OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT is made as of ____________, 1999 among ATLAS
AMERICA, INC., a Delaware corporation ("Atlas America"), RESOURCE ENERGY, INC.,
a Delaware corporation ("Resource Energy"), and VIKING RESOURCES CORPORATION, a
Pennsylvania corporation (collectively with Atlas America and Resource Energy,
the "Resource Entities"), and ATLAS PIPELINE OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, and ATLAS PIPELINE PARTNERS, L.P., a Delaware
limited partnership (collectively, the "MLP").
R E C I T A L S:
A. The MLP owns and operates natural gas gathering systems and related
facilities consisting of approximately 888 miles of intrastate pipelines located
in New York, Ohio and Pennsylvania.
B. The Resource Entities have sponsored in the past, and expect that
they will continue to sponsor in the future, oil and gas drilling programs in
areas served by the MLP's gathering systems. In connection with the transfer of
the gathering systems to the MLP, the Resource Entities desire to enter into
arrangements with the MLP regarding adding ▇▇▇▇▇ to the MLP gathering system
(Article 2), providing consultation services to the MLP in the construction of
additions or extensions to the gathering systems (Article 3), providing certain
funds to the MLP for construction (Article 4) and disposing of their ownership
interests in the general partners of investment programs and of the MLP (Article
5).
NOW, THEREFORE, in consideration of the premises and the covenants,
conditions, and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be bound hereby, agree as follows:
ARTICLE 1. DEFINITIONS
Unless otherwise defined in this Agreement, the following terms shall
have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with the Person in question. As used
herein, the term "control" means direct or indirect beneficial ownership of 50%
or more of the voting securities or voting interest of a Person or, in the case
of a limited partnership, of 50% or more of the general partnership interest,
either directly or through an entity which the Person controls. For the purposes
of this Agreement, each Investment Program shall be deemed to be an Affiliate of
the appropriate Resource Entity.
"Agreement" means this Omnibus Agreement, as it may be amended,
modified or supplemented from time to time.
"Applicable Period" means the period commencing on the date hereof and
ending on the date on which the General Partner ceases to be the General Partner
of the MLP.
"Common Units" means common units of limited partnership interest of
Atlas Pipeline Partners, L.P.
"Connectable Well" means a Resource Entity Well that is drilled within
2,500 feet of the Gathering System, such distance to be measured from the
outside edge of the wellhead of the Resource Entity Well to the nearest point of
intersection with the Gathering System.
"Flow Lines" means small diameter (two inches or less) of sales or flow
lines from a wellhead.
"Gathering System" means the natural gas pipelines and related
facilities now owned or hereafter acquired by the MLP.
"General Partner" means Atlas Pipeline Partners GP, LLC, a Delaware
limited liability company.
"Identified Third Party Gathering System" has the meaning set forth in
Section 2.5.
"Investment Program" means a Person for whom a Resource Entity or a
subsidiary of a Resource Entity acts as a general partner, managing partner or
manager (each, a "Manager") and the securities of which have been offered and
sold to investors.
"Master Natural Gas Gathering Agreement" means the Master Natural Gas
Gathering Agreement among the Resource Entities and the MLP of even date
herewith.
"Other Delivery Point" means an interstate or intrastate pipeline, a
local natural gas distribution company or an end user.
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association or
other entity.
"Resource Entity Well" means any natural gas well both drilled and
operated by a Resource Entity for itself or for an Affiliate.
"Third Party Gathering System" means a natural gas gathering system
owned by a Person other than the MLP or a subsidiary of the MLP.
"Transfer" means a sale of all or substantially all of the assets of a
Person, the disposition of more than 50% of the capital stock (or partnership or
membership interests) of a Person or a merger or consolidation that results in a
Resource Entity's owning, directly or indirectly, less than 50% of a Person's
capital stock (or partnership or membership interests).
