasonably adequate for companies engaged in similar businesses and owning similar properties in localities where any member of the Company Group operates. The Company has not received any written notice or communication that (other than ordinary course payment of premiums or increases to premiums) any material expenditures are required to be made in order to continue such insurance, and to the Company’s Knowledge, no material expenditures are pending. There are no pending claims under any of the Company’s insurance policies as to which any insurance company is denying liability or defending under a reservation of rights clause. The Company has not been notified in writing that any insurer intends to cancel or invalidate any such policies, and to the Company’s Knowledge no cancelation or invalidation is pending, or that the Company will not be able to renew its existing insurance coverage as and when such coverage expires. Schedule 4.10 sets forth (a) a list of each insurance policy (specifying the insurer, the amount of coverage, the type of insurance, the policy number, the expiration date, the annual premium) maintained by the Company relating to its properties, assets, the business of the Company Group or personnel, excluding Company Benefit Plans, and (b) a list of any pending or open claims under any insurance policy maintained by the Company.
 
Section 4.11          Taxes. Except as set forth on Schedule 4.11:
 
(a)          Each member of the Company Group has duly and timely filed all Tax Returns required by applicable Law to be filed by or with respect to such member of the Company Group. All such Tax Returns are true, correct and complete in all material respects.
 
(b)          All Taxes that are due and owing by the Company Group have been duly and timely paid in full (regardless of whether shown on any Tax Return).
 
(c)          No deficiencies for Taxes with respect to any member of the Company Group have been claimed, proposed or assessed in writing by any Taxing Authority.
 
(d)          There is no Proceeding pending or, to the Company’s Knowledge, threatened in writing against, or with respect to, any member of the Company Group in respect of any Tax or Tax assessment.
 
(e)          No written claim has been made by any Taxing Authority in any jurisdiction where a member of the Company Group does not file Tax Returns that such member of the Company Group is or may be required to file any Tax Return or subject to any Tax in such jurisdiction.
 
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(f)          There is no material outstanding waiver or extension of (or requests for a waiver or extension of) any applicable statute of limitations with respect to any Taxes or Tax Returns of any member of the Company Group.
 
(g)         No member of the Company Group (i) is a party to, is otherwise bound by or has any obligation under, any Tax sharing agreement, Tax allocation agreement, or similar agreement or arrangement (other than customary indemnification provisions in commercial agreements entered into in the ordinary course of business the principal subject matter of which is not Taxes), (ii) has been a party to any “listed transaction” with the meaning of Treasury Regulations Section 1.6011‑4(b)(2) or any similar provision of state, local or foreign Law, or (iii) has ever entered into any closing or similar agreement with respect to Taxes or received or requested a private letter ruling (or comparable ruling of any Taxing Authority).
 
(h)        No member of the Company Group has any Liability for the Taxes of any Person by reason of contract, assumption, transferee or successor liability, operation of Law, Treasury Regulation Section 1.1502‑6 or any analogous or similar provision of Law, or otherwise.
 
(i)          Each member of the Company Group has duly and timely withheld and paid to the appropriate Taxing Authority all Taxes required to be withheld (including, for the avoidance of doubt, Taxes payable as a result of any contemplated bonus payments listed on Schedule 4.14(i) or any other payment in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party).
 
(j)        There are no Encumbrances for Taxes on any of the properties or assets of the Company Group other than Permitted Encumbrances.
 
(k)         Other than Crimson Midstream I Corporation, each member of the Company Group is, and at all times since its formation has been, properly treated as an entity disregarded as separate from its owner or as a partnership (and not as a publicly traded partnership within the meaning of Section 7704(b) of the Code) for U.S. federal (and relevant state and local) income Tax purposes.
 
(l)          No member of the Company Group will be required to include any item of income in, or exclude any items of deduction from, taxable income for any taxable period (or portion thereof) ending on or after the date hereof, including as a result of (i) any change in method of accounting for a taxable period ending on or prior to the date hereof, including by reason of application of Section 481 of the Code (or an analogous provision of state, local or foreign Law), (ii) any installment sale or open transaction disposition made on or prior to the date hereof, or (iii) any prepaid amount received on or prior to the date hereof.
 
(m)        Each member of the Company Group that is treated as a partnership for U.S. federal income tax purposes (i) had a valid election in effect under Section 754 of the Code (and any corresponding provision of state or local law) for each taxable period for which such election was relevant and (ii) has not revoked any such election.
 
(n)          For purposes of this Section 4.11, any reference to a member of the Company Group shall be deemed to include any Person that merged with or was liquidated or converted into such member of the Company.
 
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Section 4.12         Company Material Contracts. Schedule 4.12 contains a complete list, as of the date of this Agreement, of all the Company Material Contracts of each member of the Company Group and copies (including all amendments thereto) of all such Company Material Contracts have been made available to Parent. All such Company Material Contracts are in full force and effect, and no member of the Company Group is in breach under any Company Material Contract nor has any member of the Company Group received, as of the date of this Agreement, any written notice of breach or any event that with notice or lapse of time, or both, would constitute a breach under a Company Material Contract by a member of the Company Group, and, to the Company’s Knowledge, no other Person that is party to a Company Material Contract is in breach under any Material Contract, in each case, in a manner that, individually or in the aggregate, would reasonably be expected to result in the imposition of damages or the loss of benefits in an amount or of a kind material to the Company Group taken as a whole.
 
Section 4.13       Transactions with Affiliates. Except as set forth on Schedule 4.13, no officer, director, manager, employee or holder of any Equity Securities of any member of the Company Group, including but not limited to the Grier Members (or any member of the immediate family of any such Person), or any of their respective Affiliates, is a party to any transaction with any member of the Company Group, including any contract, agreement or other arrangement providing for the employment of, furnishing of services by, rental of real or personal property from or otherwise requiring payments to any such Person.
 
Section 4.14         Employee Benefit Plans.
 
(a)         Schedule 4.14(a) sets forth a complete list of each Company Benefit Plan. For purposes of this Agreement, “Company Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (whether or not subject to ERISA) and any other plan, policy, program practice, agreement, understanding or arrangement (whether written or oral) providing compensation or other benefits to any current or former director, officer, employee or consultant (or to any dependent or beneficiary thereof) of the Company Group which are maintained, sponsored, contributed to or required to be contributed to by the Company or any other member of the Company Group or under which the Company or any other member of the Company Group has, or would reasonably expect to have, any obligation or liability, including all incentive, bonus, deferred compensation, vacation, holiday, cafeteria, medical, disability, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock‑based compensation plans, policies, programs, practices or arrangements. For purposes of this Section 4.14, “ERISA Affiliate” shall mean any entity (whether or not incorporated) other than the Company that, together with any member of the Company Group, is considered under common control and treated as one employer under Section 414(b), (c), (m) or (o) of the Code.
 
(b)          With respect to each Company Benefit Plan, the Company has made available to Parent complete copies of (as applicable): (i) each Company Benefit Plan, including the current plan documents, trust agreements, insurance contracts or other funding vehicles and all amendments thereto, (ii) the most recent summary plan descriptions, including any summary of modifications, (iii) the most recent annual reports (Form 5500 series) filed, (iv) the most recent actuarial report or other financial statement, (v) the most recent determination or opinion letter, if any, issued by the IRS with respect to any Company Benefit Plan and any pending request for such
 
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a determination letter, (vi) the most recent nondiscrimination tests performed under the Code (including 401(k) and 401(m) tests) for each Company Benefit Plan, and (vii) all non‑routine filings made with any Governmental Entities, including but not limited to any filings under the Voluntary Compliance Resolution or Closing Agreement Program or the Department of Labor Delinquent Filer Program.
 
(c)         Except as set forth on Schedule 4.14(c), within the prior six years, each Company Benefit Plan has been administered in accordance with its terms and all applicable Laws, including ERISA and the Code, and all contributions required to be made under the terms of any of the Company Benefit Plans as of the date of this representation is made have been timely made or, if not yet due, have been properly reflected in the Company Financial Statements.
 
(d)        Each Company Benefit Plan which is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination, advisory or opinion letter as to its qualification, and, to the Company’s Knowledge, nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification. No event has occurred and no condition exists that would subject the Company, either directly or by reason of its affiliation with any ERISA Affiliate, to any material Tax, fine, Encumbrance, penalty or other liability imposed by ERISA or the Code, and no nonexempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code or Section 502 of ERISA) has occurred with respect to any Company Benefit Plan.
 
(e)         Neither the Company nor any ERISA Affiliate, to the Company’s Knowledge, has incurred any current or projected liability in respect of post‑employment or post‑retirement health, medical or life insurance coverage for current, former or retired employees, except as required to avoid an excise tax under Section 4980B of the Code or otherwise except as may be required pursuant to any other applicable Law.
 
(f)        No Company Benefit Plan is a multiemployer pension plan (as defined in Section 3(37) of ERISA) (“Multiemployer Plan”) or other pension plan subject to Title IV of ERISA and the Company has no liability (including an account of an ERISA Affiliate) with respect to a Multiemployer Plan or other pension plan subject to Title IV of ERISA.
 
(g)        With respect to any Company Benefit Plan, (i) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the Company’s Knowledge, threatened, (ii) to the Company’s Knowledge, no facts or circumstances exist that could reasonably be expected to give rise to any such actions, suits or claims, and (iii) no administrative investigation, audit or other administrative proceeding by the Department of Labor, the PBGC, the Internal Revenue Service or other Governmental Entities are pending, or, to the Company’s Knowledge, threatened (including any routine requests for information from the PBGC).
 
(h)        Except as disclosed on Schedule 4.14(h), neither the execution and delivery of this Agreement by the Company nor the consummation of the transactions contemplated by this Agreement (whether alone or in conjunction with a subsequent event) will result in the acceleration or creation of any rights of any person to payments or benefits or increases in or funding of any payments or benefits or any loan forgiveness.
 
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(i)         No amount or benefit that could be, or has been, received (whether in cash or property or the vesting of property or the cancellation of indebtedness) by any current or former employee, officer or director of the Company or any Subsidiary of the Company who is a “disqualified individual” within the meaning of Section 280G of the Code could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) as a result of the consummation of the transactions contemplated by this Agreement. No Company Benefit Plan provides for the gross‑up of any Taxes imposed by Section 4999 of the Code. Schedule 4.14(i) sets forth a list of any severance, change of control, bonus or other similar payments to be paid by any member of Company Group to employees of the Company Group (including directors and officers of the Company Group) in connection with the transactions contemplated hereby.
 
(j)           Each Company Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A(d)(1) of the Code and any benefit or award thereunder has been maintained and operated in material compliance with Section 409A of the Code and the guidance thereunder.
 
(k)         No Company Benefit Plan provides compensation or benefits to any employee or service provider of the Company Group who resides or performs services primarily outside of the United States.
 
(l)          Except as set forth on Schedule 4.14(l), any Company Benefit Plan that is a “multiple employer plan” as defined in Section 210 of ERISA or Section 413 of the Code or a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA is and has been established, maintained, funded, operated and administered in accordance with all Laws applicable to such plans or arrangements.
 
Section 4.15        Labor Relations. Except as set forth on Schedule 4.15, no member of the Company Group is party to any collective bargaining agreement, neutrality or recognition agreement or any other type of material agreement or material arrangement with a labor organization, trade union, works council or other worker representative body concerning wages, hours, working conditions, or the representation of employees. Except as set forth on Schedule 4.15, no member of the Company Group has engaged in any unfair labor practice that could result in any liability to the Company and there are no complaints against a member of the Company Group pending before the National Labor Relations Board or any similar state or local labor agency by or on behalf of any employee of the Company Group. Except as disclosed in Schedule 4.15, there are no representation questions or arbitration proceedings, labor strikes, slowdowns or stoppages, grievances or other labor disputes pending or, to the Company’s Knowledge, threatened with respect to the employees of the Company Group, and no such events have occurred in the past five years, and no member of the Company Group has experienced any attempt by organized labor to cause the Company Group to comply with or conform to demands of organized labor relating to its employees. Except as disclosed in Schedule 4.15, the Company Group is as of the date hereof, and for the past five years has been, in material compliance with all Laws relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar Taxes, occupational safety and health and plant closings (hereinafter collectively referred to as the “Employment Laws”) and no member of the Company Group is liable for the payment of Taxes, fines, penalties or other amounts, however designated, for failure to comply with any of the
 
35

foregoing Employment Laws. During the past five years, there has been no “mass layoff” or “plant closing” (as defined by the Worker Adjustment Retraining Notification Act or any similar state or local mass layoff or plant closing Law) with respect to any member of the Company Group.
 
Section 4.16      Unauthorized Payments. No member of the Company Group or, to the Company’s Knowledge, any of their respective Representatives or equity holders has, directly or indirectly, made or authorized any payment, contribution or gift of money, property or services, in contravention of applicable Law.
 
Section 4.17          Federal and State Regulation. Except as set forth on Schedule 4.17, as of the date of this Agreement, no portion of the Company Midstream Properties is subject to (a) regulation by the U.S. Federal Energy Regulatory Commission as an intrastate pipeline under the Natural Gas Policy Act of 1978, 15 U.S.C. Section 330, and the regulations promulgated thereunder, (b) regulation by the U.S. Federal Energy Regulatory Commission as a common carrier under the Interstate Commerce Act, as implemented by the U.S. Federal Energy Regulatory Commission pursuant to 49 U.S.C. Section 60502, and the regulations promulgated thereunder or (c) rate regulation or comprehensive nondiscriminatory access regulation under the Laws of any federal, state or other local jurisdiction.
 
Section 4.18      Imbalances. Except for the Hydrocarbon imbalances reflected on Schedule 4.18, and normal and customary gathering and/or storage imbalances occurring after the date hereof, there do not exist any Hydrocarbon imbalances (a) under any Company Material Contract or (b) for which the Company Group has received a quantity of Hydrocarbons prior to the date of this Agreement for which the Company Group will have a duty to deliver an equivalent quantity of Hydrocarbons after the Closing. The Company Group has delivered all of the pipeline fill due to shippers.
 
Section 4.19        Maintenance of Properties. Except as set forth on Schedule 4.19, The offices, Company Midstream Properties, improvements, fixtures, equipment, and other Property owned, leased or used by each member of the Company Group in the conduct of its business are (a) being maintained and have been maintained in a state adequate to conduct operations as presently conducted in all material respects, (b) sufficient for the operation of the businesses of each member of the Company Group as currently conducted, and (c) in substantial conformity with all Company Permits relating thereto. Each member of the Company Group has maintained the Company Midstream Properties in a manner equivalent to a reasonable and prudent operator in the midstream pipeline industry in the location that the assets sit.
 
Section 4.20         Customers. Except as set forth on Schedule 4.20, no customer of the Company Group that generated revenue in excess of $3,000,000 in gross revenue during the three‑year period preceding the date of this Agreement (a) has ceased after June 30, 2018, or, to the Company’s Knowledge, intends to cease after the Closing, to use the Company Group’s services or to otherwise terminate or materially reduce its relationship with the Company Group, (b) has threatened in writing, or to the Company’s Knowledge, intends to commence litigation or any other dispute against the Company Group or (c) to the Company’s Knowledge, faces imminent insolvency or bankruptcy.
 
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Section 4.21        Restrictions on Distributions. Except as set forth on Schedule 4.21 and in the Third A&R LLC Agreement, no member of the Company Group is a party to any contract, agreement or other arrangement pursuant to which such Company Group member is restricted or otherwise prohibited from declaring, setting aside, or paying any dividend or making any other distribution whether in cash or in‑kind.
 
Section 4.22          Environmental Matters. Except as set forth on Schedule 4.22:
 
(a)          Each member of the Company Group is and has been in material compliance with all Environmental Laws.
 
(b)        Each member of the Company Group has obtained, and been (and is) in material compliance with, all Environmental Permits required to own and operate the properties, assets and business of the Company Group. No Proceeding is pending or, to the Company’s Knowledge, threatened to modify or revoke any Environmental Permit required to own or operate the properties, assets and business of the Company Group.
 
(c)         No member of the Company Group has received any notice, report or other information regarding any actual or alleged violation of, or Liability under, any Environmental Law relating to any of its properties, assets or operations, in each case that has resulted, or is reasonably likely to result, in a Liability to the Company Group, not reflected on the most recent Company Financial Statement.
 
(d)         No member of the Company Group has Released, treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled or exposed any Person to Hazardous Materials, or owned or operated any property or facility contaminated by Hazardous Materials in each case so as to result in any Liability of the Company Group under applicable Environmental Laws, not reflected on the most recent Company Financial Statement.
 
(e)        The Company Group has not assumed, undertaken or otherwise become subject to any Liability of any other Person, or provided an indemnity with respect to any Liability of any other Person, arising under any Environmental Law.
 
(f)        The Company Group has made available to Parent all material environmental audits, reports and assessments and other material environmental documents relating to the past or present business, operations or facilities of each member of the Company Group that are in the Company Group’s possession or reasonable control, in each case that have either (i) been prepared in the last five years or (ii) relate to any outstanding material Liability of the Company Group.
 
Section 4.23         Anti‑Corruption. The operations and activities of the Company Group and its Representatives are and have been conducted at all times in the past five years in compliance with, as applicable to the Company Group and its Representatives, Anti‑Corruption Legislation. The Company Group and its Representatives have not in the past five years offered, paid, promised to pay, authorized the payment of, received, or solicited anything of value under circumstances such that all or a portion of such thing of value would be offered, given, or promised, directly or indirectly, to any Person to obtain any improper advantage. No member of the Company Group or its Representatives has been notified in writing of and, to the Company’s Knowledge, there are no
 
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investigations or enforcement proceedings relating to breaches of Anti‑Corruption Legislation by the Company Group or its Representatives in the past five years.
 
Section 4.24        Anti‑Money Laundering. The operations and activities of the Company Group and its Representatives are and have been conducted at all times in compliance with, as applicable to the Company Group and its Representatives, the Anti‑Money Laundering Legislation. No Proceeding by or before any Governmental Entity involving the Company Group or its Representatives with respect to the Anti‑Money Laundering Legislation is pending or, to Company’s Knowledge, the subject of investigation or threatened.
 
Section 4.25        Compliance with Sanctions Requirements. The Company Group and its Representatives are not currently the target of, or otherwise subject to restrictions under, any sanctions administered or enforced by the United States, including the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State; the United Nations Security Council; Canada; the European Union; the United Kingdom; or other Governmental Entity with jurisdiction over the Parties (collectively, “Sanctions”). The Company Group and its Representatives are not located, organized or resident in a country or territory that is the subject or target of country‑ or territory‑wide Sanctions, including Crimea, Cuba, Iran, North Korea or Syria (each, a “Sanctioned Country”). In the past five years, the Company Group and its Representatives have not engaged in and are not now engaged in any dealings or transactions (a) with, or involving the interests or property of, any Person that, at the time of the dealing or transaction, was or is subject to restrictions imposed by any Sanctions or located, organized or resides in a Sanctioned Country or (b) that are otherwise prohibited by Sanctions.
 
Section 4.26         Brokers. Except for The Bank of Nova Scotia and Royal Bank of Canada, the fees and expenses of which will be paid by Carlyle at or prior to the Closing, no agent, broker, investment banker, finder, financial advisor or other person employed by any member of the Company Group is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with the transactions contemplated by this Agreement.
 
Section 4.27         Company Books and Records. The Company Books and Records have been maintained in accordance with usual and customary prudent business practices, and reflect all material information relating to the Crimson CA Business and the operation thereof.
 
Section 4.28       Solvency. The Company Group, taken as a whole, is Solvent, and will continue to be Solvent immediately following the consummation of the transactions contemplated by this Agreement.
 
Section 4.29        No Other Representations and Warranties. Except as expressly set forth in this Article IV (including the related Schedules), (a) neither the Company nor any other Person (including Carlyle and J. Grier) has made or makes any other representation or warranty on behalf of the Company Group, whether written or oral, express or implied, and any such other representation or warranty is hereby expressly disclaimed and (b) the Company Group disclaims all Liability and responsibility for any other representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Parent Group or its Affiliates or Representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Parent Group by any director, officer,
 
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employee, agent, consultant, or Representative of Carlyle, J. Grier and/or the Company Group). Without limiting the generality of the foregoing, neither the Company Group nor any other Person makes any representation or warranty with respect to any projections, estimates or budgets of future revenues, future results of operations, future cash flows or future financial condition (or any component of the foregoing) of the Crimson CA Business, it being understood that the Company Group is not disclaiming any representation and warranties set forth in this Agreement, including Section 4.06, which may be deemed to impact future revenues, results of operations, cash flows, diminution in value or financial condition (or any component of the foregoing) of the Crimson CA Business. For the avoidance of doubt, neither the Company Group nor any other Person makes any representation or warranty with respect to Crimson Gulf or the Crimson Gulf Business to the Parent Group or its Affiliates or Representatives.
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARENT GROUP
 
Except as disclosed in any Parent SEC Report (excluding any disclosure contained in any such SEC Report under the heading “Risk Factors” or “Cautionary Note Regarding Forward‑Looking Statements” or similar heading (other than any historical factual information contained within such headings, disclosure or statements)), Parent represents and warrants as of the Closing that:
 
Section 5.01          Organization; Qualifications; Power.
 
(a)        Each member of the Parent Group is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and is duly licensed or qualified to transact business as a foreign corporation, limited liability company or foreign limited partnership, as applicable, and is in good standing in each jurisdiction in which the nature of the business transacted by it or the character of the properties owned or leased by it requires such licensing or qualification. Each member of the Parent Group has full corporate, limited liability company or limited partnership power and authority, as applicable, to own and hold its properties and to carry on its business as now conducted, and Parent has full corporate power and authority, respectively, to execute, deliver and perform this Agreement and the Transaction Documents to which Parent is a party in accordance herewith and therewith.
 
(b)        As of the date hereof, Parent has made available to Carlyle and J. Grier true and correct copies of the Parent Group’s Governing Documents and all amendments thereto.
 
Section 5.02         Authorization; Validity. This Agreement and each Transaction Document to which a member of the Parent Group is or will be a party and the performance by such member of the Parent Group of its obligations pursuant to this Agreement and such Transaction Documents has been duly authorized and approved by all necessary corporate, limited liability company or limited partnership, as applicable, action on behalf of such member of the Parent Group. This Agreement and each Transaction Document to which a member of the Parent Group is or will be a party has been or will be duly authorized, executed and delivered by or on behalf of such member of the Parent Group and (assuming the due authorization, execution and delivery by the other parties thereto) constitutes the legal, valid and binding obligation of such member of the Parent
 
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Group, enforceable against such member of the Parent Group in accordance with its respective terms, except to the extent limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws of general application related to the enforcement of creditors’ rights generally and (b) general principles of equity, except that enforcement of rights to indemnification and contribution contained herein or therein may be limited by applicable federal or state Laws or the public policy underlying such Laws, regardless of whether enforcement is considered in a Proceeding in equity or at law.
 
Section 5.03        No Conflict; No Violation. Except as set forth on Schedule 5.03, the execution and delivery by applicable members of the Parent Group of this Agreement and the other Transaction Documents to which a member of the Parent Group is or will be a party, and performance of its obligations hereunder and thereunder, and the transactions contemplated hereby and thereby, will not (a) conflict with, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under the Governing Documents of any member of the Parent Group, (b) result in a violation of any Law, (c) conflict with, violate, result in a breach of, or constitute (or, with due notice or lapse of time, or both, would constitute) a default under, or give rise to any right of termination, acceleration or cancellation under, any indenture, agreement, contract, license, arrangement, understanding, evidence of indebtedness, note, lease or other financing or debt instrument to which any member of the Parent Group is a party or by which any of their respective properties or assets is bound or (d) result in the creation or imposition of any Encumbrance upon any member of the Parent Group or any of its respective properties or assets.
 
Section 5.04        Consents and Approvals. Except as set forth on Schedule 5.04, each of which have been obtained as of the date hereof or will be obtained on or prior to the Closing Date, no registration or filing with, or consent, approval, notification, waiver or other action by, any Governmental Entity or any third party is or will be necessary for the applicable members of the Parent Group’s valid execution, delivery and performance of this Agreement or the Transaction Documents to which a member of the Parent Group is a party or the transactions contemplated hereby and thereby, other than those which (a) have previously been obtained or made or (b) are required for compliance with any applicable requirements of the federal securities Laws, any applicable state or local securities Laws and any applicable requirements of a national securities exchange.
 
Section 5.05         Brokers. Except as set forth on Schedule 5.05, the fees and expenses of which will be paid by Parent at or prior to the Closing, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the other Transaction Documents or any of the transactions contemplated hereby or thereby based upon arrangements made by or on behalf of Parent or any of its Affiliates.
 
Section 5.06          Litigation.
 
(a)          Except as set forth on Schedule 5.06(a), there are no Proceedings pending against any member of the Parent Group or, to the Knowledge of Parent, threatened against a member of the Parent Group that (i) relate to the GIGS Assets or, (ii) to the extent unrelated to the GIGS Assets, that individually or in the aggregate, have had or would reasonably be expected to have a Parent Material Adverse Effect. There is no Order of any Governmental Entity outstanding against
 
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any member of the Parent Group or any of its assets and properties (including the GIGS Assets) that would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.
 
(b)         There are no Proceedings involving the Cox Entities or any of their respective Affiliates, on the one hand, and Parent or any of its Affiliates, on the other hand, that relate to the GIGS Assets and are (i) pending or (ii) were pending at any time prior to the Closing and will not be dismissed with prejudice upon signing of the Transaction Documents. All Liabilities of the Cox Entities and their respective Affiliates, on the one hand, and Parent or any of its Affiliates, on the other hand, to the extent related to the GIGS Assets or the GIGS Lease and attributable to the period prior to the Closing, will fully and forever release and discharge pursuant to the terms of the GIGS Release, other than the Environmental Indemnity (as defined in the GIGS Release).
 
Section 5.07          Solvency; No Fraudulent Conveyance; No Bankruptcy.
 
(a)          Immediately after the consummation of the transactions contemplated by this Agreement (including the payment in full of the Cash Amount and the assignment, transfer and conveyance of the GIGS Assets to Carlyle) and assuming the accuracy of the representation of the Company set forth in Section 4.28, the Parent Group, taken as a whole, will be Solvent, and will continue to be Solvent immediately following the consummation of such transactions.
 
(b)          There are no Bankruptcy Events pending against, being contemplated by or, to the Knowledge of Parent, threatened against any member of the Parent Group.
 
(c)          (i) The Subject Units and the assumption of the GIGS Assumed Liabilities together constitute reasonably equivalent value and fair consideration for the GIGS Assets (taken together with the Cash Amount), and (ii) neither Parent nor any of its Affiliates is transferring or causing to be transferred the GIGS Assets with any intent to hinder, delay or defraud any of creditors of any member of the Parent Group.
 
Section 5.08          Sufficiency of Funds. Parent has sufficient access to cash on hand or other sources of immediately available funds to enable it to make payment of the Cash Amount and consummate the transactions contemplated by this Agreement.
 
Section 5.09          Parent Financial Statements; Parent SEC Reports.
 
(a)          Except as set forth on Schedule 5.09(a), since June 30, 2018, all Parent SEC Reports have been timely filed or furnished to the SEC in accordance with the Securities Act, the Exchange Act and the Sarbanes‑Oxley Act. All Parent SEC Reports (i) complied in all material respects with the requirements of the Exchange Act, the Securities Act and the Sarbanes‑Oxley Act, as the case may be, and the rules and regulations of the NYSE and (ii) as of their respective filing dates in the case of any Exchange Act reports and as of their respective effective dates in the case of any Securities Act filings, or if amended, supplemented or superseded, as finally amended, supplemented or superseded prior to the date of this Agreement, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. To the Knowledge of Parent, no Parent SEC Report is the subject of ongoing
 
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SEC review or investigation. None of Parent’s Subsidiaries is required to file periodic reports with the SEC pursuant to the Exchange Act.
 
(b)          The historical consolidated financial statements of Parent included in the Parent SEC Reports as of their respective dates (if amended, as of the date of the last such amendment) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited quarterly statements, as indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of Parent and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in partners’ capital for the periods then ended (subject, in the case of unaudited quarterly statements, to normal and immaterial year‑end audit adjustments).
 
(c)         Parent has established and maintains internal controls over financial reporting and disclosure controls and procedures (as such terms are defined in Rule 13a‑15 and Rule 15d‑15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to Parent and its consolidated Subsidiaries required to be disclosed by Parent in the Parent SEC Reports under the Exchange Act is accumulated and communicated to Parent’s principal executive officer and its principal financial officer (the “Principal Officers”) to allow timely decisions regarding required disclosure. Such disclosure controls and procedures are effective to ensure that information required to be disclosed by Parent in the Parent SEC Reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The Principal Officers have made all certifications required by the Sarbanes‑Oxley Act and the Exchange Act with respect to the Parent SEC Reports, and the statements contained in such certifications were complete and correct when made.
 
Section 5.10        Absence of Parent Material Adverse Effect. Except for (a) the execution and delivery of this Agreement and the other Transaction Documents to which a member of the Parent Group is a party and the consummation of the transactions contemplated hereby or thereby and (b) as set forth on Schedule 5.10, since June 30, 2018: (a) the Parent Group has in all material respects conducted the business of the Parent Group in the ordinary course of business consistent with past practice, (b) there has not been any change, event or development which, individually or together with other such events, would reasonably be expected to have a Parent Material Adverse Effect and (c) none of the Parent Group has suffered any material casualty, loss, theft, destruction or damage to its assets or properties, whether or not covered by insurance.
 
Section 5.11        Absence of Undisclosed Liabilities. No member of the Parent Group has any material Liability that would be required to be reflected or reserved against on a consolidated balance sheet of Parent prepared in accordance with GAAP or the notes thereto, which is not shown or provided for in the consolidated financial statements included in the Parent SEC Reports (including the notes thereto) other than Liabilities that have arisen in the ordinary course of business consistent with past practice, including Encumbrances for Taxes that are not yet due and payable, since June 30, 2018.
 
Section 5.12          GIGS Assets.
 
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(a)          Exhibit B sets forth a description of each parcel of the GIGS Land. Parent has delivered to Carlyle (i) complete and correct copies of the deeds, acts of sale, and other instruments (as recorded) by which Grand Isle LP acquired the GIGS Land and GIGS Right of Use Agreements, and (ii) complete and correct copies of all title insurance policies, opinions, abstracts, and surveys in the Parent Group’s possession with respect to the GIGS Land. No member of the Parent Group nor, to the Knowledge of Parent, any other third party has conveyed, leased or otherwise granted to any Person (including any Affiliate) ownership or the right to use or occupy the GIGS Land or any other portion of the GIGS Assets.
 
(b)        Exhibit B sets forth a complete and correct list of the GIGS Right of Use Agreements. Parent has delivered to Carlyle complete and correct copies of the GIGS Right of Use Agreements. The GIGS Right of Use Agreements are valid and in full force and effect. No material default exists under any GIGS Right of Use Agreement, and to Parent’s Knowledge no events or conditions exist which, with or without notice or lapse of time or both, would constitute a material default under, or result in a termination of, any such GIGS Right of Use Agreement (except to the extent the grantor of the GIGS Right of Use Agreement has termination rights under applicable Law or pursuant to the express terms thereof). No grantor of any GIGS Right of Use Agreement, nor Parent or any of its Affiliates, has canceled or terminated any of the GIGS Right of Use Agreements; neither Parent nor any of its Affiliates has threatened to cancel, terminate or modify any of the GIGS Right of Use Agreements; and, to Parent’s Knowledge, no grantor of any GIGS Right of Use Agreement has threatened to cancel, terminate or modify such GIGS Right of Use Agreement. There are no Proceedings pending or, to Parent’s Knowledge, threatened under any GIGS Right of Use Agreement.
 
