Exhibit 10.3

 

CONTRIBUTION AGREEMENT

 

among

 

WESPAC ENERGY LLC,

 

KEALINE HOLDINGS LLC and

 

PRIMORIS SERVICES CORPORATION

 

and

 

WESPAC MIDSTREAM LLC,

 

HIGHSTAR WESPAC MAIN INTERCO LLC and

 

HIGHSTAR WESPAC PRISM/IV-A INTERCO LLC

 

Dated as of September 30, 2013

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I DEFINITIONS AND INTERPRETATION

2

 

 

Defined Terms

2

Interpretation

14

 

 

ARTICLE II CONTRIBUTIONS

15

 

 

Company Contribution

15

Premium Payments

15

 

 

ARTICLE III CLOSING

16

 

 

Closing

16

Deliveries at Closing

16

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS

18

 

 

Organization; Power and Authority

18

No Violation

18

Consents and Approvals

19

Litigation

19

Compliance with Laws

19

Financial Statements

20

Material Contracts

20

No Material Adverse Event

21

Taxes

21

Undisclosed Liabilities

22

Insurance

22

Investment Representations and Warranties

23

Capitalization

24

No Broker Fees

25

Transactions with Affiliates

25

Property

25

Tangible Personal Property

26

Accurate and Complete Records

26

Intellectual Property

26

No Employees and No Employee Plans

26

Labor Matters

27

Environmental Matters

27

Indebtedness

28

Bank Accounts

28

Credit Enhancements

28

 

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Permits

28

Project Milestones

29

No Other Representations

29

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY ISSUER AND THE HIGHSTAR
ENTITIES

29

 

 

Organization; Power and Authority

29

No Violation

30

Consents and Approvals

30

Litigation

30

Compliance with Laws

30

Capitalization

31

Issuance of Kealine-Primoris Class A Units

31

Status

31

No Broker Fees

32

Investment Representations and Warranties

32

Financial Capability

33

Financial Statements

33

No Other Representations

33

 

 

ARTICLE VI ADDITIONAL AGREEMENTS

33

 

 

Regulatory Matters Agreement

33

Additional Agreements

33

Tax Matters

34

Non-Competition and Non-Solicitation

36

SK Tank Farm Project

37

WesPac Marks

38

Termination of Services Agreement

38

 

 

ARTICLE VII INDEMNIFICATION

39

 

 

Assumed Liabilities and Retained Liabilities

39

Indemnification Obligations

40

Limitations of Liability

41

Third Party Claims Procedure

43

Survival

44

Exclusive Remedies

44

Limited Duty to Mitigate

45

Tax Treatment

45

 

 

ARTICLE VIII GENERAL PROVISIONS

45

 

 

Expenses

45

Notices

45

Counterparts and Effectiveness

46

Future Actions

47

 

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Applicable Law; Jurisdiction

47

Enforcement of Agreement

48

Invalidity

48

Entire Agreement and Construction

48

Amendment

49

Extension; Waiver

49

Assignment; Third Party Beneficiaries

49

Interpretation

49

Press Releases

49

Records

49

 

EXHIBITS

 

Exhibit A

 

Business and Projects

Exhibit B

 

Knowledge of Sellers

Exhibit C

 

Form of Assignment

 

SELLERS’ DISCLOSURE SCHEDULE

 

Section 1.1(b)

 

Excluded Project Assets

Section 4.3

 

Consents and Approvals

Section 4.7(a)

 

Material Contracts

Section 4.7(b)

 

Letters of Intent

Section 4.7(c)

 

Drafts of Material Contracts

Section 4.8

 

Material Adverse Event

Section 4.10

 

Undisclosed Liabilities

Section 4.11

 

Insurance

Section 4.13

 

Capitalization

Section 4.15

 

Transactions with Affiliates

Section 4.16(a)

 

Real Property

Section 4.19

 

Intellectual Property

Section 4.21

 

Labor Matters

Section 4.24

 

Bank Accounts

Section 4.25

 

Credit Enhancements

Section 4.26(a)

 

Permits

Section 4.26(b)

 

Permit Applications

Section 4.26(c)

 

Permit Exceptions

Section 4.27

 

Project Milestones

Section 7.1(a)(i)

 

Certain Assumed Liabilities

 

HIGHSTAR DISCLOSURE SCHEDULE

 

Section 5.3

 

Consents and Approvals

Section 5.4

 

Litigation

Section 5.6

 

Capitalization

Section 5.12

 

Financial Statements

 

iii

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CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT, dated as of September 30, 2013 (this “Agreement”),
is between WESPAC ENERGY LLC, a Nevada limited liability company (the
“Contributor”), KEALINE HOLDINGS LLC, a Nevada limited liability company
(“Kealine”), PRIMORIS SERVICES CORPORATION, a Delaware corporation (“Primoris”
and, together with the Contributor and Kealine, the “Sellers”) and WESPAC
MIDSTREAM LLC, a Delaware limited liability company (the “Company Issuer”), and
HIGHSTAR WESPAC MAIN INTERCO LLC, a Delaware limited liability company
(“Highstar Main”), and HIGHSTAR WESPAC PRISM/IV-A INTERCO LLC, a Delaware
limited liability company (together with Highstar Main, the “Highstar
Entities”).  Each of the Contributor, Primoris, Kealine, the Company Issuer, and
the Highstar Entities is sometimes referred to herein as a “Party” and
collectively, as the “Parties.”

 

RECITALS

 

WHEREAS, as of the date hereof, Primoris and Kealine collectively own 100.0% of
the Equity Interests of the Contributor;

 

WHEREAS, as of the date hereof, the Highstar Entities collectively own 100.0% of
the Equity Interests of the Company Issuer, and the Company Issuer holds or is
about to receive cash in an amount equal to $8,103,936.90;

 

WHEREAS, the membership interests of the Company Issuer are divided into two
classes: Class A Units and Class B Units, each having the relative rights and
preferences set forth in the Company Issuer LLC Agreement (as defined below);

 

WHEREAS, the Class A Units are further divided into three series: Series A-1
Units, Series A-2 Units and Series A-3 Units, each having the relative rights
and preferences set forth in the Company Issuer LLC Agreement; and

 

WHEREAS, the Parties have agreed that, pursuant to the terms of this Agreement,
the Contributor will contribute (a) all of the Project Assets to the Company
Issuer, (b) 25.0% of the Equity Interests and a 15.0% carried interest, as more
particularly described in the Pittsburg LLC Agreement (together, the “Pittsburg
LLC Interests”) of WesPac Energy — Pittsburg LLC, a Delaware limited liability
company (“Pittsburg LLC”), to the Company Issuer and (c) 100.0% of the Equity
Interests (the “Port Arthur LLC Interests”) of WesPac Port Arthur LLC, a
Delaware limited liability company (“Port Arthur LLC”), to the Company Issuer
and, as consideration for such contributions, the Company Issuer will (i) issue
to each of Primoris and Kealine (A) 25.0% of the Series A-1 Units of the Company
Issuer, (B) 25.0% of the Series A-2 Units of the Company Issuer and (C) 7.5% of
the Series A-3 Units of the Company Issuer (collectively, the “Kealine-Primoris
Class A Units”), and (ii) distribute to the Contributor an amount in cash of
$6,081,426.90 (the “Company Distribution”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreement contained herein, as well as other good and valuable
consideration, the

 

1

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receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS AND INTERPRETATION

 

Section 1.1                                   Defined Terms.  For all purposes
of this Agreement, the following terms shall have the respective meanings set
forth in this Article I (such definitions to be equally applicable to both the
singular and plural forms of the terms herein defined):

 

“Affiliate” means, when used with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such
Person.  For the purposes of this definition, the terms “control, controlling,
controlled by, or under common control” mean the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or by contract) of a Person;
provided, however, that for purposes of this Agreement, Pittsburg LLC shall be
deemed an Affiliate of the Contributor, Kealine, and Primoris.

 

“Agreement” has the meaning set forth in the preamble of this Agreement.

 

“Assignment” has the meaning set forth in Section 3.2(a)(i).

 

“Assumed Liabilities” has the meaning set forth in Section 7.1(a).

 

“Business” means the development, ownership, operation, maintenance, expansion,
construction, commissioning and decommissioning of, and acquisition of, crude
oil, natural gas, refined products and natural gas liquids and liquefied natural
gas storage and transportation facilities and processing and treating
facilities, including the projects described on Exhibit A, the marketing of
crude oil, natural gas, liquefied natural gas, refined products, natural gas
liquids and other hydrocarbons in connection therewith and all other acts or
activities incidental or related to any of the foregoing.

 

“Business Assets” means, collectively, the Project Assets, the Pittsburg Assets
and the Port Arthur Assets.

 

“Business Day” means a day other than a Saturday or a Sunday, on which
commercial banks are authorized to be open for business with the public in New
York, New York.

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” has the meaning set forth in Section 3.1.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time, and any comparable successor statute or statutes.

 

“Commercial Close” means, in reference to the Port Arthur Project, the full
execution and delivery of a commercial contract between Port Arthur LLC and a
counterparty that obligates Port Arthur LLC, subject to normal and customary
conditions, to construct and operate

 

2

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for the use or benefit of the counterparty an oil, refined products or liquid
natural gas loading and unloading facility, or other terminaling facilities, at
or near the Port of Port Arthur, in Port Arthur, Texas, in exchange for which
the counterparty agrees to provide Port Arthur LLC with a revenue stream
sufficient to induce Port Arthur LLC to enter into the contract and commit to
the construction and operation of the Port Arthur Project, as more specifically
described in Exhibit F to the Company Issuer LLC Agreement.  Additionally for
Commercial Close the Port Arthur LLC will (a) have obtained the full execution
and delivery of site control, or site control options, or other land use
agreements between Port Arthur LLC and the Port of Port Arthur to give Port
Arthur LLC the right to construct and operate the Port Arthur Project on the
applicable property, (b) have made sufficient progress toward receiving such
material permits and easements (in the reasonable judgment of the Board)
necessary to begin ordering long-lead items, and (c) have construction estimates
and quotes from contractors or suppliers that provide sufficient support that
(in the reasonable judgment of the Board) a construction contract can be
achieved to provide necessary economics.  “Commercial Close” means, in reference
to the Pittsburg Project, the full execution and delivery of a commercial
contract between Pittsburg LLC and a counterparty that obligates Pittsburg LLC,
subject to normal and customary conditions, to construct and operate Phase 1 of
the Pittsburg Project for the use or benefit of the counterparty, in exchange
for which the counterparty agrees to provide Pittsburg LLC with a revenue stream
sufficient to induce Pittsburg LLC to enter into the contract and commit to the
construction and operation of Phase 1 of the Pittsburg Project, as more
specifically described in Exhibit E (under the subheading “For Purposes of
Definition of ‘Commercial Operation’”) to the Company Issuer LLC Agreement. 
Additionally, for Commercial Close, Pittsburg LLC will (a) have obtained the
full execution and delivery of site control, or site control options, or other
land use agreements between Pittsburg LLC and all pertinent counterparties
sufficient to give Pittsburg LLC the right to construct and operate the Phase 1
of the Pittsburg Project on the applicable property, (b) have made sufficient
progress toward receiving such material permits and easements (in the reasonable
judgment of the Board) necessary to begin ordering long-lead items, and (c) have
construction estimates and quotes from contractors or suppliers for Phase 1 of
the Pittsburg Project that provide sufficient support that (in the reasonable
judgment of the Board) a construction contract can be achieved to provide
necessary economics.

 

“Commercial Operation” means, in reference to either the Port Arthur Project or
the Pittsburg Project, the commencement of revenue generating operation of the
facilities that constitute such project in full compliance with all required
permits and applicable Law and the applicable commercial contracts and
agreements relating to such project; provided, however, that in order for the
Pittsburg Project to be deemed to have reached Commercial Operation, it must
satisfy the requirements set forth in Exhibit E to the Company Issuer LLC
Agreement under the subheading “For Purposes of Definition of ‘Commercial
Operation’.”  Notwithstanding the specific definitions in Exhibit E and F to the
Company Issuer LLC Agreement, if either the Port Arthur Project or Pittsburg
Project achieves financial value that is materially similar to what is described
in those Exhibits by a different means without any material diminution in risk
profile or financeability (e.g., expansions or modifications that yield equal or
greater EBITDA with the same level of legal certainty and creditworthiness),
then Commercial Operation shall be deemed to have occurred with respect to such
project.

 

“Company Allocation” has the meaning set forth in Section 6.3(b).

 

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“Company Distribution” has the meaning set forth in the Recitals.

 

“Company Issuer” has the meaning set forth in the Recitals.

 

“Company Issuer LLC Agreement” means the Amended and Restated Limited Liability
Company Agreement of the Company Issuer.

 

“Competing Opportunity” has the meaning set forth in Section 6.4(a)(i).

 

“Consent” has the meaning set forth in Section 4.3.

 

“Contracts” means contracts, leases of personal property, licenses, royalty
agreements, joint venture agreements, instruments, security interests, purchase
and sale orders and other similar binding arrangements and other agreements,
whether written or oral, that are in effect as of the date of this Agreement (or
with respect to which any Person has continuing liability, contingent or
otherwise, as of the date of this Agreement).

 

“Contribution Documents” means this Agreement, the Company Issuer LLC Agreement,
the Operating Services Agreement and any other documents relevant hereto and
thereto.

 

“Contributor” has the meaning set forth in the preamble of this Agreement.

 

“Contributor Entities” means the Contributor, the Subsidiaries of the
Contributor and Pittsburg LLC.

 

“Contributor Financial Statements” means the consolidated balance sheets and
related statements of income and cash flows of the Contributor as, at and for
the years ended December 31, 2011 and December 31, 2012, in each case including
the notes thereto.

 

“Contributor Indemnitees” has the meaning set forth in Section 7.2(b).

 

“Contributor Taxes” means any and all Taxes imposed on the Contributor Entities
or for which the Contributor Entities may otherwise be liable (a) attributable
to any Pre-Closing Taxable Period; (b) resulting from a breach of the covenants
set forth in Section 6.3; or (c) as a result of being a member, prior to the
Closing, of any affiliated, consolidated, combined, unitary or similar group for
Tax purposes by reason of Treasury Regulation § 1.1502-6(a) or any analogous or
similar foreign, state or local law.  The portion, if any, of any Taxes due with
respect to a Straddle Period that is attributable to the Pre-Closing Taxable
Period is in the case of any Taxes that are either (i) based upon or related to
income or receipts or (ii) imposed in connection with any sale or other transfer
or assignment of property (real or personal, tangible or intangible), equal to
the amount that would be payable as determined by an interim closing of the
books if the relevant Straddle Period ended on and included the Closing Date;
provided, however, that exemptions, allowances or deductions that are calculated
on an annual basis (including depreciation and amortization deductions) shall be
allocated between the portion of the Straddle Period ending on and including the
Closing Date and the remainder of such Straddle Period in proportion to the
number of days in each period; provided further that any franchise Tax or other
Tax providing the right to do business shall be allocated to the period during
which the income, operations, assets or capital comprising the base of such Tax
is measured, regardless

 

4

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of whether the right to do business for another period is obtained by the
payment of such Tax.  In the case of any other Taxes due with respect to a
Straddle Period, the portion, if any, of such Taxes that is attributable to the
Pre-Closing Taxable Period shall be the amount of such Taxes for the entire
Straddle Period multiplied by a fraction, the numerator of which is the number
of days in the portion of the Straddle Period up to and including the Closing
Date and the denominator of which is the number of days in the entire Straddle
Period.

 

“Covered Claim” has the meaning set forth in Section 8.5(b).

 

“Encumbrance” means any and all liens, charges, security interests, options,
claims, mortgages, pledges, proxies, voting trusts or agreements, obligations,
understandings or arrangements or other restrictions on title or transfer of any
nature whatsoever, other than those arising under the Securities Act or
applicable state securities or blue sky Laws.

 

“Environmental Law” means all foreign, federal, state and local Laws relating to
pollution or protection of the environment or human health, including Laws
relating to Releases or threatened Releases of Hazardous Substances into the
environment (including ambient air, surface water, groundwater, land, surface
and subsurface strata), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, release, transport or handling of
Hazardous Substances and all Laws with regard to recordkeeping, notification,
disclosure and reporting requirements respecting Hazardous Substances, and all
Laws relating to endangered or threatened species and the protection, management
or use of natural resources.

 

“Environmental Permits” means any Permit required under, or issued by a
Governmental Authority pursuant to, any Environmental Law.

 

“Equity Interests” means (a)(i) with respect to a limited liability company, any
and all shares, interests, participations or other equivalents (however
designated) of membership interests of a limited liability company, (ii) with
respect to a partnership, any and all partnership interests, units, interests,
participations shares or other equivalents (however designated) of partnership
interests and (iii) with respect to a corporation, any and all capital stock,
shares and other equivalents (however designated) of equity interests and
(b) securities convertible into or exchangeable for any of the foregoing, and
any and all warrants, rights or options to purchase, or obligations of a Person
to sell, any of the foregoing, whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Excluded Business Assets” means (a) any claims for and rights to receive
refunds, credits, and loss carryforwards with respect to Taxes and Tax periods
for which the Contributor is liable under Section 6.3 and Taxes and Tax loss
carryforwards relating to the Business or Business Assets attributable to the
period ending on or prior to the Closing Date; (b) any claims, causes of action
or rights of the Contributor to receive indemnification, reimbursement,
contributions, damages or other payments from Kealine, Primoris or their
Affiliates owing to the Contributor; (c) the rights of the Contributor, Kealine
and Primoris, respectively, under or pursuant to this Agreement and the other
agreements and documents executed and delivered in

 

5

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connection herewith; (d) capital stock, membership interests or other equity
interests in the Contributor; (e) any Equity Interests issued to the Contributor
pursuant to the terms of this Agreement; (f) the Contributor’s Organizational
Documents; (g) the projects and Equity Interests in Subsidiaries holding such
projects identified on Section 1.1(b) of the Sellers’ Disclosure Schedule; and
(h) cash and cash equivalents of the Contributor.