ARTICLE 2. CONNECTIONS TO RESOURCE ENTITY ▇▇▇▇▇
2.1. Construction of Flow Lines from Connectable ▇▇▇▇▇. The Resource
Entities agree that, at their sole cost and expense, they will construct up to
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2,500 feet of Flow Lines from any Connectable Well to the Gathering System. Such
Flow Lines shall be the property of the owner of the relevant Resource Entity
Well.
2.2. Drilling New ▇▇▇▇▇. On or before December 31, 2002, the Resource
Entities agree to drill, on behalf of themselves or their Affiliates, in the
aggregate at least 225 Connectable ▇▇▇▇▇, which number shall include those
Connectable ▇▇▇▇▇ drilled by any Investment Program during 1999 before the
effective date of this Agreement.
2.3. Construction of Flow Lines from Other Resource Entity ▇▇▇▇▇.
2.3.1. Resource Entities' Right to Require Extension of the
Gathering System. With respect to Resource Entity ▇▇▇▇▇ other than Connectable
▇▇▇▇▇, if a Resource Entity constructs Flow Lines from any such Resource Entity
Well to within 1,000 feet of the Gathering System (such distance to be measured
from the end of the Flow Lines from the Resource Entity Well to the nearest
point of intersection with the Gathering System, the Resource Entities shall be
entitled to require the MLP, at the MLP's sole cost and expense, to extend the
Gathering System to meet such Flow Lines
2.3.2. MLP's Right to Extend the Gathering System. With
respect to Resource Entity ▇▇▇▇▇ other than Connectable ▇▇▇▇▇ and those
described in Section 2.3.1, the MLP shall have the right, at its sole cost and
expense, to extend the Gathering System to within 2,500 feet of such Resource
Entity Well and to require the Resource Entities to construct, at the Resource
Entities' sole cost and expense, up to 2,500 feet of Flow Lines from the
Resource Entity Well to the Gathering System extension (such distance to be
measured from the end of the Flow Lines from the Resource Entity Well to the
nearest point of intersection with the Gathering System). The Resource Entities
shall give the MLP written notice of the intent to drill a Resource Entity Well
subject to this Section. Within 30 days of the date of the Resource Entities'
notice, the MLP shall advise the Resource Entities in writing whether the MLP
wishes to exercise its rights under this Section. If the MLP exercises its
rights under this Section, it shall complete construction of the Gathering
System extension within 60 days after the date designated by the Resource
Entities as the date the Resource Entity Well will be completed as a producing
natural gas well.
2.3.3. Connections with Other Delivery Points and Third Party
Gathering Systems. In the event the MLP does not exercise its rights under
Section 2.3.2, the Resource Entities may:
(i) connect the Resource Entity Well to an Other
Delivery Point, in which event the MLP shall be entitled to assume the costs of
constructing the connecting Flow Lines. If the MLP elects to assume such costs,
it shall pay such costs to the Resource Entities within 30 days of receipt of
Resource Entities' invoice therefor and the Flow Lines shall be the property of
the MLP and part of the Gathering System; or
(ii) connect the Resource Entity Well to a Third
Party Gathering System, in which event the MLP shall assume the costs of
constructing the connecting Flow Lines, which Flow Lines shall be the property
of the MLP and part of the Gathering System. In addition, the Resource Entities
shall pay to the MLP fees as required under Section ___ of the Master Natural
Gas Gathering Agreement.
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2.4. Well Connections. All well connections to Resource Entity ▇▇▇▇▇
shall be at the direction of and in accordance with instructions and
requirements of the MLP consistent with other ▇▇▇▇▇ connected to the Gathering
System. Any such well shall be required to adhere to all of the operating,
safety, pressure, and measurement provisions contained in the Master Natural Gas
Gathering Agreement.
2.5. Consulting Services in Connection with Acquisitions. The Resource
Entities agree to assist the MLP in seeking to identify for possible acquisition
Third Party Gathering Systems and to provide consulting services to MLP in
evaluating and making an offer for any such identified gathering system.
