Common use of Dispositions and Encumbrances of Membership Interests Clause in Contracts

Dispositions and Encumbrances of Membership Interests. (a) A Disposition or Encumbrance of all or any portion of a Membership Interest may be effected only in strict accordance with the provisions of this Section 16. 1. Any attempted Disposition or Encumbrance by a Member of a Membership Interest other than in strict accordance with this Section 16.1 is void, and the Company shall not recognize it. The Members agree that a breach of the provisions of this Section 16.1 may cause irreparable injury to the Company and to the other Members for which monetary damages (or other remedy at law) are inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Member to comply with such provision and (ii) the uniqueness of the Company business and the relationship among the Members. Accordingly, the Members agree that the provisions of this Section 16.1 may be enforced by specific performance. (b) Except as permitted by Section 16.2, a Member may Dispose of its Membership Interest only if: (i) the Disposition would not allow any creditor of the Company or an operating Subsidiary to call, accelerate or otherwise alter the terms or conditions of any indebtedness of the Company or an Operating Subsidiary; (ii) the Disposing Member's assignee enters into an amendment to this Agreement or other Document acceptable in form and substance to the Management Committee whereby the assignee agrees to be bound by the terms of this Agreement; (iii) the Disposition is pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended, and other applicable securities laws; (iv) unless unanimously consented to by the Management Committee, such disposition does not result in a termination of the Company for federal income tax purposes under section 708(b)(1)(B) of the Code, or cause the Company to be treated as a corporation under the Code; and (v) the Disposition consists of equal percentages of the Disposing Member's Capital Accounts and Sharing Ratio. (c) If a filing under the Hart-▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇itrust Improvements Act of 1976, as amended, is required in connection with the Disposition by a Member of any of its Membership Interest, which filing would not be required if the transfer of such Membership Interest were instead accomplished by a change in control of the Disposing Member, then the Disposing Member may not effect such Disposition of its Membership Interest except with the unanimous consent of the Management Committee. (d) Notwithstanding any contrary provision contained in this Agreement, no Member shall dispose of such Member's rights or obligations arising from or related to this Agreement, the Company or any interest therein if such disposition would result in the violation of the Act or any other laws. Any such attempted Dispositions are void ab initio.

Dispositions and Encumbrances of Membership Interests. (a) A Disposition or Encumbrance Except to the extent permitted by this Section 8.01, a Member (the “Disposing Member”) may not Dispose of all or any portion of a its Membership Interest (the “Subject Interest”) to a Person who is not a Permitted Transferee of such Member unless and until (i) the other terms and conditions set forth in this Section 8.01 have been satisfied and (ii) such Disposition has been approved by the requisite approval of the Management Committee. If any Disposing Member intends to dispose of its Membership Interest pursuant to a bona fide offer (“Acquisition Proposal”) from a Person who is not a Permitted Transferee, such Disposing Member shall notify the Management Committee and the other Members in writing (“Transfer Notice”), which Transfer Notice shall specify the identity of the proposed transferee and the terms and conditions (including the cash and a description of the non-cash consideration constituting the purchase price) of the proposed Disposition and shall include a complete copy of the Acquisition Proposal. Except with respect to a proposed Disposition to a Permitted Transferee, the Members (other than the Disposing Member) shall have the right, at any time during the period (the “Exercise Period”) that ends at 5:00 p.m. Houston, Texas time on the 30th day after receipt of the Transfer Notice to elect to purchase the Subject Interest at the price and on the terms and conditions set forth in the Acquisition Proposal. Any Member(s) who elect to purchase the Subject Interest (each, a “ROFR Buyer”) must furnish written notice (each, a “ROFR Acceptance”) to the Disposing Member prior to termination of the Exercise Period. b) The Disposing Member shall not be bound to Dispose of any portion of the Subject Interest to any ROFR Buyer(s) unless all of such Subject Interest is accepted for purchase by ROFR Buyers in accordance with this Section 8.01. If there is more than one ROFR Buyer who timely delivers a