 

“Existing Title Policies” has the meaning set forth in Section 4.16(b).

 

“Final Pittsburg Premium” has the meaning set forth in Section 2.2(a)(ii).

 

“Final Port Arthur Premium” has the meaning set forth in Section 2.2(b)(iii).

 

“Fundamental Representations” has the meaning set forth in Section 7.3(b).

 

“GAAP” means United States generally accepted accounting principles,
consistently applied with the applicable party’s past practices.

 

“Governmental Authority” means any court or tribunal in any jurisdiction
(domestic or foreign) or any governmental or regulatory body, agency,
department, commission, board, bureau or other authority or instrumentality
(domestic or foreign).

 

“Governmental Authorization” means any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Authority or pursuant to
Law.

 

“Hazardous Substances” means any chemicals, materials or substances, whether
solid, liquid or gaseous, that is listed, regulated, classified, defined as or
included in the definition of “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “hazardous constituents,” “restricted hazardous
materials,” “extremely hazardous substances,” “toxic substances,”
“contaminants,” “pollutants,” “toxic pollutants,” or words of similar meaning
and regulatory effect under any applicable Environmental Law, and shall include
petroleum hydrocarbons, petroleum products, oil and natural gas exploration and
production wastes, natural gas liquids, condensate, natural gas, naturally
occurring radioactive materials or any other substance or waste regulated under
or for which liability or standards of care are imposed by Environmental Laws.

 

“Highstar Disclosure Schedule” means the disclosure schedules delivered by the
Company Issuer and the Highstar Entities in connection with the execution of
this Agreement.

 

“Highstar Entities” has the meaning set forth in the preamble to this Agreement.

 

“Highstar Main” has the meaning set forth in the preamble to this Agreement.

 

“Highstar Financial Statements” means the consolidated statements of financial
condition and related statements of income and cash flows of Highstar Capital
IV, L.P. and its Subsidiaries, Highstar Capital IV-A, L.P. and its Subsidiaries
and Highstar Capital IV Prism, L.P. and its Subsidiaries, in each case, as, at
and for the year ended December 31, 2012 and including the notes thereto.

 

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“Indebtedness” means, with respect to any Person, the aggregate amount (without
duplication including the current portions thereof) of all (a) indebtedness for
money borrowed from any Person, purchase money obligations, capitalized lease
obligations, obligations to pay deferred purchase price of assets, services or
securities and reimbursement obligations for letters of credit or similar
instruments that have been drawn, in each case of such Person (provided that the
foregoing shall not include trade accounts payable and other accrued current
liabilities, in each case, arising in the ordinary course), (b) indebtedness of
the type described in clause (a) above guaranteed, directly or indirectly, in
any manner by such Person or for which such Person may be liable, but excluding
endorsements of checks and other similar instruments in the ordinary course of
business, (c) interest expense accrued but unpaid on or relating to any of such
indebtedness, and (d) prepayment penalties, premiums, late charges, penalties
and collection fees relating to any of such indebtedness.

 

“Indemnifiable Loss” has the meaning set forth in Section 7.2(a).

 

“Indemnifying Party” has the meaning set forth in Section 7.3(c).

 

“Indemnitee” has the meaning set forth in Section 7.3(c).

 

“Independent Accountant” has the meaning set forth in Section 6.3(b).

 

“Initial Pittsburg Premium” has the meaning set forth in Section 2.2(a)(i).

 

“Initial Port Arthur Premium” has the meaning set forth in Section 2.2(b)(i).

 

“Insurance Policies” has the meaning set forth in Section 4.11.

 

“Intellectual Property” has the meaning set forth in Section 4.19.

 

“Investing Seller” has the meaning set forth in Section 4.12(a).

 

“Issuer Indemnitees” has the meaning set forth in Section 7.2(a).

 

“Knowledge” means, with respect to any Party, the knowledge of the individuals
listed in Exhibit B, in each case after reasonable inquiry.  For purposes of the
definition of “Knowledge,” “reasonable inquiry” by any Person with respect to
any fact, event, circumstance or condition means such Person’s making inquiries
of each of the following, but only to the extent that such Person would
reasonably expect any of the following to have actual knowledge regarding the
relevant fact, event, circumstance or condition: (a) the officers, directors and
managers of the Company or any of its Subsidiaries, (b) any employees of the
Company or any of its Subsidiaries reporting directly to the officers of the
Company or (c) the Company’s accountants or legal counsel.

 

“Law” means any supernational, regional, federal, state, local or foreign law,
statute, code, ordinance, rule, judgment, writ, injunction, regulation, order or
decree.

 

“Leased Real Property” has the meaning set forth in Section 4.16(a).

 

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“Letters of Intent” has the meaning set forth in Section 4.7(b).

 

“Liability Cap” has the meaning set forth in Section 7.3(b).

 

“Loss Basket” has the meaning set forth in Section 7.3(a).

 

“Kealine” has the meaning set forth in the preamble of this Agreement.

 

“Kealine-Primoris Class A Units” has the meaning set forth in the Recitals.

 

“Material Adverse Event” means with respect to any Party, (a) any event that has
a material adverse effect on the business, financial condition or results of
operations of such Party and its Subsidiaries, taken as a whole; provided,
however, that none of the following changes, effects, developments,
circumstances or conditions shall be taken into account for purposes of
determining whether or not a Material Adverse Event has occurred: (i) any change
in applicable Law or in the interpretation of any applicable Law by any
Governmental Authority, (ii) any change in GAAP, (iii) any circumstances or
conditions generally affecting the industry in which such Party is engaged
(iv) general economic, political or market conditions in the United States,
(v) natural disasters that affect any real property owned by the Contributor
Entities, (vi) the announcement of the transactions contemplated in this
Agreement (except this clause (vi) shall not be applicable with respect to the
representations set forth in Section 4.2, Section 4.26(a) (last sentence only)
or Section 5.2), or (vii) unknown geological fault lines that affect any real
property owned by the Contributor Entities, except in the cases of clauses
(i) through (vii), to the extent disproportionately affecting the business,
financial condition or results of operations of such Party as compared with
other Persons engaging in any business of the type described in the definition
of “Business”; or (b) any event that materially impairs the ability of such
Party to consummate the transactions contemplated hereby.

 

“Material Contracts” has the meaning set forth in Section 4.7.

 

“Non-Compete Party” means each of Kealine, David Smith and the Contributor.

 

“Non-Compete Term” means the earlier of (x) the fifth anniversary of the date of
this Agreement and (y) the last day that David Smith is employed by or an owner,
directly or indirectly through any holding companies or otherwise, of any equity
interest in any of Services Provider or Company Issuer and, in each case, for a
period of two years thereafter.

 

“Operating Services Agreement” means that certain Operating and Development
Services Agreement to be entered into on the Closing Date between the Company
Issuer and Kealine for the day-to-day management of the Company Issuer.

 

“Organizational Documents” means: (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the articles of formation and
regulations or company agreement of a limited liability company; (c) the
partnership agreement and any statement of partnership of a general or limited
liability partnership; (d) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (e) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (f) any amendment to any of the foregoing.

 

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“Owned Real Property” has the meaning set forth in Section 4.16(a).

 

“Party” or “Parties” has the meaning set forth in the preamble of this
Agreement.

 

“Per Claim Threshold” has the meaning set forth in Section 7.2(b).

 

“Permits” means any permit, license, approval and similar authorization given by
or required from any Governmental Authority.

 

“Permitted Encumbrance” means Encumbrances for:

 

(a)                                 Current Taxes not yet due and payable or not
yet delinquent;

 

(b)                                 Mechanics’, materialmen’s, carriers’,
workers’, repairers’, maritime and statutory liens and rights in rem and other
similar Encumbrances arising or incurred in the ordinary and usual course of
business for amounts that are not yet delinquent and would not materially impair
the continued use or operation of any portion of the Business;

 

(c)                                  Inchoate liens and charges imposed by Law
and incidental to the construction, maintenance, development or operation of the
Contributor Entities’ properties or the operation of the Business, if payment of
the obligation secured thereby is not yet delinquent;

 

(d)                                 Liens for assessments, obligations under
workers’ compensation or other social welfare legislation or other requirements,
charges or levies of any Governmental Authority, in each case not yet
delinquent;

 

(e)                                  Easements, servitudes, rights-of-way and
other rights, exceptions, reservations, conditions, limitations, covenants and
other restrictions that do not materially interfere with the operation or use of
the Contributor Entities’ assets, including the Business Assets, affected
thereby;

 

(f)                                   Conventional provisions contained in any
contracts or agreements affecting properties under which the applicable
Contributor Entity is required immediately before the expiration, termination or
abandonment of a particular property to reassign to such Person’s predecessor in
title all or a portion of such Person’s rights, titles and interests in and to
all or a portion of such property;

 

(g)                                  Pledges and deposits to secure the
performance of bids, tenders, trade or government contracts (other than for
repayment of borrowed money), statutory obligations, surety bonds, performance
bonds, completion bonds and other obligations of a like kind that do not
materially interfere with, impair or impede the Business as currently conducted
or contemplated to be conducted; and

 

(h)                                 Any liens consisting of (i) statutory
landlord’s liens under leases to which any Contributor Entity is a party or
other liens on leased property reserved in leases thereof for rent or for
compliance with the terms of such leases, (ii) rights reserved to or vested in
any Governmental Authority to control or regulate any property of the Company
Issuer, or to limit the use of such property in any manner which does not
materially impair the use of such property

 

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for the purposes for which it is held by the Company Issuer, (iii) obligations
or duties to any Governmental Authority with respect to any Governmental
Authorization and the rights reserved or vested in any Governmental Authority to
terminate any such Governmental Authorization or to condemn or expropriate any
property, or (iv) zoning or other land use or environmental laws and ordinances
of any Governmental Authority.

 

“Person” means an individual, partnership, limited partnership, limited
liability partnership, limited liability company, foreign limited liability
company, trust, estate, corporation, custodian, trustee, executor,
administrator, nominee or any other entity.

 

“Pittsburg Allocation” has the meaning set forth in Section 6.3(b).

 

“Pittsburg Assets” means, to the extent applicable to Pittsburg LLC, less and
except for the Excluded Business Assets:

 

(a)                                 any Equity Interests owned or held by
Pittsburg LLC;

 

(b)                                 the Tangible Personal Property owned or held
by Pittsburg LLC;

 

(c)                                  all Contracts relating to the Business to
which Pittsburg LLC is a party or with respect to which Pittsburg LLC is a
beneficiary;

 

(d)                                 the Intellectual Property owned by Pittsburg
LLC and all rights associated therewith;

 

(e)                                  all of the Records that are owned by and in
the possession or control of Pittsburg LLC;

 

(f)                                   accounts receivable and other current
assets of Pittsburg LLC other than cash and cash equivalents; the Subsidiary
Equity Interests and any other Equity Interests owned, directly or indirectly,
by Pittsburg LLC; and notes receivable and other financial instruments owned by
Pittsburg LLC;

 

(g)                                  the goodwill of the Business attributable
to Pittsburg LLC; and

 

(h)                                 all Permits held by Pittsburg LLC, including
all rights, entitlements to environmental credits, pollution credits or
emissions credits of any sort, whether banked, registered, perfected or
unperfected, vested or unvested, known or unknown as of the date hereof.

 

“Pittsburg Financial Statements” means the balance sheets and related statements
of income and cash flows of Pittsburg LLC as, at and for the years ended
December 31, 2011 and December 31, 2012, in each case including the notes
thereto.

 

“Pittsburg LLC” has the meaning set forth in the Recitals.

 

“Pittsburg LLC Agreement” means the Operating Agreement of WesPac
Energy-Pittsburg LLC, effective as of the 22nd day of July, 2011.

 

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“Pittsburg LLC Interests” has the meaning set forth in the Recitals.

 

“Pittsburg Project” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“Port Arthur Allocation” has the meaning set forth in Section 6.3(b).

 

“Port Arthur Assets” means, to the extent applicable to Port Arthur LLC, less
and except for the Excluded Business Assets:

 

(a)                                 any Equity Interests owned or held by Port
Arthur LLC;

 

(b)                                 the Tangible Personal Property owned or held
by Port Arthur LLC;

 

(c)                                  all Contracts relating to the Business to
which Port Arthur LLC is a party or with respect to which Port Arthur LLC is a
beneficiary;

 

(d)                                 the Intellectual Property owned by Port
Arthur LLC and all rights associated therewith;

 

(e)                                  all of the Records that are owned by and in
the possession or control of Port Arthur LLC;

 

(f)                                   accounts receivable and other current
assets of Port Arthur LLC other than cash and cash equivalents; the Subsidiary
Equity Interests and any other Equity Interests owned, directly or indirectly,
by Port Arthur LLC; and notes receivable and other financial instruments owned
by Port Arthur LLC;

 

(g)                                  the goodwill of the Business attributable
to Port Arthur LLC; and

 

(h)                                 all Permits held by Port Arthur LLC,
including all rights, entitlements to environmental credits, pollution credits
or emissions credits of any sort, whether banked, registered, perfected or
unperfected, vested or unvested, known or unknown as of the date hereof.

 

“Port Arthur LLC” has the meaning set forth in the Recitals.

 

“Port Arthur LLC Interests” has the meaning set forth in the Recitals.

 

“Port Arthur Project” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“Pre-Closing Taxable Period” means any taxable period ending on or before the
Closing Date and that portion of any Straddle Period up to and including the
Closing Date.

 

“Primoris” has the meaning set forth in the preamble of this Agreement.

 

“Project Assets” means, less and except for the Excluded Business Assets:

 

(a)                                 the Tangible Personal Property owned or held
by any Contributor Entity (other than Pittsburg LLC and Port Arthur LLC);

 

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(b)                                 all Contracts relating to the Business to
which any Contributor Entity (other than Pittsburg LLC and Port Arthur LLC) is a
party or with respect to which any Contributor Entity (other than Pittsburg LLC
and Port Arthur LLC) is a beneficiary;

 

(c)                                  the Intellectual Property owned by any
Contributor Entity (other than Pittsburg LLC and Port Arthur LLC) and all rights
associated therewith;

 

(d)                                 all of the Records that are owned by and in
the possession or control of the Contributor Entities (other than Pittsburg LLC
and Port Arthur LLC);

 

(e)                                  accounts receivable and other current
assets of the Contributor other than cash and cash equivalents; the Subsidiary
Equity Interests and any other Equity Interests owned, directly or indirectly,
by the Contributor; and notes receivable and other financial instruments owned
by any Contributor Entity (other than Pittsburg LLC and Port Arthur LLC);

 

(f)                                   the goodwill of the Business; and

 

(g)                                  all Permits held by any Contributor Entity
(other than Pittsburg LLC and Port Arthur LLC), including all rights,
entitlements to environmental credits, pollution credits or emissions credits of
any sort, whether banked, registered, perfected or unperfected, vested or
unvested, known or unknown as of the date hereof.

 

“Project Gantt Charts” has the meaning set forth in Section 4.27.

 

“Purchase Price Allocations” has the meaning set forth in Section 6.3(b).

 

“Real Property” has the meaning set forth in Section 4.16(a).

 

“Release” means any release, spill, emission, discharge, leaking, pumping,
pouring, dumping, injection, deposit, disposal, dispersal, or migration of
Hazardous Substances into or through air, surface water, groundwater, sediments,
land, soils, or surface or subsurface strata.

 

“Retained Liabilities” has the meaning set forth in Section 7.1(b).

 

“Records” means all of the following that are owned by and in the possession or
control of the Contributor Entities: (a) financial, accounting and operating
data, including customer lists; contact information and files; sales and
promotional data, including sales and marketing contact information; advertising
materials; credit information; cost and pricing information; vendor, supplier
and distributor lists; and contact information, (b) agreements (including
contracts in draft form), term sheets, project timelines, memoranda, and similar
documents relating to the Business and (c) except for books, records and
information relating to Taxes and Tax periods for which the Sellers are liable
under Section 6.3, other books, records and information of the Sellers relating
to the Business Assets or the Business.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Sellers” has the meaning set forth in the preamble to this Agreement.

 

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“Sellers’ Disclosure Schedule” means the disclosure schedules delivered by
Sellers in connection with the execution of this Agreement.

 

“Series A-1 Units” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“Series A-2 Units” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“Series A-3 Units” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“Services Provider” has the meaning set forth in the Company Issuer LLC
Agreement.

 

“SK” has the meaning set forth in Section 6.5.

 

“SK JDA” has the meaning set forth in Section 6.5.

 

“SK Tank Farm Project” means the new refined products tank farm to be situated
near the Port of Long Beach or the Port of Los Angeles for marine and pipeline
deliveries and receipts.

 

“Straddle Period” means any taxable period beginning on or before the Closing
Date and ending after the Closing Date.

 

“Subsidiary” means, with respect to any specified Person, any corporation,
limited liability company, association, partnership or other business entity
(a) that is controlled by such Person and (b) the outstanding equity securities
of which are entitled to more than 50.0% of the distributions.

 

“Subsidiary Equity Interests” has the meaning set forth in Section 4.13(b).

 

“Tangible Personal Property” means all capital equipment, together with all
other machinery, equipment, vehicles, leasehold improvements, furniture and
fixtures, office equipment, supplies, inventory and other tangible personal
property owned, held or used by any Contributor Entity in connection with the
conduct of the Business.