(c)         Exhibit B lists all material GIGS Improvements, and Schedule 5.12(c) lists all material items of GIGS Personal Property. The GIGS Assets (including all GIGS Improvements and GIGS Personal Property) are generally in the operating condition and repair as assessed by the Parties’ appointed consultants, Chapman Consulting, Inc. and Abadie‑Williams LLC, in determining the condition and repair, subject to ordinary wear and tear since the time of that assessment.
 
(d)         Except as set forth on Schedule 5.12(d), to the Knowledge of the Parent, no portion of the GIGS encroaches on the property of any Person. Neither Parent nor any of its Affiliates has granted any Encumbrance over any of its right, title or interest in and to the GIGS Assets, other than Permitted Encumbrances that are released simultaneously with the Closing.
 
(e)          Except as set forth on Schedule 5.12(e), to the Knowledge of the Parent, no casualty loss has occurred with respect to the GIGS Assets. There is no pending or, to the Knowledge of Parent, threatened condemnation, eminent domain or similar Proceeding or special assessment affecting any of the GIGS Assets, nor to the Knowledge of Parent, is any such Proceeding or assessment is contemplated.
 
(f)          To the Knowledge of Parent (and except as publicly disclosed as an incident of noncompliance), the operation of the GIGS Assets is currently being conducted in compliance in all material respects with all applicable Laws, including those relating to the use, ownership, and operation of the GIGS Assets. None of the Parent Group or any of their respective Affiliates has received from any Governmental Entity notice of any violation of any applicable Law related to
 
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the GIGS Assets. To the Knowledge of Parent, none of the Parent Group or any of their respective Affiliates is under investigation by any Governmental Entity for potential non‑compliance with any Law to the extent related to the GIGS Assets or operation thereof.
 
(g)          Without limiting anything in this Section 5.12, Parent has furnished to Carlyle true and complete copies of all deeds, leases, title opinions, title insurance policies and surveys in their possession or in the possession of any Subsidiary of Parent that relate to the GIGS Land or the GIGS, together with copies of all reports of any engineers or other consultants in their possession relating to any of the GIGS Land or the GIGS.
 
Section 5.13        Title to GIGS Assets. Except as set forth in Schedule 5.13, Grand Isle LP has good and valid title to the GIGS Assets, including good and marketable title to the GIGS Land and the GIGS Right of Use Agreements, in each case free and clear of all Encumbrances other than Permitted Encumbrances. Upon the Closing (should the Closing occur), Carlyle will acquire good and valid title to the GIGS Assets, including good and marketable title to the GIGS Land and the GIGS Right of Use Agreements, in each case free and clear of all Encumbrances other than Permitted Encumbrances. Other than Grand Isle LP, there are no parties in possession of any portion of any GIGS Land or other GIGS Assets that constitute real property assets as lessees, subtenants, tenants at sufferance or trespassers. To the Parent’s Knowledge, the GIGS, the GIGS Land and the GIGS Improvements are being used, occupied, and maintained in all material respects in accordance with all applicable easements, contracts, Permits, insurance requirements, restrictions, building setback lines, covenants and reservations, including the GIGS Right of Use Agreements.
 
Section 5.14         Sufficiency of Assets. The GIGS Assets constitute all of the assets, rights and properties, tangible or intangible, real or personal, that are used or necessary for use in connection with the operation of the GIGS in the same manner as operated by Grand Isle prior to April 1, 2020. No member of the Parent Group other than Grand Isle LP owns any portion of the GIGS Assets.
 
Section 5.15          Taxes.
 
(a)          Each member of the Parent Group has duly and timely filed all Tax Returns required by applicable Law to be filed with respect to any Asset Taxes. All such Tax Returns are true, correct and complete in all material respects.
 
(b)         All Asset Taxes that are due and owing have been duly and timely paid in full (regardless of whether shown on any Tax Return).
 
(c)          No deficiencies for Asset Taxes have been claimed, proposed or assessed in writing by any Taxing Authority.
 
(d)          There is no Proceeding pending or, to the Parent’s Knowledge, threatened against, or with respect to, the GIGS Assets in respect of any Asset Tax or Asset Tax assessment.
 
(e)          No claim has been made by any Taxing Authority in any jurisdiction where a member of the Parent Group does not file Tax Returns with respect to Asset Taxes that such
 
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member of the Parent Group is or may be required to file any Tax Return with respect to Asset Taxes or be subject to any Asset Taxes in such jurisdiction.
 
(f)         There is no material outstanding waiver or extension of (or requests for a waiver or extension of) any applicable statute of limitations with respect to any Asset Taxes or Tax Returns with respect thereto.
 
(g)          There are no Encumbrances for Taxes on any of the GIGS Assets other than Permitted Encumbrances.
 
(h)          Parent (i) has been subject to taxation as a real estate investment trust within the meaning of Sections 856 through and including 860 of the Internal Revenue Code (“REIT”), and has satisfied all requirements to qualify as a REIT, for all taxable years beginning with the fiscal year that ended December 31, 2013 through the fiscal year that ended December 31, 2019; (ii) has operated in a manner consistent with the requirements for qualification and taxation as a REIT (provided that the distribution requirements set forth in Section 857(a) of the Code have been determined as if the current taxable year of Parent ended as of the Closing); and (iii) has not taken or omitted to take any action that Parent reasonably expects to result in a challenge by the IRS to its status as a REIT, and to Parent’s Knowledge, no such challenge is pending or has been threatened in writing.
 
Section 5.16         Regulatory Matters.
 
(a)        Except as set forth on Schedule 5.16(a), none of the GIGS Assets is or, since July 15, 2015 has been subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act (15 U.S.C. Section 717, et seq.), the Natural Gas Policy Act of 1978 (15 U.S.C. Section 3301), or the Interstate Commerce Act; and no portion of the GIGS Assets is or would be regulated as a “public utility,” “public service company,” “common carrier” or similar designation(s) by any state public service commission, or by the Department of Transportation under the Pipeline and Hazardous Materials Safety Administration Rules on Pipeline Integrity Management. Without limiting the foregoing, the rates charged by the Parent Group with respect to the GIGS are not currently regulated by the Federal Energy Regulatory Commission under the Interstate Commerce Act, Natural Gas Act (15 U.S.C. Section 717, et seq.), the Natural Gas Policy Act of 1978, or by any state regulation commission under applicable state law.
 
(b)         All material regulatory filings, contracts, or similar documents related to or involving the ownership or, to the Knowledge of Parent the operation or use, of the GIGS Assets are identified and set forth in Schedule 5.16(b).
 
(c)          There are no Proceedings initiated by any Governmental Entity or any third party pending, or to the Knowledge of Parent, threatened, that challenge any of the rates, rules, charges or fees currently received from providing gathering or related services on the GIGS Assets.
 
Section 5.17       Anti‑Corruption. The operations and activities of the Parent Group and its Representatives are and have been conducted at all times in the past five years in compliance with, as applicable to the Parent Group and its Representatives, Anti‑Corruption Legislation. The Parent Group and its Representatives have not in the past five years offered, paid, promised to pay, authorized the payment of, received, or solicited anything of value under circumstances such that
 
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all or a portion of such thing of value would be offered, given, or promised, directly or indirectly, to any Person to obtain any improper advantage. No member of the Parent Group or its Representatives has been notified in writing of and, to Parent’s Knowledge, there are no investigations or enforcement proceedings relating to breaches of Anti‑Corruption Legislation by the Parent Group or its Representatives in the past five years.
 
Section 5.18        Anti‑Money Laundering. The operations and activities of the Parent Group and its Representatives are and have been conducted at all times in compliance with, as applicable to the Parent Group and its Representatives, the Anti‑Money Laundering Legislation. No Proceeding by or before any Governmental Entity involving the Parent Group or its Representatives with respect to the Anti‑Money Laundering Legislation is pending or, to Company’s Knowledge, the subject of investigation or threatened.
 
Section 5.19        Compliance with Sanctions Requirements. The Parent Group and its Representatives are not currently the target of, or otherwise subject to restrictions under, any Sanctions. The Parent Group and its Representatives are not located, organized or resident in a Sanctioned Country. In the past five years, the Parent Group and its Representatives have not engaged in and are not now engaged in any dealings or transactions (a) with, or involving the interests or property of, any Person that, at the time of the dealing or transaction, was or is subject to restrictions imposed by any Sanctions or located, organized or resides in a Sanctioned Country or (b) that are otherwise prohibited by Sanctions.
 
Section 5.20        CORR R&W Insurance Policy. The CORR R&W Insurance Policy is fully bound and in full force and effect in accordance with the terms thereof.
 
Section 5.21        No Other Representations and Warranties. Except as expressly set forth in this Article V (including the related Schedules), (a) neither Parent nor any other Person has made or makes any other representation or warranty on behalf of the Parent Group, whether written or oral, express or implied, and any such other representation or warranty is hereby expressly disclaimed and (b) the Parent Group disclaims all Liability and responsibility for any other representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Carlyle, J. Grier, or the Company Group or any of their Affiliates or Representatives (including any opinion, information, projection, or advice that may have been or may be provided to Carlyle, J. Grier or the Company Group by any director, officer, employee, agent, consultant, or Representative of the Parent Group). Without limiting the generality of the foregoing, neither the Parent Group nor any other Person makes any representation or warranty with respect to any projections, estimates or budgets of future revenues, future results of operations, future cash flows or future financial condition (or any component of the foregoing) of the business of the Parent Group, it being understood that the Parent Group is not disclaiming any representation and warranties set forth in this Agreement which may be deemed to impact future revenues, results of operations, cash flows or financial condition (or any component of the foregoing) of the business of the Parent Group.
 
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ARTICLE VI
COVENANTS
 
Section 6.01        Further Assurances. Each of the Parties covenants and agrees to cooperate and use all commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, including cooperating fully with the other Parties to obtain all approvals that may be necessary or which may be reasonably requested by such other Parties to consummate the transactions contemplated by this Agreement and the Transaction Documents. In case at any time after the date hereof any commercially reasonable further action is reasonably necessary or desirable to carry out the purposes of this Agreement, the Parties shall take such commercially reasonable action.
 
Section 6.02      Public Disclosures. Any public announcements regarding the terms of this Agreement or the Transaction Documents or the transactions contemplated hereby and thereby, or the financial performance of the Company Group, shall be made only with the consent of Carlyle, J. Grier and Parent, except as may be required, and to the extent required, by applicable Law or stock exchange regulations, in which case the Party required to issue the public announcement shall allow the other Parties reasonable time to comment on such release or statement in advance of its issuance.
 
Section 6.03     CPUC Application. The Parties agree and acknowledge that, after giving effect to the transactions to be consummated pursuant to this Agreement and the Transaction Documents at the Closing, (a) the outstanding voting Equity Securities will be owned, beneficially and of record, 50.5% by the Grier Members and 49.5% by Parent and (b) J. Grier, by virtue of his majority ownership of the Company, will maintain sole operational control with respect to the assets of the Company Group that are regulated by the CPUC (the “CPUC Assets”). In addition, the Parties agree and acknowledge that (i) it is the intent of the Grier Members and Parent that, upon receipt of necessary approvals from the CPUC and pursuant to the terms of this Agreement and the Transaction Documents, Parent will become the majority owner of the outstanding Equity Securities of the Company (and thereby the CPUC Assets) and operational control of the CPUC Assets will transfer to Parent, and (ii) the transactions described in the foregoing clause (i) may not be consummated without the prior approval of the CPUC. Therefore, in furtherance of the above, the Parties agree that, as promptly as practicable following the Closing (but in any event no later than two Business Days thereafter), Parent and J. Grier shall file the CPUC Application with the CPUC in accordance with the applicable provisions of the PU Code. From and after the Closing, the Parties shall use commercially reasonable efforts to obtain the approval of the CPUC with respect to the CPUC Approval Transactions, and each of Parent and J. Grier shall keep Carlyle reasonably apprised of material communications and other developments related to the CPUC Application and will use commercially reasonable efforts to consult with Carlyle prior to filing any briefs, testimony, responses, notices or other filings with the CPUC related to the CPUC Application; provided, that if the content of any such briefs, testimony, responses, notices or other filings could reasonably be expected to materially affect the interest of Carlyle or any of its Affiliates, Parent shall be required to consult with Carlyle prior to filing such responses or other notices and shall incorporate any comments thereto reasonably suggested by Carlyle.
 
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Section 6.04        Wrong Pocket. If, at any time following the Closing, any Party becomes aware that any asset, right or Liability that (a) should properly have been transferred to Carlyle (to the extent such asset, right or Liability should properly have been transferred to Carlyle as part of the GIGS Assets) such as to make true and correct the representation set forth in Section 5.12 and is held by a member of the Parent Group, or (b) is necessary for the operation of the Crimson CA Business as conducted as of the Closing and is held by Crimson Gulf Holdings or any of its Affiliates, then (i) Parent (with respect to any asset, right or Liability described in clause (a)) or J. Grier and Carlyle, jointly (with respect to any asset, right or Liability described in clause (b)), shall promptly transfer or cause its Affiliates to transfer such asset, right or Liability, as applicable, to Carlyle (with respect to any asset, right or Liability described in clause (a)) or Parent (with respect to any asset, right or Liability described in clause (b)), as applicable, and (ii) Carlyle or Parent, as applicable, shall promptly assume or cause its Affiliates to assume such asset or right, in each case for no consideration and at the transferring Party’s expense. Further, if at any time following the Closing, (x) Crimson Gulf Holdings or its Subsidiaries, on the one hand, or (y) a member of the Parent Group, on the other hand, receives any notices or monies attributable to the Crimson CA Business or the GIGS Assets, respectively, then J. Grier and Carlyle, jointly on behalf of Crimson Gulf Holdings, or Parent on behalf of the Parent Group, as applicable, shall promptly deliver such notices or monies to the appropriate Party.
 
Section 6.05         Release; Indemnification of Directors and Officers.
 
(a)        Effective as of immediately after the Closing, Parent, on its own behalf and on behalf of its Affiliates (including the Company Group), unconditionally and irrevocably acquits, remises, discharges and forever releases Carlyle and its Affiliates, and its and their respective equityholders, partners, managers, trustees, employees, officers, directors and agents (collectively, the “Carlyle Released Parties”) from any and all Liabilities, including those arising under any Law, contract, agreement, arrangement, commitment or undertaking, whether written or oral, to the extent arising on or prior to the Closing with respect to or relating to the Company Group or Carlyle’s ownership of the Subject Units. Parent, on its own behalf and on behalf of its Affiliates (including the Company Group) further covenants and agrees not to bring or threaten to bring or otherwise join in any Proceeding against any of the Carlyle Released Parties or any of them, relating to, arising out of or in connection with any such Liabilities which existed on or prior to the Closing Date. Notwithstanding the foregoing, the Liabilities acquitted, remised, discharged and released pursuant to this Section 6.05(a) shall not include any rights of such Person under this Agreement, including any rights to indemnification pursuant hereto, the Transaction Documents and the other documents and agreements executed in consummation of the transactions contemplated by this Agreement. Each of the Carlyle Released Parties is an express third‑party beneficiary of this Section 6.05(a).
 
(b)        Effective as of immediately after the Closing, Carlyle, on its own behalf and on behalf of its Affiliates (but excluding Crimson Gulf Holdings and any of its Subsidiaries), unconditionally and irrevocably acquits, remises, discharges and forever releases each member of the Company Group, and its and their respective equityholders, partners, managers, trustees, employees, officers, directors and agents (collectively, the “Company Released Parties”) from any and all Liabilities, including those arising under any Law, contract, agreement, arrangement, commitment or undertaking, whether written or oral, to the extent arising on or prior to the Closing with respect to or relating to the Company Group or Carlyle’s ownership of the Subject Units.
 
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Carlyle, on its own behalf and on behalf of its Affiliates (but excluding Crimson Gulf Holdings and any of its Subsidiaries) further covenants and agrees not to bring or threaten to bring or otherwise join in any Proceeding against any of the Company Released Parties or any of them, relating to, arising out of or in connection with any such Liabilities which existed on or prior to the Closing Date. Notwithstanding the foregoing, the Liabilities acquitted, remised, discharged and released pursuant to this Section 6.05(b) shall not include any rights of such Person (i) under this Agreement, including any rights to indemnification pursuant hereto, the Transaction Documents and the other documents and agreements executed in consummation of the transactions contemplated by this Agreement, or (ii) with respect to or relating to Crimson Gulf Holdings, its Subsidiaries or Carlyle’s or its Affiliates ownership of Equity Securities therein. Each of the Company Released Parties is an express third‑party beneficiary of this Section 6.05(b).
 
(c)          Parent agrees that all rights to indemnification, exculpation and advancement of expenses existing in favor of any present or former member, director, manager, officer, employee, trustee, fiduciary or agent of the Company Group or their Affiliates (including the Carlyle Resigning Managers), as provided in the respective Governing Documents of such Persons in effect as of the Closing Date, shall survive the Closing and shall continue in full force and effect for a period of not less than six years. For a period not less than six years, Parent shall not amend, restate, waive or terminate any Governing Document of the Company Group in any manner that would adversely affect the indemnification or exculpation rights of any such present or former member, director, manager, officer, employee, fiduciary or agent (including the Carlyle Resigning Managers).
 
Section 6.06        Post‑Closing Access; Records. From and after the Closing, (a) Parent and its Affiliates shall make or cause to be available to Carlyle all Company Books and Records, and (b) Carlyle and its Affiliates shall make or cause to be available to Parent all GIGS Books and Records, in each case upon reasonable notice during regular business hours as may be reasonably necessary for (i) investigating, settling, preparing for the defense or prosecution of, defending or prosecuting any Proceeding, (ii) preparing reports to, or filings with, equityholders or Governmental Entity or (iii) such other purposes for which access to such documents is determined by Carlyle or Parent, as applicable, to be reasonably necessary, including preparing and delivering any accounting or other statement provided for under this Agreement or otherwise, preparing Tax Returns, pursuing Tax refunds or responding to or disputing any Tax audit, or the determination of any matter relating to the rights and obligations of (x) Carlyle or any of its Affiliates or (y) Parent or any of its Affiliates, as applicable, under any Transaction Documents; provided, however, that access to such books, records, documents and employees shall not interfere with the normal operations of the Party and its Affiliates that owns the relevant books and records post‑Closing and the reasonable out‑of‑pocket expenses of such Party that are incurred in connection therewith shall be paid by the Party seeking access to such books and records. Parent and Carlyle shall each maintain and preserve all such Company Books and Records and GIGS Books and Records, respectively, for the greater of (A) seven years after the Closing Date and (B) any applicable statute of limitations, as the same may be extended and, in each case, shall offer to transfer such records to Carlyle or Parent, as applicable, at the end of the period in which it maintains and preserves such records.
 
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Section 6.07          Tax Matters.
 
(a)         In the case of Asset Taxes (other than Transfer Taxes) with respect to any taxable period that begins before or on the Closing Date and ends after the Closing Date, the portion of any such Taxes that is attributable to the portion of the taxable period ending on (and including) the Closing Date shall be:
 
(i)           in the case of Asset Taxes that are imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) or not described in Section 6.07(a)(ii), deemed equal to the amount that would be payable if the applicable taxable period ended on (and included) the Closing Date; provided, that exemptions, allowances, or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on (and including) the Closing Date and the period beginning after the Closing Date in proportion to the number of days in each period; and
 
(ii)          in the case of Taxes that are imposed on a periodic basis, deemed to be the amount of such Taxes for the entire taxable period, multiplied by a fraction, the numerator of which is the number of calendar days in the portion of the taxable period ending on (and including) the Closing Date and the denominator of which is the number of calendar days in the entire taxable period.
 
(b)         The Parties agree that the Company shall apply the interim closing method under Treasury Regulations Section 1.706‑4 with respect to the sale of the Subject Units pursuant to this Agreement.
 
(c)         At least 45 days prior to filing the federal income tax return of the Company for the taxable year that includes the sale of the Subject Units, the Company shall prepare and deliver to Carlyle and Parent a draft schedule of the purchase price (as adjusted to reflect any assumed Liabilities and other amounts treated as consideration) for the Subject Units for U.S. federal (and applicable state and local) income tax purposes and an allocation of that purchase price among the assets of the Company for purposes of Sections 743, 751 and 755 of the Code, any applicable Treasury Regulations thereunder and any analogous provision of state and local income tax Law (the “Allocation”). Carlyle and Parent shall deliver any objections to such draft Allocation to the Company no later than 15 days after the receipt thereof. In the event that either Carlyle or Parent timely deliver any such objections, the Parties shall negotiate in good faith to resolve such dispute. In the event that the Parties are unable to resolve any such dispute within 15 days after a Party delivers notice of such an objection, the Parties shall engage the Audit Firm to resolve any such disputed matters (“Disputed Items”) in accordance with the terms of this Agreement, and, in connection with such engagement, Carlyle and Parent shall execute any engagement, indemnity or other agreements as the Audit Firm may require as a condition to such engagement. The Audit Firm’s engagement shall be limited to the resolution of Disputed Items that have been identified pursuant to this Section 6.07(c) and no other matter relating to the Allocation shall be subject to determination by the Audit Firm except to the extent affected by resolution of the Disputed Items. The Parties shall cooperate diligently with any reasonable request of the Audit Firm in an effort to resolve any disputed matter as soon as reasonably possible after the Audit Firm is engaged. The decision of the Audit Firm with respect to the Disputed Items shall be made as soon as practicable
 
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and in any event within 20 days after being engaged. In any event, the Audit Firm’s decision with respect to the Disputed Items shall be final and binding on the Parties. The Allocation shall be revised, if necessary, to reflect any revisions agreed by the Parties or determined by the Audit Firm in accordance with this Section 6.07(c) (the final Allocation, as revised pursuant to this Section 6.07(c), if and as applicable, the “Final Allocation”). Unless otherwise required by a final determination within the meaning of Section 1313(a) of the Code, the Parties shall, and shall cause their Affiliates to, report consistently with the Final Allocation.
 
(d)          If the Parties submit any Disputed Items to the Audit Firm for resolution as provided in Section 6.07(c), the fees and expenses of the Audit Firm (the “Audit Fees”) will be paid by and apportioned among Carlyle and Parent based on the aggregate dollar amount of the amount in dispute and the relative recovery, as determined by the Audit Firm, of Parent and Carlyle, respectively. Parent and Carlyle shall promptly, and in any event within five Business Days after the final determination of the Final Allocation, pay to the Audit Firm the amount of Audit Fees payable by Parent and Carlyle pursuant to the preceding sentence.
 
(e)          Any sales, use, stamp, transfer, conveyance, registration, excise, documentary, or stamp Tax, recording fees, or other similar Tax imposed on or in connection with the transactions contemplated by this Agreement (“Transfer Taxes”) shall be borne by the Party transferring the property to which such Transfer Taxes relate. The Parties will cooperate with each other in connection with the filing of any Tax Returns related to Transfer Taxes, including joining in the execution of any such Tax Return where necessary. Each Party will, upon the request of any other Party, use its commercially reasonable efforts to obtain any certificate or other document from any Person as may be reasonably necessary to mitigate, reduce or eliminate any Transfer Tax.
 
ARTICLE VII
INDEMNIFICATION
 
Section 7.01         Survival of Agreements. The representations and warranties set forth in Article III, Article IV and Article V shall terminate and expire on the date that is twelve (12) months following the Closing Date, except that the Company Fundamental Representations, Parent Fundamental Representations and Carlyle Fundamental Representations shall survive indefinitely. After a representation and warranty has terminated and expired, no indemnification shall or may be sought pursuant to this Article VII on the basis of that representation and warranty by any Person who would have been entitled to indemnification pursuant to this Article VII on the basis of that representation and warranty prior to its termination and expiration; provided that, in the case of each representation and warranty that shall terminate and expire as provided in this Section 7.01, no Claim Notice on the basis of that representation and warranty delivered prior to its termination and expiration shall be affected in any way by such termination and expiration. The covenants and agreements entered into pursuant to this Agreement to be performed shall survive Closing and shall remain in full force and effect until such covenant or agreement is fully performed in accordance with the terms of this Agreement. The indemnification obligations set forth in Section 7.02(b), Sections 7.03(b) and (c), and Sections 7.04(b) and (c) shall survive indefinitely.
 
Section 7.02         Indemnification by the Company. Subject to the other provisions of this Article VII, from and after the Closing the Company shall indemnify, defend and hold harmless,
 
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without duplication, Parent, its Affiliates and their respective directors, managers, officers, partners, members, shareholders, and employees and their heirs, successors and permitted assigns, each in their capacity as such (the “Parent Indemnified Persons”), from and against any and all Damages suffered or incurred by any of the Parent Indemnified Persons, to the extent arising out of (a) the inaccuracy or breach of any representation or warranty made by the Company in Article IV, and (b) any nonfulfillment or breach by a member of the Company Group of any covenant or agreement made by a member of the Company Group under this Agreement.
 
Section 7.03         Indemnification by Carlyle. Subject to the limitations set forth in this Agreement, Carlyle shall indemnify, defend and hold harmless, without duplication, the Parent Indemnified Persons, from and against any and all Damages suffered or incurred by any of the Parent Indemnified Persons, to the extent arising out of (a) the inaccuracy or breach of any representation or warranty made by Carlyle in Article III, (b) any nonfulfillment or breach by Carlyle of any covenant or agreement made by Carlyle under this Agreement, and (c) the GIGS Assumed Liabilities.
 
Section 7.04        Indemnification by Parent. Subject to the limitations set forth in this Agreement, Parent shall indemnify, defend and hold harmless, without duplication, Carlyle, the Grier Members, their Affiliates and their respective directors, managers, officers, partners, members, shareholders, and employees and their heirs, successors and permitted assigns, each in their capacity as such (the “Carlyle/Grier Indemnified Persons”), from and against any and all Damages suffered or incurred by any of the Carlyle/Grier Indemnified Persons, to the extent arising out of (a) the inaccuracy or breach of any representation or warranty made by Parent in Article V, (b) any nonfulfillment or breach by a member of the Parent Group of any covenant or agreement made by a member of the Parent Group under this Agreement and (c) the GIGS Retained Liabilities.
 
Section 7.05         Limitations.
 
(a)        Subject to the other limitations in this Section 7.05, the Parent Indemnified Persons will be entitled to be indemnified pursuant to Section 7.02(a) for Damages, but only if and to the extent that the aggregate amount of all such Damages under Section 7.02(a) and Section 7.03(a) are in excess of $3,500,000 (the “Deductible”). Notwithstanding anything to the contrary herein, to the extent the Company is reasonably expected to have recourse or rights to indemnification from Shell for any individual claim or series of related claims that give rise to Damages, the Company shall be required to pursue such claim or claims against Shell for such Damages and such claim or claims shall only be subject to indemnification by any Person pursuant to this Agreement to the extent the Parent Indemnified Person is, after commercially reasonable efforts, unable to fully recover such Damages (including expenses incurred in pursuing the claim against Shell) from Shell. Notwithstanding anything to the contrary set forth herein, (except as specifically set forth in Section 7.05(f)), in no event will the aggregate indemnification obligations of the Company and Carlyle under this Article VII exceed $35,000,000 (the “Cap”).
 
(b)          Subject to the other limitations in this Section 7.05, including, without limitation, the final sentence of Section 7.05(a), the Parent Indemnified Persons will be entitled to be indemnified pursuant to Section 7.03(a) for Damages, but only if and to the extent that the
 
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aggregate amount of all such Damages under Section 7.02(a) and Section 7.03(a) are in excess of the Deductible.
 
(c)         Subject to the other limitations in this Section 7.05, the Carlyle/Grier Indemnified Persons will be entitled to be indemnified pursuant to Section 7.04(a) for Damages, but only if and to the extent that the aggregate amount of all Damages are in excess of $500,000. Except as specifically set forth in Section 7.05(f), in no event will Parent’s aggregate indemnification obligations under this Article VII exceed $5,000,000.
 
(d)         No Indemnifying Person will be liable for any Damages that are subject to indemnification under Sections 7.02, 7.03, or 7.04, as applicable, unless a written demand for indemnification under this Agreement is delivered by the Indemnified Person to the Indemnifying Person in accordance with the claims procedure referred to in Section 7.06(a) prior to 5:00 P.M. Mountain Time on the date pursuant to Section 7.01 on which the survival period of the applicable representations and warranties expire or, in the case of covenants and agreements entered into pursuant to this Agreement, prior to the time such covenant or agreement is fully performed in accordance with the terms of this Agreement. The written demand shall describe the basis for the express claim of indemnification in reasonable detail, including the factual circumstances giving rise to such claim and the provisions under this Agreement on which such claim is based (a “Claim Notice”).
 
(e)          Notwithstanding anything to the contrary contained in this Agreement, under no circumstances will any Party or any of its Affiliates be entitled to recover more than one time for any Damages under this Agreement, and the Deductible, the Cap, and the limitations in Section 7.05(c) shall only apply to the indemnification obligations of Section 7.02(a), Section 7.03(a), and Section 7.04(a).
 
(f)          Notwithstanding anything to the contrary contained in this Agreement: (i) the limitations set forth in Section 7.05(a) shall not apply to any Damages arising out of or relating to the inaccuracy or breach of the Company Fundamental Representations; (ii) the limitations set forth in Section 7.05(b) shall not apply to any Damages arising out of or relating to the inaccuracy or breach of the Carlyle Fundamental Representations; and (iii) the limitations set forth in Section 7.05(c) shall not apply to any Damages arising out of or relating to the inaccuracy or breach of the Parent Fundamental Representations, provided, however, that in no event shall (x) Parent’s right to recover Damages from any Person under this Article VII exceed the amount of the consideration actually received by such Person pursuant to this Agreement and (y) Parent’s indemnification obligations under this Article VII to any Carlyle/Grier Indemnified Person exceed an amount equal to the consideration actually paid to such Carlyle/Grier Indemnified Person.
 
(g)       Notwithstanding anything to the contrary set forth herein (including Section 7.05(h)), from and after Closing, a Parent Indemnified Person’s sole and exclusive recourse and remedy in respect of Damages subject to indemnification under Section 7.02(a) (other than claims of, or causes of action arising from, the breach of any Company Fundamental Representations or those matters set forth on Schedule 7.05(g)) shall be recovery of any proceeds payable pursuant to CORR R&W Insurance Policy, regardless of the amount collected, and regardless of whether the CORR R&W Insurance Policy is “available”, with respect to any
 
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claim(s) made against the CORR R&W Insurance Policy (if any), and neither the Company nor any Grier Member shall have any liability with respect to such Damages.
 
(h)        From and after the Closing, Carlyle, J. Grier and the Company shall use good‑faith efforts to reasonably cooperate with the Parent Indemnified Persons in connection with any claim made by such Person under the CORR R&W Insurance Policy. Parent shall use commercially reasonable efforts to recover Damages under the CORR R&W Insurance Policy if the CORR R&W Insurance Policy is available at such time. Nothing contained in this Section 7.05(h) shall require or be construed to require Parent or any other Parent Indemnified Person to commence any Proceeding against the insurance provider under or in respect of the CORR R&W Insurance Policy. For purposes of determining whether the CORR R&W Insurance Policy is “available” for purposes of this Section 7.05, the CORR R&W Insurance Policy shall only be deemed available to the extent that any retention, deductible or similar requirements under the CORR R&W Insurance Policy have been satisfied or eroded in full and to the extent the Damages sought are not otherwise excluded pursuant to the terms and conditions of the CORR R&W Insurance Policy. Notwithstanding anything in this Section 7.05 to the contrary (but subject to Section 7.05(g)), if (i) a Parent Indemnified Person receives from the insurance provider a notice of denial of coverage or other adverse determination with respect to all or any portion of the amount of Damages that may be subject to a claim for indemnification under this Agreement covered by the CORR R&W Insurance Policy or (ii) the amount of such Damages exceeds the CORR R&W Insurance Policy limits of liability, then with respect to the portion of Damages for which recourse under the CORR R&W Insurance Policy has been denied or otherwise adversely determined against a Parent Indemnified Person or that exceeds the R&W Insurance Policy limits of liability, the CORR R&W Insurance Policy shall be deemed not “available” for all purposes of this Agreement.
 