ROFR Acceptance, each such ROFR Buyer shall be entitled to purchase its pro rata portion of the Subject Interest, based upon the ratio that each such ROFR Buyer’s Percentage Interest bears to the total Percentage Interests of all such ROFR Buyers. The ROFR Buyer(s) may substitute the cash equivalent for any portion of the consideration specified in the Acquisition Proposal which was other than cash or a promissory note payable in cash; provided, however, that if the ROFR Buyer(s) desire to so substitute cash for any such non-cash consideration, and if the ROFR Buyer(s)’ determination of the fair market value of such non-cash consideration is less than the fair market value that was given for such consideration by the Disposing Member in the Transfer Notice, the ROFR Buyer(s) shall state their determination of such value in the ROFR Acceptance; and if the Disposing Member and the ROFR Buyer(s) are unable to mutually agree upon the fair market value of such non-cash consideration within five Business Days after the delivery of the ROFR Acceptance, then the Disposing Member and the ROFR Buyer(s) shall promptly cause such value to be effected only determined through appraisal in strict accordance the manner provided in Section 8.01(e). Such appraisal procedure shall delay, if necessary, any closing of the sale of the Subject Interest. Any delayed closing shall occur, subject to the next sentence, within 15 days after delivery to the parties of the appraiser’s determination of the value of the non-cash consideration. The cash equivalent of any such non-cash consideration that is to be paid at the closing of the purchase and sale of the Subject Interest shall in such event be the amount determined by the appraisal. c) The closing of the Disposition of the Subject Interest pursuant to the exercise of the rights of first refusal granted in Section 8.01(a) shall be at 9:00 a.m. Houston, Texas time on the 45th day following the end of the Exercise Period at the Company’s principal office, or such other place as agreed by the Disposing Member and ROFR Buyer(s), subject to any delay in the closing provided for below or in connection with any appraisal conducted as contemplated in Section 8.01(e), unless the Disposing Member and the ROFR Buyer(s) otherwise agree. At the closing, the consideration to be paid by the ROFR Buyer(s) shall be delivered by the ROFR Buyer(s) to the Disposing Member (by wire transfer in immediately available funds to the extent such consideration is cash), and the Disposing Member shall deliver to the ROFR Buyer(s) an instrument of assignment of the Subject Interest accompanied by the Interest Certificate evidencing same, free and clear of all liens, encumbrances and adverse claims with respect thereto. The ROFR Buyer(s) shall be entitled to pay for the Subject Interest in cash or with cash and a promissory note on substantially similar terms to that set forth in the Transfer Notice. The Disposing Member and the ROFR Buyer(s) shall cooperate in good faith in obtaining all necessary governmental and other third Person approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the next succeeding Business Day following the obtaining of all necessary governmental approvals or the expiration of all government waiting periods; provided, however, that in the case of such delay, the purchase price shall be increased by interest at the Default Rate from the date that the closing would have otherwise occurred. d) If, after completion of the foregoing procedures under this Section 8.01, the Members (other than the Disposing Member) fail to elect to purchase all of the Subject Interest, the Disposing Member may, at any time within 120 days after the expiration of the Exercise Period or after the decision of the appraisers, if longer, Dispose of all (but not less than all) of the Subject Interest to the proposed acquirer under the Acquisition Proposal on terms no more favorable to such acquirer than those set forth in said Acquisition Proposal (and the Transfer Notice) and offered to the Members (other than the Disposing Members). After the expiration of such 120-day period, the Disposing Member may not Dispose of the Subject Interest described in the Transfer Notice without complying again with the provisions of this Section 168.01 if and to the extent then applicable. 