 

“Tax” or “Taxes” means, however denominated, any and all taxes, assessments,
customs, duties, levies, fees, tariffs, imposts, deficiencies and other
governmental charges of any kind whatsoever (including taxes on or with respect
to net or gross income, franchise, profits, gross receipts, capital, sales, use,
ad valorem, value added, transfer, real property transfer, transfer gains,
transfer taxes, inventory, escheats, unclaimed property, capital stock, license,
payroll, employment, social security, unemployment, severance, occupation, real
or personal property, estimated taxes, rent, excise, occupancy, recordation,
bulk transfer, intangibles, alternative minimum, doing business, withholding and
stamp and taxes arising under Treasury Regulation Section 1.1502-6 (or any
comparable state or local Law) as a transferee or successor, by contract, or
otherwise), together with any interest thereon, penalties, fines, additions to
tax or additional amounts with respect thereto, imposed by any Tax Authority.

 

“Tax Authority” means, with respect to any Tax, the Governmental Authority that
imposes such Tax, and the agency (if any) charged with the collection of such
Tax for such entity

 

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or subdivision, including any governmental or quasi-governmental entity or
agency that imposes, or is charged with collecting, social security or similar
charges or premiums.

 

“Tax Claim” has the meaning set forth in Section 6.3(f).

 

“Tax Proceeding” has the meaning set forth in Section 4.9(d).

 

“Tax Return(s)” means any report, return, document, declaration or other
information or filing (including any amendments, elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to any federal, state or local Tax Authority or jurisdiction with
respect to Taxes, including, where permitted or required, combined or
consolidated returns for any group of entities that includes any Contributor
Entity, any documents supplied with respect to or accompanying payments of
estimated Taxes, or supplied with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
declaration or other information.

 

“Third Party Claim” has the meaning set forth in Section 7.4(a).

 

“Transfer Taxes” has the meaning set forth in Section 6.3(e).

 

“Treasury Regulations” means the regulations (including temporary regulations)
promulgated by the United States Department of the Treasury pursuant to and in
respect of provisions of the Code.  All references in this Agreement to sections
of the Treasury Regulations shall include any corresponding provision or
provisions of succeeding, similar or substitute, temporary or final Treasury
Regulations.

 

“Units” has the meaning set forth in the Company Issuer LLC Agreement.

 

Section 1.2                                   Interpretation.  Unless the
context of this Agreement otherwise requires:  (a) words of any gender include
each other gender; (b) words using the singular or plural number also include
the plural or singular number, respectively; (c) the terms “hereof,” “herein,”
“hereby,” “hereto,” and similar words refer to this entire Agreement and not to
any particular Article, Section, Clause, Exhibit or Schedule or any subdivision
of this Agreement; (d) references to “Article,” “Section,” “Clause,” “Exhibit”
or “Schedule” are to the Articles, Sections, Clauses, Exhibits, Sellers’
Disclosure Schedules and Issuer Disclosure Schedules, respectively, of this
Agreement; (e) the words “include” or “including” shall be deemed to be followed
by “without limitation” or “but not limited to” whether or not such words are
followed by such phrases or phrases of like import; and (f) references to “this
Agreement” or any other agreement or document shall be construed as a reference
to such agreement or document as amended, modified or supplemented and in effect
from time to time and shall include a reference to any document which amends,
modifies or supplements it.  Each section of the Sellers’ Disclosure Schedule or
Issuer Disclosure Schedule will apply only to the corresponding Section or
subsection of this Agreement, unless the relevance of a disclosure on a
particular section of the Sellers’ Disclosure Schedule or Issuer Disclosure
Schedule to one or more other sections of such disclosure schedule is reasonably
apparent from the text of such disclosure.

 

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ARTICLE II
CONTRIBUTIONS

 

Section 2.1                                   Company Contribution.  Upon the
terms and subject to the conditions of this Agreement, at the Closing, (a) the
Contributor shall contribute, or cause to be contributed, free and clear of any
Encumbrances (other than Permitted Encumbrances), to the Company Issuer the
Project Assets, the Pittsburg LLC Interests and the Port Arthur LLC Interests,
and (b) in exchange therefor, the Company Issuer shall (i) issue and deliver
50.0% of the Kealine-Primoris Class A Units to Kealine and 50.0% of the
Kealine-Primoris Class A Units to Primoris, and (ii) distribute the Company
Distribution to the Contributor.

 

Section 2.2                                   Premium Payments.  As further
consideration in exchange for the Project Assets, the Highstar Entities will
contribute to the Company Issuer the following payments, subject to the
following terms and conditions:

 

(a)                                 Pittsburg Premium Payment.

 

(i)                                     In the event the Pittsburg Project
reaches Commercial Close, then within 10 Business Days following such date, the
Highstar Entities will contribute to the Company Issuer an amount in cash equal
to $4.5 million (the “Initial Pittsburg Premium”), and the Highstar Entities
shall not receive any additional Units in exchange for such contribution. 
Promptly following the contribution of the Initial Pittsburg Premium, the
Company Issuer will distribute 50.0% of the Initial Pittsburg Premium to Kealine
on account of its Series A-1 Units and 50.0% of the Initial Pittsburg Premium to
Primoris on account of its Series A-1 Units.  If the Pittsburg Project does not
reach Commercial Close, the Initial Pittsburg Premium will be $0, and the
Highstar Entities will have no obligation to contribute or otherwise pay any
amounts, including the Final Pittsburg Premium, to Company Issuer, Kealine or
Primoris under this Section 2.2(a).

 

(ii)                                  In the event the Pittsburg Project
commences Commercial Operation, then within 10 Business Days following such
commencement of Commercial Operation, the Highstar Entities will contribute to
the Company Issuer an amount in cash equal to $4.5 million (the “Final Pittsburg
Premium”), and the Highstar Entities shall not receive any additional Units in
exchange for such contribution.  Promptly following the contribution of the
Final Pittsburg Premium, the Company Issuer will distribute 50.0% of the Final
Pittsburg Premium to Kealine on account of its Series A-1 Units and 50.0% of the
Final Pittsburg Premium to Primoris on account of its Series A-1 Units.  If the
Pittsburg Project does not commence Commercial Operation, the Final Pittsburg
Premium will be $0, and the Highstar Entities will have no obligation to
contribute or otherwise pay any amounts to Company Issuer, Kealine or Primoris
under this Section 2.2(a)(ii).

 

(b)                                 Port Arthur Premium Payment.

 

(i)                                     In the event the Port Arthur Project
reaches Commercial Close on or before January 31, 2014, then within 10 Business
Days following such date, the Highstar Entities will contribute to the Company
Issuer an amount in cash equal to $4.5 million (the “Initial Port Arthur
Premium”), and the Highstar Entities shall not receive any additional Units in
exchange for such contribution.  Promptly following the contribution of the
Initial Port Arthur Premium, the Company Issuer will distribute 50.0% of the
Initial Port Arthur Premium to

 

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Kealine on account of its Series A-2 Units and 50.0% of the Initial Port Arthur
Premium to Primoris on account of its Series A-2 Units.

 

(ii)                                  In the event the Port Arthur Project fails
to reach Commercial Close on or before January 31, 2014 but subsequently reaches
Commercial Close on or before March 31, 2014, then the Initial Port Arthur
Premium will be equal to $3.5 million, and such amount will be distributed in
accordance with Section 2.2(b)(i).  In the event the Port Arthur Project fails
to reach Commercial Close on or before March 31, 2014 but subsequently reaches
Commercial Close on or before June 30, 2014, then the Initial Port Arthur
Premium will be equal to $1.5 million, and such amount will be distributed in
accordance with Section 2.2(b)(i).  If the Port Arthur Project reaches
Commercial Close at any time after June 30, 2014, the Initial Port Arthur
Premium will be $0, and the Highstar Entities will have no obligation to
contribute or otherwise pay any amounts to Company Issuer, Kealine or Primoris
under this Section 2.2(b).

 

(iii)                               In the event the Port Arthur Project
commences Commercial Operation, then within 10 Business Days following such
commencement of Commercial Operation, the Highstar Entities will contribute to
the Company Issuer an amount in cash equal to the amount of the Initial Port
Arthur Premium, as determined under Section 2.2(b) depending on when the Port
Arthur Project reached Commercial Close (the “Final Port Arthur Premium”), and
the Highstar Entities shall not receive any additional Units in exchange for
such contribution.  Promptly following the contribution of the Final Port Arthur
Premium, the Company Issuer will distribute 50.0% of the Final Port Arthur
Premium to Kealine on account of its Series A-2 Units and 50.0% of the Final
Port Arthur Premium to Primoris on account of its Series A-2 Units.  If the Port
Arthur Project does not commence Commercial Operation, the Final Port Arthur
Premium will be $0, and the Highstar Entities will have no obligation to
contribute or otherwise pay any amounts to Company Issuer, Kealine or Primoris
under this Section 2.2(b)(iii).

 

ARTICLE III
CLOSING

 

Section 3.1                                   Closing.  Subject to the terms of
this Agreement, the closing of the Contribution (the “Closing”) will take place
at the offices of Sidley Austin LLP, 1000 Louisiana Street, Suite 6000, Houston,
Texas  77002 concurrently with the execution of this Agreement (the “Closing
Date”).

 

Section 3.2                                   Deliveries at Closing.

 

(a)                                 Sellers.  At the Closing, Sellers shall
deliver, or cause to be delivered, to the Highstar Entities:

 

(i)                                     an executed counterpart, duly signed by
the Contributor, of the Assignment and Assumption Agreement, evidencing the
assignment of the Project Assets to the Company Issuer, in substantially the
form attached as Exhibit C (the “Assignment”);

 

(ii)                                  executed counterparts, duly signed by
Primoris, Kealine and any recipients of Class B Units (such Persons to be
recipients at Closing to be determined by mutual agreement of Kealine and the
Highstar Entities), of the Company Issuer LLC Agreement;

 

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(iii)                               executed counterparts, duly signed by
Kealine, of the Operating Services Agreement;

 

(iv)                              a copy of the certificates of formation, and
any amendments thereto, of the Contributor, each of its Subsidiaries and
Pittsburg LLC, in each case, certified by the Secretary of State of the state of
such entity’s formation;

 

(v)                                 a certificate of good standing of the
Contributor, each of its Subsidiaries and Pittsburg LLC from the Secretary of
State of the state of such entity’s formation dated no earlier than seven
Business Days prior to the Closing Date;

 

(vi)                              duly executed copies of all required consents,
if any, listed on Section 4.3 of the Sellers’ Disclosure Schedule; and

 

(vii)                           a certification of non-foreign status executed
by Contributor in the form prescribed by Treasury Regulation
Section 1.1445-2(b)(2).

 

(b)                                 Highstar Entities and the Company Issuer. 
At the Closing, the following specified entity shall deliver, or cause to be
delivered:

 

(i)                                     from the Company Issuer, evidence of the
issuance of the Kealine-Primoris Class A Units to Kealine and Primoris in form
and substance acceptable to the Contributor;

 

(ii)                                  from the Company Issuer, evidence of the
issuance of the Class B Units to the recipients of such Class B Units at
Closing;

 

(iii)                               from the Company Issuer to the Contributor,
an executed counterpart, duly signed by the Company Issuer, of the Assignment;

 

(iv)                              from the Highstar Entities to the Contributor,
an executed counterpart, duly signed by the Highstar Entities, of the Company
Issuer LLC Agreement;

 

(v)                                 from the Company Issuer to the Contributor,
the Company Distribution by wire transfer of immediately available funds to the
account or accounts designated by Sellers;

 

(vi)                              from the Company Issuer to Kealine, executed
counterparts, duly signed by the Company Issuer, of the Operating Services
Agreement;

 

(vii)                           from the Highstar Entities, a copy of the
certificate of formation of the Company Issuer and any amendments thereto,
certified by the Secretary of State of the State of Delaware;

 

(viii)                        from the Highstar Entities, certificate of good
standing of the Company Issuer  from the Secretary of State of the State of
Delaware dated no earlier than seven Business Days prior to the Closing Date;
and

 

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(ix)                              from the Highstar Entities, duly executed
copies of all required consents, if any, listed in Section 5.3 of the Highstar
Disclosure Schedule.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Except as set forth in the corresponding section of the Sellers’ Disclosure
Schedule delivered concurrently with the execution of this Agreement by Sellers
to the Company Issuer, and the Highstar Entities, but subject to Section 1.2,
each Seller hereby severally represents and warrants to the Company Issuer and
the Highstar Entities as follows:

 

Section 4.1                                   Organization; Power and Authority.

 

(a)                                 Such Seller (i) is duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction in
which it is so organized or formed, (ii) has full corporate, partnership or
limited liability company power and authority to carry on its business as it is
now being conducted and (iii) where appropriate, is duly qualified to do
business as a foreign corporation, partnership or limited liability company and
is in good standing in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
reasonably be expected to materially and adversely affect its ability to
execute, deliver and perform its obligations under the Contribution Documents to
which it is a party.

 

(b)                                 Such Seller has full authority to execute,
deliver and perform its obligations under this Agreement and each other
Contribution Document to which it is a party, and to carry out the transactions
contemplated hereby and thereby.  This Agreement and each Contribution Document
to which such Seller is a party has been duly and validly executed by it and,
assuming the due authorization, execution and delivery by the Company Issuer and
the Highstar Entities, as applicable, constitutes the legal, valid and binding
obligation of it enforceable in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency or other similar Laws affecting the
enforcement of creditors’ rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.

 

(c)                                  Each of the Contributor Entities (i) is
duly organized or formed, validly existing and in good standing under the laws
of the jurisdiction in which it is so organized or formed, (ii) has full
corporate, partnership or limited liability company power and authority to carry
on its business as it is now being conducted and (iii) where appropriate, is
duly qualified to do business as a foreign corporation, partnership or limited
liability company and is in good standing in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary unless the failure to be so
qualified or in good standing would not reasonably be expected to result in a
Material Adverse Event.  No claims, actions or proceedings to dissolve any
Contributor Entity are pending or, to the Sellers’ Knowledge, threatened.

 

Section 4.2                                   No Violation.  Assuming the
accuracy of the Company Issuer’s and Highstar Entities’ representations and
warranties set forth herein, except for (a) the receipt of

 

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consents, if any, set forth in Section 4.3 of the Sellers’ Disclosure Schedule
and (b) the effectuation of the filings and registrations with and the receipt
of the Governmental Authorizations from Governmental Authorities set forth on
Section 4.3 of the Sellers’ Disclosure Schedule, neither the execution and
delivery by such Seller of the Contribution Documents to which it is a party,
nor the consummation by such Seller of the transactions contemplated hereby and
thereby, nor compliance by such Seller with any of the terms or provisions
hereof and thereof, will (i) violate any provision of the Organizational
Documents of such Seller or any Contributor Entity, (ii) violate any material
Law applicable to such Seller or any Contributor Entity, or any of its or their
properties or assets or (iii) violate, conflict with, result in a breach of any
provision of or the loss of any material benefit under, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by such Party under any
Material Contract, or result in the creation of any Encumbrance (other than
Encumbrances created by any of the Contribution Documents) upon any of the
properties or assets of such Seller or any Contributor Entity under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which such
Seller or any Contributor Entity is a party, or by which such Seller or any
Contributor Entity or any of its or their properties or assets may be bound or
affected.

 

Section 4.3                                   Consents and Approvals.  No
consent, waiver, approval, authorization, exemption, registration or declaration
(“Consent”) is required to be obtained by such Seller from, and no notice or
filing is required to be given by such Seller to, or made by such Seller with,
any Governmental Authority or other Person in connection with the execution,
delivery and performance by such Seller of this Agreement and each other
Contribution Document to which such Seller is a party or to which any
Contributor Entity is a party, except as set forth in Section 4.3 of the
Sellers’ Disclosure Schedule.

 

Section 4.4                                   Litigation.  There are no material
claims, actions, proceedings or investigations (including condemnation
proceedings) pending or, to the Sellers’ Knowledge, threatened against such
Seller or any Contributor Entity before any Governmental Authority that would
reasonably be expected to materially and adversely affect such Seller’s ability
to execute, deliver and perform its obligations under the Contribution Documents
to which it or any Contributor Entity is a party.  Such Seller is not, and the
Contributor Entities are not, subject to any outstanding judgment, order, writ,
injunction or decree of any Governmental Authority that would reasonably be
expected to materially and adversely affect such Seller’s ability to execute,
deliver and perform its obligations under the Contribution Documents to which it
or any Contributor Entity is a party.

 

Section 4.5                                   Compliance with Laws.  (a) The
Contributor Entities are in material compliance with all Laws applicable to them
or the Business (other than Environmental Laws, which are addressed in
Section 4.22, and other than any non-compliance that, individually or in the
aggregate, could not reasonably be expected to result in a material liability to
any Contributor Entity), and (b) none of the Sellers or Contributor Entities has
received any written notification within the past six years from any applicable
Governmental Authority that any Contributor Entity is not in compliance with or
is or may be in violation of any Law or has any material liability or alleged
material liability pursuant to any applicable Law, and (c) no event has

 

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occurred, and no circumstance or condition exists, that would reasonably be
expected to constitute or result in a failure of any Contributor Entity to
comply with the terms of any Law.