Section 7.06          Indemnification Procedure.
 
(a)         Promptly after receipt by any Person seeking indemnification in accordance with this Agreement (hereafter, the “Indemnified Person”) of notice (i) of the commencement or assertion of any Proceeding or Liability by a third party (a “Third‑Party Claim”) or (ii) of facts causing any Indemnified Person to believe it has a claim for indemnification under this Agreement (an “Indemnity Claim”), such Indemnified Person will promptly deliver a Claim Notice to the Person having the obligation to so indemnify (the “Indemnifying Person”). Notwithstanding the foregoing, as long as the Claim Notice is given within the applicable survival period set forth in Section 7.01, the failure to so notify the Indemnifying Person will not relieve the Indemnifying Person of its obligations or liability under this Agreement, except to the extent such failure materially prejudices the Indemnifying Person. The Claim Notice shall describe the Indemnity Claim in reasonable detail, and will indicate the amount (estimated, if necessary) of the Damages that have been or may be suffered and the provisions under this Agreement on which such claim is based. The Indemnified Person and the Indemnifying Person agree to keep each other reasonably appraised of any additional information concerning any Indemnity Claim.
 
(b)       Subject to the limitations set forth in Section 7.05 and this Section 7.06 and subject to the Indemnifying Person’s prior confirmation in writing to the Indemnified Person(s) that the Indemnity Claim is covered as an indemnified claim under this Agreement within 30 days of receipt of a Claim Notice from the Indemnified Person, the Indemnifying Person will be entitled to assume control of and appoint lead counsel reasonably satisfactory to the Indemnified Person
 
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for such defense, at the cost of the Indemnifying Person. The Indemnifying Person will keep the Indemnified Person(s) advised of the status of Third‑Party Claim and the defense of any such Third‑Party Claim on a reasonably current basis. The Indemnifying Person also agrees to consider in good faith the recommendations made by the Indemnified Person(s) with respect to the defense of the Third‑Party Claim. The Indemnifying Person shall be liable for the fees and expenses of counsel employed by the Indemnified Person(s) for any period after the applicable Claim Notice is delivered during which the Indemnifying Person has failed to assume the defense of the Third‑Party Claim. If the Indemnifying Person assumes the control of the defense of any Third‑Party Claim in accordance with the provisions of this Section 7.06, the Indemnified Person(s) will be entitled to participate in the defense of any such Third‑Party Claim. At its own expense, the Indemnified Person(s) may engage separate counsel of its choice for such purpose, it being understood, however, that the Indemnifying Person will continue to control such defense. Notwithstanding the foregoing, the Indemnifying Person will not be able to control the defense of any Third‑Party Claim if such control or defense: (i) would lead to a conflict or potential conflict of interest under applicable standards of professional conduct, between the Indemnified Person and the Indemnifying Person; or (ii) such Third‑Party Claim is (A) for equitable or injunctive relief or any Claim that would impose criminal liability, (B) the Third‑Party Claim alleges Damages in excess of the Indemnifying Person’s maximum indemnification obligations under this Agreement, (C) the assumption of defense of the Third Party Claim by the Indemnifying Party is reasonably likely to cause a Parent Indemnified Person to lose coverage under the CORR R&W Insurance Policy, or (D) a Parent Indemnified Person or the insurer is required to assume the defense of such Third Party Claim pursuant to the CORR R&W Insurance Policy.
 
(c)          Subject to Section 7.06(d), if the Indemnifying Person does not expressly elect to assume the defense of such Third‑Party Claim within the time period and otherwise in accordance with Section 7.06(a), is not otherwise entitled to assume the defense of such Third‑Party Claim under the last sentence of Section 7.06(b) or after assuming the defense of a Third‑Party Claim, fails to take commercially reasonable steps necessary to diligently defend such Third‑Party Claim, the Indemnified Person(s) shall have the sole right to assume the defense of and to settle such Third‑Party Claim, at the cost and expense of the Indemnifying Person.
 
(d)       If the Indemnified Person has assumed the defense of a Third‑Party Claim pursuant to this Section 7.06: (i) it shall use commercially reasonable efforts to diligently defend such Third‑Party Claim; (ii) it will keep the Indemnifying Person advised of the status of such Third‑Party Claim and the defense thereof on a reasonably current basis; (iii) it will reasonably consult with the Indemnifying Person with respect to the defense and settlement of the Third‑Party Claim; (iv) it will consider in good faith the recommendations made by the Indemnifying Person with respect thereto; and (v) it will not agree to any settlement thereof without the written consent of the Indemnifying Person (which consent shall not be unreasonably withheld, delayed or conditioned).
 
(e)         Notwithstanding the foregoing, the Indemnifying Person will obtain the prior written consent of the Indemnified Person(s) before entering into any settlement, compromise, admission or acknowledgement of the validity of such Indemnity Claim if the settlement requires: (i) an admission of guilt or wrongdoing on the part of the Indemnified Person(s); (ii) subjects the Indemnified Person(s) to criminal liability; (iii) does not unconditionally release the Indemnified Person(s) from all liabilities and obligations with respect to such Indemnity Claim; or (iv) the
 
55

settlement imposes injunctive or other equitable relief against, or any continuing obligation or payment requirement on, the Indemnified Person(s). In addition, the Indemnified Person(s) will be entitled to participate in the defense of such Indemnity Claim and to engage separate counsel of its choice for such purpose at its own cost and expense if: (A) the engagement of such counsel or incurrence of such expenses shall have been specifically authorized in writing by the Indemnifying Person; or (B) the named parties to the Third‑Party Claim include both an Indemnified Person(s) and an Indemnifying Person, and the Indemnified Person(s) reasonably determines after consultation with outside legal counsel that representation by counsel to the Indemnifying Person of both the Indemnifying Person and the Indemnified Person(s) would present such counsel with a conflict of interest.
 
(f)          In the case of an Indemnity Claim that is not a Third‑Party Claim (a “Direct Claim”), the Indemnifying Person shall have 30 days from its receipt of the Claim Notice to either: (i) admit its obligation to provide indemnification; (ii) agree that the Indemnified Person(s) is entitled to receive part, but not all, of the indemnification obligation; or (iii) dispute the Direct Claim for indemnification, and provide a written explanation for its position and supporting documentation. If the Indemnifying Person does not notify the Indemnified Person(s) within thirty (30) days following its receipt of a Claim Notice in respect of a Direct Claim that the Indemnifying Person disputes its liability to the Indemnified Person(s) under this Agreement, such Direct Claim specified by the Indemnified Person(s) in such Claim Notice shall be conclusively deemed a liability of the Indemnifying Person under this Agreement. In such event, subject to Section 7.05, the Indemnifying Person shall pay the amount of such liability to the Indemnified Person(s) on demand. In the event that the Indemnifying Person disputes a Claim Notice for a Direct Claim, the Parties, including appropriate management representatives, shall promptly seek to negotiate a resolution in good faith. If the Parties are unable to resolve the dispute within 120 days after the Indemnifying Person(s) first receives the Claim Notice for a Direct Claim, then the Indemnified Person may seek any remedy available to it under this Agreement.
 
Section 7.07          Exclusive Remedy; Waiver of Remedies. Each Party acknowledges and agrees that, from and after the Closing, (a) the remedies available under Section 6.07(c), this Article VII and Section 8.10 shall be the sole and exclusive remedies of the Parties for any and all Liabilities relating (directly or indirectly) to the subject matter of this Agreement or the transactions contemplated hereby, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity or otherwise; and (b) EACH PARTY AGREES THAT IT SHALL NOT SEEK AND HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, RELEASES, DISCHARGES AND SHALL NOT SUE THE OTHER PARTIES FOR, AND SHALL CAUSE ALL OTHER OF ITS INDEMNIFIED PERSONS NOT TO SEEK, AND TO WAIVE, RELEASE, DISCHARGE, AND NOT SUE THE OTHER PARTIES’ INDEMNIFIED PERSONS FOR, ANY RIGHTS, CLAIMS, CAUSES OF ACTION TO OR FOR INDEMNIFICATION, CONTRIBUTION, COST RECOVERY OR OTHER REMEDY OR RECOURSE (WHETHER ON THE BASIS OF A CLAIM SOUNDING IN TORT, CONTRACT, STATUTE, COMMON LAW OR OTHERWISE) DIRECTLY OR INDIRECTLY WITH RESPECT TO OR IN CONNECTION WITH OR ARISING FROM THE SUBJECT MATTER OF THIS AGREEMENT OUTSIDE OF THE PROVISIONS OF SECTION 6.07(c), THIS ARTICLE VII AND SECTION 8.10. Notwithstanding anything to the contrary contained herein, no limitations (including any survival limitations and other limitations set forth in this Article VII), qualifications or procedures in this
 
56

Agreement shall be deemed to limit or modify the ability of Parent Indemnified Persons to make claims under or recover under the CORR R&W Insurance Policy; it being understood that any matter for which there is coverage available under the CORR R&W Insurance Policy shall be subject to the terms, conditions and limitations, if any, set forth in the CORR R&W Insurance Policy.
 
Section 7.08         Right to Bring Claims. The indemnity of each Party provided in this Article VII shall be for the benefit of, extend to and may be brought and administered by each Person that is a Parent Indemnified Person or a Carlyle/Grier Indemnified Person, as applicable. Each of Parent and Carlyle may elect to exercise or not exercise indemnification rights under this Article VII on behalf of the other Indemnified Persons therefor in its sole discretion and shall have no liability to any such other Indemnified Person for any action or inaction under this Article VII.
 
Section 7.09        Waiver of Damages. IN NO EVENT SHALL ANY PARTY (NOR ANY PARTY’S AFFILIATES, OR ITS OR THEIR PAST, PRESENT OR FUTURE DIRECTOR, OFFICER, EMPLOYEE, INCORPORATOR, MEMBER, PARTNER, STOCKHOLDER, AGENT, ATTORNEY, REPRESENTATIVES) BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES, LOST PROFITS, DIMINUTION IN VALUE, DAMAGE TO REPUTATION OR LOSS TO GOODWILL, WHETHER BASED IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE; PROVIDED, HOWEVER, THAT THIS SECTION 7.09 SHALL NOT LIMIT A PARTY’S RIGHT TO RECOVERY UNDER THIS ARTICLE VII FOR ANY SUCH DAMAGES TO THE EXTENT SUCH INDEMNIFIED PERSON IS REQUIRED TO PAY SUCH DAMAGES TO A THIRD PARTY (WHO IS NOT AN AFFILIATE OF A PARTY) IN CONNECTION WITH A MATTER FOR WHICH SUCH PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION UNDER THIS ARTICLE VII.
 
Section 7.10         Determination of Amount of Damages. The amount of any Damages for which indemnification is provided under this Article VII will be limited to the Damages actually suffered by the Indemnified Person and will be computed net of (a) any insurance or other proceeds actually received by the Indemnified Person in connection with such Damages, net, in each case, of any reasonable costs incurred to recover such proceeds (including any related retrospective premium adjustments resulting from assertion of such claims) or (b) any indemnity, contribution or other similar payment the Indemnified Person actually received from any Person with respect to such Damages, net, in each case, of reasonable costs incurred in obtaining such recovery. Any Indemnified Person that becomes aware of Damages for which it intends to seek indemnification under this Agreement shall, at the sole cost and expense of the Indemnifying Person, use commercially reasonable efforts to mitigate such Damages and make and pursue such claims for any amounts to which it may be entitled under insurance policies or under indemnification agreements with third parties as are reasonably requested by the Indemnifying Person. Under no circumstances shall the possibility of a future insurance recovery be a basis for reducing the Damages subject to indemnification under this Agreement prior to the actual receipt of such recovery, or for limiting, postponing or delaying satisfaction of any indemnification obligation under this Agreement or any Indemnified Person’s right to be indemnified. If, however, any third‑party recovery or insurance recovery is actually received by the Indemnified Person after having previously received indemnity claim proceeds under this Agreement, such Indemnified Person will promptly tender to the respective Party an amount equal to the applicable net proceeds
 
57

of such third‑party recovery or insurance recovery up to the amount of any indemnification payments made in respect of such Damages.
 
ARTICLE VIII
MISCELLANEOUS
 
Section 8.01        Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties. Notwithstanding the foregoing, Carlyle may assign its right to take possession of the GIGS Assets at the Closing pursuant to this Agreement to (a) any of its Affiliates or (b) Crimson Gulf Holdings or any of its Subsidiaries, in each case upon written notice to Parent at or prior to the Closing. Subject to the preceding sentences of this Section 8.01, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 8.01 shall be null and void.
 
Section 8.02       Notices . Any notice, request, demand or other communication required or permitted to be given to a Party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed given under this Agreement on the earliest of: (a) the date of personal delivery, (b) the date of transmission by email, with confirmation of receipt requested or received, (c) one day after deposit with a nationally recognized courier or overnight service such as Federal Express, or (d) five days after mailing via certified mail, return receipt requested. All notices not delivered personally or by email will be sent with postage and other charges prepaid and properly addressed to the Party to be notified at the address set forth for such Party:
 
If to the Company or J. Grier:
 
Crimson Midstream Holdings, LLC
1801 California Street, Suite 3600
Denver, CO 80202
Attention: John D. Grier
Email: jgrier@crimsonml.com

with a copy to (which shall not constitute notice):
 
Lewis, Ringelman & Fanyo P.C.
1515 Wynkoop Street, Suite 700
Denver, Colorado
Attention: David J. Ringelman
Email: dringelman@lewisringelman.com
 
If to Carlyle:
 
CGI Crimson Holdings, L.L.C.
c/o Carlyle Investment Management, LLC
1001 Pennsylvania Avenue, NW

58

Washington, DC 20005
Attention: Ferris Hussein
Email: ferris.hussein@carlyle.com

with copy to (which shall not constitute notice):
 
Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Attention:  Will Mabry
Email:    will.mabry@kirkland.com
 
If to Parent:
 
CorEnergy Infrastructure Trust, Inc.
1100 Walnut Street, Suite 3350
Kansas City, Missouri 64106
Attention: David J. Schulte
Email: dschulte@corenergy.reit
 
with a copy to (which shall not constitute notice):
 
Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
Attention: Steven F. Carman
Email: steve.carman@huschblackwell.com
 
Any Party (and such Party’s permitted assigns) may change such Party’s address for receipt of future notices hereunder by giving written notice to the other Parties.
 
Section 8.03         Governing Law; Waiver of Jury Trial.
 
(a)          This Agreement and the performance of the transactions and the obligations of the Parties hereunder shall be governed by, and construed and enforced in accordance with, the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
 
(b)        THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE DELAWARE CHANCERY COURT LOCATED IN WILMINGTON, DELAWARE, OR, IF SUCH COURT DOES NOT HAVE JURISDICTION, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA OR OTHER DELAWARE STATE COURT LOCATED IN THE STATE OF DELAWARE AND APPROPRIATE APPELLATE COURTS THEREFROM, AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE, CONTROVERSY OR CLAIM MAY BE HEARD AND DETERMINED IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY OBJECTION
 
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WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE, CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY OR CLAIM. EACH PARTY AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.
 
(c)         THE PARTIES WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH.
 
Section 8.04        Entire Agreement. This Agreement, the Confidentiality Agreements and the Transaction Documents, together with the certificates, documents, instruments and writings that are delivered pursuant thereto, constitute the entire agreement and understanding of the Parties in respect of its subject matters and supersede all prior understandings, agreements or representations by or among such Parties, written or oral, to the extent they relate in any way to the transactions contemplated hereby or the subject matter hereof. The Parties hereby agree that the Confidentiality Agreements shall remain in full force and effect from and after the Closing in accordance with their respective terms.
 
Section 8.05        Counterparts. This Agreement may be executed in two or more counterparts (including by electronic means), each of which will be deemed an original but all of which together will constitute one and the same instrument. This Agreement shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. The delivery of signed counterparts by email transmission which includes a copy of the sending Party’s signature(s) is as effective as signing and delivering the counterpart in Person.
 
Section 8.06      Amendments and Waivers. This Agreement may not be amended, modified, superseded or replaced, and no provisions hereof may be waived, without the written consent of all Parties. No action taken pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by Law.
 
Section 8.07         Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision hereof will not affect the validity or enforceability of the other provisions hereof; provided that, if any provision of this Agreement, as applied to any Party or to any circumstance, is adjudged by a court, governmental body, arbitrator or mediator not to be enforceable in accordance with its terms, the Parties agree that the court, governmental body, arbitrator or mediator making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, or to
 
60

delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
 
Section 8.08       Titles and Subtitles . The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.
 
Section 8.09       Construction. The Parties have jointly participated in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party because of the authorship of any provision of this Agreement. Any reference to any federal, state, local or foreign Law will also be deemed to refer to such Law as amended and all rules and regulations promulgated thereunder, unless the context otherwise requires. The words “including,” “includes” and “include” shall be deemed to be followed by “without limitation.” Unless the context otherwise requires, the word “or” shall not be deemed to be exclusive. Pronouns in masculine, feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” herein, “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The Parties intend that each representation, warranty and covenant contained herein will have independent significance.
 
Section 8.10        Specific Performance. The Parties agree that irreparable damage would occur and that the Parties would not have any adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each Party agrees that each other Party (not including any Party who is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement) shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case, in accordance with this Section 8.10 in the Delaware Court of Chancery. Each of the Parties agrees it will not raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of this Agreement, including that it will not oppose the granting of an injunction or specific performance as provided in this Section 8.10 on the basis that (a) the applicable Party has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity. Each Party further agrees that no Party shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 8.10. Each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
 
Section 8.11         No Third‑Party Beneficiaries . This Agreement shall not confer upon any Person other than the Parties any rights (including third‑party beneficiary rights or otherwise) or remedies under this Agreement, except for the provisions of Sections 6.05(a) and 6.05(b) (Release), Article VII (Indemnification), Section 8.12 (No Recourse Against Others) and this Section 8.11 (No Third‑Party Beneficiary).
 
Section 8.12          No Recourse Against Others.
 
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(a)          All Proceedings (whether in contract or in tort, at law or in equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are expressly limited to) the Parties. No Person other than the Parties, including no member, partner, stockholder, Affiliate or Representative thereof, nor any member, partner, stockholder, Affiliate or Representative of any of the foregoing (each a “No Recourse Party”), shall have any liability (whether in contract or in tort, at law or in equity, or granted by statute) for any Proceedings or Liabilities arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance or breach; and, to the maximum extent permitted by Law, each of the Parties hereby waives and releases all such Proceedings and Liabilities against any such No Recourse Party.
 
(b)          Without limiting the foregoing, to the maximum extent permitted by Law, (i) each of the Parties hereby waives and releases any and all Proceedings and Liabilities that may otherwise be available at law or in equity, or granted by statute, to avoid or disregard the entity form of the other or otherwise impose liability of the other on any No Recourse Party, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization or otherwise; and (ii) each of the Parties disclaims any reliance upon any No Recourse Party with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement.
 
Section 8.13        Incorporation. The exhibits and schedules identified in this Agreement are incorporated herein by reference and made a part hereof.
 
[Signature Pages Follow]

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IN WITNESS WHEREOF, the Parties have executed this Membership Interest Purchase Agreement as of the day and year first above written.

COMPANY:
CRIMSON MIDSTREAM HOLDINGS, LLC
   
  By:
/s/ John D. Grier
 
Name:
John D. Grier
 
Title: 
Chief Executive Officer

J. GRIER:
 
 
/s/ John D. Grier
 
John D. Grier

Signature Page to Membership Interest Purchase Agreement


CARLYLE:
CGI CRIMSON HOLDINGS, L.L.C.
   
 
By:
/s/ Ferris Hussein
 
Name:
Ferris Hussein
 
Title:
Managing Director

Signature Page to Membership Interest Purchase Agreement
 


PARENT:
CORENERGY INFRASTRUCTURE TRUST, INC.
 
 
By:
/s/ David J. Schulte
 
Name: 
David J. Schulte
 
Title:   
Executive Chairman, CEO and President

Signature Page to Membership Interest Purchase Agreement


Exhibit D
Execution Version

CGI Crimson Holdings, L.L.C.
1001 Pennsylvania Avenue, NW
Washington, DC 20004

February 4, 2021

CorEnergy Infrastructure Trust, Inc.
1100 Walnut Street, Suite 3350
Kansas City, Missouri 64106
Attn:     David J. Schulte

Crimson Midstream Holdings, LLC
1801 California Street, Suite 3600
Denver, Colorado 80202
Attn:     John D. Grier

Re: Right of First Refusal and Non-Competition

Reference is made to that certain Membership Interest Purchase Agreement, by and among CGI Crimson Holdings, L.L.C., a Delaware limited liability company (“Carlyle”), Crimson Midstream Holdings, LLC, a Delaware limited liability company (“CMH”), CorEnergy Infrastructure Trust, Inc., a Maryland corporation (“CORR”), and the other parties thereto, dated as of the date hereof (the “MIPA”).  Each of Carlyle, CMH and CORR are individually referred to herein as a “Party” and collectively the “Parties.”

The purpose of this letter agreement (this “Letter Agreement”) is to set forth the agreement among Carlyle, CMH, CORR and Crescent Midstream Holdings, LLC, a Delaware limited liability company (“Gulf”), regarding (i) the grant by CMH to Carlyle of a right of first refusal with respect to the installation of communications fiber optic cables that involve the use of the Company Rights of Way (as defined in the MIPA) in the possession of CMH at the time of execution of the MIPA (“Qualifying ROW”) and (ii) certain non-competition obligations of the Parties, in each case in accordance with the terms of this Letter Agreement.

1.
Right of First Refusal.

(a)        If, during the two-year period commencing as of the date of this Letter Agreement (“ROFR Term”), CORR, CMH or their respective Affiliates (each, an “Offering Party”) determines the commercial viability of a fiber optic cable installation opportunity that involves the use of any portion of the Qualifying ROW (each, a “Qualifying Business Opportunity”), or if any Person presents a Qualifying Business Opportunity to an Offering Party, then such Offering Party shall, within ten (10) business days after the determination or presentation of any such Qualifying Business Opportunity, furnish written notice (a “ROFR Notice”) to Carlyle offering Carlyle the right to invest up to 50% of the required capital to be invested by CORR, CMH, and any of their respective Affiliates with respect to such Qualifying Business Opportunity, which ROFR Notice shall contain all known proposed terms and provisions of such Qualifying Business Opportunity.  Carlyle shall then have twenty (20) days following receipt of the ROFR Notice to elect to
 

participate in the Qualifying Business Opportunity on the terms set forth in such ROFR Notice.  If Carlyle so elects to participate in a Qualifying Business Opportunity, Carlyle or its designated Affiliate shall be permitted to invest up to 50% of the required capital to be invested by CORR, CMH, and any of their respective Affiliates in connection with such Qualifying Business Opportunity on the terms set forth in the ROFR Notice; provided that, in addition to any capital required to be funded by CORR, CMH or their respective Affiliates in connection with such Qualifying Business Opportunity, CORR may charge fair market rent as part of the overall economic arrangement between Carlyle (or its Affiliate), on the one hand, and CORR, CMH or their respective Affiliates, on the other hand.  If Carlyle either declines to participate in a Qualifying Business Opportunity following the receipt of a ROFR Notice in accordance with the terms of this Letter Agreement or fails to provide unqualified written notice of its election to participate in such Qualifying Business Opportunity within twenty (20) days of receipt of a ROFR Notice, Carlyle shall be deemed to have waived its rights pursuant to this Section 1(a) and CORR, CMH or their respective Affiliates shall be free to pursue such Qualifying Business Opportunity on such terms as may be negotiated by them without submitting an additional ROFR Notice.
 
(b)       In addition to the rights provided to Carlyle pursuant to Section 1(a), in the event Carlyle presents a Qualifying Business Opportunity to CORR or CMH, CORR or CMH during the ROFR Term, as applicable, shall negotiate the terms of such Qualifying Business Opportunity and the relative participation of Carlyle, CMH and CORR, as applicable, with respect thereto; provided that (i) Carlyle shall have the right to invest up to 50% of the required capital in connection with such any such Qualifying Business Opportunity, (ii) CORR may charge fair market rent as  contemplated in Section 1(a) above, and (iii) CORR will receive the same pro rata investment economics as Carlyle as part of the economic arrangement related to any Qualifying Business Opportunity presented to CMH or CORR by Carlyle.

2.
Non-Competition.

(a)       At all times during the Restricted Period (as defined below), none of CORR, CMH or their respective Affiliates (each, a “Restricted Party”) shall, directly or indirectly, either alone or in association with any other Person, or as a sole proprietor, partner, director, officer, principal, agent, employee or executive engage in any Gulf Restricted Business (as defined below).  Notwithstanding the foregoing, nothing herein shall prohibit any Restricted Party from acquiring any portfolio of assets of which less than twenty-five percent (25%) of the value of such portfolio of assets constitutes Gulf Restricted Business (a “Permitted Acquisition”).  In the event a Restricted Party desires to conduct Gulf Restricted Business that is not a Permitted Acquisition, it shall present such Gulf Restricted Business to Gulf via written notice, which written notice shall contain all known proposed terms and provisions of the Gulf Restricted Business.  Gulf shall then have ten (10) days from the receipt of such notice to elect to pursue the Gulf Restricted Business described therein.  If Gulf declines to pursue such Gulf Restricted Business or otherwise fails to demonstrably pursue such Gulf Restricted Business within such ten (10) day period, then the applicable Restricted Party shall be free to pursue such Gulf Restricted Business notwithstanding the limitations set forth in this Section 2(a).

(b)          For purposes of this Letter Agreement:

2

Gulf Restricted Business” shall mean any business or line of business that is in direct, verifiable competition with the business of Gulf and its Subsidiaries within the Gulf of Mexico.  For the sake of clarity, the limitation applies to businesses with pipeline, storage or processing assets chiefly offshore Louisiana or, if onshore, south of St. James, Louisiana.  “Gulf Restricted Business” shall not include any business offered for investment as a result of a solicitation of interest to any Restricted Party other than directly and privately presented to John D. Grier.

Restricted Period” shall mean the period beginning as of the date of this Letter Agreement and ending on the earlier of the date that is five (5) years from the date of this Letter Agreement or the date on which neither John D. Grier nor any of his Affiliates own both:  (i) any equity interests in Gulf or its Affiliates, and (ii) a greater than five percent (5%) interest in the common stock of CORR or a more than five percent (5%) interest in CMH.

3.
Insurance.

(a)        Each of the Parties agrees and acknowledges that, prior to the consummation of the transactions contemplated by the MIPA, CMH and its Subsidiaries maintained (and continue to maintain) certain insurance policies for the benefit of CMH and its Subsidiaries (which include Gulf and its Subsidiaries (the “Gulf Group”) prior to giving effect to the transactions contemplated by the MIPA) (such insurance policies, collectively the “Insurance Policies”).  Despite the fact that, from and after the date of this Letter Agreement, the Gulf Group are not Subsidiaries of CMH, CMH shall continue to maintain the Insurance Policies in full force and effect from the date of this Letter Agreement until June 1, 2021 (or such earlier date as mutually agreed amongst the Parties) (the “Termination Date”) in accordance with their respective terms and this Letter Agreement for the benefit of CMH and its Subsidiaries (after giving effect to the transactions contemplated by the MIPA, the “CMH Group”), on the one hand, and the Gulf Group, on the other hand.

(b)        If, prior to the Termination Date, either a member of the CMH Group or a member of the Gulf Group, as applicable, suffers insurable losses that are reasonably expected in the good faith judgment of the applicable member of the CMH Group or the Gulf Group to result in the reduction of the liability limit policies below $100,000,000 in the aggregate pursuant to the applicable Insurance Policies, CMH (if a member of the CMH Group incurred the insurable loss) or Gulf (if a member of the Gulf Group incurred the relevant insurable loss), as applicable, shall purchase, within five Business Days of the incident giving rise to the insurable loss, an insurance policy for the benefit of the Gulf Group or the CMH Group, respectively (and naming the Gulf Group or the CMH Group, as applicable, as the covered parties thereunder), resulting in a total liability limit available, to the entity not incurring the loss, of $100,000,000 taking into account any estimated remaining coverage.  This obligation applies to liability limits including sudden and accidental pollution.  Each of the CMH Group and the Gulf Group shall pay any deductibles required to be paid pursuant to the Insurance Policies in connection with any claim made by the CMH Group or the Gulf Group, respectively, thereunder.

4.           Notices.  All notices and other communications required or desired to be given hereunder must be in writing and shall be deemed to have been duly given if delivered in person or by courier or mailed by registered or certified mail (postage prepaid, return receipt requested), by a national
3

overnight delivery service or by electronic mail (with confirmation of receipt) to the relevant Party at the following addresses:

If to CORR:

CorEnergy Infrastructure Trust, Inc.
1100 Walnut Street, Suite 3350
Kansas City, Missouri 64106
Attention: David J. Schulte
Email: dschulte@corenergy.reit

with a copy to (which shall not constitute notice):

Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
Attention: Steven F. Carman
Email: steve.carman@huschblackwell.com

If to CMH:

Crimson Midstream Holdings, LLC
1801 California Street, Suite 3600
Denver, Colorado 80202
Attention: John D. Grier
Email: jgrier@crimsonml.com

with a copy to (which shall not constitute notice):

Lewis, Ringelman & Fanyo P.C.
1515 Wynkoop Street, Suite 700
Denver, Colorado
Attention: David J. Ringelman
Email: dringelman@lewisringelman.com
 
If to Carlyle:
 
CGI Crimson Holdings, L.L.C.
c/o Carlyle Investment Management, LLC
1001 Pennsylvania Avenue, NW
Washington, DC 20005
Attention: Ferris Hussein
Email: ferris.hussein@carlyle.com

5.
Governing Law.  This Letter Agreement shall be governed by the governing law, consent to jurisdiction and waiver of jury trial right provisions set forth in Section 8.03 of the MIPA as if such provisions were set forth herein, mutatis mutandis.

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6.
Specific Performance.  The Parties acknowledge and agree that in the event that any of the agreements, covenants or obligations under this Letter Agreement are not performed by a Party in accordance with their specific terms or are otherwise breached by a Party, the other Party would be damaged irreparably.  Accordingly, each Party agrees that, in addition to any other remedy to which the Parties are entitled at law or in equity, the Parties shall be entitled to injunctive relief to prevent any such breaches of this Letter Agreement and to otherwise enforce specifically this Letter Agreement and the terms and provisions hereof in court.

7.
Amendments.  No amendments, waivers or other modifications of terms of this Letter Agreement shall be effective or binding on the Parties unless they are written and signed by the Parties. Whenever possible, each provision or part of this Letter Agreement shall be interpreted in such manner as to be valid and effective under applicable laws, but if any provision or part of this Letter Agreement or the application of any such provision or part thereof to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or part of this Letter Agreement.

8.
Assignment.  This Letter Agreement may not be assigned, either in whole or in part, without the express prior written consent of the non-assigning Parties in such Parties’ sole discretion.  The terms, covenants and conditions contained in this Letter Agreement are binding upon and inure to the benefit of the Parties and their successors and permitted assigns.

9.
Final Agreement.  This Letter Agreement (a) represents the final agreement between the Parties, constitutes the entire understanding and agreement of the Parties, and supersedes all prior and contemporaneous negotiations, understandings, letters of intent and agreements (whether oral or written) relating to the subject matter hereof, and (b) may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the Parties.  There are no, and no Party shall have any remedies or causes of action (whether in contract or in tort, or under any other legal theory) for any restrictions, promises, statements, warranties, covenants or undertakings, other than those expressly set forth or referred to in this Letter Agreement.