1e) If the Disposing Member and the ROFR Buyer(s) are unable to agree within 30 days after the Transfer Notice is given upon one independent appraiser who will determine the value of any non-cash consideration proposed as all or part of the purchase price for any Subject Interest, then within 30 days after the Transfer Notice is given, the Disposing Member, on the one hand, and the ROFR Buyer(s), collectively, on the other, shall each appoint an independent appraiser who has at least 10 years’ experience in valuing interstate pipeline business activities similar to those conducted by the Company. If the two parties each timely appoint an independent appraiser and such appraisers are unable to agree upon the value of any non-cash consideration proposed as all or part of the purchase price for the Subject Interest, then a third appraiser shall be appointed by the two appraisers. The third appraiser shall value the non-cash consideration proposed in the Acquisition Proposal for the Subject Interest within 30 days of appointment. If such appraisal is less than the lower of the two initial appraisers’ valuation of such consideration, then the value shall equal the average of the lowest two of the three appraisers’ valuations. If such appraisal exceeds the higher of the two initial appraisers’ valuations of such consideration, then the value shall equal the average of the two highest appraisers’ valuations. The appraisers shall employ such persons and incur such expenses as are necessary to reach such determination. The Disposing Member shall bear 50% of all fees and expenses incurred by the appraisers in making such valuation determination, and the ROFR Buyer(s), collectively, shall bear the other 50% of all such fees and expenses. The determination of the appraisers shall be final and binding upon the parties. f) Except for a Disposition to a Permitted Transferee or a Disposition effect in accordance with and subject to the procedures in Sections 8.01(a)-(e) above, a Member may not Dispose of a Membership Interest without the prior written approval of the Management Committee. Any attempted Disposition or Encumbrance by a Member of a Membership Interest Interest, other than in strict accordance with this Section 16.1 is void8.01, shall be, and is hereby declared, null and void to the Company shall not recognize itfullest extent permitted by law. The Members agree that rights and obligations constituting a breach Membership Interest may not be separated, divided, split off or otherwise separated from the other attributes of a Membership Interest except with the express prior written approval of the Management Committee and as contemplated by the express provisions of this Section 16.1 may cause irreparable injury to Agreement. Notwithstanding the Company and to the other Members for which monetary damages (or other remedy at law) are inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a Member to comply with such provision and (ii) the uniqueness of the Company business and the relationship among the Members. Accordingly, the Members agree that the provisions of this Section 16.1 may be enforced by specific performance. (b) Except as permitted by Section 16.2foregoing, a Member may Dispose not effect a Disposition (including a Deemed Tax Disposition) if such Disposition, when added to the total of its Membership Interest only if: all other Dispositions (iincluding Deemed Tax Dispositions) within the Disposition would not allow any creditor of preceding twelve months, results in the Company or an operating Subsidiary being considered to call, accelerate or otherwise alter have terminated within the terms or conditions meaning of any indebtedness of the Company or an Operating Subsidiary; (ii) the Disposing Member's assignee enters into an amendment to this Agreement or other Document acceptable in form and substance to the Management Committee whereby the assignee agrees to be bound by the terms of this Agreement; (iii) the Disposition is pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended, and other applicable securities laws; (iv) unless unanimously consented to by the Management Committee, such disposition does not result in a termination of the Company for federal income tax purposes under section Section 708(b)(1)(B) of the Code, or cause the Company to be treated as a corporation under the Code; and (v) the unless such Disposition consists of equal percentages of the Disposing Member's Capital Accounts and Sharing Ratiohas been approved in accordance with Section 7.02(h)(i)(G). (cg) If Each Interest Certificate shall bear a filing under the Hart-▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇itrust Improvements Act of 1976, legend as amended, is required specified in connection with the Disposition by a Member of any of its Membership Interest, which filing would not be required if the transfer of such Membership Interest were instead accomplished by a change in control of the Disposing Member, then the Disposing Member may not effect such Disposition of its Membership Interest except with the unanimous consent of the Management CommitteeSection 8.02(f). (d) Notwithstanding any contrary provision contained in this Agreement, no Member shall dispose of such Member's rights or obligations arising from or related to this Agreement, the Company or any interest therein if such disposition would result in the violation of the Act or any other laws. Any such attempted Dispositions are void ab initio.