Further, the Resource Entities agree to give the MLP written notice of the
identification by any of them of any Third Party Gathering System for possible
acquisition by such Resource Entity or any Affiliate (each, an "Identified Third
Party Gathering System"). Such notice shall identify the gathering system and
its seller and the proposed sales price of the Identified Third Party Gathering
System, and shall include all written information about the Identified Third
Party Gathering System provided to the Resource Entities by or on behalf of the
seller as well as any information or analyses compiled by the Resource Entities
from other sources. Within 30 days of the date of the Resource Entities' notice,
the MLP shall advise the Resource Entities in writing whether MLP wishes to
acquire the Identified Third Party Gathering System. If the MLP advises the
Resource Entities of its intent to acquire the Identified Third Party Gathering
System, the Resource Entities shall refrain from making an offer for the
Identified Third Party Gathering System except as permitted hereunder. If the
MLP (i) advises the Resource Entities that it does not intend to acquire the
Identified Third Party Gathering System, (ii) advises the Resource Entities of
its intent to acquire the Identified Third Party Gathering System but does not
complete the acquisition within 60 days of the MLP's notice of its intent to the
Resource Entities or (iii) fails to timely advise the Resource Entities of its
intent, any of the Resource Entities shall be free to acquire the Identified
Third Party Gathering System.
ARTICLE 3. CONSTRUCTION MANAGEMENT SERVICES
3.1. Services to be Provided. In the event the MLP expands the
Gathering System or constructs a new addition to the Gathering System, whether
pursuant to Article 2 or otherwise, the Resource Entities agree to provide to
the MLP construction management services in connection with any such expansion.
3.2. Construction Contract. For each such construction project, the MLP
and the relevant Resource Entity shall enter into a construction contract based
substantially on the most current versions of AIA Document A111 (Standard Form
of Agreement Between Owner and Contractor) and AIA Document A201 (General
Conditions of the Contract for Construction), provided that the basis of payment
shall be the cost of the work (including an allocable portion of the Resource
Entity's employee salaries and benefits) and the MLP shall not be required to
employ an architect.
ARTICLE 4. STAND-BY FINANCING COMMITMENT
4.1. Financing Commitment. For a period of five years commencing on the
date hereof, Atlas America and Resource Energy agree to provide to the MLP
funding of up to an aggregate of One Million Five Hundred Thousand Dollars
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($1,500,000) per annum to finance the cost of expanding the Gathering System or
constructing new additions to the Gathering System. Atlas America and Resource
Energy shall provide such funding, upon the MLP's written request therefor, by
purchasing Common Units at a price equal to the arithmetic average of the
closing prices of the Common Units on the American Stock Exchange, or, if the
American Stock Exchange is not the principal trading market for such security,
on the principal trading market for such security, for the twenty consecutive
trading days ending on the trading day prior to the purchase, or, if the fair
market value of the Common Units cannot be calculated for such period on any of
the foregoing bases, the average fair market value during such period as
reasonably determined in good faith by the members of the managing board of the
General Partner.
4.2. Procedures. The MLP shall give Atlas America and Resource Energy
written notice of its intent to exercise its rights under Section 4.1.
Thereafter, Common Units shall be issued to the appropriate Resource Entity
within five business days of the date of each construction invoice issued by the
Resource Entity to the MLP pursuant to Article 3. Each Common Unit so issued
shall, upon issuance, be duly authorized, validly issued and fully paid.
4.3. Prohibited Uses. The MLP agrees to use the funds it obtains
pursuant to this Article 4 for the purposes of financing initial construction
costs only and further agrees that it will not request or use such funds for any
other purpose, including capital improvements or maintenance to existing
pipeline.
ARTICLE 5. THE GENERAL PARTNER
5.1. New Investment Programs. Until the earlier of the expiration of
the Applicable Period or the closing of the Transfers described in the first
sentence of Section 5.2, the Resource Entities agree that they shall cause the
General Partner to be designated as the Manager for Investment Programs
organized after the date hereof.