10.
Legal Review.  Each Party has had an adequate opportunity to review each and every provision of this Letter Agreement and to submit the same to legal counsel for review and advice.  Based on the foregoing, the rule of construction, if any, that a contract be construed against the drafter shall not apply to interpretation or construction of this Letter Agreement.

11.
Execution.  This Letter Agreement may be executed in one or more counterparts (including by means of signature pages delivered by facsimile transmission or electronic mail) (including being delivered by means of a facsimile or portable document format (*.pdf)), each of which will be deemed an original and all of which, when taken together, will constitute one valid and binding agreement effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Parties. Facsimile or
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scanned and emailed transmission of any signed original document or retransmission of any signed facsimile or scanned and emailed transmission will be deemed the same as delivery of an original. At the request of any Party, the Parties will confirm facsimile or scanned and emailed transmission by signing a duplicate original document.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the undersigned have entered into this Letter Agreement as of the date first written above.
 
 
CMH:
 
CRIMSON MIDSTREAM HOLDINGS, LLC
    
 
By:
/s/ John D. Grier
 
Name:
John D. Grier
 
Title:
Chief Executive Officer
     
 
CARLYLE:
 
CGI CRIMSON HOLDINGS, L.L.C.
     
 
By:
/s/ Ferris Hussein
 
Name:
Ferris Hussein
 
Title:  
Managing Director
     
 
CORR:
 
CORENERGY INFRASTRUCTURE TRUST, INC.
     
 
By:
/s/ David J. Schulte
 
Name:
David J. Schulte
 
Title:
Executive Chairman, CEO and President
     
 
GULF:
 
CRESCENT MIDSTREAM HOLDINGS, LLC
     
 
By:
/s/ Jeremiah Ashcroft
 
Name:
Jeremiah Ashcroft
 
Title:
Chief Executive Officer

Signature Page to Golden Letter Agreement



EX-2.2 3 brhc10019770_ex2-2.htm EXHIBIT 2.2

Exhibit 2.2

CONTRIBUTION AGREEMENT
 
Dated as of February 4, 2021
 
By and Among
 
CORENERGY INFRASTRUCTURE TRUST, INC.,
a Maryland corporation
 
CORRIDOR INFRATRUST MANAGEMENT, LLC,
a Delaware limited liability company
 
and
 
THE CONTRIBUTORS,
(as that term is defined in the preamble)


CONTRIBUTION AGREEMENT
 
THIS CONTRIBUTION AGREEMENT (this "Agreement") is executed as of February 4, 2021 (the "Effective Date"), by and among the individuals whose names are listed as the "Contributors" on the signature page below (each, a "Contributor" and collectively, the "Contributors"), Corridor InfraTrust Management, LLC, a Delaware limited liability company (the "Manager"), and CorEnergy Infrastructure Trust, Inc., a Maryland corporation (the "REIT"). Capitalized terms used but not defined herein shall have the respective meanings set forth on Exhibit A.
 
RECITALS
 
WHEREAS, the Contributors currently own one hundred percent (100%) of the membership interests in the Manager, which interests represent all of the issued and outstanding membership interests in the Manager (the "Membership Interests");
 
WHEREAS, the Manager was created, in part, to provide management and administrative services to the REIT pursuant to a certain Management Agreement dated as of May 8, 2015 as amended to date including by that certain First Amendment to Management Agreement dated as of February 4, 2021 (as so amended, the "Management Agreement"), and a certain Third Amended Administration Agreement dated as of August 7, 2012 as amended to date (as so amended, the "Administration Agreement" and together with the Management Agreement, the "Advisory Agreements");
 
WHEREAS, effective as of the Closing, (i) the Contributors will contribute and assign to the REIT, all of their rights, title and interest in and to the Membership Interests, all as more particularly set forth herein, and (ii) the Contributors will each receive from the REIT the Contribution Consideration (as defined below), all as more particularly set forth herein; and
 
WHEREAS, a special committee of independent members of the REIT's Board of Directors (the "Special Committee") and the REIT's Board of Directors have reviewed and evaluated the Transactions and determined that the Transactions, and the entering into by the REIT of this Agreement, are in the best interest of the REIT and its stockholders.
 
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement, the parties hereto, intending to be legally bound hereby, agree as follows:
 
ARTICLE I
CONTRIBUTION
 
Section 1.01         CONTRIBUTION TRANSACTION.
 
(a)          Consideration. At the Closing, the Contributors shall contribute to the REIT all of their right, title and interest in and to the Membership Interests (the "Contribution"). In exchange for the Contributors' contribution of the Membership Interests, the REIT shall: (i) issue to the Contributors 1,153,846 shares of its currently outstanding class of common stock (the "Common Stock"), in the aggregate, with the number of shares of Common Stock each Contributor is entitled to receive in exchange for its Contribution of Membership Interests being equal to such
 
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Contributor's Pro Rata Share of such aggregate number of shares of Common Stock in this clause (i) of Section 1.01(a); (ii) issue to the Contributors 683,761 shares of its new series of common stock being designated as Class B Common Stock (the "Class B Stock"), in the aggregate, with the number of shares of Class B Stock each Contributor is entitled to receive in exchange for its Contribution of Membership Interests being equal to such Contributor's Pro Rata Share of such aggregate number of shares of Class B Stock in this clause (ii) of Section 1.01(a); and (iii) issue to the Contributors 170,213 depositary shares, each representing 1/100th of a whole share of its 7.375% Series A Cumulative Redeemable Preferred Stock (such depositary shares to be referred to herein as the "Series A Preferred" and, together with the Common Stock and the Class B Stock, the "REIT Stock") in the aggregate, with the number of shares of Series A Preferred each Contributor is entitled to receive in exchange for its Contribution of Membership Interests being equal to such Contributor's Pro Rata Share of such aggregate number of shares of Series A Preferred in this clause (iii) of Section 1.01(a) (collectively, the "Contribution Consideration").
 
(b)          Adjustments. If, between the date of this Agreement and the Closing Date, the outstanding shares of REIT Stock shall have been changed into a different number of shares or a different class as a result of a reclassification, recapitalization, stock split or combination, exchange or readjustment, stock dividend or other similar change in capitalization, an appropriate and proportionate adjustment shall be made to the shares of REIT Stock to be delivered pursuant to this Section 1.01, as applicable.
 
Section 1.02          INTENDED TAX TREATMENT.  The REIT, the Manager and the Contributors intend that the transactions undertaken pursuant to this Agreement will be treated for all United States federal, state and local income Tax purposes as (a) a taxable sale of the Membership Interests by the Contributors under Section 1001 of the Code and (b) a purchase by the REIT of the Manager's asset (the "Intended Tax Treatment"). Unless otherwise required by a final determination within the meaning of Section 1313(a) of the Code (or a similar determination under applicable state or local Law), the REIT, the Manager and the Contributors shall file all United States federal, state and local Tax Returns in a manner consistent with such Intended Tax Treatment and shall take no position inconsistent with such treatment.
 
ARTICLE II
CLOSING
 
Section 2.01       CLOSING. The closing of the Transactions (the "Closing") will take place within seven calendar days following the REIT Stockholder Approval. The date on which the Closing actually takes place is referred to as the "Closing Date".
 
Section 2.02         CONDITIONS PRECEDENT.
 
(a)          Closing Actions and Documents. At the Closing, the following events shall occur and the following closing documents shall be delivered by and to the parties specified below:
 
(i)          the REIT shall deliver to the each Contributor (A) a share certificate, or shall make a book entry on the records of the transfer agent for the Common Stock, representing such Contributor's Pro Rata Share of the aggregate number of shares of Common Stock identified in clause (i) of Section 1.01(a), registered in the name of such Contributor, (B) a share certificate,
 
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or shall make a book entry on the records of the transfer agent for the Class B Stock, representing such Contributor's Pro Rata Share of the aggregate number of shares of Class B Stock identified in clause (ii) of Section 1.01(a), registered in the name of such Contributor and (C) a share certificate, or shall make a book entry on the records of the transfer agent for the Series A Preferred, representing such Contributor's Pro Rata Share of the aggregate number of shares of Series A Preferred identified in clause (iii) of Section 1.01(a), registered in the name of such Contributor;
 
(ii)          Each Contributor shall execute and deliver to the REIT an assignment with respect to such Contributor's Membership Interests, substantially in the form of Exhibit B (each, an "Assignment");
 
(iii)          an acknowledgement of the termination of the Advisory Agreements shall be executed by the REIT and the Manager, providing that the Advisory Agreements, following such termination, shall be void and shall have no effect, and no party thereto shall have any liability to the other party or parties thereto or their respective Affiliates, or their respective directors, officers or employees, except as expressly contemplated herein, except that nothing therein shall relieve any party from liability for any fees or expenses accrued through such termination or for any breach of the Advisory Agreements that arose prior to such termination; and;
 
(iv)          such other documents shall be executed and delivered, and such items shall be done, as may be reasonably required to effect the consummation of the Transactions, in accordance with the terms of this Agreement.
 
(b)          Closing Conditions. The respective obligations of each party to effect the Closing are subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions that run in the favor of such party:
 
(i)          For the benefit of the Contributors:
 
(A)          (1) each of the representations and warranties of the REIT set forth herein that is qualified by reference to materiality or Material Adverse Effect shall be true and correct in all respects, and each of the other representations and warranties of the REIT set forth herein shall be true and correct in all material respects, in each case, as of the Closing Date (except in any case the representations and warranties that expressly speak as of a specified date or time need only be true and correct in all respects or true and correct in all material respects, as the case may be, as of such specified date or time); and (2) all of the covenants and agreements of the REIT set forth herein and required to have been performed as of the Closing Date shall have been performed in all material respects as of the Closing Date;
 
(B)          There shall not have occurred a Material Adverse Effect with respect to the REIT;
 
(C)          The execution and delivery of the documents required to be executed and delivered by the REIT pursuant to Section 2.02(a) and the execution and delivery by the REIT of a registration rights agreement in the form attached as Exhibit C to this Agreement for each of the Contributors; and
 
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(D)          The Contributors shall have received a certificate, in form and substance reasonably satisfactory to the Manager, executed by the Secretary of the REIT, to the effect of clauses (A) and (B) above.
 
(ii)          For the benefit of the REIT:
 
(A)          (1) Each of the representations and warranties of the Contributors set forth herein that is qualified by reference to materiality or Material Adverse Effect (including those representations and warranties of any of the Contributors) shall be true and correct in all respects, and each of the other representations and warranties of the Contributors set forth herein (including those representations and warranties of any of the Contributors) shall be true and correct in all material respects, in each case, as of the Closing Date (except in any case the representations and warranties that expressly speak as of a specified date or time need only be true and correct in all respects or true and correct in all material respects, as the case may be, as of such specified date or time); and (2) all of the covenants and agreements of the Contributors set forth herein and required to have been performed as of the Closing Date (including those covenants and agreements of any of the Contributors) shall have been performed in all material respects as of the Closing Date;
 
(B)          The REIT shall have received a certificate, in form and substance reasonably satisfactory to the REIT, executed by the Contributors, to the effect of clause (A) above;
 
(C)          (1) Each of the representations and warranties of the Manager set forth herein that is qualified by reference to materiality or Material Adverse Effect shall be true and correct in all respects, and each of the other representations and warranties of the Manager set forth herein shall be true and correct in all material respects, in each case, as of the Closing Date (except in any case the representations and warranties that expressly speak as of a specified date or time need only be true and correct in all respects or true and correct in all material respects, as the case may be, as of such specified date or time); and (2) all of the covenants and agreements of the Manager set forth herein and required to have been performed as of the Closing Date shall have been performed in all material respects as of the Closing Date;
 
(D)          There shall not have occurred a Material Adverse Effect with respect to the Manager;
 
(E)          The REIT shall have received a certificate, in form and substance reasonably satisfactory to the REIT, executed by the Secretary (or other executive officer) of the Manager, to the effect of clauses (C) and (D) above; and
 
(F)          The execution and delivery of the documents required to be executed and delivered by the Contributors (or by any of the Contributors) pursuant to Section 2.02(a).
 
(iii)          For the benefit of the REIT and the Contributors:
 
(A)          the REIT Stockholder Approval shall have been obtained;
 
(B)          the Advisory Agreements shall have been terminated; and
 
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(C)          (1) no statute, rule, regulation, order, decree or injunction shall have been enacted, entered, promulgated or enforced by a Governmental Authority that prohibits the consummation of the Transactions; (2) no action, suit or proceeding shall be pending before any Governmental Authority which is reasonably likely to result in an injunction, judgment, order, decree or ruling that would prevent the consummation of the Transactions; and (3) any necessary consents and approvals of any Governmental Authority required for the consummation of the Transactions shall have been obtained.
 
Section 2.03          COSTS. The REIT will reimburse the Contributors, in the aggregate and not on an individual basis, for up to $50,000 of the costs and expenses incurred by them in connection with the Transactions. The Contributors shall directly pay for all additional out of pocket costs incurred by the Contributors or the Manager in connection with the Transactions, including any legal fees or fees of any financial, accounting and other advisors incurred by the Contributors for themselves or on behalf of the Manager in connection with the Transactions. The REIT shall directly pay for all costs of the REIT and the Special Committee incurred in connection with the Transactions, including any fees of its legal, financial and accounting advisors. The provisions of this Section 2.03 shall survive the Closing.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES
 
Section 3.01          REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS. Each Contributor hereby, severally and not jointly, represents and warrants to the REIT as follows, except as set forth on the accompanying schedules, as of the Effective Date and as of the Closing Date (except as to any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), which representations and warranties shall survive the Closing to the extent provided in Section 5.01:
 
(a)          Organization and Qualification. Such Contributor has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, the Transaction Documents to which such Contributor is a party and the documents to be executed and delivered by such Contributor pursuant to this Agreement.
 
(b)          Due Authorization; Approvals. The execution and delivery of this Agreement and the Transaction Documents to which such Contributor is a party, and the performance by such Contributor of the Transactions contemplated to be performed by it have been properly entered into on the part of such Contributor. This Agreement constitutes the legal, valid and binding agreement of such Contributor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency or other similar Laws affecting enforcement of creditors' rights and to general principles of equity (the "Enforceability Exceptions").
 
(c)          No Conflict; Legal Compliance. Except as set forth on Schedule 3.01(c), (i) neither the execution, delivery, nor performance of this Agreement by such Contributor, nor any action or omission on the part of such Contributor required pursuant hereto, nor the consummation of the Transactions by such Contributor will (A) result in a breach or violation of, or constitute a default under, any Legal Requirement applicable to such Contributor, or (B) constitute a default or result in the cancellation, termination, acceleration, breach or violation of any agreement, instrument or
 
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other material document to which such Contributor is a party, or give any Person the right to challenge any such transaction, to declare any such default, cancellation, termination, acceleration, breach or violation or to exercise any remedy or obtain any other relief under any such agreement, instrument, indenture or other material document or under any Legal Requirement; and (ii) such Contributor is not, nor will be, required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement that has not already been given or obtained.
 
(d)          Litigation and Default. (i) Such Contributor has not been served with notice of any material legal proceeding against such Contributor related to the Business or the Manager; and (ii) to the Knowledge of such Contributor, no material legal proceeding has been threatened against such Contributor related to the Business or the Manager, nor, to the Knowledge of such Contributor, is there any claim or grounds for any claim that might result in any legal proceeding against such Contributor related to the Business or the Manager.
 
(e)          Ownership of the Equity Interests. Such Contributor owns the Membership Interests set forth opposite such Contributor's name on Schedule 3.01(e). There are no voting trusts, proxies or other agreements or understandings to which such Contributor is a party with respect to the voting of any Equity Interests of the Manager. Immediately following the Closing, the REIT shall own the Membership Interests set forth opposite such Contributor's name on Schedule 3.01(e), free and clear of all mortgages, liens, pledges, charges, claims, security interests, agreements and encumbrances of any nature whatsoever, other than those imposed by Law or resulting from action by the REIT.
 
(f)          Issuance of REIT Stock.
 
(i)          Such Contributor understands that the REIT Stock being issued hereunder has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or under applicable state securities Laws ("Blue Sky Laws"), in reliance upon exemptions contained in the Securities Act and Blue Sky Laws and any applicable regulations promulgated thereunder or interpretations thereof, and cannot be offered for sale, sold or otherwise transferred unless, among other things, such REIT Stock subsequently is so registered or qualifies for exemption from registration under the Securities Act and Blue Sky Laws.
 
(ii)          The REIT Stock is being acquired under this Agreement by such Contributor in good faith solely for its own account for investment and not with a view toward resale or other distribution in violation of the Securities Act, and the REIT Stock shall not be disposed of by such Contributor in contravention of the Securities Act or any applicable Blue Sky Laws.
 
(iii)          Such Contributor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the REIT Stock, and it understands and is able to bear any economic risks associated with such investment (including the inherent risk of losing all or part of its investment in such REIT Stock).
 
(iv)          Such Contributor by virtue of such Contributor's management role in conducting the business of the Manager, is personally and directly familiar with the business that
 
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is conducted and is intended to be conducted by the REIT, including financial matters related to such business, has been given the opportunity to ask questions of, and receive answers from, the officers and directors of the REIT concerning the business and financial affairs of the REIT, and the terms and conditions of its acquisition of REIT Stock hereunder, and has had further opportunity to obtain any additional information desired (including information necessary to verify the accuracy of the foregoing).
 
(v)          Such Contributor has had an opportunity, to the full extent it deemed necessary or desirable, to inform its legal and financial advisers of the terms, nature and risks of investing in the REIT Stock at this time, and to consult with them as appropriate about the investment.
 
(vi)          Such Contributor is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act.
 
(g)          Brokers, Finders and Advisors. Such Contributor has not entered into, and to the Knowledge of such Contributor no other Contributor has entered into, any agreement resulting in, or which will result in, the REIT or any subsidiary thereof having any obligation or liability as a result of the execution and delivery of this Agreement and the consummation of the Transactions for any brokerage, finder or advisory fees or charges of any kind whatsoever.
 
For the avoidance of doubt, each Contributor shall be liable for its own representations and warranties, and will not be held liable for a breach of the representations and warranties of other Contributors.
 
Section 3.02          REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS AND THE MANAGER. The Contributors and the Manager, severally and jointly, hereby represent and warrant to the REIT as follows, except as set forth on the accompanying schedules, as of the Effective Date and as of the Closing Date (except as to any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), which representations and warranties shall survive the Closing to the extent provided in Section 5.01:
 
(a)          Organization and Qualification. The Manager: (A) is a duly formed limited liability company validly existing and in good standing under the Laws of the State of Delaware, and is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, local or foreign) in which it is required to be qualified; and (B) has the requisite limited liability company power and authority to carry on its business as now being conducted, except where the failure to be qualified would not reasonably be expected to result in a Material Adverse Effect with respect to the Manager. The Manager has the full limited liability company power and authority to execute, deliver and perform its obligations under this Agreement, the Transaction Documents to which the Manager is a party and the documents to be executed and delivered by the Manager pursuant to this Agreement. The Manager is not in default under any provision of its certificate of formation, operating agreement or other organizational document.
 
(b)          Due Authorization; Approvals. The execution and delivery of this Agreement and the Transaction Documents to which the Manager is a party, and the performance by the Manager
 
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of the Transactions contemplated to be performed by it, have been approved by all necessary limited liability company action or other proceedings on the part of the Manager. This Agreement has been duly executed and delivered by an authorized person on behalf of the Manager and constitutes the legal, valid and binding agreement of the Manager enforceable against it in accordance with its terms, subject to the Enforceability Exceptions.
 
(c)          No Conflict; Legal Compliance. Except as set forth on Schedule 3.02(c), (i) Neither the execution, delivery, nor performance of this Agreement by the Manager, nor any action or omission on the part of the Manager required pursuant hereto, nor the consummation of the Transactions by the Manager will (A) result in a breach or violation of, or constitute a default under, any Legal Requirement applicable to the Manager, (B) result in a breach of any term or provision of the organizational documents of the Manager or (C) constitute a default or result in the cancellation, termination, acceleration, breach or violation of any agreement (other than the Advisory Agreements), instrument or other material document to which the Manager is a party or by which any of the Manager's properties is bound, or give any Person the right to declare any such default, cancellation, termination, acceleration, breach or violation or to exercise any remedy or obtain any other relief under any such agreement, instrument, indenture or other material document or under any Legal Requirement, except, in the case of (A) or (C), as would not reasonably be expected to result in a Material Adverse Effect with respect to the Manager; and (ii) the Manager is not, nor will it be, required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement that has not already been given or obtained.
 
(d)          Litigation and Default. (i) There is no material legal proceeding pending against the Manager, any of the Manager's respective property, or, to the Manager's Knowledge, any executive officer or director of the Manager (in their capacity as such), except as set forth on Schedule 3.02(d); (ii) to the Knowledge of the Manager, no material legal proceeding has been threatened against the Manager, any of the Manager's respective property, or any executive officer or director of the Manager (in their capacity as such) nor, to the Knowledge of the Manager, is there any claim or grounds for any claim that might result in any such legal proceeding; (iii) the Manager is not in material breach of any provisions of any Legal Requirement; (iv) to the Knowledge of the Manager, no event has occurred that, with due notice or lapse of time or both, would constitute a material breach of any Legal Requirement on the part of the Manager; and (v) to the Knowledge of the Manager, there is no investigation of a Governmental Authority pending or threatened against the Manager, other than as have not had and would not reasonably be expected to have a Material Adverse Effect with respect to the Manager. There are no outstanding, pending or, to the Knowledge of the Manager, threatened orders, writs, judgments, decrees, injunctions or settlements against the Manager that: (x) prohibit or restrict the consummation of the Transactions; or (y) have, or would reasonably be expected to have, a Material Adverse Effect with respect to the Manager.
 
(e)          Insolvency. The Manager has not: (i) made a general assignment for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by its creditors; (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of its assets; (iv) suffered the attachment or other judicial seizure of all, or substantially all, of its assets; (v) admitted in writing its inability to pay its debts as they come due; or (vi) made an offer of settlement, extension or composition to its creditors generally.
 
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(f)          Ownership of the Equity Interests. The authorized and outstanding Equity Interests of the Manager consist of the Membership Interests set forth on Schedule 3.01(e), and the Membership Interests represent all of the issued and outstanding membership interests in the Manager. There are no outstanding subscriptions, options, warrants, calls, rights or convertible or exchangeable securities or any other agreements or other instruments giving any Person the right to acquire any Equity Interests in the Manager, or giving any Person any right or privilege (whether pre-emptive or contractual) capable of becoming an agreement or option to acquire such Equity Interests. There are no outstanding or authorized share appreciation, phantom share, profit participation or similar rights for which the Manager has any liability. There are no voting trusts, proxies or other agreements or understandings to which the Manager is a party with respect to the voting of any Equity Interests of the Manager. There are no issued or outstanding bonds, indentures, notes or other Indebtedness having the right to vote (or convertible into securities that have the right to vote) on any matters on which the members of the Manager may vote.
 
(g)          No Defaults Under Contracts; Valid and Binding. Neither the Manager nor, to the Knowledge of the Manager, any other party to any Contract, has given or received any notice of any uncured material default with respect to any Contract, and no event has occurred or, to the Knowledge of the Manager, is pending or threatened, which through the passage of time or the giving of notice, or both, would constitute a material default under any Contract. The Contracts are valid and binding and in full force and effect.
 
(h)          Compliance With Laws. Between January 1, 2017 and the Effective Date, the Manager did not receive written notice of any material violation of any Laws relating to or arising out of the Business, the Business Employees, the Transferred Assets, the Transferred Intellectual Property or the Contracts that remains uncured. The Manager is not, and since January 1, 2017 has not been, in material default under or in material violation of, nor has the Manager been charged with any material violation of, any Law, relating to or arising out of the Business, the Business Employees, the Transferred Assets, the Transferred Intellectual Property or the Contracts. The Business has at all times since January 1, 2017 been operated in all material respects in accordance with applicable Laws and Governmental Licenses.
 
(i)          Foreign Asset Control. None of the Manager or any of its Affiliates or constituents is a Person that: (i) is, or is controlled by, a Designated Person; (ii) has received funds or other property from a Designated Person; or (iii) is in breach of or is the subject of any action or investigation under any Anti-Terrorism Law. None of the Manager or any of its Affiliates or constituents engages, or will engage in, any dealings or transactions, or is or will be otherwise associated, with any Designated Person. The Manager is in compliance in all material respects with the Patriot Act. The Manager has taken commercially reasonable measures to ensure compliance with the Anti-Terrorism Laws, including the requirement that: (y) no Person who owns any direct or indirect interest in the Manager is a Designated Person; and (z) funds invested directly or indirectly in the Manager are derived from legal sources.
 
(j)          Tax Matters.
 
(i)          The Manager is, and at all times since the time of its formation has been, classified as a partnership for United States federal income Tax purposes. The Manager has never made an election under Treasury Regulations Section 301.7701-3 (or any analogous provision of
 
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state or local income Tax Law) to be treated as an association taxable as a corporation. The Manager has never taken a position with regard to any United States federal, state or local Tax that is inconsistent with the provisions of this paragraph.
 
(ii)          The Manager has timely filed all material federal, state, local and foreign Tax Returns and reports required to be filed by it with the appropriate Tax Authorities (after giving effect to any filing extension properly granted by any such Tax Authority having authority to do so). All such Tax Returns and reports are accurate and complete in all material respects. The Manager has timely paid (or had timely paid on its behalf) all material Taxes due and payable by the Manager, including any Taxes levied on any of the Manager's properties, assets, income or franchises, whether or not shown as owing on such Tax Returns. All material amounts of Taxes that the Manager was required by Law to withhold or collect in connection with amounts owing to any employee, independent contractor, creditor or other third party have been duly withheld or collected and, to the extent required, have been timely remitted to the appropriate Tax Authority. No deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Manager, and no waivers or extensions of the time to assess or collect any such Taxes are currently in effect.
 
(iii)          There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets or Equity Interests of the Manager.
 
(iv)          There are no pending or threatened in writing audits, assessments or other actions with respect to Taxes or Tax Returns of, or with respect to, the Manager, or any matters under discussion with any Tax Authority with respect to Taxes that are likely to result in an additional liability for Taxes with respect to either of them. No power of attorney has been granted to any Person with respect to any Tax matter of the Manager that will remain in force after the Closing.
 
(v)          The representations and warranties contained in this Section 3.02(j) are the sole and exclusive representations and warranties made by the Manager relating to Tax matters, including compliance with and liabilities arising under Tax Laws.
 
(k)          Financial Statements. Copies of the consolidated financial statements for the Manager, consisting of a balance sheet as of December 31, 2020 and the related statements of operations, members' equity and cash flows for the period from January 1, 2020 through December 31, 2020, and the notes thereto (the "Financial Statements") have been made available to the REIT. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved. The Financial Statements are complete and correct in all material respects and fairly present, in all material respects, the financial position and results of operations of the Manager as of their respective dates and for the respective periods presented, and are consistent with the books and records of the Manager (which books and records are complete and correct in all material respects). To the Knowledge of the Manager, the Business has no significant deficiencies in the design or operation of its internal controls that could reasonably be expected to materially impair the REIT's ability to record, process, summarize and report financial data with respect to the Business. The Manager has not identified any fraud, whether or not material, that involves management or other employees of the Manager who have
 
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a significant role in the Manager's internal controls with respect to the Business. The balance sheet for the Manager as of December 31, 2020 is referred to herein as the "Current Balance Sheet."
 
(l)          Absence of Certain Changes. From January 1, 2021 until the Effective Date, the Manager has operated in the ordinary course of business in all material respects and there has not been, with respect to the Manager, any action that would have been prohibited by Section 4.01 had this Agreement been in effect for such period.
 
(m)          Title to Assets. The Manager has good, valid and marketable title to all Transferred Assets. All such Transferred Assets are free and clear of all Encumbrances other than: (i) Encumbrances for or in respect of Taxes or governmental levies not yet due and payable; (ii) the rights of lessors and lessees under leases executed in the ordinary course of business; (iii) the rights of licensors and licensees under licenses executed in the ordinary course of business; and (iv) in the case of cash, as set forth in Schedule 3.02(m). Each of the Transferred Assets is suitable in all material respects for the purpose for which it is intended to be used.
 
(n)          Sufficiency of Assets. Except for the Pre-Closing Cash, immediately following the Closing, the REIT will have all of the assets necessary for the REIT to provide the services provided as of the Effective Date by the Manager to the REIT under the Advisory Agreements, in substantially the same manner as such Business is being conducted and such services are being provided as of the Effective Date.
 
(o)          Employees. The Manager has made available to the REIT a list of the employees of, or leased employees providing services to, the Manager and its Affiliates (including the Contributors) as of the Effective Date (each such employee or leased employee, together with any new or replacement employees or leased employees who will be employees of, or leased employees providing services to the Manager as of the Closing, being referred to herein as a "Business Employee").
 
(p)          Benefit Plans.
 
(i)          Schedule 3.02(p)(i) sets forth a correct and complete list of each Manager Plan. With respect to each Manager Plan, to the extent applicable, correct and complete copies of the following (to the extent applicable) have been delivered or made available to the REIT by the Manager: (A) all Manager Plans (including all amendments and attachments thereto and related agreements or arrangements with third party service providers or administrators); (B) written summaries of any Manager Plan not in writing; (C) all related trust documents; (D) all insurance contracts or other funding arrangements; (E) the two most recent annual reports (Form 5500) filed with the Internal Revenue Service (the "IRS"); (F) the most recent determination letter or opinion letter from the IRS; (G) the most recent summary plan description and any summary of material modifications thereto; and (H) actuarial valuations and reports for the most recently completed plan year. No Manager Plan is maintained outside the jurisdiction of the United States, or provides benefits or compensation to any Business Employees or other service providers who reside or provide services outside of the United States. The Manager and its ERISA Affiliates have not made any written commitment, intention or understanding to create, materially modify or terminate any material Plan.
 
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(ii)          Each Manager Plan has been established, operated and administered in all material respects in accordance with its terms and the requirements of all applicable Laws, including ERISA and the Code, and there are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits, arbitrations, governmental audits or investigations which have been asserted or instituted, and, to the Knowledge of the Contributors, no set of circumstances exists which may reasonably give rise to a claim or lawsuit, against the Manager, the Manager Plans or any fiduciaries thereof. All contributions required to be made to any Manager Plan by applicable Law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Manager Plan, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of the Manager.  Neither the Manager  nor any Contributor or fiduciary of a Manager Plan has engaged in a transaction with respect to any Manager Plan that could subject any Contributor, the Manager or Buyer to a Tax or penalty imposed by either Section 4975 of the Code or Section 502(l) of ERISA or a violation of Section 406 of ERISA.  Each required report and description of a Manager Plan (including IRS Form 5500 Annual Reports, Summary Annual Reports and Summary Plan Descriptions, and Summaries of Material Modifications) have been (to the extent required) timely filed with the IRS, the United States Department of Labor, or other Governmental Body and distributed as required, and all notices required by ERISA or the Code or any other applicable Law with respect to each Manager Plan have been appropriately given.
 
(iii)          Neither the Manager nor any of its ERISA Affiliates has, at any time, maintained, established, contributed to or been obligated to contribute to any Plan that is (A) a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA, (B) subject to Title IV or Section 302 of ERISA or Section 412, 430 or 4971 of the Code ,or (C) subject to corresponding or similar provisions of foreign Laws. The Manager has not sponsored, or has any obligation with respect to, any employee benefit plan that provides for any post-employment or post-retirement medical or life insurance benefits for retired, former or current employees or beneficiaries or dependents thereof, except as required by Section 4980B of the Code or applicable state law. Each Manager Plan that is intended to be qualified within the meaning of Section 401(a) of the Code (a "Qualified Plan") has received a favorable and current determination letter from the IRS, or with respect to a prototype plan, can rely on an opinion letter from the IRS to the prototype plan sponsor, and, nothing has occurred that could reasonably be expected to adversely affect the qualified status of any Qualified Plan.
 