Dispositions and Encumbrances of Membership Interests. (a) A Disposition or Encumbrance Except to the extent permitted by this Section 8.01, a Member (the “Disposing Member”) may not Dispose of all or any portion of a its Membership Interest (the “Subject Interest”) to a Person who is not a Permitted Transferee of such Member unless and until (i) the other terms and conditions set forth in this Section 8.01 have been satisfied and (ii) such Disposition has been approved by the requisite approval of the Management Committee. If any Disposing Member intends to dispose of its Membership Interest pursuant to a bona fide offer (“Acquisition Proposal”) from a Person who is not a Permitted Transferee, such Disposing Member shall notify the Management Committee and the other Members in writing (“Transfer Notice”), which Transfer Notice shall specify the identity of the proposed transferee and the terms and conditions (including the cash and a description of the non-cash consideration constituting the purchase price) of the proposed Disposition and shall include a complete copy of the Acquisition Proposal. Except with respect to a proposed Disposition to a Permitted Transferee, the Members (other than the Disposing Member) shall have the right, at any time during the period (the “Exercise Period”) that ends at 5:00 p.m. Houston, Texas time on the 30th day after receipt of the Transfer Notice to elect to purchase the Subject Interest at the price and on the terms and conditions set forth in the Acquisition Proposal. Any Member(s) who elect to purchase the Subject Interest (each, a “ROFR Buyer”) must furnish written notice (each, a “ROFR Acceptance”) to the Disposing Member prior to termination of the Exercise Period. b) The Disposing Member shall not be bound to Dispose of any portion of the Subject Interest to any ROFR Buyer(s) unless all of such Subject Interest is accepted for purchase by ROFR Buyers in accordance with this Section 8.01. If there is more than one ROFR Buyer who timely delivers a ROFR Acceptance, each such ROFR Buyer shall be entitled to purchase its pro rata portion of the Subject Interest, based upon the ratio that each such ROFR Buyer’s Percentage Interest bears to the total Percentage Interests of all such ROFR Buyers. The ROFR Buyer(s) may substitute the cash equivalent for any portion of the consideration specified in the Acquisition Proposal which was other than cash or a promissory note payable in cash; provided, however, that if the ROFR Buyer(s) desire to so substitute cash for any such non-cash consideration, and if the ROFR Buyer(s)’ determination of the fair market value of such non-cash consideration is less than the fair market value that was given for such consideration by the Disposing Member in the Transfer Notice, the ROFR Buyer(s) shall state their determination of such value in the ROFR Acceptance; and if the Disposing Member and the ROFR Buyer(s) are unable to mutually agree upon the fair market value of such non-cash consideration within five Business Days after the delivery of the ROFR Acceptance, then the Disposing Member and the ROFR Buyer(s) shall promptly cause such value to be effected only determined through appraisal in strict accordance the manner provided in Section 8.01(e). Such appraisal procedure shall delay, if necessary, any closing of the sale of the Subject Interest. Any delayed closing shall occur, subject to the next sentence, within 15 days after delivery to the parties of the appraiser’s determination of the value of the non-cash consideration. The cash equivalent of any such non-cash consideration that is to be paid at the closing of the purchase and sale of the Subject Interest shall in such event be the amount determined by the appraisal. c) The closing of the Disposition of the Subject Interest pursuant to the exercise of the rights of first refusal granted in Section 8.01(a) shall be at 9:00 a.m. Houston, Texas time on the 45th day following the end of the Exercise Period at the Company’s principal office, or such other place as agreed by the Disposing Member and ROFR Buyer(s), subject to any delay in the closing provided for below or in connection with any appraisal conducted as contemplated in Section 8.01(e), unless the Disposing Member and the ROFR Buyer(s) otherwise agree. At the closing, the consideration to be paid by the ROFR Buyer(s) shall be delivered by the ROFR Buyer(s) to the Disposing Member (by wire transfer in immediately available funds to the extent such consideration is cash), and the Disposing Member shall deliver to the ROFR Buyer(s) an instrument of assignment of the Subject Interest accompanied by the Interest Certificate evidencing same, free and clear of all liens, encumbrances and adverse claims with respect thereto. The ROFR Buyer(s) shall be entitled to pay for the Subject Interest in cash or with cash and a promissory note on substantially similar terms to that set forth in the Transfer Notice. The Disposing Member and the ROFR Buyer(s) shall cooperate in good faith in obtaining all necessary governmental and other third Person approvals, waivers and consents required for the closing. Any such closing shall be delayed, to the extent required, until the next succeeding Business Day following the obtaining of all necessary governmental approvals or the expiration of all government waiting periods; provided, however, that