 

Section 4.6                                   Financial Statements.  Sellers
have delivered to the Highstar Entities the Contributor Financial Statements and
the Pittsburg Financial Statements.  The Contributor Financial Statements and
notes have been prepared from the books and records of the Contributor and its
Subsidiaries and fairly present the assets and liabilities of the Contributor
and its Subsidiaries, the financial condition and the results of operations and
cash flows of the Contributor and its Subsidiaries on the respective dates of
and for the periods referred to in such financial statements, all in accordance
with GAAP.  The Pittsburg Financial Statements and notes have been prepared from
the books and records of Pittsburg LLC and fairly present the assets and
liabilities of Pittsburg LLC, the financial condition and the results of
operations and cash flows of Pittsburg LLC on the respective dates of and for
the periods referred to in the Pittsburg Financial Statements, all in accordance
with GAAP.  The financial statements referred to in this Section 4.6 reflect the
consistent application of such accounting principles throughout the periods
involved.

 

Section 4.7                                   Material Contracts.

 

(a)                                 Section 4.7(a) of the Sellers’ Disclosure
Schedule sets forth a list of each Contract to which (i) any Contributor Entity
is a party relating to the Business or the Business Assets or by which the
Business Assets are bound or (ii) any Seller or any Affiliate of a Contributor
Entity is a party and which relates to Business Assets, and, in each case,
involves receipts or payments by such Contributor Entity of more than $50,000
annually.  The foregoing Contracts are collectively referred to as the “Material
Contracts.”  The Highstar Entities have been provided with true, complete and
correct copies of all Material Contracts, including all amendments thereto. Each
Material Contract is in full force and effect and constitutes the legal, valid
and binding obligation of the applicable Contributor Entity and, to the Sellers’
Knowledge, the other parties thereto, except as enforcement may be limited by
bankruptcy, insolvency or other similar Laws affecting the enforcement of
creditors’ rights generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.  Except as set forth
in Section 4.7 of the Sellers’ Disclosure Schedules, no Material Contract has
any conditions to effectiveness that have not been satisfied.  None of the
Contributor Entities or, to the Sellers’ Knowledge, any other party thereto is
in material breach or default under (and no event or condition has occurred that
with or without the giving of notice, the lapse of time or both would constitute
a material default or material breach or permit termination, modification or
acceleration under) any Material Contract.  No Person (including the Contributor
Entities) has provided any Contributor Entity or any Seller with written notice
that such Person intends to cancel or terminate any Material Contract.

 

(b)                                 Section 4.7(b) of the Sellers’ Disclosure
Schedule sets forth a list of all material letters of intent, memoranda of
understanding or similar documents under which any party thereto still has
liability (contingent or otherwise (other than as relates solely to
confidentiality obligations)) on the date hereof to which any Contributor Entity
is a party or of which any Contributor Entity is a beneficiary (the “Letters of
Intent”).  A true, correct and complete copy of each such Letter of Intent has
been provided to the Highstar Entities.  To the

 

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Sellers’ Knowledge, no party (including the applicable Contributor Entity) to
any such Letter of Intent (i) intends to terminate or permit to expire such
Letter of Intent or (ii) desires to modify or eliminate any material term set
forth in such Letter of Intent in any material respect.  Except as set forth on
Section 4.7(b) of the Sellers’ Disclosure Schedule, Sellers and the Contributor
Entities are negotiating with respect to each Letter of Intent in good faith,
and, to Sellers’ Knowledge, with respect to each such Letter of Intent, the
current state of the negotiations has not resulted in any material changes in
the overall economics or timing of the project that is the subject of such
Letter of Intent.  For the avoidance of doubt, the Company Issuer and the
Highstar Entities acknowledge that the Sellers are providing no assurance that a
definitive agreement will be entered into in respect of the subject of matter of
any Letter of Intent.

 

(c)                                  Section 4.7(c) of the Sellers’ Disclosure
Schedule sets forth a list of the material Contracts that any Contributor Entity
is negotiating with a third party as of the date of this Agreement and the
redline draft date of the most recent draft of each such Contract received by
the Contributor Entity from such third party.  A true, correct and complete copy
of each such draft Contract has been provided to Buyer.  Except as set forth on
Section 4.7(c) of the Sellers’ Disclosure Schedule, to Sellers’ Knowledge the
redline drafts of the draft Contracts identified on Section 4.7(c)(i) of the
Sellers’ Disclosure Schedule accurately reflect the respective current position
of the parties regarding material terms of the business arrangement between the
applicable Contributor Entity and the third party.  To Sellers’ Knowledge, with
respect to each such draft Contract, the current state of the negotiations has
not resulted in any material changes in the overall economics or timing of the
project that is the subject of such draft Contract.  For the avoidance of doubt,
the Company Issuer and the Highstar Entities acknowledge that the Sellers are
providing no assurance that a definitive agreement will be entered into in
respect of any draft Contract.

 

Section 4.8                                   No Material Adverse Event.  Except
as set forth in Section 4.8 of the Sellers’ Disclosure Schedule, since
December 31, 2012, there has not been any Material Adverse Event in or at any
Contributor Entity, and no event has occurred or, to the Sellers’ Knowledge,
circumstance exists that would reasonably be expected to result in a Material
Adverse Event.

 

Section 4.9                                   Taxes.

 

(a)                                 All Tax Returns required to have been filed
by the Contributor Entities or with respect to their assets have been duly and
timely filed (taking into account extensions of time within which to file) with
the appropriate Tax Authority and each such Tax Return is true, correct and
complete in all material respects;

 

(b)                                 all Taxes due and payable by the Contributor
Entities or for which the Contributor Entities may be liable have been timely
paid in full whether or not such Taxes are shown as due and payable on any Tax
Return;

 

(c)                                  all Tax withholding and deposit
requirements imposed on the Contributor Entities have been satisfied in full;

 

(d)                                 no Tax Return of any Contributor Entity has
been the subject of an audit, examination or other administrative or judicial
proceeding (a “Tax Proceeding”) during the past

 

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five years; no such Tax Proceeding is currently pending or has been proposed or
threatened in writing against any Contributor Entity, there are no pending
claims for unpaid Taxes due from any Contributor Entity, and, during the past
five years, no claim has been made in writing by an authority in a jurisdiction
where any Contributor Entity does not file Tax Returns or pay Taxes that it is
or may be subject to Taxes in that jurisdiction;

 

(e)                                  none of the Contributor Entities has in
force any waiver of any statute of limitations in respect of Taxes or any
extension of time with respect to a Tax assessment or deficiency or with respect
to the due date for the filing of any Tax Return;

 

(f)                                   there are no Encumbrances for Taxes, other
than Encumbrances for current Taxes not yet due and payable or not yet
delinquent, on any of the interests in or assets of the Contributor Entities;

 

(g)                                  none of the Contributor Entities is a party
to a Tax allocation or sharing agreement or similar arrangement, is or has
previously been a member of a consolidated, combined or unitary group of
companies for Tax purposes, or has any obligation to indemnify or make a payment
to any Person (other than the Contributor) in respect of any Tax for any past,
current or future period (other than pursuant to customary indemnification
provisions contained in commercial agreements not principally related to Taxes);

 

(h)                                 each of the Contributor Entities is, and has
been since its inception, properly treated as either a partnership or an entity
disregarded as separate from its owner for U.S. federal income tax purposes; and

 

(i)                                     none of the Contributor Entities has
ever participated in any “listed transaction” within the meaning of Treasury
Regulations § 1.6011-4(b)(2).

 

Section 4.10                            Undisclosed Liabilities.  Except (a) for
liabilities and obligations incurred in the ordinary course of business since
December 31, 2012, (b) as otherwise disclosed and referenced as such in this
Agreement or in Contributor Financial Statements or Pittsburg Financial
Statements, and (c) other liabilities that, in the aggregate, are not material
to the Contributor Entities taken as a whole, none of the Contributor Entities
has incurred any liabilities or obligations (whether direct, indirect, accrued
or contingent, secured, unsecured or otherwise).

 

Section 4.11                            Insurance.  Sellers have delivered to
the Highstar Entities true and complete copies of all policies of insurance and
fidelity bonds to which any Contributor Entity is a party or under which Kealine
(with respect to the Contributor Entities and the Business only) or any of the
Contributor Entities is currently covered (or with respect to which any
Contributor Entity has been covered in the six months prior to the date hereof)
(the “Insurance Policies”), and each such Insurance Policy is listed with
expiration dates and deductibles and described in reasonable detail in
Section 4.11 of the Sellers’ Disclosure Schedule).  Other than as set forth in
Section 4.11 of the Sellers’ Disclosure Schedule, all Insurance Policies (a) are
valid, outstanding, and enforceable, (b) will continue in full force and effect
following the consummation of the transactions contemplated by this Agreement,
and (c) are, to the Sellers’ Knowledge, sufficient for compliance in all
material respects with all requirements of applicable Law (i.e., where
applicable Law requires insurance policies, binder or fidelity bonds) and of all
Material

 

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Contracts, and (d) taken together, to the Sellers’ Knowledge, provide adequate
insurance coverage for the assets and the operations of the Contributor Entities
for all risks normally insured against by a Person carrying on the same business
or businesses as the Contributor Entities.  All premiums with respect to the
Insurance Policies covering all periods up to and including the Closing Date
that are due and owing have been paid, and no written notice of cancellation or
termination has been received with respect to any Insurance Policy.

 

Section 4.12                            Investment Representations and
Warranties.

 

(a)                                 Each of Kealine and Primoris (each an
“Investing Seller”) is acquiring the Kealine-Primoris Class A Units for
investment purposes for its own account only.

 

(b)                                 Each Investing Seller is financially able to
bear the economic risk of an investment in the Kealine-Primoris Class A Units
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the investment in the Company
Issuer, and can afford a complete loss of its investment.

 

(c)                                  Each Investing Seller acknowledges that
(i) the Kealine-Primoris Class A Units have not been registered under the
Securities Act or with any state securities agency or similar Governmental
Authority, or qualified under any applicable blue sky Laws, and that the Company
Issuer has not undertaken such registration or qualification, in reliance, in
part, on its representations, warranties, and agreements in Article IV
(including the representations and warranties with respect to the bona fide
nature of the investment intent); (ii) the Company Issuer and the Highstar
Entities are under no obligation to register or qualify the Kealine-Primoris
Class A Units under the Securities Act or under any state securities Law, or to
assist Sellers in complying with any exemption from registration and
qualification; (iii) the Kealine-Primoris Class A Units are “restricted
securities” under the Securities Act in that the Kealine-Primoris Class A Units
will be acquired from the Company Issuer and the Highstar Entities in a
transaction not involving a public offering, and that the Kealine-Primoris
Class A Units may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Kealine-Primoris
Class A Units or an available exemption from registration under the Securities
Act, such securities must be held indefinitely; (iv) there are substantial
restrictions on the transferability of the Kealine-Primoris Class A Units
pursuant to the Company Issuer LLC Agreement; (v) there is no public market for
the Kealine-Primoris Class A Units and none is expected to develop, and,
accordingly, it may not be possible to liquidate its investment in the Company
Issuer; and (vi) the Kealine-Primoris Class A Units are speculative investments
that involve a substantial degree of risk of loss of an entire investment in the
Company Issuer, and each Investing Seller understands and takes full cognizance
of the risks related to the purchase of such interest.

 

(d)                                 Each Investing Seller has been provided an
opportunity for a reasonable time prior to the date hereof to obtain information
concerning the offering of the Kealine-Primoris Class A Units, the Company
Issuer, and all other information to the extent the Company Issuer and the
Highstar Entities possess such information or can acquire it without
unreasonable effort or expense.  Each Investing Seller has been given the
opportunity for a reasonable time prior to the date hereof to ask questions of,
and receive answers from, the

 

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Company Issuer, the Highstar Entities and their representatives concerning the
terms and conditions of the offering of the Kealine-Primoris Class A Units and
other matters pertaining to this investment.  Such Investing Seller has not been
furnished with any representation, oral or otherwise, or information, oral or
otherwise, in connection with the offering of the Kealine-Primoris Class A Units
other than the Company Issuer’s and the Highstar Entities’ express
representations and warranties set forth herein, and such Investing Seller is
not relying on the Company Issuer, the Highstar Entities, their Affiliates or
any of their representatives with respect to economic considerations involved in
this investment.

 

Section 4.13                            Capitalization.

 

(a)                                 The legal name, jurisdiction of organization
and ownership of each of Pittsburg LLC and the Subsidiaries of the Contributor
is set forth on Section 4.13(a) of the Sellers’ Disclosure Schedule.  Other than
the Equity Interests listed on Section 4.13(a) of the Sellers’ Disclosure
Schedule, (i) there are no outstanding Equity Interests in Pittsburg LLC or any
Subsidiary of the Contributor and (ii) none of the Contributor Entities owns any
Equity Interest in any other Person or is a party to any Contract relating
thereto.  All of the Equity Interests in Pittsburg LLC and the Subsidiaries of
the Contributor are duly authorized, validly issued, fully paid and
nonassessable, free of preemptive rights or any other third-party rights, and
have been offered, sold and issued by the applicable entity in compliance with
applicable Laws, Contracts applicable to such entity and its Organizational
Documents and in compliance with any preemptive rights, rights of first refusal
or similar rights.  The rights and privileges of the Equity Interests of each of
Pittsburg LLC and the Subsidiaries of the Contributor are set forth in the
applicable entity’s Organizational Documents.  Except as set forth on
Section 4.13(a) of the Sellers’ Disclosure Schedule, there is no option,
warrant, call, subscription, convertible security, right (including preemptive
right) or Contracts of any character to which Pittsburg LLC or any Subsidiary of
the Contributor is a party or by which it is bound obligating such entity to
issue, exchange, transfer, sell, repurchase, redeem or otherwise acquire any
Equity Interests or obligating such entity to grant, extend, accelerate the
vesting of or enter into any such option, warrant, call, subscription,
convertible security, right or Contract.  There are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to Pittsburg
LLC or any Subsidiary of the Contributor.  Except as set forth on
Section 4.13(a) of the Sellers’ Disclosure Schedule and as otherwise
contemplated by this Agreement, there are no registration rights agreements, no
voting trust, proxy or other Contract and no restrictions on transfer with
respect to the Equity Interests of Pittsburg LLC or any Subsidiary of the
Contributor.

 

(b)                                 The Contributor owns, of record and
beneficially, the Pittsburg LLC Interests and the Port Arthur LLC Interests,
free and clear of any Encumbrance except those imposed under the Pittsburg LLC
Organizational Documents and Port Arthur LLC Organizational Documents.  The
Contributor owns, of record and beneficially, all of the Equity Interests of
each of the Subsidiaries (the “Subsidiary Equity Interests”), which are
identified in Section 4.13(b) of the Sellers’ Disclosure Schedule, free and
clear of any Encumbrance except as set forth on Section 4.13(a) of the Sellers’
Disclosure Schedule.  At Closing, the Company Issuer will obtain good and valid
title to all of the Subsidiary Equity Interests, of record and beneficially,
free and clear of any Encumbrance, other than those that may arise by virtue of
any actions taken by or on behalf of the Company Issuer, the Highstar Entities
or their Affiliates, and

 

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will then own 100.0% of the Subsidiaries of the Contributor and will own all of
the Pittsburg LLC Interests.

 

Section 4.14                            No Broker Fees.  No broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of each Seller or any of its
Affiliates, that is or will be payable by any of the Contributor Entities or the
Highstar Entities, the Company Issuer or any Affiliate of the foregoing.

 

Section 4.15                            Transactions with Affiliates.  Except as
set forth on Section 4.15 of the Sellers’ Disclosure Schedule, neither any
officer, director or equity holder of any Seller nor any Affiliate of any Seller
(a) has any agreement or arrangement with any Contributor Entity or any interest
in any property, real or personal, tangible or intangible or (b) has any
pending, or to the Sellers’ Knowledge, threatened claim or cause of action
against any Contributor Entity, except for reimbursement of expenses incurred in
the ordinary course of business.

 

Section 4.16                            Property.

 

(a)                                 Section 4.16(a) of the Sellers’ Disclosure
Schedules contains a true correct and complete list of all real property owned,
either beneficially or of record, by any Contributor Entity or pursuant to which
any Contributor Entity has an option to acquire a fee interest in any real
property (the “Owned Real Property”) and a true, correct and complete list of
each parcel of real property, leased, subleased or occupied to or by any
Contributor Entity, (the “Leased Real Property” and together with the Owned Real
Property, the “Real Property”).  The Contributor Entities have delivered or made
available, to the Highstar Entities, true, correct and complete copies of all
deeds and option agreements relating to the Owned Real Property.  The
Contributor Entities have good, valid and marketable title to all of the Owned
Real Property (or, except as described on Section 4.16(a) of the Sellers’
Disclosure Schedules, the option rights thereto), free and clear of any
Encumbrance (except for Permitted Encumbrances and, in the case of Owned Real
Property under option, any applicable option agreement that is listed on
Section 4.16(a) of the Sellers’ Disclosure Schedules).  None of the Leased Real
Property is subject to any ground lease, master lease, mortgage, deed of trust
or other Encumbrance (except for Permitted Encumbrances) or interests that would
entitle the holder thereof to interfere with or disturb use or enjoyment of such
Leased Real Property or the exercise by the lessee of its rights under such
lease so long as the lessee is not in default under such lease.  None of the
Contributor Entities owes any brokerage commissions with respect to any such
Leased Real Property (including any contingent obligation in respect of future
lease extensions).