(iv)          Any "nonqualified deferred compensation plan" (as such term is defined under Section 409A(d)(1) of the Code and the guidance thereunder) under which the Manager or any ERISA Affiliate has made, makes, is obligated to make or promises to make, payments (each, a "409A Plan") has complied and complies in all material respects, in both form and operation, with the requirements of Section 409A of the Code and the guidance thereunder. No payment made or to be made under any 409A Plan is, or will be, subject to the penalties of Section 409A(a)(1) of the Code.
 
(v)          Except as set forth in Schedule 3.02(p)(v) or as contemplated by this Agreement or the Advisory Agreements (including, for the avoidance of doubt, distributions and payments authorized to be made from the transition/retention bonus pool contemplated by Section
 
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4.11(d)), neither the execution and delivery of this Agreement or the Transaction Documents, nor the performance of the Transactions, will (either alone or in conjunction with any other event, such as termination of employment) (A) result in any payment (including severance payments, payments under any other agreements or unemployment compensation payments) becoming due from the REIT or the Manager to any Business Employee or any other Person, under any Plan or otherwise; (B) materially increase any benefits otherwise payable under any Plan operated or maintained by or on behalf of the REIT or the Manager; (C) result in any acceleration of the time of payment or vesting of any benefits payable by the REIT  or the Manager to any Business Employee; (D) trigger any funding obligation under any Manager Plan or impose any restrictions or limitations on the Manager's rights to administer, amend or terminate any Manager Plan; or (E) result in any payment (whether in cash or property or the vesting of property) to any "disqualified individual" (as such term is defined in Treasury Regulation Section 1.280G-1) that could, individually or in combination with any other such payment, constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code). No Manager Plan provides for the gross-up or reimbursement of Taxes under Section 4999 of the Code or otherwise. Schedule 3.02(p)(v) sets forth (X) the amount of each payment or benefit that could become payable to any disqualified individual under a Manager Plan or by the REIT as a result of the transactions contemplated by this Agreement or the Transaction Documents or a termination of employment or service, including as a result of accelerated vesting, and (Y) the amount of the "excess parachute payments" within the meaning of Section 280G of the Code that could become payable to each such disqualified individual.
 
(q)          Loans to the Manager. There are no outstanding loans to, or other Indebtedness incurred by, the Manager.
 
(r)          Licenses and Permits. The Manager holds all licenses, permits and other regulatory and governmental authorizations ("Governmental Licenses") that are required to be maintained by it in connection with the conduct of the Business, except where the failure to hold any Governmental License would not reasonably be expected to result in a Material Adverse Effect with respect to the Manager. Each such Governmental License is valid and in full force and effect in all material respects and will not be invalidated by consummation of the Transactions. The Manager has been in compliance in all material respects with all of the terms and requirements of each Governmental License, and there are no disputes, oral agreements or forbearance programs in effect as to any Governmental License.
 
(s)          Insurance.
 
(i)          Schedule 3.02(s) sets forth a complete and correct list of all insurance policies held by or on behalf of the Business or the Manager as of the Effective Date (the "Business Insurance Policies") and a brief description of such insurance policies. The Manager has made available to the REIT a complete and correct copy of all the Business Insurance Policies together with all riders and amendments thereto. All the Business Insurance Policies are in full force and effect and the Manager is in compliance in all material respects with the terms of such policies. All premiums due and payable on the Business Insurance Policies have been duly and timely paid and no notice of cancellation or termination has been received with respect to any such policy. The Business Insurance Policies will not terminate due to the consummation of the Transactions (assuming payment of any applicable policy premiums arising after the Closing).
 
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(ii)          There are no claims pending under any of the Business Insurance Policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies (other than through customary reservation of rights letters).
 
(t)          Information Furnished. The Manager has made available to the REIT true and complete copies of all material corporate records of the Manager relevant to the Business and all other items referred to in the schedules of this Section 3.02, and neither this Agreement nor the schedules of this Section 3.02, taken as a whole, contain any untrue statement of a material fact or omit any material fact necessary to make the statements herein or therein, as the case may be, not misleading.
 
(u)          Absence of Undisclosed Liabilities. Except as set forth on Schedule 3.02(u), there are no material liabilities or obligations relating to the Business, the Transferred Intellectual Property or the Transferred Assets of any nature, whether accrued, contingent or otherwise, and, to the Knowledge of the Manager, there is no existing condition, situation or set of circumstances that reasonably could be expected to result in such a liability or obligation, except for liabilities or obligations: (i) reflected in the Current Balance Sheet; or (ii) that were incurred since January 1, 2020 in the ordinary course of business (including in the course of the Transactions) and would not reasonably be expected to have a Material Adverse Effect with respect to the Manager. As of the Closing, the Manager will not have any liabilities other than liabilities set forth on the balance sheet as of the Closing Date.
 
(v)          Real Property.
 
(i)          The Manager does not own any real property, has never owned any real property, and will not as of the Closing, own any real property. Schedule 3.02(v)(i) sets forth a correct and complete list of the addresses of the real property leased or subleased to or occupied by the Manager (all such property, the "Leased Real Property") and also lists the lease or sublease and any amendments thereto pursuant to which the Manager occupies any Leased Real Property.
 
(ii)          Assuming due authorization, execution and delivery by the counterparty to each lease, each lease required to be listed on Schedule 3.02(v)(i) is a legal, valid and binding agreement of the Manager, enforceable against the Manager and, to the Knowledge of the Manager, each other party thereto, in accordance with its terms, in each case, subject to the Enforceability Exceptions. The Manager did not, nor has it received any notice that any other party is, in default in any material respect (or any condition or event that, after notice or lapse of time or both, would constitute a default in any material respect) under any such lease. The Manager does not owe any brokerage commissions with respect to any such leased space (including any contingent obligation in respect of future lease extensions).
 
(iii)          The Manager has delivered, or made available, to the REIT prior to the execution of this Agreement correct and complete copies of all leases (including any amendments and renewal letters) required to be listed on Schedule 3.02(v)(i). There are no other written understandings, arrangements or agreements between the parties to such leases with respect to the leasing of the Leased Real Property.
 
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(iv)          No other Person holds any sublease, lease option or other current or contingent right to occupy any of the Leased Real Property before the expiration of the applicable lease. No tenant or other party in possession of any of the Leased Real Property has any right to purchase, or holds any right of first refusal to purchase, such properties.
 
(w)          Environmental Liability. There are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that are reasonably likely to result in the imposition, on the Manager of any liability or obligation arising under common law or under any local, state or federal environmental statute, regulation or ordinance pending or, to the Knowledge of the Manager, threatened against the Manager, except as would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect with respect to the Manager. The Manager is not subject to any agreement, order, judgment, decree, letter or memorandum by or with any Governmental Authority or third party imposing any liability or obligation with respect to the foregoing that is reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect with respect to the Manager.
 
(x)          Intellectual Property.
 
(i)          Schedule IP sets forth a true, complete and accurate list of: (A) all registrations or applications for patents, trademarks or copyrights for the Transferred Intellectual Property owned by the Manager; (B) the Transferred Intellectual Property necessary for the conduct of the Business as conducted as of the Effective Date or currently contemplated to be conducted; and (C) all licenses to Transferred Intellectual Property to which the Manager is a party (other than licenses for off-the-shelf computer software that is generally available to the public on commercially reasonable terms). Except as set forth in Schedule IP, no Person has any joint ownership rights in any Transferred Intellectual Property owned by the Manager. Other than the licenses to Transferred Intellectual Property listed in Schedule IP, the Manager has not granted any license to any Person for any Transferred Intellectual Property owned by the Manager. Other than Transferred Intellectual Property listed in Schedule IP, there is no other material Intellectual Property necessary for the conduct of the Business.
 
(ii)          As of the Closing Date, the Manager will own or otherwise have the right to use all of the Transferred Intellectual Property necessary for the conduct of the Business as it is currently conducted, free and clear of all Encumbrances. This representation is not to be interpreted as providing any representation of non-infringement.
 
(iii)          To the Knowledge of the Manager, use of the Transferred Intellectual Property in the conduct of the Business has not and does not infringe upon or misappropriate the Intellectual Property of any other Person. In addition, to the Knowledge of the Manager, none of the Transferred Intellectual Property owned by the Manager is being infringed upon, violated or misappropriated by any other Person.
 
(iv)          Consummation of the Transactions will not result in the imposition of any material financial obligation on the part of the REIT arising from the transfer of the Transferred Intellectual Property pursuant to the Transaction Documents.
 
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(v)          In each case in which the Manager has acquired or sought to acquire ownership of any Transferred Intellectual Property from any Person, including as a result of engaging such Person as a consultant, advisor, employee or independent contractor to independently or jointly conceive, reduce to practice, create or develop any Transferred Intellectual Property on behalf of the Manager (each an "Author"), the Manager has obtained unencumbered and unrestricted exclusive ownership of, by a written, valid and enforceable assignment sufficient to irrevocably transfer, all such Intellectual Property and has obtained from such Authors the waiver of all non-assignable rights, including of any moral rights.
 
(y)          Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Manager.
 
(z)          Transactions with Related Parties. There are no outstanding loans, receivables or payables from or to the Contributors, on the one hand, and any Business Employee or the Manager, on the other hand. There is no: (i) agreement between the Manager, on the one hand, and (A) the Contributors, (B) any current or former officer, employee, director or partner of the Contributors or the Manager or (C) any Affiliate of the Persons identified in clauses (A) and (B), excluding the Manager, on the other hand, except for the operating agreement of the Manager, employment agreements or other agreements governing terms of employment or as set forth in Schedule 3.02(z); or (ii) agreement requiring payments to be made by the Manager to any Person on a change of control or otherwise as a result of the consummation of the Transactions.
 
(aa)          Improper Payments. Neither the Manager nor, to the Knowledge of the Manager, any director, officer or representative of the Manager has (i) used any corporate funds for any unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any unlawful payment to any foreign or domestic government official or employee or (iii) made any unlawful bribe, rebate, payoff, kickback or other unlawful payment to any foreign or domestic government official or employee, in each case, in violation in any material respect of any applicable Anti-Corruption Law. The Manager has not received any written communication that alleges that the Manager, or any of their respective representatives, is, or may be, in violation of, or has, or may have, any liability under, any Anti-Corruption Law.
 
(bb)          Investment Company Act. The Manager is not required to be registered as an investment company under the Investment Company Act of 1940, as amended.
 
(cc)          Mortgage-Backed Securities; Mortgage Loans. The Manager is not the owner of, or issuer of, any mortgage-backed securities. The Manager does not hold any residential mortgage loans.
 
(dd)          No Other Business. The Manager's only client since its inception has been the REIT. The Manager has conducted no business other than the Business and has conducted no activities other than pursuant to the Management Agreement and the Administration Agreement.
 
(ee)          Brokers, Finders and Advisors. The Manager has not entered into any agreement resulting in, or which will result in, the REIT having any obligation or liability as a result of the execution and delivery of this Agreement and the consummation of the Transactions for any brokerage, finder or advisory fees or charges of any kind whatsoever.
 
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(ff)          Advisory Agreements.  To the Knowledge of the Manager, there has occurred no act or omission for which the REIT would be required to provide indemnity to the Manager or any Contributor under the Management Agreement.
 
Section 3.03          REPRESENTATIONS AND WARRANTIES OF THE REIT. In each case except as disclosed in the REIT SEC Filings (but excluding any forward looking disclosures set forth in any "risk factors" section, any disclosures in any "forward looking statements" section and any other disclosures included therein to the extent they are predictive or forward-looking in nature) and except where the failure of any such representations or warranties to be true and correct is a result of an action or inaction by the Manager or the Manager has Knowledge of such failure, the REIT hereby represents and warrants to the Contributors as follows, as of the Effective Date and as of the Closing Date (except as to any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), which representations and warranties shall survive the Closing to the extent provided in Section 5.01:
 
(a)          Organization and Qualification. The REIT: (A) is duly formed as a corporation taxable as a real estate investment trust validly existing and in good standing under the Laws of the State of Maryland and is qualified to do business in each of the states in which it is required to be qualified; and (B) has the full corporate power and authority to carry on its business as now being conducted, except where the failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect on the REIT. The REIT has the full corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Transaction Documents and the documents to be executed and delivered by the REIT pursuant to this Agreement. The REIT is not in default under any provision of its charter, bylaws or other organizational document.
 
(b)          Due Authorization; Approvals. This Agreement has been duly authorized, executed and delivered by the REIT and constitutes the legal, valid and binding agreement of the REIT enforceable against it in accordance with its terms, subject to the Enforceability Exceptions. Other than the REIT Stockholder Approval, the execution and delivery of this Agreement and the Transaction Documents to which the REIT is a party and the performance by the REIT of the Transactions have been approved, to the extent applicable, by the stockholders and directors of the REIT and no other corporate or other proceedings on the part of the REIT is necessary to authorize the execution and delivery by the REIT, of this Agreement or the Transaction Documents to which the REIT is a party or the performance by the REIT of the Transactions. Upon their execution, the Transaction Documents to which the REIT is a party will be duly executed and delivered by the REIT and will constitute valid and binding obligations of the REIT, enforceable against the REIT in accordance with their respective terms, subject to the Enforceability Exceptions.  Subject to obtaining the REIT Stockholder Approval and the related filing by the REIT, and approval by the New York Stock Exchange ("NYSE"), of all Supplemental Listing Applications required to be filed pursuant to the rules of the NYSE with respect to the issuance of any of the REIT Stock, (i) neither the execution, delivery, nor performance of this Agreement by the REIT, nor any action or omission on the part of the REIT required pursuant hereto, nor the consummation of the Transactions by the REIT will (A) result in a breach or violation of, or constitute a default under, any Legal Requirement applicable to the REIT, or (B) constitute a default or result in the cancellation, termination, acceleration, breach or violation of any agreement (other than the Advisory Agreements), instrument or other material document to which the REIT is a party, or
 
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give any Person the right to declare any such default, cancellation, termination, acceleration, breach or violation or to exercise any remedy or obtain any other relief under any such agreement, instrument, indenture or other material document or under any Legal Requirement; and (ii) the REIT is not, nor will be, required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement that has not already been given or obtained.
 
(c)          Brokers, Finders and Advisors. The REIT has not entered into any agreement resulting in, or which will result in, the Contributors or the Manager having any obligation or liability as a result of the execution and delivery of this Agreement, or the consummation of the Transactions, for any brokerage, finder or advisory fees or charges of any kind whatsoever.
 
(d)          Title to REIT Stock. The authorized capital of the REIT, and the issued and outstanding shares of REIT Stock, are accurately disclosed in the REIT SEC Filings.  At Closing, each Contributor will acquire such Contributor's Pro Rata Share of (i) the aggregate number of shares of Common Stock identified in clause (i) of Section 1.01(a), (ii) the aggregate number of shares of Class B Stock identified in clause (ii) of Section 1.01(a), and (iii) the aggregate number of shares of Series A Preferred identified in clause (iii) of Section 1.01(a), in each case, free and clear of all Encumbrances of any nature whatsoever, other than what is provided in this Agreement or by Law or resulting from action by the Contributors. The shares of REIT Stock to be issued and conveyed by the REIT to the Contributors pursuant to this Agreement will, upon such issuance, be duly authorized, validly issued and outstanding, fully paid and non-assessable.
 
(e)          Advisory Agreements.  To the knowledge of the REIT (based solely on the information presented to the REIT's board in the ordinary course of business), there has occurred no act or omission for which the Manager would be required to provide indemnity to the REIT under the Management Agreement.
 
(f)          Opinion of Financial Advisor.  The Special Committee has received an opinion of Evercore, as financial advisor to the Special Committee, to the effect that, as of the date of such opinion and based on and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Contribution Consideration to be paid pursuant to this Agreement is fair, from a financial point of view, to the REIT.
 
ARTICLE IV
COVENANTS
 
Section 4.01          CONDUCT OF BUSINESS PRIOR TO CLOSING. From the Effective Date until the Closing or earlier termination of this Agreement, except as otherwise expressly provided in this Agreement, the Manager shall, and the Contributors shall cause the Manager to: (i) conduct the Business in the ordinary course, consistent with past practice and in compliance with the requirements of the Management Agreement; (ii) use commercially reasonable efforts to preserve substantially intact its present organization; (iii) use commercially reasonable efforts to keep available the services of its present officers and employees and of all other Persons who provide material services to the REIT and its subsidiaries; and (iv) use commercially reasonable efforts to preserve its relationships with others having business dealings with it relating to the Business. Without limiting the generality of the foregoing, except as otherwise expressly provided in this
 
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Agreement, from the Effective Date to the Closing, without the prior consent of the Special Committee, the Manager shall not, and the Contributors shall cause the Manager not to:
 
(a)          sell, lease, Encumber, transfer, license or dispose of any Transferred Assets, Contracts or Transferred Intellectual Property, in each case except in the ordinary course of business (for the avoidance of doubt, the Manager shall not be restricted from making any distributions of cash to its members at or prior to Closing);
 
(b)          enter into, amend or terminate any material Contract;
 
(c)          fail to timely pay any account payable relating to the Business in the ordinary course of business other than amounts that are subject to dispute in good faith;
 
(d)          take any action that would adversely affect the REIT's qualification as a real estate investment trust within the meaning of Section 856 of the Code;
 
(e)          make any material change in any financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
 
(f)          enter into any material commitment or transaction relating to the Business except in the ordinary course of business;
 
(g)          enter into any new line of business;
 
(h)          incur, create, assume or guarantee any Indebtedness;
 
(i)          make any loans, advances or capital contributions to, or investments in, any other Person (including to any of its officers, directors, affiliates, agents or consultants), make any change in its existing borrowing or lending arrangements for or on behalf of such Persons, or enter into any "keep well" or similar agreement to maintain the financial condition of another entity;
 
(j)          change (or permit to be changed) any accounting or Tax procedure, method or practice (including any method of accounting for Tax purposes), make, change or revoke (or permit to be made, changed or revoked) any Tax election, amend any Tax Return, or settle or compromise any Tax liability;
 
(k)
 
(i)          increase in any manner the compensation or benefits of any Business Employee, or pay or otherwise grant any benefit not required by any Plan with respect to any Business Employee, or enter into any contract to do any of the foregoing, in each case other than:
 
(A)          awarding annual performance-related merit increases in base salaries made in the ordinary course of business to executive officers of the Manager by an amount that in the aggregate does not exceed five percent (5%) of such officers' current aggregate annual base salaries;
 
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(B)          awarding annual performance-related merit increases in base salaries or base wages made in the ordinary course of business to all Business Employees (other than executive officers of the Manager) by an amount that in the aggregate does not exceed five percent (5%) of such employees' current aggregate annual base salaries and base wages;
 
(C)          increasing annual bonus opportunities made in the ordinary course of business consistent with past practice;
 
(D)          providing payments and benefits required under the terms of existing Manager Plans as in effect on the date hereof;
 
(E)          making any distributions and payments authorized to be made from the transition/retention bonus pool contemplated by Section 4.11(d); or
 
(F)          to the extent required by Law;
 
(ii)          except to the extent required by applicable Law or the terms of any Manager Plan as in effect on the date hereof:
 
(A)          enter into, adopt, amend, terminate or waive any right under any Plan (including any employment or consulting arrangement) or any collective bargaining agreement; or
 
(B)          accelerate any rights or benefits, or, other than in the ordinary course of business and consistent with past practice, make any determinations or interpretations with respect to any Manager Plan;
 
(l)          commit to any single or aggregate capital expenditure or commitment in excess of $50,000 (on a consolidated basis);
 
(m)          acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof;
 
(n)          cancel any debts or waive any claims or rights of substantial value relating to the Business or the Manager;
 
(o)          enter into any lease for real property or assign its rights under, amend or terminate any lease with respect to real property;
 
(p)          issue, sell or grant any Equity Interests of the Manager, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any Equity Interests of the Manager, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any Equity Interests of the Manager or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any Equity Interests of the Manager or any other securities in respect of, in lieu of, or in substitution for, the Equity Interests of the Manager that are outstanding on the Effective Date;
 
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(q)          settle or compromise any claim, action, suit or proceeding pending or threatened against it or relating to the Business, other than any such settlement or compromise in the ordinary course of business consistent with past practice that involves solely payment of money damages in an amount not in excess of $50,000 individually or $100,000 in the aggregate that is paid prior to Closing; provided, however, that neither the Manager nor any of its Subsidiaries shall agree to, or shall, settle any claim, action, suit or proceeding if the settlement involves a conduct remedy or injunctive or similar relief or has a restrictive impact on the Business;
 
(r)          hire or terminate, or enter into any transaction or any contract with, any Business Employee, or promote or appoint any Person to a position of executive officer or director of the Manager;
 
(s)          make or authorize any change in its organizational documents;
 
(t)          abandon, encumber, convey title (in whole or in part), exclusively license or grant any right or other licenses to Intellectual Property;
 
(u)          take, or agree or otherwise commit to take, or cause the REIT to take or to agree or otherwise commit to take, any action that would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Transactions; or
 
(v)          take, or agree or otherwise commit to take, any of the foregoing actions or any other action that if taken would reasonably be expected to prevent the satisfaction of any condition set forth in Section 2.02(b).
 
Section 4.02          ACCESS TO INFORMATION; LITIGATION SUPPORT.
 
(a)          During the period from the Effective Date to the Closing or earlier termination of this Agreement, the Contributors shall furnish the Special Committee, the REIT and their representatives with any information and data (including copies of contracts, plans and other books and records) concerning the Business, the Manager and operations of the Business as the Special Committee, the REIT or any of their representatives reasonably may request.
 
(b)          In the event and for so long as any party actively is contesting or defending against any third party action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction involving the Business, each of the other parties will reasonably cooperate with such party and its counsel in the contest or defense, make available their personnel and provide such testimony and access to their books and records as shall be reasonably necessary in connection with the contest or defense; provided, however, that the contesting or defending party shall reimburse the other party for its reasonable costs and expenses (including its internal costs for the personnel providing such assistance); provided, further, that each party may restrict the foregoing access and the disclosure of information to the extent that (i) in the reasonable good faith judgment of such party, any applicable Law requires such party or its subsidiaries to restrict or prohibit access to any such information, (ii) in the reasonable good faith judgment of such party, the information is subject to confidentiality obligations to a third party or (iii) disclosure of any such information or document would result in
 
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the loss of attorney-client privilege; provided, further, that with respect to clauses (i) through (iii) of this Section 4.02(b), the applicable party shall use its commercially reasonable efforts to (A) obtain the required consent of any such third party to provide such access or disclosure, (B) develop an alternative to providing such information so as to address such matters that is reasonably acceptable to each of the parties and (C) in the case of clauses (i) and (iii), enter into a joint defense agreement or implement such other techniques if the parties determine that doing so would reasonably permit the disclosure of such information without violating applicable Law or jeopardizing such privilege.
 
(c)          Not less than five (5) business days before the Closing Date, the Contributors shall furnish to the Special Committee and to the REIT its good faith estimate of the Accrued Management Fee, setting forth in reasonable detail how such estimate was calculated.
 
Section 4.03          CONSENTS AND APPROVALS.
 
(a)          Upon the terms and subject to the conditions set forth in this Agreement, each of the REIT, the Manager and the Contributors shall and shall cause their respective Subsidiaries, to use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties hereto, all things necessary, proper and advisable under applicable Law or pursuant to any Contract to consummate and make effective, as promptly as practicable, the Transactions, including (i) the taking of all actions necessary to cause the conditions to Closing set forth in Article II to be satisfied, (ii) the preparing and filing of all documentation to effect all required filings, notices, petitions, statements, registrations, submissions and applications and the obtaining of all necessary actions or nonactions, waivers, consents, authorizations and approvals from Governmental Authorities or other Persons necessary in connection with the consummation of the Transactions and the making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid legal proceeding by, any Governmental Authority or other Persons necessary in connection with the consummation of the Transactions, (iii) the defending of any legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed, the avoidance of each and every impediment under any antitrust, merger control, competition or trade regulation Law that may be asserted by any Governmental Authority with respect to the Transactions so as to enable the Closing to occur as soon as reasonably possible, and (iv) the execution and delivery of any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement.
 
(b)          In connection with and without limiting the foregoing, each of the REIT, the Manager and the Contributors shall give (or shall cause to be given) any notices to any Person, and each of the REIT, the Manager and the Contributors shall use, and cause each of their respective Affiliates to use, its reasonable best efforts to obtain any consents from any Person not covered by Section 4.03(a) that are necessary, proper and advisable to consummate the Transactions. Each of the REIT, the Manager and the Contributors will furnish to the others such necessary information and reasonable assistance as the others may request in connection with the preparation of any required governmental filings or submissions and will cooperate in responding to any inquiry from a Governmental Authority, including promptly informing the other parties of
 
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such inquiry, consulting in advance before making any presentations or submissions to a Governmental Authority, and supplying each other with copies of all material correspondence, filings or communications between any party and any Governmental Authority with respect to this Agreement. To the extent reasonably practicable, the REIT, the Manager and the Contributors or their respective representatives shall have the right to review in advance and each of the parties will consult the others on, all the information relating to the other and each of their Affiliates that appears in any filing made with, or written materials submitted to, any Governmental Authority in connection with the Transactions, except that confidential competitively sensitive business information may be redacted from such exchanges. To the extent reasonably practicable, neither the REIT, the Manager nor the Contributors shall, nor shall they permit their respective representatives to, participate independently in any meeting or engage in any substantive conversation with any Governmental Authority in respect of any filing, investigation or other inquiry without giving the other parties prior notice of such meeting or conversation and, to the extent permitted by applicable Law, without giving the other parties the opportunity to attend or participate (whether by telephone or in person) in any such meeting with such Governmental Authority. Notwithstanding the foregoing, obtaining any approval or consent from any Person pursuant to this Section 4.03(b) shall not be a condition to the obligations of the parties to consummate the Transactions.
 
(c)          Notwithstanding anything to the contrary in this Agreement, in connection with obtaining any approval or consent from any Person (other than any Governmental Authority) with respect to the Transactions, none of the REIT, the Manager or the Contributors or any of their respective Subsidiaries or Representatives shall be obligated to pay or commit to pay to such Person whose approval or consent is being solicited any cash or other consideration, make any accommodation or commitment or incur any liability or other obligation to such Person, in each case that is not conditioned upon the occurrence of the Closing. Subject to the immediately foregoing sentence, the parties shall cooperate with respect to reasonable accommodations that may be requested or appropriate to obtain such consents. The REIT, the Manager and the Contributors acknowledge and agree that no approval or consent of any such Person is a condition to the obligations of any party to effect the Transactions.
 
Section 4.04          PROXY STATEMENT; STOCKHOLDER MEETING.
 
(a)          Reasonably promptly after the Effective Date, the Manager and the REIT shall prepare and the REIT shall file with the Securities and Exchange Commission ("SEC") a proxy statement on Schedule 14A for a meeting of stockholders of the REIT (as amended or supplemented, the "Proxy Statement"). The Manager and the REIT shall include in the Proxy Statement a proposal or proposals for or relating to the approval of the Transactions and the Transaction Documents, including the issuance of the REIT Stock as required by the NYSE Listed Company Manual, and the issuance of shares of common stock to John Grier, which proposal(s) shall be approved at a meeting by the affirmative vote of at least a majority of the votes cast by the stockholders entitled to vote on the matter other than the votes of shares owned of record or beneficially by the Contributors or their respective Affiliates, or by any other stockholder determined to have a material financial interest in the Transactions (the "REIT Stockholder Approval"). The Manager and the REIT shall cause the Proxy Statement to comply as to form and substance in all material respects with the applicable requirements of the federal securities Laws (including the SEC's proxy rules) and of Maryland Law. The Contributors shall furnish all required

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information concerning themselves, the Manager and their Affiliates to the REIT and provide such other assistance as may be reasonably requested in connection with the preparation of the Proxy Statement. Prior to filing the Proxy Statement or any amendment or supplement thereto, the Manager and the REIT shall provide the Contributors with reasonable opportunity to review and comment on such proposed filing solely with respect to the REIT Stockholder Approval and any information relating to the Contributors. If, at any time prior to the Closing Date, any information should be discovered by the REIT, on the one hand, or the Manager or the Contributors, on the other hand, that should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the REIT with the SEC and, to the extent required by applicable Law, disseminated by the REIT to the stockholders of the REIT.
 
(b)          The Manager and the REIT shall promptly notify the Contributors of the receipt of any comments from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement or for additional information and shall supply the Contributors with copies of all correspondence between the REIT or any of its representatives, on the one hand, and the SEC or the staff of the SEC, on the other hand, with respect to the Proxy Statement. Prior to responding to any comments of the SEC, the Manager and the REIT shall provide the Contributors with reasonable opportunity to review and comment on such proposed response solely with respect to the REIT Stockholder Approval and any information relating to the Contributors.
 
(c)          The REIT shall mail the Proxy Statement to the holders of Common Stock in accordance with customary practice after the SEC's review of the Proxy Statement is completed.
 
(d)          The REIT shall, in accordance with customary practice, duly call, give notice of, convene and hold a meeting of its stockholders (the "Stockholders Meeting"). One matter presented to the stockholders of the REIT at the Stockholders Meeting for approval shall be the REIT Stockholder Approval. The Board of Directors of the REIT shall, subject to its duties under the Law and the approval of the Special Committee, recommend that the stockholders of the REIT vote in favor of the issuance of the REIT Stock at the Stockholders Meeting, and the REIT shall use reasonable best efforts to solicit from its stockholders proxies in favor of such approval. Notwithstanding the foregoing, the Board of Directors of the REIT may decline to make or may withdraw, modify or change its recommendation at any time prior to obtaining the REIT Stockholder Approval if the Special Committee determines in good faith (after consultation with its outside counsel) that the failure to take such action would be inconsistent with their duties to the REIT's stockholders under applicable Law.
 
Section 4.05          COOPERATION ON POST-CLOSING TAX MATTERS.
 
(a)          Subject to Closing, the REIT shall prepare and timely file, or cause to be prepared and timely filed, all Tax Returns of the Manager that are required to be filed after the Closing Date, including Tax Returns for any taxable period ending on or prior to the Closing Date that are
 
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required to be filed after the Closing Date (such as the final IRS Form 1065 partnership return for the Manager for the Tax period ending on the Closing Date) and Tax Returns for any Tax period which begins on or before the Closing Date and which ends after the Closing Date (any such period, a "Straddle Period").  Such Tax Returns shall be prepared in a manner consistent with the positions taken, and with accounting methods used, on the Tax Returns filed by the Manager prior to the Closing Date, unless otherwise required by applicable Law or agreed by the REIT and the Contributor Representative.  The REIT shall deliver any such Tax Returns to the Contributor Representative for review at least 20 days prior to the date such Tax Return is required to be filed and shall accept all reasonable comments of the Contributor Representative in respect of such Tax Returns.  After incorporating any such comments into the Tax Returns, the REIT shall timely file them with the appropriate governmental authorities and shall timely furnish Schedule K-1s to the respective Contributors.  For purposes of determining the amount of Taxes allocable to the portion of the Straddle Period ending on (and including) the Closing Date, (i) in the case of any Taxes (other than Taxes based upon or related to income or receipts) that are imposed on a periodic basis and are payable for a Tax period that includes (but does not end on) the Closing Date, the portion of such Tax which relates to the portion of the Straddle Period ending on (and including) the Closing Date shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period; and (ii) in the case of any Taxes based upon or related to income or receipts, be deemed equal to the amount which would be payable if the relevant Tax period ended on the Closing Date.
 