in the case of such delay, the purchase price shall be increased by interest at the Default Rate from the date that the closing would have otherwise occurred. d) If, after completion of the foregoing procedures under this Section 8.01, the Members (other than the Disposing Member) fail to elect to purchase all of the Subject Interest, the Disposing Member may, at any time within 120 days after the expiration of the Exercise Period or after the decision of the appraisers, if longer, Dispose of all (but not less than all) of the Subject Interest to the proposed acquirer under the Acquisition Proposal on terms no more favorable to such acquirer than those set forth in said Acquisition Proposal (and the Transfer Notice) and offered to the Members (other than the Disposing Members). After the expiration of such 120-day period, the Disposing Member may not Dispose of the Subject Interest described in the Transfer Notice without complying again with the provisions of this Section 16. 1. Any attempted Disposition or Encumbrance by a Member of a Membership Interest other than in strict accordance with this Section 16.1 is void, and the Company shall not recognize it. The Members agree that a breach of the provisions of this Section 16.1 may cause irreparable injury to the Company 8.01 if and to the other Members for which monetary damages (or other remedy at lawextent then applicable. e) If the Disposing Member and the ROFR Buyer(s) are inadequate in view unable to agree within 30 days after the Transfer Notice is given upon one independent appraiser who will determine the value of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason any non-cash consideration proposed as all or part of the failure of a Member to comply with such provision and (ii) the uniqueness of the Company business and the relationship among the Members. Accordingly, the Members agree that the provisions of this Section 16.1 may be enforced by specific performance. (b) Except as permitted by Section 16.2, a Member may Dispose of its Membership Interest only if: (i) the Disposition would not allow purchase price for any creditor of the Company or an operating Subsidiary to call, accelerate or otherwise alter the terms or conditions of any indebtedness of the Company or an Operating Subsidiary; (ii) the Disposing Member's assignee enters into an amendment to this Agreement or other Document acceptable in form and substance to the Management Committee whereby the assignee agrees to be bound by the terms of this Agreement; (iii) the Disposition is pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended, and other applicable securities laws; (iv) unless unanimously consented to by the Management Committee, such disposition does not result in a termination of the Company for federal income tax purposes under section 708(b)(1)(B) of the Code, or cause the Company to be treated as a corporation under the Code; and (v) the Disposition consists of equal percentages of the Disposing Member's Capital Accounts and Sharing Ratio. (c) If a filing under the Hart-▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇itrust Improvements Act of 1976, as amended, is required in connection with the Disposition by a Member of any of its Membership Subject Interest, which filing would not be required if then within 30 days after the transfer of such Membership Interest were instead accomplished by a change in control of Transfer Notice is given, the Disposing Member, on the one hand, and the ROFR Buyer(s), collectively, on the other, shall each appoint an independent appraiser who has at least 10 years’ experience in valuing interstate pipeline business activities similar to those conducted by the Company. If the two parties each timely appoint an independent appraiser and such appraisers are unable to agree upon the value of any non-cash consideration proposed as all or part of the purchase price for the Subject Interest, then a third appraiser shall be appointed by the two appraisers. The third appraiser shall value the non-cash consideration proposed in the Acquisition Proposal for the Subject Interest within 30 days of appointment. If such appraisal is less than the lower of the two initial appraisers’ valuation of such consideration, then the value shall equal the average of the lowest two of the three appraisers’ valuations. If such appraisal exceeds the higher of the two initial appraisers’ valuations of such consideration, then the value shall equal the average of the two highest appraisers’ valuations. The appraisers shall employ such persons and incur such expenses as are necessary to reach such determination. The Disposing Member may not effect shall bear 50% of all fees and expenses incurred by the appraisers in making such Disposition valuation determination, and the ROFR Buyer(s), collectively, shall bear the other 50% of its Membership Interest except with the unanimous consent all such fees and expenses. The determination of the Management Committeeappraisers shall be final and binding upon the parties. (d) Notwithstanding any contrary provision contained in this Agreement, no Member shall dispose of such Member's rights or obligations arising from or related to this Agreement, the Company or any interest therein if such disposition would result in the violation of the Act or any other laws. Any such attempted Dispositions are void ab initio.