5.2. Disposition of Interest in the General Partner. The Resource
Entities agree that they will not Transfer to any Person their ownership
interest in the Manager of any Investment Program unless they simultaneously (i)
Transfer to the same Person their ownership interest in the Manager of each of
the Investment Programs and in the General Partner and (ii) cause their
Affiliates having an ownership interest in the General Partner to Transfer such
interest to the same Person. The provisions of this Section shall not apply to a
Transfer to a wholly- or majority-owned direct or indirect subsidiary of any of
the Resource Entities so long as the Resource Entities' continue to control the
relevant general partner.
ARTICLE 6. TERMINATION
This Agreement shall terminate, and no party shall have any further
obligation hereunder, in the event that the General Partner is removed as
general partner of the MLP under circumstances where cause for such removal does
not exist and units in the MLP held by the General Partner and its Affiliates
are not voted in favor of that removal.
ARTICLE 7. MISCELLANEOUS
7.1. Choice of Law; Submission to Jurisdiction. This Agreement shall be
subject to and governed by the laws of the Commonwealth of Pennsylvania,
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excluding any conflicts-of-law rule or principle that might refer the
construction or interpretation of this Agreement to the laws of another state.
Each party hereby submits to the jurisdiction of the state and federal courts in
the Commonwealth of Pennsylvania and to venue in Philadelphia, Pennsylvania.
7.2. Notice. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the party to be
notified, postpaid, and registered or certified with return receipt requested or
by delivering such notice in person or by telecopier to such party. Notice given
by personal delivery or mail shall be effective upon actual receipt. Notice
given by telecopier shall be effective upon actual receipt if received during
the recipient's normal business hours, or at the beginning of the recipient's
next business day after receipt if not received during the recipient?s normal
business hours. All notices to be sent to a party pursuant to this Agreement
shall be sent to ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ or at such other address as
such party may stipulate to the other parties in the manner provided in this
Section.
7.3. Entire Agreement. This Agreement constitutes the entire agreement
of the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written.
7.4. Effect of Waiver or Consent. No waiver or consent, express or
implied, by any party to or of any breach or default by any party in the
performance by such party of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a party to complain of any act of any Person
or to declare any Person in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights hereunder
until the applicable statute of limitations period has run.
7.5. Amendment or Modification. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto; provided, however, that the MLP may not, without the prior approval of
the conflicts committee of the General Partner, agree to any amendment or
modification of this Agreement that, in the reasonable discretion of the General
Partner, will adversely affect the Common Unit holders.
7.6. Assignment. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.
7.7. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
7.8. Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
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affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
7.9. Further Assurances. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
7.10. Third Party Beneficiaries. The provisions of this Agreement are
enforceable solely by the parties to it, and no Common Unit holder or its
assignee or any other Person shall have the right, separate and apart from the
MLP, to enforce any provision of this Agreement or to compel any party to this
Agreement to comply with its terms.
7.11. Headings. The headings throughout this Agreement are inserted for
reference purposes only, and are not to be construed or taken into account in
interpreting the terms and provisions of any Article, nor to be deemed in any
way to qualify, modify or explain the effects of any such term or provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement on, and
effective as of, the date first written above.
THE MLP:
ATLAS PIPELINE OPERATING PARTNERSHIP, L.P.
By: Atlas Pipeline Partners GP, LLC
Its general partner
By:
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Name:
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Its:
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ATLAS PIPELINE PARTNERS, L.P.
By: Atlas Pipeline Partners GP, LLC
Its general partner
By:
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Name:
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Its:
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THE RESOURCE ENTITIES:
ATLAS AMERICA, INC.
By:
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Name:
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Its:
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RESOURCE ENERGY, INC.
By:
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Name:
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Its:
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VIKING RESOURCES CORPORATION
By:
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Name:
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Its:
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