(b)          Subject to Closing, the REIT and the Contributors each shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the preparation and filing of any Tax Return and contesting any audit or other proceeding with respect to Taxes and the Intended Tax Treatment; provided, however, that the Contributors shall have the right to control the defense, settlement or compromise of any audit or proceeding with respect to Taxes of the Manager that pertain to a Tax period ending on or before the Closing Date, so long as such settlement or compromise does not adversely impact the REIT. In the event the settlement or compromise does adversely impact the REIT, the Contributors must seek the prior approval of the board of directors of the REIT, which approval shall not be unreasonably withheld.  Such cooperation shall include the retention and (upon the other party's reasonable request) the provision of records and information which are reasonably relevant to any such audit or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The parties agree: (i) to retain all books and records with respect to Tax matters pertinent to the Manager relating to any Pre-Closing Tax Period and to abide by all record retention agreements entered into with any Tax Authority; and (ii) to give the other party reasonable written notice prior to destroying or discarding any such books and records and, if the other party so requests, the REIT and the Contributors, as the case may be, shall allow the other party to take possession of such books and records.
 
Section 4.06          SUPPLEMENTAL DISCLOSURE. The REIT, on the one hand, and the Contributors and the Manager, on the other hand, shall promptly, upon having or gaining Knowledge of any event, condition or fact that would cause any of the conditions to the other party's obligation to consummate the Transactions not to be fulfilled, notify the other party hereto, and furnish the other party hereto any information it may reasonably request with respect thereto.
 
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Section 4.07          RESTRICTIVE COVENANTS.
 
(a)          Each Contributor covenants that, commencing on the Closing Date and ending on the twenty-fourth (24th) month anniversary of the Closing Date (the "Non-Competition Period"), each Contributor shall not, and it shall cause its Affiliates not to, engage, directly or indirectly, in any capacity, or have any direct or indirect ownership interest in, or permit any Contributor's or any such Affiliate's name to be used in connection with, any business in the United States engaged directly in owning, operating or providing asset management services to an entity that invests primarily in energy infrastructure assets for which, as to any particular project, the aggregate amount of assets acquired would satisfy the REIT asset test and the revenues to be generated would be used to satisfy the REIT income test (the "Restricted Business"); provided, however, that nothing in this Agreement shall prevent or restrict a Contributor or any of its Affiliates from any of the following:
 
(i)          owning equity interests, indebtedness or other securities representing not more than five percent (5%) of the equity capital of a company that is engaged in the Restricted Business, so long as such Contributor is not otherwise associated with the management of such company, including by serving on the board of directors or holding any other similar governing position;
 
(ii)          the acquisition and operation of any Person or business engaged in a Restricted Business so long as, (A) the revenues from such Restricted Business constitute less than twenty percent (20%) of the total revenues of such acquired Person or business (measured for the four (4) calendar quarters before the execution of the purchase agreement) or (B) such Contributor or its Affiliate, within twelve (12) months of the closing of such acquisition, divests a sufficient portion of the acquired Person or business such that the revenues from such Restricted Business constitute less than twenty percent (20%) of the total revenues of such acquired Person or business (measured for the four (4) calendar quarters before the disposition); or
 
(iii)          in the case of Campbell Hamilton, Inc. and David J. Schulte, Trustee of the DJS Trust under Trust Agreement dated July 18, 2016, and their Affiliate, David J. Schulte, the service by David J. Schulte as a member of the board of directors (and one or more committees of the board of directors) of Western Midstream Partners, LP or its successors or assigns (for the avoidance of doubt, neither Campbell Hamilton, Inc. and David J. Schulte, Trustee of the DJS Trust under Trust Agreement dated July 18, 2016, nor David J. Schulte, are deemed to control Western Midstream Partners, LP and Western Midstream Partners, LP shall not be deemed to be an Affiliate of any of them).
 
It is recognized that the Restricted Business is expected to be conducted in the United States and that more narrow geographical limitations of any nature on this non-competition covenant (and the non-solicitation covenants set forth in Section 4.07(b)) are therefore not appropriate.
 
(b)          Each Contributor covenants that, during the Non-Competition Period, each Contributor shall not, and it shall cause its respective Affiliates not to, (i) directly or indirectly solicit or entice, or attempt to solicit or entice, any clients or customers of the REIT or any of their subsidiaries for purposes of diverting their business or services from the REIT or any of their subsidiaries or (ii) solicit the employment or engagement of services of any person who, to the
 
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Knowledge of such Contributor, is or was employed as an employee by the REIT or any of its subsidiaries during such period on a full- or part-time basis. The foregoing shall not prohibit any general solicitation of employees, contractors or consultants or public advertising of employment opportunities (including through the use of employment agencies) not specifically directed at any such employees, nor shall it prohibit any Contributor or its Affiliates from hiring any such employee who seeks employment with such Contributor or its Affiliate on his or her own initiative, without any prior solicitation by such Contributor or any of its Affiliates.
 
For the avoidance of doubt, if any of the Membership Interests held by a Contributor are actually held by a trust, or other type of entity, on behalf on an individual, then the non-compete covenants in this Section 4.07 shall apply to the settlor of such trust holding the Membership Interests.
 
(c)          Each Contributor acknowledges that the restrictions contained in this Section 4.07 are reasonable and necessary to protect the legitimate interests of the REIT and constitute a material inducement to the REIT to enter into this Agreement and consummate the Transactions. Each Contributor acknowledges that any violation of this Section 4.07 may result in irreparable injury to the REIT and agrees that the REIT shall be entitled to seek preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 4.07, which rights shall be cumulative and in addition to any other rights or remedies to which the REIT may be entitled.
 
(d)          In the event that any covenant contained in this Section 4.07 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable Law. The covenants contained in this Section 4.07 and each provision thereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.
 
Section 4.08          PUBLICITY. The Contributors, the Manager and the REIT shall consult with each other before issuing, and, to the extent practicable, give each other a reasonable opportunity to review and comment on, any press release or other public statement with respect to the Transactions and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, duties under applicable Law or by obligations pursuant to any listing agreement with the NYSE. Notwithstanding this Section 4.08, no party shall be required to consult or obtain the consent of the other parties prior to making statements that are not inconsistent with any previous press releases, public disclosures or public statements made by any Contributor, the Manager or the REIT in compliance with this Section 4.08.
 
Section 4.09          TAIL COVERAGE. For at least six (6) years after the Closing, all current and former directors, officers and employees of the Manager shall be indemnified by the REIT for all
 
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damages in connection with any actual or threatened action or proceeding based on, or arising out of, the service of such person in any such capacity prior to the Closing to the same extent that the Manager would have been permitted to indemnify such persons under applicable law and the Manager's organizational documents.  The REIT will maintain director and officer "tail coverage" insurance, including stand-alone Side A coverage, covering all current and former directors and officers of the Manager during a claims reporting or discovery period of at least six (6) years from and after the Closing Date, secured from an insurance carrier with a comparable credit rating as the current insurance carrier of the REIT with respect to directors' liability insurance and in an amount and scope comparable to its existing policies.
 
Section 4.10          REGISTRATION OF COMMON STOCK.  Contemporaneous with the Closing, the REIT and each Contributor will enter into a registration rights agreement in the form attached as Exhibit C to this Agreement.
 
Section 4.11          EMPLOYEE MATTERS.
 
(a)          On the Closing Date, the REIT shall offer employment to, or shall cause the Manager or other Affiliate of the REIT to offer employment to, each of the existing employees of the Manager (including any Contributor or Affiliate of a Contributor employed by the Manager but not including Richard Green) on the basis of the terms and conditions, including salary and benefits no less favorable to such employees than those provided by the Manager on the date hereof (with the specific salaries and benefits for each such employee to be determined prior to the Closing by the compensation committee of the Board of Directors of the REIT, with input provided by an independent compensation consultant selected by such committee).  Each of the individuals who accepts such offer of employment (each, a "Continuing Employee") will be employed at Closing by the REIT or the Manager or other Affiliate of the REIT, as the case may be, on those terms and conditions.
 
(b)          The REIT shall cause each Continuing Employee to be credited with his or her years of service with the Manager before the Closing Date for all purposes (including vesting, eligibility to participate and level of benefits) under each employee benefit plan, program or arrangement in which such Transferred Employee participates after the Closing, to the extent permitted under ERISA and by any applicable insurer, provided that the foregoing shall not apply with respect to benefit accrual under any defined benefit pension plan or to the extent that its application would result in a duplication of benefits with respect to the same period of service.  Without limiting the generality of the foregoing, for purposes of each such plan, program or arrangement providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, the REIT shall cause all pre-existing condition exclusions and actively-at-work requirements of such plan, program or arrangement to be waived for such Continuing Employee and his or her covered dependents, unless such conditions had not been satisfied or waived under the analogous benefit plans in which such Continuing Employee participated immediately prior to the Closing Date.  In addition, the REIT shall cause each such plan, program or arrangement to credit any eligible expenses incurred by such Continuing Employee and his or her spouse and/or covered dependents prior to Closing for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to that Continuing Employee and his or her covered dependents as if such amounts had been paid in accordance with such plan, program or arrangement, to the extent permitted under ERISA and by any applicable insurer.
 
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(c)          Each person who served as an executive officer or as a member of the board of managers of the Manager prior to the Closing will be indemnified by the REIT for his or her service in such capacities to the maximum extent permitted by law.
 
(d)          In accordance with the Management Agreement (specifically, that certain First Amendment to Management Agreement comprising a part of the Management Agreement), the REIT has funded a transition/retention bonus pool in the aggregate amount of $1,000,000.  The Manager will distribute the transition/retention bonus pool in the form of cash retention awards payable to the individuals, at the times and in the amounts, in each case, as recommended by David Schulte and Richard Green and approved by the compensation committee of the Board of Directors of the REIT or as otherwise specifically provided in the Management Agreement.
 
Section 4.12          APPOINTMENT OF CONTRIBUTOR REPRESENTATIVE.
 
(a)          Each Contributor irrevocably constitutes and appoints Richard Green (the "Contributor Representative") as Contributor Representative hereunder to act as such Contributor's true and lawful attorney in fact and agent as described in this Section 4.12, and authorizes the Contributor Representative, acting for such Contributor and in such Contributor's name, place and stead, in any and all capacities, to do and perform every act and thing required or permitted to be done in connection with the transactions contemplated by this Agreement, as fully to all intents and purposes as such Contributor might or could do in person, including as follows:
 
(i)          to determine the time and place of the Closing, to determine whether the conditions to Closing set forth in Article II have been satisfied (or to waive such conditions), and to terminate this Agreement as provided in Article VI;
 
(ii)          to take any and all action on behalf of the Contributors from time to time as the Contributor Representative may deem to be necessary or desirable to fulfill the interests and purposes of this Section 4.12 and to engage agents and representatives (including accountants and legal counsel) to assist in connection therewith;
 
(iii)          to take any and all action on behalf of the Contributors from time to time that Contributor Representative deems to be necessary or desirable to make or enter into any waiver, amendment, agreement, certificate or other document contemplated hereunder;
 
(iv)          to deliver all notices required to be delivered by the Contributors hereunder;
 
(v)          to receive all notices required to be delivered to the Contributors hereunder;
 
(vi)          to seek indemnification from the REIT on behalf of the Contributor Indemnified Parties under Article V and to take all action required by Section 4.05 (Cooperation on Post Closing Tax Matters) and make all decisions on behalf of the Contributors pursuant to Article V and Section 4.05 hereof; and
 
(vii)          to prosecute, defend, settle, compromise or take any other action and make any other determination with respect to any claim or matter that may arise under this Agreement or any of the Transaction Documents, including any claim or matter for which any Contributor
 
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seeks indemnification from the REIT under Article V or for which the REIT (or any REIT Indemnitee) seeks indemnification under Article V.
 
(b)          Each Contributor grants unto the Contributor Representative full power and authority to do and perform each and every act and thing necessary or desirable to be done in connection with the matters described above, as fully to effect all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming as to the REIT and each REIT Indemnified Party all that the Contributor Representative may lawfully do or cause to be done by virtue hereof.  Each Contributor further acknowledges and agrees that, upon execution of this Agreement, with respect to any delivery by the Contributor Representative to the REIT of any waiver, amendment, agreement, certificate or other documents executed by the Contributor Representative pursuant to this Section 4.12, such Contributor shall be bound by such documents as fully as if such Contributor had executed and delivered such documents.
 
(c)          The Contributor Representative shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Contributor.  The Contributor Representative shall not be liable to any Contributor for any action taken or omitted by him hereunder or under any other document hereunder, or in connection therewith, except that the Contributor Representative shall not be relieved of any liability imposed by Law for gross negligence, willful misconduct, bad faith or fraud.  Each Contributor acknowledges and agrees that the Contributor Representative shall not be obligated to take any actions and shall be entitled to take such actions that the Contributor Representative deems to be appropriate in the Contributor Representative's reasonable discretion.  Each Contributor further agrees to indemnify and hold harmless the Contributor Representative harmless from and against any loss, liability or expense arising in connection with any act or omission of the Contributor Representative, except for any liability imposed by Law for gross negligence, willful misconduct, bad faith or fraud.  Each Contributor agrees to reimburse the Contributor Representative for its Pro Rata Share of any out of pocket expenses incurred by Contributor Representative in connection with the performance of any actions required or permitted to be taken by the Contributor Representative under this Agreement; provided, however, that the Contributor Representative undertakes to keep the Contributors reasonably informed as to his incurrence of out of pocket expenses for which such reimbursement may be requested.
 
(d)          Each Contributor agrees that the REIT shall be entitled to unconditionally assume that any action taken or omitted, or any document executed by, the Contributor Representative purporting to act as Contributor Representative under or pursuant to this Agreement or in connection with any of the transactions contemplated by this Agreement has been unconditionally authorized by the Contributors to be taken, omitted to be taken, or executed on their behalf so that they will be legally bound thereby, and each Contributor agrees not to institute any claim, lawsuit, arbitration or other proceeding against the REIT alleging that the Contributor Representative did not have the authority to act as Contributor Representative on behalf of the Contributors in connection with any such action, omission or execution.
 
ARTICLE V
INDEMNIFICATION AND CLAIMS
 
Section 5.01          SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS. The representations and warranties of the Contributors, the Manager and the
 
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REIT contained in this Agreement will survive until eighteen (18) months after the Closing Date, provided that the Contributor Fundamental Representations, the Manager Fundamental Representations and the REIT Fundamental Representations shall survive until the later of eighteen (18) months after the Closing Date or thirty (30) days after the expiration of the applicable statute of limitations with respect to the matters addressed in such representations. Notwithstanding the foregoing, a claim given in good faith in accordance with this Article V in respect of a representation or warranty on or prior to the date on which the representation or warranty ceases to survive shall not thereafter be barred by the expiration of the survival period, and may be pursued thereafter without regard to such expiration. Except as otherwise expressly provided in this Agreement, each covenant or agreement set forth in this Agreement shall survive without limit.
 
Section 5.02          INDEMNIFICATION OF THE REIT.
 
(a)          Each Contributor, severally but not jointly, shall indemnify and hold harmless the REIT and its successors and the stockholders, members, managers, partners, officers, directors, employees and agents of each such indemnified Person (collectively, the "REIT Indemnified Parties") from and against any and all Losses that may be asserted against, or paid, suffered or incurred by any REIT Indemnified Party to the extent arising out of, resulting from, based upon or relating to any breach, as of the Effective Date or the Closing Date (except any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), of any representation or warranty made by such Contributor in Section 3.01 of this Agreement or in such Contributor's Assignment;
 
(b)          Each Contributor, jointly and severally, shall indemnify and hold harmless the REIT Indemnified Parties from and against any and all Losses that may be asserted against, or paid, suffered or incurred by any REIT Indemnified Party to the extent arising out of, resulting from, based upon or relating to:
 
(i)          any breach, as of the Effective Date or the Closing Date (except any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), of any representation or warranty made by the Manager in Section 3.02 of this Agreement or in any of the Transaction Documents (other than the Assignments);
 
(ii)          any failure by the Contributors or the Manager duly and timely to perform or fulfill any of its covenants or agreements required to be performed by it under this Agreement or any of the Transaction Documents (other than the Assignments), except to the extent that such failure is caused by any act or omission of the REIT;
 
(iii)          any act or omission for which the Manager would be required to provide indemnity to the REIT under the Advisory Agreements (and regardless of whether the Management Agreement remains in effect) in effect immediately prior to the Closing, to the extent (A) such act or omission preceded the Closing, (B) the REIT does not have knowledge of such act or omission (based solely on the information presented to the REIT's board in the ordinary course of business) as of the Closing Date and (C) the REIT makes demand for indemnification with respect to such act or omission within twelve (12) months after the Closing Date; and
 
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(iv)          any liability, whether or not accrued, assessed or currently due and payable, for (a) any Taxes imposed on or with respect to the Manager for any Pre-Closing Tax Period, or (b) any Taxes of the Contributors or any Affiliate thereof, or (c) any Taxes resulting from any transfer of the Membership Interests pursuant to the Transaction Documents, in the case of each of clauses (a) through (c), regardless of any investigation or any knowledge acquired (or capable of being acquired) by the REIT Indemnified Parties at any time (whether before or after the Effective Date or the Closing Date), with respect thereto.
 
Section 5.03          INDEMNIFICATION OF THE CONTRIBUTORS. The REIT shall indemnify and hold harmless the Contributors and their respective successors and the respective stockholders, members, managers, partners, officers, directors, employees and agents of each such indemnified Person (collectively, the "Contributor Indemnified Parties") from and against any and all Losses that may be asserted against, or paid, suffered or incurred by any Contributor Indemnified Party to the extent arising out of, resulting from, based upon or relating to:
 
(a)          any breach, as of the Effective Date or the Closing Date (except any representations and warranties that expressly speak as of a specified date or time, in which case only as of such specified date or time), of any representation or warranty made by the REIT in Section 3.03 of this Agreement or in any of the Transaction Documents, except to the extent that such breach is caused by any act or omission of the Manager prior to the Closing Date; and
 
(b)          any failure by the REIT to duly and timely perform or fulfill any of their covenants or agreements required to be performed by them under this Agreement or any of the Transaction Documents, except to the extent that such failure is caused by any act or omission of the Manager prior to the Closing Date.
 
Section 5.04          INDEMNIFICATION PROCEDURES. All claims for indemnification by any person seeking indemnification under this Article V (an "Indemnified Party") shall be asserted and resolved as follows:
 
(a)          If an Indemnified Party intends to seek indemnification under this Article V, it shall promptly notify the Indemnifying Party in writing of such claim, indicating with reasonable particularity the nature of such claim and provide the Indemnifying Party with all relevant information in the Indemnifying Party's possession that the Indemnifying Party may reasonably request. The failure to provide such notice will not affect any rights hereunder except to the extent the Indemnifying Party is materially prejudiced thereby.
 
(b)          If such claim involves a Third Party Claim against the Indemnified Party and the Indemnifying Party has unconditionally acknowledged in writing its obligation to indemnify the Indemnified Party in respect of such Third Party Claim, the Indemnifying Party may, within thirty (30) days after receipt of such notice and information, and upon notice to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, assume the settlement or defense thereof, with counsel reasonably satisfactory to the Indemnified Party; provided, that the Indemnified Party may participate in such settlement or defense through counsel chosen by it at the sole cost and expense of the Indemnified Party. If the Indemnifying Party assumes the settlement or defense of such claim and the Indemnified Party determines reasonably and in good faith that representation by the Indemnifying Party's counsel of both the Indemnifying Party and
 
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the Indemnified Party would present such counsel with a conflict of interest or that there are legal defenses available to the Indemnified Party that are different from or additional to those available to the Indemnifying Party, then the Indemnifying Party shall pay the reasonable fees and expenses of the Indemnified Party's counsel. So long as the Indemnifying Party is contesting any such claim in good faith in accordance with the first sentence of this Section 5.04(b), the Indemnifying Party shall have the right to settle any claim for which indemnification has been sought and is available hereunder that imposes solely monetary obligations that are paid by the Indemnifying Party, does not contain a finding or admission of any violation of Law or any violation of the rights of any Person and contains an unconditional release of the Indemnified Party from all liability thereunder; provided, that to the extent that such settlement requires the Indemnified Party to take, or prohibits the Indemnified Party from taking, any action or purports to obligate the Indemnified Party, then the Indemnifying Party shall not settle such claim without the prior written consent of the Indemnified Party, such consent not to be unreasonably withheld, conditioned or delayed. So long as the Indemnifying Party is contesting any such claim in good faith in accordance with the first sentence of this Section 5.04(b), the Indemnified Party shall: (i) not pay or settle any such claim without the Indemnifying Party's consent, such consent not to be unreasonably withheld, conditioned or delayed; and (ii) cooperate fully with the Indemnifying Party and its counsel in the settlement and defense of such claim. If the Indemnifying Party is not entitled to join in or assume the defense of the claim pursuant to the foregoing provisions or is entitled but does not contest such claim in good faith (including if it does not notify the Indemnified Party of the assumption of the defense of such claim within the thirty (30) day period set forth above), then the Indemnified Party may conduct and control, through counsel of its own choosing and at the expense of the Indemnifying Party, the settlement or defense thereof and the Indemnifying Party shall cooperate with it in connection therewith. Except as otherwise expressly provided in this Section 5.04, the failure of the Indemnified Party to participate in, conduct or control such defense shall not relieve the Indemnifying Party of any obligation it may have hereunder. Any costs and expenses incurred by such Indemnified Party in connection with the investigation and defense of such claim (including reasonable attorneys' fees, other professionals' and experts' fees and court or arbitration costs) required to be paid by the Indemnifying Party on behalf of the Indemnified Party shall be paid as incurred, promptly against delivery of reasonably detailed invoices therefor.
 
(c)          If the Indemnifying Party chooses to defend any Third Party Claim, the Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) cause, or agree to, the waiver of the attorney-client privilege, attorney work-product immunity or any other privilege or protection in respect of confidential legal memoranda and other privileged materials drafted by, or otherwise reflecting the legal advice of, internal or outside counsel of an Indemnified Party (the "Subject Materials") relating to such Third Party Claim. Each party hereto mutually acknowledges and agrees, on behalf of itself and its Affiliates, that (i) each shares a common legal interest in preparing for the defense of legal proceedings, or potential legal proceedings, arising out of, relating to or in respect of any actual or threatened Third-Party Claim or any related claim or counterclaim, (ii) the sharing of Subject Materials will further such common legal interest and (iii) by disclosing any Subject Materials to and/or sharing any Subject Materials with the Indemnifying Party, the Indemnified Party shall not waive the attorney-client privilege, attorney work-product immunity or any other privilege or protection. The Indemnified Party shall not be required to make available to the Indemnifying Party any information that is subject to an attorney-
 
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client or other applicable legal privilege that based on the advice of outside counsel would be impaired by such disclosure or any confidentiality restriction under applicable Law.
 
Section 5.05          LIMITATIONS.
 
(a)          Notwithstanding anything to the contrary in this Agreement, no amounts of indemnity shall be payable as a result of any claim arising under:
 
(i)          Section 5.02(a), Section 5.02(b)(i), or Section 5.02(b)(iii) unless and until Losses claimed thereunder, when aggregated, are in excess of an amount equal to one percent (1%) of the Aggregate Indemnity Cap (the "Basket Amount"), in which case the REIT Indemnified Parties may recover the aggregate amount of all Losses payable; and
 
(ii)          Section 5.02(a), Section 5.02(b)(i), or Section 5.02(b)(iii) in excess of an amount equal to twenty-five percent (25%) of the Aggregate Indemnity Cap (aggregating all indemnity payments by all Contributors under Section 5.02(a), Section 5.02(b)(i), and Section 5.02(b)(iii));
 
provided, that the aggregate indemnity payments by all Contributors under Section 5.02(a) and Section 5.02(b) shall not exceed the Aggregate Indemnity Cap, and provided, further, that the aggregate indemnity payments by an individual Contributor under Section 5.02(a) shall not exceed such Contributor's Pro Rata Share of the Aggregate Indemnity Cap; and provided, further, none of the limitations set forth in this Section 5.05(a) shall be applicable with respect to, (i) any fraud or intentional misrepresentation, (ii) any breach of any Contributor Fundamental Representations or (iii) any breach of any Manager Fundamental Representations.
 
(b)          Notwithstanding anything to the contrary in this Agreement, no amounts of indemnity shall be payable as a result of any claim arising under:
 
(i)          Section 5.03(a) unless and until Losses claimed thereunder, when aggregated, are in excess of the Basket Amount, in which case the Contributor Indemnified Parties may recover the aggregate amount of all Losses; and
 
(ii)          Section 5.03 in excess of an amount equal to twenty-five (25%) of the Aggregate Indemnity Cap (aggregating all indemnity payments by the REIT under Section 5.03).
 
provided, that none of the limitations set forth in this Section 5.05(b) shall be applicable with respect to, (i) any fraud or intentional misrepresentation, or (ii) any breach of any of the REIT Fundamental Representations.
 
Section 5.06          CHARACTER OF INDEMNITY PAYMENTS. The parties agree that any indemnification payments made with respect to this Agreement shall be treated for all Tax purposes as an adjustment to or refund of the Contribution Consideration, unless otherwise required by Law (including by a determination of a Tax Authority that, under applicable Law, is not subject to further review or appeal).
 
Section 5.07          EXCLUSIVE REMEDY. Except for claims based on fraud, or claims for equitable relief with respect to Section 4.07, following the Closing the rights of the parties for
 
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indemnification relating to breaches of this Agreement shall be limited to those contained in this Article V and such indemnification rights shall be the exclusive remedies of the parties with respect to breaches of this Agreement.
 
Section 5.08          SUBROGATION/INSURANCE. If an Indemnified Party recovers Losses from an Indemnifying Party, the Indemnifying Party shall be subrogated, to the extent of such recovery, to the Indemnified Party's rights against any third party (including any employees) with respect to such recovered Losses, subject to the subrogation rights of any insurer providing insurance coverage under one of the Indemnified Party's policies and except to the extent that the grant of subrogation rights to the Indemnifying Party is prohibited by the terms of the applicable insurance policy. With respect to any rights of any Indemnifying Party (including any employees) against a third party to which an Indemnified Party is entitled pursuant to the preceding sentence, such Indemnified Party shall use commercially reasonable efforts to preserve any rights that such Indemnifying Parties may have to make claims against third parties (including under applicable insurance policies) and the Indemnified Parties and the Indemnifying Parties shall cooperate with and assist the other in issuing notices of claims to such third parties, presenting claims for payment and collecting proceeds related thereto. Notwithstanding anything in this Agreement to the contrary, the amount of any Losses of any Person under this Article V shall be net of the amount, if any, received by the Indemnified Party (after deducting all costs and expenses associated with recovering such amount) from any third party (including any insurance company or other insurance provider).
 
Section 5.09          RELEASE. Effective as of the Closing, each Contributor, the Manager, for itself and each of its Subsidiaries, and the REIT, for itself and each of its Subsidiaries (each individually, a "Releasing Party" and collectively, "Releasing Parties"), in each case, releases and forever discharges each Contributor, the Manager (including any officer or manager of the Manager) and the REIT and each of their respective Subsidiaries and Affiliates, and each of their respective individual, joint or mutual, past, present and future Representatives, successors and assigns (individually, a "Releasee" and collectively, "Releasees") from any and all claims, demands, Legal Proceedings, causes of action and Orders that any Releasing Party now has, has ever had or may hereafter have against the respective Releasees, and from any and all obligations, Contracts, debts, liabilities and obligations that any Releasee now has, has ever had or may hereafter have in favor of any Releasing Party, in each case of any nature (whether absolute or contingent, asserted or unasserted, known or unknown, primary or secondary, direct or indirect, and whether or not accrued) arising contemporaneously with or before the Closing or on account of or arising out of any matter, cause or event occurring contemporaneously with or before the Closing, including any rights to indemnification or reimbursement, whether pursuant to their respective certificate of incorporation or by-laws (or comparable documents), Contract or otherwise and whether or not relating to claims pending on, or asserted after, the Closing (in each case other than any obligations of a Releasee arising under this Agreement or under any Transaction Documents or as otherwise specifically provided in this Agreement or in any Transaction Documents) (collectively, the "Released Claims"); provided, that the foregoing release shall not cover, and the Released Claims shall not include, claims arising from the Non-Released Matters. "Non-Released Matters" shall mean rights of any Releasing Party (i) under this Agreement, including, for the avoidance of doubt, under Article II, the Advisory Agreements or any documents or instruments executed in connection herewith and therewith, (ii) to accrued fees due, and reimbursements owed, under the Advisory Agreements and (iii) to claims, if any, against current or former employees of the
 
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Manager in respect of actions, or omissions to act, in each case prior to the Closing Date, that result in a claim for indemnity under the provisions of the Management Agreement. Effective as of the Closing, each Releasing Party hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced, any Legal Proceeding of any kind against any Releasee, based upon any Released Claim.
 
ARTICLE VI
TERMINATION
 
Section 6.01          TERMINATION. This Agreement may be terminated, and the Transactions may be abandoned at any time prior to the Closing by:
 
(a)          the mutual written agreement of the REIT and the Contributor Representative, before or after the REIT Stockholder Approval is obtained;
 
(b)          either the REIT or the Contributor Representative, if any court of competent jurisdiction or other competent Governmental Authority shall have issued a statute, rule, regulation, order, decree or injunction or taken any other action permanently restraining, enjoining or otherwise prohibiting all or any portion of the Transactions and such statute, rule, regulation, order, decree or injunction or other action shall have become final and nonappealable;
 
(c)          either the REIT or the Contributor Representative, in the event: (i) of a material breach of this Agreement by (A) one or more of the Contributors or the Manager, if the REIT is the terminating party or (B) the REIT, if the Contributor Representative is the terminating party, in each case, if the non-terminating party fails to cure such breach within thirty (30) days following written notification thereof by the terminating party; or (ii) the satisfaction of any condition to the terminating party's obligations under this Agreement becomes impossible, but only if the failure of such condition to be satisfied is not caused by a breach of this Agreement by the terminating party or its Affiliates;
 
(d)          the REIT or the Contributor Representative, in the event the Stockholder Meeting is duly called and held and, despite the REIT's performance of its obligations under Section 4.04, the REIT Stockholder Approval is not obtained; or
 
(e)          either the REIT or the Contributor Representative, in the event that the Closing shall not have occurred on or before the one year anniversary of the Effective Date (the "Outside Date"), unless the failure of the Closing to occur on or before the Outside Date is a result of a breach of this Agreement by (i) the REIT or its Affiliates, if the REIT is the terminating party, or (ii) any Contributor or its Affiliates, if the Contributor Representative is the terminating party; provided, however, that the provisions of this Section 6.01(e) shall not be available, as applicable, to (A) the Contributor Representative, in the event that all conditions set forth in Section 2.02(b)(i) and Section 2.02(b)(iii) have been satisfied or waived (other than those conditions that by their terms or their nature are to be satisfied at the Closing, but subject to such conditions being satisfied or waived assuming a Closing would occur) or (B) the REIT, in the event that all conditions set forth in Section 2.02(b)(ii) and Section 2.02(b)(iii) have been satisfied or waived (other than those conditions that by their terms or their nature are to be satisfied at the Closing, but subject to such conditions being satisfied or waived assuming a Closing would occur).
 
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Section 6.02          EFFECT OF TERMINATION. If this Agreement is validly terminated pursuant to Section 6.01, this Agreement will forthwith become null and void, and have no further effect, without any liability on the part of any party hereto or its Affiliates, directors, managers, officers, stockholders, partners or members, other than the provisions of this Section 6.02 and Article VII hereof. Nothing contained in this Section 6.02 shall relieve any party from liability for any breach of this Agreement occurring prior to termination.
 