 

(b)                                 The Real Property constitutes all material
real property used or held for use in connection with the operation of the
Business by the Contributor Entities as presently conducted.  The Contributor
Entities have valid rights of ingress and egress with respect to each parcel of
the Real Property, buildings, structures, facilities, fixtures and other
improvements as are required to conduct the applicable portions of the Business
in a safe, efficient and lawful manner consistent with past practice.  None of
the Contributor Entities has received within the last six years notice of any,
and to the Sellers’ Knowledge there are no, (i) pending condemnation proceedings
affecting any Real Property, or proceedings to change the zoning or real
property tax assessment of any Real Property, (ii) material existing, pending,
contemplated,

 

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threatened or anticipated widening, change of grade or limitation on use of any
streets or other rights of way abutting any Real Property, (iii) pending or
threatened legal actions, claims or lawsuits affecting any Real Property or any
Contributor Entity’s ownership of same, (iv) outstanding violations of any Law
materially affecting any Real Property, nor any condition with which the passage
of time will result in any such violation if not corrected, and (v) unconfirmed
assessments for municipal improvements affecting any Real Property. The
Contributor Entities have delivered, or made available, to the Highstar Entities
true, correct and complete copies of all existing title insurance policies
(together with true, correct and complete copies of all title exception
documents listed thereon) insuring the Contributor Entities’ interest in any of
the Real Property (the “Existing Title Policies”).  Each of the Existing Title
Policies is in full force and effect and none of the Contributor Entities has
made any claim under any of the Existing Title Policies.

 

Section 4.17                            Tangible Personal Property.  All
material items of Tangible Personal Property are in a state of reasonable repair
(ordinary wear and tear excepted) so as to be suitable for the purposes of which
such Tangible Personal Property was constructed, obtained or currently being
used in all material respects.  The Contributor Entities have good and
marketable title to, or a valid leasehold interest in, all material Tangible
Personal Property, free of all Encumbrances other than Permitted Encumbrances. 
The Contributor Entities own, or lease under valid leases, all buildings,
machinery, equipment and other tangible assets and properties necessary for the
conduct of its respective Business as presently conducted.

 

Section 4.18                            Accurate and Complete Records.  The
books, ledgers, financial records and other records of the Contributor Entities:

 

(a)                                 are in the possession of the Contributor
Entities, as applicable;

 

(b)                                 have been, in all material respects,
maintained in accordance with all applicable Laws and generally accepted
standards of practice; and

 

(c)                                  are accurate and complete and do not
contain or reflect any material discrepancies.

 

Section 4.19                            Intellectual Property.  Section 4.19 of
the Sellers’ Disclosure Schedule sets forth a complete list of all issued
patents, registered patents, registered trademarks and registered copyrights
(collectively, “Intellectual Property”) owned or licensed by any Contributor
Entity.  The Contributor Entities own or have the right to use pursuant to
license, sublicense, agreement or otherwise all material items of Intellectual
Property required in the operation of the Business of the Contributor Entities
as presently conducted.  No third party has asserted in writing against Sellers
or any Contributor Entity a claim that any Contributor Entity is infringing on
the Intellectual Property of such third party, and to the Sellers’ Knowledge, no
third party is infringing on the Intellectual Property owned by any Contributor
Entity.

 

Section 4.20                            No Employees and No Employee Plans. 
Neither Pittsburg LLC nor any of the Subsidiaries of the Contributor has any
employees or has ever had any employees.  Neither Pittsburg LLC nor any of the
Subsidiaries of the Contributor has any employee benefit plans (within the
meaning of Section 3(3) of ERISA, whether or not subject to ERISA) and has

 

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never had any such employee benefit plans.  Neither Pittsburg LLC nor any of the
Subsidiaries of the Contributor has, or could reasonably be expected to have,
any liabilities under Section 302 or Title IV of ERISA or Section 412 or
Section 4980B of the Code.

 

Section 4.21                            Labor Matters.  Except as set forth on
Section 4.21 of the Sellers’ Disclosure Schedule, there are no collective
bargaining agreements, contracts or other agreements or understandings with
labor unions or labor organizations to which any Contributor Entity is a party.

 

Section 4.22                            Environmental Matters.

 

(a)                                 The operations of the Contributor Entities
are in compliance in all material respects with Environmental Laws;

 

(b)                                 all Environmental Permits required to be
obtained by any Contributor Entity under Environmental Law in connection with
its operations as they are currently being conducted (including Environmental
Permits that are required for the current stage of the portion of the
Contributor Entity’s systems or facilities that are under construction or
otherwise under development and including those relating to Hazardous
Substances), have been duly obtained or timely filed for, and if duly obtained,
are in full force and effect, and the Contributor Entities are in material
compliance with the terms and conditions of all such Environmental Permits;

 

(c)                                  there is no pending or, to the Sellers’
Knowledge, threatened litigation under any Environmental Law relating to the
Contributor Entities or any of their assets;

 

(d)                                 no Contributor Entity has received any
written or, to the Sellers’ Knowledge, oral notice from any Governmental
Authority of an actual or potential violation of or actual or potential material
liability under any Environmental Laws and, to the Sellers’ Knowledge, there are
no conditions or circumstances that would reasonably be expected to result in
the receipt of such written or verbal notice or that would reasonably be
expected to result in material liability for any Contributor Entity under
Environmental Laws;

 

(e)                                  there has been no Release or threatened
Release of Hazardous Substances at, on, under, or from any of the property owned
or operated by any Contributor Entity, or arising out of or in connection with
the operations of any Contributor Entity (including with respect to any off-site
disposal of Hazardous Substances) in violation of Environmental Laws or in a
manner that would give rise to material liability under Environmental Laws;

 

(f)                                   to the Sellers’ Knowledge, there has been
no exposure of any Person or property to any Hazardous Substances as a result of
or in connection with operations of any Contributor Entity that would reasonably
be expected to form the basis for a material Claim for damages or compensation;

 

(g)                                  none of the Contributor Entities has
assumed or retained by contract or operation of law any material liabilities
under any Environmental Law or regarding any Hazardous Substances; and

 

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(h)                                 Sellers have provided to the Highstar
Entities true and complete copies of all internal and external environmental
audits, studies, analyses, assessments, and all material correspondence relating
to environmental matters in Sellers’ possession or control received within the
past six years and which pertain to any Contributor Entity or otherwise relate
to the Business or the Business Assets.

 

Section 4.23                            Indebtedness.  There is no outstanding
Indebtedness of the Contributor Entities.

 

Section 4.24                            Bank Accounts.  Section 4.24 of the
Sellers’ Disclosure Schedule sets forth a list of the names and locations of
banks, trust companies and other financial institutions at which any Contributor
Entity maintains accounts of any nature or safe deposit boxes, and the
authorized signatories on each such account.

 

Section 4.25                            Credit Enhancements.  Section 4.25 of
the Sellers’ Disclosure Schedule sets forth all guarantees, letters of credit,
bonds, security deposits and other surety obligations or credit support provided
by or on behalf of Sellers or their Affiliates with respect to the Contributor
Entities or their respective assets.

 

Section 4.26                            Permits.

 

(a)                                 Section 4.26(a) of the Sellers’ Disclosure
Schedule set forth all Permits relating to the Business Assets and held by the
Contributor Entities as of the date of this Agreement, and a true and complete
copy of each such Permit has been provided to the Highstar Entities.  All such
Permits are in full force and effect, and there are no claims, causes of action
or proceedings before any Governmental Authority pending or, to the Sellers’
Knowledge, threatened that seek the revocation, cancellation, suspension or
adverse modification thereof.  None of the Contributor Entities is in violation
in any material respect of the terms of any Permit.  No Permits will be subject
to suspension, modification, revocation or non-renewal as a result of the
execution, delivery and consummation of the transactions contemplated by the
Contribution Documents.

 

(b)                                 Section 4.26(b) of the Sellers’ Disclosure
Schedule set forth all Permits relating to the Business Assets and for which any
Contributor Entity has applied as of the date of this Agreement and the status
of such Permit application as of the date of this Agreement.  The information
contained in each Permit application was true and correct in all material
respects at the time such application was filed, and no event or circumstance
has occurred that could reasonably be expected to require such Permit
application to be amended, modified or supplemented.  Sellers have complied with
all required obligations to facilitate the issuance of any such pending Permit,
and to Sellers’ Knowledge, no event, fact or circumstance exists that could be
reasonably expected to materially delay the issuance of any pending Permit or
cause Sellers’ application for such Permit to be denied.

 

(c)                                  There are no material Permits for which the
Contributor Entities have not yet applied and that are either required for the
current stage of the portion of the projects that are under development by
Pittsburg LLC and Port Arthur LLC or will be required for the next stage of
development by Pittsburg LLC and Port Arthur LLC or, to the Sellers’ Knowledge,
the

 

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construction, testing or commissioning of any project facilities of Pittsburg
LLC and Port Arthur LLC.  Except as set forth in Section 4.26(c) of the Sellers’
Disclosure Schedule, to the Sellers’ Knowledge, no event, fact, or circumstance
exists that could be reasonably expected to materially delay the submission of
an application for any such Permit or cause Sellers’ application for such Permit
to be denied.

 

Section 4.27                            Project Milestones.  Attached to
Section 4.27 of the Sellers’ Disclosure Schedule are the Gantt charts for the
projects being developed by Pittsburg LLC and Port Arthur LLC (the “Project
Gantt Charts”).  The Project Gantt Charts are complete and based on reasonable
assumptions, have been prepared in good faith and fairly represent Sellers’
reasonable expectations as to the matters covered thereby as of the date of this
Agreement; provided, however, that the Project Gantt Charts are not in any way a
guarantee or predictor of future results.  Contributor Entities have completed
any milestone or project deadline scheduled to be completed on or prior to the
date of this Agreement pursuant to the Project Gantt Charts.

 

Section 4.28                            No Other Representations.  Except for
the representations and warranties contained in this Article IV, or set forth in
the other Contribution Documents, neither the Sellers nor any other Person makes
any representation or warranty, express or implied, on behalf of the Sellers.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY ISSUER AND THE HIGHSTAR ENTITIES

 

Except as set forth in the corresponding section of the Highstar Disclosure
Schedule delivered by the Company Issuer and the Highstar Entities to the
Sellers concurrently with the execution of this Agreement, but subject to
Section 1.2, the Company Issuer and the Highstar Entities hereby represent and
warrant to the Sellers as follows:

 

Section 5.1                                   Organization; Power and Authority.

 

(a)                                 Each of the Highstar Entities and the
Company Issuer (i) is duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction in which it is so organized or
formed, (ii) has full corporate, partnership or limited liability company power
and authority to carry on its business as it is now being conducted and
(iii) where appropriate, is duly qualified to do business as a foreign
corporation, partnership or limited liability company and is in good standing in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary.

 

(b)                                 Each of the Highstar Entities and the
Company Issuer has full authority to execute, deliver and perform its
obligations under this Agreement and the Contribution Documents to which it is a
party, and to carry out the transactions contemplated hereby and thereby.  This
Agreement and the Contribution Documents to which each such Party is a party
have been duly and validly executed by such Party and, assuming the due
authorization, execution and delivery by Sellers, constitutes the legal, valid
and binding obligation of such Party enforceable in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
Laws affecting the enforcement of creditors’ rights

 

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generally and except that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.

 

Section 5.2                                   No Violation.  Assuming the
accuracy of Sellers’ representations and warranties set forth therein, except
for (a) the receipt of consents, if any, set forth on Section 5.3 of the
Highstar Disclosure Schedule and (b) the effectuation of the filings and
registrations with and the receipt of the Governmental Authorizations from
Governmental Authorities set forth on Section 5.3 of the Highstar Disclosure
Schedule, neither the execution and delivery by each of the Highstar Entities
and the Company Issuer of the Contribution Documents to which it is a party, nor
the consummation by such Party of the transactions contemplated hereby and
thereby, nor compliance by such Party with any of the terms or provisions hereof
and thereof, will (i) violate any provision of such Party’s respective
Organizational Documents or the Company Issuer LLC Agreement, (ii) violate any
Law applicable to such Party, or any of its properties or assets, or
(iii) violate, conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by such Party under any material contract, or result in the
creation of any Encumbrance (other than Encumbrances created by this Agreement)
upon any of the properties or assets of the Company Issuer, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which such Party
is a party, or by which such Party or any of its properties or assets may be
bound or affected.

 

Section 5.3                                   Consents and Approvals.  No
Consent is required to be obtained by the Company Issuer or any Highstar Entity
from, and no notice or filing is required to be given by the Company Issuer or
any Highstar Entity to, or made by the Company Issuer or any Highstar Entity
with, any Governmental Authority or other Person in connection with the
execution, delivery and performance by the Company Issuer and the Highstar
Entities of this Agreement, except as set forth in Section 5.3 of the Highstar
Disclosure Schedule.

 

Section 5.4                                   Litigation.  Except as set forth
on Section 5.4 of the Highstar Disclosure Schedule, there are no claims,
actions, proceedings or investigations (including condemnation proceedings)
pending or, to the Knowledge of the Highstar Entities, threatened against the
Company Issuer or the Highstar Entities before any Governmental Authority that
would reasonably be expected to materially and adversely affect the Company
Issuer’s or any Highstar Entity’s ability to execute, deliver and perform its
obligations under the Contribution Documents to which it is a party.  None of
the Highstar Entities and the Company Issuer is subject to any outstanding
judgment, order, writ, injunction or decree of any Governmental Authority that
would reasonably be expected to materially and adversely affect such Party’s
ability to execute, deliver and perform its obligations under the Contribution
Documents to which it is a party.

 

Section 5.5                                   Compliance with Laws.  The Company
Issuer is in material compliance with all Laws.  The Company Issuer has not
received any written notification from any applicable Governmental Authority
that it is not in compliance with or is or may be in violation of any Law or has
any material liability or potential or alleged liability pursuant to any
applicable Law, and no event has occurred, and no circumstance or condition
exists, that would reasonably

 

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be expected to constitute or result in a failure of the Company Issuer to comply
with the terms of any Law.

 

Section 5.6                                   Capitalization.  Other than the
Equity Interests listed on Section 5.6 of the Highstar Disclosure Schedule,
(i) there are no outstanding Equity Interests in the Company Issuer and (ii) the
Company Issuer does not own any Equity Interest in any other Person and is not a
party to any Contract relating thereto.  All of the Equity Interests in the
Company Issuer set forth on Section 5.6 of the Highstar Disclosure Schedule are
duly authorized, validly issued, fully paid and nonassessable, free of
preemptive rights or any other third-party rights, and have been offered, sold
and issued by the applicable entity in compliance with applicable Laws,
Contracts applicable to such entity and such entity’s Organizational Documents
and in compliance with any preemptive rights, rights of first refusal or similar
rights.  The rights and privileges of the Equity Interests of the Company Issuer
are set forth in the Company Issuer’s Organizational Documents.  There is no
option, warrant, call, subscription, convertible security, right (including
preemptive right) or Contract of any character to which the Company Issuer is a
party or by which it is bound obligating such entity to issue, exchange,
transfer, sell, repurchase, redeem or otherwise acquire any Equity Interests in
such entity or obligating such entity to grant, extend, accelerate the vesting
of or enter into any such option, warrant, call, subscription, convertible
security, right or Contract.  There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company
Issuer.  Except as otherwise contemplated by this Agreement, there are no
registration rights agreements, no voting trust, proxy or other Contract and no
restrictions on transfer with respect to any equity interests of the Company
Issuer.  Collectively, the Highstar Entities currently own, of record and
beneficially, all of the Equity Interests of the Company Issuer free and clear
of any Encumbrance.  At Closing, Kealine and Primoris will obtain good and valid
title to the Kealine-Primoris Class A Units, of record and beneficially, free
and clear of any Encumbrance other than those that may arise by virtue of any
actions taken by or on behalf of Sellers or their Affiliates, and the
capitalization of the Company Issuer will be as set forth on Section 5.6 of the
Highstar Disclosure Schedule.

 

Section 5.7                                   Issuance of Kealine-Primoris
Class A Units.  The Kealine-Primoris Class A Units that are being issued
pursuant to this Agreement, when issued, and delivered in accordance with the
terms of this Agreement, for the consideration expressed herein, will be duly
and validly issued, fully paid, and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under the Company
Issuer LLC Agreement and under applicable state and federal securities Laws.

 

Section 5.8                                   Status.  The Company Issuer was
formed on September 26, 2013, and, except for the transactions contemplated by
the Contribution Documents, it does not conduct, nor has it ever conducted, any
business or activities other than immaterial activities of an administrative
nature that are incidental to being a holding company. The Company Issuer does
not currently have nor has it ever had any right, title or interest to or in any
properties and assets (real, personal or mixed, tangible or intangible), other
than its rights under the Contribution Documents, if any, and has not and has
never been a party to any Contract other than the Contribution Documents and the
Organizational Documents of the Company Issuer and any Contract incidental to
any of the foregoing or the transactions contemplated by this Agreement.

 

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Section 5.9                                   No Broker Fees.  No broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Highstar Entities or any of
their Affiliates, that is or will be payable by the Sellers or any of their
Affiliates.

 

Section 5.10                            Investment Representations and
Warranties.

 

(a)                                 The Company Issuer is acquiring the
Subsidiary Equity Interests and the Pittsburg LLC Interests for investment
purposes for its own account only.

 

(b)                                 The Company Issuer and the Highstar Entities
are financially able to bear the economic risk of an investment in the
Subsidiary Equity Interests and the Pittsburg LLC Interests and have such
knowledge and experience in financial and business matters that they are capable
of evaluating the merits and risks of such investment, as the case may be, and
can afford a complete loss of their investment.