ARTICLE VII
GENERAL PROVISIONS
 
Section 7.01          NOTICES. All notices, demands and requests hereunder shall be in writing and shall be deemed to have been properly given if: (a) hand delivered; (b) sent by reputable overnight courier service; or (c) sent by United States registered or certified mail, postage prepaid, addressed to the parties at the respective addresses set forth below, or at such other address as any of the parties may from time to time designate by written notice given as herein required. Service of any such notice or other communications so made shall be deemed effective on the day of actual delivery (whether accepted or refused) as shown by the addressee's return receipt if by certified mail, and as confirmed by the courier service if by courier; provided, however, that if such actual delivery occurs after 5:00 p.m. (local time where received) or on a non-business day, then such notice or communication so made shall be deemed effective on the first business day after the day of actual delivery. All such notices shall be addressed as follows:
 
If to the REIT:
 
CorEnergy Infrastructure Trust, Inc.
   
1100 Walnut, Suite 3350
   
Kansas City, Missouri 64106
   
Attention: Mr. Todd Banks
     
With a copy to:
 
Steve Carman
   
Husch Blackwell LLP
   
4801 Main St.
   
Kansas City, MO 64112
If to the Manager
 
Corridor InfraTrust Management, LLC
or the Contributors:
 
1100 Walnut, Suite 3350
   
Kansas City, Missouri 64106
   
Attention: Mr. Richard Green
     
With a copy to:
 
Jim Allen
   
Stinson LLP
   
1201 Walnut St.
   
Kansas City, MO 64106

Section 7.02          ENTIRE AGREEMENT; AMENDMENTS. This Agreement (together with any exhibits) contains the entire agreement among the parties with respect to the Transactions, and shall supersede all previous oral and written agreements and all contemporaneous oral negotiations, commitments and understandings between the parties. This Agreement may be
 
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amended, changed, terminated or modified only by agreement in writing signed by all of the parties.
 
Section 7.03          SUCCESSORS AND ASSIGNS. The covenants, agreements, rights and obligations contained in this Agreement shall be binding upon and shall inure to the benefit of the respective heirs, executors, successors and assigns of the parties hereto and all Persons or entities claiming by, through or under any of them.
 
Section 7.04          FURTHER DOCUMENTS. Each party hereto agrees to execute any and all further documents and writings and perform such other reasonable actions that may be or become necessary or expedient to effectuate and carry out the Transactions, whether before or after the Closing.
 
Section 7.05          GOVERNING LAW; JURISDICTION.
 
(a)          This Agreement, and all claims or causes of actions (whether at law, in equity, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the Laws of the State of Missouri without giving effect to conflicts of Laws principles (whether of the State of Missouri or any other jurisdiction that would cause the application of the Laws of any jurisdiction other than the State of Missouri).
 
(b)          All legal proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Missouri state court or federal court of the Western District of Missouri. Each of the parties hereby irrevocably and unconditionally: (i) submits to the exclusive jurisdiction of any Missouri state court or federal court of the Western District of Missouri, for the purpose of any legal proceeding arising out of or relating to this Agreement and the Transactions brought by any party; (ii) agrees not to commence any such legal proceeding except in such courts; (iii) agrees that any claim in respect of any such legal proceedings may be heard and determined in any Missouri state court or federal court of the Western District of Missouri; (iv) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such legal proceeding; and (v) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such legal proceeding. Each of the parties agrees that a final judgment in any such legal proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by Law.
 
Section 7.06          COUNTERPARTS. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original and all of which, collectively, shall constitute one (1) agreement.
 
Section 7.07          CONSTRUCTION OF AGREEMENT. No party, or its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all language in all parts of this Agreement shall be construed in accordance with its fair meaning, and not strictly for or against any party.
 
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Section 7.08          NO WAIVER. A waiver by any party hereto of a breach of any of the covenants or agreements in this Agreement to be performed by any other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement.
 
Section 7.09          SEVERABILITY. In the event that any phrase, clause, sentence, paragraph, section, article or other portion of this Agreement shall become illegal, null or void or against public policy, for any reason, or shall be held by any court of competent jurisdiction to be illegal, null or void or against public policy, the remaining portions of this Agreement shall not be affected thereby and shall remain in force and effect to the full extent permissible by Law.
 
Section 7.10          HEADINGS. The headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. All references in this Agreement to sections and exhibits are to sections and exhibits of this Agreement, unless otherwise indicated.
 
Section 7.11          INTERPRETATION. For purposes of this Agreement: (a) the words "include," "includes" and "including" shall be deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto" and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to articles, sections, exhibits and schedules mean the articles and sections of, and the exhibits and schedules attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement, as applicable; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. All references to "dollars" or "$" shall mean United States Dollars.
 
Section 7.12          SCHEDULES. The disclosure of any fact or item in any portion of any schedule referenced by a particular section or subsection of this Agreement shall, should the existence of the fact or item or its contents be relevant to any other section or subsection of this Agreement, and if such relevance is reasonably apparent on the face thereof, be deemed to be disclosed with respect to such other section or subsection of this Agreement to which such fact or item relates.
 
[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

The REIT:
CORENERGY INFRASTRUCTURE TRUST, INC.,
 
a Maryland corporation

 
By:
/s/ Todd Banks
 
Name:
Todd Banks
 
Title:
Authorized Representative

The Manager:
CORRIDOR INFRATRUST MANAGEMENT, LLC

 
By:
/s/ Richard C. Green


Name:
Richard C. Green, Jr.

Title:
Managing Director

The Contributors:
/s/ Richard C. Green
 
/s/ Rick Kreul
 
Richard C. Green
 
Rick Kreul
 

/s/ Rebecca M. Sandring
 
/s/ Sean DeGon
 
Rebecca M. Sandring
 
Sean DeGon
 

/s/ Jeff Teeven
 
/s/ Jeffrey E. Fulmer
 
Jeff Teeven
 
Jeffrey E. Fulmer
 

Campbell Hamilton, Inc.

By:
/s/ David J. Schulte
 
/s/ David J. Schulte
 
Name: David J. Schulte
David J. Schulte, Trustee of the DJS Trust under Trust Agreement dated July 18, 2016
Title: President

[Signature Page to Contribution Agreement]

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EXHIBIT A
DEFINED TERMS
 
"Accrued Management Fee" means the amount of the base management fee (as defined in the Management Agreement) that has accrued and is unpaid under the Management Agreement through (and including) the Effective Date of this Agreement.
 
"Advisory Agreements" has the meaning set forth in the Recitals.
 
"Administration Agreement" is defined in the recitals.
 
"Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one (1) or more intermediaries, controls or is controlled by or is under common control with the Person specified. The term "control" (including the terms "controlling", "controlled by" and "under common control with") means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
 
"Agreement" is defined in the preamble.
 
"Aggregate Indemnity Cap" means $16,900,000.
 
"Anti-Terrorism Law" means each of: (a) the Executive Order; (b) the Patriot Act; (c) the Money Laundering Control Act of 1986, 18 U.S.C. Sect. 1956; and (d) any other Law now or hereafter enacted to monitor, deter or otherwise prevent terrorism or the funding or support of terrorism.
 
"Assignment" is defined in Section 2.02(a)(ii).
 
"Blue Sky Laws" is defined in Section 3.01(f)(i).
 
"Business" means the business of providing the advisory, property management and other services provided by the Manager to the REIT or any other Persons (including all of the services necessary to satisfy the obligations of the Manager under the Advisory Agreements).
 
"business day(s)" has the meaning set forth in Rule 14d-1(g)(3) of the Exchange Act.
 
"Business Employee" is defined in Section 3.02(o).
 
"Business Insurance Policies" is defined in Section 3.02(s)(i).
 
"Class B Stock" is defined in Section 1.01(a).
 
"Closing" is defined in Section 2.01.
 
"Closing Date" is defined in Section 2.01.
 
"Code" means the Internal Revenue Code of 1986, as amended.
 
"Common Stock" is defined in Section 1.01(a).
 
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"Contracts" means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral (and all amendments or modifications thereto) to which the Manager or one of its Subsidiaries is a party that are legally binding on the Manager or such Subsidiary.
 
"Contribution" is defined in Section 1.01(a).
 
"Contribution Consideration" is defined in Section 1.01(a).
 
"Contributor(s)" is defined in the preamble.
 
"Contributor Fundamental Representations" means the representations set forth in Section 3.01(a) (Organization and Qualification), Section 3.01(b) (Due Authorization; Approvals), Section 3.01(e) (Ownership of the Equity Interests), and Section 3.01(g) (Brokers, Finders and Advisors).
 
"Contributor Indemnified Parties" is defined in Section 5.03.
 
"Contributor Representative" is defined in Section 4.12(a).
 
"Designated Person" means any Person who: (a) is named on the list of Specially Designated Nationals or Blocked Persons maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control or any other similar lists maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control pursuant to authorizing statute, executive order or regulation; (b) (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of the Executive Order or any related legislation or any other similar executive order(s) or (ii) engages in any dealings or transactions prohibited by Section 2 of the Executive Order or is otherwise associated with any such Person in any manner who violates Section 2 of the Executive Order; or (c) (i) is an agency of the government of a country, (ii) is an organization controlled by a country or (iii) is a Person resident in a country that is subject to a sanctions program identified on the list maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control, or as otherwise published from time to time, as such program may be applicable to such agency, organization or Person.
 
"Effect" means any change, effect, development, circumstance, condition, state of facts, event or occurrence.
 
"Effective Date" is defined in the preamble.
 
"Encumbrances" means any and all liens, charges, security interests, mortgages, pledges, options, preemptive rights, rights of first refusal or first offer, proxies, levies, voting trusts or agreements or other adverse claims or restrictions on title or transfer of any nature whatsoever.
 
"Enforceability Exceptions" is defined in Section 3.01(b).
 
"Equity Interests" means: (a) with respect to a corporation, as determined under the Laws of the jurisdiction of organization of such entity, shares of capital stock (whether common, preferred or treasury); (b) with respect to a partnership, limited liability company, limited liability partnership
 
43

or similar Person, as determined under the Laws of the jurisdiction of organization of such entity, units, interests or other partnership or limited liability company interests; or (c) any other equity ownership.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
 
"ERISA Affiliate" means with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same "controlled group" as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
 
"Executive Order" means Executive Order No. 13224 on Terrorist Financings:—Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism issued on 23rd September, 2001, as amended by Order No. 132684, as so amended.
 
"Financial Statements" is defined in Section 3.02(k).
 
"GAAP" means United States generally accepted accounting principles consistently applied with those principles used in the preparation of the Financial Statements.
 
"Governmental Authority(ies)" means the government of the United States or any other nation, or of any political subdivision thereof, whether state, regional or local, and any agency, authority, instrumentality, regulatory body, court or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
 
"Governmental Licenses" is defined in Section 3.02(r).
 
"Indebtedness" means, as to any Person: (a) all obligations of such Person for borrowed money (including reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured); (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments; (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable and accrued commercial or trade liabilities arising in the ordinary course of business; (d) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency; (e) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person; (f) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases; (g) all indebtedness secured by any lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is non-recourse to the credit of such Person; and (h) all guarantees by such Person of the Indebtedness of any other Person.
 
"Indemnified Party" is defined in Section 5.04.
 
44

"Indemnifying Party" means any Person against whom a claim for indemnification is being asserted under any provision of Article V.
 
"Intellectual Property" means all of the following forms of intellectual property and all rights therein: (a) brands and slogans, registered and unregistered trademarks, trade names, service marks, domain names and applications and registrations therefor and all goodwill associated therewith; (b) patents, patent applications and inventions conceived or reduced to practice prior to the Closing Date, including any provisional, utility, continuation, continuation-in-part or divisional applications filed in the United States or other jurisdiction prior to the Closing Date, and all reissues thereof and all reexamination certificates issuing therefrom; (c) copyrights, including all related copyright applications and registrations; (d) know-how and trade secrets, whether or not reduced to practice; (e) the right to sue for and recover damages, assert, settle or release any claims or demands and obtain all other remedies and relief at law or equity for any past, present or future infringement or misappropriation of any of the foregoing; (f) licenses, options to license and other contractual rights to use any of the foregoing; and (g) all computer and electronic data processing programs and software programs and related documentation.
 
"Intended Tax Treatment" is defined in Section 1.02.
 
"IRS" is defined in Section 3.02(p)(i).
 
"Knowledge" means, (i) with respect to the Contributors (other than for purposes of Section 3.01) and the Manager, the actual knowledge, after reasonable investigation, of David Schulte, Becky Sandring, Jeff Fulmer, and Rick Green, and (ii) with respect to any Contributor (for purposes of Section 3.01), the actual knowledge, after reasonable investigation, of such Contributor.
 
"Law(s)" means all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directives, decrees, policies, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law, rule, regulation, ordinance, order, code interpretation, judgment, decree, directive, guideline, policy or similar form of decision of any Governmental Authority.
 
"Leased Real Property" is defined in Section 3.02(v)(i).
 
"Legal Requirement(s)" means any and all judicial decisions, orders, injunctions, writs, statutes, laws, rulings, rules, regulations, permits, certificates or ordinances of any Governmental Authority.
 
"Losses" means any and all damages, fines, fees, penalties, liabilities, losses and costs and expenses (including interest, court costs and fees, reasonable costs of attorneys, accountants and other experts or other reasonable expenses of litigation or other proceedings or of any claim, default or assessment); provided, that (i) Losses shall not include any indirect, special, punitive, incidental or consequential damages (other than any such damages asserted in a claim by a third party) and (ii) Losses of any Person shall be net of the amount, if any, received by such Person from any third party (including any insurance company or other insurance provider) to the extent provided in Section 5.08.
 
45

"made available" means (i) filed with the SEC and publicly available on the SEC's website, (ii) posted in the electronic data room established for purposes of the Transactions and made available to the Special Committee in such data room, or (iii) provided to legal counsel to the Special Committee by e-mail, in each case, at least two (2) business days prior to the Effective Date.
 
"Management Agreement" is defined in the recitals.
 
"Manager" is defined in the preamble.
 
"Manager Fundamental Representations" means the representations set forth in Section 3.02(a) (Organization and Qualification), Section 3.02(b) (Due Authorization; Approvals), Section 3.02(f) (Ownership of the Equity Interests), Section 3.02(j) (Tax Matters) and Section 3.02(ee) (Brokers, Finders and Advisors).
 
"Manager Plan" means any Plan maintained by the Manager or any of its Subsidiaries, or any ERISA Affiliate of the Manager or any of its Subsidiaries, or to which the Manager or any of its Subsidiaries, or any ERISA Affiliate of the Manager or any of its Subsidiaries contributes or is obligated to contribute, or has contributed within the past six years, or might otherwise have or reasonably be expected to have any liability.
 
"Material Adverse Effect" means:
 
(a)          with respect to the Manager, any Effect that, individually or in the aggregate, has had, or would reasonably be expected to have, (i) a material adverse effect on the condition (financial or otherwise), business, properties, assets, liabilities or results of operations of the Manager, taken as a whole, or (ii) a material adverse effect on the ability of the Contributors or the Manager to consummate the Transactions; provided, however, that for the purposes of clause (i), the following Effects shall not be taken into account when determining whether a Material Adverse Effect has occurred or is reasonably likely to exist or occur:
 
(i)          any changes after the Effective Date in general United States or global economic conditions to the extent that such Effects do not disproportionately have a greater adverse impact on the Manager relative to other similarly situated participants in the industry in which the Manager operates generally;
 
(ii)          any changes after the Effective Date to the industry or industries in which the Manager operates;
 
(iii)         any changes after the Effective Date in GAAP (or any interpretation thereof in accordance with the Financial Accounting Standards Board Statements of Financial Accounting Standards and Interpretations) to the extent that such changes do not disproportionately have a greater adverse impact on the Manager relative to other similarly situated participants in the industries in which the Manager operates generally;
 
(iv)          any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Authority after the Effective Date to the extent that such adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal does not disproportionately
 
46

have a greater adverse impact on the Manager relative to other similarly situated participants in the industries in which the Manager operates generally;
 
(v)          any actions taken, or the failure to take any action, if such action or such failure to take action is at the written request or with the prior written consent of the Special Committee,
 
(vi)          any Effect attributable to the negotiation, execution or announcement of this Agreement, or the Transactions (provided, that this clause (vi) shall be disregarded for purposes of any representations and warranties set forth in Section 3.01(c) and, to the extent related thereto, Section 2.02(b)(ii)(A));
 
(vii)          any failure by the Manager to meet any internal or published projections, estimates or expectations of the Manager's revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Manager to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure and that are not otherwise excluded from the definition of a "Material Adverse Effect" may be taken into account);
 
(viii)          any Effects after the Effective Date arising out of changes in geopolitical conditions, acts of terrorism or sabotage, the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, pandemic or other force majeure events, including any material worsening of such conditions threatened or existing as of the Effective Date to the extent that such changes do not disproportionately have a greater adverse impact on the Manager relative to other similarly situated participants in the industries in which the Manager operates generally; and
 
(ix)          any reduction in the credit rating of the Manager, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such reduction and that are not otherwise excluded from the definition of a "Material Adverse Effect" may be taken into account).
 
(b)          with respect to the REIT, any Effect that, individually or in the aggregate, has had, or would reasonably be expected to have, (i) a material adverse effect on the condition (financial or otherwise), business, properties, assets, liabilities or results of operations of the REIT, taken as a whole or (ii) a material adverse effect on the ability of the REIT to consummate the Transactions; provided, however, that for the purposes of clause (i), the following Effects shall not be taken into account when determining whether a Material Adverse Effect has occurred or is reasonably likely to exist or occur:
 
(i)          any changes after the Effective Date in general United States or global economic conditions to the extent that such Effects do not disproportionately have a greater adverse impact on the REIT, taken as a whole, relative to other similarly situated participants in the industry in which the REIT operates generally;
 
(ii)          any changes after the Effective Date to the industry or industries in which the REIT operates;
 
47

(iii)          any changes after the Effective Date in GAAP (or any interpretation thereof in accordance with the Financial Accounting Standards Board Statements of Financial Accounting Standards and Interpretations) to the extent that such changes do not disproportionately have a greater adverse impact on the REIT, taken as a whole, relative to other similarly situated participants in the industries in which the REIT operates generally;
 
(iv)          any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Authority after the Effective Date to the extent that such adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal does not disproportionately have a greater adverse impact on the REIT, taken as a whole, relative to other similarly situated participants in the industries in which the REIT operates generally;
 
(v)           any actions taken, or the failure to take any action, if such action or such failure to take action is at the written request or with the prior written consent of the Contributors or the Manager;
 
(vi)          any Effect attributable to the negotiation, execution or announcement of this Agreement, or the Transactions;
 
(vii)         any failure by the REIT to meet any internal or published projections, estimates or expectations of the REIT's revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the REIT to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure and that are not otherwise excluded from the definition of a "Material Adverse Effect" may be taken into account);
 
(viii)        any Effects after the Effective Date arising out of changes in geopolitical conditions, acts of terrorism or sabotage, the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, pandemic or other force majeure events, including any material worsening of such conditions threatened or existing as of the Effective Date to the extent that such changes do not disproportionately have a greater adverse impact on the REIT, taken as a whole, relative to other similarly situated participants in the industries in which the REIT operates generally; and
 
(ix)          any reduction in the credit rating of the REIT, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such reduction and that are not otherwise excluded from the definition of a "Material Adverse Effect" may be taken into account).
 
"Membership Interests" is defined in the recitals.
 
"Non-Competition Period" is defined in Section 4.07(a).
 
"Non-Released Matters" is defined in Section 5.09.
 
"NYSE" is defined in Section 3.03(b).
 
48

"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known as the USA Patriot Act).
 
"Person(s)" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
 
"Plan" means any employment, consulting, bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, equity (or equity-based), leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, medical, dental, vision, welfare, accident, disability, workmen's compensation or other insurance, severance, separation, termination, change of control, collective bargaining or other benefit plan, agreement, practice, policy or arrangement, whether written or oral, and whether or not subject to ERISA, including any "employee benefit plan" within the meaning of Section 3 (3) of ERISA.
 
"Pre-Closing Cash" means cash held by the Manager immediately prior to the Closing, which shall (i) include the cash received as a result of the payment of the Accrued Management Fee and (ii) exclude cash whose use is restricted (e.g., an amount of cash necessary to settle liabilities, cash posted as reserves for insurance coverage, cash posted as collateral for letters of credit, cash deposited to secure utility service or payments, and cash deposits received from prospective or actual lessees).
 
"Pre-Closing Tax Period" means any Tax period ending on or before the Closing Date and any period through the Closing Date in the case of a taxable period beginning before and ending after the Closing Date.
 
"Pro Rata Share" means, for each Contributor, the percentage set forth opposite the name of such Contributor in the table below:
 
Contributor
Pro Rata Share
David J. Schulte, Trustee of the DJS Trust under Trust Agreement dated July 18, 2016
29.85875%
Campbell Hamilton, Inc.
23.56285%
Richard C. Green
25.75905%
Jeffrey E. Fulmer
8.07727%
Rebecca M. Sandring
5.25030%
Rick Kreul
3.23096%
Jeff Teeven
2.22129%
Sean DeGon
2.03953%

"Proxy Statement" is defined in Section 4.04(a).
 
49

"Qualified Plan" is defined in Section 3.02(p)(iii).
 
"REIT" is defined in the preamble.
 
"REIT Fundamental Representations" means the representations set forth in Section 3.03(a) (Organization and Qualification), Section 3.03(b) (Due Authorization; Approvals), Section 3.03(c) (Brokers, Finders and Advisors) and Section 3.03(d) (Title to REIT Stock).
 
"REIT Indemnified Parties" is defined in Section 5.02.
 
"REIT SEC Filings" means all forms, reports, schedules, statements and documents (including all exhibits to such forms, reports, schedules, statements and documents) filed or furnished with the SEC by the REIT, including any amendments or supplements thereto, from and after January 1, 2013 to the Effective Date.
 
"REIT Stock" is defined in Section 1.01(a).
 
"REIT Stockholder Approval" is defined in Section 4.04(a).
 
"Released Claims" is defined in Section 5.09.
 
"Releasee" and collectively, "Releasees" are defined in Section 5.09.
 
"Restricted Business" is defined in Section 4.07(a).
 
"SEC" is defined in Section 4.04(a).
 
"Securities Act" is defined in Section 3.01(f)(i).
 
"Series A Preferred" is defined in Section 1.01(a).
 
"Stockholders Meeting" is defined in Section 4.04(d).
 
"Special Committee" is defined in the recitals.
 
"Subject Materials" is defined in Section 5.04(c).
 
"Subsidiary" means, with respect to any Person, any other Person (i) of which the first Person owns directly or indirectly fifty percent (50%) or more of the Equity Interests in the other Person, (ii) of which the first Person or any other Subsidiary of the first Person is a general partner or (iii) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions with respect to the other Person are at the time owned by the first Person and/or one or more of the first Person's Subsidiaries.
 
"Tax" means any and all taxes, governmental fees, imposts, levies or other like assessments or charges of any kind whatsoever (including all net income, gross receipts, capital, sales, use, ad valorem, value added, goods and services, transfer, franchise, profits, alternative, environmental, inventory, license, withholding, payroll, employment, social security, unemployment, escheat,
 
50

excise, severance, stamp, occupation, property (real or personal) and estimated taxes and customs duties), whether federal, state, local, foreign or other, together with any interest, penalty, addition to tax or additional amount imposed by any Tax Authority and any liability for any of the foregoing as transferee or successor.
 
"Tax Authority" means any Governmental Authority responsible for the imposition or administration of any Tax.
 
"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 any amendment thereof.
 
"Third Party Claim" means a third party action which constitutes a matter: (a) for which an Indemnified Party is entitled to indemnification under Article V; or (b) which if determined adversely to the applicable Indemnified Party, would provide a basis for a claim for indemnification under Article V.
 
"Transaction Documents" means this Agreement, the Assignments, the registration rights agreement contemplated by Section 4.10, and any agreements or documents prepared or executed pursuant to the transactions contemplated by such agreements, any exhibits or attachments to any of the foregoing and any other agreement signed by the parties that expressly states that it is intended to be a Transaction Document, as the same may be amended from time to time.
 
"Transactions" means the transactions contemplated by the Transaction Documents.
 
"Transferred Assets" means all material tangible personal property and other material assets reflected in the Financial Statements, excluding, however, cash and cash equivalents and any shares of Common Stock held by the Manager.
 
"Transferred Intellectual Property" means: (a) all Intellectual Property owned by the Manager and used in the Business; and (b) all licenses of Intellectual Property used in the Business to which the Manager is a party (other than licenses for off-the-shelf computer software that is generally available to the public on commercially reasonable terms).
 
*          *          *

51

EXHIBIT B
ASSIGNMENT
 
52

EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
 

53

EX-3.5 4 brhc10019770_ex3-5.htm EXHIBIT 3.5

Exhibit 3.5

CORENERGY INFRASTRUCTURE TRUST, INC.
 
ARTICLES SUPPLEMENTARY
 
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
 
CLASS B COMMON STOCK
 
CORENERGY INFRASTRUCTURE TRUST, INC., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:
 
FIRST: The charter of the Corporation (the “Charter”), authorizes the issuance of 100,000,000 shares of common stock, par value $0.001 per share (“Common Stock”), and authorizes the Board of Directors to reclassify any unissued shares of Common Stock from time to time into one or more classes or series of stock, and to set or change, subject to the express terms of any class or series of stock of the Corporation outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms or conditions of redemption of such unissued shares.
 
SECOND: In accordance with Section 2-208(b) of the Maryland General Corporation Law and pursuant to the authority expressly vested in the Board of Directors by Article VI of the Charter, the Board of Directors has duly reclassified and designated 11,810,000 unissued shares of Common Stock into a separate class designed as “Class B Common Stock.”
 
THIRD: The following is a description of the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or distributions, qualifications, and terms and conditions of redemption of the Class B Common Stock of the Corporation as set by the Board of Directors of the Corporation.
 
Section 1. Number of Shares and Designation.
 
A series of Common Stock designated Class B Common Stock (the “Class B Common Stock”) is hereby established and the number of shares constituting such series shall be 11,810,000. The par value of the Class B Common Stock is $0.001 per share. The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions, of the Class B Common Stock shall be subject in all cases to the provisions of Article VII of the Charter regarding limitations on ownership and transfer of the Corporation’s equity securities.
 
Section 2. Definitions.
 
Affiliate” of any particular Person shall mean any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise.
 
Board of Directors” shall mean the Board of Directors of the Corporation or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Class B Common Stock.
 
Business Day” shall mean any day other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to close.
 
Capital Gains Amount” shall have the meaning set forth in Section 3(c) hereof.
 
Cash Available for Distribution” or “CAFD” shall mean the Corporation’s earnings before interest, taxes, depreciation and amortization, less (i) cash interest expense, (ii) preferred dividends, (iii) regularly scheduled debt amortization, (iv) maintenance capital expenditures, (v) Reinvestment Allocation, and plus/minus Other Adjustments, but excluding the impact of any extraordinary or nonrecurring expenses unrelated to the operations of Crimson Midstream Holdings, LLC and all of its subsidiaries, all based on such amounts as calculated by the Corporation for
 

purposes of preparing, and as reflected in, the financial statements and other financial information included in the periodic reports filed by the Corporation with the SEC pursuant to the Exchange Act.
 
Change of Control” shall mean, after the original issuance of the Class B Common Stock, the following have occurred and are continuing: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of a merger or consolidation, which is covered by clause (2) below), in one or a series of related transactions, of all or substantially all of the properties or assets of the Corporation, to any Person; or (2) the consummation of any transaction (including, without limitation, pursuant to a merger or consolidation), the result of which is the acquisition by any Person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of the Corporation entitling that Person to exercise more than fifty percent (50%) of the total voting power of all shares of the Corporation entitled to vote generally in elections of the Corporation’s directors (except that such Person will be deemed to have beneficial ownership of all securities that such Person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); provided, however, that solely for purposes of the foregoing clause (2) of this definition of “Change of Control,” a “group” shall be deemed to include, in connection with a direct merger with the Corporation of any entity the equity securities of which are registered with the SEC pursuant to Section 12(b) or Section 12(g) of the Exchange Act, the shareholders of such entity with which the Corporation merges.
 
Charter” shall have the meaning set forth in the Preamble hereof.
 
Class B Common Stock” shall have the meaning set forth in Section 1 hereof.
 
Closing Date” shall mean February 4, 2021.
 
Code” shall mean the Internal Revenue Code of 1986, as amended.
 
Common Stock” shall mean the common stock, par value $0.001 per share, of the Corporation excluding any then outstanding Class B Common Stock.
 
Common Stock Base Dividend” means the Common Stock Base Dividend Per Share (as defined below) multiplied by all of the Corporation’s then issued and outstanding shares of Common Stock.
 
Common Stock Base Dividend Per Share” shall be defined as follows: (A) for the fiscal quarters of the Corporation ending June 30, 2021, September 30, 2021, December 31, 2021 and March 30, 2022, the Common Stock Base Dividend Per Share shall equal $0.05 per share per quarter; (B) for the  fiscal quarters of the Corporation ending June 30, 2022, September 30, 2022, December 31, 2022 and March 30, 2023, the Common Stock Base Dividend Per Share shall equal $0.055 per share per quarter; and (C) for the fiscal quarters of the Corporation ending June 30, 2023, September 30, 2023, December 31, 2023 and March 30, 2024, the Common Stock Base Dividend Per Share shall equal $0.06 per share per quarter.
 
Corporation” shall have the meaning set forth in the Preamble hereof.
 
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
First Year CAFD” shall mean the sum of (i) CAFD for any of the first four quarters completed after the fiscal quarter ending March 31, 2021 and (ii) the CAFD budget for any uncompleted quarters in the first four-quarter period after the fiscal quarter ending March 31, 2021, as approved by the Board of Directors.
 
LTM CAFD” shall have the meaning set forth in Section 3(a) hereof.
 
Mandatory Conversion” and “Mandatory Conversion Date” shall have the respective meanings set forth for such terms in Section 6(c) hereof.
 
2

Maximum Shares at Conversion” is calculated by dividing (i) the then-applicable LTM CAFD by (ii) the product of (A) 1.25 and (B) four (4) times the then-applicable Common Stock Base Dividend Per Share.
 
Notice of Mandatory Conversion” shall have the meaning set forth in Section 6(c) hereof.
 
NYSE” shall mean the New York Stock Exchange, Inc. or a successor that is a national securities exchange registered under Section 6 of the Exchange Act.
 
NYSE MKT” shall mean the NYSE MKT or a successor that is a national securities exchange registered under Section 6 of the Exchange Act.
 
One-for-One Conversion Thresholds” shall have the meaning set forth in Section 6(a) hereof.
 
“Other Adjustments” shall mean amounts determined in good faith by the Board as increases or decreases of amounts available for distribution, which adjustment will be consistent with past practices, and may include, but would not be limited to, nonrecurring transaction expenses or GAAP to cash variances for lease accounting.
 
Person” shall mean any natural person, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or Governmental Entity.
 
Reinvestment Allocation” shall mean the amount of nonrecurring cash flow, in the applicable period, retained for reinvestment, as determined by the Board in good faith from time to time.
 
SEC” shall mean the United States Securities and Exchange Commission, or any successor to such agency administering the provisions of the Exchange Act.
 
Total Distributions” shall have the meaning set forth in Section 3(c) hereof.
 
Transfer Agent” shall mean Computershare Trust Company, N.A. or such other agent or agents of the Corporation as may be designated by the Board of Directors or their designee as the transfer agent, registrar and dividend disbursing agent for the Class B Common Stock.
 
Section 3. Dividends and Distributions.
 