 

(c)                                  The Company Issuer and the Highstar
Entities acknowledge that (i) the Subsidiary Equity Interests and the Pittsburg
LLC Interests have not been registered under the Securities Act or with any
state securities agency or similar Governmental Authority, or qualified under
any applicable blue sky laws, and that Sellers have not undertaken such
registration or qualification, in reliance, in part, on the representations,
warranties, and agreements in this Article V (including the representations and
warranties with respect to the bona fide nature of the investment intent);
(ii) Sellers are under no obligation to register or qualify the Subsidiary
Equity Interests or the Pittsburg LLC Interests under the Securities Act or
under any state securities law, or to assist the Company Issuer or the Highstar
Entities in complying with any exemption from registration and qualification;
(iii) the Subsidiary Equity Interests and the Pittsburg LLC Interests are
“restricted securities” under the Securities Act in that such interests will be
acquired from Sellers in a transaction not involving a public offering, may not
be sold, transferred, or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and, in the absence of an effective
registration statement covering such interests or an available exemption from
registration under the Securities Act, such interests must be held indefinitely;
(iv) there are substantial restrictions on the transferability of the Subsidiary
Equity Interests and the Pittsburg LLC Interests pursuant to the Organizational
Documents of the applicable entity; (v) there is no public market for the
Subsidiary Equity Interests and the Pittsburg LLC Interests and none is expected
to develop, and that, accordingly, it may not be possible to liquidate its
investment; and (vi) the Subsidiary Equity Interests and the Pittsburg LLC
Interests are speculative investments that involve a substantial degree of risk
of loss of an entire investment, and the Company Issuer and the Highstar
Entities understand and take full cognizance of the risks related to the
purchase of such interest.

 

(d)                                 The Company Issuer and the Highstar Entities
have been provided an opportunity for a reasonable time prior to the date hereof
to obtain information concerning the offering of the Subsidiary Equity Interests
and the Pittsburg LLC Interests, Sellers, and all other information to the
extent Sellers possesses such information or can acquire it without unreasonable
effort or expense.  The Company Issuer and the Highstar Entities have been given
the opportunity for a reasonable time prior to the date hereof to ask questions
of, and receive answers from, Sellers or their representatives concerning the
terms and conditions of the offering

 

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of the Subsidiary Equity Interests and the Pittsburg LLC Interests and other
matters pertaining to this investment.  The Company Issuer and the Highstar
Entities have not been furnished with any representation, oral or otherwise, or
information, oral or otherwise, in connection with the offering of the
Subsidiary Equity Interests and the Pittsburg LLC Interests other than Sellers’
express representations and warranties set forth herein and are not relying on
Sellers, their Affiliates or their representatives with respect to economic
considerations involved in this investment.

 

Section 5.11                            Financial Capability.  The Highstar
Entities’ obligations hereunder are not subject to any conditions regarding its
or any other Person’s ability to obtain financing.  The Highstar Entities have
access to, or will have access to at the Closing, sufficient funds to enable
them to perform all of their obligations at Closing under the Contribution
Documents.

 

Section 5.12                            Financial Statements.  The Highstar
Entities have delivered to the Sellers the Highstar Financial Statements. 
Except as set forth in Section 5.12 of the Highstar Disclosure Schedule, the
Highstar Financial Statements and notes have been prepared from the books and
records of the Persons described therein and fairly present the assets and
liabilities of such Persons, the financial condition and the results of
operations and cash flows of such Persons on the respective dates of and for the
periods referred to in such financial statements, all in accordance with GAAP. 
The financial statements referred to in this Section 5.12 reflect the consistent
application of such accounting principles throughout the periods involved.

 

Section 5.13                            No Other Representations.  Except for
the representations and warranties contained in this Article V or set forth in
the other Contribution Documents, none of the Company Issuer, the Highstar
Entities and any other Person makes any representation or warranty, express or
implied, on behalf of the Company Issuer or the Highstar Entities.

 

ARTICLE VI
ADDITIONAL AGREEMENTS

 

Section 6.1                                   Regulatory Matters Agreement.

 

(a)                                 Each Party shall, upon request, furnish each
other Party so requesting with all information concerning itself, its respective
Subsidiaries, if any, directors, officers and limited partners, members and such
other matters as may be reasonably necessary or advisable in connection with any
statement, filing, notice or application made by or on behalf of the Parties or
any of their respective Subsidiaries to any Governmental Authority in connection
with the transactions contemplated by this Agreement, the continuation of the
Business after the Contribution and the other transactions contemplated by this
Agreement.

 

(b)                                 Each Party shall promptly furnish each other
Party so requesting with copies of written communications received by the Party,
or any of its respective subsidiaries or Affiliates from, or delivered by any of
the foregoing to, any Governmental Authority in respect of the transactions
contemplated by this Agreement.

 

Section 6.2                                   Additional Agreements.  In case at
any time after the Closing any further action is necessary or desirable to carry
out the purposes of this Agreement, each Party and, if

 

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applicable, the members, general partner, proper officers, managers and
directors of each Party and its respective Subsidiaries, if any, shall take all
such necessary action as may be reasonably requested by any other Party.

 

Section 6.3                                   Tax Matters.

 

(a)                                 The Parties hereby acknowledge and agree
that they intend for U.S. federal income tax purposes to treat (i) the
contribution of the Project Assets to the Company Issuer, to the maximum extent
possible, as qualifying for nonrecognition of gain or loss in accordance with
Section 721 of the Code and the portion of the Company Distribution allocable to
such Project Assets, to the maximum extent possible, as a reimbursement of
preformation expenditures in accordance with Treasury Regulation
Section 1.707-4(d), (ii) the contribution of the Pittsburg LLC Interests to the
Company Issuer, in part as a contribution of an undivided interest in such
interests qualifying for nonrecognition of gain or loss in accordance with
Section 721 of the Code and in part as a sale of an undivided interest in such
interests in accordance with the Treasury Regulations under Section 707 of the
Code, and (iii) the contribution of the Port Arthur LLC Interests to the Company
Issuer, in part as a contribution of an undivided interest in each of the assets
of Port Arthur LLC and in part as a sale of an undivided interest in each of
such assets.

 

(b)                                 Any consideration required to be taken into
account as part of a sale of the Project Assets under applicable Law shall be
allocated among the Project Assets in accordance with Section 1060 of the Code
and the Treasury Regulations thereunder (the “Company Allocation”).  Any
consideration required to be taken into account as part of a sale of the
Pittsburg LLC Interests under applicable Law shall be allocated among the assets
of the Pittsburg LLC in accordance with Sections 755 and 1060 of the Code and
the Treasury Regulations thereunder (the “Pittsburg Allocation”).  Any
consideration required to be taken into account as part of a sale of the assets
of the Port Arthur LLC shall be allocated among such assets in accordance with
Section 1060 of the Code and the Treasury Regulations thereunder (the “Port
Arthur Allocation”).  On or prior to the date that is 90 days after the Closing
Date, the Highstar Entities shall provide to the Contributor the Highstar
Entities’ proposed Company Allocation, Pittsburg Allocation and Port Arthur
Allocation.  Within 30 days after the date of the delivery of such proposed
allocations to the Contributor, the Contributor shall either propose to the
Highstar Entities any changes to such allocations in writing (together with
reasonable details supporting such changes) or otherwise shall be deemed to have
agreed with such allocations upon the expiration of such 30 day period.  The
Contributor and the Highstar Entities shall cooperate in good faith to mutually
agree to such allocations and shall reduce such agreement to writing; provided,
however, that if the allocations cannot be agreed upon by the Parties within 30
days of the Highstar Entities’ receipt of Contributor’s proposed changes (if
any) to the Highstar Entities’ proposed allocations, then the same shall be
submitted to a nationally recognized accounting firm mutually selected by the
Highstar Entities and Contributor (the “Independent Accountant”) for final
determination (as agreed upon or determined by the Independent Accountant, the
“Purchase Price Allocations”).  The costs and expenses of the Independent
Accountant shall be borne equally by the Highstar Entities on the one hand and
the Contributor on the other hand.  The Parties shall file timely any forms and
statements required under U.S. federal or state income Tax Laws consistent with
such Purchase Price Allocations.  The Purchase Price Allocations shall be
revised to take into account subsequent adjustments to the Company Distribution
and other

 

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consideration, in the manner provided by Sections 755 and 1060 of the Code and
the Treasury Regulations thereunder.  The Contributor, the Company Issuer, and
the Highstar Entities shall, and shall cause their Affiliates to, report
consistently with the Purchase Price Allocations in all Tax Returns, including
IRS Form 8594, which the Highstar Entities, the Company Issuer, the Pittsburg
Issuer and the Contributor (as applicable) shall timely file with the IRS, and
none of the Contributor, the Company Issuer, and the Highstar Entities shall
file any Tax Return that is inconsistent with such Purchase Price Allocation
except as otherwise required by applicable Law following a final determination
by the relevant Tax Authority.  Each of the Contributor and the Highstar
Entities agrees to promptly advise each other regarding the existence of any Tax
audit, controversy or litigation related to the Purchase Price Allocations (in
which case they shall cooperate in good faith in the defense of the Purchase
Price Allocation).

 

(c)                                  The Contributor shall (i) cause each of the
Contributor’s Subsidiaries that is treated as a partnership (and use
commercially reasonable efforts to cause Pittsburg LLC, with reasonable
out-of-pocket professional fees or filing fees at the expense of the Company
Issuer) to have in effect a valid election under Section 754 of the Code for any
taxable year that includes the Closing Date; and (ii) provide evidence
satisfactory to the Highstar Entities thereof.

 

(d)                                 The Parties shall reasonably cooperate, and
shall cause their respective Affiliates and representatives to reasonably
cooperate, in preparing and filing all Tax Returns relating to any Pre-Closing
Period or Straddle Period, including maintaining and making available to each
other, and to any Tax Authority as reasonably requested, all records in their
possession necessary in connection with filing Tax Returns and payment of Taxes
and in resolving all Tax Proceedings with respect to any Pre-Closing Period or
Straddle Period relating to Taxes.

 

(e)                                  The Sellers shall be responsible for all
transfer, documentary, sales, use, stamp, recording, value added, registration
and other similar Taxes and all conveyance fees, recording fees and other
similar charges (all including penalties, interest and other charges with
respect thereto, collectively “Transfer Taxes”) incurred in connection with the
consummation of the transactions contemplated by this Agreement relating to the
transfer of any interest in such entity.  The Parties shall cooperate in good
faith to minimize, to the extent permissible under applicable Law, the amount of
any such Transfer Taxes.

 

(f)                                   If a claim with respect to Taxes shall be
made by any Governmental Authority that, if successful, could result in an
obligation to make an indemnity payment to an Issuer Indemnitee pursuant to
Article VII (a “Tax Claim”), then, notwithstanding any provisions of Article VII
to the contrary, the relevant Issuer Indemnitee shall promptly, and in any event
no more than 15 days following the Issuer Indemnitee’s receipt of written notice
of such Tax Claim, give written notice to the Contributor of such Tax Claim;
provided, however, the failure of the Issuer Indemnitee to give such notice
shall only relieve the Contributor from its indemnification obligations
hereunder to the extent it is materially prejudiced by such failure.  Within 30
days of receipt of written notice of a Tax Claim, the Contributor shall provide
written notice to the Highstar Entities and the relevant Issuer Indemnitee of
its intent to control the defense of such Tax Claim.  Upon providing such
notice, the Contributor shall be entitled to control all proceedings relating to
such Tax Claim and may make all decisions taken in connection with such Tax
Claim (including selection of counsel) at its own expense; provided, however,
that the

 

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Issuer Indemnitee shall be entitled to participate in the defense of any such
Tax Claim and shall jointly control the defense of any such Tax Claim, the
resolution of which could reasonably be expected to result in an increase in the
Taxes of the Issuer Indemnitee (or of any of the Highstar Entities or any direct
or indirect owner thereof) and that are not Contributor Taxes.  With respect to
any Tax Claim that the Contributor and the Issuer Indemnitee jointly control,
the Parties agree not to settle, compromise or otherwise resolve the Tax Claim
without the written consent of the Contributor and the Issuer Indemnitee, which
consent shall not be unreasonably withheld, conditioned or delayed.  Absent
written notice of the Contributor’s intent to control the defense of a Tax Claim
as set forth above, or upon written notification to the Issuer Indemnitee that
the Contributor will decline to control the defense of a Tax Claim, the Issuer
Indemnitee shall thereupon be permitted to defend and settle such proceeding at
the Contributor’s expense.  The Contributor, the Issuer Indemnitees, the
Contributor Entities and each of their respective Affiliates shall reasonably
cooperate with each other in contesting or defending against any Tax Claim. 
Such cooperation shall include the retention and, upon the request of the Party
or Parties controlling proceedings relating to such Tax Claim, the provision to
such Party or Parties of records and information that are reasonably relevant to
such Tax Claim and making employees available on a mutually convenient basis to
provide additional information or explanation of any material provided hereunder
or to testify at proceedings relating to such Tax Claim.  To the extent there is
a conflict between the provisions of this Section 6.3(e) and the procedures set
forth in Article VII, the provisions of this Section 6.3(e) shall control.

 

Section 6.4                                   Non-Competition and
Non-Solicitation.

 

(a)                                 Agreement Not to Compete.  As a further
inducement to the Company Issuer and the Highstar Entities to enter into this
Agreement, each Non-Compete Party agrees that during such Non-Compete Party’s
Non-Compete Term, such Non-Compete Party will not:

 

(i)                                     directly or indirectly participate in
the promotion, financing, ownership, operation or management of, or assist in,
furnish advice with respect to, or carry on through a proprietorship,
partnership, joint venture, corporation or other form of business entity, or
otherwise, or solicit, any opportunity that is (A) within a 250-mile radius of
any existing Company Issuer project that is of the type described in the
definition of “Business” or any project of the type described in the definition
of “Business” then being pursued by the Company Issuer as evidenced by
substantive negotiations of the Company Issuer regarding such project and
(B) that is related to, competitive with or detrimental to any such project,
whether directly or indirectly, or through another business, as an employee,
principal, agent, shareholder, representative, consultant, independent
contractor, or otherwise in any capacity (each, a “Competing Opportunity”);

 

(ii)                                  directly or indirectly solicit or
encourage any current customer or counterparty (or any customer or counterparty
with which the Company Issuer has had substantive discussions within the
immediately preceding 12 months) of the Company Issuer not to conduct business
with the Company Issuer or solicit to do business with any such customer or
counterparty, in either case, relating to a Competing Opportunity; or

 

(iii)                               either on such Non-Compete Party’s own
behalf or for any other person, firm, partnership, corporation or other entity
(A) solicit, interfere with or endeavor to

 

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cause any employee of the Company Issuer, Services Provider or any Affiliate
thereof to leave his or her employment or (B) induce or attempt to induce any
such employee to breach his employment agreement with the Company Issuer,
Services Provider or any Affiliate thereof.

 

(b)                                 Remedies.  The Non-Compete Parties, the
Company Issuer and the Highstar Entities agree that the Company Issuer and the
Highstar Entities may pursue all available legal and equitable remedies and
rights with respect to a violation of this Section 6.4, and the specific
inclusion of any remedy in this Agreement will not constitute a whole or partial
election or waiver of any other available remedy or right.

 

(c)                                  Injunctive Relief.  Each Non-Compete Party
agrees that a violation of the terms, provisions, covered obligations, duties
and conditions described in this Section 6.4 will give rise to the Company
Issuer’s and the Highstar Entities’ causes of action against such Non-Compete
Party for, among other relief, issuance of injunctive relief, issuance of a
temporary restraining order, recovery of damages and recovery of costs,
reasonable attorneys’ fees, and expert witness fees.  Each Non-Compete Party
further agrees that it is difficult to calculate the amount and extent of any
damages caused by such a violation and such a violation threatens to injure or
actually does injure the Company Issuer and its assets and the Highstar
Entities.  Each Non-Compete Party agrees that the Company Issuer and the
Highstar Entities will have the non-exclusive right to apply for and to receive
a temporary restraining order, a temporary or preliminary injunction and a
permanent injunction to enforce the terms, provisions, covenants, obligations,
duties and conditions described in this Section 6.4.

 

(d)                                 Acknowledgements.  Each Non-Compete Party
expressly agrees and acknowledges that the non-competition covenant contained in
this Agreement is reasonable and necessary for the protection of the Company
Issuer and its Subsidiaries and their respective members, including the Highstar
Entities, with respect to the covenant’s respective stated purposes, time, scope
and geographic area, and supported by adequate compensation.  Although the
Parties have, in good faith, used their best efforts to make this covenant
reasonable in geographic area, scope of restricted activity, and duration, and
it is not anticipated, nor is it intended, by any of the Parties that any court
of competent jurisdiction would find it necessary to reform this covenant not to
compete to make it reasonable, the Parties agree that any court of competent
jurisdiction making a determination that it is necessary to reform this covenant
not to compete to make it reasonable, shall be, and hereby is, empowered and
directed to reform the covenant to the extent necessary to render it enforceable
and afford the greatest protection to the Company Issuer’s and the Highstar
Entities’ legitimate business interests.

 

Section 6.5                                   SK Tank Farm Project.  The Parties
acknowledge that as of the Closing, the Contributor has not yet obtained the
consent of SK Energy Americas, Inc. (“SK”) to assign to the Company Issuer the
Contributor’s rights under the Joint Development Agreement dated July 25, 2012
by and between SK and the Contributor (the “SK JDA”).  Notwithstanding anything
to the contrary in this Agreement or in the LLC Agreement, the SK JDA and any
assets related to the SK Tank Farm Project that would otherwise be Project
Assets will be excluded from the Project Assets at the Closing and will be
deemed Excluded Business Assets.  Following the Closing, the Contributor will
use all reasonable efforts to obtain any required consent of SK to the
assignment to the Company Issuer of the Contributor’s rights under the SK JDA
and related assets, and the Company Issuer will reasonably cooperate with the
Contributor to obtain

 

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any such consent.  Promptly following the receipt by the Contributor of any such
required consent from SK, the Contributor will assign to the Company Issuer the
Contributor’s rights under SK JDA and the Contributor’s right, title and
interest to any other assets related to the SK Tank Farm Project that were
excluded from the Project Assets at Closing, using the form of assignment
attached hereto as Exhibit C, and such assets will be deemed Project Assets for
all purposes hereunder following the date of assignment to the Company Issuer. 
At such time, the Highstar Entities will contribute to the Company Issuer cash
in an amount equal to $205,644.74, in exchange for which the Company Issuer will
issue to Highstar Main 84,330.799 Series A-3 Units and issue to Highstar Wespac
Prism/IV-A Interco LLC 121,313.951 Series A-3 Units.  Following such
contribution by the Highstar Entities and in exchange for the contribution of
the SK Tank Farm Project assets, the Company Issuer will (a) distribute to the
Contributor an amount equal to $205,644.74; (b) issue to Kealine 18,145.125
Series A-3 Units and (c) issue to Primoris 18,145.125 Series A-3 Units.  Until
such time as the SK Tank Farm Project assets are assigned to the Company Issuer
pursuant to this Section 6.5, none of the the Contributor, Kealine, Primoris or
any officer, employee or Affiliate thereof will (x) incur any liabilities, costs
or expenses related to the SK Tank Farm Project or the SK JDA, (y) expend any
time working on the SK Tank Farm Project other than in connection with obtaining
any required consent from SK as described herein or (z) directly or indirectly
participate in the development of the SK Tank Farm Project except, in each case,
to the extent legally compelled to do so or as agreed to in writing by the
Highstar Entities.

 

Section 6.6                                   WesPac Marks.  No later than 10
days following the Closing, Kealine and its members will convey to the Company
Issuer, in a form acceptable to the Highstar Entities in their reasonable
judgment, all right, title and interest to all service marks, trademarks, trade
dress, trade names and other indicia of origin of use used in connection with
the Business Assets or the Business, including the name “WesPac” and the
stylized “WesPac” mark.

 

Section 6.7                                   Termination of Services
Agreement.  Kealine and its Subsidiary have an arrangement with the Contributor
pursuant to which all employees and certain independent contractors providing
services for the Contributor and the Business have been employed or engaged by
Kealine and its Subsidiary, which arrangement is described in the third item
listed under Section 4.15 of the Sellers’ Disclosure Schedule.  Promptly
following the Closing, Kealine and the Contributor will enter into a written
agreement, in a form acceptable to the Highstar Entities in their reasonable
judgment, to amend such arrangement such that (a) Kealine and its Subsidiary and
their employees and independent contractors will provide services to the
Contributor, at the Contributor’s cost and expense, only in connection with the
projects identified on Section 1.1(b) of the Sellers’ Disclosure Schedule and
(b) the fully loaded cost on an hourly basis of all time spent by such employees
or independent contractors will not exceed $50,000 in any year without the prior
written consent of the Company Issuer.  Such written agreement will terminate
immediately following abandonment or assignment to the Company Issuer of all the
projects identified on Section 1.1(b) of the Sellers’ Disclosure Schedule.

 

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ARTICLE VII
INDEMNIFICATION

 

Section 7.1                                   Assumed Liabilities and Retained
Liabilities.

 

(a)                                 Assumed Liabilities.  Upon the terms and
subject to the conditions set forth herein (including any right of the Issuer
Indemnitees to seek indemnification pursuant to this Article VII), the Company
Issuer agrees, effective at the Closing, to assume and to timely satisfy and
discharge the following liabilities of the Contributor and relating to the
Business (but excluding, in each case (x) the Retained Liabilities, (y) any
liabilities relating to Port Arthur LLC or its assets or business and (z) any
liabilities relating to Pittsburg LLC or its assets or business other than any
obligation to make capital contributions to Pittsburg LLC) (collectively, the
“Assumed Liabilities”):

 

(i)                                     All liabilities to third parties for
materials and services, to the extent relating to the Business, pursuant to a
Contract or acquired in the ordinary course of business prior to the Closing but
scheduled to be delivered or provided after the Closing, in each case as set
forth on Section 7.1(a)(i) of Sellers’ Disclosure Schedule; and

 

(ii)                                  Those liabilities arising out of or
relating to the ownership of the Business or the Business Assets by the Company
Issuer, including the use, ownership, operation, development and management of
the Business Assets by the Company Issuer, but only to the extent such
liabilities arise from or relate to any action, omission, performance,
non-performance, event, condition or circumstance after the Closing (it being
understood that the foregoing shall not be deemed to create any liability of the
Company Issuer for actions by any Contributor Entity or Seller following the
Closing that are not contemplated or expressly permitted by this Agreement or
the Contribution Documents or that are not taken with the prior written consent
of the Company Issuer).

 

(b)                                 Retained Liabilities.  Notwithstanding any
provision in this Agreement to the contrary, the Contributor will continue to be
responsible for all liabilities and obligations of the Contributor that are not
assumed by the Company Issuer pursuant to Section 7.1(a) as Assumed Liabilities
(the “Retained Liabilities”), including, by way of example, the following:

 

(i)                                     any of the Contributor’s payables (or
any other liabilities owing by the Contributor) to Kealine or Primoris or any of
their Affiliates regardless of the capacity in which such liability is owed;

 

(ii)                                  any Indebtedness of the Sellers including
any guarantees made by a Seller in respect of indebtedness for borrowed money
incurred by any other Seller;

 

(iii)                               any liabilities and obligations that are
unrelated to any Business Asset or otherwise unrelated to the conduct of the
Business;

 

(iv)                              all liabilities and obligations of the
Contributor arising out of or relating to any Excluded Business Asset;

 

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(v)                                 any liabilities and obligations of the
Sellers or any of their Affiliates (which shall not include the Subsidiaries of
the Contributor) arising from this Agreement, the Contribution Documents or the
transactions contemplated hereby and thereby;

 

(vi)                              all legal, accounting, environmental,
brokerage, consulting or other professional advisory fees and expenses accrued
by the Sellers and their Affiliates (which shall not include the Subsidiaries of
the Contributor), regardless of the nature of such fees or expenses, in
connection with this Agreement or the transactions contemplated hereby;

 

(vii)                           any and all Taxes for which the Sellers are or
may be liable, any Transfer Taxes incurred in connection with the consummation
of the transactions contemplated by this Agreement and any and all Contributor
Taxes; and

 

(viii)                        any obligations of the Contributor under the
Organizational Documents of the Contributor.

 

Section 7.2                                   Indemnification Obligations. 
Subject to the limitations and conditions set forth in this Article VII:

 

(a)                                 Sellers shall severally and not jointly
indemnify, defend and hold harmless the Company Issuer, the Highstar Entities,
and their Affiliates and their respective successors and assigns (collectively
with the Company Issuer,  the Highstar Entities and their Affiliates (and with
respect to the Highstar Entities, their direct and indirect owners), the “Issuer
Indemnitees”) from and against any and all claims, actions, causes of action,
demands or suits by any Person, and all losses, liabilities, damages,
obligations, payments, assessments, judgments, penalties, costs and expenses
(including reasonable legal fees and expenses and including costs and expenses
incurred in connection with investigations and settlement proceedings) (each, an
“Indemnifiable Loss”), as incurred, asserted against or suffered by any Issuer
Indemnitee relating to, resulting from or arising out of any breach by Sellers
of: (i) any representation or warranty set forth in Article IV; (ii) any
covenant or agreement of Sellers contained in this Agreement; and (iii) any and
all Indemnifiable Losses attributable to, resulting from or arising out of the
Retained Liabilities. For purposes of whether indemnification is payable under
this Section 7.2(a), such representations and warranties shall be qualified by
the references to materiality contained in such representations and warranties
(i.e., such qualifications shall be considered in determining whether a breach
has occurred), but with respect to the amount of indemnification payable and the
limitations set forth in Section 7.3, such representations and warranties shall
be without qualification to any references in such representations and
warranties to materiality (i.e., once a breach has been determined, such
references to materiality shall be disregarded in calculating the damages
resulting from such breach and the amounts to be considered in determining
whether the threshold amounts and dollar levels set forth in Section 7.3 have
been exceeded).  Without limiting the generality of the foregoing, Sellers will
be liable for their indemnification obligations, as set forth herein, regardless
of whether any individual Seller made or did not make a particular
representation or warranty in this Agreement. Each Seller is liable for any
indemnification obligations relating to representations made with respect to, or
covenants to be performed by, such Seller.  In addition, Kealine and Primoris
are each liable for 50.0% of any indemnification obligations relating to
representations made with respect to, or covenants to be performed by,
Contributor, any of its Subsidiaries, Pittsburg LLC or the Business.

 

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(b)                                 The Highstar Entities shall jointly and
severally indemnify, defend and hold harmless Sellers and their Affiliates and
respective successors and assigns (the “Contributor Indemnitees”) from and
against any and all Indemnifiable Losses, as incurred, asserted against or
suffered by any Contributor Indemnitee relating to, resulting from or arising
out of any breach by the Company Issuer or the Highstar Entities of: (i) any
representation or warranty set forth in Article V; or (ii) any covenant or
agreement of the Company Issuer or the Highstar Entities contained in this
Agreement; provided, however, that for purposes of whether indemnification is
payable under this Section 7.2(b), such representations and warranties shall be
qualified by the references to materiality contained in such representations and
warranties (i.e., such qualifications shall be considered in determining whether
a breach has occurred), but with respect to the amount of indemnification
payable and the limitations set forth in Section 7.3, such representations and
warranties shall be without qualification to any references in such
representations and warranties to materiality (i.e., once a breach has been
determined, such references to materiality shall be disregarded in calculating
the damages resulting from such breach and the amounts to be considered in
determining whether the threshold amounts and dollar levels set forth in
Section 7.3 have been exceeded).

 

(c)                                  The Company Issuer shall indemnify, defend
and hold harmless the Contributor Indemnitees from and against any and all
Indemnifiable Losses, as incurred, asserted against or suffered by any
Contributor Indemnitee relating to, resulting from or arising out of any of the
Assumed Liabilities.

 

Section 7.3                                   Limitations of Liability.

 

(a)                                 Notwithstanding anything to the contrary in
this Agreement or otherwise, and subject to the limitations in this Article VII,
no Indemnitee shall be entitled to recover for any Indemnifiable Loss under
Section 7.2(a)(i) unless and until (i) with respect to any single claim (or
series of related claims arising out of the same or similar facts, events or
circumstances), the amount of such Indemnifiable Losses related to such claim or
related claims exceeds $17,250 (the “Per Claim Threshold”), and (ii) the amount
of any Indemnifiable Loss with all other Indemnifiable Losses in the aggregate,
exceeds $300,000 (the “Loss Basket”), whereupon all such Indemnifiable Losses in
excess of the Loss Basket shall be recoverable (but excluding, for the sake of
clarity, any single claim (or series of related claims arising out of the same
or similar facts, events or circumstances) that does not meet the Per Claim
Threshold); provided, however, that the Loss Basket shall not apply to breaches
by the Sellers or by the Company Issuer and the Highstar Entities of the
Fundamental Representations, the representations and warranties contained in
Section 4.9 (Taxes) or any covenant.

 

(b)                                 In no event shall the maximum aggregate
amount of Indemnifiable Losses that may be recovered by the Contributor
Indemnitees or the Issuer Indemnitees under Section 7.2 exceed $3,750,000 (the
“Liability Cap”); provided, however, that the Liability Cap set forth in this
Section 7.3(b) shall not apply to breaches by the Sellers or by the Company
Issuer and the Highstar Entities of the representations and warranties contained
in Section 4.1(b) or Section 5.1(b) (Due Authority), Section 4.13 or Section 5.6
(Capitalization), Section 4.14 or Section 5.9  (Brokers or Finders)
(collectively, the “Fundamental Representations”) and the representations and
warranties contained in Section 4.9 (Taxes) or any covenant.

 

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(c)                                  Any Person entitled to receive
indemnification under this Agreement having a claim under these indemnification
provisions shall make a good faith effort to recover any Indemnifiable Loss from
insurers of such Indemnitee under applicable insurance policies so as to reduce
the amount of any Indemnifiable Loss hereunder.  The amount of any Indemnifiable
Loss shall be reduced to the extent that the relevant Issuer Indemnitee or
Contributor Indemnitee (each, an “Indemnitee”) actually receives any insurance
proceeds with respect to an Indemnifiable Loss (less any costs, expenses or
premiums incurred in connection therewith).  If the amount of any Indemnifiable
Loss, at any time subsequent to the making of an indemnity payment in respect
thereof, is reduced by recovery, settlement, mitigation or otherwise under or
pursuant to any insurance coverage, or pursuant to any claim, recovery,
settlement or payment by or against any other Person, the amount of such
reduction, less any costs, expenses or premiums incurred in connection
therewith, will promptly be repaid by the Indemnitee to the Party required to
provide indemnification hereunder (the “Indemnifying Party”) with respect to
such Indemnifiable Loss.

 

(d)                                 TO THE FULLEST EXTENT PERMITTED BY LAW, NO
PARTY NOR ANY ISSUER INDEMNITEE OR ANY CONTRIBUTOR INDEMNITEE SHALL BE LIABLE TO
ANY OTHER PARTY OR ANY OTHER ISSUER INDEMNITEE OR CONTRIBUTOR INDEMNITEE FOR ANY
CLAIMS, DEMANDS OR SUITS FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY,
PUNITIVE, INDIRECT OR MULTIPLE DAMAGES CONNECTED WITH OR RESULTING FROM ANY
BREACH OF, OR OBLIGATION UNDER, THIS AGREEMENT, OR ANY ACTIONS UNDERTAKEN IN
CONNECTION WITH OR RELATED HERETO OR THERETO; PROVIDED, HOWEVER, THAT ANY
CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT OR MULTIPLE
DAMAGES RECOVERED BY A THIRD PARTY (INCLUDING A GOVERNMENTAL AUTHORITY BUT
EXCLUDING ANY AFFILIATE OF ANY PARTY) AGAINST AN INDEMNITEE SHALL BE INCLUDED IN
THE INDEMNIFIABLE LOSSES RECOVERABLE UNDER SUCH INDEMNITY.

 

(e)                                  EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN ARTICLE IV, THE COMPANY ISSUER AND THE
HIGHSTAR ENTITIES ACKNOWLEDGE AND AGREE THAT NONE OF THE SELLERS, THE
CONTRIBUTOR ENTITIES AND THEIR RESPECTIVE AFFILIATES ARE MAKING ANY
REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN, ORAL, STATUTORY, EXPRESS, OR
IMPLIED, CONCERNING THE CONTRIBUTOR ENTITIES, THE BUSINESS ASSETS OR THE
OPERATION OF THE BUSINESS, INCLUDING ANY RELATING TO LIABILITIES, CONDITION,
VALUE OR QUALITY OF THE BUSINESS OR THEIR PROSPECTS (FINANCIAL OR OTHERWISE),
RISKS OR OTHER INCIDENTS OF THE BUSINESS, OR WITH RESPECT TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.  THE COMPANY ISSUER AND THE HIGHSTAR
ENTITIES ACKNOWLEDGE AND AGREE THAT SELLERS SPECIFICALLY DISCLAIM ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS OF THE CONTRIBUTOR ENTITIES
OR ANY PART THEREOF, AS TO THE WORKMANSHIP THEREOF, THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 

 

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IV AND THE COMPANY ISSUER AND THE HIGHSTAR ENTITIES ACCEPT THE BUSINESS ASSETS
IN THEIR AS-IS, WHERE-IS CONDITION, WITH ALL FAULTS.

 

(f)                                   If a claim for indemnification is not
based upon a Third Party Claim, the Indemnifying Party shall pay such claim
within 30 days after the later of (i) receipt of a notice of such claim and
(ii) the date that the amount of such payment has been agreed in writing or
finally determined in accordance with this Agreement.

 

Section 7.4                                   Third Party Claims Procedure.

 

(a)                                 If any Indemnitee receives notice of the
assertion of any claim or of the commencement of any claim, action, or
proceeding made or brought by any Person who is not a Party or an Affiliate of a
Party (a “Third Party Claim”) with respect to which indemnification is to be
sought from an Indemnifying Party, the Indemnitee will give such Indemnifying
Party reasonably prompt written notice thereof, but in any event not later than
5 Business Days after the Indemnitee’s receipt of notice of such Third Party
Claim; provided, however, that a failure to give timely notice will not affect
the rights or obligations of any Indemnitee except if, and only to the extent
that, as a result of such failure, the Indemnifying Party was actually
prejudiced.  Such notice shall describe the nature of the Third Party Claim in
reasonable detail and will indicate the estimated amount, if practicable, of the
Indemnifiable Loss that has been or may be sustained by the Indemnitee.