(a) Subject to the preferential rights of the holders of any class or series of equity securities of the Corporation ranking senior to the Class B Common Stock as to dividends, the holders of the then outstanding Class B Common Stock shall be entitled to receive, when, as and if authorized by the Board of Directors and declared by the Corporation, out of funds legally available for the payment of dividends, cash dividends in accordance with the provisions of this Section 3(a).  For the fiscal quarters of the Corporation ending June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022, each share of Class B Common Stock shall be entitled to receive dividends equal to the quotient of (i) difference of (A) First Year CAFD multiplied by 0.25 and (B) 1.25 multiplied by the Common Stock Base Dividend, divided by (ii) shares of Class B Common Stock issued and outstanding multiplied by 1.25.  For each fiscal quarter of the Corporation beginning with the fiscal quarter ending June 30, 2022 through and including the fiscal quarter ending on March 30, 2024, each share of Class B Common Stock shall be entitled to receive dividends equal to the quotient of (i) difference of (A) LTM CAFD multiplied by 0.25 and (B) 1.25 multiplied by the Common Stock Base Dividend, divided by (ii) shares of Class B Common Stock issued and outstanding multiplied by 1.25.  Provided however, that in no event shall shares of Class B Common Stock be entitled to receive dividends in an amount per share that is greater than any dividends per share authorized by the Board of Directors and declared with respect to the Common Stock. For the avoidance of doubt, as is the case with Common Stock, dividends declared and payable with respect to the Class B Common Stock shall not be cumulative.  Holders of Class B Common Stock are not entitled to receive dividends paid on such Class B Common Stock if such shares were not issued and outstanding on the record date established by the Corporation’s Board of Directors with respect to any such dividend.
 
(b) No dividends on the Class B Common Stock shall be declared or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such
 
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declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration, or payment or setting apart for payment shall be restricted or prohibited by law.
 
(c) If, for any taxable year, the Corporation elects to designate as “capital gain dividends” (as defined in Section 857 of the Code or any successor revenue code or section) any portion (the “Capital Gains Amount”) of the total distributions not in excess of the Corporation’s earnings and profits (as determined for United States federal income tax purposes) paid or made available for such taxable year to holders of all classes and series of capital stock (the “Total Distributions”), then the portion of the Capital Gains Amount that shall be allocable to holders of Class B Common Stock shall be in the same proportion that the Total Distributions paid or made available to the holders of Class B Common Stock for such taxable year bears to the Total Distributions for such taxable year made with respect to all classes or series of capital stock outstanding.
 
(d) In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of the Corporation’s equity securities is permitted under the Maryland General Corporation Law, no effect shall be given to amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution.
 
Section 4. Voting Rights.
 
(a) Holders of the Class B Common Stock shall vote together with the holders of Common Stock, voting as a single class, with respect to all matters on which holders of the Corporation’s Common Stock are entitled to vote.
 
(b) So long as any shares of Class B Common Stock remain outstanding following the initial issuance of Class B Common Stock, the Corporation shall not, without the affirmative vote or consent of the holders of 66 2/3% of the shares of Class B Common Stock outstanding at any such time, given in person or by proxy, either in writing or at a meeting (voting separately as a single class), in addition to any other vote or consent of stockholders required by the Charter, authorize or issue any additional shares of Class B Common Stock beyond the number of shares authorized in Section 1 of these Articles Supplementary; provided, however, that no such separate class vote or consent of the holders of Class B Common Stock shall be required in connection with the authorization or issuance of additional shares of Class B Common Stock pursuant to any stock split, reverse stock split, stock dividend or similar transaction in which the Class B Common Stock participates on the same basis, and in the same proportion, as the Common Stock.
 
(c) In any matter in which the Class B Common Stock may vote (as expressly provided herein or as may be required by law), each share of Class B Common Stock shall be entitled to one vote per share.
 
(d) The holders of shares of Class B Common Stock shall have exclusive voting rights on any Charter amendment that would alter the contract rights, as expressly set forth in the Charter, of only the Class B Common Stock, and any such Charter amendment shall require the approval of a majority of the issued and outstanding Class B Common Stock voting as a separate class.
 
Section 5. Additional Rights and Protections for Holders of Class B Common Stock.
 
(a) So long as any shares of Class B Common Stock remain outstanding following the initial issuance of Class B Common Stock, the holders of Class B Common Stock shall be entitled to receive, in the same form, manner and proportion relative to their ownership of the Corporation’s common equity securities as the holders of Common Stock, any consideration (consisting of cash, securities or any other property) that the holders of then-outstanding shares of Common Stock become entitled to receive as a result of any Change of Control with respect to the Corporation.
 
(b) Additionally, beginning on the Closing Date and continuing for so long as any shares of Class B Common Stock remain outstanding following the initial issuance of Class B Common Stock, the Corporation shall not amend its Charter in any manner that would have the effect of: (i) impacting the dividend and distribution rights of holders of Class B Common Stock by reducing the dividend rate applicable to Class B Common Stock as provided in these Articles Supplementary, changing the form of payment of dividends with respect to the Class B Common Stock, or otherwise making any change to the priority of outstanding shares of Class B Common Stock as to the payment of
 
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dividends in relation to any other class or series of the Corporation’s equity securities outstanding as of the Closing Date; or (ii) impacting the rights of holders of Class B Common Stock in the event of any liquidation, dissolution or Change of Control of the Corporation by (A) reducing the amount payable to, or changing the applicable form of payment to be received by, holders of Class B Common Stock upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, or in connection with any Change of Control or (B) making any change to the priority of the liquidation preferences of outstanding shares of Class B Common Stock in relation to any other class or series of the Corporation’s equity securities outstanding as of the Closing Date.
 
Section 6. Mandatory Conversion of Class B Common Stock to Common Stock.
 
(a) Subject to the provisions of Section 6(c) below, shares of Class B Common Stock will be converted into shares of Common Stock on a one-share-for-one-share basis if, at any time following the initial issuance of shares of Class B Common Stock, any of the following conditions shall be satisfied (collectively, the “One-for-One Conversion Thresholds”): (i) the Board of Directors shall authorize and the Corporation shall declare any quarterly dividend per outstanding share of Common Stock in excess of the then-applicable Common Stock Base Dividend Per Share; (ii) the Corporation shall issue additional shares of Common Stock for any purpose other than in connection with (A) any director or management compensation plan or equity award, (B) any issuance of Common Stock pursuant to the Corporation’s existing Dividend Reinvestment Plan (“DRIP”) for holders of Common Stock (or as may be modified or replaced with a similar DRIP plan in the future) (C) any issuance of Common Stock with respect to the conversion rights of either (1) the Corporation’s 5.875% Convertible Senior Notes due 2025 or (2) the Corporation’s 7.375% Series A Cumulative Redeemable Preferred Stock, (D) any issuance of Common Stock in a transaction in exchange for consideration that has been approved as representing fair value for the issuance of such Common Stock by the Corporation’s Board of Directors or (E) an issuance of Common Stock pursuant to any stock split, reverse stock split, stock dividend or similar transaction in which the Class B Common Stock participates on the same basis, and in the same proportion, as the Common Stock; or (iii) the Board of Directors shall authorize and the Corporation shall declare the payment of a dividend per share with respect to the Class B Common Stock equal to the then-applicable Common Stock Base Dividend Per Share for each of any four consecutive fiscal quarters of the Corporation during a period beginning with the fiscal quarter of the Corporation ending June 30, 2022 through and including the fiscal quarter of the Corporation ending on March 30, 2024.
 
(b) Additionally, subject to the provisions of Section 6(c) below, and in the event that no conversion of Class B Common Stock to Common Stock occurs as a result of the prior satisfaction of any of the One-for-One Conversion Thresholds prescribed in Section 6(a) above, upon the occurrence of the third anniversary of the Closing Date, shares of Class B Common Stock will be converted into shares of Common Stock, with the number of shares of Common Stock issuable for each then-outstanding share of Class B Common Stock to be determined by a ratio equal to the quotient of (i) the difference of (A) Maximum Shares at Conversion and (B) the number of then-outstanding shares of Common Stock, divided by (ii) the number of then-outstanding shares of Class B Common Stock provided, however, that in no event will shares of Class B Common Stock become convertible into shares of Common Stock pursuant to the preceding formula at a ratio of (x) less than 0.6800 shares of Common Stock per share of Class B Common Stock or (y) greater than 1.000 shares of Common Stock per share of Class B Common Stock.
 
(c) Upon satisfaction of the conditions set forth in either Section 6(a) or Section 6(b) above, then the Corporation will convert the outstanding shares of Class B Common Stock (or the right to receive shares of Class B Common Stock, as applicable) into shares of Common Stock (the “Mandatory Conversion”, with the date selected by the Corporation for any Mandatory Conversion pursuant to this Section 6(c) being the “Mandatory Conversion Date”).  In any such event, the Corporation shall, within ten (10) Business Days following (as applicable) either (i) the date on which any of the One-for-One Conversion Thresholds prescribed in Section 6(a) is satisfied or (ii) the third anniversary of the Closing Date, provide a notice of the Mandatory Conversion to each holder of record of shares of Class B Common Stock (such notice, a “Notice of Mandatory Conversion”).  The Corporation shall pay all accrued and unpaid dividends due on the Class B Common Stock to but not including the Mandatory Conversion Date.  The Common Stock received in return shall accrue dividends beginning on the Mandatory Conversion Date.  The Mandatory Conversion Date selected by the Corporation shall be no less than five (5) Business Days and no more than fifteen (15) Business Days after the date on which the Corporation provides the Notice of Mandatory Conversion to such record holders. The Notice of Mandatory Conversion shall state, as appropriate:
 
i.
the Mandatory Conversion Date selected by the Corporation;

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ii.
the conversion rate as in effect on the Mandatory Conversion Date; and

iii.
the number of shares of Common Stock to be issued to such record holder upon conversion of each share of Class B Common Stock held by such holder.

(d) The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of the Class B Common Stock, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of a number of shares of Class B Common Stock equal to the sum of (i) the total number of shares of Class B Common Stock then outstanding plus (ii) all additional shares of Class B Common Stock which the Corporation remains obligated to issue pursuant to any then-existing contractual commitments (subject to additional conditions or otherwise).  Any shares of Common Stock issued upon conversion of Class B Common Stock shall be duly authorized, validly issued, fully paid and nonassessable.
 
Section 7. Ranking and Liquidation Preference.
 
In respect of rights to the payment of dividends and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the Class B Common Stock shall rank (i) senior to all equity securities issued by the Corporation in the future, the terms of which specifically provide that such equity securities rank junior to the Class B Common Stock as to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Corporation, (ii) on a parity with the Common Stock and all equity securities issued by the Corporation in the future, the terms of which specifically provide that such equity securities rank on a parity with the Class B Common Stock as to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Corporation, and (iii) junior to the 7.375% Series A Cumulative Redeemable Preferred Stock, the Series B Redeemable Convertible Preferred Stock, the 9.00% Series C Exchangeable Preferred Stock and all equity securities issued by the Corporation in the future, the terms of which specifically provide that such equity securities rank senior to the Class B Common Stock as to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Corporation. The term “equity securities” does not include convertible debt securities, which will rank senior to the Class B Common Stock prior to conversion. All shares of Class B Common Stock shall rank equally with one another and shall be identical in all respects.
 
Section 8. Restrictions on Transfer, Acquisition, Conversion and Redemption of Shares.
 
(a) The Class B Common Stock is subject to all of the limitations, terms and conditions of the Corporation’s Charter, including but not limited to the terms and conditions (including exceptions and exemptions) of Article VII of the Charter. The foregoing sentence shall not be construed to limit to the Class B Common Stock the applicability of any other term or provision of the Charter.
 
(b) Following the one year anniversary of the Closing Date, outstanding shares of Class B Common Stock may be transferred by any holder thereof without the prior approval of the Board of Directors, but only in transactions pursuant to which such holder would transfer (i) shares of Class B Common Stock to Affiliates of such holder or (ii) at least fifteen percent (15%) of the shares of Class B Common Stock then held by such holder. No such transfer of shares of Class B Common Stock pursuant to this subparagraph (c) shall be effective unless the holder of such shares delivers to the Corporation an opinion of counsel for the holder, in form and substance satisfactory to the Corporation, to the effect that the transfer of the shares is in compliance with applicable federal and state securities laws (the “Legal Opinion”), and a statement of the holder, in form and substance satisfactory to the Corporation, making appropriate representations and warranties regarding compliance with applicable federal and state securities laws.  If the holder of shares of Class B Common Stock elects to transfer his, her or its shares pursuant to this subparagraph (c), then such holder shall (in addition to furnishing the Legal Opinion) notify the Corporation in writing of the number of shares of Class B Common Stock to be transferred and the aggregate sales price of such shares, with such written notice furnished to the Corporation no later than five (5) Business Days prior to the transfer.
 
Section 9. Shares of Stock To Be Retired.
 
All shares of Class B Common Stock which shall have been issued and redeemed, purchased or reacquired in any manner by the Corporation shall, after such redemption, repurchase or other reacquisition, have the status of
 
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authorized but unissued shares of Common Stock of the Corporation, without designation as to class or series, until such shares are reclassified by the Board of Directors.
 
Section 10. Record Holders.
 
The Corporation and the Transfer Agent may deem and treat the record holder of any Class B Common Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the Transfer Agent shall be affected by any notice to the contrary.
 
Section 11. Listing.
 
The Class B Common Stock will not be listed on any exchange, including without limitation the NYSE and the NYSE MKT.
 
Section 12. Exclusion of Other Rights.
 
The Class B Common Stock shall not have any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Charter and these Articles Supplementary.
 
Section 13. Headings of Subdivisions.
 
The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
 
Section 14. Severability of Provisions.
 
If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Class B Common Stock set forth in the Charter and these Articles Supplementary are invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of the Class B Common Stock set forth in the Charter which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Class B Common Stock herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
 
Section 15. No Preemptive Rights.
 
No holder of shares of Class B Common Stock shall have any preemptive or preferential right to subscribe for, or to purchase, any additional shares of stock of the Corporation of any class or series, or any other security of the Corporation which the Corporation may issue or sell.
 
FOURTH: The shares of Class B Common Stock have been classified and designated by the Board of Directors under the authority contained in Article VI of the Charter.
 
FIFTH: These Articles Supplementary shall become effective as of 12:02 p.m., Eastern Time, on February 4, 2021.
 
SIXTH: These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.
 
SEVENTH: The undersigned President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President of the Corporation acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
 
SIGNATURES APPEAR ON NEXT PAGE
 
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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by its President and attested to by its Secretary as of February 2, 2021.
 
 
CORENERGY INFRASTRUCTURE TRUST, INC.
   
 
/s/ David J. Schulte
 
By:  David J. Schulte
 
Title: President

ATTEST: /s/ Rebecca M. Sandring

By: Rebecca M. Sandring
   
Title: Secretary
 

[Signature Page to Articles Supplementary – Class B Common Stock]

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EX-3.6 5 brhc10019770_ex3-6.htm EXHIBIT 3.6

Exhibit 3.6

CORENERGY INFRASTRUCTURE TRUST, INC.
 
ARTICLES SUPPLEMENTARY
 
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
 
SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK
 
CORENERGY INFRASTRUCTURE TRUST, INC., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:
 
FIRST: The charter of the Corporation (the “Charter”), authorizes the issuance of 10,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), issuable from time to time in one or more classes or series, and authorize the Board of Directors (as defined below) to classify or reclassify any unissued shares from time to time by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, or terms or conditions of redemption of such unissued shares.
 
SECOND: In accordance with Section 2-208(b) of the Maryland General Corporation Law and pursuant to the authority expressly vested in the Board of Directors by Article VI of the Charter, the Board of Directors has duly classified and designated 2,437,000 unissued shares of Preferred Stock into a separate series designed as “Series B Redeemable Convertible Preferred Stock.”
 
THIRD: The following is a description of the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications, and terms and conditions of redemption of the Series B Redeemable Convertible Preferred Stock of the Corporation as set by the Board of Directors and Executive Committee of the Corporation.
 
Section 1. Number of Shares and Designation.
 
A series of Preferred Stock designated Series B Convertible Preferred Stock (the “Series B Preferred Stock”) is hereby established and the number of shares constituting such series shall be 2,437,000. The par value of the Series B Preferred Stock is $0.001 per share. The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions, of the Series B Preferred Stock shall be subject in all cases to the provisions of Article VII of the Charter regarding limitations on ownership and transfer of the Corporation’s equity securities.
 
Section 2. Definitions.
 
“Aggregate Stock Ownership Limit” shall have the meaning set forth in Article VII, Section 7.1 of the Charter.
 
“Board of Directors” shall mean the Board of Directors of the Corporation or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Series B Preferred Stock.
 
“Business Day” shall mean any day other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to close.
 
“Capital Gains Amount” shall have the meaning set forth in Section 3(h) hereof.
 
“Charter” shall have the meaning set forth in the Preamble hereof.
 
“Class B Common Stock” shall mean the Class B Common Stock, par value $0.001 per share, of the Corporation.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended.
 

“Common Stock” shall mean the class of common stock registered under the Exchange Act, par value $0.001 per share, of the Corporation.
 
“Common Stock Reference Price” shall mean $7.80.
 
“Conversion Date” shall have the meaning set forth in Section 7(a) hereof.
 
“Corporation” shall have the meaning set forth in the Preamble hereof.
 
“Dividend Payment Date” shall mean the last calendar day of each February, May, August and November of each year, commencing on May 31, 2021.
 
“Dividend Payment Record Date” shall mean the date designated by the Board of Directors for the payment of dividends that is not more than 30 or less than 10 days prior to the applicable Dividend Payment Date.
 
“Dividend Period” shall mean the period commencing on and including, a Dividend Payment Date (or if no Dividend Payment Date has occurred, commencing on, and including, the Original Issue Date), and ending on, and including, the day immediately preceding the next succeeding Dividend Payment Date (or in the case of a period during which any shares of Series B Preferred Stock shall be redeemed pursuant to Section 5 hereof, ending on, and including, the redemption date with respect to the shares of Series B Preferred Stock being redeemed).
 
“DTC” shall have the meaning set forth in Section 5(g) hereof.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Liquidation Preference” shall have the meaning set forth in Section 4 hereof.
 
“Mandatory Conversion” and “Mandatory Conversion Date” shall have the meaning set forth in Section 8(a) hereof.
 
“Notice of Mandatory Conversion” shall have the meaning set forth in Section 8(b).
 
“Original Issue Date” shall mean the first date on which the Series B Preferred Stock is issued and sold.
 
“Preferred Stock” shall have the meaning set forth in the Preamble hereof.
 
“Redemption Right” shall have the meaning set forth in Section 5(b) hereof.
 
“REIT” shall have the meaning set forth in Section 5(e) hereof.
 
“REIT-Based Cash Conversion” shall have the meaning set forth in Section 7(a) hereof.

“Series A Preferred Stock” shall have the meaning set forth in Section 6(b)(ii) hereof.
 
“Series B Preferred Stock” shall have the meaning set forth in Section 1 hereof.
 
“Series C Preferred Stock” shall have the meaning set forth in Section 6(b)(i) hereof.
 
“Total Distributions” shall have the meaning set forth in Section 3(h) hereof.
 
“Transfer Agent” shall mean Computershare Trust Company, N.A. or such other agent or agents of the Corporation as may be designated by the Board of Directors or their designee as the transfer agent, registrar and dividend disbursing agent for the Series B Preferred Stock.
 
“Trust” shall have the meaning set forth in Article VII, Section 7.1 of the Charter.
 
“VWAP” means the volume-weighted average price per share of Common Stock on any trading day as displayed under the heading “Bloomberg VWAP” on the Bloomberg page (or its equivalent successor if Bloomberg
 
2

ceases to publish such price or such page is not available) in respect of the period from the open of trading on the relevant trading day until the close of trading on such trading day (or if such volume-weighted average price is unavailable, the market price of one share of Common Stock on such trading day determined, using a volume-weighted average method, by an independent financial advisor retained for such purpose by the Corporation). The VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session.
 
Section 3. Dividends and Distributions.
 
(a) Subject to the preferential rights of the holders of any class or series of equity securities of the Corporation ranking senior to the Series B Preferred Stock as to dividends, the holders of the then outstanding Series B Preferred Stock shall be entitled to receive, when, as and if authorized by the Board of Directors and declared by the Corporation, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 4.00% per annum of the $25.00 Liquidation Preference per share of the Series B Preferred Stock, which is equivalent to $1.00 per annum per share of the Series B Preferred Stock, provided, however, that such cumulative cash dividends may, in the discretion of the Board of Directors, be paid in kind, instead of in cash, by issuing additional shares of Series B Preferred Stock to the holders of the then outstanding Series B Preferred Stock (“Payment-in-Kind Dividend”).  For each Payment-in-Kind Dividend, each holder of Series B Preferred Stock on the record date for such Payment-in-Kind Dividend will receive that number of shares of Series B Preferred Stock equal to the quotient of (i) the amount of the dividend payment due such stockholder divided by (ii) $25.00.  No fractional shares shall be issued upon payment of such Payment-in-Kind Dividend pursuant to this Section 3(a) and the number of shares to be issued upon payment of such Payment-in-Kind Dividend will be rounded up to the nearest whole share; provided, that, in lieu of rounding up to the nearest whole share, the Corporation may, at its option, pay a cash adjustment in respect of such fractional interest equal to such fractional interest multiplied by $25.00 on the respective dividend date.  Holders of Series B Preferred Stock will receive written notification from the Corporation or the transfer agent if a dividend is paid in Series B Preferred Stock, which notification will specify the number of shares of Series B Preferred Stock paid as a dividend. Certificates representing the shares of Series B Preferred Stock issuable upon payment of each Payment-In-Kind Dividend (or evidence of the issuance of such number of shares of Series B Preferred Stock in book-entry form, if applicable) shall be delivered to each holder entitled to receive such Payment-in-Kind Dividend (in appropriate denominations) as soon as reasonably practicable.  All dividends payable on Series B Preferred Stock shall accrue and be cumulative from and including the Original Issue Date and shall be payable quarterly in arrears on each Dividend Payment Date, commencing on May 31, 2021, when and if authorized by the Board of Directors and declared by the Corporation; provided, however, that if any Dividend Payment Date is not a Business Day, then the dividend which would otherwise have been payable on such Dividend Payment Date may be paid on the next succeeding Business Day with the same force and effect as if paid on such Dividend Payment Date, and no interest or additional dividends or other sums shall accrue on the amount so payable from such Dividend Payment Date to such next succeeding Business Day. The amount of any dividend payable on the Series B Preferred Stock for each full Dividend Period shall be computed by dividing $1.00 by four (4) regardless of the actual number of days in such full Dividend Period. The amount of any dividend payable on the Series B Preferred Stock for any partial Dividend Period including the initial Dividend Period shall be prorated and computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stockholder records of the Corporation at the close of business on the applicable Dividend Payment Record Date.  Holders of Series B Preferred Stock are not entitled to receive dividends paid on such Series B Preferred Stock if such shares were not issued and outstanding on the Dividend Payment Record Date for such dividend. Notwithstanding any provision to the contrary contained herein, each outstanding share of Series B Preferred Stock shall be entitled to receive a dividend with respect to any Dividend Payment Record Date equal to the dividend paid with respect to each other share of Series B Preferred Stock that is outstanding on such date; provided, however that, for the avoidance of doubt any shares of Series B Preferred Stock that are converted into shares of Class B Common Stock pursuant to the terms of Section 7 or Section 8 hereof, with a Conversion Date or mandatory Conversion Date (as applicable) that falls on or after a date that also is a Dividend Payment Record Date for the Series B Preferred Stock with respect to the then-current quarter, shall not be entitled to receive any dividends payable with respect to such shares of Series B Preferred Stock with respect to such Dividend Payment Record Date if the shares of Class B Common Stock to be received upon such conversion also are entitled to receive a dividend declared by the Corporation's Board of Directors for the same fiscal quarter.
 
(b) If, by the first anniversary of the Original Issue Date, (i) the affirmative vote of the holders of the issued and outstanding Common Stock have not approved, in accordance with appliable requirements of the New York Stock Exchange (“NYSE”) Shareholder Approval Policy as set forth in Section 312.03 of the NYSE Listed Company
 
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Manual, the convertibility of the Series B Preferred Stock to Class B Common Stock as provided in Section 7 and Section 8 below, or (ii) any other action or consent necessary for such convertibility has not occurred as of such date, then (i) the dividend rate for the Series B Preferred Stock will increase from 4.00% per annum to 11.00% per annum as of such anniversary and (ii) notwithstanding anything contained herein to the contrary (including, without limitation, Section 3(a) hereof), all future dividends on the Series B Preferred Stock shall be paid by the Corporation in cash, and not in Payment-in-Kind Dividends.
 
(c) No dividends on the Series B Preferred Stock shall be declared or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration, or payment or setting apart for payment shall be restricted or prohibited by law.
 
(d) Notwithstanding anything contained herein to the contrary, dividends on the Series B Preferred Stock shall accrue whether or not (i) the terms and provisions set forth in Section 3(c) hereof at any time prohibit the current payment of dividends, (ii) the Corporation has earnings, (iii) whether or not there are funds legally available for the payment of such dividends and (iv) whether or not such dividends are authorized. Accrued but unpaid dividends on the Series B Preferred Stock will accumulate as of the Dividend Payment Date on which they first become payable. No interest shall be payable in respect of any accrued but unpaid dividend on the Series B Preferred Stock.
 
(e) Except as provided in Section 3(f) below, so long as any shares of Series B Preferred Stock are outstanding, no dividends shall be declared or paid or set apart for payment and no other distribution of cash or other property may be declared or made, directly or indirectly, on or with respect to any shares of Common Stock, Class B Common Stock or shares of any other class or series of equity securities of the Corporation ranking, as to dividends and upon liquidation, on a parity with or junior to the Series B Preferred Stock (other than a dividend paid in shares of Common Stock, Class B Common Stock or in shares of any other class or series of equity securities ranking junior to the Series B Preferred Stock as to dividends and upon liquidation) for any period, nor shall any shares of Common Stock, Class B Common Stock or any other shares of any other class or series of equity securities of the Corporation ranking, as to dividends or upon liquidation, on a parity with or junior to the Series B Preferred Stock be redeemed, purchased or otherwise acquired for any consideration and no other distribution of cash or other property may be made, directly or indirectly, on or with respect thereto (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Corporation (other than a purchase or other acquisition of shares of Common Stock or Class B Common Stock made for purposes of and in compliance with the requirements of any employee benefit, incentive or similar plan of the Corporation or any subsidiary thereof, conversion into or exchange for other shares of any class or series of equity securities of the Corporation ranking junior to the Series B Preferred Stock as to dividends and upon liquidation and except for the acquisition of shares made pursuant to the provisions of Article VII of the Charter), unless full cumulative dividends on the Series B Preferred Stock for all past Dividend Periods shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.
 
(f) If and when dividends are not paid in full (or a sum sufficient for such full payment is not so declared and set apart) upon the Series B Preferred Stock and the shares of any other class or series of equity securities ranking, as to dividends, on a parity with the Series B Preferred Stock, all dividends declared upon the Series B Preferred Stock and each such other class or series of equity securities ranking, as to dividends, on a parity with the Series B Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series B Preferred Stock and such other class or series of equity securities shall in all cases bear to each other the same ratio that accrued dividends per share on the Series B Preferred Stock and such other class or series of equity securities (which shall not include any accrual in respect of unpaid dividends on such other class or series of equity securities for prior Dividend Periods if such other class or series of equity securities does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears.
 
(g) Holders of shares of Series B Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or shares of stock, in excess of full cumulative dividends on the Series B Preferred Stock as provided herein. Any dividend payment made on the Series B Preferred Stock shall first be credited against the earliest accrued but unpaid dividends due with respect to such shares which remains payable.
 
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(h) If, for any taxable year, the Corporation elects to designate as “capital gain dividends” (as defined in Section 857 of the Code or any successor revenue code or section) any portion (the “Capital Gains Amount”) of the total distributions not in excess of the Corporation’s earnings and profits (as determined for United States federal income tax purposes) paid or made available for such taxable year to holders of all classes and series of capital stock (the “Total Distributions”), then the portion of the Capital Gains Amount that shall be allocable to holders of Series B Preferred Stock shall be in the same proportion that the Total Distributions paid or made available to the holders of Series B Preferred Stock for such taxable year bears to the Total Distributions for such taxable year made with respect to all classes or series of capital stock outstanding.
 
(i) In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of the Corporation’s equity securities is permitted under the Maryland General Corporation Law, no effect shall be given to amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution.
 
Section 4. Liquidation Preference.
 
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, before any distribution or payment shall be made to holders of shares of Common Stock, Class B Common Stock or any other class or series of equity securities of the Corporation ranking, as to liquidation rights, junior to the Series B Preferred Stock, the holders of shares of Series B Preferred Stock then outstanding, after the payment of the Corporation’s debts and other liabilities, shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders a liquidation preference of $25.00 per share (the “Liquidation Preference”), plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared). In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Corporation are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock and the corresponding amounts payable on all shares of other classes or series of equity securities of the Corporation ranking, as to liquidation rights, on a parity with the Series B Preferred Stock in the distribution of assets, then the holders of the Series B Preferred Stock and each such other class or series of shares of equity securities ranking, as to liquidation rights, on a parity with the Series B Preferred Stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. Written notice of any such liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first-class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of shares of Series B Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Corporation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of the remaining assets of the Corporation. The (i) consolidation or merger of the Corporation with or into any other corporation, trust or entity, (ii) a statutory share exchange or (iii) the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Corporation, shall not be deemed to constitute a liquidation, dissolution or winding-up of the affairs of the Corporation for purposes of these Articles Supplementary.
 
Section 5. Redemption.
 
(a) Shares of Series B Preferred Stock shall only be redeemable by the Corporation as set forth in this Section 5.
 
(b) The Corporation, at its option, upon not less than 30 nor more than 60 days’ written notice, may redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) thereon to, but not including, the date fixed for redemption, without interest (the “Redemption Right”). If fewer than all of the outstanding shares of Series B Preferred Stock are to be redeemed, the shares of Series B Preferred Stock to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional shares) or by lot. If such redemption is to be by lot and, as a result of such redemption, any holder of a number of shares of Series B Preferred Stock would become a holder of a number of shares of Series B Preferred Stock in excess of the Aggregate Stock Ownership Limit because such holder’s Series B Preferred Stock was not redeemed, or was only redeemed in part, then, except as otherwise provided in the Charter, the Corporation will redeem the requisite number of shares of Series B Preferred Stock of
 
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such holder such that no holder will hold in excess of the Aggregate Stock Ownership Limit subsequent to such redemption.
 
(c) Upon receipt of a redemption notice under Section 5(h), each holder of Series B Preferred Stock may, at his, her or its option, convert some or all of such Series B Preferred Stock subject to Redemption under this Section 5, to Class B Common Stock of the Corporation if and as permitted pursuant to Section 7 below, by notice to the Corporation at any time at least five (5) Business Days prior to the redemption date therefor set by the Corporation under Section 5(h) below.
 
(d) Holders of Series B Preferred Stock to be redeemed shall surrender such shares of Series B Preferred Stock at the place designated in such notice and shall be entitled to the redemption price of $25.00 per share and any accrued and unpaid dividends (whether or not declared) payable upon such redemption following such surrender. If (i) notice of redemption of any shares of Series B Preferred Stock has been given, (ii) the funds necessary for such redemption have been set aside by the Corporation in trust for the benefit of the holders of any shares of Series B Preferred Stock so called for redemption and (iii) irrevocable instructions have been given to pay the redemption price and all accrued and unpaid dividends (whether or not declared), then from and after the redemption date dividends shall cease to accrue on such shares of Series B Preferred Stock, such shares of Series B Preferred Stock shall no longer be deemed outstanding and (subject only to Section 5(c) above) al