 

(b)                                 If a Third Party Claim is made against an
Indemnitee, the Indemnifying Party will be entitled to participate in the
defense thereof and, if it so chooses, to assume the defense thereof at its sole
cost and expense with counsel selected by the Indemnifying Party by delivering
written notice to the Indemnitee within 30 days of receiving notice of such
Third Party Claim from Indemnitee.  If the Indemnifying Party elects to assume
the defense of a Third Party Claim, the Indemnitee (i) will cooperate in all
reasonable respects with the Indemnifying Party in connection with such defense
and (ii) will not admit any liability with respect to, or settle, compromise or
discharge, any Third Party Claim without the Indemnifying Party’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed, and
the Indemnifying Party will not compromise or settle such Third Party Claim
without the Indemnitee’s written consent, which shall not be unreasonably
withheld, conditioned or delayed, unless such compromise or settlement by its
terms (A) obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third Party Claim, (B) releases the affected
Indemnitees completely and unconditionally in connection with such Third Party
Claim and (C) does not impose any injunctive or other equitable relief on the
Indemnitee.  In the event the Indemnifying Party shall assume the defense of any
Third Party Claim, the Indemnitee shall be entitled to participate in (but not
control) such defense with its own counsel at its own expense.  The Indemnifying
Party shall keep such Indemnitee reasonably apprised of the status of the claim,
liability or expense and any resulting suit, proceeding or enforcement action. 
If the Indemnifying Party elects not to assume the defense of any such Third
Party Claim or fails to respond to Indemnitee within the specified 30-day
period, then (i) the Indemnitee may defend the same as it may deem appropriate
with counsel of its own choice, including settling such claim or litigation in a
reasonable manner after giving notice to the Indemnifying Party of the terms of
the proposed settlement and (ii) if the underlying claim is an Indemnifiable
Loss, the Indemnifying Party will reimburse the Indemnitee for the Indemnitee’s
reasonable expenses in defending the

 

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claim.  If the claim or demand is asserted against both the Indemnifying Party
and the Indemnitee and, based on the advice of counsel reasonably satisfactory
to the Indemnifying Party, it is determined that there is a conflict of interest
which renders it inappropriate for the same counsel to represent both the
Indemnifying Party and the Indemnitee, the Indemnifying Party shall be
responsible for paying the reasonable costs of separate counsel for the
Indemnitee; provided, however, that the Indemnifying Party shall not be
responsible for paying for more than one separate firm of attorneys to represent
all the Indemnitees regardless of the number of Indemnitees.  Anything contained
in this Agreement to the contrary notwithstanding, no Indemnifying Party shall
be entitled to assume the defense of any Third Party Claim to the extent such
Third Party Claim seeks an order, injunction or other equitable relief or relief
for other than monetary damages against the Indemnitee that, if successful,
would materially and adversely affect the business of the Indemnitee.

 

Section 7.5                                   Survival.  Each representation and
warranty contained herein shall survive the Closing Date for a period of 12
months after the Closing Date and shall thereafter terminate and be of no
further force and effect; provided, however, that:

 

(a)                                 the representations and warranties contained
in Section 4.9 (Taxes) shall survive for 90 days following the expiration of the
applicable statute of limitations and shall thereafter terminate and be of no
further force and effect;

 

(b)                                 the representations and warranties contained
in Section 4.22 (Environmental Matters) shall survive the Closing Date for a
period of 36 months after the Closing Date and shall thereafter terminate and be
of no further force and effect;

 

(c)                                  the Fundamental Representations shall
survive the Closing Date indefinitely; and

 

(d)                                 Indemnitees shall not be entitled to
indemnification hereunder unless written notice of a claim for indemnity or
written notice of specific facts as to which an Indemnifiable Loss is expected
to be incurred shall have been given within the applicable survival period. 
From and after the termination of each such representation and warranty, no
Party or any officer, shareholder, director, trustee or Affiliate of any of them
shall have any liability whatsoever with respect to any such representation and
warranty; provided, however, that there will be no termination of any
representation or warranty with respect to a bona fide claim asserted with
respect thereto prior to the end of the applicable survival period.

 

Section 7.6                                   Exclusive Remedies.  After the
Closing Date, except as otherwise provided in Section 8.6, the remedies
specifically provided for by this Article VII shall be the sole and exclusive
remedies of the Parties for (a) any breach or inaccuracy of the representations
and warranties contained in this Agreement, Sellers’ Disclosure Schedule,
Highstar’s Disclosure Schedule or in any certificate, agreement or document
furnished or delivered pursuant hereto, (b) the failure to perform any
covenants, agreements or obligations contained in this Agreement or in any
agreement or document furnished or delivered pursuant hereto, or (c) any loss,
relating to, resulting from or arising out of any transaction or matter relating
in any manner whatsoever to (i) the operation of the Contributor Entities or the
Business prior to Closing, (ii) this Agreement or (iii) any document furnished
or delivered pursuant hereto.

 

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Section 7.7                                   Limited Duty to
MitigateSection 1.1  Each Indemnitee shall use reasonable efforts to mitigate
its respective Indemnifiable Losses upon and after becoming aware of any event
or condition that would reasonably be expected to give rise to any Indemnifiable
Losses.  For the avoidance of doubt, no Indemnitee will be required to incur any
out-of-pocket costs (other than de minimis expenditures) in order to mitigate
any Indemnifiable Loss.  In the event an Indemnitee fails to so mitigate an
Indemnifiable Loss to the extent required by this Section 7.7, the Indemnifying
Party shall have no liability for any portion of such Indemnifiable Loss that
reasonably could have been avoided had the Indemnitee made such efforts.

 

Section 7.8                                   Tax Treatment.  The Parties to
this Agreement agree that any payment made under Article VII shall be treated by
such Parties as an adjustment to the amount of the Company Distribution  for all
Tax purposes except as otherwise required by applicable Law following a final
determination by the relevant Tax Authority.

 

ARTICLE VIII
GENERAL PROVISIONS

 

Section 8.1                                   Expenses.  All costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Party incurring such costs and expenses.  Costs and
expenses incurred by the Company Issuer shall be paid by Highstar Entities.

 

Section 8.2                                   Notices.  All notices, consents,
waivers, and other communications under this Agreement must be in writing and
will be deemed to have been duly given when delivered by hand (with written
confirmation of receipt), sent by electronic mail (with written confirmation of
receipt, including any automatic confirmation that is received) or when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
Party may designate by notice to the other Parties):

 

(a)                                 if to the Company Issuer or the Highstar
Entities to:

 

c/o Highstar Capital IV, L.P.
277 Park Avenue, Floor 45
New York, New York  10172
Attn: Scott Litman
Email: scott.litman@highstarcapital.com

Copies (which shall
not constitute notice) to:

 

Sidley Austin LLP
1000 Louisiana, Ste 6000

Houston, Texas 77002

Attn: J. Mark Metts

Email: mark.metts@sidley.com

 

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(b)                                 if to Contributor to:

 

WesPac Energy LLC
2355 Main St., No. 210

Irvine, CA 92614
Attention:  Dave Smith
Email: dsmith@wespac.com

 

Copies (which shall
not constitute notice) to:

 

Snell & Wilmer L.L.P.

350 S. Grand Ave, Suite 2600

Los Angeles, CA 90071

Attn: Josh Schneiderman

E-mail: jschneiderman@swlaw.com

 

(c)                                  if to Primoris to:

 

John M. Perisich

Primoris Services Corporation

26000 Commercentre Drive

Lake Forest, CA  92630

Email: JPerisich@prim.com

 

Copies (which shall
not constitute notice) to:

 

George J. Wall

Rutan & Tucker, LLP

611 Anton Boulevard, 14th Floor

Costa Mesa, CA 92626

Email: gwall@rutan.com

 

(d)                                 if to Kealine to:

 

2355 Main St., No. 210

Irvine, CA 92614
Attention:  Dave Smith
Email: dsmith@wespac.com

 

or to such other address as any Party shall have designated by 15 days’ notice
in writing to the other Parties.

 

Section 8.3                                   Counterparts and Effectiveness. 
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
instrument, it being understood that each of the Parties need not sign

 

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the same counterpart.  Any signature hereto delivered by a Party by facsimile or
electronic transmission shall be deemed an original signature hereto.

 

Section 8.4                                   Future Actions.  Each of the
Parties shall execute and deliver all such future instruments and take such
other and further action as may be reasonably necessary or appropriate to carry
out the provisions of this Agreement and the intention of the Parties expressed
herein.  In case at any time after the Closing any further action is necessary
or desirable to carry out the purposes of this Agreement, each Party and, in the
event a Party is a legal organization, the proper officers, managers, partners
and directors of such Party and its respective Subsidiaries, if any, or, in the
event a Party is a natural person, then the personal representatives, heirs and
assigns of such Party, shall take all such necessary action as may be reasonably
requested by any of the other Parties.

 

Section 8.5                                   Applicable Law; Jurisdiction.

 

(a)                                 THIS AGREEMENT IS GOVERNED BY AND WILL BE
CONSTRUED IN ACCORDANCE WITH LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (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 AGREE THAT ANY SUIT, ACTION OR
PROCEEDING OF ANY AND EVERY KIND (INCLUDING ANY SUIT, ACTION OR PROCEEDING BASED
ON CONTRACT, TORT, STATUTE, REGULATION OR OTHERWISE) INVOLVING THIS AGREEMENT OR
SEEKING TO ENFORCE ANY PROVISION OF THIS AGREEMENT (EACH, A “COVERED CLAIM”)
WILL BE BROUGHT ONLY IN CHANCERY COURT OF THE STATE OF DELAWARE OR ANY FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF DELAWARE.  THE PARTIES MUTUALLY
CONSENT TO THE JURISDICTION OF THE CHANCERY COURTS AND FEDERAL COURTS IN
DELAWARE (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) AND AGREE THAT ANY
COVERED CLAIM WILL BE BROUGHT ONLY IN A CHANCERY COURT OR IN FEDERAL COURT IN
DELAWARE.  THE PARTIES AGREE THAT THEY WILL NOT RAISE, AND HEREBY IRREVOCABLY
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW AND AGREE NOT TO ASSERT, ANY
DEFENSE OR OBJECTION BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE, INCONVENIENCE OF THE FORUM OR THE LIKE AND ANY DEFENSE OR OBJECTION THAT
SUCH COVERED CLAIM MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN ANY CASE FILED
IN A CHANCERY COURT OR FEDERAL COURT IN DELAWARE.  THE PARTIES IRREVOCABLY AGREE
TO ABIDE BY THE RULES OF PROCEDURE APPLIED BY THE CHANCERY COURTS OR FEDERAL
COURTS IN DELAWARE AND WAIVE ANY OBJECTION TO ANY SUCH PROCEDURE ON THE GROUND
THAT SUCH PROCEDURE WOULD NOT BE PERMITTED IN THE COURTS OF SOME OTHER
JURISDICTION OR WOULD BE CONTRARY TO THE LAWS OF SOME OTHER JURISDICTION.  THE
PARTIES FURTHER AGREE THAT ANY COVERED CLAIM HAS A SIGNIFICANT CONNECTION WITH
THE STATE OF DELAWARE AND WILL NOT

 

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CONTEND OTHERWISE IN ANY PROCEEDING IN ANY COURT OF ANY OTHER JURISDICTION. 
EACH PARTY REPRESENTS THAT IT HAS AGREED TO THE JURISDICTION OF THE CHANCERY
COURTS AND FEDERAL COURTS IN DELAWARE IN RESPECT OF COVERED CLAIMS AFTER BEING
FULLY AND ADEQUATELY ADVISED BY LEGAL COUNSEL OF ITS OWN CHOICE CONCERNING THE
PROCEDURES AND LAW APPLIED IN THE CHANCERY COURTS AND FEDERAL COURTS IN DELAWARE
AND HAS NOT RELIED ON ANY REPRESENTATION BY ANY OTHER PARTY OR ITS AFFILIATES OR
REPRESENTATIVES AS TO THE CONTENT, SCOPE OR EFFECT OF SUCH PROCEDURES AND LAW
AND WILL NOT CONTEND OTHERWISE IN ANY PROCEEDING IN ANY COURT OF ANY
JURISDICTION.  EACH PARTY AGREES THAT SERVICE OF PROCESS ON SUCH PARTY AS
PROVIDED IN Section 8.2 WILL BE DEEMED EFFECTIVE SERVICE OF PROCESS ON SUCH
PERSON.

 

(c)                                  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
DISPUTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

 

Section 8.6                                   Enforcement of Agreement.  The
Parties agree that irreparable damage would occur in the event that the
provisions contained in this Agreement were not performed in accordance with its
specific terms or were otherwise breached.  It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.

 

Section 8.7                                   Invalidity.  If any provision of
this Agreement is held invalid or unenforceable, such invalidity or
unenforceability shall not affect in any way the validity or enforceability of
any other provision of this Agreement.  In the event any provision of this
Agreement is held invalid or unenforceable, the Parties shall attempt to agree
on a valid or enforceable provision which shall be a reasonable substitute for
such invalid or unenforceable provision in light of the tenor of this Agreement
and, on so agreeing, shall incorporate such substitute provision in this
Agreement.

 

Section 8.8                                   Entire Agreement and
Construction.  The Contribution Documents together with any schedules, exhibits,
annexes and other documents contemplated hereby and thereby, contain the entire
agreement between the Parties hereto with respect to the subject matter hereof
and thereof and all prior understandings and agreements shall merge herein and
therein.  There are no additional terms, whether consistent or inconsistent,
oral or written, which are intended to be part of the Parties’ understandings
which have not been incorporated into the Contribution Documents and any
schedules, exhibits, annexes and other agreements and documents contemplated
hereby or thereby.

 

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Section 8.9                                   Amendment.  Subject to compliance
with applicable Law, this Agreement may be amended by the Parties only by an
instrument signed in writing on behalf of each Party.

 

Section 8.10                            Extension; Waiver.  The Parties may by
written instrument (a) extend the time for the performance of any of the
obligations or other acts of the other Parties and (b) waive compliance or
performance by any other Party with or of any of the covenants or agreements
made to it by any other Party contained in this Agreement.  No extension of the
time for performance of any obligation hereunder or waiver of any condition or
breach of any representation, warranty, covenant or agreement or failure to
insist on strict compliance with an obligation, covenant, agreement or condition
shall operate as an extension, waiver of, or estoppel with respect to, any
subsequent or other breach or failure.  The single or partial exercise of any
right, power or remedy provided under this Agreement shall not preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy except where expressly stated in this Agreement.

 

Section 8.11                            Assignment; Third Party Beneficiaries. 
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either Party (whether by operation of law or otherwise)
without the prior written consent of the other Parties.  Subject to the
preceding sentence, this Agreement shall inure to the benefit of, and be binding
upon, the Parties and their respective successors, permitted assigns and other
permitted transferees.  Nothing contained in this Agreement, express or implied,
is intended to confer upon any Person other than the Parties and their
respective successors, permitted assigns and other permitted transferees, any
rights or remedies under or by reason of this Agreement.

 

Section 8.12                            Interpretation.  If any claim is made by
any party relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular Party
or its counsel.

 

Section 8.13                            Press Releases.  No Party shall make, or
cause any other Person to make, any press release or other public announcement
regarding the existence of this Agreement, the contents hereof or the
transactions contemplated hereby without the prior written consent of the
Contributor and the Highstar Entities; provided, however, that the foregoing
shall not restrict disclosures to the extent (a) necessary for a Party to
perform this Agreement (including disclosure to Governmental Authorities or
Third Parties holding rights that may be applicable to the transaction
contemplated by this Agreement, as reasonably necessary to provide notices, seek
waivers, amendments or termination of such rights), (b) required (upon advice of
counsel) by applicable securities or other Laws or regulations or the applicable
rules of any stock exchange having jurisdiction over the Parties or their
respective Affiliates; provided further that, in the case of clauses (a) and
(b), each Party shall use its reasonable efforts to consult with the other Party
regarding the contents of any such release or announcement prior to making such
release or announcement.

 

Section 8.14                            Records.  Company Issuer shall use
commercially reasonable efforts to maintain the Records received from Sellers
for at least six years after the Closing Date and afford Sellers reasonable
access to the Records and a right to copy the Records at Sellers’ expense as
reasonably requested by Sellers.  If Company Issuer desires to destroy the
Records, within such

 

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six-year period, it shall use commercially reasonable efforts to notify Sellers
prior to such destruction and provide Sellers an opportunity to take possession
of them at Sellers’ expense.  In addition, Company Issuer may, in its sole
discretion, afford Sellers access to records and data produced after the Closing
Date and reasonably requested by Sellers in connection with any Retained
Liabilities or any claim for indemnity by Company Issuer under this Agreement
(excluding, however, attorney work product and attorney-client communications
entitled to legal privilege), and may permit Sellers to copy such records and
data at Sellers’ expense.

 

[Signature Pages Follow]

 

50

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.

 

 

CONTRIBUTOR:

 

 

 

WesPac Energy LLC, a Delaware limited liability company

 

 

 

By:

/s/David P. Smith

 

 

David P. Smith

 

 

President

 

 

 

 

 

PRIMORIS:

 

 

 

Primoris Services Corporation, a Delaware corporation

 

 

 

By:

John M. Perisich

 

 

John M. Perisich

 

 

Executive Vice President, General

 

 

Counsel and Secretary

 

 

 

 

 

KEALINE:

 

 

 

Kealine Holdings LLC, a Nevada limited liability company

 

 

 

By:

David P. Smith

 

 

David P. Smith

 

 

Managing Member

 

Signature Page to Contribution Agreement

 

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COMPANY ISSUER:

 

 

 

WESPAC MIDSTREAM LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/Michael J. Miller

 

 

Name:  Michael J. Miller

 

 

Title:    Authorized Person

 

 

 

HIGHSTAR ENTITIES:

 

 

 

HIGHSTAR WESPAC MAIN INTERCO LLC,

 

a Delaware limited liability company

 

 

 

By:

HIGHSTAR CAPITAL GP IV, L.P.

 

Its:

Manager

 

 

 

By:

HIGHSTAR CAPITAL GP IV, LLC

 

Its:

General Partner

 

 

 

By:

/s/Michael J. Miller

 

 

Michael J. Miller

 

 

Executive Vice President

 

 

 

 

 

HIGHSTAR WESPAC PRISM/IV-A INTERCO LLC,

 

a Delaware limited liability company

 

 

 

By:

HIGHSTAR CAPITAL GP IV, L.P.

 

Its:

Managing Member

 

 

 

By:

HIGHSTAR CAPITAL GP IV, LLC

 

Its:

General Partner

 

 

 

By:

/s/Michael J. Miller

 

 

Michael J. Miller

 

 

Executive Vice President

 

Signature Page to Contribution Agreement

 

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Exhibit C

 

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